Trade Deal with Peru Fails to Measure Up for Development

By Oxfam

WASHINGTON - International aid organization Oxfam expressed concern in today's passing of the US-Peru Free Trade Agreement by the US Senate, an agreement it says fails to deliver on its development potential and could further deepen poverty for Peru's poorest.

As the House of Representatives did last month, the Senate passed the trade deal after significant modifications negotiated by the Democratic leadership on labor, the environment, and intellectual property rules affecting access to medicines. These revisions took an important step 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.

"The Peru FTA fails to address development needs as one of its core objectives and locks in an uneven playing field between the US and Peru,"
>said Raymond C. Offenheiser, president of Oxfam America. "Although the Democratic leadership worked hard to make this agreement better, its provisions on agriculture and investment will do more harm than good for farmers, workers and consumers in Peru."<p>

The agreement fails to take into account US agriculture subsidies, according to Oxfam, 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."<p>

"The agreement provides special rights for foreign investors who want to operate in Peru at the expense of weakened ability on the part of the government to establish laws that promote social welfare and a better distribution of wealth," according to Pedro Francke, a Peruvian expert on social policy to combat poverty and former director of the health organization FOROSALUD.  "In spite of the modifications made to the intellectual property rules of the agreement, provisions remain that will make it more difficult for Peru to promote access to affordable medicines."

Civil society organizations in Peru are urging strong vigilance and monitoring of measures required for Peru to implement its obligations in the new trade deal, particularly those included by the Democratic leadership.  "We need broad public debate on all legislative and regulatory changes in Peru to allow diverse voices to be heard, particularly those who stand to be adversely affected," said Alejandra Alayza, director of the Peruvian Network for Globalization with Equity.  "It is fundamental to ensure that reforms in the areas of labor rights, environmental protection, and intellectual property rules fully incorporate all rights and obligations in accordance with the modifications to the agreement."

"This deal could be a serious blow to Peru's 14 million inhabitants who live in poverty, most of them in rural areas where agriculture is the main source of income," continued Offenheiser. "The bottom line is that this 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."

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