Title
TRADE AND ECONOMIC PARTNERSHIP AGREEMENT BETWEEN THE EFTA STATES AND THE REPUBLIC OF INDIA
Preamble
PREAMBLE
The Governments of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation (hereinafter referred to as "the EFTA States"), and the Government of the Republic of India (hereinafter referred to as "India"), hereinafter each individually referred to as a "Party" or collectively as the "Parties",
RECOGNISING the common intention to strengthen the links between the EFTA States on the one part and India on the other by establishing close and lasting relations;
RECALLING their respective rights and obligations under international law, including those set out in UN Charter and the Universal Declaration of Human Rights;
REAFFIRMING their commitment to pursue the objective of sustainable development, whose pillars economic development, social development and environmental protection are mutually supportive, interdependent and essential requirements of sustainable development;
DESIRING to create favourable conditions for the development and diversification of trade between them and for the promotion of commercial and economic cooperation in areas of common interest on the basis of equality, mutual benefit, and non-discrimination;
CONVINCED that this Agreement will enhance the competitiveness of their people and enterprises in global markets and create conditions encouraging economic, trade and investment relations between them;
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 done at Marrakesh on 15 April 1994 (hereinafter referred to as the "WTO Agreement") and the other agreements negotiated thereunder to which all Parties are parties, thereby contributing to the harmonious development and expansion of world trade;
RECOGNISING the importance of trade facilitation in promoting efficient and transparent procedures to reduce costs and to ensure predictability for the trading communities of the Parties;
DETERMINED to implement this Agreement in furtherance of the objectives to preserve and protect the environment through sound environmental management and to promote an optimal use of the worldâs resources in accordance with the objective of sustainable development;
RECOGNISING that this Agreement would contribute towards alleviating poverty, create new employment opportunities, improve living standards, and ensure a large and steadily growing real income in their respective territories through the expansion of trade and investment flows, while allowing for the
optimal use of the world's resources in accordance with the objective of sustainable development;
AFFIRMING their commitment to promote the principle of transparency; ACKNOWLEDGING the importance of good corporate governance and corporate social responsibility, and affirming their commitment to encourage
their enterprises to observe the same;
REAFFIRMING the rights of their Governments to regulate and set their sustainable development policies and priorities;
HAVE AGREED to conclude the following Trade and Economic Partnership Agreement (referred to as âthis Agreementâ):
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. Objectives
1. The EFTA States and India hereby establish a free trade area in accordance with the provisions of this Agreement.
2. The objectives of this Agreement are:
(a) to achieve the liberalisation of trade in goods, in conformity with Article XXIV of the General Agreement on Tariffs and Trade, set out in Annex 1A to the WTO Agreement (hereinafter referred to as the "GATT 1994"):
(b) to achieve the liberalisation of trade in services, in conformity with Article V of the General Agreement on Trade in Services, set out in Annex 1B to the WTO Agreement (hereinafter referred to as the "GATS");
(c) to mutually enhance investment opportunities;
(d) to promote competition in their economies, particularly as it relates to economic relations between the Parties;
(e) to provide for adequate, effective and non-discriminatory protection and enforcement of intellectual property rights;
(f) to develop their trade relations so as to contribute to the objective of sustainable development; and
(g) to contribute in this way to the harmonious development and expansion of world trade.
Article 1.2. Geographical Scope
1. Except as otherwise provided elsewhere in this Agreement, this Agreement shall apply:
(a) in respect of India: to the territory of the Republic of India, in accordance with the Constitution of India, including its territorial waters, and the airspace above it and other maritime zones including the Exclusive Economic Zone and continental shelf over which the Republic of India has sovereignty, sovereign rights, or exclusive jurisdiction in accordance with its law and the United Nations Convention on the Law of the Sea, and in accordance with international law;
(b) in respect of the EFTA States:
(i) to the land territory, internal waters, and the territorial sea of a Party, and the air-space above the territory of a Party, in accordance with international law; and
(ii) to the exclusive economic zone and the continental shelf of a Party, in accordance with international law.
2. This Agreement shall not apply to the territory of Svalbard, with the exception of trade in goods.
Article 1.3. Trade and Economic Relations Governed by this Agreement
1. The provisions of this Agreement shall apply to the trade and economic relations between, on the one side, the individual EFTA States and, on the other side, India, but not to trade relations between individual EFTA States, unless otherwise provided for in this Agreement.
2. As a result of the customs union established by the Treaty of 29 March 1923 between Switzerland and the Principality of Liechtenstein, done at Bern, Switzerland shall represent the Principality of Liechtenstein in matters covered thereby.
Article 1.4. Relationship to other Agreements
The Parties confirm their rights and obligations under the WTO Agreement and the other agreements negotiated thereunder to which they are a party and any other international agreements to which they are a party.
Article 1.5. Central, Regional and Local Government
Each Party is fully responsible for the observance of all obligations and commitments under this Agreement, and shall take such reasonable measures as may be available to it to ensure the observance of all obligations and commitments under this Agreement by its respective regional and local governments and authorities.
Article 1.6. Transparency
1. Each Party shall publish, or otherwise make publicly available, its laws, regulations, judicial decisions, administrative rulings of general application and its respective international agreements, that may affect the operation of this Agreement.
2. A Party shall promptly respond to specific questions and provide, upon request, information to the other Parties on matters referred to in paragraph 1.
3. Nothing in this Agreement shall require a Party to disclose confidential information that would be contrary to its law or would impede law enforcement, or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of any economic operator.
4. In case of any inconsistency between the provisions of this Article and provisions relating to transparency in other Chapters of this Agreement, the latter shall prevail to the extent of the inconsistency.
Chapter 2. TRADE IN GOODS
Article 2.1. Scope
This Chapter shall apply to trade in goods between the Parties.
Article 2.2. Classification of Goods
1. The classification of goods in trade between the Parties shall be as set out in each Party's respective tariff nomenclature in conformity with the International Convention on the Harmonized Commodity Description and Coding System and its Section Notes, Chapter Notes, Subheading Notes and General Rules for the Interpretation of the Harmonized System (hereinafter referred to as "HS"), as regularly amended in the framework of the World Customs Organization.
2. Each Party shall ensure that the transposition of its schedule of tariff commitments, undertaken in order to implement Annexes 2.C (Schedule of Tariff Commitments on Goods), 2.D (Schedule of Tariff Commitments on Goods), 2.E (Schedule of Tariff Commitments on Goods) or 2.F (Schedule of Tariff Commitments on Goods) in the nomenclature of the revised HS Code following periodic amendments to the HS Code, is carried out without impairing or diminishing the tariff commitments.
3. Following periodic amendments to the HS Code, the Parties shall ensure that the transposition of the Product Specific Rules set out in Appendix 2.A.1 to Annex 2.A (hereinafter referred to as "PSR") is undertaken without impairing, including rendering more stringent, the PSRs applicable upon entry into force of this Agreement.
Article 2.3. Rules of Origin and Methods of Administrative Cooperation
Goods covered by this Chapter shall be eligible for preferential tariff treatment provided that they satisfy the rules of origin as set out in Annex 2.A (Rules of Origin).
Article 2.4. Customs Duties
1. Customs duties include any duty or charge of any kind imposed in connection with the importation of a good, including any form of cess, surtax or surcharge in connection with such importation, but do not include:
(a) charges equivalent to internal taxes imposed consistently with Article I:2 of the GATT 1994;
(b) measures applied consistently with the provisions of Articles VI or XIX of GATT 1994, the Agreement on Implementation of Article VI of GATT 1994, as set out in Annex 1A to the WTO Agreement (hereinafter referred to as the "WTO Anti-dumping Agreement"), the Agreement on Subsidies and Countervailing Measures, as set out in Annex 1A to the WTO Agreement (hereinafter referred to as the "WTO SCM Agreement") or the Agreement on Safeguards, as set out in Annex 1A to the WTO Agreement (hereinafter referred to as the "WTO Safeguards Agreement"), or measures imposed in accordance with Article 22 of the Dispute Settlement Understanding by the WTO Dispute Settlement Body;
(c) fees or other charges imposed in conformity with Article VII of the GATT 1994.
2. The Parties shall apply import duties on goods originating in another Party in accordance with Annexes 2.C (Schedule of Tariff Commitments on Goods), 2.D (Schedule of Tariff Commitments on Goods), 2.E (Schedule of Tariff Commitments on Goods) or 2.F (Schedule of Tariff Commitments on Goods).
3. Where a Partyâs most-favoured-nation applied rate of customs duty on a particular good is lower than the rate of customs duty to be applied in accordance with paragraph 2 on an originating good which is classified under the same tariff line as the particular good, the good originating in the other Parties shall be eligible for that lower duty rate.
Article 2.5. Customs Valuation (1)
The determination of the customs value of goods traded between the Parties shall be governed by Article VII of the GATT 1994 and Part I of the Agreement on Implementation of Article VII of the GATT 1994, set out in Annex 1A to the WTO Agreement (hereinafter referred to as "Customs Valuation Agreement").
Article 2.6. Import and Export Restrictions
Prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licences or other measures, shall be prohibited in trade between the Parties, except in accordance with Article XI of the GATT 1994, which is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.7. National Treatment
The Parties shall accord each other national treatment in accordance with Article II of the GATT 1994, which is hereby incorporated and made part of this Agreement, mutatis mutandis.
Article 2.8. State Trading Enterprises
The rights and obligations of the Parties concerning state trading enterprises shall be governed by Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994,
Article 2.9. General and Security Exceptions
For the purposes of this Chapter, Articles XX and XXI of the GATT 1994 are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.10. Balance of Payments
1. The Parties shall endeavour to avoid the imposition of restrictions to safeguard the balance of payments.
2. The rights and obligations of the Parties with regard to restrictions to safeguard the balance of payments shall be governed by Article XII of the GATT 1994.
Article 2.11. Trade Facilitation
With the objective of facilitating trade between the EFTA States and India, the Parties shall, in accordance with Annex 2.B (Trade Facilitation):
(a) simplify, to the greatest extent possible, customs procedures for trade in goods;
(b) promote multilateral cooperation between the Parties in order to enhance their participation in the development and implementation of international conventions and recommendations on trade facilitation, in accordance with domestic laws, regulation or procedural requirements; and
(c) cooperate on trade facilitation in the framework of the Sub-Committee on Trade Facilitation.
Article 2.12. Sub-Committee on Trade In Goods
1. A Sub-Committee on Trade in Goods is hereby established, consisting of government representatives of the Parties.
2. The Sub-Committee on Trade in Goods shall consider any matter arising under this Chapter, including:
(a) monitoring and review of measures taken and implementation of commitments under this Chapter including its Annexes, except for Annexes 2.A (Rules of Origin) and 2.B (Trade Facilitation);
(b) exchange of information and review of developments;
(c) preparation of technical amendments, including HS updating, and assisting the Joint Committee;
(d) preparation of recommendations and reports to the Joint Committee as necessary;
(e) to the extent possible, promptly seeking to address tariff and non-tariff barriers, if not covered by any other Sub-Committee under this Agreement;
(f) addressing issues relating to the administration and operation of bilateral tariff rate quotas;
(g) exchanging import statistics annually which shall cover data pertaining to the most recent year available, including value and, where applicable, volume, at the tariff line level for imports of goods of another Party benefitting from preferential duty treatment under this Agreement, as well as those that received non-preferential treatment; and
(h) any other matter referred to it by the Joint Committee.
3. The Sub-Committee on Trade in Goods shall act by consensus.
4. The Sub-Committee on Trade in Goods shall meet at least every two years or more frequently if so agreed by the Parties. The meetings of the Sub-Committee on Trade in Goods shall be chaired jointly by an EFTA State and India.
5. The Parties shall examine any difficulties that might arise in trade in goods between them and shall endeavour to seek appropriate solutions through dialogue and consultations.
Chapter 3. TRADE REMEDIES
Article 3.1. 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 SCM Agreement, except as provided for in paragraphs 2 and 3.
2. Before initiating a countervailing investigation, a Party shall afford another Party concerned adequate opportunity for consultations with the aim of seeking a mutually acceptable solution. The consultations shall be held as soon as possible, but no less than 7 days from the receipt of the invitation. The invitation shall be communicated through channels that allow a record of the communication, including registered post, courier, or electronic transmission. A Party may continue an investigation if no mutually acceptable solution is reached within 21 days from the receipt of the invitation, unless the Parties concerned agree to continue the consultations.
3. If a Party takes a decision to impose a countervailing measure, that Party shall apply the "lesser duty" rule by imposing a duty which is less than the subsidy margin, when such lesser duty would be adequate to remove the injury to the domestic industry.
4. No Party shall have recourse to Chapter 12 (Dispute Settlement) for any matter arising under this Article.
Article 3.2. Anti-dumping
1. Subject to paragraphs 2 to 12, the rights and obligations of the Parties in respect of the application of anti-dumping measures shall be governed by Article VI of the GATT 1994 and the WTO Anti-dumping Agreement.
2. The Parties agree not to take such measures in an arbitrary or protectionist manner. When a Party has accepted a properly documented application and before initiating an investigation under the WTO Anti-dumping Agreement, that Party shall notify in writing another Party whose goods are allegedly being dumped 10 days in advance of initiating the investigation and provide it with the full text of such application. As soon as possible and no later than 10 days from receipt of the notification of the receipt of the application, the exporting Party may request pre-initiation consultations with the importing Party, with the aim to clarify all possible concerns regarding the matters referred to in the application and arriving at a mutually acceptable solution. (2)
3. The existence of margin of dumping in an original investigation or in a review may normally be established on the basis of a comparison of a weighted average normal value with a weighted average of prices of all comparable export transactions for the good as a whole.
4. When anti-dumping margins are established, assessed or reviewed under Articles 2, 9.3, 9.5, and 11 of the WTO Anti-dumping Agreement, regardless of the comparison basis under Article 2.4.2 of the WTO Anti-dumping Agreement, all individual margins, whether positive or negative, shall be counted toward the average.
5. Where originating goods are subject to an anti-dumping investigation, the export price of such goods before adjustment for fair comparison, in accordance with Article 2.4 of the WTO Anti-dumping Agreement, shall be based on the value which appears in relevant documents, including the certificate of origin for the goods.
6. If the investigating authority of the importing Party determines that the value referred to in paragraph 5 is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed in accordance with Article 2.3 of the WTO Anti- dumping Agreement.
7. An individual margin of dumping for an exporter or producer shall be determined with respect to all export transactions during a certain time-period, subject to Article 2.4.2 of the WTO Anti-dumping Agreement, which in no case shall be less than six consecutive months.
8. If a Party takes a decision to impose an anti-dumping duty pursuant to paragraph 1, that Party shall apply the "lesser duty" rule by imposing a duty which is less than the dumping margin, when such lesser duty would be adequate to remove the injury to the domestic industry.
9. Where an anti-dumping investigation of an importing Party with respect to goods from another Party is terminated with negative final determination, that importing Party shall not initiate an investigation on the same goods within one year from the termination of the previous investigation.
10. Notwithstanding paragraph 9, the investigating authority of the importing Party may initiate an investigation in an exceptional circumstance. If an investigation is initiated in such a case, the authorities shall explain the exceptional circumstance which warrants initiation in the notice of initiation.
11. 5 years from the entry into force of this Agreement, the Parties shall review the provisions of this Article in the Joint Committee. The Parties shall thereafter conduct biennial reviews of the provisions in the Joint Committee.
12. No Party shall have recourse to Chapter 12 (Dispute Settlement) for any matter arising under this Article.
Article 3.3. Global Safeguard Measures
1. This Agreement shall not confer any additional rights or impose any additional obligations on the Parties with regard to actions taken pursuant to Article XIX of the GATT 1994 and the WTO Safeguards Agreement, except that a Party taking a safeguard measure under Article XIX of the GATT 1994 and the WTO Safeguards Agreement may, to the extent consistent with its obligations under the WTO Agreements, exclude imports of an originating good from another Party if such imports are not a substantial cause of serious injury or threat thereof.
2. No Party shall have recourse to Chapter 12 (Dispute Settlement) for any matter arising under this Article.
Article 3.4. Bilateral Safeguard Measure
1. Where, as a result of the reduction or elimination of a customs duty under this Agreement, any goods originating in a Party is being imported into the territory of another 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 goods in the territory of the importing Party, the importing Party may take bilateral safeguard measures to the extent necessary to remedy or prevent the injury, subject to paragraphs 2 to 14.
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.
3. A Party may apply a bilateral safeguard measure only following an investigation by its investigating authority pursuant to the following:
(a) the investigation shall include reasonable public notice to all interested parties and public hearings or other appropriate means in which importers, exporters and other interested parties could present evidence and their views, including the opportunity to respond to the presentations of other interested parties and to submit their views, inter alia, as to whether or not the application of a bilateral safeguard measure would be in the public interest. The investigating authority shall publish a report setting forth its findings and reasoned conclusions reached on all pertinent issues of fact and law including a detailed analysis of the case under investigation as well as a demonstration of the relevance of factors examined;
(b) in the investigation to determine whether increased imports have caused or are threatening to cause serious injury to a domestic industry under the terms of this Agreement, the investigating authority shall evaluate all relevant factors of an objective and quantifiable nature, having a bearing on the situation of the domestic industry, in particular, the rate and amount of the increase in imports of the originating good concerned in absolute and relative terms, the share of the domestic market taken by increased imports, and changes in the level of sales, production, productivity, capacity utilisation, profits and losses, and employment;
(c) the determination of serious injury, or threat thereof shall not be made unless the investigation demonstrates, on the basis of objective evidence, the existence of a causal link between increased imports of the goods concerned and serious injury or threat thereof. When factors other than increased imports are causing injury to the domestic industry at the same time, such injury shall not be attributed to increased imports; and
(d) any information which is by nature confidential, or which is provided on a confidential basis shall, upon cause being shown, be treated as such by the investigating authority. Such information shall not be disclosed without permission of the Party submitting it. A Party providing confidential information may be requested to furnish non-confidential summaries thereof or, if it indicates that such information cannot be summarised, the reasons why a summary cannot be provided. However, if the investigating authority finds that a request for confidentiality is not warranted and if the Party concerned is either unwilling to make the information public or to authorise its disclosure in generalised or summary form, the investigating authority may disregard such information unless it can be demonstrated to their satisfaction from appropriate sources that the information is correct.
4. A Party intending to take a bilateral safeguard measure shall immediately, and in any case before taking a measure, notify the exporting Party. The notification shall contain all pertinent information, which shall include evidence of serious injury or threat thereof caused by increased imports, a precise description of the goods involved, and the proposed measure, as well as the expected duration and timetable for the progressive removal of the measure. As soon as available, the estimated date of introduction or time-period for implementing the decision shall also be notified.
5. If the conditions in paragraph 1 are met, the importing Party may take a bilateral safeguard measure consisting in:
(a) suspending the further reduction of any rate of customs duty provided for under this Agreement for the goods; or
(b) increasing the rate of customs duty for the goods to a level not to exceed the lesser of:
(i) the most-favoured-nation rate of duty applied at the time the action is taken; or
(ii) the most-favoured-nation rate of duty applied on the day immediately preceding the entry into force of this Agreement.
6. Bilateral safeguard measures shall be taken for a period not exceeding 2 years. In very exceptional circumstances, measures may be taken up to a total maximum period of 3 years. The Party intending to extend the period beyond 2 years shall make a notification to the exporting Party containing the elements listed in paragraph 3 before taking a measure.
7. The Parties concerned shall allow for consultations. Within 30 days from the notification, the Parties concerned shall examine the information provided under paragraphs 3 and 5 in the Joint Committee in order to facilitate a mutually acceptable solution of the matter.
8. 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. The Party intending to take such a measure shall immediately notify the exporting Party thereof. Within 30 days from the notification, the pertinent procedures set out in paragraphs 3 to 7 shall be initiated.
9. Any provisional bilateral safeguard measures shall be terminated within 200 days from its imposition. The period of application of any such provisional measure shall be counted as part of the duration of the measure and any extension thereof, set out in paragraph 5. 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.
10. A Party that may be affected by a bilateral safeguard measure, or a provisional bilateral safeguard measure, shall be offered, by the Party proposing to apply the measure, adequate means of trade liberalising compensation in the form of concessions having substantially equivalent trade effects. Compensation shall be based on the total period of application of the bilateral safeguard measure.
11. If, within the 30-day period set out in paragraph 6, the Parties concerned are unable to agree on compensation offered by the Party proposing to apply the bilateral safeguard measure, in accordance with paragraph 9, the Party against which the bilateral safeguard measure is applied may take compensatory action having trade effects equivalent to the bilateral safeguard measure for the minimum period necessary to achieve the equivalent trade effects. The compensatory action shall be immediately notified to the Party applying the bilateral safeguard measure. Such compensation described in paragraph 9 shall not be provided if the measure described in paragraph 4 is applied for up to 2 years.
12. Upon the termination of the measure, the rate of customs duty shall be the rate which would have been in effect but for the measure.
13. No bilateral safeguard measure shall be applied against a particular good while a safeguard measure referred to in Article 3.3 or under the WTO Agreement on Agriculture is being applied to that good. If such a global safeguard measure is applied against a particular good, any existing bilateral safeguard measure which is applied against that good shall be terminated.
14. 5 years from the entry into force of this Agreement, and thereafter biennially, the Parties shall review in the Joint Committee whether there is a need to maintain the possibility to apply bilateral safeguard measures among them. In these reviews, the Parties may decide to terminate the application of this Article.
Chapter 4. SANITARY AND PHYTOSANITARY MEASURES
Article 4.1. Objectives
The objective of this Chapter is to protect human, animal and plant life and health in the territory of the Parties while facilitating trade between them, by:
(a) ensuring full transparency as regards sanitary and phytosanitary (hereinafter referred to as "SPS") measures applicable to trade;
(b) establishing a mechanism for the recognition of equivalence of sanitary or phytosanitary measures maintained by a Party;