United States – Peru Trade Promotion Agreement

The United States – Peru Trade Promotion Agreement ( _es. Acuerdo de Promoción Comercial Perú – Estados Unidos) is a bilateral free trade agreement, whose objectives are eliminating obstacles to trade, consolidating access to goods and services and fostering private investment in and between the United States and Peru. Besides commercial issues, it incorporates economic, institutional, intellectual property, labor and environmental policies, among others. The agreement was signed on April 12, 2006; ratified by the Peruvian Congress on June 28, 2006; by the U.S. House of Representatives on November 2, 2007 and by the U.S. Senate on December 4, 2007. Both countries need to modify their legislation to abide by the treaty so that it can go into effect.

History

On December 4, 1991, under the George H. W. Bush administration, the United States enacted the Andean Trade Preference Act (ATPA), eliminating tariffs on a number of products from Peru, Bolivia, Colombia, and Ecuador. [Office of the United States Trade Representative, PDFlink| [http://www.ustr.gov/assets/Trade_Development/Preference_Programs/ATPA/asset_upload_file215_3783.pdf "Third Report to the Congress on the Operation of the Andean Trade Preference Act"] |181 KiB , January 31, 2001, p. 7. Retrieved on December 4, 2007.] Its objective was the strengthening of legal industries in these countries as alternatives to drug production and trafficking. [Office of the United States Trade Representative, PDFlink| [http://www.ustr.gov/assets/Trade_Development/Preference_Programs/ATPA/asset_upload_file215_3783.pdf "Third Report to the Congress on the Operation of the Andean Trade Preference Act"] |181 KiB , January 31, 2001, p. 1. Retrieved on December 4, 2007.] The program was renewed on October 31, 2002 by the George W. Bush administration as the Andean Trade Promotion and Drug Eradication Act (ATPDEA). [The White House, " [http://www.whitehouse.gov/news/releases/2002/10/20021031-9.html Andean Trade Promotion and Drug Eradication Act] ". October 31, 2002. Retrieved on November 30, 2007.] Under the renewed act, Andean products exempted from tariffs increased from around 5,600 to some 6,300. [Office of the United States Trade Representative, " [http://www.ustr.gov/Document_Library/Fact_Sheets/2002/New_Andean_Trade_Benefts.html New Andean Trade Benefits] ". September 25, 2002. Retrieved on December 4, 2007.] ATPDEA was set to expire on December 31, 2006 but was renewed by Congress for six months, up to June 30, 2007. [Office of the United States Trade Representative, PDFlink| [http://www.ustr.gov/assets/Trade_Development/Preference_Programs/ATPA/asset_upload_file186_11132.pdf "Third Report to the Congress on the Operation of the Andean Trade Preference Act as Amended"] |310 KiB , April 30, 2007, p. 1. Retrieved on December 4, 2007.] A further extension was granted on June 28, 2007, this time for eight months, up to February 29, 2008. [Reuters, [http://www.reuters.com/article/latestCrisis/idUSN27294490 US Senate OKs 8-month Andean trade pact extension] . June 28, 2007. Retrieved on December 4, 2007.]

On November 18, 2003, the U.S. Trade Representative, Robert Zoellick, notified Congress of the intention of the Bush administration to initiate negotiations for a free trade agreement with the countries involved in ATPDEA. [Office of the United States Trade Representative, " [http://www.ustr.gov/Document_Library/Press_Releases/2003/November/USTR_Notifies_Congress_of_Intent_to_Initiate_Free_Trade_Talks_with_Andean_Countries.html USTR Notifies Congress of Intent to Initiate Free Trade Talks with Andean Countries] ". November 18, 2003. Retrieved on December 4, 2007.] Negotiations started without Bolivia in May 2004, however, as each of the three remaining Andean countries decided to pursue bilateral agreements with the United States. After 13 rounds of negotiations, Peru and the United States concluded an agreement on December 7, 2005. Alfredo Ferrero, Peruvian Minister of Foreign Trade and Tourism, and the U.S. Trade Representative Rob Portman signed the deal on April 12, 2006 in Washington, D.C., in the presence of Peruvian President Alejandro Toledo.

The Congress of Peru debated the agreement for six hours during the night of June 27, 2006 and ratified it in the early hours of the next day. The vote was 79–14, with seven abstentions. [es icon El Comercio, " [http://www.elcomercio.com.pe/EdicionOnline/Html/2006-06-28/onlEconomia0531424.html Por amplia mayoría Congreso aprobó ratificación del TLC] ". June 28] , 2006. Retrieved on November 30, 2007.] The U.S. House of Representatives approved the agreement on November 8, 2007, with a 285–132 vote. [The New York Times, [http://www.nytimes.com/2007/11/08/washington/08cnd-trade.html?hp Democrats Divided as House Passes Peru Trade Bill] . November 8, 2007. Retrieved on November 30, 2007.] [House Clerk's Office, [http://clerk.house.gov/evs/2007/roll1060.xml] . Retrieved on February 13, 2008.] The U.S. Senate approved the agreement on December 4, 2007, with a 77–18 vote. [The New York Times, [http://www.nytimes.com/2007/12/05/business/05trade.html?_r=1&oref=slogin Senate Approves Peru Trade Deal] . December 5, 2007. Retrieved on December 5, 2007.] [Senate Clerk's Office, [http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=110&session=1&vote=00413] . Retrieved on February 13, 2008.] The implementation bills gained wide support from the Republican Party (176–16 in the House, 47–1 in the Senate) and split backing from the Democratic Party (109–116 and 29–17).

Potential benefits

Peru is interested in the agreement in order to:
*consolidate and extend the trade preferences under ATPDEA
*attract foreign investment
*generate employment
*enhance the country's competitiveness within the region
*increase the workers' income
*curb poverty levels.
*create and export sugar cane ethanol. [E85.whipnet.net, [http://e85.whipnet.net/news/sugar.cane.html Peruvian Desert to Host Ethanol Production Facility] . February 2007. Retrieved on November 30, 2007.]

The United States looks to this agreement as a way to:
*improve access to goods and services
*strengthen its investments
*promote security and democracy
*fight against drug trafficking

Sensitive topics

*Intellectual property
**Patent protection [Office of the United States Trade Representative, [http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2007/asset_upload_file585_13067.pdf Trade Facts: Free Trade with Peru] . June 2007. Retrieved on December 4, 2007. ]
**No discrimination against foreign investors
**Elimination of export subsidies
**Schedule for tariff reduction
**Application of farming safeguard measures
**Technical cooperation and assistance programs
**Effective enforcement of environmental legislation
**Sovereignty to adopt and modify environmental legislation
**Mechanisms for environmental cooperation
*Labor
**Rigorous enforcement of national legislation
**Fundamental International Labor Organization treaties
**Sovereignty to modify legislation
**Mechanisms for cooperation
**Habitat Loss Due to Expansion of Mining Development
**Increased U.S. pork and poultry exports funding factory farming
**Legislation to protect animals could be seen as trade barrier

Criticism

The agreement has suffered consistent criticism. In Peru, the treaty was championed by Toledo, and supported to different extents by President-elect Alan García and candidates Lourdes Flores and Valentín Paniagua. The 2006 election's runner-up leftist Ollanta Humala has been its most vocal critic. Humala's Union for Peru won 45 of 120 seats in Congress, the largest share by a single party, prompting the debate and ratification of the agreement before the new legislature was sworn in. Some Congressmen-elect interrupted the debate after forcibly entering Congress, in an attempt to stop the agreement ratification. [cite news|url=http://news.bbc.co.uk/2/hi/americas/5125852.stm|title=Peru ratifies US free trade deal|publisher=BBC News|date=2006-06-28|accessdate=2007-11-30]

Critics of the Peru TPA say the pact will worsen Peru's problems with child labor and weak labor rights, and expose the country's subsistence farmers to disruptive competition with subsidized U.S. crops.Fact|date=December 2007 Additionally, critics contend that Dubai Ports World will be able to use its Peruvian subsidiary to obtain rights to operate U.S. ports.Fact|date=December 2007 Animal rights groups have opposed this legislation due to the possibility of spreading factory farming practices through Latin America, increasing U.S. pork and poultry exports, and mining development that causes deforestation and habitat loss for animals. [Tamara Matheson, Alex Ross, and Joseph Martinez, [http://freetradekillsanimals.org/?page=PeruTwo The US-Peru Free Trade Agreement: Protecting Corporate Investors' "Right” To Exploit The Environment & Animals] . Retrieved on December 6, 2007.]

ee also

* Colombia Trade Promotion Agreement

References

External links

* [http://www.ustr.gov/Trade_Agreements/Bilateral/Peru_TPA/Final_Texts/Section_Index.html Final Text of the United States - Peru Trade Promotion Agreement]
*es [http://www.tlcperu-eeuu.gob.pe/index.php Página del Tratado de Libre Comercio] Peruvian Government's site on the agreement
*PDFlink| [http://hotdocs.usitc.gov/docs/pubs/2104F/pub3855.pdf U.S. International Trade Commission Report on Peru TPA] |3.64 MiB
* [http://www.opencrs.com/document/RL32770/ Congressional Research Service Report on Andean Free Trade Agreement, including Peru TPA]
* [http://finance.senate.gov/sitepages/hearing062906a.htm Senate Finance Committee Hearing on Peru TPA]
* [http://waysandmeans.house.gov/hearings.asp?formmode=detail&hearing=491 House Ways and Means Committee Hearing on Peru TPA]
*PDFlink| [http://waysandmeans.house.gov/media/pdf/109cong/wmcp/wmcp109-6.pdf House Ways and Means Committee Report on Peru TPA and AFTA] |126 KiB
* [http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=17682&prog=zgp&proj=zted Carnegie Endowment for International Peace Report on Peru TPA / AFTA]
* [http://younglives.qeh.ox.ac.uk/news-folder/the-social-impacts-of-trade-liberalisation Projections of Increases in Child Labor and Rural Poverty with US-Peru TPA by Young Lives, a project of the U.K. government and Save the Children]

;In support of Peru TPA
* [http://ustr.gov/Trade_Agreements/Bilateral/Peru_TPA/Section_Index.html U.S. Trade Representative's Site on Peru TPA]
* [http://www.ecattrade.com/issues/subsection.asp?id=46 Emergency Committee for American Trade Site on Peru TPA]
* [http://trade.businessroundtable.org/news/04-12-2006_peru.html Business Roundtable Statement on Peru TPA]
*PDFlink| [http://www.senate.gov/~finance/hearings/testimony/2005test/062906testlt.pdf Chamber of Commerce Statement on Peru TPA] |148 KiB
* [http://www.heritage.org/Research/LatinAmerica/wm1156.cfm Heritage Foundation Memo on Peru TPA]

;Opposed to Peru TPA
* [http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=18197&prog=zgp&proj=zted Rep. Sander Levin (D-Mich.) Speech on Peru TPA]
* [http://www.lulac.org/advocacy/resolutions/2006/R20.html League of United Latin American Citizens' Statement on Peru TPA]
* [http://www.oxfamamerica.org/whatwedo/campaigns/ft_agreements Oxfam America's Site on the Peru TPA and other trade pacts]
* [http://www.citizen.org/trade/afta/ Global Trade Watch Site on Peru TPA/AFTA]
* [http://citizenstrade.org/andean.php Citizen's Trade Campaign Site on Peru TPA/AFTA]
* [http://aflcio.org/issues/jobseconomy/globaleconomy/tradeagreements.cfm AFL-CIO Site on the Peru TPA and other trade pacts]
*es [http://www.perufrentealtlc.com/ El Perú frente al TLC (TLC Así NO)] Peruvian opposition site