Rangel in Peru: Reasons for Hope on Trade?

By August 6, 2007Trade

House Ways and Means Committee Chairman Charlie Rangel (D-NY) was in Peru yesterday with Trade Subcommittee Chairman Sander Levin (D-MI). (Reuters story.) Rangel’s committee will debate a Free Trade Agreement (FTA) with Peru in September. The Peru agreement is the first to include provisions that each country observe basic labor rights which was inserted at the insistence of the House leadership in a political playoff to organized labor. (USTR summary sheet here.)

Even if Rangel and Levin conclude Peru will live up to its commitments, many members of Congress remain opposed to free trade. Approval of new FTAs and renewal of Permanent Trade Negotiating Authority are in peril. This is not good. Our economy is irrevocably intertwined with the world economy. The last time the Unites States turned inward, with the Smoot-Hawley tariffs of 1930, it worsened and prolonged the Great Depression. After World War II, we championed open markets and free trade. Our economy has benefited enormously.

To be sure, unfair trade practices must be dealt with. But that doesn’t mean backing away from opening foreign markets for U.S. goods. We need to keep in mind that the U.S. exports about $70 billion a month in manufactured goods, which supports a lot of jobs in the U.S., and exports are growing faster than imports. Only a miniscule share of our overall trade deficit – about 6 percent – is with countries where we enjoy free trade agreements. Where U.S. exporters can compete on a level playing field, they more than hold their own.

“We have expressed our concerns, but we leave convinced that both the United States Congress and Peruvian Congress enthusiastically support this agreement,” Rangel said. Let us hope he is right and that Congress will summon the will to support free trade despite the blandishments of the unions.

Join the discussion One Comment

  • lorenzo jara says:

    •It is in the interest of the workers and the nations to have free trade. It is the ‘American way’.
    •Also, it is in the best interest of the long term political/economic goals of the western democracies, both old and young.
    •Cuba and its agents in Venezuela have already infiltrated Bolivia. They are trying hard in Brazil. They feel they have Ecuador in their pocket. Peru is next in their sights.
    •Chile, though in theory a ‘Socialist’ government, is at heart capitalist and will(as always) skillfully seek and attain the best situation for itself; regardless of the nature of their choice and their method.
    •Peru is most vulnerable. An ancient people, rich in natural resources, it is the price of the strategies of the west and the east. Leaderless and without national self confidence, the Peruvian nation is at the mercy of well crafted outside pressures and inside, Machiavelian selfish machinations. There is real probability that an unsuccessful A.Garcia administration would result in a lasting social political tragedy; not to mention the potential looting of the countries riches by opportunistic powers, near and far.
    •Conclusion: The US would strenghten its southern flank, politically, economically and militarily, by taking advantage of the opportunity that history presents her with the expansion of trade with the Peruvian nation. •The sooner the better. While Peru’s macroeconomy is still solid; this is the time to strenghten a still’germinating’ productive peruvian middle class.
    •The support of the Free Trade Agreement with Peru by the US President and Congress will only benefit the interests, goals and aspirations of the American people and her (Inca & hispanic) allies.

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