(December 17, 2007) U.S. President George W. Bush and Peruvian President Alan García signed the U.S.-Peru Free Trade Agreement (FTA) on Friday.

The U.S. Senate voted 77-18 on December 4 to approve the agreement, which will ensure that the United States will continue to gain access to world markets, resulting in an improved economy and additional employment of Americans.
Last month, on November 8, the U.S. House of Representatives approved the FTA by a vote of 285-132.

In June 2006 the Peruvian Congress overwhelmingly approved the agreement by a vote of 79-14 with six abstentions.
When the agreement enters into force, 80 percent of U.S. consumer and industrial exports to Peru will be duty-free immediately. Peru’s remaining tariffs phase out over 10 years. U.S. farmers and ranchers also will become much more competitive, benefiting from immediate duty-free treatment of 90 percent of current U.S. agricultural exports.

California is one of the 10 largest economies in the world with a gross state product of approximately $1.5 trillion. International-related commerce accounts for approximately one-quarter of the state’s economy. Export-supported jobs account for more than 10 percent of California’s total private sector employment-- about one in 10 jobs.

Peru, the third largest country in South America, is approximately three times the size of California. Peru is the fifth most populous country in Latin America, and has an annual gross domestic product (GDP) of more than $67 billion. Peru’s economy is one of the most dynamic in Latin America, showing particularly strong growth over the past three years. Recent economic expansion has been driven by construction, mining, investment, domestic demand and exports.

Total trade in 2006 between Peru and the United States was more than $8 billion, with the United States exporting $2.9 billion worth of goods to the nation. About 200,000 U.S. citizens visit Peru annually for business, tourism and study. Nearly 16,000 Americans reside in Peru, and more than 400 companies are represented in the country.

In 2006, California exported $180 million to Peru, making it one of the state’s 50 largest trading partners.

A U.S.-Peru FTA is a critical element of the U.S. strategy to liberalize trade through multilateral, regional and bilateral initiatives.

CalChamber Position

The California Chamber of Commerce, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad and elimination of disincentives that impede the international competitiveness of California business.

The U.S.-Peru FTA will increase momentum toward lowering trade barriers and set a positive example for other small economies in the Western Hemisphere.

Staff Contact: Susanne Stirling 

Additional Materials

International Trade