1) The governments of Peru and Australia signed the PAFTA on February 12, 2018 in the city of Canberra, Australia.
2) In February 2019, Peru ratified the Free Trade Agreement with Australia.
3) In February 2020, Australia ratified the Free Trade Agreement with Australia; and hence, the agreement takes effect.
Free trade Agreement Peru – Australia
The Peru-Australia Free Trade Agreement (PAFTA) is a comprehensive, high quality free trade agreement that will open new markets for Australian and Peruvian exporters. This agreement will strengthen economic relationships within the region and help facilitate value chains between the Americas and Asia.
The Benefits for Peruvian companies
This PAFTA is the most ambitious bilateral agreement that Peru has signed to date with another business partner. This agreement will allow the immediate entry without tariffs of 96% of Peruvian products exported to Australia. For all other products, tariffs will be eliminated within a maximum of four years.
Among the products that will benefit the most are avocados, fresh grapes, blueberries, tangerines, cotton T-shirts, shirts, frozen prawns, cuttlefish, among others. With the remaining 4% of exports, tariffs will be eliminated within four years. This last group includes products such as bamboo, some goods from the chemical sector, footwear, metalworking, as well as industrial machinery.
This agreement establishes an unrestricted framework for exports of services, such as those related to mining and manufacturing, education, software design, among others.
With the PAFTA, there will also be more certainty and security for investments in both directions.
Currently, Peru exports mainly to Australia fish and fishery products (35%), agricultural products (24%), mining products (16%); whereas Australia exports mainly sodium cyanide to Peru (39%) and miscellaneous capital goods (31%).
The Benefits for Australian companies:
Peru will eliminate 99 per cent of all its tariffs and major market access opportunities will be available for Australia in mainly beef, sheep meat, wine, pharmaceuticals, medical devices, paper products and machinery.
Peru will offer new quotas for Australia for sugar, dairy, rice and sorghum free from tariffs and from Peru’s price band.
The duty free access permitted under these tariff quotas provides unprecedented access to the Peruvian market, allowing Australia to commence exporting and establishing commercial relationships with Peru in these sectors.
The Peru-Australia Free Trade Agreement (PAFTA) also provides legal certainty for Australian service suppliers in Peru and creates new opportunities to attract more Peruvian students to study in Australia.
Department of Foreign Affairs and Trade from the Australian Government, 11 February 2020, 12.00am
Gestion Peruvian Newspaper 11 February 2020, 12.00am