Auto and Auto Parts

• Trade and Tariffs
• Tariff Elimination

Trade and Tariffs

The automotive sector covers motor vehicles and parts. Automotive products accounted for 3.1 percent of U.S. exports to Peru in 2005, totaling approximately $53 million. The top U.S. exports in this sector were brakes, shock absorbers, fuel pumps, and large engines. Peruvian tariffs range between 4 and 12 percent with an average of 7.4 percent in 2005.

Peruvian exports to the United States totaled $5.5 million in 2005 or less than 1 percent of total exports to the United States. Top Peruvian exports were safety glass, brake lining and pads, and clutches. U.S. tariffs applied to the automotive sector range from 0 to 25 percent, with an average of 2.4 percent. All Peruvian exports in this sector enter the United States duty-free under the Andean Trade Preference Act (ATPA) and Andean Trade Promotion and Drug Eradication Act (ATPDEA) tariff preferences.

Tariff Elimination

Overall, tariffs will be phased out according to four tariff elimination categories: immediate elimination, equal cuts over five years, equal cuts over seven years, and equal cuts over ten years.

For automotive products, 80 percent of U.S. industrial exports will receive duty-free treatment immediately upon implementation of the agreement. Tariffs on another 2 percent of exports will be eliminated over five years, and 6 percent will be eliminated over seven years. Duties on the remaining 12 percent of U.S. exports will be eliminated over ten years.

Tariffs on priority automotive products including large-engine 4x4 vehicles, engines, brakes, shock absorbers, and other auto parts will be phased out immediately upon implementation of the agreement.

Non-Tariff Barriers

Peru will eliminate its prohibition on the importation of remanufactured automotive goods, as defined in Chapter Four - Rules of Origin, on entry into force of the Agreement. Peru will eliminate tariffs on most remanufactured automotive goods immediately and will phase down tariffs on a small number of remanufactured goods over 10 years.

International Trade Administration
Manufacturing and Services
Office of Trade Policy Analysis