Constraints on economic growth in Peru and the other Andean countries include unnecessary bureaucracy, inadequate infrastructure, rigid workforce regulations, insufficient dispute resolution mechanisms, insufficient competition, and a plethora of bilateral trade agreements at odds with regional agreements.

CRECER encouraged policy reforms, supported decentralization, and fostered an environment conducive to trade and domestic foreign investment in Peru for example, reducing bureaucracy and improving infrastructure at the port of Callao and simplifying business registration at the municipal level. It raised awareness of the opportunities created by U.S. trade preferences, the Free Trade Area of the Americas, and the free trade agreement (FTA) with the United States.

Working closely with Peru’s Ministry of Trade and Tourism, CRECER provided services to help the ministry ensure fruitful FTA negotiations.

The project

• Organized workshops on negotiation topics and techniques;
• Sponsored trips to El Salvador, Chile, and Mexico for officials to observe the effects of FTAs;
• Installed computable general equilibrium models to assess the effects of policy and negotiation options;
• Conducted studies of sensitive agricultural crops, such as cotton and sugar;
• Devised communication strategies; and
• Surveyed Peruvian attitudes toward the FTA.

These services strengthened the ministry’s capabilities, helping it form one of the region’s best negotiating teams and earn a reputation as one of Peru’s most effective ministries. Outreach programs were run mostly through small grants to Peruvian groups. CRECER received wide recognition for these efforts.

Other activities supported the government in preparing the FTA and recommended policy reforms that have been implemented to improve the business climate.

In October 2005, the project shifted focus from Peru to the entire Andean region (Ecuador, Colombia, and Bolivia). We identified the needs for trade capacity building common throughout the region and designed and provided technical assistance to meet those needs.

Regional activities improved notification of technical barriers to trade, strengthened labor inspection systems, and heightened awareness of intellectual property rights obligations among small and medium-sized enterprises.