Peru's National Institute for Defense Competition and the Protection of Intellectual Property (INDECOPI) has applied anti-dumping duties on five types of clothing imported from China.

The move is designed to "neutralize the damage caused to the domestic industry", the agency said, due to imports of clothing from China, which entered Peru at dumping prices. The duty will apply to polos, shirts, pants and shorts, innerwear and socks.

According to the rules of the World Trade Organization (WTO), dumping is considered an unfair practice that involves exporting a product at less than normal value recorded in its home market price. If it is found that foreign companies export their products through dumping, and domestic producers suffer as a result, the WTO member countries are allowed to impose anti-dumping duties.

Peru's Commission opened an investigation into 15 types of apparel and clothing accessories, but it was found the anti-dumping measure only applied to five types of clothing.

Anti-dumping duties were set at the "lowest possible level" to avoid affecting trade flows, INDECOPI said, but at the same time sufficient enough to neutralize the damage caused to the Peruvian domestic apparel industry by dumping at lower prices.

The duties imposed on imports of polos, shirts, underwear and socks are set at US$0.14 and $1.00 per garment, while the duties imposed on imports of pants and shorts are equivalent to $3.73 per garment.

The Commission noted that between 2009 and 2011, imports of Chinese products increased significantly, from 119m to 187m garments, which covered 80% of the increase in demand. Imports increased from 66% in 2009 to 71% in 2011. During this period, imports of apparel and clothing accessories, from China entered the Peruvian market at prices that were between 37% and 38% below the price of those on the domestic market.