MercoPress. South Atlantic News Agency

Peru announces free trade agreement with United States

Peru announced Wednesday the signing of a free trade agreement with United States, which President Alejandro Toledo described as “great news but also a great challenge”.

We finally managed to rescue issues such as health, intellectual property and biodiversity" said Mr. Toledo adding that the agreement had demanded a round of thirteen negotiations.

Peru actually began free trade negotiations last year together with Ecuador and Colombia, but these two countries dropped out last November complaining about United States "inflexibility".

President Toledo also mentioned agriculture as one of the areas where Peru managed more "flexibility" from United States.

Criticized for having "abandoned" his two Andean partners in the negotiations with United States Mr. Toledo argued that "they are behind in the talks and have a different calendar to ours".

"This is a government decision and I could not act as an irresponsible president, leaving behind an expired preferential tariffs agreement without having before reached a free trade agreement with the United States".

"A deal is reached when benefits are superior to costs, and that is what has happened", added the Peruvian president insisting that "we are not leaving Peruvian production unprotected".

According to Mr. Toledo the "possible costs" will be compensated with longer terms, fifteen to twenty years, to adapt to the new conditions, particularly in agriculture.

But Luis Zuñiga president of the Agriculture National Convention claimed that what happened in Washington was not a negotiation, but simply "accepting what United States imposed".

"We've practically handed all our market of sensitive products. What is left for domestic production is virtually nothing" stressed Mr. Zuñiga arguing that the Peruvian negotiators caved in to the US "inflexibility".

Mr. Zuñiga said farmers support free markets, "but not cheating, because the US farm subsidies are very harmful and disadvantageous for our farmers".

Another area criticized was that of pharmaceutical products which according to local laboratories will translate into higher prescription and medicine costs.