In February 2009, the U.S.-Peru trade promotion agreement (TPA) went into effect. The TPA has had some exciting effects for many U.S. companies. Doug Barry of the U.S. Commercial Service interviewed John Simmons, the Department of Commerce’s senior commercial officer in Lima, about how the TPA is helping U.S. businesses.
For one, as a result of the TPA, about 80 percent of U.S. goods exported to Peru are allowed to enter duty-free. With lesser or nonexistent tariffs, U.S. sellers will be able to sell at reduced prices, making their goods more competitive. Peru is growing, as well. Despite nearly 40 percent of the population being in poverty, strong economic growth rates (9 percent a year) are bettering the standard of living for many Peruvians—making them more viable customers down the road.
While Peruvian demand for U.S. products has traditionally been in the mining sector, there have been increased demands for products such as machinery for energy exploration, and telecommunications goods and services as well. These imports are helping to diversify Peru’s economy, which in turn contributes to the demand for other goods and services, all of which continue to lead Peru towards a more well-rounded economy.
In essence, the U.S.-Peru TPA is a prime example of the mutual benefit of global trade. U.S. sellers get access to a market of growing buyers and interests with little or no import taxes to worry about. Peru gets more access to less-expensive products, which in turn helps to diversify their economy. So, until next time, keep on trading!
If you’re a U.S. seller potentially interested in trade opportunities with Peru, check out what the U.S. Commercial Service has to offer!