Peru’s Alan Garcia to revise free trade deal with the US

The President elect of Peru, Alan Garcia, readies to take over his position from incumbent Alejandro Toledo in July, as studies the country’s main pending issues ahead of five years of intensive job. Last week, the Social democratic leader, who defeated his nationalistic opponent Ollanta Humala in a close runoff two weeks ago, commented how he will manage to fight widespread poverty, rule without a majority in the Congress and renegotiate a free trade deal with the United States signed by the outgoing government.

In an attempt to vanish the ghosts of his previous ruling between 1985 and 1990, when the local economy collapsed as his plans to stop foreign debts payments failed, Garcia now stresses his support for free markets and foreign investment. On the other hand, he has promised to revise the free trade deal signed between Peru and the United States “line by line”.

The agreement "is just a first draft, which can be improved and broadened if this government decides to approve it," Garcia said. "We will not approve anything in a rush."

Garcia said he would insist on revising the free-trade agreement that Peru's outgoing government of President Alejandro Toledo signed with the United States in April. The pact hasn't been ratified by the legislature of either nation.

In a news conference in Lima last week, Garcia suggested one change he might seek would be to add language to discourage Peru's importing of subsidized U.S. crops. The less subsidized a crop, the higher the quota that could be imported from the United States, he said. "I think that's a subject that can be dealt with in an amendment," Garcia said.

In his first moves since he was elected President, Garcia tried to bring calm to the Peruvian business class, but also intended to bring hope to the impoverished masses of the country that voted for Humala. The veteran leader is moving in a narrow corridor as most of his votes in the second round came from wealthy urban citizens, but many others supported the populist background of his APRA party.

“The crazy horse”, as he was nicknamed after his chaotic first presidency between 1985 and 1990 is now a rational and experienced politician that likes to be considered as a statesman. His flourished rhetoric was enough to convince millions that he was the best choice between “two evils”.

Garcia knows that he will need more than rhetoric to rule Peru from July 28. The country faces a major political breakdown since the former military officer Ollanta Humala rose as the champion of the poor majority.

Despite accusations that link the nationalistic leader with tortures and other crimes against humanity as he served in contra insurgency military missions, Humala’s nationalistic coalition is the first minority in the Congress with 45 seats out of 120. Garcia’s Social democratic APRA party has 35, as other moderate forces  - center-right - have the remaining 40.

As soon as he will be inaugurated in July 28, Garcia will have to rule with a Congress split in thirds, as per the results obtained in the first round of the elections.

With the above in mind, he extended an olive branch to Humala. He called the upstart former military officer a de facto opposition leader and praised him for championing the rural poor, who have long been neglected by Peru's political class.

Stuck between a greedy business elite and the antidemocratic ideas of those who represent the poor masses, Garcia will have to show all the skills of a first class chess player to go ahead with his moderate plans without irritating the powerful but giving the weak reasons to believe in democracy.

Hernan Etchaleco

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Author`s name Dmitry Sudakov