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Trade Promotion Agreement U.S. - PERU

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Embassy of Peru

on 29 March 2015

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Transcript of Trade Promotion Agreement U.S. - PERU

U.S. – PERU TRADE PROMOTION AGREEMENT
It regulates, among other issues





Labor matters and Environmental matters


TPA is expected to contribute with
growth
and
diversification
of Peruvian exports in the medium term, especially for
non-traditional exports
.
Background
The TPA strengthened permanent preferential access for Peruvian exportable offer to the U.S. market.
Peru now has the option to export its products with preferential conditions to the world’s largest economy.

The U.S – Peru Trade Promotion Agreement (TPA) was signed on April 12th 2006 and entered into force on February 1st, 2009.
Tariff elimination allows Peruvian consumers and companies to have options for access to goods, inputs and modern technologies at a
lower cost.


TPA Objectives
Guarantee permanent preferential access for Peruvian exports to the world’s largest economy.

Increase and diversify exports, eliminating distortions caused by tariff rates, import quotas and non-tariff barriers.
Attract flows of private investment, promote development of economies of scale, a greater degree of economic specialization and greater efficiency in the allocation of productive factors
Contribute to improve people’s quality of life through greater access to less expensive and higher quality and larger range of goods.
Establish clear and permanent rules for trade of goods and services and investments.
Create defense mechanisms for Peruvian trade interests in the U.S. and define mechanisms to solve possible trade disputes.
Strengthen economic policy and institution stability, as well as contribute to improve Peru’s risk classification.
Reduce the economy’s vulnerability facing external financial crises and increase stability of our macro-economic indicators, tightening connections with tendencies from one of the most stable economies of the world.
Improve Peruvian companies’ productivity, by facilitating the purchase of modern technologies at lower prices, which promote manufacture exports and added value services.

Market Access
Tariff elimination for U.S. imports from Peru
Tariff elimination for Peruvian imports from U.S.
Pursuant to the U.S. – Peru TPA, the U.S. offers total tariff elimination (in a 0 to 17 years period) for 99.5% of their tariff lines.
U.S. tariff elimination offer includes 100% of U.S. imports for non-textile industrial goods from Peru
Through the APC, tariff elimination for 100% of our agricultural exports was achieved.
Peru granted U.S. immediate access to 76% of its tariff lines.
The remainder of tariff lines will be eliminated in periods between 2 and 17 years after entry into force.
RESULTS AT THE FIFTH YEAR OF U.S. - PERU TPA ENTRY INTO FORCE

Export from Peru to the U.S.
Import to Peru from the U.S.
The value of Peruvian exports to the U.S. grew at an annual average of 11% during the first five years of the TPA.
Exports of traditional goods grew 9%, while non-traditional goods exports grew 14%

During the period after the U.S. – Peru TPA entered into force, non-traditional items which recorded most annual average growth were iron and steel metallurgy (+43%) and non-metallic mining (+41%).
Items which recorded less change were handicrafts (+1%), textiles (+2%) and others – jewelry (+4%).
Non-traditional item with most participation in total value exported was agricultural, which recorded 13% participation and 16% annual average growth.
Traditional item which had the greatest growth was petroleum and derivates (+16%).
Mining exports, which represented 37% of total exports to the U.S., grew 7%.


In the fifth year of TPA entry into force, exports reached US $ 7 330,5 million, growing 16% with regard to the fourth year of enforcement.

Of this total, 99.9% is in the immediate tariff elimination category.
5 years
TLC
Sector Analysis of exports during the fifth year of TPA entry into force.
Value of Peruvian Exports to the U.S. reached US $ 7,330,5 millions, which represented an increase of
16%
with regard to the fourth year of TPA entry into force

Traditional exports grew
27%
, representing
65%
of total exports

Some traditional products such as lead, refined silver, gold and zinc, increased
731%
,
589%
,
55%
and
32%
, respectively.

Non-traditional exports increased
1%
, the most dynamic sectors being: fishing (
+43%
), metal mechanic (
+13%
) and agricultural (
+12%
)
Most representative non-traditional sectors were: agricultural (with
40%
participation of non-traditional total exports), textile (
25%
) and iron and steel metallurgy (
11%
)
During the five TPA years, value of Peruvian imports from the U.S. grew at a 20% annual average and reached US $ 34 815 million
Likewise, capital assets and building materials imports and increased at an 11% annual rate.
During this period, purchase of raw material and intermediate products had 61% participation

Capital assets and building materials recorded 31% participation.

In the fifth year of TPA enforcement, value imported was US $ 8 930,9 million, which meant an 11% increase with regard to the fourth year of TPA entry into force.
58% of the products are in the immediate tariff elimination category; while 37% are in the 10 year tariff elimination category.

85% of the value imported from the US belongs to products with 0 tariff rate.


Main products exported during the fifth year of TPA entry into force
New products exported during the five years of TPA entry into force
2,341 products were exported, of which
2,286
were non-traditional (
98% of total exports
)

Raw gold was the main product exported to the US during the fifth year of TPA entry into force, which explains
27%
of value exported and records a
56%
increase with regard to the fourth year of TPA enforcement.
In the second and third place are exports of gasoline without tetraethyl lead (
9%
of total exported) and petroleum crude oils (
6,2%
of total exported).
Main non –traditional products exported were: fresh or refrigerated asparagus (
US $ 243,5 million
), natural calcium phosphates (
US $ 120,7 million
), raw silver (
US $ 120,6 million
), cotton “t-shirts” (
US $ 107,7 million
), fresh grapes (
US $ 106,1 million
) among others
In the first year of TPA entry into force, 249 new products exported to the US were recorded for an amount of US $ 7,7 million (
0,2%

of total exports).
In the second year of TPA entry into force, 198 new products exported to the US were recorded for an amount of US $ 128,5 million (
2,1%
of total exports).
In the third year of TPA entry into force, 179 new products exported to the US were recorded for an amount of US $ 7,0 million (
0,1%
of total exports).
In the fourth year of TPA entry into force, 125 new products exported to the US were recorded for an amount of US $ 138,4 million (
2,2%
of total exports).
RESULTS AT THE FIFTH YEAR OF U.S. - PERU TPA ENTRY INTO FORCE
Exportaciones de Perú a EEUU
Import to Peru from the U.S.
New export companies during the five years of TPA entry into force
Finally, in the fifth year of TPA entry into force, 172 new products exported to the US were recorded for an amount of US $ 42,7 million (
0,6%
of total exports).
This way, at the fifth year of TPA entry into force, 923 new products exported to the US were recorded, for a total amount of US $ 983,5 million

This represented
3,2%
of exports to the US in this period.

Investment promotion
Government Procurement
Cross-Border Services
Intellectual Property Protection
Value of Peruvian imports from the U.S. reached US $ 8 930,9 million, which meant an
11%
increase with regard to the fourth year of entry into force

Sector analysis of imports during the fifth year of TPA entry into force
Most dynamic exports were; fuel, lubricants and related products
(+39%)
, perishable consumer goods
(+13%)
and building materials
(+10%)
.

In the first year of TPA entry into force,
744
new export companies to the U.S. were recorded (US $ 67,3 million)
In the second year of TPA entry into force,
653
new export companies to the U.S. were recorded (US $ 151,4 million)

In the third year of TPA entry into force,
689
new export companies to the U.S. were recorded (US $ 181,0 million)
In the fourth year of TPA entry into force,
631
new export companies to the U.S. were recorded (US $ 563,3 million)
In the fifth year of TPA entry into force,
629
new export companies to the U.S. were recorded (US $ 1 160,4 millions)
This way, at the fifth year of TPA entry into force, 3,346 new export companies to the U.S. were recorded (US $ 4 313 million)


Other products such as sugar and dark brown sugar, tin, iron, and copper dropped
89%
,
80%
, and
72%
, respectively.
Imports concentrated in fuel, lubricants and related products
(+35%)
and raw materials and intermediate products for industry
(27,4%)
.

68%
of the total of new export companies to the US recorded sales below US $ 100 thousand (average 5 years)
The U.S. – Peru TPA has helped to promote development and integration among their people.
TPA is a landmark in the bilateral relation and helps to strengthen a permanent strategic association between Peru and the U.S.
The TPA helps to achieve competitiveness, leveling conditions facing other markets.
Purchase of consumer goods, as well as raw material and intermediate products grew at 24% annual average rate.
It is an overall and balanced agreement including all bilateral economic relation matters
Market Access
j
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