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Week Ending November 9, 2007

H.R.3688 To implement the United States-Peru Trade Promotion Agreement.

The bill aims to establish free trade between the US and Peru through a reduction and eventual elimination of barriers to trade in goods and services and through investment. The bill lays the groundwork for further expansion of trade opportunities between the two countries.

In general, tariffs are reduced or phased out on selected Peruvian products by a predetermined schedule.

The bill follows earlier legislation, the Andean Trade Preference Act, that has already reduced tariffs on Peru's export into the US. The net result of this bill is a reduction in tariff revenue ranging to an estimated $423 million through 2014.

The bill also requires corporations with assets of $1 billion or more to pay a percentage increase of estimated taxes due between July and September of 2012. The CBO estimates that the change in percentage will increase US revenues by $465 billion in 2012 but the revenues will then be reduced by that amount in 2013.

Sponsor:  Rep. Steny H Hoyer (D-MD-5^th)

Vote: Passed House 285 to 132 November 8, 2007 RC 1060

Cost to the taxpayers: "The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) estimate that enacting the legislation would reduce revenues by $20 million in 2008, increase revenues by $292 million over the 2008-2012 period, and reduce revenues by $423 million over the 2008-2017 period. CBO estimates that enacting H.R. 3688 also would increase direct spending by $4 million in 2008 and by $27 million over the 2008-2012 period, and reduce direct spending by $443 million over the 2008-2017 period. Further, CBO estimates that implementing the legislation would result in new discretionary spending of less than $500,000 per year, assuming the availability of appropriated funds."

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MORE INFORMATION

The purposes of this Act are--

(1) to approve and implement the free trade agreement between the United States and Peru entered into under the authority of section 2103(b) of the Bipartisan Trade Promotion Authority Act of 2002 (19 U.S.C. 3803(b));

(2) to strengthen and develop economic relations between the United States and Peru for their mutual benefit;

(3) to establish free trade between the United States and Peru through the reduction and elimination of barriers to trade in goods and services and to investment; and

(4) to lay the foundation for further cooperation to expand and enhance the benefits of the Agreement.

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