APEC 2024 and the opportunity to relaunch the Peruvian economy

Starting this week (February), a series of key activities related to the Asia-Pacific Economic Cooperation Forum (APEC) will begin, which this year will have Peru as host, and it will do so for the third time. This economic block is vital for the country, since about 70% of our exports are directed there.

An example of its importance is that between January and October 2023 alone, exports to APEC economies totaled US$35,782 million, while total Peruvian shipments abroad reached US$52,456 million, according to data from Sunat and analyzed by Darwin Cruz. Fiestas and Diego Corthorn Navarro, consultants in Internationalization of SMEs and Commercial Intelligence.

For the experts consulted by La República, Peru hosting the forum again – which aims to promote the prosperity of these economies – will consolidate our presence in the international market. Previous editions brought tangible achievements.

After the 2008 edition, for example, the Free Trade Agreement (FTA) was concluded with Canada, China, Korea, Japan and Singapore. While in 2016, the Lima Declaration on the Asia-Pacific Free Trade Area (FTAAP) was approved and has been promoted as a common goal of the bloc.

During the year there will be more than 160 meetings that will alternate between five regions: Cusco, Arequipa, Ucayali, La Libertad and Lima. The latter will also be the setting for the Economic Leaders Week, where the heads of state of the economies that make up the forum will be present.

The culmination of this meeting, without a doubt, will be the inauguration of the Chancay Megaport, which will have the already confirmed presence of the President of China, Xi Jinping.

The opportunities

Although 2023 is considered the lost year, since the Peruvian GDP will not grow and will close in the red for the first time in more than twenty-five years – not counting the pandemic -, Peruvian shipments to the APEC economies continue to show resilience, since On average they have grown 12% per year since our incorporation in 1998, according to ComexPerú.

In 2022, a total of 5,321 companies sent 3,780 products to these destinations, thus total sales that year reached US$42,540 million. China, the United States, Japan, South Korea and Canada consolidated themselves as the five main destinations for our minerals, agricultural and fishing products (see infographic).

For Cruz, the fact that Peru is once again chairing this meeting gives us the opportunity to put different topics on the agenda, such as improving the business environment for MSMEs, which is also of interest to the Asian bloc.

In addition, it can be used to consolidate and bring to fruition the FTAs ​​that are being negotiated with Hong Kong and Indonesia, as well as the optimization of the preferential agreement with China.

Along these lines, Corthorn considers that it is a good opportunity to promote the opening of new phytosanitary protocols, in addition to receiving a large delegation, Peru is positioned as an attractive destination for tourism. “It positions us again as a country brand, also from the perspective of attracting new investments,” he says.

While “Empower, Include and Grow”, which is the motto of the event, is not just a simple statement. Corthorn points out that it allows us to show our priorities as a country, which are to strengthen open trade, highlight the empowerment of businesses led by women, the generation of sustainability in a context of climate crisis, and focus on innovation that paves the way for us to other markets. , because now to be competitive we must offer products with added value.

For his part, Carlos Posada, institutional director of the Lima Chamber of Commerce (CCL), highlights that we will be able to show the cooperation that exists between governments and the private sector, strengthen advances in sustainable development, and understand that it is not a cost but an investment. “Achieving greater economic and technical cooperation during this year in which Peru presides could be one of the most interesting achievements of the Government,” he adds.

The door to the Pacific

In the words of Luis Torres, former executive president of Promperú, a first milestone that APEC brings us is that it will be the first time that an important investment in one of these economies is inaugurated, and that it will not only be an infrastructure that will benefit Peru but to the countries with which we share the Pacific.

But the Port of Chancay will not only boost exports, but our country will be the focal point of imports from Asia to the region, Torres says.

Furthermore, for Diego Llosa, export manager of Adex Peru, this infrastructure—categorized as the most modern in the region—will put us in a favorable position to compete with global markets by reducing the logistical and financial costs of taking our products to Asia.

For example, it will only take 10 days to reach that destination, he highlights, when now it is 45 days, since we had to make stops in Valparaíso, Guayaquil or Manzanillo.

According to Cosco Cosco Shipping, the first part of the project is already 56% complete, and 60% of the US$1.3 billion budget has already been executed. This month they confirmed that they will complete the works in November.

Without a doubt, expectations are high, both from the Government authorities, who seek to reverse the 2023 figures beyond the rebound, and from the private sector, which seeks to have more presence in the global environment.

Reactions

Luis Torres Paz, former president of Promperú

“Peru is going to communicate several positive messages to the world, such as being a leader in logistics connectivity in the South American Pacific and relaunching the investment opportunities that the country has and that we so need.”

Carlos Posada, institutional director of the CCL

“Peru with APEC 2024 will have the great possibility of being on the radar and in the eyes of more than 65% of the world’s GDP. It is important that they find a stable country, not only at a social level but also at a regulatory level.”

Peru strengthens its global position

Approach. Juan Carlos Mathews, Minister of Foreign Trade and Tourism

Peru’s presidency in the APEC Forum is crucial to consolidate commercial and economic ties in the region. This benefits our objectives of promoting foreign trade in various ways:

It will give our country international visibility, attracting potential investors and business partners, strengthening its global position and generating new commercial opportunities.

In addition, it will improve efficiency in trade exchanges, creating an environment conducive to competitiveness and economic development since Peru will promote trade facilitation.

Holding the APEC presidency strengthens regional cooperation, allowing Peru to work with other Forum members to address common challenges and explore initiatives beneficial to all economies, such as greater inclusion in international trade.

During the Peruvian presidency in 2016, investment opportunities worth nearly US$9.4 billion were generated, and a larger amount is expected this year.

For tourism, it represents a great opportunity to show the image of Peru in terms of tourism, culture, crafts, gastronomy and convention tourism (RICE), consolidating ourselves as a competitive, sustainable and quality tourist destination.

Peru is responsible for organizing more than 160 meetings that will encourage income opportunities for sectors linked to lodging, transportation, food, tourism, among others. In addition, events will be held in five regions that will host more than 10,000 delegates that will contribute to the improvement of the infrastructure for international meetings, enriching the value chain of this segment.