Cablegate: A Strategy for Ratification of the Ptpa

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RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
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COMMERCE FOR 4331/MAC/WH/MCAMERON
USTR FOR EEISSENSTAT AND JMCCARTHY

E.O. 12958: N/A
TAGS: ETRD ECON PGOV PE
SUBJECT: A STRATEGY FOR RATIFICATION OF THE PTPA

1. With Peruvian President Alan Garcia's Oct 10 visit to
Washington less than two weeks away, Embassy is increasingly
concerned about the likelihood of Congressional inaction on
the implementing legislation for the Peru Trade Promotion
Agreement (PTPA). From here, the increasing uncertainty is
exacerbated by the absence of a clear interagency game plan
and time line for ratification, as well as a strategy to
protect our interests when the Andean trade preferences
(ATPDEA) expire at the end of the year. We encourage
Washington agencies meeting this week to work together to
develop both a timeline and a strategy to ensure that
Congress a) takes up the PTPA before the end of the year and
b) to ensure that U.S. importers (and Peruvian exporters) are
not penalized by the expiration December 31 of ATPDEA trade
preferences.

2. The ATPDEA Gap: Even if the House or the entire Congress
approve this legislation before the end of the year, there is
likely to be a significant and costly gap between expiration
of ATPDEA preferences on December 31, 2006 and full entry
into force of the PTPA. There is no doubt that a gap will
negatively impact countless U.S. importers, Peruvian
exporters, as well as U.S. consumers. This gap will harm
bilateral economic relationships in the region, as U.S.
businesses seek other suppliers. Supporting a program that
will provide retroactivity during this period is critical to
all our policy goals.

3. Implementation: Even if Congress is able to approve the
PTPA before the end of the year, the agreement is unlikely to
enter into force on January 1 due to the preparation of the
implementation process. This work, necessary on both sides,
will likely further extend the length of any gap between
ATPDEA and entry into force of the PTPA. Our understanding
is that the U.S. Trade Representative's Office is concerned
that discussions on implementation would prejudge or
adversely affect Congressional approval. We will need to
work together on this issue to develop a strategy and a
timeline.
STRUBLE

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