WASHINGTON--The Senate gave its approval yesterday to a free trade pact with Peru that U.S. insurers expect will make it easier for them to do business in that country.

The agreement, officially known as the United States-Peru Trade Promotion Agreement, was approved by a vote of 77-18.

All but one of the nay votes, from Sen. Jon Kyl, R-Ariz., came from Democrats and Independent Sen. Bernard Sanders of Vermont.

Marc Racicot, president of the American Insurance Association, praised the agreement as "vital for both countries" and establishing a clearer landscape for insurers looking to operate in South America.

"This Free Trade agreement with Peru will provide for more transparent regulation thereby presenting more opportunity for U.S. insurers to enter emerging markets outside our borders," he said.

Mr. Racicot added, "It is an extremely important building block in the effort to expand the nation's capacity to export goods and services all over the world, which in turn benefits American workers and families."

His comments echoed Senate floor remarks by Sen. Charles Grassley, R-Iowa, the ranking minority member of the Senate Finance Committee. In urging his fellow senators to approve the pact, Sen. Grassley said that such agreements "foster transparency and increased respect for the rule of law in international business transactions."

President Bush said the treaty will "level the playing field for American exporters and investors and will expand an important market in this hemisphere for U.S. goods and services, which will help strengthen economic growth and job creation in the United States."

The president added, "I look forward to signing this legislation into law and urge Congress to promptly consider and approve our other pending free trade agreements, starting with Colombia, which would be important to the stability of the region, and including Panama and South Korea."

Those agreements also have the support of the AIA, and Mr. Racicot said he hopes the vote will establish momentum for their passage, calling them "important to both the insurance industry and the U.S. economy as a whole."

Among those voting against the treaty was Senate Majority Leader Harry Reid, D-Nev., who criticized the administration for what he characterized as a one-dimensional trade policy with Latin America that focused solely on free trade agreements.

"We have cut development assistance, eliminated programs and repeatedly overlooked our neighbors to the South," he said. "In the place of a robust and comprehensive policy of engagement, exchange, aid and a variety of trade tools, we have a simplistic, singular policy of free trade agreements."

The treaty with Peru, Sen. Reid noted, is the first to contain an enforceable provision requiring both countries to adhere to internationally recognized labor standards.

While saying he sees this as "very important," Sen. Reid said he remains generally opposed to free trade agreements because of their impact on American workers.

"While we've approved new FTAs with 12 different countries since 2001, we still do not have an adequate trade adjustment assistance program," he said.

According to Sen. Reid, "Studies show that those workers who lose their job due to trade on average see a substantial cut in wages in their next job. We need to do a better job of ensuring that these workers do not get left behind before we move forward with more and more agreements."

Sen. Reid further criticized what he said was the Bush administration's failure to ensure that other countries live up to their obligations.

"While we've approved all of those new FTAs, the Bush administration has absolutely fallen down on the job when it comes to enforcement of trade agreements," he argued. "The Clinton administration brought an average 11 cases per year against foreign trade barriers at the WTO. The Bush administration has brought only a few more than 11 cases TOTAL over the last 7 years."

Despite the criticism from Sen. Reid, Senate Republican Leader Mitch McConnell, R-Ky., noted that "a clear bipartisan majority in both the House and Senate approved the U.S.-Peru Trade Promotion Agreement because it benefits U.S. economic growth."

He added that "not only will the agreement reinforce the free markets of Peru, it will help grow jobs here at home and continue to open the global marketplace to American products."

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U.S.-Peru Pact Gets Insurer Thumbs Up

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