U.S.-Andean trade deal 'life or death' for Peru

LIMA, Peru, March 13 (Reuters) - The swift renewal of a U.S. trade deal for Andean nations and new tariff breaks are a "life or death" matter for Peru and could help quash illegal drugs and rebel groups, a top official said on Wednesday. 

"The U.S. Congress should understand the (deal's) impact. It has little or no effect on the United States, but for Peru and the Andean region it is crucially important -- a life or death matter," Alfredo Ferrero, deputy minister of integration and international trade negotiations, told reporters. 

Foreign trade is a hot topic for this poor nation, whose president remarked recently that if U.S. lawmakers did not soon renew the Andean Trade Preferences Act (ATPA) pact, which expired last December, "my name isn't Alejandro Toledo." 

Looking to kick-start Latin America's No. 7 economy, which grew just 0.2 percent in 2001, Lima has lobbied hard for new products, like textiles, to be included in the treaty's list of duty-free imports when it is voted on by the U.S. Senate. 

The 1991 treaty was designed to give Colombia, Peru, Ecuador and Bolivia, which together lead world cocaine production, breaks on tariffs, some of which hit 21 percent, for some 6,000 goods in exchange for anti-drug programs. 

Ferrero said the deal was also key to curbing leftist rebel movements in the region, which is home to the Revolutionary Armed Forces of Colombia (FARC) and Peru's Shining Path, the once-powerful Maoist group that officials say remains a threat and is linked to drug trafficking. 

"The best way to fight terror is through work and investment -- that's why ATPA is important for us," he said. 

Ferrero said even with 25 percent to 30 percent of Peru's exports U.S.-bound, that only represented a drop in the bucket for the United States, its chief commercial partner. 

He said that Peru's apparel imports amounted to only 0.6 percent of total U.S. apparel imports. Apparel officials here are hoping that inclusion in ATPA will double the some $700 million the sector exports annually in two to three years. 

Last month, President George W. Bush deferred ATPA import duties for 90 days. But for quick passage, Ferrero said he hopes ATPA is broken out of a larger legislative package that would give Bush more authority to negotiate trade agreements. 

Trade and illegal drugs will top the agenda in Lima on March 23, when Bush makes his much-vaunted first official visit to South America. 

Ferrero said that if ATPA gets stuck in Congress or if U.S. lawmakers choose not to include textiles, the government would turn its efforts to a bilateral trade push. But he cautioned that Washington had shown no sign so far of interest in pursuing such a deal with Peru. 

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