Title
FREE TRADE AGREEMENT BETWEEN THE PEOPLE'S REPUBLIC OF CHINA AND THE SWISS CONFEDERATION
Preamble
The People's Republic of China (hereinafter referred to as "China") and the Swiss Confederation (hereinafter referred to as "Switzerland"), hereinafter individually referred to as a "Party", or collectively as "the Parties";
RECOGNISING their long-term and close relations and cooperation in the fields of politics and economy;
COMMITTED to strengthening the bonds of friendship and collaboration between the Parties by establishing and deepening close and lasting relations;
RECOGNISING further that a free trade agreement shall produce mutual benefits to each other and enhance bilateral economic and trade cooperation;
MINDFUL that economic development, social development and environmental protection are interdependent and mutually reinforcing components of sustainable development and that closer economic partnership can play an important role in promoting sustainable development;
RECOGNISING that this Agreement should be implemented with a view to promoting the public welfare in the Parties, including raising the standard of living, as well as creating new job opportunities and promoting sustainable development in a manner consistent with environmental protection and conservation;
RECALLING the progress made in bilateral relations after the establishment of diplomatic relations and in particular after the signing of the Memorandum of Understanding between the Government of the People's Republic of China and the Swiss Federal Council on Promoting Dialogue and Cooperation in 2007 and committed to deepen and expand dialogue and cooperation in suchareas;
COMMITTED to the promotion of prosperity, democracy, social progress and harmony and to uphold freedom, equality, justice and the rule of law, reaffirming their commitment to the Charter of the United Nations and fundamental norms of internationalrelations;
DETERMINED to uphold the spirit of reciprocity and promote mutually beneficial trade relations through the establishment of a well functioning and mutually advantageous bilateral preferential trade regime;
ACKNOWLEDGING the importance of good corporate governance and corporate social responsibility for sustainable development, and affirming their aim to encourage enterprises to observe internationally recognised guidelines and principles in this respect;
CONVINCED that this Agreement will reinforce market economy principles and enhance the competitiveness of the firms of the Parties inglobalmarkets;
SHARING the belief of the importance of, and determined to promote and further strengthen the multilateral trading system as embodied in the Marrakesh Agreement establishing the World Trade Organization (hereinafter referred to as the "WTO Agreement");
BUILDING on their respective rights and obligations under the WTO Agreement and other multilateral, regional and bilateralagreements;
HAVE AGREED, in pursuit of the above, to conclude the following Agreement (referred to as "this Agreement"):
Body
Chapter 1. General Provisions
Article 1.1. Objectives
1. Based on Article XXIV of the General Agreement on Tariffs and Trade (hereinafter referred to as the "GATT 1994") and Article V of the General Agreement on Trade in Services (hereinafter referred to as the "GATS"), China and Switzerland shall establish a free trade area by means of this Agreement with a view to spurring prosperity and sustainable development.
2. The objectives of this Agreement, which is based on trade relations between market economies are:
(a) to achieve the liberalisation of trade in goods;
(b) to achieve the liberalisation of trade in services;
(c) to mutually enhance investment opportunities;
(d) to promote competition in the Parties' markets;
(e) to ensure adequate and effective protection and enforcement of intellectual property rights;
(f) to achieve further understanding of the government procurement of the Parties and lay the ground for future cooperation in this field;
(g) to remove and avoid unnecessary technical barriers to trade, including sanitary and phytosanitarymeasures;
(h) to develop international trade in such a way as to contribute to the objective of sustainable development and to ensure that this objective is integrated and reflected in the Parties' trade relationship; and to contribute in this way to the harmonious development and expansion of world trade.
3. The Partiesshallinterpretand apply the provisions of this Agreement in light of its objectives set out in paragraph 2 and in accordance with customary rules of interpretation of public international law.
Article 1.2. Geographical Scope
Except as otherwise specified, this Agreement shall apply to:
(a) with respect to China, the entire customs territory of the People's Republic of China, including land, maritime and air space, and the exclusive economic zone and the continental shelf within which it exercises sovereign rights and jurisdiction in accordance with international law and its domestic law; and
(b) with respect to Switzerland, the territory of Switzerland, including land, internal waters and air space, in accordance with international law and its domestic law.
Article 1.3. Relationship to other Agreements
1. The Parties confirm their rights and obligations under the WTO Agreement and the other agreements negotiated thereunder to which they are parties and any other international agreement to which they are parties.
2. If a Party considers that the maintenance or establishment of customs unions, free trade areas, arrangements for frontier trade or other preferential agreements by the other Party has the effect of altering the trade regime provided for by this Agreement, or that there is inconsistency between this Agreement and other agreements to which both Parties are parties, it may request consultations. The other Party shall afford adequate opportunity for consultations with the requesting Party with a view to finding a mutually satisfactory solution in accordance with customary rules of interpretation of public international law.
Article 1.4. Central, Regional and Local Government
Each Party shall ensure the observance of all obligations and commitments under this Agreement by its respective regional and local governments and authorities, and by non-governmental bodies in the exercise of governmental powers delegated to them by central, regional and local governments or authorities.
Article 1.5. Transparency
1. The Parties shall publish, or otherwise make publicly available, their laws, regulations, judicial decisions, administrative rulings of general application and their respective international agreements, which may affect the operation of this Agreement.
2. The Parties shall respond to specific questions and provide, upon request, information to each other on matters referred to in paragraph 1, to the extent possible within 30 days (1) following the request.
3. The information referred to in paragraph 2 can be considered to have been provided by copying a notification to WTO for the same matter or by referring to the official, public and free of charge accessible website of the Party concerned.
4. In case of any inconsistency between the provisions of this Article and provisions relating to transparency in other Chapters, the latter shall prevail to the extent of the inconsistency.
5. The contact points established in Article 14.2 shall facilitate communications between the Parties on matters covered in this Article. Upon request of the other Party, the contact point shall identify the office or official responsible for the matter and assist, as necessary, in facilitating communication with the responding Party.
Article 1.6. Disclosure of Information
Nothing in this Agreement shall require the Parties to disclose information that would impede law enforcement, is contrary to its laws or otherwise contrary to the public interest, or would prejudice the legitimate commercial interests of any economic operator.
Chapter 2. Trade In Goods
Article 2.1. Scope
1. This Chapter shall apply, as specified therein, to any product traded between the customs territories of the Parties. The customs territory of Switzerland includes the territory of the Principality of Liechtenstein, as long as the Customs Union Treaty of 29 March 1923 between the Swiss Confederation and the Principality of Liechtenstein remains in force.
2. Goods and products shall be understood to have the same meaning, unless the context otherwise requires.
Article 2.2. National Treatment on Internal Taxation and Regulation
Each Party shall accord national treatment to the products of the customs territory of the other Party in accordance with Article III of the GATT 1994. To this end, Article III of the GATT 1994 and its interpretative notes shall apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.3. Customs Duties on Imports
1. Customs duty on imports means any duty or charge of any kind imposed in connection with the importation of a product, but does not include any:
(a) charge equivalent to an internal tax imposed consistently with paragraph 2 of Article III of the GATT 1994;
(b) antidumping or countervailing duty applied consistently with Article VI of the GATT 1994, the WTO Agreement on Implementation of Article VI of the GATT 1994, or the WTO Agreement on Subsidies and Countervailing Measures; and
(c) fee or other charge in connection with the importation commensurate with the cost of services rendered, imposed consistently with the provisions of Article VIII of the GATT 1994.
2. Except as otherwise provided for in this Chapter, each Party shall, upon entry into force of this Agreement, eliminate or reduce its customs duties imposed in connection with the importation of products originating in either Party, in accordance with the terms and conditions set out in its Schedule in AnnexI.
3. Except as otherwise provided in this Agreement, neither Party shall increase any existing customs duty, or adopt any new customs duty, on an originating product of the other Party, which is not in accordance with the terms and conditions set out in its schedule in Annex I.
Article 2.4. Base Rate of Customs Duties on Imports
1. For each product the base rate of customs duty to which the successive reductions set out in Annex 1 are to be applied, shall be the most favoured nation (hereinafter referred to as "MFN") import customs duty rate applied on1 January 2010.
2. If a Party reduces its applied MFN import customs duty rate after 1 January 2010 and before the end of the tariff elimination period, the tariff elimination schedule of that Party set out in Annex I shall be applied to the reduced rate as from the date on which the reduction is applied.
3. The reduced import customs duty rates calculated in accordance with Annex I, shall be applied rounded to the first decimal place.
Article 2.5. Import and Export Restrictions
With respect to export and import restrictions, Article XI of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.6. State Trading Enterprises
With respect to state trading enterprises, Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994 shall apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.7. 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 2.8. Review Mechanism
Two years after the entry into force of this Agreement, the Parties shall in the Joint Committee review this Chapter and the Tariff Schedules ofthe Parties set out in Annex I. The Parties shall thereafter conduct biennial reviews of this matter in the Joint Committee.
Chapter 3. Rules of Origin and Implementation Procedures
Section I. Rules of Origin
Article 3.1. Definitions
For the purposes of this Chapter:
(a) “Party” means either China or Switzerland. This Chapter applies to the customs territory of China and the customs territory of Switzerland as defined in paragraph 1 of Article 2.1;
(b) “production” means methods of obtaining products including, but not limited to, growing, mining, harvesting, fishing, trapping, hunting, manufacturing, processing or assembling a product;
(c) “material” means ingredients, parts, components, subassemblies and/or products that were physically incorporated into another product or were subject to a process in the production of another product;
(d) “nonoriginating product” or “nonoriginating material” mean a product or material that does not qualify as originating under this Chapter;
(e) “originating product” or “originating material” mean a product or material that qualifies as originating under this Chapter;
(f) “customs value” means the value as determined in accordance with the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (Customs Valuation Agreement);
(g) “exworks price” means the price paid for the product exworks to the producer located in a Party in whose undertaking the last working or processing is carried out, provided that the price includes the value of all the materials used, wage and any other cost, and profit minus any internal taxes returned or repaid when the product obtained is exported;
(h) “Harmonized System” and “HS” mean the Harmonized Commodity Description and Coding System;
(i) “chapter”, “heading” and “subheading” mean a chapter (twodigit codes), heading (fourdigit codes) or subheading (sixdigit codes) of the Harmonized System; and
(j) “authorised body” means any body designated under domestic law of a Party or by the governmental authority of a Party to issue a Certificate of Origin.
Article 3.2. Originating Products
For the purpose of this Agreement, and unless otherwise required in this Chapter, a product shall be considered as originating in a Party if:
(a) it has been wholly obtained in a Party, in accordance with Article 3.3;
(b) the nonoriginating materials used in the working or processing of that product have undergone substantial transformation in a Party (2), in accordance with Article 3.4, and meets the other applicable provisions of this Chapter; or
(c) it has been produced in a Party exclusively from originating materials of one or both Parties.
Article 3.3. Wholly Obtained Products
For the purpose of subparagraph (a) of Article 3.2, the following products shall be considered as wholly obtained in a Party:
(a) mineral products and other nonliving naturally occurring substances extracted or taken from their soil, internal waters, territorial sea, seabed or subsoil;
(b) vegetable products harvested, picked or gathered there;
(c) live animals born and raised there, and products obtained from such animals;
(d) products obtained by hunting, trapping, fishing, gathering, capturing or aquaculture conducted there;
(e) products of sea fishing and other products taken from the territorial sea or the Exclusive Economic Zone of a Party by vessels registered with that Party and flying the flag of that Party;
(f) products of sea fishing and other products taken from the high sea by vessels registered with a Party and flying the flag of that Party;
(g) products processed or made on board factory ships registered with a Party and flying the flag of that Party, exclusively from products referred to in subparagraph (e) and (f);
(h) products taken from the seabed and subsoil outside the territorial waters of a Party, provided that the Party has the rights to exploit such seabed or subsoil under domestic law in accordance with international law;
(i) waste and scrap resulting from manufacturing operations conducted there which fit only for the recovery of raw materials;
(j) used products collected there which fit only for the recovery of raw materials; and
(k) products obtained or produced there exclusively from products referred to in subparagraphs (a) to (j).
Article 3.4. Substantial Transformation
1. A product obtained using non-originating materials shall be considered to have undergone substantial transformation if the requirements specified in Annex II are fulfilled.
2. For the purpose of paragraph 1, the operations provided for in Article 3.6 are considered as insufficient to obtain originating status.
3. Where Annex II refers to a percentage of the value of non-originating material (VNM), it shall mean the maximum percentage of the VNM allowed in relation to the ex-works price of a product. That percentage shall be calculated as follows:
VNM% = VNM/exworks price x 100
4. VNM shall be determined on the basis of the customs value at the time of importation of the nonoriginating materials, including materials of undetermined origin. If such value is unknown and cannot be ascertained, the first ascertainable price paid or payable for the materials in a Partyshallbe applied.
5. 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.
Article 3.5. De Minimis
1. Notwithstanding paragraph 1 of Article 3.4, non-originating materials do not have to fulfil the conditions set out in Annex II provided that their total value does not exceed 10% of the ex-works price.
2. This Article does not apply to value criteria set out in Annex II.
Article 3.6. Minimal Operations or Processes
1. Notwithstanding Article 3.4, a product shall not be considered as originating, if it has only undergone one or more of the following operations or processes:
(a) operations to ensure the preservation of products in good condition during transport and storage;
(b) freezing or thawing;
(c) packaging and repackaging;
(d) washing, cleaning, removal of dust, oxide, oil, paint or other coverings;
(e) ironing or pressing of textiles or textile products;
(f) simple painting and polishing;
(g) husking, partial or total bleaching, polishing, and glazing of cereals and rice;
(h) operations to colour sugar or form sugar lumps;
(i) peeling and removal of stones and shells from fruits, nuts and vegetables;
(j) sharpening, simple grinding or simple cutting;
(k) sifting, screening, sorting, classifying, grading, matching;
(l) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
(m) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;
(n) simple mixing of products, whether or not of different kinds;
(o) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;
(p) slaughter of animals.
2. For the purpose of paragraph 1, "simple" describes activities which need neither special skills nor machines, apparatus or equipment especially produced or installed to carry out the activity.
3. All operations in the production of a given product carried out in a Party shall be taken into account when determining whether the working or processing undergone by that product is considered as minimal operations or processes referred to in paragraph 1.
Article 3.7. Accumulation
1. Without prejudice to Article 3.2, a product originating in a Party, which is used as material in the production of a product in the other Party, shall be considered as originating in the Party where the last operations beyond those referred to in paragraph 1 of Article 3.6 have been carried out.
2. A product originating in a Party, which is exported from a Party to the other Party and does not undergo working or processing beyond those referred to in paragraph 1 of Article 3.6, shall retain its origin.
Article 3.8. Unit of Qualification
1. For the purpose of determining the originating status, the unit of qualification of a product or material shall be considered as the basic unit and determined in accordance with the Harmonized System.
2. Pursuant to paragraph 1,
(a) where a set of articles is classified under a single heading or subheading in accordance with General Interpretative Rule 3 of the Harmonized System, it shall constitute the unit ofqualification;
(b) where a consignment consists of a number of identical products classified under a single heading or subheading of the Harmonized System, each product shall be considered separately in determining whether it qualifies as an originating product of a Party; and
(c) packaging shall be included with the product if it is included and classified with that product in accordance with General Interpretative Rule 5 of the Harmonized System. Packaging used for retail sale shall be considered as materials of the product in calculating the value of non-originating materials used in its production.
3. Packing materials and containers for shipment that are used to protect a product during transportation shall be disregarded in determining the origin of the product.
Article 3.9. Accessories, Spare Parts and Tools
1. Accessories, spare parts, tools and instruction and information material presented together and classified with the product shall be considered as part of the product in question provided that:
(a) they are invoiced together; and