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The U.S. annual trade deficit ballooned to an all time high in 2005, to over $791 billion. Despite this alarming deficit, the administration is moving forward on the Peru Free Trade Agreement, another NAFTA-style agreement that is guaranteed to increase the trade deficit even more.
The Peru Free Trade Agreement expands the CAFTA model of investor-to-state provisions that threaten the sovereignty of the countries involved. It would let Peruvian companies sue our local, state and national governments over laws protecting our health and safety. The Peru FTA would allow foreign companies to supply services to the public, such as power generation or distribution, water treatment or distribution and telecommunications. Under this agreement, companies could also undertake infrastructure projects, such as the construction of roads, bridges, canals, dams or pipelines that are not for the exclusive or predominant use and benefit of the government.
This provision also overrides our courts. CAFTA sets up an appellate body. However, the Peru FTA merely requires that “Parties shall consider whether to establish an appellate body or similar mechanism.”
Working families in the U.S. and Peru would not benefit from the agreement. It’s a step toward the Free Trade Area of the Americas (FTAA), which would extend the faulty trade model to 31 more countries and devastate farmers, ranchers and working communities throughout the Western Hemisphere. The Peru pact would harm agriculture, but when coupled with CAFTA and viewed as vehicle to the FTAA, the implications are truly onerous.
“Particularly, without U.S. implementation for mandatory Country-of-Origin Labeling for meat and produce, this trade agreement, like its predecessors, shortchanges producers and consumers alike,” said Reed Kelley, Co-Chair of WORC’s Trade Team and rancher from Meeker, CO. “Consumers will not be able to choose food grown and processed in the United States over foreign foods. Trade agreements should not compromise the ability of U.S. farmers and ranchers to provide American consumers with safe, high-quality food. They must honor local, state and federal government duty to protect the health and safety of their citizens. The Peru FTA does not meet these tests.”
The Peru FTA was introduced after negotiations with two other Andean countries, Ecuador and Columbia, fell apart. Although the Peru agreement is currently a stand alone agreement, USTR hopes that an agreement with Columbia will follow soon, expanding this broken trade model and our colossal trade deficit.
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