MercoPress. South Atlantic News Agency

Peru/China free trade agreement becomes effective next March first

President Alan Garcia has become an obstinate promoter of free trade

The free trade agreement between Peru and China becomes fully effective as of next Monday March first, according to the publication on Thursday of the official decree in Peru’s gazette. China has become Peru’s main trade partner behind the US.

Local authorities said that the full text of the bilateral trade pact will be published on the website of the Ministry of Foreign Trade and Tourism (Mincetur).

Decree 005-2010, also establishes legal provisions so that Mincetur can inform all government offices and authorities concerned about the necessary measures for the effective implementation of the FTA.

The document was signed by President Alan Garcia and Production Minister Jose Gonzales Quijano, who is temporarily in charge of the Ministry of Foreign Trade and Tourism.

Following the implementation of the trade deal and a recovery in world trade, Peru's exports to China are expected to increase 17% to 4.7 billion US dollars from 4 billion last year. Total trade with China was 7.1 billion USD last year up from 5.3 billion in 2007.

Peru is the second South American country to sign a free trade agreement with China, the other is Chile. Peruvian exports to China are mainly metals: copper, lead, zinc, iron and fish produce. China sells cell phones, motor vehicles and footwear.

Under the current administration of President Alan Garcia Peru has been involved in an aggressive campaign to promote free trade and is finalizing or negotiating trade deals with a number of other countries including the European Union, Japan and South Korea. It is also evaluating the possibility of a free trade deal with Australia.

The Peru-EU trade deal, which is currently under negotiation in Brussels, was slated for conclusion before the end of the month, but the Trade ministry said the deadline could be extended.

Exports to the European Union last year totaled 4.2 billion US dollars, making it the country’s second-most important trading partner last year behind the US. Peruvian exports to then US in 2009 totaled reached over 4.5 billion USD.

The Peru-Japan free trade agreement is expected to be concluded by the end of June.

The next round of trade talks will take place this April in Tokyo. Exports to Japan in 2009 were worth 1.4 billion USD. Trade negotiations with South Korea are also expected to be finalized before the end of June. Exports to South Korea totaled almost 750 million USD in 2009.

Peru already has a free trade deal with Canada, and overall trade was 2.3 billion USD.

Although Peru has no trade deal in force with Switzerland, Peruvian exports were almost 4 billion USD in 2009, mainly because of mineral sales.

Negotiations to establish a free trade deal between Peru and the European Free Trade Association, EFTA, (Iceland, Norway, Switzerland, and Liechtenstein) concluded in 2008, but a trade deal is not yet in force.