Thai Exporters Target Latin America as Peru FTA Upgrade Clears Final Hurdle
Thailand and Peru have finally broken the deadlock on a decade-old trade pact, clearing the runway for a modernised free-trade agreement that could reshape how Thai firms reach South America. Months of quiet shuttle diplomacy have delivered an accord that promises wider market access, slimmer red tape and fresh supply-chain options—just as many Thai exporters are hunting for growth beyond Asia.
Snapshot for busy readers
• Talks revived mid-2024 after stalling for 10 years
• Core chapters settled; only legal polishing remains
• Agreement widens duty-free lines and opens new service sectors
• Thai winners likely: processed food, auto parts, machinery, creative goods
• Peru eyes bigger sales of copper, blueberries, squid and avocados to Thailand
Why Thailand should care
Peru may sit 19,000 km from Bangkok, but it offers Thai companies a gateway to 430 M consumers across Latin America’s Pacific seaboard. With China’s growth slowing and freight costs easing, Thai CEOs have begun asking where the next untapped middle class lives. Lima’s strategic ports and the new Chancay hub—set to be South America’s answer to Singapore—could soon funnel Andean raw materials into Thai factories while ferrying Thai brands the other way.
From stalemate to sprint
The original Thailand–Peru FTA dates back to 2011, yet talks to deepen it froze in 2014. Momentum returned only after Commerce Minister Suphajee Suthumpun met Peru’s ambassador in Bangkok last October, followed by a quick hallway huddle with Peru’s trade chief during the APEC summit in Gyeongju. Those encounters gave negotiators cover to trade concessions behind closed doors and set a political deadline: wrap the upgrade by end-2025 or risk another lost decade.
What the upgrade actually delivers
According to negotiators at กรมเจรจาการค้าระหว่างประเทศ and Peru’s MINCETUR, the text now includes:
Zero-tariff treatment on an additional 1,200 tariff lines, notably canned seafood, air-conditioner parts and eco-friendly packaging.
A services chapter that lets Thai investors hold up to 100 % equity in Peruvian logistics, spa and digital-content firms, mirroring benefits Chile already grants Thailand.
Streamlined rules-of-origin paperwork—exporters can self-certify instead of queuing for consular stamps.
New disciplines on e-commerce, competition policy and SME cooperation, areas missing from the 2011 version.
A review clause requiring both sides to revisit labour and environment provisions every 3 years.
Industry reaction on the Thai side
Thai shippers group (TNSC) predicts an immediate 10 % cost edge over Chinese rivals once extra duties vanish. The Federation of Thai Industries expects Peru to climb from the kingdom’s 5th-largest to 3rd-largest Latin market within 2 years, boosted by demand for pickup trucks and halal-certified chicken. Analysts at Kasikorn Research add that the stronger rules of origin could also shield Thai exporters from anti-dumping probes in the US, because inputs can be diversified through Peruvian ports.
What’s in it for Peru
Peru’s trade minister Teresa Mera calls Thailand a beachhead into ASEAN’s $3 T economy. Her office notes that Peruvian shipments to Thailand jumped 120 % for octopus and 61 % for blueberries between January–October 2025, even before the new deal. The ministry expects copper-cathode exports to Bangkok to top $150 M by 2027, while niche items such as quinoa and natural dyes gain supermarket shelf space in Thailand.
Comparison with other Latin pacts
• Thailand–Chile: already grants 0 % tariffs on 7,100+ items; the Peru upgrade mirrors Chile’s openness on services but is stricter on environmental checks.• MERCOSUR talks (Argentina, Brazil): still in feasibility stage; Bangkok’s negotiators say Peru serves as a template for larger South American deals.
The last mile: legal scrubbing
Only “comma politics” remains. Lawyers on both sides are translating the deal into Thai, Spanish and English, checking that each tariff schedule matches HS 2022 codes. Bangkok insiders say Cabinet endorsement could come as early as Q2 2026, followed by parliamentary debate. If timelines hold, Thai SMEs could be printing new certificates of origin before 2027’s Songkran.
How Thai businesses can get ready now
1. Map the duty cuts: Identify SKUs gaining new zero-tariff access.2. Explore Peruvian partners: especially firms near the new Chancay megaport.3. Hedge currency risk: the sol can swing; forward contracts matter.4. Brush up on SPS rules: Peru’s standards on food safety differ from ASEAN norms.
Bottom line
An upgraded Thailand–Peru FTA may sound remote, yet it plugs Thai entrepreneurs into a continent where Asia still feels exotic. Diversifying export destinations, lowering input costs and testing new supply routes all flow from this single deal. For a trade-dependent economy navigating geopolitical uncertainty, that combination is hard to ignore.
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