Peruvian-American Trade Blogging

As part of my newly designated role as Obama Youth Movement Superstar (I’ll take it), Young Zeitlin wants to know what I think about the Peru FTA and Obama’s support for it. The truth of the matter is that I hadn’t looked into the details beforehand, but I had assumed that deal was typical Bush fare: tariff reductions and IP protections without a whole lot in the way of labor or environmental standards. That is, better than nothing, both for the Peruvian poor and American consumers, but far from ideal. However, it turns out that impression was wrong. Check out the text of the deal:

Article 17.2: Fundamental Labor Rights:
1. Each Party shall adopt and maintain in its statutes and regulations, and practices thereunder, the following rights, as stated in the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-Up (1998) (ILO Declaration):
(a) freedom of association;
(b) the effective recognition of the right to collective bargaining;
(c) the elimination of all forms of compulsory or forced labor;
(d) the effective abolition of child labor and, for purposes of this Agreement, a prohibition on the worst forms of child labor; and
(e) the elimination of discrimination in respect of employment and occupation.
2. Neither Party shall waive or otherwise derogate from, or offer to waive or otherwise derogate from, its statutes or regulations implementing paragraph 1 in a manner affecting trade or investment between the Parties, where the waiver or derogation would be inconsistent with a fundamental right set out in that paragraph.
Article 17.3: Enforcement of Labor Laws
1. (a) A Party shall not fail to effectively enforce its labor laws, including those it adopts or maintains in accordance with Article 17.2.1, through a sustained or recurring course of action or inaction, in a manner affecting trade or investment between the Parties, after the date of entry into force of this Agreement.
1 To establish a violation of an obligation under Article 17.2.1 a Party must demonstrate that the other Party has failed to adopt or maintain a statute, regulation, or practice in a manner affecting trade or investment between the Parties.
2 The obligations set out in Article 17.2, as they relate to the ILO, refer only to the ILO Declaration.
(b) A decision a Party makes on the distribution of enforcement resources shall not be a reason for not complying with the provisions of this Chapter. Each Party retains the right to the reasonable exercise of discretion and to bona fide decisions with regard to the allocation of resources between labor enforcement activities among the fundamental labor rights enumerated in Article 17.2.1, provided the exercise of such discretion and such decisions are not inconsistent with the obligations of this Chapter.

Unlike with NAFTA, this is in the text of the agreement. It gets more explicit:

Article 17.5: Institutional Arrangements
1. The Parties hereby establish a Labor Affairs Council (Council) comprising cabinet-level or equivalent representatives of the Parties, who may be represented on the Council by their deputies or high-level designees.
2. The Council shall meet within the first year after the date of entry into force of this Agreement and thereafter as often as it considers necessary. The Council shall:
(a) oversee the implementation of and review progress under this Chapter, including the activities of the Labor Cooperation and Capacity Building Mechanism established under Article 17.6;
(b) develop general guidelines for consideration of communications referred to in paragraph 5(c);
(c) prepare reports, as appropriate, on matters related to the implementation of this Chapter and make such reports available to the public;
(d) endeavor to resolve matters referred to it under Article 17.7.4; and
(e) perform any other functions as the Parties may agree.

Will the Bush administration use the LAC to push for real labor rights enforcement in Peru? Of course not, but this is better than, say, CAFTA or NAFTA in that it opens the door for a Democratic president, without renegotiation, to start taking labor rights seriously. It’s a good deal as these things go, good enough that major factions in the AFL-CIO are amenable to it. And the environmental side is pretty strong too, guaranteeing the right of Peruvians to sue American corporations for polluting and vice versa. Long story short, this is exactly the type of trade deal Democrats should be supporting. Those who still think it doesn’t go far enough aren’t likely to be satisfied by any trade deal of any type.

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