United States approves FTA
Democratically-controlled Congress satisfied with labor, environmental issues and approves trade pact.
The United States Senate approved the free trade pact with Peru 77-18 Dec. 4, the final step in the controversial agreement’s passage since negotiations began in May 2004.
US President George W. Bush pressured the US Congress hard to pass the deal before Christmas break. The administration has made such bilateral agreements a central part of its trade policy, but it appears unlikely that similar deals with Colombia and Panama will pass before Bush leaves office in early 2009.
Peru and the United States signed the agreement in April 2006, and Peru’s unicameral Congress approved the pact in a late-night session in June of that year.
But the agreement was held up by the US Congress. When the Democratic Party won control of both houses of the US Congress in the November 2006 election, the agreement was held up by Democratic lawmakers who feared it the bill was lacking sufficient labor and environmental protection.
Critics have slammed the trade agreement for its lack of symmetry — they say that the monster economy of the United States, especially its heavily subsidized agricultural industry, would dwarf the Peruvian economy, despite its eight consecutive years of economic growth.
“…What the US wasn’t able to do regionally, for instance the Free Trade Agreement of the Americas, the FTAA, they’ll be able to do bilaterally, one by one, locking in these countries into trade rules that aren’t necessarily beneficial to the people,” said Vicki Gass, a senior associate on rights and development at the Washington Office on Latin America, a US-based think tank.
Pushing agreement along
In June, Peru’s Congress passed a series of amendments to appease Democratic lawmakers on environmental and labor protection.
“I think there were some advancement in the labor and environmental clauses, it’s a little stronger, but … in the case of Peru, even with the new labor regulation, you have 80 percent if not more of the population working on subcontracting or in the informal market.
They don’t enjoy labor rights. This is what was seen in the CAFTA+DR countries,” she said, referring to the Free Trade Agreement between the United States and Central America and the Dominican Republic.
“I think in many ways, the labor rights issues is a red herring because it ignores the other issues starting with the impact on agriculture and the end of democratic governance,” she added.
Gass said the bill breezed through the Senate, and was passed in the House of Representatives for political reasons, not economic ones, particularly the 2008 presidential election, with Democratic lawmakers eager to win support from big business.
The Council on Hemispheric Affairs (COHA), another Washington-based think tank warns that the new deal is just a repetition of NAFTA, which in the nearly 14 years since it has gone into effect has devastated the Mexican agricultural industry.
“…It is clear that Mexican farmers were not ready to compete with a Washington subsidized, ‘factory in the field’ US-style agricultural economy,” Manuel Trujillo wrote in a recent COHA report.
“The Bush Administration is either too narrow-minded or grossly uninterested with the negative aspects of the recent history of US-backed FTAs in the region to claim that any refusal to approve the pending FTAs with Colombia and Panama would be a slap in the face for democracy in Latin America.”