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Bilateral relations between Thailand and Peru

Diplomatic Relations

Thailand and Peru established diplomatic relations in 1965. Bilateral relations between the two countries continued without any difficulty, though official and business contacts were limited at that time. For example, the bilateral trade volume was relatively low. In 1991, the values of bilateral trade transactions stood at US$ 24.7 million: with exports from Thailand to Peru at US$ 22.5 million and imports from Peru at US$ 2.2 million. However, the Peruvian Government, especially during the President Alberto Fujimori’s tenure, attached importance to the promotion of bilateral relations with countries in Asia and Pacific Region, both in political and economic dimensions. Therefore, the Peruvian Government, in 1992, inaugurated its embassy in Bangkok to promote bilateral relations, particularly in the fields of economic cooperation and trade, as both countries are members of Pacific Rim Countries. Moreover, Thailand’s economic growth averaged at 7% per annum during that period of time drew foreign investors’ attention to the potential of Thailand as a manufacture hub in South-east Asia region.

Exchange of Visits

Since 1992, the exchange of visits at all levels has been remarkably increased. Particularly, His Royal Highness the Crown Prince Vajiralongkorn paid an official visit to Peru during 9-14 April 1993, and Her Royal Highness Princess Chulabhorn Walailak also officially visited Peru in March 2000. On Peruvian part, former President Alberto Fujimori visited Thailand in 1991 and 1996, and former President Alejandro Toledo paid a visit to Thailand in 2003, respectively. At the ministerial level, H.E. Mr. Chuan Leekphai, ex-Prime Minister of Thailand visited Peru in 1999, H.E. Mr. Somchai Wongsawat , former Prime Minister, visited Peru in 2008, H.E. Mr. Surakiat Sathianthai, ex-Deputy Prime Minister, in 2006, and H.E. Mr. Kantathi Suphamongkhon, former Minister of Foreign Affairs officially visited Peru many times. On 2 December 2006, the Thai Government officially opened the Royal Thai Embassy in Lima to serve as the contact point to enhance Thailand-Peru relations as well as Thailand and Andean Community relations, considering that Peru can be an economic partner as well as a gateway to Latin America Region for Thailand in the long run.

Economic and Trade Relations

The overall picture of the closer relationship between Thailand and Peru reflected in the increase of values of bilateral trade. In 2002, the trade volume climbed up to US$ 54.8 million of US $, representing a double increase from that of 1992, and continued to grow steadily. In addition, the two parties had concluded 37 bilateral agreements as well as frameworks for cooperation and 15 more still under negotiation, including MOU on the Joint Cooperation Committee on Oil and Gas Business Cooperation among PTT Public Company Limited, PTT Exploration and Production Public Co., Ltd. and PETROPERU, and Thai-Peru Free Trade Agreement (FTA). In late 2005, both sides signed the Protocol to accelerate trade liberalization and facilitate trade between Thailand and Peru (Early Harvest). However, for the FTA to come into force fully, the two countries shall continue to negotiate further in details. In 2010, the volume of trade between Thailand and Peru accounted for US$ 414.86 million, an increase of 213.38 per cent of the previous year. Thai exports to Peru are, i.e., automobiles, equipment and parts, polymers, yarn and fiber, refrigerators, freezers, rubber products and electrical appliances. Peruvian imports to Thailand are minerals (metal ore), animals and products from animals, aquatic animals (fresh, chilled, frozen or processed), chemicals, fabrics, vegetables and fruits.

Investment Promotion

Investment between Thailand and Peru is relatively low. This may be due to the huge geographical distance between them and the number of Thai people living in Peru and the Peruvian people residing in Thailand are very few. Moreover, the business norms of investors of both countries are similar in that they do not prefer to invest in foreign countries which are far away from their home land. Despite of that, AjeThai Company, the Peruvian Company, had started to invest in Thailand in mid-February 2006 to produce carbonated drinks “ebony water” under the name of “Big Cola”. The company had intended to use Thailand as a hub for manufacturing products to be distributed and sold in the region. Hitherto, the governments of both countries had tried to find ways and opportunities in promoting investments between their respective countries and each expects the other to be the gateway to neighboring countries and strategic partnership. Geographically, Peru sits in the mid of South America which is good to be a new market for Thai products or a channel for Thailand to gain market access to MERCOSUR group (Brazil, Argentina, Paraguay, Uruguay, and Venezuela) and ANDEAN group (Bolivia, Colombia, Ecuador and Peru). Thailand has a readiness in the areas of infrastructures, communication system, transportation as well as having a clear policy in promoting trade and investment and liberalized law and regulations on investment. Furthermore, Thailand has played active roles in international arenas, in political, economic and social aspects, allowing Thailand to be a partner and political alliance to push forward policies of common interest and to create bargaining power in the matters of the mutual benefits of developing countries. Besides, Peru is a country endowed with abundant natural resources; for example, the important minerals Peru produces are steel, gold and copper, silver, zinc, lead, petroleum, natural gas, lumber and marine resources. In 2005 and 2006, the Peruvian side invited Thai business men to invest in many areas, namely: 1. hotel industry, 2. Thai food restaurant, 3. construction in transportation-related projects, and 4. wood-processed industry such as furniture (Peru will grant 50 – year concession); Thai investors will be exempted from related taxes if timber from Peru is used to produce furniture for exporting to the United State, 5. fishing and aquaculture industries, and 6. petroleum and natural gas explorations.

Cultural Cooperation

In the framework of cultural relations, both sides have been promoting contacts at people to people level. On 17 February 2006, Dusithani College and Le Gordon Bleu Peru Institute signed a Memorandum of Understanding on the Promotion of Cooperation between the two Institutes; the two institutes have carried out the project of exchanging chefs between each other. In addition, Thailand and Peru are in the process of negotiating an agreement on cooperation on museology and museography and MOU in the fields of protection and the return of cultural, archaeological, artistic and historical properties. In September 2006, the Thai side launched “Thai Food Festival” in Lima in order to demonstrate how to prepare Thai dishes such as “mieng kham”, beef spicy salad, Thai style fried noodles, prawn spicy soup and green curry to officials of the Peruvian Ministry of Foreign Affairs, diplomatic corps, lecturers and students, restaurant proprietors, owners of gastronomic academy and chefs from various restaurants.

Multilateral Cooperation

Thailand and Peru have cooperated closely with each other in various international forums. Both countries are the founding members of the Forum for Cooperation between Latin America and East Asia (FEALAC), which was set up in 1999 to link East Asia and Latin America as well as to promote their cooperation in all fields. The Forum comprises 15 member countries from Asia, namely, ASEAN member countries, China, Japan, South Korea, Australia and New Zealand, and 18 nations from Latin America, namely, Peru, Colombia, Bolivia, Venezuela, Ecuador, Brazil, Argentina, Paraguay, Uruguay, Cuba, Costa Rica, Chile, El Salvador, Mexico, Panama, Nicaragua, Guatemala and Dominican. Under the framework of FEALAC, various training scholarships will be provided for member countries on a regular basis. Thailand, therefore, offers scholarships in the training courses of Tourism Management and Hotel Management to Peruvian candidates, exclusively. In addition, the two countries are members of APEC, UN, Cairns Group and Non-aligned Movement.

Looking Forward

The relationship between Thailand and Peru tends to become closer consistently because such relationship is based on a firm basis together with supporting factors from various dimensions such as political will and economic necessities. Moreover, the two countries put an emphasis on the policy to cooperate with other countries and to actively participate in international forums as well as to enhance the connectivity between East Asia and Latin America. The two sides shall continue to carry on (further) the negotiations on various agreements and the existing cooperation of which the groundwork has been earlier paved way for. Take for example, the negotiations on FTA, agreement on energy cooperation, as well as agreements in the fields of economic, technical and cultural cooperation. In particular, Peru is interested to learn from the Royal Projects, especially, the alternative economics for a sustainable development. In this connection, the diplomatic missions of Thailand and Peru will continue to play active roles in forging even closer ties between the two countries. At present, the Royal Thai Embassy has been working hard to coordinate with the Peruvian governmental agencies and private sector with a view to strengthening the bilateral relations and cooperation between Thailand and Peru, especially in the fields of economic cooperation and trade. In addition, the Embassy has disseminated information about Thailand to the people in Peru and those in other countries to which the Embassy is accredited (Bolivia, Colombia, Ecuador and Venezuela). On the other hand, the Embassy is also providing information about Peru to the Thai people. To promote the bilateral contact at people to people level, the Royal Thai Embassy has recently facilitated the visit to Peru of the Thai academics to meet with their counterparts in order to collect first-hand information about Peru with the aim to build a body of knowledge for the Peruvian Studies and Latin America Studies.