	Introduction

The U.S.-Peru Trade Promotion Agreement (PTPA) is a comprehensive trade agreement that eliminates tariffs and other barriers in goods and services trade between the United States and Peru. The agreement was signed on April 12, 2006 by the U.S. Trade Representative and the Peruvian Minister of Foreign Trade and Tourism. On November 8, 2007, the House of Representatives passed (285-132) H.R. 3688 to implement the PTPA under the Trade Promotion Authority, which requires an expedited process with limited debate and an up or down vote. The Senate approved (77-18) legislation on December 4, 2007, and President Bush signed the implementing bill for the free trade agreement on December 14, 2007 ( P.L. 110-138 ). In Peru, the Peruvian Congress voted 79 to 14 to approve the agreement on June 28, 2006. On January 16, 2009, President Bush issued a proclamation to implement the U.S.-Peru Trade Promotion Agreement as of February 1, 2009. The PTPA negotiations began in May 2004, when the United States, Colombia, Peru, and Ecuador participated in the first round of negotiations for a U.S.-Andean free trade agreement (FTA). After thirteen rounds of talks, however, negotiators failed to reach an agreement. Peru continued negotiations alone with the United States and concluded the bilateral agreement in December 2005. Implementing legislation for the PTPA was considered by the U.S. Congress under Title XXI (Bipartisan Trade Promotion Authority Act of 2002) of the Trade Act of 2002 ( P.L. On June 25, 2007, U.S. Trade Representative Susan Schwab announced that the United States reached an agreement with Peru on a number of legally binding amendments to the PTPA on labor, the environment, and other matters to reflect the bipartisan agreement of May 10. U.S.-Peru Merchandise Trade

The United States is Peru's leading trade partner. In 2007, 19% of Peru's exports went to the United States, and 18% of Peru's imports were supplied by the United States. As shown in Table 2 , the dominant U.S. import item from Peru is copper (19% of U.S. imports from Peru in 2007), followed by petroleum and other oils and products (12% of total), and silver (8% of total). Andean Trade Preference Act

The United States currently extends duty-free treatment to imports from Peru under the Andean Trade Preference Act (ATPA), a regional trade preference program. 102-182 ), enacted on December 4, 1991. The Andean Trade Promotion and Drug Eradication Act (ATPDEA; Title XXXI of P.L. Key PTPA Provisions25

			Market Access

Upon implementation, the agreement would eliminate duties on 80% of U.S. exports of consumer and industrial products to Peru. An additional 7% of U.S. exports would receive duty-free treatment within five years of implementation. Remaining tariffs would be eliminated ten years after implementation. The PTPA would make the preferential duty treatment for U.S. imports from Peru under the ATPDEA permanent. Issues for Congress

		Economic Impact

When fully implemented, the PTPA will likely have a have a small, but positive, net economic effect on the United States because of the relatively small size of Peru's economy in relation to the U.S. economy. U.S. imports from Peru account for 0.3% of total U.S. imports, and U.S. exports to Peru account for 0.3% of total U.S. exports. Other Members of Congress have expressed strong support for the PTPA and for the government of Peru in its efforts to strengthen laws and regulations on labor, environment, intellectual property. They argue that, among other things, that the PTPA will erode protection for the environment and workers' rights in Peru.
The U.S.-Peru Trade Promotion Agreement (PTPA) is a comprehensive trade agreement that, upon implementation, eliminates tariffs and other barriers in goods and services between the United States and Peru. The agreement was signed on April 12, 2006 by the U.S. Trade Representative and the Peruvian Minister of Foreign Trade and Tourism. On November 8, 2007, the U.S. House of Representatives passed (285-132) implementing legislation for the PTPA (H.R. 3688). The U.S. Senate approved (77-18) legislation on December 4, 2007. President Bush signed the implementing bill for the free trade agreement on December 14, 2007 (P.L. 110-138). In Peru, the Peruvian Congress voted 79 to 14 on June 28, 2006 to approve the agreement. On January 16, 2009, President Bush issued a proclamation to implement the U.S.-Peru Trade Promotion Agreement as of February 1, 2009.
The PTPA will likely have a small net economic effect on the United States because U.S. trade with Peru accounts for a small percent of total U.S. trade. For Peru, the impact will be more significant because the United States is Peru's leading trade partner. In 2007, 19% of Peru's exports went to the United States, and 18% of Peru's imports were supplied by the United States. In that same year, Peru accounted for 0.3% of total U.S. trade. Peru ranks 41st among U.S. export markets and 44th as a source of U.S. imports. The dominant U.S. import item from Peru is copper followed by petroleum oils and related products. The leading U.S. export item to Peru is petroleum oils and related products, followed by wheat and meslin.
Upon implementation, the PTPA will eliminate duties on 80% of U.S. exports of consumer and industrial products to Peru. An additional 7% of U.S. exports will receive duty-free treatment within five years of implementation. Remaining tariffs will be eliminated ten years after implementation. The PTPA will make the preferential duty treatment for selected U.S. imports from Peru permanent. The United States currently extends duty-free treatment to imports from Peru under the Andean Trade Preference Act (ATPA; Title II of P.L. 102-182), enacted on December 4, 1991 and reauthorized under the Andean Trade Promotion and Drug Eradication Act (ATPDEA; Title XXXI of P.L. 107-210). The preference program is scheduled to expire on December 31, 2009.
The PTPA negotiations began in May 2004, when the United States, Colombia, Peru, and Ecuador participated in the first round of negotiations for a U.S.-Andean free trade agreement (FTA). When negotiators failed to reach an agreement, Peru continued negotiations with the United States on a bilateral basis and concluded the agreement in December 2005. Implementing legislation for the PTPA was considered by the U.S. Congress under Title XXI (Bipartisan Trade Promotion Authority Act of 2002) of the Trade Act of 2002 (P.L. 107-210), which requires an expedited process with limited debate and an up or down vote. In June 2007, the United States and Peru reached an agreement to a number of legally binding amendments to the PTPA that were subsequently approved by both countries on labor, the environment, and other matters. House Democratic leaders have stated that the PTPA has potential to improve the standards of living in the United States and Peru but they have expressed concerns about Peru's labor laws and the lack of protection for workers' rights in Peru, especially with regard to freedom of association. Other Members of Congress have expressed strong support for the PTPA and for the government of Peru in its efforts to strengthen laws and regulations on labor, environment, and intellectual property. This report will be updated as events warrant.