Remarks to the Peruvian Congress: Expanding Trade, Promoting Development, Growing Together

To take the case I know best, that is, the bilateral trade relationship with the United States. Peru shows the potential for what openness to the world can truly do.

The U.S.-Peru trade promotion agreement has been in effect for some 15 years. I was pleased and proud to play an important role in advancing the negotiations and also the ratification of the agreement in Washington, and I know that my friend Ambassador Alfredo Ferrero played a leading role from the Peruvian side, as indeed did many others both here in Peru and in Washington.

Since the agreement went into force in 2009, Peruvian exports to the United States have grown by almost 100 percent, rising from $4.7 billion to over $9.1 billion in 2023. Total exports over 15 years reached over $100 billion, with 51 percent being non-traditional products. That diversifies trade relations and directly strengthens underdeveloped sectors.

The United States is Peru’s second largest trade partner, representing approximately 17 percent of total trade. And trade brings good jobs in the formal economy. According to U.S. figures, trade with the United States has generated over one million jobs right here in Peru, including a notable increase in jobs in the agriculture sector.

All jobs matter, but jobs in the agriculture sector allow the fruits of trade to reach areas of the country that have not traditionally had access to global markets. And now they have. In fact, in over 15 years of free trade with the United States some 9,254 Peruvian companies have accessed the U.S. market for the first time. In 2023 alone, nearly 3,000 companies exported to the United States, with two-thirds (63 percent) being small and medium sized enterprises.

And this is perhaps the key point. Because SME’s bring new workers into the formal economy including women and under-represented communities, which Peru has made a priority topic for APEC this year.  

Workers in the informal economy may lack the protections of the state such as social security. They may also lack access to adequate healthcare and education, which are both vital for development, as we all saw during the recent global pandemic. And they have little chance of advancing up the economic ladder, which has significant generational implications.

Together, we must do better.

Peru shows the undeniable power of trade agreements to drive growth, and abundant opportunities exist to expand relations further still. By pursuing new trade agreements and strengthening existing ones, Peru can diversify export markets and improve resiliency when difficulties arise. A steadfast commitment to trade liberalization will position Peru perfectly for a future defined by shared prosperity.

Ladies and gentlemen, trade is worth fighting for. For Peru, for the United States, and for the Asia-Pacific region where Peru is such a vital contributor. And that’s why we need to redouble our efforts to keep markets open and not give in to protectionist impulses.

The truth is that trade, despite its obvious benefits, has become even more complicated politically around the world, including in my own country. The recent U.S. election results may have solidified a political consensus but it was already a growing consensus.

Higher tariffs, should they indeed be forthcoming, could create headwinds for emerging markets that may not in fact actually be the target of such actions. But the impact will be felt nonetheless.

The key, I would submit for your consideration, will be to understand the impetus behind these actions, and to work with partners to promote Peru and other APEC nations, as appropriate, as like-minded, democratic, free trade partners with complementary economies.

Because trade works. Democracy is just. And together, they offer the best hope for improving people’s lives. And we should not be afraid to say so.

As supply chains across our shared region and the world continue to evolve, Peru is well positioned to become a central player in global production networks. The nation has the potential to expand its position as a trusted partner in key sectors including critical minerals, energy, and food security, provided it stays the course in building formalization efforts and upholding a commitment to predictability and rule of law.

More broadly, it is increasingly important, both domestically and internationally, to stand up for trade liberalization, to support institutions such as APEC and the two, and also trade agreements like CPTPP and bilateral agreements that are built on transparency, openness, and creating conditions that allow the private sector to trade, invest, and flourish.

This is the global infrastructure that supports a healthy environment for broad based economic growth and development, and nations like Peru that are dependent on trade for their own well-being can play a leading role in lighting a path, like Morrissey’s proverbial lighthouse, away from the current protectionist temptation.

Indeed, Peru is already doing so this week here in Lima by hosting, yet again, a successful APEC leaders meeting that will advance these critically important dialogues. It is not a moment that any of us can afford to squander. Our people deserve no less and together, expanding growth through trade, we can build a better world.

Thank you for giving me the distinct honor and privilege to speak with you today from this magnificent legislative forum. It is an opportunity that I shall never forget.