WT/REG295/M/1  
 
4 October 2013  
(13-5363) Page: 1/3  
Committee on Regional Trade Agreements 
Seventieth Session    
 
 CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
PERU AND THE EFTA STATES, GOODS 
NOTE ON THE MEETING OF 17-18 SEPTEMBER 2013 
Chairman: Ambassador Francisco Lima Mena (El Salvador) 
1.1.  The 70th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/4163/REV.1 dated 4 September 2013. 
1.2.  Under Agenda Item B.V of this session, th e CRTA considered the Free Trade Agreement (FTA) 
between Peru and the EFTA States (hereinafter "the Agreement"). 
1.3.  The Chairman said that the Agreement had entered into force on 1 July 2011 for Peru, 
Liechtenstein, and Switzerland, 1 October 2011 Peru and Iceland and 1 July 2012 for Peru and 
Norway. It had been notified to the WTO by the Parties on 30 June 2011, 21 September 2011 and 
18 June 2012 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 (documents WT/REG295/N/1-3). The text of the Agreement was available, together with its 
Annexes, on the Parties' official websites. The Factual Presentation on the goods aspects 
(document WT/REG295/1 dated 19 June 2013) had been prepared by the Secretariat on its own responsibility in full consultation with the Parties, in accordance with paragraph 7(b) of the Transparency Mechanism for Regional Trade Ag reements (document WT/L/671). In addition, 
written questions and replies on this Agreemen t had been distributed in document WT/REG295/2 
dated 11 September 2013. He proposed to organize the consideration of the Agreement by first asking the Parties and then other Members to give any general comments and then use the 
Factual Presentation, document WT/REG295/1, to guide the debate.  
1.4.  The representative of Peru noted that althou gh the EFTA States belonged to a distant region 
Peru shared with them the objective of strength ening the multilateral trading system as well as 
important economic and trade links, in particular trade in goods and services, investment as well 
as scientific collaboration. Peru supported the multilateral trading system and believed that 
bilateral and regional integration schemes should be complementary to the multilateral trading system and not replace it. At the same time, Peru was committed to sustainable development with 
social inclusion which was why it had focused on policies that promoted openness to international 
trade. Having private investment and foreign trade as the main engines of growth in the last few 
years had significantly contributed to reducing poverty in Peru. The policy of trade openness that 
Peru had been developing in a consistent manner was fully compatible with its WTO obligations. In 
this spirit the three agreements to be considered at the meeting, along with the six agreements already considered in the CRTA under the Transparency Mechanism, covered 68% of Peru's 
exports. With the further consideration in the CRTA of the more recent agreements with Mexico, 
Costa Rica and the European Union 12 agreements covering 87% of Peru's exports would have been considered. This reflected Peru's firm co mmitment to the Transparency Mechanism and the 
work of the Committee to improve understanding of  regional trade agreements. Peru thanked the 
WTO Secretariat for having prepared the factual presentation, the EFTA States for their close 
co-operation and support in preparing for the meeting and Members for their questions on the Agreement.  WT/REG295/M/1 
 
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  1.5.  Peru had been implementing a trade polic y of openness and liberalization over the last 
20 years which had sought to integrate it with the global economy with the aim of increasing the wellbeing of the population and taking advant age of the benefits of international market 
specialization. The strategic aim was to sustainably increase trade, with an emphasis on exports 
from non-traditional sectors, in line with the national strategic export plan 2003-2013 whose vision 
was of Peru becoming an exporter of value added goods and services that was competitive, diversified and consolidated in international markets and whose external trade contributed to 
social inclusion and improved standards of living . For Peru regional trade agreements allowed for 
the improvement and consolidation of market access conditions for its goods and services with a greater focus on the non-traditional sector, with clear, stable and predictable rules and disciplines for foreign trade and a regulatory framework that was attractive for private investment and 
bilateral trade relations. In this context the Agr eement with EFTA was very important for Peru. It 
was the first trans-Atlantic trade agreement with the European continent and the European Economic Area, the most integrated market in the world. EFTA Member States had the highest 
levels of GDP per capita and human development. They were important financial centres and 
centres for many of the world's largest multinatio nal enterprises. The Agreement was designed to 
strengthen the special links of friendship and co-operation between the Parties and to contribute to 
the harmonious development and growth in world trade through the removal of obstacles to trade 
and promotion of greater international co-operation between Europe and South America. As was recognized in the preamble to the Agreement this  was to be based on the respective rules and 
obligations of the Parties under the WTO Agreements, and in Peru's view, complied with the 
requirement of the WTO. The aims of the Agreemen t among others was to achieve liberalization of 
trade in goods, increase substantially investment opportunities in the free trade area, to contribute to the sustainable development of the Parties, to achieve greater liberalization of government 
procurement in the markets of the Parties on a mu tual basis and to achieve appropriate protection 
of intellectual property rights.  
1.6.  As a comprehensive agreement, it not on ly covered market access in goods but also had 
provisions to facilitate trade in services and investment between the Parties and clear rules and 
predictability for economic players. In trade in services, the Parties had reaffirmed their rights and obligations under the GATS and had agreed to ne gotiate a chapter on trade in services on the 
basis of mutually advantageous provisions ensuring an overall balance between rights and 
obligations and taking into account GATS Article V.  In addition the Agreement contained provisions 
for the recognition of educational qualifications and experience gained for service providers. In the area of co-operation the Parties had agreed to pr omote trade related capacity building to expand 
and improve the benefits of the Agreement in k eeping with their national strategies and policy 
objectives. The EFTA States were the fourth main destination for Peruvian exports.  In 2012 they accounted for 11% of Peru's exports. Although most exports were traditional exports from the 
mining and fisheries sectors, especially since the entry into force of the Agreement, non-traditional 
exports had grown by 60.7% be tween 2011 and 2012 reaching US $43.4 million, 61.3% of these 
destined for Switzerland, 33.9% for Norway, 4. 8% for Iceland. The increased non-traditional 
exports between 2011 and 2012 were from the iron and steel sector, agriculture, metal products, 
and textiles. In relation to foreign direct investment, according to the Peruvian Private Investment 
Promotion Agency, the EFTA States in December 2012 were 11
th in terms of the stock of capital, 
43.2% of which was in the industrial sector, 24.5%  in the financial sector, 23.7% trade, and the 
rest in mining and construction services, housing,  transport, tourism and energy and petroleum.  
This showed the dynamic trade relations and invest ment between the Parties. The Parties expected 
these relations to improve significantly under the Agreement. In fact, at the first Joint Committee 
meeting held in April 2013 the Parties had observed that trade was developing satisfactorily. 
1.7.  Peru hoped that this exercise would contri bute to a better understanding of the terms of the 
Agreement and was ready to answer any questions.   
1.8.  The representative of Iceland, speaking on behalf of the EFTA States noted that the signing 
of a Joint Declaration on Cooperation between the Parties in 2006 had provided the impetus for 
developing further their economic and trade relations. Full-fledged negotiations on a free trade agreement had begun a year later and had been successfully concluded - after five rounds - in 
October 2008. An FTA had been signed in 2010 and had entered into force between the five 
Parties between July 2011 and July 2012. 
1.9.  Peru and the EFTA States enjoyed close an d dynamic economic and trade relations. Peru was 
an important trading partner for EFTA in South America. In the ten years preceding the conclusion WT/REG295/M/1 
 
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  of the FTA, merchandise trade had already been gr owing at an average annual rate of 15%. Since 
the Agreement’s entry into force, merchandise trade appeared to have accelerated further, registering annual growth of an impressive 40% in 2012. Overall, bilateral merchandise trade had risen significantly in recent years, peaking at US$670 million in 2012. 
1.10.  The EFTA States had traditionally run a trade deficit with Peru. This trend had continued in 
recent years. In 2012, imports from Peru had accounted for a significant share - 72% - of total merchandise trade. Exports from the EFTA States consisted mainly of machinery; pharmaceutical 
products; clocks and watches; optical and medical instruments; as well as organic chemicals. Top 
imports into the EFTA States included fats and oils; animal feed; fruits and nuts; and vegetables. 
1.11.  The EFTA-Peru FTA was a broad-based agreement containing provisions on trade in goods, 
investment, the protection of intellectual property rights, government procurement, and 
competition policy. It also foresaw the inclusion of a full-fledged chapter on trade in services. The 
agreement provided for substantive concessions by all sides while taking into account the sensitivities of the respective Parties. Trade in basic agricultural products was covered by bilateral 
agricultural agreements between the individual EF T A  S t a t e s  a n d  P e r u  w h i c h  f o r m e d  a n  i n t e g r a l  
part of the instruments establishing the free trade area.  
1.12.  Trade between the EFTA States and Peru held much potential and the Parties viewed the 
Agreement as an important instrument for pr omoting and deepening economic cooperation 
between all the Parties. In this context, the Pa rties had held their first Joint Committee meeting 
under the Agreement in June 2013 which had welcomed the effective implementation of the Agreement, and assessed the potential for adding new chapters, notably in the areas of trade in 
services and sustainable development. He again thanked the WTO Secretariat and Peru for their 
excellent collaboration in preparing for the review. EFTA looked forward to a constructive exchange 
of views on all aspects of the Agreement. 
1.13.  The representative of the United States thanked the Parties and the Secretariat for the 
materials provided and the statements. Under Sect ion 3 of the factual presentation he noted the 
substantial tariff carve out under the Agreement by Switzerland in particular.  Switzerland 
excluded 15% of its tariff lines fr om liberalization, corresponding to 22.8% of its imports from Peru 
and while none of EFTA's top 25 exports to Peru we re subject to duties, this was not the case for 
Peru's exports to EFTA. For example, in Switzerl and 15 out of 55 tariffs that comprised Peru's top 
25 exports were to remain dutiable. The United States also noted the low level of tariff elimination 
by all EFTA Parties in the agricultural sector. Iceland eliminated duties on only 72.7% of 
agricultural tariff lines, Norway on 51.6%, and Sw itzerland only 39.6%. In stark comparison, Peru, 
a developing country, eliminated between 83% and 89.5% of its agricultural duties. Furthermore, 
in Table 4.1, on participation in other RTAs, he noted a number of agreements to which Peru was a 
party that had not yet been notified to the WTO. The United States urged Peru to notify all its agreements. 
1.14.  On the questions and replies document, the representative of Colombia thanked the Parties 
for their replies which were being studied in capital.  Should there be follow up questions, these 
would be submitted very soon. Colombia also hoped that agreement between Colombia and EFTA would enter into force soon so Colombia could benefit from the agreement that it had negotiated 
over five years and which had been concluded at the same time as the Agreement between EFTA 
and Peru but had not yet been approved by  the Parliaments of Iceland and Norway. 
1.15.  The Chairman said that the consideration of the Goods Aspects of the Free Trade Agreement 
between Peru and the EFTA States had allowed the Committee to clarify a number of questions 
and the oral discussion of this RTA could be concluded in accordance with paragraph 11 of the Transparency Mechanism. If any delegations wished to ask follow up questions they were invited 
to forward submissions in writing to the Secretariat by 24 September 2013 and Parties were asked 
to submit replies in writing by no later than 8 October 2013. 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.  
1.16.  The Committee took note of the comments made. 
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