Colombian "Dry Canal" Blackmail

February 13th, 2011
in Background, econ_news

panama canal Econintersect:  Colombia has grown frustrated with the failure of the U.S. Congress to ratify the bilateral free trade agreement signed four years ago.  In what might be considered a form of legal blackmail, Colombia is discussing plans to build a rail line across their portion of the narrow land bridge between North and South America.  China would finance the venture.

Follow up:

From The Financial Times:

“It’s a real proposal  ... and it is quite advanced,” Juan Manuel Santos, Colombia’s president, told the Financial Times. “The studies [the Chinese] have made on the costs of transporting per tonne, the cost of investment, they all work out.”

The 220km “dry canal” would run from the Pacific to a new city near Cartagena where imported Chinese goods would be assembled for re-export throughout the Americas. Colombia-sourced raw materials would make the return journey to China.

Because the Panama Canal and the associated Panama Railway parallel to the canal at times delay traffic due to reaching capacity, alternative routes across the isthmus which connects North and South America have long been considered.  In addition to the "dry canal" rail line in Columbia, a canal across Nicaragua has been mentioned, most recently in 2006.
What has not been made clear is whether or not the Columbia rail line makes sense even if the U.S.-Colombia free-trade agreement is ratified by the U.S. Congress.  The expansion of manufacturing capability in Colombis in conjunction with the new railroad could make the venture a winner for the South American country.
Sources:  Financial Times and CNN








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2 comments

  1. Alvio Marin says :

    The country's name is spelled Colombia. The only Columbia is in Washington DC. They got it right in the Financial Times excerpt, but your editors didn't even notice it.

  2. admin (Member) Email says :

    Thank you, post corrected.

    administrator





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