Deforestation and the United States-Peru Trade Promotion Agreement

Abstract

Do environmental provisions in trade agreements make a difference? In part to coopt environmental criticisms, the United States has included environmental components to trade agreements since NAFTA side agreements in the mid-1990s. Environmental components are increasingly more integrated and more specific, as illustrated by the 2009 United States-Peru Trade Promotion Agreement (PTPA). In exchange for increased market access to the United States, the Peruvian government agreed to reduce illegal logging and improve forest sector governance. Recent qualitative assessments of deforestation highlight difficulties in implementing the specific requirements of the PTPA's Annex on Forest Sector Governance, but tests with Peruvian data on logging appear unreliable. We circumvent this difficulty by using satellite imagery of deforestation across Peruvian border regions and by engaging multiple methods to estimate the PTPA's impact. All results suggest that deforestation has actually increased since the PTPA entered force, although no more than in other Amazonian countries. We conclude by emphasizing the limits of external imposition of environmental rules, which appear prone to failure unless domestic interests mobilize in their support.