Before the US-Peru Free Trade Agreement was ratified in 2007, many Peruvian and international human rights and environmental organisations said the deal would lead to increased social destabilisation and drug production.
Archbishop Pedro Barreto, president of the Episcopal Commission for Social Action of the Catholic Church in Peru, said: "We are certain that the trade agreement will increase the cultivation of coca, which brings with it a series of negative consequences including drug trafficking, terrorism and violence. "
Tragically, these predictions are now starting to become a daily reality in Peru.
The available statistics point to a resurgence of "narco-terrorism" in regional centres associated with the cocaine trade.
From 2001 to 2006, armed groups mounted six major attacks on government installations and/or personnel. Since 2007, 20 separate attacks have been recorded.
In other words, the incidence of "terrorist" actions has risen from an average of one a year to roughly eight.
In a recent clash at Sinaycocha in the Junin region on September 2, a military helicopter taking off from a clearing was hit by bursts of heavy machine gun fire from surrounding jungle.
The helicopter crashed, resulting in 11 casualties (including three killed). Automatic fire continued to sweep the area for days.
This spike in civil violence is evoking traumatic memories of the 1980s era, when ultra-radical Shining Path guerrillas and US-backed government security forces committed a long and bloody series of atrocities against the population.
At least 69,000 people died.
However, what the corporate-owned news sources are not reporting is that the new conflict is a direct result of the US-Peru Free Trade Agreement (TLC).
In 2000, Peru's governmental Truth and Reconciliation Commission recommended that lasting peace and stability could be established in devastated regions only by providing programs that would encourage "employment and income generation".
Perversely, this objective has been completely undermined by the TLC, which has slashed the livelihoods of the rural poor.
The TLC required Peru to remove tariffs on many staple agricultural products, leading to a steadily-increasing flow of imports from heavily subsidised US agribusiness.
Nearly a third of the Peruvian population depend on agriculture for their income and at least 1.7 million families have already begun to suffer adverse effects from the free trade deal.
With the TLC driving down commodity prices, rural dislocation is on the rise. This is lead to a corresponding increase in coca production as desperate peasant farmers strive to make ends meet.
Increased coca production has boosted profits for the cartel bosses, who have helped to revitalise the Shining Path and other like-minded groups by hiring their members as mercenary enforcers. This symbiotic arrangement has been in place for decades, but the fallout from the TLC has lent it new life.
The drug barons are not the only beneficiaries of the devastation that has resulted from the TLC. With the US eager to restore its previously hegemonic grip on South America, the so-called "War on Drugs" has provided the Pentagon with an excuse to broaden its involvement in Andean nations such as Peru.
"Coca eradication" operations have been stepped up, leading to a wave of unreported military abuses against civilians in coca-producing areas.
Under the guise of combating terrorism, the Peruvian security forces are engaged in a struggle against all forms of dissent (peaceful or otherwise) on behalf of the ruling elites and foreign corporations who stand to gain from the TLC.
Pulling the strings by supplying funds, training and material is Washington. The Bush administration designed the free trade deal with oppressive intentions, and the Obama administration is continuing to implement that foreign policy goal.
With the US strategy of fomenting instability in the region, the threat of spill-over terrorist violence striking heavily-inhabited population centres in Peru is once again an ugly possibility.
The victims will be the ordinary people of Peru — caught, once again, in the crossfire.
Having "lost" several countries in South America to "hostile" left or centre-left regimes (such as in Bolivia, Venezuela and Ecuador), the US is determined to shore up its political and economic stake in South America.
Ruled by a US-funded client regime, Peru (along with Colombia) remains a key asset in US strategy for the Western Hemisphere.
Having already announced its intention to establish a network of new military bases in Colombia, it may not be long before similar plans are implemented by stealth in Peru.