Peru loses WTO appeal over agricultural import levy

23/07/2015 12:00 - 588 Views

(Reuters) - Peru lost its appeal on Monday in a trade dispute over its agricultural import levy, a case brought to the World Trade Organisation by sugar exporter Guatemala two years ago.
Peru, one of the countries negotiating the U.S.-led Trans-Pacific Partnership free trade deal, imposes an extra import levy on sugar, rice, corn, and dairy products when international prices fall below a certain level, a system that Guatemala said was illegal under global trade rules.
A WTO adjudication panel backed Guatemala's complaint in November 2014, and the WTO's Appellate Body upheld that ruling on Monday, saying Peru should bring its laws into conformity with the WTO rules.
Peru is a small market for Guatemala, which mainly exports to the United States and its Central American neighbours El Salvador and Honduras. Sugar is its top export, accounting for about $1 billion per year, about 10 percent of total exports.
Peru imported more than $87 million from Guatemala in 2012, almost half of it sugar, making it the eighth biggest export market for Guatemalan sugar and confectionary. But in 2014 that total had fallen to just below $26 million, and sugar imports accounted for less than $3 million.
Peru's "additional duty" scheme, in place since 2001, effectively maintains minimum import prices, making Peru's competitors less able to compete when prices are low. WTO rules say member countries should not protect their own producers by discriminating against foreign suppliers.

July 20, 2015
Source: Reuters