United States Peru Free Trade Agreement

The free trade agreement builds on the provisions of the Andean Preferences and Drug Releases Act 1991, which allowed Peruvian companies to export most of the goods to the United States duty-free. The free trade agreement will provide similar treatment to the majority of U.S. products arriving in Peru, allowing 80% of U.S. consumer and industrial products to enter Peru duty-free as soon as it comes into force; the remaining rates maturing over a 10-year period. More than two-thirds of current U.S. agricultural exports to Peru will also be immediately exempt from tariffs. Despite these changes, the 18% VAT rate remains valid for almost all commercial transactions. The free trade agreement is also the first U.S. trade agreement that reflects the improved labour and environmental standards set out in the agreement reached between the two governments in May 2007.

Prior to the implementation of the free trade agreement, the Peruvian government withdrew existing environmental protection measures to implement the provisions of the free trade agreement regarding the rights of foreign investors to access forestry, mines and other natural resources. These included access to sensitive Amazonian areas over which indigenous communities had control of the FTA, in accordance with Peruvian law. [23] Protests by indigenous Amazonian communities against the implementation of the free trade agreement and associated new foreign investors using indigenous land rights have been fatal. By contrast, when the opposition recovered, a confrontation had already taken place in June 2009 near the town of Bagua, in the northern Amazon province, which, according to official figures, killed 34 people. [24] In the face of these widespread riots, the Peruvian Congress repealed two additional decrees that redefined forests to allow for more logging and mining. [25] The U.S.-Peru Free Trade Agreement (PTPA) came into force on February 1, 2009. The PTPA removes tariffs and removes barriers to U.S. services, provides a safe and predictable legal framework for investors, and strengthens the protection of intellectual property, workers and the environment. The PTPA was the first existing agreement that contained innovative environmental and workers` rights provisions introduced as part of the multi-party trade policy agreement developed by congressional leaders on 10 May 2007.

Share

Christoph