Bush go-ahead to Peru trade deal sparks criticism

LIMA, Peru - President George W. Bush signed off Friday on a free trade pact with Peru that U.S. officials say will foster economic growth, but which lawmakers in both countries complain does not meet environmental and labor protection requirements.

In a statement issued in Washington, where Bush signed a proclamation enacting the pact on Feb. 1, U.S. Trade Representative Susan Schwab called trade expansion "a vital component of our effort to restore economic growth in the global economy."

Free trade agreements have been a hallmark of the Bush administration but the Democrat-led U.S. Congress only approved the Peru pact in December 2007 — 20 months after it was signed — following Peru's agreement to strengthen laws protecting trade unions and the environment.

Bush's move on Friday, four days before he leaves office, met with a chorus of complaints from both countries.

Opposition lawmakers in Peru complained chiefly that President Alan Garcia has failed to honor the stricter environmental standards, permitting legal loopholes that they say could endanger the country's Amazon rain forest.

Along with environmentalists, they say a newly amended forestry law backed by Garcia will allow large swaths of rain forest to be converted into biofuel projects if they are deemed "a matter of national interest."

"The new law means 70 percent of the Amazon runs the risk of deforestation," Roger Najar, who heads Congress' indigenous caucus, told The Associated Press. He said Garcia signed a January 2008 decree that deemed the development of sugar cane and bamboo plantations in the national interest.

Garcia's environment minister, Antonio Brack, said Najar was misinterpreting the new law, which he said is now stronger.

Also complaining that Peru did not meet conditions specified in the trade pact were U.S. Democrats led by Charles Rangel, D-NY, the powerful chairman of the House Ways and Means Committee.

He wrote Schwab on Wednesday, saying Peru has failed to meet the pact's labor requirements, including strengthening the right to free association and collective bargaining and prohibiting the practice of subcontracting.

Eight environmental, political and labor groups including the AFL-CIO, Sierra Club and World Wildlife Fund also decried Bush's move as premature.

"Peru's labor laws still fall far short of meeting International Labor Organization standards," Thea Lee, Policy Director at the AFL-CIO, said in the statement.

The trade pact eliminates duties on 80 percent of U.S. consumer and industrial product sales to Peru and most agriculture goods, and gradually phases out all tariffs.

Commerce between the two nations totals more than $9 billion a year and the pact fully opens to U.S. products and services an economy of 28 million people.

Almost all Peruvian exports to the United States already enjoy duty-free status under a 1990 agreement with coca-producing Andean nations designed to wean farmers off the crop that is the basis for cocaine.

In his eight years in office, Bush has reached free trade agreements with 10 Latin American countries. But the U.S. Congress has not ratified the Panama and Colombia pacts.

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Associated Press writer Frank Bajak in Bogota, Colombia contributed to this report.

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