Peru to Pursue Alternative Trade Agreements if TPP Fails in U.S. Congress, Reports Reuters

LIMA (Reuters) – Peru plans to pursue free trade agreements with Australia and other countries in the Pacific Rim if the Trans-Pacific Partnership (TPP) it joined fails to pass in the U.S. Congress, announced the incoming president on Tuesday.

Pedro Pablo Kuczynski, a centrist and former investment banker elected at the age of 77, noted that politicians from both major U.S. parties have criticized the TPP to garner support for the upcoming election on November 8. He expressed hope that the 12-member trade pact could still be ratified by Congress afterward.

“When the electoral cycle concludes, we’ll see what unfolds,” Kuczynski stated at a press conference with international media just two days before his inauguration. “If the TPP is not approved, we will look for agreements with the countries we currently lack partnerships with.”

Kuczynski pointed to Australia, Malaysia, and New Zealand as potential candidates for new trade agreements that would complement the existing over a dozen pacts Peru has established with countries including the United States, China, Canada, and Japan.

The TPP, led by the U.S. and Japan, aims to reduce tariffs on goods that account for 40 percent of the global economy. However, U.S. Republican presidential candidate Donald Trump has pledged to withdraw from the TPP if elected, while his Democratic opponent, Hillary Clinton, has expressed opposition to it, claiming it does not adequately address issues like currency manipulation.

While Kuczynski did not specify any aspects of the TPP he would like to see changed should it be renegotiated, he emphasized that China, Peru’s largest trading partner, should be included in such agreements.

President Barack Obama has advocated for the TPP as a strategy to counter China’s growing economic and political influence in the region.

“The goal of the TPP is to exclude China, which I believe is not the right approach,” Kuczynski stated. “We need treaties that are much more inclusive.”

Kuczynski intends to visit China for his first trip as president to seek investments in metal refineries and smelters, aiming to enhance Peru’s capacity to capitalize on its exports of zinc, gold, and silver.

He mentioned that Peru has the potential to easily double the capacity of its only operational copper smelter and suggested that constructing a new plant along the southern coast would be beneficial.

“We have the gas, we have the port, we have everything, except the organization to promote it,” Kuczynski added.

Peru, a global minerals exporter with a population of around 30 million, currently lacks trade agreements with TPP signatories Brunei and Vietnam.