June 15, 2006

RE: Oppose Free Trade Agreements for Oman and Peru

Dear Senator:

The United States Trade Representative has indicated that she will soon ask Congress to approve both the Oman and the Peru Free Trade Agreements (FTA).  On behalf of the 6 million members of the Change to Win unions, I strongly urge you to oppose both of these Agreements, which follow the same failed trade policies of NAFTA and CAFTA.

Change to Win believes in a fair trading system that benefits both U.S. workers and workers across the globe.  Unfortunately, the trade agreements that have been negotiated by the United States were not based on such principles; instead those agreements would benefit multinational corporations at the expense of workers.  We hope to someday be able to support a free trade agreement, but it must be a fair one, and as long as the current failed NAFTA and CAFTA model continues to be recycled this will not be possible.

Like CAFTA, the Oman FTA and the Peru FTA simply require that each country enforce its existing labor laws. The only recourse for a country not enforcing its own labor laws is a fine capped at $15 million annually. This is in stark contrast to the steep fines, trade sanctions, and even jail sentences that can be levied under the intellectual property provisions of the agreement.  There are also no safeguards in the agreement to prevent countries from explicitly weakening their labor laws.

The lack of effective labor provisions in the agreements is particularly significant in light of a recent New York Times article revealing massive human rights abuses in Jordan -- a country with which the United States has a free trade agreement.  These violations include human trafficking, forced labor with abusive working conditions, and widespread failure to pay back wages.  Even more troubling is the fact that the Oman FTA and the Peru FTA contain weaker labor provisions than what was negotiated in the Jordan FTA.

We also believe Congress should not support a trade agreement with a country that does not even permit workers to unite in unions or provide real collective bargaining rights, which is the case in Oman. The labor laws in Oman are not in compliance with the Core International Labor Organization (ILO) standards, and the laws and practices themselves are of great concern. In Oman, instead of unions there are "worker representative committees" over which the government has extreme oversight and control.  These committees are not able to meet without having a government representative and/or employer representative present in the room. 

While we appreciate the efforts that are being made by the Ways and Means Committee and the USTR to have the Omani government improve its labor laws, it is important to keep in mind that even if the Sultan of Oman agrees to strong labor protections, due to the way the agreement has been negotiated there is nothing to  prevent him or a future Sultan from weakening the laws later on.

There are also many deficiencies in Peru's labor laws, which make them far from being ILO compliant. Moreover, according to Peru's National Institute of Statistics and Information an estimated 2.3 million under-aged children worked in 2005. 

Peruvian President Alejandro Toledo several months ago indicated publicly that his nation would be willing to include enforceable Core ILO standards as the required minimum in the Peru FTA.  Unfortunately, the U.S. chose to ignore President Toledo and has kept the same flawed CAFTA model, not only with respect to the core ILO standards, but also throughout the entire Agreement. Congress should demand that USTR raise the bar especially in light of President Toledo's comments.

We are also concerned with the Oman FTA and Peru FTA provisions on investment, procurement and services, which would significantly constrain the U.S. government and the Peruvian and Omani governments from regulating in the public interest. The Oman and the Peru FTAs expand the rights of foreign investors beyond even NAFTA and CAFTA, allowing private and state-owned foreign entities to bring disputes challenging almost any U.S. regulation or decision including as it pertains to construction contracts and ports. 

Unfortunately, by using the same failed model as we saw in CAFTA, and actually making it worse, the USTR has failed to negotiate an agreement that will in fact better the lives of workers and the countries involved. We ask that you oppose both the Oman FTA and the Peru FTA.  If you have any questions please feel free to contact Frank Clemente at Change to Win at 202-721-6047.

Sincerely,

Anna Burger
Chair