WORLD TRADE  
ORGANIZATION   
WT/REG298/M/1 
27 September 2012 
 (12-5204) 
Committee on Regional Trade Agreements 
Sixty-sixth Session  
 
 
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
PERU AND THE REPUBLIC OF KOREA,  
GOODS AND SERVICES 
 
Note on the Meeting of 18-19 September 2012 
 
Chairman:  Mr. F. Riegert (France) 
 
 
1. The 66th Session of the Committee on Regional Trad e Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgra m WTO/AIR/3987 dated 7 August 2012. 
2. Under Agenda Item B.III of this session, the CRTA considered the Free Trade Agreement 
(FTA) between Peru and the Republic of Korea (h ereinafter the 'Agreement'), goods and services.  
3. The Chairman said that the Agreement had entere d into force on 1 August 2011.  It had been 
notified to the WTO by the Parties on 9 August 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/REG298/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/598).  The text of the Agreement w as available, together with its Annexes, on the 
Parties' official websites. The Factual Presentation on the goods and services aspects 
(document WT/REG298/1 dated 26 June 2012) had been 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/REG298/2 dated 
4 September 2012.  He also made a minor correc tion to the reply to question 9 which had been 
provided by both Parties and not just Peru as indicated in the document.  He proposed to organize the 
consideration of the Agreement by first asking the Pa rties and then other Members to give any general 
comments and then use the Factual Presentation, document WT/REG298/1, to guide the discussion.  
4. The representative of Peru thanked the Secret ariat for the preparation of the Factual 
Presentation on the Agreement and the delegation of  Korea for its close assistance in the joint 
preparation for the Committee's consideration of the Agreement.  This was the fifth trade agreement 
reviewed under the TM concerning Peru.  Peru's obj ective in pursuing additional liberalization was to 
stimulate competitiveness and modernization of the economy, and to contribute to the reduction of 
poverty and to promote social inclusion.  Peru's tr ade policy focus on regional and bilateral integration 
was also designed to support the multilateral trad ing system.  Peru's strategic plan for 2003-2013 
illustrated its wish to become a producer and exporte r of high quality goods and services.  For several 
years Peru had focused on developing closer links to  Asia.  The entry into force of this Agreement 
was evidence of that.  Coordination with Korea ha d been under way for several years through shared 
interests in the WTO and APEC.  Work on the Agre ement initially started with a 2006 joint statement 
by Peru and Korea's Ministers, and was cemen ted in 2008 when Peru and Korea's Presidents 
announced the formal start of negotiations.  Tho se negotiations spanned fi ve formal negotiating WT/REG298/M/1 
Page 2  
 
  sessions.  The Agreement's high level political support had helped Peru's strategy to use bilateral 
agreements to build strategic links for trade and technology and to expand its markets into the Asia 
pacific region.  Peru was aiming to become a hub be tween Latin America and Asia, on the back of the 
Agreement.  This in turn would enable Peru's e xporters to maximise the effi cient use of facilities.  
Peru had already benefitted from ne w intermediate capital imports from Korea, for use in the mining, 
hydrocarbons agro-industrial, textiles and clothing se ctors.  Those imports had improved efficiencies 
and ultimately broadened the market access opportun ities for Peruvian exporters.  Korea was a major 
consumer of Peruvian agricultural and fishery pr oducts, as well as benefitting from the opportunity to 
export high value exports to Peru.  The Agreemen t had provided a strengthened framework for trade 
in goods, services and protection of investment.   
5. Since the entry into force of the Agreement in 2011, bilateral trade had grown 20%, whilst 
retaining a satisfactory trade balance.  Korea was Peru's 9
th largest trade partner.  Trade flows had 
exceeded US$3 billion, representing a 60% growth comp ared to prior to the entry into force of the 
Agreement.  Peru had seen an 89% growth in expo rts to Korea, particularly non-traditional exports, 
but also including agriculture, fisheries, textiles,  chemical and steel products.  Korea was a major 
source of investment in Peru, and as a result Peru  was now the second largest recipient of foreign 
investment in Latin America, particularly in the trade, finance and industrial sectors.  The Agreement 
also created opportunities for Peruvian investments in Korea.  Peru had benefitted from substantial 
technical assistance from Korea.  The Agreement complied with Articles XXIV of GATT and V of 
GATS.  It had also set high standards for predictabi lity in trade between both Parties.  It contained 
ambitious outcomes on tariff liberalization, rules of origin, TBT, SPS, trade facilitation, transport, and 
temporary entry of natural persons.  On intellectua l property both Parties recognised the importance of 
biological diversity and protection of traditiona l knowledge and indigeno us communities and its 
contribution to the protection of biological divers ity.  The Agreement had established a co-operation 
mechanism to better monitor issues and opportuni ties arising from the Agreement and to ensure 
continued bilateral co-operation be tween small and medium sized indus tries.  Peru looked forward to 
receiving Members' comments on the Agreement afte r its first year of operation and would provide 
responses to questions on any provisions of the Agreement.   
6. The representative of Korea thanked the Comm ittee for considering the Agreement and the 
Secretariat for the preparation of the factual presentation as well as the delegation of Peru.  Korea was 
a strong supporter of the WTO multilateral trading system and an active participant in the DDA 
negotiations.  Korea had been actively pursuing FTAs  as it believed that FTAs could complement and 
supplement the WTO system.  Korea and Peru had concluded the Agreement, which covered 
"substantially all trade in goods" a nd had "substantial sectoral coverage in services" in compliance 
with GATT Article XXIV and GATS Article V.  The Agreement was a comprehensive agreement 
covering trade in goods, services and investments.  In  addition to liberalizing trade and investment, it 
also covered government procurement, intellect ual property rights, and economic cooperation in 
various areas.  One main feature of the Agreement w as that the Parties agreed to achieve a very high 
level of tariff liberalization.  Within ten years, 97. 4% of Korean tariffs and 98.9% of Peruvian tariffs 
would be eliminated.  In terms of average im port value from 2008 to 2010, customs duties on 100% 
of the imports from the Parties would be removed in the same ten year period.  
7. With regard to services, the Agreement guaranteed comprehensive liberalization in 
conformity with GATS Article V.  A negative lis t approach had been adopted, whereby all sectors 
were subject to commitments except for those in th e list of reservations, which permitted the Parties to 
achieve GATS-plus outcomes.  Korea and Peru  strongly believed that this comprehensive 
liberalization would enhance general productivity in the services sector for both countries, thus 
making them services hubs in their regions.  The inve stment Chapter of the Agreement created a more 
stable, transparent, and investor-friendly institutio nal arrangement for investment liberalization and 
protection.  According to recent statistics, Korea's investment in Peru had grown to US$1.79 billion, 
with Peru becoming its second larg est investment destination in Latin America.  Both countries  WT/REG298/M/1 
 Page 3 
 
 
  expected to further attract investment from e ach other, thereby promoting job creation and 
productivity growth, among other benefits.  As a comprehensive Agreement, the commitments under 
the Korea-Peru FTA extended to government proc urement and intellectual property rights.  By 
opening up the government procurement market to each other, Korea and Peru provided their respective businesses with more opportunities to enter new markets.  For the protection of intellectual 
property rights, Korea and Peru co mmitted themselves to high standa rds for patents, trademarks, and 
geographical indications, going beyond those in the TRIPS Agreement.   
8. The complementary nature of the two economies made them highly suitable trading partners 
for each other, despite the geographic distance betwee n them.  Peru was one of the countries with the 
highest growth potential in Latin America, and an  attractive business partner for Korean firms.   
Korea and Peru expected that the Agreement w ould strengthen industries by eliminating non-trade 
barriers and accelerating domestic reform, whic h would further promote trade and economic 
cooperation between Korea and Peru.  The Agreement would also facilitate Korea's efforts to enhance 
cooperation with Latin America and forge closer ties w ith the region.  The Par ties also believed that 
liberalization and cooperation accomp lished through the Agreement would also facilitate progress on 
multilateral trade liberalization.  Like Peru, Kor ea looked forward to the opportunity to assist the 
members of the Committee in their review of the Agreement and to hearing the opinions and 
questions of Members. 
9. The representative of the United States thanke d the Parties and the Secretariat for the 
documents provided including the questions and re plies document, and the updates provided at the 
meeting.  The Agreement was of a high standa rd, both in terms of sc ope and coverage.   
10. The representative of Mexico thanked the Secr etariat and the Parties for the information 
provided including replies to questions that were  currently under examination in Capital.   
11. The European Union thanked the Secretariat a nd the Parties for the information provided.  
The Agreement contained a high standard of protec tion for intellectual property which was welcomed.  
He requested further information in the section on Investment, paragraph 78,  where expropriation was 
not permitted except for a public purpose, as define d.  He requested further information on how 
"public purpose" was defined. 
12. The representative of Canada noted that the re plies to questions were still under examination 
in Capital.   
13. The representative of Korea thanked delegations for their interventions,  In response to the 
question from the representative of the European Unio n the representative of Kor ea stated that in the 
Agreement, a footnote had been included to clarify th at the term "public purpose" was a treaty term to 
be interpreted in accordance with internationa l law and that it was not meant to create any 
inconsistency with the same or similar concepts in  the domestic law of the Parties, such as "national 
security" or "public necessity." 
14. The Chairman noted that the Committee had co mpleted its considera tion of the Goods and 
Services aspects of the Free Trade Agreement betw een Peru and the Republic of Korea.  The 
Committee had concluded its oral discussion of the RTA in accordance with paragraph 11 of the TM.  
Any delegations wishing to pose follow up questions were invited to forward submissions in writing 
to the Secretariat no later than 25 September 2012.  The Parties to the Agreement were invited to 
submit replies to any such questions by 9 Octobe r 2012.  In accordance with paragraph 13 of the TM, 
all written submissions, as well as the minutes of this  meeting will be circulated promptly, in all WTO 
official languages, and would be made  available on the WTO website.   
15. The Committee took note of the comments made. 
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