China and Peru seals free-trade agreement

A free-trade agreement (FTA) between Peru and China came into force on Monday (March 8), 15 months after both countries wrapped up talks to seal the trade deal.

The official opening of the trade pact with China comes a day after Peru finalised negotiations for a FTA with the EU.

According to reports, the trade pact with China will immediately eliminate duties on 61.2% of Peruvian exports to the Asian country. More than 94% of Peruvian exports will immediately receive some type of trade benefit.

China is one of Peru's largest trading partners. In 2009, bilateral trade totaled US$7 billion, with Peruvian exports accounting for US$4 billion. The state export and tourism promotion council, PromPeru, said Peruvian exports to China could increase by 17% in 2010 totalling US$4.7 billion.

However, the Chinese ambassador to Peru, Zhao Wuyi, said the agreement could double trade between the two countries over the next few years.

"With the FTA coming into force, we expect the volume of bilateral trade will double to US$15 billion," Wuyi said. "The FTA has taken into account the worries and demands of both parties, protecting sensitive products and industries in both countries, which has demonstrated a spirit of mutual benefit between China and Peru."

China's accord with Peru is its second FTA in Latin America. China signed a trade deal with Chile in 2005.

Meanwhile, Peru's government announced their trade accord with the EU is expected to come into force in 2012. In addition, Peru has also signed trade pacts with Canada, Chile, Singapore and Thailand, and is hoping to close trade discussions with Japan and South Korea before the end of June this year.