CANBERRA – Australia plans to begin free trade talks on Wednesday with Peru, hoping to use a resulting pact to broaden commerce with three more Latin American countries and help counter a U.S. tide of protectionism.
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The talks come days after trade ministers from Australia and the 10 other countries remaining in the Trans-Pacific Partnership met in a push to revise the pact without Washington. President Donald Trump withdrew the U.S. in January.
Australian Trade Minister Steve Ciobo on Tuesday said that Peru's membership in the Pacific Alliance bloc alongside Chile, Colombia and Mexico makes it a convenient steppingstone to a free-trade pact with the whole group.
With a relatively small population reliant on trade, Australia has been one of the leading torchbearers for multination trade deals, warning that a protectionist shift embodied in Mr. Trump's "America First" policies risks harming global growth and won't bring back jobs lost to globalization.
Some Australian populist lawmakers warn that the country's embrace of trade liberalization holds risks for employment and export competitiveness.
Still, Prime Minister Malcolm Turnbull's conservative government has intensified trade talks not only with Trans-Pacific Partnership nations, but also with Europe, Hong Kong and Indonesia. Canberra has also offered to help conservative counterparts in the U.K. government grapple with thorny trade negotiations post Brexit separation from the European Union.
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Mr. Ciobo said some of the best prospects to counter momentum against free trade are in Latin America's Pacific-facing nations, which have largely bucked a prolonged trend of slower global growth.
The six-year-old Pacific Alliance's members have some of Latin America's most open economies. They also represent more than a third or the region's population and gross domestic product and nearly half of all foreign direct investment, particularly Mexico. Its member nations agreed in March to broaden their integration in the face of trade threats aimed at Mexico from the Trump administration.
For its part, Peru over the last decade has been one of Latin America's fastest-growing economies with annual GDP expansion averaging 5.9%. The Peruvian government was also instrumental in forming the alliance, targeting improved markets access with Asia to counter anti-globalization shifts in other regional nations like Brazil and Venezuela.
"Australians traditionally look north to Asia when expanding offshore, but there are also massive opportunities to our east in Latin America," Mr. Ciobo said.
Mr. Ciobo said a deal with Peru could likely be negotiated quickly, with talks in Canberra on Wednesday with Peru's Minister for Foreign Trade Eduardo Ferreyros.
However, Australia's agricultural exporters faced stiff competition to break into the market, he said, with exports from the U.S., EU and Canada already having duty free through existing trade deals. Australian beef exports currently face tariffs of up to 17%, while dairy and sugar exports attract 29% tariffs.
Australia would pursue a deal to include export of services in key sectors like mining, finance, education, health and tourism, Mr. Ciobo said, building on two-way trade worth $377.8 million last year.
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(END) Dow Jones Newswires
May 23, 2017 06:16 ET (10:16 GMT)