Thoughts on the U.S.-Peru Trade Promotion Agreement

The U.S.-Peru Trade Promotion Agreement (USPTPA) took effect on Feb. 1, 2009, deepening the two nations’ economic ties.  The USPTPA builds upon the Andean Trade Promotion and Drug Eradication Act (ATPDEA), a program designed to discourage narcotics production and foster legitimate trade–the participating South American countries get an exemption from tariffs on a range of products  in exchange for cooperation in the fight against drugs.  But whereas the ATPDEA is a multi-lateral agreement, struck between the U.S., Peru, Colombia, Bolivia, and Ecuador, the USPTPA is bilateral, as the name implies.  

So why haven’t the other signatories to the ATPDEA received the benefit of treaties similar to the USPTPA?   Well, Bolivia’s relationship with the U.S. has been tense of late–President Evo Morales accused USAID of supporting opposition leaders, for instance–so that takes care of that.  And an analogous treaty was in the works for Colombia, but died in the U.S. Congress for some reason.  The more puzzling case is Ecuador.  When the ATPDEA was renewed in late 2008, it was extended until December 31, 2009 with respect to Peru and Colombia.  The same extension was provisionally granted to Ecuador, but it can be cut short in June 2009 if the U.S. determines Ecuador has failed to carry its end of the bargain.  (Bolivia received the least protection of all.  It’s set to lose ATPDEA benefits in June 2009; an extension is possible, but Bolivia will bear the burden of persuasion.)  According to 2006 statistics, Ecuador accounted for the greatest percentage of U.S. imports under the ATPDEA, so it’s not like the program failed in that country–at least from Ecuador’s perspective.  Is there a new rift between the U.S. and Ecuador that we don’t know about?  Quite possibly.  We’ll look into it.

-N. Fromherz

Hat tip: International Trade Law News (http://www.tradelawnews.com/).

UPDATE:  Ecuador has indeed ruffled U.S. feathers lately.  President Rafael Correa met with Iran’s chief of trade in July, signaling increased cooperation between the two nations.  And this was on top of his refusal to renew a ”forward operating location” agreement that allowed the U.S. military to use an airbase in Manta for anti-narcotics operations.  Finally, Ecuador has found itself in a feud with Colombia–the U.S.’s strongest ally in the region–ever since March 2008, when Colombia bombed a FARC camp in Ecuador.