The EU-Peru Free Trade Agreement: What You Need to Know
The European Union (EU) and Peru signed a free trade agreement (FTA) on June 26, 2012, and it has been in force since March 1, 2013. The FTA is designed to boost economic growth, create jobs, and increase investment opportunities for both parties.
The agreement allows for the elimination of most tariffs on goods traded between the EU and Peru. This means that Peruvian exports such as agricultural products, textiles, and minerals can enter the EU market without being subject to high import duties. Likewise, European exporters can sell their goods and services to Peru without facing additional tariffs.
The FTA also includes provisions to protect intellectual property rights, ensure fair competition, and promote sustainable development. It prohibits the use of forced labor and child labor, and sets standards for environmental protection and labor rights.
One of the key benefits of the EU-Peru FTA is increased market access for European businesses. Peru is the world`s second-largest producer of silver, as well as a major producer of copper, gold, and zinc. The FTA allows European companies to import these minerals duty-free, which can save them millions of euros in tariffs.
Moreover, the FTA has opened up opportunities for European companies to invest in Peru`s infrastructure, mining, and energy sectors. Some of the largest European companies, such as Repsol, Total, and Eni, have already made significant investments in these sectors since the agreement was signed.
Peru has also benefited from the FTA. The agreement has helped to diversify its export base, reduce poverty, and increase economic growth. According to the European Commission, trade between the EU and Peru has increased by more than 60% since the FTA came into force.
In addition, the FTA has provided Peru with access to the EU`s preferential tariff scheme for developing countries, known as the Generalized System of Preferences (GSP). Under the GSP, certain goods from developing countries can enter the EU market at reduced or zero tariffs.
Overall, the EU-Peru FTA has been a success for both parties. It has increased trade and investment opportunities, created jobs, and improved living standards. As the world becomes more interconnected, free trade agreements like this one will continue to play an important role in promoting economic growth and prosperity.