WT/REG313/1  
4 July 2013  
(13-3547)  Page: 1/55  
Committee on Regional Trade Agreements   
 
 
FACTUAL PRESENTATION 
FREE TRADE AGREEMENT BETWEEN PERU AND PANAMA 
(GOODS AND SERVICES) 
Report by the Secretariat 
This report, prepared for the consideration of the Free Trade Agreement between Peru 
and Panama has been drawn up by the WTO Secretariat on its own responsibility and 
in full consultation with the Parties. The report has been drawn up in accordance with 
the rules and procedures contained in the Decision for a Transparency Mechanism for Regional Trade Agreements (WT/L/671). 
Any technical questions arising from this report may be addressed to 
Ms. Ana Cristina Molina (tel: +41 22 739 6060). Any statistical questions arising from 
this report may be addressed to Ms. Alejandra Barajas (tel: +41 22 739 6425). 
 WT/REG313/1 
 
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  TABLE OF CONTENTS 
Page 
 
1   TRADE ENVIRONMENT ................................................................................................. 5  
1.1   Overview .................................................................................................................. 5  
1.2   Merchand ise trade ..................................................................................................... 5  
1.3   Trade in servic es and inve stment ................................................................................. 7  
2   CHARACTERISTIC ELEMEN TS OF THE AG REEMENT ...................................................... 9  
2.1   Background  Information ............................................................................................. 9  
3   PROVISIONS ON TRADE IN GOODS ........................................................................... 10  
3.1   Import duties and charges,  and quantitative  restrict ions ................................................ 10 
3.1.1   Genera l provisions ................................................................................................. 10 
3.1.2   Liberalization of  trade and ta riff lines ........................................................................ 11 
3.1.3   Liberalization of trade and tariff lines, by products ...................................................... 13 
3.1.3.1   Panama ............................................................................................................. 13 
3.1.3.2   Peru .................................................................................................................. 14 
3.1.4   Tariff-rate quotas ................................................................................................... 15 
3.1.5   Price band system .................................................................................................. 17 
3.2   Rules of origin .......................................................................................................... 17 
3.2.1   Definitions an d main principles ................................................................................ 17 
3.2.2   Administration of  the rules of origin .......................................................................... 19 
3.3   Export duties and charges,  and quantitative  restrictions ................................................. 19 
3.4   Regulatory provisions on trade in goods ....................................................................... 20 
3.4.1   Standards ............................................................................................................. 20 
3.4.1.1   Sanitary and phytosanitary measures .................................................................... 20 
3.4.1.2   Technical barriers to trade .................................................................................... 20 
3.4.2   Safeguard mechanisms ........................................................................................... 21 
3.4.2.1   Global safeguards ............................................................................................... 21 
3.4.2.2   Bilateral safeguards ............................................................................................. 21 
3.4.3   Anti-dumping and countervailing measures ............................................................... 22 
3.4.4   Subsidie s and State-aid .......................................................................................... 22 
3.4.5   Customs-re lated procedures .................................................................................... 22 
3.4.6   Other regulations ................................................................................................... 23 
3.4.6.1   Stat e enterprises ................................................................................................ 23 
3.4.6.2   Co-operation mech anism in trad e remedies ............................................................ 23 
3.5   Sector-specific provis ions on trad e in goods ................................................................. 23 
4   PROVISIONS ON TRADE IN SERVICES AND IN VESTMENTS........................................ 23  
4.1   Scope and definitions ................................................................................................ 23 
4.2   Denial of benefits ..................................................................................................... 25 
4.3   General provisions on trade in services ........................................................................ 25 
4.3.1   Mark et acce ss ....................................................................................................... 25 WT/REG313/1 
 
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  4.3.2   National and MFN tr eatment .................................................................................... 25 
4.3.3   Commercial presence ............................................................................................. 25 
4.3.4   Movement of  natural persons .................................................................................. 26 
4.3.5   Performance requirement ........................................................................................ 27 
4.3.6   Senior Management and boards of  direct ors .............................................................. 27 
4.3.7   Other investment -related pr ovisions ......................................................................... 28 
4.4   Liberalization commitments ........................................................................................ 28 
4.4.1   Panama ................................................................................................................ 28 
4.4.1.1   Horizont al commit ments ...................................................................................... 28 
4.4.1.2   Sector-spe cific commitments ................................................................................ 29 
4.4.2   Peru .................................................................................................................. .. 33 
4.4.2.1   Horizont al commit ments ...................................................................................... 34 
4.4.2.2   Sector-spe cific commitments ................................................................................ 34 
4.5   Regulatory provisions ................................................................................................ 39 
4.5.1   Domestic regulation ............................................................................................... 39 
4.5.2   Recognition ........................................................................................................... 39 
4.5.3   Subsidies .............................................................................................................. 39 
4.5.4   Safeguards ........................................................................................................... 39 
4.6   Sector specific provis ions on trade in services ............................................................... 39 
4.6.1   Financial services ................................................................................................... 39 
4.6.1.2   Cross-border trade .............................................................................................. 40 
4.6.1.3   Right of  establishment ......................................................................................... 40 
4.6.1.4   New financial services .......................................................................................... 41 
4.6.1.5   The treatment of financ ial and confidential information ............................................. 41 
4.6.1.6   Self-regul atory organi zations ................................................................................ 41 
4.6.1.7   Recognition of  prudential measures ....................................................................... 41 
4.6.1.8   Exceptions ......................................................................................................... 41 
4.6.2   Maritime tr ansport se rvices ..................................................................................... 41 
4.6.3   Telecommunications ............................................................................................... 42 
5   GENERAL PROVISIONS  OF THE AGREEMENT ............................................................. 43  
5.1   Tran sparency ........................................................................................................... 43 
5.2   Current payments and capital movements .................................................................... 43 
5.3   Safeguards ..............................................................................................................  43 
5.4   Exceptions ............................................................................................................... 43 
5.5   Accession and Withdrawal .......................................................................................... 44 
5.6   Institutio nal framework ............................................................................................. 44 
5.7   Disput e settlement ................................................................................................... 44 
5.8   Relationship with other agr eements concluded by the Parties .......................................... 46 
5.9   Government  procurement .......................................................................................... 48 
5.10   Intellectual property rights ....................................................................................... 49 WT/REG313/1 
 
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  5.10.1   Trademarks and well-known marks ......................................................................... 49 
5.10.2   Geographic al indications ....................................................................................... 49 
5.10.3   Traditional knowledge ........................................................................................... 49 
5.10.4   Copyrights and related rights ................................................................................. 50 
5.11   Competition policy .................................................................................................. 50 
ANNEX 1 ....................................................................................................................... . 51 
ANNEX 2 ....................................................................................................................... . 55 
 WT/REG313/1 
 
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Key Facts 
 
Parties to the Treaty:  Panama and Peru  
Date of Signature:  25 May 2011 
Date of Entry into Force:  1 May 2012 
Date of Notification:   23 April 2012 (goods and services)  
End of Implementation: 2029, goods 
     2012, services 
 
 
 1  TRADE ENVIRONMENT 
1.1  Overview 
1.1.  The Free Trade Agreement (hereafter "the Agreement") between Panama and Peru, which 
covers goods and services, is the 11th regional trade agreement (RTA) notified by Panama and the 15th notified by Peru to the WTO.  
1.2.  Panama and Peru differ substantially in the size of their economies and their participation in 
world trade. In 2012, Peru's GDP amounted to US$176.7 billion, almost six times bigger than that of Panama (US$30.7 billion). In 2011, Peru was the world's 58
th largest exporter and importer with 
exports of US$45.6 billion and imports of US$38 billion. As for Panama, it ranked 94th in terms of 
exports (US$0.8 billion) and 55th for imports (US$11.3 billion). 
1.3.  With regard to services, exports from Peru amounted to US$4.6 billion in 2011, making it the 
world's 71th largest exporter of services. In the same year, Peru was the 66th largest importer with 
imports worth US$6.7 billion. Panama exported US$7.1 billion worth of services and imported 
US$3.2 billion, ranking respectively 60th and 83rd in the world. 
1.2  Merchandise trade 
1.4.  During 2000-2011, Panama's imports grew steadily but have accelerated since 2006. In 
contrast, exports performed poorly (Chart 1.1). During the same period, Peru's exports and imports with the world expanded rapidly, especi ally since 2003. In 2009, both exports and imports 
plunged as a result of the global crisis, but have picked up since. During 2000-2011, Peru boasted 
a global trade surplus, while Panama
1 reported a trade deficit, which has broadened since 2006, as 
imports surged. 
1.5.  Trade between the Parties is modest and accounts for a small share in each Party's trade. In 
2010, exports to and imports from Peru represente d, respectively, 0.5% and 0.2% of Panama's 
total exports and imports, making Peru Panama's 37th and 18th largest export destination and 
import source. As for Peru, Panama was its 17th and 18th largest export and import partner with 
0.9% of its total exports and imports. 
1.6.  During 2000-2008, Peru registered a trade surplus with Panama, reflecting export expansion 
and import stagnation. In the following years, Peru posted a trade deficit, which resulted from a 
decline in its exports to and a surge in its imports from Panama. Indeed, in 2008 imports from 
Panama reached US$292.4 million up from US$23.2 million in 2006. In 2009, both exports and 
imports declined but recovered in the next years, amounting to US$332.5 and US$344.8 million, in 2011, respectively.  
                                               
1 Panama's trade statistics do not include trade repo rted through the Canal the Panama, except if the 
imports or export flows are actually from Panama.  WT/REG313/1 
 
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  1.7.  During 2000-2011, Panama ran a trade deficit with Peru, which widened between 2006 and 
2008. Since 2006, imports from Peru have soared reaching US$107 million in 2008, almost six times its value in 2006 (US$19.4 million). During the same period, exports were modest, with values varying between one and three millions. In  2009, both exports and imports decline but only 
imports have recovered since. 
Chart 1.1 Panama and Peru: bilateral and total merchandise trade, 2000-2011 
0.000.040.080.120.160.20
03691215
2000 2002 2004 2006 2008 2010Panama 
(USD Billion)
Imports from Peru (Right Axis)
Exports to Peru (Right Axis)
Total Imports
Total Exports
0.00.51.01.52.02.5
01020304050
2000 2002 2004 2006 2008 2010Peru 
(USD Billion)
Imports from Panama
Exports to Panama
Total Imports
Total Exports
 
Source: WTO Secretariat based on the UNSD, Comtra de database and on the Instituto Nacional de 
Estadisticas y Censos (INEC) of Panama. 
 
 
1.8.  Chart 1.2 on the Parties' trade structure during 2009-2011 suggests that there is little 
complementarity between the Parties. Peru's imports from Panama are dominated by minerals, which account for almost all Peru's bilateral imports (94.8%). Yet, Panama's main exports are 
animal products (33.3%), vegetables (22.8%) and prepared food (10.6%). Panama's imports from 
Peru are relatively more diverse with prepared  foods (21.1%), chemicals (18.1%) and plastics 
(17.2%), accounting for more than half of Panama's bilateral imports in 2009-2011. Of these products, only prepared food (7.6% of Peru's total exports) ranks among Peru's top 5 global 
exports products, behind minerals (38.2%), precious stones (23.5%) and base metals (10.8%).
2  
                                               
2 It is worth noting that during 2009-2011 minerals was Panama's main import sector at the global 
level, and that this sector was also Peru's main export sector. Yet, minerals were not among the main products 
Panama imported from Peru, thus there could be an oppo rtunity to exploit potential complementarities in this 
sector. WT/REG313/1 
 
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  Chart 1.2 Panama and Peru: product compositi on of merchandise trade, annual average 
(2009-2011) 
33.3
22.810.610.110.03.42.77.0
94.81.61.52.038.2
23.510.87.66.64.72.26.6
20.2
19.4
10.1 9.37.66.94.54.23.33.02.98.7
24.7
15.4
10.2 10.29.06.94.74.23.611.121.1
18.1
17.29.38.26.96.62.72.32.15.6Panama's imports from Perua
Peru's imports from PanamaPer cent
Total:  US$ 53 million
Total:  US$ 255 millionTotal:  US $9.4 billion
Total: US $ 30 billionTotal:  US $ 36 billion
Total:  US$ 0.78 billionPeru's global exports
Panama's global exportsPanama's global importsa
Peru's global imports
Animal 
products
Vegetables
Prepared foodsMinerals
Chemicals
Plastics, 
rubberWood pulp
TextilesPrecious 
stones
Base metals
MachineryVehicles
OpticalOther
Miscellaneous Footwear
 
a Preliminary data for 2011. 
 Source: WTO Secretariat based on the UNSD, Comtrade database and Instituto Nacional de Estadísticas y 
Censos (INEC) of Panama. 
 
1.3  Trade in services and investment 
1.9.  Charts 1.3 and 1.4 depict the Parties trade fl ows in services by type of activity in 2000-2011. 
During this period, Panama recorded a global tr ade surplus, which has expanded as exports have 
continued to outpace imports. In 2011, transportation services accounted for almost half of 
services exports (55.7%), followed by travel (27.9%) and financial services (7.3%). These 
categories were also those with the largest import shares, accounting, respectively, for 53.5%, 14.2% and 18.1% of Panama's total services imports.  
1.10.  During the same period, Peru ran a trade deficit in services, which has also broadened as a 
result of a surge in imports in recent years. In 2011, Peru's main export categories were travel (59.1%), transportation (22.2%) and insurance se rvices (5%). Transportation (42.2%) and travel 
(21.2%) services were also Peru's main import sectors followed by other business services 
(15.9%) and insurance services (8.7%).  
1.11.  According to the Parties, data on bilateral trade in services was not available.  WT/REG313/1 
 
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  Chart 1.3 Panama, total commercial services trade, 2000-2011 
01234567
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Exports Imports
Transportation services
Travel
Communications servicesUS$ billion
ConstructionFinancial services
Computer and information servicesRoyalties and license fees
Other business services
Personal, cultural and 
recreational servicesUS$ billion
Insurance services01234567
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
 
 
Source: UNCTAD Stat. 
 
Chart 1.4 Peru, total commercial services trade, 2000-2011 
01234567
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Exports ImportsUS$ billionUS$ billion
Transportation services
Travel
Communications services
ConstructionFinancial services
Computer and information servicesRoyalties and license fees
Other business services
Personal, cultural and 
recreational servicesInsurance services01234567
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
 
 
Note: No export data on construction (2000-2011); computer and information services (2000-2009); other 
business services (2000-2011) and personal, cultural and recreational (2000-2006). No import data on construction (2000-2006); computer and information services (2000-2006); other business services (2000-2006) and personal, cultural and recreational services (2000-2006).  
 
Source: UNCTADStat.  
1.12.  Chart 1.5 depicts the Parties global investment position between 2000 and 2011. During 
this period, Peru was a net recipient of foreign direct investments (stocks), while Panama was a 
net provider. In the case of Peru, the gap betw een inward and outward FDI (stocks) has widened WT/REG313/1 
 
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  during 2005-2011. Table 1.1 shows Peru's FDI stocks and flows with Panama. FDI from Panama 
amounted on average to US$930 million between 2009 and 2011. Data on Peruvian outward FDI 
(stocks), as well as on Panama's FDI with Peru were not available. 
Chart 1.5 Panama's and Peru's foreign dire ct investment with the world, 2000-2011.  
0102030405060
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Panama Peru
Inward OutwardUS$ billion US$ billion
0102030405060
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
 
 
Source: Banco Central de la Reserv a del Perú, INEC and UnctadStat  
  
Table 1.1 Peru's foreign direct investment with Panama, 2009-2011 
Total FDI stocks 
(in million US)  Outward  Inward  
 2009 2010 2011 2009 2010 2011 
Total FDI stocks .. .. .. 932 934 925 
Total FDI flows 0 0 11 2 2 2 
 
.. Not available.  Source: Proinversion (FDI bilateral data was collected using Proinversion's Foreign Investment re gistry forms 
for firms/investors following the dispositions und er Article 19 from the legislative decree No°662). 
 
2  CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
2.1  Background Information 
2.1.  The Agreement covers goods and services. It was signed by the Parties on 25 May 2011 and 
entered into force on 1 May 2012.  
2.2.  The Agreement was notified to the WTO by the Parties on 23 April 2012 under 
Article XXIV:7(a) of GATT 1994 and Article V:7(a) of the GATS (WT/REG313/N/1/Rev.1 and 
S/C/N/642/Rev.1). The text of the Agreement, along with its schedules and annexes, is available in the website of the Parties' competent authorities.
3  
                                               
3 The text of the agreement can be found in 
http://www.acuerdoscomerciales.gob .pe/index.php?option=c om_content&view=category&layout=blog&id=110
&Itemid=133  (Peru) and in http://mici.gob.pa/detalle.php?cid=15&sid=58&clid=64&id=2737  (Panama).    WT/REG313/1 
 
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  2.3.  The Agreement contains 22 chapters and three annexes (Box 2.1).  
Box 2.1 Structure of the Treaty 
 Preamble 
Chapter 1 Initial Provisions and General Definitions 
Chapter 2 Market Access for Goods 
Chapter 3 Rules of Origin and Origin Procedures 
Chapter 4 Trade Facilitation and Customs Procedures 
Chapter 5 Customs Cooperation and Mutual Assistance 
Chapter 6 Sanitary and Phytosanitary Measures 
Chapter 7 Technical Barriers to Trade 
Chapter 8 Trade Remedies 
Chapter 9 Intellectual Property  
Chapter 10 Government procurement 
Chapter 11  Competition Policy 
Chapter 12  Investment 
Chapter 13 Cross-Border Trade in Services 
Chapter 14 Financial Services  
Chapter 15 Maritime Services 
Chapter 16 Telecommunications 
Chapter 17 Temporary Entry of Business Persons 
Chapter 18 Dispute Settlement 
Chapter 19 Transparency 
Chapter 20 Administration of the Agreement 
Chapter 21 Exceptions 
Chapter 22 Final Provisions 
Annex I  Non-Conforming Existing Measures - Panama and Peru 
Annex II  Non-Conforming Future Measures - Panama and Peru 
Annex III  Financial Services Non-Conforming Measures  (future and existing) - Panama and Peru 
Source: The Agreement. 
 
3  PROVISIONS ON TRADE IN GOODS 
3.1  Import duties and charges,  and quantitative restrictions 
3.1.1  General provisions 3.1.  Trade in goods between the Parties is governed by Chapter 2. The Chapter contains 
provisions on national treatment, special regimes, agriculture, tariff elimination, non-tariff 
measures, state enterprises, customs valuation and institutional matters. The Agreement follows the WTO definition for agricultural products. 
3.2.  The Parties agree to grant national treatm ent to each other's goods in accordance with 
Article III of GATT 1994 (Article 2.2), except as prov ided in Annex 2.2. In this Annex, the Parties WT/REG313/1 
 
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  list the measures that are not subject to nati onal treatment (Article 2.2) or elimination 
(Article 2.8). Peru lists measures affecting impo rts of used goods, including clothes, shoes, 
vehicles and its parts, tires and machinery using radioactive energy. Panama lists measures affecting imports of lottery tickets, used vehicles  and motors, videos and games, as well as those 
affecting exports of woods of its national forests. Both Parties, also list actions authorized by the 
WTO Dispute Settlement Body.  
3.3.  The Parties agree to eliminate customs du ties on originating goods according to their 
respective Schedules.
4 Used goods are excluded from tariff elimination. They also agree that at the 
request of either Party, they will hold consultations to consider improving the market access conditions for originating goods. As of May 2013, no consultations had taken place in this respect. The Parties can (a) increase a custom duty up to the level established in their tariff schedule, 
following an unilateral reduction; as well (b) maintain or increase a custom duty when authorized 
by the WTO Dispute Settlement Body (Article 2.3).  
3.4.   The Parties allow duty-free entry for th ree types of goods: (a) goods imported on a 
temporary basis
5 (Article 2.5), (b) goods that re-enter after repair or alteration (Article 2.6) and 
(c) commercial samples of negligible value and printed advertising materials (Article 2.7).  
3.5.  They agree to eliminate any non-tariff meas ure that prohibits or restricts their bilateral 
imports, except as provided in Article XI of the GATT 1994 and Annex 2.2 (see Paragraph 3.2). 
These non-tariff measures include import price requirements and licenses subject to a performance 
requirement (Article 2.8). 
3.6.  The Parties prohibit any measure that is in consistent with the Agreement on Import Licensing 
Procedures and commit to notify the other Party of any existing import licensing procedure, as well 
as any subsequent related change upon the Agreem ent's entry into force. A good from the other 
Party can be subject to an import license only if the procedure has been notified (Article 2.9). 
3.7.   With respect to fees and formalities, the Parties shall ensure that all administrative fees and 
charges in connection with the import and export of goods are applied in accordance with Article VIII:1 of the GATT. They w ill not require any consular transaction related to imports from 
the other Party. A list of the fees and charges curre ntly applied in connection with import or export 
must be available on the internet (Article 2.10).  
3.8.  In customs valuation, the Parties commit to  apply rules in accordance with the WTO Customs 
Valuation Agreement and any successor agreement (Article 2.13). 
3.1.2  Liberalization of trade and tariff lines 
3.9.  The Parties' tariff elimination schedule and staging categories are detailed in Annex 2.3 of the 
Agreement. The base rates employed in their schedules are the MFN rates applied on 30 June 
2010, except for 76 lines for which Peru used the MFN rates applied on 1 January 2008. For both 
Parties, liberalization started upon the Agreemen t's entry into force and will be completed by 
2029. The Parties listed 15 different staging categories in their tariff elimination schedule. Both 
Parties exclude products from liberalization: 293 by Panama and 131 by Peru. Of these lines, six 
are duty-free on an MFN basis in the case of Pa nama and 59 in the case of Peru (as of 2012). 
3.10.  Table 3.1A shows that in 2012, 32.1% of Pa nama's tariffs were already duty free on an MFN 
basis, corresponding to 44% of Panama's imports from Peru in 2009-2011.
6 Upon the Agreement's 
entry into force,  Panama liberalized  another 26% of lines which accounted for an additional 25% of 
its imports from Peru. Further tariff eliminations will take place in 2016 and between 2021 and 2029. By 2021, after 10 years of implementation, duties on 95.2% of Panama's tariff lines will be 
zero. At the end of the implementation period in 2029, this percentage will be only slightly larger 
(i.e. 96.5%). Of the 300 lines that will remain dutiable, the majority (i.e. 173 lines) will exhibit values between 10% and 30%. 
                                               
4 The Parties schedules are contained in Annex 2.3. 
5 Goods temporally admitted are professional equipm ent, goods intended for display or demonstration, 
goods imported for sports purposes, and commerci al samples and advertising films and recordings. 
6 All Panama's tariff lines (i.e. 8,560) have ad valorem  duties. WT/REG313/1 
 
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  Table 3.1A Panama: Tariff eliminatio n commitments under the Agreement and 
corresponding average trade 
Duty phase-out period Number of 
lines % of total lines in 
Panama's tariff 
schedule Value of Panama's 
imports from Peru 
(2009-2011) in million 
US$ % of Panama's total 
imports from Peru 
2009-2011 
MFN duty free (2012) 2,750 32.09  23.25  43.97 
2012 2,225 25.96  13.21  24.98 
2016 2,224 25.95  8.52 16.11 
2021 956 11.16  0.85 1.62 
2023 20 0.23  1.84 3.48 
2024 2 0.02 0.00 0.00 
2026 87 1.02  0.29 0.55 
2029 6 0.07 0.18 0.34 
Remain dutiable 300 3.50  4.74 8.97 
Total 8,570 100.00  52.88  100.00  
 
Note: Based on the HS 2007 nomenclature.  Source: WTO estimates based on data provided by Panama 
 
3.11.  Table 3.1B shows that in 2012, 55% of Peru ´s tariff lines were duty free on an MFN basis, 
which accounted for almost all its imports from Panama (99.3%) during 2009-2011.7 Following the 
Agreement's entry into force, Peru liberalized an additional 22.8% of lines. Subsequent tariff 
eliminations are scheduled for 2013 to 2029, with major changes occurring in 2016 and 2021. By 2021, after 10 years of implementation, Peru will have liberalized 97.6% of tariff lines. By 2029, 
98.3% will be duty free. Of the 128 lines that will remain dutiable, 66 and 15 will be subject to an 
MFN rate (as of 2012) of 6% and 11%, respectively. The remaining lines (i.e.47) have an ad-valorem  duty equal to zero (except for two cases)
8, but under the price band system they are 
all subject to a specific duty.  
Table 3.1B Peru: tariff elimination commitments under the Agreement and 
corresponding average trade 
Duty phase-out period Number of 
lines % of total lines in 
Peru's tariff schedule  
 Value of Peru's imports 
from Panama (2009-
2011) in million US$ % of Peru's total 
imports from Panama 
2009-2011 
 
 MFN duty free (2012) 4,054 55.01  252.93  99.30 
2012 1,678 22.77  0.19 0.07 
2013 4 0.05     
2014 2 0.03      
2016 1,021 13.85  0.21 0.08 
2018 33 0.45  1.3 0.51 
2019 3 0.04     
2021 400 5.43  0.09 0.03 
2023 9 0.12 0.01 0.00 
2025 2 0.03      
2026 34 0.46     
2029 2 0.03      
Remain dutiablea 128 1.74     
Total 7,370 100.00  254.72  100.00 
 
a This number includes the lines (i.e. 47) subject to a specific duty under Peru's price band system 
(See section 3.1.5). 
 
Note: Based on the HS 2007 nomenclature. 
 
Source: WTO estimates based on  data provided by Peru. 
 
                                               
7 All Peru's tariff lines (i.e. 7,370) have ad valorem  duties. 
8 The two cases referred to lines HS 1108.13.0000 and 1108.12.0000 (i.e. maize and potato starch), 
which are subject to a TRQ under the Agreement. For these lines, the in-quota tariff is zero and the out-of-quota tariff is 6% (see Table 3.5).    WT/REG313/1 
 
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  3.1.3  Liberalization of trade and tariff lines, by products 
3.1.3.1  Panama 3.12.  At the end of the implementation peri od, 300 lines of Panama's schedule will remain 
dutiable (Table 3.2). The majority of these lines (270 lines) refer to agricultural products 
(HS sections I to IV), in particular live animals, animal products and prepared food. For the 
corresponding HS sections, the average preferenti al tariffs will range between 12.2% and 44.4%. 
Other HS sections where tariffs will continue to  apply are: chemicals (VI), plastics and rubber 
(VII), pulp and paper (X) and articles of stones (XIII). The average preferential tariff for these 
HS sections will vary between 11.3% and 15%.  
3.13.  At the HS chapter level, the average pr eferential tariffs will range between 11.3% and 
54.8% (Chart 3.1). The HS chapters with the high est average preferential tariffs will be cereals 
(Chapter 10), meat and edible meat offal (Chapter 2) and vegetables (Chapter 7). Only for one 
chapter the average MFN rate will be higher than the average preferential rate (i.e. Chapter 10).  
Table 3.2 Panama: Tariff elimination und er the Agreement, by HS section 
HS 
Section MFN 
average 
% Total 
No. of 
lines MFN 
duty-
free 
(2012) Number of duty-free lines under the agreement 
No. of lines 
remaining 
dutiable Avg. Final 
Tariff 
(Dutiable)  
% 2012 
2016 
2021 
2023 
2024 
2026 
2029 
I 23.9 418  30 216  17    4  151 44.4  
II 10.8 420 136 171 67 18     28 42.4 
III 8.4 70 21 2 8  15   6  18 12.2  
IV 12.3 571 83 124 176 52 12 2 43 6 73 27.2 
V 7.1 195  81 35 75  2   2    
VI 2.5 1,229  800 131 236 52 2  4  4 11.3 
VII 3.9 439  248 60 79  37   4  11 12.7  
VIII 12.0 115 3 22 21 69       
IX 7.7 169  54 1 51  63       
X 7.9 392 142 42 133 44 1  19  11 12.3 
XI 7.1 1,211  441 412  217 139   2    
XII 10.3 152 5 31 116        
XIII 9.3 283  41 22 192  24     4 15.0  
XIV 7.2 66 24 11 31        
XV 7.3 900  327 140  168 265       
XVI 5.8 1,021  130 496 324 68   3    
XVII 6.4 329  159 62 52  56       
XVIII 9.5 279 18 206 41 14       
XIX 14.6 24  13 11         
XX 11.3 278 3 24 208 38 5      
XXI 7.2 9 4 4 1         
Total 7.9 8,570  2,750 2,225  2,224  956 20 2 87 6 300 35.0 
 
Note: Based on the HS 2007 nomenclature. 
 Source: WTO Secretariat estimates ba sed on data provided by Panama. WT/REG313/1 
 
- 14 - 
 
  Chart 3.1 Panama: Average of duti able rates, by HS Chapter  
0102030405060
2 4 7 9 10 11 15 16 17 19 20 21 22 23 34 39 48 70HS Chapter
MFN PreferentialAverage rate of duty (%)  
 
 
Note: For tariff lines subject to TRQs, only the out-of-quota duty is included in the tariff-related  calculations.  Source: WTO Secretariat estimates ba sed on data provided by Panama. 
 
3.1.3.2  Peru 
3.14.  By 2029, 128 lines will remain dutiable. Almost all these lines are in Sections I-IV except for 
12 lines which fall within Sections VI (chemicals), VII (plastics and rubber), X (pulp of wood and 
paper) and XIII (articles of stones, ceramics and glasses) (Table 3.3). For these sections, average tariffs (when computable) will vary between 6% and 7.7%. Sections II (vegetable products) and I (live animals and animal products) have the highest average tariffs, 7.7% and 7.5% respectively.  
3.15.  At the HS chapter level, tariffs will continue to apply in 18 chapters (Chart 3.2). The 
average tariff cannot be computed in the case of four Chapters, as the related lines have an MFN duty equal to zero but are subject to a specific duty under the price band system. For the other 
14 Chapters, the average tariff is 6%, except for Chapters 9 (Coffee, tea, "maté" and spices) and 
2 (Meat and edible meat offal), which are subject to rates of 8.9% and 7.5%, respectively. In all 14 chapters, the average preferential  rate equals the average MFN.  
Table 3.3 Peru: Tariff elimination un der the Agreement, by HS section 
HS 
Section MFN 
average 
% Total 
No. of 
lines MFN 
duty-
free 
(2012) Number of duty-free lines under the agreement  No. of 
lines 
remaining 
dutiable Avg. Final 
Tariff 
(Dutiable) 
% 
 2012 
2013 
2014 
2016 
2018 
2019 
2021 
2023 
2025 
2026 
2029 
I 2.4 308 185 57  2 3 2 59 7.49  
II 4.4 384 121 185  52 1 4 21 7.67 
III 2.6 64 36 7  3 6 1 11 6.00  
IV 3.8 301 113 51 2 78 1 11 2 2 15 1 25 6.00 
V 1.8 214 151 29  30 2 2      
VI 2.0 1,465 970 225 2 181 31 52 1 1 1 1  
VII 2.2 312 196 24  31 54 2 3 2 6.00  
VIII 5.3 79 9 11  36 23      
IX 4.4 107 28 7  55 17      
X 3.7 246 93 26  88 1 25 3 5 5 6.00 
XI 9.2 966 63 679  149 71 4      
XII 8.8 56 17  39      
XIII 2.3 174 106 7  40 17 4 6.00  WT/REG313/1 
 
- 15 - 
 
  HS 
Section MFN 
average 
% Total 
No. of 
lines MFN 
duty-
free 
(2012) Number of duty-free lines under the agreement  No. of 
lines 
remaining 
dutiable Avg. Final 
Tariff 
(Dutiable) 
% 
 2012 
2013 
2014 
2016 
2018 
2019 
2021 
2023 
2025 
2026 
2029 
XIV 3.5 57 24 31  2      
XV 1.0 700 581 27  62 30      
XVI 1.1 1,195 991 128  24 49 3      
XVII 1.2 226 181 3  5 37      
XVIII 2.4 290 175 86  29      
XIX 6.0 69 69         
XX 4.8 150 31 2  114 2 1      
XXI 6.0 7 7         
Total 3.2 7,370 4,054 1,678 4 2 1,021  33 3 400 9 2 34 2 128a 6.90 
 
a This number includes the lines (i.e. 47) subject to a specific duty under Peru's price band system 
(See section 3.1.5). In the case of these lines, only their ad-valorem  duty (if any) is considered for 
the calculations of the average tari ff. No average could be computed in the case of Section VI. Under 
this section, there is only one line, which has an ad-valorem  duty equal to zero but is subject to a 
specific duty under the price band system.  
 
Note: Based on the HS 2007 nomenclature.  Source:  WTO Secretariat estimates ba sed on data provided by Peru.  
Chart 3.2 Peru: Average of duti able rates, by HS Chapter 
0246810
2 4 7 9 10* 11 15 16 17* 19 20 21 22 23* 35* 39 48 70
HS Chapter
MFN PreferentialAverage rate of duty (%)  
 
*  Includes only tariff lines su bject to the price band system. 
Note: For tariff lines subject to TRQs, only the out- of-quota duty is included in the tariff-related  
 calculations. 
 For tariff lines subject to the price band system, only their ad-valorem  duty (if any) is considered for 
 the calculations of the average tariff. Most of the lines subject to the price band system have an MFN 
 ad-valorem  duty equal to zero. As a consequence, there are Sections (i.e. 10, 17, 23 and 25) were 
 the average tariff cannot be computed.   Source: WTO Secretariat estimates based on data provided by Peru. 
 
3.1.4  Tariff-rate quotas 
3.16.  Under the Agreement, the Parties establish tariff-rate quotas (TRQs) for certain agricultural 
products (Annex 2.3 - Appendices 1A and 1B).  
3.17.  Panama and Peru apply TRQs to 23 and 15 tariffs lines, which correspond to nine and 
six products, respectively (Chart 3.4 and 3.5). Both Parties apply TRQs to the following WT/REG313/1 
 
- 16 - 
 
  six products: bovine meat, condensed milk, hams, maize and potato starch, animal food and 
"Manjar blanco". In addition to these goods, Pana ma applies TRQs to pasta, fish flours and sweet 
and salty biscuits. TRQs for these tree products will be eliminated by 2023 and 2024.  
3.18.  At the MFN level, Panama applies TRQs to 68 tariff lines, which include products such as 
pork and poultry meat, dairy products, potatoes, be ans, maize, rice and tomato concentrate. Of 
these lines, only four are subject to TRQs under the Agreement, corresponding to condensed milk 
and hams. At the MFN level, Peru does not apply any TRQs. 
3.19.  The Parties agree to implement and administ er its TRQs in accordance with Article XIII of 
the GATT 1994 and the Import Licensing Agreemen t. They also commit to ensure that TRQ 
administration procedures are transparent, made available to the public, timely, non-discriminatory, market-oriented and do not constitute a barrier to trade (Appendix 1).  
Table 3.4 Panama: Products subject to TRQs under the Agreement 
HS Code 
(description) MFN TRQs under the Agreement 
MFN 
rate in 
2012 In 
quota 
rate Out of 
quota rate TRQs: 
transition 
period Quantity 
in 2012 Annual 
increases Quantity at the 
end of the 
transition 
period 
Bovine Meat 
0201.10.00, 
0201.20.00, 
0201.30.00, 0202.10.00, 
0202.20.00, 
0202.30.00.  
15.0% 
30.0% 30.0% 
15.0% 
30.0% 25.0%  
0% 
0% 0% 
0% 
0% 
0% MFN rate 2012-2021 899 MT Yes 1.100 MT 
Condensed milk 
0402.99.93  
30%  
0% MFN rate 2012-2016 100 MT Yes 200 MT 
Pasta 
19.02.11.00 
19.02.19.00  
10%  
10%  
0% 
0% Preferential 
ratea 2012-2023 800 MT No Unlimited 
Sweet and salty 
biscuits 
1905.31.00, 
1905.32.00, 
1905.90.30, 
1905.90.40  
 
10%  
10% 
10%  
10%  
 
0% 
0% 
0% 
0%  
Preferential 
rate 
Graduala 2012-2023 300 MT No Unlimited 
Flours of fish 
2301.20.10, 2301.20.90  
15% 15%  
0% 0% Preferential 
rate
b 2012-2026 200 MT No Unlimited 
Hams 
0210.11.11, 
0210.11.19, 
0210.11.90  
0% 
0% 
70%  
0% 
0% 
0% MFN rate  
No 
 100 MT No - 
"Manjar blanco" 
1901.90.90A  
10%  
0% MFN rate No 50 MT No - 
Animals food 
2309.90.99  
15%  
0% MFN rate No 5,000 MT No - 
Maize and potato 
starchc 
1103.13.10, 
1103.13.90, 1108.13.00  
 
10% 
15% 15%  
 
0% 
0% 0%  
MFN rate  
No  
100 MT  
No  
- 
 
a: Gradual reduction from 13.75% in 2012 to 0% in 2023. b: Gradual reduction from 14% in 2012 to 0% in 2026. c: Appendix 1A includes also the line HS 1108.12.00, however Panama has clarified that this line is not subject to TRQs and has been liberalized upon  the Agreement's entry into force. 
 Source Appendix 1A of the Agreement. WT/REG313/1 
 
- 17 - 
 
  Table 3.5 Peru: Products subject to TRQs under the Agreement 
HS Code 
(description) MFN TRQs under the Agreement 
MFN 
rate 
in 
2012 In 
quota 
rate Out of quota 
rate TRQs: 
transition 
period Quantity  
in 2012 Annual 
increases 
 Quantity 
at the end 
of the 
transition 
period  
Bovine meat 
0201.10.0000, 0201.20.0000, 
0201.30.0010, 
0201.30.0090, 0202.10.0000, 
0202.20.0000, 
0202.30.0010, 0202.30.0090.  11% 0% MFN rate 2012-2021 899 MT Yes 1.100 MT 
Condensed milk 
0402.99.1000  
0%  
0% MFN rate 2012-2016 100 MT Yes 200 MT 
Hams 
0210.11.0000  
6%  
0% MFN rate No 100 MT No - 
Maize and potato 
starch 
1103.13.0000, 
1108.12.0000, 
1108.13.0000.  
 
0% 
6% 
6%  
 
0% 
0% 
0% MFN rate No 100 MT No  - 
"Manjar blanco"  1901.90.2000  
0%  
0% MFN rate No 50 MT No - 
Animals food 
2309.90.9000  
0%  
0% MFN rate No 5,000 MT No - 
 
Source: Appendix 1B of the Agreement. 
 
3.1.5  Price band system 
3.20.  Under the Agreement, Peru can maintain its price band system for products listed in 
Annex 2.3. This list contains 47 agricultural products (at the 10-digit level) such as dairy products, 
rice, maize and sugar (see Table A2.1). Under this mechanism, a product is subject to a specific 
duty in addition to its ad-valorem  duty if its CIF (reference) price is lower than a "floor" price 
(Supreme decree N° 115-2011-EF). A tariff reduction can also apply if the CIF (reference) price is 
larger than a "ceiling" price.  Of the 47 lines subject to a price band system, 39 were excluded from 
liberalization under the Agreement, while the rest will have their ad-valorem  duty removed 
gradually or upon the Agreement's entry into force.9 As of 2012, most of the 47 lines had an MFN 
duty equal to zero (except for three lines, see Ta ble A2.1). Yet, under the price band system, all 
remain subject to a specific duty.  
3.2  Rules of origin 3.2.1  Definitions and main principles 
3.21.  Unless specified otherwise in Chapter 3, a good qualifies as originating if it is:  
 wholly obtained or produced in the territo ry of one of the Parties (as described in 
Article 3.2); 
                                               
9 The lines (i.e. five) that will be gradually liberalized include sorghum, certain type of maize, glucose, 
dextrins and other modified starches, while those that were to be liberalized upon the Agreement's entry into 
force included certain type of preparations of ce reals, flour or starches  and food preparations. WT/REG313/1 
 
- 18 - 
 
   produced in one or both of the Parties with non-originating materials in full accordance 
with the change in tariff classification (CTC), regional value content (RVC) or any specific 
rule of origin set out in Annex 3; or 
 produced in one or both of the Parties, using only originating materials and complying 
with the provisions in Chapter 3.  
3.22.  The formula to compute the RVC is set in Article 3.3. 
3.23.  Chapter 3 also specifies that the operations that do not confer originating status to a good 
(Article 3.4) are: (a) those to guarantee goods preservation, (b) grouping or disassembly of 
packages; (c) packaging, re-packaging or breaking up for retail sale of the good; and (d) slaughter 
of animal. 
3.24.  Non-originating materials contained in an intermediate material used in the production of a 
good are not to be taken into account to determine the origin of a good (Article 3.5). 
3.25.  Bilateral cumulation is permitted between the Parties provided that non-originating 
materials used in the production of a good satisfy the requirements of Article 3.1 and that all other requirements in Chapter 3 are met (Article 3.6). 
3.26.  The Agreement also provides for diagon al cumulation for materials from Costa Rica, 
El Salvador, Guatemala and Honduras provided that Peru has an FTA (in force) with these countries and that the specific rules of origin are fulfilled. Panama already has an agreement with 
Central America (Costa Rica, Guatemala, El Salvador, Honduras and Nicaragua). For textiles and 
clothing (HS Chapter 50-63), diagonal cumulati on between the Parties and Central American 
countries is permitted when the preferential tariff for the materials to be cumulated and the final 
good is zero. It does not apply to products excl uded from liberalization by the importing Party. 
Diagonal-cumulation with other non-parties (besides Central American countries) is also permitted, provided that each Party has a trade agreement (in force) with the non-party, that the rules of origin under that agreement are fulfilled, and th at these agreements contain a provision that is 
equivalent in effect (Article 3.6).  
3.27.  The Agreement provides a  de minimis  provision, under which a good qualifies as originating 
if the value of all non-originating materials used in its production which do not satisfy the specific 
rules of origin set in Annex 3 do not exceed 10% of  the F.O.B. value of the good (Article 3.7). For 
goods subject to a CTC and RCV, the value of all non-originating is to be included in the computation of the RCV. In the case of textiles and clothing (HS Chapter 50-63), a good qualifies 
as originating, if the fibers or yarns used in the production of the component that determines the 
tariff classification of the good and that do not satisfy the CTC set in Annex 3, do not exceed 10% 
of the weight of the component. 
3.28.   Annex 3 contains the specific rules of origin a given good has to meet to acquire originating 
status. Most of these rules contain a CTC requirement, except for a few cases where a RVC can 
replace the CTC or a restriction on the value of non-originating components is applied. The CTC rules require, depending on the product, a change in the tariff classification within a Chapter (HS 2 
digit), Heading (HS 4 digit) or Subheading (HS 6 digit), but also from Heading to Subheading; 
Chapter to Subheading, and from Chapter to Heading. In addition to the CTC conditions, some products also require an RVC, a restriction on the value (F.O.B.) or the weight of non-originating 
materials, or a specific manufacturing condition, such as the execution of specific operations.  
3.29.  In the case of fungible goods and materials, producers may determine the origin of these 
goods based on the physical separation of each good or by using any recognized inventory management method (Article 3.8).  
3.30.  The Agreement (Articles 3.9 to 3.13) also specifies how certain materials
10 are to be valued 
when determining the origin of a good. Originating goods in transit or transhipment are to maintain their status provided that they do not undergo any further processing in the territory of a 
                                               
10 These materials are accessories, spare parts and tools; sets or assortments of goods; packaging 
materials and containers for retail sale ; indirect materials; and packing ma terials and containe rs for shipment. WT/REG313/1 
 
- 19 - 
 
  non-party other than preservation, unloading, or reloading, and that they remain under customs 
control while outside the territories of the Parties (Article 3.14).  
3.2.2  Administration of the rules of origin  3.31.  The procedures for the administration of the rules of origin are described in Chapter 3 
(Section B). To claim preferential treatment und er the Agreement, importers must present (a) a 
certificate of origin or (b) an origin declaration (self-certification) (Article 3.15), except for imports with a value lower than US$1,000
11, or goods benefitting from a waiver by the importing Party 
(Article 3.25). Both documents will be valid for one year from the date of issue. The certificate of 
origin applies to a single importation of one or more goods (Article 3.16). 
3.32.  The origin declaration can only be issued  by an "approved exporter". Approved exporters 
completing an origin declaration shall be prepared to submit at any time, upon request of the 
exporting Party, all appropriate documents pr oving the originating status of their good 
(Article 3.17). The Parties indicated that at the moment the status of "approved exporter" exists only in Peru. The exporting Party will grant the status of "approved exported" to an exporter 
provided that he exports on a regular basis, co mplies with the regulations of the exporting Party 
and submits a written invoice to the exporting Party that he accepts full responsibility for any origin declaration he issues (Article 3.18). The status of "approved exporter" is not conditional on 
an exporter shipments' value.  
3.33.  The exporting Party can cancel the status of an "approved exporter" at any time, if the 
approved exporter fails to comply with any of the requirements specified above or makes an incorrect use of its status (Article 3.18).  
3.34.   The Parties commit to work from the entr y into force of the Agreement on the development 
of an electronic certificate of origin.  
3.35.  A Committee of Rules of Origin is established under the Agreement. The Committee will 
meet at least once a year. As of May 2013, no meeting had taken place.  
3.36.  Originating goods of Peru, Costa Rica, El Salvador, Guatemala or Honduras, that are 
re-exported (transported, deposited or transhipment) from Colon's Free trade Zone (Panama) to 
the Parties, will maintain their originating status, provided that they are accompanied by a re-
export certificate. The re-export certificate is a proof that goods were under customs control and 
did not undergo any further processing while in Colon's Free trade Zone. To obtain a re-export certificate, goods require a proof of origin in accordance with the provisions contained in Peru's 
agreement with Central American countries. In addition to this certificate, the importing Party can 
required such proof of origin.
12 The re-export certificate will be issued by Panama's customs 
authorities. Following two years of the Agreement's entry into force, the Parties shall regulate the 
application of the re-export certificate to other third parties with whom Peru has a trade 
agreement (Article 3.34). 
3.3  Export duties and charges,  and quantitative restrictions 
3.37.  Export taxes are prohibited under the Agreement (Article 2.11). 
3.38.  The Parties also agree to eliminate any measure that prohibits or restricts exports of the 
other Party, except as provided in Article XI of the GATT 1994 and Annex 2.2. Such measures include export price requirements and voluntary export restraints inconsistent with Article VI of the 
GATT 1994 (Article 2.8). 
                                               
11 Or its equivalent amount in national currency. The Parties can establish a larger amount. 
12 The proof of origin is issued by Peru, Costa Rica, El Salvador, Guatemala and Honduras. WT/REG313/1 
 
- 20 - 
 
  3.4  Regulatory provisions on trade in goods 
3.4.1  Standards 3.4.1.1  Sanitary and phytosanitary measures 3.39.  In Chapter 6 on Sanitary and Phytosanitary (SPS) measures, the Parties re-affirm their 
existing rights and obligations under the WTO SPS Agreement (Article 6.3). In case of any dispute 
regarding SPS measures, the Parties will have recourse to the Dispute Settlement Mechanism 
(DSM) established under the Agreement (Chapter 18) (Article 6.12). The Parties also establish a 
Committee on SPS measures which shall meet at least once a year (Article 6.11). As of May 2013, 
the Committee had not met. The Committee is in charge of ensuring and monitoring the implementation of Chapter 6.  
3.40.  Chapter 6 applies to all SPS measures that may affect trade between the Parties 
(Article 6.1) and includes provisions on equivalence (Article 6.5), risk assessment (Article 6.6) and 
adaptation to regional conditions (Article 6.7) which follow the main principles of the WTO SPS agreement in these areas. The Parties agree to accept the equivalence of the SPS measures of an 
exporting Party even if these are different as lo ng as these measures achieve the level of SPS 
protection sought by the importing Party. They also agree to define the mechanism to evaluate and accept the equivalence of SPS measures in the Committee on SPS measures established under 
the Agreement. This Committee will also be in ch arge of determining the procedures to streamline 
risk assessment. The Parties will help each othe r in the assessment of SPS services based on 
international standards or on mutually agreed procedures.  
3.41.  The Parties shall recognize pest- or diseas e- free areas and areas of low pest or disease 
prevalence in accordance with the WTO SPS Ag reement and the World Organization for Animal 
Health and International Pant Protection convention  guidelines. If a Party does not recognize pest- 
or disease- free areas and areas of low pest or disease prevalence of the other Party, it should 
justify its decision based on technical and scientific principles (Article 6.7).  
3.42.  To determine control, inspection and approval procedures, the Parties will take into account 
related provisions in the WTO SPS agreement (Article 6.8). 
3.43.  With respect to transparency, the Parties w ill notify (in writing) each other of their SPS 
measures, as well as the application of an emerge ncy measure or any change to existing measures 
within three days (Article 6.9). Other relevant information (e.g. cases of exotic pests or diseases, product-specific requirements, failures to comply to SPS measures) also must be notified. 
3.44.  The Parties agree to cooperate and provide each other technical assistance for the 
application of SPS-related provisions (Article 6.10). 
3.4.1.2  Technical barriers to trade 
3.45.  In Chapter 7 on Technical Barriers to Tr ade (TBT), the Parties reaffirm their rights and 
obligations under the WTO Agreement on TBTs, and incorporate them in the Chapter (Article 7.3). 
3.46.  Chapter 7 on Technical Barriers to Trade (TBT) applies to the preparation, adoption and 
application of
 all standards, technical regulations and conformity assessment procedures, including 
those related to metrology that can affect the Pa rties' bilateral trade (Article 7.1). The Chapter 
does not apply to SPS measures (Chapter 6) and government procurement conditions (Chapter 10).  
3.47.  In case of a dispute regarding any matter und er Chapter 7, the Parties will have recourse to 
the Agreement's Dispute Settlement Mechanism.  Consultations can take place under this 
mechanism (Article 18.4) or under the Committee on TBTs established by the Agreement 
(Article 7.10).  
3.48.  The Parties commit to use relevant international standards, guides and recommendations as 
the basis for their technical regulations and confor mity assessment procedures (Article 7.5). With 
regard to technical regulations, each Party shall consider accepting the technical regulations of the WT/REG313/1 
 
- 21 - 
 
  other Party as equivalent to its own. If a Party does  not accept them, it shall, at the request of the 
other Party, explain the reasons for such refusal (Article 7.6).  
3.49.  With regard to conformity assessment procedures, the Parties recognize that a broad range 
of mechanisms exists to facilitate the acceptance of conformity assessment procedures conducted 
in the other Party and agree to exchange information with respect to these mechanisms. Upon the 
request of the other Party, a Party should explain its decision, when it does not accept the results 
of a conformity assessment conducted in the territory of the other Party, or when it declines a 
request by the other Party to enter into negotiations to conclude a mutual recognition agreement 
on conformity assessment procedures. The Parties will recognize the conformity assessment bodies of the other Party on the same terms as accorded to such bodies in their own territory. If this is not the case, the Party shall, upon request, explain the reasons of its decisions (Article 7.7).  
3.50.  With respect to transparency, the Parties commit to notify (electronically) each other of 
their proposed or adopted technical regulations and conformity assessment procedures. The notification should be made at the same time as to the WTO. The Parties shall provide at least 
60 days to submit comments on the proposed regulations and procedures (or consider, upon 
request, extending the comment period) and make publicly available (in print or electronically) 
their responses to significant comments, no later than  the date of publication of the final version of 
the technical regulation or conformity assessm ent procedure. The technical regulations and 
conformity assessment procedures will enter into force at least 6 months after the date of their publication, except when such period is ineffective in achieving the objectives pursued. In addition, each Party shall ensure that its adopted technical regulations and conformity assessment 
procedures are publicly available on the internet . The Parties commit to implement the provisions 
on the publication of the responses to comments as soon as possible and no later than three years from the date of the Agreements' entry into force (Article 7.8). 
3.51.  Additional provisions on TBT cover techni cal co-operation (Article 7.9), the exchange of 
information (Article 7.11) and the establishment of a Committee on TBTs (Article 7.10). In order to facilitate market access, the Parties agreed to cooperate and provide technical assistance in the 
area of standards, technical regulations, confor mity assessment procedures, including metrology. 
Following a request of information under Chapter 7, the other Party shall answer, in print or electronically, within 30 days from the date of receipt of the enquiry, but may extend the period if necessary. The functions of the Committee on TBTs include monitoring the implementation and 
administration of Chapter 7.  
3.4.2  Safeguard mechanisms 3.52.  Sections A and B of Chapter 8 on trade reme dies deal with bilateral and global safeguards.  
3.4.2.1  Global safeguards 
3.53.  The Agreement does not confer any additional rights or obligations to the Parties with 
regard to actions taken under Article XIX of GATT 1994 and the WTO Agreement on Safeguards 
except that imports from the other Party can be ex cluded from the imposition of global safeguards 
if they are not a substantial cause of the serious injury or threat (Article 8.8). 
3.54.  The DSM established under the Agreement does not apply to matters related to global 
safeguards, except when a good is subject simultaneously to a global and bilateral safeguard.  
3.4.2.2  Bilateral safeguards 
3.55.  The Parties may apply bilateral safeguards during a transition period
13 if as a result of the 
trade liberalization under the Agreement, the im ports of a good cause to the importing Party 
serious injury or a threat thereof to sectors producing a like or directly competitive good 
(Article 8.1). The safeguard will consist of a suspension of further tariff reductions under the Agreement or the increase of tariffs to a level th at will not exceed the lesser of the MFN applied 
                                               
13 The “transition period” is a five-year period star ting on the date of the entry into force of the 
Agreement, except where the tariff elimination (Annex 2.3) for the good against which the action is taken 
occurs over a longer period of time. In that case, the transition period sh all be the period of tariff elimination 
for that good plus two mo re years (Article 8.7). WT/REG313/1 
 
- 22 - 
 
  tariff in effect at the time of the action is taken and the base tariff rate set out in the Parties' 
schedules. A bilateral safeguard on a product can be  applied for two years, extendable only once 
for one year. Upon termination of the safeguard, the applied tariff will be the rate established in the Parties' tariff schedules (Article 8.2). The same good cannot be subject, at the same time, to a 
bilateral and a global safeguard (Article 8.8). A bilateral safeguard can be applied more than once 
to the same good, provided that a period of time  equal to the duration of the previous bilateral 
measure has elapsed. The non-application period must be of at least one year.  
3.56.  The Parties may also apply a provisional safeguard when a delay in its application would 
cause damage difficult to repair and if a preliminary investigation showed that the increased imports have caused or are threatening to cause serious injury to a domestic industry (Article 8.4). A provisional safeguard can be applied for a maxi mum of 200 days and can take the same form as 
a definitive safeguard. If the final investigation concludes that the increased imports are not the 
cause or do not threaten to cause any serious injury to a domestic industry, the guarantees or funds received from the imposition of the provisional safeguard measure will be released or 
refunded. 
3.57.  Each Party will notify to the other Party of the initiation and conclusion (final decision) of a 
bilateral safeguard investigation, as well as of the application of a provisional measure 
(Article 8.5).  
3.4.3  Anti-dumping and countervailing measures 3.58.  Under the Agreement, the Parties maintain their rights and obligations under WTO 
Agreements regarding the application of antidumping and countervailing measures. The resolution 
of any related dispute will be exclusive to the jurisdiction of the WTO dispute settlement system 
(Article 8.9). 
3.59.  Without prejudice to WTO Agreements, the in vestigating authority will disclose all essential 
information used for the determination of an antidumping or countervailing measure. This 
information shall be sent in writing to the interested parties, who shall be given enough time to provide their comments in writing and orally (Article 8.9).  
3.60.  The Parties agreed to establish a co-operation mechanism between their investigating 
authorities (Article 8.10). 
3.4.4  Subsidies and State-aid 3.61.  The Parties agree to eliminate export subsidies on any agricultural good destined to the 
other Party. If a Party was to maintain, introduce or re-introduce an export subsidy on exports to 
the other Party, the Party shall, upon request of the affected Party, enter consultations to agree on the measures that could be adopted to counter the effects of the export subsidy (Article 2.15).  
3.62.  With regard to tariff exemptions, the Parties commit not to adopt any new tariff exemption 
or expand the application of an existing tariff ex emption, when such exemptions are conditional on 
the fulfilment of a performance requirement. Neither Party may apply a performance requirement 
to the continuation of any existing waiver of customs duties (Article 2.4). 
3.4.5  Customs-related procedures 3.63.  Chapter 4 sets out the provisions on trade facilitation and customs procedures. The 
Agreement also includes a Chapter on cooperation and mutual administrative assistance in 
customs matters (Chapter 5).  
3.64.  The Parties commit to publish, including on the internet, their respective laws, regulations, 
and procedures, and maintain inquiry points concerning customs matters. Any information on 
charges and duties affecting trade should  also be published (Article 4.1).  
3.65.   Each Party shall maintain or adopt simplified customs procedures to facilitate their bilateral 
trade (Article 4.2). In particular, goods should be released, to the extent possible, within 48 hours 
of arrival.  WT/REG313/1 
 
- 23 - 
 
  3.66.  Each Party shall endeavour to use informat ion technology that expedites procedures for the 
release of goods (Article 4.3), as well as risk management systems to target high-risk goods and simplify the clearance and movement of low-risk goods (Article 4.4).  
3.67.  The Parties also allow free transit to each other's' goods in accordance with GATT Article V 
(Article 4.5).  
3.68.  The Parties shall also adopt or mainta in expedited customs procedures for express 
shipments. In particular, goods shall be release within 6 hours following the presentation of the 
relevant documents, provided that the shipment has arrived (Article 4.6).  
3.69.  The Parties also commit to establish a syst em of certified exporters or importers, called 
authorized economic operator in order to facilitate goods clearance (Article 4.7). The chapter also provides for the creation of a single window (Article 4.8), review and appeal proceedings 
(Article 4.9), penalties (Article 4.10), as well as advance rulings (Article 4.11). 
3.70.  The Parties established a Committee on Trade Facilitation and customs procedures, whose 
functions include the implementation of Chapters 4 and 5 (Article 4.12). Yet, the Chapter does not 
provide any timeline for the implementation of Parties commitments. The Committee is to meet at 
least once a year. As of May 2013, no meeting had been held. 
3.71.  In the area of co-operation, the Parties commit to provide mutual technical and 
administrative assistance to ensure the application of customs legislation, prevent, investigate and 
punish customs offenses, as well as to facilitate customs procedures. Assistance as provided in the Agreement includes the sharing of all relevant information, but does not cover requests for the arrest or detention of persons, seizure of property or the refund of duties, taxes, fines on behalf of 
the other Party (Article 5.1).  
3.4.6  Other regulations 3.4.6.1  State enterprises 
3.72.  The Parties retain their rights and obligations with respect to state enterprises under Article 
17 of the GATT and the  Understanding on its Interpretation (Article 2.12) . 
3.4.6.2  Co-operation mechanism in trade remedies 
3.73.  The Parties agree to establish a cooperation mechanism between their investigating 
authorities in the areas of anti-dumping, countervailing and safeguard measures (Article 8.10).  
3.5  Sector-specific provisions on trade in goods 3.74.  Besides the provisions regarding agricultur al export subsidies (Articles 2.14-2.15), there are 
no sector-specific provisions on trade in goods in the Agreement. 
4  PROVISIONS ON TRADE IN SERVICES AND INVESTMENTS  4.1  Scope and definitions 
4.1.  Trade in services is governed by Chapter 13 (Cross-Border Trade in Services) together with 
Chapter 14 on financial Services, Chapter 15 on maritime transport services, Chapter 16 on 
telecommunications, Chapter 17 on temporary entry for business persons and Chapter 12 on 
investments. These Chapters are complemented by Annexes I, II and III, which contain the 
Parties' lists of reservations. Annexes I and II  contain reservations for existing and future 
measures, and Annex III reservations specific to financial services.  
4.2.  Chapter 9 applies to measures by a Party affecting cross-border trade in services by service 
suppliers of the other Party (Article 13.1). Cross-border trade in services, as defined in the 
Agreement, covers GATS modes of supply 1, 2 and 4 (Article 13.5). Mode 3 is treated in WT/REG313/1 
 
- 24 - 
 
  Chapter 12 and defined as the supply of a service in the territory of a Party by a covered 
investment14 or by an investor of the other Party. Chapter 9 does not apply to: 
 air services and related supporting services except for those services allowed under the 
GATS (i.e. aircraft repair and maintenance services, selling and marketing of air 
transport services, and computer reservation system services); 
 services supplied in the exercise of governmental authority15;  
 government procurement;  
 subsidies or grants by a Party, including government-supported loans, guarantees and 
insurances; and 
 financial services (covered by Chapter 14).  
4.3.  The exclusions relating to air transport se rvices and services supplied in the exercise of 
governmental authority are the same than those applied under the GATS. Regarding subsidies, the 
GATS does not contain any specific rule. As for government procurement, it is not excluded from the GATS (article XIII), but exempted from the application of market access, MFN and national 
treatment provisions.  
4.4.  Chapter 12 on investments applies to measures by a Party affecting (a) the investors of the 
other Party; (b) covered investments; and (c) all investments in the territory of the Party with respect to performance requirements and environmental measures (Article 12.1). This Chapter 
also covers measures relating to bonds or financial securities, to the extent that they are a 
covered investment.
16 It does not apply to measures covered by Chapter 14 on financial services. 
In case of any inconsistency between this Chap ter and another Chapter, the other Chapter will 
prevail to the extent of the inconsistency (Article 12.1).  
4.5.  Chapter 14 on financial services applies to (a) financial institutions of the other Party; 
(b) investors of the other Party and their investments in financial institutions in the Party's territory; and (c) cross-border trade in financial services (see Section 4.6.1).
17 
4.6.  Chapter 15 on maritime transport servic es applies to maritime transport and auxiliary 
services by (a) maritime transport service supplier of the other Party and (b) maritime auxiliary (or related) service supplier of the other Party (see Section 4.6.2).  
4.7.  Chapter 16 on telecommunications applies to (a) access to and use of public 
telecommunications transport networks or services (b) its suppliers; and (c) other related-measures (Article 16.1). The Chapter does not cover value-added telecommunication 
services; and like the GATS, applies neither to broadcast and cable distribution of radio nor 
television programming (see Section 4.6.3). 
4.8.  Chapter 17 on the temporary entry of business persons aims at facilitating the movement of 
business persons on a reciprocal basis by establishi ng transparent criteria and procedures. It does 
not apply to measures affecting natural persons seeking access to the labour market of a Party 
and to measures regarding citizenship, nationality, residence or employment on a permanent basis (Article 17.1) (see Section 4.3.4).   
                                               
14 The Agreement defines covered investment as an investment in the territory of a Party of an investor 
of the other Party existing on the date of entry into force of this Agreement, as well as investments made or acquired thereafter (Article 12.30). 
15 Such services are define d exactly as in the GATS. 
16 The requirement by a Party that a service provider of the other Party post a bond or other form of 
financial security as a condition of providing a service into its territory does not of itself make this Chapter applicable to the provisio n of that cross-border service. 
17 Cross-border trade in (or cross-border supply of) fi nancial services, as define d in the Agreement, does 
not include the supply of a financial service in the terr itory of a Party by an inve stment in th at territory 
(mode 3) (Article 13.15). WT/REG313/1 
 
- 25 - 
 
  4.2  Denial of benefits 
4.9.  A Party can deny the benefits of Chapter 13 to a service supplier of the other Party if the 
supplier is a company owned or controlled by nationals of a non-Party, which has no substantial business activities in the territory of the other Party.
18 It can also deny these benefits if the service 
supplier is a company, owned or controlled by nationals of the denying Party, that has no 
substantial business operations in the territory of the other Party (Article 13.13). 
4.10.  Under Article 12.12, a Party can deny the benefits of Chapter 12 to a company of the other 
Party, and its investments, if the company is owned or controlled by investors of a non-Party and 
is not engaged in substantial business activities in the other Party. A Party can also deny these benefits to a company of the other Party and to its investments, if the company does not have substantial business activities in the territory of th e claiming Party, and is owned or controlled by 
investors of the denying Party.  
4.11.  In financial services, a Party may also deny the benefits of Chapter 14 according to 
Articles 12.12 and 13.13 (described above), which are incorporated in that Chapter.  
4.3  General provisions on trade in services 
4.3.1  Market access 4.12.  The provision on market access under the Agr eement is almost identical to that of the GATS 
Article XVI, except that it does not prohibit measures limiting the participation of foreign capital. 
The other five limitations specified in this provision are the same as those in the GATS article.
19 
These limitations cannot be maintained or adopted by the Parties unless otherwise specified in their reservations.  
4.3.2  National and MFN treatment 
4.13.  The Parties agree to grant MFN and national treatment to: 
 services and service providers of the other Party (Articles 13.3 and 13.4); 
 investors of the other Party and covered investments with respect to the establishment, 
acquisition, expansion, management, conduct, operation and sale or other disposition of 
investments in its territory (Articles 12.2 and 12.3); 
 investors of the other Party and their investments in financial institutions, as well as 
financial institutions of the other Party with respect to activities related to financial 
institutions (Articles 14.2 and 14.3)
20; and 
 providers of the other Party of cross-border financial services (Articles 14.2 and 14.3). 
4.3.3  Commercial presence 
4.14.  Under Article 13.6, a service provider of a Party will not be required by the other Party to 
establish or maintain a representative office or other form of company, or be resident, in its territory in order to supply a service.  
                                               
18 The Parties indicate that there is no explicit definition of "substantial" business activities. 
19 Under the Agreement, like under the GATS, the Parties cannot apply measures that: (i) limit the 
number of service suppliers, (ii) the total value of service transactions or assets, (iii) the total number of service operations or the total quantity of services output, (iv) the total number of natural persons that can be employed in a particular service sector, or that a servic e supplier can employ; or that (v) restrict or require 
specific types of legal entities or joint ventures to supply a service (Article 13.5). 
20 MFN treatment is granted with respect to the establishment, acquisition, expansion, management, 
conduct, operation and sale or other disposition of investments in its territory (Article 14.2). WT/REG313/1 
 
- 26 - 
 
  4.3.4  Movement of natural persons 
4.15.  Chapter 17 describes the conditions for the temporary entry of business persons in the 
Parties' territory.21 It does not apply to measures affecting natural persons seeking access to the 
employment market of a Party and measures regarding citizenship, nationality, residence or 
employment on a permanent basis (Article 17.1). Under the Agreement, the definition of natural 
persons covers only the nationals of one Party (Annex 1.5 and Article 17.10); which is in line with the definition used by the Parties in their GATS schedule.
22 Conditional on compliance with their 
immigration requirements and according to Annex 17.3, the Parties commit to authorize the 
temporary entry of certain: (a) business visitors, (b) traders and investors and (c) intra-company transferees. Table 4.1 details the scope of app lication for each of the three categories, the 
requirements (if any) and the permitted length of stay. In all three cases, a visa can be required 
prior the entry of the business person.
  
Table 4.1 Authorized business persons by the Parties 
Authorized categories and scope 
of application  Specific requirements Length of 
stay in 
Panama Length of 
stay in  
Peru 
Business visitors     
Business visitors who seek to engage 
in one of the business activities 
listed in Appendix 1, Chapter 17.a The Parties will grant such 
authorization without requiring any 
work permit or employment 
authorization provided that the 
business visitor fulfils certain 
conditions.  
 90 days 
(renewable) 183 days 
Traders and investors     
Traders and investors who seek to 
(i) carry on substantial trade in 
goods and services principally 
between the Parties or (ii) establish, 
develop or administer an investment 
to which the business person or its 
company has committed, or will 
commit, a substantial amount of 
capital.b Neither Party can require any work 
certificate or other procedures of 
similar effect as a condition to 
authorize temporary entry to the 
applicant.   
 90 days 
(renewable), 
except in the 
case of 
investors 
seeking to 
develop and 
administer 
an 
investment Traders: 183 
days 
 
Investors: 
183 days, 
except for 
independent 
investors. 
Intra-company transferees     
Intra-company transferees who seek 
to work as an executive, manager or 
a specialist in a company or its 
subsidiaries. The Parties may require the business 
person to be employed by the 
enterprise in question for at least one 
year within the thre e-year period prior 
to the application for admission. The 
Parties can require the approval of the 
work contract by the competent 
authority, as a condition for the 
authorization of temporary entry. one year. 
(renewable) one year, 
(renewable) 
 
a The activities in this Appendix include attending meetings and consultations, conducting research, 
purchasing and production management personnel,  marketing researchers and analysts, promotion 
and sales representatives, after-sales service personnel, and certain general service professionals. 
b According to the Parties, a "substantial amount of capital" is an amount greater than US$250,000 in 
the case of Panama and of at least US$30,000 in the case of Peru. Peru, however, indicated that the amount can vary. 
 
Source: Annex 17.3 of the Agreement.  
                                               
21 Article 17.10 defines "business person" as a national of a Party who is engaged in trade in goods, the 
provision of services or investment activities. 
22 The definition does not include permanent resident s. Neither Party has made  any notification under 
GATS Article XXVIII(k) to include this catego ry in the definition of natural persons. WT/REG313/1 
 
- 27 - 
 
  4.16.  The Parties' commitments in mode 4 are broader than in their GATS schedules as they cover 
a larger number of categories of business people. For Panama, commitments under the GATS are limited to sellers of services (representatives ) and intra-company transferees. In the case of 
intra-company transferees, the GATS requirem ents seem less stringent than those in the 
Agreement, as the business person is required to be employed by the enterprise for at least six 
months preceding the date of application for entry, instead of one year within the three-year period prior to the application (Table 4.1). Under the GATS, Peru allows the temporary entry of 
natural persons employed in sectors in which it has commitments for up to three years with 
possible extensions, provided that the company complies with certain conditions. In the Agreement, Peru maintains similar conditions, but also requires preferential treatment for its nationals in hiring.  
4.17.  In the case of a refusal of a temporary entry permit under the Agreement, a Party cannot 
initiate a dispute settlement procedure under Chapter 18, unless the case is a pattern of practice and the business person has exhausted all possible administrative remedies available 
(Article 17.7). 
4.18.  In Article 17.5, the Parties establish a Committee on the Temporary Entry of Business 
Persons, whose functions include reviewing the impl ementation and administration of the Chapter. 
The Committee shall meet at least once every three years.  
4.19.  The Chapter also includes provisions regarding the exchange of information (Article 17.4), 
co-operation (Article 17.6) and transparency of the application process (Article 17.9).  
4.3.5  Performance requirement 
4.20.  Under Article 12.6 the Parties cannot impose performance requirements in connection with 
investment activities of an investor of a Party or a non-Party in its territory.
23 They can however 
require an investment to use a technology to meet generally applicable health, safety or 
environmental requirements. 
4.21.  The Parties cannot make the receipt or continued receipt of an advantage related to an 
investment in its territory of an investor of a Party or a non-Party conditional on certain 
performance requirements, unless the requirement is to locate production, provide a service, train 
or employ workers, construct or expand particular facilities, or carry out research and development, in their territories.  
4.3.6  Senior Management and boards of directors 
4.22.  A Party cannot apply nationality conditions to senior management positions of a company 
that is a covered investment, but can require that a majority of its board of directors, or any committee thereof, be of a particular nationality, or  resident in the territory of the Party, provided 
that the requirement does not impair the ability of the investor to exercise control over its 
investment (Article 12.5). 
4.23.  In financial services, the Parties cannot apply nationality conditions to the senior managerial 
or other essential personnel of financial institutions of the other Party, nor require that more than 
a minority of its board of directors be composed of nationals or residents of the Party, or a combination thereof (Article 14.9).  
                                               
23 The performance requirements prohibited under Article 12.6 are:(a) to export a given level or 
percentage of goods or services; (b) to achieve a give n  l e v e l  o r  p e r c e n t a g e  o f  d o m e s t i c  c o n t e n t ;  ( c )  t o  
purchase, use or accord a preference to goods produced in its territory, or to pu rchase goods from persons in 
its territory; (d) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment; (e) to restrict sales of goods or services 
in its territory that such investment produces or suppli es by relating such sales in any way to the volume or 
value of its exports or foreign exchange earnings; (f) to transfer technology, a production process or other 
proprietary knowledge to a person in its territory, exce pt when the requirement is imposed or the commitment 
is enforced by a court, administrative tribunal or comp etition authority, to remedy  an alleged violation of 
competition laws; or (g) to supply exclusively from the territory of the Party the goods that such investment 
produces or the services it supplies to a spec ific regional market or to the world market. WT/REG313/1 
 
- 28 - 
 
  4.3.7  Other investment-related provisions  
4.24.  In addition to the provisions on the deni al of benefits, performa nce requirements, senior 
management and board of directors, MFN and national treatment, Chapter 12 on investments includes provisions dealing with minimum standa rds of treatment (Article 12.4), environmental 
measures (Article 12.8), investments treatment in case of war (Article 12.9), expropriation and 
compensation (Article 12.10), transfers (Article 12.11), special formalities and information requirements (Article 12.13) and subrogation (Article 12.14). It also provides procedures for the 
settlement of disputes between an investor and the host Party (Articles 12.15-12.29) 
(see Section 5.6). 
4.4  Liberalization commitments 4.25.  The liberalization of trade in services and investments follows a "negative list" approach, 
which means that provisions in Chapters 12 (Investments) and 13 (Cross-border trade in services) 
apply to all sectors, unless otherwise specified in the Parties' lists of reservations. Commitments in financial services are also defined according to a negative list, except for mode 1 which is subject 
to a positive list (Annex 14.6).  
4.26.  Annexes I and II to the Agreement contain the reservations on existing and futures 
measures with respect to national and MFN treatment, market access, local presence, performance 
requirements, and senior management and board of directors in cross-border trade in services and 
investments. Annex III lists reservations for financ ial services on existing and future measures 
with respect to national and MFN treatment, right of establishment, cross-border trade and senior management and board of directors. Reservations with respect to national and MFN treatment in 
Annexes I and II also apply to financial services (Articles 14.2 and 14.3), to the extent that the 
measure or activity in the reservation is covered by Chapter 14. 
4.27.  The following sections refer to the Parties horizontal and sector-specific commitments for 
modes 1-3. Commitments (in terms of scope) in Mode 4 are described in section 4.3.4. 
4.4.1  Panama 4.28.  Under the Agreement, Panama lists 28 reservations for existing measures, of which one is 
horizontal and another multi-sector (Annex I). Under the latter, the majority of the capital of 
private enterprises operating in Panama and enga ged in public utilities shall be Panamanian, 
except where established by law. Public utilities consist of the provision of water
24, sewage, 
electricity, telecommunications, radio, television and gas transmission and distribution.  
4.29.  Panama also lists nine reservations on futures measures: three sector-specific, one 
multi-sector, two horizontal, and three non-sector specific reservations. Under the multi-sector reservation, Panama reserves the right to adopt or maintain any measure with respect to 
investments and cross-border trade in social services such as correctional services, income 
security and insurance, social security, social welf are, public education, public training, health, and 
childcare. The non-sector specific reservations refer to issues regarding Panama's Canal
25, state 
enterprises, and native populations and minorities (Annex II). In financial services, Panama lists 
six reservations only with respect to existing measures (Annex III). 
4.4.1.1  Horizontal commitments 4.30.  Panama's commitments under the Agreement are broader than under the GATS, despite a 
few horizontal reservations. Under the Agreement, Panama reserves the right to grant preferential 
treatment to its nationals over foreigners for positions in the Panama Canal Authority. It reserves the right to adopt or maintain any market-access measure consistent with its obligations under 
GATS Article XVI, except for measures relating to energy distribution, entertainment services, 
telecommunications, postal services and ports and airports.
26 It also reserves the right to adopt or 
                                               
24 The supply of water is not included in the CPC classification for services, reason why it is not taken 
into account when comparing the commitme nts under the GATS and the Agreement. 
25 It reserves the right to adopt or maintain any measure related to the Canal’s functioning. 
26 These sectors are already subject to a reservation with respect to an existing measure. This 
reservation does not apply to real estate and call centers services. WT/REG313/1 
 
- 29 - 
 
  maintain any measure that grants differential treatment to countries under an existing 
international agreement, as well as to countries under any current or future international agreement involving aviation, fisheries and maritime matters (including salvage). 
4.31.  Under its GATS schedule, Panama has no ho rizontal limitations in modes 1-2 and has bound 
mode 3. For mode 3, Panama prohibits the acquisition by foreigners of land in border areas or 
islands and applies restrictions on the nationality of a company's workforce. Under the Agreement, the restriction regarding employees' nationality was removed.  
4.4.1.2  Sector-specific commitments 
4.32.  Compared to its GATS schedule, Panama's  sector-specific commitments are also broader.
27 
Only "other services", excluded under the GATS, are fully liberalized. The remaining sectors are 
subject to reservations in both the GATS and the Agreement, but commitments are deeper under 
the Agreement, except for health related and social services where there are no commitments.  
4.33.  Table 4.2 compares Panama's sectoral commitments under the Agreement and under its 
GATS schedule for modes 1-3.28 
Table 4.2 Panama's sector-specific liberaliz ation under the Agreement at the national 
level, excluding mode 4 
Sectors (CPC Classification) GATS RTA 
Sectoral 
commitmentsa 
 Compared to 
the GATS, 
sectoral 
commitmentsb 
in the FTA are: Reservations 
specified in: 
1. Business services  partial improved   
A. Professional Services  partial Partial*  Annex I 
B. Computer and Related Services   partial Full - 
C. Research and Development Services   0c Full - 
D. Real Estate Services    0 Partial Annex I  
E. Rental/Leasing Services without Operators   partial Full - 
F. Other Business Services  partial Partial* Annexes I-II  
2. Communication services  Partial improved   
A. Postal services    0 0 Annex I 
B. Courier services    0 Full - 
C. Telecommunication services  Partiald Partial Annex I-II 
D. Audiovisual services partial Partial* Annex I 
E. Other  0 full - 
3. Construction and related engineering services  partial improved   
A. General construction work for buildings   partial partial* Annex II 
B. General construction work for civil engineering  partial partial* Annex II 
C. Installation and assembly work   partial partial* Annex II 
D. Building completion and finishing work   partial partial* Annex II 
E. Other     0 Partial  Annex II  
4. Distribution services  partial improved   
A. Commission agents' services   full Full - 
B. Wholesale trade services    full Full - 
C. Retailing services       0 Partial Annex I 
D. Franchising       partial partial* Annex I 
E. Other  0 Full - 
                                               
27Regarding MFN exemptions under the GATS, Panama in cluded in its list of exemptions the following 
sectors: business (i.e. professional) and communications (i .e. audiovisual). It also included exceptions applying 
for all sectors regarding preferential agreements with Central American countries, as well as the Panama Canal 
Treaty. The latter provides preferenti al treatment for services suppliers.  
28This Factual Presentation follows the WTO Services Se ctor Classification list, which is based on the UN 
Central Product Classification (CPC) and consists of 12 sectors (WTO document MTN.GNS/W/120). WT/REG313/1 
 
- 30 - 
 
  Sectors (CPC Classification) GATS RTA 
Sectoral 
commitmentsa 
 Compared to 
the GATS, 
sectoral 
commitmentsb 
in the FTA are: Reservations 
specified in: 
5. Education services  partial improved   
A. Primary education services   partial partial* Annex I-II 
B. Secondary education services   partial partial* Annex I-II 
C. Higher education services    partial partial* Annex I-II 
D. Adult education    0 Partial Annex I-II 
E. Other education services    0 Partial Annex I-II  
6. Environmental services  partial improved  
A. Sewage services    0 Partial Annex I 
B. Refuse disposal services    0 Full - 
C. Sanitation and similar services   0 Full - 
D. Other partial Full - 
7. Financial services partial improved   
A. All insurance and insurance-related services  partial partial* Annexes 14.6 
and III 
B. Banking and other financial services partial partial* Annexes 14.6 
and III 
C. Other  0 partial  Annexes 14.6 
and III  
8. Health related and social services partial no 
commitments  
A. Hospital services partial 0  Annex II 
B. Other Human Health Services   0 0 Annex II 
C. Social Services    0 0 Annex II 
D. Other 0 0 Annex II  
9. Tourism and travel related services  partial improved - 
A. Hotels and restaurants (incl. catering)   partial partial* Annex I 
B. Travel agencies and tour operators services  partial full - 
C. Tourist guides services    0 full - 
D. Other  0 full - 
10. Recreational and cultural and sporting services partial improved   
A. Entertainment services (including theatre, live bands and 
circus services) partial partial* Annex I 
B. News agency services    0 partial Annex I 
C. Libraries, archives, museums and other cultural services  0 partial Annex I 
D. Sporting and other recreational services   0 full - 
E. Other  0 full - 
11. Transport services  partial improved   
A. Maritime Transport Services  0 partial Annex I  
B. Internal Waterways Transport  0 partial Annex I 
C. Air Transport Services  partial partial* Annex I 
D. Space Transport    0 full - 
E. Rail Transport Services  0 full - 
F. Road Transport Services 0 partial Annex II 
G. Pipeline Transport  0 full - 
H. Services auxiliary to all modes of transport  0 partial Annex I 
I. Other Transport Services 0 full - 
12. Other services not included elsewhere  0 improved - 
 
a: Except as indicated in the GATS horizontal commitments. 
b: Except as indicated in the Ag reement horizontal reservations. 
c: "0" means that no commitments have been made. d: Full commitments were made in value-added telecommunications services in 2000.  
*: Means that partial commitments we re made in both under the GATS and the Agreement, but commitments 
under the Agreement are broader.  WT/REG313/1 
 
- 31 - 
 
  4.34.  For business services, Panama made commi tments in research and development services, 
excluded from the GATS, while maintaining a nationality restriction for economists, psychologists and sociologists. It also made full commitments in computer and related services
29 and 
rental/leasing services30 without operators, subject to GATS re strictions. In real estate services, 
excluded from the GATS, Panama made only one reservation: only its nationals can be real estate 
agents/brokers. In professional services, Panama expanded the sectoral and modal coverage while 
maintaining some reservations.31 It added auditing and bookkeeping services to its schedule. It 
expanded its commitments in taxation services, restricted to mode 1 and 2 under the GATS. In 
legal services Panama continues to reserves the practice of Panamanian law to Panamanians. In architectural and engineering services (including  integrated engineering, urban planning and 
landscape architectural services), restrictions under the Agreements seem less stringent than 
under the GATS. Under the latter, Panama reserves  such services to architects and engineers 
licensed in its territory, while under the Agreem ent, architects and engineers can provide their 
services if they have been certified by the competent authorities.
32 Companies willing to provide 
such services must be registered with competent authorities. Regarding the hiring of foreign 
architects or engineers, the restriction in the Ag reement seems stricter than in the GATS, as it 
requires that when a foreign professional is hired for less than 12 months, a Panamanian 
professional must also be hired to be trained and to replace the foreigner at the end of the 
contract. In the GATS, such condition applies only to contracts of more than 12 months. Finally, Panama reserved a list of professions and activities to its nationals in medical, dental and veterinary services, as well as in services provided by midwives and nurses and physiotherapists 
and paramedical personnel, all excluded from the GATS. In accounting services, largely unbound 
under the GATS, Panama also reserved the profession to its nationals.
33 
4.35.  In other business services, Panama includes  ten new subsectors, of which four (i.e. market 
research and public opinion polling services34, services incidental to energy distribution, 
investigation and security services and other services35) are subject to restrictions. It also expands 
sectoral and modal coverage in scientific and technical consulting services and relaxes the 
reservation which requires engineers to be licen sed in Panama (see above). In addition, Panama 
expands its commitments in services incidental to agriculture, hunting and forestry, limited to only certain activities under the GATS, but maintains nationality restrictions on agricultural professionals. In services advertising services, incidental to mining, services incidental to fishing, 
printing and publishing, Panama expands its co mmitments while maintaining some reservations. 
The majority of these reservations have no GATS equivalent. In advertising services, it removes the GATS restriction, under which foreign agencies must be associated with national enterprises, 
but introduces a new one related to television and cinema spots.
36 Panama broadens its 
commitments in services incidental to mining by including new activities, but introduced three reservations mainly related to mining extraction and exploitation. In services incidental to fishing, 
it adds mode 3 to its schedule and applies mainly nationality requirements for fish sellers and 
ships. It also reserves the right to maintain  and adopt any measure on the requirements to 
operate fishing ships. In printing and publishing, it expanded the sectoral and modal coverage but 
maintains a reservation with respect to future me asures relating to investments in and personnel 
of print media, as well as to the requirements to exercise journalism.  
4.36.  In communication services, Panama broadened its commitments by including courier and 
other services in its schedule and by expanding its commitments in telecommunications services, 
                                               
29 In Computer and related services, Panama included retail sale of hardware in its schedule and 
expanded the sectoral coverage of data proc essing services and ot her computer services. 
30 In rental and leasing services, Panama expanded  the sector and modal coverage, which under the 
GATS was limited to rental of cars with out a driver and to modes 1 and 2.   
31 The reservations apply to legal se rvices, engineers and architects, as  well as to a list of services 
provided to companies; the majority of the listed servic es are not included in Panama’s GATS schedule. The list 
covers a wide range of services including medical and de ntal services, veterinary se rvices as well as services 
provided by customs brokers, accountants, economists, librarians, midwives and nurse s, and physiotherapist.  
Activities in this list ar e reserved to Panamanians. 
32 Such authorization can be also granted to national from countries applying reciprocity. 
33 Under the GATS, Mode 1 and 2 for accounting services are unbound. In mode 3, Panama allows the 
association between foreign and national public accountant , provided that the foreign accountant is a certified 
public accountant in his country. 
34 Under the Agreement, public relation  specialist must be Panamanians. 
35 Under the Agreement, translators must be Panamanians. 
36 Panama indicated that this reservation fall s in the category "Advertising services".  WT/REG313/1 
 
- 32 - 
 
  which under the GATS are limited to value-added telecommunications services.37 In 
telecommunication services, Panama has three reservations. It does not allow foreign government participation in companies supplying telecommunication services in Panama. It also restricts the number of mobile phone operators to four, and applies a local presence requirement to supply 
telecommunication services in its territory. Under a multi-sector reservation on public utilities, the 
majority of the capital of private enterprises providing telecommunications services must be Panamanian. In audio-visual services, it expands the sectoral coverage of motion picture 
projection services; motion picture and video tape  production and distribution services; and of 
radio and television services. For radio and television services, the multi-sector reservation also applies. In addition, Panama has commitments in radio and television transmission services, excluded from the GATS, but maintains a few restrictions regarding a company's capital, the 
nationality of directors and managers and foreign governments' participation. Postal services are 
reserved for the government.  
4.37.  In construction services, Panama made commitments in mode 1, which is unbound in the 
GATS for all subsectors. It made commitments in mode 3, unbound with respect to limitations in 
national treatment; and relaxed the GATS limitations with respect to market access.
38 Panama 
reserves the right to adopt or maintain any loca l presence requirement or security in order to 
guarantee the application of Panama's law and obligations. 
4.38.  In distribution services, Panama added re tailing and other services to its schedule, but 
reserves the provision of retailing services to its nationals, foreign companies established in Panama or owned by a Panamanian, and to foreigners complying with certain conditions. In 
franchising services, it removed the restriction for mode 1 but continues to reserve the provision of 
services at the retail level to its nationals in mode 3. 
4.39.  In education services, Panama made a broad reservation on social services that allows him 
to adopt or maintain any measure in public education and public training. In private education 
services, Panama expanded its commitments by removing an authorization requirement for private educational institutions in primary, secondary and higher education, while introducing one 
restriction. Under the latter, only its nationals can teach certain topics in Panama.  
4.40.  In environmental services, Panama added refuse disposal services and sanitation services to 
its schedule. It undertook partial commitments in sewage services, also absent from the GATS, but 
subjected them to the multi-sector reservation on public utilities. In "other" related services, 
Panama expanded sectoral coverage, which under the GATS is limited to certain activities related 
to nature and landscape protection, gas cleaning and noise abatement. 
4.41.  In financial services, Panama
39 made broader commitments in insurance, banking and 
related services, but maintains six reservations, of which one applies to all financial services. The 
latter reserves the provision of bonds or bankin g guarantees related to government procurement 
to insurance companies and banks established in Panama. In insurance and insurance related 
services, it made partial commitments in services auxiliary to insurance, excluded from the GATS. 
In mode 1, its commitments apply to broking, co nsultancy, actuarial, risk assessment and claim 
settlement services related to non-life insurance services, while those in mode 2-3 cover all auxiliary services. In life, accident and health insurances services, Panama made partial 
commitments in mode 2, unbound under the GATS, by  allowing the purchase of insurances policies 
abroad, only if these policies cannot be provided by authorized companies established in Panama. Like in the GATS no commitments are made in mode 1. In non-life insurance services, it undertook 
partial commitments in mode 1 and 2, unbound under the GATS. Commitments in mode 1 apply to 
insurances of risks relating to goods in international transit, maritime shipping, commercial aviation, and space launching and freight (including satellites). Under the GATS, commitments in 
mode 1 do not include international transit. Like for other type of insurances, Panama allows 
cross-border trade, as well as the purchase of insurance policies abroad, only if these policies 
                                               
37 Panama has not adopted the Fourth Protoc ol to the GATS (i.e. Agreement on Basic 
Telecommunications). In its GATS schedule, Panama has made commitments in value-added telecommunication services in 2000. 
38 The restriction relates to the professional requir ements of persons responsible for engineering and 
architectural works. 
39 Panama has not adopted the five Protocols to the GATS on financial services and its annexes 
(i.e. Understanding on Commitments in Financial Services). WT/REG313/1 
 
- 33 - 
 
  cannot be provided by authorized companies established in Panama. It also expanded its 
commitments in reinsurance and retrocession services, by removing the restriction in mode 1 on premiums for reinsurance abroad for fire insurance, but applied a restriction on the nationality of the general proxies of reinsurance companies. Panama also maintained restrictions on nationality 
and ownership for stock agents and broker companies. 
4.42.   In banking and other financial services, Panama made commitments in mode 2-3 for 
settlement and clearing services for financial assets, the only subsector excluded from the GATS. 
Panama also expanded the sectoral coverage of financial leasing services, lending services 
payments and money transmission services, and participation in issues of all kinds of securities, all of which are limited to certain activities in the GATS. In participation in issues of all kinds of securities, as well as in trading activities, it removed the restriction under which only Panamanians 
could make placements in Panama's market. In addition, Panama applies in mode 3 two 
restrictions on the nationality of the board of di rectors of the "Caja de Ahorros" and of Panama's 
National Bank. It also imposes restrictions on the number and nationality of the general proxies of 
branches of foreign banks. In mode 1, the covera ge in terms of activities seems broader in the 
GATS than in the Agreement.   
4.43.  Health related and social services are su bject to the reservation on social services. The 
reservation applies to future measures affecting investments and cross-border trade in social 
services such as correctional services, income security and insurance, social security, social welfare, health (public and private) and childcare services.  
4.44.  In tourism and travel related services, Panama made full commitments in travel agencies, 
tourist guides services and "other" services, all excluded from the GATS. It broadens the sectoral 
coverage of tour operators services. It also expands the sectoral and mode coverage of hotels services
40 and adds restaurants services to its schedule, but maintains a reservation on the 
establishment of bars. 
4.45.  In recreational, cultural and sporting se rvices, Panama expanded the sectoral and modal 
coverage of entertainment services, which under th e GATS are limited to certain activities and to 
mode 2. Yet, entertainment services are subject to a few reservations related to the supply of 
games of chance and gambling, music shows by foreign artists and their contracts conditions. Panama also made commitments in news agency services, libraries, archives, museums, sporting as well as other recreational, cultural and related activities, all excluded from the GATS. In news 
agency services and libraries, archives, museums and other cultural services, Panama maintained 
a reservation on the requirements to practice of journalism and on the nationality of librarians.  
4.46.  In transport services, Panama added to its schedule space, rail and pipeline transport 
services, all excluded from the GATS. It also included in its schedule services auxiliary to all modes 
of transport and other transports services. Comm itments were also made in maritime, internal 
waterways, road transport services, although some  reservations were maintained. In maritime and 
internal waterway transport services, Panama reserves the positions of technical trainings to its 
nationals and imposes restrictions on the nationality of services providers of Panamanians ships, as well as on that of the proxies of placement agencies. In air transport services, Panama set 
restrictions for mode 3, such as nationality restrictions for providers of air transport services, as 
well as on the participation of foreign capital. In addition only Panamanians can provide aircraft 
maintenance and repair services. Panama also reserves the right to determine the number of 
concessions of ports and airports. Finally, in road transport services, Panama reserves the right to 
adopt or maintain any measure that restrict the provision of services and investments for 
passenger transportation, the rental of commercial vehicles with operator and buses terminal services. 
4.4.2  Peru  
4.47.  Under the Agreement, Peru lists 26 reservations on existing measures, of which two are 
horizontal (Annex I).  
                                               
40 Under the GATS, commitments in hote ls services were limite d to certain services an d to mode 2-3.    WT/REG313/1 
 
- 34 - 
 
  4.48.  Peru also has 16 reservations on future measures: 10 sector-specific, four horizontal, one 
multi-sector and one non-sector specific, which relates to natives, peasants and minority affairs (Annex II). Under the multi-sector reservation, Peru reserves the right to adopt or maintain any measure with respect to investments and cross-border trade in social services, in particular 
correctional services, income security and insurance, social security, social welfare, public 
education, public training, health, and childcare.  
4.49.  In financial services, it lists six and one reservations on existing and future measures, 
respectively (Annex III).  
4.4.2.1  Horizontal commitments 4.50.  Under the GATS, Peru has no horizontal limitations for mode 1-2. As for the GATS 
restrictions in mode 3, some are removed, some others are maintained, while others are new. The 
GATS registration requirement of any foreign investment (already made) is not included under the 
Agreement. In this respect, the authorities indicated that the requirement is still in force, but is not 
compulsory. Peru maintains a prohibition on the acquisition of mines, water, fuel, wood or energy 
resources in border areas.  It also maintains a reservation which provides preferential treatment for 
Peruvians in hiring and nationality restrictions in the work-force of a company. This reservation is similar to that in the GATS (see section 4.3.4). In addition, it reserves the right to adopt or 
maintain any measure related to investments and cross-border trade that grants differential 
treatment to countries under an existing international agreement, as well as to countries under any current or future international agreement involving aviation, fisheries and maritime matters (including salvage). It also includes a reservation on market access in cross-border trade, which 
allows Peru to adopt or maintain any market-access measure in any sector, except for a number of 
activities. The list of activities includes some business services, cabotage, telecommunications, distribution, hotels and restaurants, entertainment services, sporting and recreational, maritime 
transport, road transport, air transport services an d auxiliary services to all modes of transport.  
4.4.2.2  Sector-specific commitments 4.51.  Compared to its GATS schedule, Peru's  sector-specific commitments are also broader.
41 
Construction and related engineering services, tourism and travel related services and "other" 
services are fully liberalized under the Agreement.  Of these sectors, it has some commitments in 
the GATS only in tourism and travel related services. Education and environmental services, also excluded from the GATS, are partially liberalized. The remaining sectors, except for health related 
and social services, are all subject to restri ctions in the GATS and the Agreement, but 
commitments under the Agreement are broader. 
4.52.  Table 4.3 compares Peru's sectoral commitments under the Agreement and under its GATS 
schedule for modes 1-3. 
Table 4.3 Peru's sector-specific liberalizat ion under the Agreement, excluding mode 4 
Sectors (CPC Classification) GATS RTA 
Sectoral 
commitmentsa 
 Compared to the 
GATS, sectoral 
commitmentsb 
in the FTA are: Reservations 
specified in: 
1. Business services  partial  improved   
A. Professional Services  partial  Partial* Annex I-II 
B. Computer and Related Services   0c  Full - 
C. Research and Development Services   0 Partial Annex I 
D. Real Estate Services    0 Full - 
E. Rental/Leasing Servic es without Operators   partial  Full - 
F. Other Business Services  partial  Partial* Annex I-II 
                                               
41 Regarding MFN exemptions under the GATS, Peru included in its list of exemptions the following 
sectors: transport (i.e. land and maritime transport), financial services (i.e. reci procity), and recreational, 
cultural and sporting services.  It also includes one exemption that applies to all sectors and regards the recruitment of foreign workers und er international agreements.   WT/REG313/1 
 
- 35 - 
 
  Sectors (CPC Classification) GATS RTA 
Sectoral 
commitmentsa 
 Compared to the 
GATS, sectoral 
commitmentsb 
in the FTA are: Reservations 
specified in: 
2. Communication services   partial  improved   
A. Postal services    0  full - 
B. Courier services    0  full - 
C. Telecommunication services  Partial Partial* Annex I-II 
D. Audiovisual services 0  partial Annex I-II 
E. Other  0  Full - 
3. Construction and related engineering 
services  0 improved  
A. General construction work for buildings   0  full - 
B. General construction wo rk for civil engineering  0 full - 
C. Installation and assembly work   0 full - 
D. Building completion and finishing work   0 full - 
E. Other     0 full - 
4. Distribution services   partial  improved   
A. Commission agen ts' services   0 full - 
B. Wholesale trade services    partial  Partial* Annex II 
C. Retailing services       partial  Partial* Annex II 
D. Franchising       0 Full - 
E. Other  0 Full - 
5. Education services  0 improved   
A. Primary education services   0 partial Annex II 
B. Secondary education services   0 partial Annex II 
C. Higher education services    0 partial Annex II 
D. Adult education    0 partial Annex II 
E. Other education services    0 partial  Annex II  
6. Environmental services   0  improved   
A. Sewage services    0 partial Annex II 
B. Refuse disposal  services    0 full - 
C. Sanitation and similar services   0 full - 
D. Other 0 full - 
7. Financial services  partial  improved   
A. All insurance and insu rance-related services  partial partial Annexes 14.6 and 
III 
B. Banking and other financial services partial partial Annexes 14.6 and 
III 
C. Other  0 partial Annexes 14.6 and 
III 
8. Health related and social services  0  0  
A. Hospital services 0 0 Annex II 
B. Other Human Health Services   0 0 Annex II 
C. Social Services    0 0 Annex II 
D. Other 0 0 Annex II  
9. Tourism and travel related services   partial  improved   
A. Hotels and restaurants (incl. catering)   partial  full - 
B. Travel agencies and to ur operators services  partial  full - 
C. Tourist guides services    0 full - 
D. Other  0 full - 
10. Recreational and cultural and sporting 
services partial improved   
A. Entertainment services (including theatre, live 
bands and circus services) partial Partial* Annex I-II 
B. News agency services    0 partial Annex I-II 
C. Libraries, archives, mu seums and other cultural 
services  0 partial Annex I-II WT/REG313/1 
 
- 36 - 
 
  Sectors (CPC Classification) GATS RTA 
Sectoral 
commitmentsa 
 Compared to the 
GATS, sectoral 
commitmentsb 
in the FTA are: Reservations 
specified in: 
D. Sporting and other recreational services   partial Partial* Annex I-II 
E. Other  0 partial Annex I-II  
11. Transport services   partial  improved   
A. Maritime Transport Services  partial  Partial* Annex I 
B. Internal Waterways Transport  partial  Partial* Annex I 
C. Air Transport Services  0 partial Annex I 
D. Space Transport    0 full - 
E. Rail Transport Services  0 partial Annex I 
F. Road Transport Services 0 partial Annex I-II 
G. Pipeline Transport  0 full - 
H. Services auxiliary to all modes of transport  0 partial Annex I 
I. Other Transport Services 0 full - 
12. Other services not included elsewhere  0  improved - 
 
a: Except as indicated in the GATS horizontal commitments. 
b: Except as indicated in the Ag reement horizontal reservations. 
c: "0" means that no commitments have been made. *: Means that partial commitments we re made in both under the GATS and the Agreement, but commitments 
under the Agreement are improved.   
4.53.  In business services, Peru made full commitments in computer and real estate services, 
both excluded from the GATS. It made commitmen ts in research and development services, also 
absent from the GATS, but maintained a reservation on national treatment regarding 
archaeological projects. In rental and leasing services, Peru expanded sectoral and modal 
coverage, which under the GATS is limited to mode 3 and to in certain services related to transport equipment (other than ships and aircraft). In profes sional services, it added eight subsectors to its 
schedule, of which only one (notary services - legal services) is restricted. It liberalized 
engineering services by expanding the sectoral scope, adding modes 1 and 2. In mode 3, it 
continues to require providers to have their profe ssional degrees recognized and be enrolled in the 
relevant college. These requirements are listed in  the GATS but not in the Agreement. In this 
regard, the authorities indicated that these requirements are considered as a valid domestic regulation and thus they should not have been lis ted in the GATS. Peru also broadens the sectoral 
and modal coverage of its commitments in account ing, auditing and bookkeeping and architectural 
services
42, although it maintains some of the GATS restrictions and introduces new ones.43 In 
other business services, it added 17 subsectors to its schedule but maintained reservations in four subsectors, namely services incidental to fishing, services incidental to mining, investigation and 
security services and publishing services. It also expands sectoral coverage in management 
consulting services, which in the GATS are limited to services related to tourism development. In advertising services, Peru maintains a reservation in mode 1 regarding the participation of national 
artists and technical personnel involved in commercials produced in Peru, but removes the GATS 
restrictions in mode 3. Finally, it expands the sectoral and modal coverage in convention services. 
4.54.  In communication services, Peru added to  its schedule postal, courier, audio-visual and 
other services, of which only audio-visuals serv ices are restricted under the Agreement. The 
reservations apply in particular to radio broadcasting services and include nationality restrictions to 
obtain licences and authorizations, and domestic content quotas for movies projections and television and radio broadcasting. Peru also applies artists' quotas for audiovisual productions and 
reserves the right to grant to a non-Party a certain treatment on the basis of reciprocity in the 
audiovisual, publishing, and music sectors. In  addition, Peru reserves the right to grant 
preferential treatment to non-parties with respect to investments and cross-border trade in 
                                               
42 Under the GATS, these sub-sectors are limited to certain activities and to mode 3. 
43 In architectural services, the Agreement maintain ed the GATS requirement on the enrolment in the 
relevant college. Moreover, to register it also requires foreign architects (non-resident) to have a partnership 
contract with a resident Peruvian architect. In accounting services, Peru applies under the Agreement a 
nationality and local presence requirements to the staff of auditing companies. This reservation has no equivalent in the GATS.    WT/REG313/1 
 
- 37 - 
 
  cultural industries as a result of any existing or future bilateral or multilateral international 
agreement. Cultural industries include audiov isual, entertainment and cultural services.  
4.55.  In telecommunications, Peru made broader commitments in both basic and value-added 
telecommunication services,44 as it applies only two reservations. In basic telecommunication 
services, it removes the GATS restrictions in modes 1-3, except for a prohibition on the offer of 
call-back services. In value-added telecommunication services, it expands sectoral and modal coverage by including other value-added telecommunication services, adding mode 2 to its 
schedule. Although not listed in the Agreement, Peru continues to require an authorization to 
install and operate a private netw ork, as specified in the GATS.
45 In this regard, the authorities 
indicated that such requirement is a domestic regu lation and therefore does not need to be listed 
as a restriction. Finally, Peru reserves the right to adopt or maintain any measure relating to the 
granting of a concession for the installation, operation and exploitation of public (basic and value-
added) telecommunication services.  
4.56.  In distribution services, Peru made full commitments in commission agents' services, 
franchising and other related distribution services, for which it has no GATS commitments. It 
broadens its commitments in wholesale trade and re tailing services by expanding both the sectoral 
and modal coverage.46 It only maintains two reservations, one on cultural industries (see above) 
and another on handicrafts. Under the latter, Peru reserves the right to adopt or maintain any 
measure affecting the design, distribution, sale or exhibition of handicrafts.  
4.57.  The reservation on cultural industries (s ee above) applies to the distribution, wholesale 
trade and retailing services for books, magazines, periodicals or newspapers, as well as for audio, 
music and video recordings.  
4.58.  In education services (excluded from the GATS), Peru reserves the right to maintain or 
introduce any measure relating to social services, including public education and public training 
services. It also reserves the right to adopt or  maintain any measure regarding the provision of 
education services by individuals. 
4.59.  In Environmental services (for which it has no GATS commitments), Peru made full 
commitments in all subsectors, except sewage services. Peru reserves the right to adopt or 
maintain any measure with respect to local presence related to public sewage services. 
4.60.  Commitments in financial services are broader under the Agreements than in Peru's GATS 
schedule, although some restrictions continue to apply. Peru made broader commitments in 
insurance and insurance related services, by making commitments in mode 1 and by expanding 
the sectoral coverage in modes 2-3. Under the GATS, Peru has no commitments in mode 1 (i.e. "unbound"). In life, accident and health insurance services, it includes mode 2 (unbound under the 
GATS), expands sectoral coverage (limited to life insurance services under the GATS) and removes 
the restrictions in mode 3. Like in the GATS, no commitments were made in mode 1. In non-life insurance, it made commitments in mode 1 but only for insurance of risks relating to goods in 
international transit, maritime shipping, commercial aviation, and space launching and freight 
(including satellites). For modes 2-3, it expands sectoral and modal coverage which in the GATS is limited to mode 3 and to certain activities (including marine, aviation and other transport insurance services). In reinsurance and retrocession, Peru made full commitments in mode 1, 
excluded from the GATS. In modes 2-3, it ex pands sectoral coverage, which is limited to 
reinsurance services and removes the restriction in mode 2 regarding reinsurance companies. In 
services auxiliary to insurance (including intermediation activities), it made commitments in modes 
1 and 2, both unbound under the GATS, and expanded the sectoral coverage, which under the 
GATS is restricted to certain activities. As for its reservations, Peru reserves the right to restrict the acquisition of obligatory insurance outside of Peru, and to require that obligatory insurance be 
purchased from suppliers established in Peru.
47 It also applies one restriction regarding the 
location of the capital of a subsidiary institution. In case of liquidation of a branch of a foreign 
                                               
44 Basic telecommunication services were excluded from its 1994 GATS schedule but partially liberalized 
in its 1997 GATS schedule following the Negotiations on Basic Telecommunications (WTO document GATS/SC/69/Suppl.1). 
45 Such authorization can be obtained only if a public carrier could not supply such services. 
46 Under the GATS, these subsectors are restricted to  a certain number of activities and to mode 3. 
47 These restrictions do not apply to any insurance services allowed under mode 1. WT/REG313/1 
 
- 38 - 
 
  financial institution, it grants preferential treatment to creditors domiciled in Peru with regard to 
the assets located in Peru of this institution. The latter applies to all type of financial services.  
4.61.  Peru made also broader commitments in banking and other financial services, by liberalizing 
mode 2, unbound under the GATS and by removi ng the restriction in mode 3 regarding the 
acceptance of deposits. In mode 1, largely unbound under the GATS, Peru made commitments in 
the provision and transfer of financial information and financial data processing and related software, and advisory and other auxiliary financial services excluding intermediation. Under the 
GATS, Peru allows only the transfer of information needed by a financial institution for their 
activities, without violating banking secrecy. Peru maintains four reservations, such as capital requirements for branches, preferential treatmen t to entities with State participation, and a 
prohibition on the establishments of branches or ag encies to supply services in the security market 
or related to asset management. 
4.62.  Health related and social services, exclud ed from GATS, are subject to a broad reservation 
with respect to future measures affecting services such as correctional services, social security, 
social welfare, health and childcare.  
4.63.  In tourism and travel related services, Peru liberalized tourist guide services and others 
services, uncommitted under the GATS. It also made broader commitments in hotels, restaurants, 
travel agencies and tour operator services, by expanding their sectoral coverage and by adding 
mode 1 and 2 to its schedule. 
4.64.  In recreational, cultural and sporting services, Peru made some commitments in all 
subsectors, while maintaining a number of reservations within and across them. Peru made partial 
commitments in news agency services, libraries, archives, museums and other related services, all 
excluded from the GATS. It also made broader commitments in entertainment, sporting and other recreational services, by expanding sectoral cove rage and adding modes 1-2 to its schedule. In 
terms of reservations, Peru applies a broad reserv ation with respect to MFN treatment for cultural 
industries (see above), which covers almost all subsectors. In sporting and other recreational services, Peru maintains a nationality limitation on bullfighters. In entertainment services, it 
maintains the GATS quota for Peruvian artists perf orming in shows in Peru. Under the Agreement, 
this reservation also applies to technicians involved in such activities and includes a restriction on the wages of Peruvians artists. Peru also applies limitations on the stay of foreign circuses. In addition, it reserves the right to grant governme nt support for the development and production of 
jewellery design, theatre arts, visual arts, and music in order to achieve a given level or 
percentage of domestic creative content; as well as any measure granting special treatment to a non-Party on the basis of reciprocity in the audiov isual, publishing and music industries. These two 
last reservations have no equivalent in the GATS.  
4.65.  In transport services, Peru liberalized spac e, pipeline and other transport services. It also 
made commitments in air, road and rail transport services, as well as in services auxiliary to all 
modes of transport, all excluded from the GATS, but maintained a few reservations. In air 
transport, it added mode 3 to its schedule but applies one restriction
48, which reserves National 
Commercial Aviation Services to Peruvians. For modes 1-2, the Agreement like the GATS, applies only to aircraft repair and maintenance services, selling and marketing of air transport services, 
and computer reservation system services. In road  transport, Peru maintained four reservations, 
of these, one applies also to rail transport serv ices and imposes a local presence requirement for 
the supply of passenger transportation services. In addition, it reserves cabotage services to 
national vehicles and to Peruvians. It also reserves the right to adopt or maintain any measure 
regarding international transportation of cargo or passengers in border areas as well as services providers of international road transportation. In se rvices auxiliary to all modes of transport, Peru 
reserves the positions of port workers to Peruvian citizens (i.e. cargo-handling services) and 
applies a local presence requirement to provide cust oms warehouses services (i.e. other services).  
4.66.  Peru made broader commitments in mariti me services and internal waterways transport, 
which under the GATS, are restricted to certain activities for internal tourism and subject to 
restrictions in modes 1 and 3. Mode 2 is "unbound". Peru expands the sectoral and modal 
coverage for these services categories, but mainta ins four reservations with respect to existing 
                                               
48 Contrary to Chapter 9 on cros s-border trade, Chapter 12 on investments does not excludes air 
services from the scope of application. WT/REG313/1 
 
- 39 - 
 
  measures. In mode 1, Peru applies nationality and establishment restrictions to the providers of 
tourist water transportation services (and their fl eets), and of water transport and related services 
supplied in bay and port areas. It reserves cabotage to national-flagged fleets. 
4.67.  Peru also made a reservation on future measures regarding public water supply.49  
4.5  Regulatory provisions  
4.5.1  Domestic regulation 4.68.  Under Article 13.10 on domestic regulation, the Parties shall ensure that all measures of 
general application affecting trade in services are administered in a reasonable, objective and 
impartial manner. This obligation does not apply to the measures listed in Annexes I and II. The Parties also agree to jointly review this article following the results of the negotiations relating to qualifications requirements and procedures, technical standards and licensing requirements 
pursuant to GATS Article VI.4. The rest of Article 13.10 (Paragraphs 2 and 3) mirrors paragraph 3 
and 4 of GATS Article VI. There is only one difference.
50 Under paragraph 2 of Article 13.10, the 
Parties are not obliged to provide information concerning the status of the application for an 
authorization to supply a service that is covered by a reservation in Annex II.  
4.5.2  Recognition 4.69.  Under Article 13.11 on the recognition of pr ofessional qualifications of service suppliers, 
when a Party recognizes, autonomously or by agreement or arrangement, the education or 
experience obtained, requirements met, or licenses or certifications granted in the territory of a non-Party, the Party is not obliged to accord the same recognition to the other Party. The Parties shall endeavour to ensure that the relevant professional bodies use the standards and criteria as 
specified in Annex 13.11 if a recognition agreement or arrangement is to be negotiated. The 
remaining provisions of Article 13.11 (paragraphs 1, 3 and 4) mirror those in Article VII of the 
GATS (paragraphs 1, 2 and 3).  
4.5.3  Subsidies 
4.70.  Chapter 13 as well as cert ain provisions of Chapter 12 (i.e. MFN and national treatment, and 
senior management and boards of directors) do not apply to subsidies or grants by a Party (see 
Section 4.1.). The Parties shall (as appropriate) review the provisions relating to subsidies 
following the conclusion of the negotiations provided  by GATS Article XV and the entry into force of 
its outcomes (Article 13.2).  
4.5.4  Safeguards  
4.71.  See section 5.3. 
4.6  Sector specific provisions on trade in services 4.6.1  Financial services  
4.72.  Chapter 14 applies to measures by a Party affecting: (a) financial institutions of the other 
Party; (b) investors of the other Party, and their investments in financial institutions in the Party's territory; and (c) cross-border trade in financial services. It does not apply to measures related to 
activities or services: (a) forming part of a public retirement plan or social security system (public 
or private) or (b) for the account, or with the guarantee or using the financial resources of the Party, including its public entities (Article 14.1).  
                                               
49 The supply of water is not included in the CPC classification for services, which is why it is not taken 
into account in the comparison between commitments under the GATS and those under the Agreement. 
50 Under GATS Article VI.3, when an authorization is  required for the supply of a service on which a 
specific commitment has been made, the Parties commit  to review complete applications and inform the 
applicant of the decision within a reasonable period of time. Under GATS Article VI.4, the Parties can establish, 
develop any necessary disciplines with the view of ensuring that measures relating to qualification 
requirements and procedures, technica l standards and licensing requiremen ts do not constitute unnecessary 
barriers to trade in service. WT/REG313/1 
 
- 40 - 
 
  4.73.  Chapter 14 includes provisions on MFN and national treatment, commitments in cross-
border trade, prudential measures, the right of establishment, senior management requirements, new financial services, the treatment of financial and confidential information, the access to payment and clearing systems, self-regulatory organizations and on exceptions. Provisions on 
prudential measures, the treatment of financial an d confidential information and exceptions mirror 
those in the GATS Annex on Financial Services, while those on new financial services, right of establishment and access to payment and clearing systems
51 reflect to large extent those in the 
Understanding on Commitments in Financial Services (the GATS Understanding). In some cases 
these provisions are more detailed under the Agreement (i.e. financial and confidential information treatment, new financial services, right of establis hment and exceptions). As for the provisions on 
cross-border trade and on self-regulatory organizati ons, they are broader in Agreement than in the 
GATS Understanding. Only Peru has adopted the GATS Understanding. 
4.74.  In addition, Chapter 14 contains a pr ovision on transparency (Article 14.12) and 
incorporates  provisions from Chapters 12 (Investments) and 13 (Cross-Border Trade in Services). 
These provisions are environmental measures (Article 12.8), expropriation and indemnification 
(Article 12.10), transfers and payments (Article 12.11 and 13.12)
52, denial of benefits 
(Articles 12.12 and 13.13), and special formalities and information requirements (Article 12.13). In 
case of a dispute related to investments in the areas mentioned above, the Parties can take 
recourse to the Agreement's DSM between states and investors (Article 14.1). 
4.75.  To improve transparency the Parties commit to promote regulatory transparency in financial 
services, make available all the documentation necessary for the application to supply a financial 
service and to follow the procedures regarding such application. They also commit to publish in 
advance (if possible) any related regulation that they propose to adopt and provide the Parties with the opportunity to comment on the proposals (Article 14.12). 
4.76.  Finally, the Agreement provides for the establishment of a Financial Services Committee, 
which will supervise the implementation of Chapter 14 (Article 14.5).  
4.6.1.2  Cross-border trade 
4.77.  Provisions on cross-border trade are br oader under the Agreement than under the GATS 
Understanding. Indeed, the Agreement expands co mmitments in mode 1 (for Panama) and 2 (for 
both Parties). The Parties agree to grant national treatment to cross-border service providers of the other Party to supply a list of financial services (Annex 14.6). The list of Peru is the same than 
that agreed under the "Understanding on Commitme nts in financial Services", while the list of 
Panama is similar. Panama's list does not include for instance insurance intermediation but is less restrictive with respect to financial intermediation.  
4.78.  In addition, the Parties liberalize mode 2, by allowing its nationals and any person located in 
their territory to purchase financial services from a provider of the other Party and located in that other Party. This does not oblige the Party to authorize these suppliers to do business or 
advertisement in its territory. The Parties reserve the right to require the registration or 
authorization of cross-border financial service suppliers of the other Party and of financial instruments (Article 14.6). 
4.6.1.3  Right of establishment 
4.79.  Regarding establishment rights, the Parties allow investors of the other Party to establish a 
financial institution to provide a financial service, without the imposition of numerical restrictions or juridical requirements. The Parties reserved however the right to impose conditions or 
requirements in connection with the type of le gal entity to be established. The right of 
establishment also applies to the establishment of additional financial institutions and the acquisition of existing entities. In the case of additional financial institutions, a Party can impose 
                                               
51 Like in the "Understanding on Commitments in financial Services", the Parties commit to grant on the 
basis of national treatment, financial institutions of the other Party established in its territory access to payment and clearing systems operated  by public entities an d to official funding and refinancing facilities 
(excluding lender-of-last-resort facilities)(Article 14.14). 
52 Chapter 14 include the provisions on transfers and pa yments to the extent that cross-border trade is 
covered by Article 14.6 (Cross-border trade).   WT/REG313/1 
 
- 41 - 
 
  conditions on establishment and on institutional and juridical form (Article 14.5). Additionally, the 
Parties reserved the right to prohibit an specific financial activity or service. Such prohibition cannot be applied to all financial services or an entire subsector. Under the GATS Understanding, both the establishment and expansion of financial institutions can be subject to authorization 
conditions and procedures.  
4.6.1.4  New financial services 4.80.  Like in the GATS Understanding, the Part ies commit to national treatment with respect to 
the provision of a new financial service to financial institutions of the other party established in 
their territories (Article 14.7).  
4.6.1.5  The treatment of financial and confidential information 4.81.  The Parties are not required to provide any information related to the financial affairs of 
customers of financial institutions or cross-border financial service suppliers; or any confidential 
information, the disclosure of which would impede law enforcement or be contrary to the public 
interest or the commercial interest of a company. In essence, this is also captured in the GATS 
Annex. 
4.6.1.6  Self-regulatory organizations  4.82.  Provisions on self-regulatory organizations (Article 14.13) are broader in Agreement than in 
the GATS Understanding. The Agreem ent grants MFN treatment, in addition to national treatment, 
to services suppliers with respect to the participation in self-regulatory organizations.  
4.6.1.7  Recognition of prudential measures 4.83.  Like in the GATS Annex on Financial Se rvices, the Parties can recognize the prudential 
measures of a non-party, autonomously, through harmonization, or based on an agreement or 
arrangement (Article 14.4). The Parties will exchange  information in this regard, and will give each 
other the possibility to become member of the ag reement or arrangement, mentioned before or to 
negotiate a new one. 
4.6.1.8  Exceptions 4.84.  Provisions regarding exceptions under th e Agreement are more detailed than those in the 
GATS Annex on Financial services (i.e. domestic regulation). Like in the GATS Annex, The Parties 
can adopt or maintain prudential measures to protect investors, depositors, policy holders or persons to whom, a fiduciary duty is owned by a financial institution or cross-border financial service supplier or to ensure the stability and integrity of the financial system. Such measures 
should not be used to circumvent the Parties' obligations. Moreover, the Agreement does not apply 
to non-discriminatory measures by any public entity related to macro prudential policies and monetary and related credit policies or exchange rate policies. Finally, under certain conditions, 
the Parties can restrict transfers by a financial institution or cross-border financial services 
(Article 14.11) (see section 5.2).  
4.6.2  Maritime transport services 
4.85.  Chapter 15 applies exclusively to measures adopted or maintained by a Party affecting 
maritime transport and auxiliary services by (a) maritime transport service suppliers of the other Party and (b) maritime auxiliary (or related) service suppliers of the other Party. These measures are also covered by Chapter 12 and 13. In the event of any inconsistency between these Chapters 
and Chapter 15, Chapter 15 will prevail (Article 15.1), except in the case of measures covered by 
an exception or a reservation.  
4.86.  The Parties agree to cooperate to remove any barrier to maritime trade between the ports 
of the Parties (Article 15.2). WT/REG313/1 
 
- 42 - 
 
  4.87.  The Parties commit to grant MFN treatment to the ships of the other Party (Article 15.3), 
with respect to the access to and use of ports, as well as to the use of port facilities for the ship, its crew and its cargo (Article 15.3).  
4.88.  A supplier of maritime transport services of  a Party that operates in the territory of the 
other Party will have the right to establish a branch in the latter (Article 15.4).  
4.89.  The Parties will recognize the certificates of  nationality of the ships of the other Party, as 
well as other ship's documents, issued by the competent authority (Article 15.5). The Parties will 
also recognize the passport and seaman book of a ships' crew.  
4.90.  Any dispute relating to the working contra ct between the ship-owner of a Party and a crew 
member of the other Party, will be dealt by the authorities of the Party to which the ship belongs 
(Article 15.7) 
4.6.3  Telecommunications 
4.91.  Chapter 16 on Telecommunications applies to any measure relating to public 
telecommunications transport networks or services (including those relating to its access and use) 
and its providers. It does not apply to measures (a) relating to value-added telecommunication 
services or (b) affecting broadcast and cable distribution of radio or television programming (Article 16.1). The coverage thus reflects that of the GATS Telecommunications Annex and 
Reference Paper. Yet, Chapter 16 incorporates an d extends some of the regulatory provisions 
found in the GATS Telecommunications Annex and Re ference Paper. It is worth mentioning, that 
only Peru has adopted the reference paper. In th e event of any inconsistency between this Chapter 
and other Chapters in the Agreement, this Chapter will prevail (Chapter 16.12).  
4.92.  With respect to access to and use of public telecommunications transport networks or 
services, the Agreement reflects the GATS Annex on  Telecommunications, except for the activities 
that suppliers are permitted to carry on. Under the Agreement the companies of the other Party 
may perform switching, signalling and processing functions in addition to the activities contained in 
the GATS Annex on Telecommunications (Article 16.2). The Parties also reserved the right to 
require a licence, concession or an authorization to supply any public telecommunication service in 
its territory. The procedures related to licences, concessions and other authorizations (Article 16.3) 
reflect those in the GATS reference paper on licenses.
53  
4.93.  The definition of major supplier used in the Agreement has the same coverage than that 
used in the Reference Paper. The provisions regarding the competitive safeguards and 
interconexion with a major supplier also reflect th e text used in the GATS Reference Paper. The 
Parties commit to guarantee that major suppliers in their territories grant to suppliers of public telecommunications of the other Party treatment no less favourable than such major supplier 
accords to itself, its subsidiaries, its affiliates, or any non-affiliated service supplier regarding the 
availability, provisioning, rates, or quality of like public telecommunications services; and the availability of technical interfaces necessary for interconnection (Article 16.4). The provisions on 
universal services (Article 16.5), regulators (Article 16.7) and the role of International 
organizations (Article 16.13) are the same than in the GATS reference paper. The provision on the allocation and use of scarce resources is more detailed in the Agreement than Reference Paper, as it also specifies that the Parties retain their right to limit the number of suppliers of public 
telecommunications services and to allocate frequency bands, taking into account present and 
future needs and spectrum availability (Article 16.6).
54 The transparency provision (Article 16.10) 
is also more detailed than in GATS Annex on Telecommunications and the Reference Paper.  
4.94.  Finally, the Chapter introduces new provisions on enforcement procedures (Article 16.8), 
forbearance (Article 16.11)55 and on the resolution of domestic telecommunication disputes 
involving public telecommunication network and services providers (including major providers) 
(Article 16.9). 
                                               
53 The only difference is that the Reference paper refers to licences (only), and does not mention 
concessions or other type of authorizations.   
54 Measures relating to the allocation and assignment of spectrum and managing frequencies are not to 
be considered inconsistent with Article 13.5 (Market Access) and Chapter 12. 
55 That is reliance on market forc es to ensure variety in the supply of telecommunication services. WT/REG313/1 
 
- 43 - 
 
  5  GENERAL PROVISIONS OF THE AGREEMENT 
5.1  Transparency 5.1.  Chapter 19 contains provisions on transpar ency. The Parties will designate a contact point 
within the 60 days following the date of entry into force (Article 19.1).  
5.2.  The Parties must ensure that their laws, re gulations, procedures and administrative rulings 
with respect to any matter covered by the Agreement are promptly published or made available to the Parties and interested persons (Article 19.2). Each Party, upon request of the other Party shall 
provide any information or answer any question regarding any issue that may affect the 
Agreement (Article 19.3). The Parties commit to guarantee that all its administrative procedures are in line with domestic law and that certain pr ocedural formalities are respected (e.g. provision 
of prior notice and information, and opportunity for hearings) (Article 19.4). The Parties must 
establish or maintain judicial or administrative tribunal or procedures to review and correct final 
administrative actions for matters covered by the Agreement (19.5).  
5.2  Current payments and capital movements 
5.3.  The Agreement includes provisions on the movement of payments and capital across borders 
relating to services and investments. The Parties allow free and unrestricted flow of all transfers and payments relating to the cross-border supply of services (Article 13.12). The same obligation 
applies to transfers relating to covered investments (Article 12.11). The Parties can deny a 
transfer or payment in the case of: (a) bankruptcy , insolvency, or the protection of the rights of 
creditors; (b) issuing, trading, or dealing in securities; (c) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities; (d) criminal 
or penal offences; or (e) compliance with orders or judgments in judicial or administrative 
proceedings. In the case of financial services, the Parties can apply measures to prevent or limit transfers (by a financial institution or cross-border financial service supplier) in order to maintain 
the safety, soundness, integrity or financial responsibility of institutions or cross-border financial 
services suppliers (Article 14.11).  
5.3  Safeguards  
5.4.  Under Article 21.5, the Parties can maintain or adopt safeguard measures to restrict 
payments and capital movements in the event of serious difficulties related to the balance-of-
payments, external financial situation or to the macroeconomic environment. Such measures are to be applied on a temporary and non-discriminatory basis. The Parties indicated that this article 
can apply to any area covered by the Agreement. In particular, it can apply to transfers and 
payments related to cross-border trade in services (Article 13.12), as well as to transfers related 
to covered investments (Article 12.11).  
5.4  Exceptions 
5.5.  Chapter 21 on Exceptions describes the ci rcumstances under which the Parties can derogate 
from the provisions in the Agreement. The Ch apter covers general and security exceptions, 
taxation, disclosure of information and balance of payment measures.  
5.6.  Articles XX of GATT 1994 and XIV of the GATS (on General Exceptions) are incorporated in 
the Agreement (Article 21.1). GATT Article XX applies to Chapters 2 to 7; while GATS Article XIV applies to Chapters 13 and 15 to 17.  
5.7.  The Agreement does not apply to taxation measures and does not affect the rights and 
obligations of the Parties under any tax convention. In the event of any inconsistency between the Agreement and a tax convention, the convention w ill prevail to the extent of the inconsistency 
(Article 21.3), except in the case of export taxes (Article 2.11), and national and MFN treatment 
(Articles 2.2, 12.2, 13.4, 14.2, 12.3, 13.4 and 14.3).  
5.8.  Under the Agreement, the Parties have no obligation to furnish or allow access to any 
information contrary to its security interests and can apply any measure they consider necessary 
to keep peace and protect their essential security interests (Article 21.2). They are also not obliged WT/REG313/1 
 
- 44 - 
 
  to provide access to confidential information whose disclosure could impede law enforcement, be 
contrary to public interest or damage the commercial interests of companies (public or private) (Article 21.4). 
5.5  Accession and Withdrawal 
5.9.  The Agreement has provisions on termination but not on accessions. Any Party can end the 
Agreement by a written notification to the other Party. The termination will take effect six months after the notification, unless the Parties agree otherwise (Article 22.6).  
5.6  Institutional framework 
5.10.  The Agreement foresees the creation of a Free Trade Commission that comprises 
ministerial-level representatives of both Parties. It further establishes a committee on rules of origin, TBTs, SPS measures, facilitation and cu stoms procedures, temporary entry of business 
persons, financial service and government procurement.  
5.11.  The Commission is the main body of the Agreement and is responsible for supervising its 
implementation and developments; supervising th e work of all committees and working groups; 
approving (in its first meeting) the Panel's Model Rules of Procedure, establishing the 
remuneration of panellists and considering any other matter that may affect the operation of the Agreement. The Commission can, among others, modi fy Parties' tariff schedules, rules of origin 
and the government procurement's coverage. It shall take all its decisions by consensus and meet 
at least once a year (Article 20.1). As of May 2013, no meeting had taken place.  
5.12.  Each Party will appoint an Agreement coordinator, who will develop agendas, prepare 
meetings and follow-up on any decision  by the Commission (Article 20.2). 
5.7  Dispute settlement 
5.13.  The Agreement provides for a mechanism to settle disputes between the Parties 
(Chapter 18) and between a Party and an investor of the other Party (Chapter 12, Section B).  
5.14.  Except specified otherwise in the Agreement, Chapter 18 applies to any dispute between the 
Parties related to the interpretation or application of the Agreement or wherever a Party considers that:  
 an actual or proposed measure of the other Party is or would be inconsistent with its 
obligations; or  
 the other Party has otherwise failed to carry out its obligations (Article 18.2). 
5.15.  For disputes regarding any matter arising under the Agreement and the WTO Agreement (or 
any other agreement of which both Parties are members) the complaining Party may select the forum for the settlement of the dispute. Once the forum has been selected, it must be used to the exclusion of the other (Article 18.3). 
5.16.  The Parties are encouraged to resolve di sputes through co-operation and consultations 
(Article 18.1). Under Article 18.4, a Party can request consultations with the other Party on any matter described in Article 18.2 (see above). Failur e to reach an agreement within 40 days of the 
date of receipt of the request for consultations, or 25 days in urgent cases
56, may result in the 
complaining Party requesting the establishment of a dispute settlement (DS) panel (Article 18.5). A panel cannot be established to review a proposed measure. 
5.17.  The Panel will consist of three panellists (Article 18.7). The Panel will operate according to 
the Rules of Procedures established by the Fr ee Trade Commission (Article 18.8). The Panel will 
present a report to the Parties within 120 days from the date the last panellist was designated, or 90 days for urgent matters. In exceptional circumstances, a delay of maximum 30 days can be 
                                               
56 These include cases involving perishable goods or goods or services that rapidly lose their trade 
value. WT/REG313/1 
 
- 45 - 
 
  accepted. The report will contain the Panels' conclusions, determinations and recommendations on 
the issue under analysis (Article 18.9). Following re ceipt of the report, the Parties will agree on the 
resolution of the dispute, including wherever po ssible, the removal of the measure not conforming 
to the Agreement. Failure to agree within 30 days of the report will trigger negotiations between 
the Parties to agree on a compensation to be granted until the dispute is resolved (Article 18.10). 
If the Parties fail to agree on a solution or compensation or if the complaining Party believes that the other Party has failed to observe the terms of the Agreement, the complaining Party can 
suspend, previous notice, benefits to the other Pa rty of equivalent effect. In suspending benefits 
the Party should first consider benefits in the same sector(s) as those affected by the measures or other matter that the Panel has found to be inconsistent with the obligations under the Agreement; if it feels that suspending benefits in the same sector is not practicable or effective it 
may do so in other sectors. The suspension of be nefits shall be temporary and only applied until 
the disputed measure has been brought into conf ormity with the Agreement or the dispute has 
been resolved or until the Party complained against has complied (Article 18.12). Chart 5.1 
summarizes the procedure for the settlement of a dispute. 
5.18.  For disputes in financial services, certain procedures of the Agreement's DSM, are slightly 
different. The procedures that vary relate to the timing to request the establishment of a panel, 
the panel selection, the qualification requirements of the panellists, and to the criteria for the 
suspension of benefits by the complaining Party (Article 14.17). When an investor from a Party 
submits a claim for arbitration invoking an exception regarding financial services (Article 14.11), the matter will be referred to the Financial Services Committee for a decision. If a decision is not 
made within the specified time, a panel can be established to report on the issue (Article 14.18).  
5.19.  Chapter 12 describes the settlement of investment disputes between a Party and an 
investor of the other Party (Chapter 12, Section B). Under this mechanism, investors (on their own 
behalf or that of an enterprise) can make a claim and seek redress for damages resulting from a 
breach of the host Party' obligations (Article 12.16). WT/REG313/1 
 
- 46 - 
 
  Chart 5.1 Dispute Settlement Mechanism under the Agreement 
 
 
 
5.8  Relationship with other agreements concluded by the Parties 
5.20.  The Parties affirm their existing rights an d obligations with respect to each other under the 
WTO Agreement and other agreements to which they are party. They also indicate that in the event of any inconsistency with these agreements , the Agreement will prevail, unless specified 
otherwise (Article 1.3). 
5.21.  Table 5.1 lists the notified and non-notifi ed (if any) trade agreements that have either 
Panama or Peru as members (excluding the current Agreement).  Suspension of the benefits by the Complaining Party  (Art.18.11)   Implementation  
(Art. 18.10)  
 Non-compliance   Termination   A compensation  
is requested 
(Art.18.11)       No compensation 
is requested 
(Art.18.11)    
 Compensation 
agreed but failed 
to comply   No compensation 
agreed Max. 30 days
 agreement    disagreement   
 Max. 30 days 15 days Consultations  
(Art. 18.4)  Max. 30 days o r
 15 days in cases of urgency  
 Max. 37 days Request for establishment of DS Panel
(Art. 18.5) 
 Composition of DS Panel (Art. 18.7)
Panel selection: within 15 days   
Chair selection: within 30 days   
 Initial Panel report  
(Art. 18.9)  Max. 120 days or 
Max. 90 days for urgent cases
 Report Publication  
(Art. 18.9)   Consultations request  
(Art. 18.4) 
 Max. 40 days o r 
 25 days in cases  
of urgency  WT/REG313/1 
 
- 47 - 
 
  Table 5.1 Panama and Peru: Participation in other RTAs (notified and non-notified in 
force), as of 4 July 2013 
Partner/ 
Agreementa Date of 
entry 
into 
force Type of 
agreement GATT/WTO Notification 
Year WTO Provision 
PANAMA 
European Union-Central 
America (CA) b Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
Canada  01.04.13 Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
United States 31.10.12 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
Nicaragua (Panama-CA) 21.11.09 Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
Guatemala (Panama-CA) 20.06.09 Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
Honduras (Panama-CA) 09.01.09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Costa Rica (Panama-CA) 23.11.08 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Chile 07.03.08 Goods & Services 2008 GATT Art. XXIV & GATS Art. V 
Singapore 24.07.06 Goods & Services 2007 GATT Art. XXIV & GATS Art. V 
Chinese Taipei 01.01.04 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
El Salvador (Panama-CA) 11.04.03 Goods & Services 2005 GATT Art. XXIV & GATS Art. V 
LAIA - Accession of Panama 03.05.12  Goods - Not notified 
Colombia [LAIA, AAP.A25TM 
N°29] 01.01.95 Goods - Not notified 
Dominican Republic 08.06.87 Goods - Not notified 
Mexico [LAIA, AAP.A25 N°14] 01.05.83 Goods - Not notified 
PERU 
Costa Rica 01.06.13 Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
European Union 01.03.13 Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
Japan 01.03.12 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
Mexico 01.02.12 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
Rep. of Korea 01.08.11 Goods & Services 2011 GATT Art. XXIV & GATS Art. V 
EFTA 01.07.11 Goods 2011 GATT Art. XXIV 
China 01.03.10 Goods & Services 2010 GATT Art. XXIV & GATS Art. V 
Singapore 01.08.09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Canada 01.08.09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Chile 01.03.09 Goods & Services 2011 GATT Art. XXIV & GATS Art. V 
United States 01.02.09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
GSTP 19.04.89 Goods 1989 Enabling Clause 
Andean Community 25.05.88 Goods 1990 Enabling Clause 
LAIA 18.03.81 Goods 1982 Enabling Clause 
PTN 11.02.73 Goods 1971 Enabling Clause 
LAIA - Accession of Panama 03.05.12 Goods - Not notified 
Thailand 31.12.11 Goods - Not notified 
Andean Community 14.12.06 Services - Not notified 
MERCOSUR [LAIA, AAP.CE 
N°58] 02.01.06c Goods & Services - Not notified  
Cuba [LAIA, AAP.CE N°50] 09.03.01 Goods - Not notified 
LAIA - Seeds [AAP.AG N°2] 21.08.95 Goods - Not notified 
a For those agreements negotiated under the LAIA  framework, the LAIA reference is included in 
brackets. Details of these agreements ca n be found at: http://www.aladi.org  
b Provisional application of the Agreement by all signatory parties is expected in the course of the 
second quarter 2013. 
c  For Peru – Brazil/Argentina/Uruguay: 02.01.06; For Peru-Paraguay: 06.02.06.  LAIA:  Latin American Integration Agreement EFTA:  European Free Trade Association GSTP:  Global System of Trade Preferences PTN:  Protocol on Trade Negotiations AAP.CE: Economic Complementarity Agreements. AAP.AG: Agreements under Article 12 of the Mo ntevideo Treaty on Agricultural Goods. 
 
Source: WTO Secretariat. WT/REG313/1 
 
- 48 - 
 
  5.9  Government procurement 
5.22.  Chapter 10 contains the Parties' commitments and procedures in government procurement. 
It applies in general to any measure affecting procurement by covered government entities of goods, services and construction services listed for amounts equal to or above a given threshold 
(Article 10.1). The Parties' lists of covered governmental entities are given in Annex 10.1 (Central, 
regional and other entities). Exceptions apply for both Parties.  
5.23.  The general principles governing the procedures of government procurement are national 
treatment and non-discrimination. The Parties agr ee to grant national treatment to each other's 
products, services and suppliers. They also commit not to discriminate between suppliers established locally based on the degree of foreign affiliation or ownership or based on the origin of the goods or services offered. In addition to thes e principles, the Parties include provisions on the 
procedures to be applied when electronic means are used, transparency in the conduct of 
procurement, rules of origin and the prohibition of offsets (Article 10.3). 
5.24.  Regarding their commitments, the Parties apply the same threshold for each category of 
entity, but have different coverage. Procurement thresholds are shown in Table 5.2.
57  
Table 5.2 Procurement thresholds applied by Panama and Peru under the Agreement 
Thresholds in SDR  Central entities Regional entities Other entities 
Goods 130,000  355,000  200,000  
Services 130,000  355,000  200,000  
Construction  5000,000  5000,000  5000,000  
N° of covered entities  Panama: 18 entities 
Peru: 59 entities Panama: 12 provinces 
Peru: 25 entities Panama: 40 entities 
Peru: 20 entities 
 
Source: Annex 10.1-1 of the Agreement.  
5.25.  In general open tendering shall be used except for certain cases detailed in of Article 10.10, 
where other tendering procedures are allowed (i.e. limited tendering). Chapter 10 also includes 
provisions related to the valuation of contracts (Article 10.1); security and general exceptions (Article 10.2); the use of electronic means (Article 10.4) ; the publication of procurement 
information and notices (Articles 10.5-10.6); the conditions for participation (Article 10.7); the 
availability of tender documentation (Article 10.8); the adoption of technical specifications (Article 10.8), the time limits for the submission of tenders (Article 10.9); electronic auctions 
(Article 10.11); the treatment of tenders and awarding of contracts (Article 10.11); transparency 
(Article 10.13) ; disclosure of information on the procurement process and the treatment of confidential information (Article 10.14); the pr ocedures for the consideration and review of 
complaints and challenges by suppliers (Article 10.15); changes in the coverage of the Chapter 
(Article 10.16); participation of micro, small, and medium enterprises in government procurement 
(Article 10.19); and cooperation (Article 10.20).  
5.26.  The Parties commit to consider at the request of a Party the possibility to engage in 
additional negotiations in order to expand the coverage of Chapter 10 (Article 10.18).  
5.27.  The Parties establish under the Agreement a Committee on Government Procurement 
(Article 10.21). 
5.28.  Peru is not party to the WTO Government Procurement Agreement (GPA); while Panama is 
in the process of negotiating its accession.
58 
                                               
57 The Thresholds in the Parties national currency are to be adjusted every two years commencing 
1 January 2012 (Annex 10.1). 
58 Panama has been an observer to the GPA since September 1997.  WT/REG313/1 
 
- 49 - 
 
  5.10  Intellectual property rights 
5.29.  Intellectual property rights (IPRs) issues are covered in Chapter 9. The Chapter includes 
provisions on trademarks, geographical indicators, traditional knowledge, genetic and biological resources and associated products, copyrights and related rights, enforcement of IPRs and 
cooperation.  
5.30.  The Parties reaffirm their right and obligations under the WTO Agreement on Trade-Related 
Aspects of Intellectual Property Rights (TRIPS Agreement), the Convention on Biological Diversity, 
as well as any multilateral agreement on IP. 
5.31.  In accordance with the TRIPS Agreement, the Parties grant national and MFN treatment to 
nationals of the other Party with respect to the protection of intellectual property. 
5.32.  Regarding enforcement, the Parties will develop measures, procedures and remedies to 
enforce IP rights. The Parties include provisio ns on the suspension of release by customs 
authorities and the requirement of a security or equivalent assurance for the right holder, which mirror those in the TRIPS Agreement (Part III, section 4). In addition, the Parties commit to 
inform the right holder of the names and addresses of the consignor, the importer and the 
consignee and of the quantity of the goods when g oods are counterfeit or pirated. They will also 
allow the competent authorities to initiate ex officio border measures if there are reasons to 
suspect that trade in counterfeit or pirated goods is taking place (Article 9.8).  
5.10.1  Trademarks and well-known marks 5.33.  The Parties commit to protect trademarks and well-known marks in accordance with the 
TRIPS agreement (Article 9.3). For well-known ma rks, the Agreements extends the protection 
given in Article 16.3 of the TRIPS, and grant prot ection to well-known marks for dissimilar goods 
and services, irrespective of whether they are registered or not.
59 TRIPS Article 16.3 applies only 
to registered well-known marks.  To determine whether a trademark is well known, the Parties will 
take into account only the reputation of the trademark in the sector of the public that normally 
deals with the relevant goods or services. The sector of the public that normally deals with the relevant goods or services will be determined according to the Parties legislations.  
5.34.  The Parties commit to developing a system for the registration of trademarks, which shall 
allow interested people to oppose to a registration request; require to notify to the applicant the 
reasons for a refusal to register a trademark; as well as allow appeals. 
5.10.2  Geographical indications 
5.35.  Panama recognizes the following Peruvian ge ographical indications: "Pisco", "Cusco's giant 
white corn", "Chulucanas", "Pallar de Ica", "Caf é Villa Rica", "Loche de Lambayeque" and "Café 
Machu-Picchu-Huadquiña". Peru recognizes "Seco" (sugar-cane alcoholic beverage) as a 
geographical indication from Panama. The Parties commit to protect each other's geographical 
indications, and thus to prohibit the imports, prod uction or sale of such products unless they are 
produced following the regulations governing their manufacture (Article 9.4). 
5.10.3  Traditional knowledge 
5.36.  The Parties recognize the right of indigeno us and local communities over their traditional 
knowledge, and can protect these rights against unfair competition (Article 9.5). Panama lists under the Agreement 10 products considered as traditional knowledge.  
5.37.  The Parties expressed their interest in promoting discussions regarding the protection of 
genetic resources, traditional knowledge and traditional cultural expressions at the multilateral level.  
                                               
59 The Parties indicated that these provisions will apply in accordance with their national legislation. WT/REG313/1 
 
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  5.38.  Under the Agreement, each Party will determine access to genetic and biological resources, 
and related products.60 Such access will be subject to the Parties' consent, based on mutually 
agreed terms. Access to the traditional knowledge (TK) associated with these resources will also 
be subject to the consent of TK holders and based on mutually agreed terms.  
5.39.  The applicants for patents using biological, genetic resources or any related traditional 
knowledge, must prove that the access to such re sources or knowledge was legal and divulge the 
knowledge in question, if required by the Parties' laws. 
5.10.4  Copyrights and related rights 
5.40.  Compared to the TRIPS Agreement, the Ag reement strengthens the protection of authors, 
performers, and broadcasting organizations (Article 9.7). The Agreement provides for the protection of an author's moral rights (Article  6bis of the Berne Convention), which are not 
included under the TRIPS Agreement. Thus authors can maintain their right "to claim authorship of 
the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, which would be prejudicial to his honor or reputation", after 
their death and at least until the expiry of the economic rights.  
5.41.  The Parties also grant moral rights to performers with respect to their performances. 5.42.  Each Party shall ensure that broadcasting organizations within their territories have the 
exclusive right to authorize the fixation, reproduction and retransmission of their broadcasts.
61  
5.11  Competition policy 5.43.  Chapter 11 contains specific provisions on competition policy, applying to both goods and 
services. The Parties commit to adopt or maintain measures in the field of competition policy to 
promote economic efficiency, and to cooperate on i ssues of law enforcement, through notifications, 
consultations, and exchange of information, am ong others (Articles 11.3-11.6). The Parties cannot 
invoke the Agreement's DSM for any matter arising under Chapter 11. 
                                               
60 The Parties further recognized th e importance and value of the know ledge, innovation and practices 
of indigenous and local communities, as well as their contribution to manage in a sustainable way the genetic and biological resources, an d related products, and their role in prom oting economic and social development of 
nations. 
61 Under the TRIPS (Article 14), "broadcasting organiza tions shall have the right to prohibit the following 
acts when undertaken without their authorization: the fixation, the re production of fixations, and the 
rebroadcasting by wireless me ans of broadcasts, as well as the communication to the public of television 
broadcasts of the same". WT/REG313/1 
 
- 51 - 
 
  ANNEX 1 
1. Tables A1.1 (Panama) and A1.2 (Peru) present the Parties' tariff elimination schedule overall 
and by type of product. In the case of Panama , the share of the number of duty-free tariff lines 
went from 32.1% to 58.1% upon the Agreement's entry into force and the overall average fell 
from 7.9% to 4.9%. For agricultural goods, Peru vian exporters faced in Panama an average tariff 
rate of 10.7% instead 14.7%, and 3.7% instead of 6.6% for non-agricultural goods. By 2021, almost all non-agricultural products will be liberalized and most commitments in agricultural 
products will be implemented. At this date, 75.6% of  agricultural tariff lines will be duty-free. At 
the end of the implementation period, in 2029, 96.5%  of all tariffs lines are to become duty-free, 
and 80.7% for agricultural products. 
Table A1.1 Panama: Indicators of MFN tari ff rates and preferential rates for imports 
from Peru 
Origin 
of 
goods Year All products Agricultural products a Non-agricultural products  
Average applied 
tariff Share of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2012 7.9 11.7 32.1  14.7 18.6 21.1 6.6 10.1 34.2  
Peru 2012 4.9 11.6 58.1 10.7 21.2 49.6 3.7 9.2 59.7 
 2013 4.2 9.9 58.1  10.1 20.0 49.6 3.0 7.5 59.7  
 2014 3.5 8.2 58.1 9.5 18.8 49.6 2.3 5.7 59.7 
 2015 2.7 6.5 58.1  8.8 17.5 49.6 1.6 3.9 59.7  
 2016 2.0 12.7 84.0 8.1 26.8 69.6 0.8 6.4 86.8 
 2017 1.9 11.8 84.0  8.0 26.4 69.6 0.7 5.3 86.8  
 2018 1.7 10.9 84.0 7.9 26.0 69.6 0.5 4.1 86.8 
 2019 1.6 9.9 84.0  7.8 25.5 69.6 0.4 3.0 86.8  
 2020 1.4 9.0 84.0 7.6 25.1 69.6 0.2 1.8 86.8 
 2021 1.3 26.6 95.2  7.5 30.6 75.6 0.1 8.2 99.0  
 2022 1.3 26.3 95.2 7.4 30.4 75.6 0.1 7.5 99.0 
 2023 1.3 27.4 95.4  7.4 31.3 76.4 0.1 7.7 99.1  
 2024 1.2 27.3 95.4 7.3 31.3 76.6 0.1 7.1 99.1 
 2025 1.2 27.0 95.4  7.3 31.1 76.6 0.1 6.6 99.1  
 2026 1.2 34.3 96.4 7.3 36.7 80.2 0.1 12.7 99.6 
 2027 1.2 34.3 96.4  7.2 36.7 80.2 0.1 12.7 99.6  
 2028 1.2 34.3 96.4 7.2 36.6 80.2 0.1 12.7 99.6 
 2029 1.2 35.0 96.5  7.2 37.4 80.7 0.1 12.7 99.6  
 
a WTO Definition. 
Note: For tariff lines subject to TRQs, only the out- of-quota duty is included in the tariff-related 
calculations. 
 Based on the HS 2007 nomenclature.  Source: WTO Secretariat estimates base d on data provided by Panama.  
 
2. In the case of Peru, the share of duty-free lines went from 55% to 77.8% upon the entry 
into force of the Agreement and the overall tariff  fell to 1.5% from 3.2%. By 2021, almost all 
products (non-agricultural and agricultural) will be liberalized. At this date, 85.8%% and 99.4% of agricultural and non-agricultural tariff lines (res pectively) will be duty-free. At the end of the 
implementation, in 2029, 87.9%. of tariff lines will  be liberalized for agricultural products, and 
98.3% for all goods.  WT/REG313/1 
 
- 52 - 
 
  Table A1.2 Peru: Indicators of MFN tariff rates and preferential rates for imports from 
Panama 
Origin of 
goods Year ALL PRODUCTS Agricultural products a Non-agricultural products  
Average applied 
tariff Share of 
duty-free 
tariff lines 
(%) Average applied 
tariff Share of 
duty-free 
tariff lines 
(%) Average applied 
tariff Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2012 3.2 7.2 55.0  4.1 6.4 34.8 3.1 7.4 58.1  
Panama 2012 1.5 7.0 77.8 1.9 6.5 67.0 1.5 7.1 79.4 
  2013 1.4 6.5 77.8  1.8 6.2 67.4 1.4 6.6 79.4  
  2014 1.1 5.2 77.9 1.5 5.1 67.6 1.1 5.2 79.4 
  2015 0.8 3.6 77.9  1.2 4.0 67.6 0.7 3.6 79.4  
  2016 0.4 5.6 91.7 0.8 6.5 83.4 0.4 5.3 93.0 
  2017 0.4 4.7 91.7  0.8 6.3 83.4 0.3 4.3 93.0  
  2018 0.3 4.0 92.2 0.8 6.1 83.6 0.2 3.5 93.5 
  2019 0.2 3.2 92.2  0.7 6.0 83.8 0.2 2.4 93.5  
  2020 0.2 2.3 92.2 0.7 5.7 83.8 0.1 1.4 93.5 
  2021 0.1 5.8 97.6  0.7 6.5 85.8 0.0 4.2 99.4  
  2022 0.1 5.5 97.6 0.6 6.3 85.8 0.0 3.6 99.4 
  2023 0.1 5.6 97.7  0.6 6.2 86.0 0.0 3.9 99.5  
  2024 0.1 5.4 97.7 0.6 6.0 86.0 0.0 3.4 99.5 
  2025 0.1 5.1 97.8  0.6 5.9 86.2 0.0 2.9 99.5  
  2026 0.1 6.8 98.2 0.6 7.0 87.8 0.0 5.7 99.8 
  2027 0.1 6.8 98.2  0.5 7.0 87.8 0.0 5.6 99.8  
  2028 0.1 6.8 98.2 0.5 7.0 87.8 0.0 5.6 99.8 
  2029 0.1 6.9 98.3  0.5 7.0 87.9 0.0 6.0 99.8  
 
a WTO Definition. 
Note: For tariff lines subject to TRQs, only the out-of-quota duty is included in the tariff-related 
calculations.  
 For tariff lines subject to the price band system, only their ad-valorem  duty (if any) is considered to 
compute the average tariff.  
 Based on the HS 2007 nomenclature.  Source: WTO Secretariat estimates based on data provided by Peru. 
 
3. Table A1.3 shows market access opportunities fo r Peru's top 25 exported goods in Panama. 
These exports accounted for 80.9% of Peru's global exports during 2009-2011 and involved 
63 tariff lines. Of these lines, 23 were already duty-free on a MFN basis and 13 were liberalized 
when the Agreement entered into force. The remaining lines will become duty-free in 2016, 2021 
and 2026. At the end of the implementation pe riod, only one line referring to coffee, not 
decaffeinated, will remain dutiable.  
Table A1.3 Panama: Market access opportuni ties under the agreement for Peru's top 
25 exports. 
Peru's top export products in 2009-2011 Access Conditions to Panama's import 
markets 
MFN (2012) 
Duty-free in 
Remain dutiable HS number and description of the product Share 
in 
global 
exports 
(%) Average 
MFN 
applied 
rate, 
(%) No. of 
tariff 
lines Duty-free 
Dutiable 
2012 
2016 
2021 
2026 
710812 -- other unwrought forms 22.7  0.0 1             
260300 Copper ores and concentrates. 16.6 10.0   1 1         
740311 -- cathodes and sections of cathodes 6.6  10.0   1 1         
230120 - flours, meals and pellets, of fish or of crustaceans, 
molluscs or other aquatic invertebrates 4.5 15.0   2       2   WT/REG313/1 
 
- 53 - 
 
  Peru's top export products in 2009-2011 Access Conditions to Panama's import 
markets 
MFN (2012) 
Duty-free in 
Remain dutiable HS number and description of the product Share 
in 
global 
exports 
(%) Average 
MFN 
applied 
rate, 
(%) No. of 
tariff 
lines Duty-free 
Dutiable 
2012 
2016 
2021 
2026 
260700 Lead ores and concentrates. 3.7  10.0   1   1       
260800 Zinc ores and concentrates. 3.5 10.0   1   1       
271011 -- light oils and preparations 3.3  0.0 10             
271019 -- othe r 3.1 8.8 4 8 3 5       
090111 -- not decaffeinated  2.8 30.0   1         1 
260111 -- non-agglomerated  1.6 10.0   1   1       
271111 -- natural gas 1.5  0.0 1             
270900 Petroleum oils and oils obtained from bituminous 
minerals, crude. 1.3 0.0 1             
261390 - othe r 1.2  0.0 1             
610910 - of cotton 1.2 10.0   2 2         
261610 - silver ores and concentrates 1.0  10.0   1   1       
150420 - fats and oils and their fractions, of fish, other than 
liver oils 0.8 10.0   1   1       
070920 - asparagus 0.8  15.0   1 1         
740811 -- of which the maximum cross-sectional dimension 
exceeds 6 mm 0.7 5.0 1 1     1     
800110 - tin, not alloyed 0.6  0.0 1             
610510 - of cotton 0.6 10.0   1 1         
790111 -- containing by weight 99.99% or more of zinc  0.6 15.0   1   1       
710691 -- unwrought 0.6 0.0 1             
080610 - fresh 0.6  0.0 1             
200599 -- othe r 0.5 12.3 1 14 2 12       
030749 -- othe r 0.5  12.5   2 2         
Total of above 80.9   23 40 13 23 1 2 1 
 
Note: Based on HS 2007 nomenclature. 
 Source: WTO estimates based on data provided  by Panama and UNSD, Comtrade database. 
 
4. Table A1.4 shows market access opportunities for Panama's top 25 exports in Peru, which 
accounted for 53.7% of its global exports during 2009-2011. These exports involved 75 tariff lines, of which 33 were already duty-free on a MFN basis in 2012. Of the remaining lines, 7 became duty-free upon the Agreement's entry into force and other 35 lines will be liberalized by 2021.  
Table A1.4 Peru: Market access opportuniti es under the agreement for Panama's top 
25 exports. 
Panama's top export products in 2009-2011 Access Conditions to Pe ru's import markets  
MFN (2012)  
Duty-free in 
HS number and description of the product Share in 
global exports 
(%) Average MFN 
applied rate 
(%) No. of 
tariff lines 
Duty-free  
Dutiable 
2012 
2016 
2018 
2021 
294190 - othe r 19.8  0.0 8           
300439 -- othe r 4.6 6.0   3     3   
300490 - othe r 3.9  6.0   7 1   6    
330300 Perfumes and toilet waters. 3.2 6.0   1   1     
640299 -- othe r 2.7  11.0   2   2     
852872 -- other, colou r 2.1 6.0   1 1       WT/REG313/1 
 
- 54 - 
 
  Panama's top export products in 2009-2011 Access Conditions to Pe ru's import markets  
MFN (2012)  
Duty-free in 
HS number and description of the product Share in 
global exports 
(%) Average MFN 
applied rate 
(%) No. of 
tariff lines 
Duty-free  
Dutiable 
2012 
2016 
2018 
2021 
300420 - containing other antibiotics 1.3  6.0   3     3    
611090 - of other textile materials 1.3 11.0   1   1     
540710 - woven fabrics obtained from high 
tenacity yarn of nylon or other 
polyamides or of polyesters 1.2 8.5   2 2       
640319 -- othe r 1.2 11.0   1   1     
220830 - whiskies 1.0  6.0   1   1     
620462 -- of cotton 0.9 11.0   1 1       
620469 -- of other textile materials 0.9  11.0   1       1 
852580 - television cameras, digital cameras 
and video camera recorders 0.9 0.0 2           
611020 - of cotton 0.9  11.0   6   6     
294110 - penicillins and their derivatives with 
a penicillanic acid structure; salts 
thereof 0.9 0.0 5           
620342 -- of cotton 0.9  11.0   6   6     
852190 - othe r 0.9 6.0   2 1 1     
640291 -- covering the ankle  0.8 11.0   1   1     
620349 -- of other textile materials 0.8 11.0   1       1 
620690 - of other textile materials 0.8  11.0   1       1 
870899 -- othe r 0.8 0.0 12           
910219 -- othe r 0.7  6.0   1 1       
841510 - window or wall types, self-contained 
or "split-system" 0.7 0.0 2           
852340 - optical media 0.7  0.0 4           
Total of above 53.7 4.8 33 42 7 20 12 3 
 
Note: Based on HS 2007 nomenclature. 
 Source: WTO estimates based on data provid ed by Peru and UNSD, Comtrade database. WT/REG313/1 
 
- 55 - 
 
  ANNEX 2 
Table A2.1 List of products su bject to the price band system 
Product 
code Description  MFN 2012  Liberalization under the Agreement 
0401100000 Milk and cream products 0 Excluded 
0401200000 Milk and cream products 0 Excluded 
402101000 Powdered milk 0 Excluded 
402109000 Powdered milk 0 Excluded 
402211100 Powdered milk 0 Excluded 
402211900 Powdered milk 0 Excluded 
402219100 Powdered milk 0 Excluded 
402219900 Powdered milk 0 Excluded 
402291100 Powdered milk 0 Excluded 
402291900 Powdered milk 0 Excluded 
402299100 Powdered milk 0 Excluded 
402299900 Powdered milk 0 Excluded 
402991000 Condensed milk 0 Preferential Quota (see table 3.5) 
404109000 Other whey 0 Excluded 
405100000 Butter 0 Excluded 
405902000 Butter oil 0 Excluded 
405909000 Other milk fat 0 Excluded 
406300000 Processed cheese except powdered 0 Excluded 
0406904000 Cheese 0 Excluded 
0406905000 Cheese 0 Excluded 
0406906000 Cheese 0 Excluded 
0406909000 Cheese 0 Excluded 
1005901100 Yellow maize 0 Excluded 
1005901200 White maize 0 Excluded 
1005909000 Other maize 0 ad-valorem  duty to be removed by 2019 
1006109000 Other rice 0 Excluded 
1006200000 Husked brown rice 0 Excluded 
1006300000 Semi-milled or wholly milled rice 0 Excluded 
1006400000 Broken rice 0 Excluded 
1007009000 Other grains 0 ad-valorem  duty to be removed by 2021 
1103130000 Groats and corn meal 0 Preferential Quota (see table 3.5) 
1108120000 Maize (corn) starch 6 Preferential Quota (see table 3.5) 
1108130000 Potato starch 6 Preferential Quota (see table 3.5) 
1701119000 Other cane sugar 0 Excluded 
1701120000 Beet sugar 0 Excluded 
1701999000 Other cane and beet sugars 0 Excluded 
1702302000 Glucose syrup 0 ad-valorem  duty to be removed by 2026 
1702600000 Other fructose and fructose syrup 0 ad-valorem  duty to be removed by 2026 
1702902000 Caramel with a dry fructose content of 
50% by weight 0 Excluded 
1702903000 Sugars containing added flavouring or 
colouring matter 0 Excluded 
1702904000 Other syrups with a dry fructose 
content of 50% by weight 0 Excluded 
1901902000 "Manjar blanco" 0 Preferential Quota (see table 3.5) 
1901909000 Other food preparations 0 ad-valorem  duty to be removed by 2012 
2106907900 Other food preparations 0 ad-valorem  duty to be removed by 2012 
2106909000 Other food preparations  0 ad-valorem  duty to be removed by 2012 
2309909000 Other food preparations of flour, 
groats, meal, starch or malt extract 0 Preferential Quota (see table 3.5) 
3505100000 Dextrins and other modified starches 6 ad-valorem  duty to be removed by 2016 
__________