South Korea–Peru Free Trade Agreement
The South Korea-Peru Free Trade Agreement is an FTA signed between the governments of Korea and Peru on March 21, 2011 in Seoul, Korea. On July 6, 2011, the Korean Parliament passed a bill ratifying the agreement concluding the process of establishing the second FTA between Korea and a South American country. The FTA did not need to be ratified by the Peruvian parliament.
In the 2005 APEC meeting held in Busan, Peru proposed Korea the establishment of an FTA between the two nations. On November 2006, the two countries agreed on forming a study group to develop the potential FTA. The study started in October 2007 in Lima and concluded spring 2008 in Seoul. Throughout 2009, four negotiation meetings were held in both Lima and Seoul and the announcement on the conclusion of the negotiations was on August 30, 2010. The FTA would eventually be signed in 2011.
The goal of the FTA is to eliminate most tariffs over ten years with the exception of 107 agricultural and marine products such as rice, beef, onion and garlic. For Korea, the automotive, electronic and appliances industries will enjoy most of the benefits. For the Peruvian side, the main exports are copper, zinc, lead, iron and concentrates besides molluscs, frozen squid, fish meal, coffee and textiles. According to the Peruvian ministry of commerce, the FTA is formed by the next aspects:
- National treatment and access to markets
- Origin rules and procedures
- Trade Defense
- Technical obstacles for trade
- Hygiene measures
- Customs and easement of trade
- Trade of services
- Temporary entry for business persons
- Financial services
- Investment Inversión
- Electronic trade
- Intellectual property
- Competition policies
- Public Purchases
- Cooperation and strengthening of trade capacities
- Controversies settlements
- Institutional issues
Double Taxing Agreement
On July 8, 2011 the two countries signed an agreement to avoid double taxing, which also aims to persecute tax evasion. With the agreement, tax deductions will go up to 10 percent over the dividends in the country they were generated and interests go up to 15 percent. The Korean government aims to ease the activities of Korean companies entering the mining sector in the resource rich South American country.