Title
CHILE - PANAMA FREE TRADE AGREEMENT
Preamble
The Government of the Republic of Chile and the Government of the Republic of Panama, (hereinafter "the Parties") resolved to:
STRENGTHEN the special ties of friendship and cooperation between their nations;
CONTRIBUTE to harmonious development, the expansion of world trade and the enhancement of international cooperation;
CREATE a larger and more secure market for goods, services and investment in their respective territories;
AVOID distortions in their reciprocal trade;
ESTABLISH clear and mutually beneficial rules for their trade;
ENSURE a predictable business framework for business and investment planning;
DEVELOP their respective rights and obligations arising from the Marrakesh Agreement establishing the World Trade Organisation, as well as other multilateral and bilateral cooperation instruments;
STRENGTHEN the competitiveness of their companies in global markets;
CREATE new employment opportunities and improve working conditions and living standards in their respective territories;
DEVELOP their respective international commitments and strengthen their cooperation on labour issues;
PROTECT, strengthen and enforce the fundamental rights of its workers;
IMPLEMENT this Treaty in a manner consistent with the protection and conservation of the environment;
PROMOTE economic development in a manner consistent with environmental protection and conservation, as well as sustainable development;
CONSERVE, protect and enhance the environment, including through the management of natural resources in their respective territories and through multilateral environmental agreements to which they are both party;
CONSERVE its flexibility to safeguard the public welfare; and
CONTRIBUTE to hemispheric integration;
HAVE AGREED as follows:
Body
Chapter 1. INITIAL PROVISIONS
Article 1.1. Establishment of a Free Trade Area
The Parties to this Agreement, in accordance with Article XXIV of the General Agreement on Tariffs and Trade 1994 and Article V of the General Agreement on Trade in Services, establish a free trade area.
Article 1.2. Objectives
1, The objectives of this Treaty, developed more specifically through its principles and tules, including those of national treatment, most favoured nation (MFN) treatment and transparency, are as follows:
(a) encourage the expansion and diversification of trade between the Parties;
(b) eliminate barriers to trade and facilitate the cross-border movement of goods and services between the Parties;
(c) promote conditions of fair competition in the free trade area;
(d) substantially increase investment opportunities in the territories of the Parties; and
(e) create effective procedures for the implementation and enforcement of this Agreement, for its joint administration, and for preventing and resolving disputes.
2. The Parties shall interpret and apply the provisions of this Agreement in the light of the objectives set out in paragraph 1 and in accordance with the applicable rules of international law.
Article 1.3. Relationship to other International Agreements
The Parties confirm the rights and obligations existing between them under the WTO Agreement and other international agreements to which both Parties are parties.
Article 1.4. Scope of Obligations
The Parties shall ensure that all necessary measures are taken to give effect to the provisions of this Agreement within their territory and at all levels of government, except as otherwise provided in this Agreement.
Article 1.5. Succession of Treaties
Any reference to any other international agreement shall be understood to be made on the same terms as to a successor agreement to which the Parties are parties.
Chapter 2. GENERAL DEFINITIONS
Article 2.1. Definitions of General Application
For the purposes of this Agreement and unless otherwise specified:
Customs Valuation Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, which forms part of the WTO Agreement;
WTO Agreement means the Marrakesh Agreement establishing the World Trade Organisation, dated 15 April 1994;
Agreement on Safeguards means the Agreement on Safeguards, which is part of the WTO Agreement;
SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, which is part of the WTO Agreement;
TBT Agreement means the Agreement on Technical Barriers to Trade, which is part of the WTO Agreement;
GATS stands for the General Agreement on Trade in Services, which is part of the WTO Agreement;
Customs duty includes any import duties or taxes and any charges of any kind imposed in connection with the importation of a good, including any form of surcharge or additional charge in connection with such importation, but does not include any:
(a) charge equivalent to an internal tax applied in accordance with Article III:2 of the GATT 1994, with respect to like, directly competitive or substitute goods of the Party, or with respect to goods from which the imported good is wholly or partly manufactured or produced;
(b) anti-dumping or countervailing duty; and
(c) duty or other charge related to importation, proportionate to the cost of the services rendered;
customs authority means the competent authority which, in accordance with a Party's legislation, is responsible for the administration of customs laws and regulations;
Commission means the Free Trade Commission established pursuant to Article 12.1 (Free Trade Commission);
days means calendar days or calendar days; enterprise means any entity incorporated or organised under applicable law, whether or not for profit and whether privately or governmentally owned, including any partnership, trust, joint venture, sole proprietorship, joint venture or other association;
enterprise of a Party means an enterprise incorporated or organised under the laws of a Party;
State enterprise means an enterprise owned or controlled by a Party through ownership rights;
existing means in force on the date of entry into force of this Agreement;
GATT 1994 stands for the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
central level government means national level government;
measure includes any law, regulation, procedure, requirement or practice;
goods of a Party means domestic products as understood in the GATT 1994 or such other goods as the Parties may agree, and includes goods originating in that Party. A good of a Party may include materials from other countries;
national means a natural person who is a national of a Party in accordance with Annex 2.1 (Country-Specific Definitions) or a permanent resident of a Party;
WTO stands for the World Trade Organisation;
originating means qualifying in accordance with the rules of origin set out in Chapter 4 (Rules of Origin and Origin Procedures);
item means the first four digits of the Harmonised System (HS) tariff classification number;
person means a natural person or a company; person of a Party means a national or company of a Party;
Harmonised System (HS) means the Harmonised Commodity Description and Coding System, including its general rules of interpretation, section notes and chapter notes, as adopted and implemented by the Parties in their respective customs tariff laws;
subheading means the first six digits of the Harmonised System (HS) tariff classification number;
preferential tariff treatment means the tariff rate applicable to an originating good, in accordance with the Parties' respective tariff elimination schedules set out in Annex 3.3 (Tariff Elimination); and
territory means the land, sea and air space under the sovereignty of a Party and the exclusive economic zone and continental shelf over which it exercises sovereign rights and jurisdiction in accordance with international law and its domestic law.
Annex 2.1. COUNTRY-SPECIFIC DEFINITION
For the purposes of this Agreement, unless otherwise specified: natural person who has the nationality of a Party means:
(a) with respect to Chile, a Chilean as defined in the Political Constitution of the Republic of Chile; and
(b) with respect to Panama:
(i) Panamanians by birth, according to Article 9 of the Political Constitution of the Republic of Panama,
(ii) Panamanians by naturalisation, according to Article 10 of the Political Constitution of the Republic of Panama,
(iii) Panamanians by adoption, according to Article 11 of the Political Constitution of the Republic of Panama, and
(iv) a person who, in accordance with Panamanian law, has the status of permanent or definitive resident.
Chapter 3. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Article 3.1. Scope of Application
Except as otherwise provided, this Chapter applies to trade in goods between the Parties.
Section A. National Treatment
Article 3.2. National Treatment
1. Each Party shall accord national treatment to goods of the other Party in accordance with Article III of the GATT 1994, including its interpretative notes, and to that end Article Ill of the GATT 1994 and its interpretative notes are hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. Paragraph 1 shall not apply to the measures set out in Annex 3.2 (National Treatment and Import and Export Restrictions).
Section B. Tariff Elimination
Article 3.3. Tariff Elimination
1. Except as otherwise provided in this Agreement, no Party may increase any existing customs duty, or adopt any new customs duty, on an originating good.
2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods as set out in Annex 3.3 (Tariff Elimination).
3. At the request of a Party, the Parties shall consult to examine the possibility of accelerating the elimination of customs duties set out in their Schedules to Annex 3.3 (Tariff Elimination). When the Parties adopt an agreement on the elimination of tariffs, they shall tariff rate for a good, that agreement shall prevail over any tariff rate or staging category determined in their Schedules to Annex 3.3 (Tariff Elimination) for that good, when approved by the Parties in accordance with Article 12.1.3(b) (Free Trade Commission), and in accordance with their applicable legal procedures.
4. For greater certainty, a Party may:
(a) increase a customs tariff to the level set out in its Schedules to the Annex 3.3 (Tariff elimination), where that customs tariff has been unilaterally reduced; or
(b) maintain or increase the customs tariff when authorised by the WTO Dispute Settlement Body.
5. If a Party reduces the most-favoured-nation (MFN) duty rate after the entry into force of this Agreement and before the end of the transitional period, that Party's Tariff Elimination Schedule in Annex 3.3 (Tariff Elimination) shall be adjusted so as to maintain the implied preferences originally negotiated.
Section C. Special Schemes
Article 3.4. Exemption from Customs Duties
1. No Party may adopt a new exemption from customs duties, or extend an existing exemption with respect to existing beneficiaries, or extend it to new beneficiaries, where the exemption is conditioned, explicitly or implicitly, on the fulfilment of a performance requirement.
2. No Party may condition, explicitly or implicitly, the continuation of any existing customs duty exemption on the fulfilment of a performance requirement.
3. Parties may maintain measures inconsistent with paragraphs 1 and 2, if such measures are in conformity with Article 27.4 of the Subsidies Agreement.
Article 3.5. Temporary Admission of Goods
1. Each Party shall authorise temporary admission free of duty for the following goods, irrespective of their origin:
(a) professional equipment, including press and television equipment, computer software, and broadcasting and cinematographic equipment, necessary for the conduct of the business, trade or profession of the business person who is entitled to temporary entry under the legislation of the importing Party;
(b) goods for exhibition or demonstration; (c) commercial samples, advertising films and recordings; and (d) goods admitted for sporting purposes.
2. Each Party shall, upon application by the person concerned and for reasons deemed valid by its customs authority, extend the period for temporary entry beyond the period initially fixed.
3. The Parties may not subject the temporary duty-free admission of the goods referred to in paragraph 1 to conditions other than the following:
(a) the goods are used only by the resident or national of the other Party or under the personal supervision of a national or resident of the other Party in the exercise of that person's commercial, professional or sporting activity;
(b) the goods are not sold or leased while they remain in its territory;
(c) the goods are accompanied by a security not exceeding the charges that would otherwise be due for entry or final importation, refundable on departure of the goods;
(d) the goods are susceptible to identification on exit;
(e) leave the territory of the Party upon the departure of the person referred to in subparagraph (a) or within such other period corresponding to the purpose of the temporary admission as the Party may establish, or within the period of one year, unless extended;
(f) the goods are admitted in quantities no greater than is reasonable for their intended use; and
(g) the good is otherwise admissible in the territory of the Party under its legislation.
4. If any of the conditions imposed by a Party under paragraph 3 have not been met, the Party may apply the customs duty and any other charges that would normally be payable for the goods, in addition to any charges or penalties established in accordance with its internal legislation.
5. Each Party, through its customs authority, shall adopt procedures that provide for the expeditious release of goods admitted under this Article. To the extent possible, where such goods accompany a national or resident of the other Party seeking temporary entry, the procedures shall allow the goods to be cleared simultaneously with the entry of that person.
6. Each Party shall allow goods temporarily admitted to leave through a customs port other than the port of admission.
7. Each Party, through its customs authority and consistent with its domestic law, shall, upon presentation of evidence satisfactory to the customs authority that the good has been destroyed within the original time limit for temporary entry or any lawful extension, exempt the importer or other person responsible for a good admitted pursuant to this Article from liability for failure to remove the temporarily admitted good.
8. Subject to the provisions of Chapter 10 (Cross-Border Trade in Services):
(a) each Party shall permit containers used in international transport that have entered its territory from the other Party to leave its territory by any route that has a reasonable relationship to the prompt and economical departure of the containers;
(b) no Party may require a bond or impose any penalty or charge solely on the grounds that the port of entry of the container is different from the port of exit;
(c) no Party shall condition the release of any obligation, including a bond that it has applied to the entry of a container into its territory on its departure through a particular port; and
(d) neither Party shall require that the carrier bringing a container into its territory from the territory of the other Party be the same carrier bringing the container into the territory of the other Party.
Article 3.6. Goods Re-imported after Repair or Alteration
1. No Party may apply a customs duty to a good, irrespective of its origin, that is re-imported into its territory after having been temporarily removed from its territory into the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could have been carried out in its territory.
2. Neither Party may apply customs duties to goods which, irrespective of their origin, are temporarily admitted from the territory of the other Party for the purpose of being repaired or altered.
3. For purposes of this Article, repairs or alterations do not include operations or processes that:
(a) destroy the essential characteristics of a good or create a new or commercially different good; or
(b) transform unfinished goods into finished goods.
Article 3.7. Duty-free Importsfor Commercial Samples of Negligible Value and Printed Advertising Materials
Each Party shall allow duty-free importation of commercial samples of negligible value and printed advertising materials imported into the territory of the other Party, without regard to their origin, but may require that:
(a) such samples are imported solely for the purpose of arranging orders for goods or services from the other Party or from another non-Party; or
(b) such printed advertising materials are imported in packages containing not more than one copy of each printed matter, and neither the materials nor the packages are part of a larger consignment.
Section D. Non-Tariff Measures
Article 3.8. Import and Export Restrictions
1. Except as otherwise provided in this Agreement, neither Party may adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except as provided in Article XI of the GATT 1994, including its interpretative notes. For this purpose, Article XI of the GATT 1994 and its interpretative notes are incorporated into and made an integral part of this Agreement, mutatis mutandis.
2. The Parties understand that the rights and obligations of the GATT 1994 embodied in paragraph 1 prohibit, under any circumstances in which another form of restriction is prohibited, a Party from adopting or maintaining:
(a) export and import price requirements, except as permitted in compliance with anti-dumping and countervailing duty orders and obligations;
(b) import licensing on the condition of meeting a performance requirement; or
(c) voluntary export restrictions inconsistent with Article VI of GATT 1994, as applied under Article 18 of the Subsidies Agreement and Article 8.1 of the Anti-Dumping Agreement.
3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 3.2 (National Treatment and Import and Export Restrictions).
Article 3.9. Fees and Administrative Formalities
1. Each Party shall ensure, in accordance with Article VIII:1 of the GATT 1994 and its interpretative notes, that all fees and charges of whatever nature (other than customs duties, charges equivalent to an internal tax or other domestic charges applied in accordance with Article III:2 of the GATT 1994, and anti-dumping and countervailing duties), imposed on or in connection with importation or exportation, are limited to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a tax on imports or exports,
2. The Parties may not require consular transactions, including related fees and charges, in connection with the importation of any goods of the other Party.
3. Each Party shall make available, through the internet or a comparable computer telecommunications network, a current list of its fees and charges imposed in connection with importation or exportation.
Article 3.10. Export Taxes
No Party may adopt or maintain any tariff, tax or other charge on exports of any good to the territory of the other Party, unless such tariff, tax or charge is adopted or maintained on any good for domestic consumption.
Section E. Other Measures
Article 3.11. Geographical Indications
1. The Parties recognise the rights and obligations under the Agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPS). Each Party shall recognise and protect geographical indications and appellations of origin of the other Party, as provided for in this Article and in the laws of the Party where protection is sought.
2. Neither Party shall permit the importation, manufacture or sale of a good that uses a geographical indication or designation of origin protected in the other Party unless it has been produced and certified in the other Party in accordance with its legislation applicable to that good.