Rich in copper, silver, oil and gold, Peru is a country with much to offer. Despite its location on the Pacific as an important link between Southeast Asia and Brazil, Peru's progress has been held back by social and economic inequality, political power struggles, and a neglected economy and infrastructure. However, the Free Trade Agreement signed with the United States at the end of 2005 and the recent Presidential election are expected to bring positive changes to the economy. The Presidential election has attracted a great deal of press with the election held on April 9, 2006 and a run-off vote to take place in late May or early June. Once chosen, the president-elect will be inaugurated on July 28, 2006 and will focus efforts on investment in transport, energy, and water infrastructure. Although its GDP and export growth have been decreasing, Peru's superior credit history and continued firm revenue growth mitigate possible adverse circumstances.
Learn more about Peru on globalEDGE Country Insights.
This month's poll question is:
"With a Free Trade Agreement (FTA) in the making between Peru and the United States, what impact will the FTA have?"
Please view our homepage to vote on this month's poll question.
US, Peru Sign Trade Promotion Agreement
The CalTrade Report (April 17, 2006)
http://www.caltradereport.com/eWebPages/front-page-1145278451.html
In an effort to expand trade between the two nations, the U.S. and Peru have signed the United States - Peru Trade Promotion Agreement (PTPA), a comprehensive agreement that will eliminate tariffs and other barriers to goods and services. When implemented, the agreement will immediately render 80% of consumer and industrial products and more than two-thirds of current U.S. farm exports to Peru duty-free.
Peru's Economic Growth Rate Slows to Three-Month Low
Bloomberg, by Alex Emery (April 17, 2006)
http://www.bloomberg.com/apps/news?pid=10000086&sid=ayXTaENAN.mQ&refer=latin_america
With production of copper, zinc, and silver on the decline, Peru's annual economic growth rate fell to a three-month low in February. Estimates from the Peruvian Finance Ministry state that the economy will grow 5 % this year compared with 6.7% in 2005. With the second round of presidential elections scheduled next month, the slowdown is expected to continue as investment and consumer spending wane in the build up to the vote.
View more News on globalEDGE.
R&D Offshoring: Is It Working?
BusinessWeek, by Pete Engardio (May 10, 2006)
http://www.businessweek.com/globalbiz/content/may2006/gb20060510_613772.htm?chan=globalbiz_asia_economics+%2B+policy
A recent survey of 186 of some of the largest corporations found that 77% of them will place new research and development (R&D) centers either in India or China within the next three years. A recent study by Booz Allen Hamilton and France's INSEAD business school found that companies are placing R&D facilities in India and China because they are either closer to their manufacturing plants or the large amount of cheap highly qualified labor. The only problem that remains is that companies haven't fully integrated the brainpower potential that exists in China and India.
View more In Depth Look articles on globalEDGE.
A sample of some of our recently added sites:
Peru: Doing Business in Peru
http://www.buyusa.gov/peru/en/82.html
This is a sub-section within the official U.S. Commercial Service website. It provides information on doing business in Peru, such as how to find business partners, legal framework, market research, and business relationship between U.S. and Peru.
Country: Peru
The Law of International Trade: A Business Overview
http://globaledge.msu.edu/ibrd/gr_trade_law.asp
Produced by Warner Norcross & Judd LPP, this globalEDGE exclusive provides a thorough yet concise synopsis of major issues related to international trade law. Subjects covered include: Exporting, Importing, Contracts for the Sale or Purchase of Goods, Joint Ventures and Direct Investment, and a special section entitled "Traps for the Unwary." This is a must read for all businesspersons!
Category: Trade: Trade Law
Japan: Ministry of Finance
http://www.mof.go.jp/english/index.htm
The Ministry of Finance offers information on the budget, customs, national property, government bonds, tax policy, and stabilization. The site is also available in Japanese.
Country: Japan
Category: Research: Government Resources
View more recently added sites on globalEDGE.
Entrepreneurship Theory and Practice
http://www.blackwellpublishing.com/journal.asp?ref=1042-2587
Published by the United States Association for Small Business and Entrepreneurship, Entrepreneurship Theory and Practice (ET&P) is a leading journal in the area of entrepreneurship. It provides theoretical and practical knowledge for academicians, businesspersons, and government policy makers. The journal is published bi-monthly.
Category: Research: Journals
View more Academy Resources on globalEDGE.
Featured Discussion: Economic Changes in Peru
Challenged by political corruption and a neglected infrastructure, the Peruvian economy has created a social and economic chasm between the very rich and very poor. Yet economic growth remains strong, and the upcoming presidential election may bring significant change to the South American country. Recently, Venezuelan President Hugo Chavez threatened Peru with increased trade barriers for forming free trade agreements with the United States The likely exit of Venezuela from the Andean Community of Nations will leave Peru with one less viable trading partner. As capitalism moves deeper into South America, and as the U.S. seeks out new trading partners, it is unclear what the potential effect might be to Andean nations like Peru.
What are your thoughts on Peru's move to free trade with the U.S.? Given its past history, has Peru made an error in turning away from its Andean neighbors? Could a new president bring the changes necessary for Peru to invite greater foreign investment? Have you ever considered Peru for investment?
Join our online community to discuss this and many other current business topics!
Last month's newsletter (April 2006) had an error in the "Featured Country" section. The statement that read France is the "4th largest economy in terms of GDP" was misstated. France is actually 5th largest in terms of GDP. We apologize for the error.
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