The new free trade agreement between Peru and Australia will allow both countries to export their goods without tariffs or with tariff-free quotas.
The Peru-Australia Free Trade Agreement (PAFTA) was put into force on February 11, 2020, after the agreement was signed in 2018. It was celebrated as an opportunity to open new doors for each country’s producers. While Peru already exports products to Australia, the land down under can use this agreement to diversify the markets receiving their products.
Access to markets and providing competitive prices are some of the challenges Australian exports face. With the PAFTA, Australian producers of sugar, for example, will be able to compete with sugar producing countries like Brazil or Colombia because they will be able to export tariff-free (with a max of 30,000 tonnes per year) and during seasons when the South American countries are not producing.
Peruvian exports will also benefit from the agreement, allowing the country to amplify its presence and influence in Asia and the Pacific. According to the deputy head of mission of the Australian Embassy in Peru, James Yeomans, the agro-exports with the most potential for growth in Australia are avocados, asparagus, table grapes, tangerines.
Additionally, the agreement should also benefit small and medium producers of coffee, quinoa, chocolate, and cacao, among other products.