Peru FTA inked in quick time

By Ding Qingfen (China Daily)
Updated: 2009-04-29 07:31

China on Tuesday signed a free trade agreement (FTA) with Peru covering commodities, services and investment - the second in Latin America following the pact inked with Chile in 2005.

Under the agreement, the two countries will gradually lower tariffs to zero on about 90 percent of goods.

Peru will open 90 areas to investors including mining, education, traditional Chinese medicine and martial art, while China loosens limits on 16 sectors such as mining, consulting, tourism and physical education.

The latest agreement comes in the wake of a slew of FTAs signed with other nations and regions since last year, including Pakistan, Costa Rica and Norway.

Peruvian Minister of Trade and Tourism Mercedes Araoz said bilateral trade and investment will post robust growth in the near future. China is Peru's second largest trade partner, and in the past 15 years, bilateral trade grew 70 times. Last year, it surged 38 percent year-on-year to $7.31 billion.

China imports mineral resources, fish products, wood and fresh food from Peru, and exports textiles, chemicals, machinery equipment, automobiles and high-tech products to Peru, said Jorge Chian, economic and commercial counselor of the Peruvian embassy in China.

In the past two years, Chinese investment, especially in mineral resources, has been soaring. The top three investors - Chinalco, China's top aluminum producer, Zijin Mining, China's largest gold producer and Minmetals - have forked out a cumulative of $7 billion.

Zhang Maishan, director of the information department of China Shougang International Trade & Engineering Corp - a subsidiary of Shougang Group and China's leading steel producer - said that "the FTA will encourage Shougang to invest more in Peru and reduce costs in importing minerals".

The FTA marks the second time that China and its trade partner signed the whole package of agreements at one go, after the one signed with New Zealand last year.

Typically, China-related FTAs were signed separately, starting from easier commodity trade and graduating to services before investment.

China also spent the least time to conclude the talks with Peru. The negotiations started in January last year, and the two sides reached agreement after six rounds of talks.

Talks on a China-Australia FTA began in May 2005 but are still continuing.