Mexico-Peru Free Trade Agreement: Boosting Bilateral Trade
Mexico and Peru have a long-standing trade relationship, which reached new heights with the signing of the Free Trade Agreement (FTA) between the two countries in 2011. The accord has opened up new avenues for bilateral trade and investment, contributing to economic growth and job creation in both nations.
The Mexico-Peru FTA is a comprehensive agreement that covers a wide range of areas, including trade in goods, services, investment, intellectual property, government procurement, and environmental and labor cooperation. It eliminates tariffs on 99% of the products traded between the two countries, allowing exporters and importers to access new markets and reduce costs.
Under the agreement, Mexican and Peruvian firms have increased their exports and imports of goods and services, expanding their commercial ties beyond traditional sectors. Mexico`s main exports to Peru are vehicles, auto parts, machinery, and chemicals, while Peru`s main exports to Mexico are minerals, fruits, and seafood. The FTA has also spurred investment flows between the two countries, with Mexican firms investing in Peru`s mining, energy, and telecommunications sectors, and Peruvian companies investing in Mexico`s manufacturing and services industries.
The Mexico-Peru FTA has been instrumental in boosting bilateral trade between the two countries. In 2020, the total trade between Mexico and Peru amounted to $6.7 billion, a 21% increase from the previous year, despite the challenges posed by the COVID-19 pandemic. Mexico`s exports to Peru increased by 12.6%, while Peru`s exports to Mexico grew by 31.5%, indicating the diversified nature of their trade relations.
The FTA has also created opportunities for small and medium-sized enterprises (SMEs) to participate in international trade, helping them access new markets and build partnerships. The agreement establishes a framework for cooperation between the two countries` business communities, facilitating the exchange of information, training, and technical assistance. As a result, SMEs in Mexico and Peru have been able to enhance their competitiveness and productivity, generating jobs and income.
Moreover, the Mexico-Peru FTA includes provisions on environmental and labor cooperation that promote sustainable development and social responsibility. The agreement establishes a mechanism for dialogue and collaboration on environmental issues, such as biodiversity conservation, climate change, and pollution prevention. It also promotes respect for labor rights, including the fundamental principles and rights at work, and encourages the adoption of good labor practices by the private sector.
In conclusion, the Mexico-Peru Free Trade Agreement has been a success story in promoting bilateral trade and investment between the two countries. The elimination of tariffs and non-tariff barriers has expanded their trade relations, benefiting firms of all sizes and sectors. The FTA has also reinforced their cooperation on environmental and labor issues, aligning their economic growth with social and environmental sustainability. As the world faces new challenges and opportunities, the Mexico-Peru FTA stands as a model of trade liberalization and regional integration.