Peru to sign free trade agreements with Canada and Singapore, looks to Asia for more free markets

President Alan García is to confirm Thursday, at the opening of the APEC Trade Ministers Meeting in Arequipa, the signing of free trade agreements (FTA) with Canada and Singapore.

Peru concluded its FTA negotiations with Canada during the World Economic Forum in Davos, Switzerland in January, with both countries seeking to diversify their markets in the face of a possible prolonged recession in the United States. Weeks earlier, on Dec. 14, President George W. Bush ratified the U.S.-Peru FTA.

The Canada-Peru FTA, Peruvian Times reported last January, will immediately eliminate tariffs on 97 percent of Peruvian exports to Canada, with the remaining tariffs to be phased out over three to seven years. The deal also eliminates tariffs on 94 percent of Canadian exports to Peru, with the rest to be lifted over a period of five to 10 years.More…

Canada is one of Peru’s most important sources of direct foreign investment, mostly in the mining industry, with an etimated $2.9 billion in investment in 2006. The leading Canadian mining companies in Peru include Barrick Gold and Teck-Cominco, which is a partner in Antamina, one of the largest copper-zinc mines in the world, located in the high Andes of Ancash.

Bilateral trade between Canada and Peru totalled $2.4 billion in 2006, with the trade balance favoring Peru. Peru’s principal exports to Canada are gold, copper, asparagus and fishmeal, while its major imports are grains, machinery, electrical equipment, leguminous vegetables and paper. In 2004, Canadian commercial services exports to Peru totalled almost $46 million.

Meanwhile, the negotiations for a Singapore-Peru free trade agreement concluded in September last year, when trade ministers met during the APEC Ministerial Meeting in Sydney, Australia.

Singapore is a “great producer of services, and Peru could export from there to other countries,” said Peru’s vice-minister of foreign affairs, Gonzalo Gutierrez, during announcements on RPP Radio about the upcoming trade meeting in Arequipa.

Singapore is Peru’s key destination in Southeast Asia for manufactured exports to the region. In 2006, total bilateral trade increased 55% from 2005 to total $45.2 million.

Gutierrez also said that Peru is hoping, in the short term, to formalize similar FTAs with Japan, China and Korea.

Peru’s Minister of Foreign Trade and Tourism, Mercedes Araoz, is to the meet with her Chinese counterpart, Chen Deming, during the APEC Trade Ministers meeting this weekend to discuss a renewal of negotiations for an FTA.

China, President Garcia said during the EU-Latin America Summit held in Lima this May, has “an extraordinary and exemplary economy that will be an enormous impulse for the development of both countries.”

So far, three rounds of negotiations −the latest ending this January− have not lead to a deal.

“As in any kind of negotiation, the most sensitive and important issues are left for last. We must continue negotiating,” said Araoz. The next round of talks is scheduled for late July.

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