Title
FREE TRADE AGREEMENT BETWEEN CANADA AND THE REPUBLIC OF KOREA
Preamble
CANADA ("Canada") AND THE REPUBLIC OF KOREA ("Korea"), hereinafter referred to as "the Parties", resolved to:
STRENGTHEN the special bonds of friendship and cooperation among their peoples;
CONTRIBUTE to the harmonious development and expansion of world and regional trade and to provide a catalyst to broader international cooperation;
BUILD on their respective rights and obligations under the WTO Agreement and other multilateral, regional, and bilateral instruments of cooperation to which both Parties are party;
PROMOTE regional integration in the Asia-Pacific region;
CREATE an expanded and secure market for the goods and services in their territories, as well as new employment opportunities and improve working conditions and living standards in their respective territories;
RECOGNISE that the promotion and the protection of investments of investors of a Party in the territory of the other Party will be conducive to the stimulation of mutually beneficial business activity;
REDUCE distortions to trade;
ESTABLISH clear, transparent, and mutually advantageous rules to govern their trade;
ENSURE a predictable commercial framework for business planning and investment;
ENHANCE the competitiveness of their enterprises in global markets;
UNDERTAKE each of the preceding in a manner that is consistent with environmental protection and conservation, reflecting their desire to enhance the enforcement of environmental laws and regulations, and strengthen cooperation on environmental matters;
PROTECT, enhance, and enforce basic workers' rights, and strengthen cooperation on labour matters;
PROMOTE sustainable development;
PRESERVE their flexibility to safeguard the public welfare;
PROMOTE cultural cooperation and recognise that the Parties have the right to preserve, develop, and implement their cultural policies and to support their cultural industries for the purpose of strengthening the diversity of cultural expressions; and
AFFIRM their commitment to respect the values and principles of democracy and to protect and promote human rights and fundamental freedoms identified in the Universal Declaration of Human Rights;
HAVE AGREED as follows:
Body
Chapter One. Initial Provisions and General Definitions
Section A. Initial Provisions
Article 1.1. Establishment of a Free Trade Area
Consistent with Article XXIV of GATT 1994 and Article V of GATS, the Parties hereby establish a free trade area, in accordance with the provisions of this Agreement.
Article 1.2. Relation to other Agreements
The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which both Parties are party.
Article 1.3. Relation to Multilateral Environmental Agreements
In the event of an inconsistency between a Party's obligations under this Agreement and the Party's obligations under an agreement listed in Annex 1-A, a Party is not precluded from taking a particular measure necessary to comply with its obligations under an agreement listed in Annex 1-A, provided that the measure is not applied in a manner that would constitute, where the same conditions prevail, arbitrary or unjustifiable discrimination, or a disguised restriction on international trade.
Article 1.4. Extent of Obligations
1. Each Party is fully responsible for the observance of all provisions of this Agreement and shall take such reasonable measures as may be available to it to ensure observance of this Agreement by sub-national governments and authorities within its territory.
2. For greater certainty, the provisions of Chapter Twenty-One (Dispute Settlement) may be invoked in respect of measures affecting the observance of this Agreement taken by sub-national governments within the territory of each Party. If a Panel established under Article 21.6 (Establishment of a Panel) has ruled that a provision of this Agreement has not been observed, the responsible Party shall take such reasonable measures as may be available to it to ensure its observance. The provisions relating to suspension of benefits or other obligations apply in cases where it has not been possible to secure such observance.
Article 1.5. Reference to other Agreements
Where this Agreement refers to or incorporates by reference other agreements or legal instruments in whole or in part, those references include related footnotes, interpretative and explanatory notes, protocols, annexes, appendices, et cetera that are integral parts of the agreements or legal instruments.
Article 1.6. Cultural Cooperation
1. The Parties agree to promote cultural cooperation in order to increase mutual understanding and benefit from each other's competitive strengths in the development of content for the global market. In this regard, the Parties endeavour to promote cultural exchanges and carry out joint initiatives in various cultural spheres, such as audiovisual coproductions.
2. Recognising that audiovisual coproduction agreements can significantly contribute to the development of the audiovisual industry and to an intensification of cultural and economic exchange, the Parties agree to consider the negotiation of an audiovisual coproduction agreement. Such a future audiovisual coproduction agreement shall form an integral part of this Agreement.
3. The audiovisual coproduction agreement referred to in paragraph 2 would be negotiated between the competent authorities of the Parties, which are the Department of Canadian Heritage for Canada and the Ministry of Culture, Sports and Tourism and the Korea Communications Commission for Korea, or their respective successors.
4. Article 23.2 (Amendments) does not apply to the audiovisual coproduction agreement referred to in paragraph 2. Any amendments to that agreement shall be done by mutual consent of the competent authorities of the Parties.
5. The dispute settlement provisions of Chapters Eight (Investment) and Twenty-One (Dispute Settlement) do not apply to matters covered by this Article, including an agreement negotiated pursuant to paragraph 2.
Article 1.7. Bilateral Trade and Investment Promotion In the Automotive Sector
The Parties shall cooperate to promote bilateral trade and investment in the automotive sector, which allows the Parties to realise the benefits of global production and supply chains.
Section B. General Definitions
Article 18. Definitions of General Application
For the purposes of this Agreement, unless otherwise specified:
Commission means the Joint Commission established under Article 20.1 (Joint Commission);
customs duty includes any customs or import duty and a charge of any kind imposed on or in connection with the importation of a good, including a form of surtax or surcharge in connection with such importation, but does not include:
(a) a charge equivalent to an internal tax imposed consistently with Article III: 2 of the GATT 1994, or any equivalent provision of a successor agreement to which both Parties are party, in respect of like, directly competitive or substitutable goods of the Party, or in respect of goods from which the imported good has been manufactured or produced in whole or in part;
(b) an anti-dumping or countervailing duty that is applied pursuant to a Party's domestic law and consistent with WTO obligations and the provisions of this Agreement;
(c) a fee or other charge in connection with importation commensurate with the cost of services rendered; and
(d) a premium offered or collected on an imported good arising out of any tendering system in respect of the administration of quantitative import restrictions and tariff rate quotas.
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement;
days means calendar days, including weekends and holidays;
Dispute Settlement Understanding (DSU) means the Understanding on Rules and Procedures Governing the Settlement of Disputes, contained in Annex 2 to the WTO Agreement;
enterprise means an entity constituted or organised under applicable law, whether or not for profit, and whether privately or governmentally-owned or controlled, including a corporation, trust, partnership, sole proprietorship, joint venture, or other association;
existing means in effect on the date of entry into force of this Agreement;
GATS means the General Agreement on Trade in Services, contained in Annex 1B to the WTO Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement;
GPA means the Agreement on Government Procurement, contained in Annex 4 to the WTO Agreement;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, Chapter Notes and subheading Notes;
heading means any four-digit number, or the first four digits of a number, used in the nomenclature of the Harmonized System;
measure includes a law, regulation, procedure, requirement or practice;
national means a natural person who is:
(a) for Canada, a Canadian citizen or permanent resident under Canadian legislation;
(b) for Korea, a Korean national under Korean legislation; New York Convention means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958;
originating means qualifying under the rules of origin set out in Chapter Three (Rules of Origin); person means a natural person or an enterprise;
person of a Party means a national of a Party, or an enterprise of a Party;
Safeguards Agreement means the Agreement on Safeguards, contained in Annex1A to the WTO Agreement;
sanitary or phytosanitary measure means any measure referred to in paragraph 1 of Annex A of the SPS Agreement;
SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, contained in Annex 1A to the WTO Agreement;
state enterprise means, except as set out in Annex 15-A (Country-Specific Definitions of State Enterprise), an enterprise owned or controlled through ownership interests, by a Party;
subheading means any six-digit number, or the first six digits of a number, used in the nomenclature of the Harmonized System;
tariff classification means the classification of a good or material under a chapter, heading or subheading of the Harmonized System;
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, contained in Annex 1C to the WTO Agreement;
Universal Declaration of Human Rights means the Universal Declaration of Human Rights, adopted by the General Assembly of the United Nations on 10 December 1948;
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on 15 April 1994, or any successor agreement to which both Parties are party.
Article 1.9. Country-specific Definitions
For the purposes of this Agreement, unless otherwise specified:
national government means:
(a) for Canada, the Government of Canada; and
(b) for Korea, the Government of the Republic of Korea;
sub-national government means:
(a) for Canada, provincial, territorial, or local governments; and
(b) for Korea, as a unitary Republic, the term sub-national government does not apply;
province means:
(a) for Canada, a province of Canada, and includes the Yukon and the Northwest Territories and Nunavut; and
(b) for Korea, the term province does not apply; and
territory means:
(a) for Canada,
(i) the land territory, air space, internal waters and territorial sea of Canada;
(ii) the exclusive economic zone of Canada, as determined by its domestic law, consistent with Part V of the United Nations Convention on the Law of the Sea, done at Montego Bay on 10 December 1982 (hereinafter referred to as "UNCLOS"); and
(iii) the continental shelf of Canada, as determined by its domestic law, consistent with Part VI of UNCLOS; and
(b) for Korea, the land, maritime, and air space over which Korea exercises sovereignty, and those maritime areas, including the seabed and subsoil adjacent to and beyond the outer limit of the territorial seas over which it may exercise sovereign rights or jurisdiction in accordance with international law and its domestic law.
Annex 1-A. Multilateral Environmental Agreements
(a) The Convention on International Trade in Endangered Species of Wild Fauna and Flora, done at Washington on 3 March 1973, as amended on 22 June 1979.
(b) The Montreal Protocol on Substances that Deplete the Ozone Layer, done at Montreal on 16 September 1987, as amended 29 June 1990, as amended 25 November 1992, as amended 17 September 1997, as amended 3 December 1999.
(c) The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, done at Basel on 22 March 1989.
(d) The Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, done at Rotterdam on 10 September 1998.
(e) The Stockholm Convention on Persistent Organic Pollutants, done at Stockholm on 22 May 2001.
Chapter Two. National Treatment and Market Access for Goods
Article 2.1. Scope and Coverage
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods of a Party.
Article 2.2. National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994 and, for greater certainty, its interpretative notes, and to this end Article III of the GATT 1994 and, for greater certainty, its interpretative notes, or an equivalent provision of a successor agreement to which both Parties are party, are incorporated into and made part of this Agreement.
2. The treatment to be accorded by a Party pursuant to paragraph 1 means, with respect to a sub-national government, treatment no less favourable than the most favourable treatment that sub-national government accords to like, directly competitive or substitutable goods of the Party of which it forms a part.
3. Paragraph 1 does not apply to the measures set out in Annex 2-A.
Article 2.3. Tariff Elimination
1. Except as otherwise provided in this Agreement, a Party shall not increase an existing customs duty, or adopt a customs duty, on an originating good.
2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods in accordance with its Schedule to Annex 2-D.
3. Each party shall apply to an originating good the lesser of:
(a) The tariff rate applicable under its Schedule to Annex 2-D; or
(b) The most-favoured-nation (MFN) applied tariff rate.
4. At the request of a Party, the Parties shall consult to consider accelerating the elimination of customs duties on a good after the entry into force of this Agreement. An agreement between the Parties to accelerate elimination of customs duties on an originating good shall supersede a duty rate or staging category determined pursuant to their Schedules for that good when approved by each Party in accordance with its applicable domestic legal procedures.
5. For greater certainty, a Party may:
(a) modify its tariffs outside this Agreement on goods for which no tariff preference is claimed under this Agreement;
(b) increase a customs duty to the level established in its Schedule to Annex 2-D following a unilateral reduction; and
(c) maintain or increase a customs duty as authorised by this Agreement, the Dispute Settlement Body of the WTO, or any agreement under the WTO Agreement.
Article 2.4. Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission for the following goods imported from the territory of the other Party, regardless of their origin and regardless of whether like, directly competitive or substitutable goods are available in the territory of the Party:
(a) professional equipment necessary for carrying out the business activity, trade, or profession of a business person who qualifies for temporary entry under Chapter Twelve (Temporary Entry for Business Persons);
(b) equipment for the press or for sound or television broadcasting and cinematographic equipment;
(c) goods imported for sports purposes and goods intended for display or demonstration; and
(d) commercial samples and advertising films and recordings.
2. Except as otherwise provided in this Agreement, a Party shall not condition the duty-free temporary admission of a good under paragraph 1(a), (b), or (c), other than to require that the good:
(a) be imported by a national or resident of the other Party who seeks temporary entry;
(b) be used only by or under the personal supervision of that person in the exercise of the business activity, trade, profession, or sport of that person;
(c) not be sold or leased while in its territory;
(d) be accompanied by a bond in an amount no greater than the charges that would otherwise be owed on entry or final importation, or by another form of security, releasable on exportation of the good, except that a bond for customs duties shall not be required for an originating good (1) ;
(e) be capable of identification when exported;
(f) be exported on the departure of that person or within another period of time that is reasonably related to the purpose of the temporary admission within one year, or such other longer period in accordance with the domestic law and practices of the Party; and
(g) be imported in no greater quantity than is reasonable for its intended use.
3. Except as otherwise provided in this Agreement, a Party shall not condition the duty-free temporary admission of a good under paragraph 1(d), other than to require that the good:
(a) be imported only for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-party;
(b) not be sold, leased, or put to use other than for exhibition or demonstration while in its territory;
(c) be capable of identification when exported;
(d) be exported within a period of time that is reasonably related to the purpose of the temporary importation; and
(e) be imported in no greater quantity than is reasonable for its intended use.
4. If a good is temporarily admitted duty-free pursuant to paragraph 1 and a condition that the Party imposes pursuant to paragraphs 2 and 3 has not been fulfilled, a Party may impose:
(a) the customs duty and any other charge that would be owed on entry or final importation of the good; and
(b) any other charges or penalties provided under its domestic law.
5. Subject to Chapters Eight (Investment) and Nine (Cross-Border Trade in Services):
(a) each Party shall allow a container used in international traffic that enters its territory from the territory of the other Party to exit its territory on a route that is reasonably related to the economic and prompt departure of that container;
(b) a Party shall not require a bond or impose a penalty or charge only by reason of a difference between the port of entry and the port of departure of a container;
(c) a Party shall not condition the release of an obligation, including a bond, that it imposes in respect of the entry of a container into its territory, on its exit through a particular port of departure; and
(d) a Party shall not require that the carrier bringing a container from the territory of the other Party into its territory be the same carrier that takes such container to the territory of the other Party.
Article 2.5. Duty-free Entry of Certain Commercial Samples and Printed Advertising Materials
Each Party shall grant duty-free entry to commercial samples of negligible value, and to printed advertising materials, imported from the territory of the other Party, regardless of their origin, but may require that: