Canada and Peru Trade agreements

This article shows how writing strong laws can create a win win situation for two countries doing trade together.

 Trade Agreement with Peru Opens Doors to Latin America

 

Summary: Canada has signed a trade agreement one of her most important investment partner Peru. The two countries also have two parallel agreements on labor cooperation and the environment. The labour agreement commits Canada and Peru to respecting and enforcing standards such as the elimination of child and forced labour, freedom of association and the right to bargain collectively. The environmental provisions commit both countries to pursuing high levels of environmental protection, enforcing and maintaining their domestic environmental laws, and not relaxing these laws to encourage trade and investment. The Government of Canada is working to implement all three agreements as early as July 1, 2009.

Analysis: Peru is not only an important business partner of Canada but also a strategic destination for Canadian direct investment in financial and mining sectors. The trade agreement will give Canada an advantage over other foreign companies as they need to pay taxes and tariffs on their goods but the Canadian companies does not need to pay these extra costs. So for foreign companies competing in Peru with Canadian companies will be very difficult. Because of FTA the Canadian compaies will also enjoy a more stable and predictable investment environment  in key sectors such as natural resousrces and infrastructure.

The labor laws and the environmental laws will  protect Peru from getting exploited by the Canadian compaines. These two agreements will ensure that Canadian companies will not degrade the environment or exploit the local labor force. Canada also exports basic agricultural products such as wheat, barley, lentils and peas, these commodities will also enjoy immediate duty free access to Peru. As a result the price of these commodities will be lower and the middle class and lower middle class population of Peru will be benifited form it.

However not everything is a good news for these two countries. Infant industries in Peru will be competing directlty with the Canadian companies and the government cannot protect them from this competition as it cannot impose any trade barriers anymore. On the other hand Peru which has exported 2.8 billion dollars worth of goods in Canadian economy will probably now invest even more. As a result local Canadian products will nbe competing with cheaper  products imported from Peru. Which will be a problem since Peru has cheaper labor force than Canada. So some small Canadian firms may go out of business for these reasons.

In conclusion it can be said that ensuring free and open trade is vital to the international effort against the global rescession. This agreement will make Peru more prosperous country since it is a growing economy. It is true this agreement may cause few troubles for both the countries, but it will increase the employment rate in Peru and generate a lot of revenue and open doors for new investments in Canadian economy.. Most importantly from now onwads both of the countries will use their resources very efficiently.

 

Reviews

[wolf]

No this is the first one which I wrote.

[Azwraith]

Well written news article. But isn't it the one that I wrote?