United States-Peru Trade Promotion Agreement Implementation Act -- Continued

Floor Speech

UNITED STATES-PERU TRADE PROMOTION AGREEMENT IMPLEMENTATION ACT--Continued -- (Senate - December 04, 2007)

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Mr. FEINGOLD. Mr. President, the Senate will soon be voting on the first measure to implement a trade deal since the announcement last spring by the administration and some Members of Congress of an agreement to facilitate the consideration of trade legislation.

The centerpiece of that agreement was to be the inclusion in future trade agreements of meaningful labor standards. In fact, because last spring's announced agreement was only a set of principles, and not actual language, the Peru Trade Promotion Agreement bill before the Senate is the first opportunity to review the details of that agreement.

I will touch on the new labor provisions included in the Peru agreement shortly, but the agreement is far more than just provisions overseeing labor standards. And in those areas, the trade agreement with Peru comes up short. In fact, the agreement looks just like the provisions in other trade agreements that have been stamped out over the past decade and more by the NAFTA template--a failed model of trade that has helped ship millions of family-supporting American jobs overseas, while too often failing to produce the promised enhanced standard of living for the families of our trading partners.

Like those previous trade agreements based on the NAFTA model, the Peru agreement contains language identical to the devastating foreign investor rights provisions of NAFTA that undermine federal, state, and local protections for the environment, health, and public safety.

Like those previous trade agreements based on the NAFTA model, the Peru agreement renders meaningless our longstanding common sense government procurement policies, including the Buy America law which requires that taxpayer dollars be used by the federal government to purchase American made goods and services when they are a reasonable option.

Like those previous trade agreements based on the NAFTA model, the Peru agreement undercuts pro-environmental policies such as recycled content requirements, and undermines our ability to require imported food to meet our safety standards. As the consumer advocacy group Public Citizen has noted, the Peru trade agreement includes NAFTA provisions that require the United States ``to treat imported food the same as U.S.-produced food, even though more intensive inspection is needed to compensate for Peru's weak domestic regulatory system.''

And like those previous trade agreements based on the NAFTA model, the Peru agreement includes NAFTA provisions that undermine the right to affordable medicines for poorer countries established in the World Trade Organization's Doha Declaration.

With all of this NAFTA baggage included in the Peru agreement, one might ask if there is any reason to believe this agreement won't just reproduce the same disastrous results we have seen from failed trade policies over the past two decades.

And that brings us to the new language included in the Peru agreement stemming from the deal announced last spring between a number of Members of Congress and the administration.

Regrettably, and perhaps predictably, that new language does not live up to the billing it received at the time of the announcement. In fact, according to an analysis done by Professor Mark Barenberg of Columbia University, the new labor provisions are actually weaker than current law. Professor Barenberg compared the proposed new labor provisions with those of trade deals already in effect, and found that the Peru agreement undermines existing trade laws, which Barenberg states are already ``weak, unreliable, and inadequate to the task.''

For example, the Barenberg report notes that under current law, ``if Peru fails to comply with internationally recognized labor rights, then the United States can impose unlimited sanctions against Peru, can provide benefits to Peru in any area of foreign relations, or can withdraw special trade benefits in whole or in part, to ensure that Peru comes into compliance. The U.S. can target specific sectors, products, or actors. The U.S. can impose sanctions or withhold benefits until those specified actors comply.''

But under the U.S.-Peru agreement, ``if Peru fails to comply with the vague labor ``principles'' or with Peru's domestic labor law, Peru can choose to pay the United States only half the monetary value of the trade benefits that accrue to Peru as a result of the violations--creating a cost-benefit incentive for Peru to commit violations. If Peru chooses this monetary penalty, then the sanction is not targeted on any sector or any actor. The Agreement establishes no system of positive benefits (carrots) to Peru for compliance.''

The Barenberg report gives another example. Under existing law, ``if Peru fails to comply with internationally recognized labor rights, then private parties in the United States, such as workers and labor unions, have the right to petition the President to impose sanctions or take other measures against Peru to ensure compliance.''

But, while private parties, including trade unions are allowed under section 301 of the Trade Act to file petitions with the President, alleging that a trading partner has violated a trade agreement, under the U.S.-Peru Agreement, private parties are given ``no right to directly initiate complaints against Peru for violating its obligation to enforce the vague labor ``principles'' or domestic labor law. Only the President may bring such complaints--and, in fact, the President has never filed a complaint under the labor-rights provisions of any bilateral trade agreement.''

Here is still another example. Under existing law, ``if the President decides that Peru is failing to comply with internationally recognized labor rights, he can impose sanctions. He need not gain the approval of another decision-maker.''

By contrast, under the U.S.-Peru agreement, ``if the President decides that Peru is failing to comply with vague labor ``principles'' or domestic labor law, he cannot impose sanctions. He can only file a complaint that may lead to international arbitration to determine whether Peru stands in violation. Hence, the decision to impose sanctions must be taken by two decision-makers, rather than one--the President and a panel of international arbitrators. And international arbitrators will apply international law, which holds that an obligation to adhere to the vague labor principles does not entail an obligation to adhere to actual labor rights, let alone adhere to any concrete performance measures or indicators.''

As others have noted, Professor Barenberg's report may explain why no major labor, environmental, human rights, or consumer protection groups have endorsed the Peru agreement.

Our trade policies of the past two decades have been disastrous. They have contributed to the loss of several million family-supporting jobs in this country. They have left communities across my State devastated, and I know the same is true in communities around this country.

Our trade deficit is still out of control, as we send more and more of our wealth overseas, much of it in the form of factories that provided entire communities with decent, good-paying jobs. I hold listening sessions in each of Wisconsin's 72 counties every year. This is my 15th year holding those listening sessions, listening to tens of thousands of people from all over Wisconsin. I completed my 1000th of those sessions just about a year ago, and I can tell you that there is nearly universal frustration and anger with the trade policies we have pursued since the late 1980s. Even among those who would have called themselves traditional free-traders, it is increasingly obvious that the so-called NAFTA model of trade has been a tragic failure.

I voted against NAFTA, GATT, and permanent most favored nation status for China, in great part because I felt they were bad deals for Wisconsin businesses and Wisconsin workers. At the time I voted against those agreements, I thought they would result in lost jobs for my State. But, as I have noted before, even as an opponent of those trade agreements, I had no idea just how bad things would get.

Nor does the problem end with the loss of businesses and jobs. The model on which our recent trade agreements have been based fundamentally undermines our democratic institutions. It replaces the judgment of the people, as reflected in the laws and standards set forth by their elected representatives, with rules written by organizations dominated by multinational corporations. Food, environmental, and safety standards set by our democratic institutions are subject to challenge if they conflict with those approved by unelected international trade bureaucracies. Even laws that require the government to use our tax dollars to buy goods made here, rather than overseas, can be challenged.

We cannot live in isolation. We are in a global economy, and it makes good sense to have reasonable trade agreements with those who want to trade with us--trade agreements that have broad-based support and that will provide broad-based economic benefits to all sectors of our economy and the economies of our trading partners. That is not what we have now, and we shouldn't pass another bill to implement one of these flawed agreements until we can straighten out the twisted trade model that has done so much damage to the personal economies of thousands of families across the country.

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