Peru WT/TPR/S/69
Page 57
IV. TRADE POLICIES BY SECTOR
(1) INTRODUCTION
1. Since its last Review in 1994, Peru has continued to pursue a sectoral policy approach that
emphasizes neutrality of incentive across activities.  This complements and is supported by Peru's
generally open and non-distorting trade regime;  nevertheless, a small number of activities are still
favoured through special fiscal incentives or tariff s (Chapter III).  The sectoral regulatory framework
has remained relatively stable, after wide-ranging economic reforms in the early 1990s led to the
comprehensive liberalization of sectoral investment rules and ambitious privatization programmes in
practically all areas.
2. Peru's strategy has paid off by attracting considerable local and foreign private investment.
This has permitted mining to regain its leading role in the economy, now generating almost half of
Peru's merchandise exports.  The energy sector, in particular natural gas, is likely to become another
important growth area.  Peru also has a world-class fishing industry, however, it is highly cyclical and
suffers from apparently policy-induced over-investment and over-fishing.  In the agricultural sector,
liberalization and state-assistance reductions in the early 1990s have resulted in difficult adjustments,
which have, nevertheless, underpinned strong output expansion to supply both domestic and foreignmarkets.  Driven by international demand, production of coca leaf and derived products still appears
sizable but declining.  Other support schemes appear to  be of a general, non-distorting nature.  Certain
crops and dairy products receive protection through variable specific duties. Besides the processing of
mineral, agricultural and fisheries products, manufacturing activities make only a small contribution
to Peru's economy;  these activities have experienced extensive restructuring due to increased importcompetition.
3. Although in the past the State was the main supplier of services in Peru, the services sector is
now mostly in private hands.  While new investment has modernized key service activities, majorsteps have also been taken to set up a strong regulatory framework to prevent the abuse of dominant
positions.  Improved foreign access to the sector has gone hand in hand with Peru's substantial
commitments under the GATS Agreement, in particular in the most recent negotiations ontelecommunication and financial services.
(2) A
GRICULTURE
(i) Main features
4. Agriculture is an important sector in the Peruvian economy both in terms of output and
employment:  in 1999, the sector accounted for some 14% of GDP and employed over one third of the
labour force.   Since Peru's previous Review, the sector's performance has improved;  agriculturalproduction recovered substantially from the adverse factor s that affected it in earlier years, such as the
overall economic downturn, and the security concerns that drove farmers away from rural areas.  The
sector also had to adjust to the liberalization proces s and the reduction of state assistance.  Growth has
been sustained notwithstanding the effects on production, in 1998, of El Niño.
5. Peru's geography and climate favours the production of a great variety of commodities, from
temperate to tropical products.  The agricultural sector is characterized by a dual structure:  a
relatively modern sector producing high value crops in small quantities largely for export markets
exists alongside large numbers of subsistence farmers.  Half of the area under cultivation is devoted toproducts such as coffee, cotton, maize, potatoes, rice and sugar, mostly grown in small plots by
farmers who acquired the right to cultivate state-owned land during the agrarian reform in the
late 1960s.  Of all productive units, some 35% are less than 1 hectare, 70% less than 3 hectares and
95% less than 10 hectares.WT/TPR/S/69 Trade Policy Review
Page 58
6. In value terms, coffee, potatoes and rice were Peru's three main crops in 1997 (Table IV.1).
Overall, value of output and value added in agriculture tended to increase over the 1994-97 period, at
a slighter higher pace than GDP growth.  During this period, output in banana and potato production
grew particularly fast;  cotton production experienced a negative trend.
Table IV.1
Agricultural production, 1994-99
(1979 new soles '000;  and '000 tonnes)
1994 1995 1996 1997 1998a
Value Volume Value Volume Value Volume Value Volume Value Volume
Main crops
Alfalfa 21.3 4,574 21.8 4,682 23.0 4,940 23.2 4,977 8.0 1,726
Asparagus 8.8 131 7.2 108 8.5 128 9.7 145 2.6 38
Banana 10.7 845 13.5 1,066 17.0 1,348 16.9 1,343 5.2 412
Beans 4.9 57 4.8 56 5.9 69 5.3 61 1.0 12
Cacao 9.3 19 11.1 23 11.2 23 9.5 20 4.6 9
Coffee 42.3 91 44.9 97 49.4 107 52.4 113 13.1 28
Cotton 21.9 168 28.3 217 35.1 269 19.0 146 9.1 70
Maize 28.1 725 28.3 715 32.0 811 32.2 827 9.5 254
Onions 4.2 187 4.1 185 5.3 236 6.5 288 2.6 115
Palm oil 4.4 145 4.0 134 3.8 128 4.3 144 1.5 50
Potatoes 46.3 1,767 62.1 2,368 60.5 2,309 62.9 2,398 32.4 1,236
Rice 69.9 1,401 56.9 1,142 60.0 1,203 72.8 1,460 18.6 372
Sugar cane 17.2 5,430 20.1 6,325 19.4 6,119 22.0 6,930 4.5 1,404
Sweet corn 4.0 196 4.5 219 4.2 203 4.9 235 4.4 212
Tomatoes 7.5 218 5.9 171 7.4 215 7.8 226 1.5 43
Wheat 6.0 127 5.9 125 6.9 146 5.9 124 0.1 2
Yuccas 10.0 513 10.7 547 13.8 703 14.7 752 4.9 253
Fruit
Apples 4.3 104 6.9 166 7.2 173 7.0 169 1.9 45
Lemon 5.0 224 5.6 251 6.0 265 7.3 326 2.5 112
Oranges 5.1 204 5.7 229 5.6 224 5.4 217 1.3 53
Animal products
Beef 15.8 102 16.7 107 17.1 110 18.4 118 5.8 51
Eggs 28.4 116 35.3 144 31.9 130 36.6 149 12.4 37
Milk 36.5 830 37.7 858 39.8 905 41.7 948 14.9 28
Pork 14.8 78 15.2 80 15.8 83 16.5 87 5.4 338
Poultry 76.8 354 89.1 411 89.1 411 96.3 444 29.9 138
a January to April only.
Source: Instituto Nacional de Estadística e Informática (1998b), Perú:  Compendio de Estadísticas Económicas y
Financieras:  1997-98 .
7. In 1998, wheat and soya were the two largest agricultural imports by Peru (Table IV.2).
During 1994-98, imports of main food products grew at  an average of 10.4%, a slower rate than total
imports.  Imports of rice, soya and wheat expanded more markedly, while those of dairy products
remained stable.
8. Recorded agricultural export earnings also expanded considerably over the period, at 7.2%,
outpacing total exports.  Revenue from coffee exports grew particularly fast although it was affected
by the fall of international prices in 1998.  Peruvian  agricultural export earnings rely strongly on two
products, coffee and asparagus, which in 1998 accounted for some 65% of recorded agricultural
exports revenues (Table IV.2).  These two  products illustrate the dual structure of agriculturalproduction in Peru:  asparagus, together with other niche products, has been developed for export
markets and is grown by specialist producers in a relatively modern and dynamic sector.  Coffee is
produced mostly by small farmers located in the high jungle areas, with limited access to financial
resources.Peru WT/TPR/S/69
Page 59
Table IV.2
Recorded trade in main agricultural products, 1998
Product Importsa
Product Exportsb
Total, c.i.f. (US$ million) 779.3 Total, f.o.b. (US$ million) 598.1
Share of total (%) Share of total (%)
Traditional 52.4
Wheat 23.2 Cotton 0.7
Maize and sorghum 15.8 Sugar 4.5
Dairy 10.3 Coffee 46.9
Rice 12.3 Wool 0.3
Sugar 16.9 Non-traditional 47.6
Soya 18.4 Asparagus 19.0
Meat 3.1 Dyesc
5.1
Mango 2.0
Cocoa 2.9
Alpaca hair 2.7
Frozen  vegetables 2.4
Others 13.7
a Principal food imports excluding donations.
b Forestry products not included.
c Including cochineal, marigold and annatta.
Source: Ministry of Agriculture;  and Central Bank of Peru.
9. As noted in the Secretariat Report for the previous Review of Peru, production of coca leaf
and derived products is sizable;  driven by international demand, most such production is exported.
Since the previous Review, Peru has continued to pursue a comprehensive strategy to deal with these
issues, largely by providing farmers with viable alternatives to coca leaf cultivation and improving
basic infrastructure and services in rural areas.  The strategy appears to have been successful:  official
data show that, although Peru still accounts for over 40% of world coca leaf production, between1994 and 1998 domestic leaf production fell from 165,400 to 95,600 tonnes, land under coca
cultivation from 108,000 to 51,000 hectares, and production of basic cocaine paste (PBC) from 435 to
240 tonnes.
10. Peru's anti-drug strategy has received strong support from the international community.  In
this respect, the authorities highlighted the impor tance of the trade preferences, granted by the
European Union and the United States to Peruvian exports, to foster alternatives to coca leaf such as
asparagus and coffee (Chapter II(4)(ii)).  However, to consolidate the results already obtained, it is
estimated that a further US$1 billion investment will be needed in the 1999-2003 period.
1  T h e
Peruvian Government has earmarked investment of some US$660 million for this purpose, and has
appealed to the international community to make up the difference.  In early 2000, donors pledged anadditional US$56 million, bringing their total commitments up to US$187 million.
(ii) Policy objectives and instruments
11. The dual character of agriculture in Peru results in important disparities within the sector in
terms of production techniques, inve stment, and productivity;  income disparities are also wide, as the
sector contains a large proportion of the population considered to be living in poverty conditions.Given the sector's social and political importanc e, agricultural policy has placed emphasis on
increasing production, in particular of foodstuffs, generating employment in the sector, and fostering
exports.  Seeking to attain those aims, Peru started important structural reforms in the early 1990s as
                                                     
1 Interamerican Development Bank, Press Release , 26 January 2000.WT/TPR/S/69 Trade Policy Review
Page 60
part of its overall economic liberalization progra mme.  Price controls were withdrawn and trade
restrictions reduced for most agricultural products, the loss-making agrarian development bank was
abolished, and the Ministry of Agriculture sized dow n.  In addition, investment was promoted through
the adoption of several sectoral laws and the inclusion in the privatization process of large areas of
irrigated land and state-run cooperatives, in particular sugar cooperatives occupying some 80,000
hectares of prime coastal land.
12. Following the agrarian reform, the adoption of Legislative Decree No. 653 of 30 June 1991
constituted an important instrument for the liberalization and modernization of the sector, having
relaxed and clarified ownership criteria for ag ricultural land.  Like wise, Law No. 26505 of
18 July 1995 established the regulatory framework for private investment in domestic,
including agricultural, lands.  To promote invest ment in the sector, Legislative Decree No. 885 of
8 November 1996 granted special tax treatment to most agricultural activities (Chapter III(4)(iv)).
However, implementation of some such statutes has been held back by delays in the adoption
of the necessary regulations, reflecting the complexity of the economic, social and political
trade-offs involved.  For instance, Law No. 26505 and its subsequent regulation (Supreme Decree
No. 011-97-AG of 12 June 1997), left pending important issues such as the tax regime for holdingsover 3,000 hectares.  Similarly, delays in the adoption of a law on water pricing has maintained
incentives, in the form of under-priced water, for irrigation-intensive crops, such as rice, in coastal
areas where water is scarce.
13. Several measures have been taken to help the agriculture sector to adjust to the reforms of
recent years.  As mentioned above, the sector seems to have reacted favourably to the new
environment, with production and trade increasing since 1994.  Nevertheless, the concentration of
various border and internal support mesures (see below) in a limited range of products may wellhinder further gains by misallocating labour, land, and capital resources to supported activities at the
expense of alternative, more profitable production.
14. Different credit programmes have been established in favour of small and medium-size
holdings and of poor farmers (Chapter III(4)(iv));  substantial government spending is directed
through development programmes to rural areas to maintain and improve social and economicconditions (Chapter III(4)(vii)).  The agricultural sector as a whole is protected through higher tariff
barriers than those applied to industrial goods.  Import duties on some inputs for agricultural activities
are taken in charge by the Ministry of Finance (Chapter III(2)(iv)).  Additional protection is granted to
a limited set of staple crops - maize, rice, sorghum and sugar - as well as dairy products through
variable specific duties (Chapter III(2)(iii)).
15. To promote output and employment in maize and sorghum production, under the auspices of
the Ministry of Agriculture, crop farmers and poultry farmers signed an agreement in late 1999 to buy
part of the domestic production of those two crops at international prices plus the nationalization costs
(including all import and domestic duties).  As mentioned, rice producers are supported by the
existing water-pricing regime;  in addition, with th e aim of incorporating thousands of small-scale rice
farmers into the tax system, the general sales tax rate applied to domestic sales of rice is lower than
that applied to other cereals.  Dairy production is  promoted through local-content requirements, also
used in relation to government nutrition programmes (Chapter III(4)(vi)).  Special provisions were
adopted in 1998 to capitalize debts contracted by su gar cooperatives (Chapter III(4)(v));  following
some successful privatizations in 1998, privatization of these cooperatives is being held up by
divergences over the calculation of  workers' social benefits and sale prices.Peru WT/TPR/S/69
Page 61
(iii) Indicators of assistance
16. Estimates by the Peruvian authorities of the producer subsidy equivalent (PSE) for main
agricultural products are reported in Table IV.3.  The substantial support granted to the staple crops
mentioned in previous section appears clearly:  the PSE for cotton, maize, sugar, and wheat was
positive over the whole period (wheat producers were protected by variable import duties until 1998
Chapter III(2)(iii)).  The picture is similar for dairy products, although the sector apparently receivedno support in 1996.  According to authorities, this is explained by the rise of international prices,
which neutralized the measures of internal support.  On the other hand, coffee production, Peru's
principal recorded agricultural export, was penalized over the period.  The authorities noted that the
PSE for coffee has traditionally been negative because the lower than average quality of Peruvian
production has meant that producers are paid below benchmark international prices.  This qualitydeficiency is mainly explained by inefficient processes of selection, stockpiling and marketing.
Table IV.3
Producer subsidy equivalent by main product, 1991-97
(US$ million)
Product 1991 1992 1993 1994 1995 1996 1997
Cacao -3.4 -3.8 -1.4 -0.1 -2.5 3.1 4.3
Coffee -54.9 -34.4 -40.7 -84.3 -72.5 -62.3 -127.0
Corn 21.3 31.9 20.1 29.0 26.6 20.1 23.4
Cotton 6.2 15.4 22.5 14.5 11.0 1.5 27.4
Dairy products 68.0 46.0 8.3 53.9 16.2 -0.1 21.9
Rice -13.3 9.5 12.5 -91.2 6.2 3.3 -7.3
Sugar 88.6 77.7 103.5 62.4 22.3 72.9 83.6
Wheat 14.3 5.8 9.3 6.7 6.7 4.1 9.3
White corn 40.3 22.2 26.4 27.1 31.0 13.0 33.6
Note: The PSE represents the subsidy that would be necessary to compensate agricultural producers for removing government suppor t.
Source : Peruvian authorities.
17. Budgetary expenditures in the agriculture sector are channelled both through the
Ministry of Agriculture and other agencies, in particular in the context of development programmes.Expenditures for the 1998 agricultural year amounted  to S/. 307 million (some US$105 million).  This
amount was allocated principally to:  infrastructure (66%);  acquisition of seeds, fertilizers, pesticides,
and tools (14%);  and conservation of natural resources (5%).  The Peruvian authorities have notified
the domestic support measures for 1995, 1996 and 1997 to the WTO Committee on Agriculture.
2
Over that period, the nominal value of measures exempted from the reduction commitment (green
box) increased by some 180%, reaching US$223.4 in 1997, while the non-product-specific aggregate
measure of support increased from 5.4% of the gross value of agricultural production in 1995 to 6.2%
in 1997.
18. In addition, according to public finance accounts, at least S/. 886 million (some
US$333 million) were channelled into the sector through other government programmes, includingthe "glass of milk" and PRONAA nutritional programmes (around US$172 million); and
FONCODES investment in agricultural activities (around US$160 million).
3
                                                     
2 WTO document G/AG/N/PER/3 of 25 November 1999.
3 See Chapter III(4)(vi).WT/TPR/S/69 Trade Policy Review
Page 62
(3) FISHING AND RELATED PROCESSING ACTIVITIES
19. Peru has developed an important fishing industry based on the exploitation of its rich fishing
grounds in the Pacific Ocean.  Peru is the world's largest producer and exporter of fishmeal and fish
oil.  In 1999, the fishing (and related processing) industry represented 2.5% of GDP and some 9.8% of
total export earnings.  The sector's output is highly cyclical, largely reflecting the periodic occurrence
of El Niño warm current, which seriously affects fishing grounds.  The most recent downturn,
in 1998, resulted in a substantial drop in catches, which in turn reduced export earnings by some 55%(Table IV.4).  Such downturns are often followed by bountiful years:  for instance, El Niño effects
of 1992 were followed by record catches in 1994.
Table IV.4
Fishing sector:  selected  indicators, 1994-98
1994 1995 1996 1997 1998
Participation of fishing sector (%)
Share of GDP 3.5 2.6 2.4 2.2 ..
       -  extraction 1.7 1.3 1.2 1.0 ..
       -  processinga1.8 1.3 1.2 1.1 ..
Catch  volumes ('000 tonnes) 12,168 9,022 9,534 7,877 4,348
Ocean fishing 12,118 8,971 9,504 7,844 4,310
      for human consumption 719 767 732 845 614
      for industrial consumption 11,399 8,204 8,772 6,999 3,696
Continental fishing 50 51 30 33 37
Exports of marine products (US$ million) 980 1,011 1,121 1,403 635
As per cent of above
Fishmeal 72.8 70.5 74.5 73.5 61.7
Fish oil 6.8 7.4 6.6 6.8 2.8
Frozen shellfish and molluscs 8.5 10.3 6.8 8.9 19.6
Frozen fish 5.3 6.9 7.8 5.4 8.3
Processed or canned 3.2 3.1 3.4 4.7 6.3
Others 3.4 1.9 0.9 0.8 1.2
Share of total exports (%) 22.4 18.6 19.3 20.8 11.2
Industrial infrastructure
Industrial fleet
      Number of boats 803 829 888 .. ..
      Hold capacity ('000 tonnes) 177 184 195 .. ..
Artisanal fleet
      Number of boats 6,956 7,639 7,639 .. ..
      Hold capacity ('000 tonnes) 30 33 33 .. ..
Fishmeal plants
      Number of plants 129 127 123 130 ..
      Capacity (tonnes/hr) 5,898 7,698 8,795 7,839 ..
Curing plants
      Number of plants 56 20 23 19 ..
      Capacity (tonnes/month) 4,622 887 1,149 1,114 ..
Freezing plants
      Number of plants 119 82 77 68 ..
      Capacity (tonnes/day) 2,757 2,134 2,363 2,188 ..
Canning plants
      Number of plants 157 111 114 99 ..
      Capacity (cans/8-hr working day) 281,715 142,477 186,607 160,857 ..
.. Not available.
a Refers to industrial subsectors "fish processing" and "fish-meal and oil".
Source: Banco Central de Reservas del Perú (1998), Memoria ;  and Instituto Nacional de Estadística e Informática (1998a),
Oferta y Demanda Global, 1997 .Peru WT/TPR/S/69
Page 63
20. Since the previous Review of Peru, the privatization process in the sector has been pursued,
leading in particular, to the sale to the private sector of Pesca Perú, the main state-owned
conglomerate.  This process has generated substantial investment, directed mainly towards the
replacement of run-down boats, and the construction of new fishmeal processing plants.  Fish farming
activities have also been developed, in particular to produce a variety of seafood such as oyster,
scallop and shrimp.  New investment has also spurred exports of canned fish.
21. The Ministry of Fishing is in charge of form ulating fishing policies, as well as regulating,
promoting, and monitoring both fishing and fish fa rming activities.  It controls access to fishing
activities and resources through fishing concessions, authorizations, permits, or licences, and has
authority to impose fines for infractions in fishing activities.  Two other state bodies intervene directly
in the fishing sector:  the CONAM, which has jurisdiction over environmental issues, and IMARPE,in charge of scientific research and the development of marine resources.  Through its scientific
reports to the Ministry of Fishing, IMARPE contributes to the determination of total catch limits and
fishing seasons.
22. The Ministry of Fishing also runs various programmes to support fishing activities through
FONDEPES, for fishing development;  the Paita training centre (CEP-PAITA);  and the ITP forfishing technology.  Priority is given to small-scale fishing and fish farming, which are promoted
through educational and qualification programmes, infrastructure investment, and preferential credit;
some 52,000 small-scale fishing operators and processors are concerned.  Between 1992 and 1998,
over US$38 million were invested in the construction of 43 quays, granted in concession to various
fishing associations.  In addition, seven commercia lization units have been constructed in different
localities to increase domestic consumption of fish and seafood products.  As at December 1998,
FONDEPES had granted 1,879 credits, amounting to some US$20 million, mainly for boatconstruction and equipment.
23. To preserve Peru's fishing resources, the Ministry of Fishing imposes control measures such
as total allowable fishing limits; closed and fishin g seasons;  fish-size limitations; and prohibited or
protected zones.  Recently, a system of satellite control was introduced to monitor activities.
However, over-fishing is recognized as a serious threat to the industry, in particular for anchovy andsardines, the staple species.
24. The fishing industry faces problems related to over-investment and over-capacity.  Both are
linked to government support programmes, which have discourage operators to exit the industry, and
to the system of resources management.  The present management system, by relying on global
fishing limits rather than individual quotas, has cr eated an incentive for boat operators to invest in
individual capacity to enable them to maximize individual catches before total quotas are reached.
Although in the long run it would probably incr ease its aggregate profits, and help ensure the
sustainability of fish stocks, so far the industry has resisted the introduction of individual quotas as
this would create difficult allocation issues.  In the context of this Review, the Peruvian authorities
acknowledged the advantages of individual quotas with respect to current practices, they noted inparticular that such a system would provide incentives to minimize extraction costs through an
adjustment of fleet capacity.
25. The over-capacity problem combined with the high levels of indebtedness and the sharp
downturn in 1998 has put the fishing industry under st rong pressure.  The industry's indebtedness was
estimated at some US$1.5 billion in mid-1999.
4  A substantial part of these debts were contracted by
the fishing companies to acquire Pesca Perú's units during the privatization process.  To address this
                                                     
4 Economist Intelligent Unit (1999).WT/TPR/S/69 Trade Policy Review
Page 64
situation, and to prevent the return of privatized un its to state control due to payments default, the
privatization commission (COPRI) authorized new payment facilities and extended the delay for
payment until 2001.  In addition, operators have requested the authorities to set a plan to finance the
reduction of the fleet.  The authorities proposed the creation of a fund financed by a tax on exported
production (between US$10 to US$23 per tonne), which would be used to compensate firms for
retired capacity (at some US$4,000 per tonne).  As at February 2000, discussions on this plan weresuspended since no agreement was reached on the level of the tax.
(4) M
INING AND ENERGY
(i) Mining and mineral processing
(a) Main features
26. Mining activities (including basic metal processing) make a major contribution to Peru's
economy:  in 1998, they represented 8.4% of GDP.  Peru is a traditional and important producer and
exporter of mineral products, and appears to have considerable potential to increase further its
participation in world markets.  At the end of 1998, it ranked second in the world for production of
silver, third for tin, fourth for zinc and lead, seventh for copper and eight for gold;  among Latin
American countries Peru ranked first in gold, zinc and lead production and second in copper, silverand tin.  In 1999, despite depressed world prices, mining exports accounted for 49.2% of Peru's total
exports;  gold, copper and zinc were the major recorded products (Table IV.5).
27. The combination of low world prices, difficult domestic conditions, and government policies
led to a deep crisis in Peru's mining sector during the 1980s.  Reflecting increased investment in the
sector, there has been a clear turnaround in recent years, mineral production in general has increased
substantially since Peru's previous Review.  In particular, gold production increased at an average
annual rate of 21.7% from 1994 to 1999 (Table IV.5).  The recovery of the sector is also reflected inthe substantial growth in employment between 1994 and 1998 (some 34%);  employment in
medium-scale mining grew by some 72% over the period.
28. Although the process of privatization in the mining sector has been gradual, 80% of the assets
of the two main state-owned comp anies (Centromin and Minero Perú) had been sold by 1998 (the two
companies combined accounted for half of the labour force employed in the sector in 1991).Privatization in the sector has favoured the transfer of assets in exchange for pledges for new
investment, rather than immediate cash payments.  As a result, privatization of mining firms has
generated relatively little revenue:  at the end of 1998, they amounted to less than 14% of the total
revenue raised through privatization.  In contrast, mining accounted for 64% of total investment
commitments made by companies acquiring state assets.
(b) Main policy measures
29. Mining's resurgence in the 1990s is in good part explained by institutional reforms aimed at
promoting private activity, which have succeeded in attracting substantial investment to the sector
(Chapter I(4)).  As noted in Chapter III(4)(iv), the General Mining Law of 1992 established a set of
fiscal and administrative incentives, which included:  income tax exemptions on reinvested profits;the refund of local taxes levied on the production of exported mining products;  tax deductions on
investment made in public infrastructure, or in approved housing and welfare facilities;  compensation
for the cost of health services rendered to employees and their dependents;  non-discriminatory
policies in foreign exchange matters;  free remittance of profits, dividends, and other funds;
unrestricted availability of foreign currency;  unhindered marketing of output, both in Peru andPeru WT/TPR/S/69
Page 65
abroad;  the simplification of administrative procedures;  and non-discriminatory treatment with
respect to other sectors.
Table IV.5
Mineral mining:  selected indicators, 1994-99
1994 1995 1996 1997 1998 1999
Participation of mining  in the economy
Share of GDP (%) 8.1 8.0 8.4 8.3 8.4 ..
- mineral extraction 4.5 4.6 4.7 4.8 4.8 ..
- non-ferrous metal processing 3.6 3.4 3.7 3.5 3.7 ..
Production
Copper ('000 FMT)a396 444 494 498 521 545
Refined 265 262 249 297 310 319
Solvent extraction – electro-winning 0 33 89 98 102 115
Blister 108 83 74 50 45 31
S u l f a t e 444423
C o n c e n t r a t e 1 96 27 94 96 27 7
Lead ('000 FMT) 221 221 230 242 240 251
R e f i n e d 8 89 09 59 8 1 0 9 1 1 1
B u l l i o n 00007 1 0
Concentrate 133 132 135 144 124 130
Zinc ('000 FMT) 585 588 669 738 738 765
Refined 159 159 173 171 175 197
Zinc dust 3 3 3 4 4 4
S u l f a t e 110011
Concentrate 423 425 492 562 559 563
Silver ('000 kg.) 1,680 1,816 1,901 2,011 1,948 2,133
Refined 648 680 721 773 987 1,115
B l i s t e r 3 74 42 11 91 21 7
Concentrate 995 1,093 1,160 1,218 949 1,001
Gold ('000 kg.) 48 56 64 78 94 128
R e f i n e d 4 45 25 67 19 0 1 2 2
C o n c e n t r a t e 448746
Exports of mineral products (US$ million) 1,971 2,616 2,654 2,718 2,737 3,009
As % of above
Copper 41.8 45.8 39.6 40.3 28.4 25.8
Zinc 15.4 12.4 15.1 19.8 16.3 15.4
Lead 9.9 9.9 10.3 8.7 7.6 5.8
Silver 5.0 4.2 4.5 3.9 4.8 5.6
Gold 17.1 17.7 21.8 18.4 33.8 39.6
Others 10.8 10.0 8.6 8.8 9.1 7.8
Share of total exports (%) 42.9 46.8 45.0 39.9 47.8 49.2
.. Not available.
a FMT:  Fine content tonne.
Source: Ministerio de Energía y Minas (1999), Perú País Minero , [CD-Rom], Lima;  Instituto Nacional de Estadística e
Informática (1998a), Oferta y Demanda Global, 1997 ;  and information provided by the Peruvian authorities.
30. To promote investment in all economic sectors, Peru guarantees, by means of contracts, the
stability of the fiscal conditions in force at the time investment programmes are approved
(Chapter II(3)).  These agreements have a ten-year duration, their main benefits relate to the income
tax regime.  In addition to these provisions, defined in the general investment regime, the Mining Law
established sector-specific provisions for mining activities.  Stability contracts for mining activities
cover large-scale and small projects, for 15 and 10 years respectively, their main additional benefitwith respect to the general regime is that tax stab ility is guaranteed for all taxes applicable to theWT/TPR/S/69 Trade Policy Review
Page 66
activity, not only to the income tax.  Mining co mpanies can subscribe simultaneously to contracts
under the general and the sectoral regime.  However conditions set under these contracts are not
negotiated individually, contract conditions are thus identical for all subscribing firms.  The sectoral
stability regime covers income tax, the value added tax and the labour regime.
31. Applicable taxes in the mining sector include direct taxes (such as income tax and the
extraordinary tax on net assets) and indirect taxes (such as sale, excise and payroll taxes, and importduties).  Profits kept in the country are subject to income tax at a rate of 30%, while profits remitted
abroad are subject to a tax on royalties remittances at an equivalent rate.  Additionally, workers are
entitled to receive a share of the firm's profits, amounting to 8% of profits before tax.  No royalties are
levied on mineral extraction.
32. The mining sector is the major beneficiary of Peru's temporary import regime, which allows
the suspension of tariffs and other taxes on certain imports (Chapter III(2)(iii)).
(ii) Energy
(a) Main features
33. The energy sector contributed 4.5% to GDP in 1998, of which hydrocarbon extraction
represented 1.7%, hydrocarbon refining 1.0%, and electricity and water 1.8% (Table IV.6).  The
importance of petroleum extraction in the Peruvian economy has declined in recent years, reflecting
falling crude oil production (42.2 million barrels in 1998).  No large crude oil discoveries were made
in Peru during the 1990s despite important exploration efforts.  As a result, crude oil reserves declinedfrom 382 million barrels in 1990 to some 356 million barrels in 1999.
34. Falling crude oil production combined with the recovery of domestic demand since 1993 has
generated a growing trade deficit in hydrocarbons.  This situation should be reversed by the
development of the Camisea field, Peru's vast natural gas and liquid hydrocarbon deposit, believed to
be South America's largest field of its kind.  The project has proved hard to sell, but was finallyawarded in February 2000 to a consortium formed by Pluspetrol (Argentina), Hunt (United States)
and SK Corporation (Korea).  This consortium won the public tender by offering royalties of 37.24%
to Peruvian State in return for a 40-year concession.  Transport and distribution systems were still to
be tendered in the second quarter of 2000.
35. Reforms that began in the early 1990s have radically transformed the energy sector, which is
now largely in private hands.  At the end of 1998, some 65% of state assets in the sector had been
sold.  In parallel, changes have been made to the structure and functions of government bodies
involved in the sector's regulation.  In partic ular, a supervisory body for investment in energy,
OSINERG, was created in 1996 to oversee compliance with sectoral regulations.  The Ministry of
Mining and Energy maintains ultimate responsibility for elaborating, approving and applying sectoralpolicies.
(b) Hydrocarbons
36. As described in the Secretariat report for the previous Review of Peru, changes in the
early 1990s to the legal framework confirmed that hydrocarbon resources in the ground are theproperty of the nation, but established that once extrac ted, this property may be transferred to private
producers under specific contractual conditions.  Other important changes introduced included:
freedom to dispose of hydrocarbons, and to import or export crude oil and products;  price setting
through the market mechanism;  and free entry of private companies to upstream and downstream oil
and gas activities (ending Petroperú's monopoly).  All aspects related to authority to grant concessions
are now handled by Perupetro, a state agency created in 1993 under private law and whosePeru WT/TPR/S/69
Page 67
transactions are thus subject to international arbitration.  Taxes levied on upstream activities include
income tax and profit-based royalties.  As mentioned in Chapter III(2)(iv), imports of goods for
exploration activities are exempted of all import duties and domestic taxes for a maximum period of
seven years.
Table IV.6
Energy:  selected  indicators, 1994-99
1994 1995 1996 1997 1998 1999
Participation of the energy  sector in the economy
Share of GDP 4.4 4.5 4.5 4.6 4.5 ..
- hydrocarbon extraction 1.8 1.9 1.9 1.9 1.7 ..
- hydrocarbon refining 1.1 1.1 1.0 1.0 1.0 ..
- electricity and water 1.5 1.5 1.6 1.7 1.8 ..
Production volume
Natural gas (million cu. ft.) 35,404 34,317 34,736 37,665 50,058 55,933
Crude oil ('000 barrels) 46,468 44,443 43,909 43,157 42,191 38,663
Electricity (GWh) 15,843 16,880 17,280 17,953 18,583 18,942
Trade balance (US$ million) -159 -353 -367 -450 -352 -352
Hydrocarbon exports 165 241 348 388 251 239
Hydrocarbon imports 324 594 715 838 603 591
.. Not available .
Source: Instituto Nacional de Estadística e Informática (1998b), Compendio de Estadísticas Económicas y Financieras ;
and information provided by the Peruvian authorities.
37. After the reform of the legal framework, establishing a competitive market in upstream
operations was relatively easy, since Peru had large unexplored basins.  The task was more
complicated for downstream activities as the supply chain was entirely controlled by Petroperu.
Privatization of downstream activities started in 1992 with the sale of 78 gasoline stations owned by
Petroperu, ensuing investment improved infrastructure and retail services.  As at end 1999, Petroperuowned refineries handling about 50% of Peru's total consumption of refined petroleum products.
(c) Electricity
38. Peru's electricity generating capacity increased by some 38% between 1990 and 1999, mainly
thanks to the construction of new thermal plants. The main consumers of electrical energy are the
mining and the manufacturing industries, which to gether account for more than half of total
consumption;  residential use amounts to some 25% of total consumption.  Peru's electricity market
has considerable growth potential:  for example, reflecting its low income and relative isolation, some
30% of the rural population was yet to be serviced.
39. The 1993 legal framework for the electricity industry separated power generation,
transmission and distribution, and opened the sector to  private investment.  As a result, the sector has
attracted substantial investment;  power generation ranks second behind telecommunications in termsof privatization revenue.
40. To avoid the abuse of monopoly power, specific provisions have been introduced to control
concentration in the electricity sector (Chapter III(4)(i)):  mergers are reviewed if they result in
horizontal control of more than 15% of generation, transmission or distribution services, or in vertical
control of more than 5% of any one of these services.  Electricity rates are generally market
determined, exceptions being sales to local distribut ors,  certain energy and power transfers between
generators, and power transmission.  In these cases, the CTE (energy rates commission) is in charge
of determining prices based on marginal and long-term costs.  The electricity rates cannot differ by
more than 10% from the current free market prices.WT/TPR/S/69 Trade Policy Review
Page 68
(5) MANUFACTURING
41. Since the early 1990s, and the abandonment of trade measures as instruments of industrial
policy, the Peruvian manufacturing sector has been largely open to international competition.  Peru
applies only a few non-tariff barriers to manufacturing imports, although several contingency
measures have been taken, since the previous Review, against products competing with domestic
manufactures such as food;  textiles, clothing and footwear;  iron and steel;  and electrical apparatus
(Chapter III(2)(vi)). Specific measures affecting industrial activities include a fiscal regime for smalland medium enterprises (Chapter III(4)(iv)), and ince ntives directed to specific zones such as the
CETICOS (Chapter III(4)(iii).
42. The considerable reduction in the protection afforded to manufacturing in the last decade is
reflected in available estimates of effective rates of tariff protection (ERP) for the sector:  the average
fell from some 85% in 1990 to just below 15% in 1997. 
5  Most industries received a relatively
uniform level of effective protection (some 12%), reflecting the relatively even structure of the
Peruvian tariff (Chart IV.1):  the average tariff rate in the manufacturing sector was 13.6% in
August 1999 with a 12% tariff rate applying in a majority of subsectors (Table IV.7 and Table III.1).Subsectors for which estimated ERPs were above average included dairy products (38%), footwear
(26%), other food products (24%), textiles (21%), and clothing (20%).  On the other hand, both
leather goods and sugar seem to have been disadvantaged by the structure of Peru's tariff protection.
However, these figures should be interpreted with caution because the variable specific duties applied
to agricultural products may result in sharp fluctuations in nominal tariff protection, as world priceschange;  thus, for example, the ERP calculated for sugar would seem to be linked to the nil variable
specific duties resulting from relatively strong world sugar prices in 1997.
43. In 1998 the relative contribution of the manufacturing sector to GDP was 22%;  non-primary
industries (i.e. manufactures other than fish and mineral processing) represented some 17% of total
GDP.  Main non-primary industries included:  non-fish  food processing (16.2% of total manufacturing
GDP), textiles and clothing (12.7%), and chemicals (11.5%) (Chart IV.2).  All of these figures are
likely to underestimate the real contribution of manufacturing to the economy since they do not
account for the value added in the informal sector.
6
44. The increased exposure of Peruvian industry to import competition has induced important
restructuring in manufacturing since the early 1990s. Industries such as radio and television
equipment, electrical appliances and houseware, and paper and paperboard have contracted severely
over the decade;  in contrast, others such as pottery and china, soft drinks and mineral waters, cordage
and rope, knitted and crocheted fabrics, and basic industrial chemicals grew at annual average rates ofover 10% in terms of output volumes.
45. In 1998 the sector experienced a downturn.  Output contracted by some 3%, mainly linked to
two exogenous factors: unfavourable weather conditions affecting fishing, and a reduction ininternational credit lines in the wake of the Asian financial crisis, which pushed up interest rates and
restricted domestic credit.  Despite a subsequent recovery of primary resource manufacturing, the
sector as a whole remained under pressure in 1999, affected by a general economic downturn and, in
particular, depressed domestic demand (Chapter I(2)(i)).  In this difficult context, the authorities
introduced special provisions in 1999 to facilitate the financial restructuring or liquidation of firmsunder particularly strong pressure (Chapter III(4)(v)).
                                                     
5 Boloña and Illescas (1997).  As noted by the authors, these estimates should be considered with some
caution, in particular given the constr aints imposed by data availability.
6 Output in the informal sector may be equivalent to  two thirds of that in formal activities (Field, 1999).WT/TPR/S/69 Trade Policy Review
Page 70
Table IV.7
Trade and applied tariffs in manufacturing sector, 1998
(US$ million and per cent)
Imports Exports
ISIC
Code Description (US$ million)Applied tariff or
tariff range
(%)a
3111 Meat products 48.7 1.4 12-30
3112 Dairy products 107.6 2.2 12-52
3113 Fruit and vegetable canning 56.5 139.0 12-25
3114 Fish products 7.1 165.6 12
3115 Manufacture of oil and fats (vegetable and animal) 260.8 417.7 12
3116 Grain mill products 128.8 1.1 12-31
3117 Manufacture of bakery products 27.4 4.4 12-25
3118 Sugar products 157.8 28.0 12-71
3119 Cocoa and chocolate confectionery 29.1 23.4 12-25
3121 Other food products 49.8 12.0 12-25
3122 Manufacture of animal feeds 10.7 27.5 12
3131 Distillation of spirits and alcohol production 18.6 0.6 12 or 17
3132 Manufacture of wines 10.6 0.3 12 or 17
3133 Manufacture of malt liquors and malt 12.3 1.9 17
3134 Soft drinks and mineral waters 2.9 1.7 12
3140 Tobacco products 5.5 0.8 12
3211 Textile spinning, weaving and finishing 101.5 168.2 12 or 20
3212 Made-up textile goods except wearing apparel 19.0 4.6 12 or 20
3213 Knitted and crocheted fabrics 27.5 311.0 20
3214 Carpets and rugs 8.0 0.3 12
3215 Cordage, rope, etc. 3.6 6.8 12
3219 Textiles n.e.c. 32.1 0.5 12 or 20
3220 Clothing except footwear 36.7 26.9 12 or 20
3231 Tanning and dressing of leather 4.1 2.4 12
3232 Fur dressing and dying 0.0 1.4 12
3233 Leather products except footwear 7.1 2.0 12
3240 Footwear (ex. rubber and plastic) 17.0 0.8 20
3311 Sawmills and woodmills 12.2 47.5 12
3312 Wooden case containers and cane ware 0.4 0.1 12
3319 Wood and cork products 7.4 1.9 12
3320 Furniture and fixtures (mainly non-metallic) 27.8 4.5 12 or 20
3411 Pulp, paper and paperboard 114.1 1.4 12
3412 Containers, paperboxes, paperboard 16.7 1.3 12
3419 Articles n.e.s. (stationery) 73.1 0.8 12
3420 Printing and publishing 61.1 10.7 12
3511 Basic industrial chemicals 262.8 88.8 12
3512 Fertilizers and pesticides 144.2 6.1 12
3513 Synthetic resins, plastic materials except glass 293.3 30.2 12
3521 Paints, varnishes and lacquers 15.3 0.2 12
3522 Drugs and medicines 202.1 31.1 12
3523 Soaps 71.2 24.4 12
3529 Other chemicals n.e.s. 159.6 16.0 12
3530 Petroleum refineries 375.3 250.7 12
3540 Petroleum and coal products 17.4 0.1 12
3551 Tyre and tube industries 89.6 11.6 12
3559 Rubber products n.e.s. 51.7 2.2 12 or 20
3560 Plastic products n.e.s. 67.4 10.6 12
3610 Pottery and china 13.2 6.7 12
3620 Glass and glass products 50.6 13.4 12
3691 Structural clay products 29.2 4.0 12
3692 Cement, lime and plaster 7.2 7.7 12
3699 Non-metallic mineral products 14.3 7.8 12
3710 Iron and steel products 323.0 23.2 12
3720 Non-ferrous metal basic industries 52.7 2,214.7 12
3811 Manufacture of cutlery and hardware 51.6 1.8 12
3812 Metal furniture and fixtures 12.2 0.1 12
3813 Structural metal products 43.0 1.7 12
3819 Fabricated metal prod. except mach. & equipment n.e.c. 101.6 11.4 12 or 20
3821 Engines and turbines 27.9 1.7 12
3822 Agricultural machinery 24.5 0.0 12
3823 Metal and woodworking machinery 79.4 3.3 12
Table IV.7 (cont'd)Peru WT/TPR/S/69
Page 71
Imports Exports
ISIC
Code Description (US$ million)Applied tariff or
tariff range
(%)a
3824 Special industrial machinery 524.1 25.0 12 or 20
3825 Office machinery 279.9 3.0 12 or 20
3829 Non-electrical machinery and equipment 494.4 17.7 12 or 20
3831 Electrical motors and apparatus 172.5 5.3 12
3832 Radio, television and communication equipment 499.3 3.4 12
3833 Electrical appliances and houseware 24.6 0.1 12 or 20
3839 Electrical apparatus n.e.s. 126.3 23.0 12
3841 Ship building and repairing 26.9 0.0 12
3842 Railway and tramway 9.3 0.4 12
3843 Motor vehicles 799.3 5.3 12
3844 Motorcycles and bicycles 31.1 0.1 12
3845 Aircraft manufactures 2.4 1.3 12
3849 Other transport equipment n.e.c. 3.1 0.1 12
3851 Prof., scientific, measuring equipment 152.2 8.8 12
3852 Photographic and optical goods 37.8 0.5 12
3853 Watches and clocks 8.6 67.6 12
3901 Jewellery and related articles 2.4 121.9 12
3902 Musical instruments 3.0 0.8 12
3903 Sporting goods 16.5 1.3 12 or 20
3909 Other manufacturing n.e.c. 112.4 33.5 12
4000 Electrical energy 0.0 12
a Applied tariffs as of August 1999.
Source : UNSD, Comtrade HS1;  and WTO estimates.
Per cent
Instituto Nacional de Estadística e Informática (1999), Oferta y Demanda Global , 1998, Lima.Chart IV.2
Shares of manufacturing GDP, 1998
Sourc e:Fish processing
2.6Non-ferrous 
metals processing
17.8Petroleum refining
0.9
Paper products 6.0Non-fish food processing 16.2
Iron & steel 3.1Chemicals exc. petroleum 11.5Bevera ge & tobacco 6.7
Textile & clothing  12.7
Leather & footwear 0.9
Furniture 7.2
Share of manufacturing in total GDP, 22.0%Metal products & machinery 5.2
Others  9.2Non-primary 
industries
78.7
46. The bulk of Peru's imports of manufactured products consisted of capital goods and durable
consumer goods (Table IV.7).  At the level of i ndividual four-digit ISIC industries, most imported
manufactures corresponded to motor vehicles, mainly brought into CETICOS zones for conversion
from right- to left-hand drive (Chapter III(4)(iii)).WT/TPR/S/69 Trade Policy Review
Page 72
47. Taking advantage of its comparative advantage, Peru exports mainly manufactured goods
produced by a limited number of industries engaged in the processing of primary products, of which
minerals and fish represented over 60% of total sectoral exports in 1998.  Among non-primary
industries, the main export manufacturing activities (ISIC four-digit level) were fabrics (7%),
textiles (3.7%) and canned fruit and vegetables (3.1%).  Measures implemented in foreign markets
may hinder some Peruvian manufactured exports, including sugar, fish products, textiles, and freshcut flowers (Chapter III(3)(vii)).
(6) S
ERVICES
(i) General features
48. The State was previously a major supplier of services, including in financial, transport, and
telecommunications activities, but its involvement has decreased dramatically since the early 1990s.
In parallel, foreign access to Peru's services  market has improved markedly.  The ambitious
privatization programme and the general economic policy, aimed at promoting private investment,
have introduced important structural changes in most service areas.  With respect to privatized public
services, the Peruvian authorities have sought to es tablish a reliable regulatory framework, mainly to
prevent the abuse of dominant positions in service markets where competition is limited by technicalconstrains.
49. In 1999, services accounted for some 52% of total GDP.  According to the latest breakdown
available from the INEI (national statistics and informatics institute), in 1998 the major services
subsectors in terms of contribution to total value added were retail trade (with some 14.4% of total
value added);  construction (9.2%);  financial services (8%), transport and communications (7.7%);
business activities (5.8%);  and government services (5.4%).  Driven by the overall economic
liberalization and the increase of trade in goods, trade in non-factor services has increasedsubstantially in recent years, in particular in transport services (Chapter I(3)(ii)).
50. Under the WTO General Agreement on Trade in Services, Peru undertook horizontal
commitments with respect to the movement of natural persons and the treatment of foreign
investment;  although these commitments apply only to sectors included in its GATS Schedule, Peru's
legislation grants similar market access across most service activities.  Sector-specific commitmentscover 7 out of 12 broad categories of services (Table IV.8).  Reflecting Peru's legislation, market
access and national treatment for services supplied through commercial presence (i.e. treatment
granted to foreign investment) has been in general fully committed.  Peru's commitments in
telecommunication services are particularly comprehensive:  all services are bound except for the
granting of national treatment in relation to the presence of natural persons.
51. Reflecting concessions granted under different bilateral or regional agreements, Peru's offer
under the GATS Agreement included a list of exemptions to MFN treatment.
7  The list contains a
horizontal exemption indicating that the movement of persons nationals of a country that has
reciprocal labour or dual nationality agreement with Peru, or recruited under bilateral or multilateral
agreements concluded by Peru, is not subject to the limitations on recruitment of foreign workers.Sector-specific exemptions to MFN treatment relate to:  land and maritime transport with Andean
Community countries;  land transport with other LAIA countries;  and recreational, cultural and
sporting services with Latin American partners.  In addition, based on the reciprocity principle, an
exemption was also set for all financial services ac tivities.  All exemptions to the MFN principle are
of indefinite duration.
                                                     
7 Peru's final list of Article II (MFN) exemptions is contained in WTO documents GATS/EL/69 of
15 April 1994 and GATS/EL/64/Suppl.1 of 26 February 1998.Peru WT/TPR/S/69
Page 73
Table IV.8
Summary of Peruvian commitments under GATSa
Market access National treatment
Mode of supply:
Cross border 1 1
Consumption abroad 2 2
Commercial presence 3 3
Presence of natural persons 4 4
Commitments (■ fullb;  ◨ partial;  □ none;  − not in the Schedule)
Horizontalc□□ ◨ ◨□□□□
Sector-specific commitments
1. Business services
A. Professional services, only:
b. Accountingd□□ ◨ □□□■□
d. Architecturald□□ ◨ □□□■□
e. Engineeringd□□ ◨ □□□■□
k. Otherb■■ ■ □□□■□
B. Computer and Related −− − −−−−−
C. Research and Development −− − −−−−−
D. Real Estate −− − −−−−−
E. Rental or Leasing without Operators, only:
c. other transport equipmentd□□ ■ □□□■□
F. Other Business Services, only:
a. Advertising servicesd□□ ◨ □□□■□
s. Convention services □□ ■ ■□□■■
2. Communication services
A. Postal services −− − −−−−−
B. Courier services −− − −−−−−
C. Telecommunication services, only:
a. Voice telephone services ◨◨ ■ ■■■■□
b. Packet-switched data transmission ■■ ■ ■■■■□
c. Circuit-switched data transmission ■■ ■ ■■■■□
d. Telex ■■ ■ ■■■■□
e. Telegraph ■■ ■ ■■■■□
f. Facsimile ■■ ■ ■■■■□
g. Private leased circuit ■■ ■ ■■■■□
o. other ■■ ■ ■■■■□
D. Audiovisual services −− − −−−−−
E. Other −− − −−−−−
3. Construction services −− − −−−−−
4. Distribution services
A. Commission agents' services −− − −−−−−
B. Wholesale traded□□ ■ □□□■□
C. Retailing servicesd□□ ■ □□□■□
D. Franchising −− − −−−−−
E. Other −− − −−−−−
5. Educational services −− − −−−−−
6. Environmental services −− − −−−−−
7. Financial servicese
A. Insurance and related services
a. Life insurance exclusively □□ ◨ □□□■□
b. Non-life insurance □□ ■ □□□■□
c. Reinsurance and retrocession □◨ ■ □□■■□
d. Services auxiliary to insurance □□ ■ □□□■□
Table IV.8 (cont'd)WT/TPR/S/69 Trade Policy Review
Page 74
Market access National treatment
Mode of supply:
Cross border 1 1
Consumption abroad 2 2
Commercial presence 3 3
Presence of natural persons 4 4
B. Banking and other financial services
a. Acceptance of deposits □□ ◨ □□□■□
b. Lending of all types □□ ■ □□□■□
c. Financial leasing □□ ■ □□□■□
d. Payment and money transmission □□ ■ □□□■□
e. Guarantees and commitments □□ ■ □□□■□
f. Trading □□ ■ □□□■□
g. Participation securities □□ ■ □□□■□
h. Money broking □□ ■ □□□■□
i. Asset management □□ ■ □□□■□
j. Settlement and clearing services for financial assets □□ ■ □□□■□
k. Advisory and auxiliary services □□ ■ □□□■□
l. Information provision and transfer □□ ■ □□□■□
C. Other −− − −−−−−
8. Health and related social services −− − −−−−−
9. Tourism and travel related services
A. Hotels and restaurantsd□□ ■ □□□■□
B. Travel agencies and tour operatorsd□□ ■ □□□■□
C. Tourist guides services −− − −−−−−
D. Other −− − −−−−−
10. Recreational and sporting services
A. Entertainment servicesd□□ ◨ ◨□□■□
B. News agency services −− − −−−−−
C. Libraries, archives and museums −− − −−−−−
D. Sporting and other recreationald□□ ■ □□□■□
E. Other −− − −−−−−
11. Transport services
A. Maritime Transport Services
a. Passenger transportationd◨□ ◨ □□□■□
B. Internal Waterways Transport
a. Passenger transportationd◨□ ◨ □□□■□
C. Air Transport Services −− − −−−−−
D. Space Transport −− − −−−−−
E. Rail Transport Services −− − −−−−−
F. Road Transport Services −− − −−−−−
G. Pipeline Transport −− − −−−−−
H. Auxiliary services −− − −−−−−
I. Other Transport Services −− − −−−−−
12. Other services −− − −−−−−
a The sole authentic source of information on these commitments is Peru's Schedule of Specific Commitments, reproduced in WTO
documents GATS/SC/69 (15 April 1994), GATS/SC/69/Suppl.1 (11 April 1997), GATS/SC/69/Suppl.2 (28 February 1998).
b Technical regulations may apply.
c Apply only to services included in Peru's Schedule of commitments.d Apply only to a subset of the service category (see Peruvian Schedule for details).
e In addition to the horizontal commitments applying to all sectors included in Peru's schedule, specific provisions on both mar ket
access and national treatment apply to all activities classified under financial services.
Source: WTO Secretariat.Peru WT/TPR/S/69
Page 75
(ii) Financial services
(a) Main features
52. Peru's financial sector has experienced strong growth in recent years, recovering from the
deep crisis in the early 1990s linked to widespread state intervention, hyperinflation and capital flight.
Between 1994 and 1999, the contribution of financial services to GDP rose from 4.3% to 7.2%,
mainly generated in banking and financial services other than insurance (Table IV.9).  Deposits incommercial banks also increased substantially, from 11% of  GDP in 1994 to 18% in 1999;  loans
experienced similar growth, increasing during the same period from 15% to 24% of GDP.  Peru's
financial system is highly dollarized:  some 83% of all credits and two thirds of deposits were
denominated in U.S. dollars in 1999.
Table IV.9
Peru's financial sector:  selected indicators, 1994-99
1994 1995 1996 1997 1998 1999
Commercial banks
Number of institutions 22 23 23 25 25 20
Assets (US$ million) 9,892 13,129 17,088 22,016 22,770 20,835
Liabilities (US$ million) 8,941 11,918 15,551 20,148 19,867 18,969
Financing entities
Number of institutions 4 4 5 7 7 5
Assets (US$ million) 352 394 189 324 434 247
Liabilities (US$ million) 305 338 151 264 355 188
Insurance companies
Number of institutions 15 13 12 14 16 17
Assets (US$ million) 480 614 624 754 847 964
Liabilities (US$ million) 293 390 379 469 557 641
Contribution to GDPa
Banking and financial entities 4.1 5.8 6.5 7.5 7.5 ..
Insurance companies 0.2 0.2 0.3 0.3 0.3 ..
.. Not available.
a Per cent of total GDP at constant 1979 prices.
Source : Information provided by the Peruvian authorities.
53. As at December 1999, the Peruvian financial system, excluding insurance companies,
consisted of 20 commercial banks, 13 municipal savings and loan institutions, 13 rural savings andloan institutions, 7 small business and micro-enterprises development entities, and 5 financial entities.
Commercial banks accounted for 97% of the financial system's total assets, financing entities for 1%.
In addition, the financial system includes two government enterprises:  the Bank of the Nation,
whose main purpose is to manage the incomes and expenses of the State;  and COFIDE, a second tier
bank, which channels credits to financial system institutions for the financing of small business(Chapter III(4)(iv)).  Following the liberalization of financial services in recent years, state
participation in the financial market has been reduced and foreign investors now play an important
role in the sector:  in late 1999, foreign investor s held shares in 16 of Peru's 20 commercial banks,
controlling 12 of them;  foreign participation in financing entities was higher, controlling almost 82%
of total assets.
54. The important structural changes of the last decade, have been continued to strengthen Peru's
financial system, particularly after the tightening of international credit to Peru from mid-1998.  The
increasing share of non-performing loans and the strong reliance of the financial system on short-term
foreign borrowings has placed the sector under strong pressure.  Two banks were liquidated inWT/TPR/S/69 Trade Policy Review
Page 76
November 1998 and late 1999, each representing less than 1% of total bank deposits.  The Peruvian
authorities indicated that the financial system began to show signs of recovery at the end of 1999, in
part due to the process of consolidation, which apparently created a sounder industry. During 1999,
the Government supported the financial system through a swap programme of loan portfolio for
government bonds, with the commitment to gradually repurchase the portfolio over no more than five
years.  The programme was implemented in two stages:  the first, which started in December 1998,was intended to bring liquidity to the system through the negotiation of treasury bonds in the market;
the second, implemented in July 1999, was intended to delay the tighter provisioning requirements for
some banks.  In both cases the banks must repurchase the swapped portfolio.
55. The insurance industry has also grown significantly in recent years, although at a slower pace
than commercial banking.  Its contribution to Peru's economy has remained relatively constant;in 1999 total premiums amounted to some 1% of GDP.  The industry is relatively concentrated;  four
companies (out of 17) accounted for 61% of total premiums at the end of 1999.  As in the case of
other financial activities, foreign participation has increased substantially in recent years.  In
late 1999, 13 insurance companies had foreign participation, of which six were controlled by foreign
investors.  One insurance company is state-owned. In ternational reinsurance plays an important role in
the Peruvian market:  in 1999 one quarter of total insurance premiums were paid to foreign
reinsurance firms.
(b) Regulatory framework
56. Financial services in Peru are conducted within a relatively liberal legal framework, although
some specific provisions limit market access as well as national and MFN treatment.
Financial services are mainly regulated by Law No. 26702 of 30 October 1996;  specific regulations
apply to the private pension fund system and to the Stock Market.  To improve the authorities' abilityto address existing weaknesses in the banking syst em, reforms to the legislation were introduced in
late 1998 and early 1999.  These changes, aimed at reducing the effect of the systemic risk caused by
liquidation processes and protecting the value of the resources deposited in the financial system,
included three main points:  new faculties for the Superintendency of Banking and Insurance (SBS) to
intervene banks in difficulties;  additional flexibility for the Deposit Insurance Fund;  and reduction ofrelated lending.
57. The SBS, an autonomous governmental agency, is in charge of authorizing and supervising
the activities of banks, insurance companies, a nd other financial institutions.  The SBS is endowed
with broad regulatory and supervisory powers, and may issue regulations and impose sanctions,
including the closing and dissolution of companies.  The Deposit Insurance Fund is a special privatelegal entity whose purpose is to provide protection to clients with deposits in entities of the financial
system.  It is empowered to provide coverage to depositors, and facilitate the transfer of deposits and
assets of entitities in the process of intervention.  All financial system companies that are authorized
by law to receive deposits are members of the Fund and contribute to it according to the amount of
their covered deposits and the risk level of their activities.  Other resources include an initialcontribution from the Central Bank and eventual credits from the Public Treasury approved by decree.
58. Foreign financial firms established in Peru have the same rights and are governed by the same
laws and regulations applied to domestic entities.  There are no limitations on the market share that
foreigners may hold in the financial system or the insurance industry.  The Banking and Insurance
Law stipulates that companies of the financial system must be stock companies, except where the
nature of the company would not allow this.  In addition, majority shareholders in a financial
enterprise may not hold, directly or indirectly, more than 5% of the shares of another enterprise of thePeru WT/TPR/S/69
Page 77
same nature.  The transfer to a single person of shares representing more than 10% of a company's
capital, either directly or through third parties, is subject to prior authorization from the SBS.  Foreign
financial institutions may carry out activities in Peru through a representative without having to
establish a company in Peru, provided that this has been authorized by the SBS.
59. The Banking and Insurance Law limits the amount of capital that a financial enterprise may
invest in subsidiaries to 40% of the net worth of the investing company, except in the case of generalinsurance companies investing in subsidiaries speci alized in life insurance.  This market access
limitation was incorporated in Peru's Schedule of Sp ecific Commitments for insurance companies, but
was not reported for other financial services, which have apparently been bound with respect to
market access through commercial presence.  The Peruvian authorities noted that the restriction is a
prudential policy with the purpose of giving authorities better control of the financial system risk.
60. Under the Banking and Insurance Law, Peru grants MFN treatment to financial institutions
from all countries.  However, a limitation to MFN trea tment exists in the form of a reciprocity clause
whereby Peru reserves its right to adopt protection measures in response to actions taken by other
countries.
61. In addition to the restrictions above, which apply to all financial entities, specific restrictions
apply to banking and insurance activities.  With  respect to banking activities, the Banking and
Insurance Law introduced a national treatment limitation by giving Peruvian creditors and foreigners
domiciled in the country priority rights over assets of a branch of a foreign bank.  More specifically, if
a foreign bank closes and the Peruvian branch has valuable assets, those assets must go first to
compensate the Peruvian creditors and foreigners domiciled in Peru.  Banks may not carry out
insurance activities.
62. The Banking and Insurance Law covers all insurance areas including general insurance and
reinsurance services, insurance brokerage services and auxiliary activities.  Except for social security,
which remains in state hands, the Law provides for the opening of all insurance areas to foreign
investment.  Peruvian residents may take out insurance or reinsurance services abroad, including from
entities not legally established and authorized to operate in Peru, only if these insurance or
reinsurance services are different from those offered in the Peruvian market; in addition, theseservices must be classified by rating agencies.  There are no requirements for insurance and
reinsurance companies to be specialized by activity (e.g. personal or general insurance).  Companies
are free to set insurance premiums.
63. Peru's initial offer under GATS included commitments on financial services, although only on
insurance services.  The sector's liberalization in recent years provided the basis for Peru'sparticipation in the negotiations leading to the conclusion in 1998 of the Fifth Protocol to the GATS;
its new WTO commitments in financial services, which entered into force on 1 March 1999, expanded
the coverage of insurance services and incorporated banking and other financial services.  Virtually all
of these commitments refer exclusively to services supplied through commercial presence.
(iii) Telecommunications
(a) Main features
64. The telecommunications sector has experienced a radical transformation in recent years as a
consequence of the privatization process and the progressive introduction of competition in all
telecommunication services.  As part of this process,  Peru participated in the WTO Negotiations on
Basic Telecommunications Services and attached a list of new commitments to the Fourth Protocol.
As reflected in Peru's current commitments under the GATS (Table IV.8), market access and nationalWT/TPR/S/69 Trade Policy Review
Page 78
treatment in the sector are in general guaranteed; the only significant exception is for broadcasting
services, which in Peruvian legislation are classified as telecommunication services.
65. Major changes in the telecommunications sector began in 1991 with the enactment of
Legislative Decree No. 702 of 8 November 1991.  This Law eliminated the State's exclusive rights to
provide telecommunication services and created a new regulatory body, OSIPTEL, with the aim of
establishing an appropriate legal framework to attract national or foreign private investment andprotect consumer rights.  To achieve this latter objective, the Law made obligatory the interconnection
of public service networks and prohibited anti-competitive practices.  The sector's legal framework
was consolidated in 1993 with the adoption of the Telecommunication Law (Supreme Decree
No. 013-93-TCC of 6 May 1993) and subsequent regulations.
66. The privatization process of public telecommunication companies consisted in transferring
an important package of shares from state-owned companies (CPT S.A. and ENTEL PERU S.A.)
to a strategic shareholder that would bring investment and technology, and assume the task
of modernizing and expanding telecommunication services.  In February 1994, a package of
shares was auctioned;  the winning consortium, led by Telefónica Internacional de España,
offered some US$2,002 million.  The Peruvian State received US$1,391 million for its shares, whileUS$610.8 million were subscribed as additional capital.  As a part of Telefónica del Peru’s concession
contract, a five-year monopoly period  (from 1994 to 1999) was established for local fixed
telephone services and for long-distance national and international services.  All other
telecommunications services were liberalized.  The Peruvian authorities indicated that, as at
early 2000, all state participation in public telecommunication services companies had been sold.
67. As part of the obligations set out in the concession contract, Telefónica del Perú had to ease
the high demand for telecommunications services, through the expansion and modernization of thebasic telecommunications infrastructure.  These obligations included objectives in terms of number of
installed lines and public telephones;  reduced time-lags for line installation;  digitalization of
infrastructure;  connection of new localities to the network;  and minimum quality requirements.
Substantial results were achieved in terms of expansion, modernization and improvement of basic
telecommunication services.  Between 1993 and 1999, the telephone density increased from about3 to almost 11 telephones for every 100 inhabitants, while the average delay to have a line installed
was reduced from 70 months to about 1.5 months.  Over the same period, the number of public
telephones increased from some 4,450 to over 62,700, and over 2,000 rural localities were given
access to telecommunication services.  As at end 1999, the stock of FDI in the sector amounted to
US$2,153 million.  Nevertheless, substantial scope remains for further development as some70,000 locations with less than 3,000 inhabitants do not have access to basic telecommunication
services.
68. In August 1998, Telefónica del Perú decided to end its limited five-year monopoly a year in
advance,  thus bringing about the full liberalization of the telecommunications sector.  This was
accompanied by tariff decreases and the entry of new operators.  Between July and October 1998,long-distance tariffs decreased on average by some 14% for interdepartmental calls and 52% for
intradepartmental calls.  International long-distance tariffs decreased on average by 30%.  In addition,
by end 1998, 34 concessions for carrier services for national and international long-distance services
and four concessions for fixed telephone services had been granted.
(b) Regulatory framework
69. In response to the new market conditions created by the premature elimination of  Telefónica
del Perú's monopoly, various regulations were changed or enacted:  the guidelines for market openingPeru WT/TPR/S/69
Page 79
were set up in Supreme Decree No. 20-98-MTC (5 August 1998);  the terms of concession
contracts between Telefónica del Perú and the Peruvian State were redefined in Supreme Decree
No. 21-98-MTC (5 August 1998);  and the Telecommunication Law was amended through Supreme
Decree No. 02-99-MTC (21 January 1999).
70. Peru's legislation classifies telecommunication services into four categories:  carrier, end use,
broadcasting, and value-added services.  Carrier services, involving the transmission of signals toprovide other telecommunication services, require a concession and their interconnection is
compulsory.  Concessionaires must guarantee neutral treatment to end-user service providers to
preserve fair competition conditions among them.  End-use services include fixed and mobile
telephone services, telex, telegraph and radio-communication services.  A concession is required to
provide public end-use services.  The supply of private end-use and radio-communication servicesrequires:  an authorization to establish the servi ce;  a permit to install communication equipment in a
specific location;  and a licence to operate the service.  Final services should be provided in a
competitive environment by either national or foreign suppliers.
71. Public broadcasting services require a concession while private broadcasting requires an
authorization, permit and licence.  Market access is limited by law since natural or moral personsare not allowed to hold more than one radio-broadcasting authorization or shares in more than one
radio-broadcaster per locality.  In addition, national treatment is limited by the requirement that
natural and moral persons providing broadcasting services be Peruvian.  No authorization is needed to
provide value-added services.  Nevertheless, value-added services requiring their own networks,
separate from those already used by carrier or final services, need ministerial authorization.  With the
exception of broadcasting services, up to 100% foreign ownership is allowed in all telecommunication
services.
72. The Ministry of Transport, Communications, Housing and Construction is in charge of
defining telecommunication policies, allocating and supervising frequencies, and granting
concessions.  With the exception of value-added services, all public services require a concession.
Concession policy is based on the principle of unrestricted access of operators to any service,
provided the applicant operator fulfils the requirem ents and obligations set down in the legal terms,
except when the electromagnetic spectrum imposes technical constrains.  When the spectrum
constrains the number of operators in the market, concessions are granted through public bids.
Concessions are granted for a maximum of 20 years, which may be renewed without limitation.
Transfer of concessions require prior authorization from the Ministry.
73. As mentioned earlier, OSIPTEL is the regulatory body for public telecommunication services.
Its functions include:  setting tariffs and interconnection charges;  enforcing consumer rights;
supervising the fulfilment of commitments established in concession contracts;  solving controversies
among companies;  administering the fund for pr ivate investment in telecommunications (FITEL);
and promoting investment in the sector.  OSIPTEL has the exclusive right to set tariffs for public
telecommunication services.  Tariff policy in the sector aims to deregulate tariffs for all servicesprovided under free competition conditions.  For services where a dominant operator exists, OSIPTEL
sets maximum rates.
74. An important factor in the process of market liberalization has been interconnection policy.
In this respect, OSIPTEL regulates the determination of interconnection points;  the establishment of
default interconnection charges;  and access to basic infrastructure.  Although interconnection charges
are negotiated between operators, OSIPTEL may determine such charges when the parties do not
reach agreement.WT/TPR/S/69 Trade Policy Review
Page 80
75. A special investment fund (FITEL) has been created to promote universal access through
private investment in regions where demand does not  otherwise make such investment profitable.
The fund, administered by OSIPTEL, is financed through a contribution from all enterprises in the
sector, equivalent to 1% of their sales during the previous month, which at of end 1999 had reached
an accumulated value of US$44 million.  FITEL monies are used to subsidize concessions granted
through public bids to operate services in rural areas;  these concessions are granted to the enterprisethat makes the lowest bid for a subsidy to supply the service in question.
(iv) Transport
(a) Air transport
Market structure and performance76. Peru's airport network comprises 60 airports, of which eight are classified as international.  
The principal airport is located in Lima;  in 1998, it handled 58% and 96% of total domestic and
international passenger traffic.  Since 1994, national passenger traffic has increased at an annual
average rate of 2.6%, while international passenger traffic increased at 13.8%.  Freight traffic is also
concentrated at Lima's airport, where some 29,000 tonnes of merchandise was unloaded, and some
34,700 tonnes exported in 1998.  Between 1994 and 1998, total freight volume at Lima's airport
increased at an annual average rate of some 13%.
77. The deregulation of air transport, which began in 1991, has provoked important changes in
the composition of companies operating in Peru.  Among the 31 companies working on a regular basis
in October 1999, 18 started operations after 1992.  Twenty-one companies have ceased operationssince 1992;  the former state airline Aeroperú stopped activities in March 1999 after vain attempts to
find a buyer.  Currently, Aerocontinente, a private operator, is the principal Peruvian company in
operation.  With the aim of improving services, most airport facilities at Lima's airport have been
given in concession to the private sector.  The Government is currently proposing to offer concessions
for the administration, operation, and development of Lima's international airport through a publictender;  four other airports would be offered subsequently.
Regulatory framework
78. Air transport is governed by Law No. 24882 of 30 June 1988, on civil aviation, and its
regulations (Supreme Decree No. 054-88-TC of 27 November 1988);  Legislative Decree No. 670 of
16 September 1991, concerning access of capital and enterprises to air transport services;  and Law
No. 26917 of 23 January 1998, governing private investment.  Other regulations affecting air transport
services include:  Supreme Decree No. 06-90-TC of 23 July 1990 and its amendments (Supreme
Decree No. 035-93-TCC of 30 December 1993) regulating tourist charter flights;  and Law No. 26984of 25 October 1998 regarding cabotage practices.
79. The Ministry of Transport, Communications, Housing and Construction is responsible for
policy related to air transportation, allocating flight destinations and frequency, as determined through
bilateral agreements.  A regulatory body, OSITRAN, was established in 1998 to oversee the
concessions to the private sector of public transport infrastructure and in particular airport serviceconcessions.  Air traffic control services and navigation aids for terminal use in civil airports are
provided by the public entity CORPAC.
80. Following widespread international practice, scheduled international services are regulated
under a regime of bilateral agreements, the main limitations to national and MFN treatments arising
from Law No. 24882, which is based on Chicago's Convention on International Civil Aviation.  The
Law established that the State should promote aviation activities giving preference to Peruvian naturalPeru WT/TPR/S/69
Page 81
or moral persons.  In addition, it stipulated that air transport services are reserved exclusively to
Peruvians.  The Law incorporates a reciprocity clause stipulating that all bilateral or multilateral
concessions are subject to reciprocal treatment or equivalent compensation.  Supreme Decree
No. 054-88-TC authorizes the engagement of foreigners for a maximum period of one year but only
when no Peruvian staff is available.
81. In the early 1990s, with the aim of promoting investment in air transport services, Legislative
Decree No. 670 eliminated all restrictions and administrative procedures deemed to hinder the
development of civil aviation, including those that limited the participation of private national or
foreign capital in air transport services.  The Decree liberalized most auxiliary and airport services
including operation of ground support equipment, cargo handling, loading and unloading,
warehousing, and aircraft maintenance support.  Market access remains limited for navigation supportservices, radio-communications and air traffic control, which are reserved exclusively for CORPAC.
With respect to national treatment, Decree No. 670 reserved the registration of planes with the Public
Registry to Peruvian nationals.  National preference for international air transport routes was also
reaffirmed in the Decree.  Enterprises are considered national provided that at least one third of the
board of directors is  Peruvian or permanently resident in Peru and at least 30% of the shares are heldby Peruvians.
82. Law No. 26917 reaffirmed the exception to national treatment provided to regular and non-
regular domestic air transport.  Supreme Decree Nos. 06-90-TC and 035-93-TCC contain market
access restrictions with respect to tourist charter flights in the form of specific conditions on the
provision of such services by foreign firms, and by requiring tourist operators to have a legal
representative accredited in Peru.  Since Aeroperú ceased activities in 1999, no airline has received
national flag carrier status and, thus, no special privileges are granted to any operator.
83. Although foreign participation in the air transport sector appears relatively restricted at the
multilateral level, in the context of bilateral agreements the sector is relatively open.  In particular,
Peru has signed an agreement with Chile providing for the so-called fourth, fifth, sixth and seventh
freedoms in specific routes.  In addition, Peru has reached an open sky agreement with the United
States for freight transport.  Other liberalization arrangements subscribed by Peru include bilateralagreements with Panama, the Netherlands, and Switzerland, and regional agreements within the
Andean Community.  To promote tourist activities in specific zones, Law No. 26984, authorized
commercial cooperation agreements between Peruvian and foreign companies allowing in particular
cabotage practices, which in general are exclusively reserved for Peruvian air carriers.
(b) Maritime transport
Market structure
84. Peru has seven main maritime ports for public use, three specialized private ports operated by
mining and cement companies, and four fluvial ports.  In 1998, some 55% of the total cargo handled
by Peru's main public ports was related to import operations, 33% to exports, 9% to cabotage, and 3%
to other operations such as transit.  During 1990-98, the principal port, located in Callao, accountedfor 70% of the total cargo handled in public-use terminals, 73% of boat movements, and 86% of
container movements.
85. Despite certain remaining market access and MFN treatment restrictions, maritime transport
was largely deregulated in the early 1990s.  Deregulation included transport services per se as well as
port services.  Cargo handling services are now provided under competitive conditions, while vessel
movement services and port infrastructure are currently being transferred to private concessionaires.WT/TPR/S/69 Trade Policy Review
Page 82
As of early 2000, one port, Matarani, had been wholly transferred to private operators.  A high degree
of market access to Peru's maritime transport services is suggested by the large share of nationalmaritime trade handled by foreign boats, which reached 96% in 1999.
Regulatory framework
86. Maritime transport services are regulated by Legislative Decree No. 644 of 4 July 1991,
which governs route freedom and operating permits;  Supreme Decree No. 020-91-TC of 4 July 1991,
regulating cargo reservation and reciprocity;  and Legislative Decree No. 683 of 3 November 1991, onroute freedoms for commercial transport and cabotage.
87. The Ministry of Transport, Communications, Housing and Construction, through its General
Direction of Aquatic Transport, is responsible for the administration and development of maritimetransport in Peru, including port infrastructure.  As in the case of auxiliary air transport services,
OSITRAN is charged with overseeing port services activities and infrastructure given in concession to
the private sector.
88. Legislative Decree No. 644 gave total freedom to national enterprises to operate international
maritime routes.  The Decree allowed national enterprises to increase their capacity through boatacquisition, lease or hire without prior authorization.  Enterprises are considered national provided
they are constituted in Peru and registered with the Registry of National Shipping Companies;  the
Decree eliminated any nationality requirement for shareholders or the board of directors.
89. Supreme Decree No. 020-91-TC eliminated th e cargo reservation clause that obliged
exporters and importers to transport half of the traded volume through Peruvian companies.However, MFN treatment is not guaranteed as the Decree introduced a reciprocity clause stipulating
that participation of foreign enterprises in Peru's transport must be equivalent to the participation
allowed to Peruvian companies in foreign countries.  Peru does not participate in shipping lines
forming conferences under the U.N. Code of Conduct for Liner Conferences (Liner Code).
90. Although Legislative Decree No. 683 libera lized the operation of domestic commercial
routes, the commercial transport of passengers or cargo on domestic routes was restricted to Peruvian
enterprises, or to foreign boats operated by national companies.  Cabotage is also reserved for nationalcompanies, although preferential treatment is gran ted to Andean Community countries for cabotage
services within the region.
91. Peru participated in the suspended WTO Negotiat ions on Maritime Transport Services.  Peru's
GATS Schedule covers a limited range of maritime and internal waterway transport of passengers,
referring exclusively to internal tourist transport services.
(v) Other services
92. Peru included only a limited number of professional services in its sector-specific
commitments under the GATS.  In general, market access for foreign professionals is constrained by
specific conditions set by each professional college for the recognition of foreign degrees. Foreign
professionals must also enrol in the relevant professional college;  some enrolment fees are higher for
foreigners than for Peruvians.
93. As mentioned earlier, broadcasting services, covered by the Telecommunication Law, are
reserved exclusively for Peruvians.  National treatment is also restricted by Law No. 26370 of
23 October 1994, which stipulates that a cinematographic work might be considered national only ifPeruvian citizens represented at least 80% of all professionals engaged in its production and if they
received a minimum of 60% of the total payroll within each professional category.Peru WT/TPR/S/69
Page 83
BIBLIOGRAPHY
Aduanas (various issues) Boletín ALADI y CAN , Lima.
Banco Central de Reserva del Perú (1998), Memoria , Lima.
Banco Central de Reserva del Perú (1999), "La Política Monetaria del Banco Central de Reserva del
Perú", Notas de Estudios No. 6, December, Lima.
Banco Central de Reserva del Perú (2000), B oletín Semanal No. 6 , January [Online].  Available at:
http://www.bcrp.gob.pe/ espanol/c-notasemanal.htm [2000, 24 february].
Boloña, C. and J. Illescas (1997), Políticas Arancelarias en el Perú, 1980-1997 ;  Instituto de
Economía de Libre Mercado, Lima.
Boza, B. (Editor) (1998), Peru's Experience in Market Regulatory Reform, 1993-1998 , INDECOPI,
Lima.
Comisión Nacional de Inversiones y Tecnologías Extranjeras (1999), Boletín Estadístico , December,
Lima.
Dancourt, O., Ugaz, R. and L. Vilcapoma (1999), "Perú, 1999", Serie de Informes de Coyuntura
No. 21, Departamento de Economía de la Pontificia Universidad Católica del Perú, Lima.
Economist Intelligence Unit (1999), Country Profile, Peru 1999-2000 , London.
Energy Sector Manageme nt Programme (1999),  Peru, Reform and Privatization in the Hydrocarbon
Sector , UNDP and World Bank, Washington D.C.
Fairlie, A. (1997), "Déficit Peruano, perfiles de comercio y bloques regionales en los noventa",
Documento de Trabajo No. 136, Departamento de Economía de la Pontificia Universidad Católica del
Perú, Lima.
Field, G. (1999), Peru:  an Economy for the 21st Century , Euromoney Institutional Investor, PLC:
London.
Figueroa, A. (1998), "Políticas macroeconómicas  y pobreza en el Perú", Documento de Trabajo
No. 145, Departamento de Economía de la Pontificia Universidad Católica del Perú, Lima.
Illescas, J. (1999), La Liberación de Servicios en el Perú , Ministerio de Industria, Turismo,
Integración y Negociaciones Comerciales Internacionales, Lima.
IMF (1999), International Financial Statistics Yearbook , Vol. LII, 1999.
INDECOPI (1996), Compilación Legislativa de Propiedad Intelectual , Lima.
Instituto Nacional de Estadística e Informática (1998a), Oferta y Demanda Global, 1997 , Lima.
Instituto Nacional de Estadística e Informática (1998b), Perú:  Compendio de estadísticas económicas
y financieras, 1997-1998 , Lima.
Ministerio de Energía y Minas (1999a), Perú, País Minero , [CD-ROM], Lima.WT/TPR/S/69 Trade Policy Review
Page 84
Ministerio de Energía y Minas (1999b), Minería, plan referencial 1999-2007 , Lima.
Ministerio de Industria, Turismo, Integración y Negociaciones Comerciales Internacionales (various
issues), Perspectiva Industrial , Lima.
Ministry of Labour and Social Promotion (1998), Compendio Estadístico de Empleo e Ingresos ,
[CD-ROM], Lima.
Organismo Supervisor de Inversión Pr ivada en Telecomunicaciones (1999), Memoria anual 1998 ,
Lima.
Pagés, C. (1999), "Apertura, Reforma y Mercado de Trabajo:  la experiencia de una década de
cambios estructurales en el Perú", Working Paper No. 397, Inter-American Development Bank,
Washington D.C.
PROMPERU (1999), Guía Política y Legal , [Online].  Available at http://www.promperu.gob.pe
[8 June 1999].
Superintendencia de Bancos y Seguros (1999), Memoria anual 1998 , [online].  Available at
http://www.sbs.gob.pe, [9 February 2000].
Távara, J. (1997), "Las políticas antimonopolio y la promoción de la competencia en el Perú",
Documento de Trabajo No. 138, Departamento de Economía de la Pontificia Universidad Católica delPerú, Lima.
World Bank (1999a), Poverty and Social Developments in Peru, 1994-1997 , Washington D.C.
World Bank (1999b), World Development Indicators , Washington D.C.