January 28, 2008 / 8:11 PM / 9 years ago

Peru sees agriculture exports to Canada up sharply

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LIMA (Reuters) - Exporters in Peru said on Monday shipments of agricultural goods to Canada will rise sharply and complement traditional exports of minerals as soon as the two countries approve a free-trade deal.

Exports of mandarin oranges, mangoes, avocados, fish, textiles and wood should surge at double-digit paces, Peru's chamber of exporters said on Monday.

"The free-trade deal with Canada will permit us to diversify our exports by having an alliance with one of the world's most important markets," said Jose Luis Silva Martinot, head of Peru's chamber of exporting companies.

Over the weekend, trade ministers from the two countries said they had successfully concluded negotiations for a free-trade deal, which will need to be approved by legislatures in Canada and Peru.

Two-way merchandise trade between Canada and Peru was about $2.4 billion in 2006.

Peruvian exports to Canada totaled about $1.7 billion last year. Shipments of minerals, such as zinc and copper, comprised around $1.5 billion of the total, with much of the rest coming from the agricultural sector.

Canada is one of Peru's most important source of foreign direct investment in the mining sector, and among the largest overall foreign investors with an estimated an estimated $2.9 billion of investment stock as of 2006.

Canadian wheat, the top agricultural export to Peru, will remain duty-free because of the deal, said a marketing manager with the Canadian Wheat Board.

That will keep Canadian wheat competitive with U.S. exports, which have duty-free access because of a recent U.S.-Peru free trade deal, Erik Ordonez said.

Without the agreement, Peru could have applied a 17 percent tariff to Canadian wheat imports, worth about $90 per ton at current prices, he said.

"The Americans would have gained a lot of market access and displaced pretty much all of our sales into the country," Ordonez said.

Peru was Canada's 14th largest wheat market in the 2006/07 marketing year, which ended July 31, Canadian government statistics show.

Canada exported 429,000 tons of wheat, durum and barley to Peru in 2006/07, down from a record of close to 704,000 tons the previous marketing year.

Reporting by Terry Wade in Lima, Roberta Rampton in Winnipeg and Louise Egan in Ottawa; Editing by Christian Wiessner

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