US Senate approves free trade agreement with Peru

The US Senate has approved the text of the free trade agreement (FTA) between Peru and the United States.

In November 2003 the commercial representative for the United States, Robert Zoellick, announced the intention of the executive branch of the government to initiate negotiations with four countries of the Andean Community - Bolivia, Colombia, Ecuador and Peru - in order to conclude a FTA. Four years on, only two countries (Colombia and Peru) have reached an agreement with the United States; only the agreement with Peru has been approved by the US Congress.

The US House of Representatives ratified the FTA on November 8 2007 and the Senate approved the text on December 4 2007 (77 votes in favour, 18 votes against). In contrast, the FTA between the United States and Chile obtained only 66 favourable votes and the Dominican Republic-Central America Free Trade Agreement with the United States obtained only 54 favourable votes at the Senate. The FTA between the United States and Peru was signed by President Bush on December 14 2007. The Peruvian and US governments declared that the FTA is intended to be operative by the end of 2008.

Under the FTA, Peruvian companies will have access to a large market. The volume of export from Peru to the United States (particularly textiles and agro-industrial products) is likely to increase significantly. While trade with Peru represents less than 0.5% of the total volume of trade of the United States, the United States is Peru's main commercial partner.

During the negotiations, Peru made significant compromises in IP matters. For instance, Peru must:

• use its best efforts to approve the Madrid Protocol;
  
  
• approve the World Intellectual Property Organization's Copyright Treaty and Trademark Law Treaty by the date of entry into force of the FTA; and
  
  
• ratify or accede to the Convention relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite 1974, the Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purposes of Patent Procedure 1977 (as amended), the Performances and Phonograms Treaty 1996, the Patent Cooperation Treaty and the International Convention for the Protection of New Variety of Plants.

In addition, Peru must:

• implement a system for the electronic filing, processing, registration and maintenance of trademarks;
  
  
• create a publicly available electronic database (including an online database) of trademark applications and registrations;
  
  
• amend the law so that it will no longer be mandatory to register licensing agreements for the agreement to be valid or for the parties to assert rights in the trademark at issue;
  
  
• implement a management system for its country-code top-level domain, including an online database containing the contact details of all domain name registrants;
  
  
• establish procedures for the enforcement of IP rights; and
  
  
• publicize its efforts to enforce IP rights in civil, administrative and criminal proceedings.
  

Moreover, when determining the amount of damages to be awarded in infringement cases, the courts must take into account the amount of loss suffered based on the suggested retail price or on other legitimate measures of value submitted by the rights holder.

Peru must now pass implementing regulations. The government is expected to ask Congress to approve a law granting power to the executive to pass the necessary legislation.

José Barreda, Barreda Moller, Lima