Ministers Meet to Revive Negotiations
The Peruvian Ministry of Foreign Trade and Tourism (Mincetur) announced that Peru and El Salvador have decided to resume free trade agreement negotiations following a high-level meeting between ministers from both countries.
In an official statement, Mincetur confirmed that this decision was made during discussions between Peru’s Minister of Foreign Trade and Tourism, Desilú León Chempén, and El Salvador’s Minister of Economy, María Luisa Hayem Brevé.
Strengthening Bilateral Trade
“The goods trade between Peru and El Salvador has grown recently. We are confident that this negotiation will further enhance these trade flows, diversify our exports, and create new opportunities for investment and employment for our citizens,” Minister León stated.
According to Mincetur, El Salvador represents “a strategic market for Peru in Central America, with a growing economy and an increasing demand for value-added products.” The ministry emphasized that the proposed free trade agreement negotiations between Peru and El Salvador would open new opportunities for Peruvian exporters by granting them preferential access to a country where Peru “shares a vision of integration and economic development.”
Benefits for Small and Medium-Sized Enterprises (SMEs)
Minister León elaborated that “with this agreement, we aim to establish a stable and predictable regulatory framework that will enable our economic operators, particularly small and medium-sized enterprises (SMEs), to capitalize on the potential of our trade relations fully.” She highlighted that lowering tariffs and facilitating trade would allow more Peruvian businesses to export competitively, expand their market reach, and contribute to job creation and investment growth.
El Salvador’s Commitment to the Agreement
For her part, Minister Hayem of El Salvador emphasized that reviving free trade agreement negotiations between Peru and El Salvador—which initially began in 2010—presents a crucial opportunity to increase and diversify trade flows of goods and services between the two nations. “This agreement will strengthen bilateral trade by facilitating greater access to Peruvian and Salvadoran products and services in each other’s markets, fostering sustained growth and creating new business opportunities for our enterprises,” Hayem stated.
Official Declaration and Future Steps
Following their meeting, both ministers issued a joint declaration reaffirming their governments’ commitment to advancing negotiations decisively and finalizing an agreement that will drive economic growth in both countries. They expressed optimism about the prospects of a strengthened commercial relationship benefiting businesses and consumers.
Trade Growth and Economic Impact
Between January and November 2024, Peruvian exports to El Salvador surged by 43.8% compared to the previous year, reaching $65 million. The trade expansion saw remarkable diversification, encompassing 404 product categories and involving 183 exporting companies. Notable exports included chemical products, agricultural goods, and metallurgical products.
Conversely, imports from El Salvador to Peru amounted to $19 million over the same period, distributed across 134 product categories. Key imports included sugar, lubricating oils, long steel products, and wastepaper or cardboard.
Strategic Importance of the Agreement
The resumption of free trade agreement negotiations between Peru and El Salvador signals a strategic move for both nations as they seek to strengthen economic ties and create a more dynamic and mutually beneficial trade environment. The agreement aims to promote sustainable economic growth and ensure broader participation in the regional and global economy by addressing key trade barriers and establishing preferential terms.
Optimism from Business Leaders and Trade Analysts
Peruvian business leaders and trade analysts have expressed optimism regarding the agreement’s potential to attract investment, improve market efficiency, and enhance competitiveness for companies in both nations. Similarly, Salvadoran business representatives have welcomed the initiative, emphasizing its opportunities for increased exports, more significant business expansion, and stronger commercial collaboration with Peru.
Next Steps in the Negotiation Process
With negotiations back on track, both governments must outline a clear roadmap for completing the agreement soon. Trade experts anticipate that the deal will include provisions on tariff reductions, investment protections, trade facilitation measures, and cooperation mechanisms that will foster deeper integration between the two economies.
As discussions progress, stakeholders from both countries will closely monitor the developments, hoping for a successful conclusion to unlock new economic opportunities, stimulate trade, and reinforce the long-term economic partnership between Peru and El Salvador.
Conclusion
The free trade agreement negotiations between Peru and El Salvador represent a crucial opportunity for both nations to strengthen their economic ties, enhance trade flows, and promote long-term growth. By fostering a stable and predictable trade environment, this agreement has the potential to generate significant benefits for exporters, investors, and consumers in both countries. Reducing trade barriers, increasing market access, and establishing clear regulatory frameworks will improve the competitiveness of businesses and create new jobs and investment opportunities. Furthermore, provisions supporting small and medium-sized enterprises (SMEs) will ensure broader participation in international trade, empowering local industries and fostering economic resilience.
As the free trade agreement negotiations between Peru and El Salvador advance, both governments must address key areas such as tariff reductions, investment protections, and trade facilitation measures to create a more efficient and balanced trading relationship. Given the strong growth in bilateral trade and the rising demand for diverse products in both markets, this agreement is expected to accelerate economic integration and position both countries as stronger players in the regional and global economy. The successful completion of the free trade agreement negotiations between Peru and El Salvador will strengthen diplomatic relations and set a precedent for future trade agreements within Latin America.