Chile, Peru near-FTA likely to be reached in new round
Dow Jones Newswires
Chile, Peru Near-FTA Likely To Be Reached In New Round
1 December 2005
SANTIAGO -(Dow Jones)- Chile and Peru will likely reach a deal for a free trade agreement in everything but name at an upcoming round of negotiations, Peru’s ambassador to Chile said Thursday.
"Hopefully, (following ratification) in 2006 we will have de-facto free trade between both countries," said ambassador Jose Antonio Meier in a meeting with foreign correspondents.
The final round will be held this month, he added.
Chile’s trade office confirmed that the next round will be held Dec. 6 and Dec. 7 in Lima.
Bilateral relations between the two sides tensed noticeably only a month ago when Peru passed a law redefining its maritime border to claim waters Chile considers its own.
The ensuing diplomatic crisis derailed ongoing negotiations both regarding bilateral trade and a multilateral framework deal for linking natural gas producers and consumers in southern South America.
However, the subsequent arrival of former Peruvian President Alberto Fujimori forced another turn of events. Chile arrested Fujimori at Peru’s request, and the ice between the two has largely thawed, the ambassador said.
The issue of the maritime border "has been accorded by both Presidents to be handled at a strictly judicial level," said Meier. "Things are back in place."
The border issue "is an internal law of Peru that has no international judicial effect," he added.
However, Meier declined to specify when and how Peru would return to the negotiating table regarding the issue of natural gas.
Chile has pushed the idea as an option to help the consumers - Argentina, Brazil, Chile, Paraguay, and Uruguay - solve their chronic energy woes while helping gas-rich Peru and Bolivia develop their resources.
While initially participating, Peru has shown mixed support for the deal and said it doesn’t have enough proven gas reserves to supply the whole list of possible customers, which also includes Mexico and, above all, its domestic market.
Meanwhile, the Fujimori case will likely drag on another six months, said Alfredo Etcheberry, the local lawyer representing the Peruvian government in its efforts to have the country’s former leader handed over.
Peru will likely submit its case to the Chilean Supreme Court judge handling the Fujimori extradition before Christmas, he added.
Bilateral trade between the two countries has skyrocketed over the past few years. It will likely reach $2 billion this year, up from $600 million in 2002.
Some 80% of goods traded by both countries currently enter free of tariffs, and the expanded deal will include services and conflict resolution mechanisms, Meier said.
— By Stephan Kueffner, Dow Jones Newswires
