Title
FREE TRADE AGREEMENT BETWEEN HONG KONG, CHINA AND THE REPUBLIC OF PERU
Preamble
The Government of the Hong Kong Special Administrative Region of the People’s Republic of China (Hong Kong, China) and the Government of the Republic of Peru (Peru), hereinafter referred to as “the Parties”, resolving to:
ESTABLISH a comprehensive agreement that promotes economic integration to liberalise trade and investment, bring economic growth and social benefits, create new opportunities for workers and businesses, contribute to raising living standards, benefit consumers and promote sustainable growth;
STRENGTHEN the bonds of friendship and cooperation between the Parties;
BUILD on their respective rights and obligations under the WTO Agreement, and other agreements negotiated thereunder to which the Parties are party, thereby contributing to the harmonious development and expansion of world trade;
FACILITATE trade and investment by reducing and eliminating barriers to trade and investment between the Parties and establishing a predictable legal and commercial framework for trade and investment through mutually advantageous rules;
RECOGNISE that micro, small and medium-sized enterprises contribute significantly to economic growth, employment and innovation, and that the growth and development of those enterprises improves their ability to benefit from the opportunities created by this Agreement;
FACILITATE trade between the Parties by promoting efficient, transparent and predictable customs procedures;
RECOGNISE their right to regulate and resolve to preserve the flexibility of the Parties to set legislative and regulatory priorities, safeguard public welfare and protect legitimate public welfare objectives; and
ESTABLISH this Agreement with the desire to address future trade and investment challenges and opportunities, and contribute to advancing their respective priorities over time;
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, consistent with Article XXIV of GATT 1994 and Article V of GATS, hereby establish a free trade area in accordance with the provisions of this Agreement.
Article 1.2. Relation to other Agreements
1. The Parties affirm their existing rights and obligations with respect to each other under international agreements to which the Parties are party, including the WTO Agreement.
2. In the event of any inconsistency (1) between this Agreement and any other international agreement to which the Parties are party, the Parties shall immediately consult with a view to finding a mutually satisfactory solution.
Section B. General Definitions
Article 1.3. General Definitions
For the purposes of this Agreement, unless otherwise provided:
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;
Agreement means the Free Trade Agreement between Hong Kong, China and the Republic of Peru;
APEC means Asia-Pacific Economic Cooperation;
Area in respect of:
(a) Hong Kong, China means the Hong Kong Special Administrative Region as delineated by the Order of the State Council of the People’s Republic of China No. 221 dated July 1, 1997; and
(b) Peru means the mainland territory, the islands, the maritime areas and the air space above them, under sovereignty or sovereign rights and jurisdiction of Peru, in accordance with the provisions of the Political Constitution of Peru (Constitución Política del Perú) and other relevant domestic law and international law;
customs administration means:
(a) for Hong Kong, China, the Customs and Excise Department of Hong Kong, China; and
(b) for Peru, the National Superintendence of Customs and Tax Administration (Superintendencia Nacional de Aduanas y de Administración Tributaria - SUNAT), or its successor;
customs duty means any duty or charge of any kind imposed in connection with the importation of a good, and any surtax or surcharge imposed in connection with such importation, but does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article III:2 of GATT 1994;
(b) fee or other charge that is covered by Article VIII of GATT 1994; or
(c) anti-dumping or countervailing duty applied consistently with Article VI of GATT 1994, the AD Agreement and the SCM Agreement;
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;
day means a calendar day;
enterprise means:
(a) any entity constituted or organised under applicable laws, 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 organisation; or
(b) a branch of an enterprise;
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 Commission means the Joint Commission established under Article 17.1 (Establishment of the Joint Commission) of Chapter 17 (Administrative and Institutional Provisions);
measure includes any law, regulation, procedure, requirement or practice;
natural person of a Party means a natural person who under the law of the Party:
(a) for Hong Kong, China, is a permanent resident of the Hong Kong Special Administrative Region of the People’s Republic of China; and
(b) for Peru, is a person who has the nationality of Peru by birth, naturalisation or option in accordance with the Political Constitution of Peru (Constitución Política del Perú) and other relevant domestic legislation, or a permanent resident;
originating means qualifying as originating under the rules of origin set out in Chapter 3 (Rules of Origin and Origin Procedures);
person means a natural person or an enterprise;
SCM Agreement means the Agreement on Subsidies and Countervailing Measures, set out in Annex 1A to the WTO Agreement;
SME means a small and medium-sized enterprise, including a micro-sized enterprise;
subheading means the first six digits in the tariff classification number under the Harmonized System;
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, set out in Annex 1C to the WTO Agreement, as revised or amended from time to time by a revision or amendment that applies to the Parties and including any waiver of any provision thereof granted pursuant to the proper procedures as stated in 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 April 15, 1994.
Section C. Interpretations
Article 1.4. Interpretations
For the purposes of this Agreement, unless otherwise provided:
(a) for Hong Kong, China, any reference to an international agreement to which a Party is a party shall include an international agreement made applicable to Hong Kong, China, and any reference to the rights, obligations or undertakings of a Party under an international agreement shall include the rights, obligations or undertakings made applicable to Hong Kong, China under such an international agreement;
(b) for Hong Kong, China, if an expression is qualified by the term “national”, such expression shall be interpreted as pertaining to Hong Kong, China; and
(c) if anything under this Agreement is to be done within a number of days:
(i) of a specified date or event, the specified date or the date on which the specified event occurs shall be included in calculating that number of days; or
(ii) after, from or before a specified date or event, the specified date or the date on which the specified event occurs shall not be included in calculating that number of days.
Chapter 2. TRADE IN GOODS
Section A. Definitions and Scope
Article 2.1. Definitions
For the purposes of this Chapter:
agricultural goods means those products referred to in Article 2 of the Agreement on Agriculture, set out in Annex 1A to the WTO Agreement;
duty-free means free of customs duty;
export subsidy means an export subsidy as defined in Article 1(e) of the Agreement on Agriculture, set out in Annex 1A to the WTO Agreement, including any amendment of that Article;
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 Area of the importing Party; and
Import Licensing Agreement means the Agreement on Import Licensing Procedures, set out in Annex 1A to the WTO Agreement.
Article 2.2. Scope of Application
Unless otherwise provided in this Agreement, this Chapter shall apply to trade in goods between the Parties.
Section B. National Treatment
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 GATT 1994, including its interpretative notes. To this end, Article III of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. Paragraph 1 shall not apply to the measures set out in Annex 2-A.
Section C. Elimination of Customs Duties
Article 2.4. Elimination of Customs Duties
1. Unless otherwise provided in this Agreement, neither Party shall increase any existing customs duty, or adopt any new customs duty, on an originating good of the other Party.
2. Unless otherwise provided in this Agreement, each Party shall eliminate its customs duties on originating goods of the other Party in accordance with its Schedule to Annex 2-B.
3. On request of either Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in their Schedules to Annex 2-B.
4. 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 Schedules to Annex 2-B for such good. Such agreement shall be adopted by the Joint Commission pursuant to Article 17.2.2(d) of Chapter 17 (Administrative and Institutional Provisions).
5. For greater certainty, a Party may:
(a) raise a customs duty to the level set out in its Schedule to Annex 2-B, following a unilateral reduction for the respective year; or
(b) maintain or increase a customs duty as authorised by the Dispute Settlement Body of the WTO or in accordance with Chapter 18 (Dispute Settlement).
Section D. Special Regimes
Article 2.5. Temporary Admission of Goods
Each Party shall allow, as provided for in its laws and regulations, temporary admission of goods to be brought into its Area conditionally relieved, totally or partially, from payment of customs duty if such goods:
(a) are brought into its Area for a specific purpose;
(b) are intended for re-exportation within a specific period; and
(c) have not undergone any change except normal depreciation and wastage due to the use made of them.
Article 2.6. Duty-Free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials
Each Party shall, in accordance with its laws and regulations, grant duty-free entry to commercial samples of negligible value, and to printed advertising materials (1), imported from the Area of the other Party, regardless of their origin, but may require that:
(a) commercial samples of negligible value be imported solely for the solicitation of orders for goods, or services provided from the Area, of the other Party or a non-party; or
(b) printed advertising materials be imported in packets that each contains no more than one copy of each such material and that neither such materials nor packets form part of a larger consignment.
Section E. Non-Tariff Measures
Article 2.7. Import and Export Restrictions
1. Unless otherwise provided in this Agreement, neither Party shall 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 Area of the other Party, except in accordance with Article XI of GATT 1994 and its interpretative notes. To this end, Article XI of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. For greater certainty, the Parties understand that the rights and obligations incorporated by paragraph 1 prohibit a Party from adopting or maintaining:
(a) export and import price requirements, except as permitted in enforcement of countervailing and anti-dumping duty orders and undertakings; or
(b) voluntary undertakings inconsistent with Article VI of GATT 1994, as implemented under Article 18 of the SCM Agreement and Article 8.1 of the AD Agreement.
3. Paragraph 1 and paragraph 2 shall not apply to the measures set out in Annex 2-A.
Article 2.8. Import Licensing
1. Neither Party shall adopt or maintain a measure that is inconsistent with the Import Licensing Agreement. To this end, the Import Licensing Agreement is incorporated into and made part of this Agreement, mutatis mutandis.
2. Each Party shall, promptly after the date of entry into force of this Agreement, notify the other Party of its existing import licensing procedures. Thereafter, each Party shall notify the other Party of any new import licensing procedure and any modification to its existing import licensing procedures within 60 days of its publication. A notification provided in accordance with this Article shall include the information specified in Articles 5.2, 5.3 and 5.4 of the Import Licensing Agreement. A Party shall be deemed to be in compliance with the obligations under this paragraph if it has notified a new licensing procedure or a modification to an existing import licensing procedure to the WTO Committee on Import Licensing.
3. Before applying any new or modified import licensing procedure, a Party shall publish the new procedure or modification on its official government website(s). The Party shall do so, whenever practicable, 21 days prior to the effective date of the requirement but in all events no later than such effective date.
Article 2.9. Administrative Fees and Formalities
1. Each Party shall ensure that all fees and charges of whatever character imposed on or in connection with the importation or exportation of goods are consistent with Article VIII:1 of GATT 1994.
2. Neither Party shall require legalisation of commercial invoices, certificates of origin or other documentation requested by the customs administration, including related fees and charges, in connection with the importation of a good of the other Party.
3. Each Party shall make publicly available online the fees and charges it imposes in connection with importation or exportation.
Article 2.10. State Trading Enterprises
The rights and obligations of the Parties with respect to state trading enterprises shall be governed by Article XVII of GATT 1994, its interpretative notes and the Understanding on the Interpretation of Article XVII of GATT 1994. To this end, Article XVII of GATT 1994, its interpretative notes and the Understanding on the Interpretation of Article XVII of GATT 1994 are incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.11. Agricultural Export Subsidies
Neither Party shall introduce or maintain any export subsidy on any agricultural good destined for the Area of the other Party.
Chapter 3. RULES OF ORIGIN AND ORIGIN PROCEDURES
Article 3.1. Definitions
For the purposes of this Chapter:
aquaculture means the farming of aquatic organisms, including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants from seed stock such as eggs, fry, fingerlings or larvae, by intervention in the rearing or growth processes to enhance production such as regular stocking, feeding or protection from predators;
authorised body means any body authorised under the laws and regulations of a Party to issue a Certificate of Origin;
CIF means the value of the good imported, inclusive of the cost of insurance and freight up to the port or place of entry into the importing Party;
competent authority means:
(a) for Hong Kong, China, the Trade and Industry Department; and
(b) for Peru, the Ministry of Foreign Trade and Tourism (Ministerio de Comercio Exterior y Turismo - MINCETUR), or its successor;
FOB means the value of the good free on board, inclusive of the cost of transportation to the port or site of final shipment abroad, regardless of the means of transportation;
fungible goods or materials means goods or materials that are interchangeable for commercial purposes and whose properties are essentially identical;
generally accepted accounting principles means those principles recognised by consensus or with substantial authoritative support in 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 principles may encompass broad guidelines for general application as well as detailed standards, practices and procedures;
identical goods means goods that are the same in all respects relevant to the particular rule of origin that qualifies the goods as originating;
indirect material means a material used in the production, testing or inspection of a good but not physically incorporated into the good; or a material used in the maintenance of buildings or the operation of equipment, associated with the production of a good, including:
(a) fuel, energy, catalysts and solvents;
(b) equipment, devices and supplies used to test or inspect the good;
(c) gloves, glasses, footwear, clothing, safety equipment and supplies;
(d) tools, dies and moulds;
(e) spare parts and materials used in the maintenance of equipment and buildings;
(f) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings; and
(g) any other material that is not incorporated into the good but the use of which in the production of the good can reasonably be demonstrated to be a part of that production;
material means a good that is used in the production of another good;
non-originating good or non-originating material means a good or material that does not qualify as originating in accordance with this Chapter;
originating good or originating material means a good or material that qualifies as originating in accordance with this Chapter;
packing material and container for shipment means a good used to protect another good during its transportation, but does not include the packaging materials or containers in which a good is packaged for retail sale;
producer means a person who engages in the production of a good; and