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Will U.S. Democrats Approve Latin FTAs?

Will Democrats and the White House Agree on FTA Labor Provisions?

Latin America Advisor

Bush administration officials have been negotiating with congressional Democrats over labor provisions to be included in proposed free trade agreements with Colombia, Peru, and Panama. Do you see the two sides coming to an agreement? What are the prospects for renewal of Trade Promotion Authority (TPA) before its expiration at the end of June?

Christopher Wenk, Senior Director for International Policy at the US Chamber of Commerce: I am optimistic that the ongoing negotiations between the Bush administration (USTR Ambassador Susan Schwab), and congressional trade leaders (House Ways and Means Committee Chairman Charles Rangel and Ranking Member Jim McCrery, among others) on labor will bear fruit in the weeks ahead. The most important thing is that both sides are talking and there is a strong desire to find a common ground to move forward the pending bilateral FTAs with Peru, Colombia, and Panama. The reality is that the current negotiations between the administration and the Hill on labor will unlock possible action on the rest of the trade agenda, including TPA. That being said, time is of the essence as Congress would have to be notified on any trade agreement by the end of this month ... TPA is a critical issue for the Chamber of Commerce and the business community as a whole in 2007. The Chamber and other organizations recently launched a new effort called Trade for America, which will play a leading role in ensuring that TPA is renewed. President Bush has made TPA renewal one of his top trade priorities and we were pleased by comments made by Chairman Rangel and Senate Finance Committee Chairman Max Baucus (and Republican leaders) that they are ready to work with the administration to review and renew TPA. Without TPA, our hands will be tied and US trade leadership will be severely jeopardized.

Sander Levin, Democratic member of the US House of Representatives from Michigan: To encourage the broader sharing of the benefits of trade and globalization, Democrats have consistently urged the incorporation of the five basic international core labor standards in free trade agreements: the right to organize and to bargain collectively, and prohibitions on child labor, forced labor, and discrimination in employment. The participation of workers in raising their living standards is clearly important in the Latin American region, where poverty and income disparities are among the worst in the world, contributing to the growing unease about the benefits of globalization. Implementation of these provisions will be mutually beneficial: for the workers in developing countries; for their nations' overall need to develop a stronger middle class; for workers in the US who do not want to compete with workers whose basic rights are suppressed; and for US businesses and workers who need middle classes in other nations to buy our goods and services. The office of the US Trade Representative and Republicans are claiming that including International Labor Organization (ILO) core labor standards could lead to actions through the FTA, requiring significant change in US law. I do not agree with this argument. The USTR proposal would shift the focus from the obligation of these nations to carry out their commitment as signatories to the ILO Declaration, to a legalistic argument whether the letter of the law in one nation is 'equivalent' to those of the US. The ILO standards provide a framework, and whether a country brings their laws and practices into compliance depends on the particular situation on the ground in a nation—the traditions, values, socioeconomic conditions, and overall legal framework. I believe we must keep the focus on setting trade policy on the right course in these pending FTAs as an essential antecedent to consideration of the renewal of Trade Promotion Authority.

James Kenworthy, consultant on international trade and investment: ... The main question now is whether Peru and Colombia will accommodate such changes by agreeing to reopen the now-concluded agreements to renegotiation, with the consequent political costs in those countries. Provisions of US FTAs concluded since the one with Jordan in 2000 are all roughly similar in requiring trading partners to reaffirm their International Labor Organization obligations and commitments, legislate labor laws that reflect such obligations and commitments, and effectively enforce such laws. But what if they don't? More recent FTAs have provided for impartial arbitration of disputes between trading partners related to failure to do so, but do not provide for trade sanctions, although they may result in some form of a fine or compensation. The chances are very slight indeed that the new Democratic majorities in Congress will find these acceptable forms of enforcement. Moreover, it appears that political climates in both Peru and Colombia will make it difficult for their leaders to accept such renegotiation. They suspect that more strict labor laws may well be intended to make their exports to the US less competitive, thus canceling the benefits of the FTAs. So it would seem unlikely such renegotiations could occur within what's left of TPA ... Some extension of the current TPA to accommodate renegotiation of the Peru, Colombia, and Panama FTAs—as well as current negotiations with Malaysia and Korea—and some resolution of the Doha Round is possible, but my guess is that the current Congress would rather see them fade away as issues for the next election and revive them after the next election. So I'm not optimistic about TPA extension.

Republished with permission from the Inter-American Dialogue's daily Latin America Advisor newsletter.  

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