Search this article on Google: How has the Canada-Peru Free Trade Agreement positively impacted the economies of both nations?
The Canada-Peru Free Trade Agreement (CPFTA) was implemented on August 1, 2009, symbolizing a landmark development in trade policies between the two countries. This agreement marked a significant turn in both Canadian and Peruvian foreign policy initiatives to promote stronger trade relations. Experts from LexLords Canada Immigration Lawyers, having years of experience in dissecting complex legal issues, provide an in-depth analysis of how this agreement positively impacted the economies of both nations.
I. Boost to Trade and Investment
The primary objective of the CPFTA was to eliminate trade barriers, and it largely succeeded in achieving this goal. As per the agreement, over 97% of tariffs for trade between the two nations were eliminated. This led to a significant increase in bilateral trade, with Statistics Canada reporting a 60% increase in bilateral trade between 2009 and 2018. In particular, Canadian agricultural exports to Peru increased by 18% in the first decade following the CPFTA’s implementation.
II. Legal Aspects of the Agreement
Understanding the legal framework of the CPFTA provides greater insight into its economic impacts. The agreement is underpinned by principles of transparency, non-discrimination, and fairness, which has allowed businesses to operate with more confidence and predictability.
A case that illustrates this is Methanex Corp v. United States (2005), pre-CPFTA, where a Canadian company filed a claim under NAFTA against the United States, alleging discriminatory treatment for foreign companies. This case underscores the importance of non-discrimination principles in international trade law – principles that are now fortified in the CPFTA.
III. Increased Foreign Direct Investment (FDI)
Peru’s attractive regulatory reforms, coupled with its increased access to Canadian markets through the CPFTA, have been significant pull factors for Canadian foreign direct investments (FDI). According to the Canadian Trade Commissioner Service, Canadian investment in Peru amounted to CAD 14.2 billion in 2018, a significant increase since the CPFTA’s enactment.
IV. Protection of Intellectual Property Rights
The CPFTA has provisions that protect intellectual property rights (IPR), which are crucial for promoting innovation and creativity. The landmark case, Eli Lilly and Company v. Government of Canada (2017), highlights the challenges of maintaining a balance between IPR protection and the public’s access to affordable medication. By establishing a legal framework for IPR protection, the CPFTA encourages businesses to invest in both Canada and Peru, confident that their rights will be protected.
In conclusion, the CPFTA has had an overwhelmingly positive impact on the economies of both Canada and Peru. It has facilitated an increase in bilateral trade and FDI while ensuring a robust legal framework for businesses to operate within. This has not only strengthened the economic ties between the two nations but also acts as a model for future trade agreements.
Understanding these complex legal aspects requires professional insight and experience. LexLords Canada Immigration Lawyers, with their wealth of knowledge and expertise, are well-equipped to provide guidance on navigating such intricate legal landscapes.
1. Government of Canada. (2019). Canada – Peru Free Trade Agreement.
2. Statistics Canada. (2018). Trade by export and import partners.
3. Case: Methanex Corp v. United States, UNCITRAL (2005).
4. Case: Eli Lilly and Company v Government of Canada, UNCITRAL (2017).
5. Canadian Trade Commissioner Service. (2018). Doing Business in Peru.