In addition to renegotiating the terms of the free trade agreement (FTA) with China and guaranteeing the construction of the Chancay megaport for the APEC 2024 summit, organized in our country, the Peruvian Government, through the Ministry of Foreign Trade and Tourism (Mincetur ), is leading a fierce race to expand trade boundaries into four markets in Asia.
These are Hong Kong, Thailand, India and, most recently, Indonesia, four economies that, together, recorded goods trade of more than US$3.4 billion in 2023, and that they could take advantage of the new 25-day ship routes that Peru will have to supply Asia from 2025.
The Tiger of Asia
The FTA with Hong Kong should be closed in November of this year, most likely, within the framework of APEC 2024, organized in our country. The first round of negotiations began in February of last year and is at 85%. Its trade in goods (the sum between its imports and exports to the world) exceeded US$1,231.8 million in 2023.
Hong Kong is Peru’s twelfth trading partner in Asia, and buys especially fruit (77%), fishing products (7%) and minerals (6%). Meanwhile, we import tugboats, steel, textiles and technology.
What are the possibilities? Hong Kong is an important logistics hub in Asia, given its strategic location, along with mainland China. In 2023, the economy recorded re-exports of US$525 billion, equivalent to 89% of the imported value.
It is, at this moment, the fifth destination for Peruvian fruits (4%), behind the US. (42%), European Union (28%), China and the United Kingdom (5% each). But the opening of new trade routes could radically change the statistics.
The Thai horizon
Peru, the world’s leading exporter of table grapes, only supplies 1.7% of this fruit for the Thai market. That should be the first goal. However, Mincetur points out, there is an opportunity to increase participation in purchases of cocoa and derivatives. In addition, we are their fifth supplier of squid (10%), after China, India, Argentina and Vietnam.
Thailand also wants its FTA with Peru this year: its trade in goods reached US$590 million in 2023.
There are opportunities for agricultural products such as mandarin, sweet cookies, garlic and sugar, in addition to other sectors such as natural gas, sulfuric acid, mackerel, among others.
But the possibilities do not stop there, according to Mincetur: products such as beans and soy cake, apple, walnuts, pear and chemical wood pulp are goods that Thailand buys and that Peru still does not produce for export.
Arrival in India
YoIndia is the most populated country in the world, which is why its demand for imported food increases year after year. It is a country that imports more than it exports (trade balance of -79.4% in 2023). Currently, Peru exports gold (88%), being its second most important destination for the mineral; and imports goods aimed at the automotive and heavy industries (30%), chemicals (21%) and textiles (20%).
Recently, the seventh round of negotiations was finalized in New Delhi for an initial trade agreement. Its trade in goods reached US$1,105 million in 2023.
India imported agricultural goods worth US$35.6 billion in 2022, which represented almost four times Peru’s agricultural exports. Of this amount, only 2% corresponds to goods that we send you (with a participation of 0.3%).
There is the potential to increase Peruvian participation in purchases of cocoa powder, coffee, grapes and avocados, since their participation is at most 1%. Likewise, there is another 40% that corresponds to goods that India imports and Peru, having exportable supply, does not export; among them, palm oil (US$ 11,729 million) and cocoa beans (US$ 84 million).
Indonesia’s promise
The last one to reach the round of negotiations is Indonesia. The penetration of Peruvian supply in this economy is still low, 88% of our trade with them corresponds to imports, especially vehicles (record US$146.3 million in 2023) and textiles. Its trade in goods reached US$481 million in 2023.
This is also a potential destination for Peruvian agro-exports, whose border will expand with the implementation of irrigation projects such as Majes Siguas and Chavimochic. Indonesia imported agricultural goods worth US$26 billion into the world in 2023, of which only 5% corresponds to Peru.
In this sense, Mincetur reports that there is a 28% market share in Indonesia that corresponds to goods that the Peru, having an offer, does not trade there; among them, sugar, tangerine, garlic, onion, others. In garlic alone, that nation imports US$649 million a year.
Precisely, this week, the Peruvian Government began and ended the first round of negotiations for the trade agreement with Indonesia, a market with more than 276 million inhabitants known for being the fourth most populous country on the planet and the largest economy in the world. Southeast Asian.
We have a unique opportunity for Peru
Approach. Julio Pérez Alván, president of Adex.
They are countries with incredible possibilities for international trade in our country. Asia is an enclave of billions of inhabitants that will expand the vision that as a country we have of exporting more and more to the world, precisely towards the most dynamic market of all.
In general, we export fruits and vegetables to Asia. We are the eighth largest fruit suppliers in the world, as well as coffee and cocoa. Leaving aside the agro-industrial issue, we also have the textile issue, where Hong Kong has a consolidated industry at a global level and alpaca wool could be sent. In the case of India, agreements must be negotiated well to prevent the local market from being affected.
When exports grow, work also grows. We are talking about formal and dignified work. Therefore, we must redouble our efforts to take advantage of this virtuous circle for the benefit, above all, of small and medium-sized exporting companies, not just large ones.
More than 95% of export companies in Peru are SMEs, and we have to train them. In addition to high quality standards, customs will ask for documents and end customers will ask for product traceability. It will be a challenge for everyone, which will bring us prosperity in the future.
Keys
Pacts. Peru’s foreign trade policy has allowed it to currently have 22 trade agreements with 58 economies.
Trading. 92% of goods exports go to countries with which we have trade agreements.
Source: Larepublica
Alia is a professional author and journalist, working at 247 news agency. She writes on various topics from economy news to general interest pieces, providing readers with relevant and informative content. With years of experience, she brings a unique perspective and in-depth analysis to her work.
