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DE RUEHPE #0222/01 0332000
ZNR UUUUU ZZH
R 021959Z FEB 10
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 0643
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHPE/AMEMBASSY LIMA

UNCLAS LIMA 000222 
 
SIPDIS 
COMMERCE FOR 4331/MAC/WH/MCAMERON 
TREASURY FOR MEWENS 
USTR FOR BHARMAN AND MCARRILLO 
 
E.O. 12958: N/A 
TAGS: ETRD EINV ECON EFIN USTR PE
SUBJECT: January Trade and Investment Brief 
 
SUMMARY 
 
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¶1.  This is an update on the following trade and investment news 
from Peru: 
 
 
 
Trade 
 
-- Peru's Free Trade Agreement with S. Korea 
 
-- Entry into Force of Peru-China Agreement Delayed 
 
-- The Peru-EU Negotiations 
 
-- Negotiations with Japan Remain Complicated 
 
-- India and Peru Talk Possible Free Trade Agreement 
 
 
 
Investment 
 
-- Various Airlines Looking to Enter Peruvian Market 
 
-- Best Western to Open Its First Premier Hotel in Peru 
 
 
 
 
 
TRADE 
 
 
 
Peru's Free Trade Agreement with S. Korea 
 
----------------------------------------- 
 
In Washington, DC, between January 14-15, Peru and S. Korea held 
their fifth round of free trade agreement negotiations.  A sixth 
round of negotiations has been scheduled beginning February 24 in 
Lima.  Currently, 8,800 Peruvian products will enter the Korean 
market duty-free, which represents 85% of the 11,000 products Peru 
wanted included in the agreement.  However, in the agro-industry 
sector the agreement includes only 25%, representing 379 products. 
The duty-free products include coffee, sugar, and tomato paste. 
Asparagus and avocado will become duty-free after three to five 
years. Within ten to sixteen years, eggs, flowers, artichokes, 
strawberries, mangoes, and pork will become duty free.  Oranges and 
onions have been excluded.  While Peru continues to push for 
greater access for agricultural and fish products, S. Korea wants 
better access for its vehicle exports. 
 
 
 
Entry into Force of Peru-China Agreement Delayed 
 
--------------------------------------------- --- 
 
The Peru-China Free Trade Agreement was scheduled to enter into 
force on January 15.  On January 13, China asked for a delay. 
China cited an internal digitalization project of its economic 
sector as the reason for the requested postponement.  Once the 
agreement enters into fore, 83.5% of Peruvian products will enter 
China duty-free.  No new date has been announced for entry into 
force. 
 
 
 
The Peru-EU Negotiations 
 
------------------------ 
 
The eighth round of negotiations between Peru, Colombia, and the EU 
occurred in Lima from January 18-22.  The Minister of Foreign 
Affairs, Jose Antonio Garcia Belaunde, hopes Peru and the EU will 
be able to sign the agreement in May during the European Union - 
Latin America Caribbean Summit. President Garcia announced he will 
attend the summit in Spain.  Remaining issues under negotiations 
include drawbacks, market access, rules of origin, services, 
intellectual property, commercial disputes, commerce and 
sustainable development.  The ninth round of negotiations will be 
 
held in March in Brussels. 
 
 
 
Negotiations with Japan Remain Complicated 
 
------------------------------------------ 
 
Japan continues to exclude more than 1,000 Peruvian products from 
the agreement and to push for more access for Japanese automobiles. 
A new round of negotiations will be held in February.  Peru is 
looking to close the negotiation phase, but is not prepared at this 
time to accept the exclusion of such a large number of its 
products. 
 
 
 
India and Peru Talk Possible Free Trade Agreement 
 
--------------------------------------------- ---- 
 
The visiting Indian Minister of External Relations voiced his 
country's interest in investment opportunities in Peru and 
exploring the possibility for a free trade agreement.  Particular 
sectors of interest for investment include hydrocarbons, mining, 
pharmaceutical products, agriculture, and information technology. 
The Peruvian Minister of External Relations responded that Peru has 
not yet made a determination as to whether they will pursue 
negotiations with India given their current focus on concluding 
pending agreements with Japan, Korea, and the EU. 
 
 
 
INVESTMENT 
 
 
 
Various Airlines Looking to Enter Peruvian Market 
 
--------------------------------------------- ---- 
 
Air Europe presented to the Peruvian Director General for Civil 
Aviation (DGAC) a request to open a direct route between Madrid and 
Lima.  Air Europe plans to operate flights three times a week with 
Airbus aircraft A330 (capacity 294 passengers).  The DGAC has 90 
days to make a decision on whether to grant Air Europe 
authorization for the flights.  Other airlines, such as, the US 
carrier Jet Blue and Argentinean carrier Aerolineas Argentinas, 
have indicated their interest in operating international and 
domestic flights in Peru.  Currently, Chilean Lan Airlines 
dominates the domestic market in Peru. 
 
 
 
Best Western to Open Its First Premier Hotel in Peru 
 
--------------------------------------------- ------- 
 
In November, Best Western will open its first Premier (five star) 
hotel in Peru.  This represents Best Western's second Premier hotel 
in Latin America.  The $15 million dollar investment will include a 
hotel with 12 bungalows, 2 Presidential Suites, 90 suites and 6 
duplexes located south of Lima in Sarapampa, Canete.  Construction 
on the project began last September.  The hotel complex will also 
include restaurants, a spa, a water sports arena, and a convention 
center. 
McKinley