On November 8, 2007, the U.S. House of Representatives approved the U.S.-Peru Trade Promotion Agreement. On December 4, 2007, the U.S. Senate approved the agreement. On December 14, 2007, the President of the United States signed H.R. 366, the United States-Peru Trade Promotion Agreement Act. The agreement provides for the immediate or phasing out of tariffs and barriers to bilateral trade in goods and services originating in the United States and/or Peru. On February 1, 2009, the U.S.-Peru trade agreement (commonly known as the U.S.-Peru Free Trade Agreement) came into force. The agreement improves the overall climate of trade and investment, including deranging tariffs on many products, speeding up the clearance process for U.S. imports, and strengthening the protection of intellectual property rights. Under the US-Peru Trade Promotion Agreement (TPA), U.S. exports of consumer goods and industrial goods to Peru are no longer subject to tariffs. For agricultural products, tariffs on nearly 90% of U.S.
exports have been eliminated and the remaining tariffs will be eliminated by 2026. The TPA also provides favorable access to U.S. service providers, as well as guarantees for the protection of U.S. investors and copyrights, trademarks and patents registered in Peru. In addition, Peru has opened important public procurement contracts for U.S. bidders. The free trade agreement builds on the provisions of the Andean Preferences and Drug Releases Act 1991, which allowed Peruvian companies to export most of the goods to the United States duty-free. The free trade agreement will provide similar treatment to the majority of U.S. products arriving in Peru, allowing 80% of U.S.
consumer and industrial products to enter Peru duty-free as soon as it comes into force; the remaining rates maturing over a 10-year period. More than two-thirds of current U.S. agricultural exports to Peru will also be immediately exempt from tariffs. Despite these changes, the 18% VAT rate remains valid for almost all commercial transactions. The free trade agreement is also the first U.S. trade agreement that reflects the improved labour and environmental standards set out in the agreement reached between the two governments in May 2007. The U.S.-Peru Free Trade Agreement (PTPA) came into force on February 1, 2009. The PTPA removes tariffs and removes barriers to U.S. services, provides a safe and predictable legal framework for investors, and strengthens the protection of intellectual property, workers and the environment.
The PTPA was the first existing agreement that contained innovative environmental and workers` rights provisions introduced as part of the multi-party trade policy agreement developed by congressional leaders on 10 May 2007.