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The United States Resolves Its Request for Consultations Regarding Peru's Environmental Obligations Under Bilateral Trade Agreement

Published online by Cambridge University Press:  11 July 2019

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Extract

On April 9, 2019, the United States and Peru reached a resolution regarding concerns about Peru's forest sector obligations under the 2007 United States–Peru Trade Promotion Agreement (PTPA). At issue was Peru's relocation of the Agency for the Supervision of Forest Resources and Wildlife (OSINFOR) to a “subordinate position” in its Ministry of Environment in December 2018. The United States requested consultations under the PTPA on the ground that this relocation conflicted with a provision in the Environment Chapter's “Annex on Forest Sector Governance” (Forest Annex), which states that “OSINFOR shall be an independent and separate agency.” Following the consultations, Peru agreed to restore OSINFOR to its original location within the Peruvian government.

Type
Settlement of Disputes
Information
American Journal of International Law , Volume 113 , Issue 3 , July 2019 , pp. 640 - 642
Copyright
Copyright © 2019 by The American Society of International Law 

On April 9, 2019, the United States and Peru reached a resolution regarding concerns about Peru's forest sector obligations under the 2007 United States–Peru Trade Promotion Agreement (PTPA).Footnote 1 At issue was Peru's relocation of the Agency for the Supervision of Forest Resources and Wildlife (OSINFOR) to a “subordinate position” in its Ministry of Environment in December 2018.Footnote 2 The United States requested consultations under the PTPA on the ground that this relocation conflicted with a provision in the Environment Chapter's “Annex on Forest Sector Governance” (Forest Annex),Footnote 3 which states that “OSINFOR shall be an independent and separate agency.”Footnote 4 Following the consultations, Peru agreed to restore OSINFOR to its original location within the Peruvian government.Footnote 5

OSINFOR is mainly responsible for the “verification of all timber concessions and permits” in an effort to prevent illegal logging.Footnote 6 In the negotiating of the PTPA, the United States specifically sought to ensure that OSINFOR would remain independent in order to protect forest oversight from political pressures.Footnote 7 Following Peru's decision in December 2018 to move OSINFOR to within the Ministry of Environment, the United States requested consultations in January 2019.Footnote 8 Consistent with the PTPA's protocol for resolving disputes arising under the Environment Chapter, including the Forest Annex, the United States and Peru “held technical consultations to discuss the matter” in late January.Footnote 9 The parties then referred the matter to the PTPA's Environmental Affairs Council (EAC). A month later, this bilateral committee of senior officials with environmental responsibilities convened in Lima, Peru.Footnote 10

As a result of their deliberations, Peru withdrew its previous decision to move OSINFOR within the Ministry of the Environment.Footnote 11 Its decree of April 9 reinstated OSINFOR’s former position within the government such that OSINFOR will once again be part of the Presidency of the Council of Ministers and thus directly communicate with Peru's Prime Minister.Footnote 12 This decree also established a timeline for the Presidency of the Council of Prime Ministers to hire OSINFOR’s next leader.Footnote 13 U.S. Trade Representative Robert Lighthizer stated:

We are pleased with Peru's decision to retain OSINFOR as an independent and separate agency, as required by our bilateral agreement . . . . This shows that strong enforcement works. I am committed to using enforcement tools to ensure that our trade agreements protect the environment and advance the interests of U.S. workers and businesses.Footnote 14

In keeping with its emphasis on trade agreements and their enforcement, the Trump administration has recently initiated a set of consultations under another free trade agreement—the United States–Republic of Korea Free Trade Agreement (KORUS).Footnote 15 According to the United States, South Korea's evidentiary rules governing the competition hearings of the Korea Free Trade Commission (KFTC) prevent U.S. companies from receiving procedural protections to which they are entitled under KORUS.Footnote 16 The United States now seeks changes from South Korea that will “address issues related to opaque KFTC hearing procedures regarding [U.S. companies’] lack of access to evidence, including evidence used to bring allegations against” them.Footnote 17

References

1 Office of the U.S. Trade Rep. Press Release, USTR Successfully Resolves Concerns Raised in First-Ever Environment Consultations Under the U.S.-Peru Trade Promotion Agreement (PTPA) (Apr. 9, 2019), at https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/april/ustr-successfully-resolves-concerns# [https://perma.cc/D4GF-9R2K] [hereinafter USTR Press Release of April 9].

2 Id.

3 Id. For discussion of the U.S. request for consultations, see Jean Galbraith, Contemporary Practice of the United States, 113 AJIL 376, 400 (2019).

4 Trade Promotion Agreement, Peru-U.S., Apr. 12, 2006, Annex 18.3.4, § 3(h)(iii), available at https://ustr.gov/trade-agreements/free-trade-agreements/peru-tpa/final-text [hereinafter PTPA].

5 USTR Press Release of April 9, supra note 1.

6 See PTPA, supra note 4, at Annex 18.3.4, § 3(h)(iii).

7 USTR Press Release of April 9, supra note 1; see also Galbraith, supra note 3, at 402 n. 19 (discussing how OSINFOR once suffered from “perverse incentives and institutional pressures” because it was funded through logging revenues but gained greater independence when it was positioned inside Peru's Office of the Presidency of the Council of Ministers).

8 Galbraith, supra note 3, at 403.

9 USTR Press Release of April 9, supra note 1; see also Galbraith, supra note 3, at 403 (describing the dispute resolution mechanism set forth in Environment Chapter of the PTPA).

10 USTR Press Release of April 9, supra note 1; Galbraith, supra note 3, at 403 (providing a description of the EAC's membership).

11 USTR Press Release of April 9, supra note 1.

12 Id.

13 Id; see also Galbraith, supra note 3, at 402 (noting that OSINFOR’s former leader, Rolando Navarro, sought asylum in the United States after facing threatening protests against his efforts to carry out OSINFOR’s environmental mandate).

14 USTR Press Release of April 9, supra note 1.

15 Office of the U.S. Trade Rep. Press Release, USTR Requests First-Ever Consultations Under the U.S.-Korea Free Trade Agreement (KORUS) (Mar. 15, 2019), at https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/march/ustr-requests-first-ever [https://perma.cc/XH7X-JP4Y].

16 Id.

17 Id.