Peru WT/TPR/S/189/Rev.1 
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II. TRADE AND INVESTMENT REGIME 
(1) OVERVIEW  
1. Peru is a founding Member of the WTO and has taken part in the negotiations on 
telecommunications and financial services held follo wing the Uruguay Round.  The country is not a 
signatory to any of the WTO plurilateral agreements .  During the review period, Peru made several 
notifications in the WTO but, as of mid-2007, some of the notifications regarding agriculture were 
overdue.  The country has made use of the dispute settlement mechanism twice as a complaining party 
and four times as a respondent.  C onsultations have been held in th ese cases, but no panels have been 
established. 
2. Peru has submitted a number of proposals regard ing the Doha Work Programme, primarily in 
regard to agriculture (tropical products and a lternatives to illicit crops), intellectual property 
(biodiversity and traditional knowledge), fisher y subsidies and services (domestic regulation, 
movement of persons, professional services and other specific sectors). 
3. Generally speaking, Peru grants national treat ment to foreign investors.  The Constitution 
does not allow foreigners to own property located with in 50 kilometres of the border.  It also provides 
that natural resources are the inalienable prope rty of the State, although concessions for their 
development may be (and, in practice, are) awarded to  private Peruvian or foreign investors.  Peru has 
made an effort to furnish a more secure envir onment for foreign investment through legal stability 
agreements with private investors and reciprocal  investment promotion and protection agreements 
with other countries. 
4. Peru formulates its trade policy primarily at th e national level while taking its international 
commitments into account.  High priority is placed on preferential trade agreements and Peru has concluded three such agreements since its last  review.  At mid-2007, broad preferential trade 
agreements were in effect with the members of MERCOSUR and selective agreements within the 
framework of the Latin American Integration Associ ation (LAIA).  As at that time, Peru had signed 
broad-ranging agreements with Chile and the Unit ed States and an early harvest agreement with 
Thailand, but none of these arrangements had yet ente red into effect.  The agreement with the United 
States is of particular importance because that count ry is the largest market for Peruvian exports.  
Peru's binding of preferential liberalization measure s at the multilateral level would be an important 
step towards preventing distortions in incentives and investment flows and towards enhancing the 
predictability of its trade and investment regime. 
(2) O
VERALL LEGAL FRAMEWORK  
5. The structure of the Peruvian State is define d in its 1993 Constitution, which entered into 
force on 1 January 1994.  The Government of Peru  is unitary, representative and decentralized.  In 
accordance with the principle of the separation of po wers, it is divided into executive, legislative and 
judicial branches. 
6. There are three levels of government:  national,  regional and local.  The National Government 
is composed of the Office of the President of th e Republic, government ministries and decentralized 
government offices.  Each region is under the au thority of a regional government made up of a 
regional council, a regional president and a re gional coordinating council.  Local government 
comprises provinces, districts and the corresponding municipalities. 
7. The Head of State is the President of the Republic.  The President and two Vice-Presidents 
are elected for terms of five years.  Consecutive re -election is not permitted.  The last election took WT/TPR/S/189/Rev.1 Trade Policy Review 
Page 14 
 
 
place in June 2006.  Under the Constitution, the Presi dent is authorized to direct overall government 
policy;  to direct foreign policy and conclude a nd ratify treaties;  to enact special economic and 
financial measures by issuing emergency decrees havi ng the force of law, when such measures are in 
the national interest and Congress is informed thereo f;  and to regulate tariffs.  Responsibility for 
directing and administering public services is entrusted to the Council of Ministers and to the 
individual ministers in their respective areas of ju risdiction.  The President of the Republic is 
empowered to appoint and dismiss the President of  the Council of Ministers, whose responsibilities 
include coordinating the functions performed by the other ministers and signing legislative decrees, 
emergency decrees and other decrees or resolutions  provided for in the Constitution and by law. 
8. Legislative functions are carried out by a single-chamber Congress composed of 
120 representatives who are elected by direct proportional vote on a regional basis.  All congressional seats come up for re-election every five years.  The last congressional election was held in April 2006.  Congress drafts and passes laws as well as overseeing the actions of the Executive.  In accordance 
with Article 56 of the Constitution, international treaties on certain matters must be approved by 
Congress before being ratified by the President of the Republic.
1 
9. Judicial functions are exercised by the Judiciary, which is headed by the Supreme Court.  
Superior courts form the second level of the hierarchy,  with jurisdiction over an entire judicial district.  
The third is made up of courts of first instance,  whose jurisdictions roughly coincide with the 
provinces.  Finally, there are the district magistrate s' courts.  Judicial functions are also exercised by 
arbitral and military tribunals, acting as courts of exceptional jurisdiction. 
10. International treaties that entail administrative changes or that have an effect on national 
sovereignty or on financial obligations or tax es, including WTO Agreements and some regional 
accords, must be approved by Congress and ratified by the President before they can enter into force.  
Congress is not empowered to alter a treaty signed by  the Executive that has been submitted to it for 
approval.  Once they have been approved and ratifie d, international treaties subject to Article 56 of 
the Constitution pass into Peruvian law. 
11. Peru underwent a brief period of institutiona l instability in connection with the 2000 
presidential elections.  Ever since a new Administration was elected in 2001, however, the country's institutional status has returned to normal and pr esidential, congressional and municipal elections 
have been held on schedule.  The International Monetary Fund (IMF)
2 sees the social and political 
situation as continuing to pose a ch allenge for Peru.  The World Bank3, for its part, has noted the 
potential for social and political conflict and the ne gative impact this could have on investment and 
economic growth. 
(3) TRADE POLICY FORMULATION AND OBJECTIVES  
12. Trade policy is formulated at the national level,  taking into account the country's international 
commitments, including Andean Community (CAN) in tegration agreements.  One of the objectives of 
the Cartagena Agreement, under which the Andean Community was founded, is to develop a common 
                                                      
1 These matters are:  human rights;  State sovereignty, State ownership or the integrity of the State;  
national defence;  financial obligations of the State;  othe r treaties that create, modify or repeal taxes;  treaties 
that require the amendment or abrogatio n of a law;  and treaties whose execution requires legislative measures. 
2 IMF (2007a). 
3 World Bank (2006b). Peru WT/TPR/S/189/Rev.1 
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trade policy.  The President has the authority to regulate foreign trade4, including customs and tariff 
regimes.5 
13. The Ministry of Economy and Finance (MEF) was responsible for Peru's trade policy up to 
2002.  Law No. 27779 of 10 July 2002 created the Ministry of Foreign Trade and Tourism 
(MINCETUR) and assigned it the resp onsibility of defining,  directing, implementing, coordinating 
and supervising foreign trade and tourism policy.   Under the terms of Law No. 27779, MINCETUR is 
responsible for conducting international trade nego tiations in coordination with the Ministry of 
Foreign Affairs, the MEF and other branches of the Government in the areas falling within their purview.  It is the responsibility of the MEF to direct and monitor tariff and customs policies in 
coordination with other government branches.
6  Tariff policy has two aspects:  (i) unilateral action to 
modify the tariff structure without negotiating with  other countries;  and (ii) trade agreements 
providing for tariff reductions. 
14. The promotion of foreign trade as an engine for the country's development is a matter of State 
policy.  Law No. 27790 (Law on the Organization and Functions of the Ministry of Foreign Trade and 
Tourism of 25 July 2002) states that Peru's foreign trade policy is aimed at increasing and sustaining 
development in the country;  obtaining better conditions of access and competition for the sake of 
proper integration into international markets;  maki ng the best possible use of trade agreements signed 
by the country and of its various preferential arra ngements;  continuing to play an active role in 
international trade forums, integration sch emes, economic cooperation initiatives and trade 
negotiations;  and, as a means of increasing the c ountry's exports, promoting the development of free 
zones, special trade treatment zones and special de velopment zones.  The authorities have indicated 
that Peru's foreign trade policy continues to be di rected towards achieving efficient resource allocation 
and promoting the development of economic activities in line with market signals, with a view to 
creating the quality and quantity of jobs needed to increase the population's well-being on a lasting 
basis. 
15. The authorities have also stated that in r ecent years Peru has placed a high priority on 
concluding preferential trade agreements and that  it is now pursuing an ambitious agenda for the 
negotiation of such agreements, while at the same time continuing to play an active role at the 
multilateral level.  Peru regards the multilateral tr ading system as an important avenue for gaining 
greater trade advantages in multilateral negotiations  and for safeguarding its interests through the 
dispute settlement mechanism.  It sees the regulatory implications of the multilateral, regional and 
bilateral negotiations as being complementary. 
16. The authorities have reported that the privat e sector, through professional associations and 
trade unions, participates on an ad hoc basis in coor dination meetings on trade issues with the relevant 
ministries and agencies. 
(4) FOREIGN INVESTMENT REGIME  
17. The legal framework relating specifically to fo reign investment includes Article 63 of the 
Constitution, the Foreign Investment Law (Legisla tive Decree No. 662), the Framework Law for the 
Growth of Private Investment (Legislative Decree No. 757) and the Law for the Promotion of Private 
Investment in Public Infrastructure Works and Public Services (Supreme Decree No. 059-96-PCM). 
                                                      
4 Articles 57 and 118 of the Constitution. 
5 Single harmonized text of the General Customs Law, Supreme Decree No. 129-2004-EF of 
8 September 2004. 
6 Legislative Decree No. 183 of 15 June 1981 and Ministerial Resolution No. 005-2006-EF/15 of 
12 January 2006. WT/TPR/S/189/Rev.1 Trade Policy Review 
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18. Foreign investment policy falls within the purview  of the MEF.  It is the responsibility of the 
Private Investment Promotion Agency (PROINVERSIÓN) to propose and implement national policies for the promotion of private investment in accordance with the ge neral policy guidelines 
established by the MEF.  PROINVERSIÓN also oversees  investors' compliance with the investment 
commitments they have assumed in cases where th is task has not been assigned to any other 
regulatory agency. 
19. National and foreign investment are subject to the same conditions.  Under Legislative Decree 
No. 662, foreign investments made in the country ar e automatically granted au thorization.  The same 
decree also provides that, once fore ign investments have been undertaken, they are to be registered 
with PROINVERSIÓN.  Foreign investors are guaranteed the right to transfer the whole of their 
capital, dividends or profits out of the country in freely convertible currencies. 
20. Areas of activity in which limitations are placed  on private investment, whether national or 
foreign, include the development of protected na ture reserves, although the regulated development 
and use of such areas may be permitted subject to regulation under the applicable laws.  Foreigners 
may not acquire or possess, under any title whatsoever, mines, land, forests, bodies of water, fuels or 
energy sources located within 50 kilometres of the c ountry's borders, either directly or indirectly, as 
individuals or as corporations, on pa in of surrendering their ownership rights to the State.  Exceptions 
may be made in the interests of public need as e xpressly declared by supreme decree and approved by 
the Council of Ministers as required by law. 
21. Foreign ownership of air transport services is limited to a 49 per cent interest at the start-up of 
operations by national airlines;  the share of fore ign ownership may be increased to up to 70 per cent 
after the enterprise has been in operation for six m onths (see Chapter IV(7)(iv)).  In the case of 
maritime transport, the owner of a national vessel  or shipping company must be an individual of 
Peruvian nationality or a corporate body in which at l east 51 per cent of the equity is held by Peruvian 
citizens (see Chapter IV(7)(v)).  Foreign interest s in corporate bodies owning a radio broadcasting 
service may not exceed 40 per cent of total holdings , total share capital stock or total number of 
partners (see Chapter IV(7)(ii)). 
22. The Constitution also provides that the law may,  for reasons of national security only, place 
temporary restrictions and specific prohibitions on the acquisition, possession, utilization and transfer 
of certain goods.  The authorities have noted that this provision has not been applied, given the 
existence of the ordinary expropriation regime set  forth in Article 70 of the Constitution.  The 
Constitution also provides that publicly owned assets
7 are inalienable and imprescriptible but may be 
assigned on concession to private parties, in accordance with the applicable legal provisions, for their 
economic use. 
23. Under the Constitution, nobody may be deprived of property for any reason other than 
national security or public necessity, as declared by law and subject to payment of a cash indemnity 
assessed by judicial proceedings, which is to incl ude compensation for any damage.  Recourse may be 
had to the courts in order to contest the property value set by the State in the course of expropriation 
proceedings. 
                                                      
7 Supreme Decree No. 154- 2001-EF (General Administrative Regulations on State-owned Assets) 
defines publicly owned assets as:  (i) assets intended  for public use consisting of public works for general 
benefit or use whose preservation and maintenance is th e responsibility of a State entity;  (ii) public-service 
assets intended for direct fulfilment of public aims, which are the responsibility of State entities;  and assets intended for direct provision of public services;  and (iii) assets reserved for use in national defence. Peru WT/TPR/S/189/Rev.1 
 Page 17 
 
 
24. Peru provides guarantees of legal stability to  domestic and foreign investors and to the 
companies in which they invest, by means of ag reements in the form of "law contracts" ( contratos-
ley) which are subject to the Civil Code's general provisions concerning contracts.8  These agreements 
have a term of ten years, except in the case of con cession contracts, where they cover the term of the 
concession.  Disputes are settled by arbitral tribunals.9 
25. Between 2000 and 2006, a total of 137 legal stability agreements covering US$3.741 billion 
in investments were signed;  115 of these agreem ents were in effect as of the end of 2006 
(80 contracts with investors and 35 with recipient firms). 
26. Under the Andean Community's Common I nvestment Regime (Decision No. 291), 
subregional investments are guaranteed national tr eatment, while the treatment of other foreign 
investments is determined by the national laws of each member country.  In addition, by its Decision 
No. 578, the Andean Community approved the Re gime for the Avoidance of Double Taxation and 
Prevention of Tax Evasion among the Andean countries. 
27. By late 2006, Peru had concluded reciprocal i nvestment promotion and protection agreements 
with 33 countries, 30 of which are in effect.10  Peru is a member of the International Centre for 
Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guarantee Agency.11 
28. The country has signed bilateral agreements fo r the avoidance of double taxation with Chile, 
Canada, Spain and Brazil (the last two are cu rrently awaiting Congressional approval) and has 
embarked upon negotiations with Sweden, Fran ce, Italy, the United Kingdom, Switzerland and 
Thailand.12 
(5) INTERNATIONAL TRADE RELATIONS  
(i) World Trade Organization 
29. By means of Legislative Resolution No. 26407, on 18 December 1994 Peru ratified the 
Marrakesh Agreement Establishing the World Trade Organization, and it has been a Member of the WTO since 1 January 1995.  MINCETUR represents Peru at the WTO Ministerial Conference, while 
the Ministry of Foreign Affairs represents Peru at the WTO in Geneva.  The WTO Agreements form 
part of Peru's national legislation and can be invoked in the national courts. 
30. Peru provides, as a minimum, most-favoured-na tion treatment to all its trading partners. 
31. It has taken part in the negotiations on teleco mmunications and financia l services subsequent 
to the Uruguay Round.  Its commitme nts in the area of telecommunications are set forth in the Fourth 
Protocol to the General Agreement on Trade in Serv ices;  its commitments in regard to financial 
services are contained in the Fifth Protocol. 
                                                     
 
8 Online information from PROINV ERSIÓN.  See:  http ://www.proinvers ion.gob.pe/0/0/modulos/JER/ 
PlantillaSectorHijo.aspx?ARE=0&PFL= 0&JER=2906. 
9 Online information from PROINV ERSIÓN.  See:  http ://www.proinvers ion.gob.pe/0/0/modulos/JER/ 
PlantillaSectorHijo.aspx?ARE=0&PFL=0&JER=2906. 
10 Argentina, Australia, Belgium, Bolivia, Canada, Chile, China, Colombia, Cuba, the Czech Republic, 
Denmark, Ecuador, El Salvador, Fi nland, France, Germany, Italy, Malaysia, Norway, Luxembourg, the 
Netherlands, Paraguay, Portugal, the Republic of Ko rea, Romania, Singapore, Sp ain, Sweden, Switzerland, 
Thailand, the United Kingdom, United States and Venezuel a.  The agreements with Belgium, Canada and the 
United States were not yet in force as at mid-2007. 
11 MIGA. 
12 Online information from the MEF.  See:  h ttp://www.mef.gob.pe/ ESPEC/Convenios_DT2.php. WT/TPR/S/189/Rev.1 Trade Policy Review 
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32. Peru is neither a party nor an observer to the plurilateral WTO Government Procurement 
Agreement.  It is not a participant in the WTO Information Technology Agreement, but the Peruvian 
authorities expect to accede to the Agreement in late 2007. 
33. Between 2000 and 2006, Peru made  a number of notifications to the WTO (Table AII.1).  As 
at mid-2007, some notifications on agriculture were still pending. 
34. Peru has participated in 14 cases brought before  the WTO Dispute Settlement Body:  twice as 
complainant, four times as respondent and eight times as a third party.13  The disputes in which Peru 
has been the respondent in WTO proceedings have concerned the following:  (i) countervailing duties 
levied by Peru on imports of buses14;  (ii) domestic taxes applied by Peru to cigarettes15;  
(iii) measures applied to imports of fresh fruit, ve getables, fish, milk, tea and other natural products16;  
and (iv) provisional anti-dumping duties levied by Peru on imports of sunflower and soya vegetable 
oils and mixtures thereof.17  Consultations were held in these four cases, but no panels were 
established. 
35. Since 2000, Peru has made various contributions  to the work of the WTO, some of them 
within the framework of the Doha Work Programme.  Peru's proposals18 relate to special and 
differential treatment19;  the green box20;  market access21;  food security22;  biodiversity and 
traditional knowledge23;  trade facilitation24;  and fishery subsidies.25 
(ii) Preferential agreements 
36. At mid-2007, preferential agreements were in effect between Peru and the Andean 
Community countries, the members of MERCOSUR and other member countries of LAIA.  In 2006, 
approximately 17.4 per cent of Peru's total exports went to trading partners with which preferential 
agreements were in force and 43.3 per cent of its  total imports came from those partners.  Within 
those categories, nearly 17.7 per cent of Peru's imports were bought from Ande an trading partners and 
6.0 per cent of its exports were sold to them.26  Around 16.6 per cent of Peruvian imports came from 
the MERCOSUR countries, while 3.8 per cent of the c ountry's exports were directed to those markets 
(see also Chapter I(3)(i)). 
                                                      
13 Online information from the WTO.  See:  http://www.wto.org/spanish/thewto_s/countries_s/ 
peru_s.htm. 
14 WTO document WT/DS112/1 G/L/220 G/SCM/D19/1 of 9 January 1998. 
15 WTO documents WT/DS227/3 of 19 July 2001, WT/DS227/2 of 4 May 2001, WT/DS227/1/Corr.2 
of 9 April 2001 and WT/DS227/1 of 6 March 2001. 
16 WTO document WT/DS255/1 - G/L/536 of 29 April 2002. 
17 WTO document WT/DS272/1 - G/L/578 - G/ADP/D44/1 of 28 October 2002. 
18 WTO document G/AG/NG/W/184 of 9 May 2001. 
19 WTO documents AG/NG/W/13 of 23 June 2000 and G/AG/NG/W/78 of 28 November 2000. 
20 WTO document G/AG/NG/W/14 of 23 June 2000. 
21 WTO document G/AG/NG/W/37 of 28 September 2000. 
22 WTO document G/AG/NG/8 of 5 October 2001. 
23 WTO document IP/C/W/447 of 8 June 2005. 
24 WTO document TN/TF/W/30 of 27 April 2005. 
25 WTO document TN/RL/W/166 of 2 November 2004. 
26 These figures include trade with Bolivia, Colombia, Ecuador and Venezuela. Peru WT/TPR/S/189/Rev.1 
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37. In 2006, roughly 55 per cent of Peru's exports to the United States entered that market under 
ATPDEA27 tariff preferences, while around 48 per cent of its exports to the European Union benefited 
from GSP-plus preferences. 
(a) Andean Community 
38. Peru is a signatory to the 1969 Cartagena Ag reement, which laid the foundations of the 
Andean Community (CAN).  In addition to Peru, Co lombia, Bolivia and Ecuador are also members.  
Major changes have taken place in the Andean  Community since 2000, including Venezuela's 
departure in 2006 and the entry of Argentina,  Brazil, Chile, Paraguay and Uruguay as associate 
members and of Mexico and Panama as observers. 
39. In 1992, the Andean Pact, now the Andean Community, was notified to the GATT under the 
Enabling Clause.28 
40. The Andean Council of Foreign Ministers and the Commission of the Andean Community are 
responsible for defining a Community strategy for deepening integration with other regional 
economic blocs and establishing political, social, econom ic and trade relations with systems outside 
the region.29  The Andean Community has developed common guidelines for trade relations among 
member countries in such areas as customs, tariffs,  services, agricultural health and safety, technical 
regulations, contingency measure s and intellectual property. 
41. The Andean Community's main objectives incl ude the creation of a free trade area and a 
customs union.  The Andean free trade area was fu lly constituted on 1 January 2006 when, pursuant to 
Decision No. 414, Peru brought the gradual tariff reduction process it had been pursuing since 1997 to 
a successful completion.  Although Venezuela with drew from the Andean Community in April 2006, 
the trade preferences established between the two countries will remain in effect for five years 
following the Bolivarian Republic's denunc iation of the Cartagena Agreement.30 
42. The authorities have stated that Peru is appl ying its national tariff rather than the Andean 
Community's common external tariff.  This issue is still being evaluated by the member countries. 
43. The establishment of a common market in whic h services, capital and people will circulate 
freely is also still pending.  Peru is a party to  the Andean Community agreements concerning the 
liberalization of services (Decisions Nos. 439 a nd 659);  land, air and maritime transport;  
telecommunications;  and a series of other trade issues. 
44. The enforcement of Andean Community rules and regulations is the res ponsibility of its Court 
of Justice and General Secretariat.  The General Secretariat may initiate the preliminary phase of an 
action for non-compliance either ex officio or following a claim by member countries or private 
individuals.  The judgement phase of such an acti on begins when the General Secretariat, member 
countries or private parties file a claim with the Court of Justice.  The Court of Justice hands down a 
                                                      
27 Andean Trade Promotion and Drug Eradication Act. 
28 WTO documents L/6737;  WT/COMTD/W/27/Rev.1 of 13 June 1997. 
29 Article 51, Andean Subregional Integr ation Agreement (Cartagena Agreement). 
30 Article 135 of the Cartagena Agreement provides that any member country wishing to denounce the 
Agreement shall so inform the Commission.  From that moment on, it shall cease to enjoy the rights and have 
the obligations deriving from its stat us as a member, with the exception of the benefits received and granted 
under the Subregional Liberalization Programme, which sha ll remain effective for a period of five years after 
the date of the denouncement. WT/TPR/S/189/Rev.1 Trade Policy Review 
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decision and may authorize suspension of advantag es under the Cartagena Agreement or order other 
coercive measures if its decision is not executed. 
45. Six actions for non-compliance were brought against Peru between 2000 and 2006 in the 
CAN context.31  These cases dealt with issues of non-comp liance in connection with:  surtaxes on 
imports from other Andean Community member countries;   tariff reductions for oils and lubricants;  
import levies on various agricultural products;  phyt osanitary requirements;  trademark registration 
requirements;  and the granting of patent s for second use of a pharmaceutical compound. 
46. In relation to negotiations with third countries, CAN members adopted Decision No. 598, 
which permits member countries of the Community to negotiate trade agreements with third countries 
on a community, individual or joint basis.32  Members that choose to negotiate such trade agreements 
individually are required to observe the following guidelines:  "preser ve the Andean legal system in 
relations between member countries of the Andean  Community;  take into account the commercial 
sensitivities of other Andean partners in trade li beralization offers;  and maintain an adequate 
exchange of information and consultations in the course of the negotiations, within a framework of 
transparency and solidarity".33 
(b) Agreement between Peru and MERCOSUR34 
47. LAIA Economic Complementarity Agreemen t (ECA) No. 58 of 25 August 2003 between 
Peru and MERCOSUR is designed to lead to the crea tion of a free trade area.  The agreement contains 
provisions concerning restrictive trade practices;  dispute settlement;  intellectual property;  investment;  safeguards;  standards, technical re gulations and conformity assessment;  and sanitary 
and phytosanitary measures. 
48. Tariff reduction schedules are established on a bilateral basis between Peru and each 
MERCOSUR country.  This agreement provides for the continued application of special safeguards to 
imports from Argentina and Brazil of such goods as m eat and dairy products, fresh fruit, grains and 
cereals, vegetable oils, pastas, juices and cotton.  General safeguards are applied in Peru's trading 
activity with Uruguay and Paraguay.  Peru has estab lished timetables for tariff reductions up to 2019 
for such products as wheat, maize and barley.  Ther e are 12 subheadings in the sugar sector for which 
tariffs will not be eliminated.  In addition, only the ad valorem tariff will be eliminated for 45 subheadings included in Peru's price stabilization system. 
49. Mechanisms are to be created for the gradual lib eralization of trade in services within a period 
to be determined.  Free zones and special cust oms areas are the subject of ongoing negotiations. 
50. On 15 December 2003 Peru was accepted as an as sociate member of MERCOSUR.  This was 
a step towards deepening economic integration,  especially in the areas covered by the Peru-
MERCOSUR Partial Scope Economic Complementarity Agreement. 
                                                     
 
31 Online information from the General Secretariat of the Andean Community. 
See:  http://www.comunidadandina.org/canprocedimientosinternet/ListaExpedientes11.aspx? 
CodProc=7&TipoProc='T'. 
32 Article 1 of Andean Community Decision No. 598 of 11 July 2004. 
33 Article 2 of Andean Community Decision No. 598 of 11 July 2004. 
34 Economic Complementarity Agreement signed by the Governments of the Argentine Republic, the 
Federative Republic of Brazil, the Republic of Paraguay, the Eastern Republic of Uruguay, States members of MERCOSUR and the Government of the Republic of Peru. Peru WT/TPR/S/189/Rev.1 
 Page 21 
 
 
(c) Free trade agreement between Peru and Chile35 
51. On 22 August 2006, Peru and Chile signed a fr ee trade agreement that modifies and replaces 
LAIA Economic Complementarity Agreement No. 38 of 22 June 1998.  The new agreement seeks to 
further bilateral trade liberalization efforts and covers such topics as:  competition policy;  trade in 
services (temporary entry of business people and cross-border trade in services);  investment;  
cooperation in regard to labour and migration;  dispute settlement;  traditional knowledge;  and a 
commitment to negotiate the mutual recognition of diplomas at a later date.  The authorities have 
stated that no time-frame has been establish ed for the agreement's entry into force.36 
52. The tariff reduction schedules for ECA No. 38 of 1998 provide for terms of 0, 3, 5, 10, 15 and 
18 years.  For Peru, the main products subject to th e ten-year term are dairy products, potatoes, coffee 
and fresh vegetables.  The 15-year tariff-reduction period applies to such products as wheat, maize, 
rice and rye.  Used goods will not qualify for tari ff reductions.  Under the ag reement, new goods will 
not be included in Chile's price band system or in  Peru's variable specific duties regime and existing 
mechanisms will not be modified or applied in such a way as to entail a deterioration of access 
conditions.  Goods that are processed or that origin ate in free zones or qualify for free-zone benefits 
are not covered by the liberalization programme. 
(d) Other LAIA agreements 
53. Peru has partial-scope agreements with Ar gentina, Brazil, Chile, Mexico, Paraguay and 
Uruguay within the framework of the Latin American  Integration Association (LAIA).  Pre-existing 
LAIA agreements with Argentina, Brazil, Chile , Paraguay and Uruguay have served as a basis for 
negotiating these agreements. 
54. In March 2007, Peru entered into the followi ng additional agreements within the framework 
of the LAIA:  intra-regional specific preferentia l tariff concessions (Regional Agreement No. 4);  
framework for the development of scientific and t echnical cooperation (Regional Agreement No. 6);  
and cooperation and exchange of cultural, edu cational and scientific goods (Regional Agreement 
No. 7).37 
(iii) Other agreements and arrangements 
55. Peru qualifies for preferences granted under the Generalized System of Preferences (GSP) by 
the following countries:  Australia, Bulgaria, Ca nada, the Czech Republic, the European Union, 
Hungary, Japan, New Zealand, Pola nd, the Russian Federation, Slovakia, Switzerland and the United 
States.  Some products which receive partial tari ff reductions under the European Union's general 
GSP regime are accorded duty-free tr eatment when they originate in Pe ru or any of the other countries 
included in the regime to combat drug production and trafficking.38  These additional benefits expire 
on 31 December 2008. 
                                                      
35 The official Spanish-language name of this agreement translates as a "Free Trade Agreement 
between the Government of the Republic of Peru and the Government of the Republic of Chile, amending and 
replacing ECA No. 38, its annexes, appendices, protocols and other instruments signed thereunder". 
36 Online information from MINCETUR.  S ee:  http://www.mincetur. gob.pe/default. 
asp?pag=COMERCIO/cuerpo1.asp&lat=COMERCIO/ lateraL.asp?pag=comercio&num=3. 
37 The complete list of Peru's LAIA agreements  can be consulted at:  http://www.aladi.org/. 
38 Article 11, Council Regulation (EC) No. 980/2005 (27 June 2005) and Commission Decision 
No. 2005/924/EC (21 December 2005). WT/TPR/S/189/Rev.1 Trade Policy Review 
Page 22 
 
 
56. Peru takes part in the Global System of Trade Preferences among Developing Countries 
(GSTP), under which it grants tariff preferences for 71 different products. 
57. A considerable number of Peruvian products receive duty-free treatment when they are 
exported to the United States under the Andean Trad e Preference Act (ATPA).  The Andean Trade 
Promotion and Drug Eradication Act (ATPDEA), signed into law in August 2002, extended the 
ATPA until 31 December 2006 and broadened its benef its to include imports of textiles and apparel, 
footwear, petroleum and petroleum products, clocks  and watches, made-up articles of leather and 
vacuum-packed tuna in flexible aluminium pouch es.  A few products, such as certain textiles and 
articles of apparel, rum and canned t una are not eligible for these pref erences.  In late December 2006, 
the Government of the United States extended the A TPA preferences for another six months, with the 
possibility of a further six-month extension thereafter. 
58. Peru and the United States concluded negotiatio ns leading to a free trade agreement in 
December 2005.  The agreement cove rs market access, rules of orig in, customs procedures, sanitary 
and phytosanitary measures, technical barriers to trade, trade protection, government procurement, 
investment, cross-border services, financial services, telecommunications, electronic commerce, 
intellectual property, competition policy, labour issues, the environment, transparency and dispute 
settlement.  The Peruvian Congress ratified the agreement on 28 June 2006.  As at mid-2007, the agreement was awaiting ratification by the United States Congress. 
59. On 19 November 2005, Peru and Thailand si gned an Early Harvest Protocol as the 
first outcome of the negotiations they are pursui ng with a view to the conclusion of a free trade 
agreement.  An additional protocol incorpor ating specific rules of origin was signed in 
November 2006.  These protocols have not yet entered into force. 
60. On 4 June 2007, Peru and Colombia embark ed upon negotiations concerning a free trade 
agreement with the countries of the European Free Trade Association (EFTA), an association formed 
by Iceland, Liechtenstein, Norway and Switzerland. 
61. The fifteenth Andean Presidential Council, in 2004, agreed on guidelines for launching 
negotiations on a free trade agreement between th e Andean Community and the Central American 
Common Market (CACM).
39  As at mid-2007, negotiations  had not yet begun, however. 
62. In 2002, the Andean Community countries a nd Canada agreed to begin talks aimed at 
exploring the possibility of negotiating a free trade ag reement.  On 16 July 2007, Peru, Colombia and 
Canada initiated negotiations. 
63. In 2004, the Andean Community and the Europ ean Union agreed to start a dialogue with a 
view to concluding an association agreement that wo uld include provision for a free trade area.  In the 
course of the seventeenth meeting of the Andean Presidential Council, held in June 2007, it was 
agreed that negotiations would commence in September 2007. 
64. Peru is currently engaged in bilateral nego tiations on trade agreements with Mexico and 
Singapore.  As at mid-2007, Peru and Mexico had completed six rounds of negotiations for this 
purpose and Peru and Singapore had completed three r ounds.  Peru and China have also been working 
on a joint study with a view to initiating negotiations on a trade agreement. 
                                                      
39 Act of San Francisco de Quito, Annex to the Presidential Dialogue (12 July 2004).