Trade Watch: US-Peru Free Trade Agreement Approved

From AFP:

A US-Peru free tade agreement Tuesday cleared Congress and headed to President George W. Bush for signing, a victory in his embattled drive to seal a clutch of trade deals.

The Senate approved the free trade pact on an overwhelming 77-18 vote after lengthy debate since Monday, capping nearly two years of effort by Bush's Republican administration.

While the victory was all but certain, the fate of pending US free trade agreements with Colombia, Panama and South Korea remained problematic.

"I commend the Senate for approving the free trade agreement with Peru with strong bipartisan support," Bush said in a statement.

"This agreement will level the playing field for American exporters and investors and will expand an important market in this hemisphere for US goods and services, which will help strengthen economic growth and job creation in the United States."

The free trade agreement (FTA) was modified under pressure from the Democratic-controlled Congress in May to take into account environmental and human rights concerns.

The House of Representatives approved the FTA on November 8 on a 285-132 vote.

To date, the pact with Peru is the only one of the pending FTAs the White House has submitted to Congress for approval. The remaining three FTAs face a tougher fight in the legislature.

"I look forward to signing this legislation into law and urge Congress to promptly consider and approve our other pending free trade agreements, starting with Colombia, which would be important to the stability of the region, and including Panama and South Korea," Bush said.

Bilateral trade between the United States and Peru amounted to 8.8 billion dollars in 2006, according to US government data.

Nearly all products from Peru already have duty-free access to the United States. The new deal will allow Americans reciprocal access to the growing Peruvian market.

The president of Peru, Alan Garcia, hailed the US Senate's passage of the pact.

"The approval of the FTA with the United States is good news for the increase of jobs and wages that should boost foreign investment in the country," Garcia said at the presidential palace in Lima, surrounded by members of his cabinet.

Susan Schwab, the US trade representative, also applauded the cooperation between Republicans and Democrats on trade.

"With the strong votes by both Chambers of Congress, we are sending a strong signal to the world that the United States is regaining its bipartisan footing on trade policy and is a reliable ally to countries that are building political and economic freedom," Schwab said.

Her remarks came against the backdrop of a massive US trade deficit, rising protectionism and a long-stalled round of trade negotiations in the World Trade Organization, with the US and the European Union at odds over agricultural subsidies.

US labor groups and some lawmakers remained fiercely opposed to the deal.

"It is outrageous that Congress and the Bush administration have approved yet another job-killing trade agreement at a time when American families are seeing their jobs shipped overseas, their food and toys tainted, their wages decline and their houses foreclosed upon," said Jim Hoffa, president of the large Teamsters union.

The Opposition:
The agreement has suffered consistent criticism. In Peru, the treaty was championed by Toledo, and supported to different extents by President-elect Alan García and candidates Lourdes Flores and Valentín Paniagua. The 2006 election's runner-up Ollanta Humala has been its most vocal critic. Humala's Union for Peru won 45 of 120 seats in Congress, the largest share by a single party, prompting the debate and ratification of the agreement before the new legislature was sworn in. Some Congressmen-elect interrupted the debate after forcibly entering Congress, in an attempt to stop the agreement ratification. Critics of the Peru TPA say the pact will worsen Peru's problems with child labor and weak labor rights, and expose the country's subsistence farmers to disruptive competition with subsidized U.S. crops. Additionally, critics contend that Dubai Ports World will be able to use its Peruvian subsidiary to obtain rights to operate U.S. ports. Even animal rights groups have opposed this legislation due to the possibility of spreading factory farming practices through Latin America, increasing U.S. pork and poultry exports, and mining development that causes deforestation and habitat loss for animals.