1. Pursuant to Procedural Order No. 2, the Republic of Peru hereby provides its comments on the September 10, 2014, Submission of Non-Disputing Party the United States of America (“Non-Disputing Party Submission” or “Submission”) regarding the preliminary objections provision in Article 10.20.4 of the Peru-United States Trade Promotion Agreement (“Treaty”).1

I. INTRODUCTION

2. Peru appreciates the cooperative relationship that it shares with the United States in matters relating to trade, investment, development, and environmental protection, among others. These shared commitments of Peru and the United States are embodied in the Treaty, which reflects the States’ agreement on a broad range of issues negotiated over a period of years. Peru respects its international obligations under the Treaty and its rights thereunder, including those related to cooperation in environmental practices and dispute resolution where there is legitimate jurisdiction and transparency. As with all rights accorded each State under the Treaty, Peru also respects the right of the United States to make a non-disputing Party submission under Article 10.20.2.

3. On March 21, 2014, Peru exercised its right to raise objections pursuant to the Treaty, identifying three focused objections relating to waiver, temporality, and contract. As Professor Michael Reisman of Yale University has explained, the Treaty’s preliminary objections mechanism is “exceptionally concerned with protecting the respondent state from abusive uses of the extensive procedural powers afforded the putative investor.”2 As Peru has explained, each objection can be decided as a matter of law based on the facts as alleged by Renco or on undisputed facts – and therefore meets the requirements of Article 10.20.4.3 Each objection raises threshold issues that, when decided, could extinguish, narrow, or clarify the claims that may proceed to a fuller inquiry on the merits. Deferring resolution of such objections for a later phase not only contravenes the express terms of the Treaty, which provide that objections raised under Article 10.20.4 shall be decided as a preliminary question, but also would be highly inefficient and, thus, contrary to the purpose of Article 10.20.4, and the rights and protections it affords respondent States.