Article 5.7. Scope and Duration of Safeguard Measures
1. A Party shall apply a safeguard measure for such period of time as may be necessary to prevent or remedy serious injury and to facilitate adjustment. A Party may apply a safeguard measure for an initial period of no longer than two years. The period of a safeguard measure may be extended by up to one year provided that the conditions of this Chapter are met and that the safeguard measure continues to be applied to the extent necessary to prevent or remedy serious injury and that there is evidence that the industry is adjusting. The total period of a safeguard measure, including any extensions thereof, shall not exceed three years.
2. Regardless of its duration or whether it has been subject to extension, a safeguard measure on a product shall terminate at the end of the transition period for such product. No new safeguard measure may be applied to a product after the end of the transition period.
3. In order to facilitate adjustment in a situation where the proposed duration of a safeguard measure is over one year, the Party applying the safeguard measure shall progressively liberalise it at regular intervals during the application of the safeguard measure, including at the time of any extension.
4. A Party shall not apply a safeguard or provisional measure again on the same originating product for a period of time equal to the duration of the previous safeguard measure or two years, whichever is longer.
5. A Party shall not apply a safeguard or provisional measure on an originating product that is subject to a measure that the Party has applied pursuant to Article XIX of GATT 1994 and the WTO Agreement on Safeguards, or the WTO Agreement on Agriculture. When a Party intends to apply, pursuant to Article XIX of GATT 1994 and the WTO Agreement on Safeguards, or the WTO Agreement on Agriculture, a measure on a product to which a safeguard measure is being applied, it shall terminate the safeguard measure prior to the imposition of the action to be applied pursuant to Article XIX of GATT 1994 and the WTO Agreement on Safeguards, or the WTO Agreement on Agriculture.
6. Each Party shall not apply a safeguard or provisional measure on an originating product imported up to the limit of quota quantities granted under tariff rate quotas applied in accordance with its Tariff Schedule in Annex 1 (Schedules of Tariff Commitments).
7. On the termination of a safeguard measure, the Party that applied the measure shall apply the rate of Customs duty in effect as set out in its Tariff Schedule as specified in Annex 1 (Schedules of Tariff Commitments) on the date of termination as if the safeguard measure had never been applied.
Article 5.8. Investigation
1. A Party may apply or extend a safeguard measure only following an investigation by the Party’s competent authorities in accordance with the same procedures as those provided for in Articles 3 and 4.2 of the WTO Agreement on Safeguards.
2. The investigation shall include reasonable public notice to all interested parties and public hearings or other appropriate means in which importers, exporters and other interested parties could present evidence and their views, including the opportunity to respond to the presentations of other parties and to submit their views, inter alia, as to whether or not the application of a safeguard measure would be in the public interest.
3. An investigation shall as far as possible be completed within 180 days after being initiated but in no case shall exceed one year. A Party shall prior to the 180th day notify the other Party of the expected duration of the investigation, if the investigation is likely to take more than 180 days to complete. Upon completion of an investigation, the competent authorities shall promptly publish a report setting forth their findings and reasoned conclusions reached on all pertinent issues of fact and law.
Article 5.9. Provisional Measures
1. In critical circumstances where delay would cause damage which would be difficult to repair, a Party may apply a provisional measure, which shall take the form of the measure set out in Article 5.6(1)(a) or 1(b) (Application of Safeguard Measures), pursuant to a preliminary determination that there is clear evidence that increased imports of an originating product of the other Party as a result of the reduction or elimination of a duty pursuant to this Agreement have caused or are threatening to cause serious injury.
2. The duration of such a provisional measure shall as far as possible not exceed 120 days, but shall not extend beyond 200 days, during which period the pertinent requirements of Articles 5.5 (Definitions) to 5.8 (Investigation) shall be met. The duration of any such provisional measure shall be counted as part of the total period referred to in Article 5.7 (Scope and Duration of Safeguard Measures).
3. Any additional Customs duties collected as a result of such a provisional measure shall be promptly refunded if the subsequent investigation referred to in Article 5.8 (Investigation) does not determine that increased imports of an originating product of the other Party have caused or threatened to cause serious injury to a domestic industry. In such a case, the Party that applied the provisional measure shall apply the rate of Customs duty set out in its Tariff Schedule in Annex 1 (Schedules of Tariff Commitments) as if the provisional measure had never applied.
Article 5.10. Notification and Consultation
1. A Party shall promptly notify the other Party, in writing, upon:
(a) initiating an investigation under Article 5.8 (Investigation);
(b) making a finding of serious injury or threat thereof caused by increased imports of an originating product of the other Party as a result of the reduction or elimination of a Customs duty on the product pursuant to this Agreement;
(c) taking a decision to apply or extend a safeguard measure, or to apply a provisional measure; and
(d) taking a decision to progressively liberalise a safeguard measure previously applied.
2. A Party shall provide to the other Party a copy of the public version of the
report of its competent authorities required under Article 5.8(1) (Investigation) immediately after it is available.
3. In the written notice referred to in paragraph 1(a), the reason for the initiation of the investigation, a precise description of an originating product subject to the investigation and its subheading or more detailed level of the HS, the period subject to the investigation and the date of initiation of the investigation shall be included.
4. In notifying under paragraphs 1(b) and (c), the Party applying or extending a safeguard measure shall also provide evidence of serious injury or threat thereof caused by increased imports of an originating product of the other Party as a result of the reduction or elimination of a Customs duty pursuant to this Agreement; a precise description of the product involved and its subheading or more detailed level of the HS; the details of the proposed safeguard measure; and the date of introduction, duration and timetable for progressive liberalisation of the measure, if such timetable is applicable. In the case of an extension of a safeguard measure, evidence that the domestic industry concerned is adjusting shall also be provided. Upon request, the Party applying or extending a safeguard measure shall to the extent possible provide additional information as the other Party may consider necessary.
5. A Party proposing to apply or extend a safeguard measure shall provide adequate opportunity for prior consultations with the other Party, with a view to, inter alia, reviewing the information provided under paragraph 4, exchanging views on the safeguard measure and reaching an agreement on compensation as set forth in Article 5.11(1) (Compensation).
6. Where a Party applies a provisional measure referred to in Article 5.9 (Provisional Measures), on request of the other Party, consultations shall be initiated immediately after such application.
7. The provisions on notification in this Article shall not require a Party to disclose confidential information the disclosure of which would impede law enforcement or otherwise be contrary to the public interest, or would prejudice the legitimate commercial interests of particular enterprises, public or private.
Article 5.11. Compensation
1. A Party proposing to apply a safeguard measure shall, in consultation with the other Party, provide to the other Party mutually agreed trade compensation in the form of substantially equivalent concessions during the period of application of the safeguard measure. Such consultations shall begin within 30 days of the decision to apply the safeguard measure and, in accordance with Article 5.10(5) (Notification and Consultation), shall take place prior to the application of the safeguard measure.
2. If the Parties are unable to reach agreement on compensation within 30 days of the commencement of the consultations, the exporting Party shall be free to suspend the application of substantially equivalent concessions to the trade of the Party applying the safeguard measure.
3. A Party shall notify the other Party in writing at least 30 days before suspending concessions under paragraph 2.
4. The Party exercising the right of suspension shall suspend the application of concessions of Customs duties only for the minimum period necessary to achieve the substantially equivalent effects and only while the bilateral safeguard measure is maintained. The right of suspension provided for in this paragraph shall not be exercised for the first year that the safeguard measure is in effect, provided that the bilateral safeguard measure has been applied as the result of an absolute increase in imports and that such a measure conforms to this Section.
5. The obligation to provide compensation under paragraph 1 and the right to suspend substantially equivalent concessions under paragraph 2 shall terminate on the date of the termination of the safeguard measure.
Chapter SIX. SANITARY AND PHYTOSANITARY MEASURES
Article 6.1. Definitions
For the purpose of this Chapter:
(a) the definitions in Annex A of the SPS Agreement and relevant definitions developed by Codex Alimentarius Commission (“Codex”), the World Organisation for Animal Health (“OIE”), and the International Plant Protection Convention (“IPPC”) shall apply to the implementation of this Chapter; and
(b) SPS Agreement means the WTO Agreement on the Application of Sanitary and Phytosanitary Measures.
Article 6.2. Objectives
The objectives of this Chapter are to:
(a) uphold and enhance implementation of the SPS Agreement and applicable international standards, guidelines and recommendations developed by Codex, OIE, and the relevant international and regional organisations developed under the framework of the IPPC;
(b) establish a mechanism to facilitate trade between the Parties while protecting human, animal or plant life or health in the territory of the Parties, including through possible development of Implementing Arrangements on matters of mutual interest to the Parties;
(c) provide a means to improve communication, consultation and cooperation between the Parties on sanitary and phytosanitary issues; and
(d) strengthen collaboration between the Parties in relevant international bodies that develop international standards, guidelines and recommendations relevant to the matters covered by this Chapter.
Article 6.3. Scope
This Chapter shall apply to all sanitary or phytosanitary measures of a Party that may, directly or indirectly, affect trade between the Parties.
Article 6.4. International Obligations
1. The Parties reaffirm their existing rights and obligations with respect to each other under the SPS Agreement.
2. Nothing in this Chapter or any Implementing Arrangements shall limit the rights or obligations of the Parties pursuant to the SPS Agreement.
Article 6.5. Competent Authorities and Contact Points
1. Recognisingtheimportanceofcloseandeffectiveworkingrelationships between the Parties in giving effect to the objectives of this Chapter, the Parties shall promote communication to enhance present and future relationships between their competent authorities.
2. Both Parties shall recognise that the competent authorities are those authorities which are accountable for the implementation of matters within the scope of this Chapter. As at the date of entry into force of this Agreement, the competent authorities shall be as set out in the Implementing Arrangement (Competent Authorities and Contact Points).
3. Where requested by a Party, or where appropriate in the circumstances (for example where proposed changes to sanitary or phytosanitary measures would have a significant effect on bilateral trade), each Party shall provide the other Party through the designated Contact Points information relevant to the implementation of this Chapter. As at the date of entry into force of this Agreement, the Contact Points for such communications shall be those set out in the Implementing Arrangement (Competent Authorities and Contact Points).
4. Each Party shall notify the other Party of any changes to the competent authorities or Contact Points and of any significant changes in the structure, organisation and division of responsibility within its competent authorities or Contact Points.
Article 6.6. Sanitary and Phytosanitary Committee
1. The Parties shall establish a Sanitary and Phytosanitary Committee (“the Committee”) consisting of representatives of the competent authorities of the Parties and any other representatives of the Parties. The Committee shall consider any matters relating to the implementation of the Chapter including:
(a) establishing technical working groups, as required, to identify and address technical and scientific issues arising from this Chapter;
(b) initiating, developing, adopting, reviewing and modifying Implementing Arrangements on technical matters which further elaborate the provisions of this Chapter in order to facilitate trade between the Parties;
(c) establishing, monitoring and reviewing work plans; and
(d) reporting to the Joint Commission.
2. This Committee shall meet within one year of the entry into force of this Agreement and annually thereafter, or as mutually determined by the Parties. It shall meet in person, by teleconference, by video-conference, or through any other means, as mutually determined by the Parties. The Committee may also address issues through correspondence, including e-mail.
3. Decisions of the Committee shall be by consensus.
Article 6.7. Facilitation of Trade and Implementing Arrangements
1. The Parties may adopt, through the Committee, Implementing Arrangements which further elaborate the provisions of this Chapter in order to facilitate trade between the Parties or to achieve other mutually agreed objectives related to sanitary or phytosanitary measures. Such Implementing Arrangements may set out understandings reached with respect to matters of mutual interest, including competent authorities, Contact Points, equivalence, regionalisation, certification, and verification as provided for, inter alia, in Articles 6.5 (Competent Authority and Contact Points), 6.8 (Equivalence), 6.9 (Regionalisation) and 6.10 (Verification).
2. Where Implementing Arrangements have been adopted, they shall be applied to trade between the Parties. Where conditions for trade are not set out in an Implementing Arrangement, trade shall take place under the conditions required by the importing Party to meet its appropriate level of sanitary or phytosanitary protection.
3. Each Party shall take all necessary actions to implement the understandings reached in an Implementing Arrangement within three months of the adoption of the Implementing Arrangement by the Committee under Article 6.6(1)(b) (Sanitary and Phytosanitary Committee), or as otherwise mutually determined by the Parties.
Article 6.8. Equivalence
1. The Parties recognise the principle of equivalence as set down in the SPS Agreement and, in particular, Article 4 of that Agreement, which provides for the recognition of sanitary or phytosanitary measures as equivalent where the exporting Party objectively demonstrates to the importing Party that its measures achieve the importing Party’s appropriate level of sanitary or phytosanitary protection.
2. Where equivalence is recognised, it may be recognised by the Parties in relation to an individual measure and/or a group of measures and/or systems applicable to a sector or part of a sector. The Parties may mutually decide principles and procedures applicable to determinations of equivalence and record them in an Implementing Arrangement. Any determinations of equivalence shall be recorded in an Implementing Arrangement.
Article 6.9. Regionalisation
1. The Parties recognise the concept of regionalisation, zoning and compartmentalisation, as set down in Article 6 of the SPS Agreement, and as elaborated in OIE and IPPC Standards, which provide, inter alia, for the recognition of pest- or disease-free areas or areas of low pest or disease prevalence where the exporting Party objectively demonstrates to the importing Party that such areas are, and are likely to remain, pest- or disease-free areas or areas of low pest or disease prevalence, respectively.
2. Within this framework, the Parties may mutually recognise regionalisation, zoning and compartmentalisation at various levels, including farms and processing establishments, as having appropriate biosecurity measures, as mutually agreed.
3. The Parties may mutually decide principles, procedures and/or certification provisions applicable to regionalisation decisions and record them in an Implementing Arrangement. Where the Parties come to an agreed determination with respect to commodities or situations where regionalisation decisions are, or will be, accepted, these shall be recorded in an Implementing Arrangement.
Article 6.10. Verification
1. In order to maintain confidence in the effective implementation of the provisions in relation to trade, each Party shall have the right to carry out verification and audit of the exporting Party’s regulatory control system to enable trade to commence. Audit procedures shall be risk-based and reflect performance. They may include reviews of the exporting Party’s central or regional controls, onsite visits to a sample of establishments and/or checks of a proportion of imports from the exporting Party.
2. The Parties may decide on the principles and guidelines that are applicable to any audit procedures. Such principles and guidelines shall be recorded in an Implementing Arrangement.
Article 6.11. Emergency Measures
A Party may, on serious human, animal or plant life or health grounds, take provisional measures necessary for the protection of human, animal or plant life or health. These measures shall be notified within 24 hours to the other Party and, on request, consultations regarding the situation shall be held within 14 days unless otherwise agreed between the Parties. The Parties shall take due account of any information provided through such consultations.
Article 6.12. Notification
The Parties shall notify each other, in a timely and appropriate manner, in writing through the Contact Points of any significant food safety issue or change in animal health, plant health or pest status relevant to existing trade.
Article 6.13. Situations of Non-Compliance
The Parties shall cooperate where there is a notification of non- compliance of imported consignments for products subject to sanitary or phytosanitary measures, drawing on the guidelines of relevant international organisations where available. In particular, where such non-compliance arises, the importing Party shall notify as soon as possible the exporting Party of the consignment details. Unless specifically required by its laws, regulations or policies, the importing Party shall avoid suspending trade based on one consignment, but in the first instance shall contact the exporting Party to ascertain how the problem has occurred. The Parties shall consult to ensure that appropriate remedial actions are undertaken to address the area of non- compliance, and that further consignments are unaffected.
Article 6.14. Explanation of Measures and Consultations
Where a Party considers that a sanitary or phytosanitary measure affecting trade between it and the other Party warrants further discussion, it may, through the Contact Points, request a fuller explanation of the sanitary or phytosanitary measure including explanations as to why it is deemed necessary for trade between the Parties and the objectives of the measure. The request may additionally ask for consultations to be held. The other Party shall respond promptly to any requests for such explanations. Where a Party requests consultations, these consultations shall take place as soon as practicable.
Article 6.15. Cooperation
The Parties shall explore opportunities for further cooperation, collaboration and information exchange on sanitary and phytosanitary matters of mutual interest consistent with the provisions of this Chapter. Such opportunities include technical assistance, capacity building and facilitation of market access for products of interest.
Chapter SEVEN. TECHNICAL BARRIERS TO TRADE
Article 7.1. Definitions
For the purposes of this Chapter, the definitions set out in Annex 1 of the WTO TBT Agreement shall apply. In addition, the following definitions shall apply:
(a) Designation means the authorisation of a conformity assessment body to perform conformity assessment activities, by a body with the authority to designate, monitor, suspend or withdraw designation, or remove suspension of conformity assessment bodies within territories of the Parties;
(b) Technical regulations has the meaning set out in the WTO TBT Agreement and also includes standards that regulatory authorities recognise as meeting the mandatory requirements related to performance based regulations; and
(c) WTO TBT Agreement means the WTO Agreement on Technical Barriers to Trade.
Article 7.2. Objectives
The objectives of this Chapter are to:
(a) increase and facilitate trade through furthering the implementation of the WTO TBT Agreement and building on the work of APEC on standards and conformance;
(b) promote regulatory cooperation to manage risks to health, safety and the environment as a means of supporting trade-facilitation;
(c) reduce, where possible, unnecessary transaction costs associated with trade between the Parties;
(d) eliminate unnecessary technical barriers to trade in goods between the Parties;
(e) promote mutual understanding of each Party’s standards, technical regulations, and conformity assessment procedures;
(f) strengthen information exchange and cooperation among the Parties in relation to the preparation, adoption and application of standards, technical regulations and conformity assessment procedures;
(g) strengthen cooperation among the Parties in the work of international bodies related to standardisation and conformity assessments; and
(h) provide a framework to implement supporting mechanisms to realise these objectives.
Article 7.3. Affirmation of WTO TBT Agreement
The Parties affirm their existing rights and obligations with respect to each other under the WTO TBT Agreement.
Article 7.4. Scope
1. This Chapter applies to all standards, technical regulations and conformity assessment procedures that may affect the trade in goods between the Parties, except as provided in paragraphs 2 and 3.
2. This Chapter does not apply to purchasing specifications prepared by governmental entities for production or consumption requirements of such entities.
3. This Chapter does not apply to sanitary and phytosanitary measures which are covered by Chapter 6 (Sanitary and Phytosanitary Measures).
4. Nothing in this Chapter shall prevent a Party from adopting or maintaining, in accordance with its rights and obligations under the WTO TBT Agreement, technical regulations or standards necessary to fulfil a legitimate objective taking into account the risks non-fulfilment would create. This shall include technical regulations necessary to ensure its national security requirements, the prevention of deceptive practices, the protection of human health or safety, animal or plant life or health, or the environment.
Article 7.5. International Standards
1. The Parties shall use international standards, or the relevant parts of international standards, as a basis for their technical regulations and related conformity assessment procedures where relevant international standards exist or their completion is imminent, except when such international standards or their relevant parts are ineffective or inappropriate to fulfil legitimate regulatory objectives.
2. The Parties shall cooperate with each other, where appropriate, in the context of their participation in international standardising bodies, to ensure that international standards developed within such organisations are trade facilitating and do not create unnecessary obstacles to international trade.
Article 7.6. Conformity Assessment Procedures
1. In accordance with the objective of facilitating trade, the Parties shall seek to increase efficiency, avoid duplication and ensure cost effectiveness by the use of a range of appropriate mechanisms, including but not limited to:
(a) promoting recognition of cooperative arrangements between accreditation agencies from each other’s territory;
(b) implementing unilateral recognition by one Party of the results of conformity assessments performed in the other Party’s territory;
(c) implementing mutual recognition of conformity assessment procedures conducted by bodies located in the respective territories of the Parties;
(d) recognising accreditation procedures for qualifying conformity assessment bodies;
(e) recognising government designation of conformity assessment bodies;
(f) utilising existing regional and international multilateral recognition agreements and arrangements; and
(g) accepting suppliers’ declaration of conformity.
2. The Parties shall seek to ensure that conformity assessment procedures applied between them facilitate trade by ensuring that they are no more restrictive than is necessary to provide an importing Party with confidence that products conform with the applicable technical regulations, taking into account the risk that non-conformity would create.
3. The Parties may consult on such matters as the technical competence of the conformity assessment bodies involved, as appropriate, to enhance confidence in the continued reliability of each other’s conformity assessment results.
4. A Party shall, on the request of the other Party, explain its reasons for not accepting the results of any conformity assessment procedure performed in the territory of that other Party.
5. A Party may accredit or otherwise recognise conformity assessment bodies in the territory of the other Party. The terms of accreditation or recognition shall be no less favourable than those it accords to conformity assessment bodies in its territory. If a Party accredits or otherwise recognises a body assessing conformity with a particular technical regulation or standard in its territory and it refuses to accredit or otherwise recognise a body of the other Party assessing conformity with that technical regulation or standard, it shall, on request, explain the reasons for its refusal.
6. The Parties shall cooperate with the objectives of reducing compliance and administrative costs and the effective monitoring of compliance with their legitimate regulatory objectives.
7. Where a Party declines a request from the other Party to enter into negotiations on facilitating recognition of the results of conformity assessment procedures conducted by bodies of the other Party, it shall, on request, explain its reasons.
Article 7.7. Equivalence of Technical Regulations
1. Consistent with the WTO TBT Agreement, each Party shall give positive consideration to accepting as equivalent technical regulations of the other Party, even if these regulations differ from its own, provided that those technical regulations produce outcomes that are equivalent to those produced by its own technical regulations in meeting its legitimate objectives and achieving the same level of protection.
2. A Party shall, upon the request of the other Party, explain the reasons why it has not accepted a technical regulation of the other Party as equivalent.
Article 7.8. Cooperation for Regulatory Effectiveness
1. Recognising the important relationship between good regulatory practices and trade-facilitation, the Parties shall cooperate in the areas of standards, technical regulations, and conformity assessment to:
(a) promote good regulatory practice based on risk management principles;
(b) improve the quality and effectiveness of their regulations;
(c) develop joint initiatives for managing risks to health, safety and the environment; and
(d) build understanding and capacity to promote better regulatory compliance.
2. The Parties shall seek to implement paragraph 1 by establishing work programmes under Article 7.10 (Implementation) to:
(a) exchange information on, inter alia:
(i) regulatory systems;
(ii) incident analysis;
(iii) hazard alerts;
(iv) product bans and recalls;
(v) protocols, strategies and programmes for product surveillance activities; and
(vi) related market information material; and
(b) cooperate on, inter alia:
(i) the development of technical regulations;
(ii) regulatory reviews and implementation; and
(iii) the development and implementation of risk management principles including product monitoring, safety, compliance and enforcement protocols.