Democrats, Labor Sound Warnings On Peru Free-Trade Deal

National Journal's CongressDailyAM

March 9, 2006

By Martin Vaughan

House Democrats and a major labor union sounded warnings Wednesday on the U.S.-Peru free-trade agreement, which the Bush administration might submit for congressional approval this
year.

Taking aim at Peru's record on protecting worker rights and eradicating child labor, the Democrats' criticisms cast doubt on whether the administration will be able to secure widespread
bipartisan support for the deal.

Those doubts surface as President Alejandro Toledo of Peru is in Washington this week. Toledo is slated to meet with House Ways and Means Committee members in a closed session this
morning.

Ways and Means ranking member Charles Rangel, D-N.Y., highlighted findings in a State Department country report on human rights practices released Wednesday. According to the
report, "serious problems" remain in Peru with respect to collective bargaining by unions, and the interdiction of child labor.

"I was looking forward to working with President Toledo to address these problems in the text of the agreement ... I cannot believe our government would move forward with an FTA that
ignores these problems so clearly outlined by our very own State Department," Rangel said in a statement.

The State Department mentioned several actions taken by Peru's government aimed at combating child labor.

It has established a government-nongovernmental organization committee that has drafted a 10-year plan to eliminate labor for children under the age of 14, the report says.

And the Ministry of Labor increased its stable of labor inspectors by 30 percent over 2004, for a total of 236 inspectors, according to the report.

Nonetheless, Peru's National Institute of Statistics and Information estimated that 2.3 million children between six and 17 years old were engaged in work in 2005, most of them in the
informal sector. Inspection efforts focused on reports of child labor abuses in the formal sector, the report said.

Complicating matters for the Bush administration, Toledo last
year publicly stated he would be willing to accept a commitment
to abide by international core labor standards in the text of
the free-trade agreement.

In keeping with guidelines under trade negotiating authority
and agreements negotiated to date, U.S. trade officials proposed
no such language and it does not appear in the final text of the
Peru deal. But Democrats have seized on that as evidence that it
is the Bush administration that is hesitant to push for stronger
labor protections, not its trading partners.

Teamsters President James Hoffa told Trade Representative
Portman in a Wednesday letter that the Teamsters would work
vigorously to build opposition both to the Peru deal and a
separate free-trade agreement concluded earlier this month with
Colombia.

"Do not expect the Teamsters Union to stand idly by as you
attempt to move forward another flawed trade agenda," Hoffa
wrote. "If the Peru FTA is not renegotiated, the Teamsters Union
stands ready to actively and strongly oppose it and force the
Administration to once again use all of its political power to
try to pass it."

Senate Finance Chairman Grassley and House Ways and Means
Chairman Thomas are of different minds on how Congress should
approach the Peru and Colombia deals. Grassley said Tuesday he
wants the Peru deal to move as soon as it is signed.

But congressional and business sources said Thomas would
prefer to move the two agreements in tandem. Colombia, with the
largest economy of the Andean nations, holds greater potential
commercial benefits for the United States. And the free-trade
agreement is a priority for House Speaker Hastert, who has a
record of working to eradicate the narcotics trade in Colombia.

But moving the two agreements simultaneously might cause
problems for Peru.

U.S. sugar growers are supportive of the Peru deal, but would oppose the Colombia pact.

Domestic textile and apparel interests would also likely remain on the sidelines for Peru, but would work against Colombia.

Add labor into the equation and that adds up to a large force that would be energized to fight against the Colombia agreement, which would be smaller if Peru were to move separately.