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Peru hopes to seal FTA with China in November

Peru hopes to conclude in November a Free Trade Agreement (FTA) with the People's Republic of China, during Chinese president Hu Jintao's official visit to Peru on the occasion of the APEC Leaders' Summit, said Peruvian vice-chancellor Gonzalo Gutiérrez.

In this sense, he noted that representatives from both countries have sped up negotiations so that the agreement can become a reality on that date.

"The goal is to reach said trade deal between China and Peru during Hu Jintao's official visit in November," he said on a local TV program.

The Fourth Round of the Negotiations for the Free Trade Agreement (FTA) between Peru and China began this Saturday in Lima and will last until July 3, 2008.

In this new round, Peru and China will discuss themes related to Market Access, Rules of Origin, Commercial Defense, Services, Investment, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Dispute Resolution, Customs Procedures and Institutional Affairs.

News source: ANDINA

 | |

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# jb says :
1 July, 2008 [ 05:24 ]

I am sure the Chinese will be conditioning the treaty approval until the Peruvian government brings their labor laws and intellectual property rights up to Chinese standards.

# carl says :
1 July, 2008 [ 05:50 ]

what do you mean. It makes no sense. China is not the USA.

# jb says :
1 July, 2008 [ 05:58 ]

Carl, its called satire. Precisely my point. The US took four years to approve the FTA with Peru while Democratic politicians wrung their hands about Peru's labor laws (more stringent than the US's).  Meanwhile not a whimper from the same politicians as they make junkets to China with their home state constituents falling all over themselves to make a deal.  Meanwhile the same Chinese that bought the product from the US manufacturer are reverse engineering the product and planning to sell it back to the stupid Americans at 1/3 the price in Sam's Club.

# Michelle Pastor says :
1 July, 2008 [ 06:36 ]

I really don't understand the Democrats foreign policy. Against FTA for Latin America, which is mutually beneficial and the region certainly has more transparency than China, yet they fawned over the crooked Chinese and did everything to appease them. I get the impression that there is a lot of lobbyist money that originates in China.

They are condencending with a great leader and ally, Uribe, yet Jimmy Carter never seemed to meet a dictator he didn't support. Marxist ideology seems to have taken over a once great party.

# Chairman Mao.... says :
1 July, 2008 [ 07:12 ]

Democrats, China and Free Trade???....  These are the same people who opposed the FTA with Peru and now Colombia.

 

The People's Republic of China was involved in the influence of domestic American politics prior to and during the Clinton administration and also involved in the fund-raising practices of the Clinton administration itself.
China’s role first gained public attention when Bob Woodward and Brian Duffy of The Washington Post published a story stating that a United States Department of Justice investigation into the fund-raising activities had uncovered evidence that agents of China sought to direct contributions from foreign sources to the Democratic National Committee (DNC) before the 1996 presidential campaign. The journalists wrote that intelligence information had shown the Chinese Embassy in Washington, D.C. was used for coordinating contributions to the DNC in violation of United States law forbidding non-American citizens or non-permanent residents from giving monetary donations to United States politicians and political parties. A Republican investigator of the controversy stated the Chinese plan targeted both presidential and congressional United States elections, while Democratic Senators said the evidence showed the Chinese targeted only congressional elections. The Chinese government denied all accusations.

Twenty-two people were eventually convicted for fraud or for funneling Asian funds into the United States elections. A number of the convictions came against longtime Clinton-Gore friends and political appointees.

 

# President Billnev Klinton says :
1 July, 2008 [ 07:57 ]

Not too mention my unbrideled support for Loral Space Communications for selling off to the Commie Reds, sensitive missle guidence tecnology under the guise of helping China develop their space program, satilite communications and so on. Only problem is that this same missle guidence tecnology is also used to guide ICBM's. But I thought China had the right to protect themselves against all who would oppose their future take over of Taiwan. But thanks to all of those campaign contributions, Loral had the full support of the Communist/Father Mao loving, Democratic National Committee.

# Mike says :
1 July, 2008 [ 08:04 ]

I know Peru's labor laws pretty well, and no, they aren't even close to the US'.  Which is why the US wanted them improved.

# Sorry Charlie says :
1 July, 2008 [ 08:18 ]

Mike, I would agree in as much as most of Peru's labor operates in the informal sector.  However, formalized economy to formalized economy, Peru wins, hands down.  Let's start with 4 weeks vacation from day one of employment.  In the US, you get 2 weeks after 1 year.  You can take 1 week after 6 months.  Would you like me to count the national and religious holidays? They account for as much as 19 additional days off - depending on where they fall.  This does not take into account undeclared presidential decree holidays.  In the US, you are generally "employed at will" which means the employer has only the responsibility to pay you through your final day worked plus any unused vacation.  In Peru, the employer owes you your CTS, and 1 month pay for every year of employment.  I know, I have terminated people and had to cut checks for $50K.  Kind of makes you not want to fire a guy with 20 years on the job.  Just the reverse in the US -- the older employee (with higher salary and benefit structure) is the most likely to get shown the door first.  I actually terminated a guy who was receiving kick backs from a vendor.  Dumb me, I thought I could fire him for "cause".  Our labor lawyer said he could arbritrate and we would have to continue to pay him for as much as an additional year and at the end we probably would have to pay him his contract liquidation anyway.  Tell me the US has tougher labor laws.

# Mark says :
1 July, 2008 [ 08:22 ]

Hi Michelle

In what way, or ways, will this or any other free trade agreement be mutually beneficial to the region? While your at it, which sectors of the region will these FTAs benefit?

Before you answer, consider what has already happened to your own manufacturing industries, employment sector and what your country (America I assume) has benefited from these type of agreements?

Also take into consideration how these agreements will affect the small, local farmer trying to feed his family and the person on the street.

From previous agreements signed by the US involving many other countries, including mine (Australia), who has gained the most?

I, as an Australian, do not understand either the democrats or the republicans foreign policy. As far as I can tell both parties policies involve bending over for the multinational corporations who gave them the money to get elected, very little diplomacy and seem to be from the school of "do as I say, not as I do" and have nothing to do with the document that your country was founded on. It's called the Constitution, remember that one?

Your government uses schoolyard bully tactics to achieve it's goals and if anyone disagrees you invade them or put sanctions in place. Sorry, I don't include Israel in that last sentence. They can get away with anything-after all you pay 'em so much money every year they can afford to! Don't call me anti semetic because I've stated a fact!
If it all wasn't so sickening it would be laughable.

When someone comes along who has new ideas about what could fix up the mess that has become America, they are usually silenced or just plain ignored. Ron Paul is one of a few who has positive changes in mind. The people in control don't want to fix anything, they're too busy making money by ripping off the American public. Chaney must be laughing along with his mates from Haliburton, KBR and Parsons just to name a few. There's more than enough information out there about the Bush family and their ties, goes right back to GWs grand daddy Prescott. 

The people who are forcing these laws through, by their track record, have proven themselves to be nothing more than criminals. Some of them could be put in the category of war criminals.

Give me one justifiable, valid reason why I or any other free thinking individual who has some level of awareness about the world political scene should believe that the FTAs these criminals are passing as law will be of benefit to anyone other than the people in power and the big corporations lobbying for them. The average person on the street? Doesn't really matter I suppose.... does it?
 
By signing FTAs your government condones the labour laws of 3rd world countries and the products produced by virtual slave labour whilst at the same time turning your economy and manufacturing industries into S***.

Why can goods be imported into your country (and mine) far cheaper than we can produce them?

You don't have to Einstein WAGES & CONDITIONS

Who benefits? BIG BUSINESS & GOVERNMENT

If it wasn't for these people working for $2 a day do you think these goods would be cheaper?

Next time you go and buy "the cheaper imported alternative" think about the people who made it and how they are forced to live because people in the west buy these cheap imports. 

The Chinese are far smarter than the US, they've been around for thousands of years and have a little more experience in foreign affairs. Maybe the US could start to teach Mandarin in the public school system, god knows you're gonna need it.... or maybe they might just nuke 'em, who knows?

Do you know who one of the main instigators for these so called FTAS in America is? Mr Rockefeller. He is one of the leading proponents backing these deals through at least 5 organisations that I'm aware of.

If Peru's labour laws are so stringent why is over half of the population living in poverty and unemployed? Do you or anyone else really believe that these FTAs will go anywhere near fixing this issue?

Do you think this or any other FTA is going to change that? The people who will benefit are already wealthy, this and all other FTAs with the US or any other country will just make them wealthier at the expense of the poorest of the poor.

The American government is like a chameleon, it changes who it supports and who it doesn't with amazing regularity to the point where most free thinkers in the world see your President as an idiot and by far the worst American President the world has seen.

The American government now realises that for far too long it has ignored the people of South America and is now seen in a lot of these countries as an unhelpful neighbour. Maybe Venezuela will be next...after all they've got a lot of oil too haven't they?

Peru and Latin America need to make decisions for themselves based on what is best for their peoples, not cowtowing to the US government who are only in it for their corporate mates! Peru has an annual growth rate most countries envy, they don't even need these agreements.

Peru will start to see the benefits of this and other FTA's real soon.

Sit back and watch the poor get poorer whilst the big American corporations just keep on keeping on.

All this will happen whilst mainstream America knows nothing about it because they're too busy watching Deperate Housewives whilst their country collapses around their feet.

We all eventually get what we deserve whether on a personal or national level.

We all reap what we sow.

Peace

Mark

# AhSo says :
1 July, 2008 [ 09:26 ]

Mark, whew!  Australians must have a lot of time on their hands.  If Europeans, Americans, Japonese, AUSTRALIANS, et.al. were so concerned about cheap labor they would involk trade barriers from these goods.  But all people vote with their pocket books.  Peruvians are no exception.  My wife is in the textile business -- barely.  Why?  Because you can import 10 cotton T-Shirts from China to Peru for the price of 3 made locally.  I guess the Peru should demand that China adhere to Peruvian labor laws!!  CHinese dumping of products probably made by prisoners.  Chinese innovation?  This advanced civilization has reversed engineered every important invention of the West for the past 100 years.  Whenever my company launches a new product, we see an exact copy in the Asian market within weeks.  No R&D budget means you can undercut the competition.  Eventually, there goes innovation.  No one wants to invent, manufacture and market a product that you know will be ripped off.

# Minister Chu Wi says :
1 July, 2008 [ 10:44 ]

AhSo, you are so correct on China's ability to compeat in the world market. We have the worlds most capable knock off artists, to undermine all international patents, because we do believe in Capitalism at the end of the day as well. We also enjoy sentencing political prisoners to death for speaking out against the communist party. Especialy when they get tired of having that AK-47 pointed to the back of their heads manufacturing some of those cheap labor products, so we can then sell off their kidneys to the highest bidder. Yes communist China has come a very long way indeed, and we continue to have lots of innovation. Ching Ho Comrades!!

# Rachel says :
1 July, 2008 [ 14:52 ]

If the U.S. can't stand up to the economic and manufacturing power of China then how will Peru?

Does the Peruvian government not take into consideration that a FTA could open the flood doors for the Chinese to inundate the Peruvian market with their "cheaper" products?

It seems like a win-lose agreement to me. The Chinese win and Peru loses.

It's a very irresponsible idea.

Furthermore, the U.S. is at the whim of the Chinese. Why? The Chinese come second in the world as they hold more U.S. treasury securities than even the United States.

If the Chinese decided to "dump" the dollar then the U.S. would feel the effects. So basically that puts the U.S. in the pocket of the Chinese.

Special interests rather than old-fashion diplomacy rules the U.S. legislative branch. Don't expect to see that change with a new President in power. It won't happen.

Back to the topic, an FTA between China and Peru. The questions should be "What exactly are the benefits for Peru?" More cheap Chinese cars?

That's one of the problems here, the Peruvian government only thinks an idea half way through before they actually verify if its a good one or not.

# Trader Darwin says :
1 July, 2008 [ 15:41 ]

Before everyone condemns this deal, first we ought to read the details which I don't think anyone has access to yet.  Secondly for all those worried about the flood of cheap imports here is some news.  Peru needs cheap imports!  Do you think Peru manufactures everything it needs here at home?  Peru isn't a big enough country.  They need washing machines and garbage disposals and yes cars.  Someone mentioned cheap chinese cars above.  Would you rather drive the Peruvian alternative?  What a llama?  I think an FTA will be good overall for the people of Peru and open up another channel that will keep the powers balanced in Peru between Europe, Asia and North America.  I'd rather have them all fighting to do business with Peru than turned away.  And by having all three major blocks involved it assures vested interest of the others will keep any one from gaining an upper hand.

Play all sides and profit Peru.

# Rachel says :
1 July, 2008 [ 16:16 ]

At least the Peruvian version of a "cheap" car would be made of quality materials! ;)

Llamas are good too for those narrow mountain roads.

# CapitanDan says :
1 July, 2008 [ 17:31 ]

The good news about the FTA with China is that it will lower the cost of many items produced in China .The bad news is that it will prevent Peru from acquiring it's own manufacturing plants. The FTA(NAFTA) between Mex., Canada and the U.S. allowed many U.S. companies to move their manufacturing facilities to Mex. just across the U.S. border giving thousands of jobs to Mex.. Why?Labor was cheaper in Mexico.China already has the lowest labor costs now. Why? Basically ,slave labor.So, Peru can initially be happy with more cheaper goods, but will always be held in chains to be a Global Raw Material supplier with No opportunity to start and expand the manufacturing sector. Which by the way pays the most.If Peru wants to have productive opportunities for it's children it must be wary of "Greeks Bearing Gifts", Whether they maybe Chinese, European or North American..Chau Friends

# Ahyes says :
1 July, 2008 [ 22:52 ]

Dan, I don't disagree with you that pressure needs to be applied worldwide to China to raise their labor and environmental (I added that) standards tremendously.

However I don't follow your logic on how a FTA with China will prevent Peru from gaining manufacturing jobs. 

Let's suppose no FTA is signed with China what would happen next?  China would continue to export cheap goods all around the world, although not quite as cheap in Peru because the tariffs would be higher here.  But in this case Peru hasn't gained any manufacturing jobs... China is still selling goods cheaper all over the world than Peru can produce them.

Let's say the FTA with China IS signed.  Peru consumers get access to lower cost Chinese made products.  They still can't beat the low cost (slave) labor of China and don't get the manufacturing jobs.

Peru is a tiny market on a global basis.  A FTA between China and Peru is not likely to have any impact on whether or not Peru is able to become competitive for manufacturing jobs. 

The USA for example will keep buying the lowest cost goods (China) whether or not there is free trade between Peru and China.

The only effect I see from not doing an FTA is higher prices for Peruvian consumers than they otherwise would have to pay.

# dali llama says :
1 July, 2008 [ 22:57 ]

Rachel, llamas are actually pretty lousy transporation.  They can't support much weight, almost unrideable because of that unless you are a serious flaca.  But they are great for packing stuff up those mountains as long as you a walking with them!

# Anonymous Dave says :
1 July, 2008 [ 23:01 ]

Remember though, Ahyes, that the current extra cost of buying Chinese goods doesn't just go into magic la la land, its an important revenue source for the government. So, unless Chinese goods at a cheaper price can raise the living standards of Peruvians higher than spending the tax raised on import duties, then the deal isn't worth it.

# CapitanDan says :
1 July, 2008 [ 23:11 ]

AhYes, I couldn't begin to go into detail of what Peru needs to do to make this FTA work for us, in this forum, but briefly here's an idea or two..We need to get provisions in the treaty whereas like the U.S. that their will be an attempt to build manufacturing plants in Peru to increase the content of Peruvian made parts in ,for instance Cars. Let the Chinese set up foundries here to produce Engine blocks,frames,springs and the heavier ,bulkier components.Let Peru produce the wiring harnesses for Chinese Vehicles. We have the raw materials.Let them build an assembly plant in Peru. Now is the time to get the commitments not latter. I think you can see my drift Amigo. Chau

# AhYes says :
2 July, 2008 [ 09:30 ]

Dan those are interesting ideas, do you have any links to where I can learn more?  I couldn't agree more that Peru needs to move up the value chain and not solely be a producer of raw materials.  For example I always wondered why do we ship out so much copper instead of creating finished goods even simple ones like copper piping or wiring and then shipping it out.  Those don't seem like highly advanced manufacturing like say building a semiconductor, but yet I don't believe Peru does any of it here. 

I have always been an optimist that there will be a few leaders with courage and vision like the founding fathers in the USA (just finished reading David McCouloughs biography on John Adams what an outstanding and virtuous man he was) that will help lead Peru in the right direction.  I understand there is vast corruption etc. but I hope Alan Garcia at least sees the big picture of Peru's future and believes in building a legacy.  (you know the thing that stays with you forever after you are dead and gone).

Nothing changes overnight, and while I believe in free trade benefiting the people (through lower prices and competition) I see your points about investment requirements.  It's important and not something that can be solved on a message board, only through principaled negotations with intelligent men and women that understand what is at stake and how to strike a compromise.  If they only care about lining their pockets the country will lose, but I ask, is there a John Adams out there leading the way for Peru?

I can hope.

# AhSo says :
2 July, 2008 [ 09:42 ]

You might also read David McCoulough's biography on Harry Truman.  Great author.

# Michelle says :
4 July, 2008 [ 18:20 ]

Mark,

You anymosity towards the US seems stange coming from an Australian. The US is a country of immigrants just like Australia. I found Australia, and the people extremely similar to the US. It is a great country and Syndney is a particularly nice city. Although I still prefer the strong Latin influence and the diversity that is exsists in the US.

I can only think that envy is at the root of someone who applauds a totalitarian government, over an imperfect yet democratic government. The Chinese have done serious damage to industry in Latin America. I know of several Peruvian businesses, which employed hundreds of people, that were destroyed from the Chinese dumping their goods here.


Peru is logistically perfect for trade with the US. The better the economy is in Peru, the better they are able to buy American products, and spend their tourist dollars in the US. Peru has a unique array of agriculture that isn't even grown in the US. They have a lot to offer us, and the US consumer market is the largest in the world. So obviously Peru also benefits.

Peru has already become a manufacturer of many leading European designers that are highly regarded by consumers in the US. Lacoste, Abercrombie & Fitch etc., the trade agreement with Peru and the US is mutally beneficial.

China has a long history of corruption, a lack of integrity, and I consider it an enslaved nation. It is hard to compete with slave labor.

# Mark says :
5 July, 2008 [ 17:38 ]

Hi Michelle,

I can only think that envy is at the root of someone who applauds a totalitarian government, over an imperfect yet democratic government. The Chinese have done serious damage to industry in Latin America.

Envy is not one of the 'seven deadly sins' I suffer from. I'm not applauding any country or government. I have simply stated that the Chinese have been doing it for thousands of years and have become quite good at it whereas the US is a relative baby when it comes to international foreign policy.

China has a long history of corruption, a lack of integrity, and I consider it an enslaved nation. 

You are correct and the word 'China' in this statement could quite easily be replaced with the word 'America' or the 'US'. Anyone who has studied world history with any sense of ojectivity has been able to see this.

This news article from MSN homepage yesterday regarding documents released under the Australian Freedom Of Information Act show what the American Government is prepared to do to it's allies citizens (Australia). What is even sadder is the fact that my government, the Australian government, was prepared to let them do it.

Click on the link

http://news.ninemsn.com.au/article.aspx?id=592652

The actual TV news report is airing on Australian TV this morning (Sunday 6th July) on the 'Sunday" program.

Peace

Mark

# Michelle says :
6 July, 2008 [ 08:58 ]

I do find that the proposal of gas by the US government in 1960 deplorable even though it never took place.

Still that doesn't compare with the atrocities that take place in China, Cuba, Africa etc., at this very moment.

Like I said the US is imperfect like any other country. As an objective observer and traveler, I think the fact that 25 million "illegal" immigrants prefer to live in the US with no rights than their native countries says a lot. Meanwhile million of people have risked their live and left everything behind to escape Cuba, China etc.

Venezuelans are arriving to South Florida by the hundreds every day. There is a town called Doral that is now know as Little Caracas. I'm not necessarily a native American, but I am gratefull to a country that allowed a nobody like me the opportunity to achieve success and prosperity. I have a home in Miami, which is city filled with immigrants who arrived with NOTHING, and have also been provided the dignity to be able to work hard and provide for their families.

Sorry but the Marxist liberal theology of the left simply contradicts reality. People risk their lives and are even killing themselves to get into the US, there are good reasons for that.

# Devilmaycare says :
6 July, 2008 [ 15:18 ]

Greats points Michelle, ask Mark how those same immigrants would be treated in his country? 

# Mr Rothschild says :
6 July, 2008 [ 15:46 ]

Hello. I think Michelle is quiet right. The United States is the land of the free... land of the free market. It is via this system that hardworking people like you and me can aquire a fair share of the economy's wealth. Communism on the other hand, while it is great for controlling the masses, aways fails because the masses feel controlled. Controlling you all by capital on the other hand, allows for the effective control of the masses because the masses believe they do, and in some way do actually have the opportunity to make more of themselves. Having the people feel they are not pawns is the best way to keep them in their place. Letting them have just a little wealth and the ability to gain just a little more keeps you working hard and gives you something to lose. With something to lose... you are easy to controll.

So you have a choice. Live in adject poverty with your liberal theology with someone controlling you, or make some money and at least feel like you are free.

# Michelle says :
6 July, 2008 [ 17:48 ]

Thanks, my personal theory is that the US constitution, and the Bill of Rights are amazing documents. To me they must have been divinely inspired. They truly protect "the masses" from government, which historically has been the worst offenders of the masses.

I love my country, I love Peru. The reality is that the US has been the only country I've lived in which can provide relative stability and legal protection to pursue my dreams. I feel respected as an individual and in Miami more Spanish is spoken than English. New York looks like the United Nations, Los Angeles feels like Asia at it's best. I love the options and diversity.

Peru is doing very well now, but the reality is that it is still too close to the destructive grasps of Marxist ideology.