According to JapanToday, the FTA is expected to enable Japanese automobile and electric appliance makers to keep up with their South Korean rivals in the competitive market in Latin America.

Foreign Minister Takeaki Matsumoto and Peruvian Foreign Trade and Tourism Minister Eduardo Ferreyros endorsed the pact, which will abolish tariffs on more than 99 per cent of the value of goods traded between the two nations within 10 years, Japanese officials said.

Through the FTA, Japan expects to increase exports of automobiles, auto parts, and electronic items such as TVs, while Peru can offer goods such as farm and marine products, among them pork, poultry, squid, asparagus and corn, and resources such as copper and zinc.

The agreement will take effect after it gains approval from the Japanese parliament, the officials said. With an FTA between South Korea and Peru expected to come into effect possibly in July, Tokyo hopes to ratify the accord soon.

At present, Peru imposes a nine per cent tariff on Japanese passenger vehicles and TVs. Japan’s share of vehicles in the Peruvian market has dropped in recent years due to advances of South Korean cars.

Tokyo also hopes to catch up with other economies such as the United States and China that already have FTAs with the resource-rich South American country.

Tokyo and Lima started their FTA negotiations in May 2009 and wrapped up talks in November last year after holding seven rounds of meetings.