Australia and Peru have signed the Peru-Australia Free Trade Agreement (PAFTA) opening the door for Australian exports to one of the fastest growing economies and regions in the world.
PAFTA will eliminate tariffs on 99 per cent of Australian goods within five years of the Agreement’s entry into force.
Australian exports of sugar, dairy, rice, sorghum, sheepmeat, wine, kangaroo, almonds, pharmaceuticals, medical devices, paper products and machinery will have immediate tariff free access. Beef will be tariff free within five years.
Trade Minister Steven Ciobo says PAFTA will help create new Australian jobs and drive economic growth.
“It delivers huge wins for our exporters, with historic market access that goes beyond the TPP-11 Agreement,” he said.
Sweet deal for sugar exporters
One of the biggest winners is the Australian sugar industry.
The new agreement opens the door to 90,000 tonnes of sugar – more than any other sugar exporting country has achieved into Peru in the last 20 years. This is equivalent to roughly 30 per cent of Peru’s sugar imports.
The elimination of tariffs will also provide opportunities for Australian farmers.
Until now, Australian farmers have been effectively shut out of the market, Mr Ciobo said.
And PAFTA is one of Australia’s most ambitious trade agreements for services.
The new agreement will create new opportunities for Australian education providers. Peru will recognise Australian degrees, helping Australian universities attract more Peruvian students to study in Australia.
Fast growing world economy
PAFTA also delivers greater access for Australian financial, legal and other professional service operators, such as those that supply mining-related and oilfield services in Peru.
Peru is one of the fastest growing economies in the world with an average growth rate of 5.9 per cent over the last decade.
“This agreement gives Australian businesses the opportunity to share in the growth,” said Mr Ciobo.
“PAFTA will serve as a gateway to Latin America, and to value chains between Asia and the Americas. It is also a stepping-stone to a trade agreement with the Pacific Alliance (Mexico, Colombia, Chile and Peru).”
PAFTA is the fastest trade agreement Australia has ever concluded, after negotiations were launched in May last year.