The free trade agreement between the United States and Peru now looks certain to be approved by the US Congress before its August recess, after Democratic legislators and the Republican administration reached an agreement that will also set a framework for future US trade agreements, including those that have recently been negotiated with Panama and Colombia.
The Democrat-Republican accord that opens the way for ratification was announced last Friday 10 May by House Speaker Nancy Pelosi, who called it "a new day for our trade policy".
Pelosi stressed that "we have certain principles which we must accept the foundation of how we talk about trade...labour standards form a core element of our agreements".
The stronger labour and environmental standards that Democrats had been arguing for are now likely to be included in annexed letters to the main agreement, meaning it will probably not have to be renegotiated, or re-ratified by Peru's congress. These new policies include requirements that US trade agreement partners adopt and enforce five core International Labour Organization labour standards and seven major multilateral environmental agreements. Intellectual property-based restrictions on generic medicines are also softened, and Peru is specifically required to act against illegal logging, particularly of mahogany. A summary of the key adjustments to US trade policy can be read here.
If ratified as expected, the agreement will come into force towards the end of 2007 or early in 2008. Until then, Peru's existing trade concessions under the Andean Trade Preferences and Drug Eradication Act (ATPDEA) will be automatically renewed.
Peruvian sources credited the recent visit of President Alan Garcia to Washington with helping convince US legislators of the importance of the trade agreement to Peru's development.
In a forthcoming post, I'll summarize the key issues and controversies of the US-Peru trade agreement.
Categories: free trade, Latin America, Peru, FTA, TLC