WASHINGTON — The Senate overwhelmingly passed a free trade agreement with Peru Tuesday and sent the first trade agreement of the year to President Bush's desk for his signature.
The trade accord with Peru, which the Senate passed on a vote of 77-18, would make duty free benefits permanent and provide certainty to companies manufacturing apparel in Peru.
Apparel importers brought in $857.6 million worth of apparel and textiles from Peru for the year ended Sept. 30, under a U.S. trade program that provides a duty free advantage to companies making apparel in Peru, Ecuador, Colombia and Bolivia, but Congress must vote to renew that program periodically.
Importers are also pressing Congress to pass a more permanent trade pact with Colombia, but there is strong opposition to it and Democratic leaders have said they will push it off until next year.
The textile industry remained divided over Peru, which represents a small market for U.S. producers that exported $24 million worth of fabrics and yarns to the country in the last 12 months.
Senate leaders moved ahead with the vote on Peru despite some opposition from organized labor and a group of Democrats, including freshmen, who were elected on platforms to minimize the impact of international trade on companies and workers in their states.
Sen. Max Baucus, chairman of the Senate Finance Committee, whose panel shepherded the Peru accord to the floor, said it represents a new model with stronger labor and environmental protections. Baucus and House leaders reached an agreement with the Bush administration in May to strengthen workers' rights and environmental standards in the Peru deal, as well as in pending trade pacts with Colombia, Panama and South Korea.
"Some may criticize this agreement as not going far enough," said Baucus during his floor speech Tuesday. "But these [stronger and enforceable labor and environmental] provisions are, in fact, exactly what many of us in Congress and in the labor and environmental movements have been seeking to include in trade agreements for decades."
Baucus drew the line on moving other free trade deals, however, noting that Congress must pass an overhaul of the Trade Adjustment Assistance program, which gives aid to workers who lose their jobs because of foreign competition, before taking up the other three pending trade deals.Democrats who opposed the Peru pact argued on the Senate floor for trade deals to be put on hold until issues with China's trade and currency policies are addressed and the record trade deficit with that country is narrowed. The House passed the trade agreement last month.