(e) exchange of experts on the topics detailed in paragraph 3 and other areas of interest identified by the Parties.
7. The costs and expenses arising from this Article and the implementation of the established activities shall be borne, to the extent possible, by the requesting Party, or by mutual agreement between the Parties.
8. Each Party shall establish such cooperation mechanisms with commercial operators as it deems appropriate.
9. Bearing in mind the provisions of this Article, and considering the need for the Parties to establish a robust mechanism for international cooperation in matters related to the administration and enforcement of customs legislation for the prevention, investigation and repression of customs infractions, exchange of information and, in general, with respect to the matters contained in this Agreement, especially in this Chapter and Chapter 3 (Rules of Origin), the customs authorities of the Parties shall negotiate an agreement on cooperation and mutual administrative assistance in customs matters, which they shall be empowered to enter into, amend and replace by another agreement of the same nature.
10. In order to comply with the above, the customs authorities of the Parties shall sign the aforementioned agreement on cooperation and mutual administrative assistance in customs matters within one (1) year from the date of entry into force of this Agreement.
11. Pursuant to paragraphs 9 and 10 of this Article, and prior to the entry into force of the agreement on cooperation and mutual administrative assistance in customs matters to be signed by the customs authorities of the Parties, Annex 5.1 of ECA No. 65 entitled "Cooperation and Mutual Assistance in Customs Matters" shall remain in force.
Article 4.19. Points of Contact
1. The Parties designate Points of Contact responsible for following up on matters relating to the implementation of this Chapter. Each Party shall promptly notify the other Party of any changes to its Contact Points, as well as details of the relevant officials.
2. For the purposes of this Article, the Points of Contact are:
(a) in the case of Chile, the Directorate General for Bilateral Economic Affairs of the Undersecretariat for International Economic Relations of the Ministry of Foreign Affairs, or its successor, and
(b) in the case of Ecuador, Subsecretaria de Negociaciones Comerciales e Integración Económica del Viceministerio de Comercio Exterior del Ministry of Production, Foreign Trade, Investment and Fisheries, or its successor.
3. The responsibilities of the Points of Contact will include:
(a) facilitate discussions,requests and the timely exchange of information;
(b) consult and, as appropriate, coordinate with the competent governmental authorities in its territory on matters related to this Chapter; and
(c) carry out such additional responsibilities as may be agreed by the Parties.
Article 4.20. Committee on Rules of Origin and Trade Facilitation
The provisions of the Committee on Rules of Origin and Trade Facilitation applicable to this Chapter are set out in Article 21.4 (Committee on Rules of Origin and Trade Facilitation).
Article 4.21. Transitional Provision
No Party may have recourse to the dispute settlement mechanism provided for in Chapter 22 (Dispute Settlement) with respect to any matter arising out of the application or interpretation of the provisions contained in Annex 4.1 during the period between the entry into force of this Agreement and the dates set out in that Annex.
Chapter 5. TRADE DEFENSE
Section A. Safeguarding Measures
Article 5.1. Definitions
For purposes of this Section:
threat of serious harm means the clear imminence of serious harm based on facts and not merely on allegation, conjecture or remote possibility;
competent investigating authority means:
(a) in the case of Chile, Comisión Nacional Encargada de Investigar la Existencia de Distorsiones en el Precio de las Mercaderias Importadas, or its successor, and
(b) in the case of Ecuador, the Trade Defense Directorate of the Ministry of Production, Foreign Trade, Investment and Fisheries, or its successor;
serious injury means a significant overall impairment of the position of a domestic industry;
transitional safeguard measure means a measure described in Article 5.2;
transition period means the period during which a good achieves zero duty according to its schedule of relief, and
domestic industry means, with respect to an imported good, the aggregate of producers of like or directly competitive goods operating in the territory of a Party, or those producers whose collective output of like or directly competitive goods constitutes a majority proportion of the total domestic production of that good.
Article 5.2. Transitional Safeguarding Measure
1, For those goods that are subject to a schedule of relief, a Party may apply a measure described in paragraph 2 if, as a result of the reduction or elimination of a customs duty under this Agreement, a good originating in the other Party is imported into its territory in such increased quantities in absolute terms or relative to domestic production and on such terms or conditions as to cause or threaten to cause serious injury to the domestic industry producing like or directly competitive merchandise.
2. If the conditions set out in paragraph 1 are met, to the extent necessary to prevent or remedy serious injury, or threat thereof, and to facilitate adjustment, the Party may:
(a) suspend the further reduction of any tariff rate provided for in this Agreement for the good, or
(b) increase the rate of duty for the good to a level not to exceed the lesser of:
(i) the most-favoured-nation tariff rate applied at the time the measure is applied, and
(ii) the most-favoured-nation tariff rate applied on the day immediately preceding the entry into force of this Agreement.
Article 5.3. Standards for a Transitional Safeguarding Measure
1. No Party may maintain a transitional safeguard measure:
(a) for a period exceeding two (2) years, except that this period may be extended for an additional two (2) years if the competent authority determines, in accordance with the procedures set out in Article 5.4, that the measure continues to be necessary to prevent or remedy serious injury and to facilitate readjustment, or
(b) after the expiry of the transitional period.
2. In order to facilitate readjustment in a situation where the expected duration of a transitional safeguard measure exceeds one year, the Party applying the measure shall progressively liberalise it at regular intervals during the period of application.
3. No Party shall apply a transitional safeguard measure more than once on the same good.
4. Upon termination of the transitional safeguard measure, the Party that applied the measure shall apply the tariff rate that will correspond to that which would be in effect under the Schedule of Liberalization, according to Annexes 2.1 (Schedule of Tariff Elimination of Chile) and 2.2 (Schedule of Tariff Elimination of Ecuador), as if the transitional safeguard had never been applied.
Article 5.4. Investigation Procedures and Transparency Requirements
1. A Party may apply a transitional safeguard measure only after an investigation by the Party's competent authority pursuant to Articles 3 and 4.2(c) of the Agreement on Safeguards and, for this purpose, these Articles are incorporated into and made part of this Agreement, mutatis mutandis.
2. In the investigation described in paragraph 1, the Party shall comply with the requirements of Article 4.2(a) and 4.2(b) of the Agreement on Safeguards and, for this purpose, this Article is incorporated into and made part of this Agreement, mutatis mutandis.
Article 5.5. Notification and Consultation
1. A Party shall promptly notify the other Party in writing, when:
(a) Initiate a transitional safeguard procedure in accordance with this Chapter;
(b) make a determination of serious injury, or a threat thereof, caused by increased imports pursuant to Article 5.2;
(c) take a decision to apply, modify or extend a transitional safeguard measure, and
(d) adopt a decision to modify a transitional safeguard measure it has previously adopted.
2. A Party shall provide to the other Party a copy of the public version of the report of its competent investigating authority required under Article 5.4.1.
3. Where a Party notifies under paragraph 1(c) that it is applying or extending a transitional safeguard measure, that Party shall include in that notification:
(a) proof of serious injury, or threat thereof, caused by increased imports of a good originating in the other Party as a result of the reduction or elimination of a customs duty under this Agreement;
(b) a precise description of the originating good subject to the transitional safeguard measure, including the heading or subheading under the Harmonized System Code on which the schedules of tariff concessions in Annexes 2.1 (Chile's Tariff Elimination Schedule) and 2.2 (Chile's Tariff Elimination Schedule) are based, and 2.2 (Ecuador Tariff Elimination Schedule);
(c) a precise description of the transitional safeguard measure;
(d) the date of introduction of the transitional safeguard measure, its expected duration and, if applicable, the timetable for progressive liberalisation of the measure, and
(e) in the case of an extension of the transitional safeguard measure, evidence that the relevant domestic industry is adjusting.
3. On request of a Party whose good is subject to a safeguard investigation under this Chapter, the Party conducting the proceeding shall initiate consultations with the requesting Party to review the notifications under paragraph 1 or any public notice or report issued by the competent investigating authority in connection with such proceeding.
Article 5.6. Compensation
1. A Party extending a transitional safeguard measure shall, after consulting with the other Party against whose good it is applying the extension of the transitional safeguard measure, provide mutually agreed trade liberalizing compensation in the form of concessions having substantially equivalent trade effects, or equivalent to the value of the additional tariffs it expects would result from the transitional safeguard measure. The Party shall provide an opportunity for such consultations no later than thirty (30) days following the extension of the application of the transitional safeguard measure.
2. If consultations under paragraph 1 do not result in an agreement on trade liberalization compensation within thirty (30) days, the Party against whose good the extension of the transitional safeguard measure is applied may suspend the application of substantially equivalent concessions to the trade of the Party applying the extension of the transitional safeguard measure.
3. The Party against whose good the extension of the transitional safeguard measure is applied shall notify in writing the Party applying the extension of the transitional safeguard measure at least thirty (30) days prior to suspending concessions pursuant to paragraph 2.
4. The obligation to grant compensation under paragraph 1 and the right to suspend concessions under paragraph 2 expire upon termination of the extension of the transitional safeguard measure.
Article 5.7. Global Safeguarding Measures
1. Each Party retains its rights and obligations under Article XIX of the GATT 1994 and the Agreement on Safeguards.
2. This Agreement confers no additional rights or obligations on the Parties with respect to actions taken pursuant to Article XIX of the GATT 1994 and the Agreement on Safeguards.
3. No Party may apply simultaneously a safeguard measure under Article XIX of the
GATT 1994 or the Agreement on Safeguards and a transitional safeguard measure under this Chapter.
Section B. Antidumping and Countervailing Duties
Article 5.8. Antidumping and Countervailing Duties
1. Each Party retains its rights and obligations under Article VI of the GATT 1994, the Anti-Dumping Agreement and the Subsidies Agreement.
2. Nothing in this Agreement, including the provisions of Chapter 22 (Dispute
Settlement), shall be construed to impose any rights or obligations on the Parties with respect to antidumping and countervailing duty measures.
Chapter 6. GOOD REGULATORY PRACTICES
Article 6.1. Definitions
For purposes of this Chapter:
Regulatory impact analysis is the systematic process of analyzing and determining the impact of regulatory measures, based on the definition of a problem. This analysis is a fundamental public policy tool for evidence-based decision making, allowing to present alternatives so that the regulatory authority can choose the option it deems appropriate to solve the problem and maximize social welfare;
Good regulatory practices refers to the use of tools in the process of planning, elaboration, adoption, implementation, review and monitoring of regulatory measures;
public consultation is the participatory mechanism, of a consultative and non-binding nature, by means of which the State, during a reasonable period of time, collects data and opinions from society in relation to a draft regulatory measure, and
regulatory measures means measures of general application determined in accordance with Article 6.3, relating to any matter covered by this Agreement, adopted by regulatory authorities, and with which compliance is mandatory.
Article 6.2. General Objective
The general objective of this Chapter is to strengthen and encourage the adoption of good regulatory practices, in order to promote the establishment of a regulatory environment that is transparent and with predictable procedures and steps, both for citizens and economic operators.
Article 6.3. Scope of Application
Each Party shall, in accordance with its law and no later than three (3) years after the entry into force of this Agreement, determine and make publicly available the regulatory measures to which the provisions of this Chapter shall apply. In making such determination, each Party shall consider achieving meaningful coverage.
Article 6.4. General Provisions
1. The Parties reaffirm their commitment to the adoption of good regulatory practices in order to facilitate trade in goods and services, as well as the flow of investment between them.
2. The provisions of this Chapter shall not affect the right of the Parties to:
(a) adopt, maintain or establish such regulatory measures as they deem appropriate, in accordance with their respective regulatory and administrative procedures and other internationally agreed commitments, with a view to achieving legitimate public policy objectives, or
(b) identify their regulatory priorities in the area and at the levels of government they deem appropriate.
Article 6.5. Establishment of Coordination Processes or Mechanisms
1. The Parties recognize that good regulatory practices can be promoted through effective interagency coordination, so that each Party:
(a) promote the creation and strengthening of internal mechanisms to facilitate effective inter-agency coordination;
(b) seek to generate internal processes in each competent body for the elaboration and review of regulatory measures, aimed at the promotion of good regulatory practices, and
(c) may establish or maintain coordination processes at the national or central level.
2. The Parties recognize that the processes referred to in paragraph 1 above may vary according to their respective circumstances, including differences in political and institutional structures. Nevertheless, the Parties shall seek to:
(a) encourage that international good regulatory practices, including those set out in Article 6.6, be taken into consideration in the preparation of draft and proposed regulatory measures;
(b) to strengthen coordination and information exchange among national governmental institutions, to identify possible duplication and to avoid creating inconsistent regulatory measures;
(c) promoting good regulatory practice policies in a systematic way, and
(d) publicly report any proposals for systemic regulatory reform actions.
Article 6.6. Implementation of Good Regulatory Practice
1. Each Party shall encourage its respective competent regulatory authorities to subject draft and proposed amendments to regulatory measures to public consultation, for a reasonable period of time, to allow interested parties to comment.
2. Each Party shall encourage its competent regulatory authorities to conduct, in accordance with its legal system, a regulatory impact analysis (RIA) prior to the adoption and proposed modification of regulatory measures that have a significant economic impact, or, where appropriate, another criterion established by that Party.
3. Recognizing that institutional, social, cultural and legal differences may result in specific regulatory approaches, regulatory impact assessments conducted should, inter alia:
(a) identify the problem to be solved, the actors or groups affected, the legal basis for the proposed action, existing international references and the objectives to be achieved;
(b) describe the feasible alternatives for addressing the identified problem, including the no action option, and outline their potential impacts;
(c) compare the alternatives proposed, indicating, with justification, the solution or combination of solutions considered most appropriate to achieve the objectives pursued;
(d) be based on the best available scientific, technical, economic or other relevant information available to the respective regulatory authorities within their competence, mandate, capacity and resources; and
(e) describe the strategy for the implementation of the suggested solution, including monitoring and enforcement where appropriate, as well as the need for modification or repeal of existing regulatory measures.
4. Each Party shall encourage its competent regulatory authorities, when developing regulatory measures, to take into consideration international benchmarks, to the extent appropriate and consistent with their respective legal systems.
5. Each Party shall seek to ensure that new regulatory measures are clearly written, concise, organized and easy to understand, recognizing the possibility of involving technical issues that require specialized knowledge for their correct understanding and application.
6. Each Party shall endeavour to ensure that its competent regulatory authorities, in accordance with its legal system, facilitate public access to information on draft and proposed regulatory measures and make such information available on the Internet.
7. Each Party shall seek to maintain or establish domestic procedures for the review of existing regulatory measures, as often as it considers appropriate, to determine whether they should be modified, expanded, simplified or repealed, with the objective of making its regulatory regime more effective.
8. When conducting regulatory impact assessments, competent authorities should consider the potential impact of the regulatory proposal on Micro, Small and Medium Enterprises, and Actors of the Popular and Solidarity Economy (hereinafter referred to as "MSMEs").
Article 6.7. Cooperation
1. The Parties shall cooperate in order to properly implement this Chapter and maximize the benefits derived from it. Cooperative activities shall take into account the needs of each Party and may include:
(a) information exchange, dialogues, bilateral meetings or meetings between Parties and stakeholders, including MSMEs;
(b) training programmes, seminars and other technical assistance initiatives;
(c) strengthening cooperation and exchange of experience on the management of existing regulatory measures and other relevant activities among regulatory authorities;
(d) exchange of data, information and practices related to drafting new regulatory measures, conducting public consultations, regulatory impact analysis practices, estimation of potential costs and benefits of the regulatory measure, and practices related to ex-post review of regulatory measures.
2. The Parties recognise that regulatory cooperation depends on a commitment that regulatory measures will be developed and made available in a transparent manner.
Article 6.8. Chapter Administration
1. The Parties shall establish focal points, who shall be responsible for following up on issues relating to the implementation of this Chapter.
2. The focal points may meet in person or by any available technological means.
3. The Parties shall, every three (3) years after the entry into force of this Agreement, consider the need for a review of this Chapter, in light of milestones in the area of good regulatory practices at the international level and the experiences accumulated by the Parties.
Article 6.9. Implementation Reporting
1. Each Party shall, for transparency purposes, submit a report on the implementation of this Chapter through the focal points within two (2) years of the date of entry into force of this Agreement and at least once every three (3) years thereafter.
2. In its first report, each Party shall describe the actions it has taken since the date of entry into force of this Agreement and those it plans to take to implement this Chapter, including:
(a) establish a body or mechanism to facilitate effective interagency coordination and review of draft or proposed regulatory measures covered, in accordance with Article 6.5;
(b) encourage the competent regulatory authorities to conduct regulatory impact analyses in accordance with paragraphs 1 and 2 of Article 6.6;
(c) ensure that draft or proposed regulatory measures covered are accessible, in accordance with paragraphs 5 and 6 of Article 6.6;
(d) review existing covered regulatory measures in accordance with Article 6.6.7, and
(e) to make public the annual notice of covered regulatory measures intended to be issued or modified during the following twelve (12) months, in accordance with Article 6.6.6.
3. In its subsequent reports, each Party shall describe the actions it has taken since the previous report and those it plans to take to implement this Chapter.
4. In considering matters related to the implementation of this Chapter, the Parties may review implementation reports and may discuss or ask questions about specific aspects of either Party's report. Based on such review, they may also identify opportunities for assistance or cooperative activities
Article 6.10. Relation to other Chapters
In the event of any inconsistency between this Chapter and another Chapter of this Agreement, the other Chapter shall prevail to the extent of the inconsistency.
Article 6.11. Non-Application of Dispute Resolution
Neither Party may have recourse to the dispute settlement mechanism provided for in Chapter 22 (Dispute Settlement) with respect to any matter arising under this Chapter.
Chapter 7. SANITARY AND PHYTOSANITARY MEASURES
Article 7.1. General Provisions
The Parties reaffirm their commitment to implement the SPS Agreement, the decisions and reference documents adopted In the framework of the Committee on Sanitary and Phytosanitary Measures of the World Trade Organization (hereinafter referred to as the "WTO SPS Committee").
Article 7.2. Objectives
The objectives of this Chapter are:
(a) protect human, animal and plant life and health in the territory of each Party by facilitating the exchange of goods between the Parties;
(b) ensure that the application of the Parties' SPS measures does not constitute a disguised restriction on international trade;
(c) promote the implementation of the SPS Agreement and the standards, guidelines and recommendations developed by the international reference organizations identified by the SPS Agreement, and