PERU SUPPORT OF FREE TRADE DRAWS PRAISE IN BUSH VISIT

LIMA, Peru -- Peru's economy is stumbling, and the president's popularity
has plummeted. The war on drugs shows signs of stalling, and a long-dormant
rebel group may be restive again, as evidenced by a bombing here on Wednesday.

But the government of President Alejandro Toledo is still viewed by the
United States as democratic and reform-minded, a world away from the
authoritarian government of Alberto Fujimori, who was toppled 17 months ago
in a corruption scandal. Indeed, in many ways, Peru is better off than
neighbors like Colombia, with its intensifying drug-fueled war, and
Argentina, where default on a $141 billion debt brought down the government.

So in visiting here today, President Bush demonstrated his support for
President Toledo, whose administration has made its mark by trying to
reform Peru's troubled institutions while sticking to the principles of
free trade so cherished by the United States.

"I've been impressed by his commitment to democracy and his determination
to improve the lives of the people of Peru," Mr. Bush said this evening in
a news conference after meeting with his Peruvian counterpart. Mr. Bush
added that he was "inspired by his life, inspired by his story," referring
to Mr. Toledo's rise from a shoeshine boy to a position in the World Bank
to president of this country of 25 million.

Mr. Bush's visit came at an important time for Mr. Toledo, who won office
last July but whose approval rating in national polls has tumbled to just
25 percent, down from around 55 percent, as promises to bring jobs and
prosperity have foundered. That has concerned officials in Washington, who
worry about stability here and in other Andean countries.

"Right now, the loss of confidence is serious," said Alfredo Torres,
director of Apoyo, a Lima polling company. "And the danger is for that lack
of confidence to translate into a lack of confidence in democracy."

Today, though, Mr. Toledo enjoyed the limelight, taking Mr. Bush through a
color guard on national television before entering the ornate government
palace, where the American leader met with Mr. Toledo and leaders from
three other Andean countries, Bolivia, Colombia and Ecuador. Mr. Toledo
joked about how both men had good taste in ties -- they both coincidentally
wore the same powder blue ties -- and stressed that both had "the same
energy and stubbornness" to deal with difficult problems.

Mr. Bush, for his part, helped Mr. Toledo by telling reporters that he
remained firmly committed to pushing the American Congress to renew a
regional trade pact that has created thousands of jobs in agriculture and
small-scale manufacturing in Peru and its neighbors.

The pact expired in December.

That agreement, the Andean Trade Preference Act, has for a decade lowered
tariffs for 6,000 products from Peru and the other Andean countries. Now
Andean leaders are urging Washington to now only renew the deal, but to
expand it to cover more products, like high-quality cottons from Peru,
canned tuna from Ecuador and footwear from Colombia.

"The Andean trade pact is a cornerstone of good policy," Mr. Bush said. "It
is the cornerstone of good relations."

The trade pact is considered a matter of "life or death" for this country,
as one Peruvian trade minister recently told reporters, because it is
believed to have provided legal jobs for people who would otherwise work in
drug-related enterprises. The Preference Act, in fact, was created
expressly for that reason, with the Andean countries agreeing to cooperate
with Washington's drug war in exchange for tariff breaks.

Indeed, while the United States often focuses on drug trafficking and
security issues, particularly now that Mr. Bush has declared a world-wide
war on terrorism, the Andean countries prefer to talk of trade and economic
aid, analysts say.

"The Peruvians care more about alpaca than Al Qaeda," said Michael Shifter,
who tracks the region for the Inter-American Dialogue, a Washington policy
analysis group.

Some Peruvian political experts say that since the American Congress is the
ultimate arbiter on the Preference Act, Mr. Bush's trip is mainly symbolic.

"There are few solutions being offered," said Javier Diez Canseco, a member
of Congress. "This visit is just a political act, an expression of
confidence, but only true gestures lead to economic and social advances."

Peruvian government officials are very much aware that high expectations
could prove illusory.

Diego Garcia-Sayan, the foreign minister, warned his countrymen in recent
days, saying, "President Bush's visit is not a visit by Santa Claus."