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Viewing cable 07LIMA884, LABOR LEADERS SKEPTICAL ABOUT GARCIA, FTA, LABOR

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Reference ID Created Released Classification Origin
07LIMA884 2007-03-21 12:10 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Lima
VZCZCXYZ0018
PP RUEHWEB

DE RUEHPE #0884/01 0801210
ZNR UUUUU ZZH
P 211210Z MAR 07
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC PRIORITY 4528
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 4470
RUEHBU/AMEMBASSY BUENOS AIRES PRIORITY 2828
RUEHCV/AMEMBASSY CARACAS PRIORITY 0234
RUEHLP/AMEMBASSY LA PAZ MAR 4120
RUEHMN/AMEMBASSY MONTEVIDEO PRIORITY 9135
RUEHQT/AMEMBASSY QUITO PRIORITY 1094
RUEHSG/AMEMBASSY SANTIAGO PRIORITY 1181
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 4383
RHMFIUU/CDR USSOUTHCOM MIAMI FL PRIORITY
RUEHC/DEPT OF LABOR WASHINGTON DC PRIORITY
UNCLAS LIMA 000884 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ELAB ETRD PGOV PHUM PE
SUBJECT: LABOR LEADERS SKEPTICAL ABOUT GARCIA, FTA, LABOR 
LAW 
 
REF: A. LIMA 33 
 
     B. LIMA 167 
     C. LIMA 667 
 
1. (SBU) Summary: During a March 12 Embassy event, Peruvian 
labor leaders claimed that President Garcia had betrayed the 
trust of organized labor by reneging on key campaign 
promises.  They were skeptical that the benefits of the Peru 
Trade Promotion Agreement (PTPA) would "trickle down" to the 
poor, and believed the General Labor Law did not adequately 
protect worker rights.  Speaking about the government's 
effort to defang the teacher's union (SUTEP), they said it 
revealed an anti-union bias.  Comment: Many observers have 
applauded Garcia's pro-growth policies, but labor's 
skepticism about how wealth and benefits are distributed go 
the heart of the challenges facing his government.  End 
Comment and Summary. 
 
2. (U) DCM Phyllis Powers hosted a reception for 21 labor 
leaders as an informal follow up to Deputy USTR John 
Vereneau's meetings with union officials, business leaders 
and government representatives, including President Garcia 
and Labor Minister Pinilla.  Participants included 
representatives from Peru's three largest labor unions (CGTP, 
CTP, and CUT), as well as smaller confederations representing 
judicial workers, healthcare professionals and performing 
artists. 
 
Garcia Reneges on Promises 
-------------------------- 
3. (U) Labor leaders criticized President Garcia for 
betraying their trust by campaigning on a labor friendly 
platform only to cater to business interests once assuming 
office.  Specifically, they said Garcia had promised a return 
to the 1979 Constitution, in which strong labor protections 
such as the right to stable employment were enshrined, but 
had done nothing to fulfill that promise since taking office. 
 (Note: Even if the government wished to push for it, there 
is little Congressional support to return to the 1979 
document.  End Note.)  They also noted that Garcia had 
pledged to reopen negotiations on the PTPA but had since 
become a strong supporter of the agreement as is.  Finally, 
they said the president had promised to push for a more 
labor-friendly General Labor Law but had since (in their 
view) taken the side of business on this sensitive issue. 
 
Down with the FTA and the General Labor Law 
------------------------------------------- 
4. (U) Most labor representatives were sharply critical of 
the PTPA.  Many openly doubted that the agreement's benefits 
would "trickle down" to workers and believed instead that, by 
favoring powerful producers over unprotected workers, it 
would widen the gap between rich and poor.  The agricultural 
workers union was particularly concerned the agreement would 
open Peru to potentially devastating competition from U.S. 
agricultural conglomerates.  Some leaders saw calls by U.S. 
Congressional representatives to strengthen the labor 
protections in the agreement as a ray of hope, and several 
acknowledged that as long as the agreement remained 
unfinished organized labor would maintain leverage to 
negotiate its interests in the General Labor Law and 
elsewhere. 
 
5. (U) Many labor representatives also believed that the 
General Labor Law, currently stuck in Congress's labor 
committee (refs), failed adequately to protect workers' 
rights.  Several characterized as unfair the widespread 
criticism that organized labor sought only to represent the 
small fraction of workers in Peru's formal sector, and said 
they wished to expand labor protections for all workers.  In 
this connection, they noted their interest in seeing the law 
reduce or eliminate the practice of rampant subcontracting, 
which resulted in a majority of workers in many sectors 
enjoying few or none of the basic labor rights guaranteed to 
full formal employees ("en planilla").  In their view, the 
proposed law did not do this, did not guarantee sector-wide 
organizing and did not provide protections for informal 
workers, which is why labor protections in it needed to be 
strengthened. 
 
Breaking SUTEP Equals Anti-Union Bias 
------------------------------------- 
6. (U) Commenting on the GOP's (so far successful) attempt to 
break the stranglehold of the Maoist national education union 
(SUTEP) over the education system, several labor leaders said 
they thought it reflected the government's anti-union bias. 
Although few were sympathetic with the education union's 
radical politics, many worried that the government may be 
emboldened to take on other unions in the future.  In 
response, they said, many unions were mounting membership 
drives and information campaigns for their members. 
 
Comment: Labor's Rejectionism Reflects Broader Challenge 
--------------------------------------------- ---------- 
7.  (SBU) Embodying in some cases the entrenched views of an 
anachronistic Latin American left, labor leaders were 
predictably rejectionist in their views of Garcia's moderate 
pro-growth policies and the benefits of the PTPA.  Where they 
see campaign promises discarded, others see a president who 
has learned (the hard way) the importance of economic 
pragmatism -- the need for free trade, a labor law that 
favors growth, and unions that seek to represent workers 
rights and not radical and untenable political positions. 
Still, labor's skepticism about how wealth and benefits are 
distributed, and particularly how the underrepresented poor 
and the working class will fare under the new rules, go to 
the heart of the challenges facing the Garcia government. 
STRUBLE