Living in Peru : your everyday companion

DowJones.com
Anthony Esposito

Chile's foreign minister Mariano Fernandez sent a clear message on Thursday that trade with Peru wouldn't be damaged, at least for now, because of Peru's accusations of Chilean espionage in the country.

Last week Peruvian authorities detained Peruvian military official Victor Ariza Mendoza, alleging he had spied for neighboring Chile. The escalation of verbal hostilities reached a new high when some members of Peru's Parliament asked for the bilateral trade agreement with Chile to be revoked.

Fernandez said that reason will at some point prevail in Peru, leading authorities to see the importance of Chile's economic contribution through commerce. Chile is also the second biggest foreign investor in Peru, he added.

Chile's chief trade negotiator, Carlos Furche, said "from a trade point of view, Chile is more important for Peru and if we take into consideration investments, there is no doubt, because there are some $7 billion of Chilean investment in Peru."

In 2008, Chile exported $1.5 billion worth of goods to Peru, while importing $1.8 billion in goods from Peru.

The espionage allegations have led Peru's nationalist party to demand that Peru's government retaliate on the economic front.

"What we have asked for is a suspension of the free trade deal with Chile," nationalist party leader Ollanta Humala said Tuesday in a broadcast interview.

Relations between the two countries have been especially cool this year because of increased Chilean arms purchases, and Peru's demands at the International Court of Justice at The Hague over a maritime border that Chile considers its own.

Earlier this week Alberto Van Klaveren, Chile's Foreign Relations Under Secretary, left his post to be exclusively in charge of representing Chile at The Hague.

Have other topics you'd like to see in our news section? If you or someone you know would like to contribute a news article to Living in Peru, whether it's translated or based on a personal investigation, send it to editor@livinginperu.com.