Some Democrats are supporting this effort because President Alan
Garcia of Peru has agreed to improve some international labor laws with
presidential decrees. But Peruvian labor leaders think this is
insufficient and will not protect the rights of the majority of people,
75 percent of whom work in the informal sector of the economy.
Like many workers in Latin American countries, Peruvians face
constant threats to their labor rights. Violations include
discrimination against union organizers, illegal firings, and forced
overtime without pay. Further, the new system of fixed-labor contracts
and subcontracting radically undermines workers' rights because it does
not guarantee a 44-hour work week or labor standards. The new,
much-talked-about labor language added to the US-Peru agreement does
not solve this or many other key labor rights issues.
Latin America is infamous for having the most unequal income
distribution in the world. In Peru, the meager income growth of the
last few years has not been shared equally. Peru's capital, Lima, the
country's most densely populated city, has experienced growth at a rate
twice that of the rest of the largely rural country. This manifests
itself in limited access to critical services, including healthcare.
According to the United Nations' Food and Agriculture Organization,
nearly 15 percent of Peru's population is malnourished.
As if that weren't enough, there's an unseemly underbelly to the
proposed deal that could lock Peru into a privatized social security
system similar to the proposal by President Bush that Democrats
successfully fought off in the last Congress. The main beneficiary of
the provision seems to be Citibank, the largest shareholder in
ProFuturo AFP, a company authorized to compete against Peru's national
social security system.
An effective trade policy with Peru would create jobs and increase
wages, reinforcing our national security by strengthening our
industries, promoting economic opportunities abroad, and seeking
specifically to alleviate income inequality in both countries.
Our policy makers must change the model if they expect to achieve a
different economic result than the one NAFTA has produced. Halting our
expansion of the NAFTA model into new bilateral trade agreements is not
an end to trade. Rather, it is a starting point for a long overdue
revision of trade models that consider not only maximum profits for
multinational corporations, but critical improvements in the lives of
working families of all trading partners.
This piece was originally printed in The Boston Globe.
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