Peru experienced radical economic policy changes during the first half of the decade of 1990. An analysis of these new economic policies, especially those related to foreign trade are presented in this article. Between 1990 and 1994, the Peruvian government eliminated price controls and exchange rate restrictions; measures were given to promote national and foreign private investment; state monopolies to import goods were suppressed; import prohibitions were phased out; most import tariffs were drastically reduced; a much more uniform tariff structure was imposed, and export subsidies were eliminated. Local import substituting activities that used to be highly protected before the reform were forced to adapt to the new open market conditions, with smaller effective rates of protection. Many of them closed down business, but others were able to stabilize and continued growing, although they had to invest in new equipment and had to reduce their sale prices in the internal market, which benefited consumers. Overall, total GDP as well as manufacturing GDP both grew up during the period. There was not any industrial collapse that some analysts predicted to happen. Employment level in the manufacturing sector contracted, but labor productivity picked up. Imports increased faster than exports, thus generating serious balance of trade deficits that were financed by capital inflows. Trade openness did no eliminate the prevailing anti export bias, but this bias certainly was reduced, and a basis for the future development of new exporting sectors was established. Initially, tariff reduction caused fiscal revenue losses, but they were compensated later on by the increase in import volumes.