WORLD  TRADE  
ORGANIZATION  WT/TPR/S/189/Rev.1 
17 December 2007  
 
(07-5580) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
PERU 
 
Revision 
 
 
 
 
This report, prepared for the third Trade Policy Review of Peru, has been drawn 
up by the WTO Secretariat on its own responsibility.  The Secretariat has, as 
required by the Agreement establishing  the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Pe ru on its trade policies and practices. 
 
Any technical questions arising from this report may be addressed to 
Mr Karsten Steinfatt (Tel.:  022 739 67 59), Mr Mario Berrios 
(Tel.:  022 739 63 97) and Mr Raymundo Valdés (Tel.:  022 739 53 46). 
 
Document WT/TPR/G/189 contains the policy statement submitted by Peru. 
 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Peru. Peru WT/TPR/S/189/Rev.1 
 Page iii 
 
 
CONTENTS 
 
  Page 
SUMMARY OBSERVATIONS vii 
 (1) E CONOMIC ENVIRONMENT  vii 
 (2) T RADE AND INVESTMENT POLICY FRAMEWORK  vii 
 (3) M ARKET ACCESS FOR GOODS  viii 
 (4) E XPORT MEASURES  ix 
 (5) O THER MEASURES AFFECTING TRADE  ix 
 (6) S ECTORAL POLICIES  x 
I. ECONOMIC ENVIRONMENT 1 
 (1) O VERVIEW  1 
 (2) M ACROECONOMIC TRENDS  1 
  (i) Structure of the economy, growth and employment 1   (ii) Fiscal policy 4 
  (iii) Monetary and exchange rate policy 6 
  (iv) Balance of payments 8 
 (3) T
RENDS IN TRADE AND INVESTMENT FLOWS  9 
  (i) Trade in goods 9 
  (ii) Trade in services 10 
  (iii) Foreign investment 11 
 (4) O UTLOOK  11 
II. TRADE AND INVESTMENT REGIME 13 
 (1) O VERVIEW  13 
 (2) O VERALL LEGAL FRAMEWORK  13 
 (3) T RADE POLICY FORMULATION AND OBJECTIVES  14 
 (4) F OREIGN INVESTMENT REGIME  15 
 (5) I NTERNATIONAL TRADE RELATIONS  17 
  (i) World Trade Organization 17 
  (ii) Preferen tial agreements 18 
  (iii) Other agreements and arrangements 21 
III. TRADE POLICY BY MEASURE 23 
 (1) O VERVIEW  23 
 (2) M EASURES AFFECTING IMPORTS  24 
  (i) Customs procedures 24 
  (ii) Customs valuation 27 
  (iii) Rules of origin 28   (iv) Tariffs 29 
  (v) Other charges 34 
  (vi) Quantitative restrictions, controls and licences 35 
  (vii) Anti-dumping, countervailing and safeguard measures 37 
  (viii) Technical regulations and standards 40   (ix) Sanitary and phytosanitary measures 43 WT/TPR/S/189/Rev.1 Trade Policy Review 
Page iv 
 
 
    Page 
 
 (3) M EASURES DIRECTLY AFFECTING EXPORTS  45 
  (i) Registration and documentation 45 
  (ii) Other charges 46   (iii) Quantitative restrictions, controls and permits 46 
  (iv) Subsidies, charge and tax concessions and free zones 47 
  (v) Financing, insurance and promotion 48 
 (4) O
THER MEASURES AFFECTING PRODUCTION AND TRADE  49 
  (i) Legal framework for business 49 
  (ii) Price controls and competition policy 50 
  (iii) State trading, State-owned enterprises and privatization 53 
  (iv) Incentives 53   (v) Government procurement 57 
  (vi) Intellectual property protection 60 
IV. TRADE POLICY BY SECTOR 63 
 (1) O
VERVIEW  63 
 (2) A GRICULTURAL SECTOR  64 
  (i) General features and objectives of the policy 64   (ii) Border measures 65 
  (iii) Other measures 67 
 (3) F
ISHING   69 
 (4) M INING , EXCLUDING HYDROCARBONS  71 
 (5) H YDROCARBONS , INCLUDING THOSE DERIVED FROM PETROLEUM  74 
 (6) M ANUFACTURING  77 
 (7) S ERVICES  79 
  (i) Main features 79 
  (ii) Telecommunications 81   (iii) Financial services 84 
  (iv) Air transport 89 
  (v) Maritime transport 91 
  (vi) Professional services 95 
 REFERENCES 99 
 
APPENDIX TABLES 103 
 
 
 Peru WT/TPR/S/189/Rev.1 
 Page v 
 
 
TABLES 
 
  Page 
 
I. ECONOMIC ENVIRONMENT 
 I.1 Main economic indicators, 2000-2006 2 
I.2 Structure of GDP by expenditure, 2000-2006 3 
I.3 Transactions in the non-financial public sector, 2000-2006 5 
I.4 Leading monetary indicators, 2000-2006 7 
I.5 Balance of payments, 2000-2006 8 I.6 Trade in services, 2000-2006 10 
 
 III. TRADE POLICY BY MEASURE 
 
III.1 Principal origin criteria under the preferential agreements signed by Peru 29 
III.2 MFN tariff structure, April 2007 30 
III.3 Summary of MFN tariff, April 2007 31 
III.4 Prohibited imports, March 2007 36 III.5 Anti-dumping and countervailing measures, 2000-2006 38 
III.6 Main elements of CETICOS and ZOFRATACNA, March 2007 54 
III.7 Participation in agreem ents on intellectual propert y protection, December 2006 60 
 
IV. TRADE POLICY BY SECTOR 
 IV.1 Selected indicators in th e agricultural sector, 2000-2006 64 
IV.2 Selected indicators in the fishery sector, 2000-2006 70  
IV.3 Selected indicators in the mining sector, 2000-2006 72  
IV.4 Selected indicators in the hydrocarbons sector, 2000-2006 75 
IV.5 Structure of GDP in the manufacturing sector, 2000-2005 78 IV.6 Structure of the fina ncial sector, December 2006 84 
 WT/TPR/S/189/Rev.1 Trade Policy Review 
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APPENDIX TABLES 
 
  Page 
 
I. ECONOMIC ENVIRONMENT  
AI.1 Merchandise imports by product, 2000-2006 105  
AI.2 Merchandise exports by product, 2000-2006 107  AI.3 Merchandise imports by trading partner, 2000-2006 109  
AI.4 Merchandise exports by trading partner, 2000-2006 110  
 II. TRADE AND INVESTMENT REGIME 
 
AII.1 Selected notifications to the WTO, April 2007 111  
III. TRADE POLICY BY MEASURE 
 AIII.1 Tariffs according to Peru's preferential agreements, April 2007 114 
AIII.2 Goods and services subject to the Selective Consumption Tax (ISC), March 2007 117  
AIII.3 Import restrictions, March 2007 118  
AIII.4 Anti-dumping duties adopted by Peru, January 2000 – June 2006 121 
AIII.5 Countervailing duties adopted by Peru, January 2000 – June 2006 124 AIII.6 General aspects of intellectual property right protection, 2006  125 
 
 IV. TRADE POLICY BY SECTOR 
 
AIV.1 Summary of Peru's commitments under the GATS 128 
 Peru WT/TPR/S/189/Rev.1 
 Page vii 
 
 
SUMMARY OBSERVATIONS 
 
1. Peru has continued to liberalize its 
trade regime since its last Review in 2000, 
mostly through unilateral initiatives.  In the 
context of broader structural reform, trade liberalization has allowed Peru to reap the benefits of a favourable external environment, and helps explain Peru's robust economic 
performance since 2000.  However, Peru has 
also moved away from its largely uniform tariff structure, thus increasing the level of effective assistance to some sectors.  Additional selective assistance has also been granted through several fiscal incentives, some 
of which are contingent upon the use of 
domestic inputs or domestic processing requirements. 
2. The current favourable economic 
environment presents an opportunity to inject 
greater competition into the domestic market 
and to set up a more uniform incentive structure by rationalizing assistance schemes.  In addition, further reform, including of some services sectors, would help reduce remaining bottlenecks, in particular those arising from 
poor infrastructure.  Using multilateral 
commitments to advance and lock-in such reforms, the way Peru did so successfully in the mid 1990s, would help to sustain current rates of economic growth and to provide a 
secure basis on which to further spread the 
benefits of liberalization and continue reducing poverty. 
(1) E
CONOMIC ENVIRONMENT  
3. Peru's real GDP increased at an annual 
average rate of 4.8 per cent during 2000-06, 
notwithstanding a marked slowdown in 2001.  This solid growth was fostered by prudent macroeconomic management and the implementation of structural reforms sustained over many years.  Peru conducts monetary 
policy within an inflation targeting framework, 
while fiscal policy is implemented with reference to quantitative targets set by law.  Inflation has been low, the fiscal position has improved, and public debt has fallen.  A 
favourable external environment, which has facilitated the expansion of trade and 
investment, has also contributed significantly to Peru's good economic results in recent years. 
4. Exports of goods and services 
expanded at a real annual rate of 8.3 per cent over 2000-06;  the equivalent rate for imports was 7 per cent.  As a result, the share of merchandise trade in GDP increased from 
27 per cent in 2000 to 41 per cent in 2006.  
These increases have been accompanied by changes in both the composition and direction of trade.  The share of minerals in total exports has risen markedly, particularly since 2003, reflecting higher commodity prices and export 
volumes.  Although the United States and the 
European Communities continue to be Peru's main trading partners, accounting together for around 37 per cent of Peru's trade, the relative importance of partners in Asia and Latin 
America has increased. 
5. Notwithstanding the economy's robust 
performance in recent years, Peru still faces significant challenges due, inter alia , to the 
lack of adequate infrastructure, excessive regulation, and deficiencies in the system of 
public security and justice administration.  
Formal unemployment remains sizeable and most of the labour force is engaged in the informal sector.  Moreover, although the proportion of the population living in poverty 
has fallen, it remains high, at around 45 per 
cent. 
(2) T
RADE AND INVESTMENT POLICY 
FRAMEWORK  
6. Peru is an original Member of the 
WTO.  It accords at least MFN treatment to all 
its trading partners.  It participated in the extended negotiations on telecommunications and financial services.  Peru has not taken part in any of the WTO plurilateral agreements but is in the process of acceding to the Information 
Technology Agreement. 
7. During the period under review Peru 
presented numerous notifications to the WTO, although by mid 2007 a small number WT/TPR/S/189/Rev.1 Trade Policy Review 
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remained outstanding in areas such as 
domestic support to agriculture.  Peru has been involved in the dispute settlement mechanism in 14 cases, two as a complainant, four as a 
respondent (involving consultations only), and 
eight as a third party.  In the context of the Doha Development Agenda, Peru has made a number of proposals on issues such as agriculture (tropical and alternative products to 
illicit crops);  fisheries subsidies;  intellectual 
property (biodiversity and traditional knowledge);  and services (movement of natural persons). 
8. Peru's trade policy is formulated 
predominantly at the national level, taking into 
account its international commitments.  Peru is 
a member of the Andean Community.  It gives high priority to the conclusion of free-trade agreements, and has concluded three such agreements since its last Review.  By mid 
2007, Peru had in force comprehensive FTAs 
with MERCOSUR members, and agreements of a narrower scope under LAIA.  FTAs with Chile and with the United States have also been signed but are not yet in force.  The agreement with the United States is of 
particular importance as this is the principal 
destination for Peruvian exports.  It is important for Peru to consolidate its preferential liberalization at the multilateral level in order to prevent distortions, and to 
give greater predictability to its trade and 
investment regime. 
9. The Peruvian Constitution guarantees 
equal treatment to national and foreign investment, except within 50 kilometres of 
international borders.  However, there are 
specific laws that impose restrictions on foreign participation in maritime services, air transport and broadcasting services.  Although the Constitution also establishes that natural resources are an inalienable State property, 
concessions for their exploitation may be 
granted to private investors. 
10. The Constitution allows the State to 
act against other countries' protectionist or discriminatory measures that affect the 
national interest by adopting equivalent measures.  Based on this provision, laws in the 
financial and maritime transport sectors require that foreign investment be subject to the reciprocity principle. 
11. During 2000-06 Peru continued 
implementing an ambitious privatization programme, which generated about 
US$1 billion.  By end 2006, there were about 50 firms with state participation, mainly in the 
services sector. 
(3) M
ARKET ACCESS FOR GOODS  
12. Peru's solid economic performance 
has been accompanied by a process of liberalization and modernization of its trade regime.  The average applied MFN tariff rate 
decreased, from 13.6 per cent in 1999 to 
8.2 per cent in April 2007, reflecting tariff reductions on capital goods and inputs not produced in Peru.  However, in reducing tariffs, Peru has moved away from the 
relatively uniform tariff structure it maintained 
during the 1990s, increasing the level of effective tariff protection in some sectors.  All tariffs are ad valorem;  those applied on 46 tariff agricultural lines are subject to reductions or surcharges linked to variations in 
world prices. 
13. Peru has bound its entire tariff 
schedule, mostly at 30 per cent.  While this enhances predictability, further progress in this direction could be made by reducing the 
prevailing gap of some 22 percentage points 
between average applied and bound rates. 
14. In the context of its participation in the 
Andean Community, Peru grants duty-free treatment to all products originating in Bolivia, 
Colombia, Ecuador, and Venezuela.  Peru also 
grants tariff preferences to Chile, Cuba, MERCOSUR, and Mexico, although their scope varies greatly. 
15. Peru has adopted a number of trade 
facilitation measures.  As a result, customs 
clearance times for goods subject to physical 
or documentary inspection have decreased by 30 per cent since 2002.  Around 35 per cent of Peru WT/TPR/S/189/Rev.1 
 Page ix 
 
 
imports are subject to such inspections at the 
main customs facilities.  Peru eliminated pre-shipment inspection in May 2004.  In addition to tariffs, imports valued at S/. 10,350 (around 
US$3,250) or more are subject to a customs 
fee levied on a specific basis. 
16. In general, imports receive national 
treatment in the application of internal taxes.  However, the beverage Pisco is subject to an 
excise tax (ISC) at a specific rate of 
S/. 1.50 per litre (some US$0.47 per litre) while the minimum ISC rate applied on other alcoholic beverages is 20 per cent.  Used vehicles are subject to ISC at a rate of 30 per cent but are zero rated if they are imported for 
repair and conversion in a transformation, 
industry, commercialization and services centre (CETICOS) or in the Tacna free trade zone (ZOFRATACNA), and subsequently 
introduced into Peruvian territory.  Certain 
services rendered to domestic flag vessels are 
exempt from value-added tax (IGV). 
17. Peru prohibits the importation of 
beverages manufactured abroad under the name "Pisco", used clothing and footwear for commercial purposes, and used motors and 
parts for road vehicles.  Several goods are 
subject to authorization to preserve health, the environment, or national identity. 
18. There has been a significant increase 
during the review period in the number of anti-
dumping investigations, which have focused 
mostly on a handful of pr oducts and exporters.  
As at end 2006, 34 anti-dumping measures and one countervailing duty were in force.  Peru has applied two provisional safeguard 
measures to WTO Members during the review 
period. 
19. Peru has maintained an active 
programme of notifications under the Agreement on Sanitary and Phytosanitary Measures;  all of Peru's SPS measures were 
based on international standards.  There is a 
limited number of technical regulations in force;  as a general rule, compliance with them is not verified at the border.  Peru has established a system to ensure that new and existing regulations in general are not more 
trade restrictive than necessary. 
(4) E
XPORT MEASURES  
20. Peru does not apply charges or taxes 
on exports.  A few export prohibitions on 
wood, and plants and plant products are in place, mostly to promote local processing and investment, control access to genetic resources, or protect the environment. 
21. Peru maintains a "simplified" duty 
drawback scheme, under which exporters receive 5 per cent of the f.o.b. value of their exports or half of their production cost, whichever is less.  This simplified regime provides no mechanism to ensure that the 
amount given back to exporters does not 
exceed the actual value of duties paid. 
22. In mid-2005, Peru eliminated the 
export requirements for granting benefits under the CETICOS or ZOFRATACNA 
programmes. 
(5) O
THER MEASURES AFFECTING 
TRADE  
23. Peru continues to maintain a number 
of incentive programmes to promote business activity and investment.  The incentives, many 
in the form of fiscal exemptions, seem to 
create a burden on public finances.  It would thus be important to identify the incentives that result in net benefits for the economy and to consider rationalizing of the others.  Peru 
took an important step in this direction at the 
beginning of 2007 with the establishment of a general framework that regulates the granting and the renewal of fiscal incentives. 
24. Competition policy, intellectual 
property protection, and trade remedies are the 
responsibility of a single authority (INDECOPI).  In view of the valuable potential synergies this arrangement creates across, it would be important to build up the institutional strength of such authority. WT/TPR/S/189/Rev.1 Trade Policy Review 
Page x 
 
 
25. Peru is not a member of 
WTO Plurilateral Agreement on Government Procurement.  Since 2000, important changes have been made to the regulatory framework 
on government procurement.  Peruvian 
legislation grants a 20 per cent preference margin to bidders that use Peruvian goods;  and certain programmes (e.g. food aid) require that only domestic food products be acquired.  
Although these measur es could promote 
national production, they also result in higher costs for tax payers. 
26. Peru has notified the WTO of its 
legislation for the protection of intellectual property, which was reviewed by the 
TRIPS Council in 2001.  Peru also presented 
answers on compliance issues in the context of the TRIPS Agreement. 
(6) S
ECTORAL POLICIES  
27. The value of agricultural production 
has increased every year since 2000, albeit at a 
lower rate than the economy as a whole.  Exports of agricultural products tripled between 2000 and 2006.  However, productivity in various segments is low.  At 14.9 per cent, average tariff protection in 
agriculture (WTO definition) is twice as high 
as in other sectors.  A 50 per cent reduction in income tax is available to some agricultural producers that use domestic inputs.  Official support to agriculture also consists of 
measures to facilitate access to credit and debt 
reduction programmes.  The legal limits on the use of imported inputs for the production of liquid milk and derived products are not applied in practice. 
28. The fisheries sector contributes 
significantly to exports (about 8 per cent of total exports in 2006).  Peru's legislation does not limit foreign ownership of fishery enterprises, processing plants, or aquaculture operations.  However, foreign flag vessels may 
be granted fishing permits only to the extent 
that this supplements the activity of the Peruvian fleet.  Certain tax benefits and reductions in the price of fishing permits are 
contingent upon unloading the catch in Peru. 29. Mining and hydrocarbon output has 
increased significantly in recent years, reflecting a sharp rise in investment.  Between 2000 and 2006, the share of mining exports 
(minerals, non-ferrous metals, and fuels) in 
total exports increased from 55 per cent to 72 per cent.  In mid 2004 Peru introduced mining royalties, and since end 2006 it has encouraged mining firms to make 
contributions for social and infrastructure 
projects.  Holders of mining concessions have benefited from sector-specific tax stability contracts.  Exports of natural gas from the proven reserves of Peru's largest field (Camisea) are subject to ability to meet 
forecast demand for 20 years. 
30. Average tariff protection on 
manufactured products is 7.2 per cent, down from 13 per cent in 1999.  This reduction has been accompanied by a significant increase in 
labour productivity.  However, manufacturing 
activities related to dairy, grain mill products, clothing, and footwear benefit from effective tariff protection levels between 30 per cent and 
50 per cent. 
31. Peru made commitments in 7 of the 
12 services sectors under the GATS.  It signed 
the Fourth Protocol on Basic Telecommunications, accepted the Reference Paper on regulatory principles in telecommunications, and signed the 
Fifth Protocol on Financial Services.  In the 
context of the Doha Development Agenda, Peru presented an initial services offer in 2003 and a revised offer in 2005. 
32. The liberalization process in the 
telecommunications sector has continued since 
Peru's previous Review, although one private firm still controlled some 95 per cent of all fixed telephone lines at the end of 2006.  Nevertheless, tariffs ha ve tended to fall and 
service quality to improve.  Since Peru's 
previous Review, the sector's legal framework 
has undergone substantial changes aimed at, among other things, facilitating entry for new operators.  Foreign participation in radio broadcasting services may not exceed 40 per 
cent of the capital stock or of stakeholders. Peru WT/TPR/S/189/Rev.1 
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33. Consolidation of the banking sector 
continued during the period under review, particularly as a result of problems that affected the sector in 2003 and that led the 
authorities to carry out a precautionary 
intervention of certain financial institutions.  Prudential indicators for the banking sector have improved since then, and credit has increased in recent years.  In case of closure of 
a foreign bank, the assets of the Peruvian 
branch must be used first to compensate Peruvian creditors and foreigners resident in Peru.  Peru maintains a tax on financial transactions at a rate of 0.08 per cent on the value of each deposit and withdrawal from a 
bank account;  the tax is set to be reduced 
according to an established schedule. 
34. In the transport sector, important 
regulatory progress has been made since 2000 but problems related to infrastructure persist in 
certain activities.  In maritime transport, 
cabotage services are reserved to national flag vessels with majority Peruvian ownership.  A minimum of 25 per cent of the volume of hydrocarbons transported in national routes is reserved for Peru's navy.  Although the law establishes freedom of routes, the reciprocity 
principle may be applied to foreign trade cargoes.  In 2005, Peru adopted a law to grant incentives for the development of the national 
merchant marine;  however, this is awaiting 
the adoption of regulations. 
35. In air transport, up to 49 per cent 
foreign participation is allowed at the start of operations by firms estab lished in Peru, which 
may be increased to 70 per cent after 
six months.  Peruvian firms that provide regular international air transport services are required to provide a similar national service. 
36. There are 22 regulated professions in 
Peru, for which registration in a professional 
association is required.  Professionals with 
diplomas issued by foreign institutions must validate their degrees in order to practice in Peru.  Each professional association establishes specific requirements for the 
validation of foreign degrees.  Engineers with 
foreign degrees may offer their services temporarily without having to validate their diplomas.  This possibility is not available for lawyers or accountants.