International Trade: Australia’s Free Trade Agreement with Peru

Australian beef, dairy and sugar producers have been boosted by the Free Trade Agreement with Peru and Australia. The FTA came into force in February 2020 and has helped develop trade across the Pacific Ocean.

Previously, Australia and Peru did not have high rates of trade. This is not due to a lack of quality production, but was attributed to the high tariffs enforced by both governments; discouraging trade between the two nations. When Canberra signed the trade agreement with Peru, all that changed.

However, that all changed in 2020 as the negotiations came to an end, offering better incentives for Australian investors wanting to do business via the trade agreement with Peru and other countries in Latin America. That may include company formation in Peru and fully entering the market.

Peru Investment Opportunities for Australian Investors and Companies

Those unaware of Peru’s economic/commercial situation may not realize the amount of investment opportunities available for foreign investors. Peru has always been a popular destination for Australian mining companies and with the FTA between the two nations, the opportunities for international trade has increased.

Increases in exports has benefitted a range of Australian industries, notably beef, horticulture and wine. One market that is showing great potential is the exportation of kangaroo meat. This opportunity is due to a combination of large scale production by Australian farmers and the fact that kangaroo meat is a niche market in Peru.

These international trade opportunities, combined with the fact that Peru is an extremely attractive market for foreign investment, has resulted in an increase in the number of Australians choosing to do business in Peru.

The Peruvian market has seen a growth in foreign start-ups such as company formations and incorporations; strongly encouraged by pro-investment government policies. Australian investors, along with foreigners from all corners of the globe, are looking towards the business opportunities now available in Peru.

Why You Should Do Business in Peru

Peru has seen strong economic growth over the past years, and this trend is expected to continue. In addition to this strong economic growth, Peru is a stepping stone for access to other attractive markets in Latin America such as Colombia. Apart from the obvious economic benefits this FTA would bring to both nations, it also opens up work, travel and study opportunities.

Since the beginning of the 21st century, Peru has drastically increased its trade activity. The biggest export sectors are natural resources, such as copper ore and gold, whereas the most important imports into Peru are refined petroleum and cars.

Fundamental to Peru’s international trade success are its strategic free trade agreements (FTA). Peru is a member of the World Trade Organization and has FTAs with several key Latin America economies including Mexico and Chile. In Asia, Peru has FTAs with China and Singapore, among others. Additionally, Peru fosters an important FTA with the European Union, established in 2013.

Most exporting companies in Peru are small-medium sized entities (SMEs), accounting for around 82% of all exporting companies. SMEs that engage in exporting activities are able to expand their target market immensely, enlarging it by six to seven times, which motivates more SMEs to start exporting their products.

However, before starting an international trading business, companies need to understand the legal procedures involved with accountancy compliance.

Biz Latin Hub can assist you with Australia’s trade agreement with Peru

At Biz Latin Hub, we can provide you with the assistance you need when entering the market and doing business in Peru.

Our comprehensive portfolio of professional solutions includes accounting & taxation, company formation, due diligence, legal services, visa processing, and hiring & PEO, and we provided tailored packages of integrated back-office services to suit every need.

Whether you are interested in Peru imports and exports, or any other type of business venture, contact us today to find out more about how we can help you reach your commercial goals.

Or read about our team and expert authors.