(Reuters) - Australia and Peru on Friday signed a free trade pact that will eliminate nearly all tariffs Australian exporters face in Peru in a boost for Australia’s sugar industry, farmers and mining services firms, Prime Minister Malcolm Turnbull said.
The deal marks one of the first steps toward reducing trade barriers in the Pacific region after U.S. President Donald Trump withdrew the United States from the 12-nation Trans-Pacific Partnership (TPP) trade agreement, which Australia and Peru had signed onto.
Australian sugar growers are expected to be the big winners, with the deal expected to give them access to about a third of the Peru’s import market.
The free trade agreement, finalised within just five months of launching talks, will also open up trade in beef, rice, dairy, almonds, sheep meat, wine and mining technology and services.
“Australian farmers, effectively shut out of the market until now, will have the opportunity to compete on a level playing field,” Turnbull said in a statement.
Peru last year imported more than $6 billion worth of agricultural products.
The deal will allow 30,000 tonnes of sugar to be exported straight away, then doubling to 60,000 tonnes within five years. Within 18 years, that number is expected to grow to 90,000 tonnes.
Australia’s dairy industry said it would have an export quota of 7,000 tonnes of dairy products, peaking at 10,000 tonnes within 10 years.
“The Peru-Australia FTA will have a head-turning effect on a market that despite being a mystery for many Australian businesses is the fastest growing economy in Latin America,” Australian Industry Group Chief Executive Innes Willox said in a statement.
Reporting by Alana Schetzer; Editing by Sonali Paul and Nick Macfie