On June 28, Chinas Ministry of Commerce Minister Wang Ventao and Perus Ministry of Foreign Trade and Tourism Minister Gardo jointly signed the Memorandum of Understanding between the Ministry of Commerce of the Peoples Republic of China and the Ministry of Foreign Trade and Tourism of the Republic of Peru on the substantial completion of the China- Peru Free Trade Agreement upgrading negotiations.

The Importance of Escalating the Free Trade Agreement

The substantial achievement of the upgrading negotiations of the CPC Free Trade Agreement is aimed at further exploiting the trade investment potential of the two countries and raising the level of bilateral economic and trade cooperation. Since the signing of the CPC Free Trade Agreement in April 2009 and its entry into force in March 2010, the volume of trade and investment of the two countries has steadily increased. However, as the global trade situation continues to change, the original Free Trade Agreement has been difficult to meet the new economic development needs. Therefore, since the end of 2018, the two sides have started upgrading negotiations on the CPC Free Trade Agreement, covering the rules of origin, customs procedures and trade facilitation, health and plant health measures, service trade, temporary entry of business personnel, investment, e-commerce, competition policy, intelle

Main elements of upgrading negotiations

1. Rules of OriginThe upgrading of the new Free Trade Agreement will optimize the rules of origin, simplify the application and audit process for certificates of origin, reduce the operating costs of enterprises and increase the level of trade facilitation.
2. Customs Procedures and Trade FacilitationThe two sides will strengthen customs cooperation, improve customs efficiency, reduce customs time, and further promote trade exchanges between the two countries.
3. Sanitary and plant hygiene measuresThe upgraded free trade agreement will strengthen cooperation in sanitary and phytosanitary measures, ensure the safety of agricultural products and foodstuffs, and promote the healthy development of agricultural trade between the two countries.
4. Trade in ServicesThe new agreement will expand the scope of the opening up of trade in services and increase the opportunities for cooperation between the two sides in the fields of finance, education, healthcare, tourism and more.
5. Temporary entry of commercial personnelThe two sides will simplify the procedures for temporary entry of business personnel and promote business exchanges and cooperation between the two countries.
6. Protection of InvestmentThe upgraded Free Trade Agreement will further strengthen the protection of investors, ensure the security of investments of companies in each others countries, and create a more transparent and fair business environment.
7. Electronic CommerceThe two sides will strengthen cooperation in the field of e-commerce, promote the development of cross-border e-commerce and enhance the competitiveness of the two countries in the digital economy.
8. Protection of intellectual propertyThe new agreement will further improve the mechanism for the protection of intellectual property rights, combat the violation of intellectual property rights, and promote the innovative development of the two countries.

Joint support for multilateralism and regionalism

In the Memorandum of Understanding, the two sides emphasized that China will continue to jointly support multilateralism and open regionalism and oppose trade protectionism and unilateralism.China recognizes the positive significance of the priority areas of cooperation defined by the APEC in 2024 in Peru, while the South China welcomes Chinas willingness to join the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) and reiterates that the CPTPP remains open to economies that can meet the Three Principles of Auckland.

Impact on the economies of both countries

The upgraded free trade agreement will have a lot of positive effects on the two-country economies. First, an optimized trade and investment environment will promote bilateral investment and increase the level of economic cooperation between the two countries. Second, trade facilitation measures will reduce trade costs, improve trade efficiency and increase trade volume between the two countries. In addition, enhancing cooperation in the fields of service trade, e-commerce and intellectual property protection will promote the development of the two countries in the emerging industries and digital economies, and enhance the competitiveness of the two economies.

The future prospect

With the substantive completion of the upgrading negotiations, the two sides will accelerate the legal review and domestic procedures and strive to sign upgrading protocols as soon as possible. This will not only further deepen economic and trade cooperation between the two countries, but will also provide useful leads for other countries and regions to negotiate free trade agreements. The upgrading of the free trade agreement marks a solid step in promoting free trade and opposing protectionism, but also injects new momentum to the healthy development of global trade.

Through this upgrade, the two countries will not only a higher level of trade liberalization and facilitation, but will also contribute to the stability and prosperity of the global trade system.In the current complex and changing international economic environment, the upgrade of the Secret Free Trade Agreement is undoubtedly an important milestone in international economic and trade cooperation.