On December 14, 2007, President George W. Bush signed the U.S.-Peru Trade Promotion Agreement. The agreement is currently being implemented and is expected to come into force in early 2009.
In recent years, Peru has opened a new chapter in its history, embracing the worldwide economy and charting a new path as one of the fastest growing economies in the Americas. Today, the United States is Peru's leading commercial partner, and Peru is an increasingly important market for U.S. companies even before implantation of the free trade agreement.
Peru: A Dynamic Partner for Progress
- Growth and Trade: Over the past five years (2001-2006), Peru's GDP expanded by 57% and per capita income rose by 47%, one of the most impressive records in the Americas. Fueling this growth was a dramatic boom in trade. Both exports and two-way trade doubled after the U.S. Congress voted in 2002 to further open the U.S. market through the Andean Trade Promotion and Drug Eradication Act — underscoring the power of trade as an effective alternative development program.
- Poverty and Development: With dynamic growth, Peru's rates of poverty and extreme poverty each fell by six percentage points over the past five years. Rural poverty fell by nine percentage points. Part of the reason was the boom in exports to the United States, which generated tens of thousands of jobs outside Lima, strengthening the economy in the north and south of Peru and helping to reverse decades of migration to the capital.
- Jobs and U.S. Companies: In 2004, U.S. companies employed over 100,000 Peruvians directly and generated at least three times as many jobs indirectly. Far from leading a "race to the bottom," these companies are paying wages that are triple the average in Peru's urban areas (and many times those in rural areas).
- Jobs and Exports to the U.S.: All told, Peruvian exports to the United States supported nearly a million jobs in 2006 — three times the number a decade earlier. This figure represents approximately one quarter of Peru's formal sector employment, underscoring how economic ties to the United States are providing Peru with critically needed jobs, income, and tax revenues.
- Investment and Growth: U.S. companies have played a pivotal role in Peru's development for 150 years, providing investment that has proven vital to the development of critical infrastructure ranging from railroads and ports to roads and telecommunications. U.S. companies' investments in Peru generated $6.3 billion in sales in 2003, boosting Peru's economy and generating value for the companies' shareholders.
- Energy: U.S. companies have invested $1 billion in Peru's natural gas sector and plan to invest an additional $2 billion in the next few years. Much of the sector is oriented toward shipping liquefied natural gas (LNG) to the North American market. With natural gas prices at record highs in the United States, Peru is attractive as a reliable and secure source of this environmentally benign fuel.
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