WORLD TRADE  
ORGANIZATION   
WT/REG304/M/1 
20 December 2012 
 (12-6990) 
Committee on Regional Trade Agreements 
Sixty-seventh Session  
 
 
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
PERU AND CHILE, GOODS AND SERVICES 
 
Note on the Meeting of 20-21 November 2012 
 
Chairman:  Mr. F. Riegert (France) 
 
 1. The 67
th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WT O/AIR/4013/Rev.1 dated 9 November 2012. 
2. Under Agenda Item B.V of this session, th e CRTA considered the Free Trade Agreement 
(FTA) between Peru and Chile (hereinaft er the 'Agreement'), goods and services.  
3. The Chairman said that the Agreement had entere d into force on 1 March 2009.  It had been 
notified to the WTO by the Parties on 29 Novemb er 2011 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/REG304/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/613).  The text of the Agreem ent was available, together with its Annexes, 
on the Parties' official websites.  The Factual Presentation on the goods and services aspects (document WT/REG304/1 dated 31 August 2012) had b een prepared by the Secretariat on its own 
responsibility in full consultation with the Parti es, in accordance with paragraph 7(b) of the 
Transparency Mechanism for Re gional Trade Agreements (document WT/L/671) ("TM").  Written 
questions and replies on this Agreement had b een distributed in document WT/REG304/2 dated 
14 November 2012.  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/REG304/1, to guide the discussion.  
4. The representative of Chile thanked the Secretar iat for the factual presentation and also Peru 
for its assistance in preparing for the review.  He al so thanked the Members that showed their interest 
through their questions and hoped the replies provided by both Parties would dispel any doubts they might have had with respect to the Agreement.  He also acknowledged the wo rk done in their capitals 
by their respective national authorities responsible fo r the administration of trade agreements and of 
the WTO agreements, as well as the efforts of their de legations in Geneva to coordinate and organize 
the joint work that had culminated in the presentation of the Agreement. 
5. Chile attached great value to the Transp arency Mechanism of the WTO Committee on 
Regional Trade Agreements, as evidenced by the 18 agreements in force that  had been submitted to 
the Committee.  The FTA between Chile and Peru reflected Chile's on-going efforts to strengthen 
bilateral relations and achieve progress in the di fferent integration processes, particularly with 
neighbouring countries, promoting investment and encouraging the free movement of goods, services, 
capital and persons. WT/REG304/M/1 
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  6. The Agreement had been signed on 22 August 2006, and had entered into force 
on 1 March 2009.  Trade between the Parties had in creased sharply over the past five years from 
US$2.947 billion in 2007 to a historical peak of US$4.024 billion in 2011.  The atmosphere of cordiality and trust surrounding the ne gotiating rounds had been reflected in the high quality of the 
Agreement and in the benefits it had brought to both Parties. 
7. The Agreement had marked considerable pr ogress in extending and updating the disciplines 
adopted in areas such as market acc ess, rules of origin, trade facilitation, technical barriers to trade, 
sanitary and phytosanitary standards, customs matte rs, temporary entry of business persons, and trade 
defence.  It also included investment protection,  trade in services, and a new dispute settlement 
mechanism.  At the same time, it established co mmitments to future negotiations on free zones, 
government procurement, mutual recognition of  professional qualifications, financial services, 
tourism, and the adoption of measures to protect biological diversity. 
8. Under the Agreement, the Parties had granted tari ff preferences which had resulted, to date, in 
a zero tariff on 96% of bilateral tariffs, and pr ovided for 100% liberalization of their tariffs 
by 1 January 2016.  The Agreement was one of th e most extensive and far-reaching agreement signed 
between two Latin American countries, and met al l the necessary requirements to be considered 
consistent with the principles of the WTO. 
9. The Agreement sought to stimulate and protect investment for both countries, providing 
greater legal certainty for investors as well as for thei r investments in each others' the territories.  Peru 
now ranked third as a destination for Chile's i nvestments abroad, with a cumulated total of 
US$6,944 billion as of 2011 (according to the Centra l Bank of Chile).  The services sector had been 
opened up and a clear and stable legal framework  had been set up for service providers in both 
countries, which should help to boost trade between th e Parties.  In the dis pute settlement area there 
was now a single and definitive option available to th e Parties, the complaining party having the right 
to choose between the procedure established unde r the World Trade Organization (WTO) and the 
procedure provided fo r in the Agreement. 
10. An Administrative Commission had been set up,  together with committees to facilitate 
communication between the Parties and sought to avoid any disputes.  The Administrative 
Commission had met for the first time in June 2010,  in Santiago, and hoped to meet for a second time 
in the not too distant future. 
11. The delegation of Peru joined Chile in thanki ng the WTO Secretariat and the Members that 
had shown an interest in the review.  They al so thanked the delegation of Chile for its close 
cooperation in the preparatory work for the meeting. 
12. The Agreement was Peru's sixth trade agreemen t to be considered under the Transparency 
Mechanism, an instrument greatly valued by Peru  for providing space to show that, under their trade 
policy, the multilateral trading system and regional a nd bilateral integration sch emes were compatible 
and complemented each other, and that such integr ation schemes were contributing to the objective of 
transforming Peru into an exporter of high-qualit y goods and services, in accordance with the 
National Strategic Plan for Exports 2003-2013. 
13. Bilateral relations with Chile had been excepti onally dynamic in recent years as reflected in 
key aspects such as the substantial increase in trade and growing investment flows between both countries, which had contributed to the wellbeing of their citizens. 
14. Convergence in the trade openness of both countri es and in the main pillars of their economic 
policies had been reflected in their shared interests in the WTO, through their participation in various 
groups in the multilateral trade negotiations, such as  the Cairns Group, the agricultural G-20 and the  WT/REG304/M/1 
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  "Friends of Fish" Group.  This convergence could also be seen in regional forums such as the 
Asia-Pacific Economic Cooperation (APEC) forum and Latin American Integration Association 
(LAIA), and recently in initiatives such as the P acific Alliance and in negotiations within the 
framework of the Trans-Pacific Partnership Agreement (TPP). 
15. In this context, on 1 March 2009, the Agreemen t between Peru and Chile had entered into 
force.  It was based on the Economic Compleme ntarity Agreement (ACE) No. 38, signed in 1998 
within the LAIA framework, which, although providi ng for the liberalization of all tariffs between 
both countries by 2016, did not include issues relating to services and investment.  The Agreement not only incorporated these issues, but had also improved certain rules relating to disciplines in trade in 
goods. 
16. The Agreement was comprehensive, based  on the provisions and principles of 
the WTO agreements.  It contained 20 chapters on disciplines in areas including trade in goods, trade 
in services, intellectual property ri ghts, and standards.  It therefore met stringent requirements for 
consistency with multilateral ob ligations relating to free trade agreements under the WTO - 
Article XXIV of the GATT and Article V of the GATS. 
17. According to Peru's statistics, between the y ear of entry into force of ACE No. 38 (1998) 
and 2011, bilateral trade in goods had grown by 702 % at an average annual rate of 17%.  During this 
period, Peruvian exports to Chile had increased by  1,327%, while imports rose by 380%.  This made 
Chile-Peru's seventh largest export destination in the world and largest export destination in Latin 
America.  Non-traditional exports featured promin ently and increased at an average annual rate of 
15% between 1998 and 2011.  They included non-traditional exports in the chemical, agricultural, 
metal-working and textile sectors.  It should be no ted that 70% of Peruvian companies exporting to 
Chile were micro and small enterprises. 
18. As regards services, the FTA was based on a negative list approach and opened up important 
and interesting opportunities for Peru's service su ppliers.  These allowed for the promotion of a 
value-added supply of software, contact centres,  Business Process Outs ourcing, architecture, 
engineering, business consulting,  publishing houses and franchises. 
19. Furthermore, Chile was the primary Latin Ameri can source of foreign investment in Peru and 
according to Peru's Private Investment Promotion Ag ency accounted for 7.4% of foreign investment.  
Chile investments in Peru covered almost all target sectors, in particular:  trade, construction, energy, 
finance, industry, mining, services and housing.  The investment chapter of the Agreement had 
established a legal framework that had helped to generate a stable and predictable climate for 
investment development, which would not only help to attract more Chilean investment to Peru, but 
also establish favourable conditions for the devel opment of Peruvian investment in Chile, which 
already existed in sectors such as business services , food and beverages, c onstruction, financial 
services, chemicals, and other industries. 
20. Peru and Chile continued to work on deve loping mechanisms for deep economic and 
commercial integration that would strengthen th e progressive regional integration process with a 
view to encouraging the more inclusive, equ itable, dynamic and comp rehensive development 
of South America.  This, in turn, would help create a stepping stone towards other regions, in 
particular the Asia-Pacific region.  They hope d that this exercise would contribute to a better 
understanding of the terms of the Agreement and we re open to answer any further questions that 
might arise. 
21. The representative of El Salvador said she had taken note of what had been said in relation 
with the Agreement.  She thanked both delegatio ns for the very succinct and clear information 
provided and congratulated them on their excellent presentations. WT/REG304/M/1 
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  22. The representative of the European Union welcomed  the full reciprocal tariff liberalization for 
goods foreseen at the end of the implementation peri od.  He asked whether the Parties intended to 
make further commitments in services sectors particularly in relation to market access, national and MFN treatment and local presence. 
23. The representative of Chile said that the Agreem ent had only considered establishing future 
negotiations on financial services as well as a commitment to negotiate a mutual recognition 
agreement on professional qualifications which was in fact services-related.  This was as far as they 
had gone bilaterally and were not planning to go further in the shor t and medium-term.  They were 
participating in other multilate ral and regional processes like the TPP and other processes in Latin 
America, such as the Pacific Alliance where these issues were on the table and they were favouring 
these negotiations.   
24. The Chairman said that the consideration of the Goods and Services Aspects of the Free 
Trade Agreement between Peru and Chile had a llowed the Committee to clarify a number of 
questions and 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 Secretaria t by 27 November 2012 and Parties were asked to 
submit replies in writing by no later than 11 Decemb er 2012.  In accordance with paragraph 13 of the 
Transparency Mechanism all written submissions , as well as minutes of the meeting would be 
circulated promptly, in all WTO official la nguages, and would be made available on the 
WTO website. 
25. The Committee took note of the comments made. 
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