On November 15, 2024, Hong Kong and Peru solidified their economic partnership by signing a comprehensive free-trade agreement in Lima, aimed at enhancing local firms' access to Latin America. The agreement, which covers goods, services, and investment, was witnessed by Peruvian President Dina Boluarte and Hong Kong Chief Executive John Lee Ka-chiu. Notably, Peru will eliminate tariffs on 98.3% of its tariff lines for Hong Kong goods, marking a significant step in trade relations. [259f3a6b]
This deal is expected to bolster opportunities for Hong Kong businesses, particularly in sectors such as innovation and technology, finance, transport, and research and development. The bilateral trade between the two regions reached HK$5.2 billion (approximately US$668 million) last year, with Hong Kong importing HK$1.7 billion worth of goods from Peru, primarily fruits and nuts, and re-exporting HK$3.5 billion, mainly in telecommunications equipment. [259f3a6b]
The agreement also includes a dispute resolution mechanism and aims to protect intellectual property rights, which is crucial for fostering a secure business environment. The Hong Kong General Chamber of Commerce has expressed strong support for the deal, emphasizing its potential to expand trade networks and facilitate business operations in Latin America. [259f3a6b]
Peru becomes Hong Kong's second free-trade partner in South America, following Chile. The recent influx of Chinese immigrants in Peru, who have established a vibrant community exceeding 100,000, has further strengthened economic ties, particularly in sectors such as real estate, construction, and hospitality. [b9776128]
However, challenges remain, including Peru's inflation rate, which reached 14.41% in 2023, posing risks to economic stability. Experts like Gary Ng have warned that uncertainties in trade flows could arise from potential global tariff increases, impacting the business environment for newcomers. Nevertheless, the free-trade agreement is viewed as a crucial step in fostering economic resilience and expanding opportunities for Hongkongers in Peru. [904cb12f]
In a broader context, the recent meeting between Chinese Premier Li Qiang and Peruvian President Dina Boluarte in Beijing underscores the importance of strengthening economic ties between China and Peru. This partnership has already led to significant investments in energy and infrastructure, further enhancing the attractiveness of Peru for Hong Kong businesses. [292a808e]
Following the signing of the agreement, Chief Executive John Lee Ka-chiu announced plans to explore additional free-trade agreements with more Latin American countries during his first official visit to South America. He emphasized the potential for growth in trade relations and encouraged the establishment of business chambers in Hong Kong to facilitate communication. The newly signed agreement with Peru is expected to take effect in about six months, benefiting over 150 industries, including professional services and finance. [ae24d218]
As the geopolitical landscape evolves, the US has expressed concerns over China's growing influence in Peru, highlighting the need for deeper collaboration between the US and Peru. This situation presents a unique opportunity for Hongkongers to engage with Peru's burgeoning market while navigating the complexities of international trade dynamics. [a9cbd030]