WORLD TRADE  
ORGANIZATION  WT/REG270/M/1 
13 October 2010 
 (10-5251) 
Committee on Regional Trade Agreements 
Fifty-eighth Session  
 
 
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
CANADA AND PERU, GOODS AND SERVICES 
 
Note on the Meeting of 27-28 September 2010  
 
Chairman:  Mr A. Suescum (Panama) 
 
 1. The meeting was convened in document WT O/AIR/3598/Rev.1, dated 17 September 2010. 
2. Under Agenda Item C.IV of its 58
th Session, the Committee on Regional Trade Agreements 
(hereinafter CRTA or the Committee) considered the Free Trade Agreement between the Canada and 
Peru (hereinafter the 'Agreement'), goods and services.  
3. The Chairman  said that the Agreement had entered into force on 1 August 2009 and had been 
notified by the Parties to the WTO on 31 July 2009 under Article XXIV:7(a) of the GATT 1994 and the Understanding on the Interpretation of Article XXIV of GATT 1994 as an Agreement establishing 
a free trade area (document WT/REG270/N/1) and under GATS Article V:7(a) as an Agreement 
providing for the liberalization of trade in services  within the meaning of GATS Article V (document 
S/C/N/508).  The text of the Agreement was availabl e, together with its Annexes, on the Parties' 
official websites.  The Factual Presentation on the goods and services aspects (document WT/REG270/1, dated 19 July 2010) had been prepared  by the Secretariat on its own responsibility in 
full consultation with the Parties, in accordance w ith paragraph 7(b) of the Transparency Mechanism 
(TM) for Regional Trade Agreements (document WT/L/671).  In addition, written questions and 
replies on the Agreement had been recently distributed in document WT/REG270/2, dated 
20 September 2010.  He proposed to organize the c onsideration of the Agreement by first asking the 
Parties and then other Members for general comm ents.  The Committee would then turn to the 
specifics of the Agreement using the Factual Presen tation to guide the debate.  He proposed to go 
through the Factual Presentation section by section,  and then look at the questions and replies 
document.  
4. The representative of Peru
 thanked the Secretariat for the Factual Presentation which 
provided a general, informative a nd broad vision of the Agreement, the delegation of Canada who had 
closely worked with Peru in the preparation fo r the meeting and Members for their interesting 
questions.  She hoped that this information and the general consideration exercise would be useful for 
Members to have a better understanding of the terms of the Agreement.  Peru's trade policy objective 
was to promote sustainable growth and modern ization of its economy so as to ensure its 
competitiveness and help reduce poverty.  Its trad e policy, based on openness and liberalization, was 
aimed at converting Peru into an exporting countr y of high quality goods and services, as established 
in the National Strategic Plan for Exports 2003-2013.   Peru believed that multilateral, regional and 
bilateral trade negotiations were ke y for the achievement of its trade policy as a means to generate and 
consolidate market access for goods and services to  international markets, to ensure stable and 
predictable rules on trade relations, to increase efficiency and productivity of national production 
chains and to contribute to consumers' wellbeing.  In light of the above, the Parties had signed the WT/REG270/M/1 
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  Agreement in May 2008, at the margin of the Mee ting of APEC Ministers Responsible for Trade, in 
Peru.  Since the two countries shar ed the same interests in fora such as the WTO, APEC and the 
Cairns Group, the Agreement reflected their commitme nts to strengthen the special links of friendship 
and cooperation, to contribute to the harmonious development and expansi on of world and regional 
trade and to provide a catalyst for international coop eration.  She reaffirmed Peru's commitments to 
the multilateral trading system and said that the Agreement was based on the Parties' rights and 
obligations under the WTO Agreements.  She be lieved that the Agreement was a means towards 
promoting further multilateral trade liberalization a nd the Aid for Trade initiative within the WTO.  
For example, the Parties had agreed , in the Agreement, to contribute to agricultural negotiations in the 
WTO with a view to reducing domestic support me asures with distortive effects on production and 
trade.  In accordance with the figures of ADUANA S of Peru, exports to Canada had increased by 
1698% in 2005-2009, having passed  from US$128 million to US$2,309 million.  Even in 2009, 
exports to Canada had increased by 18% compared to 2008, in particular with respect to exports of 
non-traditional textiles and agricultural products wh ich increased by 20% and 24%, respectively.  
Moreover, Peru had passed from a trade balance deficit with Cana da in 2005 to a surplus in the 
following years.  Canada was also an important source  of foreign direct investment in Peru, in sectors 
such as mining and financial services, with an estim ated US$323 million of investment stock in 2009.   
5. She emphasized that in negotiating the Agreement,  Peru had always kept in mind the need to 
guarantee full compliance with its WTO obligati ons, including provisions under GATT Article XXIV 
and GATS Article V.  The Agreement also reaffirm ed the Parties' rights and obligations under the 
TRIPS Agreement.  In her delegation's view, th e Agreement was comprehensive, ambitious and 
unique due to the high quality of its provisions.  On market access for goods, the Agreement not only 
consolidated the preferential duty-free access grante d by Canada under the Generalized System of 
Preference to developing countries, but it significan tly expanded it by immediately eliminating 97% 
of its tariffs, which represented 100%  of Peruvian exports to Canada .  The Agreement also provided 
improved access conditions in services sectors of inte rest to both Parties, covering cross-border trade, 
telecommunications, financial services and temporar y entry of business persons under four categories, 
namely:  business visitors;  traders and investors;  intra-corporate transferees;  and professionals and 
technicians.  The latter covered 19 categories of tec hnicians, in the following fields:  engineering;  
construction;  machinery;  electricity;  plumbing;  industrial instruments;  oil and gas;  graphic and 
interior design;  chefs;  computer and informati on technology;  and sales.  The Agreement reaffirmed 
the Parties' commitments under the Convention on Biol ogical Diversity to protect biodiversity at the 
very highest level and to respect, preserve and maintain traditional know ledge, innovations and 
practices of indigenous and local communities.  With the aim of maximizing the benefits of the Agreement, a chapter on cooperation had been includ ed so as to promote initiatives for trade capacity-
building;  this was recognized as a tremendous effort  by Canada and proved its deep commitment to 
Aid for Trade in the WTO.  It was also an acknowl edgment of Peru's policy to include trade in its 
development and competitiveness strategy.  Lastly, in the Agreement, the Parties would provide the 
legal means to protect geographical indications for wine and spirits and, in the case of Canada this 
would make it possible to protect the geographical indication "Pisco" of Peru.  She then passed the 
floor to the delegation of Canada. 
6. The representative of Canada
 thanked the Secretariat for the excellent and detailed Factual 
Presentation and the government of Peru for its colla boration and valued contribution to the process.  
Like many other Members, Canada was pursuing an ambitious trade liberalization agenda and 
remained strongly committed to the conclusion of the Doha Round.  In line with Canada's Global 
Commerce Strategy, a particular focus had been d eepening its engagement within the Americas.  
Canada’s partnership with Peru w as significant and growing rapidly.  In 2009, bilateral merchandise 
trade reached more than Can$3.3 billion.  Despite  negative trends in global trade, Canadian 
merchandise exports to Peru had increased by 13%  from 2008 to 2009, while Peru’s merchandise 
exports to Canada had increased by 18%.  Peru was the fourth largest destination of Canadian direct 
investment in South and Central America.  She sai d that the Agreement was comprehensive, covering  WT/REG270/M/1 
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  substantially all trade, would serve to strengthen the bilateral economic relationship and was also a 
testament to Canada’s commitment to trade liberaliza tion.  As set out in the Factual Presentation, the 
Agreement covered everything from market access  for goods to cross-border trade in services, 
investment and government procurement and was also accompanied by parallel Agreements on 
Labour Cooperation and Environment.  All agre ements had been signed on 29 May 2008 and had 
come into force on 1 August 2009.  With respect to  market access for goods, the Agreement provided 
for immediate tariff liberalization on the majority of products, with rema ining tariffs to be eliminated 
over three to seven years for Canada, and five to ten years for Peru.  By the end of the transition 
period, 98.7% of Canada’s tariff lines would be dut y-free, corresponding to 100% of its imports from 
Peru, and 99.1% of Peru’s tari ff lines would be duty-free, accounting for 99.9% of its imports from 
Canada.  The substantive provisions governing cross-border trade in services ensured secure, 
predictable and equitable treatment for services providers of the Parties.  The Agreement also provided market access for services that exceeded the Parties' GATS commitments and would provide a strong basis to take their current trade in services to a new level in the years ahead.  The Agreement 
also built on an existing bilateral Foreign Invest ment Promotion and Protection Agreement (FIPA), 
which established strong obligations to ensure free tr ansfer of capital related to investment, protection 
against expropriation without ade quate and prompt compensation, a nd non-discriminatory treatment 
of respective investments.  Both Parties beli eved that sustained ec onomic and investment 
liberalization was the best way for any country to foster innovation, attract advanced technology and strengthen domestic sources of growth.  The Agre ement would give both Par ties' suppliers improved 
market access in the area of government procuremen t and guaranteed the right to bid on a broad range 
of goods, services and construction contracts carried out  by federal government entities.  It would also 
ensure that practices remained transparent and fair  for all suppliers.  The Agreement further contained 
disciplines on rules of origin;  origin procedures and trade facilitation;  sanitary and phytosanitary 
measures;  technical barriers to trade;  emergency actions and trade barriers;  telecommunication;  financial services;  competition policy;  monopolies and state enterprises;  electronic commerce;  and 
dispute settlement.  It also included compre hensive and highly amb itious provisions to 
facilitate temporary entry for business persons, be yond the coverage achieved in any previous FTA 
Canada had implemented.  She said that the Ag reement paved the way for significant dialogue in 
other areas of mutual interest as well, in partic ular through a new chapter on trade-related cooperation 
which would create a mechanism to discuss issues related to the FTA, all with the objective for 
companies and citizens from both countries to draw maximum benefit from the Agreement.  Canada 
was pursuing an ambitious bilateral and regional fr ee trade agenda;  however, these agreements were 
complementary to the multilateral trading system.  As a global trader, Canada believed in the 
importance of a stable, predictable and rules-b ased international trading system and remained 
staunchly committed to the multilateral process in the WTO.  She believed that  bilateral and regional 
trade agreements, such as the Agreement with Peru , served to strengthen the multilateral framework.  
She welcomed any questions or comments from Members. 
7. The representative of the United States
 thanked the Secretariat, Canada and Peru for their 
hard work in having put together the Factual Pr esentation and appreciated the written responses to 
their questions.  As with Peru's Agreement with  Singapore, she commended the Parties for the high 
level of tariff elimination that they had committed to  through the Agreement.  She noted in particular 
that all of Peru and Canada's t op 25 exports to the world in 2006-20 08 had gained or would gain duty-
free access under the terms of the Agreement. 
8. The representative of the European Union  asked further clarification with respect to the 
exclusions contained in Annex 202.2 of the Agreem ent, in particular those affecting Articles III and 
XI of the GATT 1994.   
9. In response to the question of the EU on whet her Articles 202 and 207 of the Agreement were 
to be understood in the sense that Articles II and XI  of the GATT 1994 did not apply to the measures 
set out in Annex 202.2, the representative of Canada  gave some examples of the measures listed in WT/REG270/M/1 
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  Annex 202.2.  These included measures of Peru on import of used clothing and footwear, used tyres, 
used goods, machinery and equipment which utilized radioactive sources, and actions authorized by 
the WTO Dispute Settlement Body.  For Canada, the list included import of any goods of the prohibited provisions of certain tariff items in th e Canadian customs tariff and those tariff items 
related to fire arms, endangered species and matc hes, excise duties on absolute alcohol used in 
manufacturing under existing provisions of the Canadian  Excise Act, internal sale and distribution of 
wine and distilled spirits and actions authorized by  the WTO Dispute Settlement Body.  She clarified 
that Articles III and XI of GATT 1994 continued to apply to the measures set out in Annex 202.2 of 
the Agreement.  The provisions of Article 202.2 did not affect the Pa rties' rights and obligations under 
the WTO Agreements;  in fact, Annex 202.2 establishe d for greater certainty that any issue arising 
between the Parties with respect to the listed m easures would be addressed in the WTO and not under 
the Agreement.  With respect to the EU's second question, which requested legal basis in the GATT 
for such restriction of the national treatment obligation under Article III of the GATT 1994 in the 
context of the Agreement, she repeat ed that Article 202.2 of the Agreement did not affect the Parties' 
rights and obligations under the GATT and that no thing in the Agreement restricted the national 
treatment obligations of the Partie s under Article III of GATT 1994.  With respect to the EU's third 
question, relating to WTO jurisprudence and in  particular to the Appellate Body report in 
Turkey-Textiles, she said that her delegation would provide the response in writing within the deadline 
established by the Transparency Mechanism.   
10. The representative of the European Union
 appreciated the efforts made by Canada to reply the 
questions. 
11. The Chairman  said that the consideration of the goods and services aspects of the Free Trade 
Agreement between the Canada and Peru had allowed the Committee to clarify a number of questions 
and oral discussion of the Agreement could be co ncluded in accordance with paragraph 11 of the 
Transparency Mechanism.  If any delegations wished  to ask follow-up questions they were invited to 
forward submissions in writing to the Secretariat by 5 October 2010  and the Parties were asked to 
submit replies  in writing by no later than 19 October 201 0.  In accordance with paragraph 13 of the 
Transparency Mechanism all written submissions , as well as minutes of this meeting would be 
circulated promptly, in all WTO official la nguages, and would be made available on the 
WTO website. 
12. The Committee took note  of the comments made. 
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