China–Peru Free Trade Agreement
Encyclopedia
The China–Peru Free Trade Agreement is a bilateral free trade agreement designed to eliminate obstacles to trade and investment between China
and Peru
. The two sides concluded talks in November 2008 and signed the agreement in April 2009. The agreement was officially ratified by both countries governments on December 6, 2009 and came into effect on March 1, 2010.
The idea of such a trade agreement was first formally proposed by the Peruvian Minister of Trade, Mercedes Aráoz
, to her Chinese counterpart, Bo Xilai
, on November 18, 2006 during the 2006 APEC summit. On February 2007, both ministers agreed to the realization of a feasibility study
, which was successfully completed six months later. On September 7, 2007, during the 2007 APEC summit
, the presidents of China, Hu Jintao
, and Peru, Alan García announced the formal start of negotiations. The first round of negotiations was carried out in Lima
between January 20 and January 23, 2008; the second round took place in Beijing
between March 3 and March 7 of the same year. The third round was carried out in May, also in Beijing. On November 19, 2008, President Alan Garcia announced that both sides have concluded trade pact talks and that the deal would be signed in the coming months.
China is the second most important trade partner for Peru; as of 2006, it accounted for 9.6% of Peruvian exports and 10.3% of Peruvian imports for a trade volume of $US5.5 billion in 2007 On the other hand, Chinese investments are still small; as of 2006 companies headquartered in the People's Republic of China accounted for only 1.5% of foreign direct investment
in Peru. Under the agreement, 10 percent of Peruvian products such as textiles, clothing and shoes were excluded from the deal, while only 1 percent of Chinese products — wood and tobacco — were left out, said Eduardo Ferreyros, Peruvian foreign trade vice minister. The proposed China — Peru trade agreement has draw criticism in Peru from some economic sectors that feel threatened by Chinese competition; this is the case of the textile industry which claims that the low wages paid by their Chinese counterparts represent an unfair advantage. As an alternative, these sectors have proposed the exclusion of products such as textiles from the agreement or long periods to phase out tariffs on them.
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
and Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
. The two sides concluded talks in November 2008 and signed the agreement in April 2009. The agreement was officially ratified by both countries governments on December 6, 2009 and came into effect on March 1, 2010.
The idea of such a trade agreement was first formally proposed by the Peruvian Minister of Trade, Mercedes Aráoz
Mercedes Aráoz
Mercedes Rosalba Aráoz Fernández is a Peruvian economist, professor, and politician. She served as Minister of Foreign Commerce and Tourism from 2006 to December 2009, after which she was appointed as Peru's Finance Minister....
, to her Chinese counterpart, Bo Xilai
Bo Xilai
Bo Xilai is the Communist Party of China Chongqing Committee Secretary, first-in-charge of the Western interior municipality and a member of the Politburo of the Communist Party of China...
, on November 18, 2006 during the 2006 APEC summit. On February 2007, both ministers agreed to the realization of a feasibility study
Feasibility study
Feasibility studies aim to objectively and rationally uncover the strengths and weaknesses of the existing business or proposed venture, opportunities and threats as presented by the environment, the resources required to carry through, and ultimately the prospects for success. In its simplest...
, which was successfully completed six months later. On September 7, 2007, during the 2007 APEC summit
APEC Australia 2007
APEC Australia 2007 was a series of political meetings held around Australia between the 21 member economies of the Asia-Pacific Economic Cooperation during 2007...
, the presidents of China, Hu Jintao
Hu Jintao
Hu Jintao is the current Paramount Leader of the People's Republic of China. He has held the titles of General Secretary of the Communist Party of China since 2002, President of the People's Republic of China since 2003, and Chairman of the Central Military Commission since 2004, succeeding Jiang...
, and Peru, Alan García announced the formal start of negotiations. The first round of negotiations was carried out in Lima
Lima
Lima is the capital and the largest city of Peru. It is located in the valleys of the Chillón, Rímac and Lurín rivers, in the central part of the country, on a desert coast overlooking the Pacific Ocean. Together with the seaport of Callao, it forms a contiguous urban area known as the Lima...
between January 20 and January 23, 2008; the second round took place in Beijing
Beijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...
between March 3 and March 7 of the same year. The third round was carried out in May, also in Beijing. On November 19, 2008, President Alan Garcia announced that both sides have concluded trade pact talks and that the deal would be signed in the coming months.
China is the second most important trade partner for Peru; as of 2006, it accounted for 9.6% of Peruvian exports and 10.3% of Peruvian imports for a trade volume of $US5.5 billion in 2007 On the other hand, Chinese investments are still small; as of 2006 companies headquartered in the People's Republic of China accounted for only 1.5% of foreign direct investment
Foreign direct investment
Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...
in Peru. Under the agreement, 10 percent of Peruvian products such as textiles, clothing and shoes were excluded from the deal, while only 1 percent of Chinese products — wood and tobacco — were left out, said Eduardo Ferreyros, Peruvian foreign trade vice minister. The proposed China — Peru trade agreement has draw criticism in Peru from some economic sectors that feel threatened by Chinese competition; this is the case of the textile industry which claims that the low wages paid by their Chinese counterparts represent an unfair advantage. As an alternative, these sectors have proposed the exclusion of products such as textiles from the agreement or long periods to phase out tariffs on them.
External links
- China's Free Trade Agreements > China-Peru FTA - Ministry of Commerce, People's Republic of China Tratado de Libre Comercio Perú - China Peruvian Government site on the agreement.