WT/REG393/M/1  
 
10 August  2020 
(20-5489) Page: 1/3 
Committee on Regional Trade Agreements  
Ninety -sixth  Session    
 
 
FREE TRADE AGREEMENT BETWEEN PERU AND HONDURAS  
(GOODS AND SERVICES ) 
NOTE ON THE MEETING OF  27 JULY 2020 
Chairman: Ambassador H.E. Mr. Mārtiņš KREITUS (Latvia)  
1.1.  The 9 6th Session of the Committee on Regional Trade Agreements (hereinafter  'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/RTA/ 21/Rev.1  dated 6 July 2020. 
1.2.  Under Agenda Item D.IV of the Session, the CRTA considered the  Free Trade A greement 
between Peru and Honduras (Goods and Services ). (hereinafter  "the Agreement").  
1.3.  The Chairman  noted that the Agreement had entered into force on 1 January 2017. It had been 
notified to the WTO by the Parties on 17 October 2018 under Article  XXIV:7(a) of the GATT  1994 
and the Understanding on the Interpretation of Article  XXIV of GATT 1994 as an Agreement 
establishing a free trade area (document  WT/REG393/N/1) and under GATS  Article V:7(a) as an 
Agreement providing for the liberalization of trade in services within the meaning of Article V of the 
GATS (document S/C/N/918). The text of the Agreement was available, together with its Annexes, 
on the Parties' official websites.  The Factual Presentation on the goods and services aspects 
(document  WT/REG393/1 dated 11 October 2019) and questions and replies on this Agreement 
(document WT/REG393/2 dated 9 January 2020) ha d been distributed.  
1.4.  The representative of Peru, speaking on beha lf of both Parties  referred to the particular 
situation that had forced them  to address the Committee  via virtual means on account of the terrible 
pandemic currently afflicting their nations . He hoped that th e situation would soon be overcome 
through joint  efforts. It was clear that trade was the engine that w ould reactivate economies, which 
had also been impacted.  
1.5.  He said that the  current circumstances did not detract the Parties  from the ir trade policy 
objective s, which were oriented towards promoting sus tainable growth and the modernization of 
their economies, and improving the efficiency and productivity of their economies in order to ensure 
their competitiveness and help reduce poverty in their countries. This trade policy, based on open 
and liberaliz ed markets , sought  to transform their countries into exporters of high -quality goods and 
services, while fostering investment and promoting the deeper integration of their nations.  
1.6.  Within this framework, negotiations to establish a Free Trade Agreement betwe en Honduras 
and Peru had been  launched in 2010 as part of a joint initiative between Costa Rica, El Salvador, 
Guatemala, Honduras and Panama. These countries  had agreed to engage in the process with Peru 
on the basis of an approach that had entailed region al negotiation but had been implement ed 
bilateral ly between each of the Central American countries and Peru. Account had been taken of 
experiences regarding the negotiation of similar agreements.  
1.7.  The first round of negotiations had been  held in November 2010, and the last round of bilateral 
negotiations in May 2015. After eight rounds of negotiations, and a great deal of hard wo rk over the 
course of five years, the Free Trade Agreement had been  signed in Lima, Peru, on the 29 May 2015, 
and approved by the National Congress of Honduras through Decree No. 105 2015 on 5 August 
2016. Peru had ratified the Agreement through Supreme De cree No. 060 2016  RE of 23 July 2016 
and had provided for its implementation through Supreme Decree No. 009 2016 MINCETUR, WT/REG393/M/1  
 
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  published on 30 December 2016 in the Official Journal El Peruano. The Agreement had entered into 
force on 1 January 2017.  
1.8.  The Partie s made the relevant notification to the WTO on 11 October 2018, in accordance with 
Article XXIV:7(a) of the GATT 1994 and Article V:7(a) of the GATS.  
1.9.  The Agreement form ed part of the Parties' trade strategy, which aimed at contributing to the 
consolidation  of economic integration processes and integration into international markets and 
improving market access conditions. The Agreement also establishe d a legal framework with clear, 
stable and transparent rules, as well as disciplines that promote d trade in g oods and services and 
investment and include d mechanisms to prevent the application of discretional measures that had 
an unjustified impact on trade. In addition, it ensure d legal certainty and predictability for economic 
operators and provide d consumers w ith more choice when purchasing goods and services. It also 
establishe d effective and transparent dispute settlement procedures.  
1.10.  The Agreement had given  the Parties  an extended market of around 40 million people, to 
which should be added a further 9 millio n people from Costa Rica and Panama, countries with which 
Peru had existing trade agreements, which allow ed for cumulation of origin. Furthermore, it was an 
instrument that would  foster bilateral trade, generating benefits primarily for SMEs, which were 
constantly on the lookout for nearby and likeminded  destinations for their value -added  products.  
1.11.  In 2019, bilateral trade amounted to around USD66 million, a figure that was still very low, 
but which present ed the Parties  with a significant challenge – that of increasing trade using the 
mechanisms provided for in the Agreement, especially in t he post pandemic economic recovery 
phase.  
1.12.  Before the entry into force of the Agreement, 3,456 tariff lines had been  duty free on an MFN 
basis, representing 51.5% of Honduras' tariff, and corresponding to 70% of its imports from Peru 
during the period 2014 -2016. Following the entry into force of the Agreement, an additional 2,109 
tariff lines (29% of the tariff)  had become duty free for  imports from Peru (7.1% of imports from 
Peru entered under these lines). After 10 years of implementation, an additional 20% of Honduras' 
tariff would  be liberalized, accounting for 22.7% of its imports from Peru. At the end of the transition 
period in 20 31, 98.7% of Honduras' tariff would  be duty free for imports from Peru, corresponding 
to 100% of imports in terms of value. Ninety -three  tariff lines (1.3% of Honduras' tariff) would  
remain dutiable or subject to the price band system.  
1.13.  Similarly, before the entry into force of the Agreement, 5,441 tariff lines had been  duty free 
on an MFN basis, representing 69.9% of Peru's tariff, and corresponding to 72.5% of its imports 
from Hondur as during the period 2014 -2016. Upon the entry into force of the Agreement, an 
additional 1,120 tariff lines (14.4% of the tariff) became duty free for imports from Honduras. After 
10 years of implementation, Peru would  have liberalized a further 13.8% of its tariff, corresponding 
to 13.5% of its imports from Honduras. At the end of the transition period in 2031, 99% of Peru's 
tariff would  be duty free for imports from Honduras, corresponding to 100% of imports in terms of 
value. Seventy -eight tariff lines (corresponding to around 1% of Peru's tariff) would  remain dutiable.  
1.14.  In light of the foregoing, the Parties were  sure that the Agreement would  be very beneficial 
and enable both nations to meet their growth and development objectives. They hoped that th e 
presentation of the Agreement would  help Members to acquire a better understanding of its terms 
and were ready to reply to any additional questions Members  may have.  
1.15.  The representative of Colombia  thanked the Secretariat for the factual presentation. She 
indicated that th e work was particularly relevant considering that the two Parties were  important  
trading partners for Colombia. She referred to the two written questions that Colombia had sent to 
the Parties with respect to rules of origin and origin cumula tion and indicated that her capital was 
satisfied with the response given by the Parties. She noted with interest the provisions on extended 
cumulation of origin applicable when both Parties had a free trade agreement with the same third -
party. Colombia would be interested in  learning about the experience of the Parties regarding the 
implementation of this provision. The question raised by Ecuador also with respect to the question 
of cumulation of origin had also attracted the interest of her delegation. Sh e thanked the delegations 
of Honduras and Peru for the work done with respect to the factual presentation.  WT/REG393/M/1  
 
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  1.16.  The representative of the United States  thank ed Peru, Honduras and the Secretariat for the 
transparency on this agreement. She commend ed Peru and Hon duras for the high level of 
liberalization under the agreement. She noted, however, that both Parties had non-notified 
agreements that were in force. She hoped these agreements would  be notified promptly.  
1.17.  The Chairman  noted that the consideration of the Goods and Services Aspects of the Free 
Trade Agreement between Peru and Honduras  had allowed the Committee to clarify a number of 
questions and could now conclude oral discussion of the RTA in accordance with paragraph 11 of the 
Transparency Mechanism. If delegations wished to ask follow up questions they were invited to 
forward submissions in writing to the Secretariat by 3 August 2020. Parties were asked to submit 
replie s in writing by no later than 17 August 2020. In accordance with paragraph 13 of the 
Transparency Mechanism all written submissions, as well as minutes of this meeting would be 
circulated promptly, in all WTO official languages, and would be made available on the WTO website.  
1.18.  The Committee took note  of the comments made.  
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