The Koreans are Coming!

A South Korean woman practices coffee making in a Bogotá cafe. She plans to serve Colombian coffee in Seoul.

Of course, the South Koreans have been here for a while, as the myriad Korean-made products, including cellphones, computers and cars, show.

A South Korean-made car on a Bogotá street.

But, with the impending approval of a Colombia-Korea Free Trade Agreement, expect a real Korean invasion.

Sure, this'll mean cheaper computers for Colombian students. But it'll also mean a tidal wave of cheap and dirty Korean cars. Think that the traffic jams are bad now? Just wait.

More fundamentally, eliminating trade barriers with South Korea could trap Colombia deeper in its raw materials-based economy. Today, Colombia sells Korea coffee and minerals and buys back cars, phones and computers. That's a bad deal for Colombia, since mining creates few jobs, feeds corruption and damages biodiversity.


Imported from Asia? A Bogotá traffic jam.

 Some people believe that Colombia simply cannot compete with Asian manufacturers. But why shouldn't it? After all, Colombia's got plentiful raw materials, low-wage labor and millions of buyers at home and nearby. But opening the floodgates to cheap Asian products will make that belief a self-fulfilling conclusion.

Colombian auto assembly plant workers have protested the Colombia-Korea FTA. Rightly, they believe that their jobs will be exported across the Pacific Ocean. With them will go a piece of Colombia's small and fragile middle class.

Developing manufacturing isn't just a nice idea - it's also necessary. After all, resource extraction's not only unhealthy for Colombia's economy and its environment - it's also doomed. After all, that gold, coal and oil will run out eventually, and Colombia will be fortunate if they do so while Colombia still has some biodiversity left. 

By Mike Ceaser, of Bogotá Bike Tours

Korea and Colombia Intersect Again

The Colombian and Korean leaders meet to talk trade.

More than a half century ago, 4,300 Colombianos traveled halfway around the globe to fight communism. Today, they are forgotten combatants in a nearly-forgotten war. But they helped accomplish something for which South Korea should be perpetually grateful: today, South Korea is a dynamic democracy, while its northern neighbor is just about the globe's last totalitarian regime, with millions of its citizens in slave labor camps. South Korea's per capita GDP is $30,000, while the North's is one 12th of that. South Korea is home to some of the globe's biggest corporate names, incouding Kia, Mitsubishi and Samsung. North Korea has the distinction of being the world's only industrialized state to have experienced a famine.

So, those 4,000 Colombians who fought in the Korean War and in particular the 686 killed, injured, captured or disappeared there, made their sacrifices for something. During a visit to Bogotá this weekend, South Korean Pres. Lee Myung-bak told a group of aged veterans that his people "would never forget your sacrifice...and were forever indebted."

Colombia was the only Latin American nation to send troops to Korea. Whether the Koreans have or will repay that debt is a question for historians and the veterans.

But Colombia could find something extremely valuable in Korea's incredible story. A Japanese colony for most of the first half of the 20th-century, exploited and trampled by imperialist Japan during World War II, after the war the Korean peninsula was occupied by U.S. and Soviet forces. Since then, Korea has been divided in half, the southern part today prosperous and democractic, the northern part ruled by a lunatic family dynasty which makes itself feel relevant by building atomic weapons and bombing South Korean ships while its people starve.

In today's El Tiempo, Colombian Korean War veteran Isaac Vargas Córdoba recalls the Colombian Batallion's send-off in 1953: "(The Koreans) were displaced, naked, widows and orphans, left with a nation under rubble, its economy destroyed.

"Korea didn't sit around crying over its devastation," Córdoba adds, observing that today South Korea is democratic and highly industrialized.

If South Korea has overcome all of that, what does it say about blaming history for today's problems?

Colombia, with almost the same population as South Korea, but more than 11 times its geographic size and many more natural resources, has a per capita GDP only one third of South Korea's.

How has South Korea done it? Its leaders credit education, which is undoubtedly a factor. Another must be a strong cultural work ethic, perhaps intensified by the Korean people's many years of hardship and deprivation.

Today, South Korea and Colombia have just signed a free trade agreement. But it's hard for me to imagine how Colombia is in any condition to compete with a sophisticated, efficient economy like Korea's. More than likely, Colombia will just ship Korea raw materials, and buy back manufactured goodsfrom them.

How did Korea do it? There's a valuable lesson for Colombia.


By Mike Ceaser, of Bogotá Bike Tours

The OTHER Free Trade Agreements

A man stands beside a graffiti saying 'No Free Trade Agreement' in central Bogotá. 

With the approval last year of Colombia's free trade agreement with the United States, protests against and public attention to free trade issues seemed to disappear.

But the U.S. deal is only one of many FTAs for Colombia. Some of them, such as ones with Turkey, Switzerland and Iceland are not likely to fundamentally affect Colombia's economy, others might.

And probably the most important deal being negotiated is with South Korea. The Korea FTA's supporters emphasize that Korea has become a major world economy, and one of the planet's most vital economies. In only 60 years, Korea rose from Japanese occupation and, despite enduring a civil war and a hostile, totalitarian neighbor to its north, converted itself into one of the more important and dynamic economies in the world.

Today, despite having few natural resources, Korea's economy is five times the size of Colombia's and it has a per-capita GDP almost six times Colombia's. Korea is home to some of the world's best-known brands, including Samsung, LG and Hyundai.

Bagging export coffee by hand in a small Bogotá coffee factory. Can Colombian industry compete with Korea's
highly-sophisticated manufacturers?

FTA advocates say that Colombia needs to open the door to such an important market, which could also be a gateway to Asia.

But South Korea's success story also contains a lesson for Colombia. Korea grew its economy not on free trade and lassie faire, but with government assistance and protectionism. This 1985 Kellog University paper about Korea's economy said: "In order to secure the domestic market, the government not only placed orders once production began, but also quickly protected the products with an armory of barriers. These included a prohibited list of good, quotas and tariffs...."

The Colombian government argues that Colombia's exports have grown after signing FTAs. But, to Canada, Colombia appears to have exported primarily hydrocarbons and coffee - raw materials or products with limited added value. Economic leaders appear to expect the same from the proposed Korea FTA. The El Colombiano newspaper and ex-Pres. Alvaro Uribe's website - both FTA supporters - predicted that "With the treaty, some economic sectors will win, such as primary materials, and others which could be hurt, such as home appliances and cars, since Korea is a world power in these areas."

It's no surprise, then, that Colombia's engineers, automobile assemblers and manufacturing unions are opposing the Korea FTA.

Sure, by signing the Korean FTA Colombia could export more oil, coal, coffee and bananas. But it'll open the floodgates to cheap Korean-made cars and other manufactured goods. That'll be great for Colombian retailers, but terrible for its unions and manufacturers. And those manufacturing jobs are the ones which create skilled labor and a healthy middle class, instead of the low-wage sales jobs.

You build a healthy economy by putting people to work designing and manufacturing microwaves and refrigerators - not making minimum wage hawking appliances manufactured overseas.

And, besides, do Colombia's leaders really think they'll benefit their nation by clogging Colombia's streets with cheap (and often polluting) which also export Colombian jobs? In other words, if Colombia is going to strangle its cities and poison its air with more cars, at least let them be made here by Colombians!

The Korea FTA's advocates assert that Korea and Colombia have 'complementary economies.' That's true, in a sense: Colombia's economy depends on agriculture and raw materials production; Korea's is based on manufacturing and thinking work. But, to increase its wealth and qualit of life, Colombia needs to make the shift to a manufacturing economy. But if Colombia destroys its incipient manufacturing sector with a flood of cheap foreign-made goods, it'll never make the leap.

Coming up are other FTAs, including one with the European Union, which could bring more cheap manufactured goods, as well as subsidized agricultural products. Find all the signed and possible future treaties on the government's website here: www.tlc.gov.co

Here's an excellent commentary in Foreign Policy: Will Colombia be the next free trade victim?

Related posts:

March of the Milk Makers

Free trade - for what?

Students' Day of Rage

The Gringo Invasion Vs Colombian Innovation

By Mike Ceaser, of Bogotá Bike Tours

The Gringo Invasion Vs Colombian Innovation

Francisco Andres Buitrago rides an ergonomic bike he designed. 

Yesterday, U.S. Pres. Barack Obama signed a long-delayed Free Trade Agreement with Colombia.

El Tiempo newspaper recently reported it'll mean a flood of cheap cars and subsidized U.S. farm products. That'll be back for Colombia if it means more pollution and traffic jams and bankrupts peasant farmers, who might then become internal refugees or turn to planting drug crops.

BTA Capital makes shirts and other clothing
emblazoned with...Bogotá's name and symbols. 

Vegetariano designs shoes and boots made
out of renewable, non-animal materials.  

Unfortunately, huge differences in infrastructure, economies of scale, education and even culture of innovation will make it difficult for Colombia to sell the U.S. anything besides raw materials like lumber, coal and oil, and a few traditional exports such as flowers and coffee. Miami Herald columnist Andres Oppenheimer predicts that South Korea, which also sealed a FTA with the U.S., will export to the States because of Korea's high educational levels and entrepeneurial culture. In fact, last year Koreans registered 8,800 patents in the U.S., compared to 100 by Brazilians, 8 by Colombians and 2 by Panamanians, according to Oppenheimer. Colombia, by the way, is also close to signing an FTA with Korea.

Of course, Colombians have lots of ingenuity and creativity, which I saw at a crafts fair sponsored by the private Jorge Tadeo University. Young people there had created novel foods, clothing,

Diego Alejandro with tables he's 
designed using innovative structures. 

furniture and even bicycles. Original, innovative products, but it's a long way to the U.S., particularly when one's competing against China, where people work for very little under poor conditions and companies churn out shirts, chairs and bicycles by the millions.

A bag of Melate Chocolates. 

Melate Chocolates designs chocolates for special occasions, sometimes filling them with traditional Colombian fruits.

I test rode one of Francisco's bikes, and it was comfortable, altho the steering takes some getting used to.

Related entry: La Salle Invents!

By Mike Ceaser, of Bogotá Bike Tours