Title
FREE TRADE AGREEMENT BETWEEN THE UNITED MEXICAN STATES AND THE REPUBLIC OF PANAMA
Preamble
PREAMBLE
The United Mexican States (hereinafter referred to as "Mexico") and the Republic of Panama (hereinafter referred to as "Panama"),
DETERMINED TO:
REAFFIRM the special ties of friendship, solidarity and cooperation between their peoples;
STRENGTHEN the regional economic integration schemes;
REACH a better balance in their trade relations, taking into consideration their levels of economic development, through clear and mutually beneficial rules for their commercial exchange;
CONTRIBUTE to harmonious development, the expansion of world trade and the broadening of international cooperation;
PROVIDE a larger and more secure market for goods and services produced in their respective territories;
REDUCE distortions in their reciprocal trade;
CONTRIBUTE to the competitiveness of the services sector by creating business opportunities in the free trade area;
ENSURE a predictable commercial framework for the planning of productive activities and investment;
DEVELOP their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization and the Treaty of Montevideo 1980, as well as other bilateral and multilateral integration and cooperation instruments to which they are party;
PROMOTE trade facilitation by promoting efficient and transparent customs procedures that reduce costs and ensure predictability for importers and exporters;
STRENGTHEN the competitiveness of their companies in global markets;
STIMULATE creativity and innovation by promoting trade in goods and services that are subject to intellectual property rights protection;
RECOGNIZE the importance of transparency in international trade;
PROMOTE new opportunities for the economic and social development of their States; and
PRESERVE their ability to safeguard the public welfare;
HAVE AGREED AS FOLLOWS:
Body
Chapter 1. INITIAL PROVISIONS
Article 1.1. Establishment of the Free Trade Area
The Parties establish a free trade area in accordance with the provisions of Article XXIV of GATT 1994 and Article V of GATS.
Article 1.2. Objectives
1. The objectives of this Agreement, as specifically developed through its principles and rules, including those of national treatment, most-favored-nation treatment, and transparency, are the following:
(a) to stimulate the expansion and diversification of trade in goods and services between the Parties;
(b) to facilitate the movement of goods and services between the Parties and the elimination of barriers to trade;
(c) promote conditions of fair competition within the free trade area;
(d) facilitate the movement of capital and business persons between the territories of the Parties;
(e) to increase investment opportunities in the territories of the Parties;
(f) protect and enforce, in an adequate and effective manner, intellectual property rights in the territory of each Party;
(g) establishing guidelines for bilateral, regional and multilateral cooperation aimed at extending and enhancing the benefits of this Agreement; and
(h) creating effective procedures for the implementation and enforcement of this Agreement, for its joint administration and for the settlement of disputes.
2. The Parties shall interpret and apply the provisions of this Agreement in light of the objectives set out in paragraph 1 and in accordance with applicable rules of international law.
Article 1.3. Relationship to other Treaties and International Agreements
1. The Parties confirm the rights and obligations existing between them under the WTO Agreement and other treaties or agreements to which they are a Party.
2. In the event of any inconsistency between the provisions of the treaties and agreements referred to in paragraph 1 and the provisions of this Agreement, the latter shall prevail to the extent of the inconsistency.
Article 1.4. Enforcement of the Treaty
Each Party shall ensure, in accordance with its constitutional requirements, compliance with the provisions of this Treaty in its territory, at the central, regional and local levels, as appropriate, except as otherwise provided in this Treaty.
Article 1.5. Succession of Treaties
Any reference to any other treaty or international agreement shall be understood to be made in the same terms to a successor treaty or agreement to which the Parties are parties.
Chapter 2. GENERAL DEFINITIONS
Article 2.1. Definitions of General Application
For the purposes of this Agreement, unless otherwise specified, the following definitions shall apply:
Antidumping Agreement: the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, which forms part of the WTO Agreement;
Customs Valuation Agreement: the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, including its interpretative notes, which is part of the WTO Agreement;
SPS Agreement: the Agreement on the Application of Sanitary and Phytosanitary Measures, which is part of the WTO Agreement;
TBT Agreement: the Agreement on Technical Barriers to Trade, which is part of the WTO Agreement;
Agreement on Agriculture: the Agreement on Agriculture, which is part of the WTO Agreement;
Agreement on WTO: the Marrakesh Agreement Establishing the World Trade Organization, dated April 15, 1994;
Agreement on Import Licensing: the Agreement on Import Licensing Procedures, which is part of the WTO Agreement;
Agreement on TRIPS: the Agreement on Trade-Related Aspects of Intellectual Property Rights, which is part of the WTO Agreement;
Agreement on Safeguards: the Agreement on Safeguards, which is part of the WTO Agreement;
Agreement on Subsidies and Countervailing Measures: the Agreement on Subsidies and Countervailing Measures, which is part of the WTO Agreement;
GATS: the General Agreement on Trade in Services, which is part of the WTO Agreement;
customs duty: any import duty or tax and any charge of any kind levied in connection with the importation of goods, 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 has been manufactured or produced in whole or in part;
(b) antidumping or countervailing duty that is applied in a manner consistent with Article VI of the GATT 1994, the Antidumping Agreement, or the Agreement on Subsidies and Countervailing Measures;
(c) duty or other charge related to importation, commensurate with the cost of services rendered; and
(d) any premium offered, paid or collected on imported goods, arising from any tendering system, with respect to the administration of quantitative import restrictions or tariff-rate quotas or tariff preference quotas;
MFN customs tariff: the Most Favored Nation customs tariff;
Commission: the Administrative Commission established pursuant to Article 17.1 (Administrative Commission);
days means calendar days;
enterprise: any entity incorporated or organized under applicable law, whether or not for profit, and whether privately or governmentally owned, including any corporation, trust, partnership, sole proprietorship, joint venture, joint venture or other association, and a branch of an enterprise;
enterprise of a Party: an enterprise incorporated or organized under the domestic law of a Party, and a branch office located in the territory of a Party and carrying out substantive business activities in that territory;
existing: in effect at the date of entry into force of this Agreement;
tariff item: the breakdown of a Harmonized System tariff classification code to more than 6 digits;
GATT 1994: the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
measure: any law, regulation, procedure, provision, requirement or administrative practice, among others;
goods: products or merchandise as understood in the GATT 1994, whether originating or non-originating;
goods of a Party: domestic products as understood in the GATT 1994, such goods as the Parties may agree, and includes originating goods. A good of a Party may incorporate materials from other countries;
originating good or originating material: a good or material that qualifies as originating in accordance with the provisions of Chapter 4 (Rules of Origin and Customs Procedures);
national: a natural person who has the nationality of a Party in accordance with its applicable legislation, but does not include permanent residents;
WTO: the World Trade Organization;
Party: the United Mexican States and the Republic of Panama;
Exporting Party: the Party from whose territory a good or service is exported;
Importing Party: the Party into whose territory a good or service is imported;
item: the first 4 digits of the tariff classification code of the Harmonized System;
person: a natural or juridical person, or an enterprise;
person of a Party: a national or company of a Party;
Tariff Elimination Program: the program set forth in Article 3.4 (Tariff Elimination);
Harmonized System: the Harmonized Commodity Description and Coding System in force, including its General Rules of Interpretation and its section, chapter, and subheading legal notes, as well as its explanatory notes, as adopted and implemented by the Parties in their respective national legislation;
subheading: the first 6 digits of the Harmonized System tariff classification code;
territory: for each Party, as defined in Annex 2.1; and
Treaty of Montevideo 1980: the Treaty establishing the Latin American Integration Association.
Annex 2.1. COUNTRY-SPECIFIC DEFINITIONS
For the purposes of this Treaty, unless otherwise provided, the following definitions shall apply:
government at the central level:
(a) with respect to Mexico, the government at the federal level; and
(b) with respect to Panama, the national level of government;
regional level government:
(a) with respect to Mexico, a federative entity of the United Mexican States; and
(b) with respect to Panama, "government at the regional level" does not apply;
local level government:
(a) with respect to Mexico, municipalities; and
(b) with respect to Panama, municipalities;
territory:
(a) with respect to Mexico:
(i) the states of the Federation and the Federal District;
(ii) the islands, including reefs and cays in adjacent seas;
(iii) the islands of Guadalupe and Revillagigedo, located in the Pacific Ocean;
(iv) the continental shelf and the submarine sockets of islands, cays and reefs;
(v) the waters of the territorial seas, to the extent and under the terms established by international law, and the internal maritime waters;
(vi) the space above the national territory, to the extent and under the terms established by international law; and
(vii) any area beyond the territorial seas of Mexico within which Mexico may exercise rights over the seabed and subsoil and over the natural resources contained therein, in accordance with international law, including the United Nations Convention on the Law of the Sea, as well as with its national legislation; and (b) in respect of Panama, the area beyond the territorial seas of Mexico within which Mexico may exercise rights over the seabed and subsoil and over the natural resources contained therein, in accordance with international law, including the United Nations Convention on the Law of the Sea, as well as with its national legislation.
(b) with respect to Panama, the land, maritime and air space under its sovereignty; the exclusive economic zone and the continental shelf, over which it exercises sovereign rights and jurisdiction, in accordance with its national legislation and international law.
Chapter 3. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Section A. Definitions and Scope of Application
Article 3.1. Definitions
For the purposes of this Section, the following definitions shall apply:
import license or permit: the document issued by the relevant administrative body, as a condition precedent to importation into the territory of the importing Party, issued under an administrative procedure used for import licensing regimes, which requires the submission of an application or other documents (other than those required for customs purposes);
printed advertising materials: those goods classified in Chapter 49 of the Harmonized System, which includes brochures, advertising, commercial catalogs, loose sheets, yearbooks published by a trade association, tourist promotion materials and posters that are:
(a) used to promote, advertise, or publicize a good or service;
(b) intended to advertise a good or service; and
(c) distributed free of charge;
goods intended for exhibition or demonstration: goods that temporarily enter the territory of a Party for exhibition or demonstration purposes, including components, ancillary apparatus, and accessories of the goods;
goods temporarily admitted or imported for sporting purposes: sporting equipment for use in sporting competitions, events or training in the territory of the Party to which they are admitted or imported;
commercial sample of negligible value: a commercial sample having a value, individually or in the aggregate shipped, of not more than one United States dollar or in the equivalent amount in the currency of either Party, or which are marked, torn, perforated or otherwise treated so as to be unsuitable for sale or for use other than as a commercial sample;
advertising films and recordings: visual media or recorded audio materials consisting essentially of images and/or sound showing the nature or performance of a good or service offered for sale or rental by a person established or resident in the territory of a Party, provided that such materials are suitable for exhibition to potential customers, but not for dissemination to the general public, and are imported in packages each containing not more than one copy of each film or recording, and are not part of a larger consignment;
performance requirement: the requirement to:
(a) export a certain volume or percentage of goods or services;
(b) replace imported goods or services with goods or services of the Party granting the exemption from customs duties or import license;
(c) a person benefiting from a customs duty exemption or import license purchases other goods or services in the territory of the Party granting the customs duty exemption or import license, or grants a preference to goods produced in the territory of that Party;
(d) a person benefiting from a customs duty exemption or import license produces goods or services in the territory of the Party granting the customs duty exemption or import license with a specified level or percentage of domestic content, or
(e) relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows;
but does not include a requirement that an imported good be:
(a) subsequently exported;
(b) used as a material in the production of another good that is subsequently exported;
(c) substituted for an identical or similar good used as a material in the production of another good that is subsequently exported; or
(d) substituted for an identical or similar good that is subsequently exported; and (e) substituted for an identical or similar good that is subsequently exported.
consular transactions or requirements: requirements that goods of one Party destined for export to the territory of the other Party must first be submitted to the supervision of the consul of the importing Party in the territory of the exporting Party for the purpose of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, shipper's export declarations, or any other customs documents required for or in connection with importation.
Article 3.2. Scope of Application
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods between the Parties.
Section B. National Treatment
Article 3.3. 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. For this purpose, Article III of the GATT 1994 and its interpretative notes are incorporated into this Agreement and form an integral part thereof, mutatis mutandis.
2. The provisions of paragraph 1 mean, with respect to a regional or local level government, treatment no less favorable than the most favorable treatment accorded by that regional or local level government to any like, directly competitive, or substitute goods, as the case may be, of the Party of which it is a member.
3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 3.3.
Section C. Tariff Elimination
Article 3.4. Tariff Elimination
1. Except as otherwise provided in this Agreement, each Party shall eliminate its customs duties on originating goods in accordance with the Tariff Elimination Schedule set out in Annex 3.4.
2. Except as otherwise provided in this Agreement, no Party may increase any existing customs duties, or adopt any new customs duties, on originating goods.
3. With respect to goods excluded from the Tariff Elimination Program, any Party may maintain or adopt measures in accordance with its rights and obligations under the WTO Agreement.
4. At the request of either Party, the Parties shall consult to examine the possibility of improving the tariff terms and conditions of market access for originating goods covered by Annex 3.4. When the Parties approve an agreement to this effect, it shall prevail over any tariff or allowance category set out in their respective Tariff Elimination Schedules. These agreements shall be adopted through decisions of the Commission.
5. A Party may:
(a) increase a customs duty to be applied to an originating good to a level no higher than that set out in its Tariff Elimination Schedule, following a unilateral reduction of that customs duty; or
(b) maintain or increase a customs duty on an originating good, when authorized by the Dispute Settlement Body of the WTO Agreement.