The audience at the Peruvian Embassy awaits the keynote speaker, Ambassador Ortiz de Zevallos.
Members of the PACC stand with Ambassador Ortiz de Zevallos (second from the left).
Three PACC members catch up.
Even as the Colombia Free Trade Agreement languishes in Congress, the Peru Promotion Trade Agreement signed last year is moving forward into its implementation phase.
On a recent night, approximately 50 local business men and women gathered at the Peruvian Embassy on Massachusetts Avenue in the District to hear the Peruvian Ambassador, Felipe Ortiz de Zevallos, speak about the new bilateral free trade agreement between the United States and Peru.
Signed by President Bush on December 14, 2007, implementation of the agreement is under work by both countries. Still, the attendees were eager to hear how the agreement will benefit businesses both in Peru and in the United States.
“This is something that most countries are looking for,” said Ricardo Villanueva, president of the Peruvian American Chamber of Commerce, which sponsored the event. The chamber has approximately 200 members in the local Washington, D.C. metropolitan area.
Villanueva estimated that the Peruvian business community is the second largest Hispanic business community in the area, behind the Salvadorans.
Guillermo and Jenny Avellaneda attended the event at the embassy. A husband and wife team who came to the United States from Peru 17 years ago, Guillermo Avellaneda, 47, plans to start his own auto parts business. Jenny Avellaneda, 46, is a realtor with Long and Foster who spoke optimistically about the real estate market in Peru.
When Guillermo Avellaneda’s father began caring for his mother who has Alzheimer’s Disease, they also got the idea to open a retirement home in Peru.
The Avellanedas worry about the stability of the Peruvian economy, and are hopeful that the trade agreement will encourage more investment in Peru. “We’re trying to make Peru,” Jenny Avellaneda said, smiling.
Until this new agreement was signed, trade between the United States and Peru was governed by the Andean Trade Preference and Drug Eradication Act, signed into law by President Bush in 2002.
"This agreement solidifies a relationship with a critical ally in Latin America. For over 14 years, Peru has enjoyed duty-free access to the U.S. market under the Andean Trade Preference Act, which will now be made permanent,” United States Trade Representative Susan Schwab said in a statement the day of the signing. “And finally, U.S. farmers, ranchers, manufacturers and service providers will enjoy the same access to Peru’s growing market,” the statement said.
Not everyone is so enthusiastic about the agreement. Andy Gussert of the Citizens Trade Campaign thinks only big business will benefit. “Not one U.S. faith, labor, or environmental group endorsed the Peru FTA. Not one out of thousands. That says a lot,” Andy Gussert wrote in an email.
The Citizens Trade Campaign was founded in 1992 to fight passage of the North American Free Trade Agreement. It is critical of what Gussert calls the NAFTA model of free trade agreement, which he says has been a failure. “Most of the organizations we work with are in favor of trade. They just don’t like this model,” he said.
The organization predicts the agreement will drive down prices of products for United States farmers and claims the agreement favors foreign investors over American investors.
Juan Zegarra, originally from Callao, Peru, disagrees. “It’s going to benefit both sides,” he said. Zegarra works for the local Hispanic Yellow Pages. “I deal with whoever wants to reach the Hispanics.”
Villanueva, the chamber president, predicted the agreement will create jobs in the United States as well as Peru, but is concerned about finalizing implementation before the November presidential election. “Barack Obama and Hillary [Clinton] are not in favor,” he said.
Indeed, Ambassador Ortiz de Zevallos indicated an urgency in complying with the remaining implementation aspects of the agreement before the November election. “The clock is ticking,” he said.
Not only Peruvians attended the event at the embassy. Pamela Cousins is a travel agent with YTB Travel Network who said she was there to network with the local Peruvian business leaders about tourism in Peru.
A Calvert County resident, Cousins joined the Peruvian American Chamber of Commerce that night at the embassy. “I think it’s going to boost tourism,” she said of the agreement.
Ambassador Ortiz de Zevallos provided regional comparisons, noting that Peru is home to 13 of the top 500 businesses in Latin America. Mexico has 120, and Chile has 67. “We are growing, but we are still small,” he said.
He also described what he sees as the main problem with the Peruvian economy, referring to a chart of the Peruvian Gross Domestic Product. “It looks like an electrocardiogram,” he said, referring to the hyperbolic highs and lows.
The ambassador noted that the Peruvian government needs to work hard to improve the infrastructure of the Peruvian countryside. He said that it takes slightly less time to ship goods from Callao across the Andes to Iquitos in Peru than it does to ship the same goods from Callao to China. And, it costs twice as much.
Some participants were disappointed in the ambassador’s presentations.
“We were expecting more,” Luis Salinas said. Salinas liquidates businesses that have folded.
“I was expecting the ambassador to tell me what to do,” Mario Villavicencio added. Villavicencio is the owner of Pietra Graniti, a marble and granite company based in Lorton.
Salinas and Villavicencio complained that the presentation included too many statistics and not enough specifics on what the agreement will mean to local business owners who want to expand their business to Peru.
Dr. Dino Flores, the chamber’s treasurer, said the event is just the first in a series the chamber will be hosting at the embassy. “We are trying to create a high level of technical information,” Flores said.
Despite the obstacles that both countries must overcome during the implementation phase of the agreement, the mood among the participants was optimistic. “It’s something new for us,” said Juan Zegarra.
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