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Viewing cable 06LIMA2373, CONGRESSMAN MEEKS DISCUSSES TRADE ACCORD AND LABOR

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Reference ID Created Released Classification Origin
06LIMA2373 2006-06-14 15:04 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Lima
VZCZCXYZ0000
RR RUEHWEB

DE RUEHPE #2373/01 1651504
ZNR UUUUU ZZH
R 141504Z JUN 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 1005
INFO RUEHBO/AMEMBASSY BOGOTA 3557
RUEHBU/AMEMBASSY BUENOS AIRES 2467
RUEHCV/AMEMBASSY CARACAS 9599
RUEHQT/AMEMBASSY QUITO 0460
RUEHLP/AMEMBASSY LA PAZ JUN SANTIAGO 0650
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
UNCLAS LIMA 002373 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
USTR FOR AUSTR EEISSENSTAT AND BHARMAN 
DEPT FOR WHA/AND, EB/TPP, WHA/EPSC 
COMMERCE FOR 4331/MAC/WH/MCAMERON 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EINV PGOV KIPR PREL PE
SUBJECT: CONGRESSMAN MEEKS DISCUSSES TRADE ACCORD AND LABOR 
ISSUES 
 
 
1. (U) Summary:  During his codel to Peru, Congressman 
Gregory Meeks met with representatives from the business 
community and labor organizations.  The business leaders 
laid out a good case for ratifying the accord, citing the 
probable job creation in the formal sector.  The labor 
leaders said that they are not opposed to trade, but had 
problems with the way the agreement had been negotiated and 
with Peru's current labor regime. End Summary. 
 
2. (U) Congressman Gregory Meeks visited Peru on May 26-28 
to meet with Peruvian leaders to discuss the U.S.-Peru trade 
agreement.  His meetings with President Toledo, Prime 
Minister Kuczynski and Afro-Peruvians are covered in 
septels.  Ambassador Struble, Congressman Meeks' Legislative 
Director, Sophia King, and Emboffs also accompanied the 
Congressman to the meetings. 
 
3. (U) Congressman Meeks met with eight members of the 
business community at the Ambassador's residence: Jose 
Miguel Morales, President of the Confederacin Nacional de 
Empresas Privadas (CONFIEP), George Schofield, General 
Manager of the Sociedad Nacional de Industrias, Jos Pep 
Chlimper, President & CEO of Corporacion Drokasa-Agrokasa, 
Aldo Defilippi, Executive Director of the American Chamber 
of Commerce, Ernesto Montoya, Legal Counsel of Nextel, 
Fernando de la Flor, General Manager of McDonalds, Mariela 
Alcalde, General Manager of FedEx, and Guillermo Ferreyros, 
General Manager of Maple Gas. 
 
 
 
Labor Standards - Business Perspective 
-------------------------------------- 
 
4. (U) Congressman Meeks raised the criticism he had heard 
in Washington that businesses were sub-contracting rather 
than hiring permanent employees.  The business 
representatives responded that sub-contracting was a reality 
of the global economy.  They added that Peruvian law does 
not permit sub-contracting the "core" business in most 
industries.  It is, however, allowed in sectors such as 
farming, where the work is cyclical.  These industries hire 
subcontractors to cover peak labor demands. 
 
5. (U) Congressman Meeks then raised the issue of 
enforcement of labor laws, reporting the criticism that even 
where there were adequate legal protections, the laws were 
not being enforced.  Several of the business representatives 
responded that the reality was that Peruvian exporting 
companies are being held to the highest international 
standards by their customers.  The U.S. companies are 
demanding standards higher than those required under 
Peruvian law.  In effect, the U.S. clients were acting as 
the enforcers of high standards. 
 
6. (U) The Congressman pressed the group on the criticism he 
had heard that workers were not being allowed to organize. 
The businesspersons denied this, pointing out that there 
already existed many large unions. 
 
7. (SBU) If the agreement is not implemented and the ATPDEA 
preferences expire, the Congressman then asked, what would 
be the impact on the economy.  Asparagus and mango farmer 
Pepe Chlimper reported that there are 250,000 jobs directly 
related to ATPDEA, and many of those jobs, particularly in 
the textile and apparel industries, would be lost if the 
preferences lapsed and the FTA was not in place.  Mariela 
Alcalde, the General Manager of FedEx in Peru, reported that 
her company is already seeing a decline in shipments by 
textile producers because of the uncertainty over which 
tariff rate would apply in the near future. 
 
Positive Impacts - More Jobs 
---------------------------- 
 
8. (U) The businesspersons spoke at length about the 
positive impact the PTPA would have on the economy.  The 
PTPA will create jobs in the formal sector, since only 
companies in the formal sector can export.  Moreover, 
 
exporting jobs tend to pay more, and formal sector jobs 
benefit from access to government services, such as social 
security.  Government revenues will increase since formal 
sector businesses pay taxes. 
 
9. (U) The Congressman closed the session by telling the 
group that he had just met with a group of Afro-Peruvians, 
and that Afro-Peruvians were being discriminated against. 
He encouraged the business representatives to provide jobs 
and training opportunities for them. 
 
Labor Perspective - Secrecy and Sub-Contracting 
--------------------------------------------- -- 
 
10. (U) Congressman Meeks met with Peruvian labor leaders to 
discuss their concerns.  Present were Secretary General Juan 
Jose Gorritti of the General Confederation of Peruvian 
Workers (CGTP), AFL-CIO Solidarity Center Representative 
Oscar Muro, and Luis Valer, Vice President of the United 
Confederation of Peruvian Workers (CUT-Peru).  The CGTP is 
the country's largest labor federation with 1.5 million 
members. 
 
11. (SBU) Juan Jose Gorritti led off the discussion and 
spoke for the group when he described labor's disappointment 
with the Toledo Government and labor's reluctance to support 
the PTPA.  He noted that labor conditions had improved 
dramatically since the Fujimori dictatorship, but there had 
not been much progress recently. 
 
12. (SBU) Gorritti charged that under present conditions, 
workers can be fired from private enterprises "without 
reference to cause."  According to Gorritti, this, in 
addition to high levels of unemployment, makes union- 
formation a difficult task.  Gorritti also charged that the 
millions of new jobs that the Toledo administration created 
are not solid jobs with good benefits, but temporary work 
that is highly vulnerable. 
 
13. (SBU) Gorritti criticized the GOP's handling of the FTA 
negotiations, which he claimed were conducted in secret. 
Gorritti stressed that the agreement should be approved by 
plebiscite.  He questioned the GOP's right to conclude an 
FTA with both a lame duck president and an unpopular lame 
duck Congress. 
 
14. (SBU) Oscar Muro of the AFL-CIO and Luis Valer of CUT- 
Peru echoed Gorritti's complaints about both the GOP's 
alleged lack of moral authority to conclude an FTA and the 
scarcity of information for the populace.  He cited the 
booming agro-export sector where, he alleged, during an 
inspection of 62 farms last year, only four fulfilled the 
norms for labor.  In addition, Muro complained about the 
seasonal/rotating nature of the agricultural labor force, a 
fact that allows employers to only gradually extend contract 
time for employees, enabling them, he charged, to weed out 
potential union organizers or anyone who would not accept 
the low wages and precarious job stability under which they 
are forced to work. 
 
Comment - The Right Voices 
-------------------------- 
 
15. (U) Congressman Gregory Meeks received a very good and 
broad briefing on the PTPA, democracy and other issues from 
some of the most important sectors.  Based on information 
gathered on his trip, the Congressman pledged to stimulate 
the debate on the PTPA in Congress.  He indicated his 
willingness to encourage other Congresspersons to travel to 
Peru to discuss the trade accord, noting that he would like 
to return with representatives of the Congressional Black 
Caucus during the July 4 recess.  Post encourages these fact- 
finding visits and looks forward to working with the U.S. 
Congress to promote a clear understanding of how the PTPA 
would benefit both the U.S. and Peru. 
 
16. (U) This cable was not cleared by Congressman Meeks' 
office. 
 
STRUBLE