US accuses Peru of violating FTA forestry provisions

The White House is accusing Peru of violating its commitment to protect the Amazon rainforest from deforestation, threatening to hold Lima in violation of the 2007 US-Peru Free Trade Agreement (formally the Peru Trade Promotion Agreement or PTPA). On Jan. 4, Robert Lighthizer, President Trump's top trade negotiator, announced that he is seeking formal consultations with Lima to address concerns about its recent move to curtail the authority of Peru's auditor for timber exports, the Organism for the Supervision of Forestry Resources (OSINFOR), which was established as a provision of the trade agreement. "By taking this unprecedented step, the Trump administration is making clear that it takes monitoring and enforcement of US trade agreements seriously, including obligations to strengthen forest sector governance," Lighthizer said in a statement. 

On Dec. 14, the Presidency of the Council of Ministers (PCM), Peru's cabinet chief, approved Supreme Decree 122, issued two days earlier by President Martín Vizcarra, which removed OSINFOR from PCM oversight and placed it under the Ministry of Environment (MINAM). MINAM presented the proposal without consulting, or even informing, OSINFOR. The change was made in opposition to the official and public position of OSINFOR, and is seen as a measure to undermine the agency's independence.

OSINFOR is responsible for certifying that all Peru's timber exports are of legal origin. Calls for curtailing the agency's power gained momentum after the January 2018 siezure in the United States of illegal Peruvian timber shipments following a joint investigation by OSINFOR and Peru's customs enforcement body, SUNAT, dubbed Operation Amazonas. Immediately after the siezure, OSINFOR's president, Rolando Navarro, was abruptly dismissed by the PCM, and the logging industry launched demands for the agency to be placed either under the Agriculture Ministry (MINAGRI), the Forestry Ministry (SERFOR) or MINAM. The industry has a long-established relationship with these ministries, and OSINFOR was intended to provide more aggressive oversight, untained by networks of corruption. 

The White House needs support from congressional Democrats to pass the pending US-Mexico-Canada Agreement (USMCA), Trump's replacement for NAFTA, which is supposed to have tougher provisions for raising wages, especially in the automotive industry. The forestry annex in the Peru agreement was conceived as a model for a new inspection system that could include confiscation at the border of goods found to violate treaty provisions, and the prosecution of companies that import noncompliant products. (Gestión, Lima, Jan. 5; NYT, Jan. 4; Center for International Environmental Law, Dec. 17)

Image via Sierra Club