U.S.-Peru Free Trade Agreement to be Implemented on Feb. 1, 2009
The United States and Peru already enjoy a two-way trade relationship of nearly $9.4 billion annually. Prior to the U.S.-Peru FTA, Peru benefited from temporary trade preferences extended under the Andean Trade Preferences Act. The implementation of the FTA will build upon these preferences and make them permanent.
The USTR states that the agreement will open up a growing market of 28 million Peruvian consumers to U.S. business interests. Specifically, Schwab noted that “[o]n the first day this agreement enters into force, 80 percent of U.S. industrial and consumer products and more than two-thirds of current U.S. farm exports will enter Peru duty-free.”
The majority of U.S. exports that will receive the duty-free treatment are technology products; mining, agricultural, and construction equipment; and agricultural products (i.e. wheat, beef, fruits and vegetables), and other processed foods.
Colombia FTA: Are U.S. Free Trade Agreements Doomed?
In an attempt to have the Colombia FTA decided before the November elections, the Bush Administration introduced the agreement to Congress on April 8, 2008. However, in an unprecedented move, the U.S. House of Representatives voted 224-195 on April 10, 2008, to exempt the implementing legislation of the Columbia FTA from the fast-track authority of the Trade Act of 1974 via a one sentence resolution. This removes the fast-track timeline for the Columbia FTA. Although President Bush has accused Speaker Nancy Pelosi of "killing" the agreement with a close U.S. ally, Pelosi has responded by insisting that the White House and Congress agree on a new U.S. aid package before a vote is taken on the Colombia FTA.
Democrats have expressed concern over violence in Colombia against union leaders and would like stronger labor and environmental provisions to be included. However, supporters of the FTA argue that about 90% of imports from Colombia already enjoy duty-free treatment under the Andean Trade Preferences Act while U.S. imports into Colombia do not receive similar treatment. Once the Colombia FTA is signed, 80% of U.S. imports into Colombia will become immediately duty-free, and all remaining tariffs would be eliminated within a decade. Additionally, supporters state that Congress was able to agree upon a very similar free trade agreement with Peru last year that was renegotiated to included stronger labor and environmental provisions. (See this opinion by James Baker III in support of the Colombia FTA.) Support for the Colombia FTA has been strong in newspaper opinion pieces across the nation, with little opposition similarly expressed. (See here for links.)
Both Senator Hillary Clinton and Senator Barack Obama oppose the Colombia FTA, siding with the AFL-CIO, which is fighting the agreement because it believes Colombia has not done enough to stop killings of trade unionists and bring their killers to justice. Republican Senator John McCain supports the Colombia FTA.
Senators Clinton and Obama also oppose the U.S.-South Korea free trade agreement because they say it fails to eliminate trade barriers to imports of American cars, though the U.S. and South Korea recently resolved a 4 year-old trade dispute over beef.
The free trade agreement with Panama became endangered last September when Panama's National Assembly elected Pedro Miguel Gonzalez to lead its legislature. Gonzalez is wanted in the U.S. on charges that he killed a U.S. soldier in 1992. However, Gonzalez has said he will not seek a second term this year, giving the trade community hope that the smallest FTA could still pass.
The political atmosphere with regard to trade agreements will likely affect Congressional consideration of the Doha talks. Trade officials from India and the U.S. are set to meet on May 8, 2008 to brainstorm ways to jump-start the stalled WTO Doha round of talks. A ministerial meeting of WTO representatives will take place in May in Geneva. The Doha Development Round commenced in November 2007 in Doha, Qatar. Its objective is to lower trade barriers and permit free trade while taking into account the differences in development levels of the negotiating countries. Talks have been stalled due to differences between the EU, US, and Japan on one side and India, Brazil, China, and South Africa, on the other. The main source of contention has been the opening up of agricultural and industrial markets in various countries and the cutting of farm subsidies in the developed countries.
Israel Signs Free Trade Pact with Latin America's Mercosur Bloc
U.S. Reported Working on New Pacific Trade Accord
President Bush Signs U.S.-Peru Free Trade Agreement
For more details, see the U.S. Customs House Guide's article here.
Senate Votes 77-18 to Approve Peru Free Trade Agreement
On December 5, 2007, the United States Senate voted
77-18 to approve the
U.S.-Peru
Trade Promotion Agreement
as reported by the Washington Post
here.
The Senate approval comes after the House voted
285 to 132 to approve the agreement. The
agreement will now be sent to the President for
approval.
The Washington Post reports that this agreement is
the first bilateral trade agreement approved by
Congress this year and is also the first under a
Democratic formula that requires negotiators to put
labor rights and environmental standards on par
with tariff reductions, investor protections, and
other key elements of the accord.
As reported, the agreement:
The Administration is now urging Congress to approve three other pending bilateral trade agreements with Colombia, Panama, and South Korea.It would immediately eliminate duties on 80 percent of U.S. consumer and industrial product sales to Peru and most agriculture goods, and gradually phase out all tariffs. Almost all Peruvian goods already enjoy duty-free status under trade breaks the United States extends to Andean nations to boost their economies and provide alternatives to illicit drug production.
House Passes Peru Free Trade Agreement
U.S. Trade Representative Susan C. Schwab issued the following statement:
Today’s vote marks an historic achievement for the U.S. and Peruvian people. The U.S.-Peru Trade Promotion Agreement is the foundation of an enduring partnership with one of America’s key friends and allies in Latin America. … I look forward to an equally strong and bipartisan vote as soon as possible in the Senate, and additional successes on the Colombia, Panama, and Korea FTAs.
Her full statement can be found here.
House Ways and Means Committee Approves U.S.-Peru Free Trade Agreement
On
October 31, 2007, the House Ways and Means
Committee unanimously approved the U.S.-Peru
Free Trade Agreement (FTA) by a 39-0 margin
after two years of debate. The FTA will move
to the House floor for consideration.
The agreement will life tariffs immediately for the 80 percent of U.S. industrial and consumer products exported to Peru and will phase out the remaining over ten years. If the House approves the bill and the Senate and President follow, it will become the 10th U.S. free trade agreement in effect.
The Houston Chronicle reported the news here. Further information regarding the U.S.-Peru FTA can be found here.