Title
FREE TRADE AGREEMENT BETWEEN CANADA AND THE REPUBLIC OF ECUADOR
Preamble
PREAMBLE
CANADA AND THE REPUBLIC OF ECUADOR (“Ecuador”) collectively referred to as the “Parties”, having resolved to:
STRENGTHEN the friendship among their peoples, and the economic opportunities developed through trade and investment;
ENHANCE employment opportunities and living standards in their respective territories;
BUILD on their rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994, and other international agreements to which they are both parties, to strengthen the international rules-based system;
FACILITATE trade in goods and services between the Parties by preventing, identifying, and eliminating unnecessary technical barriers to trade, enhancing transparency, and promoting good regulatory practices;
PROMOTE diversification, sustainability and resilience of supply chains;
ESTABLISH a clear, transparent, and predictable legal and commercial framework for business planning that supports further expansion of trade and investment;
RECOGNIZE the differences in the level of development and the size of the Parties’ economies and the importance of creating opportunities for economic development;
FACILITATE trade between them by promoting efficient and transparent customs procedures that ensure predictability for importers and exporters and encouraging expanded cooperation in the area of trade facilitation and enforcement;
PROTECT human, animal, and plant life and health in their territories and advance science-based decision making while facilitating trade between them;
FACILITATE the cross-border movement of a Party’s business persons to support trade in goods, the supply of services, and the conduct of investment activities;
FACILITATE new opportunities for businesses and consumers through digital trade and addressing barriers to trade enabled by electronic means;
RECOGNIZE that the promotion and the protection of investments of investors of a Party in the territory of the other Party will be conducive to the stimulation of mutually beneficial business activity;
ENHANCE AND PROMOTE the competitiveness of their firms in global markets and conditions of fair competition;
ACKNOWLEDGE their respective autonomy and right to regulate within their territories in order to achieve legitimate policy objectives, such as health, safety, environmental protection, conservation of living or non-living exhaustible natural resources, integrity and stability of the financial system, and public morals, in accordance with the rights and obligations provided in this Agreement;
PROMOTE the protection and enforcement of labour rights, the improvement of working conditions, the strengthening of cooperation and the Parties’ capacity on labour issues;
PROMOTE high levels of environmental protection, including through effective enforcement of environmental laws and environmental cooperation;
RECOGNIZE the importance of mutually supportive trade and environmental policies and practices;
PROMOTE sustainable development and support progress towards achieving the United Nations Sustainable Development Goals;
RECOGNIZE the multi-faceted nature of cultural goods and services as activities of cultural, economic and social value and the importance of incorporating culture as a strategic element in international development cooperation;
AFFIRM their commitments as parties to the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions, done at Paris
on 20 October 2005, building upon its principles, and recognizing the importance of strengthening the diversity of cultural expressions within their respective territories;
RECOGNIZE that small and medium-sized enterprises contribute significantly to economic prosperity and innovation, as well as to the achievement of the United Nations Sustainable Development Goals;
SUPPORT the growth and development of small and medium-sized enterprises by enhancing their ability to fully participate in and benefit from the opportunities created by this Agreement;
RECOGNIZE that the economic empowerment of women in all their diversity and the achievement of gender equality contribute significantly to sustainable economic development;
SEEK to increase women’s access to, and benefit from, the opportunities created by this Agreement by removing barriers to international trade and investment and by facilitating their full participation in the global economy and supply chains;
ENCOURAGE the increased participation of Indigenous Peoples in international trade and investment to foster sustainable and inclusive economic growth, employment and innovation in a manner that preserves Indigenous knowledge, cultural heritage, and cultural expressions;
RECOGNIZE the importance of improving the economic and social conditions of Indigenous Peoples, while respecting, protecting and promoting their rights as recognized under applicable international or domestic law;
ENCOURAGE enterprises operating within their territory or subject to their jurisdiction to pursue best practices of responsible business conduct, and to respect internationally recognised standards, guidelines and principles of responsible business conduct and corporate social responsibility, including the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct and the United Nations Guiding Principles on Business and Human Rights;
PROMOTE transparency, good governance and the rule of law, and prevent and combat bribery and corruption in trade and investment;
HAVE AGREED as follows:
Body
Chapter 1. INITIAL PROVISIONS AND GENERAL DEFINITIONS
Section A. Initial Provisions
Article 1.1. Establishment of a Free Trade Area
The Parties to this Agreement, consistent with Article XXIV of the GATT 1994 and Article V of the GATS, hereby establish a free trade area.
Article 1.2. Relation to other Agreements
1. The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which they are party.
2. In the event of any inconsistency between this Agreement and the agreements referred to in paragraph 1, this Agreement prevails to the extent of the inconsistency, except as otherwise provided in this Agreement.
3. In the event of any inconsistency between this Agreement and the TRIPS Agreement, the TRIPS Agreement prevails to the extent of the inconsistency. (1)
4. In the event of an inconsistency between an obligation of a Party under this Agreement and an obligation of that Party under a multilateral environmental agreement to which both Parties are party, the latter obligation prevails to the extent of the inconsistency, provided that the measure taken is not applied in a manner that would constitute, when the same conditions prevail, arbitrary or unjustifiable discrimination, or a disguised restriction on international trade.
5. The WTO Agreement exclusively governs the rights and obligations of the Parties regarding subsidies and the application of anti-dumping, countervailing, and global safeguard measures, including the settlement of any disputes in respect thereof.
Article 1.3. Reference to other Agreements
Except as otherwise provided, when this Agreement refers to or incorporates by reference other agreements or legal instruments in whole or in part, those references include:
(a) related annexes, protocols, footnotes, interpretative notes, and explanatory notes; and
(b) successor agreements to which the Parties are party or amendments that are binding on the Parties, except where the reference affirms existing rights.
Article 1.4. Reference to Laws
When this Agreement refers to laws, either generally or by reference to a specific statute or regulation, the reference is to the laws, as they may be amended, unless otherwise indicated.
Article 1.5. Extent of Obligations
Except as otherwise provided in this Agreement, each Party is fully responsible for the observance of all provisions of this Agreement and shall take reasonable measures as may be available to it to ensure observance of the provisions of this Agreement by governments and authorities other than the central level of government within its territory.
Article 1.6. Delegated Authority
Each Party shall ensure that any person that has been delegated regulatory, administrative or other governmental authority by a Party, (2) including a state-owned enterprise, state enterprise, or designated monopoly, act in accordance with the Party’s obligations as set out under this Agreement in the exercise of that authority.
Section B. General Definitions
Article 1.7. General Definitions
For the purposes of this Agreement, unless otherwise specified:
confidential information means confidential business information or information that is privileged or otherwise protected from disclosure under the law of a Party; (3)
customs administration means the competent authority that is responsible under the law of a Party for the administration of customs laws and regulations;
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, set out in Annex 1A to the WTO Agreement;
days means calendar days, including weekends and holidays;
enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, or similar organization;
existing means in effect on the date of entry into force of this Agreement;
GATS means the General Agreement on Trade in Services, set out in Annex 1B to the WTO Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, set out in Annex 1A to the WTO Agreement;
good means any merchandise, product, article or material;
Harmonized System (“HS”) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, Chapter Notes, and Subheading Notes as adopted and implemented by the Parties in their respective laws;
heading means the first four digits in the tariff classification number under the Harmonized System;
Joint Committee means the Joint Committee established under Article 26.1 (Administrative and Institutional Provisions – Establishment of the Joint Committee);
measure includes a law, regulation, procedure, requirement, or practice;
originating means qualifying as originating under the rules of origin set out in Chapter 3 (Rules of Origin);
person means a natural person or an enterprise;
person of a Party means a national of a Party or an enterprise of a Party;
Safeguards Agreement means the Agreement on Safeguards, set out in Annex 1A to the WTO Agreement;
state enterprise means an enterprise owned, or controlled through ownership interests, by a Party;
subheading means the first six digits in the tariff classification number under the Harmonized System;
territory means, for a Party, the territory of that Party as set out in Article 1.8;
Trade Facilitation Agreement means the Agreement on Trade Facilitation, set out in Annex 1A to the WTO Agreement;
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, set out in Annex 1C to the WTO Agreement;
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.
Article 1.8. Country-Specific Definitions
For purposes of this Agreement, unless otherwise specified:
central level of government means:
(a) for Canada, the Government of Canada; and
(b) for Ecuador, the Government of Ecuador.
Indigenous Peoples means:
(a) for Canada, Aboriginal peoples (including First Nations, Inuit, and Métis peoples) as defined in subsection 35(2) of the Constitution Act, 1982 of Canada;
(b) for Ecuador, Indigenous communities, peoples and nations, the Afro-Ecuadorian people, the Montubio people and the communes as stated in article 56 of the Constitución de la República del Ecuador, 2008 (Constitution of the Republic of Ecuador, 2008).
national means a natural person who is:
(a) for Canada, a Canadian citizen or permanent resident under Canadian law;
(b) For Ecuador, Ecuadorians by birth or naturalization, in accordance with the Constitution of Ecuador.
regional level of government means:
(a) for Canada, a province or territory of Canada; and
(b) for Ecuador, provincial governments, or two or more contiguous provinces according to the procedure established in the Constitution of Ecuador and the law.
territory means:
(a) with respect to Canada,
(i) the land territory, internal waters, and territorial sea of Canada, as well as the airspace above those areas;
(ii) the exclusive economic zone of Canada; and
(iii) the continental shelf of Canada,
as determined by its domestic law and consistent with international law.
(b) with respect to Ecuador,
(i) the mainland, internal waters, islands adjacent, territorial sea as well as the airspace above those areas;
(ii) the archipelago of the Galapagos Islands, as well as the airspace above those islands; and
(iii) the exclusive economic zone, and the continental shelf, over which it may exercise sovereign rights or jurisdiction,
as determined by its domestic law and consistent with international law.
Chapter 2. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Section A. Definitions and Scope
Article 2.1. Definitions
For the purposes of this Chapter:
Agreement on Agriculture means the Agreement on Agriculture, set out in Annex 1A to the WTO Agreement;
AD Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, set out in Annex 1A to the WTO Agreement;
Andean Price Band System (“APBS”) means the price band system established in accordance with Decision 371 of the Andean Community Commission, adopted on 26 November 1994, and its modifications or any successor to that system;
consular transaction means a requirement to obtain from a consul of the importing Party in the territory of the exporting Party, or in the territory of a non-party, a consular invoice or a consular visa for a commercial invoice, certificate of origin, manifest, shippers’ export declaration, or any other customs documentation required on or in connection with the importation of the good;
consumed means:
(a) actually consumed; or
(b) further processed or manufactured so as to result in a substantial change in the value, form or use of the good, or in the production of another good;
customs duty means a duty or a charge of any kind imposed on or in connection with the importation of a good, including any form of surtax or surcharge imposed on or in connection with that importation, but does not include:
(a) a charge equivalent to an internal tax imposed consistently with Article III:2 of the GATT 1994;
(b) an anti-dumping or countervailing measure applied in accordance with Article VI of the GATT 1994, the SCM Agreement, or the AD Agreement; or
(c) a fee or other charge imposed in connection with the importation commensurate with the cost of services rendered;
duty-free means free of customs duty;
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;
good means any merchandise, product, article or material;
goods of a Party means domestic products as these are understood in the GATT 1994 or any other goods as the Parties may decide, and includes originating goods of a Party;
import licensing 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 as a prior condition for importation into the territory of the importing Party;
Import Licensing Agreement means the Agreement on Import Licensing Procedures, set out in Annex 1A to the WTO Agreement;
performance requirement means a requirement that:
(a) a given level or percentage of goods or services be exported;
(b) domestic goods or services of the Party granting a waiver of customs duties or an import licence be substituted for imported goods or services;
(c) a person benefiting from a waiver of customs duties or a requirement for an import licence purchase other goods or services in the territory of the Party that grants the waiver of customs duties or the import licence, or accords a preference to domestically produced goods or services;
(d) a person benefiting from a waiver of customs duties or a requirement for an import licence produce goods or supply services in the territory of the Party that grants the waiver of customs duties or the import licence, with a given level or percentage of domestic content; or
(e) relates in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows,
but does not include a requirement that an imported good be:
(f) subsequently exported;
(g) used as a material in the production of another good that is subsequently exported;
(h) substituted by an identical or similar good used as a material in the production of another good that is subsequently exported; or
(i) substituted by an identical or similar good that is subsequently exported; and
SCM Agreement means the Agreement on Subsidies and Countervailing Measures, set out in Annex 1A to the WTO Agreement.
Article 2.2. Scope
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods of a Party.
Section B. National Treatment and Market Access for Goods
Article 2.3. National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, and to this end, Article III of the GATT 1994 is incorporated into and made part of this Agreement.
2. For greater certainty, the treatment to be accorded by a Party under paragraph 1 means, with respect to a regional level of government, treatment no less favourable than the most favourable treatment that the regional level of government accords to any like, directly competitive or substitutable goods, as the case may be, of the Party of which it forms a part.