Title
Free Trade Agreement Between the Democratic Socialist Republic of Sri Lanka and the Republic of Singapore
Preamble
The Republic of Singapore and the Democratic Socialist Republic of Sri Lanka (hereinafter referred to individually as “Singapore” or “Sri Lanka”, respectively, and collectively as “the Parties”);
RECOGNISING their longstanding and strong partnership and their important economic, trade and investment relationship;
DESIRING to further strengthen and deepen their economic relationship as part of and in a manner coherent with their overall relations, and convinced that this Agreement will create a new enabling climate for the development of trade and investment between the Parties;
DESIRING to raise living standards, promote economic growth and stability, create new employment opportunities and improve the general welfare and, to this end, reaffirming their commitment to promoting trade and investment liberalisation;
CONVINCED that this Agreement will create an expanded and secure market for goods and services and a stable and predictable environment for investment, thus enhancing the competitiveness of their firms in global markets;
RECOGNISING the need to promote and protect bilateral investments, which will be made with the aim of establishing lasting economic relations, contributing to economic development, and fostering the flow of capital and technology between the Parties, and to increase their economic prosperity,
RECOGNISING the importance of transparency and predictability in international trade to the benefit of all stakeholders;
SEEKING to establish clear and mutually advantageous rules governing their trade and investment and to reduce or eliminate the barriers to mutual trade and investment;
RESOLVED to contribute to the harmonious development and expansion of international trade by removing obstacles to trade through this Agreement and to avoid creating new barriers to trade or investment between the Parties that could reduce the benefits of this Agreement;
BUILDING on their respective rights and obligations under the WTO Agreement and other multilateral, regional and bilateral agreements and arrangements to which they are party,
HAVE AGREED as follows:
Body
Chapter 1. OBJECTIVES AND GENERAL DEFINITIONS
Article 1.1. Establishment of a Free Trade Area
The Parties to this Agreement hereby establish a free trade area, consistent with Article XXIV of GATT 1994 and Article V of GATS.
Article 1.2. Objectives
The objectives of this Agreement are to liberalise and facilitate trade and investment between the Parties in accordance with the provisions of this Agreement.
Article 1.3. Definitions of General Application
For the purposes of this Agreement, unless otherwise specified:
(a) “Agreement on Agriculture” means the Agreement on Agriculture contained in Annex 1A of the WTO Agreement;
(b) “Agreement on Government Procurement” means the Agreement of Government Procurement contained in Annex 4 of the WTO Agreement;
(c) “Agreement on Preshipment Inspection” means the Agreement on Preshipment Inspection contained in Annex 1A of the WTO Agreement;
(d) “Anti-Dumping Agreement” means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement;
(e) “Customs Valuation Agreement” means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement;
(f) “day” means a calendar day;
(g) “DSU” means the Understanding on Rules and Procedures Governing the Settlement of Disputes contained in Annex 2 of the WTO Agreement;
(h) “GATS” means the General Agreement on Trade in Services contained in Annex 1B of the WTO Agreement;
(i) “GATT 1994” means the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement;
(j) “Harmonized System” means the Harmonized Commodity Description and Coding System, including all legal notes and amendments thereto (hereinafter referred to as the “HS”);
(k) “IMF” means the International Monetary Fund;
(l) “Import Licensing Agreement” means the Agreement on Import Licencing Procedures contained in Annex 1A of the WTO Agreement;
(m) “measure” means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form, and includes measures taken by:
(i) central, regional or local governments and authorities; and
(ii) non-governmental bodies in the exercise of powers delegated by central regional or local governments or authorities.”
(n) “national” means:
(i) with respect to the Republic of Singapore, any person who is a citizen of Singapore within the meaning of its Constitution and its domestic laws or a permanent resident of Singapore within the meaning of its domestic laws; and
(ii) with respect to Sri Lanka, any person who is a citizen of Sri Lanka within the meaning of its Constitution and its domestic laws.
(o) “natural person of a Party” means a natural person who is a national of a Party. However, a natural person who also possesses nationality of any non-Party shall be deemed to possess exclusively the nationality of the State of his or her dominant and effective nationality. Provided further that a natural person who is considered a national of both Parties shall not be deemed to be a natural person of either Party.
(p) “person” means a natural person or a legal person;
(q) “Safeguards Agreement” means the Agreement on Safeguards contained in Annex 1A of the WTO Agreement;
(r) “SCM Agreement” means the Agreement on Subsidies and Countervailing Measures contained in Annex 1A of the WTO Agreement;
(s) “SPS Agreement” means the Agreement on the Application of Sanitary and Phytosanitary Measures contained in Annex 1A of the WTO Agreement;
(t) “TBT Agreement" means the Agreement on Technical Barriers to Trade contained in Annex 1A of the WTO Agreement;
(u) “territory” means:
(i) with respect to Singapore, the territory of the Republic of Singapore, as well as the territorial sea, including the airspace above them, and any maritime area situated beyond the territorial sea which has been or might in the future be designated under its national law, in accordance with international law, as an area within which Singapore may exercise rights with regards to the sea, the sea-bed, the subsoil and the natural resources;
(ii) with respect to Sri Lanka, the land territory including the territorial sea and the airspace above such territory, and the maritime and submarine areas adjacent to its coast, including the exclusive economic zone and the continental shelf, over which Sri Lanka exercises sovereign rights or jurisdiction under its national law, international law and the United Nations Convention on the Law of the Sea (1982);
(v) “TFA” means the WTO Agreement on Trade Facilitation;
(w) “TRIMs Agreement” means the Agreement on Trade-Related Investment Measures contained in Annex 1A of the WTO Agreement;
(x) “TRIPS Agreement” means the Agreement on Trade-Related Aspects of Intellectual Property Rights contained in Annex 1C of the WTO Agreement;
(y) “WIPO” means the World Intellectual Property Organization;
(z) “WTO Agreement” means the Marrakesh Agreement Establishing the World Trade Organization done at Marrakesh on 15 April 1994;
(aa) “WTO” means the World Trade Organization.
Chapter 2. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Section 2-A. COMMON PROVISIONS
Article 2.1. Objective
The Parties shall progressively liberalise trade in goods over a transitional period starting from the date of the entry into force of this Agreement in accordance with this Agreement and in conformity with Article XXIV of the GATT 1994.
Article 2.2. Scope
This Chapter shall apply to trade in goods between the Parties.
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, including its Notes and Supplementary Provisions. To this end, the obligations contained in Article III of the GATT 1994, including its Notes and Supplementary Provisions, are incorporated into and made part of this Agreement, mutatis mutandis.
2 For greater certainty, the treatment to be accorded by a Party under paragraph 1 of this Article means, with respect to a regional level of government, treatment no less favourable than the most favourable treatment that 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.
Article 2.4. Customs Duty
1. For the purposes of this Chapter, a customs duty includes any duty or charge of any kind imposed on or in connection with the importation or exportation of a good, including any form of surtax or surcharge imposed on or in connection with such importation or exportation, but excluding that as set out in paragraph 2 of this Article.
2. A “customs duty” does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article 2.3 (National Treatment);
(b) duty imposed consistently with Chapter 3 (Trade Remedies);
(c) duty applied consistently with Article 5 of the Agreement on Agriculture and the DSU;
(d) fee or other charge imposed consistently with Article 2.13 (Fees and Formalities Connected with Importation and Exportation).
Article 2.5. Classification of Goods
The classification of goods in trade between the Parties shall be governed by each Party’s respective tariff nomenclature in conformity with the HS and its amendments.
Section 2-B. REDUCTION AND/OR ELIMINATION OF CUSTOMS DUTIES
Article 2.6. Reduction and/or Elimination of Customs Duties on Imports
1. Each Party shall reduce and/or eliminate its customs duties on imported goods originating in the other Party in accordance with the Schedules in Annex 2-A (Elimination of Customs Duties). For the purposes of this Chapter, “originating” means in accordance with the rules of origin set out in Protocol 1 (Concerning the Definition of the Concept of “Originating Product” and Methods of Administrative Co-operation).
2. The base rate of customs duties on imports to which the successive reductions are to be applied under paragraph 1 of this Article, shall be that specified in the Schedules in Annex 2-A (Elimination of Customs Duties).
3. If at any moment a Party reduces its applied most favoured nation (“MFN”) customs duty rates on imports after the date of the entry into force of this Agreement, that duty rate shall apply if and for as long as it is lower than the customs duty rate on imports calculated in accordance with its Schedule in Annex 2-A (Elimination of Customs Duties).
4. Three years after the date of the entry into force of this Agreement, or at the request of either Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in the Schedules in Annex 2-A (Elimination of Customs Duties).
5. An agreement between the Parties to accelerate the elimination of a customs duty on an originating good shall supersede any duty rate or staging category determined pursuant to their respective Schedules in Annex 2-A (Elimination of Customs Duties) for that good.
6. A Party may at any time unilaterally accelerate the elimination of customs duties on originating goods set out in its Schedule in Annex 2-A (Elimination of Customs Duties).
Article 2.7. Elimination of Customs Duties and Taxes on Exports
A Party shall not impose customs duties or taxes on or in connection with the exportation or sale for export of goods to the other Party at a rate higher than those imposed on or in connection with the exportation or sale for export of like goods to any non-Party.
Article 2.8. Goods Re-Entered after Repair or Alteration
1. A Party shall not apply a customs duty to a good, regardless of its origin, that re- enters its territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in the territory of the Party from which the good was exported for repair or alteration or has increased the value of the good
2. A Party shall not apply a customs duty to a good, regardless of its origin, admitted temporarily from the territory of the other Party for repair or alteration.
3. For the purposes of this Article, repair or alteration does not include an operation or process that:
(a) destroys a good's essential characteristics or creates a new or commercially different good; or
(b) transforms an unfinished good into a finished good.
Article 2.9. Duty-Free Entry of Commercial Samples of Negligible Value and Printed Advertising Material
Each Party shall grant duty-free entry to commercial samples of negligible value (1) and printed advertising material imported from the territory of the other Party, regardless of their origin, but may require that:
(a) such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-Party; or
(b) such advertising materials are imported in packets that each contain no more than one copy of each material and that neither such materials nor packets form part of a larger consignment.
Article 2.10. Standstill
1. Except as provided in the Schedules in Annex 2-A (Elimination of Customs Duties), upon the entry into force of this Agreement, a Party shall not increase any existing customs duty or introduce any new customs duty, on the importation of a good originating in the other Party. This shall not preclude either Party from raising a customs duty to the level established in its Schedule in Annex 2-A (Elimination of Customs Duties) following a unilateral reduction of its applied MFN customs duty rates on imports.
2. Paragraph 1 of this Article shall not apply to goods which are not subjected to tariff reduction/elimination under a Party’s Schedule in Annex 2-A (Elimination of Customs Duties), unless otherwise provided in the same Schedule.
3. However, in the case of para-tariffs listed out in the Annex 2-A (Elimination of Customs Duties), paragraph 1 of this Article may be applied, on an exceptional basis, to mutually agreed specific tariff lines in the negative list.
Section 2-C. NON-TARIFF MEASURES
Article 2.11. Import and Export Restrictions
1. A Party shall not 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, in accordance with Article XI of GATT 1994, including its Notes and Supplementary Provisions. To this end Article XI of GATT 1994, its Notes and Supplementary Provisions are incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties understand that before taking any measures provided for in sub-paragraph 2(a) and sub-paragraph 2(c) of Article XI of GATT 1994, the Party intending to take the measures shall supply the other Party with all relevant information as far in advance as practicable, with a view to seeking a solution acceptable to the Parties. The Parties may agree on any means needed to put an end to the difficulties. If no agreement is reached within thirty (30) days of supplying such information, the Party intending to apply the measures under this Article may proceed to do so.
4. Notwithstanding paragraph 2 of this Article, where exceptional and critical circumstances requiring immediate action make prior information or examination impossible, the Party intending to take the measures may apply forthwith the precautionary measures necessary to deal with the situation and shall inform the other Party immediately thereof.
5. The Parties understand that the rights and obligations in GATT 1994 incorporated by paragraph 1 of this Article prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:
(a) export price requirements, except as permitted in enforcement of countervailing and anti-dumping duty orders and undertakings;
(b) import licensing conditioned on the fulfilment of a performance requirement; or
(c) voluntary export restraints inconsistent with Article VI of GATT 1994, as implemented under Article 18 of the SCM Agreement and Article 8.1 of the Anti-Dumping Agreement.
Article 2.12. Remanufactured Goods
1. For greater certainty, paragraph 1 of Article 2.11 (Import and Export Restrictions) applies to prohibitions and restrictions on the importation of remanufactured goods.
2. If a Party adopts or maintains measures prohibiting or restricting the importation of used goods, it shall not apply those measures to remanufactured goods.
3. For the avoidance of doubt, “remanufactured goods” under this Chapter shall be as defined in Article 14 (Treatment of Recovered Materials Used in Production of a Remanufactured Good) of Protocol 1 (Concerning the Definition of the Concept of “Originating Product” and Methods of Administrative Co-operation).
Article 2.13. Fees and Formalities Connected with Importation and Exportation
1. Each Party shall ensure, in accordance with Article VIII of GATT 1994, including its Notes and Supplementary provisions, that all fees and charges of whatever character (other than customs duties, and measures listed in sub-paragraph 2(a), sub-paragraph 2(b) and sub-paragraph 2(c) of Article 2.4 (Customs Duty)) imposed on or in connection with importation or exportation of goods:
(a) are limited in amount to the approximate cost of services rendered, which shall not be calculated on an ad valorem basis, and
(b) shall not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.
2. The obligation set out in sub-paragraph 1(a) of this Article shall be implemented pursuant to the transitional arrangements that each Party has provided for under the TFA. Notwithstanding the above, each Party shall fully implement the obligation in sub-paragraph 1(a) of this Article no later than five (5) years from the date of entry into force of the TFA or at any time earlier as notified by that Party to the WTO.
3. Each Party shall make available via an officially designated medium, including through the internet, fees and charges it imposes in connection with importation or exportation.
4. A Party shall not require consular transactions, (2) including related fees and charges, in connection with the importation of any good of the other Party.
5. Each Party shall periodically review its fees and charges with a view to reducing their number and diversity, where practicable.
Article 2.14. Import and Export Licensing Procedures
1. The Parties affirm their existing rights and obligations under the Import Licensing Agreement.
2. The Parties shall introduce and administer any import or export licensing procedures (3) in accordance with:
(a) Paragraphs 1 to 9 of Article 1 of the Import Licensing Agreement;
(b) Article 2 of the Import Licensing Agreement; and
(c) Article 3 of the Import Licensing Agreement.
To this end, the provisions referred to in sub-paragraphs (a), (b) and (c) of this paragraph are incorporated into and made part of this Agreement. The Parties shall apply those provisions, mutatis mutandis, for any export licensing procedures.
3. The Parties shall ensure that all export licensing procedures are neutral in application and administered in a fair, equitable, non-discriminatory and transparent manner.
4. Each Party shall respond within sixty (60) days to a reasonable enquiry from the other Party regarding:
(a) any licensing procedures which the Party intends to adopt, or has adopted or maintained; or
(b) the criteria for granting and/or allocating import or export licenses.
Article 2.15. State Trading Enterprises
1. The Parties affirm their existing rights and obligations under Article XVII of GATT 1994, its Notes and Supplementary Provisions and the Understanding on the Interpretation of Article XVII of the GATT 1994, contained in Annex 1-A to the WTO Agreement, which are hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. A Party may request information from the other Party bilaterally as foreseen in sub- paragraph 4(c) and sub-paragraph 4(d) of Article XVII of GATT 1994.
3. Neither Party shall apply any measure that is subject to the requirements under paragraph 2 of this Article to food purchased for non-commercial humanitarian purposes.
Section 2-D. SPECIFIC EXCEPTIONS RELATED TO GOODS
Article 2.16. General Exceptions
1. Nothing in this Chapter prevents the taking of measures in accordance with Article XX of GATT 1994, its Notes and Supplementary Provisions, which are hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties understand that before taking any measures provided for in paragraphs (i) and (j) of Article XX of GATT 1994, the exporting Party intending to take the measures shall supply the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. The Parties may agree on any means needed to put an end to the difficulties. If no agreement is reached within thirty (30) days, the exporting Party may apply measures under this Article on the exportation of the good concerned. Where exceptional and critical circumstances requiring immediate action make prior information or examination impossible, the Party intending to take the measures may apply forthwith the precautionary measures necessary to deal with the situation and shall inform the other Party immediately thereof.
Chapter 3. TRADE REMEDIES
Section 3-A. ANTI-DUMPING AND COUNTERVAILING MEASURES
Article 3.1. Anti-Dumping, Subsidies and Countervailing Measures
1. Each Party retains its rights and obligations under Article VI of the GATT 1994 and the Anti-Dumping Agreement and any amendment thereto. To this end, the provisions of the Anti-Dumping Agreement shall apply, mutatis mutandis, to the extent not specifically provided for in this Agreement.
2. Each Party retains its rights and obligations under Articles VI and XVI of GATT 1994 and the SCM Agreement, or any amendments thereto. To this end, the provisions of the SCM Agreement shall apply, mutatis mutandis, to the extent not specifically provided for in this Agreement.
3. The Parties, recognising that anti-dumping and countervailing measures can be
abused to obstruct trade, agree that:
(a) such measures should be used in full compliance with the relevant WTO requirements and should be based on a fair and transparent system; and
(b) careful consideration may be given to the interests of the Party against which such a measure is to be imposed.
4. For the purpose of this Section, origin shall be determined in accordance with the non-preferential rules of origin of the Parties.