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Turkey and Peru reach deal for $1 billion trade volume

Staff writer |
Aims to boost economic relations between Turkey and Peru were at the top of President Recep Tayyip Erdogan's agenda during his three-country tour of Latin America.

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Erdogan and Peruvian President Ollanta Humala addressed the issue of economic cooperation during bilateral and inter-committee meetings.

The two leaders penned five agreements with the objective to increase the bilateral trade volume by more than $1 billion in the shortest time possible - from $260 million in 2015.

Chile, the first stop on President Recep Tayyip Erdoğan's tour of Latin America, is a net-exporting country thanks to years of trade surpluses, except for 2012 and 2013.

Since 2011, Chile's trade volume increased remarkably from the range of $40-$70 billion it reached a decade ago, and now fluctuates around $150 billion, particularly since signing Free Trade Agreements (FTA) with several countries. Mining and agricultural products are Chile's main export goods.

Despite the FTA signed with Turkey in 2011, considering the size of Chile's domestic economy ($330 million according to International Monetary Fund (IMF) data in 2015) and distance as major factors, Turkey is not among Chile's major trade partners. Turkey sells mainly steel and motor vehicles to Chile.

Peru's trade with Turkey is similar, as Peru has a GDP of $203 billion and will be the second country Erdoğan will visit as part of his visit to the continent, with Ecuador planned as his third destination.

Turkey exports steel and steel products to Peru, while importing mainly non-processed zinc and plant seeds.

Given distance and a GDP of $193 billion, Ecuador, is not a major trade partner either, with the main goods imported to Turkey including bananas and coffee. Meanwhile, the Turkish export sectors most popular with the Latin country are steel and steel products, home appliances and motor vehicles.

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