2. When a Party denies preferential tariff treatment to a good by a decision based on the non-fulfillment of a period established in this Chapter, with regard to the submission of records or other information to the customs authority of this Party, the ruling made in the review or appeal shall only deal with the compliance of the time period referred to in this paragraph.
3. The rights referred to in paragraphs 1 and 2 include access to at least one administrative review, independent from the official or office responsible for the determination or advance ruling under review, and access to a judicial review of the determination or ruling taken at the final instance of administrative review, according to the laws of each Party.
Article 5.12. Uniform Regulations
1. The Parties shall establish, and implement through their respective laws or regulations by the date this agreement enters into force, Uniform Regulations regarding the interpretation, application and administration of Chapter 4 (Rules of Origin), this Chapter and other matters as may be agreed by the Parties.
2. Each Party shall implement any modification of or addition to the Uniform Regulations no later than 180 days after the Parties agree on such modification or addition, or such other period as the Parties may agree.
Article 5.13. Cooperation
1. Each Party shall notify the other Party of the following determinations, measures and rulings, including to the greatest extent practicable those that are prospective in application:
(a) a determination of origin issued as the result of verification conducted pursuant to Article 5.06, once the petitions of review and appeal referred to in Article 5.11 of this Chapter are exhausted;
(b) a determination of origin that the Party considers contrary to a ruling issued by the customs authority of the other Party with respect to the tariff classification or value of a good, or of materials used in the production of a good;
(c) a measure establishing or significantly modifying an administrative policy that is likely to affect future determinations of origin; and
(d) an advance ruling or its modification, pursuant to Article 5.07 of this Chapter.
2. The Parties shall cooperate in the following aspects:
(a) the enforcement of their respective customs-related laws or regulations implementing this Agreement, and under any customs mutual assistance agreements or other customs-related agreement to which they are party;
(b) to the extent possible and for purposes of facilitating the flow of trade between their territories, such customs-related matters as the collection and exchange of statistics regarding the importation and exportation of goods, the standardization of data elements and the exchange of information;
(c) to the extent possible, the collection and exchange of documentation on customs procedures; and
(d) to the extent possible and for purposes of verifying the origin of a good, the customs authority of the importing Party may request to the certifying authority of the other Party to conduct in its territory some related investigations or inquiries, and to issue the corresponding reports.
Chapter 6. SAFEGUARD MEASURES
Article 6.01. Definitions
For purposes of this Chapter, the following terms shall be understood as:
Agreement on Safeguards: the Agreement on Safeguards which forms part of the WTO Agreement;
causal link: “causal link”as defined in the Agreement on Safeguards;
critical circumstances: those circumstances where a delay in the application of safeguard measure would cause damage difficult to repair;
domestic industry: the producers as a whole of the like or directly competitive goods which operate within the territory of a Party, or those producers whose whole production of the like or directly competitive goods constitutes a major proportion of the total domestic production of these goods;
investigating authority: “investigating authority”as according to Annex 6.01;
safeguard measure: all kinds of tariff measures as applied in accordance with the provisions of this Chapter. It does not include any safeguard measure derived from a proceeding initiated before the entry into force of this Agreement;
serious injury: “serious injury”as defined in the Agreement on Safeguards;
threat of serious injury: “threat of serious injury” as defined in the Agreement on Safeguards; and
transition period: the period stated in the Tariff Reduction Schedule plus 2 years.
Article 6.02. Bilateral Safeguard Measures
1. The application of the bilateral safeguard measures shall be governed by this Chapter, and supplementary by Article XIX of GATT 1994, the Agreement on Safeguards and the respective laws of each Party.
2. Subject to paragraphs 4 through 6 and during the transition period, each Party may apply a safeguard measure if, as a result of reduction or elimination of a customs tariff in accordance with this Agreement, an originating product from the territory of a Party is being imported into the territory of the other Party, in such increased quantity, in relation to domestic production and under such conditions that the imports of that product to the Party itself constitutes a substantial cause of serious injury, or a threat thereof to the domestic industry of the like or directly competitive product. The Party into whose territory the product is being imported may, to the minimum extent necessary, to remedy or prevent the serious injury, or threat thereof:
(a) suspend the further reduction of any rate of duty provided for under this Agreement on the product; or
(b) increase the rate of duty on the product to a level not to exceed the lesser of:
(i) the most-favored-nation (MFN) applied customs tariff in effect at the time the measure is taken, and
(ii) the MFN applied customs tariff in effect on the day immediately preceding the date of entry into force of this Agreement.
3. The following conditions and limitations shall be observed in the proceeding that may result in the application of a safeguard measure according to paragraph 2:
(a) a Party shall, without delay and in writing, notify the other Party of the initiation of the proceeding which could have as a consequence the application of a safeguard measure against a product originating in the territory of the other Party;
(b) any safeguard measure shall be initiated no later than one year counted from the date of the initiation of the procedure;
(c) no safeguard measure may be maintained:
(i) for more than two years, extendable for a period of one additional consecutive year, according to the proceeding stated in Article 6.04(21), or
(ii) after the termination of the transition period, unless with consent of the Party against whose product the measure is applied;
(d) during the transition period, the safeguard measures, with or without extension, may only be applied twice on the same product;
(e) a safeguard measure may be applied for a second time, provided that at least a period equivalent to the half of that one during which the safeguard measure has been applied at the first time has been passed;
(f) the period which a provisional safeguard measure has been applied shall be calculated for the purpose of determining the period of duration of the definitive safeguard measure established in subparagraph (c);
(g) the provisional measures that are not definitive shall be excluded from the limitation provided for in subparagraph (d);
(h) on the termination of the safeguard measure, the applied rate of import duty shall be the rate as that in the Tariff Reduction Schedule.
4. In critical circumstances where any delay would cause damage which it would be difficult to repair, a Party may apply bilateral provisional safeguard measure pursuant to a preliminary determination that there is clear evidence that, as a result of the reduction or elimination of a customs tariff under this Agreement, the imports of the goods originating from the other Party have been increased in such rate and amount and under such conditions as to cause or threaten to cause serious injury. The duration of provisional measures shall not exceed 120 days.
5. Only with the consent of the other Party, a Party may apply a safeguard measure after the termination of transition period, in order to deal with cases of serious injury, or threat thereof, to the domestic industry that arise from the implementation of this Agreement.
6. The Party applying a safeguard measure according to this Article shall provide to the other Party a mutually agreed compensation, in the form of concessions having substantially equivalent trade effects or being equivalent to the value of the additional customs tariff expected to result from the safeguard measure. If the Parties concerned are unable to agree on the compensation, the Party against whose product the safeguard measure is applied may take tariff measures with trade effects substantially equivalent to the effects of the safeguard measure applied pursuant to this Article. The Party shall apply the tariff measure only during the minimum necessary period to achieve the substantially equivalent effects.
Article 6.03. Global Safeguard Measures
1. Each Party shall reserve its rights and obligations in accordance with Article XIX of GATT 1994 and the Agreement on Safeguards, except those relating to compensation or retaliation and exclusion of a safeguard measure which are inconsistent with the provisions of this Article.
2. Any Party applying a safeguard measure in accordance with paragraph 1 shall exclude goods imported from the other Party from this measure unless:
(a) imports from the other Party account for a substantial share of total imports; and
(b) imports from the other Party contribute importantly to the serious injury, or threat thereof, caused by total imports.
3. To determine if:
(a) imports from the other Party account for a substantial share of total imports, those imports normally shall not be considered to be substantial if that Party is not among the top five suppliers of the product subject to the proceeding, measured in terms of its import share during the most recent three-year period; and
(b) imports from the other Party contribute importantly to the serious injury, or threat thereof, the investigating authority shall consider factors such as the change in the import share of the other Party in the total imports, as well as the import volume of the other Party and the change of that volume has occurred. Normally the imports from a Party shall not be considered to contribute importantly to serious injury or the threat thereof, if its growth rate of imports from a Party during the period in which the injurious surge in imports occurred is appreciably lower than the growth rate of total imports from all sources during the same period.
4. A Party shall, without delay and in writing, notify the other Party of the initiation of
a proceeding that may result in the application of a safeguard measure in accordance with paragraph 1.
5. No Party may apply a measure under paragraph 1 which imposes restrictions on a product, without prior written notification to the Commission, and without appropriate opportunity for consultation with the other Party, as much far in advance of taking the action as practical.
6. Where a Party determines, in accordance with this Article, to apply a safeguard measure to those goods originating from the other Party, the measure applied to those goods shall consist, only and exclusively, of tariff measures.
7. The Party taking a safeguard measure under this Article shall provide to the other Party mutually agreed trade liberalization compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional customs tariffs expected to result from the safeguard measure.
8. If the Parties are unable to agree on the compensation, the Party against whose product the safeguard measure is applied may impose measures which have trade effects substantially equivalent to the effects of the safeguard measure applied pursuant to paragraph 1.
Article 6.04. Administration of Safeguard Measure Proceedings
1. Each Party shall ensure the consistent and impartial application of its laws, regulations, decisions and rulings governing all safeguard measures proceedings.
2. Each Party shall entrust the application of safeguard measure, the determination of the existence of serious injury, or threat thereof, to an investigating authority of each Party. These decisions may be subject to review by judicial or administrative proceedings of the Party, as provided in its domestic laws. The negative determinations on the existence of serious injury, or threat thereof, shall not be subject to modification by the investigating authority, unless the modification is required by such judicial or administrative review. The investigating authority under the domestic laws, in order to carry out these proceedings, shall be provided with all necessary resources to fulfill its duties.
3. Each Party shall adopt or maintain equitable, timely, transparent and effective procedures for the application of safeguard measures, in accordance with the requirements indicated in this Article.
Institution of a Proceeding
4. The investigating authority may institute a proceeding, ex officio or by a request of the authorized entities in accordance with its laws, for the application of safeguard measure. The entity filing the petition shall demonstrate that it is representative of the domestic industry producing a product like or directly competitive with the imported product. For this purpose it shall be construed that the major proportion shall not be less than twenty five percent (25%).
5. Except as stated in this Article, the time periods that govern these proceedings shall be established in the domestic laws of each Party.
Contents of a Petition
6. Entities representing a domestic industry that file a petition to initiate an investigation shall provide the following information in the petition, to the extent that such information is publicly available from governmental or other sources, or its best estimates and the basis therefore if such information is not thus available:
(a) product description: the name and description of the imported product concerned, the tariff subheading under which that product is classified, its current tariff treatment and the name and description of the like or directly competitive domestic product concerned;
(b) representativeness:
(i) the names and addresses of the entities who present the request, as well as the location of the establishments where they produce the domestic product concerned,
(ii) the percentage of domestic production of the like or directly competitive product that such entities account for and the reasons for claiming that they are representative of the domestic industry, and
(iii) the names and locations of all other domestic establishments in which the like or directly competitive product is produced;
(c) import data: import data for each of the 3 full years immediately prior to the initiation of the proceedings relative to the application of a safeguard measure, that form the affirmative basis that the product concerned is imported in a steadily increasing manner, either in absolute terms or relative to domestic production as appropriate;
(d) domestic production data: data on total domestic production of the like or directly competitive product, for each of the 3 full years immediately previous to the initiation of the proceedings relative to the application of a safeguard measure;
(e) data showing injury, or threat thereof: quantitative and objective data indicating the nature and extent of injury, or threat thereof to the concerned domestic industry, such as data showing changes in the level of sales, prices, production, productivity, installed capacity utilization, market share, profits and losses, and employment;
(f) cause of injury: an enumeration and description of the alleged causes of the injury, or threat thereof, and a summary of the basis for the assertion that the increased imports, relative to domestic production, of the imported goods are causing or threatening to cause serious injury, supported by pertinent data; and
(g) criteria for inclusion: quantitative and objective data indicating the share of imports coming from the territory of the other Party, and the petitioner’s views on the extent to which such imports are contributing importantly to the serious injury, or threat thereof.
7. Once a petition is accepted, it shall promptly be made available for public inspection, except that it contains confidential information.
Consultations
8. Once a petition filed in accordance with paragraph 6 is accepted and in any case before the initiation of the investigation, the Party that intend to initiate the case shall notify and invite the other Party to hold consultations aimed at clarifying the situation.
9. During all the investigation period, the Party, whose goods are subject to the investigation, shall be given an adequate opportunity to continue consultations.
10. During these consultations, the Parties may deal, among others, the issues relating to the investigation procedures, elimination of the measure, the issues referred to in Article 6.02 (5) and, in general, to exchange opinions about the measure.
11. Without prejudice to the obligation to provide appropriate opportunity to hold consultations, the provisions of the paragraphs 8, 9 and 10 above regarding consultations are not aimed at preventing the competent authorities of either Party from proceeding promptly to initiate an investigation or from making preliminary or final determinations, positive or negative, nor to prevent them from applying measures under this Agreement.
12. The Party carrying out an investigation shall allow, if being requested, access to the Party whose product is the subject of the investigation to the public file, including the non-confidential summary of the confidential information used for the initiation or during the course of the investigation.
Notice Requirements
13. When initiating a proceeding for the application of a safeguard measure, the investigating authority shall publish the notice of the initiation of the proceeding in the official journal or the other nationally circulated newspaper in accordance with the domestic laws of each Party, within the period of thirty (30) days starting from the acceptance of the petition. The above-mentioned publication shall be notified to the other Party, without delay and in writing. The notification shall contain the following data: the name of the applicant; the indication of the imported product that is the subject of the proceeding and its tariff item number; the nature and timing of the determination to be made; the place where the request and other documents presented during the proceeding may be inspected; and the name, address and telephone number of the office to be contacted for more information. The periods to present the proofs, reports, statement and other documents shall be established in accordance with the legislation of each Party.
14. With respect to a proceeding for the application of a safeguard measure, initiated on the basis of a petition filed by an entity alleging itself as the representative of the domestic industry, the investigating authority shall not publish the notification required by paragraph 13 without evaluating carefully first if the petition meets the requirements set out in paragraph 6.
Public Hearing
15. In the course of each proceeding, the investigating authorities shall:
(a) without prejudice to the Party’s legislation, and after providing reasonable notice, notify all interested parties, including importers, exporters, consumer groups and other interested parties the date and place of a public hearing fifteen (15) days before it is held, to allow them to appear in person or by representative, to present evidence, allegation and to be heard on the questions of serious injury, or threat thereof, and the appropriate remedy; and
(b) provide an opportunity to all interested parties appearing at the hearing to cross- exam the arguments presented by interested parties.
Confidential Information
16. For the purposes of Article 6.02, the investigating authority shall establish or maintain procedures for the treatment of confidential information, protected under domestic law, that is provided in the course of a proceeding, and shall request the interested parties providing such information furnish non-confidential written summaries thereof. If the interested parties indicate that the information cannot be summarized, they shall explain the reasons why a summary cannot be provided. Unless it is demonstrated that the information is accurate, in a convincing way and from an appropriate source, the authorities may disregard that information.
17. The investigating authority shall not disclose any confidential information provided in accordance with any obligation related to the confidential information, that it has obtained in the course of the proceedings.
Evidence of injury, or threat thereof
18. In conducting its proceedings the investigating authority shall gather, to the best of its ability, all relevant information appropriate to the determination it must make. It shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of that domestic industry, including the rate and amount of the increase in imports of the product concerned in relation with the domestic industry, the share of the domestic market taken by the increased imports, and changes in the level of sales, production, productivity, installed capacity utilization, profits and losses, and employment. In making its determination, the investigating authority may also consider other economic factors, such as changes in prices and inventories, and the ability of entities in the domestic industry to generate capital.
Deliberation and Determination
19. Except in critical circumstances and in global safeguard measures involving perishable agricultural goods, the investigating authority, before making an affirmative determination in a proceeding for the application of a safeguard measure, shall allow sufficient time to gather and check the relevant information, shall hold a public hearing and provide adequate opportunity for all interested parties to prepare and submit their views.
20. The investigating authority shall publish promptly a final determination in the official journal or other nationaly circulated newspaper which shall indicate the results of the investigation and the reasoned conclusions on all pertinent issues of law and fact. The determination shall describe the imported product and its tariff item number, the standard applied and the finding made in the proceedings. The statement of reasons shall set out the basis for the determination, including a description of:
(a) the domestic industry seriously injured or threatened with serious injury;
(b) information supporting a finding that imports are increasing, the domestic industry is seriously injured or threatened with serious injury, and increasing imports are causing or threatening serious injury; and
(c) if provided for by domestic law, any finding or recommendation regarding the appropriate remedy, as well as the basis therefor.
Extension
21. If the importing Party determines that the reasons justifying the application of a bilateral safeguard measure, the Party shall notify to the competent authority of the other Party its intention of extending the measure, at least ninety (90) days before it is expected to expire, and shall prove that the reasons leading to its application persist, for the purpose of holding respective consultations which shall be done according to the provisions of this Article.
22. Additionally, entities representing a domestic industry that submit the request for an extension, shall present a readjustment plan including variables controllable by the domestic industry or production involved.
23. The notifications of extension and compensation shall be presented pursuant to this Article before the expiration of the applied measures.
Article 6.05. Dispute Settlement In Safeguard Measure Matters
No Party shall request the establishment of an arbitral group under Article 19.09 (Request for an Arbitral Group) before the applicaton of any safeguard measure by the other Party.
Chapter 7. UNFAIR TRADE PRACTICES
Article 7.01. Scope and Coverage
1. The Parties confirm their rights and obligations according to Articles VI and XVI of GATT 1994, the Agreement on Implementation of Article VI of GATT 1994 and the Agreement on Subsidies and Countervailing Measures, that form part of the WTO Agreement. In this sense, the Parties shall ensure that their laws are consistent with the commitments taken in these agreements.
2. Each Party may initiate an investigation procedure and apply countervailing duties or antidumping duties in accordance with this Chapter, the agreements and articles referred to in paragraph 1, as well as its laws.
Article 7.02. Obligation for Completing an Investigation
1. The importing Party may end an investigation with respect to an interested party, where its competent authority determines that the dumping margin or the amount of the subsidy is de minimis, or that sufficient evidence of dumping, subsidy, injury, or causal link does not exist; or where its competent authority determines that the volume of the dumped or subsidized imports is insignificant.
2. For purposes of paragraph 1, it shall be considered that:
(a) the dumping margin is de minimis when it is less than 6%, expressed as a percentage of the export price;
(b) the amount of the subsidy is de minimis when it is less than 6% ad valorem; and
(c) the volume of the dumped or subsidized imports is insignificant if it represents less than 6% of the total imports of the like products of the importing Party.
3. An applicant may, at any time, withdraw its investigation request. Once a request for withdrawal is filed after the investigation has been initiated, the competent authority shall notify the rest of the applicants for the purpose of exerting their right of concurrence. If the applicants who disagree with the withdrawal do not represent a percentage of the national production necessary to initiate an investigation, then the investigation shall be terminated and the interested parties will be notified. The investigation may not be continued on the competent authority’s own motion under any circumstance.
Part THREE. TECHNICAL BARRIERS TO TRADE
Chapter 8. SANITARY AND PHYTOSANITARY MEASURES
Article 8.01. Definitions
For purposes of this Chapter, the Parties shall apply the definitions and terms set out in:
(a) the Agreement on the Application of Sanitary and Phytosanitary Measures, that forms a part of the WTO Agreement, hereinafter referred to as ASPS;
(b) the Office International des Epizooties, hereinafter referred to as OIE;
(c) the International Plant Protection Convention, hereinafter referred to as IPPC; and
(d) the Codex Alimentarius Commission, hereinafter referred to as Codex.
Article 8.02. General Provisions
1. The authorities legally responsible for ensuring the compliance with the sanitary and phytosanitary obligations provided in this Chapter shall be deemed as the competent authorities.
2. The Parties, on the basis of the ASPS, established this framework of rules and disciplines that shall guide the adoption and implementation of sanitary and phytosanitary measures.
3. The Parties shall facilitate trade through mutual cooperation to prevent the introduction or spreading of pests or diseases and to improve plant health, animal health and food safety.
Article 8.03 . Rights of the Parties
The Parties, according to the ASPS, may:
(a) establish, adopt, maintain or implement any sanitary and phytosanitary measures in their territories, only to the extent necessary to protect human life and health (food safety) and animal life and health or to preserve plant health, even if they are stricter than international standards, guidelines or recommendations, provided that there is a scientific basis to justify them;
(b) implement the sanitary and phytosanitary measures only to the extent necessary to reach an appropriate level of protection; and
(c) verify that plants, animals, products and by-products bound for export are subject to sanitary and phytosanitary monitoring to ensure conformity with the requirements of the sanitary and phytosanitary measures established by the importing Party.
Article 8.04. Obligations of the Parties
1. Sanitary and phytosanitary measures shall not constitute a disguised restriction to trade and shall not have the purpose or effect of creating an unnecessary obstacle to trade between the Parties.
2. Sanitary and phytosanitary measures shall be based on scientific principles, shall only be maintained if there are reasons to sustain them and shall be based on a risk assessment.
3. Sanitary and phytosanitary measures shall be based on international standards, guidelines or recommendations.
4. Where conditions are identical or similar, sanitary and phytosanitary measures shall not discriminate arbitrarily or unjustifiably.
Article 8.05. International Standards and Harmonization
With the aim to harmonize sanitary and phytosanitary measures, the procedures of control, inspection and approval of sanitary and phytosanitary measures of the Parties shall be based on the following principles:
(a) each Party shall use international standards, guidelines or recommendations as reference guideline for its sanitary and phytosanitary measures;
(b) each Party may adopt, implement, establish or maintain a sanitary or phytosanitary measure with a level of protection different from or stricter than that of international standards, guidelines or recommendations, provided that there is scientific justification for the measure;