Press Release

Statement by Commerce Secretary Carlos M. Gutierrez on the House Ways and Means Committee Passing Unanimously the U.S.-Peru Trade Promotion Agreement

WASHINGTON—Commerce Secretary Carlos M. Gutierrez today issued the following statement on the House Ways and Means Committee passing unanimously the U.S.-Peru Trade Promotion Agreement.

“This unanimous, bipartisan vote in the House Ways and Means Committee reaffirms the importance America places on its friends and allies in Latin American and opening more markets for American workers, farmers and businesses. The U.S.-Peru Trade Promotion Agreement will strengthen the bonds between our countries while eliminating trade barriers so American workers can compete and win in the Peruvian market.

“U.S. exports are now at a historically high level and contribute strongly to the growth of America’s gross domestic product. Third quarter GDP growth was 3.9 percent—and almost a fourth of that growth was attributed to trade. This agreement levels the playing field for American businesses and workers. Congress already allows 98 percent of imports from Peru to enter the United States duty-free, while U.S. exports to Peru currently face significant tariffs.

“The Administration is committed to continued bipartisanship in the pursuit of a market-opening, pro-growth trade policy for the American people and positive relations with America’s friends overseas. We look forward to working with Congress in a bipartisan way to pass all four pending Free Trade Agreements with Peru, Colombia, Panama and Korea.

“We must not turn our backs from these important allies. In Latin America, after decades of violence, poverty and instability, the tides have begun to turn. These FTAs are good for democracy and will help Peru, Colombia and Panama on their continued paths to peace, true social justice and prosperity.”

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 Preference 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.