Wednesday, April 12, 2006

Peruvian-American Free Trade Deal Signed

Alejandro Toledo, the outgoing President of Peru, today signed a deal with the United States to establish a bilateral free trade deal between the two nations. The terms of the deal mean that large quantities of food and industrial products will be duty-free. Ollanta Humala, the frontrunner in the current election, says that Toledo overstepped his authority and that Toledo should have postponed signing the deal until the new government was ushered in in July.

Critics of the deal worry that the Peruvian-American treaty could have the same disastrous results as NAFTA had on Mexican workers. Due to the lack of tarriffs on food stuffs going into Peru, there is a risk that the market there could become so inflated with U.S. agricultural commodities that the prices of crops in Peru will be forced down. A deflation in crop prices will put the millions of Peruvians who rely on farming in jeopardy of loosing their single source of income. The treaty may also raise the price of medicines in Peru. Jeff Vogt of the Washington Office on Latin America says that the free trade deal "leaves workers to confront routine violations of their labor rights without recourse, and no incentive to the government to improve existing labor laws"