"Removing the trade barriers between our two countries will attract more foreign investment, increase economic growth, and give consumers more choices and lower prices of goods," said Tom Gales, Caterpillar vice president for Caterpillar's Latin America Division. "We believe that trade expansion is an essential ingredient in any recipe for economic success in the 21st century, and the U.S.-Peru Trade Promotion Agreement (PTPA) is an excellent model in this regard."
If enacted, the PTPA will immediately cut Peru's tariff on U.S. products. As a result, 80 percent of U.S. consumer and industrial products, and more than two-thirds of current U.S. farm exports will enter Peru duty-free.
"In practical terms, what that means is nearly all of the tariffs on U.S. manufactured goods are eliminated on the first day that the agreement goes into effect," Gales continued. "Like the Chile Free Trade Agreement that preceded it, and the just-completed Colombia Trade Agreement, these are front- end loaded, state-of-the-art agreements."
Trade with Peru and its Andean neighbors reached nearly $24 billion in 2004, underscoring its role as one of America's most important allies. Today, with the region's mining sector booming, the area is a significant market for Caterpillar, the world's largest manufacturer of mining equipment. If combined, Caterpillar's U.S. exports to Peru, Colombia and the other Andean partners would be the company's fourth largest export market, behind Australia, Mexico and Canada, according to Gales.
In concluding today's testimony, Gales stated, "Too often we have tended to only focus on what we can measure - namely things like tariffs, quotas, and economic growth rates. And while important, we tend to forget that perhaps the biggest benefit of free trade is that it promotes human understanding and thus a more peaceful and prosperous world. The Andean region needs to be a much bigger priority for all of us."
