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Miami-Peru Annual Report: No. 16 trade partner- Tariff exemptions boost trade

July 27th, 2006

Free trade agreement with the United States could give Peruvian economy an even bigger advantage.

Food products and apparel led South Florida imports from Peru while the Miami Customs District exported technology products and machinery to the Andean country during a year that saw double-digit percentage increases on both sides of the exchange.

Although the $1.3 billion in bilateral commerce in 2005 reflected an overall 16.5 percent increase, traders on both sides predicted that would grow even more after implementation of a pending free trade agreement between Peru and the United States. At press time, the U.S. Congress still needed to ratify the accord, which was expected to add as much as 2 percent annual growth to Peru’s GDP.

South Florida’s imports from Peru reached $446.5 million, reflecting a 10 percent gain from 2004 trade results. Exports grew an even more boisterous 20 percent, ending the year at $850.5 million.

Asparagus, one of Peru’s top agricultural products, was the most valuable product imported through the Miami Customs District, which is one of the most important U.S. gateways for perishable goods. South Florida imported more than $96 million-worth of asparagus in 2005, up nearly 7 percent from the year earlier. Asparagus enters the United States duty free and that incentive has turned Peru into the world’s top asparagus producer. South Florida also imported nearly $9 million in peas and beans, up 85 percent from 2004

Apparel products, including men’s shirts, sweaters, pullovers and T-shirts, also figured prominently in the import list. Imports of men’s shirts rose 50 percent to close the year at $55 million. Peruvian textiles also enjoy certain duty-free preferences when it comes to trade with the United States. However, program under which the preferences are extended the Andean Trade Program and Drug Eradication Act (ATPDEA) is set to expire in December 2006.

Polo and Adidas are among the multinational companies that source clothing from Peru.

Sweater imports were also on the rise, jumping 10.5 percent to total nearly $52 million, while T-shirts neared $48 million, a leap of more than 45 percent when compared with 2004.

The Peruvian Trade Center in Doral, a chamber of commerce organization, said the Andean nation’s garment sector has grown about $1.2 billion over the last three years. Despite the expansion, Peru has been watching China carefully to see if the Asian powerhouse’s textile and apparel industry will displace workers in Peru.

The Andean Trade Program also benefited Peru’s jewelry sector, which sent $26 million worth of products to South Florida in 2005. That was a jump from the $23 million in Peruvian jewelry that entered the Miami area a year earlier.

When it came to exports, computers, computer parts and transmission devices for cellular phones led the roster.

In 2005, computer exports worth $96 million were sent to Peru. That’s a gain of nearly 11 percent when compared with 2004 trade data. Computer parts, meanwhile, rose 28 percent to end the year at $81 million. But transmission apparatus for cell phones dropped more than 16 percent to just under $76 million.

South Florida was also a major supplier of machinery and parts for Peru energy and mining industry. Exports of machinery parts were almost $53 million, a nearly 73 percent jump from 2004. That total included nearly $29 million in parts for derricks and $19 million in parts for boring equipment.

In August 2004, Peru inaugurated its massive Camisea natural gas project. According to the U.S. Department of State, Camisea gas is fueling an electricity generator and six industrial plants in Lima but, in the near future, the United States will import liquefied natural gas from the Camisea energy fields.

South Florida also exported mining-related equipment. The South American country is the world’s sixth largest producer of gold, the second producer of silver behind Mexico and the world’s second most important copper producer after neighboring Chile. Strong demand for those commodities has helped Peru’s GDP grow an annual rate of near 7 percent.

Going through a prosperous economic period with an annual Gross Domestic Product of $78.4 billion growing at an annual rate of 6.7 percent.

Jos Delfino, president of the Peruvian Trade Center in Doral, said Peru is welcoming U.S. investors and South Florida businesses should look at opportunities, including in the production of ethanol as a gasoline alternative.