Peru and the TPP

With the global market as prominent as it is, any major global trading agreement is something to research and understand. The TPP, or Trans-Pacific Partnership, is one of the bigger agreements made in recent history, and one of the major players in this agreement is Peru. What part does Peru play and what are some of the benefits they will get from being a member of this agreement? The article “The TPP will give Peru direct access to markets such as Australia and New Zealand” (http://www.amcham.org.pe/publicaciones/articulos.php?art=3) touches on these questions and dives into their respective answers. Three of the main takeaways with respect to Peru are shown below:

  1. “Peru will see its exports increase by $3.2 billion by 2025, once the TPP is finalized.
  2. Peru will now have access to Australia, New Zealand, Malaysia, and Vietnam and their corresponding markets.
  3. “Many of the benefits will be seen in non-traditional sectors, such as agricultural exports”

With the TPP being such a talking point, especially now during the Presidential debates, it will be interesting to monitor the progress of this agreement, and how Peru actually benefits from being part of this free trade agreement. Will the benefits be the same as this article predicts? Only time will tell.

TTIP and TPP – A Threat to Latin America?

An article in EconoMonitor (March 21, 2016) titled “TTIP & TPP – A Threat to Latin America?” (http://www.economonitor.com/blog/2016/03/ttip-tpp-a-threat-to-latin-america/) analyzes the impact that the new regional mega-deals will have on different Latin American economies. For years, most Latin American countries have supported their economies on exporting commodities and natural resources. To face the risk that commodities’ prices are variable, these countries have implemented import-substitution industrialization policies, which mean high tariffs to protect domestic industry and discourage imports. With the TPP, it is expected that Peru takes the most advantage of this deal since the agreement could lead to a 2.4% increase in real income. On the other hand Chile and Mexico already have deep trade agreements with most of the TPP members, preventing them from expecting a relevant impact in their economies thanks to the latest commercial deal. Mercosur countries, which are not involved in the TPP agreement, such as Brazil and Venezuela are currently facing economic crisis that need them to reevaluate their access to international markets and enhance their integration in global value chains. Will the TPP members allow any Mercosur country to join the deal in the coming years? How can Chile and Mexico leverage their current position as members of the TPP deal?