Bryan Andía
Affiliated Researcher, Center for China and Asia-Pacific Studies
Last week, President Dina Boluarte visited the Republic of Indonesia, accompanied by a delegation of public officials and business representatives. There were two main reasons for the trip: the signing of the Comprehensive Economic Partnership Agreement (CEPA) between Peru and Indonesia, and the celebration of the fiftieth anniversary of diplomatic relations between the two countries.
Although one of the pillars of Peru’s foreign policy has been its relationship with Asia, up to now priority has been given to our ties with China, South Korea, and Japan, as these are global powers with significant investments by their companies in our country. In contrast, relations with Southeast Asia have been of lesser priority. Southeast Asia is a region of Asia comprising 11 countries, including Thailand, Vietnam, Indonesia, and the Philippines, known for its cultural diversity, tropical climate, and strategic location between the Indian and Pacific Oceans.
This lower priority is explained by the region’s limited economic presence in Peru, as well as the physical distance that separates us, given that there is no direct maritime or air link between Latin America and Southeast Asia. That being said, the visit and this trade agreement with Indonesia represent the result of years of efforts by the Ministry of Foreign Affairs and MINCETUR, prior to the current presidency.
While the Port of Chancay represents a major opportunity to improve our connection with China and, incidentally, to reduce transshipment time in our trade with Southeast Asia, the question remains whether this reduction in time, together with the signing of this agreement, will significantly strengthen our ties with Indonesia.
On the Peruvian side, the challenges to finalizing this agreement have been numerous. For example, Peru’s commercial office in Jakarta, the capital of Indonesia, was closed in 2019 and relocated to Bangkok, Thailand. Although we are the sixth country in Latin America with the highest number of diplomatic missions in Southeast Asia, our embassies in the region typically have only one ambassador and one other diplomat. This lack of personnel limits the scope of action on the ground.
On the Indonesian side, although negotiations for the trade agreement began under the previous presidency of Joko Widodo, in mid-2023, the trip and the signing of the agreement took place under the new president, Prabowo Subianto, who plays a more active role in his country’s foreign policy.
Why this growing interest from Peru in Southeast Asia? While one of the priorities of our foreign policy is our relationship with neighboring countries, at present these relations are not at their best with some of them. This situation has led Torre Tagle to seek new agendas and spaces for maneuver in regions that previously received less priority. It is in this context, for example, that the trade agreement with Indonesia was reached, that negotiations began to deepen the FTA with Thailand, and that the presidents of Brunei, Malaysia, Indonesia, and Vietnam were received at the Government Palace during APEC 2024, countries that in previous editions would not have been given such prominence.
This agreement represents an opportunity for the commercial diversification of Peru, as well as the potential to diversify investments with the fourth most populous country in the world (with an estimated 285 million citizens), which is also projected to become the world’s fourth-largest economy by 2050. This renewed focus on Southeast Asia by Torre Tagle is also an important step in Peru’s integration into global value chains.
