Title
Free Trade Agreement between the Government of the United Mexican States and the Government of the Republic of Nicaragua
Preamble
The Government of the Republic of Nicaragua and the Government of the United Mexican States,
Determined to:
To strengthen the special bonds of friendship, solidarity and cooperation between their peoples;
Accelerating and encourage the revitalization of American integration schemes;
To achieve a better balance in trade relations between their countries, taking into account their levels of economic development;
To contribute to the harmonious development and expansion of world trade and the expansion of international cooperation;
Create a wider market and insurance to produced goods or services supplied in their territories;
Reducing distortions in their reciprocal trade;
Establish clear rules and mutual benefits for their commercial exchanges;
Ensure a predictable trading environment for business planning and investment;
Develop their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization (WTO) Agreement and other bilateral and multilateral instruments of cooperation and integration;
Strengthen the competitiveness of their enterprises in global markets;
Encourage innovation and creativity through the protection of intellectual property rights;
The creation of new employment opportunities, improving working conditions and living standards in their respective territories;
Protecting fundamental rights of workers;
The foregoing engage in a manner consistent with the protection and conservation of the environment;
Strengthen the development and implementation of laws and regulations on the environment;
Promote sustainable development;
Preserving its ability to safeguard the public welfare; and
Promoting the active participation of the various economic operators, in particular the private sector, in efforts to strengthen economic relations between the parties and to develop and to maximize the opportunities for its joint presence in international markets;
This held Free Trade Agreement
In accordance with the provisions of the WTO Agreement.
Body
Chapter I. Initial Provisions
Article 1-01. Establishment of the Free Trade Area
The parties establish a free trade area in accordance with Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and article V of the General Agreement on Trade in Services.
Article 1-02. Objectives
1. The objectives of this Treaty, specifically developed through its Principles and Rules, including the national treatment and most favoured nation treatment and transparency, are the following:
a) Encourage expansion and diversification of trade between the parties;
b) Eliminate barriers to trade and facilitate the movement of goods and services between the parties;
c) Promote conditions of fair competition in the trade between the parties;
d) Substantially increase investment opportunities in the territories of the Parties;
e) Protect and enforce adequate and effective protection of intellectual property rights in the territory of each party;
f) Establish guidelines for further cooperation between the parties, as well as at the regional and multilateral cooperation to expand and enhance the benefits of this Treaty; and
g) Create effective procedures for the implementation and application of this Treaty, for its joint administration and for the resolution of disputes.
2. The Parties shall interpret and apply the provisions of this Treaty in the light of the objectives set out in paragraph 1 and in accordance with applicable rules of international law.
Article 1-03. Relationship with other International Treaties and Agreements
1. The Parties confirm their rights and obligations existing between them under the WTO Agreement and other treaties and agreements to which they are party.
2. In the event of any inconsistency between the provisions of the treaties and agreements referred to in paragraph 1 and the provisions of this Treaty, the latter shall prevail to the extent of the inconsistency.
Article 1-04. Observance of the Treaty
Each Party shall ensure, in accordance with its constitutional rules, the implementation of the provisions of this Treaty in its territory at the federal or central, regional and state or municipal respectively, except where otherwise provided in this Treaty.
Article 1-05. Succession
Any reference to any other treaty or international agreement shall be made on the same terms for a treaty or a successor agreement to which the parties are party.
Chapter II. General Definitions
Article 2-01. Definitions of General Application
For the purposes of this Agreement, unless otherwise provided, the following definitions shall apply:
customs tariff: any tax or tariff import duty and any other charge of any kind imposed in connection with the importation of goods, including any form of surtax or surcharge on imports, except:
a) Any charge equivalent to an internal tax established in accordance with article 111: 2 of the GATT 1994 with respect to similar goods, direct competitors or replacement of the party or in respect of goods from which has been manufactured or produced in whole or in part the imported goods;
b) Any compensatory quota applied in accordance with the domestic law of the party and is not inconsistent with the provisions of chapter IX (unfair practices of international trade);
c) Any duty or other charge in connection with importation commensurate with the cost of services rendered; and
d) Any premium offered or collected on imported goods, arising out of any tendering system in respect of the administration of quantitative import restrictions or preference or aranceles-cuota tariff quotas;
Goods of a Party: means domestic products as understood in GATT 1994 or goods such as the parties may agree and includes originating goods. a good of a Party may include materials of other countries;
Originating good: means good which complies with the rules of origin set out in chapter IV (rules of origin);
Customs valuation code: means the Agreement on Implementation of article VII of the General Agreement on Tariffs and Trade 1994, including its interpretative notes;
Commission: the Administering Commission established under article 19-01; share: compensatory duty and quota anti-dumping or countervailing duty according to the legislation of each party;
Days: means normal or calendar days;
Enterprise: means constituted a legal person or organized under the applicable law, whether or not for profit and whether privately-owned or governmental and other organizations or economic units which are duly constituted or otherwise organized under the applicable law, including branches, foundations, companies, trusts, shares, firms, sole proprietorship enterprise co-investments or other associations;
State enterprise: means an enterprise that is owned by a party or under its control through participation in the capital;
Enterprise of a party: means an enterprise constituted or organized under the law of a party;
Fraction tariff: the breakdown of a code of tariff classification of the harmonized system for more than six digits;
Measure: means any law, regulation, provision or administrative practice; national means a natural person who has the nationality of a Party according to its applicable law. the term also extends to persons who, in accordance with the legislation of that Party, having the character of permanent residents in the territory of the same;
Party: any State with respect to which this Treaty has entered into force;
Exporting Party: the Party from whose territory is exported goods or services;
Importing Party: the party into whose territory is imported goods or services;
Heading: a code of tariff classification of the Harmonized System at the 4-digit level;
Person: means a natural person or an enterprise;
Party: means a person of a national or an enterprise of a party;
Programme of tariff relief: the one established in article 3-04;
Secretariat: the Secretariat established under article 19-02;
Harmonized System (HS): means the Harmonized Commodity Description and Coding System of goods, including its general rules of classification and its explanatory notes;
Subheading: a code of tariff classification six-digit HS level; territory means: for each Party, as defined in the annex to this Article.
Annex to Article 2-01. Country-specific definitions
For purposes of this Treaty, unless otherwise specified:
Territory:
a) With respect to Mexico:
i) The States of the Federation and the Federal District;
ii) The islands and cays, including the reefs in adjacent seas;
iii) The islands of Guadalupe revillagigedo and situated in the Pacific Ocean;
iv) the continental shelf and the submarine sockets of islands, cays and reefs;
v) The waters of the territorial seas, in the extension and terms set by international law, and inland waters;
vi) The space on the national territory to the extent and modalities that establishes the International Law; and
vii) Any areas beyond the territorial seas of Mexico within which it may exercise rights with respect to the seabed and subsoil and the natural resources therein, in accordance with international law, including the United Nations Convention on the Law of the Sea, as well as with its domestic law; and
b) In Nicaragua, the Land, Sea and Air Space under its sovereignty, marine and submarine areas over which the Republic of Nicaragua exercises sovereign rights and jurisdiction in accordance with its legislation and international law.
Chapter III. National Treatment and Market Access for Goods
Section A. Scope and Definitions
Article 3-01. Definitions
For purposes of this chapter:
Consumed:
a) Actually consumed; or
b) Processed or manufactured so as to result in a substantial change in value, form or use of the good or good in the production of another;
Non-commercial samples: the commercial samples are marked, broken, perforated or treated so that the disqualifying for sale or for any use that is not a significant sample; and
Performance requirement means a requirement to:
a) Specific export volume or percentage of goods or services;
b) Replace goods or services imported goods or services of the party granting the waiver of customs duties;
c) Where a person benefiting from a waiver of customs duties other purchase goods or services in the territory of the party or granting a accord preference to domestically produced goods or services;
d) Where a person benefiting from a waiver of customs duties produce goods or provide services in the territory of the party which accords with a given level or percentage of domestic content; or
e) In any way relate to the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows.
Article 3-02. Scope
This chapter applies to trade in goods between the parties except as otherwise provided in this Treaty.
Section B. National Treatment National Treatment
Article 3-03. National Treatment
1. Each Party shall accord to the National Treatment goods of the other Party in accordance with article III of the GATT 1994, including its interpretative notes. to this end article III of the GATT 1994 and its interpretative notes are incorporated into this Agreement and form an integral part thereof.
2. The provisions of paragraph 1 regarding National Treatment means with respect to a State or municipality, treatment no less favourable than the most favourable treatment accorded by such State or municipality to any similar goods, direct competitors or substitutes, as the case may be, of the Party of which they are members.
3. Paragraphs 1 and 2 do not apply to the measures set out in the annex to article 3-03 and 3-09.
Section C. Tariffs
Article 3-04. Tariff Relief
1. Except as otherwise provided in this Agreement, no Party may increase any existing customs duties, or adopt any new customs duties, on originating goods. (1) ( 2)
2. Except as otherwise provided in this Treaty, each Party shall progressively eliminate its customs duties on goods originating as set out in the Annex to this article.
3. At the request of either party shall consult the parties to consider accelerating the elimination of customs duties set out in the schedule of tariff relief. once approved by the parties in accordance with its applicable legal procedures, the Agreement on the accelerated elimination of customs duties on a good that is reached between the parties, shall prevail over any customs tariff or period of relief identified in accordance with the schedule of relief that tariff for good.
4. Except as otherwise provided, this treaty incorporates the tariff preferences previously negotiated between the parties pursuant to the First Protocol amending the partial agreement concluded between Mexico and Nicaragua, as reflected in the manner in the schedule of tariff relief. from the entry Entry into Force of this Treaty shall be without effect preferences granted or negotiated between the parties in the framework of the First Protocol amending the partial agreement concluded between Mexico and Nicaragua.
5. Each Party may adopt or maintain measures to allocate the import share of imports under the volumes set through tariffs (tariff-quota) according to the schedule of tariff relief, provided that such measures do not have restrictive trade effects on imports additional to those caused by the imposition of the tariff rate quota.
6. At the written request of any Party, a party applying or intending to apply measures on imports in accordance with paragraph 5 shall consult to review the administration of those measures.
Article 3-05. Restrictions on Duty Drawback on Exported Goods and on Duty Deferral Programs
1. For purposes of this Article, the following definitions shall apply:
customs duties: the customs duties that would be applicable to a good that is imported for consumption in the customs territory of a Party if the good were not exported to the territory of another Party;
fungible goods: "fungible goods" as defined in Chapter VI (Rules of Origin);
identical or like goods: goods that are alike in all respects, including physical characteristics, quality and goodwill, as well as goods that, although not alike in all respects, have similar characteristics and composition, enabling them to perform the same functions and to be commercially interchangeable; and
material: "material" as defined in Chapter VI (Rules of Origin).
No Party may refund the amount of customs duties paid, or exempt or reduce the amount of customs duties owed, on a good imported into its territory by an amount that exceeds the total customs duties paid or owed on that quantity of that imported good, with due allowance for waste, that is:
a. used as a material in the production of another good subsequently exported to the territory of the other Party; or
b. replaced by an identical or similar good used as a material in the production of another good subsequently exported to the territory of the other Party.
No Party may, on condition of export, refund, waive or reduce:
a. countervailing duties applied in accordance with the legislation of each Party;
b. premiums offered or collected on imported goods arising from any tendering system relating to the application of quantitative import restrictions, tariff-rate quotas, or tariff preference quotas; or
c. customs duties paid or owed on a good imported into its territory and replaced by an identical or similar good that is subsequently exported to the territory of the other Party.
4. Except as otherwise provided in this Article, on or after July 1, 2005, and in the circumstances set out in paragraph 6, a Party may not refund the amount of customs duties paid, or waive or reduce the amount of customs duties owed, with respect to a good imported into its territory, provided that the good is:
a. used as a material in the production of an originating good subsequently exported to the territory of the other Party; or
b. replaced by an identical or similar good used as a material in the production of an originating good subsequently exported to the territory of the other Party.
5. under the tariff deferral program and any of the conditions set out in subparagraphs (a) and (b) of paragraph 4 are met, the Party from whose territory the good was exported shall
a. determine the amount of customs duties as if the exported good had been destined for domestic consumption; and
b. within 60 days of the date of exportation, collect the amount of customs duties as if the exported good had been destined for domestic consumption.
6. Paragraphs 4 and 5 apply:
a. from the time Nicaragua applies to a non-Party provisions similar to those contained in those paragraphs; or
b. to a good imported into the territory of a Party that satisfies the conditions in paragraph 4(a) and (b). In this case, drawback of customs duties shall be suspended for three years where it is demonstrated that the drawback, exemption, or reduction of customs duties simultaneously
i) creates a significant distortion of the tariff treatment applied by the Party granting the duty drawback, exemption, or tariff reduction in favor of the export of goods from the territory of that Party; and
ii) causes injury to the domestic production of identical or similar goods, or direct competitors of the other Party.
7. For purposes of paragraph 6, there is a significant distortion of the tariff treatment applied by the Party granting the refund, exemption or reduction of customs duties in favor of the export of goods of the territory of that Party where:
a. the amount of customs duties refunded, exempted or reduced on goods imported into the territory of that Party that meet the conditions set out in subparagraphs (a) and (b) of paragraph 4 and for which there is production in the territory of the Parties exceeds 5% of the total value of imports in any one year of originating goods classified in a tariff item of the Party to whose territory those originating goods are exported; or
b. a Party refunds, exempts, or reduces customs duties on goods or materials originating in the territory of a non-Party on the importation of which it maintains quantitative restrictions and those goods or materials are subsequently exported to the other Party and used in the production of goods subsequently exported to the other Party.
8. For purposes of paragraph 6, for the determination of injury:
a. injury means a significant impairment of domestic production; and
b. domestic production means the producer or producers of identical or similar goods, or direct competitors operating within the territory of a Party and constituting a significant proportion exceeding 35% of the total domestic production of those goods.
9. Paragraphs 3, 4 and 5 do not apply to:
a. a good that is imported under bond or guarantee to be transported and exported to the territory of the other Party;
b. a good that is exported to the territory of the other Party in the same condition in which it was imported into the territory of the Party from which it is exported. Processes such as testing, cleaning, repackaging, inspection or preservation of the good in the same condition shall not be considered as changes in the condition of the good. When a good has been commingled with fungible goods and exported in the same condition, its origin, for purposes of this paragraph, may be determined on the basis of the inventory methods set out in Chapter VI (Rules of Origin);