[Free Trade] U.S., Peru Sign Free Trade Agreement

from Salon

By GEORGE GEDDA Associated Press Writer

The United States and Peru on Wednesday signed a free trade agreement that the administration said will lead to increased prosperity in both countries.

Once implemented, 80 percent of consumer and industrial products and more than two-thirds of current U.S. farm exports to Peru would become duty-free. Many products from Peru already enter the U.S. market without duties. The agreement ensures that this status would remain unchanged.

As Peruvian President Alejandro Toledo looked on, the official documents were signed at an Organization of American States ceremony by U.S. Trade Representative Rob Portman and Peruvian Minister of Foreign Trade and Tourism Alfredo Ferrero Diez Canseco.

Ratification by the congresses of both countries is required.

The agreement has caused a political storm in Lima, but Toledo said the pact will ensure long term benefits in such areas as jobs and access to health, nutrition and education.

He accused his opponents of engaging in "easy populism" that may win support from voters but damages the country's long-term interests. "When you look at the future, you don't reduce poverty by playing with words.... I'm not playing short-term games."

Ollanta Humala, the opposition candidate who received the most votes in Sunday's presidential election in Peru, accused Toledo's government of mishandling the negotiations leading to the agreement.

"We are in favor of a trade deal with the United States and with different nations," he said Wednesday in Lima. "What has happened is this commercial deal was poorly negotiated."

Humala faces a runoff against either former Congresswoman Lourdes Flores, who supports the deal, or former president Alan Garcia, who believes the pact should be renegotiated.

Humala says the decision on whether to move ahead with the agreement should be left to the new government, due to be installed on July 28.

In 2005, U.S. goods exported to Peru totaled nearly $2.3 billion. Two-way trade between the U.S. and Peru last year totaled $7.4 billion.

Critics in Peru contend the agreement would lead to steep increases in the price of medicine.

And the Washington Office on Latin America (WOLA) said the accord lacks protections for Peruvian workers.

"The agreement's language leaves workers to confront routine violations of their labor rights without recourse, and no incentive to the government to improve existing labor laws," said Jeff Vogt, a WOLA labor specialist.

Rep. Charles Rangel, D-N.Y., noted that President Toledo has advocated the inclusion of stronger labor standards in the agreement's text. Acceptance of Toledo's advice will ensure broader congressional support, said Rangel, the top Democrat on the House committee responsible for trade issues.

"It's not too late to change this pact for the better," Rangel said.

The agreement won support from the U.S. Chamber of Commerce.

"From Lima, Ohio, to Lima, Peru, this trade agreement will mean growth and opportunity for workers, farmers, and business," said Dan Christman, the chamber's senior vice president of international affairs.

"It also sends a message to our friends and allies in the Andean region about our commitment to the rule of law, workers rights, and transparency in business and government," he said.

Anne Alonzo, co-chair of the Hispanic Alliance for Free Trade, said the agreement "means more growth opportunity for Hispanic-American business owners and workers here in the United States, including many of them of Peruvian descent."

In May 2004, the United States agreed to negotiate free trade accords with Peru, Colombia and Ecuador. Negotiations with Peru concluded in December and an agreement with Colombia was reached in February. Discussions are ongoing with Ecuador.