Title
ECONOMIC COMPLEMENTATION AGREEMENT N°75 BETWEEN THE REPUBLIC OF CHILE AND THE REPUBLIC OF ECUADOR
Preamble
The Government of the Republic of Chile and the Government of the Republic of Ecuador (hereinafter referred to as the Parties"), resolved to:
DEEPEN the special bonds of friendship and cooperation;
EXPAND trade, recognizing the importance of ACE N° 65, promoting greater international cooperation and strengthening economic relations between their peoples for mutual benefit;
REAFFIRM its commitment to democratic principles, the rule of law, human rights and fundamental freedoms;
CREATE a more open, secure and predictable market for reciprocal trade and fair competition to facilitate business and investment planning;
AVOID distortions and non-tariff trade barriers and other restrictive measures in reciprocal trade;
IMPLEMENT their respective rights and obligations under the WTO Agreement, as well as other multilateral and bilateral cooperation instruments;
PROMOTE the increase of investment opportunities in the territories of the Parties, promoting an intensive use of their markets, and strengthening their competitive capacity in world trade;
ESTABLISH a common framework of principles and rules for their bilateral trade in government procurement, with a view to its expansion under transparent conditions and as a means of promoting economic growth;
CREATE effective procedures for the implementation and enforcement of this Agreement, for its joint administration, and for preventing and resolving disputes;
PROMOTE gender mainstreaming in international trade, encouraging equal rights, treatment and opportunities between men and women in business, industry and the world of work, leading to inclusive economic growth;
FACILITATE contacts between the business and private sectors of the Parties;
STRENGTHEN the competitiveness of its companies in global markets, and seek greater insertion in global and regional value chains;
PROTECT and enforce labor rights, improve the living standards of workers, and promote the cooperation and capacity of the Parties in labor matters, and
PROMOTE the protection and conservation of the environment and the contribution of trade to sustainable development,
HAVE AGREED to conclude this Trade Integration Agreement between the Republic of Chile and the Republic of Ecuador, in accordance with the following:
Body
Chapter 1. INITIAL PROVISIONS AND GENERAL DEFINITIONS
Article 1.1. Establishment of a Free Trade Area
The Parties, in accordance with the provisions of Article XXIV of GATT 1994, Article V of GATS, the Treaty of Montevideo 1980 and Resolution No. 2 of LAFTA, establish a free trade area.
Article 1.2. Relationship to other International Agreements
The Parties acknowledge their intention for this Agreement to coexist with their existing international agreements, and to that effect:
(a) each Party confirms its rights and obligations vis-a-vis the other Party, in relation to existing international agreements to which both Parties are party, including the WTO Agreement;
(b) if Party considers that a provision of this Agreement is inconsistent with a provision of another agreement to which both Parties are party, upon request, the Parties shall consult with a view to reaching a mutually satisfactory solution. This paragraph is without prejudice to a Party's rights and obligations under Chapter 22 (Dispute Settlement), and
(c) for purposes of the application of this Agreement, the Parties agree that the fact that an agreement has provided for more favorable treatment of services, investment or persons than that provided for under this Agreement does not mean that there is an inconsistency within the meaning of this Article.
Article 1.3. General Definitions
For purposes of this Agreement and unless otherwise specified:
ACE N° 65 means the Economic Complementation Agreement N° 65 between the Republic of Chile and the Republic of Ecuador, signed on March 10, 2008.
Actors of the Popular and Solidarity Economy means, in the case of Ecuador, economic organizations, where its members, individually or collectively, organize and develop processes of production, exchange, commercialization, financing and consumption of goods and services, to satisfy needs and generate income, based on relationships of solidarity, cooperation and reciprocity, privileging work and the human being as the subject and purpose of their activity, oriented to good living, in harmony with nature, over appropriation, profit and capital accumulation;
Anti-Dumping Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, which forms part of the WTO Agreement;
SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, which is part of the WTO Agreement;
TBT Agreement means the Agreement on Technical Barriers to Trade, which is part of the WTO Agreement;
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, dated 15 April 1994;
Agreement on Safeguards means the Agreement on Safeguards, which is part of the WTO Agreement;
Subsidies Agreement means the Agreement on Subsidies and Countervailing Measures, which is part of the WTO Agreement;
GATS stands for the General Agreement on Trade in Services, which is part of the WTO Agreement;
ALADI stands for Latin American Integration Association, instituted by the Treaty of Montevideo 1980;
Customs duty includes any duty or charge of any kind applied to or in connection with the importation of a good, and any form of surcharge or surtax applied in connection with such importation, but does not include any:
(a) charge equivalent to an internal tax established in accordance with Article Il:2 of GATT 1994;
(b) anti-dumping duty or countervailing measure;
(c) duty or other charge related to importation, proportionate to the cost of services rendered;
customs authority means the authority which, under the respective laws of each Party, is responsible for administering and enforcing the customs laws and regulations, as appropriate:
(a) in the case of Chile, to the National Customs Service, or its successor, and
(b) in the case of Ecuador, to the National Customs Service of Ecuador, or its successor;
goods means a commodity, product or merchandise;
Commission means the Economic and Trade Commission established under Article 21.1 (Economic and Trade Commission);
days means calendar, running or calendar days; existing means in effect on the date of entry into force of this Agreement;
GATT 1994 means General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
measure means any law, rule, regulation, procedure, requirement or practice;
originating good means a good or product that complies with the rules of origin set out in Chapter 3 (Rules of Origin);
national means a natural person who has the nationality of a Party in accordance with its Political Constitution or a permanent resident of a Party;
WTO stands for the World Trade Organization;
heading means the first four digits of the Harmonized System tariff classification code;
person means a natural person or a company;
person of a Party means a national or company of a Party;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes and Chapter Notes, as adopted and implemented by the Parties in their respective customs tariff laws;
subheading means the first six digits of the Harmonized System tariff classification code;
territory means:
(a) with respect to Chile, the land, sea and air space under its sovereignty and the exclusive economic zone and continental shelf over which it exercises sovereign rights and jurisdiction in accordance with international law and its internal legislation, and
(b) in respect of Ecuador, the continental territory and the adjacent islands; the Galapagos Archipelago; the subsoil; the territorial sea and other maritime spaces; and, the respective airspaces, over which it exercises sovereignty and jurisdiction in accordance with international law and its domestic legislation.
Chapter 2. NATIONAL TREATMENT AND MARKET ACCESS
Article 2.1. National Treatment
Except as provided in Annex 2.3, each Party shall accord National Treatment to goods of the other Party in accordance with Article II of the GATT 1994, including its interpretative notes, and to that end Article III of the GATT 1994 and its interpretative notes are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.2. Elimination of Customs Duties
1. Except as otherwise provided in this Agreement, each Party shall eliminate its duties on originating goods in accordance with Annexes 2.1 and 2.2.
2. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duties, or adopt any new customs duties, on originating goods.
3. If, at any time after entry into force of this Agreement, a Party reduces its applied MFN tariff, such tariff shall apply only if it is less than the tariff resulting from the application of Annexes 2.1 and 2.2.
4. A Party may consult with the other Party, in accordance with this Chapter, to examine the possibility of improving the tariff terms and conditions of market access on originating goods set out in Annexes 2.1 and 2.2. Agreements to this effect between the Parties shall be adopted through decisions of the Commission.
5. An agreement between the Parties to improve the tariff terms for market access on originating goods based on paragraph 4 shall prevail over any customs duties or categories of relief set out in Annexes 2.1 and 2.2.
6. A Party may:
(a) increase a customs duty to be applied to an originating good to a level no higher than that set out in Annexes 2.1 and 2.2, following a unilateral reduction of that customs duty, or
(b) to maintain or increase a customs duty on an originating good, when authorized by the WTO Dispute Settlement Body.
Article 2.3. Import Licensing
1. Neither Party shall adopt or maintain a measure that is inconsistent with the WTO Agreement on Import Licensing, and to that end, that Agreement is incorporated into and made a part of this Agreement, mutatis mutandis.
2. From the date of entry into force of this Agreement, the Parties shall notify any new import licensing procedures, and any modifications to their existing import licensing procedures, well in advance and, to the extent possible, at least twenty (20) days prior to their entry into force.
Article 2.4. Export Taxes
Neither Party may adopt or maintain duties, taxes, or other charges on exports of any good to the territory of the other Party, unless such duties, taxes, or charges are adopted or maintained on any good for domestic consumption, notwithstanding Article 2.6.
Article 2.5. Fees and other Charges
1. Each Party shall ensure, in accordance with paragraph 1 of Article VII of the GATT 1994 and its interpretative notes, that all fees and charges of any nature, other than customs duties, charges equivalent to an internal tax or other domestic charges applied in accordance with paragraph 2 of Article I of the GATT 1994, and anti-dumping and countervailing duties and countervailing measures, imposed on or in connection with importation or exportation, are limited to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a tax on imports or exports for fiscal purposes.
2. Neither Party shall require consular transactions or requirements, including related fees and charges, in connection with the importation of any good of another Party.
3. Each Party shall make available to the other Party the fees or charges imposed in connection with the importation or exportation, and shall use its best efforts to keep them updated through the Internet.
Article 2.6. Import and Export Restrictions
Except as provided in Annex 2.3, neither Party may adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except as provided in Articles XI, XX, and XXI of the GATT 1994, including their respective interpretative notes. For this purpose, Article XI of the GATT 1994 and its respective interpretative notes are incorporated into and made an integral part of this Agreement, mutatis mutandis.
Article 2.7. Agricultural Export Subsidies
1. The Parties share the objective of the multilateral elimination of export subsidies or other measures with equivalent effect on agricultural goods, and shall work together towards achieving compliance with and implementation of the WTO Ministerial Decision of 19 December 2015 of the Nairobi Ministerial Conference, as well as to prevent the reintroduction of these measures in any form.
2. No Party shall introduce or maintain any export subsidy on any agricultural good that is inconsistent with the regulations of the WTO Agreement, particularly the Agreement on Agriculture.
Article 2.8. Committee on Trade In Goods
1. The Parties hereby establish a Committee on Trade in Goods (hereinafter referred to as the "Committee"), composed of representatives of each Party.
2. The Committee shall meet at the request of any Party or the Commission to consider any matter covered by this Chapter and the release program.
3. The functions of the Committee shall include:
(a) promote trade in goods between the Parties, including consultations for the acceleration of tariff elimination under this Agreement and other matters as appropriate;
(b) consider obstacles to trade in goods between the Parties, in particular those related to the application of non-tariff measures, and, if necessary, submit these matters to the Commission for consideration;
(c) consult and use its best efforts to resolve any consultations or differences that may arise between the Parties on matters relating to modifications and transpositions of the Harmonized System that affect the tariff classification of goods in each Party's National Tariff, to ensure that the tariff preferences provided under this Agreement are not altered, and
(d) others as the Parties may agree.
Chapter 3. RULES OF ORIGIN
Section A. Rules of Origin
Article 3.1. Definitions
For purposes of this Chapter:
Customs Valuation Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, which forms part of the WTO Agreement.
customs authority means the authority which, under the respective legislation of each Party, is responsible for administering and enforcing the customs laws and regulations, as appropriate:
(a) in the case of Chile, to the National Customs Service of Chile, and
(b) in the case of Ecuador, to the National Customs Service of Ecuador, or its successor.
competent authority means the authority which, according to the legislation of each Party, is responsible for issuing the certificate of origin or for delegating the issuance to qualified entities:
(a) in the case of Chile, the Dirección General de Promoción de Exportaciones (PROCHILE), or its successor, and
(b) in the case of Ecuador, the Ministry of Production, Foreign Trade, Investment and Fisheries, or its successor.
CIF means the value of the imported goods including insurance and freight costs to the port or place of introduction into the country of importation by whatever means of transport.
shipping containers and packing materials means goods used to protect merchandise during transportation and does not include containers and materials in which merchandise is packaged for retail sale.
exporter means the person who makes an export.
FOB means the value of the goods free on board, whatever the means of transport, at the place of shipment abroad.
importer means the person who makes an import.
material means a good or any material, substance, ingredient, part or component used or consumed in the production or transformation of another good.
In-house produced material means material that is produced by the producer of a good and used in the production of that good.
indirect material means a good used in the production, verification, or inspection of another good, but not physically incorporated therein; or a good used in the maintenance of buildings or operation of equipment related to the production of another good, including:
(a) fuel, energy, solvents and catalysts;
(b) equipment, apparatus and attachments used for the verification or inspection of goods;
(c) gloves, goggles, footwear, clothing, safety equipment and attachments;
(d) tools, dies and moulds;
(e) spare parts and materials used in the maintenance of equipment and buildings;
(f) lubricants, greases, composites and other materials used in the production, operation of equipment or maintenance of buildings, and
(g) any other material which is not incorporated in the goods, but the use of which in the production of the goods can be shown to be part of that production.
identical goods means goods that are alike in all respects, including their physical characteristics, quality and merchantability. Minor differences in appearance do not preclude goods that otherwise conform to the definition from being considered identical.
fungible goods or materials means goods or materials which are interchangeable for commercial purposes, the properties of which are essentially identical and which cannot be distinguished from one another by simple visual examination.
non-originating good or non-originating material means a good or material that does not meet the requirements of this Chapter to be considered originating.
goods wholly obtained or produced entirely in the territory of one or the other Party, means:
(a) minerals extracted or obtained in the territory of either Party;
(b) plant products harvested, collected or gathered in the territory of either Party;
(c) live animals born and bred in the territory of one or the other Party; goods obtained from live animals in the territory of either Party;
(d) goods obtained from hunting, trapping, fishing, aquaculture, gathering or harvesting in the territory of one or the other Party;
(e) fish, crustaceans and other marine species taken from the sea outside the territory of the Parties by fishing vessels registered or recorded in a Party and flying the flag of that Party or by fishing vessels leased or chartered by enterprises established in the territory of a Party;
(f) goods obtained or produced on board factory ships exclusively from the goods identified in subparagraph (f), provided that the factory ships are registered or recorded in a Party and that they fly the flag of that Party or are leased or chartered by enterprises established in the territory of a Party;
(g) goods taken from the seabed or subsoil outside the territorial waters of a Party, by a Party or a person of a Party, provided that the Party has rights to exploit that seabed or subsoil;
(h) waste and scrap derived from
(i) manufacturing or processing operations in the territory of either Party, or
(ii) used goods collected in the territory of either Party, provided that such goods serve only for the recovery of raw materials; or,
goods produced in the territory of one or more of the Parties exclusively from the goods referred to in subparagraphs (a) through (b), (c), (d), (e), (f), (g), (h) and (i).
(i) or its derivatives, at any stage of production.
Generally Accepted Accounting Principles means those on which there is recognized consensus or which enjoy substantial and authoritative support, in the territory of a Party and at a given point in time, with respect to the recording of revenues, expenses, costs, assets and liabilities, disclosure and the preparation of financial statements. The principles may cover procedures of general application as well as detailed rules, practices and procedures.
production means methods of obtaining goods including but not limited to growing, breeding, raising, raising, mining, harvesting, fishing, trapping, hunting, trapping, catching, harvesting, gathering, extracting, manufacturing, processing, assembling or disassembling a good.
producer means a person who carries out a production process.
origin ruling means the written document issued by the customs authority as a result of a procedure verifying whether a good qualifies as originating under this Chapter.
preferential tariff treatment means the tariff applicable to an originating good under this Agreement.
value means the value of a good or material for purposes of the application of this Chapter.
transaction value means the price paid or payable for a good determined in accordance with the provisions of the Customs Valuation Agreement.
Article 3.2. Originating Goods
Except as otherwise provided in this Chapter, a good shall be considered to be originating when:
(a) the good is wholly obtained or produced entirely in the territory of one or the other Party, as defined in Article 3.1;
(b) the good is produced in the territory of either Party exclusively from materials that qualify as originating under the provisions of this Chapter; or