TRADE POLICY REVIEW: PERU
17 and 19 October 2007
Concluding remarks by the Chairperson
The Third Trade Policy Review of Peru has allowed this Body to consider Peru's trade and investment policies and practices against the backdrop of its economic and institutional environment. Our discussions have benefited greatly from the active participation of Vice-Minister Ferreyros, Ambassador Pouce, Ms. Elmore and the rest of the Peruvian delegation, the thoughtful intervention by the discussant, Ambassador Gosper, and the involvement of many delegations.
Members commended Peru's solid economic growth in recent years, underpinned by prudent macroeconomic policies, structural reforms and a favourable global economic environment. Nevertheless, they noted that Peru still faced challenges in translating these achievements into stronger improvements in social indicators including poverty reduction. Members encouraged Peru to persevere with structural reforms, including those necessary to eliminate bottlenecks created by inadequate infrastructure, as a means to sustain its recent economic performance.
Members welcomed Peru's commitment to the multilateral trading system and its support for the DDA. They noted Peru’s ambitious preferential trade agenda, including its participation in the Andean Community, the recently completed agreement with the United States, and the several ongoing bilateral negotiations. Peru was invited to notify its preferential agreements to WTO in order to enhance their transparency.
Members praised Peru's liberalization of its trade regime, including the unilateral reduction of applied MFN tariffs. However, some noted that the tariff structure had lost uniformity, resulting in increased effective assistance to some sectors. In response to Members' questions, Peru indicated that it had recently abolished the tariff surcharge applied on certain products, but that the elimination of the price band system was not under discussion. Peru was encouraged to enhance the predictability of its trade regime by eliminating the gap between bound and applied tariff rates.
Members welcomed Peru's efforts to facilitate trade, although some considered customs clearance procedures to be lengthy and complex. Concerns were also expressed about the increase in anti-dumping investigations, and the use of a simplified duty drawback scheme. Peru gave detailed information about its policies and practices regarding technical regulations and SPS measures. It also indicated that consideration was being given to reducing local preferences in government procurement but not to acceding to the GPA. Peru stressed the total independence of its competition authority, while some Members considered desirable to strengthen further this important entity.
In response to concerns about its use of incentive programmes, Peru noted that its current aim was to reduce fiscal distortions, and that steps were being taken to apply stricter assessment criteria to future programmes and to phase out others. Peru also indicated that it was working on formally abolishing local content requirements for dairy products, and reassessing income tax benefits contingent on the use of domestic inputs.
With respect to service activities, Members noted the considerable liberalization that Peru had undertaken in areas such as telecommunications and financial services. However, they also pointed to certain restrictive measures in areas such as maritime and air transport, and the need to accelerate the modernization of ports. Peru provided responses to Members' specific questions concerning activities such as telecommunications, banking, maritime and air transport, as well as professional services.
I would like to conclude this meeting by congratulating Peru for its steadfast support of trade liberalization as a development tool. In Peru, liberalization and sound economic policies have paid off with much improved external and internal balances as well as robust economic growth. But additional reforms are necessary to rise productivity and, critically, distribute the gains from trade more widely. Thus, I welcome Peru's renewed emphasis on improving social indicators, as well as its ongoing efforts to strengthen its institutions and infrastructure. I invite Peru to bind its reforms in the WTO in order to give greater predictability to its trade regime, and thus further promote investment and growth.
