CYIL vol. 8 (2017)

ELISA BARONCINI CYIL 8 ȍ2017Ȏ establishes that the amount of such additional duty be “based on the difference between the floor price and the reference price.” As Peru has bound at 68% ad valorem the custom duties on the products subject to the PRS, the additional levies required by Lima, combined with Peru’s ad valorem duties, cannot exceed Peru’s bound tariff rate. On the contrary, the PRS provides for the application of tariff rebates, thus of reductions when the reference price exceeds the ceiling price. Finally, tariffs are unaltered if the reference price is above the floor price and below the ceiling price. 55 Almost a decade after the entry into force of the PRS system, Guatemala and Peru agreed on the possibility to maintain such a mechanism by virtue of Annex 2.3, para. 9 of the FTA signed between the two countries on 6 December 2011, pursuant to which “Peru may maintain its Price Range System established in Supreme Decree No. 1152001EF and the amendments thereto.” A similar explicit guarantee was negotiated by Peru in several FTAs with other trade partners, in order to benefit of the flexibility to maintain its PRS. 56 When Guatemala attacked the Peruvian measure before the WTO dispute settlement system, Lima also argued that the WTO Panel did not have jurisdiction: according to the defendant, by signing the FTA, Guatemala impliedly guaranteed to Peru not to initiate WTO proceedings with regard to the PRS. In fact, pursuant to Article 1.3 of the FTA, on the relationship with other international agreements, “[t]he Parties confirm their existing mutual rights and obligations under the WTO Agreement and other agreements to which they may be parties”; however, the same provision foresees the prevalence of the FTA in case of bilateral obligations incompatible with Marrakesh law: “[i]n the event of any inconsistency between this Treaty and the agreements referred to in paragraph 1, this Treaty shall prevail to the extent of the inconsistency, unless otherwise provided in this Treaty.” The Peru / Guatemala FTA was not officially binding during the Panel and AB proceedings: indeed, Guatemala ratified the Agreement, 57 but Peru had yet to conclude and implement the FTA in observance of its internal procedures. 58 Instead of declining the arguments on 55 For an overview of the Peruvian measure attacked by Guatemala see Panel Report, Peru – Additional Duties on Imports of Certain Agricultural Products , WTO Doc. WT/DS457/R (adopted on 31 July 2015), paras. 7.97-7-167; Appellate Body Report, WTO Doc. WT/DS457/AB/R (adopted on 31 July 2015), paras. 5.1- 5.4; WorldTradeLaw.net Dispute Settlement Commentary (DSC), Panel Report, Peru – Additional Duty on Imports of Certain Agricultural Products , (WT/DS457/R), August 3, 2015, pp. 2-4; WorldTradeLaw.net Dispute Settlement Commentary (DSC), Appellate Body Report, Peru – Additional Duty on Imports of Certain Agricultural Products , (WT/DS457/AB/R), August 3, 2015, pp. 2-4. 56 See SAGGI, Kamal, WU, Mark, Understanding Agricultural Price Range Systems as Trade Restraints: Peru – Agricultural Products, World Trade Review , 2016, pp. 1-28, at p. 20. On the Peru – Agricultural Products dispute see also RAINA , Akhil, “The Day the Music Died”: The Curious Case of Peru-Agricultural Products, Global Trade and Customs Journal 2016, pp. 71-85; SHAFFER, Gregory, WINTERS, L. Alan, FTAs as Applicable Law in WTO Dispute Settlement: Was the Appellate Body Wrong in Peru-Additional Duty (DS457)?, EUI Working Papers RSCAS 2016/65, November 2016. For the text of the Peru / Guatemala FTA see the Investment Policy Hub of the United Nations Conference on Trade and Development at the link http://investmentpolicyhub. unctad.org/IIA/country/86/treaty/3293 (accessed on 25 January 2017). 57 As already mentioned in the text, the FTA was signed by both parties on 6 December 2011. Subsequently, the bilateral treaty was approved by the Guatemalan Congress on 4 July 2013 by Decree No. 5-2013 published in the Journal of Central America (Guatemala’s official journal) on 23 July 2013, and then formally ratified by the Guatemalan President. Guatemala notified Peru with a letter dated 21 February 2014 that it had fulfilled the legal requirements for the entry into force of the FTA. See WT/DS457/AB/R, Annex B-1, para. 9. 58 During the DSU proceedings, Peru stated not to have yet ratified the FTA, and underlined that, under Article 57 of its Political Constitution, the President of the Republic could ratify the FTA without having to obtain the

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