PERU Trade Minister Eduardo Ferreyros says two-way opportunities exist for agriculture in the Peru-Australia Free Trade Agreement (PAFTA), with Peruvian “Super Foods” heading the menu for exports destined down under from his country.
Mr Ferryros unveiled the new trade negotiations had started in Canberra yesterday alongside Australia’s federal Trade Minister Steven Ciobo which they hope to conclude by the year’s end.
Asked if Peruvians would prefer to eat Australian beef or kangaroo - two farm products set to benefit from the trade deal - Mr Ferryros at first had trouble understanding the question.
But he said – tongue in cheek – he was going to try eating kangaroo meat at lunch time.
“I've been in Canberra before and I love the way you live with the kangaroos - I see them everywhere,” he said.
But on a more serious note, Mr Ferryros said both countries had opportunities through the PAFTA in agricultural products.
He highlighted the potential export from Peru of nutrient rich superfoods, with products made from ingredients that grow well in that part of South America.
“We buy agricultural products from Australia and I think there are opportunities for Peruvian, what we call, ‘Superfoods of Peru’ to be more present in the Australian market,” he said.
“We have launched these brands, ‘Superfoods Peru’ that have to be with food related to health (and) good eating.
“I'm talking about quinoa but also about blueberries as power food, avocados, fruit or vegetables in general.
“I think we can be complimentary in the agricultural sectors.
“An idea is to eat food at low cost, so tariffs always increase prices for our people so I think we can work and we are going to do pretty fine on that.”
Mr Ciobo said he generally refrained from commenting on sector by sector aspects of trade deals but spoke about the opportunity for cutting high tariffs on Australian farm products exported into Peru.
He said sugar was ab example where Peru currently imported around $150 million worth of sugar per annum and “Australia currently has zero out of that sugar”.
“We've got a…tariff, up to a 29 per cent tariff on sugar, so there's opportunities, and I use that by way of example, in relation to agricultural products,” he said.
Mr Ciobo said another initiative Mr Ferreyros was undertaking while visiting Australia was to open a new trade office, in time, which would help drive the investment relationship between the two countries.
“Driving the investment relationship from Australia into Peru, from Peru into Australia, helps to bind businesses and that in turn helps to bind those people-to-people links,” he said.
“Of course, many Australians take the time to travel to Peru, they know about some of the tourism features of that and like me we both share tourism responsibility.
“I want to make sure that we continue and improve Australia's standing as a destination for Peruvians and more broadly for those from Latin America to travel to Australia to experience Australian culture, to experience the Australian lifestyle.
“So it's not just about particular agricultural products, it's actually about a full suite of the comprehensive trade deal that embraces those people-to-people links, the investment links, the goods and services links.”
Rabobank analyst Cheryl Kalisch Gordon the PAFTA was an initiative to gather some of the concessions promised under the previously-agreed Trans Pacific Partnership.
Ms Kalisch Gordon said two-way trade with Peru was reportedly worth $504m in 2015/16 which included just $5m of primary industries exports, alongside $350m in Peruvian imports to Australia.
She said Peruvian imports in that year comprised coffee ($9m), cocoa ($4m), animal feed ($A20m), ores ($200m), horticultural production ($24m), seafood ($2m) and a wide range of manufactured goods.
“With the exception of dairy (average $2.5m over past five years, mostly or entirely butter) and alcohol, Australian agricultural exports to Peru have been opportunistic,” she said.
“Peru is a small export destination for Australian agriculture, but removal of tariffs may create opportunities for opportunistic exports to become more consistent, expand total volumes, or open market opportunities.
“Freight considerations and coinciding southern hemisphere supply periods will temper opportunities for many Australian agricultural sectors.”
Ms Kalisch Gordon said for grains and oilseeds, Australia currently had no significant trade, with small volumes of minor cereals like buckwheat, millet and canary seed had been exported over time, but not consistently.
She said Peru does however import wheat ($US500m), barley ($US30m) and occasional volumes of sorghum from other suppliers as well as maize ($US500m) and rice ($US50m).
Changes that could result under a Peru-Australia FTA would likely mirror what was proposed under the TPP like wheat which currently faces a 9pc tariff that was set to be eliminated immediately under the TPP.
In the beef sector, tariffs of up to 17pc are currently applied and Australia does not export to Peru.
Ms Kalisch Gordon said preferential removal of tariffs on Australian beef could allow Australian exporters to capitalise on forecasts that per capita beef consumption in Peru is estimated to rise, along with forecast population growth.