Peru Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

The EU was Peru’s third most important trading partner in 2021 (after China and the USA). Exports to Peru reached a value of EUR 3.53 billion in 2021, imports to the EU EUR 6.548 billion. Compared to the same period of the previous year, exports to Peru increased by 19% and imports from Peru by 29%. Mutual trade with the EU in 2021, compared to 2020, decreased by 5% in the case of exports to the EU, and by 13% in the case of imports. The EU’s most important export products are machinery and equipment, chemical and pharmaceutical products, automobiles, metals, and optical and medical devices. On the other hand, copper, avocados, zinc, gas, coffee, grapes, and mangoes are mostly imported from Peru.

2017 2018 2019 2020 2021
Exports from the EU (million EUR) 3,850.60 3,533.50 3,755.90 2,967.20 3,530.40
Imports into the EU (million EUR) 5,771.00 5,663.50 5,292.10 5,067.40 6,548.70
Balance with the EU (million EUR) 1,920.4 2,130.0 1,536.2 2,100.2 3,018.2

Source: European Commission

Trade relations with the Czech Republic

In 2021, compared to the same period of the previous year, there was a revival of trade exchange. Exports from the Czech Republic to Peru increased by 17.52%, imports to the Czech Republic by 23.27%. Peru accounted for 3.13% of total exports to Latin America, and 1.63% of imports. Within the region, it was ranked 6th among export destinations, after Mexico, Brazil, Chile, Argentina and Colombia.

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 0.4 1 1.3 1 1.1
Imports to the Czech Republic (billion CZK) 0.8 0.5 0.4 0.5 0.6
Balance with the Czech Republic (billion CZK) 0.5 -0.4 -0.9 -0.5 -0.4

Source: businesscarriers.com

Trade relations with countries outside the EU

Peru’s most important trading partner is China (in 2021, Peru exported goods worth EUR 18.452 billion), followed by the USA (exports EUR 7.249 billion). These countries account for 74% of total exports. As in the case of the EU, the main export items are raw materials and agricultural and food products. E.g. EUR 11.056 billion worth of copper and its concentrates were exported to China alone. The growing value of exports points to the revival of the world economy after the Covid-19 pandemic.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 34,757.3 38,172.6 37,027.1 33,502.1 50 109.7
Imports to countries outside the EU (million EUR) 27 142.7 29,922.6 29,644.6 24,435.3 34,548.0
Balance with non-EU countries (million EUR) 7,614.6 8,250.0 7,382.5 9,066.8 15,561.8

Source: EIU, Eurostat

Foreign direct investment

Foreign direct investment (FDI) in 2021 amounted to USD 6.201 billion, which is USD 4.819 billion more than in 2020. The Central Bank expects FDI to grow by USD 5.138 billion in 2022 and then by USD 5.138 billion in 2023 5.708 billion USD.

Great Britain had the largest share of FDI in 2021 (22%), followed by Spain (18%), Chile (12%) and the USA (11%).

In terms of sectoral breakdown, 63% of FDI went into mining, finance and telecommunications. Specifically, the mining industry contributed 24%, finance 20%, telecommunications 19%. Of the other sectors, industry and energy each participated with 12%.

FTAs and treaties

Treaties with the EU

Relations between the EU and Peru are defined by the Rome Declaration of 1996. They were strengthened in 2003 on the basis of the Treaty on Political Dialogue and Cooperation between the EU and the Andean Community. The free trade agreement between the EU and Peru was concluded in 2010 and entered into force in 2013. The agreement gradually reduces customs barriers and creates conditions facilitating trade exchange. To date, the FTA is not properly applied in some areas (especially agriculture and food industry), where obstacles such as insufficient protection of the designation of origin for European brands, weak punishment for counterfeits, transparency of public procurement or the existence of tax measures persist.

On 15 March 2016, the Agreement between the EU and Peru on the abolition of the visa requirement for short-term stays (up to 90 days in any 180-day period) for holders of all types of Peruvian passports entered into force. This agreement does not apply to persons traveling for gainful employment.

Contracts with the Czech Republic

  1. Agreement on the support and protection of investments signed on 16 March 1994. It entered into force on 6 March 1995. In November 2018, the Czech Republic requested its renegotiation. The Ministry of Finance of the Czech Republic is currently assessing the Peruvian counterproposal.
  2. Memorandum of understanding and cooperation in the field of tourism between the MMR of the Czech Republic and the Ministry of Foreign Trade and Tourism of Peru (2007)
  3. Agreement on Economic and Industrial Cooperation (2007)
  4. Memorandum of understanding and cooperation between the Ministry of Defense of the Czech Republic and the Ministry of Defense of Peru (2007)
  5. Memorandum of Understanding between the Ministry of the Interior of the Czech Republic and Peru (2015)
  6. In November 2018, the Czech Republic requested the negotiation of the Double Taxation Avoidance Agreement. The Ministry of Finance of Peru is assessing the Czech proposal.
  7. Agreement on cooperation between the Chamber of Commerce of the Czech Republic and the Lima Chamber of Commerce (1995)
  8. Memorandum of Understanding between CzechInvest and Proinversión (2009)
  9. Memorandum of Understanding between EGAP and Banco de la Nación (2008)
  10. Memorandum of Understanding between EGAP and Corporación Financiera de Desarrollo SA – COFIDE (2008)
  11. Memorandum of Understanding between the Directorate General of the Fire and Rescue Service of the Czech Republic and the National Institution for Civil Protection INDECI (2019)
  12. Agreement on cooperation between the SPD of the Czech Republic and the National Industrial Company of Peru SNI (2019)

Developmental cooperation

Peru is considered an upper-middle income country with the goal of approaching OECD standards. Peru’s bilateral development assistance is therefore gradually changing from purely financial contributions to the exchange of experience and good examples. The Peruvian Agency for International Cooperation (APCI), which is part of the Ministry of Foreign Affairs, is in charge of development cooperation. The most recent data available is for 2018. Peru received $406.757 million in development aid. Of this, 35% was from non-governmental organizations, 89% from bilateral and 11% from multilateral sources. The main providers of bilateral aid were the USA, China, the EU, Germany, Canada, Switzerland and Spain. Territorially, aid was mainly directed to the areas of Lima, Cusco and Loreto. According to focus in the field of social inclusion, natural resources and the environment, public administration and governance and competitiveness,

For development cooperation for the period 2014-2020 (a total of EUR 81 million), the EU has set the following main priorities: 1. fight against gender discrimination, 2. territorial development (increasing the competitiveness of remote parts of the country and prevention of natural risks), 3. fight against organized of crime (illegal mining, people smuggling) and 4. improving the judiciary. Data for 2021 are not available.

Regarding cooperation with the Czech Republic, two small local projects were implemented in Peru in 2021. Specifically, these are the following: “Strategies to alleviate malnutrition and poverty through an ecosystem approach”, implemented by the Asociación Peruana de Productores Agroecoógicos and “Czech Automatic Climate Station (presentation and training for CIGA-PUCP staff)”, implemented by the Pontificia Universidad Católica del Perú ( PUCP.

Prospective fields of study (MOP)

Mining industry

A key sector of the national economy, which contributes almost 10% to GDP creation, more than 60% to exports. Mining in the first half of 2021 increased by 71.9%, the prices of raw materials on world markets are also favorable. The Czech Republic could offer its technologies. Czech companies could find interesting opportunities, for example, in the case of removing the consequences of mining, providing geological services, equipment for transporting materials and people.

Healthcare and pharmaceutical industry

The Covid-10 pandemic has shown that this sector is significantly underfunded. Projects planned by the previous government, the new government are either not implemented at all, or are significantly delayed. There is a lack of medical facilities, equipment, medicines, and there is a long waiting time for the procedure to be performed. Czech technologies offering financing could have a better chance. Due to the complete lack of anything, medical aids, building medical infrastructure, special medical furniture, special devices, systems for immobile patients, tent systems are needed.

Energy industry

Peru’s economy needs more electricity to grow. Like other countries, Peru also plans to increase the share of electricity production from renewable sources. According to the National Energy Plan, this share of non-traditional renewable sources (small hydroelectric power plants under 20 MW capacity, solar and biogas power plants, and power plants burning residues after the extraction of sugar cane and agave juice) should increase to 20% by 2040.

There could be opportunities for Czech companies to enter the Peruvian market, especially in rural areas and the Amazon; as well as subcontracting for the construction and repair of distribution networks.

ICT

In recent years, Peru has intensified efforts to digitize the country. As of 2019, 95% of small and medium-sized companies accelerated the digitization process. Although its quality is still at a low level. In addition to public digitization, Peru has begun to invest more in supporting innovation and online solutions. The development of telecommunications infrastructure, improvement of connections and expansion of services concerns mainly rural areas. Czech companies could also apply in the security of digital operations and processes, such as security elements or holograms.

Transport Industry and Infrastructure

Infrastructure development is key to the development of the Peruvian economy. The National Infrastructure Plan for 2016-2025 assessed the needs of the sector at almost USD 160 billion, of which almost USD 57.5 billion is transport infrastructure. Czech companies could participate as subcontractors of technologies and solutions. Specifically, it could be, for example, electrical control systems, traffic control systems, parking systems or assistance service systems.

Peru Trade