Ricardo Pelaez, Senior Commercial Officer, Lima, Peru
For a decade (2003-2013), Peru was Latin America’s fastest growing economy with an average annual growth rate of 6.3 percent. Over the same time period, it cut poverty in half from 54% to 23.4%. Peru’s economy continued to grow at rates of 2.4 and 2.9% in 2014 and 2015 respectively and is outperforming its regional neighbors. Experts forecast Peru’s economy will return to 3.7 and 4.1 % growth in 2016 and 2017, respectively. This growth will be driven by expanded mining production and anticipated continuation of sound macro-economic and market friendly policies under a new Kuczynski government that takes office on July 28, 2016.
Peru’s low inflation and second highest credit rating in Latin America make it an attractive market for U.S. exporters. Peru is our 6th largest export market in Latin America, with U.S. exports totaling $8.8 billion in 2015. Some 12,000 U.S. companies currently export to Peru, roughly 86% of which are SMEs. The United States is Peru’s 2nd largest export market and 2nd largest supplier of imports after China. U.S. products and services are well-positioned to expand in sectors such as mining, construction, food processing and packaging, e-commerce, education, industrial chemicals, medical supplies and equipment, plastics, water management, and security and safety equipment.
The U.S.-Peru Trade Promotion Agreement (PTPA) entered into force in 2009, immediately eliminating tariffs on over 80% of U.S. consumer and industrial products exports to Peru. PTPA has had a tremendously positive impact on trade between our two countries. Since 2009, two-way trade between the U.S. and Peru has grown 8% per year and U.S. exports to Peru have grown 11% per year. Furthermore, the PTPA was a catalyst for Peru to sign another 16 FTAs encompassing 52 economies, cementing its free- trade policy. Peru is actively pursuing regional trade integration through membership in the Pacific Alliance and the Trans-Pacific Partnership (TPP).
In the past few months, my team has assisted more than 170 U.S. exporters interested in penetrating the Peruvian market and recruited over 420 Peruvian buyers to attend U.S. trade shows. We supported over 50 U.S. exhibitors at Perumin, Peru’s largest mining convention and trade show held in Arequipa biennially. In response to a Presidential initiative improving Peruvian citizens’ access to healthcare, we organized a three-day Healthcare Trade and Investment mission led by the Deputy Secretary of Commerce that featured 23 U.S. companies.
The Peruvian government has allocated an additional $1.6 billion to invest in education projects in 2016, which includes the building and design of high performance schools with state of the art educational technologies. Peru’s investment in new transportation and telecommunications infrastructure will contribute to growth in the construction sector, while ongoing mining and energy projects and the continued demand for housing and office facilities will further spur growth in the market and offer new opportunities for U.S. firms.
Peru’s world-renowned gastronomy has fostered growth in its local food processing and packaging industry. Local Peruvian ingredients such as fruits, peppers and Andean cereals are now being successfully marketed internationally. The growing middle-class now has greater purchasing power for more expensive, processed and packaged food products which offers opportunities for U.S. technologies in this sector.
All of these developments mean good news for U.S. exporters. Once in force, the TPP Agreement will amplify the synergies between our two markets, as we increase exports to the other TPP member countries, particularly Asian markets. The TPP will add to the success of the PTPA and increase opportunities for new partnerships between Peruvian and U.S. companies.
As of 2014, over 39,000 U.S. jobs were supported by goods exported to Peru, and that success is expected to increase under the TPP. To learn more about doing business in Peru and other markets, I invite you to select Peru under our Country Commercial Guides. To learn more about U.S. export opportunities to Peru under TPP visit our Peru TPP Country Report.