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Peru approves free-trade pact with U.S.


Peru approves free-trade pact with U.S.

28 June 2006

LIMA, Peru (AP) — Peru’s Congress overwhelmingly voted to ratify a free trade pact with the United States early Wednesday.

In a 79-14 vote with six abstentions, the 120-member legislature approved the bilateral deal reached between Peru and Washington late last year and signed in April by President Alejandro Toledo’s government.

The ratification received the full backing of President-elect Alan Garcia’s 28-member Aprista party bloc.

Toledo’s administration lobbied fiercely for ratification before Garcia is sworn in July 28 along with a new Congress, which will have a strong anti-free-trade bloc led by Ollanta Humala, who lost the June 4 presidential runoff to Garcia.

About two hours into the late-night debate, several legislators-elect from Humala’s nationalist alliance punched and kicked their way past security guards to gain the floor of Congress, pumping their fists in the air, waving placards and chanting anti-free-trade slogans. One guard suffered a broken nose, said Pablo de la Flor, Peru’s chief free trade negotiator.

The legislature’s president, Marcial Ayaipoma, called a half-hour suspension of the session while the protesters were cleared from the building.

One of the protesters, Congresswoman-elect Nancy Obregon, said lawmakers had violated the public’s trust by passing the measure in the pre-dawn hours while Peruvians slept.

"This free trade deal is going to greatly harm 95 percent of agricultural producers," Obregon told CPN radio.

Humala’s movement captured 45 congressional seats, but recently lost at least three of them to defections by politicians who said Humala — an admirer of Peru’s 1968-75 leftist dictatorship of Gen. Juan Velasco — had veered to far to the left.

But his group will still be the largest single bloc. Garcia’s party has 36 seats.

Humala says the free trade deal, which still must be approved by the U.S. Congress, would flood Peru with subsidized U.S. agricultural goods like cotton, rice, corn and potatoes, making it impossible for local producers to compete.

Backers say the deal will raise incomes in Peru by making its industry more competitive and by further opening the U.S. market.

Before the ratification debate began, the legislature approved four measures to help Peru’s agricultural sector, including one offering compensation to Peruvian producers of cotton, yellow corn and wheat.

Agricultural Minister Manuel Manrique said the fund would provide about $36 million to those sectors during the first year the trade deal goes into effect.

Congressman Michael Martinez, of the Union for Peru party that backed Humala’s failed presidential bid, said the subsidy package falls far short of his estimates of projected losses: $5 million for Peruvian cotton, $16 million for corn and $52 million for wheat.

Socialist Congressman Javier Diez Canseco argued that the free trade pact would limit Peru’s ability to renegotiate or cancel contracts with transnational mining and gas companies to force them to be more environmentally responsible because the deal stipulates conflicts be resolved through international mediators.

Conservative Congressman Rafael Rey said opposition to the pact had little to do with the deal, and everything to do with opposition to the United States.

"The problem is not the free trade agreement. It is not the terms of the negotiation," Rey said. "The problem is the United States and it is a purely ideological issue."

Peru and the United States, along with Colombia and Ecuador, entered into talks in May 2004 for a deal to lower trade barriers.

The three Andean nations enjoy preferential trade with the United States for more than 6,000 products through a program aimed at helping countries on the front lines of the drug war, but that agreement expires at the end of this year.

Colombia also reached an accord with Washington earlier this year that must still be ratified.

Free trade talks between Washington and Ecuador stalled last month after Ecuador canceled U.S.-based Occidental Petroleum Corp.’s contract and seized its facilities over a long-standing contract dispute.