US-Peru FTA
US-Peru Free Trade Agreement
The US-Peru Free Trade Agreement was completed on December 7, 2005 and was signed by the US and Peru on April 12, 2006. The US Trade Representative may present it to the US Congress for a vote as soon as May or June.
Agriculture
A third of Peru's population depends on agriculture to make a living. Just like with the US-Central America-Dominican Republic Free Trade Agreement (DR-CAFTA), the US-Peru FTA would force Peru to open its market to subsidized agricultural imports. Each year, the US government pays billions of dollars in subsidies. This encourages industrial-sized farms to overproduce and dump surpluses, which depresses local prices. Peruvian farmers, who grow crops that are vital to the domestic economy, such as wheat, corn, rice, and cotton, simply can't compete. The US-Peru FTA would push poor farmers deeper into poverty.
Health
The intellectual property provisions in the US-Peru FTA would go far beyond agreed upon rules at the World Trade Organization. The Free Trade Agreement would limit Peru's ability to use public health safeguards to ensure that people have access to medicines. The FTA provisions would also restrict competition between brand-name drugs and generics. This means that the cost of new life-saving drugs would remain out-of-reach for most poor people in Peru. This would be especially harmful to those living with diseases such as tuberculosis and HIV/AIDS.
Sustainable Development
The provisions governing investment in the US-Peru FTA would make it easier for foreign investors to operate in Peru. But they would leave the Peruvian government with a weakened ability to protect public health, safety, and the environment. For example, the agreement would give foreign investors the right to challenge environmental laws, which could hinder community efforts to regulate the mining industry. The US-Peru FTA would also strip the Peruvian government of the ability to mandate that foreign investment must contribute to the local economy through the use of local materials, employment, or transfers of technology. Prohibiting these requirements means that the Peruvian government has fewer ways to ensure that foreign investment contributes to strengthening the local economy and reducing poverty.