Trade Agreement Implemented Despite Peru’s Environmental Rollbacks, Failure to Meet Labor Standards

Jan. 16, 2009

Trade Agreement Implemented Despite Peru’s Environmental Rollbacks, Failure to Meet Labor Standards

Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch Division

President Bush’s announcement that the Peru Free Trade Agreement (FTA) will be implemented despite Peru’s refusal to conform its laws to the pact’s labor rights requirements and its gutting of forestland protections after the pact’s U.S. passage, is the sort of outcome we worried about when we opposed the deal in 2007.

The Bush administration and Democratic congressional leaders negotiated improvements to the FTA’s labor and environmental standards, but the fact that the pact is going into effect after Peru gutted its forestry law and has refused to bring its labor laws up to International Labor Organization standards shows more improvements are needed to the labor and environmental provisions of the U.S. trade agreement model.

The Peru FTA, which included enhanced labor and environmental standards but also extended some of the most damaging provisions of the North American Free Trade Agreement (NAFTA), including extreme foreign investor protections, was opposed by a majority of House Democrats.

Given the problems we have seen with the Peru FTA model upon which the Panama FTA is based, plus Panama’s money-laundering and tax evasion issues that were highlighted in legislation co-sponsored by President-elect Obama during the last Congress, Bush’s announcement today will only fuel opposition to the sidelined Panama FTA. In addition, since the Peru FTA vote, 28 House members who campaigned against NAFTA and its expansion were elected to replace those who had voted for the Peru FTA.

Earlier this week, House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) and Ways and Means Trade Subcommittee Chair Sandy Levin (D-Mich.) wrote to Bush asking that he not implement the FTA because Peru has not “implemented its obligation (under Article 17.2.1 of the FTA) to adopt and maintain in its statutes, regulations and practices the fundamental right of workers to freely associate and collectively bargain.”

The environmental rollback that has received the most attention since the U.S. Congress passed the FTA was the approval by Peru’s Congress of a law that removed protections for as much as 60 percent of Peruvian lands now defined as forest, such as recently deforested areas and plantations.

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