WT/DS457/15  
16 December 2015  
(15-6635)  Page: 1/24  
 Original: Spanish  
 
  PERU – ADDITIONAL DUTY ON IMPORTS OF CERTAIN AGRICULTURAL PRODUCTS 
ARB-2015-3/30 
Arbitration 
under Article 21.3(c) of the 
Understanding on Rules and Procedures 
Governing the Settlement of Disputes 
Award of the Arbitrator 
Ricardo Ramírez-Hernández WT/DS457/15 
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CONTENTS 
1  INTRODUC TION ........................................................................................................... 6  
2  ARGUMENTS OF THE PARTIES ...................................................................................... 7  
3  REASONABLE PERI OD OF TIME .................................................................................... 7  
3.1  Mandate of the Arbitrator und er Article 21.3(c) of the DSU ............................................... 7  
3.2  Measure to be brou ght into conf ormity .......................................................................... 9  
3.3  Factors affecting the determination of the reasonable period of time ................................. 10 
3.3.1  Means of implementation ......................................................................................... 11 
3.3.2  Stages in the implementation process ........................................................................ 11 
3.3.3  Legal analysis ........................................................................................................ 12 
4  AWARD ......................................................................................................................  18 
ANNEX A  Executive Summar y of Peru's Submission.............................................................. 19 
ANNEX B  Executive Summary of  Guatemala's Submission ..................................................... 22 
 WT/DS457/15 
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  ABBREVIATIONS USED IN THIS AWARD 
Abbreviation Description 
Appellate Body Report Appellate Body Report, Peru – Additional Duty on Imports of Certain 
Agricultural Products , WT/DS457/AB/R and Add. 1, adopted 
31 July 2015 
CCV Comisión de Coordina ción Viceministerial  (Vice-Ministerial Coordination 
Commission) 
DGAEICYP Dirección General de Asuntos de Ec onomía Internacional, Competencia 
y Productividad  (Directorate-General of Inte rnational Economic Affairs, 
Competition and Productivity) 
DSB Dispute Settlement Body 
DSU Understanding on Rules and Proced ures Governing the Settlement of 
Disputes 
Economic and Legal Analysis Manual Manual for the economic and legal anal ysis of normative output in the 
Ministry of Economy and Financ e of Peru (Exhibit PER-9) 
GATT 1994 General Agreement on Tariffs and Trade 1994 
Panel Report Panel Report, Peru – Additional Duty on Im ports of Certain Agricultural 
Products , WT/DS457/R and Add. 1, adopted 31 July 2015, as modified 
by Appellate Body Report WT/DS457/AB/R 
PRS Price Range System 
WTO World Trade Organization  
 WT/DS457/15 
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  CASES CITED IN THIS AWARD 
Short Title Full Case Title and Citation 
Argentina – Hides and Leather 
(Article 21.3(c)) Award of the Arbitrator, Argentina – Measures A ffecting the Export of 
Bovine Hides and Import of Fini shed Leather – Arbitration under 
Article 21.3(c) of the DSU , WT/DS155/10, 31 August 2001, DSR 2001:XII, 
p. 6013  
Australia – Salmon 
(Article 21.3(c))  Award of the Arbitrator, Australia – Measures Affecting Importation of 
Salmon – Arbitration under Article 21.3(c) of the DSU , WT/DS18/9, 
23 February 1999, DSR 1999:I, p. 267  
Brazil – Retreaded Tyres 
(Article 21.3(c))  Award of the Arbitrator, Brazil – Measures Affecting Imports of Retreaded 
Tyres – Arbitration under Article 21.3(c) of the DSU , WT/DS332/16, 
29 August 2008, DSR 2008  
Canada – Patent Term 
(Article 21.3(c))  Award of the Arbitrator, Canada – Term of Patent Protection – Arbitration 
under Article 21.3(c) of the DSU , WT/DS170/10, 28 February 2001, 
DSR 2001:V, p. 2031  
Canada – Pharmaceutical Patents 
(Article 21.3(c))  Award of the Arbitrator, Canada – Patent Protection of Pharmaceutical 
Products – Arbitration under Article 21.3(c) of the DSU , WT/DS114/13, 
18 August 2000, DSR 2002:I, p. 3  
Chile – Alcoholic Beverages 
(Article 21.3(c))  Award of the Arbitrator, Chile – Taxes on Alcoholic Beverages – Arbitration 
under Article 21.3(c) of the DSU , WT/DS87/15, WT/DS110/14, 
23 May 2000, DSR 2000:V, p. 2583  
Chile – Price Band System 
(Article 21.3(c))  Award of the Arbitrator, Chile – Price Band System and Safeguard 
Measures Relating to Certain Agricu ltural Products – Arbitration under 
Article 21.3(c) of the DSU , WT/DS207/13, 17 Marc h 2003, DSR 2003:III, 
p. 1237  
China – GOES (Article 21.3(c))  Award of the Arbitrator, China – Countervailing and Anti-Dumping Duties 
on Grain Oriented Flat-Rolled Electrical Steel from the United States – 
Arbitration under Article 21.3(c) of the DSU , WT/DS414/12, 3 May 2013, 
DSR 2013:IV, p. 1495  
Colombia – Ports of Entry 
(Article 21.3(c))  Award of the Arbitrator, Colombia – Indicative Prices and Restrictions on 
Ports of Entry – Arbitration un der Article 21.3(c) of the DSU , 
WT/DS366/13, 2 October 2009, DSR 2009:IX, p. 3819  
EC – Chicken Cuts 
(Article 21.3(c))  Award of the Arbitrator, European Communities – Cu stoms Classification of 
Frozen Boneless Chicken Cuts – Arbi tration under Article 21.3(c) of the 
DSU, WT/DS269/13, WT/DS286/15, 20 February 2006  
EC – Export Subsidies on Sugar 
(Article 21.3(c))  Award of the Arbitrator, European Communities – Export Subsidies on 
Sugar – Arbitration under Article 21.3(c) of the DSU , WT/DS265/33, 
WT/DS266/33, WT/DS283/14, 28 October 2005, DSR 2005:XXIII, p. 11581
 
EC – Hormones (Article 21.3(c))  Award of the Arbitrator, EC Measures Concerning Meat and Meat Products 
(Hormones) – Arbitration under Article 21.3(c) of the DSU , WT/DS26/15, 
WT/DS48/13, 29 May 1998, DSR 1998:V, p. 1833  
EC – Tariff Preferences 
(Article 21.3(c))  Award of the Arbitrator, European Communities – Conditions for the 
Granting of Tariff Preferences to Developing Countries  – Arbitration under 
Article 21.3(c) of the DSU , WT/DS246/14, 20 September 2004, DSR 
2004:IX, p. 4313  
Indonesia – Autos 
(Article 21.3(c))  Award of the Arbitrator, Indonesia – Certain Me asures Affecting the 
Automobile Industry – Arbitration under Article 21.3(c) of the DSU , 
WT/DS54/15, WT/DS55/14, WT/DS59/13, WT/DS64/12, 
7 December 1998, DSR 1998:IX, p. 4029  
Japan – Alcoholic Beverages II 
(Article 21.3(c))  Award of the Arbitrator, Japan – Taxes on Alcoholic Beverages – Arbitration 
under Article 21.3(c) of the DSU , WT/DS8/15, WT/DS10/15, WT/DS11/13, 
14 February 1997, DSR 1997:I, p. 3  
Japan – DRAMs (Korea) 
(Article 21.3(c))  Award of the Arbitrator, Japan – Countervailing Duties on Dynamic Random 
Access Memories from Korea – Arbitrat ion under Article 21.3(c) of the 
DSU, WT/DS336/16, 5 May 2008, DSR 2008:XX, p. 8553  
Peru – Agricultural Products Appellate Body Report, Peru – Additional Duty on Imports of Certain 
Agricultural Products , WT/DS457/AB/R and Add.1, adopted 31 July 2015 
Peru – Agricultural Products Panel Report, Peru – Additional Duty on Im ports of Certain Agricultural 
Products , WT/DS457/R and Add.1, adopted 31 July 2015, as modified by 
Appellate Body Report WT/DS457/AB/R WT/DS457/15 
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  Short Title Full Case Title and Citation 
US – COOL (Article 21.3(c))  Award of the Arbitrator, United States – Certain Country of Origin Labelling 
(COOL) Requirements  – Arbitration under Article 21.3(c) of the DSU , 
WT/DS384/24, WT/DS386/23, 4 Dece mber 2012, DSR 2012:XIII, p. 7173  
US – Countervailing Measures 
(China) (Article 21.3(c))  Award of the Arbitrator, United States – Countervai ling Duty Measures on 
Certain Products from China – Arbitrat ion under Article 21.3(c) of the DSU , 
WT/DS437/16, 9 October 2015  
US – Hot-Rolled Steel 
(Article 21.3(c))  Award of the Arbitrator, United States – Anti-Dumping Measures on Certain 
Hot-Rolled Steel Products from Japan – Arbitration under Article 21.3(c) of the DSU , WT/DS184/13, 19 February 2002, DSR 2002:IV, p. 1389
 
US – Offset Act (Byrd 
Amendment) (Article 21.3(c))  Award of the Arbitrator, United States – Continued Dumping and Subsidy 
Offset Act of 2000 – Arbitration under Article 21.3(c) of the DSU , 
WT/DS217/14, WT/DS234/22, 13 June 2003, DSR 2003:III, p. 1163  
US – Section 110(5) Copyright Act 
(Article 21.3(c))  Award of the Arbitrator, United States – Section 110(5) of the 
US Copyright Act – Arbitration under Article 21.3(c) of the DSU , 
WT/DS160/12, 15 January 2001, DSR 2001:II, p. 657  
US – Stainless Steel (Mexico) 
(Article 21.3(c))  Award of the Arbitrator, United States – Final Anti-Dumping Measures on 
Stainless Steel from Mexico – Arbitration under Article 21.3(c) of the DSU , 
WT/DS344/15, 31 October 2008, DSR 2008:XX, p. 8619  
 WT/DS457/15 
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  WORLD TRADE ORGANIZATION  
AWARD OF THE ARBITRATOR  
  
 
Peru – Additional Duty on Imports of Certain Agricultural Products 
Parties: 
Guatemala 
Peru ARB
–2015 –3/30 
Arbitrator: 
Ricardo Ramírez-Hernández 
 
 
1  INTRODUCTION 
1.1.  This arbitration is being conducted pursuant to Article 21.3(c) of the Understanding on Rules 
and Procedures Governing the Settlement of Disputes (DSU) in order to determine the "reasonable 
period of time" for implementation of the recommendations and rulings of the Dispute Settlement Body (DSB) in the dispute Peru 
– Additional Duty on Imports of Certain Agricultural Products.1 
1.2.  On 31 July 2015, the DSB adopted the Appellate Body Report2 and the Panel Report3, as 
modified by the Appellate Body Report, in Peru – Additional Duty on Imports of Certain Agricultural 
Products . This dispute relates to the imposition of a dditional duties by Peru on certain types of 
rice, sugar, maize and milk. The Panel and the A ppellate Body found that the additional duties 
resulting from the Price Range System (PRS) are in consistent with Article 4.2 of the Agreement on 
Agriculture and with the second sentence of Article II:1(b) of the General Agreement on Tariffs and Trade 1994 (GATT 1994).
4 
1.3.  At the DSB meeting held on 31 July 2015, Peru informed the DSB of its intention to 
implement the recommendations and rulings of the DS B in this dispute, and indicated that it would 
need a reasonable period of time for implementation.5 By joint letter dated 14 September 2015, 
Guatemala and Peru agreed that, in the absenc e of an agreement between the parties on a 
reasonable period of time, any award issued by an arbitrator under Article 21.3(c) of the DSU, 
including awards not made within 90 days after th e date of adoption of the recommendations and 
rulings of the DSB, would be deemed to be an  award of the arbitrator for the purposes of 
Article 21.3(c) of the DSU in determining the reason able period of time for Peru to implement the 
recommendations and rulings of the DSB.6 
1.4.  On 1 October 2015, Guatemala informed the DSB that it had not reached an agreement with 
Peru on the reasonable period of time for im plementation. Consequently, Guatemala requested 
that the reasonable period of time be determined through binding arbitration pursuant to Article 21.3(c) of the DSU.
7 
1.5.  By joint letter dated 9 October 2015, Peru and Guatemala agreed that I should serve as 
Arbitrator pursuant to Article 21.3(c) of the DSU. In a letter dated 9 October 2015, I informed Peru and Guatemala of my acceptance of the designation as Arbitrator.
8 
1.6.  Peru and Guatemala presented their written subm issions, together with executive summaries 
thereof, on 19 and 26 October 2015, respectively. The hearing was held on 3 November 2015. The 
                                               
1 WT/DS457. 
2 WT/DS457/AB/R. 
3 WT/DS457/R. 
4 See section 3.2 of this Award. 
5 WT/DS457/12; WT/DSB/M/366, para. 1.8. At th e DSB meeting held on 31 August 2015, Peru 
reiterated that it would require a reasonable period of time for implementation. (WT/DS457/12. See also document WT/DSB/M/367, para. 2.7) 
6 WT/DS457/12. 
7 WT/DS457/13. 
8 WT/DS457/14. WT/DS457/15 
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  parties have agreed that this Award will be  deemed to be an arbitration award under 
Article 21.3(c) of the DSU.9 
2  ARGUMENTS OF THE PARTIES 
2.1.  The arguments of the parties are reflected in the executive summaries of their written 
submissions, which are contained in Annexes A and B of this Award. 
3  REASONABLE PERIOD OF TIME 
3.1.  I shall first address the mandate of the Arbitrator in the light of the text of Article 21.3(c) of 
the DSU, taking into account previous awards issued pursuant to that provision. I shall then 
examine the measure to be brought into conformity with the recommendations and rulings of the DSB and the arguments of the parties as to the reasonable period of time for implementation in this dispute. 
3.1  Mandate of the Arbitrator under Article 21.3(c) of the DSU 
3.2.  Article 21.3 of the DSU provides, in relevant part: 
If it is impracticable to comply immediately with the recommendations and rulings [of 
the DSB], the Member concerned shall have a reasonable period of time in which to 
do so. The reasonable period of time shall be: 
… 
(c) a period of time determined through binding arbitration within 90 days after the 
date of adoption of the recommendations and rulings. In such arbitration, a guideline for the arbitrator should be that the reasonable period of time to implement panel or Appellate Body recommendations should not exceed 15 months from the date of 
adoption of a panel or Appellate Body repo rt. However, that time may be shorter or 
longer, depending upon the particular circumstances.
10 
3.3.  According to this provision, my mandate as Arbitrator in the present proceeding is to 
determine the period of time within whic h the Member concerned must implement the 
recommendations and rulings of the DSB in this dispute. 
3.4.  Certain provisions of the DSU provide guidance regarding my mandate in this proceeding. 
Article 21.1 of the DSU provides that "[p]rompt compliance with recommendations or rulings of 
the DSB" is essential for the effective resolution  of disputes of the World Trade Organization 
(WTO). Further on, the introductory clause to Arti cle 21.3 of the DSU stipulates that a reasonable 
period of time for implementation shall be available only "[i]f it is impracticable to comply 
immediately with the recommendations and rulings [of the DSB]". According to the last sentence 
of Article 21.3(c), the "particular circumstances" of a dispute may affect the calculation of the 
reasonable period of time, making it "shorter or longer".11 In principle, therefore, the reasonable 
period of time for implementation should be the sh ortest period possible within the legal system of 
the implementing Member12, in the light of the "particular circumstances" of a dispute.13 Moreover, 
previous arbitration awards have held that the Me mber must utilize all the "flexibilities" available 
                                               
9 See document WT/DS457/12. 
10 Footnotes omitted. 
11 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.5; 
US – COOL (Article 21.3(c)) , para. 69; and EC – Chicken Cuts (Article 21.3(c)) , para. 49. 
12 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.5; 
China – GOES (Article 21.3(c)) , para. 3.3; EC – Hormones (Article 21.3(c)) , para. 26; and Japan – DRAMs 
(Korea) (Article 21.3(c)) , para. 25. 
13 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.5; and 
China – GOES (Article 21.3(c)) , para. 3.3. WT/DS457/15 
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  within its legal system in order to implement the relevant recommendations and rulings of the DSB 
in the shortest period of time possible.14 
3.5.  With regard to the method of implementation , previous awards have indicated that the 
Member has a measure of discretion in choosing th e means of implementation that it deems most 
appropriate.15 However, a Member's right to choose the means of implementation is not 
unfettered.16 Accordingly, it is necessary to consider whether the implementing action falls within 
the range of permissible actions that can be taken in order to implement the DSB's 
recommendations and rulings.17 Thus, "the means of implementation chosen must be apt in form, 
nature, and content to effect compliance".18 On the basis of the foregoing, a Member's chosen 
method of implementation must be capable of br inging the measure into conformity with its WTO 
obligations within a reasonable period of time, in accordance with the guidelines contained in 
Article 21.3(c) of the DSU.19 
3.6.  With regard to the content of the measure to be implemented, previous awards have made it 
clear that it is not for me, as the Arbitrator, to determine the consistency with the covered 
agreements of the measure taken to comply.20 Arbitration under Article 21.3(c) of the DSU is 
limited to determining the period of time with in which implementation of the recommendations 
and rulings of the DSB must occur.21 In previous arbitrations, the mandate of the Arbitrator was 
considered to relate to the time by which the implementing Member must comply, not to the 
manner  in which that Member must comply.22 However, the  time by which a Member must comply 
cannot always be determined without considering the chosen means  of implementation. In some 
cases, in order to establish the time by which a Member must comply, it will be necessary to take 
into account the manner  in which the Member proposes to do so as an element of analysis.23 
3.7.  Moreover, Article 21.2 of the DSU provides that "[p]articular attention should be paid to 
matters affecting the interests of developing co untry Members with respect to measures which 
have been subject to dispute settlement." Previous awards have recognized that, in determining 
the reasonable period of time under Article 21.3(c), an arbitrator should pay particular attention to matters affecting the interests of both an implementing  and a complaining  developing country 
Member or Members.
24 
3.8.  Finally, with regard to the burden of proof, previous arbitrations have established that the 
Member seeking to implement the recommendatio ns and rulings of the DSB bears the overall 
burden of proving that the period of time requ ested for implementation constitutes a "reasonable 
                                               
14 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.5; 
China – GOES (Article 21.3(c)) , para. 3.4; US – COOL (Article 21.3(c)) , para. 30; and US – Offset Act 
(Byrd Amendment) (Article 21.3(c)) , para. 64. 
15 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.3; 
China – GOES (Article 21.3(c)) , para. 3.4; and Brazil – Retreaded Tyre s (Article 21.3(c)) , para. 48. 
16 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.3; 
US – COOL (Article 21.3(c)) , para. 69; and EC – Export Subsidies on  Sugar (Article 21.3(c)) , para. 69. 
17 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.3; 
US – COOL (Article 21.3(c)) , para. 69; and Japan – DRAMs (Korea) (Article 21.3(c)) , para. 27. 
18 Awards of the Arbitrators, US – Countervailing Measures  (China) (Article 21.3(c)) , para. 3.3; 
China – GOES (Article 21.3(c)) , para. 3.2; Colombia – Ports of Entry (Article 21.3(c)) , para. 64. 
19 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.3; 
China – GOES (Article 21.3(c)) , para. 3.2; and EC – Export Subsidies on Sugar (Article 21.3(c)) , para. 69. 
20 If this question is raised, it can only be addres sed in proceedings under Ar ticle 21.5 of the DSU. (See 
Awards of the Arbitrators, US – Countervailing Measures  (China) (Article 21.3(c)) , para. 3.4; China – GOES 
(Article 21.3(c)) , para. 3.2; and Colombia – Ports of Entry (Article 21.3(c)) , para. 77) 
21 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.4; and 
China – GOES (Article 21.3(c)) , para. 3.2. 
22 See Awards of the Arbitrators, US – Stainless Steel (Mexico) (Article 21.3(c)) , para. 41; and 
Brazil – Retreaded Tyres (Article 21.3(c)) , para. 47. 
23 See Awards of the Arbitrators, US – Stainless Steel (Mexico) (Article 21.3(c)) , para. 41; 
Brazil – Retreaded Tyres (Article 21.3(c)) , para. 47; Japan – DRAMs (Korea) (Article 21.3(c)) , para. 26; and 
US – COOL  (Article 21.3(c)) , paras. 68-69. 
24 See Award of the Arbitrator, US – COOL (Article 21.3(c)) , para. 71. WT/DS457/15 
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  period of time".25 In fact, the longer the proposed period  of implementation is, the greater this 
burden will be.26 
3.9.  In response to questioning at the hearing in this arbitration, both Guatemala and Peru agreed 
that the principles set out above are relevant for the determination of the reasonable period of 
time for implementation in this dispute. 
3.2  Measure to be brought into conformity 
3.10.  According to the findings of the Panel and the Appellate Body, Peru maintains a PRS that 
may result in the imposition of additional duties  or rebates on certain types of imported rice, 
sugar, maize and milk.27 Peru applies the PRS in addition to the tariffs that, pursuant to Article II:1 
of the GATT 1994, Peru has bound at 68% ad valorem  for the products subject to the PRS.28 
3.11.  The PRS operates on the basis of the differenc e between (i) a floor price and a ceiling price 
and (ii) a reference price.29 The PRS imposes an additional duty on the transaction value of 
imports when the reference price is below the floor price.30 The amount of the additional duty is 
based on the difference between the floor price and the reference price.31 The additional duties 
resulting from the PRS plus Peru's ad valorem  duties may not exceed Peru's bound tariff rate.32 
The PRS also provides for tariff rebates when the reference price is higher than the ceiling price.33 
A detailed description of the Panel's understanding of the scope and content of the PRS is set forth 
in the Panel Report.34 
3.12.  In the dispute underlying this arbitration, the Appellate Body found that "the measure 
[brought by Guatemala] before the Panel comprised both the additional duties resulting from the PRS and the PRS calculation methodology".
35 In their reports, the Panel and the Appellate Body 
referred to the measure at issue as, respectively, "the duties resulting from the PRS"36, and the 
"additional duties resulting from the PRS" or the "additional duties".37 
3.13.  With regard to the findings and conclusions relevant to this arbitration, the Panel concluded 
that: 
a. the duties resulting from the PRS constitute variable import levies or, at the least, share 
sufficient characteristics with variable import levies to be considered a border measure 
similar to a variable import levy, within th e meaning of footnote 1 to the Agreement on 
Agriculture38; 
b. by maintaining measures which constitute a variable import levy or, at the least, are 
border measures similar to a variable import levy, and are thus measures of the kind 
which have been required to be converted into ordinary customs duties, Peru is acting 
                                               
25 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.6; 
China – GOES (Article 21.3(c)) , para. 3.5; and Canada – Pharmaceutical Patents (Article 21.3(c)) , para. 47. 
26 See Awards of the Arbitrators, China – GOES (Article 21.3(c)) , para. 3.5; and Canada –
 Pharmaceutical Patents (Article 21.3(c)) , para. 47. 
27 Appellate Body Report, para. 5.1; Panel Report, para. 7.115. 
28 Appellate Body Report, para. 5.1; Panel Report, para. 7.166. With the exception of three tariff lines 
for maize, to which an ad valorem  tariff of 6% is applied, Peru applies no ad valorem  tariffs to products subject 
to the PRS. (Panel Report, para. 7.167 and fn 231 to para. 7.145) 
29 The floor and ceiling prices are, respectively, averages of international prices in a specified 
international market over a recent pa st period of 60 months. The reference price is an average of international 
price quotations in the same international market over a recent past period of two weeks. (Appellate Body 
Report, para. 5.1; Panel Report, paras. 7.130-7.133 and 7.136-7.137) 
30 Appellate Body Report, para. 5.2; Panel Report, para. 7.140. 
31 Appellate Body Report, para. 5.2; Panel Report, paras. 7.140-7.141. 
32 Appellate Body Report, para. 5.2; Panel Report, para. 7.142. 
33 The tariff rebate may not exceed "the sum payable by the importer as the ad valorem  duty and 
additional tariff surcharge corresponding to each pr oduct". (Appellate Body Report, fn 34 to para. 5.2; 
Panel Report, paras. 7.143 and 7.145) 
34 See Panel Report, paras. 7.97-7.167. 
35 Appellate Body Report, para . 5.4. (footnote omitted) 
36 Panel Report, para. 2.2. 
37 Appellate Body Report, para. 5.4. 
38 Panel Report, para. 8.1.b. WT/DS457/15 
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  inconsistently with its obligations under Article 4.2 of the Agreement on Agriculture39; 
and 
c. moreover, the additional duties resulting from the PRS constitute "other duties or 
charges … imposed on or in connection with the importation", within the meaning of the 
second sentence of Article II:1(b) of the GATT 1994. In applying measures which 
constitute "other duties or charges", without having recorded them in its Schedule of Concessions, Peru's actions are inconsistent with its obligations under the second 
sentence of Article II:1(b) of the GATT 1994.
40 
3.14.  With regard to the findings and conclusions relevant to this arbitration, the Appellate Body 
upheld: 
a. the Panel's findings, in paragraph 8.1.b of the Panel Report, that the additional duties 
resulting from the PRS constitute "variable import levies" within the meaning of 
footnote 1 of the Agreement on Agriculture, and in paragraph 8.1.d of the Panel Report, 
that, by maintaining a measure that constitutes a "variable import levy", Peru acts 
inconsistently with its obligations under Article 4.2 of the Agreement on Agriculture41; 
and 
b. the Panel's findings, in paragraph 8.1.e of the Panel Report, that the additional duties 
resulting from the PRS constitute "other duties or charges … imposed on or in connection 
with the importation", within the meaning of th e second sentence of Article II:1(b) of the 
GATT 1994, and that, by applying such measure without having recorded it in its Schedule of Concessions, Peru acts inconsistently with its obligations under the second 
sentence of Article II:1(b) of the GATT 1994.
42 
3.15.  In the course of the hearing, Peru and Guat emala confirmed that implementation by Peru 
must focus on complying with the findings and conclusions referred to above. 
3.16.  The Panel and the Appellate Body recommended that the DSB request Peru to bring its 
measure into conformity with its obligations under the Agreement on Agriculture and the GATT 1994.
43 
3.3  Factors affecting the determination of  the reasonable period of time 
3.17.  Peru contends that the reasonable period of time for implementing the DSB's 
recommendations and rulings in this dispute must be at least 19 months. Peru asserts that this is the most appropriate period of time within which it can bring its measure into conformity with the 
recommendations and rulings of the DSB, taking into account the procedural steps provided for in 
Peru's domestic regulatory framework, the fores eeable impact of the El Niño phenomenon on the 
process of implementation, and the complexity of the PRS and its role in Peruvian tariff policy.
44 
3.18.  In response, Guatemala argues that the reasonable period of time for implementing the 
recommendations and rulings of the DSB in this dispute should be five months. Guatemala maintains that this length of time is sufficient and reasonable since it is in conformity with the 
applicable Peruvian regulatory framework. In addition, Guatemala considers that the El Niño 
phenomenon is not a valid consideration for extending the reasonable period of time, and that the PRS is not a complex measure or an essential component of Peru's tariff policy. Nevertheless, Guatemala notes that it would not object to a reason able period of time of six months if I were to 
decide to consider other factors in determining the reasonable period of time.
45 
3.19.  In this section, I will first address the means of implementation in this dispute, before 
considering the steps in the implementation process specific to this arbitration. Finally, I will 
                                               
39 Panel Report, para. 8.1.d. 
40 Panel Report, para. 8.1.e. 
41 Appellate Body Report, para. 6.6.a. 
42 Appellate Body Report, para. 6.6.b. 
43 Panel Report, para. 8.8; Appe llate Body Report, para. 6.8. 
44 Peru's submission, pa ras. 3, 9, and 36. 
45 Guatemala's submission, paras. 1.4, 4.50-4.51, and 4.66-4.67. WT/DS457/15 
- 11 - 
  examine the arguments of the parties with respect to the factors and particular circumstances 
affecting the determination of the reasonable period of time. 
3.3.1  Means of implementation 
3.20.  Peru asserts that, according to the Political Constitution of Peru, the President of the 
Republic regulates customs duties by Supreme De cree. According to Peru, Supreme Decrees "are 
laws of general application issued by the President of the Republic, which govern rules with the status of law or regulate functional sectoral or multisectoral activity at the national level".
46 
Consequently, the means of implementation chosen by Peru is the modification of the 
WTO-inconsistent measure by Supreme Decree. Guatemala and Peru disagree as to the procedures and periods of time provided for in Peru's legal system. I shall examine those 
procedures and periods of time below. 
3.3.2  Stages in the implementation process 
3.21.  The relevant implementation procedure for this ar bitration, as outlined by Peru, consists of 
the following six steps: (i) the process of consultations; (ii) the definition of the implementation 
measure; (iii) the preparation of the draft Suprem e Decree; (iv) the approval of the draft by the 
Vice-Ministerial Coordination Commission (CCV); (v) the approval of the draft by the Council of 
Ministers; and (vi) the endorsement of the draft by  the Minister of Agriculture and Irrigation, the 
signing of the draft by the Minister of Economy and Finance, and the publication and entry into 
force of the Supreme Decree. In its written submissi on and during the hearing, Peru identified the 
periods of time for completing each step, and stated that the periods necessary for preparing 
Supreme Decrees may be longer or shorter, depe nding on the complexity of the subject to be 
regulated through such Supreme Decrees.
47 
3.22.  With respect to the first step, Peru indicates that a consultations process will be conducted 
between the competent ministries and the sectors of production covered by the PRS in order to 
discuss the means of implementation and the ways of addressing the impact of implementation.48 
Peru states that the consultations process will take approximately 60 to 70 days.49 
3.23.  As regards the second step, Peru indicates that the definition of the implementation 
measure requires coordination between the Minist ry of Economy and Finance, the Ministry of 
Agriculture and Irrigation, the Ministry of Foreig n Affairs, and the Ministry of Foreign Trade and 
Tourism.50 Work on the definition of the measure is carried out at a technical preparatory meeting 
held by the Directorate-General of International Economic Affairs, Competition and Productivity 
(DGAEICYP)51 of the Ministry of Economy and Finance, in order to prepare a summary of the 
problem that a possible rule is meant to remedy, and to draft a preliminary analysis of the problem to be regulated.
52 According to Peru, and in accordance with the Economic and Legal Analysis 
Manual, the maximum period of time for this  preparatory meeting will be six months.53 In parallel 
with the definition of the implementation meas ure, programmes would be established to enable 
the sectors of production affected to cope with the impact of implementation and accept the 
modification of the PRS.54 According to Peru, the design of these programmes will take six to 
nine months, on average.55 
                                               
46 Peru's submission, para. 22. See ibid., para. 23; an d Peru's response to ques tioning at the hearing. 
47 See Peru's submission, paras. 17, 29, 40, 45, 54, 62, 67, and 69-71; Peru's response to questioning 
at the hearing. 
48 See Peru's submission, paras.  37 and 38; Peru's response to  questioning at the hearing. 
49 Peru's submission, para. 40; Peru's re sponse to questioning at the hearing. 
50 Peru's submission, paras. 41-42. 
51 With regard to measures within the purview of th e Ministry of Economy and Finance, Peru clarified 
that two entities shall participate at this stage: th e DGAEICYP and the administ rative body possessing the 
substantive expertise (the Área Sustantiva ) that would be responsible for preparing the draft regulatory 
instrument and its regulatory im pact report. However, accordin g to Peru, in this case, the Área Sustantiva  is 
the DGAEICYP itself. (Peru's submission, para. 45) 
52 Peru's submission, paras.  43-46; Manual for economic  and legal analysis of normative output in the 
Ministry of Economy and Finance of  Peru (Economic and Legal Analysis  Manual) (Exhibit PER-9), p. 10. 
53 Peru's submission, para. 45; Economic and Le gal Analysis Manual (Exhibit PER-9), p. 10. 
54 Peru's submission, paras. 47 and 49. 
55 Peru's submission, para. 48. WT/DS457/15 
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  3.24.  With regard to the third step, Peru points out that the competent ministries prepare the 
draft Supreme Decree which will contain the descripti on of the measure and the justification of the 
need for its implementation.56 In this case, the draft Supreme Decree will be referred for approval 
to the Ministry of Agriculture and Irrigation.57 According to the Economic and Legal Analysis 
Manual, the DGAEICYP must conduct a prior assessment of the economic impact of the regulatory 
draft.58 Peru maintains that the process of preparing the draft may take 30 to 45 days.59 
3.25.  With respect to the fourth step, Peru indicates that, inasmuch as it involves more than one 
sector, the draft Supreme Decree must be approved by the CCV.60 Within the CCV, the 
Vice-Ministries of the Executive Branch have the op tion of determining the viability of the draft, 
and of making observations or comments thereon.61 Peru states that the period of time for this 
step may be 14 to 30 days under normal conditions, depending on the observations submitted and 
the time it takes to respond to them.62 
3.26.  Regarding the fifth step, Peru indicates that the draft is placed on the agenda of the Council 
of Ministers, which must approve the draft or re turn it for any further amendment. According to 
Peru, such approval, in normal circumstances, may take between 7 and 14 days on average.63 
3.27.  With respect to the sixth step, Peru states that the draft is endorsed by the Minister of 
Agriculture and Irrigation and signed by the Minister of Economy and Finance, for subsequent 
publication in the Official Journal El Peruano  and entry into force the following day.64 According to 
Peru, endorsement may, in normal circumstances, take about 7 days.65 
3.3.3  Legal analysis 
3.28.  Article 21.1 of the DSU provides that "[p]rompt compliance with recommendations or rulings 
of the DSB is essential in order to ensure effect ive resolution of disputes to the benefit of all 
Members". In addition, the second clause of Article 21.3 stipulates that a reasonable period of time 
shall be available for implementation only "[i]f it is impracticable to comply immediately with the 
recommendations and rulings [of the DSB]". The provisions of Article 21 are clear: the primary 
obligation of the Member is to comply immediately , and only if such immediate compliance is 
impracticable will a "reasonable period of time" be granted.66 Therefore, I must consider the 
determination of the reasonable period of time in  the light of the primary obligation to comply 
immediately with the recommendat ions and rulings of the DSB. 
3.29.  The obligation to implement the recommendations  and rulings of the DSB arises with the 
adoption of the relevant panel or Appellate Body reports.67 Once the DSB adopts the relevant 
reports, any inaction or dilatory conduct by a Member would exacerbate the nullification or 
impairment of the rights of other Members caused by the inconsistent measure.68 Therefore, I 
consider that the Member must act immediately and as expeditiously as possible to fulfil its 
obligation to bring the offending measure into conformity. 
                                               
56 Peru's submission, para. 55. 
57 Peru's submission, para. 57. 
58 Peru's submission, paras. 59-60. 
59 Peru's submission, para. 62. 
60 Peru's submission, para. 63. 
61 Peru's submission, para. 67. 
62 Peru's submission, para. 67. 
63 Peru's submission, paras. 68-69. 
64 Peru's submission, para. 70. 
65 Peru's submission, para. 70. 
66 See Awards of the Arbitrators, Chile – Price Band System (Article 21.3(c)) , para. 33; 
Canada – Pharmaceutical Patents (Article 21.3(c)) , para. 45; Australia – Salmon (Article 21.3(c)) , para. 30; 
and US – Hot-Rolled Steel (Article 21.3(c)) , para. 25. 
67 Awards of the Arbitrators, China – GOES (Article 21.3(c)) , para. 3.30; Chile – Price Band System 
(Article 21.3(c)) , para. 43. I also observe that Article 21.3(c) of the DSU clearly indicates that the "reasonable 
period of time" for implementation is calculated from "the  date of adoption of a panel or Appellate Body report" 
by the DSB.  
68 Award of the Arbitrator, Chile – Price Band System (Article 21.3(c)) , para. 43. Similarly, in previous 
arbitrations it has been stated that the implementing Member "must use the time after adoption of a panel 
and/or Appellate Body report to begin to implement th e recommendations and rulings of the DSB". (Awards of 
the Arbitrators, US – COOL (Article 21.3(c)) , para. 84; US – Section 110 (5) Copyright Act (Article 21.3(c)) , 
para 46) WT/DS457/15 
- 13 - 
  3.30.  In an arbitration under Article 21.3(c) of the DSU, an arbitrator cannot accept the continued 
exposure of the complaining party to the negative consequences of the maintenance of a measure declared inconsistent in the reports adopted by the DSB for any further period of time that is not strictly necessary within the legal system of the defending party, in order for the latter to bring its 
measure into conformity with WTO rules. Consequently, as stated previously, I agree that the 
reasonable period of time for implementation, in cases where it is impracticable to comply "immediately", must be the shortest period possible  as provided in the legal system of the Member 
that is to implement the recommendations and rulings of the DSB
69, taking into account the 
"particular circumstances" of a dispute.70 
3.31.  I now turn to examine the points of disagr eement between Peru and Guatemala concerning 
the six steps identified by Peru for the drafti ng and enactment of supreme decrees in normal 
circumstances.71 The aim of this analysis is to identify  the necessary steps for implementation by 
Peru, and to identify the customary periods of time  under Peruvian legislation. I will then examine 
the particular circumstances affecting the determination of the reasonable period of time. 
3.32.  With respect to the first step – that is, the process of consultations between the competent 
ministries and sectors of production covered by th e PRS – Peru confirms that, although there is no 
legal provision establishing the obligation to conduct such consultations, they have become a 
practice for maintaining a dialogue with the sectors of production affected by regulatory changes.72 
Guatemala, for its part, maintains that consultations do not constitute a mandatory step under Peru's internal regulations, for which reason they should not be taken into account in order to determine the reasonable period of time.
73 However, the absence of an explicit obligation under 
Peru's legal system to undertake consultations between the competent ministries and the relevant 
sectors of production is not necessarily sufficient, in itself, to rule out the relevance of such consultations in determining the reasonable period of time for implementation. In the course of the 
hearing, Peru added that consultations between competent ministries and the relevant sectors of 
production constitute a current practice within Peru's legal system.
74 I consider that the standard 
practices that form part of the process of drafting  laws and regulations within Peru's legal system, 
although they are not strictly mandatory, may, in certain cases, be relevant for the determination 
of the reasonable period of time.75 Therefore, I shall now turn to consider the relevance of 
consultations in determining the reasonable period of time for implementation in this arbitration. 
3.33.  Peru maintains that the consultations process, in the first step, serves three objectives: 
(i) to inform the sectors of production that implementation derives from the mandate of an 
international organization; (ii) to discuss the means of implementation with the sectors of production; and (iii) to establish support programmes in order to improve competitiveness and 
productivity in those sectors and to address the impact of implementation.
76 Guatemala, for its 
part, contends that the consultations do not constitute a necessary step for implementation.77 As 
has been observed in previous arbitrations, when a measure has been found inconsistent with a 
M e m b e r ' s  o b l i g a t i o n s ,  s o m e  d e g r e e  o f  a d j u s t m e n t  w i l l  f r e q u e n t l y  b e  n e c e s s a r y  i n  t h e  d o m e s t i c  
industry of the Member in question. However, structural adjustments to take account of the withdrawal or modification of an inconsistent measure, including support programmes for the affected sectors of production, can under no circumstances be relevant to the determination of the 
reasonable period of time for implementation.
78 I agree with previous awards, where it has been 
                                               
69 Awards of the Arbitrators, US – Countervailing Measures  (China) (Article 21.3(c)) , para. 3.5; 
China – GOES (Article 21.3(c)) , para. 3.3; EC – Hormones (Article 21.3(c)) , para. 26. 
70 See Awards of the Arbitrators, US – Countervailing Measures (China) (Article 21.3(c)) , para. 3.5; and 
China – GOES (Article 21.3(c)) , para. 3.3. 
71 See paras. 3.21-3.27 of this Award. 
72 Peru's response to ques tioning at the hearing. 
73 In particular, Guatemala refers to the Economic and Legal Analysis Manual, which, according to 
Guatemala, does not envisage that consultations would be  held either to achieve the objectives mentioned by 
Peru or as a separate and distinct step prior to the definition of th e measure. (Guatemala's submission, 
para. 4.23; Guatemala's response to questioning at the hearing) 
74 Peru's response to ques tioning at the hearing. 
75 See Awards of the Arbitrators, Chile – Price Band System (Article 21.3(c)) , para. 42; and 
EC – Chicken Cuts (Article 21.3(c)) , para. 79. 
76 Peru's submission, para. 37; Peru's re sponse to questioning at the hearing. 
77 See Guatemala's submission, paras. 4.14 and 4.16. 
78 See Awards of the Arbitrators, Indonesia – Autos (Article 21.3(c)) , para. 23; Argentina – Hides and 
Leather (Article 21.3(c)) , para. 41; and Canada – Pharmaceutical Patents (Article 21.3(c)) , para. 52. See also WT/DS457/15 
- 14 - 
  indicated that the domestic "contentiousness" of an implementation measure also does not serve 
as a basis for granting longer implementation periods.79 In fact, in my opinion, any consideration 
of the domestic effect or "contentiousness" that  might be generated by the implementation of a 
measure would also necessarily lead to the consideration of the domestic effect produced by the 
failure to implement a WTO-inconsistent measure in the complaining Member. 
3.34.  In addition, at the hearing, Peru explaine d that the support programmes in question, 
addressed during the first step, are the same support programmes that are included in the second 
step. As I indicated above, the second step includes two activities that are developed in parallel: 
(i) the definition of the implementation meas ure, and (ii) the establishment of programmes 
enabling the affected sectors of production to co pe with the impact of implementation and to 
accept modification of the PRS.80 Thus, in relation to the second step, Peru expressly accepted that 
the establishment of support programmes may take place in parallel to the definition of the 
implementation measure.81 
3.35.  For the foregoing reasons, I do not consider the framing and establishment of support 
programmes to be relevant for the establishment of a reasonable period of time. These are actions 
unrelated to the implementation of an inconsiste nt measure. In any event, I observe that such 
consultations and actions could take place parallel to the implementation process.82 
3.36.  In the light of the foregoing, I consider that the first step and the part of the second step 
related to the support programmes in question are not relevant to the determination of the reasonable period of time for implementation. 
3.37.  With regard to the period of time for the part of  the second step that relates to the definition 
of the implementation measure, Peru points out that, according to the Economic and Legal 
Analysis Manual, the maximum period of ti me for this step will be six months.
83 Guatemala argues 
that this step can be carried out within a maximum period of three months in view of the clarity of 
Peru's obligations to implement the recommendations  and rulings of the DSB – that is, that Peru 
should stop collecting the additional duty resulting from the PRS.84 As was noted above, although 
Peru has the overall burden of proving that th e period of time requested for implementation 
constitutes a "reasonable period of time", Guat emala may submit evidence in support of its 
assertion that the period of time requested by Peru  is not "reasonable" and that a shorter period of 
time is justified for implementation.85 However, Guatemala did not duly substantiate how it arrived 
at the maximum period of three months that it proposed for this step. Therefore, I consider only 
the period of six months, as provided for in Peru's legal system, as the maximum period of time 
for the part of the second step that relates to the definition of the implementation measure. 
3.38.  With regard to the third, fourth, fifth, and sixt h steps, Peru indicates that the total period of 
time for these steps may be 58 to 96 days "under normal conditions".86 Guatemala does not 
question the relevance of these steps for the im plementation of the measure or the minimum or 
maximum time-frames for the periods described by Peru. Its argument is that, in determining the 
reasonable period of time, the defending party must take full advantage of the flexibility offered by 
                                                                                                                                               
Awards of the Arbitrators, Japan – Alcoholic Beverages II (Article 21.3(c)) , paras. 19 and 27; and EC – Tariff 
Preferences (Article 21.3(c)) , para. 31. 
79 See Awards of the Arbitrators, Chile – Price Band System (Article 21.3(c)) , para. 47; 
Canada – Protection Te rm (Article 21.3(c)) , para. 58; US – Section 110(5) Copyright Act (Article 21.3(c)) , 
para. 42; and Canada – Pharmaceutical Patents (Article 21.3(c)) , para. 60. 
80 See para. 3.23 of this Award. 
81 Peru's submission, para. 47; Peru's re sponse to questioning at the hearing. 
82 See Guatemala's submission, paras. 4.20 and 4.31-4. 33; Guatemala's response to questioning at the 
hearing. 
83 Peru's submission, para. 45; Economic and Le gal Analysis Manual (Exhibit PER-9), page 10. 
84 Guatemala's submission, paras. 4.35-4.36. Guat emala also contends that, as the substantive 
department is the DGAEICYP itself in this case, and th e DGAEICYP does not need to coordinate with another 
department within its Ministry, th e preparation of the draft Supreme Decree should be "more agile than 
normal". (Ibid., para. 4.29) Guatemala also indicates that the Government of Peru has the capacity to issue a 
Supreme Decree more promptly than is suggested by Peru in its written submission. According to Guatemala, 
Peru enacted Supreme Decree No. 121-2006-EF on 20 July 2006, less than 30 days after the previous 
Supreme Decree issued in relation to the PRS. In  Supreme Decree No. 121-2006-EF, Peru modified the 
"marker product" for sugar and created a new Customs Ta ble for the same product. (Ibid., paras. 4.39-4.41) 
85 See para. 3.8 of this Award. 
86 See paras. 3.24-3.27 of this Award. WT/DS457/15 
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  its legal system to reduce that period to the greatest extent possible. Accordingly, Guatemala 
considers that, with respect to these steps, I must consider the minimum periods of time indicated by Peru.
87 
3.39.  In this connection, I agree with Guatemala's reasoning. In my opinion, a Member must 
undertake all available efforts, within the flexibility offered by its legal system, to implement, as 
expeditiously as possible, the recommendations  and rulings of the DSB and to bring into 
conformity a measure that has been declared inco nsistent with WTO rules. Expeditious compliance 
with the recommendations and rulings of the DSB is essential to the proper functioning of the WTO 
dispute settlement mechanism. Consequently, for the purpose of calculating the "reasonable period of time" within the meaning of Article 21.3(c), I will take the shortest possible period of time as the baseline, that is, the minimum  periods indicated by Peru in relation to the third, fourth 
and fifth steps, in addition to th e single period indicated by Peru in relation to the sixth step. 
3.40.  During the hearing, Peru argued that the periods of time may also vary in accordance with 
the nature of the implementation measure. In my opinion, it is clear that, to the extent that I have 
more information regarding the way in which the inconsistent measure is to be implemented, this 
could facilitate my consideration of other elements that might justify a longer period of time. However, Peru did not provide detailed or specific information concerning the implementation 
measure. As I do not have that information, it is impossible for me to assess precisely the impact, 
within the Peruvian legal system, on the periods of time established for each step of the implementation measure. 
3.41.  In the light of the foregoing, I consider that, in accordance with the regular periods of time 
provided for in the Peruvian legal system, and taking into account Peru's obligation to bring its 
measure into conformity as quickly as possible, Peru  is able to draft and enact a supreme decree in 
a shorter period of time than the period it proposes. 
3.42.  I shall examine below the particular circumstances, as identified by Peru, which may affect 
the determination of the reasonable period of time. First, I shall review the legal provisions of Article 21 of the DSU concerning the status of developing country Members. I shall go on to 
address the relevance of the El Niño phenomenon to  the determination of the reasonable period of 
time. Lastly, I shall address the role of the PRS within Peru's tariff policy. 
3.43.  It should be pointed out that, in previous arbitrations, arbitrators have been mindful of 
Article 21.2 of the DSU, which provides that "[p]articular attention should be paid to matters 
affecting the interests of developing country Memb ers with respect to measures which have been 
subject to dispute settlement." Regarding this pr ovision, I fully agree with the arbitrators who 
have maintained that, in determining the reasonable period of time, particular attention should be 
paid to "'matters affecting the interests' of both an implementing  and a complaining  developing 
country Member or Members".
88 For this reason, I consider that "in a situation where both the 
implementing and the complaining Member are deve loping countries, the requirement provided in 
Article 21.2 is of little relevance, except if one party succeeds in demonstrating that it is more 
severely affected by problems related to its developing country status than the other party."89 
Throughout the proceedings in this arbitration, I have been mindful of the interests of both Peru, which is participating as a developing country Member required to bring an inconsistent measure 
into conformity, and Guatemala, which is participating as a complaining developing country 
Member. However, I do not consider that either Peru or Guatemala has demonstrated that its developing country status should be a factor to be considered in the final determination of the 
reasonable period of time in this arbitration.
90 Consequently, I consider that the developing 
country status of the two parties does not, in this  arbitration, constitute an element of analysis 
relevant for determining the "reasonable period of time". 
                                               
87 Guatemala's submission, para. 4.43. 
88 Awards of the Arbitrators, US – COOL (Article 21.3(c)) , para. 71; EC – Export Subsidies on Sugar 
(Article 21.3(c)) , para. 99. (emphasis original) 
89 Award of the Arbitrator, Colombia – Ports of Entry (Article 21.3(c)) , para. 106. 
90 See Award of the Arbitrator, Chile – Alcoholic Beverages (Article 21.3(c)) , para. 44. In that arbitration 
award, it was noted that Chile, the respondent deve loping country Member, was "not … very specific or 
concrete about its particular interests as a developi ng country Member nor about how those interests would 
actually bear upon the length of the 'reasonabl e period of time' to en act necessary amendatory 
legislation". (Ibid.) WT/DS457/15 
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  3.44.  With regard to the 2015-2016 El Niño phenomenon , Peru contends that the implications of 
this natural phenomenon have an impact on the di fferent steps of the regulatory process in Peru.91 
Peru foresees a severe future impact on the main agricultural crops of the country from the El Niño phenomenon, generating losses and harm to li fe, health and means of subsistence of the 
population, in addition to public and private infrastructure.
92 Guatemala, for its part, argues that 
the El Niño phenomenon is not a circumstance justif ying extension of the reasonable period of time 
beyond the minimum period permitted under the Peruvian legal system.93 Guatemala claims that 
the likelihood of natural disasters occurring is an extra-legal factor which cannot be taken into 
consideration in determining the reasonable period of time.94 According to Guatemala, the 
prioritization of a particular matter of State over others is not a legal criterion to be examined by an arbitrator in connection with a measure for the implementation of the recommendations and 
rulings of the DSB.
95 
3.45.  I do not, in principle, rule out the possibility that a natural disaster may constitute a 
"particular circumstance" and, hence, an element to be considered in the determination of the 
reasonable period of time. The prevention of natu ral disasters, such as those which could result 
from the El Niño phenomenon, and the mitigation of their effects may clearly affect the regulatory or legislative capacity of a Member to implement the recommendations and rulings of the DSB. In 
my opinion, the relevant issue in this arbitration is how and to what extent Peru's activities to 
address and mitigate the effects of the El Niño phenomenon affect the period of time for implementing the DSB's recommendations and rulings. 
3.46.  Peru has declared a State of Emergency in 14 of the country's 24 departments.
96 Under the 
State of Emergency and the Emergency Decree that was issued, priority has been given to the 
human and financial resources of the Peruvian Ministries to cope with the impact of the El Niño phenomenon.
97 In this connection, Peru argues that it is reasonable to expect that it will take a 
longer period of time to fulfil the regulatory f unctions of the Ministries concerned. According to 
Peru, although the Emergency Decree contains no provision modifying the procedure for the drafting and enactment of supreme decrees or the specific periods of time for that procedure
98, the 
Emergency Decree and the State of Emergency take precedence over the administrative process 
required by law for the implementation of the recommendations and rulings of the DSB.99 For this 
reason, Peru requests that I grant an additional period of seven and a half months in my determination of the reasonable period of time.
100 Guatemala, for its part, maintains that Peru's 
administrative and regulatory activities follow their normal course and that, since the date of the 
Emergency Decree, the Ministry of Economy and Fina nce, the Ministry of Agriculture and Irrigation, 
the Ministry of Foreign Affairs and the Ministry of Foreign Trade and Tourism have continued 
issuing and modifying rules of all kinds, including rules of general application.101 
3.47.  I consider that Peru has not sufficiently demonstrated that actions for the prevention of the 
negative consequences or the mitigation of the effects of the El Niño phenomenon have specific 
implications for its regulatory capacity to implement the DSB's recommendations and rulings.102 As 
                                               
91 Peru's submission, para. 54. 
92 Peru's submission, para. 18. 
93 Guatemala's submission, para. 4.30. 
94 See Guatemala's submission, para. 4.74. 
95 Guatemala's submission, para. 4.91. 
96 See Peru's submission, para . 18; Supreme Decree No. 045-2015-PCM (Exhibit PER-3); and 
Emergency Decree No. 004-2015 (Exhibit PER-6). 
97 Peru's submission, paras. 19 and 52. 
98 See section 3.3.2 of this Award. 
99 Peru's submission, paras. 18-19; Peru's response to questioning at the hearing. 
100 I understand that Peru re quested an additional four and a half months because it is concentrating its 
financial and human capital on implementation measures to mitigate the impact of the El Niño phenomenon, in order to undertake the subsequent process of reconstructi on, and on account of the seriousness of the El Niño 
phenomenon and the state of emergency. In addition, Pe ru requested three additional months over and above 
the maximum period of six months prescribed for step 2 – that is, definition of the measure – in the light of the 
El Niño phenomenon. As a result, I understand that Peru  has requested seven and a ha lf additional months in 
relation to the El Niño phenomenon. (Peru's submission, paras. 54 and 71) 
101 See Guatemala's submission, paras. 4.79-4.81, 4.83,  4.84, and 4.86-4.89; and rules issued by: the 
Ministry of Economy and Finance (Exhibit GTM-61 ); the Ministry of Agriculture and Irrigation 
(Exhibit GTM-62); the Ministry of Foreign Affairs (Exh ibit GTM-63); and the Minist ry of Foreign Trade and 
Tourism (Exhibit GTM-64). 
102 Guatemala's submission, para. 4.75. WT/DS457/15 
- 17 - 
  noted above, Peru bears the overall burden of proving that the period of time requested for 
implementation constitutes a "reasonable period of time".103 In the course of the hearing, Peru did 
not demonstrate or, at least, explain how it arrived at the calculation of the additional period of time said to derive from the actions of prevention or mitigation in relation to the El Niño 
phenomenon. Nor did Peru indicate, in relation to each of the steps in the procedure for drafting 
and enacting a supreme decree, how and for what reas ons the period of time for each step of this 
procedure would be lengthened in the light of the El Niño phenomenon. Given that Peru has not 
sufficiently demonstrated the impact that the El Niño phenomenon will have on its regulatory 
capacity to implement the recommendations and rulings of the DSB, I find it impossible to 
examine how and to what extent Peru's activities relating to the El Niño phenomenon affect the period of time for implementation. 
3.48.  With regard to the function of the PRS, Peru argues that the PRS is an essential element in 
Peru's tariff and economic policy. Peru argues that the PRS has formed part of its national programme of liberalization, including trade liberalization, and macroeconomic reforms for more 
than a decade.
104 Peru also points out that the specific du ties resulting from implementation of the 
PRS have been an important part of its tariff policy and an essential part of the measures necessary to transform its economy.
105 Peru suggests that the PRS has a regulatory position for 
the determination of domestic prices, which must be considered to be part of the particular 
circumstances in this arbitration.106 
3.49.  On the other hand, Guatemala argues that the PRS currently performs a limited role in 
Peru's tariff and economic policy.107 Guatemala maintains that Peru has negotiated free trade 
agreements with its trading partners, under which Peru has been prepared to stop applying the 
PRS, provided that it obtains adequate trade benefits.108 Guatemala also claims that the PRS is not 
a complex measure and that the compliance action to be taken by Peru – i.e. cessation of the 
collection of variable additional duties – is not "particularly complicated".109 Guatemala refers to 
certain statistics which, in its opinion, indicate that, for some of the four products covered by the PRS, only a small proportion of imports and an even smaller percentage of domestic consumption 
are covered by the PRS.
110 Finally, Guatemala emphasizes that, during the proceedings before the 
Panel and the Appellate Body, Peru endeavoured to demonstrate that the PRS had no impact on import prices and did not insulate the price on the national market from international price fluctuations.
111 
3.50.  In the proceedings that are the subject of this  arbitration, the Appellate Body pointed out 
that, as the Panel had found, the PRS has an impact on prices in the Peruvian market for the four products covered. In particular, the Appellate  Body observed that, as the Panel had found, the 
use of a floor price updated every six months and the use of a reference price updated every 
two weeks are key elements of a system that is designed to, and indeed does to certain extent, 
"neutralize" or dilute fluctuations in international prices.
112 In addition, referring to the findings of 
the Panel, the Appellate Body pointed out that, in  the short term, the PRS is designed to prevent 
any fall in prices from being transmitted to Peru's domestic market, and that, in the medium term, the PRS may also distort the transmission of international prices to the domestic market.
113 
Despite the fact that the PRS has played a role in regulating prices in the Peruvian market, there is 
no doubt, in my opinion, that Peru has gradually reduced the relevance of the PRS in relation to 
                                               
103 See para. 3.8 of this Award. 
104 See Peru's submission, para. 9. Both in the current pr oceedings and in the pr oceedings before the 
Panel and the Appellate Body, the parties have disagreed about the year in which the PRS was established. Peru maintains that it established a system of specific duties in 1991 and has applied it ever since, and that the PRS is only a revised system. Guatemala rejects this argument and claims that Supreme Decree No. 115-2001-EF (Panel Exhibit GTM-4), in 2001, tacitly repealed the 1991 system of specific duties and established the PRS. (Appellate Body Report, fn 26 to para. 5.1 (referring to Panel Report, para. 7.101)) See Peru's submission, para. 10; and Guatemala's submission, para. 4.63. 
105 Peru's submission, para. 12. 
106 See Peru's submis sion, paras. 12-17. 
107 Guatemala's submission, para. 4.57. 
108 Guatemala's submission, para. 4.52. 
109 Guatemala's submission, para. 4.64. 
110 Guatemala's submission, para. 4.57. 
111 Guatemala's submission, para. 4.61. 
112 Appellate Body Report, para. 5.59 (referri ng to Panel Report, paras. 7.344-7.349). 
113 Appellate Body Report, fn 127 to para. 5.35 (referring to Panel Report, paras. 7.345-7.346). WT/DS457/15 
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  the products covered.114 I consider that Peru has not demonstrated that the PRS currently 
constitutes an essential element of its tariff an d economic policy and, furthermore, how this 
element would affect or influence Peru's regulatory  capacity in a way that would justify a longer 
period of time for implementing the measure at i ssue. In the light of all of the above, I do not 
consider that, as Peru claims, the function and role of the PRS should be taken into account as a 
"particular circumstance" that would affect my de termination of the reasonable period of time. 
3.51.  In conclusion, examining the matter reasonably and fairly, after having reviewed the 
shortest period possible, under Peru's legal system, within which Peru would be expected to 
implement the recommendations and rulings of  the DSB, and evaluating the particular 
circumstances claimed by the parties in this dispute, I do not consider the period of 19 months proposed by Peru to be necessary. I also do not consider that the period of 5 or 6 months 
proposed by Guatemala is a sufficient "reasonable" period of time within which Peru would be able 
to complete implementation as expeditiously as possible. 
4  AWARD 
4.1.  In the light of the foregoing considerations, the "reasonable period of time" for Peru to 
implement the recommendations and rulings of the DSB in this dispute is 7 months and 29 days from 31 July 2015, that is, from the date on wh ich the DSB adopted the Panel and Appellate Body 
Reports in this dispute. Thus, the reasonable period of time will expire on 29 March 2016. 
Signed in the original at Geneva this 11
th day of December 2015 by: 
  
 
________________________ 
Ricardo Ramírez-Hernández 
Arbitrator 
  
_______________ 
  
                                               
114 See Peru's response to Panel question No. 8; Guatemala's submission, paras. 4.52, 4.55, 
and 4.57-4.60. WT/DS457/15 
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  ANNEX A 
EXECUTIVE SUMMARY OF PERU'S SUBMISSION 
1  INTRODUCTION 
1. On 31 August 2015, Peru informed the DSB that it intended to implement the DSB's 
recommendations and rulings in this dispute. Peru explained that it would not be possible to 
comply immediately and that it would need a reasonable period of time to bring its measures into conformity with the WTO Agreements. 
2. Given that the Appellate Body's recommendation concerning the additional duties implies a 
significant change in Peruvian tariff policy, and that "particular circumstances" exist, an implementation period of at least 19 months constitutes a reasonable period of time for the implementation of the DSB's recommendations and rulings. 
2  GENERAL CONSIDERAT IONS REGARDING THE IM PLEMENTATION OF THE 
RECOMMENDATIONS OF THE PANE L AND THE APPELLATE BODY 
2.1  The PRS is an essential element of Peru's economic policy 
3. It is important to emphasize the level of integration of the PRS in Peru's agricultural and 
tariff policies since the creation of this system in 1991. In May 1991, Peru established specific duties under Supreme Decree No. 016-91-AG. During the Uruguay Round, Peru bound its tariffs 
for all products at 30%, with the exception of ri ce, sugar, dairy, maize and wheat – that is, the 
products subject to specific duties in existence since 1991 – which were bound at 68%. 
4. It is not by chance that the measure encompassed the four categories of agricultural 
products that are still included today. These four product categories are very important to Peru, as 
they provide work for a large part of Peruvian soci ety. The integral role of the PRS and the specific 
duties in the Peruvian system is currently very relevant for determining a reasonable period of time in the context of proceedings under Article 21.3(c) of the DSU.
1 
2.2  State of emergency in Peru requirin g the concentration and prioritization of 
resources to address the El Niño phenomenon 
5. Pursuant to a decision taken at the highest political level, the ministries involved in the 
implementation of the recommendations of the Pa nel and the Appellate Body are currently in the 
process of taking measures to prevent and mitigate the El Niño phenomenon. As a consequence, which constitutes unforeseeable circumstances not attributable to the country, the state of emergency will also have a considerable impact  on the process of modifying the measure and 
implementing the recommendations of  the Panel and the Appellate Body. 
2.3  Legal nature of a Supreme Decree 6. Pursuant to Article 11 of Chapter II of the Executive Organic Law – Law No. 29158
2, 
Supreme Decrees are general enactments issued by  the President of the Republic, which govern 
rules with the status of law or regulate functional sectoral or multisectoral activity at national level. Furthermore, pursuant to the Political Constituti on of Peru, customs duties are regulated by the 
President of the Republic by Supreme Decree. 
                                               
1 Award of the Arbitrator, Chile – Price Band System (Article 21.3(c)) , para. 48. 
2 Executive Organic Law No. 29158, PER-7. WT/DS457/15 
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  3  ANALYTICAL FRAMEWORK FOR DETERMINING THE REASONABLE PERIOD OF TIME 
FOR IMPLEMENTATION OF THE APPE LLATE BODY'S RE COMMENDATIONS 
7. Taking into consideration the particular circumstances of the present case, which include the 
nature of the measure as an integral part of the country's economic policy and the current state of 
emergency requiring the prioritization of Government resources, set out below are details of the 
administrative procedure required to implement the recommendations of the Appellate Body and 
the Panel. 
3.1  Consultation process with the production sectors concerned 
8. Given that the implementation of the DSB's recommendations will have a negative impact 
on the staple goods-producing sectors concerned, it is essential to conduct a consultation process. The ministries responsible for formulating relevant programmes assess comments and hold 
coordination meetings to design the programmes concerned. On average, this process can take 
between 15 and 20 days, following which a further meeting is held with the production sectors. The total duration of these consultations is around 60 to 70 days. 
3.2  Definition of the measure 
9. The measure to implement the DSB's recommendations must be defined by the ministries 
responsible for issuing the Supreme Decree. Coordi nated efforts are therefore required, involving 
not only the Ministries of the Economy and Finance (MEF), and of Agriculture and Irrigation, but 
other State sectors. 
10. By Ministerial Resolution No. 639-2006-EF/67,  the MEF approved the "Economic Analysis 
Manual", according to which the determination of a measure requires a preparatory meeting with 
all the units involved in the draft legislation. 
11. To date, despite the efforts made, the competent ministries have been unable to agree on 
any proposed modification of the measure in order to match the DSB's recommendations to the 
PRS. A period of between six and nine months is  therefore envisaged for the completion of this 
stage. 
3.3  Preparation of the draft Supreme Decree 
12. Once the measure has been determined and the consultation process with the sectors 
concerned has been concluded, the competent mini stries formulate the draft Supreme Decree that 
will contain the description of the measure and the justification for its implementation. Under normal circumstances, the process of preparin g and approving the draft measure can take 30 
to 45 calendar days. 
3.4 Vice-Ministerial Coordination Commission 13. Any draft Supreme Decree involving more than one sector must first be approved by the 
Vice-Ministerial Coordination Commission (CCV).  Under normal circumstances, this approval 
process can take between 14 and 30 days, depending on the comments submitted and the time it takes to respond to them. 
3.5  Council of Ministers 
14. Once approved by the CCV, the draft legislatio n is placed on the agenda of the Council of 
Ministers, which must either approve the draft or return it for further amendment. Council of Ministers sessions are convened by the Secretariat of the Council of Ministers and are held on a 
weekly basis. The presence of the head of the pr oposing sector is necessary for the Council to give 
its approval. Under normal circumstances, this approval process can take, on average, between 
7 and 14 days. WT/DS457/15 
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  3.6  Ministerial endorsement, publication and entry into force 
15. Once the draft text has been agreed and approved by the Council of Ministers, it is endorsed 
by the Minister of Agriculture and Irrigation and signed by the Minister of the Economy and 
Finance, for subsequent publication in the Official Journal, El Peruano . Under normal 
circumstances, this endorsement can take around seven days. The Supreme Decree will enter into 
force on the day following its publication, unless otherwise provided. 
4  CONCLUSION 
16. Peru requests the Arbitrator to determine th at the reasonable period of time for the 
implementation of the Appellate Body's ruling be 19 months, starting from the date of approval of 
the report by the DSB and thus ending on 31 October 2016. 
_______________ 
 
  WT/DS457/15 
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  ANNEX B 
EXECUTIVE SUMMARY OF GUATEMALA'S SUBMISSION 
1  INTRODUCTION 
1. The purpose of this arbitration is to determine the reasonable period of time that will be 
granted to Peru to comply with the recomme ndations and rulings adopted by the Dispute 
Settlement Body (DSB). 
2. Peru requests 19 months as a reasonable period of time. The main reasons for this 
excessive length of time are the likely occurrence of the El Niño phenomenon and Peru's decision 
to design production sector support programmes to offset the allegedly negative effects of modifying the PRS. 
3. Guatemala considers five months to be an amply sufficient and perfectly reasonable period 
of time for Peru to implement the DSB's recommendations and rulings, in accordance with its 
domestic legislation. Nevertheless, Guatemala would not object to a time-period of six months, if the Arbitrator were to decide to consider other factors in the determination of the reasonable 
period of time. 
4. In the present case, Peru needs to implemen t the recommendations and rulings of the DSB 
through an administrative act (i.e. a Supreme Decr ee of the President of the Republic, endorsed by 
the Minister of the Economy and Finance and the Mini ster of Agriculture and Irrigation). While Peru 
has the discretion to decide how to implemen t these recommendations and rulings, its sole 
obligation is to stop collecting the additional duties resulting from the PRS. The modification of the PRS and the adoption of production sector support me asures do not, therefore, form part of Peru's 
implementation obligations that would justify extending the reasonable period of time. 
5. Furthermore, while Guatemala regrets Peru's vu lnerability to natural phenomena, Peru has 
not, in this case, demonstrated that the El Niño phenomenon is a consideration that the Arbitrator 
should take into account for extending the reasonable period of time. On the contrary, the 
evidence shows that the Government of Peru continues to carry out its functions as normal and that the uncertain likelihood of the impact of th e El Niño phenomenon has not at all impaired its 
regulatory capacity. 
2  LEGAL STANDARD UNDER ARTICLE 21.3(C) OF THE DSU 6. In the present case, the Arbitrator should consider certain key principles of the case law 
under Article 21.3(c) of the DSU, such as the following: immediate compliance is the rule and the 
reasonable period of time only applies where immediate compliance is "impracticable"; the 
responding Member bears the burden of demonstrating that the reasonable period of time is the shortest period possible; the reasonable period of  time is the shortest period possible within the 
domestic legal system; one of the "particular circ umstances" that should be considered is that 
compliance via administrative means requires less time than compliance via legislative means; the reasonable period of time should only cove r the time required to implement the DSB's 
recommendations and rulings (not to make other changes to legislation); the "contentiousness" or 
"political sensitivity" of the measure to be implemented is not a "particular circumstance[ ]" that is relevant for determining the reasonable period of  time; and the fact that the responding Member 
has not yet commenced implementation of the DSB's recommendations and rulings is a factor that 
the arbitrator should take into account in determining the reasonable period of time. 
3  FIVE MONTHS IS THE SHORTEST PERI OD OF TIME UNDER THE PERUVIAN LEGAL 
FRAMEWORK 
7. The reasonable period of time proposed by Peru  is excessively long, as Peru considers it to 
include the time required for designing, approv ing and implementing production sector support 
measures; Peru also claims that it does not have the human and financial resources necessary to WT/DS457/15 
- 23 - 
  design the implementation measures, since such resources are channelled entirely towards 
addressing the state of emergency related to the El Niño phenomenon. 
8. A time-period of five months is, however, pe rfectly reasonable for the following reasons: 
a. The time required for establishing production sector support measures does not form 
part of the reasonable period of time. Peru's obligation is in fact to stop collecting the 
additional duties resulting from the PRS, an d the support measures are not necessary for 
the implementation of the DSB's rulings and recommendations. 
b. Furthermore, consultations with the production sectors concerned are not required under 
Peruvian legislation. In any event, such consultations may take place in parallel to or as part of the process of designing the me asure, and Guatemala therefore considers 
three months to be amply sufficient. In some cases, the entire process of preparing, 
approving and publishing Supreme Decrees takes no more than 30 days. 
c. Regarding the definition of the measure, the time required for interinstitutional 
coordination may be less than that indicated by Peru; in particular, because instead of 
requiring the coordination of two separate Government units, only one unit is responsible 
for preparing the draft legal instrument. 
d. Guatemala does not dispute the minimum and maximum time-frames for the periods 
described by Peru for the preparation of th e draft Supreme Decree, its analysis by the 
Vice-Ministerial Coordination Commission and the Council of Ministers, and ministerial approval, or for the publication and entry into force of the measure. The combined total of the minimum and single time-periods described by Peru does not exceed two months. 
4  THE PRS IS NOT A MEASURE FUNDAMEN TALLY INTEGRATED INTO TARIFF POLICY 
9. Peru has been willing to abandon the PRS in free trade agreement negotiations and the 
system currently plays a limited role in Peru's agricultural policy. Statistics show that for some of 
the products covered, the PRS accounts for only a small proportion of imports and an even smaller 
percentage of domestic consumption. Furthermore, as explained by Peru, the PRS is not a tool for 
regulating prices in the Peruvian market. 
5  THE EL NIÑO PHENOMENON IS NOT A VALID CONSIDERATION FOR EXTENDING THE 
REASONABLE PERIOD OF TIME 
10. Peru's reasoning behind this argument is that the El Niño phenomenon will prevent it from 
focusing on the implementation of the DSB's recommendations and rulings, as its human and 
financial resources are channelled towards addressing an emergency situation. 
11. However, while Peru may be able to predict the likely occurrence of the El Niño 
phenomenon, it cannot determine a priori  the potential effects of the phenomenon in the future. A 
natural event that has not occurred cannot constitute "unforeseeable circumstances", and 
determining a reasonable period of time on this basis would be speculative. 
12. Moreover, the facts show that Peru continues to carry out its normal regulatory activities, 
despite the existence of an Emergency Decree issued by the President of the Republic. 
13. In addition, the Action Plan devised to addres s El Niño situations does not require urgent 
response actions from the officials responsible for the implementation of the DSB's rulings and 
recommendations. 
14. In any case, the Arbitrator should not consider speculation concerning events that have not 
occurred to be relevant for granting addition al time for the implementation of the DSB's 
recommendations and rulings. A reasonable period of time determined in this way, where such 
events do not occur, would not be the "shortest period" possible. WT/DS457/15 
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  6  CONCLUSION 
15. Five months is an amply sufficient and perfec tly reasonable period of time for Peru to 
implement the DSB's recommendations and rulings. The determination of the reasonable period of time should not be influenced by the design of production sector support measures; speculation 
concerning potential effects of the El Niño phenomenon; or considerations such as how long the 
PRS has been in place or its level of integration in tariff policy. 
16. If the El Niño phenomenon were to have devastating consequences in Peru, thereby 
affecting the country's regulatory capacity to the point of preventing it from complying with the 
DSB's recommendations and rulings within the reasonable period of time determined by the Arbitrator, Peru could inform the DSB of this situation in the context of its status reports on compliance pursuant to Article 21.6 of the DSU. Guatemala would give sympathetic consideration 
to this situation. 
__________