WT/REG313/M/1  
 
4 October 2013  
(13-5365) Page: 1/3  
Committee on Regional Trade Agreements 
Seventieth Session    
 
 CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
PERU AND PANAMA, G OODS AND SERVICES 
NOTE ON THE MEETING OF 17-18 SEPTEMBER 2013 
Chairman: Ambassador Francisco Lima Mena (El Salvador) 
1.1.  The 70th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/4163/REV.1 dated 4 September 2013. 
1.2.  Under Agenda Item B.VI of this session, the CRTA considered the Free Trade Agreement 
(FTA) between Peru and Panama (hereinafter "the Agreement"). 
1.3.  The Chairman said that the Agreement had entered into force on 1 May 2012. It had been 
notified to the WTO by the Parties on 23 April 2012 under Article XXIV:7(a) of the GATT 1994 and 
the Understanding on the Interpretation of Article XXIV of GATT 1994 as an Agreement 
establishing a free trade area (document WT/REG313/N/1/Rev.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/642/Rev.1). The text of the Agreement was available, together with 
its Annexes, on the Parties' official websites. Th e Factual Presentation on the goods and services 
aspects (document WT/REG313/1 dated 4 July 2013) had been prepared by the Secretariat on its own responsibility in full consultation with the Parties, in accordance with paragraph 7(b) of the Transparency Mechanism for Regional Trade Ag reements (document WT/L/671) ("TM"). Written 
questions and replies on this Agreement had been  distributed in document WT/REG313/2 dated 11 
September 2013. He proposed to organize the consideration of the Agreement by first asking the Parties and then other Members to give any general comments and then use the Factual 
Presentation, document WT/REG313/1, to guide the discussion. 
1.4.  The representative of Peru noted that Peru and Panama shared the objective of strengthening 
the multilateral trading system as well as important economic and trade links, in particular trade in 
goods and services, investment as well as scientific collaboration. Peru supported the multilateral 
trading system and believed that bilateral and regional integration schemes should be complementary to the multilateral trading system and not replace it. At the same time, Peru was committed to sustainable development with social inclusion which was why it had focused on 
policies that promoted openness to international trade. Having private investment and foreign 
trade as the main engines of growth in the last few years had significantly contributed to reducing poverty in Peru. The policy of trade openness that Peru had been developing in a consistent 
manner was fully compatible with its WTO obligations. In this spirit the three agreements to be 
considered at the meeting, along with the six agreements already considered in the CRTA under the Transparency Mechanism, covered 68% of Peru's  exports. With the further consideration in the 
CRTA of the more recent agreements with Mexico, Costa Rica and the European Union 
12 agreements covering 87% of Peru's exports would have been considered. This reflected Peru's firm commitment to the Transparency Mechanism and the work of the Committee to improve understanding of regional trade agreements. Peru thanked the WTO Secretariat for having 
prepared the factual presentation, Panama for its close co-operation and support in preparing for 
the meeting and Members for their questions on the Agreement. 
1.5.  The bilateral relationship between Peru  and Panama in the past few years had shown 
uncanny dynamism which was reflected in such important aspects as increased trade and WT/REG313/M/1 
 
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  investment flows which had contributed to a greater goal, namely the well-being of their citizens. 
Convergence in the market access policy of both countries and in their basic economic policies had been reflected in their shared interests in the WTO as well as through interest groups such as the Agricultural Tropical Products Group. The convergence was also noticeable in regional and 
plurilateral fora such as the Latin American Integration Association and recent initiatives such as 
the Pacific Alliance of which Peru and Panama were members as well as in plurilateral negotiations in Geneva in the agreement on services. In this context, in August 2010 in Lima the joint 
statement between Peru and Panama was signed which showed the will of both countries to begin 
negotiations on a free trade agreement. On that date the statement from the trade ministers reflected this intention and committed to establish a treaty negotiation framework as soon as possible. In order to achieve this a work session took place in September 2010 in Panama City 
between the trade ministers of both Peru and Pa nama. The negotiation framework was subscribed 
to in the Ministerial Meeting of the Latin America Pacific Rim Forum in 2010. After four negotiation rounds which took place with other Central American countries the Peru-Panama FTA was signed 
on 25 May 2011 and had been valid since 1 May 2012. Its preamble set out the development of 
the Parties' rights and obligations as part of the WTO Agreement as well as the objectives of the Agreement which was to stimulate expansion and di versification of trade between the Parties, to 
eliminate unnecessary obstacles and to increase an d facilitate cross-border of goods and services 
between the Parties, to create free competition in the free trade area, to increase investment opportunities, and to promote intellectual property rights. The Agreement was comprehensive based on the provisions and principles of the WTO Agreement. It included 22 Chapters on 
disciplines in goods, services, intellectual proper ty rights, rules and others. It therefore complied 
with high standards and was compatible with multilateral obligations under Article XXIV of the GATT and Article V of the GATS.  
1.6.  As regards goods, with the entry into forc e of the Agreement, Panama had accorded to Peru 
tariff free treatment on 58% of tariff lines, equivalent to 69% of imports from Peru. At the end of the liberalization period, these percentages would increase to 96.5% and 91%, respectively. For 
Peru, with the entry into force of the Agreement it gave Panama tariff-free treatment on 77.8% of 
tariff lines equivalent to 99.4% of imports from Peru. At the end of the implementation period these percentages would rise to 98.3% and 100%, respectively. Panama was the main destination for Peruvian exports in Central America and the Caribbean. Between 2011 and 2012, Peruvian 
exports to Panama grew by 49% and reached US $496.2 million. In 2012, a quarter of its exports 
were non-traditional and they grew 36% in comparison to the previous year which made Panama one of the twenty main export destinations for non-traditional exports from Peru. 27% of 
non-traditional exports were in the metal and mechanical sector, chemicals, agriculture and 
fishing.  
1.7.  As regards services, the Agreement which was based on a negative-list approach, opened 
multiple opportunities for service providers including among others the promotion of added-value 
supply with software, contact centres, business process outsourcing, architecture, engineering, business consultancies, publishing houses and franchises. The Agreement would not discriminate against Peruvian businesses and people wishing to supply services in Panama. There were also 
provisions on easing business carried out by Pe ruvian persons temporarily working in Panama. 
Panama was the eighth largest source of foreign investment in Peru and the fourth in the Latin American region representing, according to the Investment Promotion Agency of Peru, 4.1% of FDI 
in 2012. Panama's investment in Peru was present in all sectors including industry, energy, 
finance, trade and gas. Furthermore, Panama was the second largest foreign investor in the transport sector (21% in total), the third in the industry sector and the third in the fisheries sector. 
The investment Chapter of the Agreement establ ished a legal framework which contributed to 
generating a stable and predictable climate for investment. Peru and Panama would continue to work to develop mechanisms for economic and tr ade integration which would be deep-seated and 
would allow for progressive integration on a regional level in order to favour more inclusive, fair, 
dynamic and full-scale development in Latin America which would open a platform to other 
regions, particularly Asia Pacific. His delegation  hoped that the exercise would contribute to a 
better understanding of the Peru-Panama FTA and th e Parties were at Members' disposal for any 
clarifications required.  
1.8.  The representative of Panama thanked th e Secretariat for the preparation of the Factual 
Presentation and the delegation of Peru for its c ooperation in the preparation for the meeting. On 
26 August 2010 the Presidents of Peru and Panama  had signed the Presidential statement between 
the two countries highlighting the willingness to begin trade negotiations with a view towards WT/REG313/M/1 
 
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  concluding an FTA. The Agreement sbetween Pa nama and Peru was signed on 25 May 2011 and 
entered into force on 1 May 2012. It increased market access for goods and services between both economies which showed the highest level of grow th in the continent. For this purpose, the 
Agreement had clear and standing rules which wo uld favour an investment-friendly environment 
and the development of business between the Pa rties. As regards investment measures, the 
Agreement had modern disciplines which guaran teed the protection and legal certainty of 
businesses and business people between both countries. The main Peruvian investments in 
Panama were concentrated in the food, restaurant and banking sectors. As regards services, the 
Agreement offered opportunities for the financial, maritime, telecommunications and free zone sectors. It had a Chapter on maritime services wh ich included a wide range of services offered by 
the maritime industry which prospered in both co untries. Peru occupied an important place as a 
user of the Panama Canal. The Chapter on financial services offered guarantees for the promotion 
of banking services, insurance, maritime transport, and reinsurance. Among the main imports from Peru were fresh grapes, food preparations wi th fish, metal sheets, plastic sheets, shellfish, 
advertising and business catalogues, preparation of sardine cans, mandarin oranges, asparagus, 
beans, peppers and others. Panama exported preparations of canned meat, vacuum-packed 
chicken among others. With the Agreement both countries liberalized trade in goods and the 
government of Panama was satisfied with the implementation of the Treaty. 
1.9.  The representative of the United States th anked the Parties and the Secretariat for the work 
and the Parties for their presentations. He had observed in Table 5.1 that both Parties had a 
number of non-notified RTAs and he hoped they would notify them as soon as possible. 
1.10.  The representative of Colombia thanked the Parties for their exhaustive presentation of the 
Agreement. She asked if Peru had tariff preferen ces for products coming from the free zone of 
Panama. The representative of Peru replied that tariffs were eliminated on products from Panama 
according to the tariff phasedown list. The representative of Colombia said her delegation would 
provide a follow-up question. 
1.11.  The Chairman said that the considerat ion of the Goods and Services Aspects of the 
Free Trade Agreement between Peru and Panama 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 submission s in writing to the Secretariat by 24 September 
2013 and Parties were asked to submit replies in writing by no later than 8 October 2013. In 
accordance with paragraph 13 of the Transparency Mechanism all written submissions, as well as minutes of this meeting would be circulated promptly, in all WTO official languages, and would be 
made available on the WTO website.  
1.12.  The Committee took note of the comments made. 
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