Congress Okays U.S.-Peru Trade Pact

WASHINGTON — The Senate gave decisive backing yesterday to an American-Peruvian free trade agreement, opening the way for expanded economic ties with the Andean nation and giving the administration a boost in its quest to shore up relations with Latin America. The first bilateral trade deal approved by Congress this year is also the first under a new Democratic formula that requires negotiators to put labor rights and environmental standards on a par with tariff reductions, investor protections, and other key elements of the accord.

The 77–18 Senate vote on the bill implementing the agreement followed a 285–132 House vote last month. The agreement will go into effect after the two countries adjust laws needed to abide by it.

American trade with Peru is small scale, about $9 billion a year, but proponents of the agreement argued that it has real political benefits. "There is a growing division in Latin America today," Senator Grassley, a Republican of Iowa, said, referring to the leftist campaign of President Chavez of Venezuela. Opponents looked to the bigger picture, blaming past trade pacts, particularly with China and Mexico, for rising trade deficits and the loss of American manufacturing jobs. "One of the major reasons that the middle class in the United States is shrinking, poverty is increasing, and the gap between the rich and the poor is growing wider is in fact due to our disastrous, unfettered, trade policy," Senator Sanders, an independent of Vermont, said.