Peru Trade Deal Fails to Deliver on Development Potential

By Oxfam

WASHINGTON — International aid organization Oxfam expressed concern in today’s passing of the US-Peru Free Trade Agreement by the US House of Representatives, an agreement it says would do more harm than good for millions of Peruvians who live in poverty.

The modifications negotiated by the Democratic leadership after the agreement was signed and now included in the text take important steps toward making trade work for people living in poverty but remain insufficient to overcome the agreement’s adverse effects on development and poverty reduction in Peru, according to Oxfam. In its current form, this agreement still fails to address development needs as one of its core objectives.

“While trade could be an engine to pull millions out of poverty, this agreement will institutionalize an uneven playing field between the US and Peru,” said Raymond C. Offenheiser, president of Oxfam America. "Although we appreciate the House leadership’s determination to make this agreement better, provisions on agriculture, investment and intellectual property still do not add up to a good deal for farmers, workers and consumers in Peru."

According to Oxfam and other civil society leaders, the agreement fails to take into account US agriculture subsidies, meaning that Peru's small farmers will face massive dumping of subsidized farm products on their market.

“By fully opening Peru’s markets to subsidized US agricultural products, this trade agreement will destroy our domestic agriculture, threaten our food security and increase social problems,” said Luis Zúñiga, president of the National Convention of Peruvian Agriculture (Conveagro). “Farmers’ demands for greater public investment in and modernization of the agricultural sector have gone unmet over many years, but now our needs will be far greater and the threat to our livelihoods far worse.”

The agreement makes it easier for foreign investors to operate in Peru, but it also leaves the government with a weakened ability to enact or enforce its own laws on public health, safety, and the environment. In addition, modifications made on intellectual property remain insufficient to enable Peru to promote access to affordable medicines for all.

“Oxfam welcomes the significant achievement by Congressional leaders to reduce the onerous requirements for intellectual property protections for pharmaceuticals in the agreement, as it will make a real difference in preserving access to affordable medicines, a critical need for the poor,” said Offenheiser. “But more is needed on the intellectual property front and others, to really turn this into a pro-development deal.”

Nearly half of Peru’s 28 million inhabitants live in poverty, the majority of them in rural areas. Agriculture is the main source of income in rural areas and generates nearly a third of all employment nationally. About 90 percent of land under cultivation is dedicated to basic crops that supply the domestic market, like rice, wheat, corn, barley, and cotton.

“The trade agreement’s adverse effects on Peruvians will outweigh its limited benefits, which will primarily accrue to a limited group of exporters, whose current duty-free access to the US under the Andean Trade Preferences Act will be made permanent, continued Offenheiser.

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