Peru Expands Regional FTAs

by Mike Godfrey, Tax-News.com, Washington

01 June 2011

Peru has added to its treaty network, signing new free trade agreements (FTA) with Panama and Costa Rica.

The deals took place within the space of two days, with the Minister of Foreign Trade and Tourism, Eduardo Ferreyros concluding the Panamanian treaty on May 25 and the Costa Rican agreement the following day.

Ferreyros noted that, because the necessary legal reviews of the treaty documents were carried out in parallel to the negotiations, the process moved along quickly, meaning the FTAs could come into force as early as July or August this year.

It is hoped that the implementation of these FTAs will bolster what remains a relatively small trade between Peru and these countries. According to Ferreyros, in 2010 Peru exported USD44m to Costa Rica, and imported USD24m. Trade with Panama was slightly more substantial, with exports totalling USD253m and imports reaching USD287m.

In addition, Ferreyros feels that trade growth is slow, currently at 10% with Panama, and 12% with Costa Rica. Once the FTAs are brought in, he expects growth to hit between 20%-25% by the end of this year alone.

Peru is also in FTA negotiations with three other central American states - Guatemala, Honduras and El Salvador. Ferreyros said that the Ministry intends to wrap up these negotiations during June, and delegations from Guatemala and Honduras are due to arrive in Peru to do so over the next two weeks.

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