2018/SCSC/WKSP4/005 Session: 3 Peru s Experience on Free Trade Agreement s Equivalence Provisions Submitted by: Peru Workshop on Trade Facilitation Through the Recognition of Food Safety Systems Equivalence Lima, Peru 21-22 June 2018
Peru s Experience on FTA s Equivalence provisions ERNESTO GUEVARA LAM Director Directorate of Technical Requirements for Foreign Trade Ministry of Foreign Trade and Tourism
Agenda Overview of Peru s Trade Policy Evolution of equivalence on FTAs Implementation process Challenges Possible next steps Conclusions 2
Unilateral Tariff Liberalization Trade Agreements Peru s Trade Policy Trade development
Continuous trade liberalization process based on FTAs and the participation in other trade fora. Strong reduction since 2008 because of the implementation of FTAs Currently, Peru does not apply major tariffs for importing goods. Source: MEF
Peru s Trade Agreements In Force Signed CPTPP Negotiations Announced/ Commenced Feasibility Canada European Union Indonesia Andean Community China Venezuela Brazil Peru Chile Australia Mexico India Turkey El Salvador Thailand Trade Agreements coverage on Exports (%) 89 % Cuba South Korea Singapore Guatemala Canada New Zeland AP - AS 8.0 % Costa Rica 2,006 2,016 2006 2017 Mexico Chile Australia Brunei Malaysia Pacific Alliance United States Japan Thailand TPP Japan Singapore Australi a Canada Honduras Panama Pacific Alliance Vietnam New Zeland Singapore Source: http://www.acuerdoscomerciales.gob.pe
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 US$ million 50000 40000 30000 20000 10000 0 Peru: Trade Balance (US$ Million) +22% Trade Policy that promotes the generation of employment, competitiveness and development Increase of 22% of its exports in 2017 Highest export rate in the last six years. -10000 Exports Imports Trade Balance Source: SUNAT Peru was in third place among the countries with the highest growth in exports in the world Greater growth of the sectors: +9% Agroindustrial +18% Fishery products +6.3% Textile and clothing Products under the Super Foods Peru brand reached shipments of US$ 3,461 millones (+8.7%)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Non-traditional exports reached a record in 2017 (8,5% growth). In 2018, a new record is expected: US$ 13 billion. Non Traditional Exports (US$ Million FOB) US$ 13 bn +8,5% 10,190 11,206 11,076 11,726 11,731 10,813 10,906 7,469 7,715 2,195 2,270 2,594 3,488 4,286 5,286 6,318 6,209 Source: SUNAT, Elaboration: MINCETUR
National Strategic Export Plan (PENX 2025) PENX 2025 PILLAR 1 Market diversification and Entreprise Internationalization PILLAR 2 Development of a Diversified, Competitive and Sustainable exportable supply PILLAR 3 Trade facilitation and intenational logistic chain efficiency PILLAR 4 Capacity building for strengthening export culture By 2025, it is expected 27 trade agreements in force that involve more than 72 trading partners
Evolution of Equivalence on FTAs FTAs without equivalence article FTAs provisions just related to the implementation of WTO SPS Agreement FTAs provisions related to the determination of equivalence of a measure or a group of measures CPTPP equivalence article WTO SPS Agreement
Equivalence at WTO SPS Agreement Article 4 1. Members shall accept the sanitary or phytosanitary measures of other Members as equivalent, even if these measures differ from their own or from those used by other Members trading in the same product, if the exporting Member objectively demonstrates to the importing Member that its measures achieve the importing Member's appropriate level of sanitary or phytosanitary protection. For this purpose, reasonable access shall be given, upon request, to the importing Member for inspection, testing and other relevant procedures. 2. Members shall, upon request, enter into consultations with the aim of achieving bilateral and multilateral agreements on recognition of the equivalence of specified sanitary or phytosanitary measures. G/SPS/19 26 October 2001 DECISION ON THE IMPLEMENTATION OF ARTICLE 4 OF THE AGREEMENT ON THE APPLICATION OF SANITARY AND PHYTOSANITARY MEASURES
Equivalence in Peru s FTAs (I) FTA Peru - Canada Article 504: Committee on Sanitary and Phytosanitary Measures 2 (c) as needed and taking into account guidelines developed or being developed by the WTO Committee on Sanitary and Phytosanitary Measures, the Committees of the Codex Alimentarius Commission, the International Plant Protection Convention (IPCC) and the World Organization for Animal Health (OIE), the development of guidelines for the practical implementation of: (i) mutual recognition and equivalence agreements ARTICLE 6.7 : EQUIVALENCE FTA Peru - Singapore 1. The Parties recognize that the principle of equivalence as set down in Article 4 of the SPS Agreement, as applied to SPS measures, has mutual benefits for both exporting and importing countries. 2. The Parties shall follow the procedures for determining the equivalence of SPS measures developed by the SPS Committee and the Codex Alimentarius Commission, the World Organization of Animal Health and the International Plant Protection Convention, as amended from time to time. 3. The Parties shall give favourable consideration to accepting the equivalence of each other s SPS measures, in order to ease the trade of the products subject to SPS measures and foster mutual confidence between the respective competent authorities. 4. Compliance by an exported product with a SPS standard that has been accepted as equivalent to a SPS standard of the importing Party shall not remove the need for that product to comply with any other relevant mandatory requirements of the importing Party. 5. Whenever an agreement on recognition of the equivalence is in process of negotiation and no final approval is achieved, the Parties should neither stop nor apply sanitary and/or phytosanitary measures more restrictive than those in force in their mutual trade, except where sanitary or phytosanitary emergencies arise or threaten to arise for a Party.
Equivalence in Peru s FTAs (II) Article 7.8: Equivalence CPTPP Further to Article 4 of the SPS Agreement, the Parties shall apply equivalence to a group of measures or on a systems-wide basis, to the extent feasible and appropriate. Exchange of information about procedures, rationale and results of the process. Enhancement of communication between the Parties regarding the results of the equivalence process.
Implementation Process Main focus on opening markets for agricultural products Not all SPS Committees are implemented More WTO plus equivalence provisions without implementation Equivalence implementation is not a key topic It must be in a near future for APEC Members
Challenges Implement the provisions of FTAs Not a clear definition of equivalence for SPS authorities Support the work of Codex National Committee and Technical Commissions Equivalence is not a main topic Understand the benefits of equivalence in the long term
Possible Next Steps Work on equivalence at bilateral level on FTAs Support APEC work Include equivalence as a priority issue in the modernization of food safety systems
Conclusions Peru strongly supports trade facilitation through WTOplus provisions in FTAs. Equivalence should be a key issue to implement in the near future in order to facilitate trade. APEC could support the implementation and share of experiences related to this topic. In the modernization of food safety systems, equivalence could have a key role for SPS authorities.
Peru s Experience on FTA s Equivalence provisions ERNESTO GUEVARA LAM Director Directorate of Technical Requirements for Foreign Trade Ministry of Foreign Trade and Tourism