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CRS — The Trans-Pacific Partnership Negotiations and Issues for Congress

April 1, 2013 Comments off

The Trans-Pacific Partnership Negotiations and Issues for Congress (PDF)

Source: Congressional Research Service (via Federation of American Scientists)

The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement (FTA) being negotiated among the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. On March 15, 2013, Japanese Prime Minister Shinzo Abe announced that Japan would seek to participate in the TPP negotiations. U.S. negotiators and others describe and envision the TPP as a “comprehensive and high-standard” FTA that aims to liberalize trade in nearly all goods and services and include commitments beyond those currently established in the World Trade Organization (WTO). The broad outline of an agreement was announced on the sidelines of the Asia-Pacific Economic Cooperation (APEC) ministerial in November 2011, in Honolulu, HI. If concluded as envisioned, the TPP potentially could eliminate tariff and non-tariff barriers to trade and investment among the parties and could serve as a template for a future trade pact among APEC members and potentially other countries. Congress has a direct interest in the negotiations, both through influencing U.S. negotiating positions with the executive branch, and by passing legislation to implement any resulting agreement.

The 16th round of negotiations concluded in Singapore on March 14, 2013, and the 17th round is scheduled to be held in Lima, Peru in May 2013. The current goal is to reach an agreement in time for the October 2013 APEC summit in Indonesia. For this deadline to be achieved, outstanding negotiating positions may need to be tabled soon in order for political decisions to be made. The negotiating dynamic itself is complex: decisions on key market access issues such as dairy, sugar, and textiles and apparel may be dependent on the outcome of controversial rules negotiations such as intellectual property rights or state-owned enterprises.

Twenty-nine chapters in the agreement are under discussion. The United States is negotiating market access for goods, services, and agriculture with countries with which it does not currently have FTAs: Brunei, Malaysia, New Zealand, and Vietnam. Negotiations are also being conducted on disciplines to intellectual property rights, trade in services, government procurement, investment, rules of origin, competition, labor, and environmental standards and other issues. In many cases, the rules being negotiated are intended to be more rigorous than comparable rules found in the WTO. Some topics, such as state-owned enterprises, regulatory coherence, and supply chain competitiveness, break new ground in FTA negotiations. As the countries that make up the TPP negotiating partners include advanced industrialized, middle income, and developing economies, the TPP, if implemented, may involve substantial restructuring of the economies of some participants.

The TPP serves several strategic goals in U.S. trade policy. First, it is the leading trade policy initiative of the Obama Administration, and is a manifestation of the Administration’s “pivot” to Asia. If concluded, it may serve to shape the economic architecture of the Asia-Pacific region by harmonizing existing agreements with U.S. FTA partners, attracting new participants, and establishing regional rules on new policy issues facing the global economy—possibly providing impetus to future multilateral liberalization under the WTO.

As the negotiations proceed, a number of issues important to Congress are emerging. One is whether the United States can balance its vision of creating a “comprehensive and high standard” agreement with a large and expanding group of countries, while not insisting on terms that other countries will reject. Another issue is how Congress will consider the TPP, if concluded. The present negotiations are not being conducted under the auspices of formal trade promotion authority (TPA)—the latest TPA expired on July 1, 2007—although the Administration informally

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CRS — Peru in Brief: Political and Economic Conditions and Relations with the United States

November 19, 2012 Comments off

Peru in Brief: Political and Economic Conditions and Relations with the United States (PDF)

Source: Congressional Research Service (via Federation of American Scientists)

This report provides an overview of Peru’s government and economy and a discussion of issues in relations between the United States and Peru.

Peru and the United States have a strong and cooperative relationship. Several issues in U.S.-Peru relations are likely to be considered in decisions by Congress and the Administration on future aid to and cooperation with Peru. The United States supports the strengthening of Peru’s democratic institutions, its respect for human rights, environmental protection, and counternarcotics efforts. A dominant theme in bilateral relations is the effort to stem the flow of illegal drugs, mostly cocaine, between the two countries. In the economic realm, the United States supports bilateral trade relations and Peru’s further integration into the world economy. The United States is Peru’s top trading partner. The U.S.-Peru Trade Promotion Agreement (PTPA) went into effect February 1, 2009. The Obama Administration requested $74 million in foreign assistance for Peru for FY2013 to advance these objectives.

Ollanta Humala, of the left-wing Gana Peru, was sworn in as Peru’s president in July 2011 for a five-year term. Gana Peru won 47 seats out of the 130 seats in the unicameral Congress, requiring Humala to rely on political alliances with lesser parties in order to pass legislation. Deep social divides over how to pursue development continue to undercut political stability. The more radical elements of Humala’s original support base and his party urge the pursuit of more leftist policies, such as nationalization of strategic industries, which Humala called for during the election campaign. Forces that resist more radical policies include a strong business sector; a conservative, wealthy elite; a centrist middle class; and a divided Congress. Social unrest, especially over exploitation of natural resources, is likely to remain a challenge for the Humala government.

Since 2001 Peru’s economy has been stronger than all others in the region, with its growth due mostly to the export of natural resources. High economic growth, along with social programs, has helped to lower Peru’s overall poverty rates. Nonetheless, in some jungle, mountain, and rural areas of the country, over 60% of the population continue to live in poverty. The income distribution gap remains quite large as well. This economic disparity has contributed to rising social unrest. President Humala submitted, and the legislature approved, a bill increasing royalties mining companies must pay. The government estimates the royalties will generate about US$1 billion a year, which it will use to finance social development programs intended to narrow both the social divide and the economic distribution gap.

Evidence of Rabies Virus Exposure among Humans in the Peruvian Amazon

August 8, 2012 Comments off

Evidence of Rabies Virus Exposure among Humans in the Peruvian Amazon

Source:  American Journal of Tropical Medicine and Hygiene

In May of 2010, two communities (Truenococha and Santa Marta) reported to be at risk of vampire bat depredation were surveyed in the Province Datem del Marañón in the Loreto Department of Perú. Risk factors for bat exposure included age less than or equal to 25 years and owning animals that had been bitten by bats. Rabies virus neutralizing antibodies (rVNAs) were detected in 11% (7 of 63) of human sera tested. Rabies virus ribonucleoprotein (RNP) immunoglobulin G (IgG) antibodies were detected in the sera of three individuals, two of whom were also seropositive for rVNA. Rabies virus RNP IgM antibodies were detected in one respondent with no evidence of rVNA or RNP IgG antibodies. Because one respondent with positive rVNA results reported prior vaccination and 86% (six of seven) of rVNA-positive respondents reported being bitten by bats, these data suggest nonfatal exposure of persons to rabies virus, which is likely associated with vampire bat depredation.

Country Analysis Brief: Peru

May 5, 2012 Comments off

Country Analysis Brief: Peru
Source: Energy Information Administration

Peru is currently a net oil importer and a natural gas exporter, but rising exploration and development may lead to increased production and exports of both oil and gas in the next few years.

CRS — Trans-Pacific Partnership (TPP) Countries: Comparative Trade and Economic Analysis

February 21, 2012 Comments off
Source:  Congressional Research Service (via Federation of American Scientists)
The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement (FTA) currently under negotiation between Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States, and Vietnam. The negotiating partners have expressed an interest in allowing this proposed “living agreement” to cover new trade topics and to include new members that are willing to adopt the proposed agreement’s high standards. To that end, Canada, Japan, and Mexico recently stated that they would seek consultations with the partner countries about the possibility of joining the negotiations.
The TPP negotiations are of significant interest to Congress. Congressional involvement includes consultations with U.S. negotiators on and oversight of the details of the negotiations, and eventual consideration of legislation to implement the final trade agreement. In assessing the TPP negotiations, Members may be interested in understanding the potential economic impact and significance of TPP and the economic characteristics of the other TPP countries as they evaluate the potential impact of the proposed TPP on the U.S. economy and the commercial opportunities for expansion into TPP markets.
This report provides a comparative economic analysis of the TPP countries and their economic relations with the United States. It suggests that the TPP negotiating partners encompass great diversity in population, economic development, and trade and investment patterns with the United States. This economic diversity and inclusion of fast-growing emerging markets presents both opportunities and challenges for the United States in achieving a comprehensive and high standard regional FTA among TPP countries.
The proposed TPP and its potential expansion are important due to the economic significance of the Asia-Pacific region for both the United States and the world. The region is home to 40% of the world’s population, produces over 50% of global GDP, and includes some of the fastest growing economies in the world. While current TPP negotiating partners made up about 5% of U.S. trade in 2010, Asia-Pacific economies as a whole, made up over 60%.
The United States is the largest TPP market in terms of both GDP and population. In 2010, nonU.S. TPP partners collectively had a GDP of $2.3 trillion, 16% of the U.S. level, and a population of 195 million, 63% of the U.S. level. Entry of Canada, Japan, and/or Mexico would increase the economic significance of the agreement on both these metrics. Among the TPP partners, the majority of overall U.S. trade and investment flows are with Australia and Singapore. In merchandise trade, however, the United States imports more from Malaysia than any other TPP country. Considering the TPP region collectively, over 25% of all U.S.-TPP imports and exports are in computers/electronic components. At the bilateral level, top U.S. exports are largely in the same major product categories, but top U.S. imports vary considerably by country.
There are four U.S. bilateral FTAs in place with current TPP partners: Australia, Chile, Peru, and Singapore. All other TPP partners except Peru, have agreements in place with five or more of the other TPP partners. The Association of Southeast Asian Nations (ASEAN), of which Brunei, Malaysia, Singapore, and Vietnam are members, accounts for much of this existing interconnectedness. Moreover, ASEAN agreements with larger regional economies (e.g., China, Japan, and Korea), present a second possible avenue for Asia-Pacific economic integration, albeit one that currently excludes the United States.

A vulnerability approach to the definition of the middle class

January 1, 2012 Comments off
Source:  World Bank (working paper)
Measurement of the middle class has recently come to the center of policy debate in middle-income countries as they search for the potential engines of growth and good governance. This debate assumes, first, that there is a meaningful definition of class, and second, that thresholds that define relatively homogeneous groups in terms of pre-determined sociological characteristics can be found empirically. This paper aims at proposing a view of the middle class based on vulnerability to poverty. Following this approach the paper exploits panel data to determine the amount of comparable income — associated with a low probability of falling into poverty — which could define the lower bound of the middle class. The paper looks at absolute thresholds, challenging the view that people above the poverty line are actually part of the middle class. The estimated lower threshold is used in cross-section surveys to quantify the size and the evolution of middle classes in Chile, Mexico, and Peru over the past two decades. The first relevant feature relates to the fact that the proposed thresholds lie around the 60th percentile of the distribution. The evidence also shows that the middle class has increased significantly in all three countries, suggesting that a higher number of households face lower probabilities of falling into poverty than they did in the 1990s. There is an important group of people, however, which cannot be defined as middle class from this perspective, but are not eligible for poverty programs according to traditional definitions of poverty.

Full Paper (PDF)

Country Analysis Brief: Peru

April 24, 2011 Comments off

Country Analysis Brief: Peru
Source: Energy Information Administration

Peru’s rapid economic growth in recent years has led to an increase in energy demand, especially in the industrial sector. Peru has the potential to be a significant producer of both natural gas and petroleum due to its untapped reserves; however, lack of investment has limited Peru’s oil production, and made it an importer of both crude oil and petroleum products. The Peruvian government has enacted a series of policies to attract foreign investment and increase energy security by promoting the use of domestic natural gas and hydroelectric resources. These policies have included a conversion program for transportation fuel from diesel to natural gas, and an energy efficiency program for the residential sector. Increases in the production of natural gas from the Camisea gas fields and the first natural gas liquefaction plant in South America at Pampa Melchorita have enabled Peru to become a natural gas exporter despite increases in domestic consumption.
Map of Peru
Categories: energy, Peru
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