US-Peru Free Trade Deal a Step Back for Development

By Oxfam

International aid organization Oxfam criticized today's signing of the US-Peru Free Trade Agreement (FTA) in Washington, an agreement it says would do more harm than good for millions of Peruvians who live in poverty. Provisions in this trade agreement threaten the livelihood of small farmers in Peru and will put access to important life-saving drugs at affordable prices out of reach for the majority of Peruvians.

According to Oxfam, the agreement includes strict new intellectual property rules that exceed World Trade Organization (WTO) standards and could dangerously hinder Peru's access to important life-saving drugs. The agreement also fails to take into account that the US subsidizes farm production with billions of dollars in taxpayer support, meaning that Peru's small farmers will face massive dumping of subsidized farm products on their market. Although the agreement makes it easier for foreign investors to operate in Peru, it also leaves the government with a weakened ability to enact or enforce its own laws on public health, safety, and the environment.

"Agreements between trading partners should offer economic opportunity and development, not the demise of a poor country's agriculture sector or impediments to public health," Raymond C. Offenheiser, president of Oxfam America. "This agreement's provisions on intellectual property, agriculture and investment do not add up to a good deal for farmers, workers and consumers in Peru."

The FTA will have to be approved by Congress in both the US and Peru, but opposition has been mounting. A recent poll indicated that two-thirds of Peruvians believe the FTA should not be brought to a vote until after their newly elected Congress is seated on July 28, despite President Toledo’s insistence to the contrary. An alliance of Peruvian grassroots organizations under the banner "TLC Asi No" (Not This FTA) circulated a petition in support of a national referendum on the FTA. Election authorities validated nearly 60,000 signatures last week, setting in motion procedures under Peru’s Citizens Participation Law that allows the general public to put forward legislation Congress must vote on within 120 days. The Peruvian Congress is now to decide whether to put the FTA to a national referendum, giving all citizens the opportunity to weigh in on whether or not this trade agreement is in their best interests. Oxfam supports the democratic rights of Peruvian citizens to participate in the policymaking that will affect their lives.

"The US-Peru FTA was negotiated in secret and includes provisions imposed by the United States that will fail to promote development or reduce poverty," said Offenheiser. "While trade could be the engine to pull millions out of poverty, this agreement will institutionalize an uneven playing field between the two countries."

In Washington, Oxfam called on the US Congress to focus its energies on strengthening current trade preference legislation, such as the Andean Trade Preferences Act, which provide duty-free access to the US market for specific products from designated developing countries such as Peru. Current programs are set to expire this year but Congress is now considering new legislation to extend those preferences through the Trade Preference Extension and Expansion Act.

"The US Congress should oppose the US-Peru FTA and others like it because they threaten development priorities for poor countries,” said Offenheiser. “The US should encourage developing countries to utilize trade as a means of achieving sustained economic growth and poverty reduction-extending our trade preference programs would contribute to this end."

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