The Canada–Peru Free Trade Agreement (''CPFTA'') is a free trade agreement between

Peru Peru, officially the Republic of Peru, is a country in western South America. It is bordered in the north by Ecuador and Colombia, in the east by Brazil, in the southeast by Bolivia, in the south by Chile, and in the south and west by the Pac ...

and

Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...

. It was signed on 29 May 2008 and entered into force on 1 August 2009. The CPFTA facilitates establishment of free trade, creation of opportunities for economic development, elimination of trade barriers and promotion of fair competition.

Negotiation and ratification

In August, 2002, Canada and the

Andean Community The Andean Community (, CAN) is a free trade area with the objective of creating a customs union comprising the South American countries (Andean states) of Bolivia, Colombia, Ecuador, and Peru. The trade bloc was called the Andean Pact until 1 ...

agreed to discuss on proposed FTA. The Minister of International Trade had detail discussions on the subject with various groups in Canada including provincial and territorial governments to obtain advice and views. On June 7, 2007,

David Emerson David Lee Emerson, (born September 17, 1945) is a Canadian economist, financial executive, and politician. He was formerly the Member of Parliament for the riding of Vancouver Kingsway. He was first elected as a Liberal and served as Mi ...

, Minister of International Trade, announced the launch of free trade negotiations between Canada and Colombia and Peru.

Impact

Canada

The CPFTA creates a competitive advantage for Canadian producers and exporters in one of the friendly economies in South America. Peru's economy is fast-growing with GDP growth of 6.9% in 2011. Peru has become one of the key partners of Canada in many aspects; it is the third-largest trading partner in Latin America and the Caribbean. In 2011 the value of Canadian exports to Peru reached $516 million, an increase of 36 percent over 2008, the year before the agreement came into force. Peru has become the third-largest nation attracting Canadian FDI in South and Central America.

Opportunities in Agriculture and Agri-food

The agreement positioned Canada into a competitive position where agricultural and agri-food producers and exporters are benefited by reduced and eliminated tariffs which ranged up to 25% previously. There are potential opportunities for exports in the areas of durum wheat, malting barley and malt, pulses, canary seed, animal feed preparations, linseed, pork and certain live cattle and beef.

Opportunities in Mining and Oil and Gas

The tariffs which was previously ranged up to 12 percent on Canadian mining and oil and gas equipment, are eliminated by the agreement. Peru's reserves on

zinc Zinc is a chemical element; it has symbol Zn and atomic number 30. It is a slightly brittle metal at room temperature and has a shiny-greyish appearance when oxidation is removed. It is the first element in group 12 (IIB) of the periodic tabl ...

lead Lead () is a chemical element; it has Chemical symbol, symbol Pb (from Latin ) and atomic number 82. It is a Heavy metal (elements), heavy metal that is density, denser than most common materials. Lead is Mohs scale, soft and Ductility, malleabl ...

silver Silver is a chemical element; it has Symbol (chemistry), symbol Ag () and atomic number 47. A soft, whitish-gray, lustrous transition metal, it exhibits the highest electrical conductivity, thermal conductivity, and reflectivity of any metal. ...

and

gold Gold is a chemical element; it has chemical symbol Au (from Latin ) and atomic number 79. In its pure form, it is a brightness, bright, slightly orange-yellow, dense, soft, malleable, and ductile metal. Chemically, gold is a transition metal ...

is the largest in the

South American South America is a continent entirely in the Western Hemisphere and mostly in the Southern Hemisphere, with a considerably smaller portion in the Northern Hemisphere. It can also be described as the southern Subregion#Americas, subregion o ...

Continent; it demands borers,

crushers A crusher is a machine designed to reduce large rocks into smaller rocks, gravel, sand or rock dust. Crushers may be used to reduce the size, or change the form, of waste materials so they can be more easily disposed of or recycled, or to reduce ...

drills A drill is a tool used for making round holes or driving fasteners. It is fitted with a drill bit for making holes, or a screwdriver bit for securing fasteners. Historically, they were powered by hand, and later mains power, but cordless bat ...

, specialty vehicles and other mining equipments, along with

engineering Engineering is the practice of using natural science, mathematics, and the engineering design process to Problem solving#Engineering, solve problems within technology, increase efficiency and productivity, and improve Systems engineering, s ...

geophysical Geophysics () is a subject of natural science concerned with the physical processes and properties of Earth and its surrounding space environment, and the use of quantitative methods for their analysis. Geophysicists conduct investigations acros ...

and

metallurgy Metallurgy is a domain of materials science and engineering that studies the physical and chemical behavior of metallic elements, their inter-metallic compounds, and their mixtures, which are known as alloys. Metallurgy encompasses both the ...

services.

Opportunities in Information and Communications Technology (ICT)

The tariffs which was previously ranged up to 12 percent on Canadian ITC products, are eliminated by the agreement. Since Peru expands its ITC infrastructure, Canada has an opportunity to supply

wireless communication Wireless communication (or just wireless, when the context allows) is the transfer of information (''telecommunication'') between two or more points without the use of an electrical conductor, optical fiber or other continuous guided med ...

s, customized

software Software consists of computer programs that instruct the Execution (computing), execution of a computer. Software also includes design documents and specifications. The history of software is closely tied to the development of digital comput ...

solutions,

geomatics Geomatics is defined in the ISO/TC 211 series of standards as the "discipline concerned with the collection, distribution, storage, analysis, processing, presentation of geographic data or geographic information". Under another definition, it ...

and health-related solutions.

Opportunities in Services Sector

Peru has enough liquidity to carry out huge projects in public and private sectors. Peruvian government has initiated to activate infrastructure projects worth $40 billion over the forthcoming 5 years. Canadian companies are in a competitive position by their years long experience on building water treatment projects, hydro-electric power generators, mass transit systems and award-winning ports and airports despite geographic and climate challenges of remoteness, high altitudes, extreme cold and heat and

water scarcity Water scarcity (closely related to water stress or water crisis) is the lack of fresh water resources to meet the standard water demand. There are two types of water scarcity. One is ''physical.'' The other is ''economic water scarcity''. Physic ...

, to secure contracts successfully in wide range of government procurement projects. Canadian banks and other insurance and securities sectors are other beneficiaries by the wider access in Peru.

Peru

History of trade balances

(Amounts in thousands of Canadian dollars) Industry Canada:Trade Data Online
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Investment

The Free Trade Agreement was updated and integrated with previously existed the Canada-Peru Foreign Investment Promotion and Protection Agreement (FIPA) which had been in force since June 2007. The modified FTA facilitates Canadian investors in many ways; it provides stability, transparency and protection for their investments. Investors further benefits by binding international arbitration when it comes resolving disputes. Both the FIPA and the FTA have prompted Canada to become one of the most important sources of FDI in Peru's mining sector. The following are some of the valuable investment opportunities: * Mining (Gold and Iron) * Infrastructure (Roads, Irrigation Systems and Ports) * Telecommunications (Telephony, Wireless and Internet Services) * Oil and Gas

Disputes and controversies

In Peru's southern

Andes The Andes ( ), Andes Mountains or Andean Mountain Range (; ) are the List of longest mountain chains on Earth, longest continental mountain range in the world, forming a continuous highland along the western edge of South America. The range ...

Vancouver Vancouver is a major city in Western Canada, located in the Lower Mainland region of British Columbia. As the List of cities in British Columbia, most populous city in the province, the 2021 Canadian census recorded 662,248 people in the cit ...

-based company Bear Creek's proposed Santa Ana mine resulted in the deaths of at least five locals at the hands of police. In a company press release, Bear Creek CEO Andrew Swarthout blamed the protests on a "pre-election political climate", and insisted that "Bear Creek has received strong local community support for our Santa Ana project". The protests were so uncontainable however that the previous Peruvian government of

Alan García Alan Gabriel Ludwig García Pérez (; 23 May 1949 – 17 April 2019) was a Peruvian politician who served as President of Peru for two non-consecutive terms from 1985 to 1990 and from 2006 to 2011. He was the second leader of the American Popula ...

suspended Bear Creek's licence. Bear Creek has applied for a constitutional injunction against the Peruvian government in its retaliation to the García's decision. Swarthout contends that the cancellation of the concession is unconstitutional and in violation of foreign investment laws. He noted that it is plausible that Bear Creek could use the Canada–Peru Free Trade Agreement to challenge the loss of their concession. Since there were widespread conflicts over the mining, the Peruvian congress signed into law a bill that requires mining and oil companies to consult with Indigenous communities before constructing extractive projects.

References

External links

Text of the Canada-Peru Free Trade Agreement

Text of the Canada-Peru Agreement on Environmental Cooperation

Text of the Canada-Peru Agreement on Labour Cooperation
{{DEFAULTSORT:Canada-Peru Free Trade Agreement

Treaties concluded in 2008 Treaties entered into force in 2009 2008 in Canada 2008 in Peru Treaties of Peru Foreign trade of Peru