Peru Requests EU Free Trade Talks without Andean Community

(LIP-ir) -- During his visit to Spain, Peru's President Alan Garcia told a group of Spanish investors during a meeting that Peru was willing to negotiate a free trade deal directly with the European Union and without the help of the Andean Community (CAN), a trade bloc comprising the South American countries of Bolivia, Colombia, Ecuador and Peru.

Because of slow progress attributed to the CAN, Garcia explained that it was necessary to begin talks on how to remove trade barriers between the countries without the participation of the Andean Community.

After having concluded an official visit to Spain, Peru's Head of State affirmed that it would be impossible to establish a trade pact between the two blocs because Ecuador and Bolivia "do not believe in free trade".

"Brussels should analyze this situation (...) with these partners it is impossible to have a contract", said Garcia.

Furthermore, Peru's president requested that Spain and the EU not set Latin America aside and continue giving it the attention it deserved.

In response, Spain's Prime Minister assured that the country would support Latin America and offered to help in speeding up negotiations between Latin America and the EU.

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# Rob says :
24 January, 2008 [ 10:45 ]

This is an excellent development.  Peru has more in common from a trade standpoint with Chile than with countries like Bolivia.  To be tied into waiting for progress from a backward looking, socialist trade system as in Bolvia is a mistake and I am glad to see Garcia stepping outside that to advocate for a free trade agreement for Peru.  Peru has the potential and resources to be one of the top economies in latin america. 

Bolivia will learn something about free markets once PetroBrasil develops the huge gas find they just discovered off their coasts.  Currently Brasil relies on gas imports from Bolivia, but 10 years from now they will likely be a net gas exporter.  Peru should concentrate on strengthening the ties with Brasil, Chili, Panama and other countries that know the benefits of the global economy.  Countries like Venezuela, Cuba and Bolivia can stick with their isolationist policies.

# Artur says :
24 January, 2008 [ 11:11 ]

I also think Peru shouldn't wait for socialist-oriented governments(which are looking more for protection than opening of the trade) and try to secure along with Colombia independent FTAs with EU. I think for the Peruvian exports it might be more beneficial then FTA with USA(there is already almost 90% of Peruvian exports entering US market without any tariffs). Plus EU countries have over 50% of foreign direct investments in Peru, which FTA will just stregthen and encourage more companies to explore this developing economy. Good job for the promotion of free trade and opening economy to more investments which means long-term development and more employemnt.

# HA says :
24 January, 2008 [ 13:31 ]

Arthur grow the hell up. All "Free Tree Agreements" are made with third world countries like Peru to exploit its cheap labor. As for your comment on "sociliast" government you are just sore than you live in a pathetic selfish capitalist society like Peru/USA where the majority of people will always be wage slaves like YOU are but like them YOU pretend you will be rich someday  RIIIGHT ... and there is a Santa Claus too

# Artur says :
24 January, 2008 [ 21:12 ]

HA...what the hell are You talking about? Maybe free trade agreements  allow to some extend to explore cheap labor- but they usually offer much better working conditions and through investment create new jobs that otherwise wouldn't be there. Just to ask you where do you  live HA? In some utopian country where money grow on trees? Or maybe places like with Santa Claus Hugo Chavez are model for development of Latin America?I don't know what you refer as to wage slaves- I'm not gonna comment on that.

# mericorps says :
25 January, 2008 [ 07:45 ]

Rob says :
24 January, 2008 [ 10:45 ]
Bolivia will learn something about free markets once PetroBrasil develops the huge gas find they just discovered off their coasts


Rob, where are Bolivia's coasts?

# Rob says :
25 January, 2008 [ 08:09 ]

Mericorps, I should have been clearer in my sentence structure.

I just assumed most people interested in South America would be familiar with the news of the giant gas field that Petrobras discovered off the coast of BRASIL.  Very near a recent huge deep water oil discovery they also made.

This has huge implications for Bolivia because in 10 years time they will likely not be able to hold Brasil hostage over energy policy since Brasil will have more than enough gas for their own needs, and no longer need to import from Bolivia.  Brasil in fact may become a net gas exporter. With their energy "nationalization" Bolivia recently screwed Petrobras over on many of the energy assets they had helped develop in Bolivia so it is true poetic justice.  Note these gas reserves will be difficult to develop because of the location so probably at least the 10 year range before it makes a signficant dent.

Petrobras Shares Surge On Large New Brazil Gas Discovery

Petrobras Shares Surge On Large New Brazil Gas Discovery

DOW JONES NEWSWIRES
January 22, 2008 8:11 a.m.

RIO DE JANEIRO (Dow Jones)--Stocks of state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, surged early Tuesday after the company late Monday announced the discovery of a large new gas and condensate reserve off Brazil's coast.

Petrobras shares jumped 3.35% to BRL68.70 ($37.44) in Sao Paulo at 1306 GMT, while the Ibovespa stock index rose 0.7%. The company's locally traded stocks had plunged 25% this month through Monday amid falling oil prices and a general market malaise.

The new gas reserve, dubbed Jupiter, lies in the ultra-deep pre-salt play in the Santos Basin, just as the nearby Tupi oil field. Petrobras in November said Tupi may contain reserves of up to 8 billion barrels of oil equivalent, or BOE, making it Brazil's biggest-ever discovery.

Petrobras has a 80% stake in the new gas field in Brazil's BM-S-24 block, with Portuguese oil firm Galp Energia SGPS SA (GALP.LB) holding the remaining 20%. Galp Energia early Tuesday added 10% in Lisbon to EUR15.05.

Jupiter lies at 290 kilometers off the coast of Rio de Janeiro and 37 km west of Tupi, at a water depth of 2,187 meters, and below another 3,000 meters of rocks and salt.

Petrobras didn't make a reserve estimate for the new gas find, but said the hydrocarbon-bearing rock containing it is more than 120 meters thick, and the find's dimensions may be similar to that of Tupi.

Brazil's new Energy Minister Edson Lobao according to the O Globo newspaper said Jupiter "is a mega gas field of gigantic proportions."  (so, you think it's good then?);)

Lobao added the new field will help Brazil to become independent in its gas supplies in a "very short time."

Oil Analyst Marc McCarthy at Bear Stearns went one step further, and said Jupiter could turn Brazil into a gas exporter, which is "bad news for Bolivia."

Bear upped its 2008 year-end target price for Petrobras to $105 per ADR from $90 per ADR. On Friday, the company's ADR's closed at $94.37.

Neighboring Bolivia currently supplies about 50% of Brazil's gas consumption of more than 46 million cubic meters a day. But the Andean country said it may not be able to fulfill all of its gas export commitments this year.

Also, Bolivia angered Petrobras and the Brazilian government with its 2006 nationalization of its oil and gas sector that harmed the company.

Yet, onland gas from Bolivia with its relatively low production costs will almost certainly remain cheaper than gas from ultra-deep locations off Brazil's Atlantic shore.

# Rob says :
25 January, 2008 [ 08:16 ]

BTW, from a Bolivians perspective a 2nd answer to your question would be that Bolivia's coasts exist and are located partially where the country of Chile sits now. 

The Bolivian Navy still trains off the coast of Lake Titicaca in anticipation of the day they recover access to the sea that was lost in the War of the Pacific.