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U.S. And Peru Ink Free Trade Deal

President Bush signed legislation Friday to implement a U.S.-Peru free trade agreement the administration hopes will not only strengthen ties with the Andean nation but also improve relations throughout Latin America.

"The bill will help increase opportunities for workers, ranchers, farmers and business in both our countries," Bush said, standing with Peru's President Alan Garcia.

In calling on Congress to now also approve pending free-trade agreements with Colombia and Panama, Bush - without naming names - jabbed leftist leaders like Venezuela's President Hugo Chavez, an outspoken antagonist of Washington.

"Across this hemisphere, people are watching what Congress will do. They're watching to see what this Congress will do when it comes to how we treat our friends," Bush said. "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. Those who espouse the language of false populism will use failure of these trade agreements as a way of showing America isn't committed to our friends in the hemisphere."

Bush said passage of the other trade agreements would "send a strong message that the United States of America is committed to advancing freedom and prosperity in our neighborhood."

Reinforcing the point, he said that ambassadors from Colombia and Panama, and also South Korea, which also has a pending trade agreement with the U.S., attended the event at the White House's invitation.

Standing at Bush's side, Garcia gave the president's message a boost.

In a rare move for a visiting leader, he made the case on behalf of his neighbors. Noting that relations between Washington and Latin America have been "plagued by misunderstandings" recently, he said expanded trade with his country and others around it like Colombia and Panama offers "a crucial opportunity" to turn things around.

"Today, I think, begins a new era," he said. "It's a bad day for authoritarianism and those who are against the democracy and free trade."

Bush called trade a key driver of economic growth and helps lift people from poverty. "When we expand trade, America advances our deepest values, as well as our economic interests," he said.

He said Peru is one of the fastest-growing economies in the Western Hemisphere, expanding last year by more than 7.5 percent. "Wish he'd lend us a couple of percent," the president said.

The agreement will go into effect as soon as the two countries adjust laws needed to abide by it, a process expected to take a few months. It is the first bilateral trade deal under a new agreement between Democrats and the administration that requires negotiators to put labor rights and environmental standards on par with tariff reductions, investor protections and other key elements of the accord.

It would immediately eliminate duties on 80 percent of U.S. consumer and industrial product sales to Peru and most agriculture goods, and gradually phase out all tariffs. Almost all Peruvian goods already enjoy duty-free status under trade breaks the United States extends to Andean nations to boost their economies and provide alternatives to illicit drug production.

U.S. trade with Peru is small scale, about $9 billion a year, but proponents of the agreement argued - like Bush and Garcia - that it has real political benefits. The accord has strong backing from business groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers.

But it is opposed by labor and other groups who say the tougher labor and environmental standards won't be enforced and that Peruvian peasants won't be able to compete with cheaper American farm goods.

Lori Wallach, director of Public Citizen's Global Trade Watch Division, said the pact "will further damage U.S. relations in Latin America, the devastating outcomes of similar agreements are fueling anti-American sentiment."

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