Perú & economics, phew.
In the past few days I have received a deluge of emails regarding the Perú-US Free Trade Agreement (FTA) that may be coming up for consideration in the US congress. Now, I’m no economist, but even economists can’t seem to make up their mind whether FTAs help or hinder economies. I was in Perú when their congress signed the agreement. The fact that the main opposition to the bill came from Humala’s UPP party didn’t necessarily persuade me to dislike the agreement, nor did the near brawl that several congresspeople-to-be started during discussion on the FTA in their congress. And then there was our visit the the U.S. Embassy where one of the speakers made the reasonable point the economic advancement wasn’t easy or painless, but it helps in the long run.
Fast forward to today. After months of not really thinking about it, the Perú-US FTA may be coming to a vote in U.S. congress. American organizations that I respect (like MCC) oppose the agreement. At first I was confused.
After all, it didn’t seem all bad when I was down there. But the more I read about NAFTA and other FTAs the more I stared to think that maybe this wasn’t such a good thing for the average Peruvian. My host dad in Caraz worked with cooperatives of local farmers who’s goal was to start exporting their products to more lucrative markets. So my initial reaction was, wow, remove some of those export barriers, they can start shipping to the US. But there’s the opposite reaction too. Other cheap foods coming into the Peruvian market putting different farmers out of business. Another point I discussed with my host dad was that it is often hard for local cooperatives to reach the US market because they often cannot provide the consistent supply and consistent qualities demanded for export. Hmmmm, so if local cooperatives can’t export, but trade is increasing guess where all that increase in profit goes. Likely to the large corporations who already have some business overseas, but who now can really rake in the dough because of lower tariffs
Trickle down is a nice theory, but I really don’t think it’s that effective.
So, where does that leave me? Well, I think pretty soon I’m gonna send an email off to my host dad in Caraz, see what he has to say about the issue. But unless someone can really give me compelling arguments to the contrary I don’t see how I can tell my representatives to support the Perú-US FTA. And now I will end my political rant… Hopefully this gave you something good to think about. Rambling like this sure helps me think through things
Oh, and the photo is my host dad, Freddy, and a cuy. One of several potential export to the US. Hear more about cuyes on The World.


