In the South Carolina Democratic primary debate held in late January, former Senator John Edwards tried to take his competitor, Senator Barack Obama, to task for voting in favor of a recently-approved free trade agreement with Peru; Edwards condemned the Peru FTA as part of his condemnation of free trade agreements in general, dismissing both the Peruvian agreement and NAFTA(the North American Free Trade Agreement, signed in 1994 under President Bill Clinton, which created a free trade zone from the North Pole to the Mexican border with Guatemala). Obama fought back, arguing that NAFTA and the Peru FTA were distinct agreements and that while he agreed with Edwards that NAFTA was a failure, he was proud to support the Peru agreement. Should he be?
The Peru FTA, originally envisioned by the Bush administration as an extension of the NAFTA model into continental Latin America, was first proposed in 2003 as part of a whole slate of agreements with the region – Colombia, Panama, Ecuador, and Bolivia, along with Central American nations, were to be brought to the negotiating table as well. In the summer of 2005, the Bush administration secured the approval of a Central American Free Trade Agreement, which also included the Dominican Republic. But after failing to garner sufficient support for a hemispheric-wide Free Trade Agreement of the Americas – demonstrated most clearly at the Mar del Plata Summit in November 2005 – a country-to-country trade approach was adopted as a last hope for expanding the trade agenda in the Americas. Although deals with Colombia and Panama have been negotiated, they have been stalled in the American Congress. Ecuador and Bolivia, having elected populist presidents in recent years, have expressed little interest in negotiating. Thus far, since the passage of CAFTA-DR, only an agreement with Peru has been brought to a vote in the Congress, which accounts for Edwards’ particular (if somewhat odd, given the breathtaking range of issues facing the American public, and thus the next American president, in 2008) focus on this particular agreement.
The Peru agreement initially faced the same Congressional obstacles that the Panamanian and Colombian deals have failed to overcome; in December 2007, however, Congressional leaders reached a compromise with the White House, and the bill was passed. Barack Obama supported the compromise and voted for the agreement, as Edwards repeatedly pointed out. Specifically, Democratic congressional negotiators demanded changes to the labor and environmental standards included in the agreement, provisions which were initially nearly identical to NAFTA labor and environmental standards (despite being nearly 14 years old). It was to these changes that Obama pointed in justifying his support for the trade agreement.
Frankly, these changes do not seem particularly substantial or innovative. One should assume that environmental standards would be improved since the early 1990s, what with the technological innovation, corporate support, and consumer concern that has become increasingly central in the American political arena. One would similarly hope that labor standards would have been tailored to and strengthened on behalf of Peruvian workers.
Furthermore, while there is absolutely no argument to be made against protecting workers’ rights anywhere in the world, the provisions that Obama mentioned do not address the larger labor-related issues inherent in deals like these – namely, that there may be a net loss in American jobs, particularly in industries that are already struggling, such as heavy manufacturing and small agriculture, and that American wages are driven down (and wages in the other country stay down) as this outsourcing takes place.
In fairness, it should be mentioned that Senator Hillary Clinton also supports the Peru FTA, for many of the same reasons that Senator Obama does, and that she was not similarly pressed to explain her views for political reasons, not because they were substantively different. John Edwards was conveniently not a member of the United States Senate to cast a vote on NAFTA or the Peru FTA.
Should Obama have been so proud of this vote, on balance? It is certainly a start that the troubling parts of NAFTA were not allowed to be replicted unchanged, but this cannot be enough. For the United States, as well as for her trading partners in Latin America, a new model for free – and fair – trade must be constructed.