Market of the Month – Peru
Global Financial Crisis and Peru
Peru’s Changing Commercial Environment
Best prospects for U.S. Exporters
Listen to an interview with John Simmons, Senior Commercial Officer at the U.S. Embassy in Lima
Peru is one of the most rapidly expanding markets for U.S. goods and services. The U.S. is Peru’s leading trading partner, accounting for approximately 20 percent of imports and exports. As of February 1, 2009, U.S. firms have greater access to Peru through the U.S. Peru Trade Promotion Agreement, commonly referred to as the Free Trade Agreement (FTA). To help U.S. firms take advantage of the increased market opportunities, the U.S. Department of Commerce is leading a trade mission to Peru and Chile, June 1-5, 2009.
Now, 80% of all U.S. consumer and industrial products are eligible for duty-free access into Peru, with the remaining tariffs to be phased-out over ten years. More than two-thirds of current American agricultural exports to Peru also benefit from such treatment. The FTA is designed to enhance protection of intellectual property and to streamline customs clearance procedures, including the establishment of a 48 hour time-frame for processing of inbound shipments. The U.S. International Trade Commission estimates that the FTA will boost annual U.S. exports to Peru by $1.1 billion.
Propelled by economic growth that exceeded 9% in both 2007 and 2008, U.S. exports to Peru have doubled in just the past two years. In 2008 alone, American exports to Peru increased by 50%, reaching a level of $6.2 billion; making Peru the 35th largest market for U.S. good worldwide.
Map of Peru
The attractiveness of the Peruvian market has not been lost on key U.S. competitors. A number of nations, including China, Canada, Singapore, as well as the European Union have completed or are in the process of negotiating trade agreements with Peru. When concluded, these accords are expected to afford many of the same benefits currently enjoyed by U.S. firms under the FTA.
Global Financial Crisis and Peru
To date, Peru has weathered the global financial crisis remarkably well. The economy is still growing, with some observers suggesting the economy could expand by about 5% in 2009, as opposed to the nearly 10% rate in 2008.
However, signs are beginning to emerge that Peru will not be immune to the effects of the global economic downturn. In each of the last three months of 2008, Peru’s exports declined in comparison to the previous year’s levels. Exports for December 2008 were off a full 36%, with all major export sectors showing significant declines. The impact is being felt most acutely in the mining sectors, which accounts for a majority of Peru’s exports and which has seen global prices for many metals drop significantly. Some major mining operations have announced delays in new investment totaling in the billions of dollars.
Despite such potentially worrisome signs, Peruvian imports continued to grow, albeit at slower rates, and consumer confidence remains stronger. The Peruvian Government has also adopted a stimulus package to bolster economic activity.
Peru’s Changing Commercial Environment
Strong economic growth, an eased market access regime, infrastructure development and industrial diversification have combined to broaden the sectors in which marketing opportunities exist for U.S. firms. While still heavily dependent upon the mining sector, Peru’s economic growth has spurred the expansion of a number of sectors including telecommunications, oil and gas, computers, transportation equipment, consumer goods and the construction sector.
This same expansion has also started to impact the geographic reach of marketing opportunities. While Lima remains Peru’s commercial capital and is still home to one-third of the country’s population and generates half of the nation’s GDP, secondary cities and provinces are starting to present more important commercial opportunities.
Lima, Capital of Peru
Best prospects for U.S. Exporters
The Best Prospects for U.S. exports of non-agricultural products to Peru include the following sectors:
 | Mining Industry Equipment |
| Oil and Gas Field Machinery |
| Industrial Chemicals |
| Food Processing and Packaging Equipment |
| Security and Safety Equipment |
| Air Conditioning and Refrigeration Equipment |
| Construction Equipment |
| Pumps, Valves, Compressors |
| Building Products |
| Pollution Control Equipment |
| Drugs and Pharmaceuticals |
The following tips may be useful for prospective exporters:
| U.S. companies may wish to designate local representatives to investigate market opportunities and facilitate business operations. |
| Most successful companies employ expert local legal counsel to navigate Peru’s informal business practices and bureaucracy. |
| Product pricing and dependability are the two most important selling factors in the Peruvian market. |
| For information about how to benefit from the FTA, go to http://export.gov/fta/peru/doc_fta_peru.asp. |
| Population: 28.3 million |
| Capital: Lima |
| Government: Constitutional Republic |
| Languages: Spanish and Quechua |
| Real GDP Growth Rate in 2008: 9.8% |
| Primary Industries: Mining and Refining of minerals; Steel, Metal fabrication; Petroleum Extraction and Refining, Natural Gas; Fishing and Fish processing, Textiles, Clothing, Food Processing |
| Import Commodities: Petroleum and Petroleum Products, Plastics, Machinery, Vehicles, Iron and Steel, Wheat, Paper |
| Major Sources of Imports: United States (18.7%), China (13.6%), Brazil (8.1%), Ecuador, Argentina |
| Principal U.S. Exports to Peru in 2008: Industrial/Power Generating Equipment (25.9%); Refined Petroleum Products (19.4%); Electrical Machinery (9.3%); Plastics (8.3%); Vehicles (3.9%). |
| Major foreign investors: United States (mining, oil & gas, telecommunications, consumer goods); Spain (oil & gas, telecommunications), Chile (retail), Mexico (telecommunications, mining) and increasingly China (mining) |
| World Bank’s Doing Business 2008 ranking: Peru is 58 among 178 countries in terms of ease of doing business |
U.S. Department of Commerce Trade Mission to Peru and Chile
June 1-5, 2009
http://www.export.gov/eac/show_detail_trade_events.asp?EventID=28112
U.S. companies across a range of industry sectors are invited to act now to take advantage of this fast-breaking opportunity – the Commerce Department's first Executive Trade Mission to Santiago, Chile and Lima, Peru since the U.S.-Peru Free Trade Agreement entered into force February 2009. Under the leadership of Walter Bastian, Deputy Assistant Secretary for the Western Hemisphere, the mission will put U.S. companies in direct contact with pre-screened potential business representatives, clients, and partners in both FTA partner markets. It is designed to promote U.S. products, services, and technologies in a cross section of industries, including, but not limited to, construction, electric power generation, food processing and packaging, environmental protection, information technology, mining, oil and gas, safety and security, and telecommunications.
PeruModa 09 – 12th International Trade Show of the Fashion Industry
Apparel, Footwear, Accessories, Jewelry, Services
April 22-24, 2009, Lima
http://www.perumoda.com/english/perumoda.asp
Envase/Alimentek Peru 2009
International Packaging, Process Technology, Warehousing and Distribution Logistics Exposition
May 14 – 16, 2009, Lima
http://www.envaseperu.com/ingles/ingles.php
Feria Industrial de las Americas 2009
Industrial Equipment, Supplies & Services
May 21 – 23, 2009, Lima
http://www.thaiscorp.com/feriaamericas/site/index_en.html
Fibca 2009 – International Fair for Capital Goods
Machinery, equipment, industrial inputs, and services May 28 – 30, 2009, Lima
Expomina Peru 2009 – Seminar and Trade Show
Mining Machinery, Equipment, Supplies, and Services
June 17 – 19, 2009, Lima
http://www.expominaperu.com/home.html
Expoalimentaria Peru 2009
Food, Beverages, Machinery, Inputs, Packaging, Services
September 9 – 11, 2009, Lima
http://www.expoalimentariaperu.com/
Perumin 29th Mining Convention
Mining Conference and Trade Show
September 14 – 18, 2009, Arequipa
http://www.convencionminera.com/eng/home.html
Excon 2009
Construction, Building Products, Environmental Engineering Trade Show
October 6 – 11, 2009, Lima
http://www.buyusa.gov/peru/en/220.html
Expo Pesca 2009
Fishing and Aquaculture
November 12 – 14, 2009, Lima
http://www.thaiscorp.com/expopesca_new/site/index_en.html
Machu Picchu, Ruins in Peru
U.S. Department of Commerce (U.S. Embassy Lima, Peru)
U.S. Commercial Service Lima
Tel.: (511) 618-2442, 434-3040
Fax: (511) 434-3041
E-mail: Lima.Office.Box@mail.doc.gov
Website: http://www.buyusa.gov/peru/en/
| John Simmons, Senior Commercial Officer, John.Simmons@mail.doc.gov |
| Cesar Jochamowitz, Senior Commercial Specialist, Cesar.Jochamowitz@mail.doc.gov |
| Flora Muroi, Commercial Specialist, Flora.Muroi@mail.doc.gov |
| Gustavo Romero, Commercial Specialist, Gustavo.Romero@mail.doc.gov |
| Country Commercial Guide |
| Peru Market Research |
| Peru Free Trade Agreement (FTA) Information for U.S. Exporters |
| CIA World Fact Book |
| US Department of State Background Notes |