Peru has agreed a free trade deal with the United States after nearly 18 months of negotiations.
President Toledo says the deal will make Peru more competitive
The agreement, which must be approved by the US Congress, will scrap tariffs on US goods entering Peru while removing barriers to trade in services.
Peruvian goods already enter the US duty-free under a deal providing preferential arrangements for imports from Andean nations.
Colombia and Ecuador hope to negotiate separate free-trade deals with the US.
Talks between the two countries and the US are currently on hold, although they are expected to resume next year.
The Peruvian government welcomed the agreement, but unions said they were worried about job losses which might result from rising US imports.
"Now we can hold our place in the market and stay competitive," Peruvian President Alejandro Toledo said on Thursday.
Trade between the US and Peru is currently worth $5.8bn a year and the agreement will provide new opportunities for US companies.
The US is keen to reinforce existing trading agreements with Peru, Colombia and Ecuador, seen as a way of creating new jobs outside the illegal narcotics trade.
Andean countries account for 90% of cocaine sold in the US.
"An agreement with Peru is a key building block in our strategy to advance free trade within our hemisphere," Rob Portman, the US Trade Representative, said.
The US has existing free trade agreements with 12 countries and is in talks with a further 10.
Peruvian farming unions have criticised the agreement, however, claiming a flood of imports will force domestic firms out of business.
"Our government and negotiators have handed over our agricultural sector to the United States," said Luis Zuniga, president of the Conveagro union.
The Peruvian government has agreed to compensate farmers for losses suffered over the next 20 years.