U.S.-Peru Trade Promotion Agreement
Tariff Elimination Schedule
More than 80 percent of U.S. exports of consumer and industrial products to Peru will become duty-free on the day the U.S.-Peru Trade Promotion Agreement (TPA) enters into force, with remaining tariffs phased out over a ten-year period. Additionally, more than two-thirds of current U.S. farm exports will become duty-free. Tariffs on most U.S. farm products will be phased out within 15 years, with all tariffs eliminated in 17 years.
To determine how this Agreement will affect the tariff rate assessed on your product(s) exported to Peru:
1) It is first necessary to obtain the appropriate HS number for your product
2) With this number it is then possible to check the Peruvian tariff schedule to find out at what rate the duties on your product will be reduced. Each line item of the Peruvian tariff schedule is assigned a letter code that indicates the staging by which the current tariff for each item is reduced and ultimately eliminated. The schedule also notes the base rate of customs duty, which is used to determine the starting point and interim rate at each stage of reduction for an item. For importing goods from Peru to the United States, you would check the U.S. tariff schedule.
3) After obtaining the staging category letter from the tariff elimination schedule, read the definition for the category below to determine that product's tariff elimination schedule.
Staging Categories
Except as otherwise noted in the General Notes section to each tariff schedule, the codes are generally defined as follows:
Category A:
Goods (there are unique rules for textile or apparel goods) will be duty-free immediately on the date that the Agreement enters into force.
Category B:
Duties will be eliminated in five equal annual stages beginning on the date the Agreement enters into force, and shall be duty-free effective January 1 of year five.
Category C:
Duties will be eliminated in ten equal annual stages beginning on the date the Agreement enters into force, and shall be duty-free effective January 1 of year ten.
Category D:
Duties will be eliminated in fifteen equal annual stages beginning on the date the Agreement enters into force, and shall be duty-free effective January 1 of year fifteen.
Category E:
Duties will remain at base rates for years one through ten. Duties shall thereafter be reduced in seven equal annual stages from the base rate, beginning on January 1 of year eleven, and such goods shall be duty-free effective January 1 of year seventeen.
Category F:
Originating goods already receiving duty-free treatment shall continue to receive duty-free treatment under the TPA.
Categories G through S:
In addition to the staging categories listed above, the Agreement has country-specific schedules that contain staging categories G through S. These categories may be found in the General Notes of the country-specific tariff elimination schedule.
For additional information, please review Annex 2.3 of Chapter 2 of the TPA.
Sample Calculations for Exports
The following examples are expressed in terms of the Customs Tariff Schedule of Peru, which is similar to the Harmonized Tariff Schedule of the United States (HTSUS), but is not exactly identical.
Tomato Concentrate (HS 2002.90.00):
According to the Peruvian tariff schedule, this product has been designated Category A staging with a base rate of 25 percent. On the date the U.S.-Peru TPA enters into force, this product, if qualifying as originating, will become duty-free.
Footwear incorporating a protective metal toe-cap, (HS 6401.10.00):
According to the Peruvian tariff schedule, this product has been designated Category C with a base rate of 20 percent. Beginning on the date the Agreement enters into force, provided that the good qualifies as originating, the duty will be reduced on a yearly basis in ten equal stages. Thus, in year one the duty will be 18 percent, in year two 16 percent, in year three 14 percent etc., until the product becomes duty-free on January 1 of year 10.
Prepared by the Trade Information Center