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Peru expected to pass U.S. free-trade pact

Miami Herald | 25 May 2007

Peru expected to pass U.S. free-trade pact

A proposed free-trade agreement will boost exports and jobs in both Peru and the United states, political leaders of both nations say.


LIMA — Peruvian political leaders expect the country’s Congress to ratify protections for workers and the environment demanded by Democrats in Washington as part of a revised Free Trade Agreement between Peru and the United States.

’’It’s certain that our Congress will pass the agreement,’’ said Carlos Bruce, a Peruvian congressman who chairs the foreign trade committee. He believes that the vote could come before the Congress recesses on June 15 for six weeks.

The measure needs a simply majority of those voting. Bruce calculates that the amendments to the original agreement have the support of nearly all the members of President Alan García’s APRA party, the conservative National Unity Party, the bloc allied with former President Alberto Fujimori and a grouping of smaller parties under the Parliamentary Alliance. In all, they total about 70 of the 120-member Congress.


Bruce also expects to pick up a few votes from congressmen who broke with Ollanta Humala, the anti-globalization nationalist who opposes the accord and narrowly lost the presidential election last year to Garcia.

Leaders in both governments believe that the FTA will boost exports and create jobs for both countries and institutionalize Peru’s role as a free-market-oriented economy. This is especially important to U.S. policymakers given the rise of Venezuelan President Hugo Chávez and his anti-globalization policies.

Peru’s Congress last year approved the original FTA agreement negotiated by outgoing President Alejandro Toledo with the Bush administration. Following elections in June, the new Congress is less free-trade inclined.

The U.S. Congress has not approved the FTA.

Democrats, having taken control of Congress in November, reached agreement in principle with the Bush administration in April to add an amendment requiring that Peru meet certain labor and environmental standards. The AFL-CIO and environmental groups have criticized the proposed agreement — even as amended — for not providing enough protections.

Others fear that the deal will cause U.S. businesses to invest in Peru rather than at home.

Government officials are settling on the final text to be presented to the congresses in Peru and the United States.

The amended agreement would basically ratify rules already in place in Peru that meet International Labor Organization standards. But because Peru does not meet the standards in practice, supporters of the amendments believe they will pressure Peru to better enforce its laws, a difficult matter in a country where half the population lives on $2 a day or less and about two-thirds of Peru’s labor force works in the informal economy, off the books.


The U.S. State Department reported last year that Peruvian companies illegally keep workers from joining labor unions and deliberately hire workers informally to avoid providing healthcare or paid vacations. The report also found that some 30,000 people do forced labor — particularly in the logging industry — and tens of thousands of children are working, particularly in rural areas and in the drug trade.

Jorge Villasante, director of the Labor Ministry’s inspectors unit, said the García administration has increased the number of work site inspectors by 100 to 342 and will be hiring another 250 before year-end.


Villasante acknowledged that more inspectors are needed in a workforce of 13-14 million, but added that the existing force will be getting training this year with the help of funding from the U.S. Agency for International Development.

The Democrats’ biggest environmental concern in Peru is the illegal cutting of mahogany trees in the Amazon rain forest, worth $100,000 each by the time they reach the United States.

’’The days of the Spanish conquistadors are long over, but the jungles of Peru are still being plundered,’’ reports the National Resource Defense Council.

The García administration has promised more enforcement agents to reduce this trade.

 source: Miami Herald