El Salvador and Peru have taken a significant step toward boosting bilateral trade and investment with the announcement of negotiations for a Free Trade Agreement (FTA). This move, which marks the formal start of negotiations in August 2024, is set to accelerate trade exchanges and foster a more dynamic economic relationship between the two countries.

Jorge Rosado, the Peruvian ambassador to El Salvador, expressed optimism about the agreement, highlighting its potential to attract new investment and increase trade between the nations. The FTA, he explained, will help position both countries more strategically on the regional map, benefiting from proximity to key markets such as the United States.

This milestone follows previous negotiations that began in 2010 but were temporarily halted in 2012 due to economic sensitivities in El Salvador. The new momentum comes as a result of a shared vision between the administrations of President Nayib Bukele of El Salvador and President Dina Boluarte of Peru.

The countries have already agreed on the General Negotiation Framework, which outlines the guidelines for developing the trade agreement. The FTA aims to promote economic growth, foster investment, and strengthen integration between El Salvador and Peru. This deal will open access to an expanded market with clear and predictable rules, presenting new business opportunities and enhancing competitiveness.

Mariano Olazábal, executive director of the Salvadoran-Peruvian Chamber of Commerce and Industry (Casalpe), emphasized that the acceleration of the negotiations is not a coincidence. He pointed to the recent organic growth in bilateral trade, noting that Peru’s exports to El Salvador grew by 41.8% in 2024, reaching $29.1 million, up from just $4.4 million in 2015. Key exports included sugar, petroleum oils, and tableware.

Olazábal also highlighted the growing presence of Peruvian companies in El Salvador, including major players like Ramsa, a logistics operator, and Opp Film, which manufactures films for various industries. This strong foundation of trade and investment sets the stage for even greater economic collaboration in the years to come.

As the negotiations continue, the FTA is expected to strengthen ties between El Salvador and Peru, opening the door to a more prosperous and integrated future for both nations.