As you begin your term as Minister, what do you see as the key challenges confronting Peru in terms of foreign policy priorities?
During the most recent Summit of the Americas, held last April in Panama, President Humala underlined the two key challenges the region faces. He highlighted the crucial importance of reducing social and economic inequalities. We must address those gaps to strengthen the social fabric of our nations. Our foreign policy must respond by contributing to spur economic growth focused on social inclusion and poverty-reduction. Achieving said goal requires modern partnerships abroad aimed at improving Peru's public services, human capital, job market, and productivity, by increasing trade, foreign investment, and international cooperation.
President Humala also stressed the need to adopt—by consensus—concrete steps to mitigate climate change, a major global challenge that already affects Peru and other Latin-American countries. Peru's firm commitment to this issue was clearly demonstrated while conducting negotiations at the COP20 meeting held in Lima last December, which led to adoption of the Lima Call for Climate Change, a major step forward heading to the 2015 agreement. We hope to sign a comprehensive and effective multilateral agreement this year when we conclude the COP21 meeting at Paris.
What are the next steps in deepening Peru's integration with Pacific Alliance countries, and what economic and political benefits will this bring to Peru?
The benefits brought by the Pacific Alliance are already being enjoyed by our citizens. Nearly 92% of our trade today has tariff-free status. We also have a joint stock-market agreement in place that allows free share trading among its members. And meanwhile, Mexico's recent inclusion to the Integrated Latin American Market (MILA) will make the Pacific Alliance stock exchange market the largest one in Latin America. Likewise, several innovating cooperation projects have been launched, including a scientific web to tackle climate change and an exchange program for voluntary work by youth organizations.
The Alliance aims at deepening integration by increasingly including new actors and fields in the joint effort. We are convinced that integration has to be an ongoing inclusive process. For instance, this year we have held meetings to promote commercial exchange by SMEs, which today only account for 5% of our trade. We intend to continue promoting exports by including suggestions made by the business sector in our policies. The full entry of our trade agreement into force will boost intra-regional trade to integrate production lines and produce more intermediate and final goods by the Alliance as a unit.
Peru will chair the Alliance starting in July. Peru intends to give priority to strengthening our institutional framework, deepening the integration process, and expanding decisively our relations with the Asia-Pacific region. We expect to see the Alliance's framework agreement come into full force under our chairmanship. We will also review the progress of our integration process and establish new goals, and we will work closer with observer states—which amount to 32 today and will soon expand to 39—as well as with international institutions.
At the COP20, President Humala and his Pacific Alliance counterparts presents a Declaration Against Climate Change. What steps can Peru take to ensure that the fight against climate change is integrated into its foreign policy priorities?
Peru remains at the forefront of the multilateral process working closely with France to ensure success for COP21. We are focused now in defining the key elements to be included in the final draft of the text to be approved in Paris. At the regional level, Peru is seeking to find common positions on financing and adaptation measures within the Community of Latin American and Caribbean States (CELAC) and the Pacific Alliance. Bilaterally, Peru is establishing joint programs aimed at conservation and management of its biodiversity, and also at enhancing national capacities to combat climate change.
Peru announced its contribution to the Green Climate Fund last December at the COP20. We are now preparing our national contribution. A national commission is preparing a proposal based on five areas identified as those with larger climate change mitigation potential: forests, agriculture, transport, industrial processes, and solid waste management. Well-funded and scaled-up financing, technology, and capacity building from developed countries and the world's largest economies are vital to enabling the developing world to move ahead in cutting-down greenhouse gas emissions, while building strong economies for the well-being of future generations
What makes Peru a favorable destination for international investment?
Foreign investment has been a cornerstone of Peru's strong economic performance for over two decades. A combination of stable rules, political stability, fiscal responsibility, and sound policies attracts major foreign investments in diverse fields of Peru's economy, including mining, energy, utilities, retail, and agriculture.
Our regulatory system rests on non-discriminatory treatment for foreign and national investors. Foreign firms can invest in all economic activities and have unrestricted access to national and international financial sources. Access to international dispute-settling institutions is also guaranteed. This ample set of favorable business conditions remains unchanged and provides a suitable environment to welcome international investment.
Currently, PPPs offer new opportunities for investing in infrastructure, transport, and communications. We believe that working together with transnational enterprises is an effective way to increase the use of scientific and technological knowledge in Peru's economy, and to strengthen our competitiveness.
What are the key foreign policy priorities you plan to pursue during your tenure as Minister?
Persistent efforts to maintain cooperation and integration flows with neighboring countries are of utmost importance to improve the livelihood of our citizens. Likewise, regional integration is an essential foreign policy guideline in playing a significant role in the world economy. Nurturing our strategic associations with the US, the EU, and China, as well as with other international powers, is also a major priority. We underscore the need to focus cooperation with said countries on increasing human capital and the use of science and technology in our production lines.
The Pacific Alliance reflects the high priority we grant both to deepening regional integration and to bolstering relations with the Asia-Pacific region. Peru hosts the 2016 APEC Summit to strengthen ties with the US and Asian-Pacific countries. At the same time, we will work to open new roads by increasing engagement with BRIC countries, as well as with growing economies in Asia and Africa
Finally, it is also a priority to address global challenges by implementing global responses agreed upon within multilateral institutions. Peru seeks to maintain an active role in multilateral efforts to promote sustainable development with social inclusion and to combat climate change. In this light, next October we will host the annual IMF and IDB meeting, and also the UN Conference on Trade and Development (UNCTAD) in Lima, while in 2018 Peru is due to host the Summit of the Americas.