U.S. - Peru Trade Promotion Agreement

Better Trade practices

In an attempt to level the playing fields for American companies, the United States entered into the U.S.-Peru Trade Promotion Agreement in April 2006. The act was signed in December 2007 and went into effect Feb. 2009.

The objectives in the U.S.-Peru Trade Promotion Agreement are to eliminate obstacles to better trades, consolidate access to goods and services, and promote private investment. In addition to the commercial aspects of the U.S.-Peru Trade Promotion Agreement, it incorporates economic, institution, intellectual property, labor and environmental policies.

The U.S.-Peru Trade Promotion Agreement had its beginnings in 1991 as the Andean Trade Preference Act, which included abolition of most tariffs on products from Peru, Bolivia, Colombia and Ecuador. It remained in effect until the American government opted to negotiate individual agreements during the George W. Bush administration.

There was little debate on the U.S.-Peru Trade Promotion Agreement in either country, as both sides viewed it as a better trade. The Congress of Peru debated only six hours before give its overwhelming support. The U.S. House and Senate each gave it wide approval.

Peru was in favor of the agreement because it consolidated and extended the trade practices established by the Andean Act. Peru saw the U.S.-Peru Trade Promotion Agreement as a better trade because of the potential to attract foreign investors, generate jobs, increase wages to workers, cut the poverty level, improve competitiveness within the region, and create and export sugar cane ethanol.

The U.S. viewed the agreement as an outlet to improve access to goods and services, secure existing investments, promote democracy in the region, and help fight drug trafficking.

The biggest issues voiced by critics were the lack of strength in regards to child labor and rights of workers. Peruvians also see the country's poor farm families as possible victims of an American agricultural industry that is heavily subsidized. Animal rights groups opposed the act for fear that factory farming, as practiced in America, would spread to the region.

Organized labor in Peru opposed the legislation, citing a decline in unionization rates and the increased use of child labor. The League of United Latin American Citizen claims that unionized workers in Peru have dropped to one-sixth of its total twenty years ago.