PERU – ADDITIONAL DUTY ON IMPORTS OF CERTAIN AGRICULTURAL PRODUCTS NOTIFICATION OF AN OTHER APPEAL BY GUATEMALA UNDER ARTICLE 16.4 AND ARTICLE 17 OF THE UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU), AND UNDER RULE 23(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
Document: AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU), AND UNDER RULE 23(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
Date: 1 April 2015
Document codes: WT/DS457/8
Complainant: Guatemala
Respondent: Peru
Third parties: Argentina, China, El Salvador, EU, India, U.S., Brazil, Ecuador, South Korea, Honduras, Colombia
Dispute stage: Appellate Body
Agreements cited: Art. 4.2  AgricultureArt. II:1, XI:1, X:1, X:3(a)  GATT 1994Art. 1, 2, 3, 5, 6, 7  Customs valuationArt. 3.8  Dispute Settlement Understanding (DSU)

PERU – ADDITIONAL DUTY ON IMPORTS OF
CERTAIN AGRICULTURAL PRODUCTS
NOTIFICATION OF AN OTHER APPEAL BY GUATEMALA
UNDER ARTICLE 16.4 AND ARTICLE 17 OF THE UNDERSTANDING ON RULES
AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU),
AND UNDER RULE 23(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
The following communication, dated 30 March 2015, from the delegation of Guatemala, is being
circulated to Members.

Pursuant to Article 16.4 and 17 of the Understa nding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") and Rule 23(1) of the Working Procedures for Appellate Review,
Guatemala hereby notifies its decision to appeal to the Appellate Body certain issues of law
covered in the Panel Report on Peru – Additional Duty on Imports of Certain Agricultural Products
(), which was circulated on 27 November 2014 (the "Panel Report"). Pursuant to
Rule 23(3) of the Working Procedures for Appellate Review, Guatemala is simultaneously filing this
Notice of Other Appeal and its Other Appellant's Submission with the Appellate Body Secretariat.

Guatemala appeals the Panel's finding on paragraphs 7.370, 7.371 and 8.1(c) of the Panel Report
that the duties resulting from Peru's Price Rang e System ("the measure at issue") does not fall
within the category of "minimum import prices … and similar border measures" prohibited under
Article 4.2 and footnote 1 of the Agreement on Agriculture.
1

Guatemala seeks review by the Appellate Body of the following errors of law by the Panel in the
Panel Report:

I. The Panel erred in applying an excessively narrow legal standard to define measures
that constitute a minimum import price within the meaning of Article 4.2 and footnote 1
of the Agreement on Agriculture

1. The Panel erred in law in concluding that the measure at issue was not a minimum import
price because it was not applied by reference to the actual transaction value of each shipment of
imports. In reaching this finding, the Panel applied an excessively narrow legal definition of
"minimum import prices" within the meaning of Article 4.2 and footnote 1 of the Agreement on
Agriculture.
2. Nothing in the definitions used by the panels and the Appellate Body in the Chile – Price
Band System disputes implies that the concept of minimum import price includes only measures
that are applied with respect to the actual transaction value of each shipment.
3. The reference price of Peru’s Price Range System ("PRS") is designed to operate as a
substitute or proxy for the typical transaction value of any given shipment. In this sense, the
reference price and the manner in which it is calculated, ensures that the floor price functions as a

1 The Panel's errors in law are contained inter alia in paragraphs 7.360, 7.361, 7.366-7.371 and 8.1(c)
of the Panel Report. In accordance with Rule 23(2)(c)(ii)(C), the foregoing is an indicative list of the
paragraphs of the Panel report containing the alleged errors.

true minimum import price, even if the PRS does not operate directly by reference to actual
transaction values of individual shipments.
4. The Panel improperly rejected Guatemala's argu ment that the measure at issue constitutes
a minimum import price even if it does not in ev ery instance equalize entry prices with the floor
price. The essential legal character of the measure does not change even if it does not achieve its
purpose in every instance.
II. The Panel erred in finding that the measure at issue is not a minimum import price
despite the existence of an implicit minimum threshold

5. The Panel’s finding that the measure at issue does not constitute a minimum import price
failed to consider that the measure's design, structure and operation gives rise to an implicit
minimum price threshold. This threshold consists of the sum of the lowest transaction price of the
previous fortnight and the duty resulting from the PRS.
6. Even though, in certain instances, the final entry value of an imported product may not
reach the floor price, it will always reach or exceed the alternative implicit threshold. It is highly
unlikely that a shipment will arrive in Peru at a price lower than the lowest price observed in the
international reference market designated by Peru's legislation.
7. The Panel also incorrectly equated the effects of the implicit threshold with those produced
by ordinary customs duties in the form of a specific tariff. The implicit threshold contained in the
measure at issue affords a specific type of protection not afforded by ordinary specific duties. As
acknowledged by the Panel, the PRS has the decl ared objective of being a "stabilization and
protection mechanism that serves to neutralize fluctuations in international prices and limit the
negative effects of falls in such prices".
2 Unlike the implicit threshold of Peru's measure, the
threshold generated by a specific duty does not re spond to changes in world prices of a particular
commodity. Additionally, while the implicit threshold is inherently linked to the lowest transaction
of the previous fortnight, any ordinary specific duty would lack any such characteristic.
III. The Panel erred in conflating the legal standard for minimum import prices with
the legal standard for measures "similar" to minimum import prices

8. The Panel conducted a legally incorrect analysis of whether the measure was "similar" to a
minimum import price within the meaning of foot note 1 of the Agreement on Agriculture. The
Panel's reasons for finding that the measure at issue is not similar to a minimum import price are
essentially the same as those for finding that the measure is not a minimum import price. The
Panel thus conflated two related but different legal concepts: a minimum import price and a
measure similar to a minimum import price.
9. Under the Panel's legal interpretation, a measure could only be "similar" to a minimum
import price if, in effect, it is a minimum import price.
10. By using a definition of "similar" that was the same as the definition used for minimum
import prices, the Panel failed to give effect to the concept of "similar" measures in the context of
footnote 1 to Article 4.2 of the Agreement on Agriculture.
IV. The Panel erred in finding that Peru's measure is not similar to a minimum import
price because it does not impede imports from entering Peru at a price below a certain
threshold

11. The Panel erred in finding that the measure at issue is not similar to a minimum import price
because it does not impede imports from entering the Peruvian market at prices below a certain
threshold.
12. Contrary to the Panel's conclusion, the design, structure and operation of the measure at
issue shows the existence of an explicit threshold, which is the floor price itself. The floor price

2 Panel Report, para. 7.317(a).

acts as a true threshold because it operates on the basis of a reference price, which is calculated in
a manner that mimics the value of actual transactions.
13. The measure at issue also contains an implicit threshold, which consists of the lowest
transaction of the previous fortnight plus the addi tional duties generated by the PRS. Even if, in
certain limited cases, the application of the additional duties fails to elevate the price to the level
of the floor price, those shipments will not enter the Peruvian market below the alternative implicit
threshold.

For the above reasons, the Panel erred in law in finding that the measure at issue is neither a
minimum import price nor a measure similar to an import price within the meaning of Article 4.2
and footnote 1 of the Agreement on Agriculture. Guatemala, therefore, requests the Appellate
Body to reverse the Panel’s finding contained in paragraphs 7.370, 7.371 and 8.1 (c) of the Panel
Report.

Additionally, Guatemala requests that the Appellate Body complete the legal analysis and find that
the measure at issue is inconsistent with Article 4.2 of the Agreement on Agriculture because it is
either a minimum import price or a measure si milar to a minimum import price. The factual
findings contained in the Panel Report, as well as the undisputed facts on the record, constitute a
sufficient basis to conclude that the measure at issue is a minimum import price or a measure
similar to a minimum import price.