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Peru ratifies US free trade deal


Peru ratifies US free trade deal

28 June 2006

Peru’s outgoing Congress has voted overwhelmingly to ratify a free trade deal with the US amid protests by recently elected opposition deputies.

Congress voted 79 to 14 to approve the accord, which businesses say will boost Peru’s economy but which opponents say will flood the country with US imports.

The agreement must now be passed by the US Congress to take effect.

The agreement will scrap tariffs on US goods entering Peru while removing barriers to trade in services.

Peruvian goods already enter the US duty-free under a deal providing preferential arrangements for imports from Andean nations.

President Alejandro Toledo’s administration had lobbied hard for the accord to be ratified before the president-elect, Alan Garcia, takes office on 28 July and the new Congress is sworn in.

Mr Garcia has said he believes the agreement should be modified but many in his Apra party backed ratification.


The most vocal opposition has come from defeated presidential candidate, Ollanta Humala, who had demanded a referendum on the deal.

He is backing a planned nationwide protest later on Wednesday.

During the debate, several legislators elect from Mr Humala’s nationalist alliance forced their way past security guards onto the floor of Congress, waving placards and chanting anti-free trade slogans.

Last December, Peru and the US reached the free trade deal after more than a year of negotiations.

It is due to come into effect from 2007 if approved by the US Congress.

Trade between the US and Peru amounted to $7.4bn (£4bn) in 2005, and the agreement will provide new opportunities for American companies.

Farming unions in Peru have criticised the agreement, saying a flood of imports will force domestic firms out of business.

The Peruvian Congress approved a series of measures to help the agriculture sector, including compensation for cotton, yellow corn and wheat producers, the Associated Press reported.

But some deputies said the subsidies fell far short of estimated projected losses.

Others argued that the deal would limit the country’s ability to renegotiate or cancel contracts with international mining and gas companies.