TWN Info Service on Free
28 September 2006
FTA MEANS DEEPER POVERTY IN PERU
GMO’s arrive. Democracy doesn’t.
Inti Montenegro de Wit
During his final month in office, Peruvian President Alejandro Toledo
introduced a bilateral free trade agreement (FTA) with the United States
to Peru’s national legislature where it was overwhelmingly approved
for ratification. Toledo and Peruvian business groups say the FTA will
lead to increased prosperity in Peru, where over fifty percent of the
population lives below the poverty line.
However, a recent study by GRADE, a Lima-based public policy research
institute, predicts that the poorest of the poor-Quechua and Aymara
subsistence farmers in the rural highlands-will suffer rather than benefit
from the trade deal. Although Peru’s economy as a whole will enjoy a
$417 million increase in its first year, these gains will be directed
almost exclusively at the urban sector, which will benefit by $575 million,
whereas the rural sector will lose $158 million.  The findings of
this report echo impact analyses conducted in Colombia and Ecuador,
who are negotiating similar FTAs with the US. 
These studies which focus on who wins and who loses when subsidized
US crops are not kept at bay by trade barriers tell only part of the
story of the damage to developing countries caused by FTAs. More than
being “just about trade,” US FTAs are also stringent commitments to
investment and intellectual property rights (IPR’s) which, in developing
countries, are at odds with public health, safety, and the environment.
Poor indigenous farmers in Peru have expressed particular concern regarding
the IPR commitments established by the US-Peru FTA, which would legalize
the patenting of genetic resources and traditional knowledge that have
long been used and developed in indigenous communities. With the FTA,
Peru snubs Andean law and accepts the US demand to “make all reasonable
efforts” to start patenting plants and to never go back on this policy
once in place. The Andean Community-a trade block linking Bolivia, Peru,
Ecuador, and Colombia-currently outlaws the patenting of plants.
Nor does the US-Peru FTA obligate the US patent office to require applicants
seeking plant patents to include “disclosure requirements.” Drawn from
the UN Convention on Biological Diversity and valid in the Andean Community,
such requirements would force applicants to declare where they got their
materials or knowledge from, prove that they received permission to
use them, and make arrangements to share benefits with their original
owners. If included in trade deals, these requirements would channel
some benefits to biodiversity-rich developing countries, even while
undermining the rights of indigenous peoples who protest that their
plants and knowledge should never be patented in the first place. 
The rules, trade-related and otherwise, that US FTAs bring to the global
trading system are even more ruthless than those conceived in the World
Trade Organization (WTO). To a limited extent, WTO rules provide breathing
room for the poor while pressing for lower trade barriers. Missing from
US FTAs, for example, are the WTO’s “special and differential treatment”
provisions that allow developing countries exemption from tariff reductions
and longer implementation periods for essential products. Also, the
WTO’s Trade Related Aspects of Intellectual Property Rights (TRIPS),
which amounts to a globalization of IPR law, includes limited exceptions
to patent protection on medicines when public health must take precedent.
Developing countries have recently proposed that TRIPS be amended to
also include “disclosure requirements” for patent applications. 
The FTA and GMO’s
An issue that has received less attention is the implications of the
FTA for the entry of genetically modified organisms (GMO’s) into Peru.
Consumers around the world, particularly in the European Union and Japan,
have adamantly rejected GMO’s which pose potential dangers to the environment
and human health. Meanwhile, agricultural biotechnology companies are
eager to enter new markets.
Peru is the fourth most biodiverse country in the world and is the center
of origin of the potato. If allowed to enter Peru, GMO’s could endanger
diverse native crop varieties including potato, yucca, tomato, and corn,
as well as those of industrial importance like cotton, all of which
are currently subject to genetic engineering in the US. The cultures
and livelihoods of over 6 million indigenous subsistence farmers in
Peru’s rural highlands depend on healthy native crops and ecosystems.
Of course, the consumption of GM foods could endanger the health of
all Peruvians, rich and poor.
Peru has signed and ratified the Biosafety Protocol, an international
agreement which gives countries the option of banning imports of GMO’s.
However, the US-Peru FTA, by synchronizing Peru’s sanitary and fitosanitary
regulatory measures with those in the US, implies the deregulation of
GMO’s. Furthermore, since the US is not a signatory to the Protocol,
it is under no obligation to adhere to labeling and other “biosafety
measures” required by the agreement. Along with the FTA, the only legal
catalyst needed for GMO’s to flood into Peru is national legislation
outdating Peru’s weakly-implemented 1999 “Law for the Prevention of
Risks from the Use of Biotechnology” which stresses the risks of GMO’s
and how to prevent them.
Such legislation was recently approved by Peru’s Congress. The “Law
to Promote the Use of Modern Biotechnology in Peru” is expected to be
authorized by newly sworn-in President Alan Garcia as soon as August.
The director of the Science and Technology Commission (CONCYTEC), the
government entity in charge of regulating Peru’s biotechnology framework,
has indicated that the elaboration of this new law was heavily influenced
by a prestigious Peruvian scientist with close ties to leading multinational
agricultural biotechnology corporation, Monsanto.  In 2004, Thailand,
too, cracked under corporate pressure to revoke its ban on GMO’s during
its now finalized FTA negotiations with the US. 
The FTA and Democracy
With corporations guiding the pen on domestic policy making in Peru,
one can only imagine the extent of corporate influence on policy making
that is bilateral-the FTA. 
Equally as clear is what voices have not been allowed influence. Independent
news sources in Peru have reported on the bias of major Peruvian newspapers
which downplayed the magnitude of peasant strikes during the weeks leading
up to the congressional vote on the trade deal.  “The media are linked
to economically powerful groups that have not only muted criticism but
have even demonized conflict within the democratic process over fundamental
questions like the viability of the economic model,” said one panelist
during a June roundtable discussion at a Lima-based research center,
the Peruvian Studies Institute. 
Last November, in an effort to give Peru’s poor the opportunity to decide
the fate of the FTA, a national civil society campaign called “Así No”
managed to collect the 46,000 signatures needed to make Congress vote
on a bill to put the decision to a referendum. In June, Congress rejected
the proposal and whatever last chance existed for those most affected
by the FTA to exercise their democratic right to stop it.
Ironically, a defense of the rights of Peru’s poor is now being mounted
not in Peru’s Congress, where the deal met overwhelming approval, but
by congressional Democrats in the United States. A number of civil society
groups in the US hope Democrats will vote down the agreement. On the
same day that the FTA was signed in Washington, Public Citizen, a consumer
advocacy non-profit, hosted a press call panelled by a Peruvian health
expert, a Peruvian labor expert, and a Peruvian Archbishop, to begin
lobbying efforts against US ratification.  In May, the League of
United Latin American Citizens (LULAC), the oldest Hispanic Organization
in the US, drafted a resolution urging Congress to reject the agreement.
Democrats, although having supported the ratification of numerous trade
agreements in the past, have expressed concern that the US-Peru FTA
will promote instability in the region by adversely affecting Peru in
the fields of agriculture, intellectual property, and labor.  Democratic
opposition to the agreement has rallied around the latter issue, which
they seek to resolve by ammending the FTA to uphold International Labor
Organization (ILO) labor standards. The decision on the FTAs ratification
is on hold until Congress resumes session on September 4th.
The knock out punch delivered to Peru’s poor is unlikely to be significantly
dampened by whatever amendments, if any, Democrats manage to work into
the agreement. Bracing for the inevitable, one local indigenous organization
in Cusco, Peru, The Association of Potato Park Communities (ACPP), is
spearheading a campaign to lobby their regional government to declare
Cusco a GMO-free zone. 
The current work of the ACPP also includes collaboration with indigenous
communities across the region to approve a home-grown variety of FTAs
based on the Andean principle of reciprocity. Promoting a trade that
is truly free, these agreements between indigenous communities would
ban GMO’s, assert the rights of indigenous peoples over their resources,
and guarantee the local traditions of seed saving and barter within
biological corridors that link the communities together. Needless to
say, the ACPP’s task is made more formidable following the FTAs green
light on plant patents and GMO’s.
While Congress is on summer recess, one can only hope that more than
a smattering of conscientios US citizens will call their representatives
and complain about the FTA. However, the poor masses of Peru-those most
affected by what Congress decides to do-have no one to turn to. Democracy
seems to be going on in a far away place and for a select few. With
the FTA expected to be ratified in the US later this year, the downtrodden
in Peru who are already bending over backwards to protect their cultures
and environment will have no choice but to bend over a little more.
They will bear the brunt of an assault by the corporate forces of the
world’s most powerful nation.
 Vulnurabilidad de los hogares peruanos ante el TLC by Javier Escobal
y Carmen Ponce: http://www.grade.org.pe/boletin/10/....
 For Colombia See: Colombian Agriculture and the FTA with the United
States, Columbian Ministry of Agriculture (July 2004); For Ecuador See:
Los Impactos Diferenciados del Tratado de Libre Comercio Ecuador - Estados
Unidos de Norte America sobre la agricultura de Ecuador, UN Economic
Commission for Latin America and the Caribbean (ECLAC) (January 2005).
 For a full account of how developing countries lack the legal infrastructure
in place in the US to intepret the FTA in such a way as to reflect the
general interplay between IPR rules and exceptions which strikes a balance
between the rights of IPR holders and consumers see: “Intellectual Property
Provisons of Bilateral and Regional Trade Agreements in Light of US
federal law,” Frederick M. Abbott: http://www.unctad.org/en/docs/iteip....
 IIFB Opening/Closing Statements at CBD WG on ABS 2006; http://ipcb.org/pipermail/ipcb-net_....
 Gerhardsen, Tove Iren S. “Developing countries propose TRIPS amendment
on disclosure,” http://www.grain.org/bio-ipr/?id=481.
 For information on how to read a copy of the CONCYTEC director’s
comments contact: Asociación Andes; firstname.lastname@example.org
 “Policy Reversal: Greenlight for GMO’s,” The Nation, Bangkok; 21
August 2004: http://www.bilaterals.org/article.p....
 The US Trade Representative, as mandated by Congress, must clear
FTAs through a series of advisory councils that are made up of major
 “Perú: Los Diarios y el Paro Agrario Contra el TLC,” Raúl Wiener:
 “Rapporteur’s report on a Round Table Discussion at the Instituto
de Estudios Peruanos (IEP), Lima, June9, 2006. http://weblogs.elearning.ubc.ca/per....
 Opposition to US-Peru Free Trade Agreement Press Call, April 12,
 Letter from 24 members of Congress to USTR about the Andean FTA
 The ACPP is the governing body of the Potato Park, a conservation
area comprised of and run by six Quechua communities dedicated to protecting
their biological and cultural heritage. 006
TO MAIN | ONLINE
BOOKSTORE | HOW TO ORDER