Posts Tagged ‘economy’
The first goods exchanged between Peru and the U.S. around the recently signed Free Trade Agreement arrived to Peru and were shipped to the U.S., correspondingly, according to an article in El Comercio.
In a historic celebration, the first shipment coming from the U.S. to Peru’s international port of Callao arrived yesterday Monday, February 2 including apples from California worth US$17,542. And the first shipment of Peruvian textiles to the U.S. left Callao.
The vast majority of goods coming from the U.S. to Peru free of customs charges include complementary and industrial goods, supplies, and machinery for Peruvian producers.
The U.S. is Peru’s largest commercial partner. In average, trade among both countries reaches nearly US$ 9.4 billion per year.
Click here to watch a news video on this relevant trade accomplishment for both countries.
Key US-Peru trade facts, according to El Comercio:
- Since last Sunday, products imported to Peru from the U.S. are entering free of customs — in the past they included a 9% or 17% customs charge.
- In 2008, 18% of the US$31,163 million of total Peruvian exports were shipped to the U.S.
- In the following months, the Free Trade Agreements with Canada, Singapore, China and Chile will become effective.
As we expect news on the American Economic Stimulus Package in the next two weeks, Reuters writes about the status of the Peruvian’s stimulus package which will help Peru ride best the global economic recession with government estimates reaching up to 4-5% GDP growth in 2009.
The Reuters article reads:
Peru started the first part of spending under its economic stimulus package (…).
The first bit includes 4.5 billion soles ($1.42 billion) of price cuts and spending. It includes a 10 percent reduction in fuel prices, 3 billion soles in social spending, help for non-traditional exporters, and infrastructure projects.
The finance ministry said it also has been working to keep credit lines open and obtain loans from multilateral agencies.
Just a few moments ago, President Bush proclaimed the approval of the US-Peru FTA agreement!!
This is a very important accomplishment for Peru on its way to become an economic leader in Latin America and in the world — and of course will also bring foreigners closer to Peruvian goods in the U.S.
Click here to read President Bush’s Proclamation signed today.
As the Associated Press (via BusinessWeek) reports:
U.S. Trade Representative Susan Schwab says it is the first free trade pact to reflect enhanced labor and environmental standards outlined in an accord the Bush administration reached with Congress in 2007.
For the first time in history, Schwab said, U.S. exporters will be able to sell the vast majority of their products in the Peruvian market duty-free.
Two-way trade between the two nations totals more than $9 billion a year. For Peru, the pact will make permanent and build on temporary trade preferences that have benefited Peruvian farmers, workers and entrepreneurs through the Andean Trade Preference Act.
The Office of the U.S. Trade Representative issued this press release (full version click here):
WASHINGTON, DC – U.S. Trade Representative Susan C. Schwab made the following statement today regarding the entry into force of the United States–Peru Trade Promotion Agreement:
“With the President’s issuance of a proclamation to implement the U.S.-Peru Trade Promotion Agreement as of February 1, 2009, I am very pleased to be able to celebrate the entry into force of this important trade agreement.
“We have worked closely with the Government of Peru to ensure that the obligations and responsibilities of each party have been met under this Agreement. We have engaged in this effort as true partners, and I want to thank President Garcia and his government for their hard work and dedication over the course of the last year.
“I want to thank those in Congress who worked with the Administration to develop a bipartisan trade policy template, paving the way for the approval of the U.S.-Peru Trade Promotion Agreement. This is the first free trade agreement (FTA) in force that will reflect the enhanced labor and environmental standards set out in the May 10, 2007, agreement between the Administration and the congressional leadership.
“Today’s proclamation marks an important milestone in our relationship with Peru, one of our strongest allies in Latin America. For the first time in history, American exporters will be able to sell the vast majority of their products into the Peruvian market duty-free. Through this Agreement, we have seized the opportunity to lead by strengthening our partnership and helping promote economic growth, prosperity and well being in Peru and throughout the hemisphere.”
“Trade and trade expansion will be a vital component of our effort to restore economic growth in the global economy. The additional market openness brought by this agreement will enhance our trade and prosperity in the future and support existing and future high-paying American jobs, particularly in manufacturing and agriculture.”
Very exciting! Looks like it will be an amazing year for Peru despite the global economic crisis!
One of “Connect to Peru”‘s regular readers, Juan Carlos Seminario, was kind to share with me his insights on the optimism and risks that Peru could face in 2009. A native Peruvian executive who has worked for Fortune 500 Companies like P&G, Johnson, and Loreal, and principal professor for the Diplomacy Academy of Peru, among other credits, I thought would be interesting to share what he has to say via his blog “Latinopinion“.
In summary, Seminario outlines inflation, devaluation and the drop of net international reserves are among the top risks Peru could face in 2009. But the way it can best face all of these risks is via foreign investments. Well, sounds pretty in line with what I have been writing about in my recent posts, including the Minister of Economy’s tour to key cities in the U.S. and Europe, and the two upcoming FTAs with China and South Korea in 2009, for example.
Following up from my earlier post on the Peruvian Minister of Economy Luis Valdivieso visiting New York, Boston, London and Spain, today he made a statement on how his “Non Deal Road Show” is progressing, according to a report from Andina.
Today Valdivieso is in London and stated investors in the U.S. and the U.K. are surprised that Peru continues growing and with a low inflation despite de international economic crisis.
Below are quotes from his declaration to the press (translated to English):
“They were all surprised that we keep growing with low inflation and are very interested to know which are our fiscal plans and monetary policy, as well as which are our investment plans. [...] It is important to communicate to the market where we are and where we are headed to.”
U.S. Congressman Rubén Hinojosa (D-TX) meets with the Peruvian President Alan Garcia., as Andina reports via a video (in Spanish).
During his stay, the Congressman made a statement to the press calling to support the Free Trade Agreement between the U.S. and Peru to increase commerce, investments, and generate employment opportunities in Peru and also in the U.S. to ride through the current global economic crisis.
Great Article in The Economist: Preparing For Tougher Times; Credit Suisse Conservative 4.5 Percent GDP Growth in Peru
This is the title of a great article in today’s Economist print and online issues that provides an economic overview and outlook of Latin American countries, including Peru, and puts the region’s economy in perspective as it rides the U.S. and global economic crisis. The article begins saying:
In the five years from 2004 Latin America’s economies grew at an annual average rate of over 5%, inflation remained generally low, credit expanded and exports boomed. All this meant that the proportion of people living in poverty fell from 44% in 2002 to 33% this year, according to an estimate this week by the United Nations Economic Commission for Latin America and the Caribbean. Now the task facing the region’s policymakers is to limit the damage as the world economy deflates.
- GDP estimates in 2009: Brazil 4%, Mexico 0.4%. And as mentioned in my earlier post, Peru is expecting to grow at least 6% according to government estimates.
- The two main factors contributing to Latin America’s downturn are: a) Continuing steep fall in commodity prices because of worries that China’s economy is stalling. Commodities, from Venezuelan oil to Peruvian minerals, Argentine soya and Brazilian iron ore and orange juice, make up a big chunk of the region’s exports; and b) Banks in Latin America have turned cautious. Many foreign banks are cancelling credit lines to the region, or renewing them for shorter periods or at higher rates.
Additionally, Credit Suisse just released a report for Latin America, where Peru is slated to show the highest growth in the region, although takes a conservative 4.5% GDP growth, as Bloomberg reports.
Peru’s Minister of Economy Visiting NY, Boston, London and Spain to Promote Country’s Economic Strength
The Peruvian Minister of Economy Luis Valdivieso will be visiting New York, Boston, London and Spain starting tomorrow December 11 thru December 18 to promote Peru’s economic strength despite the US and global crisis, as Andina news reports.
The goals behind this tour named “Non Deal Road Show” include to:
- Demonstrate Peru’s attractiveness and strength for foreign investments
- Promote Peru’s commitment to its investment policies to improve its business environment and reduce poverty based on free market principles
- Promote the recognition from the Organization for Economic Cooperation and Development (OCDE) as Peru became the 41st country to join the International Declaration of Investments and Multinational Businesses
Google Bets in Latin America Despite US Crisis; Google Survey Shows Peru’s Main Access to the Internet Via Cabins
Google’s head for Latin America Alexandre Hohagen expressed his optimism in Latin America despite the US (and global) economic crisis, according to a Reuters Latin America article.
Also, and in line with my post on Peruvian kids being the biggest users of Internet cabins in Latin America, Google also just released a survey conducted by Pyramid Research stating Peru is the #1 country in Latin America where Internet users prefer accessing the Web from cabins as opposed to doing it from home, as El Comercio newspaper reports. Another interesting statistic from this survey is that Peru is in third place (lead by Ecuador and Uruguay) where Internet users are not too much into using online banking.
The survey also reveals that online advertising in Latin America will grow 5-fold to reach $2.6 billion in 2013. Which means Latin America will represent 9% of the world’s online advertising market versus current 2%.
I don’t typically write about economic-related news but more on fun and useful information about Peru. But I think it is worth mentioning how Peru is actually riding the US economic crisis.
As I mentioned in my November post, Peru is one of the few countries in Latin America that will be able to ride the crisis better than others with estimates of 9 percent in 2008 and 6.5 percent in 2009. In fact, the first statistics showing a downturn include:
- Copper and minerals prices are tumbling, thus exports fell in October for the first time in more than six years and down 11.4 percent from the same month last year.
- In September, Peru registered a trade deficit for the first time in more than five years, followed by a US$ 506 million shortfall in October.
As a result, the Peruvian government today announced a US$ 13 billion stimulus package for housing, highways and other projects in 2009, as Reuters reports today.