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

Peru , image_flag = Flag of Peru.svg , image_coat = Escudo nacional del Perú.svg , other_symbol = Great Seal of the State , other_symbol_type = National seal , national_motto = "Firm and Happy f ...

and

Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...

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

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 politician, financial executive, and economist. He was formerly the Member of Parliament for the riding of Vancouver Kingsway. He was first elected as a Liberal and served as Minist ...

, 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 with the symbol Zn and atomic number 30. Zinc 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 periodi ...

lead Lead is a chemical element with the symbol Pb (from the Latin ) and atomic number 82. It is a heavy metal that is denser than most common materials. Lead is soft and malleable, and also has a relatively low melting point. When freshly cu ...

silver Silver is a chemical element with the symbol Ag (from the Latin ', derived from the Proto-Indo-European ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, white, lustrous transition metal, it exhibits the highest electrical ...

and

gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile me ...

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 relatively small portion in the Northern Hemisphere at the northern tip of the continent. It can also be described as the southe ...

Continent; it demands borers, crushers, drills, specialty vehicles and other mining equipments, along with

engineering Engineering is the use of scientific principles to design and build machines, structures, and other items, including bridges, tunnels, roads, vehicles, and buildings. The discipline of engineering encompasses a broad range of more speciali ...

geophysical Geophysics () is a subject of natural science concerned with the physical processes and physical properties of the Earth and its surrounding space environment, and the use of quantitative methods for their analysis. The term ''geophysics'' some ...

and metallurgy 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 between two or more points without the use of an electrical conductor, optical fiber or other continuous guided medium for the transfer. The most ...

s, customized

software Software is a set of computer programs and associated software documentation, documentation and data (computing), data. This is in contrast to Computer hardware, hardware, from which the system is built and which actually performs the work. ...

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: physical or economic water scarcity. Physical water scarcity is whe ...

, 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
/ref>

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 Mountains (; ) are the longest continental mountain range in the world, forming a continuous highland along the western edge of South America. The range is long, wide (widest between 18°S – 20°S ...

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 ...

-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 Peruvian Apris ...

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