Minister of Foreign Trade of Peru: “The market cannot be superior to society, rights and the State”

RIO DE JANEIRO, BRAZIL – “There are new trade parameters in the midst of this international crisis, there we could rethink an approach.” With these words, the Minister of Foreign Trade of Peru, Roberto Sánchez, explained the advantages that his country and Chile have in international markets today. Mining and agribusiness are two sources of commercial growth, and between the two, said the authority, greater profit could be made.

Visiting Santiago last week, Sánchez explained that his visit had to do with accompanying   a commercial mission that lasted three days. In 2021, the products of this industry exported to Chile reached US$418 million, 46% more than in 2020.

Read also: Check out our coverage on Chile

But on his way through Chile, Sánchez also met with the undersecretary of International Economic Relations, José Miguel Ahumada, to coordinate the realization of the Peru-Chile binational cabinet on May 24, and also see the administrative commission of the free trade agreement between both nations.

The objective of this next meeting, said the Peruvian Secretary of State, is to put an emphasis “on the issues of microentrepreneurs, get our regions through this framework of integration, identify a trade from the approach of social inclusion of small farmers, as well as putting on the agenda a closer link for the promotion of tourism”.

The Minister of Foreign Trade pointed out that the trade balance between Peru and Chile was US$3.1 billion in 2021. “This amount exceeds almost US$600 million the pre-pandemic year. This indicator means that the export offer between both countries is improving”, Sánchez emphasized.

Along these lines, he pointed out that in addition to exports, “in terms of financing, Chile has a solid presence in Peru. There are trade and macroeconomic indicators that, in the midst of what reactivation means, are a reason for consolidation and hope, not everything is gray. It seems to us that we are complementary destinations, and we even talked with Mr. Ahumada about venturing, in some complementary products, to identify certain common markets for joint actions, for example in the Asian market, in China. That is breaking a bit the protocol of unilateral actions, but it would be very important.”

In general, Chile’s business and that of your country are closely linked to mining. Are you looking to expand it to other sectors?

-We can look at different aspects. For example, in metalworking, non-metallic mining, and exports and growth in other sectors such as agro-exports, which is very important. So is the chemical industry, not only because of the presence of sulfuric acid; we can diversify to have an important presence. Now we want to focus on MSMEs and on areas such as agriculture.

Is the conflict between Ukraine and Russia an opportunity for that industry?

-In both countries food production is having an important performance. We thought that 2021 had been our record year, but between January, February and March we have exceeded US$56 billion in exports, 20% more than the same quarter of the previous year.

There are new trade parameters in the midst of this international crisis, there we could rethink an approach. In Chile they are highly recognized because they have managed to understand digital commerce and have been able to penetrate markets. That is something we could learn from. In our case, Prom Peru has been recognized as the most important entity of all the promotion agencies in the world. That means that there is a very important know-how, and that at the regional level we do not have to play a secondary role, but to integrate our economies.

Where could they diversify further?

-In the Peruvian case, in mining we have almost the same destinations, but we also have challenges around seafood. There is a good demand from the Asian market, where I also think that, on the Peruvian side, we could emphasize our entire organic culture. Our challenge in Peru is focused on how we generate a technological revolution to provide added value. We just create the Ministry of Science, Technology and Innovation, but it is far from having technological innovation in agriculture, in fishing, and even in mining, where we have the largest open pit mine in the world and we are not capable of making threads of copper.

Does Chile face the same challenge?

-In copper one day Chile is the number one producer, we are number two, or vice versa, but if we joined forces, who knows what we could achieve?

But we must face other challenges. In Peru there is a conflict with the Las Bambas mine, one of the largest in the country.

-Yes, it is the only mine currently in conflict. It is quite large, with Chinese capital, we have a social problem. We have established a dialogue table, there is a negotiation. We believe that in the imminent term it will return to formal activity.

How do you deal with social conflict, considering that you have this problem of Las Bambas and Chile has theirs?

-The high price of raw materials also challenges communities to say: “Well, benefits also have to be rethought.” I’m not saying it’s legitimate, but the reasons are understandable, the rethinking of agreements and benefits. I believe that there is significant room to think about a fairer redistribution, adjusted to the law and negotiations, because in any case the high price is managing to increase surplus profits, and I do not believe that a democratic approach to improve the redistribution of taxes is insane.

A new social pact?

-Peru has US$60 billion in its investment portfolio in mining projects, but there are only ideas, since action is not taken. On that side, the social contract is very important for Peru, so as not to stay in this inertia.

President Castillo presented a proposal for constitutional reform, but Congress rejected it. How do you assess that situation?

-We still have a stretch to go to in politics to understand citizen education, didactic pedagogy. As a citizen, I am convinced of a new social pact among all Peruvians, as a political solution to the very harsh crisis of these 10 years, which has been accentuated by this health emergency and the war, but there are sectors that do not believe that.

In that sense, how do you see the process of writing a new Constitution that is being developed in Chile?

I see it with great hope. We know that nothing is easy, that victory cannot be claimed until the last second. The entire region is watching the very original process that the political and social class and the new representation of modern Chile are carrying out. I think that from the supposed neoliberal stars of the south that we were, we have become the most unequal countries in the region. In the Peruvian case there are monopolies, oligopolies, mercantilism. The market cannot be superior to society, rights and the State. We believe that the ground has to become more even.

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