Peru–United States Trade Promotion Agreement
The United States–Peru Trade Promotion Agreement (Spanish: Tratado de Libre Comercio 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. The Agreement was implemented on February 1, 2009.
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. Its objective was the strengthening of legal industries in these countries as alternatives to drug production and trafficking. The program was renewed on October 31, 2002 by the George W. Bush administration as the Andean Trade Promotion and Drug Eradication Act (ATPDEA). Under the renewed act, Andean products exempted from tariffs increased from around 5,600 to some 6,300. ATPDEA was set to expire on December 31, 2006 but was renewed by Congress for six months, up to June 30, 2007. A further extension was granted on June 28, 2007, this time for eight months, up to February 29, 2008.
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. 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. The U.S. House of Representatives approved the agreement on November 8, 2007, with a 285–132 vote. The U.S. Senate approved the agreement on December 4, 2007, with a 77–18 vote. 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).
On January 16, 2009 President George W. Bush signed a proclamation To Implement the United States-Peru Trade Promotion Agreement and for Other Purposes, effective February 1, 2009.
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.
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
- Intellectual property
- Patent protection
- 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
- Rigorous enforcement of national legislation
- Fundamental International Labor Organization treaties
- Sovereignty to modify legislation
- Mechanisms for cooperation
- Environment/Animal Welfare
- 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
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 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.
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. Additionally, critics contend that Dubai Ports World will be able to use its Peruvian subsidiary to obtain rights to operate U.S. ports. 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.
The most controversial elements of the agreement relate to forestry. Laura Carlsen, of the Center for International Policy, and contributor to Foreign Policy in Focus notes that "Indigenous organizations warn that this ruling effectively opens up 45 million hectares to foreign investment and timber, oil, and mining exploitation."
- PDF, published at 74 FR 4105, January 22, 2009
- Office of the United States Trade Representative, PDF (181 KiB), January 31, 2001, p. 7. Retrieved on December 4, 2007.
- Office of the United States Trade Representative, PDF (181 KiB), January 31, 2001, p. 1. Retrieved on December 4, 2007.
- The White House, Andean Trade Promotion and Drug Eradication Act. October 31, 2002. Retrieved on November 30, 2007.
- Office of the United States Trade Representative, New Andean Trade Benefits. September 25, 2002. Retrieved on December 4, 2007.
- Office of the United States Trade Representative, PDF (310 KiB), April 30, 2007, p. 1. Retrieved on December 4, 2007.
- Reuters, US Senate OKs 8-month Andean trade pact extension. June 28, 2007. Retrieved on December 4, 2007.
- Office of the United States Trade Representative, USTR Notifies Congress of Intent to Initiate Free Trade Talks with Andean Countries. November 18, 2003. Retrieved on December 4, 2007.
- (Spanish) El Comercio, Por amplia mayoría Congreso aprobó ratificación del TLC. June 28], 2006. Retrieved on November 30, 2007.
- The New York Times, Democrats Divided as House Passes Peru Trade Bill. November 8, 2007. Retrieved on November 30, 2007.
- House Clerk's Office, . Retrieved on February 13, 2008.
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- Senate Clerk's Office, . Retrieved on February 13, 2008.
- E85.whipnet.net, Peruvian Desert to Host Ethanol Production Facility. February 2007. Retrieved on November 30, 2007.
- Office of the United States Trade Representative, Trade Facts: Free Trade with Peru. June 2007. Retrieved on December 4, 2007.
- "Peru ratifies US free trade deal". BBC News. 2006-06-28. Retrieved 2007-11-30.
- Levin, Sander. "Remarks of Representative Levin for Discussion on FTAs between the US and Latin America". Carnegie Endowment for International Peace.
- Rosales, Rosa (July 1, 2006). "Resolution REJECT NEW TRADE AGREEMENTS WITH PERU AND COLOMBIA". League of United Latin American Citizens.
- "Ports Privatization and the Peru FTA: An Assault on Working People, the Public Interest and Security". Public Citizen.
- "Dubai Ports World already operates in Peru, thus approval of the Peru FTA would grant DPW new rights to operate U.S. ports rights to operate U.S. ports". Public Citizen.
- Tamara Matheson, Alex Ross, and Joseph Martinez, The US-Peru Free Trade Agreement: Protecting Corporate Investors' "Right” To Exploit The Environment & Animals. Retrieved on December 6, 2007.
- [Trade Agreement Kills Amazon Indians http://www.fpif.org/fpiftxt/6200]
- U.S. Trade Representative's Site on Peru TPA
- Final Text of the United States - Peru Trade Promotion Agreement
- Congressional Research Service Report on Andean Free Trade Agreement, including Peru TPA
- PDF (126 KiB)
- Carnegie Endowment for International Peace Report on Peru TPA / AFTA
- Heritage Foundation: Congress Should Advance U.S.-Peruvian Free Trade Ties
- Rep. Sander Levin (D-Mich.) Speech on Peru TPA