House Takes Up Peru Free Trade Agreement

By JIM ABRAMS

WASHINGTON – The House on Tuesday took up a free trade agreement with Peru, the first under new Democratic standards that elevate labor rights and the environment to a more central role in trade pacts.

The agreement would eliminate duties immediately on some 80 percent of U.S. industrial exports and two-thirds of farm exports to the South American country.

Equally important, supporters said, it could boost U.S. standing and influence in an area where governments hostile to U.S. interests, led by Venezuela, have gained prominence.

“The decision to support legislation expanding our commercial relations signals the importance that Peru holds for U.S. economic and security interests,” said Rep. Ileana Ros-Lehtinen of Florida, top Republican on the House Foreign Affairs Committee.

The House was scheduled to vote on the bill implementing the agreement late Tuesday. The Senate vote on the pact, signed between the U.S. and Peruvian governments in April 2006, was expected later this month.

Democrats generally have resisted free trade deals they blame for job losses and trade deficits, and their rise to power in January was seemingly a blow to the Bush administration’s aggressive free trade agenda. But the situation changed in May when the administration agreed to Democratic demands that labor rights and the environment be core elements of any future agreements.

Still, many Democrats, including some freshmen with ties to organized labor or from districts that have seen jobs disappear overseas, remained skeptical.

With every trade agreement “we end up outsourcing more wealth and more middle class jobs,” said Rep. Marcy Kaptur, a 13-term Democrat from Ohio. If labor rights are protected, “why are no trade unions in our country or Peru supporting the agreement?” she said.

Opponents noted that, on the day of the House vote, the Peruvian government had decreed a miners’ strike illegal and threatened to fire miners who do not return to work in three days.

“Workers everywhere want globalization policies that will benefit all and not just the wealthiest few,” Teamsters President James Hoffa said in a letter to House members. “Unfortunately, the Peru FTA (free trade agreement) and the other pending FTAs do not meet this standard.”

The agreement requires the parties to abide by International Labor Organization standards. The pact also commits the parties to enforce their own environmental standards, participate in international environmental accords, and not weaken or reduce environmental laws to attract trade or investment.

Lori Wallach, director of Public Citizen’s Global Trade Watch, said that despite the gesture toward labor and environmental rights, Democrats have yet to address problems with foreign investor privileges, incentives for U.S. companies to move offshore or issues of food import safety. She said a surge in American agriculture exports to Peru could also displace tens of thousands of poor Peruvian farmers, forcing them into drug production, paramilitary groups or flight to the United States.

The White House has been a strong supporter of the agreement, saying in a statement that approval would “send a clear signal to our neighbors, and the world, that we are willing to support those who share our values of economic freedom and democracy.”

Currently, through a regional trade agreement with Andean nations, Peru already can export most of its products to the United States duty-free. The deal will more immediately affect U.S. sales, removing tariffs, opening opportunities for U.S. investors and service industries and protecting intellectual property rights.

In 2006, Peru sold $5.9 billion worth of goods to the United States, while buying $2.9 billion in U.S. exports.

The agreement, if approved by the Senate, would be the first to clear Congress since a bilateral deal with Oman was accepted in September 2006. The United States in recent years also has concluded deals with Bahrain, Morocco and Australia, as well as putting in force the Central America Free Trade Agreement.

Congressional action is pending on deals with Panama, Colombia and South Korea, but votes are unlikely to occur this year.

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The bill is H.R. 3688

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On the Net:

Congress: http://thomas.loc.gov/

U.S. Trade Representative: http://www.ustr.gov/