Queensland exporters are among those set to benefit from the new Peru–Australia Free Trade Agreement (PAFTA), which has now come into force.
In particular, Queensland sugar, dairy and beef producers are expected to receive major benefits, with PAFTA delivering reduced tariffs and improved access to the lucrative Peruvian agriculture market.
The new agreement will see about 95% of Australian products entering Peru duty-free. Key outcomes include:
- elimination of tariffs on beef within 5 years to ensure that Australian beef farmers have duty-free access to the Peruvian market at the same time as US farmers
- more access for Australian sugar farmers than Peru has provided to any other sugar-exporting country in the last 20 years
- open competition for Australian dairy farmers with competitors, and better outcomes on certain dairy products (eg butter) than those provided to the EU
- immediate duty-free access for Australian wine, sheep meat, most horticulture products (including almonds), kangaroo meat and wheat
- immediate duty-free access for pharmaceuticals, medical devices, paper and paperboard
- the best services commitments that Peru has offered any other country, which will create new opportunities for Australian mining service providers
- recognition of Australian university degrees.
By setting high-quality rules and promoting transparent laws and regulations, PAFTA will also provide certainty for businesses and reduce costs and red tape for Australian exporters, service suppliers and investors in Peru.
Queensland Trade and Investment Commissioner for Latin America Alex Pessagno encouraged exporters to look ahead to opportunities in Peru after the current COVID-19 crisis.
‘Obviously it’s a very difficult time for exporters at present with the restrictions imposed on all countries by the current crisis,’ he said.
‘But once normal trade is able to resume, PAFTA has real potential to smooth the way for Queensland exporters of both goods and services who are interested in Peru.
‘I’d encourage them to start assessing what opportunities might exist there, and to contact us at TIQ Latin America if they’d like more targeted market advice.’
Peru is one of the fastest growing economies in the world, with an average annual growth rate of 5.9% over the last decade.
Queensland businesses exported $26 million worth of goods to Peru in 2019. Major export items included specialised equipment such as scientific and measuring instruments and apparatus, mechanical-handling equipment, and civil engineering and contractors’ plant and equipment.
PAFTA was announced in November 2017, signed in February 2018, and came into force on 11 February 2020. See the Department of Foreign Affairs and Trade website for more detailed information on the agreement.
Supporting exports is a key goal of the Queensland Trade and Investment Strategy 2017–2022.