A World Trade Organization dispute panel ruled last Wednesday that Peru was violating global trade rules in imposing additional duties on key agricultural products when their international prices fell below a set floor.
The case was brought to the WTO last April by Guatemala, which argued that its exports to Peru had suffered under the measure that is intended to protect Peruvian farmers from turbulence on global commodity markets.
The commodities affected were rice, sugar, corn, milk and a range of milk products.
The three-member panel said in a report that it was recommending that Peru bring the duties it imposes under a measure known as a price range system, or PRS, into line with WTO agreements on farm trade.
But the panel said it could not recommend to Peru, as Guatemala had asked, that the PRS system be dismantled, because the original complaint had been focused only on the duties and had not specifically challenged the PRS.
The two countries have 60 days to appeal the ruling before it becomes final. There was no immediate indication in Geneva whether they would do so.