USTR - 1996 National Trade Estimate-Peru
Office of the United States Trade Representative

 

1996 National Trade Estimate-Peru

In 1995, the United States trade surplus with Peru was $740 million, or $172 million greater than that in 1994. U.S. merchandise exports to Peru were $1.8 billion, up $367 million or 26.1 percent from 1994. Peru was the thirty-ninth largest U.S. export market in 1995. U.S. imports from Peru totaled $1 billion in 1995, or 23.2 percent greater than those in 1994.

The stock of U.S. foreign direct investment in Peru was $836 million in 1994, an increase of 33.1 percent over 1993. U.S. direct investment in Peru is concentrated largely in wholesale and manufacturing.

IMPORT POLICIES

Tariffs

Peru has a two-tier tariff structure with a 15 percent duty on the vast majority of imports and 25 percent on the rest. The weighted-average tariff is less than 16 percent, down from 80 percent when President Fujimori took office in 1990. The Government has announced that it intends to move toward a flat 10 percent tariff, but no timetable has been set.

On March 21, 1991 Peru introduced "temporary" surcharges on eighteen categories of agricultural products, covering five basic commodities: wheat, rice, corn, sugar, and milk products. These surcharges are in addition to the 15 percent ad valorem tariff. The surcharges are calculated on a weekly basis, according to prevailing international prices for each commodity, rather than the actual price of the commodities entering Peru. As a condition for disbursement of an Inter-American Development Bank trade sector loan, the GOP agreed to phase out the surcharges over a three-year period ending in 1997. The Government began reducing the surcharges in increments in April 1994. During 1995, because of high prevailing international prices, surcharges were practically non-existent.

Peru is a member of the Andean Pact but does not fully participate in the Pact's free trade arrangements or abide by the Pact's common external tariff (CET). The Andean Pact CET, which in reality applies only to Colombia, Ecuador, and Venezuela, has rates of 5, 10, 15 and 20 percent. As of January 1, 1995, products from other Andean Pact countries that fall under the five and ten percent categories of the Pact's CET enter Peru duty- free. In addition, Peru maintains bilateral agreements with each of the other four members of the Pact that grant duty-free treatment to numerous products. The agreement with Bolivia covers practically alltraded goods. As a result, about 75 percent of imports from other Pact members currently enter Peru with zero duties. Peru has committed itself to continue to broaden and harmonize these agreements with the goal of liberalizing all trade within the Andean Pact.

Peru has partial free trade agreements which grant tariff preferences to most Latin American countries under the Latin American Integration Association (ALADI). Peru is currently negotiating a free trade agreement with Chile and has initiated similar talks with Mexico. Negotiations for an association agreement with MERCOSUR stalled in 1995.

Non-tariff Measures

Almost all non-tariff barriers including subsidies, import licensing requirements, import prohibitions, and quantitative restrictions have been eliminated. Peru applies a value-added tax (VAT) rate of 18 percent to most products, and special consumption taxes, ranging from 10 to 50 percent, on certain items. Peru's methodology of applying a "consolidated rate" to assess special consumption and sales taxes on imported goods is burdensome, since the taxes are applied consecutively.

Under a 1992 customs reform, most imported cargo must be pre-inspected by contracted supervising firms to check for possible under-invoicing. The cost of these inspections -- as much as one percent of the f.o.b. value of the goods -- is paid by the importer. Some importers have complained of excessive customs delays caused by the pre-inspection system, while others have complained that there are continuing difficulties with Peru's valuation system relating to certainty.

STANDARDS, TESTING, LABELING, AND CERTIFICATION

According to U.S. industry, Peru requires an inspector to be physically on site to watch the preparation and sealing of containers of appliances. This requirement is an added cost as well as a production scheduling burden if an acceptable inspector is not available. The industry estimates that removal of this barrier could save U.S. business from $1 to $5 million in administrative costs.

GOVERNMENT PROCUREMENT

Government procurement is normally handled by public international tender. Contracts above a specified minimum value -- currently about $26,000 for purchases of goods and services and $100,000 for public works -- must be adjudicated by competitive bid. There is no statutory requirement to buy Peruvian goods or services. Interested companies must purchase bid documents, however, and bidders must have a localoffice or representative to qualify. Peru is not a signatory to the WTO Plurilateral Agreement on Government Procurement.

EXPORT SUBSIDIES

Peru does not provide any direct payment upon export. Exporters can receive rebates of the tariffs and value-added taxes paid on their inputs. In June 1995 the Government approved a simplified drawback scheme which allows small exporters to claim a flat 5 percent rebate, subject to certain restrictions. Other policy measures to encourage exports are under discussion.

LACK OF INTELLECTUAL PROPERTY PROTECTION

Peru has made improvements in its intellectual property rights protection but does not yet appear to provide adequate and effective protection. As a result, Peru has been placed on the "watch list" under the Special 301 provision of the 1988 Trade Act each year since 1992. The United States continues to raise intellectual property rights issues with Peru. Peru, which is a WTO member, has ratified its Uruguay Round implementing legislation, but has not fully implemented the provisions of the WTO Agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPs).

Patents and Trademarks

In late 1993 the Andean Pact passed two Decisions on the protection of patent and trademarks and of plant varieties -- Decisions 344 and 345 -- which took effect in Peru as of January 1, 1994. The Decisions are comprehensive and offer a significant improvement over previous standards of protection for intellectual property in the Andean Pact countries. For example, they provide a 20-year term of protection for patents, a reversal of the burden of proof in cases of alleged patent infringement, and also allow each member of the Andean Pact to improve its own respective patent law. The portions of the decisions covering protection of trade secrets and new plant varieties are generally consistent with world class standards for protecting intellectual property rights.

However, Decisions 344 and 345 remain deficient in several respects. These include compulsory licensing provisions, working requirements, restrictions on biotechnology inventions which prohibit patents on animal species or materials derived from the human body, denial of pharmaceutical patent protection for patented products listed on the World Health Organization's Model List of Essential Drugs -- although Peru's domestic patent law allows patents to be taken out on these products -- lack of transitional ("pipeline") protection, and lack of protection from parallel imports. The Decisions also fail to address procedures for enforcing intellectual property rights.

Decisions 344 and 345 supersede Peru's old industrial property law of 1992, which was passed in response to the Andean Pact Decision 313. Progress in the enforcement of patent and trademark regulations has resulted from the creation in December 1992 of the "National Institute for the Defense of Competition and Protection of Intellectual Property" (INDECOPI), which is in charge of protecting intellectual property in all its forms. While INDECOPI has had some success, jurisdictional conflicts between INDECOPI and the Peruvian justice system continue to hamper efforts to enforce trademarks.

Copyrights

Andean Pact Decision 351, which took effect in Peru on January 1, 1994, establishes a generally effective and Berne-consistent system. However, it fails to address procedures for enforcing intellectual property rights. Peru is in the process of updating its national copyright law to address enforcement issues.

Piracy of copyrighted material is widespread, although protection of copyrights is improving with government efforts to seize pirated merchandise and fine violators. Illegal copies of technical books, textbooks, audio cassettes and motion picture videos are widely available. Pirated software is also widely available. The Peruvian Government has conducted raids on large-scale users and publicly destroyed pirated software. The government also has conducted raids on vendors of pirated books, audio cassettes and videos. More needs to be done, however, to combat piracy in all its forms and to improve coordination between INDECOPI and the criminal justice system.

Motion picture industry losses in Peru have occurred due primarily to video piracy and unauthorized exhibitions by video theaters. Cable television systems also illegally intercept and retransmit copyrighted material. 1995 losses due to motion picture piracy in Peru are estimated to be $4 million.

INVESTMENT BARRIERS

Peru has greatly liberalized its investment regime since 1990. National treatment for foreign investors is guaranteed in the 1993 Constitution. "Juridical Stability Agreements" are available to foreign investors in the mining and petroleum sectors, guaranteeing tax, foreign exchange and regulatory stability for a period of ten years. There are no restrictions on remittances of profits, dividends, royalties or capital.

Arbitration is an accepted alternative to the courts. The September 1993 establishment of the Lima Chamber of Commerce's International Arbitration Center has helped to institutionalize this option.

Rules regarding hiring of foreign personnel have been liberalized, although foreign employees still may not make up more than 20 percent of the workforce of a company established in Peru -- whether owned by foreign or national interest -- and their combined salaries may not account for more than 30 percent of the total payroll. Services companies, including banks, and free trade zones are exempted from these hiring limitations. In addition, a company may apply for exemption from the limitations for foreign managerial or technical personnel.

 
click here for printer friendly version
 




Help Link Site Map Link Contact Us Link
 
 Search Title Image
Document Library Link