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Trading away social security in Peru

Thanks to the efforts of Todd and Lori here at GTW, as well as our friends at USAction and Americans for Democratic Action, wading through some serious legal weeds, yesterday we released a new report detailing the threat posed by the Peru FTA to Peru's social security system.

In brief, the FTA's foreign investor protection provisions could undermine any attempt by the Peruvian government to reverse the deeply unpopular attempt to privatize the country's social security system. Because ProFuturo AFP, one of the four major private social security providers in Peru is majority-owned by Citibank, a U.S. corporation, Citibank could sue Peru for extensive damages should the country attempt to re-nationalize the social security system.

Ironically, given the Death Star Deal fails to correct this (easily fixable) problem, it puts pro-deal Democrats in the awkward position of supporting the social security privatization that they so vehemently opposed domestically, as reported last week by Ian Swanson in The Hill.

The full report is available in both English and Spanish (PDF links).

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Very interesting argument. Couldn't Citibank sue Peru in the Peruvian courts anyway though?

I would think that there would likely be some out of court settlement in either case.

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