Peru offers Brazil a 'bridge to Asian markets'

Wednesday, 19 November 2008

Peru is inviting Brazil to go west with moves that could prove beneficial to both South American countries.

In September Peruvian President Alan Garcia led a trip to meet his Brazilian counterpart Lula Da Silva and aside from private investment in mining and energy initiatives in Peru, multi-billion dollar infrastructure investments were also due to be discussed between the two premiers.

Garcia was said to have tabled an idea that would see three roads built across Brazil, thereby giving the leading South American economy a ‘bridge to Asia’ from Peru’s Pacific ports.

The roads would be funded by Brazilian organisations that could benefit from such infrastructure. As well as helping Brazil find a quicker route to Asian markets with timesensitive products such as soya and ethanol, Brazil could also benefit from new trade agreements proposed by Peru.

By January 2009 Peru could have new free trade agreements with the USA, Canada and Singapore with other such accords with China and South Korea also in the pipeline. Taxes and tariffs on Brazilian exports could disappear with their passage through Peru.

The outcome could be positive for both nations according to Paul Murphy, a British businessman working in Peru. ‘Effectively this is a win-win situation. Brazil will benefit from access to both Peru’s ports and its beneficial trade agreements with the US and other markets.

‘Similarly Peru, behind its neighbour Brazil in the global economy, can profit from new trade agreements and benefit from the needs of Brazil by improving its own infrastructure, which can only increase opportunities both on an internal level and also for companies looking at Peru from abroad.’ Meanwhile Peru is cashing in on high oil prices and has awarded 17 new mining and exploration contracts in the Amazon Basin which the government hopes will lead to $800m investment.