Peru-Australia free-trade deal: Aussie businesses, farmers and families to be 'big winners'

A local farmer sits on his bicycle as he looks at a 40-hectare farm managed by New Zealand dairy export giant Fonterra Co-operative Group in Yutian County, Hebei Province around 150 km (93 miles) southeast of Beijing March 15, 2012. Reuters/David Gray

The Peru-Australia free-trade deal is tipped to create jobs and deliver an extra $13.5 million to sugar cane farmers. Under the deal, Queensland sugar farmers get a premium export access to one of the world’s largest-growing economies.

The Courier Mail reports that 99 percent of tariffs that Aussie exporters face will be eliminated under the Peru-Australia free-trade deal. Lobby group Canegrowers trumpets the news and estimates that phase one of the deal will deliver an extra $13.5 million to cane farmers. The estimate are based on current prices of raw sugar.

Local farmers can export around $30,000 worth of sugar to Peru from the first year of the deal, increasing to 60,000 tonnes in year six and 90,000 tonnes in year 18. Australian Prime Minister Malcolm Turnbull has said the Peru FTA would also open opportunities for dairy, meat and seafood producers, pharmaceutical and medical supplies and services industries.

Turnbull vowed that the export agreement will generate Australian jobs for decades to come. He also believes it will lead to economic growth; Australian farmers, businesses and families are the big winners.

More exports, more jobs

“The equation is simple: more trade means more exports; more exports means more jobs, higher wages and better incomes,” the Australian leader said. The agreement is the first free trade deal negotiated and signed within a year. It was struck by Queensland’s own Trade Minister Steve Ciobo.

In May, the trade minister announced the launch of the Peru-Australia Free Trade Agreement (PAFTA) negotiations with Eduardo Ferreyros, Peru’s minister for foreign trade and tourism. In a media release, he said the Turnbull government is seeking a high quality and comprehensive Free Trade Agreement (FTA) with Peru as such would open new markets for Aussie exporters and create more jobs in Australia.

Ciobo believed Peru presents an increasing opportunity for Australian exporters. He pointed out that Peru has been one of the fastest growing economies in Latin America and in the world over the last decade.

Many of Australia’s exports to Peru are blocked by high tariffs. The deal is expected to eliminate this problem. “Australian dairy and sugar exports currently attract tariffs of up to 29 percent, beef exports face tariffs of up to 17 percent, and sheep meat, wheat, rice and wine also face tariff barriers,” Ciobo notes in the press release, adding that the PAFTA will help Aussie farmers compete and break into this growing market.