Press Release

Secretary Gutierrez Statement on President Bush Signing the U.S.-Peru Trade Promotion Agreement

WASHINGTON—Commerce Secretary Carlos M. Gutierrez today issued the following statement regarding President Bush’s signing of the U.S.-Peru Trade Promotion Agreement.

“President Bush’s signing of the U.S.-Peru Trade Promotion agreement marks an historic step in strengthening America’s friendship with an ally and opening a new market to U.S. exports. President Bush’s vision and leadership is keeping America’s economy vibrant, while growing our economic relationships with important neighbors. I thank Congress for its overwhelming bipartisan cooperation in passing the U.S.-Peru Trade Promotion Agreement, a very important agreement for both Americans and Peruvians.

“Last year, Peru's economy expanded by eight percent. Trade between the U.S. and Peru has more than doubled over the past three years. Congress allows more than 90 percent of imports from Peru to enter the U.S. duty-free, while U.S. exports to Peru face significant tariffs.Greater access to new markets, such as Peru, will enable U.S. businesses to hire more, produce more, export more and create more wealth. The U.S.-Peru Trade Promotion Agreement will give American exporters the same access to the Peruvian market they have to our market to continue to expand and grow.

“Our economy created 8.3 million new jobs during its 51 straight months of job growth and GDP growth was 4.9 percent. America’s exports continue rising at more than twice the rate of imports. Now is the time to continue the success of the pro-growth policies that strengthen America’s competitiveness.

“Free trade agreements are critical to lowering barriers to American exports and creating better-paying American jobs. Now, more than ever, exports are driving American economic growth and I look forward to working with Congress to pass pending free trade agreements with Colombia, Panama and Korea in the coming months. I call on Congress to act as quickly as possible to give American businesses a level playing field. These FTAs are good for democracy and will help Peru, Colombia and Panama on their paths to peace, true social justice and prosperity.”

Background
Year-to-date through October U.S. merchandise exports to Peru have reached a record $3.4 billion, 44 percent higher than the $2.3 billion in merchandise exported to Peru during the same period of 2006. Year-to-date merchandise exports to the four pending FTA countries, Peru, Colombia, Panama and S. Korea, totaled $42.0 billion through October, up 14 percent from the $36.9 billion in merchandise exported during the same period of 2006.

Bilateral free trade agreements (FTAs) are one of the best ways to open up foreign markets to U.S. exporters. Today the United States has implemented FTAs with 14 countries. Last year, trade with countries with which the United States has FTAs was significantly greater than their relative share of the global economy. Although comprising 7.5 percent of global GDP, not including the United States, those FTA countries accounted for more than 42 percent of U.S. exports.

In 2006, more than 90 percent of Peruvian, Colombian and Panamanian imports into the United States entered duty-free under unilateral U.S. trade preference programs, such as the Andean Trade Promotion and Drug Eradication Act (ATPDEA) and the Generalized System of Preferences (GSP), or under zero Normal Trade Relations (NTR) tariffs. These FTAs will open these markets to U.S. exporters as they will provide duty-free treatment for U.S. exports to countries that already purchase from the United States.

The United States is Peru’s leading trading partner, accounting for 23.3 percent of Peru’s exports and supplying 16.4 percent of the country’s imports in 2006. Peru-U.S. bilateral trade has almost tripled over the past decade from $3 billion in 1996 to $8.8 billion in two-way trade in 2006, due in large part to the ATPDEA.

The FTAs with Peru, Colombia, Panama and S. Korea would level the playing field for U.S. workers, businesses and agriculture. The FTAs will give U.S. businesses duty-free access to growing markets with a combined population of approximately 126 million consumers and GDP of $1.1 trillion. Between 2002 and 2006, U.S. exports to Peru, Colombia, Panama and S. Korea increased by more than 50 percent, with exports reaching $2.9, $6.7, $2.7, and $32.4 billion, respectively, in 2006.