	Background1

Peru has had a turbulent political history, alternating between periods of democratic and authoritarian rule. Current Political and Economic Issues

		Political Situation

On June 4, 2006, former President Alan GarcÃ­a defeated populist Ollanta Humala 53% to 47% in a close election. Economic Issues

President GarcÃ­a has continued the pro-market economic policies of his predecessor, Alejandro Toledo, who presided over one of the highest economic growth rates in Latin America throughout his term, with 8% growth in 2006. GarcÃ­a has embraced the U.S.- Peru Trade Promotion Agreement (PTPA), appointed a fiscally conservative finance minister, and cut government pay. U.S. - Peru Trade Promotion Agreement

The United States is Peru's largest trading partner. President Bush notified the Congress of the United States' intention to enter into the PTPA on January 6, 2006, and the agreement was signed on April 12, 2006. The PTPA was ratified by the Peruvian legislature in June 2006. PTPA implementing legislation ( H.R. 3688 ) passed the House on November 8, 2007, by a vote of 285 to 132; the Senate on December 4 by a vote of 77 to 18; and was signed by President Bush on December 14, ( P.L. 110-138 ).
Peru, a coca-producing country in the Andean region of South America, has had a turbulent political history. Despite its tumultuous past, Peru has recently taken steps to consolidate its democracy and pursue market-friendly economic policies. For the past seven years, Peru, a leading mineral exporter, has posted some of the fastest economic growth rates in Latin America. GDP growth reached 8% in 2007. In June 2006, former president Alan GarcÃ­a (1985-1990) was elected president in a close race. After taking office, GarcÃ­a embraced the United States-Peru Trade Promotion Agreement (PTPA), which the two countries signed on April 12, 2006 and the Peruvian legislature ratified in June 2006. PTPA implementing legislation ( H.R. 3688 ) passed the House on November 8, 2007, by a vote of 285 to 132; the Senate on December 4 by a vote of 77 to 18; and was signed by President Bush on December 14, ( P.L. 110-138 ). In addition to trade matters, congressional interest in Peru focuses on human rights issues and counternarcotics cooperation. See CRS Report RL34108, U.S.-Peru Economic Relations and the U.S.-Peru Trade Promotion Agreement and CRS Report RS22521, Peru Trade Promotion Agreement: Labor Issues . This report will be updated periodically.