Title
INTERIM AGREEMENT ON TRADE BETWEEN THE EUROPEAN UNION AND THE REPUBLIC OF CHILE
Preamble
PREAMBLE
THE EUROPEAN UNION,
and
THE REPUBLIC OF CHILE, hereinafter referred to as "Chile", hereinafter jointly referred to as "the Parties",
CONSIDERING the strong cultural, political, economic and cooperation ties which unite them,
MINDFUL of the significant contribution to the strengthening of those ties made by the Association Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Chile, of the other part, signed in Brussels on 18 November 2002 ("Association Agreement"),
EMPHASISING the comprehensive nature of their relationship,
CONSIDERING their commitment to modernise the existing Association Agreement to reflect new political and economic realities and the advancements made in their partnership,
ACKNOWLEDGING the importance of a strong and effective multilateral system, based upon international law, in preserving peace, preventing conflicts and strengthening international security and in tackling common challenges,
AFFIRMING their commitment to strengthen cooperation on bilateral, regional and global issues of common concern and to use all available tools to promote activities designed to develop an active and reciprocal international cooperation,
RECOGNISING the interim nature of this Agreement, which will strengthen bilateral economic and trade relations between the Parties, and which will cease to have effect and will be replaced by the Advanced Framework Agreement upon the entry into force of that Agreement,
WELCOMING the adoption and calling for the implementation of the Sendai Framework for Disaster Risk Reduction 2015-2030, adopted at the Third UN World Conference in Sendai on 18 March 2015, the Addis Ababa Action Agenda of the Third International Conference on
Financing for Development, adopted at Addis Ababa on 13 to 16 July 2015, the Resolution 70/1 adopted by the General Assembly of the United Nations ("UN General Assembly") on 25 September 2015, containing the outcome document "Transforming our world: the 2030 Agenda for Sustainable Development and the 17 Sustainable Development Goals" ("2030 Agenda"), the Paris Agreement under the United Nations Framework Convention on Climate Change, done at Paris on 12 December 2015 ("Paris Agreement"), the New Urban Agenda, adopted during the UN Conference on Housing and Sustainable Urban Development (Habitat III) in Quito on 20 October 2016 ("New Urban Agenda") and the World Humanitarian Summit Commitments, adopted at the World Humanitarian Summit in Istanbul on 23 and 24 May 2016,
REAFFIRMING their commitment to promote sustainable development in its economic, social and environmental dimensions, their commitment to the development of international trade in such a way as to contribute to sustainable development in those three dimensions, which are recognised as deeply interlinked and mutually reinforcing, and their commitment to promote the achievement of the objectives of the 2030 Agenda,
REAFFIRMING their commitment to expand and diversify their trade relations in conformity with the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994, and the specific objectives and provisions set out in this Agreement,
DESIRING to strengthen their economic relations, in particular their trade and investment relations, by strengthening and improving market access, and contributing to economic growth, while remaining mindful of the need to raise awareness of the economic and social impact of environmental damage, unsustainable patterns of production and consumption and their associated impact on human well-being,
CONVINCED that this Agreement will create a climate conducive to the growth of sustainable economic relations between them, in particular in the trade and investment sectors, which are essential to the realisation of economic and social development, technological innovation and modernisation,
RECOGNISING that the provisions of this Agreement are intended to stimulate mutually beneficial economic activity without undermining the right of each Party to regulate in the public interest within its territory,
RECOGNISING the close relationship between innovation and trade, as well as the relevance of innovation for economic growth and social development, and
RECALLING the importance of the various agreements signed by the European Union and Chile, which have fostered cooperation across the sectoral areas of the relationship between the Parties, and increased trade and investment,
HAVE AGREED AS FOLLOWS:
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. Establishment of a Free Trade Area
The Parties hereby establish a free trade area, in conformity with Article XXIV of GATT 1994 and Article V of GATS.
Article 1.2. Objectives
The objectives of this Agreement are:
(a) the expansion and the diversification of trade in goods, in conformity with Article XXIV of GATT 1994, between the Parties through the reduction or elimination of tariff and non-tariff barriers to trade;
(b) the facilitation of trade in goods, in particular through the provisions regarding customs and trade facilitation, standards, technical regulations, conformity assessment procedures, and sanitary and phytosanitary measures, while preserving the right of each Party to regulate to achieve public policy objectives;
(c) the liberalisation of trade in services, in conformity with Article V of GATS;
(d) the development of an economic climate which is conducive to increased investment flows, the improvement of the conditions of establishment on the basis of the principle of non- discrimination while preserving the right of each Party to adopt and enforce measures necessary to pursue legitimate policy objectives;
(e) the facilitation of trade and investment between the Parties, including through the free transfer of current payments and capital movements;
(f) the effective and reciprocal opening of public procurement markets of the Parties;
(g) the promotion of innovation and creativity by ensuring the adequate and effective protection of intellectual property rights in accordance with the international obligations applicable between the Parties;
(h) the promotion of conditions fostering undistorted competition, in particular with regard to trade and investment between the Parties;
(i) the development of international trade in a manner that contributes to sustainable development in its economic, social and environmental dimensions; and
(j) the establishment of an effective, fair and predictable dispute settlement mechanism to resolve disputes regarding the interpretation and application of this Agreement.
Article 1.3. Definitions of General Application
For the purposes of this Agreement:
(a) "Advanced Framework Agreement" means the Advanced Framework Agreement between the European Union and its Member States, of the one part, and the Republic of Chile, of the other part, to be concluded;
(b) "Agreement on Agriculture" means the Agreement on Agriculture in Annex 1A to the WTO Agreement;
(c) "Anti-Dumping Agreement" means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade in Annex 1A to the WTO Agreement;
(d) "Association Agreement" means the Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Chile, of the other part, signed in Brussels on 18 November 2002;
(e) "customs duty" means any duty or charge of any kind imposed on or in connection with the importation of a good, not including any:
(i) charge equivalent to an internal tax imposed in accordance with Article 2.4 of this Agreement;
(ii) anti-dumping, special safeguard, countervailing or safeguard duty applied in conformity with GATT 1994, the Anti-Dumping Agreement, the Agreement on Agriculture, the SCM Agreement and the Safeguards Agreement, as appropriate; and
(iii) fee or other charge imposed on or in connection with the importation that is limited in amount to the approximate cost of services rendered;
(f) "CPC" means the Provisional Central Product Classification (Statistical Papers
Series M No. 77, Department of International Economic and Social Affairs, Statistical Office of the United Nations, New York, 1991);
(g) "days" means calendar days, including weekends and holidays;
(h) "existing" means in effect on the date of entry into force of this Agreement;
(i) "GATS" means the General Agreement on Trade in Services in Annex 1B to the WTO Agreement;
(j) "GATT 1994" means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(k) "good of a Party" means a domestic good as that is understood in GATT 1994, and includes originating goods of that Party;
(l) "Harmonized System" or "HS" means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, Chapter Notes and Subheading Notes, developed by the World Customs Organization;
(m) "heading" means the first four digits in the tariff classification number under the Harmonized System;
(n) "juridical person" means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately owned or publicly owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
(o) "measure" means any measure in the form of a law, regulation, rule, procedure, decision, administrative action, requirement, practice or any other form;
(p) "measure of a Party" means any measure adopted or maintained by (1):
(i) governments and authorities at all levels;
(ii) non-governmental bodies in the exercise of powers delegated by governments or authorities at all levels (2); or
(iii) any entity which is in fact acting on the instructions of or under the direction or the control of a Party with regard to the measure (3);
(q) "Member State" means a Member State of the European Union;
(r) "natural person" means:
(i) for the European Union, a national of a Member State, according to its law (1); and
(ii) for Chile, a national of Chile, according to its law;
(s) "originating good" means a good qualifying under the rules of origin set out in Chapter 3;
(t) "person" means a natural person or a juridical person;
(u) "personal data" means any information relating to an identified or identifiable natural person;
(v) "Safeguards Agreement" means the Agreement on Safeguards in Annex 1A to the WTO Agreement;
(w) "sanitary or phytosanitary measure" means any measure referred to in paragraph 1 of Annex A to the SPS Agreement;
(x) "SCM Agreement" means the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement;
(y) "SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A to the WTO Agreement;
(z) "TBT Agreement" means the Agreement on Technical Barriers to Trade in Annex 1 to the WTO Agreement;
(aa) "third country" means a country or territory outside the territorial scope of application of this Agreement as set out in Article 33.8;
(ab) "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1C to the WTO Agreement;
(ac) "Vienna Convention on the Law of Treaties" means the Vienna Convention on the Law of Treaties, done at Vienna on 23 May 1969; and
(ad) "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.
Article 1.4. Relation to the WTO Agreement and other Existing Agreements
1. The Parties affirm their rights and obligations with respect to each other under the WTO Agreement and other existing agreements to which they are party.
2. Nothing in this Agreement shall be construed as requiring either Party to act in a manner which is inconsistent with its obligations under the WTO Agreement.
3. In the event of any inconsistency between this Agreement and any existing agreement other than the WTO Agreement to which both Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution.
Article 1.5. References to Laws and other Agreements
1. Unless otherwise provided, where reference is made in this Agreement to the laws and regulations of a Party, those laws and regulations shall be understood to include any amendments thereto.
2. Unless otherwise provided for in this Agreement, where international agreements are referred to or incorporated, in whole or in part, into this Agreement, they shall be understood to include any amendments thereto or successor agreements which enter into force for both Parties on or after the date of signature of this Agreement.
3. If any matter arises regarding the implementation or application of this Agreement as a result of any amendment or successor agreement as referred to in paragraph 2, the Parties may, on request of either Party, consult with each other with a view to finding a mutually satisfactory solution.
Article 1.6. Fulfilment of Obligations
1. Each Party shall take any general or specific measures required to fulfil its obligations under this Agreement.
2. If either Party considers that the other Party has failed to fulfil any of the obligations that are described as essential elements in Article 1.2(2) or 2.2(1) of the Advanced Framework Agreement, it may take appropriate measures. Appropriate measures shall be taken in full respect of international law and shall be proportionate to the failure to fulfil the obligations referred to in this paragraph. Priority must be given to those measures which least disturb the functioning of this Agreement. For the purposes of this paragraph, "appropriate measures" may include the suspension, in part or in full, of this Agreement.
3. The measures referred to in paragraph 2 may be taken irrespective of whether the relevant provisions of the Advanced Framework Agreement are being provisionally applied.
Chapter 2. TRADE IN GOODS
Article 2.1. Objective
The Parties shall progressively and reciprocally liberalise trade in goods in accordance with this Agreement.
Article 2.2. Scope
Except as otherwise provided for in this Agreement, this Chapter applies to trade in goods of a Party.
Article 2.3. Definitions
For the purposes of this Chapter and Annex 2:
(a) "Agreement on Import Licensing Procedures" means the Agreement on Import Licensing Procedures in Annex 1A to the WTO Agreement;
(b) "consular transactions" means the procedure for obtaining from a consul of the importing Party in the territory of the exporting Party, or in the territory of a third country, a consular invoice or a consular visa for a commercial invoice, certificate of origin, manifest, shipper's export declaration or any other customs documentation in connection with the importation of a good;
(c) "Customs Valuation Agreement" means the Agreement on Implementation of Article VII of GATT 1994 in Annex 1A to the WTO Agreement;
(d) "export licensing procedure" means an administrative procedure requiring the submission of an application or other documentation other than that generally required for customs clearance purposes, to the relevant administrative body or bodies as a prior condition for exportation from the territory of the exporting Party;
(e) "import licensing procedure" means an administrative procedure requiring the submission of an application or other documentation, other than that generally required for customs clearance purposes, to the relevant administrative body or bodies as a prior condition for importation into the territory of the importing Party;
(f) "remanufactured good" means a good classified in HS Chapters 84 to 90 or under heading 94.02, except for a good classified under HS headings 84.18, 85.09, 85.10, 85.16 and 87.03 or subheadings 8414.51, 8450.11, 8450.12, 8508.1 and 8517.11, that:
(i) is entirely or partially comprised of parts obtained from goods that have been used;
(ii) has a similar performance and working condition compared to an equivalent good in new condition; and
(iii) is given the same warranty as an equivalent good in new condition;
(g) "repair" means any processing operation undertaken on a good to remedy operating defects or material damage and entailing the re-establishment of the good to its original function, or to ensure compliance with technical requirements for its use, without which the good could no longer be used in the normal way for the purposes for which it was intended; repair of a good includes restoration and maintenance, but does not include an operation or process that:
(i) destroys the essential characteristics of a good, or creates a new or commercially different good;
(ii) transforms an unfinished good into a finished good; or
(iii) is used to improve or upgrade the technical performance of a good;
(h) "staging category" means the timeframe for the elimination of customs duties ranging from zero to seven years, after which a good is free of customs duty, unless otherwise specified in the schedules in Annex 2.
Article 2.4. National Treatment on Internal Taxation and Regulation
Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its Notes and Supplementary Provisions. To that end, Article III of GATT 1994 and its Notes and Supplementary Provisions are incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.5. Reduction or Elimination of Customs Duties
1. Unless otherwise provided for in this Agreement, each Party shall reduce or eliminate customs duties on goods originating in the other Party in accordance with its schedule in Annex 2.
2. For the purposes of paragraph 1, the base rate of customs duties shall be the one specified for each good in the schedules in Annex 2.
3. If a Party reduces its applied most-favoured-nation customs duty rate ("MFN rate"), the schedule in Annex 2 of that Party shall apply to the reduced rates. If a Party lowers its applied MFN rate to a level below the base rate in relation to a particular tariff line, that Party shall calculate the preferential applicable rate effecting the tariff reduction on the lowered applied
MFN rate, maintaining the relative margin of preference for that particular tariff line for as long as the applied MFN rate is lower than the base rate. The relative margin of preference for any given tariff line in each staging period corresponds to the difference between the base rate set out in the schedule in Annex 2 of that Party and the applied duty rate for that tariff line in accordance with that schedule, divided by that base rate, and expressed in percentage terms.
4. On request of a Party, the Parties shall consult each other in order to consider accelerating the reduction or elimination of customs duties set out in the schedules in Annex 2. Having regard to such consultation, the Trade Council may adopt a decision to amend Annex 2 to accelerate that tariff reduction or elimination.
Article 2.6. Standstill
1. Unless otherwise provided for in this Agreement, a Party shall not increase any customs duty that is set as the base rate in Annex 2 or adopt any new customs duty on a good originating in the other Party.
2. For greater certainty, a Party may increase a customs duty to the level set out in Annex 2 for the respective staging period following a unilateral reduction.
Article 2.7. Export Duties, Taxes and other Charges
1. A Party shall not introduce or maintain any duty, tax or other charge of any kind imposed on, or in connection with, the exportation of a good to the other Party, or any internal tax or other charge on a good exported to the other Party that is in excess of the tax or charge that would be imposed on like goods when destined for domestic consumption.
2. Nothing in this Article shall prevent a Party from imposing on the exportation of a good a fee or charge that is permitted pursuant to Article 2.8.
Article 2.8. Fees and Formalities
1. Fees and other charges imposed by a Party on, or in connection with, the importation or exportation of a good of the other Party shall be limited in amount to the approximate cost of the services rendered, and shall not represent an indirect protection of domestic goods or taxation of imports or exports for fiscal purposes.
2. A Party shall not levy fees or other charges on, or in connection with, importation or exportation on an ad valorem basis.
3. Each Party may impose charges or recover costs only where specific services are rendered, including the following:
(a) attendance, where requested, by customs staff outside official office hours or at premises other than customs premises;
(b) analyses or expert reports on goods and postal fees for the return of goods to an applicant, in particular in respect of decisions relating to binding information or the provision of information concerning the application of customs legislation;
(c) the examination or sampling of goods for verification purposes, or the destruction of goods, where costs other than the cost of using customs staff are involved; or
(d) exceptional control measures, where such measures are necessary due to the nature of the goods or a potential risk.
4. Each Party shall promptly publish all fees and charges that it imposes in connection with importation or exportation in such a manner as to enable governments, traders and other interested parties to become acquainted with them.
5. A Party shall not require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.
Article 2.9. Repaired Goods
1. A Party shall not apply a customs duty to a good, regardless of its origin, that re-enters its customs territory after that good has been temporarily exported from its customs territory to the customs territory of the other Party for repair.
2. Paragraph 1 does not apply to a good imported in bond, into free-trade zones, or in a similar status, that is then exported for repair and is not re-imported in bond, into free-trade zones, or in a similar status.
3. A Party shall not apply a customs duty to a good, regardless of its origin, imported temporarily from the customs territory of the other Party for repair (1).
Article 2.10. Remanufactured Goods
1. Unless otherwise provided for in this Agreement, a Party shall not accord to remanufactured goods of the other Party treatment that is less favourable than that which it accords to like goods in new condition.
2. For greater certainty, Article 2.11 applies to import and export prohibitions or restrictions on remanufactured goods. If a Party adopts or maintains import and export prohibitions or restrictions on used goods, it shall not apply those measures to remanufactured goods.