Peru FTA Gets Final Approval

The US/Peru free trade agreement (FTA) has received final congressional approval with a December 3
Senate vote of 77 to 18, following House approval in November by a vote of 285 to 132. The pact,
which gives Peru permanent duty-free access to the US market, enjoyed the support of US textile
manufacturers and importers of textiles and apparel. It won the support of the US textile industry,
because it has a rule of origin requiring that apparel enjoying the duty-free treatment will have
to contain yarn and fabric made in the participating countries. The agreement is seen as an
opportunity for new markets for US fabric in apparel that could displace apparel imports from Asia
and the Far East.

As the measure cleared the Senate, Kevin Burke, president and CEO of the American Apparel &
Footwear Association, praised its passage as an important step toward encouraging trade with the
other Andean nations like Panama and Colombia. He said an “unprecedented coalition” of
representatives from the entire US textile and apparel supply chain — from cotton to consumers —
supported the agreement.

The National Retail Federation (NRF) said the agreement will promote economic growth in both the
United States and Peru, and will increase job opportunities for US workers whose jobs depend on the
$7.4 billion in current trade between the two nations. NRF also said it will promote “ democratic
stability” and aid in the war on narcotics.

US Trade Representative Susan C. Schwab took advantage of the strong bipartisan support for the
agreement to make a pitch for Congress to approve FTAs with Colombia, Panama and South Korea. Those
agreements, however, face considerable opposition and are unlikely to be acted upon this year.

December 4, 2007