Title
FREE TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF SERBIA AND THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA
Preamble
PREAMBLE
The Government of the Republic of Serbia (hereinafter referred to as "Serbia"), on one part, and the Government of the Peopleâs Republic of China (hereinafter referred to as "China"), on the other part, hereinafter individually referred to as a "Party" or collectively referred to as "the Parties";
RECALLING the Agreement on Trade and Economic Cooperation between the Government of Federal Republic of Yugoslavia and the Government of the People's Republic of China signed in 1996 with the objective of strengthening cooperation and developing trade and economic relation;
COMMITTED to deepening close and lasting relations through the free trade agreement with a view to bring economic and social benefits, to create new opportunities for employment and to improve the living standards of their peoples;
REAFFIRMING their commitment to carry out comprehensive cooperation under the Belt and Road Initiative and jointly forging a community of shared future;
REAFFIRMING their commitment to pursue the objective of sustainable development;
COMMITTED to the promotion of prosperity, democracy, social progress and to uphold freedom, equality, justice and the rule of law, reaffirming their commitment to the Charter of the United Nations and fundamental norms of international relations;
DETERMINED to promote and further strengthen the multilateral trading system, building on their respective rights and obligations under the Marrakesh Agreement establishing the World Trade Organization (hereinafter referred to as "the WTO");
CONSIDERING that no provision of this Agreement may be interpreted as exempting the Parties from their obligations under other international agreements, especially the Marrakesh Agreement establishing the WTO and the other agreements negotiated thereunder;
DECLARING their readiness to examine the possibility of developing and deepening their economic relations in order to extend them to fields not covered by this Agreement;
CONVINCED that this Agreement will enhance the competitiveness of their firms in global markets and create conditions encouraging economic, trade and investment relations between them;
HAVE DECIDED, in pursuit of the above, to conclude the following Agreement:
Body
Chapter 1. GENERAL PROVISIONS
Article 1. Objectives
1. The Parties shall establish a free trade area by means of this Agreement, with a view to spurring prosperity and sustainable development.
2. The objectives of this Agreement, which is based on trade relations between market economies, are:
(a) to achieve the liberalization of trade in goods, in conformity with Article XXIV of the General Agreement on Tariffs and Trade (hereinafter referred to as "the GATT 1994");
(b) to mutually increase investment opportunities between the Parties, and to gradually develop an environment conducive to enhanced trade in services;
(c) to provide fair conditions of competition for trade between the Parties and to ensure adequate and effective protection of intellectual property rights;
(d) to gradually achieve further understanding of the government procurement of the Parties;
(e) to develop international trade in such a way as to contribute to the objective of sustainable development and to ensure that this objective is integrated and reflected in the Partiesâ trade relationship; and
(f) to contribute in this way to the harmonious development and expansion of world trade.
Article 2. Territorial Application
Without prejudice to Chapter 3 and related Annexes, this Agreement shall apply:
(a) With respect to Serbia, the territory of the Republic of Serbia, including land territory, internal waters and territorial airspace, in accordance with international law and its domestic law;
(b) With respect to China, the entire customs territory of the Peopleâs Republic of China, including land territory, territorial airspace, internal waters, territorial sea as well as their bed and subsoil, and any area beyond its territorial sea within which it may exercise sovereign rights and/or jurisdiction in accordance with international law and its domestic law.
Article 3. Central, Regional and Local Government
Each Party shall ensure the observance of all obligations and commitments under this Agreement by its respective central, regional and local governments and authorities, and by non-governmental bodies in the exercise of governmental powers delegated to them by central, regional and local governments or authorities.
Article 4. Transparency
1. The Parties shall publish or otherwise make publicly available their laws, regulations, judicial decisions, administrative rulings of general application and their respective international agreements that may affect the operation of this Agreement.
2. The Parties shall promptly respond to specific questions and provide, upon request, information to each other on matters referred to in paragraph 1. They are not required to disclose confidential information.
3. The contact points established in Article 71 (Contact Points) shall facilitate communications between the Parties on matters covered in this Agreement. Upon request of the other Party, the contact point shall identify the office or official responsible for the matter and assist, as necessary, in facilitating communication with the responding Party.
Chapter 2. TRADE IN GOODS
Article 5. Scope
Except as otherwise provided in this Agreement, this Chapter shall apply to trade in goods between the Parties.
Article 6. National Treatment
Each Party shall accord National Treatment to the goods of the other Party, in accordance with Article III of the GATT 1994, including its interpretative notes. To that end, Article I of the GATT 1994 and its interpretative notes are incorporated into and form an integral part of this Agreement, mutatis mutandis.
Article 7. Elimination of Customs Duties
1. Except as otherwise provided in this Agreement, neither Party shall increase any existing customs duty or adopt any new customs duty on an originating good of the other Party.
2. Except as otherwise provided in this Agreement, each Party shall reduce or eliminate its customs duties on originating goods of the other Party in accordance with the Chapter 3 (Rules of Origin and Implementation Procedures), in accordance with its Schedule in Annex 1 (Schedule of Tariff Commitments).
3. Customs duty includes any duty or charge of any kind imposed in connection with the importation of a good, but does not include:
(a) any charge equivalent to an internal tax imposed consistently with Article UL.2 of GATT 1994;
(b) any anti-dumping or countervailing duty applied consistently with the provisions of Article VI of GATT 1994, the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, or the WTO Agreement on Subsidies and Countervailing Measures, any duty applied consistently with Article XIX of GATT 1994 and WTO Agreement on Safeguards; and
(c) any fee or other charge in connection with importation commensurate with the cost of services rendered.
Article 8. Base Rate
1. For each product the base rate of customs duties, to which the successive reductions set out in Annex 1 (Schedule of Tariff Commitments) is to be applied for imports between the Parties, shall be the most-favoured-nation (hereinafter referred to as âMFNâ) customs duty rate applied by each Party on January 1, 2022.
2. If at any moment a Party reduces its applied MFN customs duty rate after the entry into force of this Agreement, that duty rate shall apply as regards trade covered by this Agreement if and for as long as it is lower than the customs duty rate calculated in accordance with its Schedule to Annex 1 (Schedule of Tariff Commitments).
Article 9. Quantitative Restrictions
The rights and obligations of the Parties in respect of quantitative restrictions, shall be governed by Article XI of the GATT 1994, which is hereby incorporated into and made part of this Agreement.
Article 10. Sanitary and Phytosanitary Measures
1. The rights and obligations of the Parties in respect of sanitary and phytosanitary measures shall be governed by the WTO Agreement on the Application of Sanitary and Phytosanitary Measures.
2. The Parties shall exchange names and information of contact points with sanitary and phytosanitary expertise and competent authorities in order to facilitate communication and the exchange of information.
Article 11. Technical Regulations
1. The rights and obligations of the Parties in respect of technical regulations, standards and conformity assessment procedures shall be governed by the WTO Agreement on Technical Barriers to Trade.
2. The Parties shall strengthen their co-operation in the field of technical regulations, standards and conformity assessment procedures, with a view to increasing the mutual understanding of their respective systems and facilitating access to their respective markets.
Article 12. State Trading Enterprises
The rights and obligations of the Parties in respect of state trading enterprises shall be governed by Article XVII of the GATT 1994, its interpretative notes, and the Understanding on the Interpretation of Article XVII of the GATT 1994, which are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 13. Subsidies and Countervailing Measures
1. The rights and obligations of the Parties relating to subsidies and countervailing measures shall be governed by Articles VI and XVI of the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures, except as provided for in paragraph 2.
2. Before one of the Parties, as the case may be, initiates an investigation to determine the existence, degree and effect of any alleged subsidy in the other Party, as provided for in Article 11 of the WTO Agreement on Subsidies and Countervailing Measures, the Party considering initiating an investigation shall notify in writing the Party whose goods are subject to investigation as soon as possible and allow for consultation with a view to finding a mutually acceptable solution. The consultations shall take place if either Party so requests within 15 days from the receipt of the notification.
Article 14. Anti-dumping
1. The rights and obligations of the Parties in respect of antidumping measures shall be governed by Article VI of the GATT 1994 and the WTO Agreement on Implementation of Article VI of the GATT 1994. The Parties agree not to take such measures in an arbitrary or protectionist manner.
2. As soon as possible following the acceptance of a properly documented application from an industry in one Party for the initiation of an antidumping investigation in respect of goods from the other Party and before proceeding to initiate such investigation, that Party shall notify the other Party.
3. Both Parties confirm that there shall be no practice between the two Parties to use a methodology based on surrogate value of a third country, including the use of surrogate price or surrogate cost in determining normal value and export price when determining dumping margin during an anti-dumping procedure.
Article 15. Global Safeguard Measures
The rights and obligations of the Parties in respect of global safeguards shall be governed by Article XIX of GATT 1994 and the WTO Agreement on Safeguards.
Article 16. Bilateral Safeguard Measures
1. Where, as a result of the reduction or elimination of a customs duty under this Agreement, any product originating in a Party is being imported into the territory of other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to constitute a substantial cause of serious injury or threat thereof to the domestic industry of like or directly competitive products in the territory of the importing Party, the importing Party may take bilateral safeguard measures to the minimum extent necessary to remedy or prevent the injury, subject to the provisions of paragraphs 2 to 12 during the transition period only.
2. Bilateral safeguard measures shall only be taken upon clear evidence that increased imports have caused or are threatening to cause serious injury pursuant to an investigation in accordance with the procedures laid down in the WTO Agreement on Safeguards.
3. If the conditions set out in paragraph 1 are met, the importing Party may take measures consisting in:
(a) suspending the further reduction of any rate of duty provided for under this Agreement for the product; or
(b) increasing the rate of customs duty for the product to a level not to exceed the lesser of:
(i) the MEN rate of duty applied at the time the action is taken; or
(ii) the MFN rate of duty applied on the day immediately preceding the date of the entry into force of this Agreement.
4. A Party shall immediately deliver written notice to the other Party upon: (a) initiating a bilateral safeguard investigation; (b) taking a provisional safeguard measure according to paragraph 10;
(c) making a finding of serious injury or threat thereof caused by increased imports;
(d) taking a decision to apply or extend a safeguard measure; and (e) taking a decision to modify a measure previously undertaken.
5. In making the notification referred to in paragraphs 4 (b) to (e), the Party proposing to apply or extend a bilateral safeguard measure shall provide the other
Party with all pertinent information, which shall include evidence of serious injury or threat thereof caused by the increased imports, precise description of the good involved and the proposed measure, proposed date of introduction and expected duration; the Party proposing to apply a measure shall also provide any additional information which the other Party considers pertinent.
6. A Party proposing to apply or extend a bilateral safeguard measure shall provide adequate opportunity for prior consultations with the other Party as far in advance of taking any such measure as practicable, with a view to reviewing the information arising from the investigation, exchanging views on the measure and reaching an agreement on compensation set out in paragraph 11. The Parties shall in such consultations review, inter alia, the information provided under paragraph 5, to determine:
(a) compliance with the other provisions of this Article; (b) whether any proposed measure should be taken; and
(c) the appropriateness of the proposed measure, including consideration of alternative measures.
7. Bilateral safeguard measures shall be taken for a period not exceeding two years. In very exceptional circumstances, measures may be taken up to a total maximum period of three years. No bilateral safeguard measure shall be applied to the import of a product which has previously been subject to such a measure.
8. No bilateral safeguard measure shall be taken against a particular product while a global safeguard measure in respect of that product is in place; in the event that a global safeguard measure is taken in respect of a particular product, any existing bilateral safeguard measure which is taken against that product shall be terminated.
9. Upon the termination of the bilateral safeguard measure, the rate of customs duty shall be the rate which would have been in effect but for the measure.
10. In critical circumstances, where delay would cause damage which would be difficult to repair, a Party may take a provisional bilateral safeguard measure pursuant to a preliminary determination that there is clear evidence that increased imports constitute a substantial cause of serious injury, or threat thereof, to the domestic industry. Any provisional measure shall be terminated within 200 days at the latest. The period of application of any such provisional measure shall be counted as part of the duration of the measure set out in paragraph 7 and any extension thereof. Any tariff increases shall be promptly refunded if the investigation described in paragraph 2 does not result in a finding that the conditions of paragraph 1 are met.
11. The Party proposing to apply a measure described in paragraph 3 shall provide to the other Party a mutually agreed adequate means of trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the measure. If the Parties are unable to agree on compensation within 30 days in the consultations referred to in paragraph 6, the Party against whose originating goods the measure is applied may take action having trade effects substantially equivalent to the measure applied under this Article. This action shall be applied only for the minimum period necessary to achieve the substantially equivalent effects, and in any case shall be terminated no later than the date of the termination of the bilateral safeguard measure. The right for action referred to in this paragraph shall not be exercised for the first eighteen months that a bilateral safeguard measure is in effect, provided that the safeguard measure has been taken as a result of an absolute increase in imports and that such a measure conforms to the provisions of this Agreement.
12. For the purposes of this Article, âtransition periodâ means the five-year period beginning on the date of entry into force of this Agreement, except that in the case of a product where the liberalization process lasts five or more years, the transition period shall last until such product reaches zero tariff according to the Schedule as set out in Annex 1 (Schedule of Tariff Commitment) plus two years.
Article 17. General Exceptions
The rights and obligations of the Parties in respect of general exceptions shall be governed by Article XX of the GATT 1994, which is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 18. Security Exceptions
The rights and obligations of the Parties in respect of security exceptions shall be governed by Article XXI of the GATT 1994, which is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 19. Measures to Safeguard the Balance of Payments
Where any Party is in a serious balance of payments and external financial difficulties, or under threat thereof, it may, in accordance with Article XII of the GATT 1994 and the Understanding on the Balance-of-Payments Provisions of the GATT 1994, adopt restrictive import measures. Such restrictive measures shall be consistent with the Articles of Agreement of the International Monetary Fund.
Article 20. Disclosure of Information
Nothing in this Agreement shall be construed to require a Party to furnish or allow access to confidential information, the disclosure of which would impede law
enforcement, or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of particular enterprises, public or private.
Article 21. Confidentiality
Unless otherwise provided in this Agreement, where a Party provides information to another Party in accordance with this Agreement and designates the information as confidential, the other Party shall, subject to its laws and regulations, maintain the confidentiality of the information.
Chapter 3. RULES OF ORIGIN AND IMPLEMENTATION PROCEDURES
Section I. RULES OF ORIGIN
Article 22. Definitions
For the purposes of this Chapter:
(a) "Harmonized System" means the current version of the Harmonized Commodity Description and Coding System defined by the International Convention on the Harmonized Commodity Description and Coding System of 14 June 1983;
(b) "consignment" means products which are sent simultaneously from one exporter to one consignee.
(c) "customs value" means the value as determined in accordance with the Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (WTO Agreement on Customs Valuation);
(d) "ex-works price" means the price paid for the product ex works to the manufacturer in the Party in whose undertaking the last working or processing is carried out, provided that the price includes the value of all the materials used and all other costs related to its production, minus any internal taxes which are, or may be, repaid when the product obtained is exported. Where the last working or processing has been subcontracted to a manufacturer, the term 'manufacturer' refers to the enterprise that has employed the subcontractor;
Where the actual price paid does not reflect all costs related to the manufacturing of the product which are actually incurred in the Party, the ex-works price means the sum of all those costs, minus any internal taxes which are, or may be, repaid when the product obtained is exported;
(e) "goods" means both material and product; (f) âproductionâ means any kind of working or processing, including assembly;
(g) "product" means the product being manufactured, even if it is intended for later use in another manufacturing operation;
(h) "material" means any ingredient, raw material, component or part, etc., used in the manufacture of the product;
(i) "non-originating material" means material that is not considered as originating in a Party in accordance with these Rules or material of unknown origin;
(j) "authorized body" means any body designated under domestic legislation of a Party or by the governmental authority of a Party to issue a Certificate of Origin.
Article 23. Originating Goods
For the purposes of this Agreement, the following goods shall be considered as originating in a Party, if they are:
(a) wholly obtained or produced in such Party, as provided for in Article 24 (Wholly Obtained Goods) of this Chapter;
(b) produced in a Party exclusively from originating materials; or
(c) produced from non-originating materials in a Party, provided that the goods conform to a regional value content of no less than 40%, except for the goods listed in the Annex 2 (List of Product Specific Rules) which must comply with the requirements specified therein.
Article 24. Wholly Obtained Goods
The following shall be considered as wholly obtained In a Party:
(a) mineral products extracted from its soil or from Its seabed;
(b) plants, including aquatic plants, and vegetable products grown or harvested there;
(c) live animals born and raised there and products obtained from such animals; (d) products obtained by hunting or fishing conducted there;
(e) products of aquaculture where the fish, crustaceans, molluscs and other aquatic invertebrates are born or raised there from eggs, larvae, fry or fingerlings;
(f) products of sea fishing and other products taken from the territorial sea or the Exclusive Economic Zone of a Party by vessels registered with that Party and flying the flag of that Party;
(g) products of sea fishing and other products taken from the high sea by vessels registered with a Party and flying the flag of that Party;
(h) products processed or made on board factory ships registered with a Party and flying the flag of that Party, exclusively from products referred to in subparagraphs (f) and (g);
(i) waste and scrap resulting from manufacturing operations conducted there which fit only for the recovery of raw materials;
(j) products extracted from the seabed and subsoil outside the territorial water of a Party, provided that the Party has the right to exploit such seabed or subsoil under domestic legislation in accordance with international law;
(k) goods produced there exclusively from the products specified in points (a) to (i).
Article 25. Regional Value Content (RVC)
1. For the purpose of sub-paragraph (c) of Article 23 (Originating Goods) of this Chapter, the Regional Value Content (RVC) criterion shall be calculated as follows:
RVC = Ex-works price - VNM / Ex-works prince x 100%
where: RVC is the regional value content, expressed as a percentage; and
VNM is the value of the non-originating materials.
2. VNM shall be determined on the basis of the customs value at the time of importation of the non-originating materials, including materials of undetermined origin. If such value is unknown and cannot be ascertained, the first ascertainable price paid or payable for the materials in an exporting Party shall be applied.
3. If a product which has acquired originating status in a Party in accordance with paragraph 1 of this Article is further processed in that Party and used as materials in the manufacture of another product, no account shall be taken of the non- originating components of those materials in the determination of the originating status of the product.
Article 26. De Minimis
A product that does not meet tariff classification change requirements, pursuant to Annex 2 (List of Product Specific Rules), shall nonetheless be considered to be an originating product, provided that:
(a) the value of all non-originating materials, determined pursuant to Article 25 (Regional Value Content) of this Chapter, including materials of undetermined origin, that do not meet the tariff classification change requirement does not exceed 10% of the ex-works price of the given product; and
(b) the goods meet all the other applicable criteria of this Chapter.
Article 27. Minimal Operations or Processes
1. Without prejudice to paragraph 2 of this Article, the following operations shall be considered to be insufficient working or processing to confer the status of an originating product, whether or not the requirements of sub-paragraph (c) of Article 23 (Originating Goods) of this Chapter are satisfied:
(a) preserving operations that are necessary to ensure that a good retains its condition during storage and (or) transportation;
(b) operations to prepare the goods for sale and (or) transportation (splitting up of consignments, forming of consignments, sorting, repacking), disassembly and assembly of packages;
(c) washing, cleaning, removal of dust, oil, paint or other coverings;