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Peru, Colombia spark free-trade-pact déjà vu

The Hill (Washington DC), 15 March 2006

Peru, Colombia spark free-trade-pact déjà vu

By Elana Schor

Capitol Hill is starting to feel the pangs of trade déjà vu as two pending Latin American free-trade agreements prompt Democrats to demand stronger labor standards and business lobbyists push back.

Negotiators for the Bush administration settled on a free-trade agreement with Peru in December and a Colombian pact last month. But the White House and congressional leadership face the challenge of how to lock down Democratic support before the president’s “fast track” trade-negotiating authority expires next year.

Both Peru’s and Colombia’s presidents recently have made high-profile Washington visits, with Peruvian leader Alejandro Toledo making a strong impression on House Ways and Means Committee Democrats by voicing support for including International Labor Organization (ILO) standards in the U.S.-Peru agreement. Still, tough talk on labor is not likely to sway business groups, which stand behind the enforcement standards written into 2002’s fast-track law.

Frank Vargo, the National Association of Manufacturers’ vice president for international economic affairs, asserted the prevailing K Street view that Congress already settled the labor-standards issue during the debate over fast-track authority. The fast-track law requires Congress to hold an up-or-down, no-amendment vote on free-trade agreements, or FTAs.

“There always has been, from day one, very strong insistence on the part of Democrats that - even though [fast-track] doesn’t call for it - there should be some further provisions for including trade enforcement leverage and seeing other countries comply fully with ILO requirements,” Vargo said. “But I don’t see that.”

During his meeting Thursday with Ways and Means Democrats, Toledo sought to sooth Democratic discontent over Peru’s labor climate, unrest that was stoked by a critical State Department report 24 hours earlier.

“I cannot believe our government would move forward with an FTA that ignores these problems so clearly outlined by our very own State Department,” Ways and Means ranking Democrat Charles Rangel (N.Y.) said in a statement before the Toledo meeting.

But after the meeting, Rangel’s remarks were more optimistic: “If we involve all parties in an honest, open dialogue, I believe we can achieve the FTA we all know is possible.”

Rep. Sander Levin (Mich.), who could seek to reclaim his former post as Ways and Means’ top trade Democrat if the current trade ranking member, Rep. Benjamin Cardin (Md.), wins his Senate bid, told officials yesterday that he could not support the Peru deal without significantly strengthened labor standards. Levin rapped White House negotiators for relying, as during last summer’s brutal debate over the Central America Free Trade Agreement (CAFTA), on a mandate for foreign countries to enforce their existing labor laws.

“‘Enforce your own laws’ doesn’t fit the realities within Peru,” Levin told The Hill after his speech at the Carnegie Endowment for International Peace. “This is an opportunity to move ahead” and effect substantive change, he added.

In May 2004, when trade talks began with the Andean nations of Peru, Colombia and Ecuador, the opportunity to combine the three into a broader trade pact sparked the interest of congressional Republicans. Ways and Means Chairman Bill Thomas (R-Calif.) led a delegation to the Andean nations in September, and the committee’s summary of that codel strongly endorsed a combined agreement.

“The Andean market holds tremendous opportunity for U.S. interests, but only if a comprehensive agreement is struck,” committee staffers wrote.

Recognizing that Peru is on a faster path to congressional consideration than Colombia or Ecuador, the report said, the Ways and Means delegation “encouraged Peruvian officials to work with their counterparts, particularly in Colombia, to reach agreement on a comprehensive FTA to maximize congressional support; it will be difficult for Congress to pass an FTA with Peru alone.”

Levin said the administration had not yet decided whether to combine the Peru and Colombia agreements, and a senior Democratic aide confirmed that minority members have not been consulted on such a strategy. But Colombia’s labor laws are far weaker than Peru’s, and lobbyists said that pushing a U.S.-Colombia pact to passage is an even harder lift.

“The business community is going to go all out. We don’t take anything for granted,” said Mark Smith, managing director for Western Hemisphere affairs at the U.S. Chamber of Commerce. “Colombia, it’s a bigger agreement and a lot more trade is involved, so I think it will probably be a bigger effort on our part” than Peru.

Despite the Democrats’ escalating rhetoric on Peru and Colombia’s comparative lack of progress, Smith added, “Thomas ... still thinks they should be linked.”

Another lobbyist closely tracking the deals said that the current verbal battles are just the beginning: “We’re in the opening phases of a bidding war.” The Peru agreement could be ready for congressional consideration as soon as June, setting the stage for a second straight summer of trade deal-making by GOP leadership.

Ecuador may be out of reach for officials and lawmakers still seeking an Andean free-trade agreement. Indigenous Ecuadorean activists mounted protests against the negotiations this week, arguing that an agreement would harm workers’ rights.

 source: The Hill