The United States and Peru concluded the U.S.-Peru Trade Promotion Agreement (PTPA) on December 7, 2005 and, on April 12, 2006, U.S. Trade Representative Rob Portman and Peruvian Minister of Foreign Trade and Tourism Alfredo Ferrero Diez Canseco signed the agreement. The proposed PTPA is a comprehensive trade agreement that, if approved by Congress, would eliminate tariffs and other barriers in goods and services trade between the United States and Peru. A free trade agreement with Peru is one of several bilateral free trade agreements (FTAs) negotiated or being considered by the United States with Latin American countries in its effort to advance free trade throughout the region. Peru s President Alan Garc a views the pending agreement as fundamental to reforms Peru has taken for economic growth and social redistribution. 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).1 After thirteen rounds of talks, however, negotiators failed to reach an agreement. Peru continued negotiations alone with the United States and concluded a bilateral agreement in December 2005. On January 6, 2006, President Bush notified the Congress of his intention to enter into a free trade agreement with Peru. Colombia also continued negotiations with the United States in January 2006, and this agreement was concluded on February 27 and signed on November 22, 2006.

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 six years, Peru, a leading mineral exporter, has posted some of the fastest economic growth rates in Latin America. GDP growth reached 8% in 2006 and, despite damage caused by a recent earthquake, is expected to exceed 7% in 2007. In June 2006, former president Alan Garcia (1985-1990) was elected president in a close race. Since taking office, Garcia has embraced the proposed United States-Peru Trade Promotion Agreement (PTPA) and launched an aggressive coca eradication campaign. The United States enjoys strong ties with Peru, with trade issues a key U.S. priority. The proposed PTPA was ratified by the Peruvian legislature in June 2006, and amended to include labor and environmental provisions in June 2007. After a trip to Peru in August 2007, congressional leaders indicated that consideration of the proposed PTPA would likely occur this fall. 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.

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 six years, Peru, a leading mineral exporter, has posted some of the fastest economic growth rates in Latin America. GDP growth reached 8% in 2006 and, despite damage caused by a recent earthquake, is expected to exceed 7% in 2007. In June 2006, former president Alan García (1985-1990) was elected president in a close race. Since taking office, García has embraced the proposed United States-Peru Trade Promotion Agreement (PTPA) and launched an aggressive coca eradication campaign. The United States enjoys strong ties with Peru, with trade issues a key U.S. priority. The proposed PTPA was ratified by the Peruvian legislature in June 2006, and amended to include labor and environmental provisions in June 2007. After a trip to Peru in August 2007, congressional leaders indicated that consideration of the proposed PTPA would likely occur this fall. 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.