Peru trade deal probed over labor rights

United Press International

Peru trade deal probed over labor rights

By DONNA BORAK

UPI Business Correspondent

11 March 2006

WASHINGTON, March 11 (UPI) — The Peruvian government is hoping to swiftly complete a free trade agreement with the United States despite reports by the U.S. government that point to inadequate labor rights in the region that do little to protect workers.

Peruvian President Alejandro Toledo, who met with President George W. Bush and other senior officials Friday, is hoping to secure passage of the trade compact which is currently under review by Congress. The administration completed talks with Peru in December, but it will be up to Congress to decide on whether or not to implement the trade legislation in the next few weeks.

"It’s very important, the free trade agreement, because it generates jobs and enables to continue the sustained rates of economic growth, to reduce poverty," said Toledo, in a news conference with Bush at the White House on Friday.

Toledo, who has worked aggressively to complete a free trade deal with the United States in order to help further bolster economic growth, has sought to leave a legacy of progress and economic stability as his term of office is set to expire.

Peru grew 6.7 percent last year and has been growing on average five percent a year for the last five years.

"I’m sure that after I finish and pass away the power to the next president, Peruvians and Latin Americans do not want to go through this cycle that creates instability, that does not attract capital investment, to continue growth, to generate jobs, to invest more in health, nutrition and education, and to reduce poverty," said Toledo.

However, despite efforts by Toledo to make substantial progress on labor rights in his country, there has been growing concern by some members of Congress over Peru’s worker’s rights and enforcement laws.

Additionally, a new report issued this week by the U.S. State Department points to a series of labor rights violations by the Peruvian government. House Democrats are now calling on the administration to include basic labor standards in the text of the free trade deal, something they say the administration is unwilling to do.

"Including basic labor standards in the text of the FTA is the easiest, most effective way to hold countries accountable, and it’s not too late to do this," said Rep. Benjamin Cardin, D-Md., lead Democrat on the House Ways and Means Trade subcommittee. "The Bush administration has been unwilling to deviate from their hard-line stance, but here they’ve been presented with a partner eager to expand the rights of its working people for the good of all those involved.

Toledo, according to Democrats, offered last September to include a commitment to comply with International Labor Organization standards for basic labor rights within the text of the free trade agreement.

While the administration confirmed Toledo’s offer, it did not confirm whether ILO standards have been incorporated into the text of the agreement at the time of this filing.

The U.S. trade office has tried to make the case that Peru has made efforts to reform its labor rights by ratifying 71 ILO rules, as well as, passing a major labor law reform in 2003 to reduce the number of workers needed to establish a union. The reformed law also eliminated prohibitions keeping workers away from joining unions and limiting the power of the labor ministry to cancel a union’s registration.

"Enforcement of labor rights in the Andean countries is a vitally important issue and was emphasized throughout the negotiations with the Andean countries," said Neena Moorjani, spokeswoman for U.S. Trade Representative Rob Portman. "Both Peru and Columbia are committed to enforcing and improving the rule of law in general, and adherence to international labor standards in particular."

However, according to the State Department report, these efforts to reform labor standards have not been successful. In many cases, forming a union remains just as difficult as before the 2003 reform, with only about 5 percent of the 8.5 million workforce belonging to an organized labor union. Companies have resorted to hiring temporary workers in order to prevent the increase of union members. While the law restricts that only 20 percent of the workforce can be a temporary employee, labor advocates argue that often times companies exceed that limit.

While workers are allowed to strike, the law requires that unions that represent public service workers must notify the ministry of labor before they strike. According to the ministry, there was only one legal strike and 45 illegal strikes between January and August of 2005.

"Labor leaders alleged that it was difficult to get approval for a legal strike and believed that the ministry of labor was reluctant to do so for fear of hurting the economy," said the State Department report.

Additionally the State Department reported that in many cases there was still forced labor including those involved with children. Narcotics traffickers and Shining Path terrorists also continued to hold indigenous families captive in remote areas using their labor including children to grow crops and coca.

While these reports have called into question the Peruvian government’s ability to sustain reform and maintain ILO standards, the administration has remained optimistic that Congress will successfully pass the trade deal.

"We would not have concluded the agreement if we didn’t believe that they have an improving situation with regard to labor," Rob Portman, told reporters on Wednesday, after an executive session with House Agriculture committee. "The issue isn’t the FTA. We can use the FTA to improve the situation whether its labor, environment or market access or non-tariff barriers."

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