Peru's Garcia Woos U.S. Investors as Trade Agreement Completed

Dec. 14 -- Peruvian President Alan Garcia urged American companies to invest in his country, saying that a free- trade agreement with the U.S. to be signed today will guarantee the safety of their ventures.

``The company that acts today will reap three times as much as the one who invests tomorrow,'' Garcia told the U.S. Chamber of Commerce in Washington. ``We are at the takeoff point.''

Garcia and U.S. President George W. Bush are to sign a free- trade agreement between the two countries at a White House ceremony this afternoon. That deal will eliminate tariffs and set rules governing investments between the two nations.

The completion today was welcomed by companies such as Caterpillar Inc., which said the agreement could lead to a boom in U.S.-made mining equipment being sent to the Andean nation.

``It's a big market and getting bigger,'' said Tom Gales, vice president for Latin America at Caterpillar.

Oil, mining, agriculture, fishing and manufacturing firms should now flock to his nation of 29 million people, which has a per-capita income of less than $3,000 a year, Garcia said. ``Come and open your factories in my country so we can sell your own products back to the U.S.,'' Garcia told the business executives today.

Negotiations for the deal began in 2003, and it took two years to get the U.S. Congress to approve the accord from an initial agreement in December 2005. Garcia was forced to renegotiate the agreement this year to meet demands by Democrats in Congress to toughen labor and environmental rules and roll back provisions guaranteeing patents for medicines.

Democrats Skeptical

The Peru agreement passed the U.S. the House of Representatives and Senate within the past month after Peru acceded to the Democrats' demands. The House approved it in a 285 to 132 vote on Nov. 8, and the Senate approved it 77-18 this month.

Still, among House Democrats the vote was 109 to 116 against the Peru agreement, suggesting it will be difficult for the administration to win approval of three additional trade agreements with Colombia, Panama and South Korea, all of which are more controversial than the Peru accord.

Garcia today urged Congress to back the Panamanian and Colombian deals, saying they would aid leaders in the region who are committed to democracy and free markets.

``Peru is just the first act in a much, much longer running play,'' said Dan Christman, senior vice president of the U.S. Chamber of Commerce. ``Congress should support these other agreements. The logic is inescapable, even for Washington.''

Jobs and Wages

Trade between the U.S. and Peru, which totaled $8.8 billion last year, will grow by $1.5 billion once the accord is implemented as Peru ships more asparagus and apparel and American producers export more meat and grain, according to the U.S. International Trade Commission.

Critics of the agreement said they doubted the Bush administration would enforce the new provisions guaranteeing greater workers' rights. Some Democrats also said trade agreements cost U.S. workers jobs as companies move production overseas to tap cheaper labor, undercutting wages for Americans.

Peru's exports rose to a record $2.59 billion in October, spurred by surging sales of copper, zinc and natural gas.

The country is already seeing companies based in both the U.S. and in neighboring nations such as Ecuador and Bolivia set up shop in Peru as they anticipate the benefits of the free-trade agreement, said Aldo Defilippi, president of the American Chamber of Commerce in Peru.