MINING FINANCE AND INVESTMENT

MAC touts Canada-Peru FTA benefits for mining investment

If recently completed free trade agreement is ratified, the Canadian government forecasts greater stability, transparency and protection for Canadian mining investments in Peru.

RENO, NV -

The President and CEO of Mining Association of Canada (MAC), Gordon Peeling, Saturday said a new Canada-Peru free trade agreement will "further position Peru as a positive destination for investment by Canadian mining companies in resource development."

Canada is one of Peru's most important sources of foreign direct investment in the mining sector and among the South American country's largest foreign investors overall with Cdn$2.9 billion of investment as of 2006.

In a news release, the mining association said that Peru "is a very attractive destination for Canadian mining investment. MAC strong strongly supported the commencement of these negotiations and is very pleased to see them concluded in such a timely manner."

Canada's Minister of International Trade David Emerson and Mercedes Aráoz Fernández, Peruvian Minister of International Trade and Tourism, concluded the negotiations Saturday on the free-trade agreement while at the World Economic Forum in Davos, Switzerland.

Among the benefits of a Canada-Peru FTA are:

• Removal of barriers that limit Canadian participation in growing markets

• Elimination of tariffs on Canadian exports to help make Canadian goods more competitive in a range of sectors including: mining, agriculture and agri-food products.

• A level playing field for Canadian business vis-à-vis their competitors who are benefiting from preferential market access terms

• Enhanced market access for Canadian service providers in areas such as financial, professional (engineering), environmental, mining, oil and gas, and construction services.

• Secure and predictable environment for investors

• Lower prices and improved choice for consumers

Agreement has been reached with regard to cross-border trade in services of interest to Canada in sectors including mining and energy. "Through this FTA, greater stability, transparency and protection for Canadian investments in Peru have been achieved, creating a more receptive environment for the rapidly growing stock of Canadian investment in Peru," said a Government of Canada news release.

Under the agreement, Peru will immediately eliminate tariffs on 94% of current Canadian exports with the remaining tariffs to be eliminated during a five to 10-year period. Among the products that will enjoy immediate duty-free access to Peru are machinery and equipment. Canada will also immediately eliminate 97% of its tariffs on Peruvian exports, with the remaining Canadian tariffs to be eliminated over a three to seven-year period.

The FTA will also provide enhanced market for service sectors of interest to Canada, including mining, energy and professional services.

The agreement also will lock in market access for Canadian investors and provide them greater stability, transparency and protection for their investments, according to the Canadian government. Obligations will be included to ensure the free transfer of capital related to investment, protect against unlawful expropriation, and provide for non-discriminatory treatment of Canadian investment. Canadians will also be entitled to access international arbitration to resolve disputes.

The two nations have also committed to providing protection for occupational safety and health, as will as respecting the International Labor Organization's Declaration on Fundamental Principles and Rights at Work at 1998.

Canadian and Peru have also negotiated an agreement on the environment that promotes corporate social responsibilities, maintaining high levels of environmental protection, and adhering to the Convention on Biological Diversity and respecting, preserving and maintaining the traditional knowledge of indigenous communities.

The FTA is awaiting ratification by Canada's Parliament and Peru's Congress.