1. A Party may, subject to the provisions of this Section, apply a transitional safeguard measure set out in paragraph 2, during the transition period only, if as a result of the reduction or elimination of a customs duty in accordance with this Agreement, an originating good from the other Party is being imported into the Area of the Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to the domestic industry that produces a like or directly competitive good.
2. If the conditions in paragraph 1 are met, the Party may, to the minimum extent necessary to prevent or remedy serious injury and to facilitate adjustment:
(a) suspend the further reduction of any rate of customs duty provided for under this Agreement on the good; or
(b) increase the rate of customs duty on the good to a level not exceeding the lesser of:
(i) the most-favoured-nation applied rate of customs duty in effect at the time the measure is applied; or
(ii) the most-favoured-nation applied rate of customs duty in effect on the day immediately preceding the date of entry into force of this Agreement.
3. Neither Party shall apply or maintain tariff rate quotas nor quantitative restrictions as transitional safeguard measures.
4. Neither Party shall apply a transitional safeguard measure against an originating good from the other Party where the exporting Party’s share of imports of the originating good in the importing Party does not exceed three per cent.
Article 7.6. Investigation Procedures and Transparency Requirements
A Party shall apply a transitional safeguard measure only following an investigation by the competent authorities of the Party in accordance with Articles 3 and 4.2 of the Safeguards Agreement. To this end, Articles 3 and 4.2 of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis.
Article 7.7. Standards for a Transitional Safeguard Measure
1. A Party shall apply a transitional safeguard measure only for such period as may be necessary to prevent or remedy serious injury and to facilitate adjustment.
2. A Party shall apply a transitional safeguard measure for a period not exceeding two years. In very exceptional circumstances, the period may be extended by up to one year if the competent authority of the Party that applies the measure determines, in conformity with the procedures set out in Article 7.6, that the transitional safeguard measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment and that there is evidence that the domestic industry is adjusting. The total period of application of a transitional safeguard measure, including the period of initial application and any extension thereof, shall not exceed three years.
3. Neither Party shall maintain a transitional safeguard measure beyond the expiration of the transition period.
4. In order to facilitate adjustment in a situation where the expected duration of a transitional safeguard measure is over one year, the Party applying the measure shall progressively liberalise it at regular intervals during the period of application.
5. Upon the termination of the measure, the rate of customs duty shall be the rate which would have been in effect but for the measure.
6. Neither Party shall apply a transitional safeguard measure more than once on the same good.
Article 7.8. Notification and Consultation
1. A Party shall immediately notify the other Party, in writing, including through electronic means, if it:
(a) initiates a transitional safeguard investigation under this Chapter;
(b) makes a finding of serious injury or threat thereof caused by increased imports, in accordance with Article 7.5; and
(c) takes a decision to apply or extend a transitional safeguard measure.
2. A Party shall provide to the other Party a copy of the public version of the report of its competent authorities that is required under Article 7.6.
3. When a Party makes a notification pursuant to paragraph 1(c), that Party shall include in that notification:
(a) evidence of serious injury or threat thereof caused by increased imports of an originating good from the other Party as a result of the reduction or elimination of a customs duty in accordance with this Agreement;
(b) a precise description of the originating good subject to the transitional safeguard measure including its heading or subheading under the HS Code, on which the schedule of tariff commitments in Annex 2-B (Schedules of Tariff Commitments) of Chapter 2 (Trade in Goods) is based;
(c) a precise description of the transitional safeguard measure;
(d) the date of introduction of the transitional safeguard measure, its expected duration and, if applicable, a timetable for progressive liberalisation of the measure; and
(e) in the case of an extension of the transitional safeguard measure, evidence that the domestic industry concerned is adjusting.
4. On request of the Party whose good is subject to a proceeding for the application or extension of a transitional safeguard measure under this Chapter, the other Party shall, no later than 30 days after the date of receipt of a notification referred to in paragraph 1, enter into consultations with the requesting Party to review the notification or any public notice or report that the competent investigating authority issued in connection with that proceeding, with a view to finding a mutually acceptable solution.
Article 7.9. Compensation
1. A Party applying or extending a transitional safeguard measure shall, in consultation with the other Party, provide mutually agreed trade liberalising compensation in the form of concessions that have substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the transitional safeguard measure. The Party shall provide an opportunity for those consultations no later than 30 days after the application of the transitional safeguard measure.
2. If the consultations under paragraph 1 do not result in an agreement on trade liberalising compensation within 30 days, a Party against whose good the transitional safeguard measure is applied may suspend the application of substantially equivalent concessions of customs duties with respect to the same sector or other sectors. If the Party considers that it is not practicable or effective to suspend the application of concessions of customs duties, it may suspend the application of concessions or other obligations under any part of this Agreement to the trade of the other Party.
3. The Party against whose good the transitional safeguard measure is applied shall notify the other Party in writing at least 30 days before it suspends concessions in accordance with paragraph 2.
4. The obligation to provide compensation under paragraph 1 and the right to suspend concessions under paragraph 2 shall terminate on the date of the termination of the transitional safeguard measure.
Article 7.10. Relation to other Safeguard Measures
Neither Party shall apply or maintain the following measures under this Chapter, with respect to the same good, at the same time:
(a) a transitional safeguard measure;
(b) a measure taken under Article 7.4.
Chapter 8. TRADE IN SERVICES
Article 8.1. Definitions
For the purposes of this Chapter:
airport operation services means the supply of air terminal, airfield and other airport infrastructure operation services on a fee or contract basis. Airport operation services do not include air navigation services;
commercial presence means any type of business or professional establishment, including through:
(a) the constitution, acquisition or maintenance of an enterprise; or
(b) the creation or maintenance of a branch or a representative office, within the Area of a Party for the purpose of supplying a service; computer reservation system services means services provided by computerised
systems that contain information about air carriers’ schedules, availability, fares and fare
rules, through which reservations can be made or tickets may be issued; enterprise of a Party means an enterprise which is either:
(a) constituted or organised under the laws of that Party, or a branch located in the Area of that Party and carrying out business activities there; (1) or
(b) in the case of the supply of a service through commercial presence in the Area of the other Party, owned or controlled by:
(i) natural persons of that Party; or
(ii) enterprises of that Party identified under subparagraph (a);
ground handling services means the supply at an airport, on a fee or contract basis, of the following services: airline representation, administration and supervision; passenger handling; baggage handling; ramp services; catering, except the preparation of the food; air cargo and mail handling; fuelling of an aircraft; aircraft servicing and cleaning; surface transport; and flight operations, crew administration and flight planning. Ground handling services do not include: self-handling; security; line maintenance; aircraft repair and maintenance; or management or operation of essential centralised airport infrastructure, such as de-icing facilities, fuel distribution systems, baggage handling systems and fixed intra-airport transport systems;
measures adopted or maintained by a Party means measures adopted or maintained by:
(a) central, regional, or local governments or authorities; or
(b) non-governmental bodies in the exercise of powers delegated by central, regional, or local governments or authorities;
selling and marketing of air transport services means opportunities for the air carrier concerned to sell and market freely its air transport services including all aspects of marketing such as market research, advertising and distribution. These activities do not include the pricing of air transport services or the applicable conditions;
service supplied in the exercise of governmental authority means, for each Party, any service that is supplied neither on a commercial basis nor in competition with one or more service suppliers;
service supplier of a Party means a person of a Party that seeks to supply or supplies a service;
specialty air services means any specialised commercial operation using an aircraft whose primary purpose is not the transportation of goods or passengers, such as aerial fire-fighting, flight training, sightseeing, spraying, surveying, mapping, photography, parachute jumping, glider towing, helicopter-lift for logging and construction, and other airborne agricultural, industrial and inspection services; and
trade in services means the supply of a service:
(a) from the Area of a Party into the Area of the other Party (Cross-border supply: Mode 1);
(b) in the Area of a Party to a person of the other Party (Consumption abroad: Mode 2);
(c) by a service supplier of a Party, through commercial presence in the Area of the other Party (Commercial presence: Mode 3); or
(d) by a natural person of a Party in the Area of the other Party (Presence of natural persons: Mode 4).
Article 8.2. Scope
1. This Chapter shall apply to measures adopted or maintained by a Party affecting trade in services by service suppliers of the other Party. Such measures include measures affecting:
(a) the production, distribution, marketing, sale or delivery of a service;
(b) the purchase or use of, or payment for, a service;
(c) the access to and use of distribution, transport or telecommunications networks and services in connection with the supply of a service;
(d) the presence in the Party’s Area of a service supplier of the other Party; and
(e) the provision of a bond or other form of financial security as a condition for the supply of a service.
2. This Chapter shall not apply to:
(a) financial services as defined in Article 9.1 (Definitions) of Chapter 9 (Financial Services);
(b) government procurement;
(c) services supplied in the exercise of governmental authority in a Party’s Area; or
(d) subsidies or grants provided by a Party, including government-supported loans, guarantees and insurance, or to any conditions attached to the receipt of such subsidies or grants.
3. This Chapter does not impose any obligation on a Party with respect to a natural person of the other Party who seeks access to its employment market or who is employed on a permanent basis in its Area, and does not confer any right on that natural person with respect to that access or employment.
4. This Chapter shall not apply to air services, including domestic and international air transportation services, whether scheduled or non-scheduled, or to related services in support of air services, other than the following:
(a) aircraft repair and maintenance services during which an aircraft is withdrawn from service, excluding so-called line maintenance;
(b) selling and marketing of air transport services;
(c) computer reservation system services;
(d) specialty air services;
(e) airport operation services; and
(f) ground handling services.
5. In the event of any inconsistency between this Chapter and a bilateral, plurilateral or multilateral air services agreement to which the Parties are party, the air services agreement shall prevail in determining the rights and obligations of the Parties.
6. If the Parties have substantially equivalent obligations under this Agreement and a bilateral, plurilateral or multilateral air services agreement to which the Parties are party, they may invoke the dispute settlement procedures of this Agreement only after any dispute settlement procedures in the other agreement have been exhausted.
7. If the Annex on Air Transport Services of GATS is amended, the Parties shall jointly review any new definitions with a view to aligning the definitions in this Agreement with those definitions, as appropriate.
Article 8.3. National Treatment (2)
- Each Party shall accord to services and service suppliers of the other Party treatment no less favourable than that it accords, in like circumstances, to its own services and service suppliers.
- For greater certainty, the treatment to be accorded by a Party under paragraph 1 means, with respect to a regional level of government, treatment no less favourable than the most favourable treatment accorded, in like circumstances, by that regional level of government to service suppliers of the Party of which it forms a part.
Article 8.4. Most-Favoured-Nation Treatment
Each Party shall accord to services and service suppliers of the other Party treatment no less favourable than that it accords, in like circumstances, to services and service suppliers of a non-party.
Article 8.5. Market Access
Neither Party shall adopt or maintain, either on the basis of a regional subdivision or on the basis of its entire Area, measures that:
(a) impose limitations on:
(i) the number of service suppliers, whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirement of an economic needs test;
(ii) the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(iii) the total number of service operations or the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test; (3) or
(iv) the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test; or
(b) restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service.
Article 8.6. Local Presence
Neither Party shall require a service supplier of the other Party to establish or maintain a representative office or any form of enterprise, or to be resident, in its Area as a condition for supply of a service under Mode 1, Mode 2 or Mode 4.(4)
Article 8.7. Non-Conforming Measures
1. Articles 8.3, 8.4, 8.5 and 8.6 shall not apply to:
(a) any existing non-conforming measure that is maintained by a Party at:
(i) the central level of government, as set out by that Party in its Schedule to Annex I;
(ii) a regional level of government, as set out by that Party in its Schedule to Annex I; or
(iii) a local level of government;
(b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or
(c) an amendment to any non-conforming measure referred to in subparagraph (a), to the extent that the amendment does not decrease the conformity of the measure, as it existed immediately before the amendment, with Articles 8.3, 8.4, 8.5 or 8.6.
2. Articles 8.3, 8.4, 8.5 and 8.6 shall not apply to any measure that a Party adopts or maintains with respect to sectors, sub-sectors or activities, as set out by that Party in its Schedule to Annex II.
3. If a Party considers that a non-conforming measure applied by a regional level of government of the other Party, as referred to in paragraph 1(a)(ii), creates a material impediment to trade in services in relation to the former Party, it may request consultations with regard to that measure. The Parties shall enter into consultations with a view to exchanging information on the operation of the measure and to considering whether further steps are necessary and appropriate. (5)
Article 8.8. Domestic Regulation
1. Each Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.
2. With a view to ensuring that measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services, while recognising the right to regulate and to introduce new regulations on the supply of services in order to meet its policy objectives, each Party shall endeavour to ensure that any such measures that it adopts or maintains are:
(a) based on objective and transparent criteria, such as competence and the ability to supply the service;
(b) not more burdensome than necessary to ensure the quality of the service; and
(c) in the case of licensing procedures, not in themselves a restriction on the supply of the service.
3. In determining whether a Party is in conformity with its obligations under paragraph 2, account shall be taken of international standards of relevant international organisations6 applied by that Party.
4. If a Party requires authorisation for the supply of a service, it shall ensure that its competent authorities:
(a) within a reasonable period of time after the submission of an application considered complete under its laws and regulations, inform the applicant of the decision concerning the application;
(b) to the extent practicable, establish an indicative timeframe for the processing of an application;
(c) if an application is rejected, to the extent practicable, inform the applicant of the reasons for the rejection, either directly or on request, as appropriate;
(d) on request of the applicant, provide, without undue delay, information concerning the status of the application;
(e) to the extent practicable, provide the applicant with the opportunity to correct minor errors and omissions in the application and endeavour to provide guidance on the additional information required;
(f) if they deem appropriate, accept copies of documents that are authenticated in accordance with the Party’s laws and regulations in place of original documents;
(g) reach and administer their decisions in an independent manner and ensure that the procedures are impartial;
(h) avoid requiring an applicant to approach more than one competent authority for each application for authorisation; and
(i) taking into account their competing priorities and resource constraints, endeavour to accept applications in electronic format.
5. Each Party shall ensure that any authorisation fee charged by any of its competent authorities is reasonable, transparent and does not, in itself, restrict the supply of the relevant service. (7)
6. Each Party shall make publicly available the information necessary for service suppliers to comply with the requirements and procedures for obtaining, maintaining, amending and renewing such authorisation. Such information shall include, inter alia, where it exists:
(a) fees;
(b) contact information of relevant competent authorities;
(c) procedures for appeal or review of decisions concerning applications;
(d) procedures for monitoring or enforcing compliance with the terms and conditions of licenses;
(e) opportunities for public involvement, such as through hearings or comments;
(f) indicative timeframes for processing of an application;
(g) the requirements and procedures; and
(h) technical standards.
7. If licensing or qualification requirements include the completion of an examination, each Party shall ensure that:
(a) the examination is scheduled at reasonable intervals; and
(b) a reasonable period of time is provided to enable interested persons to submit an application.
- Each Party shall ensure that there are procedures in place domestically to assess the competency of professionals of the other Party.
- Paragraphs 1 through 8 shall not apply to the non-conforming aspects of measures that are not subject to the obligations under Articles 8.3 or 8.5 by reason of an entry in a
Party’s Schedule to Annex I, or to measures that are not subject to the obligations under Articles 8.3 or 8.5 by reason of an entry in a Party’s Schedule to Annex II.
10. If the results of the negotiations related to Article VI:4 of GATS, or the results of any similar negotiations undertaken in other multilateral fora in which the Parties participate, enter into effect, the Parties shall jointly review these results with a view to bringing them into effect, as appropriate, under this Agreement.