The Impact of the Andean Trade Preference Act Twelfth ... - USITC

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Alternative DevelopmentThe USAID alternative development program in Peru aims to improve communityparticipation in local government to strengthen the rule of law for the community’s benefit.To support a stronger legal environment locally, USAID provides economic aid to build thelocal economy’s competitiveness through legal crops and improved infrastructure, makingthe alternative development program available to communities in coca-growing areas thatvoluntarily eradicate their coca cultivation. Pro-coca-farming groups challenge communitiesthat accept these voluntary eradication agreements, at times violently. As a result, progressimplementing these agreements slowed during 2005 as cocalero strikes and threats ofviolence forced the closure of regional offices for roughly a third of the year. 340In 2005, an additional 9,000 families joined the voluntary eradication program, which beganin October 2002. Since the program’s start, 11,000 hectares of coca have been voluntarilyeradicated, approximately 3,000 hectares in 2005. 341 The director of Peru’s national drugagency cited a variety of legal crops as substitutes for illegal coca cultivation for familiesenlisted in the alternative development program. These crops included bananas, birdseedmaize, cacao, coffee, cotton, oil palm, orchids, hearts of palm, palm oil, papaya, peanuts,pineapples, rice, rubber, sesame seeds, and variety beans. 342By the end of 2005, USAID reported providing technical assistance to 26,469 familyfarmers, covering more than 31,000 hectares of legal crops, as well as building infrastructurefor communities participating in the voluntary eradication program. By the end of 2005, 231separate projects had been completed. In addition, USAID completed the $30-millionrehabilitation of the Fernando Belaunde Terry highway, the sole major highway thatconnects the Central Huallaga Valley–a major coca growing area–with western Peru, wherelegal agricultural markets are more accessible. Such transport access should contributesignificantly to improved legal agricultural production in the Central Huallaga Valley. 343Since October 2002 when it began, the national alternative development program, Programade Desarollo Alternativo (PDA), working in conjunction with USAID, had enrolled 50,000families by May 2006 and agreed to 600 contracts with rural communities to voluntarilyreduce coca cultivation. 344 According to Peru’s national drug control agency, Devida, theprogram has helped build 600 various infrastructure projects in nearly four years, includinglocal roads, bridges, electricity stations, water systems, and community education and healthcenters. Under this and related programs, 60,000 hectares of coca have been forciblyeradicated and an additional 11,000 hectares have been voluntarily eliminated, substitutingto date approximately 52,000 hectares of legal crops. According to the U.S. Embassy, the340 U.S. Department of State, INCSR 2006, pp. 116-119.341Ibid.342U.S. Department of State telegram, “Ambassador Discusses Free Trade in Piura,” message referenceNo. 2235, prepared by U.S. Embassy, Lima, May 18, 2005; Nils Ericsson Correa, “Cacao... No Coca,” ElComercio, May 31, 2006; Devida, “Stand de Devida Fue Premiado en Semana de Comercio Exterior,” pressrelease, Oct. 21, 2005. As noted previously, a number of alternative development products may receive tradepreferences under other programs in addition to ATPA or may already enter the United States duty-free.Also, industries established with the help of ATPA trade preferences may market alternative developmentproducts in markets other than the United States, for example, for local consumption or export to neighboringcountries, thereby still providing legitimate employment opportunities as a counter to coca cultivation butwithout alternative development products being imported into the United States per se.343U.S. Department of State, INCSR 2006, pp. 116-119.344Devida, “Devida Cumplio Cuatro Anos de Fundada,” press release May 16, 2006, found athttp://www.devida.gob.pe/Modulos/Noticia/DetalleNoticia.asp? Cod=355, retrieved June 12, 2006.4-12
agricultural sector in Peru has clearly benefitted from ATPA preferences, developingnontraditional export crops such as artichokes, asparagus, beans, flowers, grapes, mangoes,onions, and paprika. 345Asparagus has proved to be one of the foremost alternative development export crops thatbenefits from ATPA. According to the Peruvian Asparagus and Vegetables Institute in itssubmission to the Commission for this report, Peru ranked as the world’s largest exporter ofasparagus in 2005. The institute notes that Peru is also a significant and growing exporterof other fresh and preserved vegetables, such as artichokes, chili peppers, pimientos, andpaprika. Stating that it supports the positive effect ATPA has had on these industries, theinstitute points out that the asparagus industry now “provides alternative legal employmentto over 60,000 workers, many of whom come from mountainous areas where cocaproduction has traditionally taken place.” 346The institute’s submission estimates that, of 4.3 million formal jobs in Peru in 2004, 1.1million were related to nontraditional exports, and 600,000 of those were in the agriculturalexport sector, which benefits from trade preferences offered under programs such as ATPA.The institute highlights the artichoke industry as another nontraditional agricultural exportsector. The sector currently employs 15,000 people and surpassed $40 million in value in2004. Paprika exports also increased by 88 percent between 2004 and 2005, surpassing $90million in value to make Peru the world’s top paprika exporter.The administration of President Alan Garcia, who was elected in June 2006, is formulatinga five-year export promotion plan called Sierra Exportadora that aims to encourage farmersin the Peruvian highlands–where much of Peru’s coca is grown–to increase economic growthby shifting from traditional food crops, such as corn, potatoes, and quinoa, 347 to higher-valueexport products, such as artichokes, snow peas, peppers and paprika, onions, and trout. 348This export promotion plan is modeled on increased agricultural exports, such as those fromthe asparagus industry that were induced by ATPA trade-based preferences and which hasgenerated economic growth on the Peruvian southern coast. 349345U.S. Department of State telegram, “USITC 2005 Investment and Drug Crop Survey,” messagereference No. 2490, prepared by U.S. Embassy, Lima, June 21, 2006.346Carlos Mateo Paz-Soldan, and John B. Totaro, Jr., attorneys, Schmeltzer, Aptaker & Shepard, onbehalf of the Peruvian Asparagus and Vegetables Institute, written submission to the Commission concerninginv. No. 332-352, Andean Trade Preference Act: Impact on U.S. Industries and Consumers and on DrugCrop Eradication and Crop Substitution, June 8, 2006.347A high protein, desirable plant found in the high Andes whose seeds are often ground for food in Peru.348 U.S. Department of State telegram, “Understanding Garcia’s Export Promotion Plan,” messagereference No. 2507, prepared by U.S. Embassy, Lima, June 22, 2006; U.S. Department of State telegram,“Garcia’s Campaign Proposals – He’s Got the Dough,” message reference No. 2532, prepared by U.S.Embassy, Lima, June 26, 2006.349U.S. Department of State telegram, “Understanding Garcia’s Export Promotion Plan,” messagereference No. 2507, prepared by U.S. Embassy, Lima, June 22, 2006.4-13
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U.S. International Trade Commission
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PREFACEThe submission of this study
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Trade-Related Activities in 2005•
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Organization of the ReportThis chap
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actions to withdraw or suspend coun
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textile and apparel articles made i
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duty-free entry are identical—a C
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analysis assumes that the supply of
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$11.1 billion in 2005 compared with
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Table 2-2 Leading U.S. imports for
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and 9.5 percent in 2004 to 7.7 perc
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2-8Table 2-5 U.S. imports for consu
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2-10Table 2-6 Leading U.S. imports
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Table 2-8 Textiles and apparel: U.S
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Virtually all flower imports from t
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The 2005 list of leading imports un
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Table 2-9 U.S. imports for consumpt
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cathodes, four apparel products, on
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2-26Table 2-11 U.S. exports to ATPA
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2-28Table 2-12 Leading U.S. exports
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Page 73 and 74: more in 2004. 132 Asparagus and cut
Page 75 and 76: esulted in greater availability of
Page 77 and 78: In recent years, some U.S. growers
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Page 81 and 82: Table 3-6 Foreign direct investment
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Page 89 and 90: place will have a devastating effec
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Page 93 and 94: Textile and Apparel SectorPeru has
Page 95: could begin producing the high-end
Page 98 and 99: Role of ATPA in Counternarcotics Ef
Page 100 and 101: (table 4-1, figure 4-1). 306 Net co
Page 102 and 103: Figure 4-1Net Coca Cultivation in t
Page 104 and 105: to other forms of legal justice. Th
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Page 111: APPENDIX AFederal Register NoticeA-
Page 114 and 115: 27278 Federal Register / Vol. 71, N
Page 117 and 118: American Chamber of Commerce of Per
Page 119 and 120: Government of Colombia—Colombian
Page 121: Peruvian Asparagus Importers Associ
Page 125: Technical Notes to Chapter 3:Partia
Page 128 and 129: (1)N(Q a /Q a N) = (1+t)ε aa(2)N(Q
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