WORLD TRADE  
ORGANIZATION  G/SG/Q1/PER/4 
5 April 2005 
 
 (05-1381) 
Committee on Safeguards Original:   Spanish 
  
 
NOTIFICATION OF LAWS AND REGULATIONS UNDER 
ARTICLE 12.6 OF THE AGREEMENT 
 
Replies to the Questions Posed by BOLIVIA
1 
Regarding the Notification of PERU2 
 
 
 The following communication, dated 4 April 2005, is being circulated at the request of the delegation of Peru.  
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  The Agreement Establishing the World Trad e Organization and the Multilateral Trade 
Agreements contained in the Final Act of the Uruguay Round, including the "Agreement on 
Safeguards", were incorporated with the status of law into national legislation by Legislative Decision 
No. 26407.  Supreme Decree No. 020-98-ITINCI (amended by Supreme Decree No. 023-2003-
MINCETUR/DM and Supreme Decree No. 017-2004 -MINCETUR/DM) subsequently approved the 
regulation governing the implementation of the WT O Agreement on Safeguards.  In this respect, 
provisions of the Agreement on Safeguards which are not contained in Supreme Decree No. 020-98-
ITINCI are  enforceable and applicable by direct authority of the law, i.e., the Agreement on 
Safeguards . 
1. Article 1, paragraph 2, of the Supreme Decree on Safeguards No. 017-2004-MINCETUR 
of the Ministry of Foreign Trade and Tourism states that "The general safeguard provided for 
in the WTO Agreement on Safeguards may be a pplied to any product, including agricultural 
products". Should "agricultural products" be und erstood here to mean the products listed in 
Annex 1 to the Agreement on Agriculture?  If this is the case, why would the Agreement on 
Safeguards apply to this kind of product when a special safeguard for such products is provided 
for in Article 5 of the Agreement on Agriculture?  Is this to remain in effect until completion of 
the agricultural reform process? 
Reply  
 Article 1, paragraph 2, of Supreme Decree No. 017-2004-MINCET UR, amending Supreme 
Decree on Safeguards No. 020-98-ITINCI, does indeed cover the products listed in Annex 1 to the 
Agreement on Agriculture.    Members may also have recourse to the genera l safeguard in connection with the agricultural 
products listed in Annex 1 to the Agreement on Agricu lture, that is to say, either of these options may 
legitimately be used.  Only a group of countries, not including Peru, which made certain commitments 
under the Uruguay Round may avail th emselves of the special safeguard. 
                                                     
 
1 G/SG/Q1/PER/3 
2 G/SG/N/1/PER/2/Suppl.2 G/SG/Q1/PER/4 
Page 2  
 
 2. Article 29 of the above-mentioned Supreme Decree refers to the preparation of a 
preliminary technical report by the investigating authority.  Would Peru please explain whether 
this report takes into consideration factors su ch as the rate and amount of the increase in 
imports of the product concerned in absolute and relative terms, the share of the domestic 
market taken by increased imports, changes in the level of sales, production, productivity, 
capacity utilization, profits and losses, and employment.
3 
Reply  
 Pursuant to Article 6 of the Agreement on Safe guards, a preliminary determination that there 
is clear evidence that increased im ports have caused or are threateni ng to cause serious injury to the 
domestic industry must be available to the investig ating authority.  In this respect, the preliminary 
technical report must evaluate the rate and amount of the increase in imports of the product concerned 
in absolute and relative terms, the share of the domestic market taken by increased imports, changes 
in the level of sales, production, productivity, capacity  utilization, profits and losses, and employment.  
 These elements are reflected in Article 31 of Supreme Decree No. 
017-2004-MINCETUR, as follows: 
"Article 31 .  The text providing for the adoption of a provisional safeguard measure shall 
contain: 
1. A determination as to the increase in imports, in absolute and relative terms. 
 2. A description of the product to which the measure applies.  3. A list of the countries or economies fr om which Peru impor ts the product under 
investigation. 
 
 4. A preliminary determination as to the ex istence of clear evid ence that the increased 
imports are the cause of serious injury or threat thereof, including an account of the economic factors analysed for the purpose of the determination. 
 
5. The level of the provisional safeguard measure, i.e., the amount of the tariff increase. 
 6. The planned duration of the provisional measure.  
 In the event that it is decide d not to adopt a provisional me asure, the corresponding decision 
shall contain the factual and legal grounds on which the Multisectoral Commission based its 
decision." 
 
3. Article 47 of Supreme Decree No. 017-2004-MINCETUR states that "A safeguard 
measure may be applied again to imports of a pro duct that has previously been subject to such 
a measure, adopted in accordance with the Agreement, after a period of time equal to half that 
during which such a measure had been previously  applied, provided that the period of non-
application is at least two years".  Why does Peru omit from its legislation the condition set out in Article 7 of the Agreement on Safeguards, namely that the period may be extended when the measure continues to be necessary to prevent or remedy serious injury and when there is 
evidence that the industry is adjusting? 
 
                                                     
 
3 Article 4.2(a) of the Agreement on Safeguards.  G/SG/Q1/PER/4 
 Page 3 
 
 
 Reply  
 Peru would draw Bolivia's attention to the fact that if an issue is not explicitly referred to in 
the Peruvian regulation, the provisions of th e Agreement on Safeguards are enforceable and 
applicable by both the investigating authority and the Multisectoral Commission.  
 Furthermore, it should be noted that Ar ticle 45 of Supreme Decree. No. 020-98-ITINCI 
provides that, "In order for a safeguard measure to  be extended, the Multisectoral Commission shall 
base its decision on the technical report of the investigating authority and on the finding that 
application of the measure continues to be necessar y to prevent or remedy serious injury and that 
there is evidence that the industry is adjusting, an d shall satisfy itself that the provisions of the WTO 
Agreement relating to consultations and notifications are duly observed". 
 
4. Article 1, paragraph 2, of Supreme Decree  No. 020-98-ITINCI of the Ministry of 
Industry, Tourism, Integration and International Trade Negotiations, which is referred to in the 
communication from Peru and regulates the Agree ment on Safeguards and the Agreement on 
Textiles and Clothing, states that "The genera l safeguard provided for in the WTO Agreement 
on Safeguards may be applied to any produc t, including agricultural products, with the 
exception of products subject to the provisions of the WTO Agreement on Textiles and Clothing which have not yet been integrated into the general regime (GATT 1994), pursuant to Article 2 
of that Agreement". 
 Given that the textile and clothing sector  was fully integrated into the GATT 1994 on 
1 January 2005, what, in the opinion of Peru, is the legal status of the Article and the Supreme 
Decree in question? 
Reply
 
 Supreme Decree No. 020-98-ITINCI (amended by Supreme Decree No. 023-2003-
MINCETUR/DM and Supreme Decree No. 017-2004- MINCETUR/DM) was issued in 1998, when 
the integration programme for textile sector products  was still under way.  At present, given that all 
textile and clothing sector goods have now been integr ated into the GATT 1994, if the application of a 
safeguard measure to textile and clothing sector pr oducts is considered necessary, the investigation 
must be conducted pursuant to th e WTO Agreement on Safeguards. 
 
5. Article 31 of Supreme Decree No. 020-98-INTINCI refers to the elements which a text 
providing for the adoption of a safeguard measur e is required to contain.  Would Peru please 
indicate whether the factors fo r consideration when adopting a safeguard measure include the 
following:  the rate and amount of the increase in  imports of the product concerned in absolute 
and relative terms, the share of the domestic ma rket taken by increased imports, changes in the 
level of sales, production, productivity, capaci ty utilization, profits and losses, and employment, 
as provided for in Article 4.2(a) of the Agreement on Safeguards. 
Reply  
 It should be noted that Article 31 of S upreme Decree No. 020-98-ITINCI refers to the 
elements which a text providing for the adoption of a safeguard measure is required to contain.  All of 
the elements specified by the Bolivian delegation mu st be included in the technical report issued by 
the investigating authority which will serve as th e basis for the decision taken by the Multisectoral 
Commission. Consequently, Supreme Decree No. 020-98-ITINCI provides for the following with 
regard to the analysis of injury: G/SG/Q1/PER/4 
Page 4  
 
 "Article 20.-   In the investigation to determine whether increased imports of a specific 
product have caused or are threatening to cause serious injury, account shall be taken of all 
factors of an objective and quantifiable nature having a bearing on the situation of the domestic industry affected, including the following in particular:  
(i) The rate and amount of the increase in im ports of the product, in absolute terms and 
in relation to domestic pr oduction and consumption; 
 (ii) the share of the domestic market taken by increased imports;  
(iii) the price of the imports, especially in order to determine whether there has been 
significant underpricing in relation to the ordinary price of the like or directly competitive domestic product; 
 (iv) the impact on the domestic industry of th e like or directly competitive products, as 
evidenced by changes in the economic factors identified in Article 8.7(a); 
 (v) other factors which, although not related to import trends, have  a causal relationship 
with the injury or threat of injury to the domestic industry concerned." 
 
6. Would Peru please explain why, pursuant to Article 40 of Supreme Decree 
No. 020-98-INTINCI, the total duration of a safeguard measure, including the period of 
application of any provisional measure, the p eriod of initial application and any extension 
thereof, shall not exceed six (6) years, when Arti cle 7 of the Agreement on Safeguards states that 
the total period of application of a safegu ard measure shall not exceed eight (8) years. 
Reply
 
 Although the Agreement on Safeguards provides for the application of a measure for a period 
of up to eight (8) years, Peru considers it appropria te for the total duration of a safeguard measure, 
including the period of applicati on of any provisional measure, the period of initial application and 
any extension thereof, not to exceed six years.  This decision does not violate multilateral rules.  
7. With regard to Article 41 of the same legal provision (Supreme Decree 
No. 020-98-INTINCI), would Peru please explain why the last part of Article 7.4 of the 
Agreement on Safeguards, regarding the proce dures to be followed when the duration of the 
measure exceeds three years, was not take n into consideration in this Article. 
Reply  
 The last part of Article 7.4 of the Agreemen t on Safeguards refers to measures the duration of 
which exceeds three years. Article 39 of the Peruvian  Regulation, however, states that the duration of 
safeguard measures shall not exceed three years unless they are extended in accordance with the 
provisions of Articles 44 et seq. thereof, which provi de that, in order for a safeguard measure to be 
extended, the investigating authority is required to i ssue a technical report to su bstantiate the need for 
the measures, inter alia. 
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