Press Release

Secretary Gutierrez Statement on Senate Finance Committee Vote on Peru Trade Promotion Agreement

WASHINGTON—U.S. Commerce Secretary Carlos M. Gutierrez today issued the following statement on the Senate Finance Committee resounding mark-up voice vote in support of the Peru Trade Promotion Agreement (TPA).

“I commend Finance Chairman Baucus and Ranking Member Grassley for today’s action on today’s Peru mark up. This agreement is good for workers, farmers and businesses.

“The Peru TPA has strong support in both the House and the Senate, and marks what I hope will be the beginning of a new period of bipartisanship on trade.

“It has been nearly five months since the Administration and Congress agreed on a framework on labor and environmental issues.

“Congress has previously allowed 98 percent of imports from Peru to enter the U.S. duty free, while our American exports to Peru face significant tariffs.

“There is no time to waste – every day of delay is another day of one-way free trade that puts all the tariff burdens on American workers, farmers and businesses.

“I am pleased that Congress is finally ready to vote on this important agreement.”

Background
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 Preferences Act (ATPA) 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 FTAs 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 75 million consumers and GDP of almost $246 billion. Between 2002 and 2006, U.S. exports to Peru, Colombia and Panama increased by more than 87 percent, with exports reaching $2.9 and $6.7 billion respectively in 2006.

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 more than doubled 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 ATPA.