Peru says country closes to finishing free trade agreements with U.S.

Peru's president said Thursday that his country was close to finishing free trade agreements with the United States and several other countries, and that it had begun talks with China on a similar deal. At a meeting this week of Pacific Rim leaders, President Alejandro Toledo touted investment opportunities in Peru and said his nation would host the Asia-Pacific Economic Cooperation summit in 2008.

"Although back in 2001 many people thought we were insane to set the goal of doubling our exports by the end of our administration, we were able to reach it a year before our promise," Toledo said. "We hope the next government will set a similar goal, even if it sounds crazy, because we can do it."

He said exports now represent 20 percent of gross domestic product, compared to 12 percent in 2001.

"We started and are about to finish negotiating free trade agreements" with the United States, Thailand, Singapore and Chile, Toledo said.

Peru's proposed free trade pact with the U.S. has sparked big demonstrations in Peru. Farmers of sugar cane, rice, corn, potatoes and cotton fearful that U.S. agricultural subsidies will make it impossible for them to compete.

Peru's pharmaceutical industry believes such an agreement will usher in dominance by U.S. companies, pushing the cost of essential drugs out of reach of millions of poor Peruvians, and labor groups argue that an FTA would also erode Peruvian labor laws and job security. Toledo, who is constitutionally prohibited from seeking a consecutive five-year term, is eager to sign the treaty. He has seen his ruling party alliance disintegrate and his popularity ratings mired near the single digits for most of the past two years.

Toledo said Peru's poverty rate had declined from 54.3 percent in 2001 to 51.6 percent in 2004, part of a long-term policy to reduce high unemployment and generate economic activity in rural provinces. "Peru has still a long way to go, this is something that transcends my government," he said.

Toledo did not comment on diplomatic relations with Japan that turned sour after Peru withdrew its ambassador from Japan last week. The move was an apparent protest of Japan's response to Peruvian attempts to extradite former President Alberto Fujimori from Chile, reports the AP. I.L.