<p>International trade is connecting the world’s frontiers.</p><p>Economic growth is being achieved by opening up to exterior markets and many countries are</p><p>nowadays unified by bilateral and multilateral agreements which enable the global market to</p><p>conduct a freer trade without restrictions. Trade negotiations are supervised by the World</p><p>Trade Organization whose intention is to eliminate the obstacles in trade between countries.</p><p>The liberalization process of a freer trade has however failed in certain sectors such as in the</p><p>agriculture. This sector is still highly protected in many countries and a concern in the</p><p>agricultural trade is that by having a high protectionism level in the global market it could</p><p>consequently lead to higher world prices and losses to developing countries that mainly work</p><p>in rural sectors and depend on the prices of their produce.</p><p>Peru is a developing country consisting of a large agricultural sector. More than half of the</p><p>inhabitants are small producers with economies of scale living in extreme poverty.</p><p>The country is today processing negotiations of a possible Free Trade Agreement with the</p><p>United States. The main concern of Peru entering the agreement is how the aperture of the</p><p>market is going to affect sensible unprotected sectors of small farmers. The sensitive produce</p><p>could be distortional on price and affect the farmers’ welfare because of the entrance of</p><p>subsidized produce from the American side.</p><p>The purpose of the study was to investigate the potential effects the Free Trade Agreement</p><p>between Peru and United States could have upon the Peruvian farmers in the sector of selfsufficiency,</p><p>producing any type of sensitive produce in relation to price and labour. I have</p><p>conducted the study from the farmers’ perspective.</p><p>The theoretical framework was divided in two parts to be able to cover the aspect of</p><p>international trade and moreover the national aspect involving the system of Peru.</p><p>The study was conducted interpreting a future happening and therefore the approach was the</p><p>hermeneutical using an abductive research method with a qualitative strategy which enabled</p><p>the observation to be conducted through interviews. The interviews were divided in two</p><p>different sectors. Four semi-structured telephone interviews with the administrative sector and</p><p>five structured interviews through an intermediary in the agricultural sector where performed.</p><p>My intention with the study was to interpret future happenings and not to generalize an</p><p>outcome.</p><p>Furthermore the analysis was divided in four main factors based on the empirical and</p><p>theoretical observations to be able to analyze each category more deeply in an entire context</p><p>of both external and internal factors using the theoretical framework to support the arguments</p><p>of my observation.</p><p>The main conclusions of the study were that the potential effects of the Peruvian farmers’ in</p><p>price and labour would not be depending solely on the price fall of the sensitive produce</p><p>entering the market but on the ability of Peru to build stability within the country</p><p>implementing internal factors lacking today. This is to prevent the external factors of</p><p>worsening the conditions of the farmers. Consequently depending on how the situation is</p><p>handled internally in the country there could be two possible outcomes, one negative effect</p><p>and one positive effect.</p>
| Identifer | oai:union.ndltd.org:UPSALLA/oai:DiVA.org:umu-1230 |
| Date | January 2007 |
| Creators | Holler Sotomayor, Pamela |
| Publisher | Umeå University, Umeå School of Business, Umeå : Handelshögskolan vid Umeå universitet |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, text |
Page generated in 0.0018 seconds