The United States-Peru Free Trade Agreement (PTPA) entered into force on February 1, 2009. The PTPA eliminates tariffs and removes barriers to U.S. services, provides a secure, predictable legal framework for investors, and strengthens protection for intellectual property, workers, and the environment. The PTPA is the first agreement in force that incorporates groundbreaking provisions concerning the protection of the environment and labor rights that were included as part of the Bipartisan Agreement on Trade Policy developed by Congressional leaders on May 10, 2007. Since 2009, total trade between the United States and Peru has risen from close to $9 billion to $15.9 billion in 2017
Some Facts on the PTPA
New Opportunities for U.S. Farmers and Ranchers: The PTPA creates new opportunities for increased US agricultural exports to Peru. More than two-thirds of current U.S. farm exports became duty-free immediately after the Agreement went into force. Tariffs on most U.S. farm products will be phased out within 15 years, with all tariffs eliminated in 17 years. The top U.S. agricultural exports to Peru are wheat, corn, and rice. Learn more here.
Commitments and Cooperation to Protect the Environment: The Agreement commits Parties to effectively enforce their own domestic environmental laws and adopt, maintain and implement laws, regulations and all other measures to fulfill those obligations. The Environment Chapter includes a groundbreaking Annex on Forest Sector Governance, addressing the environmental and economic consequences of trade associated with illegal logging and illegal trade in wildlife. It also includes provisions recognizing the importance of conserving and protecting biodiversity, and creates a public submissions process with an independent secretariat for environmental matters to ensure that views of civil society are appropriately considered. Learn more here.
Strong Protections for U.S. Investors: The Agreement established a secure, predictable legal framework for U.S. investors operating in Peru. All forms of investment are protected under the Agreement. U.S. investors will enjoy in almost all circumstances the right to establish, acquire and operate investments in Peru on an equal footing with local investors. As of December 2013, the United States accounted for 14% of the total stock of investment in Peru, a 12% increase since the PTPA went into effect. Learn more here.
Expanded Access to Services Markets: Peru accords substantial market access across its service sector to include financial services. The Agreement eliminates Peruvian measures that required U.S. firms to hire national rather than U.S. professionals and measures requiring the purchase of local goods. Peru also agreed that both mutual funds and pension funds in Peru will be allowed to use portfolio managers in the United States. Learn more here.