(By Monisha Bansal, Dec. 18, 2007, CNSNews.com) – President George W. Bush signed a bilateral free trade agreement with Peru on Friday, drawing criticism from labor and human rights groups.
In a joint press conference with Peruvian President Alan Garcia, Bush said that exports now account for a larger part of the U.S. Gross Domestic Product than at any previous time in U.S. history and that they increased by 13 percent in the twelve months prior to this October.
The president also argued that free trade agreements are part of his democracy-promoting policy.
“When we extend trade, when we expand trade, America advances our deepest values as well as their economic interests,” he said. “Opening markets has helped expand democracy. Openings markets helps expand and strengthen the rule of law. And opening markets helps lift millions out of poverty.””
Teamsters President Jim Hoffa took a different view. “Working men and women understand the damage done to them by these job-killing ‘free-trade agreements,'” he said. “These deals are less about reducing trade barriers than they are about exploiting cheap labor and protecting investments of multinational corporations.”
“Another so-called ‘free-trade agreement’ is just what we don’t need,” added Hoffa.
The U.S. International Trade Commission has said that “as compared with the United States, Peru’s labor market is small and is characterized by relatively high unemployment and low labor costs.”
The group noted that Peru in 2003 had an unemployment rate of 9.7 percent and registered an average labor cost of $1.28 per hour. In that same year, the U.S. had an unemployment rate of 6.0 percent and had an average hourly labor cost of $21.83.
But during his press conference with Peruvian President Garcia, Bush said, “The Peruvian people understand that expanding trade with the United States will improve their lives – that’s what they understand.”
The free trade agreement (FTA) had broad bipartisan support. It passed the House on Nov. 8 by a vote of 285 to 132 and passed on the U.S. Senate on Dec. 4 by a vote of 77 to 18.
But Young Lives, a British group that studies international childhood poverty, said the FTA could exacerbate child labor issues in Peru.
“Although analysis shows that it is unlikely that child labor in sectors with export potential will increase because of the FTA, child labor in non-tradable sectors (domestic work, local agriculture) may increase,” the group said in a statement.
“This is because those households that lose income may be compelled to take their children out of school or reduce the time they dedicate to studying, to increase family income,” the group added.
According to Young Lives, 28.6 percent of children between the ages of six and 17 in Peru receive wages or are paid in-kind.
The bill includes provisions that would allow the United States to restrict trade if Peru does not meet the International Labor Organization’s standards for workers’ rights.
This includes provisions to ensure freedom of association, the right to collective bargaining, elimination of all forms of forced labor, abolition of child labor, a provision for acceptable work conditions, and elimination of discrimination in employment.
According to the U.S. International Trade Commission, “Peru has made progress toward the improvement of workers’ rights protections in recent years, having passed new labor regulations and undertaken additional international obligations on labor standards.
“However, several groups indicate that problems persist in Peru’s workers’ rights regime, most notably with regard to the right to organize, freedom of association, and child labor,” the commission added.
The USITC noted that specifically, Peru has made progress toward improving collective bargaining and the right to organize, freedom of association, and the rights of public-sector employees.
“Peru has increased the power of labor inspectors, provided for higher fines for workers’ rights violations, and reduced or removed several limitations on the establishment, membership, and operation of unions,” the group said.
“Further, an industry representative from the agricultural sector indicates that inspections have improved in recent years, and that some farms have started to provide transportation to their employees,” it added.
House Minority Leader John Boehner (R-Ohio) welcomed the FTA’s passage. “More trade leads to more jobs, more economic growth, and a better standard of living for American workers,” he said in a statement. “America must maintain its role as an international economic leader and must open more markets for our businesses, farmers, ranchers, and manufacturers.
“Our economic competitors understand the value of trade, with the European Union, China, and Japan negotiating more than 50 free trade agreements in recent years,” he added.
“Worldwide, more than 300 regional trade agreements have been negotiated – all of them without the United States. So it is critical congressional leaders build on this agreement with Peru and continue our efforts to bring down more barriers to our goods,” Boehner said.
Most U.S. industries have been supportive of the FTA, which the USITC estimates will not have a large economic impact for the U.S. The U.S. asparagus industry, however, has voiced concern that it could hurt their overall market share.
Kevin Smith, Boehner’s spokesman told Cybercast News Service , “This trade agreement is a great opportunity to break down trade barriers and open doors in Peru to our goods and services here at home. Doing so will foster better relations between the two countries and ultimately create more family-wage jobs here in the U.S.”
All original CNSNews.com material, copyright 1998-2007 Cybercast News Service. Reprinted here with permission from CNSNews. Visit the website at CNSNews.com.
1. Who is Alan Garcia?
2. How did President Bush defend the free trade agreement he signed with Peru last week?
3. a) What type of organization is the Teamsters? Be specific.
b) Why is Teamsters president Jim Hoffa opposed to free trade agreements?
4. How did the House and Senate vote on the free trade agreement with Peru?
5. What provisions are included in the free trade bill that would allow the U.S. to restrict trade if Peru does not meet the International Labor Organization’s standards for workers’ rights?
6. In which areas of workers’ rights has Peru made progress, according to the U.S. International Trade Commission (USITC)?
7. In what areas have several groups told USITS that problems persist with Peru’s workers’ rights?
8. Re-read statements made by House Minority Leader John Boehner (R-Ohio) and his spokesman regarding the passage of the free trade agreement in para. 22-26. The media/economic experts/uions/teachers/etc. are strongly opposed to or supportive of free trade agreements. Liberals, Democrats and unions generally oppose free trade agreements. Conservatives and Republicans generally support free trade agreements. Ask your parents what they think about free trade agreements.
Read “Making the Case for Free Trade” here. If you can, read the whole text. It will help you think more about this issue and where you stand.
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