WASHINGTON — President Bush signed a free-trade agreement with Peru into law Friday at a ceremony with his Peruvian counterpart, Alan Garcia, and both used the occasion to promote a more controversial deal with Colombia.
The event represented a victory lap for onetime populist firebrand Garcia and seemed to seal his conversion to cheerleader for open markets and free trade. As president in 1985-1990 he'd nationalized banks, raised trade barriers and presided over a hyper-inflationary economic collapse. He was initially skeptical to the agreement largely negotiated by his predecessor but then embraced it with gusto.
The Peru pact passed Congress easily after Republicans and Democrats hammered out a compromise that included more labor and environment provisions, but Democrats have said they won't pass a similar pact with Colombia for now, citing human rights concerns. The Peru deal is the first to become law under a Democratic-led Congress and comes at a time when many Americans are uneasy with free trade.
Without naming Venezuelan President Hugo Chavez, a strong critic of free trade with the United States and an outspoken populist, both presidents made it clear whom they had in mind when they addressed a gathering of top Bush administration officials, diplomats and lawmakers at the Dwight D. Eisenhower Executive Office Building.
"Peru and the United States are strong partners, and today we're making that partnership even stronger," Bush said, before urging Congress to pass the Colombia and Panama trade agreements.
"The champions of false populism will use any failure to approve these trade agreements as evidence that America will never treat other democracies in the region as full partners," he said.
"It's a great day for democracy and social justice and freedom," Garcia said. "On the contrary, it's a bad day for . . . those who (are) against democracy and free trade."
Unusual for a Latin American leader, Garcia was exuberant in his praise of Bush.
"I wish to express my sincere recognition to your excellency, the great supporter of the treaty and a true — a real, true ally and friend of the Peruvian people," Garcia said.
Chavez has lampooned Bush as an "imperialist" and a "devil," and he called Garcia a "thief" during Peru's 2006 presidential campaign.
The pact immediately lowers trade tariffs on most U.S. exports to Peru. Annual bilateral trade with Peru is small — around $9 billion — but the agreement carries symbolic weight, with the White House hoping to build momentum for the pending trade agreements.
"The hurdles that are claimed to delay the agreement with Colombia will be swiftly solved if the treaty is approved, creating more jobs and investment and development," Garcia said.
At a U.S. Chamber of Commerce speech earlier, Garcia touted his nation as a politically stable venue, with predictable monetary and fiscal rules.
He said there was a race between two models in Latin America, one based on markets and democracy and the other "inward-looking, not linked to democracy and the renovation of political leadership," a reference to attempts by Chavez and a close ally, Bolivian President Evo Morales, to change their constitutions to allow for indefinite re-elections.
"When you see what is happening in neighboring countries, you will come to Peru; you are welcome," he said. "It is the takeoff moment for Peru."
"What a change," Eric Farnsworth, with the pro-business group Council of the Americas, said of Garcia's conversion. "I think his efforts today have all the more credibility because he's seen close up the results of the other model."