3. Research centres, higher-education institutions, and other stakeholders, including MSMEs, located in the Parties shall be involved in this cooperation as appropriate.
4. The Parties agree to use all mechanisms to increase the quantity and quality of highly qualified human resources, including through training, collaborative research, scholarships and exchanges.
5. The Parties shall promote the participation of their respective entities in each other's scientific and technological programmes in pursuit of mutually beneficial scientific excellence and in accordance with their respective provisions governing the participation of legal entities from third countries.
Part IV. TRADE
Title I. INITIAL PROVISIONS
Article 77. Establishment of a Free Trade Area and Relation to the Wto Agreement
1. The Parties to this Agreement, consistent with Article XXIV of the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as "GATT 1994") and Article V of the General Agreement on Trade in Services (hereinafter referred to as "GATS"), hereby establish a free trade area.
2. The Parties reaffirm their existing (1) rights and obligations with respect to each other under the WTO Agreement.
Article 78. Objectives
The objectives of Part IV of this Agreement are:
(a) the expansion and the diversification of trade in goods between the Parties, through the reduction or the elimination of tariff and non tariff barriers to trade;
(b) the facilitation of trade in goods through, in particular, the agreed provisions regarding customs and trade facilitation, standards, technical regulations and conformity assessment procedures as well as sanitary and phytosanitary measures;
(c) the liberalisation of trade in services, in conformity with Article V of GATS;
(d) the promotion of economic regional integration in the area of customs procedures, technical regulations and sanitary and phytosanitary measures to facilitate the circulation of goods between and within the Parties;
(e) the development of a climate conducive to increased investment flows, the improvement of the conditions of establishment between the Parties on the basis of the principle of non-discrimination and the facilitation of trade and investment among the Parties through current payments and capital movements related to direct investment;
(f) the effective, reciprocal and gradual opening of government procurement markets of the Parties;
(g) the adequate and effective protection of intellectual property rights, in accordance with international obligations in force between the Parties, so as to ensure the balance between the rights of the right-holders and public interest, taking into consideration the differences between the Parties and the promotion of technology transfer between the regions;
(h) the promotion of free and undistorted competition in the economic and trade relations between the Parties;
(i) the establishment of an effective, fair and predictable dispute settlement mechanism; and
(j) the promotion of international trade and investment between the Parties in a way that contributes to the objective of sustainable development through joint collaborative work.
Article 79. Definitions of General Application
Unless otherwise specified, for the purposes of Part IV of this Agreement, the below terms shall have the following meaning:
- "Central America" means the Republics of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama;
- "customs duty" includes any duty or charge of any kind imposed on or in connection with the importation of a good, including any form of surtax or surcharge imposed on or in connection with such importation. A "customs duty" does not include any: (a) charge equivalent to an internal tax imposed consistently with Article 85 of Chapter 1 (National Treatment and Market Access for Goods) of Title II; (b) duty imposed pursuant to a Party's domestic legislation and consistently with Chapter 2 (Trade Remedies) of Title II; (c) fee or other charge imposed pursuant to a Party's domestic law and consistently with Article 87 of Chapter 1 of Title II;
- "days" means calendar days, including weekends and holidays unless otherwise defined in this Agreement;
- "Harmonized System" or "HS" means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, and Chapter Notes, as adopted and implemented by the Parties in their respective tariff laws;
- "juridical person" or "legal person" means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
- "measure" means any act or omission, including any law, regulation, procedure, requirement or practice;
- "national" means a natural person who has the nationality of one of the Member States of the European Union or of a Republic of the CA Party according to their respective legislation;
- "person" means a natural person or a juridical or legal person;
- "preferential tariff treatment" means the rate of customs duty applicable under this Agreement to an originating good.
Title II. TRADE IN GOODS
Chapter 1. National Treatment and Market Access for Goods
Section A. General Provisions
Article 80. Objective
The Parties shall progressively liberalise trade in goods in accordance with the provisions of this Agreement and in conformity with Article XXIV of GATT 1994.
Article 81. Scope
Except as otherwise provided, the provisions of this Chapter shall apply to trade in goods between the Parties.
Section B. Elimination of Custom Duties
Article 82. Classification of Goods
The classification of goods in trade between the Parties shall be that set out in each Party's respective tariff nomenclature in conformity with the Harmonized System.
Article 83. Elimination of Customs Duties
1. Each Party shall eliminate customs duties on goods originating in the other Party in accordance with the Schedules set out in Annex I (Elimination of Customs Duties). For the purposes of this Chapter, "originating" means qualifying under the rules of origin set out in Annex II (Concerning the Definition of the Concept of "Originating Products" and Methods of Administrative Cooperation). (2)
2. For each good, the base rate of customs duties, to which the successive reductions are to be applied under paragraph 1, shall be that specified in the Schedules.
3. If, at any moment, a Party reduces its applied most favoured nation customs duty rates after the date of entry into force of this Agreement, that duty rate shall apply if and for as long as it is lower than the customs duty rate calculated in accordance with that Party's Schedule.
4. After five years of the entry into force of this Agreement, on the request of either Party, the Parties shall consult to consider accelerating and broadening the scope of the elimination of customs duties on imports between the Parties. An agreement by the Parties on the acceleration of the pace of elimination or the elimination of a customs duty on a good shall supersede any duty rate or staging category determined pursuant to their Schedules for that good.
Article 84. Standstill
Neither Party shall increase any existing customs duty, or adopt any new customs duty, on a good originating in the other Party (3). This shall not preclude either Party from:
(a) raising a customs duty to the level established in its Schedule following a unilateral reduction;
(b) maintaining or increasing a customs duty as authorised by the Dispute Settlement Body of the WTO; or
(c) increasing the base rates of excluded goods with a view to reaching a common external tariff.
Section C. Non-tariff Measures
Article 85. National Treatment
Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its interpretative notes. To this end, Article III of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement (4).
Article 86. Import and Export Restrictions
Neither Party shall adopt or maintain any prohibition nor restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined to the territory of the other Party, except as otherwise provided in this Agreement or in accordance with Article XI of GATT 1994 and its interpretative notes. To this end, Article XI of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement (5).
Article 87. Fees and other Charges on Imports and Exports
Each Party shall ensure in accordance with Article VIII.1 of GATT 1994 and its interpretative notes that all fees and charges of whatever character (other than customs duties, charges equivalent to an internal tax or other internal charges applied consistently with Article 85 of this Chapter, and antidumping and countervailing duties applied pursuant to a Party's domestic law and consistently with Chapter 2 (Trade Remedies) of this Title), imposed on or in connection with importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.
Article 88. Duties or Taxes on Exports
Except as otherwise provided for in this Agreement, neither Party shall maintain or adopt any duties or taxes imposed on or in connection with the exportation of goods to the other Party.
Section D. Agriculture
Article 89. Agricultural Export Subsidies
1. For the purposes of this Article, "export subsidies" shall have the meaning assigned to that term in Article 1(e) of the WTO Agreement on Agriculture (hereinafter referred to as "Agriculture Agreement"), including any amendment of that Article.
2. The Parties share the objective of working jointly in the WTO to ensure the parallel elimination of all forms of export subsidies and the establishment of disciplines on all export measures with equivalent effect. For this purpose, export measures with equivalent effect comprise export credits, export credit guarantees or insurance programmes, exporting state trading enterprises and food aid.
3. No Party shall maintain, introduce or reintroduce export subsidies on agricultural goods, which are destined to the territory of the other Party and are either:
(a) fully and immediately liberalised in accordance with Annex I (Elimination of Customs Duties); or
(b) fully but not immediately liberalised and benefit from a duty free quota at entry into force of this Agreement in accordance with Annex I (Elimination of Customs Duties); or
(c) subject to preferential treatment as established under this Agreement for products falling under headings 0402 and 0406, and benefitting from a duty free quota.
4. In the cases described under paragraph 3(a) to 3(c), if a Party maintains, introduces or reintroduces export subsidies, the affected/importing Party may apply an additional tariff that would increase customs duties for imports of such good up to the level of either the Most Favoured Nation (MFN) applied duty or the base rate set out in Annex I (Elimination of Customs Duties), whichever is lower, for the period established for retaining the export subsidy.
5. For products fully liberalised over a transition period in accordance with Annex I (Elimination of Customs Duties) and not benefiting from duty free quota at entry into force, no Party shall maintain, introduce or reintroduce export subsidies at the end of that transition period.
Section E. Fisheries, Aquaculture, Artisanal Goods and Organic Products
Article 90. Technical Cooperation
Technical cooperation assistance measures to enhance trade in fisheries, aquaculture, artisanal goods and organic products between the Parties are established in Articles 59, 60 and 61 of Title VI (Economic and Trade Development) of Part III of this Agreement.
Section F. Institutional Provisions
Article 91. Sub-committee on Market Access for Goods
1. The Parties hereby establish a Sub-Committee on Market Access for Goods, in accordance with Article 348 and as set out in Annex XXI (Sub-Committees). 2. The functions of the Sub-Committee shall include: (a) monitoring the correct application and administration of this Chapter; (b) serving as a forum for consultations concerning the interpretation and application of this Chapter; (c) examining the proposals presented by the Parties regarding acceleration of tariff dismantling and inclusion of goods in the Schedules; (d) making any relevant recommendations to the Association Committee with regards to matters of its competence; and (e) any other issue instructed by the Association Committee.
Chapter 2. Trade Remedies
Section A. Anti-dumping and Countervailing Measures
Article 92. General Provisions
1. The Parties retain their rights and obligations under the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as the "Anti-Dumping Agreement") and from the WTO Agreement on Subsidies and Countervailing Measures (hereinafter referred to as the "SCM Agreement") and the WTO Agreement on Rules of Origin (hereinafter referred to as the "Agreement on Rules of Origin").
2. Where anti-dumping or countervailing measures can be imposed on a regional basis and on a national basis, the Parties shall ensure that such anti-dumping or countervailing measures are not applied simultaneously in respect of the same product by regional and national authorities.
Article 93. Transparency and Legal Certainty
1. The Parties agree that trade remedies shall be used in full compliance with WTO requirements and shall be based on a fair and transparent system.
2. Recognising the benefits of legal certainty and predictability for the economic operators, the Parties shall ensure that, where applicable, their respective domestic legislation in the field of anti-dumping and countervailing measures is and will remain harmonised and fully compatible with WTO legislation.
3. Notwithstanding Article 6.9 of the Anti-Dumping Agreement and Article 12.8 of the SCM Agreement, it is desirable that the Parties ensure, immediately after any imposition of provisional measures, complete and meaningful disclosure of all essential facts and considerations which form the basis for the decision to apply measures, without prejudice to Article 6.5 of the Anti-Dumping Agreement and Article 12.4 of the SCM Agreement. Disclosures shall be made in writing and shall be provided to interested parties with sufficient time to defend their interests.
4. Upon request of the interested parties, the Parties shall grant them the possibility to be heard in order to express their views during anti-dumping or countervailing measures investigations. This shall not unnecessarily delay the conduct of the investigations.
Article 94. Consideration of Public Interest
A Party may choose not to apply anti-dumping or countervailing measures where, on the basis of the information made available during the investigation, it can clearly be concluded that it is not in the public interest to apply such measures.
Article 95. Lesser Duty Rule
Where a Party decides to impose an anti-dumping or countervailing duty, the amount of such duty shall not exceed the margin of dumping or countervailable subsidies, but it is desirable that the duty be less than this margin if such lesser duty would be adequate to remove the injury to the domestic industry.
Article 96. Causal Link
In order to impose anti-dumping or countervailing measures, and in accordance with the provisions established in Article 3.5 of the Anti-Dumping Agreement and Article 15.5 of the SCM Agreement, investigating authorities shall, as part of the demonstration of a causal relationship between the dumped imports and the injury to the domestic industry, separate and distinguish the injurious effects of all known factors from the injurious effects of the dumped or subsidized imports.
Article 97. Cumulative Assessment
When imports from more than one country are simultaneously subject to anti-dumping or countervailing duty investigations, the investigating authority of the EU Party shall examine with special care whether the cumulative assessment of the effects of the imports from any Republic of the CA Party, is appropriate in light of the conditions of competition between the imported products and the conditions of competition between the imported products and the like domestic product.
Article 98. Exclusion from Dispute Settlement Procedures
The Parties shall not have recourse to dispute settlement procedures under Title X (Dispute Settlement) of Part IV of this Agreement for matters arising under this Section.
Section B. Safeguard Measures
Subsection B.1. General Provisions
Article 99. Administration of Safeguard Proceedings
1. Each Party shall ensure the consistent, impartial, and reasonable administration of its laws, regulations, decisions and rulings governing the proceedings for the application of safeguard measures.
2. Each Party shall entrust determinations of serious injury, or threat thereof, in safeguard proceedings under this Section to a competent investigating authority. These determinations shall be subject to review by judicial or administrative tribunals, to the extent provided by domestic legislation.
3. Each Party shall adopt or maintain equitable, timely, transparent and effective procedures for safeguard proceedings under this Section.
Article 100. Non Cumulation
Neither Party may apply, with respect to the same product, at the same time: (a) a bilateral safeguard measure in accordance with Sub-Section B.3 (Bilateral Safeguard Measures) of this Chapter; and (b) a measure under Article XIX of GATT 1994, the WTO Agreement on Safeguards (hereinafter referred to as the "Safeguards Agreement") or Article 5 of the Agriculture Agreement.
Subsection B.2. Multilateral Safeguard Measures
Article 101. General Provisions
The Parties retain their rights and obligations under Article XIX of GATT 1994, the Safeguards Agreement, Article 5 of the Agriculture Agreement and the Agreement on Rules of Origin.
Article 102. Transparency
Notwithstanding Article 101, at the request of the other Party, the Party initiating an investigation or intending to take safeguard measures shall provide immediately ad hoc written notification of all pertinent information including where relevant, on the initiation of a safeguard investigation, on the provisional findings and on the final findings of the investigation.
Article 103. Exclusion from Dispute Settlement Procedures
The Parties shall not have recourse to dispute settlement procedures under Title X (Dispute Settlement) of Part IV of this Agreement for provisions referring to WTO rights and obligations arising under this Sub-Section.
Subsection B.3. Bilateral Safeguard Measures
Article 104. Application of a Bilateral Safeguard Measure
1. Notwithstanding Sub-Section B.2 (Multilateral Safeguard Measures), if as a result of the reduction or elimination of a customs duty under this Agreement, a product originating in a Party is being imported into the territory of the other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions so as to constitute a substantial cause or threat of serious injury to domestic producers of like or directly competitive products, the importing Party may take appropriate measures under the conditions and in accordance with the procedures laid down in this Sub-Section.
2. If the conditions in paragraph 1 are met, the safeguard measures of the importing Party may only consist of one of the following:
(a) suspension of the further reduction of the rate of customs duty on the product concerned provided for under this Agreement; or
(b) increase in the rate of customs duty on the product concerned to a level which does not exceed the lesser of:
(i) the most-favoured nation applied rate of customs duty on the product in effect at the time the measure is taken; or
(ii) the most-favoured nation applied rate of customs duty on the product in effect on the day immediately preceding the date of entry into force of this Agreement.
3. In case of products which were already fully liberalised before the entry into force of this Agreement following tariff preferences granted before the entry into force of this Agreement, the EU Party shall examine with special care whether increased imports result from the reduction or elimination of customs duties under this Agreement.
4. None of the above measures shall be applied within the limits of the preferential duty free tariff quotas granted by this Agreement.
Article 105. Conditions and Limitations
1. A bilateral safeguard measure may not be applied: (a) except to the extent, and for such time, as may be necessary to prevent or remedy the situation described in Article 104 or 109; (b) for a period exceeding two years. The period may be extended by another two years if the competent authorities of the importing Party determine, in conformity with the procedures specified in this Sub-Section, that the measure continues to be necessary to prevent or remedy the situations described in Article 104 or 109, provided that the total period of application of a safeguard measure, including the period of initial application and any extension thereof, does not exceed four years; or (c) beyond the expiration of the transition period, except with the consent of the other Party. "Transition period" means ten years from the date of entry into force of this Agreement. For any good for which the Schedule in Annex I (Elimination of Customs Duties) of the Party applying the measure provides for tariff elimination of ten or more years, transition period means the tariff elimination period for the goods set out in that Schedule, plus three years.
2. When a Party ceases to apply a bilateral safeguard measure, the rate of customs duty shall be the rate that would have been in effect for the good, according to the Schedule of that Party.
Article 106. Provisional Measures
In critical circumstances where delay would cause damage that would be difficult to repair, a Party may apply a bilateral safeguard measure on a provisional basis, without complying with the requirements of Article 116, paragraph 1 of this Chapter, pursuant to a preliminary determination that there is clear evidence that imports of a product originating in the other Party have increased as the result of the reduction or elimination of a customs duty under this Agreement, and that such imports cause or threaten to cause the situations described in Article 104 or 109. The duration of any provisional measure shall not exceed two hundred days, during which time the Party shall comply with the relevant procedural rules laid down in Sub-Section B.4 (Procedural Rules Applicable to Bilateral Safeguard Measures). The Party shall promptly refund any tariff increases if the investigation described in Sub-Section B.4 does not result in a finding that the requirements of Article 104 are met. The duration of any provisional measure shall be counted as part of the period described in Article 105, paragraph 1(b). The importing Party concerned shall inform the other Party concerned upon taking such provisional measures and it shall immediately refer the matter to the Association Committee for examination if the other Party so requests.
Article 107. Compensation and Suspension of Concessions
1. A Party applying a bilateral safeguard measure shall consult with the Party whose products are subject to the measure in order to mutually agree on appropriate trade liberalising compensation in the form of concessions having substantially equivalent trade effect. The Party shall provide an opportunity for such consultations no later than thirty days after the application of the bilateral safeguard measure.
2. If the consultations under paragraph 1 do not result in an agreement on trade liberalising compensation within thirty days, the Party whose products are subject to the safeguard measure may suspend the application of substantially equivalent concessions to the trade of the Party applying the safeguard measure.
Article 108. Time Lapse In between Two Measures
No safeguard measure referred to in this Sub-Section shall be applied to the import of a product that has previously been subject to such a measure, unless a period of time equal to half of that during which the safeguard measure was applied for the immediately preceding period has elapsed.
Article 109. Outermost Regions
1. Where any product originating in one or several of the Republics of the CA Party is being imported into the territory of one or several outermost regions of the EU Party in such increased quantities and under such conditions as to cause or threaten to cause serious deterioration in the economic situation of the outermost region(s) concerned of the EU Party, the EU Party, after having examined alternative solutions, may exceptionally take safeguard measures limited to the territory of the region(s) concerned.
2. Without prejudice to the provisions of paragraph 1, other rules laid down in this Sub-Section applicable to bilateral safeguards are also applicable to any safeguard adopted under this Article.
3. The Association Council may discuss whether in cases of threat of, or serious deterioration in the economic situation of extremely underdeveloped regions of the Republics of the CA Party, this Article may also apply to those regions.
Subsection B.4. Procedural Rules Applicable to Bilateral Safeguard Measures
Article 110. Applicable Law
For the application of bilateral safeguard measures, the competent investigating authority shall comply with the provisions of this Sub-Section and in cases not covered by this Sub-Section, the competent investigating authority shall apply the rules established under its domestic legislation.
Article 111. Initiation of a Proceeding
1. Pursuant to each Party's domestic legislation, a safeguard proceeding may be initiated by the competent investigating authority on its own initiative, upon receipt of information from one or more Member States of the European Union, or upon a written application by entities specified in domestic legislation. In the cases when the proceeding is initiated on the basis of a written application, the entity filing the application shall demonstrate that it is representative of the domestic industry producing a good like or directly competitive with the imported good.
2. Once the written applications have been filed, these shall promptly be made available for public inspections, except for the confidential information contained.
3. Upon initiation of a safeguard proceeding, the competent investigating authority shall publish a notice of initiation of the proceeding in the official journal of the Party. The notice shall identify the entity which filed the written application, if applicable, the imported good that is the subject of the proceeding and its subheading and the tariff item number under which it is classified, the nature and timing of the determination to be made, the time and place of the public hearing or the period within which interested parties may apply to be heard orally by the investigating authority, the period within which interested parties may make known their views in writing and submit information, the place at which the written application and any other non-confidential documents filed in the course of the proceeding may be inspected and the name, address and telephone number of the office to be contacted for more information.
4. With respect to a safeguard proceeding initiated on the basis of a written application filed by an entity asserting that it is representative of the domestic industry, the competent investigating authority shall not publish the notice required by paragraph 3 without first assessing carefully that the written application meets the requirements of its domestic legislation.
Article 112. Investigation
1. A Party may apply a safeguard measure only following an investigation by the competent investigating authority of that Party pursuant to procedures laid down in this Sub-Section. This 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.