Briefing paper on trade policy and poverty in Peru is published

The document by Waldo Mendoza (research coordinator for COPLA Peru) titled ‘Trade policy and poverty in Peru. How do free trade agreements (FTA) impact rural poverty?’ presents clearly the existent evidence that links international trade with growth and with poverty as the other side of the same story. The document published by CIES and available in the resources area of COPLA Peru in http://www.cop-la.net/en/node/357 analyses theories on the matter and then focuses on the implementation of the FTA signed with the United States.

Available evidence points out that the agricultural sector of the south Andes, area that concentrates the poorest people in the country, is particularly vulnerable to imports of goods that could cause demand and prices of local production to drop, whether farmers wish to compete with the U.S. or not.

The intensification in rural poverty may have “collateral” negative effects such as school drop out rates of boys and girls that will have to support their parents in generating income for their families.

This indicates that it is essential to design complementary politics to protect those who are most vulnerable to negative effects of the FTA, that, otherwise and looking at aggregated figures, will result in benefits for other national producers. That’s why COPLA’s work in Peru seeks to gather evidence and influence decision makers that should design policy to protect the poor and the excluded.

And what about trade with the European Union?
The FTA with the US may be taken as a precedent in the negotiations between Peru and the European Union, depending on the conversations starting in the V Summit of Chiefs of State and Government of Latin America and the European Union (ALC – UE in Spanish) to be held in Lima, Peru between the 13th and the 17th of may 2008.

Although trade between Peru and the EU is not as significant as the trade with the US, it is relevant to know if the association agreements with the EU will take the FTA as precedent because this gives a range of negotiable issues between the EU and Peru, depending whether they are covered by the FTA or not.

This was one of the conclusions by Juan Manuel Villasuso, official of the Latin American Trade Network (LATN) in the seminar-workshop ‘Relaciones América Latina – Unión Europea y la Cumbre de Lima’ organized by Alan Fairlie, economist of the Pontifical Catholic University of Peru and responsible for one of the case studies actually being researched by COPLA.

In the event, also attended by officials of the Foreign Trade and Tourism Ministry of Peru, Dr. Fairlie presented his book ‘Relaciones Comerciales CAN – UE: una perspectiva andina’. Finally Dr. Villasuso talked with the peruavian team of COPLA and manifested interest in supporting the project’s work.