The trade strategy of Peru is focused towards three main objectives, increased exports, reduced poverty levels, and improved global competitiveness. In this respect the country has also embarked on seeking both bilateral and multilateral trade deals thus becoming one of the most proactive countries in this region. Nowadays, Peru is widening scope to include more sectors such as manufacturing, services and agriculture, aiming to reduce overdependence on primary products like copper and gold. While change is beneficial for the Peruvian economy in general, it also facilitates foreign companies willing to enter the Peruvian market in search for resources and goods.
Key trade agreements impacting Peru’s economy
Trade agreements in Peru offer Peruvian enterprises a crucial opportunity to access diverse markets in North America, Asia and Europe expanding their market presence. Below are some of the important trade agreements that Peru has signed:
United States-Peru trade promotion agreement (PTPA)
The 2006 PTPA, which was implemented in 2009, ensured the entry of goods and services from Peru into the U.S. As the PTPA focused on Peru which mainly relied on exports of manufactured goods, textiles and agricultural products, the country was able to gain an upper hand. On the other hand, American companies were also able to enjoy the benefits of the Peruvian market by undertaking investments on sectors like technology, services and energy.
European Union free trade agreements
The 21st century saw the political evolution of most post-colonial states in Africa and their inclusion into global economies. Considering the region as more than just a health and economic crisis, it is important to note the political interplays involved. Peru and the European Union signed an agreement in 2012, paving the way for international trade between these two regions. Geographical areas include international territories common to all but specific to none in commercial trade polices 23. G.T.O is devoted to co-operation, expansions of trade and overcoming all barriers to free movements of goods and people between participating countries 22.
Trans-pacific partnership (TPP) and comprehensive and progressive agreement for trans-pacific partnership (CPTPP)
Owing to its involvement in the initial TPP and later on the CPTPP, Peru still shares several Asia Pacific economies like Japan, Canada and Australia. Since the approval of the CPTPP, Peru has witnessed growth in trade with countries in Asia, more so in the lines of textiles, fisheries, and agriculture, which were most prominent in trade prior. In addition, it features similar provisions concerning intellectual property, labor and environmental standards which would also attract investors to the markets of Peru.
Pacific alliance
Chile, Colombia, Mexico, and Peru make up the Pacific Alliance, a regional trading group. It was founded in 2011 with the goal of establishing a free trade zone in Latin America that draws in both domestic and international commerce. In order to extend its influence beyond conventional trade boundaries, the alliance also invites collaborations with nations in Asia, Europe, and beyond and has observer members.
China-Peru free trade agreement
The 2009 China-Peru Free Trade Agreement helped strengthen Peru’s relations with China, one of its major trading partners. Presently, China is Peru’s largest commercial partner, especially in the context of trade in agricultural and mineral products. The mining, fishing, and agriculture industries of Peru are flourishing since it is also able to export its products thanks to the FTA with no or minimal tax burdens.
The foundation of Peru’s economic strategy is its trade agreements, which promote development, attract more foreign investment, and provide chances for domestic and foreign companies. Through these accords, Peru’s economy has become more dynamic and diversified, with a wide spectrum of exports reaching international markets.
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