Pelosi and Bush vs. Four Million Farmers
Blog Post About DMI's TheMiddleClass.org
You know that trouble is afoot when House Majority Leader Nancy Pelosi agrees with George Bush. Unfortunately, today was one those trouble's-in-the-air sort of days.
Pelosi and Bush became strange bedfellows today, when the House passed the U.S.-Peru Trade Promotion Agreement Implementation Act. Although Republicans largely voted for the Act -- 176 voted for it and only 16 against it -- Democrats were split on the deal, with 109 voting for the agreement and 116 voting against it. Pelosi was one of those "yes" votes, and she pushed her caucus to vote in favor.
The Peru Trade Agreement is modeled on The North American Free Trade Agreement (NAFTA), which was passed in 1994, and the 2005 Central American Free Trade Agreement (CAFTA). The agreement removes export tariffs between the United States and Peru and also increases intellectual property restrictions. According to the agreement, public services must be open to private investment and governments must allow international companies to bid on federal contracts.
Although the bill does include some environmental and labor rights provisions, they don't bind Peru to any specific standards but rather stipulate that Peru must agree to a set of labor rights principles. The provisions would also only apply to Peru and Panama, and wouldn't apply to future trade agreements. According to The Nation, similar labor provisions in a trade agreement with Jordan in 2000 were largely ignored. "In fact, Jordan has easily evaded what were thought--even by labor activists--to be solid protections in that agreement. If Pelosi is fighting for a genuinely progressive agreement, she should insist that Bush commit himself to the same strong labor/enviro rules for the stalled Doha round of the World Trade Organization negotiations. That would be a real victory," the Nation editors write. Given Mexico's experience with NAFTA, Peru's workers are likely to see their standard of living decline under the Peru Agreement.
Peruvian workers have taken a firm stand against the trade plan. Four million Peruvian farmers went on strike against the agreement, and all major Peruvian trade unions oppose the deal. Even the president of the U.S. Chamber of Congress, Tom Donahue, has said the Peruvian labor standards don't meet those of the International Labor Organization Conventions. “The labor provisions [in the Peru FTA] cannot be read to require compliance with ILO Conventions," he said. Peru, which has a monthly minimum wage of only $155, certainly doesn't need wages and labor practices to get any worse. The decreased access to products like generic drugs also contribute to a the decreased standard of living that is likely to result from this bill.
Not only is this bill bad for Peruvians, but it's bad for the American middle class. According to TheMiddleClass.org,
"A central problem is that the Peru trade agreement empowers businesses and investment capital to cross international borders more easily, providing a decisive advantage over working people who are not so internationally mobile and whose rights are not equally well protected in all of the nations covered by the agreement. This imbalance of power creates incentives to move U.S. jobs overseas and puts downward pressure on the wages of American workers as they are placed in more direct competition with poorly-paid, disempowered Peruvian workers... In the U.S., the experience of NAFTA suggests that more jobs will be lost due to displaced domestic production than will be gained due to export growth. The deal also raises concerns about food safety for middle-class consumers especially because the imports of largely untested Peruvian seafood are expected to increase dramatically."
Some Congressmembers are rightfully concerned about the effect that the trade agreement could have on the districts that they represent. For example, Illinois Representative Phil Hare said, "Districts like mine represent the very worst of unfair trade -- jobs lost, economies devastated and lives shattered. Weary of more bad trade deals, last November voters swept fair-trade Democrats into office -- sending a clear mandate for a new direction on trade. And yet here we are. Voting on another one-sided, so-called free-trade agreement." An estimated 7% of increased earnings inequality in the U.S. is due to trade policy.
The bill isn't law yet -- it still has to pass a vote in the Senate -- but things aren't looking good for the Peruvian and the American middle classes. Trade deals with South Korea, Colombia, and Panama are also in the works. Let's hope that Pelosi can come to her senses and get the Democrats -- and the American middle class -- back on track. Substantive legislation on issues such as labor rights and affordable education and health care will help America's middle class more than more free trade deals ever will.