WORLD TRADE WT/MIN(98)/ST/18
18May1998
ORGANIZATION(98-2002)
Original: Spanish
MINISTERIAL CONFERENCE
Second Session
Geneva, 18and20May1998
PERU
Statement Circulated byH.E. Mr.Gustavo Caillaux,
Minister forIndustry, Tourism, Integration andInternational Trade Negotiations
Since 1990, Peruhascarried outathorough legal andinstitutional reform inacontext of
economic stabilization, economic liberalization andfreemarkets. Inthisframework, theGovernment
carried outastabilization programme aimed atrestoring macroeconomic equilibria andcontrolling
inflation. Thechiefmeasures adopted inthedrive forstability included liberalization ofprivate-sector
pricesandwages,adjustmentofpublic-sectorpricesandcharges,downsizingofthepublic-sectorpayroll,
fiscal andmonetary discipline, exchange-rate unification andliberalization, elimination oftrade and
financial subsidies toexports, simplification ofthetariff system totworates(currently 12percent
and20percent), elimination ofallinternational trade prohibitions andrestrictions, elimination ofall
restrictions oncapital flows, liberalization ofinterest rates, andstrengthening ofthesupervision of
thefinancial system. Allthishashelped toeliminate theanti-export bias,raiseproductivity andfoster
thespread oftechnology through relatively cheaper imports ofcapital goods andforeign credits.
Seven years afterthestabilization programmes andreforms werelaunched, theresults show
thatgreat strides havebeenmade. Inflation hasbeenbrought down from 7,650 percentin1990 to
under 9percentin1997, close totheinternational level. Meanwhile, production activity hasbeen
steadily picking upsince 1993, when GDP grew by6.5percent, witharateofabout 8percentin
1997. Likewise, netinternational reserves, withanegative balance ofUS$100 million inmid-1990,
arenowinexcess ofUS$10,000 million, while atthesame timethecountry hasalsomanaged tosettle
itsdebtpayment arrears withinternational financial institutions suchastheIDB,IMFandWorld Bank,
anddebtwiththeParisClubgovernments, which totalled US$14 billion (70percentofaggregate debt)
in1990; andfinally in1997 agreed onaBrady Planwithinternational commercial banks.
Theprimary objective ofthisprocess ofreintegration carried outsince 1990 wasnotjustto
obtain apositive netinflow ofresources frominternational financial institutions, butrather tonormalize
relations withthose institutions andreduce Peru'scountry-risk soastomake itapotential recipient
offinancial andproduction investment.
These reforms havehelped, andwillhelpevenmore, toboost Peru'sforeign trade. Thus,
theflowofexports ofgoods andservices hasrisenfromUS$4,120 million in1990toUS$8,372 million
in1997, headed byexports ofcopper, fishmeal, tourism, gold, textiles andzinc,inthatorder. Finally,
asfordirect investment, foreign firms havehadamajor share intheprocess ofprivatization, andthere
havealsobeenpurchases ofPeruvian firms byforeign companies aswellastheestablishment ofnew
firms. Weexpect thistrend todevelop inthecoming years.
With regard totheimplementation oftheUruguay Round Agreements, the"built-in agenda"
andthesubjects stemming fromtheSingapore Ministerial Conference Declaration, wewishtomake
thefollowing remarks.WT/MIN(98)/ST/18
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Liberalization ofservices
Theliberalization oftrade inservices isamatter ofparticular interest toPeru. Inthecontext
ofthereform process begun in1990, mycountry hasunilaterally liberalized itsservices market, thereby
notonlypromoting competition andwidening thechoice available tofinalconsumers, butalsoenhancing
thecompetitivenessofdomesticproducersofgoodsandotherservices,sothattheycanmeetthestringent
requirements ofinternational markets. Thus, Perusignificantly increased itsofferonfinancial services
andbasic telecommunications, andlooks forward tothenegotiations scheduled fortheyear2000.
Itisalsoworth highlighting theimportance ofthetourism-related services. Tourism isan
increasingly important sector owing toitsastonishing growth rate,asamajor source offoreign exchange
earnings fordeveloping countries inparticular, andbecause itbrings inarange ofrelated services
suchasairtransport, telecommunications, accommodation services together withrelated foodservices,
aswellassporting, cultural andrecreational activities. Herewebelieve thatthescheduled negotiations
andthebroad liberalization achieved inthissector willcontribute tobalanced andcompetitive growth
oftourism, thereby promoting jobcreation, thedevelopment ofdepressed areas andthebestpossible
conservation ofthecultural heritage ofthehostcountries.
Competition andtrade
Itisparticularly important tocontinue studying theinteraction between trade andcompetition
policy. Inprinciple, byreducing tariffs andnon-tariff barriers totrade, newopportunities arecreated
andinternational competition isexpanded, thusfostering innovation andefficiency inthecountries
taking partintrade. Weconsider thattradeshould begoverned bymarket rules, sothatthecompetitive
advantages andefficiency ofeachproducer determine ithowsuccessful itisininternational competition.
Tothisend,wemustspurontheactivities oftheWorking Group ontheInteraction between
Trade andCompetition Policy. Theaimistodesign competition regimes within themultilateral order
capable ofpreventing orinanycasesanctioning possible anti-competitive behaviour byfirms thatwield
great economic power, thusensuring thatthistypeofbehaviour doesnotnullify thebenefits created
bymultilateral trade liberalization forthesound functioning ofmarkets andtheconsumer society
worldwide.
Investment andtrade
Wemustalsocontinuestudyingtherelationshipbetweentradeandinvestmentinordertoachieve
withintheWTOacomprehensiveandbalancedtreatmentlinkinginvestmentwitheconomicdevelopment
andgrowth, while alsotaking intoaccount thattheapplication ofincentives andevenspecific restrictive
trade measures affect investment decisions. Thus, theprogress being made within theWTO isof
particular importance, inviewofthestalled negotiations fortheadoption ofamultilateral investment
agreement intheOrganization forEconomic Cooperation andDevelopment (OECD).
Dispute settlement
Theimplementationofclearandpreciserulesgoverningtraderelationsamongcountriesprovides
legalsecurity forprivate international transactions. Theestablishment oftheWorld Trade Organization
andentry intoforce oftheAgreements contained intheUruguay Round Final Acthavebolstered
confidence inthemultilateral trading system, withthecreation ofanOrganization thathaslegal
personality, astable andpredictable legalframework forinternational traderelations, andanintegrated
andefficient dispute settlement system toensure compliance.WT/MIN(98)/ST/18
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Wewelcome thework oftheWTO Dispute Settlement Body, since ithashelped tostrengthen
credibility aswellastheability ofsmall countries suchasPerutotakeaction toinvoke fulfilment of
theestablished rules andthecommitments agreed through thesystem. Wehope thatstrengthening
thismechanism willbeapriority itemonthemultilateral agenda.
Agricultural negotiations
Perualsoattaches special importance tothepreparation oftheforthcoming negotiations on
agriculture. Webelieve thatagricultural reform, ofwhich thefirststepistheAgreement onAgriculture
thatwehavebeenimplementing since1995, isacontinuing process aimed inthelong-term atachieving
amarket-oriented agricultural trading system inwhich developing countries cancompete onfairterms.
Wetherefore think itisfundamental thatthefuture discussions should takeintoaccount (a)theneed
toincorporateasubstantiveimprovementinmarketaccessopportunitiesforagriculturaltropicalproducts,
which areofparticular interest tomycountry; (b)measures toencourage diversification away from
crops fortheobtention ofillegal drugs; (c)prompt andeffective implementation oftheDecision on
net-food-importing developing countries; andnolessimportant, (d)emphasis onspecial anddifferential
treatmentfordevelopingcountryMembersasprovidedforinArticle20oftheAgreementonAgriculture.
Small textile suppliers
Peruhaslongbeenanefficient producer ofhighquality textiles andclothing, which iswhy
weplace emphasis ontheneedforfullimplementation oftheAgreement onTextiles andClothing,
particularly theclauses referring tosmall suppliers. Inaddition weareconcerned attheuseof
protectionist measures against textiles products thatarebeing integrated intotheGATT 1994. We
arealsointerested inthepossibility ofinitiating tariff-cutting negotiations inthetextile andclothing
sector.
Wethink itisnecessary tomention thedesirability ofconcluding satisfactorily theprogramme
ofharmonization ofrulesoforigin, soastohavetransparent, clearly defined andmultilaterally agreed
rules.
Customs valuation andpreshipment inspection
Wewishtostress theimportance ofthetransition periods allowed intheUruguay Round for
developing countries. Asregards customs valuation, forexample, thisrightallow ustoimplement
theCustoms Valuation Agreement inamanner thatislesstraumatic andmore inlinewiththefiscal
policy objectives needed forthecountry 'sdevelopment. Likewise, asregards preshipment inspection,
weconsider thattheAgreement hassuitably safeguarded national interests against harmful practices
suchascustoms undervaluation, inkeeping withtheprinciples ofnon-discrimination andtransparency,
while respecting theinterests ofexporting countries. Webelieve thattheexchange ofviews carried
outwithin theWorking Party onPreshipment Inspection willhelptoachieve abetter understanding
ofnational systems, inaccordance withthespirit ofequity reflected inthatAgreement.
Lastly, Ishould liketotaketheopportunity ofthissecond Ministerial Conference oftheWTO,
heldinparallel withthe50thAnniversary ofthemultilateral trading system, tomention thatPeruhas
beenanactive participant inGATT activities since 1951andwillcontinue toparticipate constructively
intheWTO.
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