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China-Peru Free Trade Agreement Upgrade Protocol Takes Effect: What Foreign Founders Need to Know

The upgraded protocol between China and Peru introduces new chapters on standards, competition, e-commerce, global supply chains and environment, and improves existing rules on origin, customs, IP, services and investment. For foreign founders operating in China, this signals a more predictable trade and investment environment with Peru, one of Latin America's key markets.

China-Peru FTA Upgrade Protocol Enters into Force

On November 1, the Protocol between the Government of the People's Republic of China and the Government of the Republic of Peru on Upgrading the Free Trade Agreement (hereinafter the “Upgrade Protocol”) officially took effect. The Upgrade Protocol was signed on November 14, 2024, following negotiations that began in November 2018. It revises the original China-Peru FTA, which has been in force since 2010.

What the Upgrade Protocol Covers

The Upgrade Protocol enhances seven existing chapters of the original FTA: rules of origin, customs procedures and trade facilitation, sanitary and phytosanitary measures, intellectual property, trade in services, temporary entry of business persons, and investment. In addition, it introduces five new chapters: cooperation on standards and conformity assessment, competition policy, e-commerce, global supply chains, and environment and trade. The two sides also established future-work provisions for negotiations on negative lists for trade in services and investment, with the aim of further liberalizing these areas.

Trade Growth Under the Original FTA

Since the original China-Peru FTA came into effect in 2010, it has played a significant role in boosting bilateral economic and trade cooperation. Trade between the two countries rose from USD 6.4 billion in 2009 to USD 50.4 billion in 2025, an increase of nearly seven times. The entry into force of the Upgrade Protocol is expected to help further unlock bilateral trade and investment opportunities, provide a better business environment for companies from both sides, and inject new vitality into economic and trade relations.

Practical Implications for Foreign Founders in China

For foreign founders registering or operating a company in China, the upgraded protocol may bring several practical benefits. Although the protocol is bilateral between China and Peru, it forms part of the broader trade facilitation landscape that affects how companies in China can engage with international markets. Here are key areas to watch:

• Rules of origin: The improved rules may make it easier to determine whether goods qualify for preferential tariff treatment under the FTA. If your company imports from or exports to Peru, reviewing origin requirements could help you take advantage of reduced tariffs.
• Customs procedures and trade facilitation: Enhanced customs procedures aim to streamline clearance processes, potentially reducing time and costs for cross-border shipments.
• Sanitary and phytosanitary measures: Updated measures may affect food, agricultural, and related products, with clearer requirements for market access.
• Intellectual property: Stronger IP provisions could offer better protection for trademarks, patents, and copyrights, which is relevant for founders bringing technology or brands to China.
• Trade in services: Improvements in services trade may open opportunities in sectors such as distribution, logistics, and professional services.
• Temporary entry of business persons: Clearer rules could facilitate short-term business travel and assignments between China and Peru.
• Investment: Enhanced investment provisions, along with future negotiations on negative lists, may lead to greater openness and predictability for investors.
• New chapters: Cooperation on standards and conformity assessment can reduce technical barriers; competition policy provisions promote fair competition; e-commerce rules support digital trade; global supply chain provisions aim to strengthen connectivity; and environment and trade provisions encourage sustainable practices.

These changes are particularly relevant for founders whose businesses involve sourcing from Peru, exporting to Peru, or integrating Peru into regional supply chains. Even if your company does not directly trade with Peru, the upgrade reflects China's ongoing efforts to improve its trade and investment environment through FTAs, which can indirectly benefit all companies operating in China.

How to Leverage the Upgrade Protocol

To make the most of the upgraded FTA, foreign founders should consider the following steps:

• Review your supply chain: Identify any goods or services that originate from Peru or are destined for Peru, and assess whether they can benefit from preferential treatment under the upgraded rules.
• Stay informed on origin rules: Understand the specific origin criteria and documentation requirements to claim preferences.
• Evaluate IP strategy: If you hold intellectual property, consider how the upgraded IP chapter might affect your protection and enforcement strategies in both markets.
• Monitor future developments: The negative list negotiations for services and investment could lead to further liberalization; keep an eye on announcements from Chinese authorities.
• Consult professionals: Given the technical nature of trade agreements, seek advice from customs brokers, legal advisors, or trade consultants to ensure compliance and maximize benefits.

Conclusion

The China-Peru FTA Upgrade Protocol represents a continued effort to deepen economic ties between the two countries. For foreign founders operating in China, it offers potential opportunities to reduce costs, improve market access, and benefit from a more transparent trade and investment framework. As with any trade agreement, the practical impact will depend on your specific business activities and how well you adapt to the new rules.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.

For assistance with registering and operating a company in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.