Australia is to open free trade talks with Peru in what could be a boon for beef, sugar and services exports.
Trade Minister Steve Ciobo will launch trade negotiations with Peruvian counterpart Eduardo Ferreyros in Canberra on Wednesday.
"Peru, with a population of 31 million, presents a growing opportunity for Australian exporters and an important gateway to the Latin American market," Mr Ciobo told AAP.
Mr Ciobo said he hopes to conclude a deal by year's end.
Both countries were signatories to the Trans-Pacific Partnership trade pact which is struggling to get off the ground following President Donald Trump's decision to withdraw the US.
Peru, Mexico and Canada are the only TPP countries which do not have separate bilateral agreements with Australia.
Mr Ciobo said Australian exporters are at a competitive disadvantage in Peru with exports from the US, EU and Canada already enjoying duty-free access through existing deals.
"A high-quality free trade agreement with Peru will help Australian farmers compete and break into this market," he said.
There are tariffs of up to 17 per cent on Australian beef, while dairy and sugar exports face stings of up to 29 per cent.
Lamb, wheat, rice, and wine also face tariff barriers.
A major Peruvian supermarket chain has already expressed interest in importing Australian beef but without a free trade deal those export opportunities can't be realised, Mr Ciobo said.
Peru had an increasing appetite for specialised services which played to Australian strengths in areas such as mining, finance, education, health and tourism.
Mr Ciobo believes a deal with Peru could be a stepping stone to a wider Australia-Pacific Alliance free trade deal, which could cover Mexico, Chile and Colombia.
In 2015-16, total two-way trade in goods and services with Peru was worth $504 million, up 19.4 per cent from the previous year.
Australia's major export to Peru is mining equipment.
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