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Labor Cooperation Agreement (LCA) Agreement on tha Environment (EA) Entered into force on August 1, 2009.



Peru is a dynamic emerging market with 28 million people

and an economy with high growth potential. In 2008, twoway merchandise trade between Canada and Peru totalled more than $2.8 billion, with hundreds of Canadian companies doing business with Peru. Peru is also a strategic destination for Canadian direct investment (mining and financial services) Canadian producers will benefit from the elimination of tariffs on exports into Peru. Many agricultural exports such as wheat, barley, lentils and peas will receive immediate duty-free status. The FTA provides enhanced market access in service sectors that are of interest to Canada, including mining, energy and professional services. Canadas banking, insurance and securities sector will also benefit from greater access to the Peruvian marketplace.

Parallel agreements on labour cooperation and on

the environment also came into effect on August 1. The labour agreement commits Canada and Peru to respecting and enforcing international labour standards such as the elimination of child and forced labour, freedom of association and the right to bargain collectively. The environment agreement commits both countries to substantially increase environmental protection, to enforce their respective environmental laws, and to refrain from diminishing these laws or reducing their enforcement to encourage trade and investment.

Canada-Peru Free Trade Agreement The Free Trade Agreement (FTA) provides commercial benefits to

Canadian and Peruvian business. Benefits include: Better market access through elimination of tariffs on goods Peru will immediately eliminate tariffs on 94 percent of current Canadian exports, with most remaining tariffs to be eliminated over a five- to ten-year period. Products that will receive immediate duty-free access to Peru include wheat, barley, lentils, peas and selected boneless beef cuts, a variety of paper products, and machinery and equipment. Canada will immediately eliminate 100 percent of its tariffs on Peruvian imports. The remainder will be eliminated over a threeor seven-year period, with the exception of over-quota tariffs on dairy, poultry, eggs and refined sugar, which are excluded from tariff reductions. A tariff-rate quota will be applied to refined sugar.

Better market access for service providers The FTA provides enhanced market access in

service sectors that are of interest to Canada, including mining, energy and professional services. Canada and Peru have also signed an agreement on comprehensive disciplines within the financial services sector, including banking, insurance and securities. Professional associations in each country will work toward the negotiation of mutual recognition agreements, with priority granted to the engineering profession.

Promotion of two-way investment between Canada and

Peru The agreement incorporates existing provisions from the Canada-Peru Foreign Investment Promotion and Protection Agreement, and locks in market access for Canadian investors to provide them with greater stability, transparency and protection for their investments. Strong obligations are included to ensure the free transfer of capital related to investment, to protect against unlawful expropriation and to provide for non-discriminatory treatment of Canadian investments. In addition, investors now have access to binding international arbitration to resolve disputes.

Better access to government procurement contracts The FTA gives Canadian and Peruvian suppliers improved market access in the area of government procurement. It guarantees Canadian suppliers the right to bid on a broad range of goods, services and construction contracts carried out by Perus central government entities. It also ensures that practices remain transparent and fair for suppliers.


The Canada-Peru FTA will contribute to Perus economic development by creating new market opportunities for exports of Peruvian goods and services, and by providing a positive environment for Canadian direct investment. Since Peru is a developing country, many of its products already enter Canada duty-free. The FTA acknowledges Perus status as a developing country in several ways, for example, by allowing Peru more time than Canada to phase out tariffs on products. To complement Canadas development cooperation objectives with Peru, and to help maximize the benefits of the agreement, the FTA includes a chapter on trade-related cooperation to facilitate traderelated capacity initiatives. These efforts aim to strengthen Perus ability to maximize the agreements benefits. Furthermore, Peru has been identified as a country of focus for the Canadian International Development Agencys development assistance program. The goal of this program is to help trade partners and potential trade partners in the Americas maximize the opportunities and benefits of increased trade and investment.

Promotion of corporate social responsibility and

anti-corruption measures The agreement encourages Canadian and Peruvian businesses operating within either countrys borders to respect and follow internationally recognized standards, practices and principles related to corporate social responsibility. On March 26, 2009, the Government of Canada introduced Building the Canadian Advantage, a new corporate social responsibility strategy to help Canadian companies implement these standards, practices and principles. The FTA also includes measures designed to combat bribery and corruption.


Canada-Peru Agreement on Labour Cooperation Through the labour cooperation agreement (LCA), Canada and Peru commit to ensuring that their laws respect the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work, adopted in 1998. To further protect workers, Canada and Peru have also committed to improving occupational health and safety standards and to reviewing minimum employment standards such as minimum wages and hours of work. Migrant workers will now receive the same legal protection as domestic workers. The agreement also includes a clause to prevent either country from encouraging trade or investment at the expense of worker protection. Canada and Peru are obligated to respect the LCA, which includes an open and robust process to resolve complaints and disputes. Failure to respect ILO principles and to enforce domestic laws is subject to penalties, which could include payment of up to $15 million in any twelve-month period into a cooperation fund. These funds will be applied to the dispute resolution process.


Canada-Peru Agreement on the Environment The Canada-Peru Agreement on the Environment commits both countries to achieving higher levels of environmental protection by developing and improving their respective environmental laws and policies. The agreement also includes key obligations that require the two countries to comply with, and effectively enforce, these laws and to refrain from diminishing them or reducing their enforceability to encourage trade or investment. The agreement reaffirms commitments by both countries under the UN Convention on Biological Diversity to protect biological diversity to a higher degree and to respect, preserve and maintain traditional knowledge, innovations and practices of indigenous and local communities. Canada is committed to working with Peru to protect and conserve the latters biological resources-among the most diverse in the world-in a manner that respects the interests of indigenous peoples and local communities. Both parties have committed to addressing any potential issues arising under the agreement in a cooperative manner, through consultation and the exchange of information. The parties may request consultations at the ministerial level to help resolve outstanding issues.