Peru’s official ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expected to help boost trade between Vietnam and the South American nation.
With the ratification, Vietnamese goods will have more chances to penetrate the Peruvian market in the time ahead.
According to the Vietnamese Ministry of Industry and Trade, Peru has joined most of international and regional institutions such as the WTO, the Asia-Pacific Economic Cooperation (APEC), the Pacific Alliance (PA) and the Southern Common Market (MERCOSUR), and signed 27 free trade agreements with 55 countries.
Trade between Vietnam and Peru increased from 284.96 million USD in 2014 to 422.73 million USD in 2019.
Last year, the value stood at only 391.17 million USD due to the impact of the COVID-19 pandemic. However, the bilateral trade grew strongly in the first half of this year to reach 278.27 million USD, up 78.7 percent year-on-year.
Notably, Vietnam’s exports to Peru hit 242.49 million USD, representing a rise of 103.6 percent.
Vietnam’s major exports to Peru include phones and electronic components, computers and electronics, footwear, clinker and cement, garments-textiles and aquatic products. Meanwhile, Peru ships fish powder, antimony and minerals to the Southeast Asian nation.
Peru has been viewed as a potential market that matches Vietnamese firms’ capacity and scale as up to 75 percent of Peruvian export and import companies are small and medium-sized ones.
Peru commits to removing up to 81 percent of tax lines right after the CPTPP comes into force, and 99.4 percent of tax lines in the 17th year after the deal takes effect.
Notably, exterior wood and agricultural products like cashew nut, tea, pepper, fruit and vegetables, and certain coffee products will enjoy a zero percent tariff after the deal comes into force, while garments-textiles and footwear are subject to the zero percent tariff in the 16th year.
The ministry suggested local firms optimise opportunities presented by the CPTPP to step up exports to Peru, improve their competitiveness and put forth sustainable export strategies.
The Peruvian Congress has recently ratified the CPTPP, which was signed in March 2018, becoming the eighth member country to ratify the deal. It will officially take effect in Peru 60 days after the country completes the registration of the ratification with New Zealand, the depository for the TPP.