MercoPress. South Atlantic News Agency

Peru associate member of Mercosur

Brazilian and Peruvian presidents signed this Monday in Lima a free trade agreement between Mercosur and Peru with the specific commitment of increasing continental integration.

The Partial Mercosur-Peru Economic Complementation Agreement was subscribed in the "Golden Hall" of Peru's Government House with Presidents Luiz Inacio Lula da Silva and host Alejandro Toledo acting as "honour witnesses" of the event.

The landmark agreement makes Peru the third associate member of Mercosur, together with Chile and Bolivia, and paves the way for a similar event in the near future with the rest of the Community of Andean Nations, (Bolivia, Peru, Ecuador, Colombia and Venezuela).

Brazilian president Lula da Silva who is in an official state visit to Peru said that "Peru's integration to Mercosur, under the 4+1 scheme, signals a gesture that can change South America's physiognomy", adding that these "are probably the first steps to building here in this continent what has been achieved by the European Union".

Peruvian president Toledo described the occasion as "historic", a pact "that makes us stronger and turns our comparative advantages in competitive advantages".

Brazil and Peru signed a total of eight bilateral integration documents which will help relations between both countries advance "with samba and huayano rhythm" to fulfil our common objectives said President Toledo.

The eight documents plus the Mercosur agreement are geared towards a "strategic alliance" between Peru and Brazil, said President Lula da Silva.

The Mercosur agreement gives Peru access to full members Argentina, Brazil, Paraguay and Uruguay's markets, with the purpose of expanding and diversifying trade plus the gradual elimination of tariff and non tariff restrictions.

Brazil is also interested in the physical integration of the area with trans-oceanic corridors that will help reduce costs and generate competitive advantages as well as a profitable energy complementation. Last year only 2,8% of Peru's exports went to Mercosur and of those 91% went for Brazil.