Effects of the US-Peru Trade Promotion Agreement
Obama (Source: Global Trade Review)
Also published on LatAm Observer.
The US-Peru Trade Promotion Agreement (TPA) came into effect on 1 February 2009. The Office of the USA Trade Representative claims that from 2009-2013 total trade between the countries increased from $9-16 billion. However, this increase in trade cannot be attributed solely to a FTA, more likely Peru’s quick recovery after the global recession had a greater effect.
The agreement has its roots in Andean Trade Preference Act (ATPA) between the US and Peru, Bolivia, Columbia and Ecuador. However, when this agreement expired the individual Andean nations opted for individual bilateral treaties with the US.
The TPA was created to eliminate tariffs between the two countries as well as give US investors the same right as local investors and allow the employment of US citizens in Peruvian companies. In addition to increasing foreign direct investment, the agreement also included clauses for the protection of the Peruvian environment. Supporters also claim that both countries are obligated to comply with international labour laws, in particular reducing the amount of child labour in Peru.
