Peruvian President Alan García is celebrating after the United States House of Representatives approved a free trade agreement with Peru today. “Peru will have open access to the largest economy in the world. The United States, economically, is 150 times larger than Peru,” García told reporters. The 285-132 vote in favor of the accord was a major hurdle for the pact and means the FTA will become law if approved by the U.S. Senate.
Supporters say the agreement will help Peru’s economy expand by 10 percent in 2008 and 2009. “The FTA is a blow against poverty, against those that want an isolated Peru, against those that refuse investments and want to see povery continue,” said the president of Peru’s Congress, Luis Gonzales Posada.
The FTA could increase American exports by US$1 billion a year by eliminating duties on some 80 percent of U.S. industrial exports and two-thirds of agriculture exports. U.S. supporters also say the accord would boost their presence in Latin America and counter Venezuelan President Hugo Chavez oil-powered influence and biting anti-U.S. rhetoric.
Critics say trademark protection in the FTA will force Peruvian health care providers to abandon generic drugs, signaling a 30 percent increase in the cost of medicine. Peruvian farmers say they won’t be able to compete with heavily subsidized U.S. agricultural goods, potentially devastating Peru’s corn, cotton, rice and sugar sectors.
Investors’ rights provisions could also sharply curtail Peru’s ability to enforce environmental protection regulations for mining in the Andes and oil and gas exploitation in the fragile Amazon.
San Francisco-based Amazon Watch, representing indigenous groups, says the FTA would encourage devastation of the Peruvian Amazon, and abuses against the region’s indigenous peoples. Lori Wallach, director of Washington-based Public Citizen’s Global Trade Watch, says thousands of poor Peruvian farmers could be displaced and forced into drug production, paramilitary groups or exile from a surge in U.S. agriculture exports.
