WORLD TRADE  
ORGANIZATION  WT/REG270/1  
19 July 2010 
 (10-3921) 
Committee on Regional Trade Agreements  
  
 
    
 
 
FACTUAL PRESENTATION 
 
Free Trade Agreement between 
Canada and Peru 
(Goods and Services) 
 
Report by the Secretariat 
 
 
 
 
This report, prepared for the considera tion of the Free Trade Agreement between 
Canada and Peru has been drawn up by the WTO Secretariat on its own 
responsibility and in full consultation with the Parties.  The report has been drawn 
up in accordance with the rules and pro cedures contained in the Decision for a 
Transparency Mechanism for Regiona l Trade Agreements (WT/L/671).  
 
Any technical questions arising from this report may be addressed to 
Ms. Jo-Ann Crawford (tel: +41 22 739 5422).  WT/REG270/1 
 Page iii 
 
 
  TABLE OF CONTENTS 
 
 
  Page 
 
I. TRADE ENVIRONMENT 1  
A. OVERVIEW  1 
B. MERCHANDISE TRADE  1  
C. SERVICES AND INVESTMENT  5  
II. CHARACTERISTIC ELEMENTS OF THE AGREEMENT 9  
A. BACKGROUND INFORMATION  9  
III. TRADE IN GOODS 11  
A. NATIONAL TREATMENT AND MARKET ACCESS PROVISIONS ON TRADE IN GOODS  11  
1. General Provisions 11  
2. Import duties and charges, and quantitative restrictions 11  
3. Liberalization of tariff lines and trade 13  
4. Canada's liberalization schedule 14  
5. Peru's liberalization schedule 17  
6. Tariff Rate Quotas 20  
B. RULES OF ORIGIN  20  
C. EXPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  22  
D. REGULATORY PROVISIONS ON TRADE IN GOODS  22  
1. Standards 22  
(a) Sanitary and phytosanitary measures 22  
(b) Technical barriers to trade 23  
2. Safeguard mechanisms 23  
(a) Global safeguards 23  
(b) Bilateral safeguards 23  
3. Anti-dumping and countervailing measures 24  
4. Subsidies and State-aid 24  
5. Customs-related procedures 25  
IV. PROVISIONS ON TRADE IN SERVICES AND INVESTMENT 25  
A. SCOPE AND DEFINITIONS  25  
B. DENIAL OF BENEFITS  27  
C. CROSS -BORDER TRADE IN SERVICES  27  
1. Market access 27  
2. National and MFN treatment 27  
3. Local presence 27  
D. INVESTMENT  27  
1. National and MFN treatment 27  
2. Performance Requirements 28  
3. Senior Management and board of directors 28  
E. MOVEMENT OF NATURAL PERSONS  29  
 
 WT/REG270/1 
Page iv  
 
  F. LIBERALIZATION COMMITMENTS ON CROSS -BORDER TRADE IN SERVICES , INVESTMENT 
AND FINANCIAL SERVICES  30  
1. Cross-border trade in services and investment 30  
(a) Canada 30  
(b) Peru 33  
G. COMMITMENTS IN SELECTED SERVICES SECTORS  35  
1. Telecommunications Services 35  
2. Transport Services 36  
3. Financial Services 36  
(a) Canada 37  
(b) Peru 38  
H. DOMESTIC REGULATION  38  
I. RECOGNITION  39  
V. PROVISIONS AFFECTING TRADE IN GOODS, SERVICES AND INVESTMENT 39  
A. TRANSPARENCY  39  
B. CURRENT PAYMENTS AND CAPITAL MOVEMENTS  39  
C. EXCEPTIONS  39  
1. General and security exceptions 39  
D. ACCESSION  40 
E. DISPUTE SETTLEMENT  40  
F. RELATIONSHIP WITH OTHER AGREEMENTS CONCLUDED BY THE PARTIES  43  
G. INTELLECTUAL PROPERTY RIGHTS  44  
1. Geographical Indications for Wine and Spirits 44  
H. COMPETITION POLICY , MONOPOLIES AND STATE ENTERPRISES  44  
I. GOVERNMENT PROCUREMENT  44  
J. ELECTRONIC COMMERCE  47  
K. LABOUR  47 
L. ENVIRONMENT  47  
M. INSTITUTIONAL FRAMEWORK  48  
ANNEX I 49 
ANNEX II 53  WT/REG270/1 
 Page 1 
 
 
  FREE TRADE AGREEMENT BETWEEN CANADA AND PERU 
 
Factual Presentation by the Secretariat  
  I. TRADE ENVIRONMENT 
A. O
VERVIEW  
1. The Free Trade Agreement betwee n Canada and Peru (h ereafter "the Agreement") is Canada's 
fourth free trade agreement (FTA) with a Latin Am erican country (following its FTAs with Mexico 
(North American Free Trade Agreement), Chile and Costa Rica).  It is Peru's third bilateral FTA 
notified to the WTO (following its FTAs with the United States and Singapore).   
2. The two Parties to the Agreement are of quite different size.  Peru's GDP was estimated at 
US$127.4 billion in 2008, while that  of Canada reached US$1.4 trillion.1  With total merchandise 
exports of US$31.5 billion and imports of US$30.0 billion, Peru ranked in 2008 as the 61st and 
65th highest exporter and importer respectively, am ong WTO Members;  with merchandise exports of 
US$456.5 billion and imports of US$418.3 billion,  Canada ranked as the 11th top exporter and 
importer in that year.  The structure of their merchandise exports and imports are considerably different, with Canada exporting and importing ma inly manufactures and natural resources, whereas 
Peru mainly exports fuels and mini ng products and imports manufactures. 
3. With respect to trade in commercial services, Canada in 2008 ranked as the 20
th largest 
exporter and 12th largest importer of commercial services, with total exports of US$64.8 billion and 
imports of US$86.6 billion (respectivel y 1.7% and 2.5% of world exports  and imports).  In the same 
year Peru ranked as the 78th largest exporter and 66th largest importer of commercial services with 
total exports of US$3.5 billion and imports of US $5.4 billion (respectively 0.09% and 0.16% of world 
exports and imports).2  The Parties' overall trade to GDP ratio s vary:  70.9 (2006-08) for Canada and 
51.5 for Peru (2006-08). 
B. MERCHANDISE TRADE  
4. Recent developments in global and intra-Party merchandise trade are presented in Charts I.1 
and I.2.  Since 2004, Canada has run a growing trad e deficit with Peru.  Chart I.1 shows a significant 
growth in Canada's imports from Peru in 2005-08, fo llowed by a modest increase in Canada's exports 
to Peru in the same period. 
                                                      
1 WTO Statistics Database, Trade Prof iles, viewed at www.stat.wto.org. 
2 WTO Statistics Database, Trade Profiles (2009). WT/REG270/1 
Page 2  
 
  050100150200250300350400450500
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20080.00.51.01.52.02.53.03.54.0US$billion US$billionChart I.1 - Canada: Merchandise im ports from and exports to world 
and Peru, 1998-2008
Source : UNSD, Comtrade database.Imports from Peru
Exports to PeruTotal imports
Total exportsLeft hand scale: Right hand scale:
 
 
 5. Canada is Peru's fifth largest trading partner in terms of e xports, absorbing 6.3% of its exports 
and accounting for 1.4% of its imports in 2008.  As can be seen from Chart I.2, Peru has experienced 
a sharp increase of both its exports and imports  after 2003, including exports to Canada.   
0510152025303540
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20080.00.51.01.52.02.53.03.54.0US$billion US$billionChart I.2 - Peru: Merchandise impo rts from and exports to world 
and Canada, 1998-2008
Source : UNSD, Comtrade database : trade with world and Canada (1998-2007); export to Canada and world (2008); 
             Peru submission : import from world and Canada (2008).Imports from Canada
Exports to CanadaTotal imports
Total exportsLeft hand scale: Right hand scale:
  WT/REG270/1 
 Page 3 
 
 
  6. The commodity structure of trade among the Parti es, as well as of their imports and exports to 
the world in 2006-2008, the three years prior to th e Agreement's entry into force, is shown in 
Chart I.3.  The structure of Canada's imports from Peru mirrors Peru's overall export structure, 
dominated by primary commodities: precious stones,  minerals, and metals.  Prepared foods and 
vegetables are also a significant export sector for Pe ru accounting for 12.4% of total exports;  such 
categories accounted for 5.7% of Canada's imports  from Peru. Over half of Canada's exports are 
accounted for by minerals, vehicles and machinery;   one of these - machinery - accounted for more 
than a quarter of Peru's imports from Canada in  2006-08.  Cereals and edible vegetables and certain 
roots and tubers made up Peru's largest import cat egory from Canada, accounting in total for 40.6% of 
average imports in 2006-08.    WT/REG270/1 
Page 4  
 
  Chart I.3
Canada and Peru: product composition of  merchandise trade,  annual average 
(2006-2008)
Canada's imports from Peru Peru's imports from Canada
Source:  UNSD, Comtrade database  (trade with world and Canada in 2006-2007); exports to Canada and world in 2008;      
                 Peru submission  (imports from Canada and world in 2008).Per cent
Total:  US$2,051 million Total:  US$354 million
Total:  US$380 billion Total: US$22 billion
Total:  US$ 421 billion Total:  US$28 billionCanada's global exportsPeru's global exportsCanada's global imports Peru's global importsOther
3.4
Precious stones
60.9Base metals 3.8
Vegetables
42.0Other 
3.4
Wood pulp 6.5
Machinery 
26.5
Other 
5.9
Machinery
24.3
Vegetables 4.8Prepared foods 3.2Other 4.7
Minerals
11.3Base metals 7.5Machinery
25.2Optical 2.9
Miscellaneous 3.2Wood pulp 2.5
Plastics 7.0Textiles 3.0Optical 1.7
Other 
7.4Other 
4.9
Wood pulp 4.8Vegetables 3.3
Base metals 9.6Chemicals 6.1Base metals 16.2Chemicals 1.8
Precious stones
19.0Vegetables 5.0Animal products 1.7Base metals 
9.2Textiles 3.6Plastics 3.4
Chemicals 
8.4Chemicals 5.3
Machinery 12.2Minerals 
24.7 Precious stones 2.3
Articles of wood 3.0 Textiles 6.4Animal products 2.2Prepared foods 2.0Vehicles 2.8Optical 2.5
Precious stones 1.8
Wood pulp 2.9Minerals 26.2Vegetables 3.7
Minerals 
19.1Vehicles 8.3
Chemicals 9.7
Minerals 
37.6
Prepared foods 7.4Vehicles 
18.4Plastics 4.7Prepared foods 3.2Vegetables 2.0
Vehicles 16.8Plastics 3.8Miscellaneous 1.8Base metals 5.7
Fats and oils 1.5Prepared foods 2.0Textiles 1.9
 
  WT/REG270/1 
 Page 5 
 
 
  C. SERVICES AND INVESTMENT  
7. Chart I.4 shows the breakdown of commercial services trade for Canada in 2006-2008.  
Canada is a net importer of commercial services globa lly and its top three categories for both exports 
and imports over the period surveyed were travel  services, transportation services and royalties and 
license fees.   
0102030405060708090
2006 2007 20080102030405060708090
2006 2007 2008Chart I.4
Canada, Total commercial services trade, 2006-2008
Exports Imports
Travel
Management services
Source : Statistics Canada CANSIM database.Arhitectural, engineering and 
other technical servicesUS$ billion
Royalties and license feesOther commercial services
Transportation services
Computer and information 
servicesInsurance servicesUS$ billion
Research and development
Other financial services
Miscellaneous business 
services
 
 
8. Canada's bilateral services trade w ith Peru is shown in Table I.1.  
Table I.1 
Canada's bilateral services trade with Peru, US$ million 
Year 2003 2004 2005 2006 2007 
Exports 26.4 34.6 19.8 79.3 39.1 
Imports 6.4 1.5 2.5 2.6 2.8 
Source:  Statistics Canada 
 
9. Chart I.5 shows Canada's inward and outward stock of FDI with the world in 2000-2008.  
Both inward and outward investment grew steadily over the period reaching a peak in 2007.  In 2008 
inward stocks of FDI declined while the le vel of outward stocks remained constant. WT/REG270/1 
Page 6  
 
  050100150200250300350400450500550
2000
20012002
2003
2004
2005
2006
2007
2008050100150200250300350400450500550
2000
2001
2002
2003
20042005
2006
2007
2008Chart I.5
Canada, inward and outward foreign di rect investment stock from world, 
2000-2008
Inward Outward
Source: UNCTAD, Foreign Direct Investment database.US$ billion US$ billion
 
 
10. Chart I.6 shows the breakdown of commercial ser vices trade for Peru in 2000-2008.  Peru 
maintained a growing deficit in its global trade in commercial services during this period, with both 
imports and exports increasing steadily over this peri od.  Peru's top three categories of commercial 
services for both exports and imports over the period surveyed were travel services, transportation 
services and other business services.   WT/REG270/1 
 Page 7 
 
 
  0.00.51.01.52.02.53.03.54.04.55.05.56.0
2006 2007 20080.00.51.01.52.02.53.03.54.04.55.05.56.0
2006 2007 2008Chart I.6
Peru, total commercial services trade, 2006-2008
Exports Imports
Transportation services
Travel
Source : Central Reserve Bank of Peru.Communications servicesUS$ billion
ConstructionFinancial services
Computer and information services
Royalties and license feesOther business services
Personal, cultural and 
recreational servicesUS$ billion
 Insurance services
Government services
 
 
11. The stock of total (goods and services) inward foreign direct investment (FDI) into Peru has 
increased strongly since 2004 (Chart I.7), to reach  US$30 billion in 2008.  Outward FDI has also 
increased, but remains much smaller,  at US$2.3 billion in 2008.   WT/REG270/1 
Page 8  
 
  05101520253035
2000
2001
2002
20032004
2005
2006
2007
20080.00.51.01.52.02.53.03.54.04.55.0
2000
2001
2002
20032004
2005
2006
2007
2008Chart I.7
Peru, inward and outward foreign dire ct investment stock from world, 
2000-2008
Inward Outward
Source: UNCTAD, Foreign Direct Investment database.US$ billion US$ billion
 
 
12. Peru has provided detailed statistics of its inward and outward FDI stocks with Canada, 
showing the main recipient sectors of activity over the past three years (Table I.2).  Services industries 
account for less than half of total Canadian FDI stoc k in Peru.  Canadian FDI in Peru is invested 
mostly in mining and quarrying, financial interm ediation and manufacturing (mainly manufacture of 
radio, television and communicati on equipment and apparatus).  
Table I.2 
Peru's inward and outward foreign direct investme nt stock with Canada, 2006-2008, millions of US$ 
2006 2007 2008  Inward Outward Inward Outward Inward Outward 
Total (all industries) 900.23 (184.69) 900.23 (184.69) 948.91 (184.69) 
Agriculture, hunting and forestry       
Fishing       
Mining and quarrying 501.29 (104.28) 501.29 (104.28) 549.97 (104.28) 
Manufacturing 67.16 (27.31) 7.16 (27.31) 67.16 (27.31) 
Electricity, gas and water supply 52.88 (52.88) 52.88 (52.88) 52.88 (52.88) 
Construction 0.39  0.39  0.39  
Services industries       
Wholesale and retail trade; repairs 0.60 (0.21) 0.60 (0.21) 0.60 (0.21) 
Hotels and restaurants       
Transport, storage and communication       
Financial intermediation 276.03  276.03  276.03  
Real estate, renting and business activities 1.82  1.82  1.82  
Education       
Health and social work       
Other community, social and personal 
service activities 0.05  0.05  0.05  
Private households with employed persons       
 
Source : PROINVERSIÓN. 
  WT/REG270/1 
 Page 9 
 
 
  13. Peru has provided information on the movement  of persons between the two countries over 
2006-08 (Table I.3).  This data indicates a decline in the number of visits for business purposes, and 
for work between 2006 and 2008.3   
Table I.3 
Data on the movement of natural persons between Canada and Peru 
Peruvians going to Coming from 
Canada Categories 
2006 2007 2008 2006 2007 2008 
Total natural persons  7,117 7,418 7,443 41,877 42,113 51,697 
Business  
(including business visitors) 1 3 1 231 74 65 
 Workers (including 
 intra-corporate transferees) 2 4 6 318 149 144 
 
Source:  Peru, General Directorate of Migrations and Naturalization. 
 
II. CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
A. BACKGROUND INFORMATION  
14. The Agreement was signed by Canada and Peru (h ereinafter referred to as "the Parties") on 
29 May 2008 and entered into force on 1 August 2009.   
15. The goods and services aspects of the Agreement were notified to the WTO by the Parties 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, and Article V:7(a) of the GATS, respectively (WT/REG270/N/1 and S/C/N/508).  The text of the Agreement is availa ble, together with its related annexes, on the 
following official websites: 
 Canada:  
http://www.international.gc.ca/trade-agreements -accords-commerciaux/agr-acc/andean-andin/can-
peru-perou.aspx?lang=en  (English) 
http://www.international.gc.ca/trade-agreements -accords-commerciaux/agr-acc/andean-andin/can-
peru-perou.aspx?lang=fra   (French) 
 Peru:  
http://www.mincetur.gob.pe/newweb/Portals/0/ comercio/tlc_canada/cierre_negociacion.html  
(Spanish) 
 
16. The Agreement is composed of 23 Chapters  and related annexes (Table II.1).  The Agreement 
on the Environment  between Canada and the Republic of Peru  and the Agreement on Labour 
Cooperation  which were negotiated in parallel with th e FTA were signed on 29 May 2008 and came 
into force on 1 August 2009.  
                                                      
3 According to Peru, it is not possible to identify the reasons for the decline in the number of visits for 
business purposes, taking into account that legislation was modified in 2008 to be more flexible.  For example, the length of stay for a business visa has been extended from 90 days to 183 days.  Also, since 2008, it is 
possible to change the migratory category (i.e. from business to worker) once inside Peru. WT/REG270/1 
Page 10  
 
  Table II.1 
Table of Contents of the Agreement 
Chapters and annexes Title/Description 
Preamble  
Chapter 1  Initial Provisions and General Definitions 
Annex 103 Multilateral Environment Agreements 
Chapter 2  National Treatment and Market Access for Goods 
Annex 202.2 Exceptions to National Treatme nt and Import and Export Restrictions 
Annex 203.2 Tariff Elimination 
Annex 212  Geographical Indications for Wines and Spirits 
Annex 218  Products subject to the price Band System 
Chapter 3  Rules of Origin 
Annex 301  Specific Rules of Origin 
Chapter 4 Origin Procedures and Trade Facilitation 
Chapter 5 Sanitary and Phytosanitary Measures 
Chapter 6 Technical Barriers to Trade 
Chapter 7 Emergency Action and Trade Remedies 
Chapter 8 Investment 
Annex 804.1 Most-Favoured-Nation Treatment 
Annex 812.1 Indirect Expropriation 
Annex 823.1 Standard Waiver and Consent in  Accordance with Article 823 of Agreement 
Annex 824.1 Submission of a Claim to Arbitration 
Annex 836.1 Submissions by other Persons 
Annex 844.1 Exclusions from Dispute Settlement 
Chapter 9 Cross Border Trade in Services 
Annex 910.4 Guidelines for Mutual Rec ognition Agreements or Arrangements fo r the Professional Services Sector 
Chapter 10 Telecommunications 
Chapter 11 Financial Services 
Annex 1103.3(a) Understanding Concerni ng Subparagraph 3(a) of Article 1101 
Annex 1101.5  Understanding Regarding Financial Services Measures  
Annex 1105  Cross-Border Trade Canada  
Annex 1111 Transparency  
Annex 1114  Authorities Responsible for Financial Services  
Chapter 12 Temporary Entry for Business Persons 
Annex 1203 Temporary Entry for Business Persons 
Chapter 13 Competition Policy, Mo nopolies and State Enterprises 
Annex 1308 Country-Specific Definitions of State Enterprises 
Chapter 14 Government Procurement 
Annex 1401.1-1  Central level entities 
Annex 1401.1-2  Other covered entities 
Annex 1401.1-3  Goods 
Annex 1401.1-4  Services 
Annex 1401.1-5  Construction services 
Annex 1401.1-6  General notes  
Annex 1401.1-7  Threshold adjustment formula  
Annex 1401.1-8 Transiti onal thresholds for goods and services proc ured by central level entities of Peru 
Chapter 15 Electronic Commerce 
Chapter 16 Labour 
Chapter 17 Environment 
Chapter 18 Trade-related cooperation 
Chapter 19 Transparency 
Chapter 20 Administration of the Agreement  
Chapter 21 Dispute Settlement 
Chapter 22 Exceptions 
Tahle II.1 (Cont'd)  WT/REG270/1 
 Page 11 
 
 
  Chapters and annexes Title/Description 
Chapter 23 Final provisions 
Annex I Entry into force reservati ons for existing measures and liberalization commitments 
Schedule of Canada Schedule of Peru 
Annex II Reservations for future measures 
Schedule of Canada 
Schedule of Peru  
Annex III Financial services Non-conforming measures  
Tariff Schedule of Canada 
Tariff Schedule of Peru  
Source:  Free Trade Agreement between Canada and Peru. 
III. TRADE IN GOODS 
A. NATIONAL TREATMENT AND MARKET ACCESS PROVISIONS ON TRADE IN GOODS  
1. General Provisions 
17. Chapter 1 sets out initial provisions and general definitions.  Chapter 2 sets out the national 
treatment and market access provisions applicab le to trade in goods between the Parties. 
18. Under Article 202, each Party accords national treatment to the other Party's goods in 
accordance with Article III of the GATT 1994 and its  interpretative notes, which are incorporated 
mutatis mutandis  into the Agreement.  The provisions on national treatment do not apply to any 
measure, including that measure's continuation, pr ompt renewal or amendment of the products laid 
out in Table III.1. 
Table III.1:  Parties' Exceptions to National Treatmen t and provisions on Import and Export Restrictions 
Party Measure 
imports of used clothing and footwear  
used vehicles and used automotive engines, parts and replacements  
used tyres 
used goods, machinery and equipmen t which utilize radioactive sources Peru 
actions authorized by the Disput e Settlement Body of the WTO. 
Canada exports of logs of all species 
 export of unprocessed fish 
 imports of any goods of the prohibited provisions  of tariff items 9897.00.00, 9898.00.00 and 9899.00.00 
 excise duties on absolute alcohol used in manufacturing 
 measures relating to the use of ships in the coasting trade of Canada 
 the internal sale and distribu tion of wine and distilled spirits 
 actions authorized by the Disput e Settlement Body of the WTO. 
Source: Text of the Agreement.  
 
2. Import duties and charges, and quantitative restrictions 
19. Under Article 203 the Parties agree to elimin ate customs duties on originating goods in 
accordance with their resp ective Schedules as set out in Annex 203.2 of the Agreement.  During the 
tariff elimination process, the Parties agree to apply the lesser of the preferential rate and the existing 
applied rate.  The Annex sets out the main staging categories that apply to the elimination of customs 
duties by the Parties including for certain tari ff quotas (described below).  The longest phase-out 
period for the elimination of customs duties is 17 years from the date of entry into force of the WT/REG270/1 
Page 12  
 
  Agreement.  The Parties agree to consult, upon requ est by either Party, to consider accelerating the 
elimination of customs duties set out  in Annex 203.2 (Article 203.4).
4 
20. Under Article 203.1, neither Party may increase any existing, nor adopt any new, customs 
duty on an originating good.  However, a Party ma y raise a customs duty back to the level established 
in its Schedule following an unilateral tariff reducti on;  or maintain or increase a customs duty as 
authorized by the Agreement, the WTO's Dispute Settlement Bo dy or any agreement under the 
WTO Agreement.   
21. Chapter two sets out certain special regimes rela ting to market access for goods.  These are as 
follows: (a) Article 204 provides for the temporary admission of goods, in particular, the duty-free 
temporary admission of professional equipment, goods  admitted for sports purposes, and commercial 
samples;  (b) Article 205 provides that neither Pa rty may apply a customs duty to a good, regardless 
of its origin, that re-enters its territory after that  good has been temporarily exported from its territory 
to the territory of the other Party for repair or altera tion, regardless of whether such repair or alteration 
could be performed in its territory;  and (c) duty-fr ee entry shall be granted to commercial samples of 
negligible value and to printed advertising materials imported from the territory of either Party 
(Article 206).   
22. With respect to non-tariff measures, neither Part y may adopt or maintain any import or export 
prohibitions or restrictions except as provi ded for in Article XI of the GATT 1994 and its 
interpretative notes, which are incorporated mutatis mutandis  into the Agreement.  The prohibitions 
on import and export restrictions do not appl y to the measures listed in Table III.1. 
23. In the event that a Party maintains a prohibition or restriction on the import or export of a 
good from or to a non-party, it may: (a) limit or prohibit the import of the good of the non-party from 
the territory of the other Party; or (b) require as a condition for exporting the good of the Party to the territory of the other Party, that the good not be  re-exported to the non-Party without being consumed 
in the territory of the other Party.  In such a case,  the Parties, upon the request of either Party, shall 
consult to avoid undue interference with or dist ortion of pricing, marketing, and distribution 
arrangements in the other Party (Article 207). 
24. No Party may adopt or maintain  a measure that is inconsistent with the Import Licensing 
Agreement (Article 208).   
25. Under Article 209, the Parties will ensure th at all administrative fees and charges in 
connection with the import and expor t of goods are limited to the approximate cost of the service 
rendered without representing an indirect protection to domestic goods or a taxation of imports or 
exports for fiscal purposes.  They agree to avoid re quiring consular transactions , including related fees 
and charges, in connection with the import of any goods.  The current list of fees and charges applied 
by the Parties shall be made available on the Internet.   
26. The Parties agree to implement and administ er their tariff-rate quotas (TRQs) in accordance 
with Article XIII of the GATT 1994 and the Import Licensing Agreement (Article 214).  Peru may 
maintain its Price Band System with respect to a number of products (Article 218).  These products 
are set out in Annex II of this Report.
5 
                                                      
4 According to the Parties, to date no tariff acceleration consultations have taken place. 
5 According to Peru, the system intends to stabilize volatile international prices in order to give some 
certainty to producers' decisions regarding sowing, production and commercialization.  Additional duties and 
  WT/REG270/1 
 Page 13 
 
 
  3. Liberalization of tariff lines and trade 
27. The elimination of customs duties between the Pa rties is detailed in their respective Schedules 
to Annex 203.2.  For both Parties, the elimination of  customs duties started at entry into force of the 
Agreement (1 August 2009);  the base rates for ta riff reductions are the MFN applied duties for 2007 .  
Subsequent duty reductions take place on 1 January  of each year.  Annex 203.2 sets out the main 
staging categories that apply to the elimination of  customs duties by the Parties which are as follows: 
(a) Category A: customs duties on such goods are eliminated on the date of the 
Agreement's entry into force; 
(b) Category B: customs duties on such goods are to be progressively eliminated in 
equal annual stages beginning on the date of the Agreement's entry into force over a 
period of three (Canada) or five (Peru) years; 
(c) Category C: customs duties on such goods are to be progressively eliminated in 
equal annual stages beginning on the date of the Agreement's entry into force over a 
period of seven (Canada) or ten (Peru) years; 
(d) Category D: customs duties on such goods are to be progressively eliminated in 
equal annual stages beginning on the date of the Agreement's entry into force over a 
period of 12 years (Peru only); 
(e) Category E:  such goods are exempt from tariff elimination; 
(f) Category F: customs duties on such goods are to be progressively eliminated in 
equal annual stages beginning on the date of the Agreement's entry into force over a 
period of 15 years (Peru only); 
(g) Category G: customs duties on such goods are to be progressively eliminated in 
equal annual stages beginning in the ninth year  after the Agreement's entry into force 
over a period of nine years (Peru only). 
28. Tariff elimination under the Agreement is depicted in Tables III.2 to III.3.6  In the case of 
Canada, 54.4% of its tariff lines were already duty-free on an MFN basis in 2009 corresponding to 
96.6% of its total imports from  Peru for the period 2006-2008.7  On entry into force of the Agreement 
a further 43.1% of Canada's tariff schedule was liber alized, accounting for an additional 3.3% of its 
imports from Peru becoming duty-free.  By 2015, a further 1.1% of tariff lines will be liberalized, 
resulting in 98.7% of Canada's tariff lines bei ng duty-free which corresponds to 100% of its imports 
from Peru. 
                                                                                                                                                                     
duty reductions are applied as a result of the system's methodology.  Customs duties which include the 
mentioned duties are elaborated and published by the Central Bank of Peru in Gazette. 
6 For tariff lines subject to TRQs only the out-of-quota duty is included in the tariff-related 
calculations. 
7 Canada's tariff is composed of 8,176 tariff lines at the HS 8-digit level;  7,881 tariff lines are 
ad valorem, 89 lines are subject to specific duties, 43 to compound duties, and 163 to mixed duties. WT/REG270/1 
Page 14  
 
  Table III.2 
Tariff elimination commitments under the Agree ment and corresponding average trade values 
A. Canada 
Duty phase-out 
period Number of lines % of total lines in 
Canada's tariff 
schedule Value of Canada's imports 
from Peru (2006-2008) 
in million US$ % of Canada's total 
imports from  
Peru 2006-2008 
MFN duty free 
(2009) 4,449 54.4 1,971.8 96.6 
2009 3,523 43.1 68.3 3.3 
2010 1 0.0 0.0 0.0 
2011 22 0.3 0.0 0.0 
2013 2 0.0 0.3 0.0 
2014 17 0.2 0.0 0.0 
2015 52 0.6 0.0 0.0 
Remain dutiable 110 1.3 0.0 0.0 
Total 8,176 100.0 2,040.3 100.0 
 
Note: Excludes data beyond HS Chapter 97.  
 Tariff lines subject to in-quota rates are excluded in the com putation; for the calculation of averages, specific rates are ex cluded 
 and the ad valorem  part of alternate rates are included. 
 Based on the HS 2007 nomenclature. 
 
Source :  WTO estimates based on data provided by Canada. 
 
29. In the case of Peru, 53.8% of its tariff lines were already duty-free on an MFN basis in 2009 
corresponding to 82.2% of its total im ports from Canada for the period 2006-2008.8  On entry into 
force of the Agreement a further 29.2% of Peru's  tariff was liberalized, accounting for an additional 
12.9% of its imports from Canada becoming duty-free.   By the end of the transition period in 2025 a 
total of 99.1% of Peru's tariff lines will be duty -free accounting for 99.9% of its imports from Canada 
for the reference period. 
Table III.3 
Tariff elimination commitments under the Agree ment and corresponding average trade values 
A. Peru 
Duty phase-out 
period Number of lines % of total lines in 
Peru's tariff schedule Value of Peru's imports 
from Canada (2006-2008) 
in million US$ % of Peru's total 
imports from  
Canada 2006-2008 
MFN duty free (2009) 3,957 53.8 290.6 82.2 
2009 2,149 29.2 45.8 12.9 
2013 672 9.1 7.1 2.0 
2018 492 6.7 9.5 2.7 
2020 4 0.1 0.0 0.0 
2025 13 0.2 0.0 0.0 
Remain dutiable 64 0.9 0.4 0.1 
Total 7,351 100.0 353.4 100.0 
 
Note: Tariff lines subject to in-quota rates are excluded in the computation. 
 Based on the HS 2007 nomenclature. 
 
Source :  WTO estimates based on data provided by Peru. 
 
4. Canada's liberalization schedule 
30. The MFN rates used by Canada for implementing its tariff liberalization commitments 
already provided for 54.4 % of its tariff lines being duty free before the entry into force of the Agreement (Chart III.1).  The bulk of lines liberali zed upon entry into force of the Agreement in 2009 
held rates of 20% or below.  Only three of the 92 tariff lines subject to duty rates of more than 50% 
are liberalized by the end of the transition period.   
                                                     
 
8 Peru's tariff is composed of 7,351 tariff lines at the HS 8-digit level, all of which are ad valorem  
duties.  WT/REG270/1 
 Page 15 
 
 
  0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000200920102011201320142015Chart III.1
Canada's duty elimination under the Agreement
Year of duty free treatment   
Source: WTO Secretariat estimates, based on data provided by Canada.Number of duty-free lines (cumulative)
Duty-free <10% <20% MFN is: non ad valorem <30% <50% >50%
 
 
31. Table III.4 shows Canada's liberalization co mmitments under the Agreement organized by 
HS Section product categories.  The 4,449 tari ff lines liberalized upon entry into force of the 
Agreement are distributed across all HS Sections  with a majority falling under HS Sections XI 
(Textiles) and VI (Chemicals).  Of the 110 tariff lines which remain subject to duties, all fall within 
the definition of agricultural products under the WTO Agreement on Agriculture (Annex I).  The 
average final tariff on dutiable items ranges from 218% to 229%.  
Table III.4 
Canada: Tariff elimination under the Agreement, by HS section 
Number of duty-free lines  
HS section and description  MFN 
average
% Total 
No of 
lines  MFN 
2009  
2009 
2010 
2011 
2013 
2014 2015 Remain 
dutiable  Avg. Final 
Tariff 
(Dutiable) 
% 
I Live animals and animal 
products 52.4 283 179 34 1 1  1 1 66 228.8 a 
II Vegetable products 3.8 427 247 177   1 2    
III Animal or vegetable fats and 
oils 8.7 62 20 40      2 218.0 a 
IV Prepared foods etc. 17.7 516 154 318  1 1 2  40 228.9 b 
V Minerals 1.1 174 144 30        
VI Chemicals and chemical 
products 3.0 1,120 564 553     1 2 - 
VII Plastics and rubber 3.7 381 168 210     3   
VIII Hides and skins 3.3 183 65 113  2   3   
IX Wood and articles 2.7 136 70 66        
X Pulp, paper etc. 0.0 177 177         
XI Textiles and textiles article s 7.7 1,495 660 810    10 15   
XII Footwear, headgear 11.1 99 24 55  15  2 3   
Table III.4 (Cont'd) WT/REG270/1 
Page 16  
 
  Number of duty-free lines  
HS section and description  MFN 
average
% Total 
No of 
lines  MFN 
2009  
2009 
2010 
2011 
2013 
2014 2015 Remain 
dutiable  Avg. Final 
Tariff 
(Dutiable) 
% 
XIII Articles of stone 3.1 195 105 87     3   
XIV Precious stones, etc. 2.3 65 41 24        
XV Base metals and base 
metals products 2.0 883 557 326        
XVI Machinery 1.4 1,191 895 296        
XVII Transport equipment 5.5 237 100 116     21   
XVIII Precision equipment 2.0 324 205 119        
XIX Arms and ammunition 3.8 31 8 23        
XX Misc. manufactured articles 5.6 188 59 124  3   2   
XXI Works of art, etc. 1.4 9 7 2        
Total 6.2 8,176 4,449 3,523 1 22 2 17 52 110 228.7 
 
- Specific duty 
a Contains mixed and specific duties 
b Contains ad valorem , mixed and specific duties 
Note: Excludes data beyond HS Chapter 97.  
 Tariff lines subject to in-quota rates are excluded in the com putation; for the calculation of averages, specific rates are 
excluded and the ad valorem  part of alternate rates are included. 
Based on the HS 2007 nomenclature. 
 
Source : WTO estimates based on da ta provided by Canada. 
 
32. Chart III.2 shows a comparison of average du tiable rates in those HS Chapters where 
preferential duties remain.  The comparison is made  between Canada's average preferential and MFN 
rates for lines which remain subject to preferentia l duties only.  As can be seen from Chart III.2, 
average preferential duties are the same as the MFN rates (except where preferential rates are specific 
duties), indicating that no preferential liberalization of these lines has taken place under the 
Agreement.  WT/REG270/1 
 Page 17 
 
 
  0 50 100 150 200 250 300010204151617181921222335Chart III.2
Canada:  Average of dutiable rates, by HS Chapter
HS Chapter  
Note: MFN and preferential rates in HS chapters 17 & 35 contain specific duties.
Source : WTO Secretariat estimates, based on data provided by Canada.Average rate of duty (%)
MFN Preferential
 
 
 
5. Peru's liberalization schedule 
33. The MFN rates used by Peru for implementing its tariff liberalization commitments already 
provided for 53.8% of its tariff lines being duty free before the entry into force of the Agreement 
(Chart III.3).  The bulk of lines liberalized upon entr y into force of the Agreement in 2009 held rates 
of 20% or below.  None of the seven tariff lines subject to duty rates of more than 30% are liberalized under the Agreement.   WT/REG270/1 
Page 18  
 
  0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,00020092013201820202025Chart III.3
Peru's duty elimination under the Agreement
Year of duty free treatment   
Source: WTO Secretariat estimates, based on data provided by Peru.Number of duty-free lines (cumulative)
Duty-free <10% <20% MFN is: <30%
 
 
34. Table III.5 shows Peru's liberalization commi tments under the Agreement organized by 
HS Section product categories.  The 2,149 tari ff lines liberalized upon entry into force of the 
Agreement are distributed across all HS Sections  with a majority falling under HS Sections XI 
(Textiles) and II (Vegetable Products).  Of the 64 ta riff lines which remain subject to duties, all but 
four are agricultural products.  The average fina l tariff on dutiable items ranges from 9% to 17%.  
Table III.5 
Peru: Tariff elimination under the Agreement, by HS section 
Number of duty-free lines  
HS section and 
description  MFN 
average
% Total 
No of 
lines  MFN 
2009  
2009 
2013 
2018 2020 
2025 Remain 
dutiable  Avg. Final 
Tariff 
(Dutiable) %  
I Live animals and 
animal products 3.9 305 192 49 8 10  11 35 12.9 
II Vegetable products 6.7 384 121 223 20 17 1 2   
III Animal or vegetable 
fats and oils 3.9 64 36 5 20 2   1 9.0 
IV Prepared foods etc. 6.0 297 109 102 43 15 3  25 12.2 
V Minerals 2.9 202 138 33 31      
VI Chemicals and 
chemical products 3.0 1,465 970 175 198 120   2 9.0 
VII Plastics and rubber 3.4 312 195 21 49 47     
VIII Hides and skins 8.0 79 9 26 26 18     
IX Wood and articles 6.6 107 28 1 16 62     
X Pulp, paper etc. 5.6 246 93 76 49 28     
XI Textiles and textiles 
articles 14.1 966 63 881 11 10   1 17.0 
XII Footwear, headgear 13.4 56  33 17 6     
XIII Articles of stone 3.5 174 106 14 32 22     
Table III.5 (Cont'd)  WT/REG270/1 
 Page 19 
 
 
  Number of duty-free lines  
HS section and 
description  MFN 
average
% Total 
No of 
lines  MFN 
2009  
2009 
2013 
2018 2020 
2025 Remain 
dutiable  Avg. Final 
Tariff 
(Dutiable) %  
XIV Precious stones, etc. 6.8 57 14 12 31      
XV Base metals and base 
metals products 2.5 700 505 88 56 51     
XVI Machinery 1.7 1,195 991 149 25 30     
XVII Transport 
equipment 1.8 226 181 5 15 25     
XVIII Precision 
equipment 3.6 290 175 105 10      
XIX Arms and 
ammunition 9.0 69  69       
XX Misc. manufactured 
articles 7.1 150 31 75 15 29     
XXI Works of art, etc. 9.0 7  7       
Total 5.0 7,351 3,957 2,149 672 492 4 13 64 12.5 
 
Note: Tariff lines subject to in-quota rates are excluded in the computation. 
Based on the HS 2007 nomenclature. 
 
Source : WTO estimates based on data provided by Peru. 
 
35. Chart III.4 shows a comparison of average du tiable rates in those HS Chapters where 
preferential duties remain.  The comparison is ma de between Peru's average preferential and MFN 
rates for lines which remain subject to preferentia l duties only.  As can be seen from Chart III.4, 
average preferential duties are the same as the MFN ra tes, indicating that no preferential liberalization 
of these lines has taken place under the Agreement.  
0 5 10 15 2002041516171819213563Chart III.4
Peru:  Average of dutiable rates, by HS Chapter
HS Chapter  
Source : WTO Secretariat estimates, based on data provided by Peru.Average rate of duty (%)
MFN Preferential
 WT/REG270/1 
Page 20  
 
  6. Tariff Rate Quotas 
36. Under the Agreement Canada has allocated tari ff rate quotas (TRQs) for sugar and Peru for 
sugar, and meat and edible offal.
9  The tariff lines covered by these TRQs and the modalities for 
liberalization are detailed in Tables III.6 – III.7. 
Table III.6 
Canada: Tariff-rate quotas for products originating in Peru 
HS Code (description) In 
quota 
rate Out of quota rate Quantity 
Sugar 
17019100, 17019900, 17029011, 17029012, 
17029013, 17029014, 17029015, 17029016, 
17029017, 17029018, 17029020, 17029030, 17029060 Free MFN rate 0 MT in 2009-2013.  3,000 MT in 2014 
increasing by 413 or 414 MT annually until 
2018.  From 2019 onwards, 4,654 MT. 
 
Source : Text of the Agreement. 
 
Table III.7 
Peru: Tariff-rate quotas for pro ducts originating in Canada 
HS Code (description) In 
quota 
rate Out of quota rate Quantity 
Sugar 
1701910000, 1701991000, 1701999000, 1702901000, 
1702902000, 1702903000, 1702904000, 1702909000 Free MFN rate 0 MT in 2009-2013.  3,000 MT in 2014 
increasing by 413 or 414 MT annually until 
2018.  From 2019 onwards, 4,654 MT. 
Meat and Edible Meat Offal 
0203110000, 0203120000, 0203190000, 0203210000, 0203220000, 0203290000, 0206300000, 0206410000, 
0206490000, 0209001000, 0209009000, 0210110000, 
0210120000, 0210190000 Free 
MFN rate 325 MT in 2009, increasing annually by 5% 
until 2018.  From 2019 onwards, 504 MT. 
Meat and Edible Meat Offal 
0201309000, 0202309000 Free MFN rate 100 MT in 2009. increasing annually by 5% 
until 2013.  From 2014 onwards, 122 MT.   
Meat and Edible Meat Offal 
0206100000, 0206210000, 0206220000, 0206290000 Free MFN rate 5,000 MT in 2009, increasing annually by 
5% until 2018.  Free of TRQ as of 2019. 
Source : Text of the Agreement. 
 
B. RULES OF ORIGIN  
37. Disciplines regarding rules of origin are set out in Chapter 3 of the Agreement with the 
specific rules of origin set out in Annex 301.  A ccording to Article 301, a good is originating when it 
is wholly obtained or produced entirely in the terr itory of one or both of the Parties or exclusively 
from originating materials.10  For goods produced from non-originating materials, the good must 
                                                      
9 Peru does not have bound WTO TRQs.  For Canada, these bilateral TRQs are in addition to existing 
WTO TRQs. 
10 "Goods wholly obtained or produced entirely in the territory of one or both of the Parties" is defined 
in Article 318 to be minerals and other non-living natura l resources extracted in or taken from the territory of 
one or both of the Parties;  plants and plant products harvested or gathered in the territory of one or both of the Parties;  live animals born and raised in the territory of one or both of the Parties;  goods obtained from live 
animals in the territory of one or both of the Parties;  goods obtained from hunting, trapping, fishing or 
aquaculture in the territory of one or both of the Parties;  fish, shellfish, and other marine life taken from the sea, 
seabed or subsoil outside the territory of one or both Parties, by a vessel registered or recorded with a Party, or 
leased or chartered by an enterprise established in the territory of a Party, and entitled to fly its flag, or listed with a Party; goods produced from such fish, shellfish, and other marine life on board a vessel registered or 
recorded with a Party, or leased or chartered by an en terprise established in the territory of a Party and entitled 
to fly its flag, or listed with a Party;  goods, other than fish, shellfish, and other marine life, taken or extracted from the seabed, ocean floor or subsoil outside the territori es of the Parties by a Party or a person of a Party, 
provided that such Part y or person of such Party has rights to explo it such seabed, ocean fl oor or subsoil;  goods 
  WT/REG270/1 
 Page 21 
 
 
  satisfy the specific rule of origin applicable to that good as set out in Annex 301 as a result of 
production occurring entirely in the territory of one or both of the Parties. Finally, except as provided in Annex 301, or except for goods of HS Chapters 1 through 21, HS headings 39.01 through 39.15, or 
Chapters 50 through 63, a good is originating if it is produced entirely in the territory of one or both of 
the Parties but one or more of the non-originating materials used in its production cannot satisfy the 
requirements in Annex 301 because both the good and the non-originating materials are classified in 
the same subheading, or heading that is not furt her subdivided into subheadings, provided that the 
value of non-originating materi als classified as or with the good does not exceed 55% of the 
transaction value of the good.  A good qualifying as orig inating under any of these criteria must also 
satisfy all the other applicable requirements of this Chapter. 
38. The specific rules of origin are set out in Anne x 301, at either the HS heading level (4-digit), 
or HS subheading level (6-digit), depending on the product.  A change in HS chapter is common for 
agricultural products (HS Chapters 1-24).  In the case of mineral fuels and chemicals (HS Chapters 
27-29) in addition to specific rules of origin requiri ng a change in tariff classification, origin can be 
conferred to products of a chemical reaction.  For some products, a specific rule of origin may require 
that the good satisfy both a change in tariff clas sification and an additional requirement, such as 
undergoing a specific process or meeting a value or weight test, whereby the value or weight of 
specified non-originating materials used in the production of the good may not exceed a certain threshold.  This is the case for certain products of the chemical and allied industries, plastics, 
footwear, precious stones, base metals, machinery,  vehicles and other transport equipment, optical 
equipment, arms and ammunition, and miscellaneous manufactured articles.  In such cases, the value 
or weight of permitted non-origin ating materials ranges from 35%-65% .  In the case of textiles and 
apparel (HS chapters 50-63), certain nylon filament ya rn is considered as originating if a) the yarn is 
imported into the territory of the Party from the Un ited States or Mexico, and b) the yarn would be 
originating if the United States or Mexico were part of the free-trade area established by the 
Agreement.  For textiles (HS chapters 50-60), most  of the specific rules of origin are at the 
HS heading level, while for apparel (HS chapters 61-62) , the six-digit subheading level is the norm.     
39. Articles 303 and 304 set out the method for calcula ting the value of non-originating materials 
used to produce originating goods, based on eith er the transaction value or, as an option for the 
automotive goods of headings 87.01 through 87.08, the net cost of the good.  Article 305 provides for an absorption principle, i.e. that any non-origin ating material used in a product which acquires 
originating status shall be considered as origina ting if used in the subse quent production of another 
good.   
40. Article 306 of the Agreement provides for bilate ral cumulation between the Parties, both in 
terms of production and the value of materials produced in the territories of the Parties.  This Article 
also provides for cumulation with non-Parties such that, where each Party has a free-trade agreement 
with the same non-Party, the territory of the non-Party is deemed to form part of the territory of the 
free-trade area of the Canada-Peru FTA for th e purposes of determining whether a good is an 
originating good under this Agreement, provided that  the FTA between each Party and the non-Party 
contains a provision equivalent in effect.  The Par ties may agree to limit such cumulation to specified 
goods or to apply it under specified conditions. 
41. Article 307 provides for a de minimis  provision such that a good is considered as originating 
if the value of all non-originating materials used in its production that do not undergo an applicable 
                                                                                                                                                                    
 
taken from outer space, provided that they are obtained by a Party or a pers on of a Party and not processed in a 
non-Party;  waste and scrap derived from production in the territory of one or both of the Parties; and goods 
produced in the territory of one or both of the Parties exclusively from goods referred to in this definition, or 
from their derivatives, at any stage of production. WT/REG270/1 
Page 22  
 
  change in tariff classification do not exceed 10% of the transaction value of the good.  For products in 
HS Chapters 1 through 21 the de minimis  provision only applies when the good and the 
non-originating material are classified in different subheadings.  For textiles (HS Chapters 50 through 
60) a de minimis  provision based on 15% of the total weight of non-originating fibres or yarns applies, 
while for apparel and made-up goods  (HS Chapters 61 through 63), a de minimis  provision based on 
15% of the total weight of non-originating yarns used in the component that determines the tariff 
classification of the good applies. 
42. Article 308 (Fungible Goods and Materials) provides for the use of recognized inventory 
management methods for purposes of determini ng whether a good is an originating good.  
Articles 309 through 313 clarify how certain material s (indirect materials; sets or assortments of 
goods;  accessories, spare parts and tools; packaging materials and containers for retail sale;  and 
packing materials and containers for shipment) are to be treated/valued when determining whether a 
good is originating.  Article 314 (Transit and Tran shipment) allows originating goods to transit 
through the territory of a non-Party provided that  no further processing takes place in the non-Party 
other than preservation, unloading, or reloading, an d that the originating goods remain under customs 
control in the territory of a non-Party.   
43. Article 315 specifies that the basis for tariff classification is the Harmonized System, guided 
by its Section or Chapter Notes,  in accordance with the General Ru les for the Interpretation of the 
Harmonized System, and that all costs referred to in the Chapter are to be reco rded and maintained in 
accordance with the Generally Accepted Accounting Prin ciples applicable in the territory of the Party 
in which the good is produced. Under Article 316, the Parties agree to consult regularly to ensure the 
effective administration of rules of origin and agr ee to cooperate in their administration in accordance 
with Chapter 4 (Origin Procedures and Trade Facilitation). 
44. Article 317 contains a short supply rule which provides for the Parties to temporarily allow 
fibre, yarn or fabric from a non-Party to be considered originating when used in the production of goods of HS Chapters 50 through 63 if such inputs are not available in commercial quantities in a 
timely manner in the territory of either Party. 
C. E
XPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
45. Article 207 provides that neither Party may adopt or maintain any prohibition or restriction on 
the export or sale for export of any good destined for the territory of the other Party.  Article 210 further prohibits the adoption or maintenance of a ny tax, duty, or other charge on the export of any 
good to the territory of the other Party, unless the tax,  duty, or charge is also adopted or maintained on 
the good when destined for domestic consumption.   
D. R
EGULATORY PROVISION S ON TRADE IN GOODS  
1. Standards 
(a) Sanitary and phytosanitary measures 
46. Chapter 5 lays down the provisions applying to sanitary and phytosanitary measures (SPS).  
The Parties affirm their existing rights and obl igations under the WTO Agreement on Sanitary and 
Phytosanitary Measures and agree to use the WTO dispute settlement  procedures for any disputes 
regarding SPS measures (Article 503).  The Parties establish a Committee on Sanitary and 
Phytosanitary Measures which shall meet no later than  six months following the entry into force of 
the Agreement unless the Parties decide otherwise (Article 504).  WT/REG270/1 
 Page 23 
 
 
  (b) Technical barriers to trade 
47. Chapter 6 on Technical Barriers to Trade (TBT) applies to all standards, technical regulations, 
and conformity assessment procedures of national gove rnment bodies that affect the Parties' mutual 
trade except for purchasing specifications prepared by governmental bodies for their production or consumption and SPS measures.  The Parties affirm  their existing rights and obligations under the 
WTO Agreement on TBT.   
48. The Parties agree to use relevant internati onal standards, guides and recommendations as the 
basis for their technical regulations and conformity  assessment procedures (Article 605).  With regard 
to technical regulations, they agree to give positiv e consideration to accepting technical regulations of 
the other Party as equivalent to their own (Artic le 606).  With regard to conformity assessment 
procedures the Parties recognize that a broad range of mechanisms exists to facilitate the acceptance 
of conformity assessment procedures conducted in the other Party's territory and agree to exchange 
information with respect to these mechanisms.  If a Party does not accept the results of a conformity 
assessment procedure conducted in the territory of the other Party, it shall, upon the request of the 
other Party, explain the reasons for its decision.  Wh en a Party declines a request of the other Party to 
enter into negotiations to conclude an agreement for recognition of conformity assessment procedures, 
it shall explain the reasons for its decision (Article 607).   
49. With respect to transparency,  the Parties agree to allow each others' persons on terms no less 
favourable than that accorded to their own persons , to participate in the development of technical 
regulations and conformity assessment procedur es (Article 608).  Additional provisions on 
transparency cover electronic submission of technical regulations and conformity assessment 
procedures with, upon request, the rationale theref ore.  The obligations on transparency of 
TBT measures are to be implemented as soon as pract icable and no later than two years from the date 
of entry into force of the Agreement.  Under A nnex 609.1, TBT Country Coordinators are established 
to inter alia  monitor the implementation and administrati on of the TBT Chapter, enhance cooperation 
in the development and improvement of standard s, technical regulations, conformity assessment 
procedures and metrology, and for consultati ons on any matter arising under the Chapter 
(Article 609). 
2. Safeguard mechanisms 
(a) Global safeguards 
50. The Parties retain their rights and obliga tions under Article XIX of GATT 1994 and the 
WTO Agreement on Safeguards.  The Agreement does not  confer any  additional rights or obligations 
on the Parties with regard to actions taken unde r Article XIX of GATT 1994 and the WTO Agreement 
on Safeguards except that a Party taking a global saf eguard action may exclude imports of the other 
Party if such imports are not determined to be a subs tantial cause of serious injury or threat thereof .  
The same good cannot be subject, at the same time, to a bilateral safeguard under the Agreement and 
to a measure pursuant to WTO provisions (Article 701). 
(b) Bilateral safeguards 
51. During the transition period
11 only, if as a result of the reduction or elimination of customs 
duties under the Agreement, a good is  imported into the other Party in such increased quantities, in 
                                                      
11 Article 707 defines “transition period” as the seven year period beginning on the entry into force of 
the Agreement, except where the tariff elimination for the good against which the action is taken occurs over a 
longer period of time, in which case the transition period shall be the period of tariff elimination for that good. WT/REG270/1 
Page 24  
 
  absolute terms or relative to domestic production, to constitute a substantial cause of serious injury, or 
threat thereof, to domestic production, the importing Party may apply a bilateral safeguard measure to 
prevent or remedy serious injury and to facilitate adjustment (Article 702).
12  Bilateral safeguards may 
take the form of a suspension of the further reduction of customs duty on the good or an increase in  customs duty up to the lesser of the applied MFN dut y when the safeguard is taken and the base rate 
as provided in the schedule to Annex 203.2 (Article 702). 
52. Article 703 sets out the conditions for notifica tion and consultation w ith regard to the 
application of a safeguard measure.  A Party initiating  an investigation is obliged to notify and consult 
with the other Party before applying a measure (A rticle 703).  Article 705 outlines the investigation 
procedures and transparency requirements to be fo llowed.  A safeguard measure may only be imposed 
following an investigation in accordance with th e WTO Agreement on Safeguards and may not be 
maintained for a period exceeding three years, beyond the expiration of the transition period, nor more 
than twice against the same good (Article 704).  A Party may only take a second safeguard action if 
the period of time that has elapsed since the end of  the first action is at least half the period of 
application of the first action against the same good.  If the expected duration of the measure is longer 
than one year, the importing Party shall progressi vely liberalize it at regular intervals.  
53. Mutually agreed compensation shall be provided to the exporting Party in the form of 
concessions having substantia lly equivalent trade effects or equiva lent to the value of the additional 
duties expected from the measure (Article 704).  If an agreement on compensation cannot be reached, the other Party may take tariff action having trade e ffects substantially equivalent to the safeguard 
measure, for the minimum period necessary to achieve  the substantially equi valent effects and only 
while the safeguard measure is being applied.  On ce the safeguard measure has been terminated, the 
rate of customs duty must be the same as that agreed  to in the Party's schedule to Annex 203.2 (Tariff 
Elimination).  The Agreement does not provide for the possibility of imposing provisional measures. 
3. Anti-dumping and countervailing measures 
54. The Parties retain their rights and obligati ons under the WTO Agreement which exclusively 
governs the application of antidumping and counter vailing measures (Article 706).  The Agreement's 
provisions on dispute settlement do not appl y with regard to AD and CVD measures. 
4. Subsidies and State-aid 
55. Article 215 prohibits export subsidies on any agricultural products in trade between the 
Parties.  If either Party maintains an export subs idy on a product exported to the other Party, the 
applying Party shall, upon  request, consult with a view to agreeing on specific measures that either 
Party may adopt to counter the effects of such expor t subsidy, including an increase of the rate of duty 
up to the applied MFN rate. 
56. If either Party maintains, introduces or reintr oduces a domestic support measure that the other 
Party considers to distort bilateral trade covered by the Agreement, the Party applying the measure 
shall, upon request, consult with a view to a voiding the nullification and impairment of the 
concessions granted under the Agreement (Article 217). 
                                                     
 
12 In Article 707, the definitions of "domestic industry ", "serious injury", and "threat of serious injury" 
mirror those in Article 4 of the WTO Agreement on Safegu ards.  In addition, the Agreement defines "substantial 
cause" as "a cause that is important and not less important than any other cause".  WT/REG270/1 
 Page 25 
 
 
  57. The rights and obligations of the Parties with re spect to state trading enterprises are governed 
by Article XVII of the GATT 1994 and its Unders tanding, which are incorporated into the 
Agreement, mutatis mutandis  (Article 216). 
5. Customs-related procedures 
58. Chapter 4 sets out the provisions relating to origin procedures and trade facilitation.  It 
requires the Parties to establish, no later than the date of entry into force of the Agreement, a 
certificate of origin for the purpose of certifying  goods qualifying as originating.  Obligations 
regarding importations and expor tations are detailed in Articles 402 and 404, respectively.  
Certificates of origin are to be maintained to dem onstrate origin determination for a minimum of five 
years.  Detailed procedures which apply to origin ve rification are laid out in Article 406.  Provisions 
relating to trade facilitation are laid out in Section B of Chapter 4.  The Parties agree to publish their 
customs laws, regulations and administrative procedur es on the internet and to designate one or more 
contact points to address inquiries from interested persons (Article 409);  adopt simplified customs procedures to ensure the efficient release of goods by customs, if possible, without interim transfers to 
warehouses (Article 410);  facilitate customs procedures through the use of information technology 
based on international standards (Article 411);  maintain risk management systems to improve 
controls on high-risk goods and simplify clearance of  low-risk goods (Article 412);  and to adopt or 
maintain procedures for express shipments (Article 416).   
59. The Parties agree, inter alia , to cooperate in international fora such as the WCO to achieve 
mutually-recognized goals, to cooperate in the enfo rcement of their respective customs-related laws 
and regulations in implementing the Agreement, to f acilitate the collection and exchange of statistics, 
to harmonize customs laboratories' methods and exch ange of information, a nd to develop a technical 
cooperation programme in customs-re lated areas (Article 414).  Wher e a Party has reasonable grounds 
to suspect a fraudulent claim for pr eferential treatment, it may request that the other Party provide 
specific information that pertains to the offence.   
60. Each Party shall ensure that decisions made pur suant to Chapter 4 are subject to (a) at least 
one level of administrative review independent of th e official or office that issued the decision; and 
(b) judicial or quasi-judicial review of the decision (Article 417).  With respect to advance rulings, each Party must provide written advance rulings prior to import, at the request of an importer, exporter or producer in the other Party, on matters relating inter alia  to tariff classification, applicable 
rate of customs duty, information on the appli cation of quotas, and qualification of the good as 
originating.  Advance rulings remain in effect unless  circumstances change and must be issued within 
150 days of a request, provided that the request er has submitted all the necessary information 
(Article 419).  The obligations on advance rulings take  effect for Peru three years after the date of 
entry into force of the Agreement.  The Parties agree to establish a sub-co mmittee on trade facilitation 
(Article 420). 
IV. PROVISIONS ON TRADE IN SERVICES AND INVESTMENT 
A. S
COPE AND DEFINITIONS  
61. In the Agreement, cross-border trade in servi ces is defined to include GATS modes of supply 
1, 2, and presence of natural persons and is mainly  governed by Chapter 9 on Cross-Border Trade in 
Services.  Investment provisions, including a ll measures falling under mode 3 of the GATS, are 
covered by Chapter 8 on investment.  Cross-borde r trade in financial services and investment in 
financial institutions are governed by  Chapter 11 on Financial Services.   
62. The provisions of Chapter 9 on Cross-Border Tr ade in Services do not apply to:  financial 
services;  air services and related services in support of air services other than aircraft repair and WT/REG270/1 
Page 26  
 
  maintenance services, the selling and marketing of air transport services and computer reservation 
system services;  procurement by a Party or a state enterprise;  and subsidies or grants provided by a Party, including government-supported loans,  guarantees, and insurance (Article 901). 
63. Chapter 9 applies to measures adopted or main tained by the Parties affecting cross-border 
trade in services by service suppliers of the other Part y.  Although the definitions of cross-border trade 
in services contained in Article 915 do not include mode 3, Article 802 stipulates that market access 
and domestic regulation provisions shall also apply to measures by a Party affecting the supply of a 
service in its territory by a covered investment .  Additional disciplines on telecommunications are 
contained in Chapter 10 of the Agreement.  With respect to movement of natural persons, Chapter 9 
does not impose any obligation on a Party with resp ect to a national of the other Party seeking access 
to its employment market, or employed on a permanen t basis in its territory, and does not confer any 
right on that national with respect to that access or employment (Article 901.3).  Chapter 12 lays down provisions applying to the te mporary entry for business persons. 
64. The provisions governing investment are set out  in Chapter 8.  These apply to measures 
adopted or maintained by a Party relating to invest ors of the other Party;  their investments in its 
territory ("covered investments");  and with r espect to Articles 807 (Performance Requirements), 809 
(Health, Safety and Environmental Measures) a nd 810 (Corporate Social Responsibility), to all 
investments in the territory of the Party.  The provisions of the Chapter do not apply to measures 
adopted or maintained by a Party to the extent that they are covered by Chapter 11 (Financial 
Services). 
65. Chapter 11 on Financial Services applies to measu res adopted or maintained by the Parties 
relating to:  (a) financial institutions of the other Party
13;  (b) investors of the other Party, and 
investments of such investors, in financial institu tions in the Party's territory;  and (c) cross-border 
trade in financial services (Article 1101).  Ch apters 8 and 9 apply to measures adopted under 
Chapter 11 to the extent that articles from such Chap ters are incorporated into Chapter 11.  Chapter 11 
does not apply to activities or services forming part of a public retirement plan or statutory system of 
social security;  or to activities or services conduc ted for the account or with the guarantee or using 
the financial resources of the Party, including its public entities (Article 1101.3).   
66. Definitions specific to services, investment and financial services are contained in 
Articles 915, 847 and 1118, respectively.  Liberalizati on of trade in services and investment is based 
on a "negative-list approach" whereby the obligati ons of national and MFN treatment, local presence, 
and market access, in the case of trade in services; and national and MFN treatment, performance 
requirements, and senior management and board of dir ectors, in the case of investments, apply to all 
sectors except for: (a) existing non-conforming measur es as specified in Annex I; and (b) the sectors, 
sub-sectors or activities for which the Parties reserve the right to maintain existing, or adopt new or 
more restrictive measures as set out in Annex II. In the case of financial services, the obligations of national and MFN treatment, right of establishment, cross-border trade, and senior management and 
board of directors apply to all sectors except for:  (a) existing non-conforming measures (Section I to 
Annex III);  and (b) the sectors, sub-sectors or activ ities for which the Parties may maintain existing, 
or adopt new or more restrictive measures subsequent  to the Agreement's entry into force (Section II 
to Annex III).  National treatment for cross-border trade in financial services (modes 1 and 4) is 
granted on the basis of a positive list of sectors as  set out in Annex 1105.  Also, Section III of 
Annex III contains additional specific commitments made by the Parties. 
                                                     
 
13 "Financial institution"  means any financial intermediary or other enterprise that is authorized to do 
business and regulated or supervised as a financial institu tion under the law of the Party in whose territory it is 
located.  WT/REG270/1 
 Page 27 
 
 
  B. DENIAL OF BENEFITS  
67. Subject to prior notification and consultation, a Party may deny the benefits of Chapter 9 to a 
service supplier of the other Party that is an en terprise owned or controlled by nationals of a 
non-Party, if the denying Party prohibits transactions with that non-Party.  A Party may also deny the benefits of the Chapter if the service supplier is an enterprise owned or controlled by persons of a 
non-Party or by the denying Party, and the ente rprise has no substantial business activities in the 
territory of the other Party.   
68. A Party may also deny the benefits of Chapter 8 to an investor of the Party that is an 
enterprise of such Party and to its investments if the enterprise is owned or controlled by a non-Party 
with which the denying Party prohibits transactions .  A Party may also deny the benefits of the 
Chapter to an investor of the other Party if investors of a non-Party own or control the enterprise and 
the enterprise has no substantial business activ ities in the Party where it is constituted.  
C. C
ROSS -BORDER TRADE IN SERVICES  
1. Market access 
69. Article 906 provides that neither Party may adop t or maintain measures that (a) constitute 
limitations on the number of service suppliers, the total value of service transactions or assets, the 
total number of service operations or the total qu antity of services output, and the total number of 
natural persons that may be employed in a particular  service sector;  or (b) restrict or require specific 
types of legal entities or joint ventures through wh ich a service supplier may supply a service.  This 
provision, like those of national and MFN treatment and local presence, is subject to the Parties' 
reservations listed in Annexes I and II. 
2. National and MFN treatment 
70. According to Articles 903 and 904, each Party sh all accord to services suppliers of the other 
Party treatment no less favourable than that it acc ords, in like circumstances, to its own service 
suppliers and to services suppliers of a non-party.  With respect to sub-national level of government, 
national treatment means that each Party shall acco rd treatment no less favourable than the most 
favourable treatment accorded, in like circumstanc es, by that sub-national level of government to 
service suppliers of the Party of which it forms a part. 
3. Local presence 
71. Neither Party may require a service supplier of  the other Party to establish or maintain a 
representative office or any form of enterprise, or to  be resident, in its territory as a condition for the 
cross-border supply of a service (Article 907).  
D. INVESTMENT  
1. National and MFN treatment 
72. Articles 803 and 804 provide respectively for national and MFN treatment requiring each 
Party to accord to investors of the other Party and covered investments treatment no less favourable 
than that it accords in like circumst ances to its own investors and their investments and to investors of WT/REG270/1 
Page 28  
 
  any non-Party and their investments w ith respect to investment activities.
14  With respect to a 
sub-national level of government, national treatment  means that each Party shall accord treatment no 
less favourable than the treatment a ccorded, in like circumstances, by  that sub-national government to 
investors, and to investments of investor s, of the Party of which it forms a part. 
73. Article 816 (Special formalities and information requirements) provides that Article 803 shall 
not prevent a Party from adopting or maintaining a measure that prescribes special formalities in 
connection with covered investments provided that such formalities do not materially impair the 
protections afforded by a Party to investors of the other Party and covered investments.  Notwithstanding Articles 803 and 804, a Party may require an investor of the other Party or its covered investment to provide in formation concerning that investme nt solely for informational or 
statistical purposes.  
2. Performance Requirements 
74. Article 807 sets out the performance requireme nts which are prohibited under the Agreement 
in connection with investment activ ities of an investor of a Party or of a non-Party in its territory.
15  
The Parties may require an investment to use a tec hnology to meet generally applicable health, safety 
or environmental requirements.  Neither Party may condition the receipt or continued receipt of an 
advantage in connection with an investment on compliance with the performance requirements listed 
therein16 except a requirement to locate production, provide a service, train or employ workers, 
construct or expand particular fac ilities, or carry out research and development, in their territory.  
Some of the performance requirements listed in the Article do not apply to qualification requirements 
for goods or services with respect to export promo tion and foreign aid programmes;  to government 
procurement;  and to requirements imposed by an  importing Party relating to the content of goods 
necessary to qualify for preferential tariffs or preferential quotas. 
3. Senior Management and board of directors 
75. Neither Party may require that an enterprise of a Party that is a covered investment appoints 
to senior management positions individuals of any particular nationality (Article 806). A Party may 
require that a majority of the board of directors, or any committee thereof, of an enterprise that is a 
covered investment, be of a particular nationality, or  resident in the territory of the Party, provided 
                                                      
14 'Investment activities' includes the establishment, acquisition, expansion, management, conduct, 
operation, and sale, or other disposition of investments. 
15 This includes imposing or enforcing in connection with an investment activity any of the following: 
(a) to export a given level or percentage of goods; (b) to achieve a given level or percentage of domestic 
content; (c) to purchase, use, or accord a preference to goods produced or services provided in its territory, or to purchase goods or services from persons in its territory; (d) to relate in any way the volume or value of imports 
to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment; 
(e) to restrict sales of goods or services in its territory that such investment produces or provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings; (f) to transfer technology, a 
production process, or other proprietary knowledge to a person in its territory; or (g) to supply exclusively from 
the territory of the Party the goods it produces or the servi ces that it provides to a speci fic regional market or to 
the world market. 
16 These include: (a) to achieve a given level or percen tage of domestic content; (b) to purchase, use, or 
accord a preference to go ods produced in its territory, or to purchase goods from produce rs in its territory; (c) to 
relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign 
exchange inflows associated with such investment; or (d) to restrict sales of goods or services in its territory that such investment produces or provides by relating such sale s in any way to the volume or value of its exports or 
foreign exchange earnings.  WT/REG270/1 
 Page 29 
 
 
  that the requirement does not materially impair the ability of the investor to exercise control over its 
investment. 
76. The Parties recognize that it is inappropriate to encourage investment by relaxing domestic 
health, safety or environmental measures.  They agre e not to waive or derogate from such measures as 
an encouragement for the establishment, acquisition,  expansion or retention of an investment or 
investor (Article 809). 
77. Articles 811 and 812 contain provisions govern ing compensation for losses and expropriation 
while Article 813 deals with transfers and Article  805 addresses the minimum standard of treatment 
under customary international law.  Annex 812.1 contains the Partie s' understanding with respect to 
the meaning of indirect expropriation.  According to Article 845, the Agreement Between Canada and 
the Republic of Peru for the Promotion and Protection of Investments  of November 2006 is suspended 
from the date of entry into force of the Agreement,  but remains operative for a period of 15 years after 
the Agreement's entry into force for the purpose of an y breach of obligations that occurred prior to the 
entry into force of the Agreement. 
E. MOVEMENT OF NATURAL PERSONS  
78. Chapter 12 lays out the provisions relating to the temporary entry for business persons.  The 
Parties agree to grant temporary entry to busin ess persons who comply with existing immigration 
measures applicable to temporary entry such as t hose relating to public hea lth and safety and national 
security (Article 1203).  Articles 1204 and 1205 pr ovide for explanatory materials regarding 
requirements for temporary entry to be made av ailable no later than six months following the 
Agreement's entry into force and for the establishm ent of contact points.  The dispute settlement 
provisions of the Agreement may not be invoked with  regard to the Chapter unless the matter involves 
a pattern of practice and the business person has e xhausted the available administrative remedies 
regarding the matter.   
79. Annex 1203 lays out the conditi ons that apply to four categories of business persons:  
business visitors;  traders and investors;  intra- company transferees (ICTs);  and professionals and 
technicians.17  The conditions applying to business visito rs cover those who engage in a business 
activity as set out in Appendix 1203.A.1 and incl ude those attending meeting and consultations,  
conducting research, purchasing and production manage ment personnel, marketing researchers and 
analysts, sales representatives, transportation opera tors, after-sales or afte r-lease service personnel and 
certain general service professionals and technicians.   In the case of intra-company transferees, the 
Parties may require such business persons to have been employed continuously by the enterprise for 
six months within the three-year period immediat ely preceding the date of application for admission.18  
In the case of professionals and technicians, the Ag reement provides for the temporary entry of such 
persons either on an independent basi s, in a subordinate relationship or  as a contract service supplier.  
All professionals except for those listed in Appendi x 1203.D.1 are covered under the Chapter.  These 
include all health, education and social services o ccupations and related occ upations,  all professional 
occupations related to cultural industries, recreati on, sports and fitness program and service directors, 
managers in telecommunication carriers, posta l and courier services, manufacturing, utilities, 
                                                      
17 In its GATS schedule, Canada has commitments w ithout being subject to economic needs tests or 
numerical limits on business visitors, ICTs and certain pr ofessionals.  Peru has commitments on all categories of 
natural persons providing services and employed by service suppliers (who may stay for a period of up to three 
years, which can be extended), subject to ceilings on the number of foreign service providers employed in a 
given company and their shar e of the overall payroll. 
18 In its GATS schedule, Canada specifies that ICTs should have been employed for a period of not less 
than one year prior to  transfer.  Peru's GATS schedule does not specifically mention ICTs. WT/REG270/1 
Page 30  
 
  construction and transportation and judges, lawyers a nd notaries except foreign legal consultants.  In 
the case of technicians, a positive list of 19 categor ies covered under the Agreement is contained in 
Appendix 1203.D.1.  These include technicians in engi neering, construction, machining, electricians, 
plumbers, instrument technicians, oil and gas tec hnicians, graphic and interior designers, chefs, 
computer and IT technicians and sales agents. 
80. Table IV.1 provides details of the length of stay granted for the different categories of 
business persons under the Agreement. 
Table IV.1:  Temporary Entry for Business Person s:  Categories and Applicable Length of Stay 
Peru Canada 
Category Length of Stay Category Length of Stay 
Business Visitor Business visitor Up to six months, extensions are 
possible 
Traders Traders and investors Up to one year, extensions are possible 
Investor (in the process of committing an investment Up to 90 days, renewable for 30 
days 
Intra-company 
transferees Up to three years, extensions are 
possible. 
Investor Professionals and 
technicians Up to one year, extensions are possible. 
Intra-company transferees 
Professionals and technicians 
(in a subordinate role) 
Professionals and technicians (independent) Up to 1 year, renewable for 
consecutive periods, the number 
of times requested if conditions 
are maintained.  
Professionals and technicians 
(contract service suppliers) Up to 6 months  
 
Source:  WTO Secretariat, based on text of Canada-Peru FTA. 
 
F. LIBERALIZATION COMMITMENTS ON CROSS -BORDER TRADE IN SERVICES , INVESTMENT AND 
FINANCIAL SERVICES  
1. Cross-border trade in services and investment 
81. Chapters 8 and 9 adopt a negative-list appr oach to the scheduling of non-conforming 
measures, meaning that all sectors are liberali zed unless a Party takes a specific reservation. 
82. Each Party maintains a schedule of non-confor ming measures to the obligations of national 
and MFN treatment, local presence, and market acce ss, in the case of trade in services; and national 
and MFN treatment, performance requirements, and senior management and boards of directors, in 
the case of investment.  Annex I lists any existin g measures maintained at national or sub-national 
levels of government that do not conform with Articles 803 or 903 (National Treatment), 804 or 904 
(Most-Favoured-Nation Treatment), 906 (Market A ccess), 907 (Local Presence), 807 (Performance 
Requirements), and 806 (Senior Manage ment and Boards of Directors);19  Annex II lists the sectors, 
sub-sectors or activities for which the Parties may main tain existing, or adopt new or more restrictive 
measures that do not confirm with  the obligations listed above.  
(a) Canada 
83. Table IV.2 shows Canada's reservations for ex isting non-conforming measures at the national 
level of government (Annex I).  With respect to cr oss-border trade in services, Canada has taken a 
number of reservations on existing measures for 16 sector s, sub-sectors or activities mostly relating to 
                                                      
19 The measures listed in Annex I are subject to a "ratchet" clause (Article  808.1(b) and (c) and 
Article 908.1(b) and (c)) meaning that if a Party unila terally modifies any existing non-conforming measure 
with the effect of making it more lib eral, such liberalization is bound and becomes its new level of commitment 
towards the other Party.  WT/REG270/1 
 Page 31 
 
 
  national treatment and local presence and to a lesser extent to MFN treatment.  Such measures cover, 
inter alia,  customs brokers, duty free shops, cultural prope rty, patent agents, auditing services and  
transportation services.  In many cases the rese rvation relates to residency and nationality 
requirements, particularly in the case of transportatio n services.  Canada also has reserved the right to 
maintain all existing non-conforming measures of a ll provinces and territories;  such measures are 
however not listed in the Annex.  In the case of in vestment, reservations apply to 10 sectors, sub-
sectors or activities mostly relating to national treatme nt and in some cases to the obligation of senior 
management and boards of directors.  With respect to investment, Canada has also taken reservations 
across all sectors concerning ownership restrictions  in Canadian businesses.  For instance, in 2010 
direct acquisitions of Canadian businesses with assets of C$299 million or more by investors from 
WTO member states are subject to review by the Director of Investments.  For non-WTO investors, or 
where the transaction involves a cultural business, th e review threshold is C$5 million for direct 
acquisitions and C$50 million for indirect acquisitions.   
Table IV.2 
Non conforming measures listed by Canada in Annex I  
Sector Reservation Mode Description 
All sectors NT/PR/SMBD I Acquisitions over an established threshold of Canadian 
businesses by non-Canadians are subject to review by the 
Director of Investments 
All sectors NT/SMBD I Restrictions may be placed on the ownership of equity 
interests in privatized state enterprises or governmental entities. 
All sectors NT I Constraints may be  placed on the issue, transfer and 
ownership of shares in federally incorporated corporations. 
All sectors SMBD I For most federally-incorporated corporations, 25% (of 
directors) must be resident Canadians. 
All sectors NT I Restrictions on owners hip of controlled land in Alberta. 
All sectors NT I Ownership restrict ions of voting shares of certain 
corporations. 
All sectors LP CBTS Residency requirement in relation to the Export and Import 
Permits Act . 
All sectors NT/MFN/LP/PR/ 
SMBD CBTS/I All existing non-conforming measures of all provinces and 
territories. 
Customs Brokers NT/LP/SMBD I/CBTS Nationa lity/incorporation requirements for licensed 
customs brokers. 
Duty Free Shops NT/LP I/CBTS Nationality/res idency requirements for duty free shops 
operators. 
Examination Services relating to the 
Export and Import of Cultural Property LP CBTS Residency requirement in order to be designated as an 
"expert examiner" of cultural property. 
Patent Agents and Agencies NT/LP CBTS Residency requirement for patent agents. 
Trade-Mark Agents NT/LP CBTS Residency re quirement for representations before the 
Trade-Mark Office. 
Oil and Gas NT I Incorporation require ment for certain oil and gas production 
licenses. 
Oil and Gas PR/LP I/CBTS Approval of a be nefits plan is required to receive 
authorization for oil and gas development project 
Oil and Gas PR I Target levels in relati on to the provisions of a benefit plan.  
Transfer of technology requirement. 
Uranium Mines NT/MFN I Ownership lim itation of uranium mining properties. 
Fish Harvesting and Processing NT I Ownership limitations with regard to fish processing 
enterprises. 
Auditing Services NT/MFN/LP CBTS Residency requirement. 
Air Transportation NT I Nationality requirement for certain commercial air 
transportation services 
Air Transportation LP CBTS Residency requireme nt for aircraft repair and maintenance 
services. 
Land Transportation NT/LP CBT S Nationality requirement for truck and bus services. 
Water Transportation NT/LP I/CBTS Nationality  requirement for ship registration. 
Water Transportation NT/LP CBTS Nationality requi rement for masters, mates, engineers and 
certain other seafarers. 
Water Transportation NT/LP CBTS Nationality require ment for issuance of license for pilotage 
and berthing services. 
Table IV.2 (Cont'd) WT/REG270/1 
Page 32  
 
  Sector Reservation Mode Description 
Water Transportation LP CBTS Local Presen ce requirement for members of a shipping 
conference. 
Water Transportation MFN CBTS Exception for Un ited States with regard to prohibitions 
under the Coasting Trade Act . 
 
Note: 
CBTS: Cross-border trade in services; I: Investment;  LP: Local  presence; MFN: Most-Favoured-Nation treatment; NT: National Tre atment;  
PR: Performance Requirements; SMBD:  Senior  Management and Boards of Directors. 
 
Source: The Free Trade Agreement between Canada and Peru, Annex I. 
 
84. In its Schedule to Annex II, Canada lists its reservations for areas where it may adopt or 
maintain non-conforming measures (Table IV.3).  In the case of cross-border trade in services, 
reservations have been scheduled for 11 sectors, s ub-sectors or activities;  more specifically, Canada 
reserves the right, for all sectors, to adopt or mainta in any measure that is not otherwise inconsistent 
with its market access obligations under Article XVI of the GATS.  In social services, Canada 
reserves the right to adopt any measure relating to the provision of public law enforcement and other 
social services.  Air and water transportation are subject to MFN, national treatment and other reservations.  With respect to investment, reserva tions apply to 11 sectors, sub-sectors or activities 
and relate mostly to national and MFN treatment and in some cases to the obligations of senior 
management and boards of dir ectors and performance requireme nts.  Canada takes an MFN 
reservation (for investment only) for any measu re according preferential treatment under any pre-
existing agreement and for future agreements with re gard to aviation, fisheries and maritime matters, 
including salvage.  Further, Article 2205 specifies that nothing in the Agreement shall apply to the 
Parties' measures relating to cultural industries ex cept as provided in Article 203 (National Treatment 
and Market Access for Goods – Tariff Elimination). 
Table IV.3 
Non conforming measures listed by Canada in Annex II 
Sector Reservation Mode Description 
Aboriginal Affairs NT/MFN/LP/PR/S
MBD CBTS/I Any measure conferring rights or preferences provided to aboriginal 
peoples. 
All sectors NT I Residency requirements for ownership of oceanfront land.  
Telecommunications Transport Networks NT/SMBD I Any measure which limits fo reign investment in facilities-based 
telecommunications service suppliers. 
Telecommunications Transport Networks LP/NT/SMBD I/CBTS Any measure relating to  the provision of or investment in 
telecommunications services classi fied in CPC 7529, excluding mobile 
services and CPC 7549. 
Telecommunications 
Transport Networks NT I Any measure that may limit competit ion in the provision of local wireline 
telephone services in the serving areas of Northwestel Inc. 
Fishing NT/MFN I/CBTS Any measure with respect to the issuance of licen ses to foreign fishing 
vessels and to access for foreign fi shing vessels to Canada's ports, 
territorial waters or Exclusive Economic Zone.   
Government Finance NT I Any measure relating to the acquisition, sale or disposition by nationals 
of Peru of bonds, treasury bills and ot her kinds of debt securities issued 
by the Government of Canada, a province or local government. 
Minority Affairs NT/LP/PR/SMBD I/CBTS Any measure accordi ng rights or preferences to socially or economically 
disadvantaged minorities. 
Social Services NT/MFN/LP/SMBD I/CBTS Any measure with respect to the provision of public law enforcement and 
correctional services and the following  to the extent they are social 
services established or maintained fo r public purpose:  income security or 
insurance, social security  or insurance, social welfare, public education, 
public training, health, and child care. 
Air Transportation MFN CBTS Reserves the right to  selectively negotiate agreements with other 
aeronautical authorities or servi ce providers to recognize their 
accreditation of repair, overhaul and maintenance facilities. 
Air Transportation NT/MFN/LP CBTS Any measure relating to  the sale and marketing of air transport services. 
Water Transportation NT/MFN/LP/PR/S
MBD I/CBTS Any measure relating to the investment in or provision of marine 
cabotage services. 
Table IV.3 (Cont'd)  WT/REG270/1 
 Page 33 
 
 
  Sector Reservation Mode Description 
Water Transportation MFN CBTS Any measure relating to agreements with respect to maritime activities in 
areas as pollution control, safe navi gation, barge inspection standards, 
water quality, pilotage, salvage, drug abuse control and maritime 
communication. 
Transportation Services MFN CBTS Any measure in respect of transportation services that accords differential 
treatment under any bilateral or multila teral agreement in force or signed 
prior to the date of entry in to force of the Agreement. 
All sectors MFN I Any measure that accords di fferential treatment under any bilateral or 
multilateral agreement in force or signe d prior to the date  of entry into 
force of the Agreement.  Any measur e that accords differential treatment 
pursuant to any existing or future bilateral or multilateral agreement 
relating to aviation, fisheries, and maritime matters, including salvage. 
All sectors MA CBTS Any measure that is not in consistent with Canada's obligations under 
Article XVI of the GATS. 
Note: 
CBTS: Cross-border trade in services; I: Investment;  LP: Local presence; MA: Market Access; MFN: Most-Favoured-Nation treatmen t; 
NT: National Treatment;  PR: Performance Requirements; SM BD:  Senior Management and Boards of Directors. 
 
Source: The Free Trade Agreement between Canada and Peru, Annex II. 
 
(b) Peru 
85. In its Annex I, Peru has made a number of r eservations (Table IV.4).  With respect to 
cross-border trade in services, Peru has taken a nu mber of reservations on existing measures for 
20 sectors, sub-sectors or activities mostly relating to national treatment and to a lesser extent local 
presence.  For the most part, such measures take th e form of residency and licensing requirements, or 
provide preferential treatment to nationals when hi ring.  In the case of investment, reservations apply 
to six sectors, sub-sectors or activities mostly relati ng to national treatment and in some cases to the 
obligation of senior management and boards of direct ors.  With respect to investment, Peru has also 
taken reservations across all sectors concerning owners hip restrictions in land located near the border 
and restricting the number of fo reign employees on the payroll. 
Table IV.4  
Non conforming measures listed by Peru in Annex I  
Sector Obligations Mode Description 
All sectors NT  I Ownership restrictions on land located within 50kms of the Peruvian border. 
All sectors NT/SMBD I/CBTS All employers in Peru shall gi ve preferential treatment to  nationals when hiring.  
Limitations on total number of foreign em ployees and of their percentage of the 
payroll. 
Legal services NT I/CBTS Nationality condition to supply notary services. 
Architectural services NT CBTS/I Differentiated fee st ructure for architects depe nding on nationality and degree.   
Auditing services NT/LP CBTS/I Licensing and residency requirement. 
Security services NT/SMBD CBTS/I Nationality/residency requirement. 
National artistic 
production services NT CBTS Preferences for national artists. 
Circus services NT CBTS Preferences for national artists and technicians. 
Commercial 
advertising services NT CBTS Preferences for national artists. 
Fishing NT CBTS Letter of guarantee required by ship owners of foreign-flagged vessels. 
Bullfighting NT CBTS Preferences for nationals.  
Customs Warehouses 
Services LP CBTS Domicile requirement . 
Telecommunications NT CBTS Call-back is prohibited. 
Air Transport NT/SMBD I National commercial aviation is reserved to a Peruvian national or juridical 
person. 
Aquatic Transport NT/LP/SMBD CBTS/I Nationality/residency requi rement and equity ceiling.  
Aquatic Transport NT/LP CBTS/I Domicile requirements fo r a number of water transport and related services 
supplied in bay and port areas. 
Aquatic Transport LP CBTS Domicile requirement for provision of tourist water transportation services. 
Aquatic Transport NT CBTS Citizenship requirement to  register in the Registry of Port Workers. 
Land Transport of 
Passengers LP CBTS Local presence requirement. 
Table IV.4 (Cont'd) WT/REG270/1 
Page 34  
 
  Sector Obligations Mode Description 
Land Transport NT CBTS Prohibition on provision of local transport (cabotage) 
Research & 
Development NT CBTS Archaeological research projects head ed by foreign archaeologists must include 
a Peruvian archaeologist. 
Energy-related 
Services  NT/LP CBTS Registration/incorporation requirement.  
Note: 
CBTS: Cross-border trade in services;  I:  Investment;  LP:  Local presence requirements; MA:  Market access restriction;  
 MFN:  Restriction to MFN treatment;  NT:  National treatment restriction;  PR:  Performance requirements;   SMBD:  Restrictions affecting senior  management and board of directors. 
 
Source: The Free Trade Agreement between Canada and Peru, Annex I 
86. In its Schedule to Annex II, Peru lists its  reservations for areas where it may adopt or 
maintain non-conforming measures (Table IV.5).  In the case of cross-border trade in services, 
reservations have been scheduled for 15 sectors, s ub-sectors or activities;  more specifically, Peru 
reserves the right, for all sectors, to adopt or main tain any measure relating to market access except 
for a number of sectors and sub-sectors which are listed in Annex II and any measure affecting the 
supply of a service supplied in the exercise of governmental authority.  In social services, Peru 
reserves the right to adopt any measure relating to the provision of public law enforcement and other 
social services.  Telecommunications and road tran sportation are subject to MFN, national treatment 
and other reservations.  With respect to investment, reservations apply to 9 sectors, sub-sectors or activities and relate mostly to national and MFN treat ment and in some cases to the obligations of 
senior management and boards of directors and performance requirements.  Peru takes an MFN 
reservation for any measure according preferential tr eatment under any pre-existing agreement and for 
future agreements with regard to aviation, fisheri es and maritime matters, in cluding salvage.  Further, 
Article 2205 specifies that nothing in the Agreement shall apply to the Parties' measures relating to 
cultural industries except as provided in Article  203 (National Treatment and Market Access for 
Goods – Tariff Elimination). 
Table IV.5 
Non conforming measures listed by Peru in Annex II 
Sector  Obligations Mode Description 
All sectors MFN CBTS/I Right to adopt or maintain any measure that accords differential treatment to 
countries under any bilateral or multilatera l international agreement in force or 
signed prior to entry into force of this Agreement.   Right to adopt or maintain any 
measure that accords differential treatm ent to countries under any bilateral or 
multilateral international agreement in for ce or signed after  entry into force of 
this Agreement involving: (a) aviation;  (b) fisheries; or (c) maritime matters 
(including salvage). 
Indigenous 
communities, peasant, native and minority affairs NT/MFN/LP/
PR/SMBD CBTS/I Right to adopt or maintain any measur e according rights or preferences to socially 
or economically disadvantaged  minorities and ethnic groups.  
Fishing NT/MFN/PR I Right to adopt or maintain  any measure relating to artisanal fishing. 
Cultural industries 
 MFN CBTS/I Right to adopt or maintain any meas ure giving preferential treatment to persons of 
other countries pursuant to any existing or future bilateral or multilateral 
international agreement regardi ng cultural related activities. 
Handicraft industries NT/PR CBTS/I Right to adopt or main tain any measure relating to the design, distribution, 
retailing, or exhibition of handicrafts that are identified as Peruvian handicrafts.   
Jewellery design, 
theatre arts, visual arts, music NT/PR CBTS/I Right to adopt or maintain any m easure conditioning receipt or continued receipt 
of government support for the developm ent and production of jewellery design, 
theatre arts, visual arts and music on recipient achieving a given level or 
percentage of domestic creative content. 
Theatre and visual 
arts NT/MFN CBTS/I Any measure that affords a person of the other Party the treatment that is afforded 
by that Party to Peruvian persons in the theatre and visual arts and music sectors. 
Social services  NT/MFN/LP/
PR/SMBD CBTS/I Right to adopt or maintain any meas ure with respect to the provision of law 
enforcement and correctional services, and the following services to the extent 
that they are social services establis hed or maintained for a public purpose: 
income security and insurance, social s ecurity, social welfare, public education, 
public training, health, and childcare. 
Table IV.5 (Cont'd)   WT/REG270/1 
 Page 35 
 
 
  Sector  Obligations Mode Description 
Public supply of 
potable water  LP CBTS Right to adopt or maintain any meas ure related to the public supply of potable 
water. 
Public sewage 
services LP CBTS Right to adopt or maintain any measur e in relation to public sewage services  
Telecommunications MFN/LP CBTS Right to adopt or maintain any measure in relation to granting a concession for the 
installation, operation and exploitation of  public telecommunication services. 
Education NT/MFN/LP CBTS Right to ad opt or maintain any measure relating to natural persons who render 
educational services. 
Road Transport NT CBTS Right to adop t or maintain any measure that authorizes only Peruvian natural or 
juridical persons to supply land transpor tation of persons and merchandise inside 
the territory of Peru. 
International Road Transport NT/MFN/LP CBTS/I Right to adopt or maintain an y measure relating to the international land 
transportation of cargo or passengers in border areas. 
All sectors MA CBTS Right to adopt or maintain any measure relating to market access except for a 
number of sectors and sub-sectors which are listed in Annex II. 
All sectors NT/MFN/LP/
MA CBTS Right to adopt or maintain any measur e affecting the supply of a service supplied 
in the exercise of governmental authority. 
 
Note: CBTS: Cross-border trade in services;  I:  Investment;  LP:  Local presence requirements;  MA:  Market access restriction;  
 MFN:   Restriction to MFN treatment;  NT:  National treatment restriction;  PR:  Performance requirements;  
 SMBD:  Restrictions affecting senior  management and board of directors. 
 
Source: The Free Trade Agreement between Canada and Peru, Annex II. 
 
G. COMMITMENTS IN SELECTED SERVICES SECTORS  
1. Telecommunications Services 
87. Regulatory undertakings relating to telecommuni cations services are contained in Chapter 10 
which covers all measures affecting trade in tel ecommunications services.  The Chapter expands upon 
the commitments made by Canada and Peru u nder their scheduled Reference Paper and their 
obligations under the GATS Telecommunications Annex.   
88. Chapter 10 echoes, for the most part, the provisions found in the GATS Telecommunications 
Annex and Reference Paper.  With regard to access  to and use of public te lecommunications transport 
networks, Chapter 10 provides that enterprises are permitted to perform switching, signalling and 
processing functions in addition to those contai ned in the GATS Annex on Telecommunications.  
Major suppliers are defined as suppliers of "public  telecommunications transport services that has the 
ability to materially affect the terms of particip ation (having regard to price and supply) in the 
relevant market for public telecommunications transport networks or services".20   
89. As regards liberalization commitments on tel ecommunication services pursuant to Chapters 8 
and 9, Canada has not listed any reservations for existing measures for the telecommunications sector.  
In terms of future measures, Cana da reserves the right to limit foreign investment in facilities-based 
telecommunications services suppliers, to adopt or maintain any measure relating to the provision of 
or investment in other telecommunications ser vices (CPC 7529, excluding mobile services, and 
CPC 7549), and to adopt or maintain any measure that  may limit competition in the provision of local 
wireline telephone services in the serving areas of Northwestel Inc. 
90. Peru, for its part, has improved market access under this Agreement relative to its limited 
GATS commitments, which contained limitations unde r modes 1 and 3.  In the Agreement, Peru 
maintains a single reservation for existing measures through which it reserves the right to prohibit 
call-back services.  With regard to  future measures, Peru reserves the right to adopt or maintain any 
                                                      
20 In the case of Peru, rural telephone companies that have at least 80% of their total fixed subscriber 
lines in operation in ru ral areas are not considered as major suppliers. WT/REG270/1 
Page 36  
 
  measure in relation to the granting of a concession fo r the installation, opera tion and exploitation of 
public telecommunication services.  
2. Transport Services 
91. Canada's GATS commitments on transport servi ces include a number of air, rail, road 
transport and maritime auxiliary services sub-sectors and services auxiliary to all modes of transport.  
Under the Agreement in its Annex I, Canada appli es limitations on national treatment, local presence 
and senior management and boards of directors for customs brokers.  With respect to air 
transportation in its Annex I, Canada applies a foreign investment limit on companies providing 
certain commercial air transportation services;  and a local presence requirement for the repair and maintenance of aircraft and aeronautical products.  In land transportation, Canada applies a national 
treatment and local presence limitation on truck and bus services within Canada.  With respect to 
water transportation, Canada has sch eduled national treatment and local  presence limitations requiring 
citizenship or residency for the provision of marine  crewing and pilotage services;  Canada has also 
taken an MFN reservation granting more favourable treatment to the United States with regard to 
maritime activities where vessels are used solely for the purpose of transporting goods owned by the 
U.S. Government from the territory of Canada to su pply Distant Early Warning sites.  In its Annex II, 
Canada has taken an MFN reservation with regard to  agreements or arrangements with other countries 
covering the repair and maintenance of aircraft a nd aeronautical products;  and reserves the right to 
adopt or maintain any measure relating to the selli ng and marketing of air transportation services, the 
investment in or provision of marine cabotage services and commercial maritime activities.     
92. Peru's GATS commitments in transport services are limited to liberalization of modes 1 and 3 
of maritime and inland waterways transport, subject to authorization.  Under the Agreement, Peru has 
taken a national treatment and senior management a nd boards of directors reservation for investment 
in national commercial aviation. In water transport,  Peru has scheduled a number of reservations, 
mostly in the form of national treatment limitations and local presence requirements in a number of water transport and related services.  In land tr ansport, Peru has scheduled a national treatment 
limitation on local transport (cabotage) in Peru a nd a local presence requirement for the land transport 
of passengers. 
3. Financial Services 
93. Chapter 11 governs the Parties' commitments in financial services under th e Agreement.  As a 
general rule Chapter 11 adopts a negative-list a pproach to the scheduling of liberalization 
commitments in financial services except for Artic le 1105 which deals with cross-border trade in 
financial services.  In accordance w ith this Article the Parties have agreed to permit, under terms and 
conditions that accord national treatment, cross-borde r financial service suppliers of the other Party 
(modes 1 and 4) to supply the services specified  in Annex 1105.  Cross border financial service 
suppliers by mode 2 are subject to a negative list (Annex III). 
94. In the case of Canada, the following services s ectors are listed in Annex 1105:  cross-border 
supply of (a) insurance of risk relating to ma ritime shipping and commercial aviation and space 
launching and freight (including sate llites) and goods in international transit;  and (b) reinsurance and 
retrocession services auxiliary to in surance, such as consultancy, act uarial, risk assessment, and claim 
settlement services, and insurance intermediation, such as brokerages and agency.  In banking and 
other financial services (excluding insurance), Article  1105 applies with respect to (a)  the provision 
and transfer of financial information and financia l data processing;  and (b)  advisory and other 
auxiliary services, and credit reference and analysis, excluding intermediation, relating to banking and 
other financial services.    WT/REG270/1 
 Page 37 
 
 
  95. In the case of Peru, the following services s ectors are listed in A nnex 1105:  cross-border 
supply of (a) insurance of risk relating to ma ritime shipping and commercial aviation and space 
launching and freight (including satellites)  and goods in international transit21;  (b) reinsurance and 
retrocession services;  (c)  consultancy, actuarial, risk assessment and claim settlement services;  and (d)  insurance intermediation, such as brokerages and agencies.  In banking and other financial 
services (excluding insurance), Article 1105 applies with respect to the provision and transfer of 
financial information and financ ial data processing and related so ftware, and advisory and other 
auxiliary services (excluding intermediation). 
96. With respect to other commitments in financial services, a negative-list approach is followed 
whereby all covered sectors are assumed to be liber alized, unless as specified in Annex III.  Section I 
of the Parties' Schedules to Annex III lists any exis ting measures maintained at the national level of 
government that do not conform with the Article s 1102 (National Treatment), 1103 (MFN Treatment), 
1104 (Right of Establishment), and 1105 (Cross-Bo rder Trade), or 1108 (Senior Management and 
Boards of Directors).
22  Section II to Annex III sets out the reservations taken by the Parties for 
measures that the Parties may adopt or maintain th at do not conform with the obligations imposed by 
Article 1102 (National Treatment), 1103 (MFN Treat ment), 1104 (Right of Establishment), 1105 
(Cross-Border Trade), or 1108 (Senior Management  and Boards of Directors).  Section III of 
Annex III sets out certain additional specific commitments by the Parties. 
(a) Canada 
97. Under Annex III, Canada retains a single reser vation on existing measures and two on future 
measures in financial services (Table IV.6).   
                                                      
21 Effective two years after the entry into force of the Agreement or when Peru has adopted and 
implemented the necessary modifications to its relevant legislation, whichever occurs first. 
22 The measures listed in Annex I are subject to a "r atchet" clause (Article 1 109.2(b) and (c)) meaning 
that if a Party unilaterally modifies any existing non- conforming measure with the effect of making it more 
liberal, such liberalization is bound and becomes its  new level of commitment towards the other Party. WT/REG270/1 
Page 38  
 
  Table IV.6 
Non conforming measures listed by Canada in Annex III 
Sub-Sector Reservation Description 
Section I 
Insurance  CBT Limitation on the proportion of risks that a Canadian insurer, other 
than a life insurer or reinsurer, can reinsure with a non-resident 
reinsurer    
Section II 
Banking and other financia l services (excluding 
insurance) ROE/NT Right to adopt or maintain measures requiring a foreign bank to 
establish as a subsidiary in order to accept or maintain retail deposits 
of less than CDN$150,000. 
Banking and other financia l services (excluding 
insurance) ROE/NT Right to adopt or maintain m easures respecting the membership of 
foreign bank branches in the Canadian Payments Association. 
 Note: 
CBT: Cross-border trade;  ROE:  Right of Establishment restriction;  NT:  National Treatment restriction;   
 
Source: The Free Trade Agreement between Canada and Peru, Annex III. 
 
(b) Peru 
98. Under Annex III, Peru retains five reserva tions on existing measures and two on future 
measures in financial services (Table IV.7).   
Table IV.7 
Non conforming measures listed by Peru in Annex III 
Sub-Sector Reservation Description 
Section I 
Banking and other financial services 
(excluding insurance) ROE Establishment cond itions for branches. 
Banking and other financial services 
(excluding insurance) CBT Financial institutions and debt secu rities must be rated by credit rating 
companies constituted under the laws of Peru. 
Banking and other financial services (excluding insurance) NT Exclusive rights or advantages ma y be granted to certain state owned 
financial entities. 
Banking and other financial services 
(excluding insurance) ROE Establishment condition for suppliers of financial services in the securities or 
commodities markets or related to asset management, including pension fund 
managers. 
All subsectors of Financial Services CBT Creditors domiciled in Peru have legal preference in case of liquidation of a 
financial institution or branch in Peru. 
Section II 
Social Services ROE Measures imposing lim itations on total value of financial service 
transactions or assets in the form of numerical quotas or the requirement of 
an economic needs test and the total num ber of financial service operations.. 
Insurance and insurance-related 
services CBT Measures restricting the acquisition of obligatory insurance outside of Peru. 
 
Note: 
CBT: Cross-border trade;  ROE:  Right of Establishment restriction;  NT:  National Treatment restriction;   
 
Source: The Free Trade Agreement between Canada and Peru, Annex III. 
 
99. Under Section III of Annex III, Pe ru commits to allow a financia l institution organized either 
inside or outside its territory to provide invest ment advice and portfolio management services to a 
collective investment scheme located in its territory. 
H. DOMESTIC REGULATION  
100. Article 909 contains provisions which mirror tho se contained in paragra phs 3 and 4 of GATS 
Article VI.  Should any new disciplines be adopted  by WTO Members, the Parties agree to review 
them jointly with a view to determining whether th ey should be incorporated into the Agreement.    WT/REG270/1 
 Page 39 
 
 
  I. RECOGNITION  
101. Article 910 mirrors Article VII of GATS, in particular paragraphs 1, 2, and 3.  Where a Party 
recognizes, autonomously or by an agreement or a rrangement,  the education or experience obtained, 
requirements met, or licences or certifications gr anted in the territory of a non-Party, the MFN 
obligation under Article 904 does not require that Pa rty to accord such recognition in the territory of 
the other Party. 
102. Annex 910.4 provides guidelines for mutual recognition agreements (MRAs) for the 
professional services sector.  Although the guidelines are non-binding the Parties agree to consider them when negotiating MRAs.  The Annex contai ns guidance with regard to the conduct of 
negotiations, for instance the information to be supp lied by a Party at the opening of negotiations and 
on conclusion of an MRA, the form and content of  the MRA, the elements required in order to be 
eligible for recognition and the licensing requirements which apply. 
V. PROVISIONS AFFECTING TRADE IN GOODS, SERVICES AND INVESTMENT 
A. T
RANSPARENCY  
103. Chapter 19 on transparency requires the Parties to ensure that their laws, regulations and 
administrative rulings of general application are promptly published or otherwise made available 
(Article 1901);  to notify each other of any measure  that may materially affect the implementation of 
the Agreement or substantially affect any of the Part y's interests (Article 1902);  and to ensure that 
their administrative proceedings are applied in  a consistent, impartia l and reasonable manner 
(Article 1903). 
104. Pursuant to Article 1904, each Party shall also establish or maintain judicial or administrative 
tribunal or procedures for review and appeal of fina l administrative actions for matters covered by the 
Agreement.  Section B of Chapter 19 outlines the an ti-corruption measures the Parties agree to adopt 
or maintain in order to establish criminal offences affecting international trade or investment when 
committed intentionally. 
B. CURRENT PAYMENTS AND CAPITAL MOVEMENTS  
105. Under Article 912, the Parties agree to permit all transfers and payments relating to the 
cross-border supply of services to be made freely and without delay, in a freely usable currency into 
and out of their territory.  The same obligation app lies in the case of transfers relating to a covered 
investment (Article 813). A Party may, however, deny a transfer or payment in case of:  (i) bankruptcy, insolvency, or the protection of the right s of creditors; (ii) issuing, trading, or dealing 
in securities, futures, options, or derivatives; (iii)  financial reporting or reco rd keeping of transfers 
when necessary to assist la w enforcement or financial regulatory authorities; (iv) criminal or penal 
offences; or (v) compliance with orders or judgme nts in judicial or administrative proceedings.  
C. E
XCEPTIONS  
1. General and security exceptions 
106. Exceptions to the Agreement's provisions are laid down in Chapter 22.  Article XX of 
GATT 1994 is incorporated into and made part of the Agreement, mutatis mutandis , with regard to 
provisions contained in Chapters 2-7 and 15, while Article XIV of the GATS applies with regard to 
Chapters 9, 10, 12 and 15 (and Chapters 2-7 to the extent that a provision of these chapters applies to 
services), including environmental measures necessary to protect human, animal or plant life or health 
(Article 2201).  For the purposes of Chapter 8 (inv estment), subject to the requirement that such WT/REG270/1 
Page 40  
 
  measures are not applied in a manner that constitute  arbitrary or unjustifiable discrimination between 
investments or between investors, or a disguised restriction on international trade or investment, 
nothing in the Agreement shall be construed to prevent a Party from adopting or enforcing measures 
necessary  to protect human, animal or plant life or health, which the Par ties understand to include 
environmental measures necessary to protect human,  animal or plant life or health; to ensure 
compliance with laws and regulations that are not  inconsistent with this Agreement; or, for the 
conservation of living or non-living exha ustible natural resources (Article 2201).  
107. Nothing in the Agreement shall be construed to  require a Party to furnish information it 
determines to be contrary to its essential security  interests or to preclude a Party from applying 
measures that it considers necessary for its essential security interests (Article 2202).  The Agreement 
does not apply to taxation measures except as set out in Article 2203.
23  The Agreement shall not 
require the Parties to disclose any information wh ich would impede law en forcement or would be 
contrary to the Party's law protecting the executiv e branch of government, personal privacy or the 
financial affairs and accounts of individual customer s of financial institutions  (Article 2204).  Nothing 
in the Agreement shall be construed to apply to me asures adopted or maintained by either Party with 
respect to cultural industries (Article 2205).   
D. ACCESSION  
108. Any country or group of countries may accede to the Agreement subject to the terms and 
conditions as agreed between the Parties (Article 2306). 
E. DISPUTE SETTLEMENT  
109. Chapter 21 sets out procedures for the settlement  of disputes between the Parties on matters 
relating to the interpretation or application of the Agreement.24  Such provisions apply wherever a 
Party considers that:  (a) an actual or proposed measur e of the other Party is or would be inconsistent 
with its obligations;  (b) the other Party has otherw ise failed to carry out its obligations;  or (c) a 
benefit the Party could reasonably have expected to  accrue to it under Chapters 2 (National Treatment 
and Market Access for Goods), 3 (Rules of Origin),  4 (Origin Procedures and Trade Facilitation), 14 
(Government Procurement), or 9 (Cross-Border Trade in Services) is being nullified or impaired as a 
result of the application of any measures of the other Party that is not inconsistent with the Agreement 
(Article 2102).25  Under Article 2103, in the event of a dispute regarding a matter arising under both 
the Agreement and the WTO Agreement the compla ining Party may select either forum for the 
settlement of the dispute. Once the complaining Pa rty has requested the establishment of a dispute 
settlement panel under one forum, th at forum must be used  exclusively for the dispute.  However, 
where the Party complained against claims that its measures in dispute are subject to Article 103 of 
the Agreement (inconsistency betw een the Agreement and the specific trade obligations set out in 
certain Multilateral Environmental Agreements) and re quests in writing that the matter be considered 
under the Agreement, the complaining Party, in resp ect of that matter, may have recourse to dispute 
settlement procedures only under the Agreement.     
                                                      
23 Article 202 (National treatment) applies to taxation measures to the same extent as does Article III of 
GATT 1994;  Article 210 (Export taxes) applies to ta xation measures.  Article 2203 lists several other 
provisions of Chapters 8 (Investment), 9 (Cross-border tr ade in services), and 11 Financial services which apply 
to taxation measures.   
24 Chapter 21 does not apply to matters covered in Chapters 16 (labour) and 17 (environment) . 
25 Neither Party may invoke this paragraph with re spect to a benefit under Chapter 9 (Cross-Border 
Trade in Services) if the measure is subject to an exception under Article 2201 (General Exceptions) or with 
respect to a benefit under Chapters 2 (National Treatment and Market Access for Goods), 3 (Rules of Origin), 4 (Origin Procedures and Trade Facilitation), 9 (Cro ss-Border Trade in Services), and 14 (Government 
Procurement) if the measure is subj ect to an exception under Article 2201  (Exceptions – Cultural Industries).  WT/REG270/1 
 Page 41 
 
 
  110. The Chapter encourages the Parties to resolve disputes through consulta tions (Article 2104).  
Article 2104 provides that either Party may request in writing consultations with the other Party on 
any matter described in Article 2102 (see above).  If the consultations fail to resolve a matter within 
45 days of the date of receipt of the request for consultations, or 25 days when the matter concerns 
perishable goods the complaining Party may refer the matter to a dispute settlement panel through a 
written request (Article 2106).  The Agreement provides for detailed steps in the process for dispute 
resolution;  Articles 2107-2110 deal, respectively,  with the qualifications  of panellists, panel 
selection, rules of procedure, and panel reports; Articles 2113-2115 set out procedures for the implementation of the final report, non implementa tion and suspension of benefits, and review of 
compliance and suspension of bene fits.  The procedure for the settlement of a dispute is summarized 
in Table V.1 below. WT/REG270/1 
Page 42  
 
  Table V.1 
Synopsis of the Agreement's dispute settlement provisions 
Consultations to be held   (Art. 2104.5) 
Request to establish a Panel  
(Art. 2106) Consultations (Art. 2104) 
30 or 15 days (perishable goods) 
45 or 25da ys (perishable goods ) 
Panel Selection  (Art. 2108) 
Rules of procedure  (Art. 2109) 
Max 30 days for composition 
Panel examination  (Art. 2109) 
90 days 
Panel  initial report to be sent to 
the parties (Art. 2110.3) 
30 days 
Panel final report  (Art. 2110.6) 
15 days 
Report becomes public  (Art.2110.7) Implementation 
In agreement by the parties (Art. 2113) 
30 days from receipt of final report 
failure to reach agreement 
Non-implementation 
Negotiations on mutually acceptable 
compensation (Art. 2114) No retaliation Retaliation (Art. 2114.2) 
- 30 days after retaliation notice; or 
- after panel determination (See below) 
30 days from retaliation notice 
Request for Panel to reconvene 
upon request from losing party (Art. 2115) 
60 or 90 days from panel reconvention 
Panel determination   (Art. 2115.4) 
Panel recommendation (Art. 2115.5)  
may recommend that suspension of benefits be 
terminated or that the amount of benefits 
suspended be modified. Notice of retaliation (Art. 2114) 
-If no agreement on compensation (30 days); or 
-failure by non conforming party to observe agreed compensation or resolution 
 
Source: The Free Trade Agreement between Canada and Peru, Chapter 21. 
111. With respect to investment, the Agreement provi des for an Investor-State Dispute Settlement 
mechanism;  the rules and procedures for such di sputes are detailed in Section B to Chapter 8.  WT/REG270/1 
 Page 43 
 
 
  F. RELATIONSHIP WITH OTHER AGREEMENTS CONCLUDED BY THE PARTIES  
112. The Agreement's relationship with other agreemen ts concluded by the Parties is defined in 
Article 102, where the Parties affirm their existing rights and obligations with respect to each other 
under the WTO Agreement and other agreements to which they are party.  In the event of any 
inconsistency between the Agreem ent and the specific trade obliga tions set out in the Multilateral 
Environmental Agreements referred to in the Agre ement's Annex 103, such obligations shall prevail 
(Article 103).26  
113. Table V.2 lists notified and non-notified RTAs in force to which Canada and Peru are parties. 
Table V.2 
Canada and Peru:  Participation in  other RTAs (notified and non-no tified in force), as of July 2010 
GATT/WTO Notification 
Partner / Agreement Date of 
entry  
into force Type of 
agreement Year WTO Provision 
CANADA 
Costa Rica 01.11.02 Goods 2003 GATT Art. XXIV 
Chile 05.07.97 Goods & Services 1997 GATT Art. XXIV & GATS Art. V 
Israel 01.01.97 Goods 1997 GATT Art. XXIV 
NAFTA 01.01.94 Goods & Services 1993 GATT Art. XXIV & GATS Art. V 
EFTA 01.07.09 Goods 2009 GATT Art. XXIV 
PERU 
Singapore 01.08.09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
United States 01.02.09 Goods & Services  2009 GATT Art. XXIV & GATS Art. V 
GSTP 19.04.89 Goods 1989 Enabling Clause 
Andean Community 25.05.88 Goods 1990 Enabling Clause 
LAIA 18.03.81 Goods 1982 Enabling Clause 
China 01.03.10 Goods & Services 2010 GATT Art. XXIV & GATS Art. V 
PTN 11.02.73 Goods 1971 Enabling Clause 
Chile 01.03.09 Goods Not notified  
Cuba 09.03 Goods Not notified  
Mexico 26.05.87 Goods Not notified  
MERCOSUR 01.01.05 Goods Not notified  
 
Source: WTO Secretariat.  
 
NAFTA: North American Free Trade Agreement 
EFTA: European Free Trade Association 
GSTP: Global System of Trade Preferences LAIA: Latin American Integration Agreement 
PTN: Protocol on Trade Negotiations 
                                                      
26 The agreements listed in Annex 103 are the Convention on International Trade in Endangered 
Species of Wild Fauna and Flora , the Montreal Protocol on Substances that Deplete the Ozone Layer , the Basel 
Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal , the 
Rotterdam Convention on the Prior Informed Consent Procedures for Certain Hazardous Chemicals and 
Pesticides in International Trade , and the Stockholm Convention on Persistent Organic Pollutants .   WT/REG270/1 
Page 44  
 
  G. I
NTELLECTUAL PROPERTY RIGHTS  
1. Geographical Indications for Wine and Spirits 
114. The Parties shall provide the legal means to protect geographical indications for wines and 
spirits (Article 212).  Annex 212 de tails the nature of protection that the Parties should provide.  Such 
obligations are to become effective six months following the date of entry into force of the 
Agreement.  Peru shall allow for the protection of "Canadian Whisky" and "Canadian Rye Whisky", 
as well as "Whisky Canadiense" and "Whisky canadien se de Centeno".  Canada shall allow for the 
protection of "Pisco, Perú".  The Parties agree to take the necessary steps to provide protection as set 
out in Article 23 of the TRIPS Agreement after an application has been made in good and due form.   
H. COMPETITION POLICY , MONOPOLIES AND STATE ENTERPRISES  
115. Chapter 13 contains the provisions of the Ag reement that apply to competition law and 
policy, monopolies and state enterprises.  In respect  of competition law and policy, the Parties agree 
to maintain their independence in the development and the application of their competition laws and 
agree to adopt or maintain measures to proscr ibe anti-competitive business conduct.  Measures to 
proscribe anticompetitive business conduct and enforcem ent actions taken pursuant to those measures 
must be consistent with the principles of transp arency, non-discrimination and procedural fairness.  
Peru may implement its competition law and polic y obligations through the Andean Community 
competition laws or an Andean Community enforcem ent authority.  The Parties agree to negotiate a 
cooperation instrument between their respectiv e competition authorities, which may include 
notification, consultation, positiv e and negative comity, technical assistance and exchange of 
information, among others.  
116. Chapter 13 also provides disciplines for monopoli es and state enterprises.  The Parties may 
designate monopolies;  should such designation affect  the interests of the other Party, prior written 
notification shall be given where possible.  State enterprises may also be established or maintained.  
Chapter 13 further ensures that monopolies and state enterprises do not operate in a manner 
inconsistent with the Agreement when exercising delegated governmental authority, and that such 
entities provide non-discriminatory treatment to goods and services of the other Party. 
117. The dispute settlement provisions of the Agre ement may not be invoked for any matter 
arising under Chapter 13 except in the case of th e provisions on monopolies and state enterprises. 
118. The Parties agree that they will enter into cons ultations at the request of a Party to foster 
understanding between them or to addr ess a specific matter under Chapter 13. 
I. GOVERNMENT PROCUREMENT  
119. Chapter 14 and related annexes contain de tailed provisions on government procurement.27  
The Chapter's core principles ar e national treatment, non-discrimination and transparency;  other 
general principles include the prohibition of offsets, the use of open tendering procedures and disciplines regarding rules of origin.  The Parties agree to grant to the suppliers, goods and services of 
the other Party treatment which is no less favourable than that accorded to domestic suppliers, goods 
and services.  Annex 1401.1 sets out the government entities which are covered by the Chapter, the 
thresholds applied, and the specific types of pr ocurement and procurement arrangements that each 
Party has exempted from the application of the Ch apter.  A Party may modify the coverage of 
procurement subject to notification and an offer of compensatory adjustment (unless the modification 
                                                     
 
27 Canada is a signatory of the WTO Government Procurement Agreement (GPA);  Peru is not.  WT/REG270/1 
 Page 45 
 
 
  is minor or the modification covers an entity over wh ich the Party has lost its control or influence) 
(Article 1413). 
120. In addition to general principles, the Chapter c ontains a number of provisions with respect to 
transparency and procurement procedures:  these include provisions on valuation;  publication of 
procurement information (Article 1404);  condition s for participation (Article 1406);  technical 
specifications and tender documentation (Article  1407);  time limits for submission of tenders 
(Article 1408);  limited tendering (Article 1409);  an d treatment of tenders and awarding of contracts 
(Article 1410).  The Chapter also sets out procedur es for dealing with supplier challenges arising in 
the context of the Chapter (Article 1412).  The Pa rties agree to the estab lishment of a Committee on 
Procurement to address matters related to the im plementation of the Chapter (Article 1414).   
121. The Chapter covers procurement of goods, ser vices or both (except those excluded from the 
scope of the Chapter).28  The Chapter includes an exclusi on in the case of security and general 
exceptions (Article 1402).  Annex 1401.1-1 lists 78, in the case of Canada, and 61, in the case of Peru 
national level government entities to which the Chap ter's provisions apply.  Thresholds vary for 
different groups of entities and according to the nature of purchases (goods, services, or construction 
services) and are adjusted at two-year intervals.   
Table V.3  
Canada-Peru FTA: threshold values for government procur ement of goods, services and construction services 
Canada 
Threshold Value 
GPA - SDRs Canada-Peru FTA - SDR  Classification 
Goods & services Construction services Goods & services Construction services 
National Government Entitie s SDR 130,000 5 million 44,405a 5 million 
Sub-National Government En tities SDR 355,000 5 million   
Other Entities SDR 400,000 5 million 222,200 7.1 million 
Peru 
Threshold Value 
GPA - SDRs Canada-Peru FTA - SDR  Classification 
Goods & services Construction services Goods & services Construction services 
National Government Entities SDR 46,900b 5 million 
Sub-National Government Entities   
Other Entities Not Applicable  
234,494 7.5 million 
 
a Converted from Canadian dollars, using ex change rate (2008) of 1.722775 C$/1 SDR. 
b For a transitional period of three years fr om the entry into force of the Agreement,  Peru shall apply a threshold of SDR 95,0 00 
for goods and services procured by central level entities.  Figur e converted from nuevos soles at the conversion rate (2008) of  
4.70715 nuevos soles/1 SDR. 
 
Source: The Free Trade Agreement between Canada and Peru, Annex 1401.1. 
 
122. The Chapter covers all goods procured by th e listed entities.  In  the case of Canada, 
procurement by the Department of National Defenc e, the Royal Canadian Mounted Police, and the 
Canadian Coast Guard only certain goods listed in  Section B to Annex 1401.1-3 are covered.  
                                                      
28 The Chapter does not apply to (a)  non-contractual ag reements or any form of assistance that a Party, 
including a state enterprise, provides, including grants, loans, equity infusions, fiscal incentives, subsidies, 
guarantees, and cooperative agreements;  (b)  government provision of goods or services to persons or to 
sub-national governments;  (c)  purchases for the direct purpose of providing foreign assistance;  (d) purchases funded by international grants, loans, or other assistan ce, where the provision of su ch assistance is subject to 
conditions inconsistent with this Chapter;  (e)  acquis ition of fiscal agency or depository services, liquidation 
and management services for regulated financial institutions, and sale redemption and distribution services for public debt;  (f)  hiring of government employees and related employment measures;  and (g) procurements 
made by an entity or state enterprise from another entity or state enterprise. WT/REG270/1 
Page 46  
 
  Services excluded from the scope of Chapter 14 are listed in the Parties' respective schedules as 
shown in Table V.4.   
Table V.4 
Procurement of services excluded by the sc ope of the FTA between Canada and Peru 
Schedule of Canada  
• Services relating to research and development: all classes 
• Special Studies and Analysis – not R&D 
• Architecture and Engineering services 
• Information Processing and Relate d Telecommunicati ons Services 
• Natural Resources and Conservation Services 
• Health and Social services – all classes 
• Quality Control, Testing and Inspection and Technical Representative Services 
• Maintenance, Repair, Modification, Re building and Installation of Equipment 
• Custodial Operations and Related Services 
• Financial and Related Se rvices – all classes 
• Operation of Government Owned Facilities 
• Professional, Administrative an d Management Support Services 
• Utilities – all classes 
• Communications, Photographic, Mapping, Pr inting and Publicati ons – all classes 
• Education and Training Services 
• Transportation, Travel and Relocation Services – all classes except travel agent services 
• Lease or Rental of Equipment 
• Information Processing and Related Telecommunications Services (other covered entities only) 
• natural Resources and Conservation Serv ices (other covered entities only) 
• Professional, Administrative an d Management Support Services (other covered entities only) 
Schedule of Peru  
• Accounting and auditing services 
• Architectural services 
• Engineering and design services 
• Engineering services during cons truction and installation phase 
• Arbitration and Conciliating services. 
 
Source: The Free Trade Agreement between Canada and Peru, Annex 14.  
123. In the case of Canada, dredging, construction co ntracts tendered by or on behalf of the 
Department of Transport and mining of oil an d gas are excluded from construction services.  
Additional exclusions listed by Canada in Annex 1401.1-6 include procurements in respect of 
shipbuilding and repair;  urban rail and urban transportation e quipment;  contracts respecting 
communications, detection and coherent radiatio n equipment;  set-asides for small and minority 
businesses;  the Department of Transport, the Depart ment of Fisheries and Oceans, the Canadian Food 
Inspection Agency, the Department of Canadian Her itage, the Department of Industry in respect of 
telecommunications, and the Department of Public  Works and Government Services;  agricultural 
products made in furtherance of agricultural support programs or human feeding programs;  
procurement of transportation services;  national security exceptions include oil purchases related to 
any strategic reserve requirements and procurem ents made in support of safeguarding nuclear 
materials or technology.  In the case of Peru, th e Chapter does not cover procurement programmes on 
behalf of small and micro-sized companies;  the procurement of goods for food assistance programmes;  the acquisition of weavings and clothing made with alpaca and llama fibres;  and the procurement by embassies, consulates and other miss ions of the foreign service of Peru, exclusively 
for their operation and management.  WT/REG270/1 
 Page 47 
 
 
  J. ELECTRONIC COMMERCE  
124. Chapter 15 contains specific provisions re garding electronic commerce.  The Parties 
recognize the economic growth and opportunities th at electronic commerce provides, the importance 
of avoiding barriers to its use and development,  and the applicability of WTO rules to measures 
affecting electronic commerce.  With respect to di gital products, Article 1503 pr ovides that the Parties 
may not apply customs duties, fees, or other charg es on or in connection with the import or export of 
digital products by electronic means.  In addition,  the Parties shall endeavour to adopt the necessary 
measures to facilitate electronic commerce, includi ng those related to transparency, data privacy, 
consumer protection, and paperless trade administration. 
K. LABOUR  
125. In Chapter 16 the Parties reaffirm their oblig ations as members of the International Labour 
Organization (ILO), and lay out non-binding objectives in the area of labour cooperation.  The Parties' 
mutual obligations are set out in the Labour Cooperation Agreement between Canada and the 
Republic of Peru (LCA) which was signed on the same date as the Agreement .29 
126. Under the LCA, the Parties commit to ensure  that their labour laws embody and provide 
protection for internationally recognized labour  rights and principles and are enforced through 
appropriate government action, private rights of acti on, procedural guarantees, public information and 
awareness.  The Parties also commit to provide protections for occupational safety and health, migrant workers, as well as minimum employment standards such as minimum wages and hours of work.  The 
Agreement enables members of the public to subm it complaints to either country concerning the 
compliance of labour laws with the principles found in the ILO’s 1998 Declaration  on Fundamental 
Principles and Rights at Work , or a perceived failure to enforc e domestic labour legislation. An 
independent review panel may require the offending country to pa y up to US$15 million annually into 
a cooperation fund to be spent on programs to ensu re that the identified problems are rectified. 
L. E
NVIRONMENT  
127. In Chapter 17 the Parties recognize, amongst othe r elements, that each Party has sovereign 
rights and responsibilities to conserve and protect it s environment, and affirm their environmental 
obligations under their domestic law, as well as their international oblig ations under multilateral 
environmental agreements.  The Agreement on the Environment between Canada and the Republic of 
Peru  was signed and entered into fo rce in parallel to the Agreement.30  
128. Under the Environment Agreement the Parties commit inter alia  to ensure that their laws and 
policies provide for high levels of environmental pr otection;  effectively enforce their environmental 
laws;  not relax their environmental laws in order to encourage trade or investment;  ensure that 
procedures for environmental impact assessment ar e maintained;  ensure that proceedings are 
available to provide sanctions or remedies for viol ations of their environmental laws;  promote the 
conservation and sustainable use of biological diversity;  and encourage voluntary best practices of corporate social responsibility.  The Environm ent Agreement also includes enforcement and 
complaint mechanisms, which allow any Canadian or Peruvian to submit a written question to either 
country regarding any obligation under the Agreemen t;  provide that any Canadian or Peruvian can 
request an investigation of alleged violations of  environmental laws in his or her country;  and 
establish a dispute resolution mechanism to address any matter that may arise under the Agreement.  
                                                     
 
29 The LCA can be viewed at:  http://www.hrsdc.gc.ca/eng/labour/la bour_agreements/cpalc/index.shtml  
30 The Agreement on  Environment can be viewed at:  
http://ec.gc.ca/caraib-carib/default.asp?lang=En&n=2396DF2F-1  WT/REG270/1 
Page 48  
 
  The Environment Agreement further creates a fr amework to undertake environmental cooperative 
activities.  The Parties are to decide on priority areas and create a work program of environment-related cooperative activities. The activities may be ca rried out through technical (e.g., training) or 
financial cooperation.
 
M. INSTITUTIONAL FRAMEWORK  
129. A Joint Commission is established under Ar ticle 2001 comprising cabinet-level 
representatives of both Parties.  The Committee shall convene normally once a year, or upon request 
in writing from a Party.  The functions of the Jo int Commission are to:  supervise the implementation 
of the Agreement;  review the general functioning  of the Agreement;  assess the outcomes of the 
application of the Agreement;  oversee the further el aboration of the Agreement;  supervise the work 
or all bodies established under the Agreement;  approve  the model rules of procedure;  and consider 
any other matter that may affect the operation of the Agreement.31 
 
                                                      
31 According to the Parties, to date, the Joint Commission has not yet met.  WT/REG270/1 
 Page 49 
 
 
  ANNEX I 
 
Details of tariff liberalization under the Agreement  
 
 
1. A comparison between the scheduled elimination of tariffs applied to the Parties' mutual 
imports and the MFN rates applied by Canada and Peru is shown in  Tables AI.1 (Canada) and AI.2 
(Peru) below, by total products, agricu ltural products and non-agricultural products. 
2. Canada's overall average applied MFN rate in 2009 was 6.2%;  the average tariff applied  on 
agricultural products was 22% compared to an av erage applied tariff of 3.7% for non-agricultural 
products.  Duty-free tariff lines accounted for 54.4% of all tariff lines.  On entry into force of the 
Agreement, Peru's exporters enjoyed a relative ma rgin of preference of 22.7% for agricultural goods 
vis-à-vis  the prevailing average MFN tariff in 2009, a nd 94.6% for non-agricultural goods.  Overall, 
Peru's exporters enjoyed a relative margin of preference of 58.1% vis-à-vis the prevailing average 
applied MFN tariff, as well as an increase to 97.5% in the share of Canada's duty-free lines.  By the 
end of the period of implementation, 98.7% of tariffs will be duty-free under the Agreement.  
Table AI.1 
Canada:  Indicators of MFN tariff rates and preferential rates for imports from Peru 
ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin of 
goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFN 2009 6.2 13.9 54.4 21.8 42.6 45.1 3.7 8.4 56.1 
Peru 2009 2.6 118.3 97.5 17. 0 206.3 90.1 0.2 13.4 98.8 
 2010 2.6 117.4 97.5 17.0 208.2 90.2 0.1 10.3 98.8 
 2011 2.6 131.9 97.8 17.0 212.3 90.3 0.1 9.3 99.1 
 2012 2.6 130.9 97.8 17.0 212.3 90.3 0.1 7.0 99.1 
 2013 2.5 131.6 97.8 17.0 216.7 90.5 0.0 4.6 99.1 
 2014 2.5 146.3 98.0 17.0 228.7 90.9 0.0 2.5 99.3 
 2015 2.5 228.7 98.7 17.0 228.7 91.0 0.0 0.0 100.0 
 
a WTO Definition. 
 
Note: Excludes data beyond HS Chapter 97.  
 Tariff lines subject to in-quota rates are excluded in the com putation; for the calculation of averages, specific rates are ex cluded 
and the ad valorem  part of alternate rates are included. 
 Based on the HS 2007 nomenclature. 
 
Source : WTO Secretariat estimates based on data provided by Canada. 
 
3. Peru's overall average applied MFN rate in 2009 was 5.0%;  the average applied tariff on 
agricultural products was 6.3% compared to an av erage applied tariff of 4.9% for non-agricultural 
products.  Duty-free tariff lines accounted for 53.8% of all tariff lines.  On entry into force of the 
Agreement, Canada's exporters enjoyed a relative margin of preference of 61.9% for agricultural 
goods vis-à-vis  the prevailing average MFN tariff in 2009, and 69.4% for non-agricultural goods.  
Overall, Canada's exporters enjoyed a relative margin of preference of 68% vis-à-vis the prevailing 
average applied MFN tariff, as well as an increase to 93.1% in the share of Peru's duty-free lines.  By 
the end of the period of implementation, 99.1% of  tariffs will be duty-free under the Agreement.  WT/REG270/1 
Page 50  
 
  Table AI.2 
Peru: Indicators of MFN tari ff rates and preferential rate s for imports from Canada 
ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin of 
goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) 
MFN 2009 5.0 10.9 53.8 6.3 9.8 35.4 4.9 11.1 56.4 
Peru 2009 1.6 9.4 83.1 2. 4 10.0 76.1 1.5 9.2 84.0 
 2010 1.4 8.4 83.1 2.3 9.6 76.1 1.3 8.2 84.0 
 2011 1.2 6.9 83.1 2.1 8.8 76.1 1.0 6.5 84.0 
 2012 0.9 5.1 83.1 1.8 7.3 76.1 0.7 4.6 84.0 
 2013 0.6 7.2 92.2 1.4 10.6 86.9 0.4 6.2 93.0 
 2014 0.5 6.2 92.2 1.4 10.4 86.9 0.3 5.0 93.0 
 2015 0.4 5.1 92.2 1.3 9.9 86.9 0.3 3.7 93.0 
 2016 0.3 3.9 92.2 1.2 9.1 86.9 0.2 2.5 93.0 
 2017 0.2 2.8 92.2 1.1 8.2 86.9 0.1 1.3 93.0 
 2018 0.1 11.7 98.9 1.0 11.6 91.7 0.0 17.0 100.0 
 2019 0.1 11.6 98.9 1.0 11.5 91.7 0.0 17.0 100.0 
 2020 0.1 12.1 99.0 0.9 12.0 92.1 0.0 17.0 100.0 
 2021 0.1 12.0 99.0 0.9 11.9 92.1 0.0 17.0 100.0 
 2022 0.1 11.8 99.0 0.9 11.8 92.1 0.0 17.0 100.0 
 2023 0.1 11.5 99.0 0.9 11.4 92.1 0.0 17.0 100.0 
 2024 0.1 10.9 99.0 0.9 10.9 92.1 0.0 17.0 100.0 
 2025 0.1 12.5 99.1 0.8 12.4 93.5 0.0 17.0 100.0 
 
a WTO Definition. 
 Note Tariff lines subject to in-quota rates are excluded in the computation. 
 Based on the HS 2007 nomenclature. 
 
Source : WTO Secretariat estimates based on data provided by Peru. 
 
4. Table AI.3 shows the market access opportunities in Canada for Peru's top 25 exports, which 
in the period surveyed (2006-2008) accounted on average for 81.5% of Peru's global exports.  The table shows at which year all HS 8-digit tariff lines corresponding to the product definition 
(i.e. applying to the 6-digit HS code used to cap ture the volume of trade) will become duty-free in 
Canada. 
5. Peru's top 25 exports cover a total of 42 HS 8-digit tariff lines of which 27 are already 
duty-free on an MFN basis.  All of the remaining tariff lines gain immediate duty-free access in Canada.  The margin of preference granted to Peru  by Canada under the Agreement varies from 0 to 
18 percentage points. 
Table AI.3 – Market access opport unities under the Agreement for Pe ru's top 25 exports to the world 
Access Conditions to Canada's import markets  Peru's top export products in 2006-2008  MFN (2009)  
No. of tariff lines  
HS number and description of the product  Share in 
global 
exports 
(%) Average 
MFN 
applied rate 
(%) Duty-free Dutiable Duty-
free for 
Peru in  
2009 
 
710812 Gold, other unwrought forms 16.6 0.0 1   
260300 Copper ores and concentrates 14.9 0.0 1   
740311 Refined copper and copper alloys, cathodes and 
sections of cathodes 9.8 0.0 1   
260800 Zinc ores and concentrates 6.5 0.0 1   
230120 Flours, meals and pellets, of fish or of crustaceans, 
molluscs or other aquatic invertebrates 4.6 1.0 2 1 1 
271019 Petroleum oils & oils obtained from bituminous 
minerals (other than crude) 3.7 2.6 3 2 2 
261390 Molybdenum ores & concentrates, other than roasted 3.5 0.0 1   
271011 Light oils and preparations 2.8 3.3 2 2 2 
Table AI.3 (Cont'd)  WT/REG270/1 
 Page 51 
 
 
  Access Conditions to Canada's import markets  Peru's top export products in 2006-2008  MFN (2009)  
No. of tariff lines  
HS number and description of the product  Share in 
global 
exports 
(%) Average 
MFN 
applied rate 
(%) Duty-free Dutiable Duty-
free for 
Peru in  
2009 
 
260700 Lead ores and concentrates 2.3 0.0 1   
270900 Petroleum oils and oils obtained from bituminous 
minerals, crude 2.1 0.0 1   
710691 Silver unwrought 2.0 0.0 1   
090111 Coffee, not decaffeinated 1.9 0.0 1   
610910 T-shirts, of cotton 1.6 18.0  1 1 
800110 Tin, not alloyed 1.2 0.0 1   
150420 Fats and oils and their fractions, of fish, other than liver 
oils 1.0 2.3 1 1 1 
740811 Copper wire, of which the maximum cross-sectional 
dimension exceeds 6 mm 1.0 1.1 3 2 2 
610510 Men's or boys' shirts, of cotton 0.9 18.0  1 1 
780110 Refined lead 0.8 1.3 1 1 1 
070920 Asparagus 0.8 6.7 1 2 2 
790111 Zinc, containing by weight 99.99%  or more of zinc 0.8 0.0 1   
260111 Iron ores and concentrates, non-agglomerated 0.6 0.0 1   
610610 Women's or girls' blouses, of cotton 0.6 18.0  1 1 
200560 Other vegetables, prepared or preserved, asparagus 0.5 14.0  1 1 
260112 Iron ores and concentrates, agglomerated 0.5 0.0 1   
740200 Unrefined copper; coppe r anodes for electrolytic 
refining 0.4 0.0 1   
Total of above 81.5 27 15 15 
 
Source : WTO estimates based on data provided by Canada and UNSD, Comtrade data. 
 
6. Table AI.4 shows the market access opportunities in Peru for Canada's top 25 exports, which 
in the period surveyed (2006-2008) accounted on average for 45.6% of Canada's global exports.  The table shows at which year all HS 8-digit tariff lines corresponding to the product definition 
(i.e. applying to the 6-digit HS code used to cap ture the volume of trade) will become duty-free in 
Peru. 
7. Canada's top 25 exports cover a total of 97 HS  8-digit tariff lines of which 77 are already 
duty-free on an MFN basis.  One tariff line is liber alized upon entry into force of the Agreement and 
the remaining lines are liberalized in 2013 or 2018.  The margin of preference granted to Canada by 
Peru under the Agreement varies from 0 to 9 percentage points. 
Table AI.4 – Market access opportuni ties under the Agreement for Cana da's top 25 exports to the world 
Access Conditions to Peru's import markets  Canada's top export products in 2006-2008  MFN (2009)  
No. of tariff lines  Duty-free in 
HS number and description of the product  Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate 
(%) Duty-
free Dutiable 2009  2013 2018 
270900 Petroleum oils and oils obtained from 
bituminous minerals, crude 10.7 0.0 1     
870324 Motor cars, of a cy linder capacity exceeding 
3,000 cc 6.8 9.0  4  1 3 
271121 Natural gas 6.4 0.0 1     
271019 Petroleum oils & oils obtained from 
bituminous minerals (other than crude) 1.8 0.0 20     
870323 Motor cars, of a cy linder capacity exceeding 
1,500 cc but not exceeding 3,000 cc 1.5 9.0  4  1 3 
440710 Wood sawn or chipped lengthwis e, coniferous 1.5 4.5 1 1  1  
710812 Gold, other unwrought forms 1.4 9.0  1  1  
870431 Motor vehicles, g.v.w. not exceeding 5 tonnes 1.3 0.0 3     
271011 Light oils and preparations 1.3 0.0 14     
470321 Chemical wood pulp, unbleached, coniferous 1.2 0.0 1     
300490 Medicaments, other 1.0 9.0  7  1 6 
Table AI.4 (Cont'd) WT/REG270/1 
Page 52  
 
  Access Conditions to Peru's import markets  Canada's top export products in 2006-2008  MFN (2009)  
No. of tariff lines  Duty-free in 
HS number and description of the product  Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate 
(%) Duty-
free Dutiable 2009  2013 2018 
480100 Newsprint, in rolls or sheets 0.9 0.0 1     
880240 Aeroplanes and other aircraft, of an unladen 
weight exceeding 15,000 kg 0.9 0.0 1     
270112 Bituminous coal 0.9 0.0 1     
870829 Parts and accessories of motor vehicles, other 0.9 0.0 6     
310420 Potassium chloride 0.9 0.0 2     
760110 Aluminium, not alloyed 0.8 0.0 1     
100190 Wheat and meslin, other 0.8 3.0 2 1 1   
750210 Nickel, not alloyed 0.8 0.0 1     
760120 Aluminium alloys 0.7 0.0 1     
271600 Electrical energy. (optional heading) 0.7 0.0 1     
480261 Other paper and paperboard , in rolls 0.6 3.0 4 2  2  
840734 Reciprocating piston engines, of a cylinder 
capacity exceeding 1,000 cc 0.6 0.0 1     
870899 Parts and accessories of motor vehicles, other 0.6 0.0 12     
880230 - Aeroplanes and other aircraft, of an unladen 
weight exceeding 2,000 kg but not exceeding 
15,000 kg 0.6 0.0 2     
Total of above 45.6 77 20 1 7 12 
 
Source : WTO estimates based on data provided by Peru and UNSD,  Comtrade data. 
  WT/REG270/1 
 Page 53 
 
 
  ANNEX II 
  
Table AII.1:  Products for which Peru may maintain its Price Band System. 
Product Description 
401100000 Milk and cream, not concentrated , no added sugar or other sweetener, fa t content not exceeding 1% by weight 
401200000 Milk and cream, not concentrated, no added sugar or other sweetener, fat c ontent exceeding 1% but not exceeding 6% by  
weight 
402101000 Milk and cream, powdered, in granul es or other solid forms, fat content not exceeding 1.5% by weight, with added suga r 
or other sweetener, in containers w ith net contents not exceeding 2.5 kg 
402109000 Milk and cream, powdered, in granul es or other solid forms, fat content not exceeding 1.5% by weight, with added suga r 
or other sweetener, in containers with net contents exceeding 2.5 kg 
402211100 Milk and cream, powdered, in granul es or other solid forms, fat content equa l to or exceeding 26% by weight, in the d ry 
state, with no added sugar or other sweetener, in containers with net contents not exceeding 2.5 kg 
402211900 Milk and cream, powdered, in granul es or other solid forms, fat content equa l to or exceeding 26% by weight, in the d ry 
state, with no added sugar or other sweetener, in  containers with net contents exceeding 2.5 kg 
402219100 Milk and cream, powdere d, in granules or other solid forms, fat content exceeding 1.5% but not exceeding 26% by 
weight, in the dry state, with no added sugar or other sw eetener, in containers with net contents not exceeding 2.5kg 
402219900 Milk and cream, powdere d, in granules or other solid forms, fat content exceeding 1.5% but not exceeding 26% by 
weight, in the dry state, with no added sugar or other sw eetener, in containers with net contents exceeding 2.5 kg 
402291100 Milk and cream, powdered, in granul es or other solid forms, fat content equa l to or exceeding 26% by weight, in the d ry 
state, with added sugar or other sweetener, in containers with net contents not exceeding 2.5 kg 
402291900 Milk and cream, powdered, in granul es or other solid forms, fat content equa l to or exceeding 26% by weight, in the d ry 
state, with added sugar or other sweetener, in  containers with net contents exceeding 2.5 kg 
402299100 Milk and cream, powdere d, in granules or other solid forms, fat content exceeding 1.5% but not exceeding 26% by 
weight, in the dry state, with added sugar or other sweete ner, in containers with ne t contents not exceeding 2.5kg 
402299900 Milk and cream, powdere d, in granules or other solid forms, fat content exceeding 1.5% but not exceeding 26% by 
weight, in the dry state, with added sugar or other swee tener, in containers with net contents exceeding 2.5 kg 
402991000 Condensed milk 
404109000 Other whey, whether or not modified, including c oncentrated or with added sugar or other sweetener 
405100000 Butter 
405902000 Anhydrous milk fat (butter oil) 
405909000 Other milk fats 
406300000 Processed cheese, not grated or powdered 
406904000 Cheese with moisture content not exceeding 50%  by weight, calculated on a totally defatted basis 
406905000 Cheese with moisture content equal to or exceeding 50% but not exceeding 56% by weight, calculated on a totally 
defatted basis 
406906000 Cheeses with moisture content equal to or exceeding 56% but not exceeding 69% by weight, calculated on a totally 
defatted basis 
406909000 Other cheeses 
1005901100 Yellow corn, except for sowing 
1005901200 White corn, except for sowing 
1005909000 Other corn, except for sowing 
1006109000 Other rice, except for sowing 
1006200000 Husked rice (cargo or brown rice) 
1006300000 Rice, semi-milled or wholly-mille d, whether or not polished or glazed 
1006400000 Broken rice 
1007009000 Other grain sorghum, except for sowing 
1103130000 Maize groats and meal 
1108120000 Cornstarch 
1108130000 Potato starch 
1701119000 Raw cane sugar, with no added flavourings or colourings, except chancaca  (panela , raspadura ) 
1701120000 Raw beet sugar, with no added flavourings or colourings 
1701999000 Other cane or beet sugars, in solid form 
1702302000 Glucose syrup 
1702600000 Other fructoses and fruc tose syrup, with fructose content in the dr y state exceeding 50% by weight, except inverted sugar 
1702902000 Caramelized sugar and mola sses, with fructose content in the dry state of 50% by weight 
1702903000 Sugars with added flavouring or  colouring, with fructose content in the dry state of 50% by weight 
1702904000 Other syrups, with fructose cont ent in the dry state of 50% by weight 
1901902000 Blancmange 
1901909000 Other food preparations of flour, groats, meal, starch  or malt extract, not containing cocoa or containing less than  40% by 
weight of cocoa calculated on a totally defa tted basis, not named or included elsewhere 
2106907900 Other food supplements 
2106909000 Other food preparations not named or included elsewhere 
2309909000 Other prepared animal feed 
3505100000 Dextrin and other modified starches 
Source:  Annex 218 of the Canada-Peru FTA 
__________