Last week, we mentioned briefly that Peru is suspending two new laws related to the U.S.-Peru FTA aimed at encouraging "investment" (ie resource extraction) in the Peruvian Amazon. OpenLeft's Paul Rosenberg reported in depth on these developments.
As it turns out, this story has legs. Today, the Wall Street Journal reports that Peruvian Prime Minister Yehude Simon "will resign in the near future, amid criticism of his handling of bloody indigenous protests in the Amazon earlier this month in which at least 32 police and Indians were killed... Under Peru's constitution, Mr. Simon's resignation will lead to the resignation of the entire cabinet, opening the door for [Peruvian President Alan] García to push out other ministers tarnished by the conflict, such as Interior Minister Mercedes Cabanillas."
And then there's this:
Mr. García may also now pull back from his unofficial policy of favoring investments with or without the consent of local populations, said political analyst Santiago Pedraglio. The government had approved the decrees in part to bring Peru's laws in line with requirements outlined in its free-trade deal with the U.S.
"García made a bet that there could be these large-scale investments without taking into account the people in those regions," says Mr. Pedraglio. "But he will have to now, and I imagine investors will also want to take those concerns into account now."
The WSJ article makes it sound like García himself is free of blame, but of course he played a key role in getting the U.S.-Peru FTA passed and implemented. And as should be abundantly clear by now, it's the FTA's pro-corporate investment provisions that are a root cause of these upheavals.
EDIT: Courtesy Peruanista, check out this video (Spanish language) of Citizens Trade Campaign's Octavio Ruiz discussing Peru's future under the FTA, outside the Peruvian embassy in Washington DC. (There have been numerous protests outside the embassy in the past week; we'll have photos from one of them shortly.)