Peru Free Trade Agreement - Fundamentally Flawed

Why be concerned about the Peru Free Trade Agreement?

The Peru Free Trade Agreement is rapidly moving its way through Congress with the support of the Democratic Party leadership.  The Peru agreement and its companion agreements, the Columbia, Panama and South Korean agreements are fundamentally flawed even though there has been some attempt to bolster protections for workers and the environment

What are some of the details of the critically flawed Peru FTA?

The new labor protections in the Peru FTA are merely cosmetic. 

Instead of requiring compliance with the very detailed International Labor Organization Conventions, this new agreement refers to the much more vague, two page, 1988 Declaration of Fundamental Principles and Rights at Work. The detailed ILO Conventions are what really spell out what a ban on child and forced labor means in practice. In addition, the Peru FTA allows secret trade dispute resolution panels to interpret and apply these minimal rights in the Declaration differently than they have been interpreted and applied by the ILO itself.  Even Tom Donahue, President of the U.S. Chamber of Congress, has noted, “the labor provisions (in the Peru FTA) cannot be read to require compliance with ILO Conventions.

It is hard to believe that the labor provisions will even be enforced.

Unlike the investment chapter, which allows corporations to file complaints, the new labor provisions rely entirely upon the White House, not labor organizations, to initiate enforcement!  Peru’s major labor confederations have likewise urged opposition to the FTA because they do not believe the anti-labor Peruvian President Garcia will enforce the “supreme decrees” on labor he has recently issued. We need trade agreements with enforceable protections for worker rights and the environment--this agreement is a far cry from fair trade that labor demands.

The Peru FTA repeats the failed NAFTA model.

Of additional concern are the many other chapters in the Peru FTA that repeat the exact same NAFTA provisions that have proven so harmful over the past decade-plus.  Just like trade agreements before it, this FTA’s investment chapter will put U.S. environmental, food safety and other public interest protections in jeopardy of direct challenge by foreign investors in secret international tribunals. The Peru FTA also continues the NAFTA ban on many anti-offshoring and “Buy Local” government procurement policies, and even contains some of the original NAFTA intellectual property provisions that undermine the rights of poor countries to use generic medicines.  

Of particular concern are the agricultural provisions that will force Peru to remove most of its protections for domestic farmers, and thus face a flood of taxpayer-subsidized agricultural imports from the United States.  Four million workers and small-scale Peruvian farmers went on strike this summer to protest the impact that the FTA would have on rural communities there.  Agriculture accounts for a third of all employment in Peru.  Requiring Peru to unfairly compete with subsidized agricultural imports will push countless Peruvian farmers off the land, compounding problems with everything from urban poverty to forced migration to the drug trade. 

What is labor saying about the Peru FTA and the other agreements?

1. The Oregon AFL-CIO recently passed a resolution opposing the Peru Free Trade Agreement as well as the pending agreements with Panama, Columbia and South Korea.

2. A letter from the two largest Peruvian labor federations urging a “No” vote on the Peru FTA to all U.S. Congresspeople says, “We very much appreciate the effort made by some members of the US Congress to improve this disastrous FTA negotiated by the administrations of our two countries. But at the same time, we have to be clear that – as was commented recently in the August 8th edition of Congress Daily –  ‘The problem is that those who support the FTA in Peru are the same people that oppose labor reform in Peru.’ ” To read the entire letter, go to this link.

3. The Change to Win labor federation has recently sent a persuasive and extensive analysis to U.S. legislators strongly urging a “No” vote on the Peru FTA, saying among other things, “…By providing greater privileges to investors who move overseas, these investment rules actually promote offshoring.” To read the entire letter, go to this link

4. The Machinists wrote a strong letter to legislators that can be found at this link.

5. In Oregon AFSCME Council 75 passed a resolution against the Peru FTA.  Also, UFCW Local 555 has just ratified the Change to Win document.

Please help stop the backwards trend towards “free” trade. Since the vote on the Peru FTA is coming right up, we are on a very short timeline.

For more information check out The Bush Trade Agenda, Bad for Oregon, Bad for the World.