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US House Dems vow to oppose Peru FTA on labor standards

12 July 2006

US House Dems Vow To Oppose Peru FTA On Labor Standards

By Elizabeth Price


WASHINGTON —(Dow Jones)— Democrats on the House Ways and Means Committee Wednesday said they would oppose a free trade agreement between the U.S. and Peru, citing inadequate provisions to protect labor standards.

Assistant U.S. Trade Representative for the Americas Everett Eissenstat testified at a Ways and Means hearing that the agreement will open Peru’s markets to U.S. exports the way the U.S. already has opened up to Peruvian goods under the Andean Trade Preference Act. He said it would create new opportunities for trade in services and tackle non-tariff barriers that are particularly problematic for small and medium-size companies.

Eissenstat also noted that the agreement has provisions for consultations and fines should either country fail to enforce their own laws governing labor standards. Those provisions are too weak, overshadowing any commercial benefits of the deal, Democrats said.

"There’s nothing we can do if those laws are made worse," said Sander Levin, D-Mich., the ranking Democrat on the Ways and Means Trade Subcommittee. He said the administration should have required Peru to commit to the International Labor Organization’s core labor standards in the text of the agreement.

Republicans, including Chairman Bill Thomas, R-N.Y., said that Peru should be supported because the people have resisted efforts by Venezuelan President Hugo Chavez to influence their elections.

Levin said that Chavez is in power primarily because economic prosperity in Venezuela left too many people behind for too many years, undermining support for democracy.

"I think our job is to design trade agreements so the benefits of trade are spread as broadly as possible," he said.

Last month, the Peruvian Congress ratified the free trade agreement with the U.S., which the Bush administration signed with former President Alejandro Toledo last year. The legislation was passed with a comfortable margin; 79 votes in favor, 14 against, with 7 Congressmen not voting. It received full support from legislators from President-elect Alan Garcia’s Aprista party bloc.

Rep. Jerry Weller, R-Ill., said Peru’s Congress, under outgoing President Toledo, had demonstrated a commitment to rebuilding labor protections dismantled under former President Alberto Fujimori. The government passed new laws in 2000, 2001 and 2004 and has implemented a national action plan to combat child labor, he said.

These efforts haven’t reversed the damage done under Fujimori, Levin said.

"Problem areas in Peru’s laws, as identified in reports by the ILO and the State Department, include a failure to provide for a neutral arbiter to determine strike legality and inadequate judicial procedures for handling cases of anti-union discrimination and other labor law violations," Levin said.

Brett Gibson, a representative of the AFL-CIO, told the committee that though Peruvian law restricts child labor, the laws are violated routinely in the informal sector of the economy.

"Child labor in the mining sector, a ’worst form’ due to the hazards it poses to the health and welfare of children, still persists in Peru," he said in prepared testimony.

Eissenstat told lawmakers the Peru FTA includes programs to build capacity to improve labor conditions and enforce laws, as did the free-trade agreement with Central America. He said that a deeper trade relationship with the U.S. would help create more, better-paid jobs in the formal economy, lessening pressure on children to work to make ends meet for poverty-stricken households.

Failure by Congress to ratify the FTA will cause Peru "to lose exporting jobs that will put more people into dire straits," Eissenstat said.

The Andean Trade Preference Act, like the broader program of trade preferences for poor countries known as the Generalized System of Preferences, or GSP, will expire at the end of the year. Eissenstat didn’t answer questions from Rep. Jim McDermott, D-Wash., asking whether the Bush administration would support renewal of GSP. Eissenstat said GSP isn’t his area of responsibility.

 source: Easy Bourse