In October 1998, Peru and Ecuador signed a peace accord which definitively resolved border differences which had, over the years, resulted in armed conflict. Peru and Ecuador are now jointly coordinating an internationally sponsored border integration project. The United States Government, as one of four guarantor states, was actively involved in facilitating the 1998 peace accord between Peru and Ecuador and remains committed to its implementation. The United States has pledged $40 million to the Peru-Ecuador border integration project and another $4 million to support Peruvian and Ecuadorian demining efforts along their common border.

In November 1999, Peru and Chile signed three agreements which put to rest the remaining obstacles holding up implementation of the 1929 Border Treaty . (The 1929 Border Treaty officially ended the 1879 War of the Pacific.) In December 1999, President Alberto Fujimori made the first visit ever to Chile by a Peruvian head of state.

Peru has been a member of the United Nations since 1949, and Peruvian Javier Pérez de Cuéllar served as UN Secretary General from 1981 to 1991. Former President Fujimori’s tainted re-election to a third term in June 2000 strained Peru's relations with the United States and with many Latin American and European countries, but relations improved with the installation of an interim government in November 2000 and the inauguration of Alejandro Toledo in July 2001 after free and fair elections. Peru is planning full integration into the Andean Free Trade Area . In addition, Peru is a standing member of APEC and the World Trade Organization, and is an active participant in negotiations toward a Free Trade Area of the Americas (FTAA).

Disputes - international: demarcation of the agreed-upon border with Ecuador was completed in May 1999

Illicit drugs: until recently the world's largest coca leaf producer, Peru has reduced the area of coca under cultivation by 24% to 387 km&sup2 at the end of 1999; most of cocaine base is shipped to neighboring Colombia, Bolivia, and Brazil for processing into cocaine for the international drug market, but exports of finished cocaine are increasing by maritime conveyance to Mexico, US, and Europe.

See also : Peru