Peru–United States Trade Promotion Agreement
   HOME

TheInfoList



OR:

The United States–Peru Trade Promotion Agreement () is a bilateral
free trade agreement A free trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating state (polity), states. There are two types of trade agreements: Bilateralism, bilateral and Multilateralism, m ...
, whose objectives are eliminating obstacles to
trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. Traders generally negotiate through a medium of cr ...
, consolidating access to goods and services and fostering private investment in and between the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
and
Peru Peru, officially the Republic of Peru, is a country in western South America. It is bordered in the north by Ecuador and Colombia, in the east by Brazil, in the southeast by Bolivia, in the south by Chile, and in the south and west by the Pac ...
. Besides commercial issues, it incorporates economic, institutional,
intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, co ...
,
labor Labour or labor may refer to: * Childbirth, the delivery of a baby * Labour (human activity), or work ** Manual labour, physical work ** Wage labour, a socioeconomic relationship between a worker and an employer ** Organized labour and the labour ...
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 The United States House of Representatives is a chamber of the bicameral United States Congress; it is the lower house, with the U.S. Senate being the upper house. Together, the House and Senate have the authority under Article One of th ...
on November 2, 2007, and by the
U.S. Senate The United States Senate is a chamber of the bicameral United States Congress; it is the upper house, with the U.S. House of Representatives being the lower house. Together, the Senate and House have the authority under Article One of the ...
on December 4, 2007. The Agreement was implemented on February 1, 2009.


History

On December 4, 1991, under the
George H. W. Bush George Herbert Walker BushBefore the outcome of the 2000 United States presidential election, he was usually referred to simply as "George Bush" but became more commonly known as "George H. W. Bush", "Bush Senior," "Bush 41," and even "Bush th ...
administration, the United States enacted the Andean Trade Preference Act, eliminating
tariff A tariff or import tax is a duty (tax), duty imposed by a national Government, government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods ...
s on a number of products from Peru,
Bolivia Bolivia, officially the Plurinational State of Bolivia, is a landlocked country located in central South America. The country features diverse geography, including vast Amazonian plains, tropical lowlands, mountains, the Gran Chaco Province, w ...
,
Colombia Colombia, officially the Republic of Colombia, is a country primarily located in South America with Insular region of Colombia, insular regions in North America. The Colombian mainland is bordered by the Caribbean Sea to the north, Venezuel ...
, and
Ecuador Ecuador, officially the Republic of Ecuador, is a country in northwestern South America, bordered by Colombia on the north, Peru on the east and south, and the Pacific Ocean on the west. It also includes the Galápagos Province which contain ...
. 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 George Walker Bush (born July 6, 1946) is an American politician and businessman who was the 43rd president of the United States from 2001 to 2009. A member of the Bush family and the Republican Party (United States), Republican Party, he i ...
administration as the Andean Trade Promotion and Drug Eradication Act. Under the renewed act, Andean products exempted from tariffs increased from around 5,600 to some 6,300. The new act 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 Free trade is a trade policy that does not restrict imports or exports. In government, free trade is predominantly advocated by political parties that hold Economic liberalism, economically liberal positions, while economic nationalist politica ...
agreement with the countries involved in the Andean trade act. 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 Robert Jones Portman (born December 19, 1955) is an American attorney and politician who served as a United States senator from Ohio from 2011 to 2023. A member of the Republican Party, Portman was the 35th director of the Office of Management ...
signed the deal on April 12, 2006, in
Washington, D.C. Washington, D.C., formally the District of Columbia and commonly known as Washington or D.C., is the capital city and federal district of the United States. The city is on the Potomac River, across from Virginia, and shares land borders with ...
, in the presence of Peruvian President
Alejandro Toledo Alejandro Celestino Toledo Manrique (; born 28 March 1946) is a Peruvian former politician who served as President of Peru, from 2001 to 2006. He gained international prominence after leading the opposition against president Alberto Fujimori, w ...
. 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.


Potential benefits

Peru is interested in the agreement in order to: *consolidate and extend the trade preferences under the Andean Trade Promotion and Drug Eradication Act *attract foreign investment *generate employment *enhance the country's competitiveness within the region *increase workers'
income Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. F ...
*curb
poverty Poverty is a state or condition in which an individual lacks the financial resources and essentials for a basic standard of living. Poverty can have diverse Biophysical environmen ...
levels. *create and export sugar cane
ethanol Ethanol (also called ethyl alcohol, grain alcohol, drinking alcohol, or simply alcohol) is an organic compound with the chemical formula . It is an Alcohol (chemistry), alcohol, with its formula also written as , or EtOH, where Et is the ps ...
. The United States looks to this agreement as a way to: *improve access to goods and services *strengthen its investments *promote security and
democracy Democracy (from , ''dēmos'' 'people' and ''kratos'' 'rule') is a form of government in which political power is vested in the people or the population of a state. Under a minimalist definition of democracy, rulers are elected through competitiv ...
*fight against
drug trafficking A drug is any chemical substance other than a nutrient or an essential dietary ingredient, which, when administered to a living organism, produces a biological effect. Consumption of drugs can be via inhalation, injection, smoking, ingestion, ...


Sensitive topics

*
Intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, co ...
**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 Sovereignty can generally be defined as supreme authority. Sovereignty entails hierarchy within a state as well as external autonomy for states. In any state, sovereignty is assigned to the person, body or institution that has the ultimate au ...
to adopt and modify environmental legislation **Mechanisms for environmental cooperation *Labor **Rigorous enforcement of national legislation **Fundamental
International Labour Organization The International Labour Organization (ILO) is a United Nations agency whose mandate is to advance social and economic justice by setting international labour standards. Founded in October 1919 under the League of Nations, it is one of the firs ...
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 Intensive animal farming, industrial livestock production, and macro-farms, also known as factory farming, is a type of intensive agriculture, specifically an approach to mass animal husbandry designed to maximize production while minimizing co ...
**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 Alan Gabriel Ludwig García Pérez (; 23 May 1949 – 17 April 2019) was a Peruvian politician who served as President of Peru for two non-consecutive terms from 1985 to 1990 and from 2006 to 2011. He was the second leader of the American Popula ...
and candidates
Lourdes Flores Lourdes Celmira Rosario Flores Nano (born October 7, 1959) is a Peruvian lawyer and politician who served as a Metropolitan Municipality of Lima, councilwoman of Lima, Congress of the Republic of Peru, Deputy from Lima from 1990 to 1992, Democrati ...
and
Valentín Paniagua Valentín Toribio Demetrio Agustin Paniagua Corazao (23 September 1936 – 16 October 2006) was a Peruvian lawyer and politician who briefly served as 55th President of Peru from 2000 to 2001. Elected President of Congress on 16 November 2000, ...
. The 2006 election's runner-up
Ollanta Humala Ollanta Moisés Humala Tasso (; born 27 June 1962) is a Peruvian politician and former military officer who served as president of Peru from 2011 to 2016. Originally a socialist and left-wing nationalist, he is considered to have shifted towar ...
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 Child labour is the exploitation of children through any form of work that interferes with their ability to attend regular school, or is mentally, physically, socially and morally harmful. Such exploitation is prohibited by legislation w ...
and weak
labor rights Labor rights or workers' rights are both legal rights and human rights relating to labor relations between workers and employers. These rights are codified in national and international labor and employment law. In general, the ...
, and expose the country's
subsistence farmers Subsistence agriculture occurs when farmers grow crops on smallholdings to meet the needs of themselves and their families. Subsistence agriculturalists target farm output for survival and for mostly local requirements. Planting decisions occu ...
to disruptive competition with subsidized U.S. crops. Additionally, critics contend that
Dubai Ports World DP World is a multinational corporation, multinational logistics company based in Dubai, United Arab Emirates. It specialises in cargo logistics, port terminal operations, maritime services and free trade zones. Formed in 2005 by the merger of D ...
will be able to use its Peruvian subsidiary to obtain rights to operate U.S. ports.
Animal rights Animal rights is the philosophy according to which many or all Animal consciousness, sentient animals have Moral patienthood, moral worth independent of their Utilitarianism, utility to humans, and that their most basic interests—such as ...
groups have opposed this legislation due to the possibility of spreading factory farming practices through
Latin America Latin America is the cultural region of the Americas where Romance languages are predominantly spoken, primarily Spanish language, Spanish and Portuguese language, Portuguese. Latin America is defined according to cultural identity, not geogr ...
, increasing U.S.
pork Pork is the culinary name for the meat of the pig (''Sus domesticus''). It is the most commonly consumed meat worldwide, with evidence of pig animal husbandry, husbandry dating back to 8000–9000 BCE. Pork is eaten both freshly cooke ...
and
poultry Poultry () are domesticated birds kept by humans for the purpose of harvesting animal products such as meat, Eggs as food, eggs or feathers. The practice of animal husbandry, raising poultry is known as poultry farming. These birds are most typ ...
exports, and
mining Mining is the Resource extraction, extraction of valuable geological materials and minerals from the surface of the Earth. Mining is required to obtain most materials that cannot be grown through agriculture, agricultural processes, or feasib ...
development that causes
deforestation Deforestation or forest clearance is the removal and destruction of a forest or stand of trees from land that is then converted to non-forest use. Deforestation can involve conversion of forest land to farms, ranches, or urban use. Ab ...
and habitat loss for animals. The most controversial elements of the agreement relate to forestry. Laura Carlsen, of th
Center for International Policy
and contributor t
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." Prior to the implementation of the FTA the Peruvian government rolled back existing environmental protections in order to implement the FTA's foreign investor rights provisions to access forestry, mining and other natural resources. This included access to sensitive Amazonian territories over which indigenous communities had control under pre-FTA Peruvian law. Protests by indigenous communities in the Amazon against the execution of the free trade agreement, and related new foreign investors accessing rights to indigenous lands, have been deadly. As the opposition for this grew there was a confrontation back in June 2009 near the town of
Bagua The ''bagua'' ( zh, c=八卦, p=bāguà, l=eight trigrams) is a set of symbols from China intended to illustrate the nature of reality as being composed of mutually opposing forces reinforcing one another. ''Bagua'' is a group of trigrams—co ...
in the northern province of Amazonas, which according to official reports left a death toll of 34. Faced with this widespread unrest, the Peruvian Congress repealed two additional decrees that redefined forest land to permit more logging and mining. The government had made a mistake by failing to consult with indigenous communities before passing 10 decrees that modified Peru's legal and regulatory framework on access to and use of natural resources in the country's Amazon jungle region. The decrees were declared unconstitutional in December 2008 by a multi-party parliamentary commission because they undermined the right of native people to prior consultation with respect to mining projects or other economic activities affecting their communities. Indigenous groups in Peru's Amazon are demanding that their land rights are acknowledged by national government, as well as being able to participate and be consulted on decisions or legislation that could affect them. A majority feel anger towards the fact that they were not consulted about the series of decrees passed by the government after the implementation of the FTA with the US. Between January 2008 and June 2009, the government auctioned 7,700 square miles of land for mining, including forest area that is the ancestral home of the Awajun and Wampis indigenous groups. In addition to this legal mining, illegal mining in the Peruvian rainforest has skyrocketed since international gold prices have reached new heights (increasing 35 percent since FTA implementation). Indigenous land as well as parts of the Amazon rainforest are being lost at an alarming rate because of this activity. In October 2007 the AIDESEP, a Federation Representing 350,000 Indigenous Peoples in Amazon Region, sent a letter to congress and made the following statement: "The FTA will give incentives for further and irreversible destruction of virgin rainforest, which will in turn increase global warming and displace our communities from their home territories… Provisions contained in the Peru FTA are directly incentivizing this massive takeover that is threatening our livelihoods and leading to irreversible destruction of virgin rainforest". A cross-party congressional commission, created after the indigenous protests in the Amazon in August 2008, recommended the repeal of two of the laws that opened up communally-owned native lands to private investment. Decree 1015 introduced substantial changes to the decision-making process for community property such that the sale or leasing of communal lands no longer requiring approval by two-thirds of qualified community members, but just a simple majority of those members of the community attending an assembly meeting. Degree 1073 modified this arrangement, which stated that these community members must have occupied or used land during the preceding year.Reyes, Anna. "Legal But Not Legitimate: Legislative Decree 1015 and Others." Peru Support Group, 31 July 2008, www.perusupportgroup.org.uk/article-125.html. In 2008, the indigenous people involved in the Interethnic Associations of the Peruvian Amazon (AIDESEP) demanded that the decrees be repealed. However, when Congress failed to implement the repeal of these decrees that affected indigenous people's rights, new protests began in April 2009.


See also

* Colombia Trade Promotion Agreement * Rules of Origin *
Market access In international trade, market access refers to a company's ability to enter a foreign market by selling its goods and services in another country. Market access is not the same as free trade, because market access is normally subject to condition ...
*
Free-trade area A free trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, import quotas and tariffs, and ...
*
Tariffs A tariff or import tax is a duty imposed by a national government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods or raw materials and is ...


References


External links


U.S. Trade Representative's Site on Peru TPA
* ttp://www.opencrs.com/document/RL32770/ Congressional Research Service Report on Andean Free Trade Agreement, including Peru TPA
Carnegie Endowment for International Peace Report on Peru TPA / AFTA
*
Rep. Sander Levin (D-Mich.) Speech on Peru TPA
{{DEFAULTSORT:Peru-United States Trade Promotion Agreement Foreign trade of Peru Free trade agreements of the United States Peru–United States relations Treaties of Peru Treaties concluded in 2006 Treaties entered into force in 2009 Foreign policy of the George W. Bush administration Acts of the 110th United States Congress