Peru Free Trade Agreement Faces Mixed Labor Response

On October 9, the Oregon AFL-CIO passed a resolution opposing the U.S.-Peru Free Trade Agreement and three other pending trade deals with Panama, Colombia, and South Korea.  A state federation condemning a free trade deal would normally be an unremarkable event, except for the remarkable absence in the Peru case of a typically heavy-weight free trade opponent: the national AFL-CIO.  In fact, the national AFL-CIO has overturned the Oregon resolution, citing policy against taking policy positions inconsistent with the national level.

The AFL-CIO’s lack of support is angering some fair trade activists, who attribute the federation’s absence to a horse-trading mentality of affiliated unions responding to political pressure from Democratic politicians.


According to journalist and fair-trade campaigner David Sirota, the AFL-CIO’s non-position on the Peru deal is tied to the Democrats’ desire to fundraise from employers in the lead-up to 2008 elections.  He thinks that some in labor may be looking for a pass on the Peru deal in exchange for Democratic opposition to the Colombia and South Korea free trade agreements.  Publicly, the AFL-CIO praises the Peru deal for the addition of certain labor and environmental protections.

Speaker Nancy Pelosi and the Democratic leadership of the House Ways and Means Committee — namely Rep. Charles Rangel (NY), Sander Levin (MI), and and Rep. Earl Blumenauer (OR) — christened the Peru deal the model for a “New Trade Policy for America.”   Critics maintain that the protections are insufficient, hard to enforce, and provide cover for all four pending free trade agreements at a time of unprecedented public opposition to the NAFTA model.

“It’s a very strategically wise move to not oppose the Peru agreement,” countered Thea Lee, the AFL-CIO’s policy director for legislation.  “Congressmen face pressure from a lot of different people on these issues and they tend not to give us 100 percent of their vote.  We have a better chance of beating the other deals.”

The United Auto Workers (UAW) in particular has pushed for the federation to not take up the issue.  Said Lee: “The UAW has been quite firm in pushing that we don’t oppose the Peru agreement.  The UAW shares our strategic view because Korea is a big threat to them.”  South Korea exported 800,000 vehicles to the U.S. last year.

The UAW’s decision on the deal reflects a labor trade policy driven by self-interested calculations, said labor activist Jerry Tucker, a former member of the UAW’s International executive board.

Labor has also backed itself into a corner by limiting criticism of trade deals to the lack of labor and environmental protection, said Jessica Walker Beaumont of the Interfaith Working Group on Trade and Investment.

Beaumont said that the AFL-CIO’s decision not to oppose the Peru deal distracts from the fair trade movement’s comprehensive opposition to the NAFTA trade model, which incorporates concerns about agriculture, indigenous people’s rights, investment, and other issues.  Many fair trade activists believe that the AFL-CIO’s non-position has severely undermined the power of a previously united movement.

Holding the line on the Peru deal is important to keep the political seesaw from tilting against fair trade demands, said Arthur Stamoulis of the Oregon Fair Trade Campaign.  If the Peru deal passes by a landslide with a lot of Democratic support, he said, Bush gains leverage to press other bilateral deals.  Growing opposition in the U.S. and Latin America has led to the election of fair trade politicians across the hemisphere, from U.S. Senator Sherrod Brown to Venezuelan President Hugo Chavez and Bolivian head of state Evo Morales.  The growing movement for global economic justice has put Bush and other supporters of corporate trade on the defensive.  After the collapse of both the World Trade Organization’s Doha round of negotiations and the Free Trade Area of the Americas (FTAA), the Bush Administration’s trade strategy appears to be dependent on country-by-country bilateral agreements.  In giving Democrats a pass on the Peru deal, fair trade activists argue, the AFL-CIO has given in to Bush’s piecemeal strategy for FTAA implementation.


Both main Peruvian union federations strongly oppose the deal.  Four million Peruvian campesinos, or small farmers, staged a two-day national strike in July against the trade deal.  They are particularly concerned about provisions of the Peru agreement that eliminate tariffs for food crops and introduce highly subsidized and artificially cheap U.S. crops.

The Change to Win (CTW) Coalition announced its formal opposition to the agreement in a September 18 letter to Congress.  The Machinists  (IAM) are the only major AFL-CIO affiliate on record opposing the agreement.  Members of AFSCME Locals 3336 and 3214 led opposition to all four pending trade deals at AFSCME Council 75 and Oregon AFL-CIO meetings.

Linda Peterson, a home care worker and president of Local 3214, said the resolution notes that the “new labor and environmental standards . . . still rely entirely upon the White House for enforcement” and do not ensure clear adherence to International Labor Organization (ILO) standards.  Lee said that “core ILO standards are included.”

Even if they are, commitments to ILO rules have fallen short before.  The 2000 U.S.-Jordan Free Trade Agreement was praised for including labor-rights language, but six years later the National Labor Committee documented brutal sweatshop practices.

Some local union leaders express disappointment in the AFL-CIO’s stance. “I guess they want [Democrats] to help them on other issues,” said Jack Herbert, a Department of Environmental Quality worker and AFSCME Local 3336 executive board member.  “So they gave up on one less important to them.”

Daniel Denvir was the coordinator of the Portland Central America Solidarity Committee (PCASC) and is now a freelance journalist and activist en route to Ecuador.  A shorter version of the this article appeared in the November issue of Labor Notes (

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