Ambassador Carlos Vásquez: “APEC investments in Peru exceed US$50 billion”

Ambassador Carlos Vásquez, SOM Chair of APEC 2024, anticipates the consolidation of investments of more than US$50 billion from Asia Pacific to Peru with the organization of APEC 2024, a block that totals US$44 billion only in exports to our country. This would place us in a key position in global trade.

How important is the APEC summit for Peru?

APEC economies represent 40% of the global population — China alone has 1.4 billion inhabitants — 60% of global GDP and almost 50% of trade. When Peru joined the forum in 1998, we did not have free trade agreements with any of the APEC economies and it is because of our entry that we have reached bilateral agreements with 10 of them. With four of them, we have a plurilateral free trade agreement, which is the CPTPP, which involves economies such as Malaysia, Brunei, New Zealand and Vietnam. We are negotiating a free trade agreement with Indonesia and Hong Kong, and with the latter it is quite advanced and we hope to close it this year during the summit. If this happens, by the end of 2024 we would have agreements with 15 APEC nations, practically all of them.

How much does it benefit us in terms of exports?

Peru’s exports to Asia have grown by an average of 12% to 14% annually since we joined the forum. Twenty-six years ago, our exports to the Asia-Pacific bloc were between US$4 and US$5 billion. Last year, US$44 billion were exported. This has multiplied by ten.

And how important are the bloc’s investments in our country?

Official sources indicate that we have received an investment of around US$9.4 billion from the bloc. This figure, in my opinion, is very low. China alone indicates that its investment stock here reaches US$30 billion. So, if we consult the different sources, we would be talking about US$50 billion from APEC economies to Peru in the last two decades.

We are coming out of a war. How was dialogue restored?

Following the war in Ukraine, it was difficult to reach a consensus in APEC, a forum that adopts non-binding recommendations and decisions based on consensus. In Thailand 2022, it was impossible because Russia is one of the economies of the bloc, but consensus has already been restored since the beginning of this 2024 summit. Let us hope that it will be maintained. One of Peru’s merits is that it has managed to reconcile the opposing parties.

Food security and mining meetings are next on the list.

FAO says that globally, on average, 30% of food production is lost each year. In Peru, it is 47%, and we are a country with anemia, which is paradoxical. Not only because the distribution chain is bad (road infrastructure, cold chain, etc.), but because hotels and restaurants waste food. For example, we discussed this at the Urubamba meeting, we made a commitment about it, and we propose that the economies that support it adopt measures.

And the mining agenda?

It is not an official meeting, but rather an informal high-level dialogue in which we hope to restore the group’s tasks. We must recognize that, as a country, we continue to export minerals, fundamentally. The endowment of resources will give us advantages over other countries, but it is about managing them efficiently, socially and environmentally speaking, and not just exporting raw materials. The advantage of producing copper is that we can be suppliers for the next three decades, not falling into another ‘false prosperity’. We are a country that repeats cycles, and we do not learn from them. We propose a three-point agenda: the role of minerals in the transition, innovation in the industry to reduce pollution levels, and the situation of small-scale mining or informal and illegal mining in Peru. We have sent the proposal and are waiting for a response.

Peru has also introduced, for the first time in APEC, the issue of informality.

For us, in terms of our reality, the most important deliverable is the roadmap for the transition of the actors towards a formal and global economy. We negotiated this roadmap with eight key elements that include the intensive use of digital tools to promote formality —both small and medium-sized companies, as well as the Government—, financial inclusion and structural reforms in tax matters and labor standards. I hope they accept.

What strategy is the Foreign Ministry adopting to present a government with such low approval rating in the forum?

There is no clear perception of the situation in Peru among the forum’s technical representatives. It does not affect the decisions we make. By regaining consensus, we project the image of a country with a role of constructive neutrality for the benefit of the bloc.

Even if Chancay reconfigures trade in the Asia Pacific in favor of China?

This discussion may be a side effect, but it is not on the agenda. Undoubtedly, geopolitical tension reaches the summit. There is indeed a growing rivalry and a more dispersed and equitable distribution of economic power at a global level. An alternative pole to that represented by the US and Europe is emerging, and what Peru has to do, with a minimum margin of strategic autonomy, is to benefit from the best that everyone can offer. From the Chinese point of view, this port can be an extension of its Silk Road.

But the US is another APEC guest, and Xi Jinping will cut the Chancay ribbon in front of them. Isn’t that a message to the world?

Yes, it can be seen that way. For us, it is an investment that benefits the country. However others interpret it, they will do so based on their own interests.

And would an escalation of internal tensions in the coming months complicate the Foreign Ministry’s task in view of APEC?

It would be absolutely essential to avoid them.