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House Committee Vote Masks Lack of Democratic Rank-and-File Support for Bush NAFTA Expansion to Peru

Sept. 25, 2007

House Committee Vote Masks Lack of Democratic Rank-and-File Support for Bush NAFTA Expansion to Peru

House Ways and Means Committee Shuts Out Public, Refuses to Hear Discontent Over More-Of-The-Same NAFTA Trade Policy

WASHINGTON,   D.C. – Today’s House Ways and Means Committee non-binding vote on the Peru Free Trade Agreement (FTA) will be the high-water mark of Democratic support for Bush’s proposed expansion of the North American Free Trade Agreement (NAFTA), Public Citizen predicted today.

The Bush-negotiated Peru NAFTA expansion, which became bogged down in the past Congress, was revived by a deal between Ways and Means Committee leaders and the administration. That deal and the modified agreement have been the focus of considerable opposition by many Democrats who are not on the trade committee.

“This deal is bad policy because it extends many of the most damaging provisions of NAFTA and CAFTA, but what’s incomprehensible are the politics of a Democratic Congress passing another Bush NAFTA expansion by a majority of Republicans and a small minority of Democrats,” said Lori Wallach, director of Public Citizen’s Global Trade Watch division. “This is especially incomprehensible after many of the freshmen Democrats – who tipped the balance of power in Congress – were elected by focusing on ending more-of-the-same trade policies.”

Not one key Democratic base group supports the expansion of NAFTA to Peru. Dozens of unions and environmental, consumer, Latino civil rights, faith, development and family farm groups have called on Congress to oppose the deal, which also is opposed by Peru’s two labor federations.

When some Democratic trade leaders announced in January 2007 that they would engage the Bush administration to obtain changes to Bush-negotiated NAFTA expansions to Peru, Panama, Colombia and South Korea, unions and civil society groups listed minimal changes necessary to avoid their opposition. Among the critical items that needed to be removed or altered:

  • Foreign investor privileges identical to those found in NAFTA and CAFTA that create incentives for U.S. firms to move offshore and expose basic environmental, health, zoning and other laws to attack in foreign tribunals;
  • Bans on “Buy America” and anti-offshoring policies;
  • Threats to renewable energy, recycled content and prevailing wage procurement laws;
  • Limits on food import safety standards and inspection rates;
  • Agriculture rules identical to those found in NAFTA and CAFTA that are projected to increase coca production and create rural unrest in trade partners. Under NAFTA, these rules led to displacement of 1.3 million Mexican peasant farmers and a 60 percent increase in immigration from Mexico to the U.S.;
  • Patent extensions that would provide large pharmaceutical companies new protections that limit poor countries’ access to affordable medicines; and
  • Peru FTA terms that could subject that country to compensation claims for reversing its Social Security privatization.

The groups also listed as necessary the addition of enforceable labor and environmental standards. On May 10, some Democratic leadership members and the White House agreed to add improved environmental and labor standards to the trade agreements, but they failed to address many terms that directly contradict Democrats’ domestic agenda on food safety, job-offshoring, environmental protection and more.

Further angering many rank-and-file Democrats and advocacy groups was the House Ways and Means Committee’s decision to skip a hearing on the Peru FTA.

“It is outrageous that there has not been a hearing on this deal since 2006, especially given a midterm election in which the American public went to the polls in droves and voted for candidates who explicitly ran against incumbents’ votes on past NAFTA-style deals and thereby delivered the Democratic majority,” said Wallach. “The politics of this vote eerily echo the 1993 NAFTA vote when a Democratic-controlled Congress passed another Bush’s NAFTA deal and promptly lost its majority.”

The focus on the need for a different trade policy by Democratic candidates in the midterm election and the political success of this approach, when 37 fair trade congressional candidates replaced supporters of the failed NAFTA trade model, corrected the political dislocation wrought in 1993 by President Bill Clinton’s pushing of NAFTA that then contributed to the historic Democratic losses in 1994. Democratic support for NAFTA was identified as a key factor in the erosion of Democratic support by working-class households in the 1994 midterm elections.

“We have to fix our trade policy. We have to have a policy that benefits American workers and workers around the world. Voters this past November sent us a clear message to say ‘no’ to the failed Bush free trade policies,” said Rep. Keith Ellison (D-Minn.), who, along with nearly all the Democratic freshmen class made fair trade a centerpiece of his campaign.

For more information about the pending Peru and Panama free trade agreements, visit www.tradewatch.org.