Guest columnist | Pacific Alliance enters the large Asia-Pacific market with PASFTA ratification.

Ana Cecilia Gervasi
Foreign Secretary

Peru reaffirmed its strong and resolute commitment to the Pacific Alliance (PA) by ratifying the Pacific Alliance-Singapore Free Trade Agreement (PASFTA) on 22 February. implement it since it was signed on 26 January 2022 at the Bahia-Malaga summit. Singapore also ratified it on July 7 last year.

PASFTA is the result of five years of negotiations. An agreement aimed at attracting Singaporean investment and expanding the market for goods and services for Peruvian exporting companies, especially small and medium-sized enterprises (SMEs).

Reaching this trade agreement is part of the fundamental goals of the PA: to become a platform for economic and commercial integration and cooperation with a global perspective, especially in the Asia-Pacific region, and to promote the well-being and development of our citizens. It also contributes to the goal of the Strategic Vision 2030, which proposes a more global PA that forms an integration network between Latin America and the world, with disciplines of high standards that stimulate trade and investment.

PASFTA consists of 25 chapters, including state-of-the-art disciplines for inclusive economic growth and provisions that create an environment that enhances the competitiveness of SMEs. Among the benefits of PASFTA are Peruvian exports with a total of 10,809 tariff lines that will enter Singapore duty-free, representing 99.96% of the Singapore tariff aggregate; as well as the obligation of the parties to adopt or maintain legislative or other measures necessary to qualify corruption-related offences. Perhaps the most telling advantage is the accumulation of ancestry. The agreement will allow the use of original materials or resources between the parties, contributing to the formation of production chains at the regional level and in the Asian market. This will encourage Peruvian SMEs to join higher value-added regional value chains and thus diversify their exports.

When the PASFTA enters into force for the four member states of the PA, Singapore will become the bloc’s first associated state and, as such, will be able to participate in the meetings of the different instances of the integration mechanism and hold events to promote the PA. , among other forms of collaboration.

Trade relations with Singapore will be comprehensively strengthened. The PA countries and the Asian country signed on the same day after the signing of PASFTA the Joint Declaration and its Work Plan, which identified areas of mutual interest to deepen cooperation, such as the digital economy, technology and innovation; green energy and sustainability; logistics, communications and trade facilitation; business contacts, education and capacity building.

With a market of approximately 233 million people, the PA is an economic and commercial integration mechanism that encourages joint ventures, provides opportunities for foreign investment, and is open to new ventures and innovations in various fields.

I send the following message to the entrepreneurs of the member countries: The PA establishes commercial disciplines that provide benefits to SMEs, encourage investment, create new companies, and in doing so create cash flow and important financial movements.

As the next PA interim president, Peru hopes to continue this path of progress by advancing the accession processes of Costa Rica and Ecuador and advancing negotiations with other candidates to become associated states such as the Republic of Korea, Australia. , Canada and New Zealand, important partners in the Asia-Pacific region, and thus continue to strengthen the Pacific Alliance and its expansion to the world for the benefit of our citizens.

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