Trade and investment are vital for a middle-income economy like Peru, which requires access to export markets and a steady supply of external capital flows in order to thrive, Peruvian Ambassador to the U.S. Luis Miguel Castilla affirmed.
Peru’s foreign trade of goods and services measured by value is equivalent to 48% of its GDP, Castilla wrote in an article published by Americas Quarterly.
For over a decade, Peru has sustained an open trade and investment policy aimed at integrating its economy into global markets, with a network of 17 fully fledged free trade agreements (FTAs), which currently cover 95 percent of merchandise trade and accounts for nearly US$80 billion in annual exports and imports.
These said agreements have led to turning Peru into one of Latin America’s great success stories. Between 2002 and 2013, its economy grew at an average rate of 6.1%. Despite slowed region-wide growth, Peru continues to outpace its neighbors, with 2.4 % growth in 2014, compared to 0.8% for the rest of the region, the Ambassador underlined.
This economic growth has brought important social gains: The number of Peruvians living in poverty fell by more than half between 2005 and 2014.
According to the diplomat, free trade has become a “cornerstone of Peru’s economic policy.” The Peruvian government is in the process of expanding its trading network through negotiations within and outside the region that will eventually cover nearly all of Peru’s global trade.
Each round of negotiations, including the present one, has been supported by several governments from different political parties over the past decade and a half.
He went on to add there’s no mystery about why Peru’s ambitious trade policy has received such broad domestic political support. It is a crucial element of an economic and social agenda aimed at enhancing the welfare and social inclusion of all Peruvians.
"FTAs have worked in three key ways: by boosting Peruvian exports and reducing the costs of imports; by encouraging confidence in Peru as a reliable trade partner; and by helping transform inefficient domestic structures and institutions," the Ambassador stated.