The Government of Peru and the People’s Republic of China signed today the Protocol for Optimization of the Free Trade Agreement (FTA) that both nations share. With this, it has been possible to reach a more modern trade agreement that responds to the current needs and demands of international trade.
This event took place at the Government Palace, in the city of Lima, in a ceremony that was led by the President of the Republic, Dina Boluarte, and the President of the People’s Republic of China, Xi Jinping. The signing of the trade agreement was carried out by the Minister of Foreign Trade and Tourism of Peru, Desilú León, and the Minister of Commerce of China, Wang Wentao.
The Optimization of the FTA between Peru and China includes 12 chapters (7 modernized chapters and 5 new chapters). Those joining the agreement are Competition, Electronic Commerce, Global Supply Chain, Cooperation on Standards and Conformity Assessment, and Environment.
Likewise, the existing chapters that have been modernized are Rules of Origin, Customs Procedures and Trade Facilitation, Trade in Services, Temporary Entry of Business Persons, Investment, Intellectual Property, and Sanitary and Phytosanitary Measures.
“China is our main trading partner and this Optimization allows us to modernize our FTA, thus seeking to increase the use of the agreement and encourage greater Chinese investment in Peru, as well as facilitate the operations of companies involved in foreign trade,” highlighted the minister. Desilú León.
The minister added that this Optimization Protocol aligns with the Peruvian strategy of becoming the center of operations for Asia in South America. “It represents an opportunity for Peru to further strengthen trade ties with China and achieve deeper trade integration. In addition, it provides a positive signal that will increase the interest of capital from China and other countries to invest more actively in Peru,” he commented.
SCOPE OF THE NEW CHAPTERS
Among the modernized chapters, the Trade in Services chapter stands out, which includes provisions to encourage investments in telecommunications and multimodal transportation, promoting large infrastructure investments. The development of Chinese-Peruvian co-productions is also encouraged, to encourage the use of Peruvian locations and thus promote our tourist attractions.
Likewise, in the Intellectual Property chapter, a list of 7 geographical indications that have obtained protection in Peru after the entry into force of the FTA has been included. These are Café Villa Rica, Loche de Lambayeque, Café Machu Picchu-Huadquiña, Maca Junín-Pasco, Olive from Tacna, Cacao Amazonas Perú and Oregano from Tacna.
As for new chapters, the Global Supply Chain stands out, the first in our FTAs and which was proposed by our country with the objective of strengthening international logistics. In this, both countries undertake to exchange information on logistics indicators and cooperate in this matter. Likewise, China and Peru will promote the recognition of transport documents, in such a way that the activities of foreign trade operators are simplified, benefiting MSMEs.
Optimization has also added an Environment chapter, where the relevance of sustainability in production processes is reaffirmed, so that Peru can maintain environmental protection standards that it determines; as well as identifying joint cooperation initiatives in the field of circular economy, among others.
“Now it is up to the teams of both parties to work very hard so that the Optimization Protocol comes into force in the shortest possible time,” concluded Minister Desilú León.
DATA
China is the country’s main trading partner, 32% of our trade is with this market. Between January-September 2024, we have exported goods for a total of U$18,877 million (10.5% more compared to the January-August 2023 period).
In the 14 years of the FTA, the value of Peruvian exports to that country grew at an annual average of 12.8%. The non-traditional sectors that registered the highest average annual growth were: non-metallic mining (+45.4%) and agriculture, with products such as blueberries, avocados, and fresh grapes (+25.5%).
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