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Australia on track to seal free trade agreement with Peru

Australia on track to seal free trade agreement with Peru article image

Australia has stepped-up negotiations for a free trade agreement with Peru, which would deliver new opportunities for Australian primary producers.

Deputy Prime Minister and Minister for Agriculture and Water Resources, Barnaby Joyce, said an Australia-Peru FTA not only offers immediate economic benefits to both nations, but also represents a critical gateway into Latin America.

“An FTA with Peru will strengthen our economic relationship with the region, facilitate essential value chains between the Americas and Asia and prove Australia’s credentials as a reliable and responsible supplier of high-quality agricultural produce,” Mr Joyce said.

“Peru is a member of the Pacific Alliance trading bloc and a FTA could be used as a stepping stone to an Australian-Pacific Alliance FTA, including Mexico, Chile and Colombia.”

Peru is Australia’s fifth-largest commercial partner in Latin America.

In 2015-16, Australia’s total two-way trade in goods and services with Peru was worth $504m – up 19.4pc from the previous year.

In the same period Australia exported $6.7 million of agricultural products to Peru, and imported $114 million worth.

Positive development for exporters 

Mr Joyce said the Government is in discussions with 10 countries, including Peru, involved in the Trans Pacific Partnership negotiations following the withdrawal of the US earlier this year.

The government is keen to bring the TPP into force as soon as possible, he said.

Mr Joyce said negotiations with Peru are a positive development for Australian agricultural exporters, and represent a new step forward for Australian exports into Latin America.

Industries expected to benefit included the kangaroo meat industry along with beef, horticulture and wine.

“Economic partnerships are the bedrock of success for modern trading nations,” Mr Joyce said. “A Free Trade Agreement with Peru will ensure that Australian farmers have the opportunity to share in Latin America’s economic growth and be on an even footing with our competitors.

“Australia’s agricultural exports to Peru, such as beef, horticulture and wine, face high tariffs that many of our competitors do not—the US, the EU, and Canada, all have FTAs with Peru, which give them preferential access.”

Niche opportunities

Mr Joyce said Peru’s booming gastronomy industry offered niche opportunities for many other high-value Australian agricultural and food exports.

Ray Borda, President of the Kangaroo Industry Association of Australia, said the commencement of negotiations with Peru represents an exciting opportunity for kangaroo meat exports.

“It’s fantastic, not only are they big meat eaters in Peru but all throughout South America and they love the taste of kangaroo,” Mr Borda said.

Five new free trade agreements

“If negotiations go well this will be a huge step towards opening up the rest of South America and towards demonstrating how great this product is to the rest of the world.”

Mr Joyce said the government is currently working on negotiations to deliver five new Free Trade Agreements, which include:

  • The Regional Comprehensive Economic Partnership (RCEP),
  • The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA),
  • An Australia-EU Free Trade Agreement (A-EU FTA),
  • Australia-India Comprehensive Economic Cooperation Agreement (AI-CECA),
  • The Australia-Gulf Cooperation Council FTA, and 
  • The Australia-Hong Kong FTA (A-HFTA)

Negotiations for a high-value Free Trade Agreement with Peru could be completed quickly building on the work already undertaken between both nations as part of TPP negotiations, he said.

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