Senate Approves Peru Trade Agreement

Earlier today, the US Senate voted to approve the Peru Free Trade Agreement, following in the House of Represenatatives' footsteps. Both Senators Ron Wyden and Gordon Smith voted in favor of the deal.

From the New York Times:

The Senate gave overwhelming final approval Tuesday to a trade agreement with Peru, with most Democrats joining nearly all Republicans in handing President Bush an unusual victory but leaving prospects unclear for other trade deals.

The 77-to-18 vote sends the bill to President Bush for his signature.

As it had in the House, the Peru deal exposed a rift among Democrats, with 29 Senate Democrats voting yes and 17 voting no. In the House, where the vote last month was 285 to 132, with 109 Democrats were in favor and 116 opposed.

As in the House, Democratic supporters said they were comfortable with the deal because the House Speaker, Nancy Pelosi, negotiated concessions from President Bush in May extending protections for workers and the environment in Peru. Democratic supporters also said that the deal opens up markets for American exports.

But Democratic critics argued that the worker and environmental protections stand little chance of being enforced by the administration, and that the Peru deal is another example of free trade policies that they argue have cost three million jobs in the last six years and caused a stagnation of wages for the middle class.

After the vote, US Senate candidate Steve Novick voiced his disapproval of the agreement:

"Today's Senate vote to continue expanding the failed free trade system that has cost this nation millions of jobs is deeply disappointing. With the record of NAFTA, CAFTA, permanent trade relations with China, the WTO, and a host of other trade agreements, it couldn't be clearer that more unfair trade pacts are not what we need to help the working people of this nation.

"The Peruvian trade agreement does not have adequate requirements that Peru abide by international labor standards that protect workers, with only weak enforcement provisions for violations. Provisions, I might add, that are much weaker than the steep fines, sanctions and jail time that can be levied under the agreement to protect the patents of multinational corporations. I used to enforce federal environmental laws and I know that the severity of penalties has a direct relation to whether a law will be respected. In effect, this agreement says that the money people have more rights than the working people.

"This agreement reflects the same failed trade model of putting profits first that has been undermining this nation for decades. I know we can do better and as Oregon's next Senator I won't vote for any trade agreement that does not include proven safeguards for American workers, as well as enforceable requirements that ensure we compete on a level playing field when it comes to labor and environmental regulations."

Speaker Jeff Merkley, also a U.S. Senate candidate, had also declared his opposition to the trade agreement last month:

“Democrats in Congress have done a commendable job of forcing the Bush administration to renegotiate this deal,” Merkley said. “But unfortunately, the concessions they got are not enough to offset the negative impact this deal will have on American jobs.” ...

“The Peru trade deal still sticks too closely to NAFTA. With the loss of thousands of Oregon jobs since NAFTA passed, we have to move away from using it as a model,” Merkley said. “Future trade negotiations would be wise to ditch NAFTA as a starting point. Right now, the Peru agreement just isn’t good enough for American working families.”

Discuss.

  • Bill Bodden (unverified)
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    This is the Senate vote

  • Urban Planning Overlord (unverified)
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    Score one for Gordon Smith. On this one issue at least, he knows what a positive vote means in terms of positive outcomes for Oregon working men and women. Not to mention Peruvian working men and women.

    And shame on Merkley and Novick, who would sell Oregon's economic health down river for Union campaign contributions and plaudits from Chomskyite economic illiterates.

  • Urban Planning Overlord (unverified)
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    For a much more persuasive argument for free trade than I can provide, try Ben Bernanke.

  • Urban Planning Overlord (unverified)
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    And thank you, Ron Wyden, for eschewing the easy road of partisanship and casting a vote for working class Oregonians AND Peruvians.

  • John Reed (unverified)
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    UPO, What positive outcomes are you expecting to see from this trade deal? More destruction of our manufacturing base? A longer period of stagnant wages for working America? Increased levels of income inequality?

    It is so disappointing to see how many progressives are willing to regurgitate right wing talking points when it comes to neo-liberal trade deals. The bottom line is that trade policies designed to put American workers in direct competition with lower paid workers in the developing world are bad for American workers. This is especially true when these same trade pacts maintain protections from competition for wealthier Americans. This should be obvious even to all those Chomskyite economic illiterates out there.

  • Tom Civiletti (unverified)
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    John Reed, would you define "Chomskyite economic illiterates", or did you not have a definition and just like the sound of the phrase?

    If you were referring to Noam Chomsky, he has said this about trade:

    Globalization that does not prioritize the rights of people will very likely degenerate into a form of tyranny, perhaps oligarchic and oligopolistic, based on concentrations of tightly-linked state-private power, largely unaccountable to the public. Global Agenda

    and:

    The so-called "free trade agreements" are one such device of undermining democracy. They are designed to transfer decision-making about people's lives and aspirations into the hands of private tyrannies that operate in secret and without public supervision or control. Z Magazine

  • Tom Civiletti (unverified)
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    Or perhaps you were making sarcastic comment on Urban Planning Lord's screed. As for him, the arguments in favor of free trade are well known and fail to address several important, well-supported concerns. The Chomsky links above refer to a few. A Google search on "Fair Trade" will find about 289,000 pages to explore for more.

    Excuse me if I do not accept Ben Bernanke as a good faith arbiter of the interests of multinational corporations and workers, water drinkers and air breathers.

  • John Reed (unverified)
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    Tom,

    I was in fact being sarcastic. Thanks for the quotes and good point about Bernanke. After all, this guy has a pretty poor track record when it comes to making economic judgments.

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    Naomi Klein, (http://www.naomiklein.org) columninst for The Nation and author of The Shock Doctrine, was on KPOJ this morning discussing the failure of free trade and the erosion of the working class. She will be speaking this Friday Dec 7 at the First Unitarian Church on SW12th in Portland. No charge for admission (but make a donation.) I imagine the Peru deal will among the topics or questions she addresses.

  • SFBakker (unverified)
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    When you look at the breakdown, both senators from Oregon and both senators from Washington voted for AFTA. In the House, Blumenauer, Walden and Hooley voted for it, Wu and DeFazio against, which isn't too schocking.

    In Washington state, all congressmen voted FOR it except Republicans McMorris-Rodgers and Hastings. Mainly because prior Peruvian trade agreements have decimated the asparagus industry in those districts.

    So, to me, Merkley and Novicks comments do smack of election cycle posturing. But that aside, I wonder how likely either one of them would have caved on their position if actually in office.

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    Naomi Klein, (http://www.naomiklein.org) columninst for The Nation and author of The Shock Doctrine, was on KPOJ this morning discussing the failure of free trade and the erosion of the working class. She will be speaking this Friday Dec 7 at the First Unitarian Church on SW12th in Portland. No charge for admission (but make a donation.) I imagine the Peru deal will among the topics or questions she addresses.

  • Urban Planning Overlord (unverified)
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    Glen HD28-1: If the "free trade" you're talking about:

    1) the concept that is rapidly making the two most populous and traditionally impoverished nations of the world into economic powerhouses, with rapidly decreasing rates of poverty, disease, infant mortality, etc? (China and India).

    2) the concept that has not reduced employment in the U.S. (our unemployment rate is the same rate as it was 40 years ago), because it has replaced jobs exported overseas with new jobs, many of them better paying and more economically productive?

    3) the concept that has produced lower consumer prices for all Americans, putting more discretionary income into our pockets, rich and poor?

    Or are you talking about something else?

  • andy (unverified)
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    UPO - you're fighting the good fight but I'm afraid that it is a stacked deck on this site. For some reason, the subject of free trade makes liberals stupid. Nobody really understands this strange reaction but it has been observed for many years. Some suspect it is due to the fact that the Democratic party whored themselves out to unions years ago but that doesn't fully explain the issue. After all, the longshoremen union is very strong, very rich and an obvious beneficiary of expanded trade. The abhorance of trade on the part of liberals can't be explained with data since it is rather obvious that wealth continues to increase in the USA and that trends for employment, mfg jobs, etc are generally positive and/or healthy over the long run. So we still have this mystery on our hands, why does the subject of free trade make liberals stupid? Just one of those things we'll most likely never understand.

  • John Reed (unverified)
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    Andy,

    Your right, real liberals don't understand free trade. We don't get it because there is nothing to get - it’s a meaningless term meant to market a particular set of trade policies.

    Here is a good article that refutes the conventional wisdom on current trade policy, which some on this site are parroting.

  • genop (unverified)
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    It's telling that Hillary was absent. No position, no ammunition. How astute?

  • Bill Bodden (unverified)
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    This is from a farmer in Mississippi. He doesn't think much of the Peru Trade Agreement either.

  • Tom Civiletti (unverified)
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    John Reed,

    I apologize for not reading up-thread before getting snide.

    It's interesting that most progressives opposed to "free trade" agreements are more, not less, inclined to internationalism than treaty boosters. This issue is not about xenophobia, it's about manipulation of markets to further enrich those already able to buy influence.

    And this should not be left out of discussion:

    The prospect of extreme inflation in the cost of energy, particularly liquid fuels, makes long distance transport of low value products a dead end. The dismantling of local production capability in response to the pressures of globalism leaves us in an extremely vulnerable position. Fuel prices can raise much more quickly than production ability can be reconstituted. The high cost of future energy will make this reversion even more difficult. Every time a berry field is paved over under pressure from Latin American imports, every time sophisticated machinery is sold for scrap value as Chinese imports flood in, we move closer to impoverishing our children and grandchildren, not to mention our own retirement.

  • Harry Stark (unverified)
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    The passage of this trade agreement officially ends all credibility the Congressional Democrats have on the trade issue. At least Casey, Brown, Whitehouse, and Tester (all of which replaced Free Traders) stuck to their guns and voted against it.

    Ron Wyden, I hope, will get a primary opponent or a pro-working family Republican running against him in 2010. He is nothing but a bought and paid for vote in the Senate. One expects such poor judgement from Gordon Smith, but from a supposed pro-working family Senator, it is simply disappointing.

    -Harry Stark

  • trishka (unverified)
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    i'm disappointed that wyden voted for this. he's definitely a glass-half-ful senator (maybe a little more than half). overall pretty good, but not everything i'd like to be that's for sure.

  • Urban Planning Overlord (unverified)
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    Bill Bodden: Are the good citizens of Mississippi supposed to pay more for their food so that this guy can make a living? How many poor Mississippians will have an incrementally poorer diet because they can't afford as much nutritious food?

    As for food safety - the answer is better inspection procedures, something we should be doing for all goods, imported or domestically produced. I expect a future Democratic administration to do a better job than the current one on this topic.

    As for rising energy costs - if the cost to bring low-value goods into this country goes up and makes these goods uneconomical, so be it. Energy costs are part of the cost structure for all goods - it's called the free market. I would think those pining for more textile mills and high cost farms in the U.S. would like this development.

    As for losing capacity to replant farmland and rebuild industry - you are underestimating the resiliency of the American economic machine. We have plenty of farmland, and Oregon is one state that is making sure such farmland remains unpaved over in case it becomes economical to farm it again.

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    "Are the good citizens of Mississippi supposed to pay more for their food so that this guy can make a living? "

    In a word, yes. Would you suggest that the better moral choice was to reap $.40 savings on a pound of grapes? Ill-gotten gains are just that. Whatever other arguments are made for competitiveness or the cost of living in the US, I can't see how they would outweigh the troubles associated with environment-raping, employee-abusing foreign companies and their products.

  • aboyd (unverified)
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    It's telling that Hillary was absent. No position, no ammunition. How astute?

    Well, so was Obama...

  • Bill Bodden (unverified)
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    How many poor Mississippians will have an incrementally poorer diet because they can't afford as much nutritious food?

    Probably as many as are not paid a living wage or an honest wage for an honest day's work. Since this latest trade agreement was written by and for major corporations it will probably be as detrimental to the laboring classes as was NAFTA and CAFTA.

  • David Dickey-Griffith (unverified)
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    Right now, free trade helps U.S. business, U.S. consumers, and foreign workers, but it hurts U.S. workers. This will continue to be the case until wages in developing countries rise to match those in the U.S., which (admittedly) may take a while :-)

    Obviously, environmental and labor concerns are legitimate, and there's an interesting discussion to be had about the best way of addressing these issues through trade policy, but let's not confuse our legitimate concerns for the environment and/or labor conditions in third-world countries with our illegitimate and economically illiterate fear of competition. True liberals celebrate job-creation in the third world even if it comes at the expense of U.S. workers.

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    I support passage of the Peruvian FTA, but not without reservations. I think the US used the carrot of permanent access to our markets to get some predatory, special interest sections into the agreement. Namely, as Oxfam has pointed out, the advantages granted to foreign investors in Peru and the intellectual property protections for medicines are not in Peru’s public interest. And I am uncomfortable forcing Peru to lower its tariffs on agricultural goods so long as the US significantly subsidizes our exports. I would prefer a longer phasing in of the reduction in Peruvian agricultural tariffs to give us more time to close down our subsidies. So, it is not a perfect agreement.

    But I agree with Urban Planning Overload on the general advantages of free trade. I especially agree with him that trade, along with foreign investment, is bringing billions out of poverty all around the globe. If the influence of special interest corporations is too pervasive, we need to reduce their influence not close down trade. That’s why I am Democrat.

    As for the Peruvian FTA, I would ask its opponents whether they would support continuation of (or making permanent) the existing agreement (which expires periodically, which eliminates tariffs on about 80% of Peru’s exports to the US) or not. What alternative to the agreement would they support? Tariffs forever?

    And, to advocates of “fair” trade, I would ask if there is an example of a trade agreement between a low wage nation and the US that meets their criteria of “fair.” Or what are their solutions for bringing billions out of poverty around the world?

  • Bill Bodden (unverified)
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    Joseph Stiglitz and Haidir Rashid see hypocrisy in the policies of the U.S. and other developed countries toward trade liberalization

    UBO: I'm not an economist, but I hope you will pardon me if I place more faith in Joseph Stiglitz's opinion than yours.

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    Stiglitz is part of an interesting social phenomenon -- a whole cast of formerly highly ideological neoliberal economists who retained enough of a real commitment to actual evidence to change his mind. Perhaps the most prominent of them is Jeffrey Sachs, formerly the wunderkind guru of "shock treatment" to transform eastern European economies. Over the past 15 years there has been a quite regular phenomenon within the World Bank in which a small group of internal economists starts to question orthodoxies and received truths, starts to gain influence and converts, and then gets forced out. (The Bank, while no longer as knee-jerk as the IMF, will only take its reformed church neoliberalism so far.)

    Stiglitz was one of the first to break from the orthodoxy in the face of reality, and get pushed out. But there are quite a lot of them now.

  • CJ (unverified)
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    Long live the multi-national corporations!

  • Bill Bodden (unverified)
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    Long live the multi-national corporations!

    This reminds me of a rallying call in Germany in the 1930s: Heil Hitler!

  • Tom Civiletti (unverified)
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    UPO wrote:

    "As for rising energy costs - if the cost to bring low-value goods into this country goes up and makes these goods uneconomical, so be it. Energy costs are part of the cost structure for all goods - it's called the free market. I would think those pining for more textile mills and high cost farms in the U.S. would like this development.

    As for losing capacity to replant farmland and rebuild industry - you are underestimating the resiliency of the American economic machine. We have plenty of farmland, and Oregon is one state that is making sure such farmland remains unpaved over in case it becomes economical to farm it again."

    Yep, this is a good summary of globalist thinking about economy, based on faith in the infinite wisdom of the Holy Free Market, Most High and Exulted Lord of All Good Things.

    The belief that all F-ups are reversible grows out our last two centuries of cheap energy driven economic intoxication. It took 15 years to work ourselves out of the Great Depression, and that was with almost free energy to burn. It will not be so easy next time.

    And, by the way, it is the close-in fertile ground, which is being paved over at a high rate, that we will need to feed the teeming urban masses of the not-so-fat future. Oregon is doing a good job of this. Landuse planning is, unfortunately, planning for the 20th century, not the 21st.

  • Blue Collar (unverified)
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    After we unseat Smith we can then turn our focus on the DINO Mr. Wyden.

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    "let's not confuse our legitimate concerns for the environment and/or labor conditions in third-world countries with our illegitimate and economically illiterate fear of competition."

    I don't think it's fear of competition (least not with me); it's that the playing field is not competitive. There's simply no way to compete with a company whose labor costs are at rock bottom because the workers get $3.85 a day for 7 days a week of work at 12 hours per. Protecting the environment (at whatever level we do in the US) and paying humanly responsible wages costs money.

  • Chomskyite illiterate (unverified)
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    My drool has soaked into the keyboard, so I don't have much time to respond. Thanks to these genius "free" traders who have developed the current economic miracle. Ignore the man behind the curtain.

    As for Wyden, Blumenauer et al: with Democrats like these, we really don't need Republicans, do we?

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    The debate about PFTA was not economically illiterate. Nor is the opposition to globabilization & the WTO trade regime, which is not the only way a good trade system could be constructed.

    The PFTA contained a change from previous FTAs (which all need to be redone at a minimum, & the WTO massively restructured at a minimum), in that the labor and environmental clauses were incorporated rather than being only-for-show side agreements. The AFL-CIO for instance acknowledged that change, while arguing that they were not strong enough. Earl B. justified his vote in an uncharacteristically intellectually dishonest way by quoting the first part of the AFL-CIO position but not even acknowledging the existence of the second part.

    "Strength" has to do both with the standards themselves and their capability of enforcement.

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    UPO, you appear to confuse lower relative evaluation than yours of the importance of economics, compared to other dimensions of social relationships and standards of ethical evaluation, or other modes of social analysis and inquiry, with "economic illiteracy." It's a non-sequitur and a category error.

    Judgment of the relative importance, utility and limits of economic theory, compared to other ways of thinking about social relationships, cannot be established from within economic theory, nor by mere assertion.

    Your claim is a ridiculous as if I were to say you are morally or anthropologically or sociologically or historically or public health illiterate. You may or may not be. The mere fact that you conclude to give economics a greater weighting in that scheme of things doesn't make you illiterate in them ipso facto, nor give me any information that would warrant my reaching that conclusion.

    Conversely, the fact that I rate economic theory lower than you do in the scheme of things that need to be evaluated to reach decisions does not mean I'm economically illiterate, or that you have any evidence as to whether I am or not. If you think it does, and that your preference is self-evidently true, well, that's just evidence of failure of critical and self-critical thinking on your part. Not our fault, and certainly no warrant for adopting snide and condescending attitudes of superiority.

  • Tom Civiletti (unverified)
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    David Dickey-Griffith wrote:

    "True liberals celebrate job-creation in the third world even if it comes at the expense of U.S. workers."

    You mean "true liberals" in the old sense like Milton Friedman, right? If you mean the kind of liberal who is likely a member of the Democratic Party, then you must be out of your mind.

  • Harry Kershner (unverified)
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    Chris Lowe said: "Earl B. justified his vote in an uncharacteristically intellectually dishonest way"

    Oh, Chris, if it were only so.

    Please note Blumenauer's intellectually dishonest way of debating the impeachment question, or foreign policy, including Lebanon, Palestine, Iraq, & Iran.

    Another matter overlooked by his supporters (and denied by his office staff, who have outright misinformed) is his vote for the original authorization for Bush to use force (that only Barbara Lee opposed), from which have flowed all his and Cheney's other claims to unchallenged power.

    Like Hillary, Earl is a triangulating corporatist and imperialist.

    You Democrats must stop worshiping false idols.

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    Harry,

    Don't know if you worship any idols, but I certainly don't worship Earl B. I don't like his arguments on numbers of things, or his positions, though he also does stand up for things that matter to me.

    But I can't think of a time previous to this where I've seen him cite an opponent of his position as if that person actually supported it. I don't think he does that on any of the issues you've mentioned.

    I disagree with him about impeachment but I don't think his position is intellectually dishonest -- just wrong.

    Regarding war powers, I think there are two votes that get confused. The one you are citing I think is the first one, which was closer to the September 2001 terrorist attacks and maybe specifically related to attacking Afghanistan. Some people, perhaps including yourself, like to treat this as if it justified everything Bush has done since or will do, legally speaking. I don't accept that and think it's a self-defeating interpretation to adopt.

    Bush's and Cheney's claims to unlimited commander (imperator=emperor) power do not flow from any congressional resolution. They explicitly claim that they don't need such authorizations. Likewise the domestic "unitary executive" theory does not depend on congress in any way, although I wish to hell that congress would challenge it more directly. Including Blumenauer.

    There was a second vote, in the autumn of 2002, that related specifically to authorizing use of force against Iran. Blumenauer did vote against that, & I assume his staff thought you were talking about that vote. So did De Fazio and Wu.

    And sorry, whatever Earl's faults, he is not a triangulator like Hillary or Bill Clinton. He is part of the section of the DP against whom they triangulate. See, that's the thing about the triangulators -- they don't even remotely have even the social democratic left in mind, never mind the socialist left -- we're far too weak to matter. They triangulate against other Democrats. If you want to argue about triangulation, you can't really make sense if you're simultaneously arguing Democrats = capitalist party = bad. Triangulation only matters if differences among Democrats matter.

    I can't comment on his positions vis a vis Palestine & Israel because I don't know what they are.

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    <h2>I should have said "triangulate against liberal Democrats," which, because I'm a social democratic Democrat, effectively includes me too, but only en passante (sp?).</h2>
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