Peru and Ecuador to join Colombia in May launch of FTA Negotiations with the US

USTR Press Release
May 3, 2004

Peru and Ecuador to Join With Colombia in May 18-19 Launch of FTA Negotiations With the United States

WASHINGTON -The United States announced today that Peru and Ecuador will join
with Colombia in the first round of negotiations on a U.S.-Andean Free Trade Agreement
(FTA) scheduled for May 18-19. The FTA negotiations were scheduled to begin with
Colombia alone, pending the resolution of certain issues with respect to Peru and
Ecuador, which have now been addressed. The U.S. hopes to include Bolivia at a later
stage, and is working with Bolivian officials to prepare.

"The United States has been busy completing top-notch FTAs with our neighbors in the
hemisphere, so we are delighted that the Andean countries want to work with us to
remove barriers for our farmers, workers, exporters and businesses," Zoellick said. "The
inclusion of Peru and Ecuador in the negotiation will expand benefits beyond the U.S.-
Colombia relationship. Our Andean friends rightly view a cutting edge FTA with the
U.S. as a key component in their economic growth and reform plans, and we see the FTA
as a great way to open markets and opportunities while supporting developing
democracies in our neighborhood."

In his November 18, 2003 letter notifying Congress of the Administration’s intent to
negotiate a U.S.-Andean FTA, United States Trade Representative Robert B. Zoellick
indicated that the U.S. would initiate negotiations with the countries that have
demonstrated their readiness to begin. The Peruvian Government has recently resolved
certain outstanding disputes with U.S. investors and has taken significant steps to resolve
others. Similarly, the Ecuadorian Government has taken important steps to address
certain concerns regarding the protection of worker rights and has resolved certain
investor disputes. There remains work to be done in order for all outstanding issues to be
completely resolved. The U.S. Government will continue to work with Peru and Ecuador
to follow through on these matters as the negotiations proceed.

In order to spur economic growth in Peru and Ecuador, the United States today also
announced that the board of the Overseas Private Investment Corporation (OPIC) has
approved, subject to notification to Congress by OPIC, a $54 million loan for a microfinancing
initiative in the Andean countries and several others. The loan will help
recipients - particularly women - get a start in small business and promote economic
development. This short-term assistance, when coupled with the benefits created by the
FTAs, will help to expand U.S. access and opportunities in these growing markets.

Zoellick led the U.S. delegation for the inauguration of Alejandro Toledo as President of
Peru in July 2001, and in November 2002 he visited Ecuador for the Free Trade Area of
the Americas (FTAA) Ministerial.
In 2003, U.S. goods exports to Ecuador were $1.4 billion. The stock of foreign direct
investment (FDI) in Ecuador in 2002 was $1.1 billion. In 2003, U.S. goods exports to
Peru were $1.7 billion. The stock of foreign direct investment (FDI) in Peru in 2002 was
$3.2 billion. The four Andean countries collectively represent a market of over $7 billion
for U.S. exports, and are home to over $8 billion in U.S. foreign direct investment.

Background:

On March 15, 2004, the United States completed FTA market access negotiations with
the Dominican Republic. It will be added to the recently concluded CAFTA. The U.S.
has completed FTAs with eight countries - Costa Rica, the Dominican Republic, El
Salvador, Guatemala, Honduras, Nicaragua, Australia and Morocco - over the past few
months. New and pending FTA partners, taken together, would constitute America’s third
largest export market and the sixth largest economy in the world.

The United States is aggressively working to open markets globally, regionally, and
bilaterally and to expand American opportunities in overseas markets. In a January 2004
letter to the 146 WTO members, Zoellick urged Members to revive the global trade talks.

In February Zoellick traveled over 30,000 miles and met with over 40 WTO members in
strategic consultations. Immediately following that trip, Zoellick traveled to San Jose,
Costa Rica for meetings February 23-24 with ministers from the Cairns Group of
agriculture exporting countries to discuss liberalizing trade in agriculture within ongoing
World Trade Organization (WTO) trade negotiations.

In addition to the global efforts, a top goal for the U.S. is the FTAA negotiation to create
a $13 trillion, 800 million person Western Hemispheric free trade zone stretching from
Alaska to Tierra del Fuego. Comprehensive, high-quality agreements that promote
regional economic integration (Chile, CAFTA)
with like-minded, ambitious trading
partners, complement and provide impetus for the FTAA negotiations. The United States
is also currently negotiating an FTA with Panama.

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