On February 1, 2009, the U.S. Peru Trade Promotion Agreement (commonly referred to as the U.S.-Peru Free Trade Agreement, or FTA) entered into force. The agreement enhances the overall commercial and investment climate by, inter alia, eliminating tariffs on many goods, accelerating the customs clearance process for U.S. imports, and strengthening the protection on intellectual property rights.
The FTA builds upon the provisions of the previously existing Andean Trade Preferences and Drug Eradication Act (1991), which has allowed Peruvian firms to export most goods to the United States duty-free. The FTA will afford similar treatment to a majority of U.S. goods entering Peru, making 80% of U.S. consumer and industrial products eligible for duty-free access into Peru immediately upon entry into force; with the remaining tariffs phased-out over ten years. More than two-thirds of current U.S. farm exports to Peru will also become duty free immediately. Despite these changes, the 18% VAT rate still applies to almost all commercial transactions. The FTA is also the first U.S. trade agreement in force that reflects the enhanced labor and environmental standards set out in the May 2007 agreement between the two governments.
What is the TPP?
The Trans-Pacific Partnership (TPP) is a trade agreement among twelve Pacific Rim countries concerning a variety of matters of economic policy, which was reached on 5 October 2015 after 7 years of negotiations. The agreement's stated goal had been to "promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in our countries; and promote transparency, good governance, and enhanced labor and environmental protections." Among other things, the TPP Agreement contains measures to lower trade barriers such as tariffs, and establish an investor-state dispute settlement mechanism.
Historically, the TPP is an expansion of the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4), which was signed by Brunei, Chile, New Zealand, and Singapore in 2005. Beginning in 2008, additional countries joined the discussion for a broader agreement: Australia, Canada, Japan, Malaysia, Mexico, Peru, the United States, and Vietnam, bringing the total number of participating countries in the negotiations to twelve.
Participating nations aimed at completing negotiations in 2012, but contentious issues such as agriculture, intellectual property, and services and investments caused negotiations to continue. They finally reached agreement on 5 October 2015.
The Trans-Pacific Partnership (TPP) writes the rules for global trade—rules that will help increase Made-in-America exports, grow the American economy, support well-paying American jobs, and strengthen the American middle class.
Learn more about the TTP.