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New trade pact includes enforceable labor and environmental protections

WASHINGTON, DC – 12/10/07 – The US Senate has voted 77 to 18 in favor of the free-trade agreement with Peru, clearing the pact for final action by President Bush, who has already stated he will sign the bill.

The House of Representatives approved the agreement late last month on a vote of 285-132.

The agreement is the first that meets conditions set in a May agreement between Congress and the White House to include enforceable labor and environmental standards in such pacts. It also offers greater protection of intellectual property rights and food safety.

While most Peruvian products already enter the US duty-free under a number of trade preference programs, including the Andean Trade Preference Act, US goods and services routinely face an average weighted tariff of 9% to 10%.

Under the terms of the agreement, 80% of US consumer and industrial products and more than two-thirds of current US farm exports, including beef, cotton, wheat and soybeans, will enter Peru duty-free immediately.

In 2006, two-way trade between the US and Peru reached $8.8 billion, with $2.9 billion of this coming from US exports, according to the US Bureau of Economic Analysis (BEA).

The National Foreign Trade Council (NFTC), the country’s largest international trade promotion group, was quick to applaud the Senate vote.

''Peru is a growing market for U.S. goods and services, and this FTA strengthens our existing trade partnership by expanding opportunities for US industries and workers,'' said Mary Irace, NFTC Vice President for Trade and Export Finance.

"It is important to recognize that the US market is already wide open to imports from Peru under existing US trade preference programs and generally low tariffs,” she said, adding, the agreement ''will change that by eliminating tariff and non-tariff barriers to our bilateral trade in both markets.''

The new pact drew also praise from both sides of the aisle.

Iowa Republican Senator Charles Grassley, in a Senate floor statement urging approval of the free-trade pact, said such agreements are especially important for Latin American nations because they ''create more opportunities for increased economic growth and prosperity in neighboring economies, which helps to foster political stability.''

Senate Finance Committee Chairman Max Baucus, a Democrat from Montana, had urged passage of pact, saying it would ''strengthen our ties with one of the fastest-growing economies in Latin America.''

But Baucus qualified his support for the new agreement saying that he will not push for action on the pending agreement with South Korea until that country agrees to accept US beef, which it had barred, citing fears of mad cow disease.

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