An updated free trade pact between Peru and Mexico, which extends preferences to 12,000 tariff lines, entered into force on February 1, 2012.

The agreement, signed on April 6, 2011, supersedes the existing 8th Economic Complementation Agreement, signed in the 1980s, which provided preferential tariffs on just 700 items.

Bilateral trade has grown four-fold in the last ten years, amounting to USD1.4bn in 2010. However, trade is expected to grow by 40% in the first year following the pact's entry into force.

Following five years of negotiations, it was eventually agreed that some farm product tariffs be altered on a cyclical basis, depending on production levels.

The updated agreement with Peru has been negotiated as part of the two countries' plans to launch four-party negotiations towards a pact to include Chile and Colombia. Another free trade agreement for Mexico with five other Central American nations - Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua - also entered into force on February 1, 2012.

Source: Tax News

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