The Executive Power through a Supreme Decree that was published in the official newspaper El Peruano on February 12, 2018, the Free Trade Agreement between Peru and Australia, will enter into force as of February 11 of this year. It should be mentioned that in mid-December, the head of the Ministry of Foreign Trade and Tourism, Edgar Vásquez announced that the legal procedures had already been completed, so the FTA between both countries is already a reality.
The aforementioned trade agreement will free 96% of Peruvian products that are exported to Australia since February 11, while for the rest of the products, tariffs will be eliminated in a maximum of four years. This trade agreement will provide opportunities for service exporting companies and will allow attracting greater Australian investment to Peru.
Among the Peruvian products that will benefit from the implementation of the FTA with Australia can be mentioned: avocados, fresh grapes, blueberries, tangerines, asparagus, shrimp and frozen shrimp, polo shirts and t-shirts made of cotton, shirts, alpaca items and dyes natural.
According to the Peruvian union, Comex says that despite the low population density, Australia is a large economy that has continued to grow above 2.7%, despite the global economic slowdown. Its GDP adjusted for purchasing power parity in 2019 (the US $ 1, 365,000 million) tripled that of our country (the US $ 478,000 million), according to estimates of the International Monetary Fund.
Currently, trade between Peru and Australia is reduced. According to Sunat figures, between January and November of last year, our country exported goods for the amount of US $ 84.4 million. This not only represents a tiny part of our total exports to the world (0.2%) but also means a 58.4% drop over the same period last year.
It should be clarified that the trade agreement with Australia not only represents a growth opportunity for the products we already exchange but also opens the doors to new goods and services that can be exported and imported more easily.