Title
Sri Lanka Thailand Free Trade Agreement (SLTFTA)
Preamble
PREAMBLE
THE KINGDOM OF THAILAND and THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA, hereinafter referred to individually as a "Party" or collectively as the "Parties":
INSPIRED by their longstanding friendship and cooperation and growing economic, trade, and investment relationship;
DESIRING to enlarge the framework of relations between the Parties through promoting trade and investment liberalisation;
RECOGNISING that the strengthening of their economic partnership will bring economic and social benefits, create new opportunities for employment, and improve the living standards of their people;
CREATING an expanded and secure market for the goods and services as well as a stable and predictable environment for investment;
RESOLVED to promote bilateral trade through the establishment of clear and mutually advantageous trade rules and the avoidance of trade barriers;
REAFFIRMING their respective rights and obligations under the World Trade Organization, other multilateral, regional, and bilateral agreements to which both Parties are party; and
DESIRING to strengthen the cooperative framework for the conduct of economic relations to ensure its dynamism and to encourage broader and deeper economic
cooperation; HAVE AGREED AS FOLLOWS:
Body
Chapter 1. INITIAL PROVISIONS AND GENERAL DEFINITIONS
Article 1.1. Objectives
The objectives of this Agreement are to:
(a) increase and enhance the economic cooperation for mutual benefit of the Parties;
(b) promote the expansion of trade through the harmonious development of the economic relations between the Parties;
(c) gradually eliminate difficulties and restrictions on trade between the Parties so as to improve the efficiency and competitiveness of their respective sectors;
(d) establish a framework of transparent and predictable rules to facilitate trade between the Parties; and
(e) create environment conducive to broadening and supplementing the scope of this Agreement to include trade in services and bilateral investment.
Article 1.2. 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.
Article 1.3. Relation to other Agreements
1. Each Party reaffirms its existing rights and obligations with respect to each other in relation to existing international agreements to which both Parties are party, including the WTO Agreement.
2. In the event of any inconsistency between this Agreement and any other agreement to which both Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution.
Article 1.4. Definitions of General Application
For the purposes of this Agreement, unless otherwise specified:
(a) Agreement means the Free Trade Agreement between the Kingdom of Thailand and the Democratic Socialist Republic of Sri Lanka;
(b) Commission means the Free Trade Commission established under Article 14.1 (Free Trade Commission);
(c) customs authority means the authority that, according to the legislation of each Party, is responsible for the administration and enforcement of its customs laws and regulations:
(i) in the case of Thailand, the Customs Department;
(ii) in the case of Sri Lanka, Sri Lanka Customs;
(d) customs duties means any duties or charges, including any form of surtax or surcharge, imposed in connection with the importation of goods, except for:
(i) charges equivalent to an internal tax imposed in conformity with Article I of GATT 1994;
(ii) duties imposed in conformity with Section IV (Bilateral Safeguard Measures) of Chapter 7 (Trade Remedies), Article XIX of GATT 1994, the Agreement on Safeguards, and Article 5 of the Agreement on Agriculture, contained in Annex 1A to the WTO Agreement;
(iii) anti-dumping or countervailing duties imposed in conformity with Article VI of GATT 1994, the Agreement on Implementation of Article VI of GATT 1994, and the SCM Agreement, contained in Annex 1A to the WTO Agreement; or
(iv) fees or other charges imposed in conformity with Article VII of GATT 1994;
(e) Customs Valuation Agreement means the Agreement on Implementation of Article VII of GATT 1994, contained in Annex 1A to the WTO Agreement;
(f) days means calendar days, including weekends and public holidays;
(g) existing means in effect on the date of entry into force of this Agreement;
(h) GATT 1994 means the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement;
(i) goods means any merchandise, product, article or material;
(j) Harmonized System or HS means the Harmonized Commodity Description and Coding System governed by the International Convention on the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, and Chapter Notes, as may be amended, adopted and implemented by the Parties in their respective tariff laws;
(k) heading means the first four digits in the tariff classification number under the Harmonized System;
(l) Import Licensing Agreement means the Agreement on Import Licensing Procedures, contained in Annex 1A to the WTO Agreement;
(m) measure means any measure by a Party, whether in the form of a law, regulation, rule, procedure, practice, decision, administrative action or any other form;
(n) originating means qualifying under the rules of origin set out in Chapter 3 (Rules of Origin);
(o) preferential tariff treatment means the duty rate applicable under this Agreement to an originating good;
(p) Safeguards Agreement means the Agreement on Safeguards, contained in Annex 1A to the WTO Agreement;
(q) SCM Agreement means the Agreement on Subsidies and Countervailing Measures, contained in Annex 1A to the WTO Agreement;
(r) SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, contained in Annex 1A to the WTO Agreement;
(s) subheading means the first six digits in the tariff classification number under the Harmonized System;
(t) TBT Agreement means the Agreement on Technical Barriers to Trade, contained in Annex 1A to the WTO Agreement;
(u) territory means:
(i) in the case of Thailand, its land territory, its internal waters, its territorial sea, and the air space above them, the exclusive economic zone, the continental shelf, and any maritime areas over which it exercises rights or jurisdiction in accordance with international law.
(ii) in the case of 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) Trade Facilitation Agreement means the Agreement on Trade Facilitation, contained in Annex 1A to the WTO Agreement;
(w) WTO means the World Trade Organization; and
(x) WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.
Chapter 2. TRADE IN GOODS
Article 2.1. Scope
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods between the Parties.
Article 2.2. National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article Il of GATT 1994, including its Notes and Supplementary Provisions. To this end, the obligations contained in Article Il of GATT 1994 and 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 means, with respect to a regional level of government, treatment no less favourable than the most favourable treatment that the 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 2.3. Customs Value
The Parties shall determine the customs value of goods in accordance with the provisions of Article VII of GATT 1994 and the Customs Valuation Agreement.
Article 2.4. Reduction or Elimination of Customs Duties
1. The provisions of this Chapter concerning the reduction or elimination of customs duties on imports shall apply to goods originating in the territory of the Parties.
2. Except as otherwise provided in this Agreement, each Party shall reduce or eliminate its customs duties on imported goods originating in the other Party in accordance with its Schedule of Tariff Commitments in Annex 2A (Schedule of Tariff Commitments - Thailand) or Annex 2B (Schedule of Tariff Commitments - Sri Lanka).
3. Reduction or elimination shall occur upon entry into force of the Agreement and thereafter on 1 January of each calendar year, as provided for in each Party's Schedule.
4. The base rate of customs duties on imports to which the successive reductions or eliminations are to be applied under paragraph 2 shall be that specified in the Schedules of Tariff Commitments in Annex 2A (Schedule of Tariff Commitments - Thailand) and Annex 2B (Schedule of Tariff Commitments - Sri Lanka).
5. At the time of importation, where the most-favoured-nation ("MFN") applied rate is lower than the rate of customs duty provided for in the Schedules of Tariff Commitments in Annex 2A (Schedule of Tariff Commitments - Thailand) and Annex 2B (Schedule of Tariff Commitments - Sri Lanka), originating goods of the Parties shall be eligible for the MFN applied rate of customs duty for those goods. If an importer did not make a claim for the lower rate of customs duty at the time of importation, such importer may apply for a refund of the difference as per the provisions of domestic laws and regulations.
Article 2.5. Standstill Clause
1. Except as provided in the Schedules of Tariff Commitments in Annex 2A (Schedule of Tariff Commitments - Thailand) and Annex 2B (Schedule of Tariff Commitments - Sri Lanka) or in any other provisions of this Agreement, each Party shall not increase an existing customs duty or introduce a 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 of Tariff Commitments in Annex 2A (Schedule of Tariff Commitments - Thailand) or Annex 2B (Schedule of Tariff Commitments - Sri Lanka) following a unilateral reduction of customs duties on originating goods of the other Party set out in its Schedule.
2. Paragraph 1 shall not apply to the goods of a Party, which are in the Exclusion List of that Party's Schedule of Tariff Commitments in Annex 2A (Schedule of Tariff Commitments - Thailand) or Annex 2B (Schedule of Tariff Commitments - Sri Lanka), unless otherwise provided in the same Schedule.
Article 2.6. Accelerated Tariff Elimination
1. Three years after the date of entry into force of this Agreement or on the request of either Party, the Parties shall consult to consider accelerating the elimination of customs duties on originating goods as set out in their Schedules of Tariff Commitments in Annex 2A (Schedule of Tariff Commitments - Thailand) and Annex 2B (Schedule of Tariff Commitments - Sri Lanka).
2. If the Parties agree to accelerate the reduction or elimination of customs duties on originating goods, which shall supersede any rates of customs duties specified in their respective Schedules of Tariff Commitments in Annex 2A (Schedule of Tariff Commitments - Thailand) and Annex 2B (Schedule of Tariff Commitments - Sri Lanka) for such goods, such agreement shall be treated as an amendment to the Schedules of Tariff Commitments in Annex 2A (Schedule of Tariff Commitments - Thailand) and Annex 2B (Schedule of Tariff Commitments - Sri Lanka), and shall enter into force in accordance with Article 14.9 (Amendments).
3. A Party may at any time accelerate unilaterally the elimination of customs duties on originating goods of the other Party set out in its Schedule. A Party considering doing so shall inform the other Party as early as practicable.
Article 2.7. Classification of Goods
The classification of goods in trade between the Parties shall be set out in each Party's respective tariff nomenclature in conformity with the Harmonized System, as may be amended.
Article 2.8. HS Transposition of Schedules of Tariff Commitments
1. Each Party shall ensure that the HS transposition of its Schedule of Tariff Commitments in Annex 2A (Schedule of Tariff Commitments - Thailand) or Annex 2B (Schedule of Tariff Commitments - Sri Lanka), undertaken following the periodic amendments to the Harmonized System, is carried out without impairing existing tariff concessions granted under this Agreement.
2. Each Party shall provide its Schedule of Tariff Commitments as per the nomenclature of the revised HS and a two-way correlation table setting out national tariff line level in a timely manner after completion of the HS transposition.
3. In case the Parties agree that there is any HS transposition error in the Schedules of Tariff Commitments, such error shall be rectified by the relevant Party.
4. Each Party shall make publicly available its transposed Schedule of Tariff Commitments in the nomenclature of the revised HS in a timely manner.
Article 2.9. Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with paragraph 1 of Article VII of GATT 1994, that all fees and charges of whatever character (other than import and export duties and other than taxes within the purview of Article II of GATT 1994) imposed on or in connection with importation or exportation shall be limited in amount to the approximate cost of services rendered and shall not represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purposes.
2. Each Party shall ensure that the fees and charges are imposed in accordance with paragraphs 1 and 2 of Article 6 of the Trade Facilitation Agreement. The obligation set out in this paragraph shall be implemented pursuant to the transitional arrangements that each Party has provided for under the Trade Facilitation Agreement. Notwithstanding the above, each Party shall fully implement the obligation in this paragraph no later than 30 June 2024 or within the extended period as notified by that Party and approved by the WTO.
3. Each Party shall promptly publish in an officially designated medium details of the fees and charges that it imposes on or in connection with importation or exportation of goods and shall make such information available on the internet.
Article 2.10. Non-Tariff Measures
1. Each Party shall not introduce or maintain any non-tariff measures on the importation of any goods of the other Party or on the exportation or sale for export of any goods destined for the other Party, except in accordance with its WTO rights and obligations, including those set out in Article XI of GATT 1994, and other provisions of this Agreement. To this end, Article XI of GATT 1994 and its Notes and Supplementary Provisions are incorporated into and made part of this Agreement, mutatis mutandis.
2. Each Party shall ensure the transparency of its non-tariff measures permitted in paragraph 1 and shall ensure that any such measures are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to trade between Parties.
3. The Parties understand that the rights and obligations under GATT 1994, as incorporated into and made part of this Agreement, mutatis mutandis, pursuant to paragraph 1, prohibit a Party from adopting or maintaining:
(a) export and import price requirements, except as permitted in enforcement of countervailing and antidumping orders and undertakings;
(b) voluntary export restraints, inconsistent with Article VI of GATT 1994, as implemented under Article 18 of the SCM Agreement and paragraph 1 of Article 8 of the Anti-Dumping Agreement.
4. The Parties recognise the treatments under the WTO of a net food- importing developing country for the purpose of food security under this Agreement. (1)
Article 2.11. Import 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 licensing procedures in accordance with:
(a) paragraphs 1 through 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 subparagraphs (a) through (c) are incorporated into and made part of this Agreement, mutatis mutandis.
3. The Parties shall ensure that all importing licensing procedures are neutral in application and administered in a fair, equitable, non-discriminatory, and transparent manner.
4. Each Party shall respond within 30 days after the date of receipt of an enquiry from the other Party regarding:
(a) any licensing procedures which the Party has adopted or maintained; or
(b) the criteria for granting or allocating import licenses.
For greater clarity, the enquiry and response shall be made through the contact points designated pursuant to subparagraph 3(f) of Article 2.15 (Committee on Trade in Goods).
Article 2.12. State Trading Enterprises
1. The Parties affirm their existing rights and obligations under Article XVII of GATT 1994, its Notes and Supplementary Provisions, which are incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties shall be exempted from the obligations stated in subparagraph 4(c) of Article XVII of GATT 1994 with regard to food imported or purchased for non-commercial humanitarian purposes.
Article 2.13. Modification and Withdrawal of Concessions
1. A Party may, by mutual agreement with the other Party, modify or withdraw a concession contained in its Annex 2A (Schedule of Tariff Commitments - Thailand) or Annex 2B (Schedule of Tariff Commitments - Sri Lanka). Such mutual agreement shall include provisions for compensatory adjustment with respect to other goods. The Party modifying or withdrawing any concession provided in Annex 2A (Schedule of Tariff Commitments - Thailand) or Annex 2B (Schedule of Tariff Commitments - Sri Lanka) shall maintain a level of reciprocal and mutually advantageous concessions not less favorable to trade than that provided for in this Agreement prior to such agreement.
2. The modification or withdrawal of concessions shall be treated as an amendment to Annex 2A (Schedule of Tariff Commitments - Thailand) or Annex 2B (Schedule of Tariff Commitments - Sri Lanka) and shall enter into force in accordance with Article 14.9 (Amendments).
Article 2.14. Restrictions to Safeguard the Balance of Payments
1. The Parties shall endeavor to avoid the imposition of restrictive measures for balance of payments purposes.
2. Any measures taken for balance-of-payments purposes shall be in accordance with Article XII of GATT 1994, Section B of Article XVIII of GATT 1994, and the Understanding on the Balance-of-Payments Provisions, which are incorporated into and made part of this Agreement, mutatis mutandis.
3. Nothing in this Chapter shall be regarded as altering the rights enjoyed and obligations undertaken by a Party under the Articles of Agreement of the International Monetary Fund, as may be amended.
4. Any Party maintaining or having adopted measures to safeguard the balance of payments, or any changes thereto, shall promptly notify the other Party.
Article 2.15. Committee on Trade In Goods
1. The Parties hereby establish a Committee on Trade in Goods, comprising representatives of the Parties.
2. The Committee shall meet at least once a year or on the request of either Party to consider any matter arising under this Chapter.
3. The functions of the Committee shall be to:
(a) review and monitor (2) the implementation and operation of this Chapter;
(b) establish any sub-committee or working group, as and when necessary;
(c) receive reports from, and review the work of all sub-committees and working groups related to trade in goods established pursuant to subparagraph (b);
(d) identify and recommend measures to promote and facilitate improved market access;
(e) address barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures, and, if appropriate, refer such matters to the Commission for its consideration;
(f) designate one or more contact points of each Party to coordinate the implementation of this Chapter. Each Party shall notify the other Party of the contact details of such contact points and promptly notify the other Party of any changes thereto;
(g) report the findings and the outcome of discussions to the Commission; and
(h) carry out other functions as may be delegated by the Commission in accordance with Article 14.2 (Duties of the Commission) of Chapter 14 (Institutional and Final Provisions).
Chapter 3. RULES OF ORIGIN
Section I. GENERAL PROVISIONS
Article 3.1. Definitions
1. For the purposes of this Chapter:
(a) aquaculture means the farming of aquatic organisms including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants, from seedstock such as eggs, fry, fingerlings, and larvae, by intervention in the rearing or growth processes to enhance production such as regular stocking, feeding, or protection from predators;
(b) chapters, headings, and sub-headings mean the chapters, headings and sub-headings used in the nomenclature which makes up the HS with the changes pursuant to the Recommendation of 26 June 2004 of the Customs Co- operation Council;
(c) CIF means the value of the good imported and includes the cost of insurance and freight up to the port or place of entry in the country of importation. The valuation shall be made in accordance with Article VII of GATT 1994;
(d) classified refers to the classification of a good or material under a particular chapter, heading, or sub-heading of the HS;
(e) competent authority means the authority that, according to the legislation of each Party, is responsible for the issuance of the certificate of origin and may designate the issuance of the certificate of origin to other entities or bodies. In the case of Sri Lanka, the competent authority is the Department of Commerce or any other Authority acting on behalf of the Ministry of Trade. In the case of Thailand, the competent authority is the Ministry of Commerce or any other Authority acting on behalf of the Ministry;
(f) customs value means the value as determined in accordance with the Customs Valuation Agreement;
(g) exporter means a natural or juridical person located in the territory of a Party, where a good is exported from, by such a person;
(h) FOB means the free-on-board value of the good, inclusive of the cost of transport to the port or site of final shipment abroad. The valuation shall be made in accordance with Article VII of GATT 1994 and the Agreement on the Implementation of Article VII of GATT 1994;
(i) fungible materials means materials that are of the same kind and commercial quality, with the same technical and physical characteristics, and which cannot be distinguished from one another once they are incorporated into the finished goods;
(j) Generally Accepted Accounting Principles means those principles recognised by consensus or with substantial authoritative support in the territory of 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;