Title
FREE TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE KINGDOM OF CAMBODIA
Preamble
PREAMBLE The Governments of the People's Republic of China ("China") and the Kingdom of Cambodia ("Cambodia"), hereinafter referred to collectively as "the Parties":
Inspired by their longstanding friendship and growing bilateral economic relationship since the establishment of diplomatic relations in 1958;
Desiring to strengthen their economic partnership and further liberalise bilateral trade and promote investment to bring economic and social benefits;
Resolved to establish transparent and predictable rules governing the trade and investment between the Parties;
Committed to carrying out comprehensive pragmatic cooperation under the Belt and Road Initiative and jointly forging a community of shared future;
Building on their rights and obligations under the Marrakesh Agreement Establishing the World Trade Organisation;
Upholding the rights of their governments to regulate in order to meet national policy objectives, and to preserve their flexibility to safeguard the public welfare;
Recognising that the strengthening of their economic partnership through a Free Trade Agreement will produce mutual benefits for the Parties;
Have agreed as follows:
Body
Chapter 1. INITIAL PROVISIONS AND DEFINITIONS
Article 1.1. Establishment of a Free Trade Area
The Parties, consistent with Article XXIV of GATT 1994 and Article V of GATS, hereby establish a free trade area.
Article 1.2. Relation to other Agreements
The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other existing agreements to which both Parties are party.
Article 1.3. Scope and Coverage
1. For China, this Agreement shall apply to the entire customs territory of the People's Republic of China, including land territory, territorial airspace, internal waters, territorial sea, and areas beyond the territorial sea within which China exercises sovereign rights or jurisdiction under its domestic laws, in accordance with international law.
2. For Cambodia, this Agreement shall apply to the territory of the Kingdom of Cambodia, as well as those maritime areas, including the seabed and subsoil adjacent to the outer limits of the territorial sea and airspace over which the Kingdom of Cambodia exercises, in accordance with international law, sovereign rights or jurisdiction.
3. Each Party is fully responsible for the observance of all provisions of this Agreement and shall take such reasonable measures as may be available to it to ensure their observance by local governments and authorities in its territory.
Article 1.4. General Definitions
For the purposes of this Agreement, unless otherwise specified:
(a) days means calendar days;
(b) existing means in effect on the date of entry into force of this Agreement;
(c) GATS means the General Agreement on Trade in Services, contained in Annex 1B to the WTO Agreement;
(d) GATT 1994 means the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
(e) measure means any law, regulation, procedure, requirement, practice, in any other form.
(f) Person means either a natural person or a judicial person. (g) WTO means the World Trade Organisation; and
(h) WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organisation, done at Marrakesh on 15 April 1994.
Chapter 2. TRADE IN GOODS
Article 2.1. Scope
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods between the Parties.
Article 2.2. Definition
For the purposes of this Chapter, unless otherwise specified:
base rate of customs duty means the most-favoured-nation (MFN) import customs duty rate applied on 1 January 2017 provided by each Party.
customs duty includes any duty or charge of any kind imposed in connection with the importation of a good, but does not include:
(a) any charge equivalent to an internal tax imposed consistently with Article IIL.2 of GATT 1994;
(b) any anti-dumping or countervailing duty applied consistently with the provisions of Article VI of GATT 1994, the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, or the WTO Agreement on Subsidies and Countervailing Measures, and any duty applied consistently with Article 2.8 (Global Safeguard Measures);
(c) any fee or other charge in connection with importation commensurate with the cost of services rendered; goods and products shall be understood to have the same meaning, unless the context otherwise requires;
originating means qualifying under the rules of origin set out in Chapter 3 (Rules of Origin);
Article 2.3. National Treatment
Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, including its interpretative notes. To this end, Article I of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.4. Reduction and/or Elimination of Customs Duties
1. Except as otherwise provided in this Agreement, each Party shall, upon entry into force of this Agreement, reduce and/or eliminate its customs duties on originating goods of the other Party in accordance with its schedule in Annex 1 (Schedule of Tariff Commitments).
2. Except as otherwise provided in this Agreement, neither Party may increase any existing import customs duty, or adopt any new customs duty, on an originating good of the other Party.
3. For each product the base rate of customs duties, to which the successive reductions set out in Annex 1 (Schedule of Tariff Commitments) are to be applied, shall be the most-favoured nation customs duty rate applied on 1 January 2017.
4. If a Party reduces its applied most-favoured-nation (hereinafter referred to as "MFN") customs duty rate after the entry into force of this Agreement, that duty rate shall apply as regards trade covered by this Agreement if and for as long as it is lower than the customs duty rate calculated in accordance with its Schedule to Annex 1 (Schedule of Tariff Commitments).
Article 2.5. Acceleration of Tariff Commitments
1. At the request of either Party, the Parties shall consult to consider accelerating the reduction and elimination of customs duties on originating goods as set out in their Schedules in Annex 1 (Schedule of Tariff Commitments).
2. An agreement by the Parties to accelerate the reduction and elimination of customs duties on originating goods shall supersede any duty rate determined pursuant to their Schedules for such good and shall enter into force following approval by each Party in accordance with their respective applicable legal procedures.
3. A Party may at any time accelerate unilaterally the reduction and elimination of customs duties on originating goods of the other Party set out in its Schedule in Annex 1 (Schedule of Tariff Commitments). A Party considering doing so shall inform the other Party as early as practicable before the new rate of customs duty takes effect.
Article 2.6. Quantitative Restriction and Non-tariff Measures
1. Unless otherwise provided in this Agreement, neither Party shall adopt or maintain any prohibition or restriction or measure having equivalent effect, including quantitative restrictions, on the importation of a good originating in the territory of the other Party, or on the exportation or sale for export of a good destined for the territory of the other Party except in accordance with WTO rights and obligations. To this end, Article XI of GATT 1994 is incorporated into and made part of this Agreement, mutatis mutandis.
2. A Party shall not adopt or maintain any non-tariff measures on the importation of any good of the other Party or on the exportation of any good destined for the territory of the other Party, except in accordance with its rights and obligations under the WTO Agreement or this Agreement.
3. Each Party shall ensure the transparency of its non-tariff measures permitted in paragraph 2 and shall ensure that any such measures are not prepared, adopted or applied with a view to, or with the effect of, creating unnecessary obstacles to trade between the Parties.
Article 2.7. Import Licensing Procedures
Each Party shall ensure that import licensing regimes applied to goods originating in the other Party are applied in accordance with the WTO Agreement, and in particular, with the provisions of the Agreement on Import Licensing Procedures.
Article 2.8. Global Safeguard Measures
Each Party retains its rights and obligations under Article XIX of GATT 1994 and the Safeguards Agreement.
Article 2.9. Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with Article VIIL1 of GATT 1994 and its interpretative notes, that all fees and charges of whatever character (other than customs duties, charges equivalent to an internal tax or other internal charge applied consistently with Article 1.2 of GATT 1994, and anti-dumping and countervailing duties) imposed on or in connection with importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation on imports or exports for fiscal purposes.
2. Each Party shall make available through the Internet or a comparable computer-based telecommunications network a current list of the fees and charges it imposes in connection with importation or exportation.
Article 2.10. Trade Promotion
1. The Parties shall intensify cooperation to promote bilateral trade by taking into account the importance of ensuring safe and reliable supplies, expanding mutual benefits, and narrowing development gap, in helping to alleviate poverty and supporting to advance social and economic development in their territories.
2. To further promote bilateral trade, the Parties shall provide good policy environment and work on an arrangement to expand commercial opportunity of market access for products under partial reduction and exclusion categories of each Party. The Parties shall encourage the industries and businesses to engage in communication exchange and cooperation in trade in goods.
Article 2.11. Exceptions
With respect to general and security exceptions, Articles XX and XXI of the GATT 1994 shall apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.12. Contact Points
Each Party shall designate one or more contact points to facilitate communications between the Parties on any matter covered by this Chapter, and shall provide details of such contact points to the other Party. The Parties shall notify each other promptly of any amendments to the details of their contact points.
Chapter 3. RULES OF ORIGIN
Section A.
Article 3.1. Definitions
For the purposes of this Chapter:
(a) aquaculture means the farming of aquatic organisms, including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants, from seedstock such as eggs, fry, fingerlings and larvae, by intervention in the rearing or growth processes to enhance production, such as regular stocking, feeding, protection from predators, etc.;
(b) Costs, Insurance and Freight (CIF) means the value of the good imported, and includes the costs of freight and insurance up to the port or place of entry into the country of importation. The valuation shall be determined in accordance with the Customs Valuation Agreement;
(c) Free-on-board (FOB) means the free-on-board value of the good, inclusive of the costs of transport to the port or site of final shipment abroad. The valuation shall be determined in accordance with the Customs Valuation Agreement;
(d) Generally Accepted Accounting Principles (GAAP) means the accounting standards, recognised consensus or substantial authoritative support of a Party, with respect to the recording of revenues, expenses, costs, assets and liabilities; the disclosure of information; and the preparation of financial statements. These standards may encompass broad guidelines of general application as well as detailed standards, practices and procedures;
(e) good means any merchandise, product, article, or material;
(f) identical and interchangeable materials means materials being of the same kind which are fungible for commercial purposes, whose properties are essentially identical, and between which it is impractical to differentiate by a mere visual examination;
(g) material means any matter or substance used in the production of goods, physically incorporated into a good or subjected to a process in the production of another good;
(h) originating material or originating good means a material or good which qualifies as originating in accordance with the provisions of this Chapter;
(i) packing materials and containers for transportation means the materials and containers used to protect a good during its transportation, different from those materials and containers used for its retail sale;
(j) production means methods of obtaining goods, including growing, raising, mining, harvesting, fishing, aquaculture, farming, trapping, hunting, capturing, gathering, collecting, breeding, extracting, manufacturing, producing, processing, assembling a good, etc.;
(k) Product Specific Rules means rules that specify that the materials have undergone a change in tariff classification or a specific manufacturing or processing operation, or satisfy a Regional Value Content criterion or a combination of any of these criteria;
(l) Harmonised System means the Harmonised Commodity Description and Coding System of the World Customs Organisation;
(m) neutral element means a good used in the production, testing or inspection of another good but not physically incorporated into the good by itself;
(n) Customs Valuation Agreement means the Agreement on the Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, which is a part of the Marrakesh Agreement Establishing the World Trade Organisation;
(o) non-originating good or non-originating material means a good or material that does not qualify as originating under this Chapter or a good or material of undetermined origin;
Article 3.2. Originating Goods
For the purposes of this Chapter, a good shall be treated as an originating good and eligible for preferential tariff treatment if it is either:
(a) wholly produced or obtained in a Party as provided in Article 3.3 (Goods Wholly Produced or Obtained) of this Chapter;
(b) produced in a Party exclusively from originating materials;
(c) produced from non-originating materials in a Party, provided that the good has satisfied the requirements of Article 3.4 (Goods Not Wholly Produced or Obtained) of this Chapter
and meets all other applicable requirements of this Chapter.
Article 3.3. Goods Wholly Produced or Obtained
For the purposes of Article 3.2 (a), the following goods shall be considered as wholly produced or obtained:
(a) plants and plant products (including fruits, flowers, vegetables, trees, seaweed, fungi and live plants) grown, harvested, picked, or gathered in a Party;
(b) live animals born and raised in a Party;
(c) goods obtained from live animals in a Party without further processing, including milk, eggs, natural honey, hair, wool, semen and dung;
(d) goods obtained from hunting, trapping, fishing, aquaculture, gathering, or capturing in a Party;
(e) minerals and other naturally occurring substances extracted or taken from the soil, waters, seabed or beneath the seabed in a Party;
(f) goods taken from the waters, seabed or beneath the seabed outside the territorial waters of that Party, provided that that Party has the rights to exploit such waters, seabed and beneath the seabed in accordance with international law;
(g) goods of sea fishing and other marine products taken from the high seas by vessels registered with a Party or entitled to fly the flag of that Party;
(h) goods processed and/or made on board factory ships registered with a Party or entitled to fly the flag of that Party, exclusively from products referred to in patagraph (g) above;
(i) waste and scrap derived from production process or from consumption in a Party provided that such goods are fit only for the recovery of raw materials; or
(j) used goods consumed and collected in a Party provided that such goods are fit only for the recovery of raw materials; and
(k) goods produced or obtained in a Party exclusively from products referred to in subparagraphs (a) to (j) or from derivatives of the goods produced or obtained in the Party exclusively from products referred to in subparagraphs (a) to (j).
Article 3.4. Goods Not Wholly Produced or Obtained
1. For the purposes of Article 3.2 (c) of this Chapter, except for those goods covered under paragraph 2, a good shall be treated as an originating good:
(a) if the good has a regional value content of not less than 40 per cent of FOB calculated using the formula as described in Article 3.5 (Calculation of Regional Value Content) of this Chapter, and the final process of production is performed within a Party; or
(b) for the purpose of goods classified in Chapters 25, 26, 28, 29 (1), 31 (2), 39 (3), 42-49, 57-59, 61, 62, 64, 66-71, 73-83, 86, 88, 91-97 of the Harmonised System if all non-originating materials used in the production of the goods have undergone a change in tariff classification (hereinafter referred to as "CTC") at the four-digit level, which is a change in tariff heading, of the Harmonised System.
2. In accordance with paragraph 1, and unless otherwise provided for in the Product Specific Rules as specified in Annex 2 (Product Specific Rules of Origin), a good shall be treated as an originating good if it meets a regional value content of not less than 40 per cent or those criteria in the Product Specific Rules.
Article 3.5. Calculation of Regional Value Content
1. The Regional Value Content (RVC) shall be calculated as follows:
RVC = FOB-VNM/FOB x 100%
where:
RVC is the regional value content, expressed as a percentage;
VNM is the value of the non-originating materials.
2. VNM shall be determined according to the following circumstances:
(a) in case of the imported non-originating materials, VNM shall be the CIF value of the materials at the time of importation;
(b) in case of the non-originating materials obtained in a Party, VNM shall be the earliest ascertainable price paid or payable for the non-originating materials in that Party. The value of such non-originating materials shall not include freight, insurance, packing costs and any other costs incurred in transporting the material from the supplier's warehouse to the producer's location.
3. If a product which has acquired originating status in accordance with paragraph 1 in a Party is further processed in that Party and used as material in the manufacture of another product, no account shall be taken of the non-originating components of that material in the determination of the originating status of the product.
4. The valuation shall be determined in accordance with the Customs Valuation Agreement.
Article 3.6. Accumulation
Unless otherwise provided in this Chapter, goods originating in a Party, which are used in another Party as materials for finished goods eligible for preferential tariff treatment, shall be treated as originating in the latter Party where working or processing of the finished goods has taken place.
Article 3.7. Minimal Operations and Processes
Notwithstanding any provisions of this Chapter, the following operations when undertaken on non-originating materials to produce a good shall be considered as insufficient working or processing to confer on that good the status of an originating good:
(a) preserving operations to ensure that the good remains in good condition for the purposes of transport or storage;
(b) packaging or presenting goods for transportation or sale;
(c) simple (4) processes, consisting of sifting, screening, sorting, classifying, sharpening, cutting, slitting, grinding, bending, coiling, or uncoiling;
(d) affixing or printing of marks, labels, logos, or other like distinguishing signs on goods or their packaging;
(e) mere dilution with water or another substance that does not materially alter the characteristics of the good;
(f) disassembly of products into parts;
(g) slaughtering (5) of animals;
(h) simple painting and polishing operations;
(i) simple peeling, stoning, or shelling;
(j) simple mixing of goods, whether or not of different kinds; or
(k) any combination of two or more operations referred to in subparagraphs (a) through (j).
Article 3.8. Direct Consignment
1. Preferential tariff treatment shall be applied to goods satisfying the requirements of this Chapter and which are consigned directly between the exporting Party and the importing Party.
2. The following shall be considered as consigned directly from the exporting Party to the importing Party:
(a) goods transported directly from an exporting Party to the importing Party; or
(b) goods transported through one or more non-Parties, provided that: