Gonzalo Gutiérrez Reinel, Minister of Foreign Affairs: Interview

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Gonzalo Gutiérrez Reinel, Minister of Foreign Affairs

Interview: Gonzalo Gutierrez Rienel

What role can diplomatic missions play in attracting foreign direct investment (FDI)?

GONZALO GUTIÉRREZ REINEL: There has been a deceleration of the Peruvian economy, partly due to the decrease in commodity prices. The Ministry of Foreign Affairs is one of the country’s most important tools for attracting FDI; thus, we have to support and complement the Ministry of Foreign Trade and work closely with its offices abroad.

We recently signed an agreement with Peru’s seven major export associations, which will aim to attract FDI directed at local small and medium-sized enterprises. This presents major potential, not only for the companies to grow, but also as an incentive towards formalisation. Those projects that are considered viable will be presented to the ministry, which, through a network of 129 agencies worldwide, will look for investors. This will complement the National Diversification Plan presented by the Ministry of Production.

What benefits are there to Asia-Pacific Economic Cooperation (APEC) membership?

GUTIÉRREZ: APEC is celebrating its 25th year, with Peru being one of the newest members to have joined, in 1998. It has been a useful tool to deepen relations with Asian countries and was pivotal in negotiating FTAs with China, Korea, Japan, Singapore and Thailand, among others. APEC wants to increase its level of integration, and a possible free trade zone among all 21 states is on the agenda for the medium to long term.

As the host for APEC meetings in 2008 and again in 2016, Peru plays an important role; however, there is always room for growth. Peru’s international influence is growing beyond APEC, as seen in the numerous events it will host in the next few years. The UN Economic Commission for Latin America and the Caribbean; the American Society for Public Administration conference and the UN Framework Convention on Climate Change were hosted in 2014. In 2015 the IMF and the World Bank will hold their annual sessions in South America for the first time since 1977, and they will be held in Peru. All of these events help to improve the country’s image and convey political and economic stability.

Which countries are trying to join the Pacific Alliance, and is convergence with the Southern Common Market (Mercosur) possible?

GUTIÉRREZ: The Pacific Alliance negotiations are in the more advanced stages with Costa Rica and Panama, both of which comply with one of the most important requirements, free trade agreements (FTAs) with all the member states. While there is no predetermined date, these two are the leading candidates, with other Central American states showing interest. The resolution of this process is important for further integration.

Concerning Mercosur, there is already an open dialogue showing some affinities but also important differences. Both blocs are going to identify a series of common issues and start working to bring the two sides closer together. As of today, speaking about a possible convergence is not much of a reality, at least not in the short term. Economic integration is difficult due to policy differences, but we need to work on issues that can be bridged, such as the movement of people, infrastructure integration and international cooperation. It must, however, be a gradual process.

How best can you take advantage of the trading potential offered by the BRICS countries (Brazil, Russia, India, China and South Africa)?

GUTIÉRREZ: From a commercial perspective, we are not convinced that BRICS countries should be targeted as a bloc due to their differences, which are not only geographical but also economic. There is more potential from the political and diplomatic point of view. In fact, apart from the official visits to China and Russia in the past few months, there was also a meeting in Brazil between BRICS and South American countries. This is the first stepping stone towards political integration and working towards a commercial partnership with countries of the magnitude of India and Russia.

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Gonzalo Gutiérrez Reinel

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This article is from the Country Profile chapter of The Report: Peru 2015. Explore other chapters from this report.