WT/REG342/M/1  
 
28 July 2014  
(14-4335)  Page: 1/4  
Committee on Regional Trade Agreements 
Seventy-third Session   
 
 FREE TRADE AGREEMENT BETWEEN COSTA RICA AND PERU,  
GOODS AND SERVICES 
NOTE ON THE MEETING OF 23 JUNE 2014 
Chairman: Ambassador Francisco Pirez Gordillo (Uruguay) 
1.1.  The 73rd Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/4299/Rev.1 dated 13 June 2014. 
1.2.  Under Agenda Item B.III of the session, the CRTA considered the Free Trade Agreement 
between Costa Rica and Peru, (hereinafter "the Agreement"). 
1.3.  The Chairman said that the Agreement had entered into force on 1 June 2013. It had been 
notified to the WTO by the Parties on 5 June 2013 under Article XXIV:7(a) of the GATT 1994 and 
the Understanding on the Interpretation of  Article XXIV of GATT 1994 as an Agreement 
establishing a free trade area (document WT/REG342/N/1) and under GATS Article V:7(a) as an 
Agreement providing for the liberalization of trade in  services within the meaning of Article V of the 
GATS (document S/C/N/696). The text of the Agreement was available, together with its Annexes, 
on the Parties' official websites. The Factual Presentation on the goods and services aspects 
(document WT/REG342/1 dated 14 April 2014) had b een prepared by the Secretariat on its own 
responsibility in full consultation with the Parties, in accordance with paragraph 7(b) of the Transparency Mechanism for Regional Trade Ag reements (document WT/L/671). In addition, 
written questions and replies on this Agreemen t had been distributed in document WT/REG342/2 
dated 17 June 2014. He proposed to organize the consideration of the Agreement by first asking the Parties and then other Members to give any general comments and then turn to the specifics 
of the Agreement, using the Factual Presentati on, document WT/REG342/1 to guide the debate. 
They would then go through the questions and replies document. 
1.4.  The representative of Peru said that the st rengthening of bilateral relations between Peru and 
Costa Rica in recent years was reflected not only in increased trade, but in the similarities in both 
countries' policies to open up, which were, in turn , reflected in shared interests at the WTO  such 
as in the Cairns Group, the Group on Tropical Products in Agriculture and, recently, the "Friends of Fish" group; in regional and plurilateral foru ms; and in the Geneva based negotiations for a 
plurilateral agreement on trade in services (TISA), in which both countries had been participating 
actively since 2012. 
1.5.  In view of their strengthening bilateral re lations, Costa Rica had expressed its interest in 
initiating negotiations with Peru in September 2010, in Panama City, at a working session with 
various Central American countries. The negotiating framework had been signed at the Sixth Ministerial Meeting of the Latin American Pacific Rim Forum, held in October 2010 in Urubamba, 
Cusco, Peru. Following four rounds of negotiat ions between November 2010 and May 2011 (held 
jointly with other Central American countries), th e Peru Costa Rica FTA had been signed on 26 May 
2011 in San José in Costa Rica, and had celebrated the first anniversary of its entry into force on 1 June 2014. 
1.6.  The Agreement's preamble referred to building on the Parties' rights and obligations under 
the WTO Agreement, while the text's objectives were to encourage the expansion and diversification of trade between the Parties; to eliminate unnecessary barriers to trade and 
facilitate the cross border movement of goods and services between the Parties; to promote WT/REG342/M/1 
 
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  conditions of free competition within the free trade area; to increase investment opportunities in 
the territories of the Parties; to provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory, taking into consideration the rights and obligations deriving therefrom; and to create effective procedures for the implementation and 
application of the Agreement, for its joint administ ration, and for the prevention and resolution of 
disputes. 
1.7.  Peru believed the Agreement allowed for the improvement of market access conditions and 
the establishment of clear rules and disciplines that promoted a greater level of complementarity 
in trade in goods and services and investment between the Parties, with special emphasis on small and medium sized enterprises, which were constantly seeking nearby and neighbouring destinations for their value added products. It was a comprehensive Agreement based on the 
provisions and principles of WTO rules, which met stringent requirements for consistency with 
multilateral obligations on regional trade agreements under the WTO (Article XXIV of the GATT and Article V of the GATS). 
1.8.  For goods, upon the entry into force of th e Agreement, Peru had granted Costa Rica duty free 
treatment for 83.6% of tariff lines. By the end of  the implementation period for Peru, this figure 
would stand at 98.8%. Costa Rica had granted Pe ru duty free treatment for 77.9% of its tariff 
lines, a figure that would rise to 98.6% by th e end of the implementation period. In 2013, 87.3% 
of Peru's exports to Costa Rica were non-traditio nal, i.e. value added products, and such exports 
had increased by 13.2% in relation to 2010, the year in which the FTA negotiations had begun. 34% of such exports were chemical sector prod ucts (which had increased by 56% between 2010 
and 2013), followed by agricultural and textile se ctor goods. 77% of Peruvian companies exporting 
to Costa Rica were micro and small export companies. Peruvian imports from Costa Rica had risen by 28% between 2010 and 2013, 65% of which were raw materials and intermediate products, 
which favoured the Peruvian domestic industry through access to high quality inputs and 
technologies at a lower price. 
1.9.  Regarding services, the Agreement, which was based on a negative list approach, opened up 
considerable and interesting opportunities for service suppliers. Such opportunities made it 
possible to, amongst other things, promote a va lue added supply of design, distribution and 
franchising services. The Agreement ensured that there would be no discrimination against Peruvian persons and companies seeking to provide services in Costa Rica. Peruvian and Costa 
Rican service suppliers could therefore compete under the same conditions in both markets. 
Provisions were also envisaged to facilitate the temporary entry of Peruvian business persons into Costa Rica. The beneficiaries of this measure were business visitors, traders and investors, and 
anyone travelling as part of an intra-compan y move. Furthermore, the Chapter on investment 
established a legal framework that helped to generate a stable and predictable climate for the development of investment, which would attract in vestment from Costa Rica to Peru, and ensure 
favourable conditions for the development of Peruvian investment in Costa Rica. Peru hoped that 
the transparency exercise would contribute to a better understanding of the terms of the Peru-
Costa Rica FTA.  
1.10.  The representative of Costa Rica welcomed the opportunity to present the Free Trade 
Agreement between Costa Rica and Peru, and thanked the delegation of Peru for the joint 
preparatory work done in connection with th e review and the Secretariat for the Factual 
Presentation. 
1.11.  The Agreement was an important tool for promoting economic development, creating new 
employment opportunities and improving living standards in both countries. Its purpose was to consolidate economic integration by strengthening and deepening existing trade relations, to 
develop an environment conducive to investment , to stimulate trade activities and prevent 
distortions in reciprocal trade between the two countries, to promote the competitiveness of companies, to facilitate trade and to enhance oppo rtunities to improve the level of development of 
both countries. 
1.12.  The negotiation of the Agreement had begun in November 2010 and ended in May 2011; 
the Agreement had entered into force on 1 J une 2013. The regulatory framework had been 
developed on the basis of the fundamental princi ples of the multilateral trading system. The 
Agreement had 19 chapters containing regulatory provisions on market access of goods, rules and 
procedures of origin, customs procedures and trade facilitation, cooperation and mutual assistance WT/REG342/M/1 
 
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  in customs issues, sanitary and phytosanitary measures, technical barriers to trade, trade defence, 
intellectual property, government procurement, competition policy, investment, services, temporary entry for business persons, dispute settlement and institutional matters. Among the most significant results of this Agreement were the combination of rigid and flexible rules of origin 
depending on the productive sectors' interests, the possibility of using raw materials and inputs 
from other Central American countries and from other countries with agreements in common to export within the framework of the agreement, and a tariff elimination programme with broad 
coverage and a considerable number of tariff items traded freely. 
1.13.  For trade in goods, with the entry into force of the Agreement, 83.6% of Peru's tariff lines 
for exports from Costa Rica were duty free. In 2013, this corresponded to 71% of exports to the 
Peruvian market. At the same time, 78% of Costa Rica's tariff lines for exports from Peru were 
duty free, i.e. 64% of the goods purchased from Peru in 2013. In addition, close to 25% of goods 
traded between Costa Rica and Peru had preferen tial tariffs that would progressively decrease. 
1.14.  With regard to trade relations between the two countries, trade had grown at an average 
annual rate of 18.9% from US$20.4 million in  2003 to US$60.1 million in 2013. Costa Rica's 
exports to Peru had grown at an average annual rate of 3.8%, while impo rts had grown by 16.5%. 
In 2013, Costa Rica was Peru's second trading partner in the Central American region, while Peru 
was the sixth most important destination for Costa Rican exports in South America. Since the 
entry into force of the Agreement, trade had been on the rise, thus the Agreement had succeeded in strengthening trade relations and boosting trade flows. 
1.15.  In 2013, Costa Rican exports to the Peruvian market had consisted mainly of food 
preparations; medicines; paper or paperboard to be recycled; metal caps; tyres, and rubber seals. 
During 2014, exports included new products such as underwear, cigarettes and fungicides. Products imported from Peru in 2013 consisted mainly  of plates, sheets, strips and film of plastic; 
seeds, fruit and spores, of a kind used for sowing ; animal feeds; tampons, napkins for babies and 
similar articles; and grapes. Peruvian foreign direct investment in Costa Rica had reached a cumulative total of US$42.7 million during the period 2007-2013. In 2013, Peruvian investment 
flows were a total of US$5.5 million, chiefly in the real estate sector. Peru was one of the countries 
in which Costa Rica had invested, particularly, in software, construction, food and paper. The Agreement had generated benefits for both countries , inter alia by stimulating trade expansion and 
diversification, promoting conditions of free competition, facilitating cross border movement of 
goods and services, and increasing investment opportunities. 
1.16.  The Costa Rican Government was firmly committed to the multilateral trading system. 
Agreements such as these, which were based on  WTO disciplines, promoted the economic growth 
and efficiency of the Parties involved and were complementary to multilateral trade liberalization. 
He thanked all the delegations that had submitted questions prior to the meeting and expressed readiness to answer any questions that Members might have in relation to the Agreement. 
1.17.  The representative of the European Union noted the wide scope of liberalization in goods 
between the Parties and the significant improvem ent in the level of commitments in services 
compared to their GATS commitments. The EU had as ked for clarifications on some provisions of 
the Agreement relating to performance requiremen ts and the relationship with other agreements 
concluded by the Parties. He thanked the Parties for their written replies and did not have any 
more questions. 
1.18.  The representative of Canada joined the EU in thanking the Parties for their responses to 
the written questions and would contact them as soon as possible should he have any follow up 
questions. 
1.19.  The representative of the United States thanked the Parties and the Secretariat for the 
materials provided and the work that the do cuments and the presentations entailed. He 
commended the Parties for the high percentage of tariff elimination under the Agreement. He pointed out the non-notified agreements in Table 5. 1 and encouraged the Parties to notify them as 
soon as possible. 
1.20.  The representative of Colombia thanke d the Parties for their answers to Colombia's 
questions relating mainly to rules of origin, the diagonal cumulation of rules of origin with WT/REG342/M/1 
 
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  El Salvador, Guatemala, Honduras and Panama and to the conditions for origin cumulation with 
third parties with whom both Parties had trade agreements. 
1.21.  The Chairman said that consideration of the Goods and Services Aspects of the Free Trade 
Agreement between Costa Rica and Peru had allowed the Committee to clarify a number of 
questions and the oral discussion of this RTA could be concluded in accordance with paragraph 11 
of the Transparency Mechanism. If any delegations wished to ask follow up questions they were invited to forward submissions in writing to the Secretariat by 30 June 2014 and Parties were 
asked to submit replies in writing by no later than 14 July 2014. In accordance with paragraph 13 
of the Transparency Mechanism all written submissi ons, as well as minutes of this meeting would 
be circulated promptly, in all WTO official languages, and would be made available on the WTO website. 
1.22.  The Committee took note of the comments made. 
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