Title
FREE TRADE AGREEMENT BETWEEN CHILE AND MEXICO
Preamble
The Government of the Republic of Chile (Chile) and the Government of the United Mexican States (Mexico), resolved to:
Strengthen the special bonds of friendship and cooperation between their nations;
Fortify the Latin American integration process to achieve the objectives envisaged in the Montevideo Treaty 1980;
Achieve a better balance in trade relations between their countries;
Contribute to the harmonious development and expansion of world trade and broader international cooperation;
Create an expanded and secure market for the goods and services produced in their territories;
Reduce distortions to trade;
Establish clear and mutually advantageous rules governing their trade;
Ensure a predictable commercial framework for business planning and investment;
Build on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization, the Montevideo Treaty 1980 and other multilateral and bilateral instruments of integration and cooperation;
Enhance the competitiveness of their firms in global markets;
Encourage innovation and creativity through the protection of intellectual property rights;
Create new employment opportunities and improve working conditions and living standards in their respective territories;
Undertake each of the preceding in a manner consistent with environmental protection and conservation;
Promote sustainable development;
Preserve their capacity to safeguard the public welfare;
Promote dynamic participation by the different economic agents, particularly the private sector, in the effort to enhance economic relations between the Parties and to develop and cultivate to the greatest extent possible the opportunities for their joint presence on international markets; and
Contribute to hemispheric integration;
Have agreed as follows:
Body
Part One. GENERAL PART
Chapter 1. INITIAL PROVISIONS
Article 1-01. Establishment of the Free Trade Area
The Parties to this Agreement, consistent with Article XXIV of the General Agreement on Tariffs and Trade 1994 and Article V of the General Agreement on Trade in Services, which are part of the Marrakesh Agreement Establishing the World Trade Organization, and the Montevideo Treaty 1980, hereby establish a free trade area.
Article 1-02. Objectives
1. The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favoured-nation treatment and transparency, are to:
(a) encourage the expansion and diversification of trade between the Parties;
(b) eliminate barriers to trade and facilitate the movement of goods and services in the free trade area;
(c) promote conditions of fair competition in the free trade area;
(d) increase substantially investment opportunities in the free trade area;
(e) protect and appropriately and effectively enforce intellectual property rights in the free trade area;
(f) establish a framework for further bilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement; and
(g) establish effective procedures for the application and observance of this Agreement, for its joint administration and for dispute settlement.
2. The Parties shall interpret and apply the provisions of this Agreement in the light of its objectives set out in paragraph 1 and in accordance with applicable rules of international law.
Article 1-03. Relation to other International Agreements
1. The Parties affirm their existing rights and obligations with respect to each other under the Agreement Establishing the World Trade Organization, the Montevideo Treaty 1980 and other agreements to which they are party.
2. In the event of any inconsistency between this Agreement and the agreements and treaties mentioned in paragraph 1, this Agreement shall prevail to the extent of the inconsistency.
Article 1-04. Observance of the Agreement
The Parties shall ensure that all necessary measures are taken for observance of the provisions of this Agreement in their territories by their national or federal, state and municipal governments, except as otherwise provided in this Agreement.
Article 1-05. Successor Agreements
All references to any other international agreement or treaty shall be understood to be made in the same terms to a successor agreement or treaty to which the Parties are party.
Article 1-06. Relation to Environmental and Conservation Agreements
In the event of any inconsistency between this Agreement and the specific trade obligations set out in:
(a) the Convention on International Trade in Endangered Species of Wild Fauna and Flora, done at Washington, 3 March 1973, as amended 22 June 1979;
(b) the Montreal Protocol on Substances that Deplete the Ozone Layer, done at Montreal, 16 September 1987, as amended 29 June 1990; or
(c) the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, done at Basel, 22 March 1989;
such obligations shall prevail to the extent of the inconsistency, provided that where a Party has a choice among equally effective and reasonably available means of complying with such obligations, the Party chooses the alternative that is the least inconsistent with the other provisions of this Agreement.
Chapter 2. GENERAL DEFINITIONS
Article 2-01. Definitions of General Application
For purposes of this Agreement, unless otherwise specified:
customs duty includes any customs or import duty and a charge of any kind imposed in connection with the importation of a good, including any form of surtax or surcharge in connection with such importation, but does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article Ill:2 of the GATT 1994, in respect of goods from which the imported good has been manufactured or produced in whole or in part;
(b) anti-dumping or countervailing duty that is applied pursuant to a Party's domestic law;
(c) fee or other charge in connection with importation commensurate with the cost of services rendered; and
(d) premium offered or collected on an imported good arising out of any tendering system in respect of the administration of quantitative import restrictions, tariff rate quotas or tariff preference levels;
Commission means the Free Trade Commission established under Article 17- 01(1) (The Free Trade Commission);
Customs Valuation Code means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, including its interpretative notes, which is part of the WTO Agreement;
days means calendar days;
ECA No. 17 means the Economic Complementation Agreement between Chile and Mexico of 22 September 1991;
enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately-owned or governmentally-owned, including any foundation, corporation, trust, partnership, sole proprietorship, joint venture or other association;
enterprise of a Party means an enterprise constituted or organized under the law of a Party;
existing means in effect on the date of entry into force of this Agreement;
GATS means the General Agreement on Trade in Services, which is part of the WTO Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
goods of a Party means domestic products as these are understood in the GATT 1994 or such goods as the Parties may agree, and includes originating goods of that Party. Goods of a party may incorporate materials from non-Party countries;
Harmonized System 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;
heading means the first four digits in the tariff classification number under the Harmonized System;
LAIA means the Latin American Integration Association created under the Montevideo Treaty 1980;
measure includes any law, regulation, procedure, requirement or practice;
Montevideo Treaty 1980 means the Treaty of Montevideo Establishing the Latin American Integration Association;
national means a natural person who is acitizen of a Party as established in Annex 2-01. The term also includes persons who are permanent residents in the territory of that Party under its law;
NAFTA means the North American Free Trade Agreement, done on 17 December 1992;
originating means qualifying under the rules of origin set out in Chapter 4 (Rules of Origin);
Party means a State in which this Agreement has entered into force; person means a natural person or an enterprise; person of a Party means a national, or an enterprise of a Party;
Secretariat means the Secretariat established under Article 17-02 (The Secretariat);
states includes the municipal governments in astate, except as otherwise provided in this Agreement;
State enterprise means an enterprise that is owned or controlled through ownership interests by a Party;
subheading means the first six digits in the tariff classification number under the Harmonized System;
Tariff Reduction Programme means the programme established in Article 3- 04(3) (Tariff Elimination);
territory means for a Party the territory of that Party as set out in Annex 2- 01;
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, which is part of the WTO Agreement;
Uniform Regulations means the regulations established pursuant to Article 5- 12 (Uniform Regulations); and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on 15 April 1994.
ANNEX 2-01. Country-Specific Definitions
For purposes of this Agreement, unless otherwise specified:
citizen means:
(a) with respect to Chile, a Chilean as defined in Article 10 of the Political Constitution of the Republic of Chile ("Constitucón Política de la República de Chile"); and
(b) with respect to Mexico, a Mexican as defined in Article 30 of the Political Constitution of the United Mexican States ("Constitución Política de los Estados Unidos Mexicanos"); and
territory means:
(a) with respect to Chile, the land, maritime, and air space under its sovereignty, and the exclusive economic zone and the continental shelf over which it exercises sovereign rights and jurisdiction in accordance with international law and its domestic law; and
(b) with respect to Mexico:
(i) the states of the Federation and the Federal District;
(ii) the islands, including the reefs and keys, in adjacent seas;
(ii) the islands of Guadalupe and Revillagigedo situated in the Pacific Ocean;
(iv) the continental shelf and the submarine shelf of such islands, keys and reefs;
(v) the waters of the territorial seas, in accordance with international law, and its interior maritime waters;
(vi) the space located above the national territory, in accordance with international law; and
(vii) any areas beyond the territorial seas of Mexico within which, in accordance with international law, including the United Nations Convention on the Law of the Sea, and its domestic law,
Mexico may exercise rights with respect to the seabed and subsoil and their natural resources.
Part Two. TRADE INGOODS
Chapter 3. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Section A. Definitions, Scope and Coverage
Article 3-01. Definitions
For the purposes of this Chapter:
advertising films means recorded visual media, with or without sound-tracks, consisting essentially of images showing the nature or operation of goods or services offered for sale or lease by a person established or resident in the territory of a Party, provided that the films are of a kind suitable for exhibition to prospective customers but not for broadcast to the general public, and provided that they are imported in packets that each contain no more than one copy of each film and that do not form part of a larger consignment;
agricultural good means a good classified in one of the following chapters, headings or subheadings of the Harmonized System:
(The descriptions are provided for purposes of reference)
| Chapters 1 through 24 | (other than a fish or fish product) |
| Subheading 2905.43 | Manitol |
| Subheading 2905.44 | Sorbitol |
| Subheading 2918.14 | Citric acid |
| Subheading 2918.15 | Salts and esters of citric acid |
| Subheading 2936.27 | Vitamin C and its derivatives |
| Heading 33.01 | Essential oils |
| Headings 35.01 to 35.05 | Albuminoidal substances, modified starches |
| Subheading 3809.10 | Finishing agents |
| Subheading 3824.60 | Sorbitol, except in subheading 2905.44 |
| Headings 41.01 to 41.03 | Hides and skins |
| Heading 43.01 | Raw furskins |
| Headings 50.01 to 50.03 | Raw silk and silk waste |
| Headings 51.01 to 51.03 | Wool and animal hair |
| Headings 52.01 to 52.03 | Raw cotton, cotton waste and cotton carded or combed |
| Heading 53.01 | Raw flax |
| Heading 53.02 | Raw hemp |
commercial samples of negligible value means commercial samples having a value, individually or in the aggregate as shipped, of not more than one U.S. dollar, or the equivalent amount in the currency of either of the Parties, or so marked, torn, perforated or otherwise treated that they are unsuitable for sale or for use except as commercial samples;
consumed means:
(a) actually consumed; or
(b) further processed or manufactured so as to result in a substantial change in value, form or use of the good or in the production of another good;
export of goods means the export or temporary export of goods;
export subsidies refer to:
(a) the provision by governments or their agencies of direct subsidies, including payments in kind, to a firm, to an industry, to producers of an agricultural product, to a cooperative or other association of such producers, or to a marketing board;
(b) the sale or disposal for export by governments or their agencies of non-commercial stocks of agricultural products at a price lower than the comparable price charged for the like product to buyers in the domestic market;
(c) payments on the export of an agricultural product that are financed by virtue of governmental action, whether or not a charge on the public account is involved, including payments that are financed from the proceeds of a levy imposed on the agricultural product concerned or on an agricultural product from which the exported product is derived;
(d) the provision of subsidies to reduce the costs of marketing exports of agricultural products (other than widely available export promotion and advisory services) including handling, upgrading and other processing costs, and the costs of international transport and freight;
(e) internal transport and freight charges on export shipments, provided or mandated by governments, on terms more favourable than for domestic shipments; and
(f) subsidies on agricultural products contingent on their incorporation in exported products;
first come first served means the mechanism for assigning quotas, in accordance with the administrative procedures established in the Uniform Regulations in this Chapter;
fish and fish products means fish, crustaceans, molluscs and all other aquatic invertebrates, marine mammals and by-products thereof, classified in one of the following chapters, headings or subheadings of the Harmonized System:
(The descriptions are provided for purposes of reference)
| Chapter 03 | Fish and Crustaceans, Molluscs and other Aquatic Invertebrates |
| Heading 05.07 | Ivory, tortoise-shell, marine mammals, horns, antlers, shells, hooves, nails, claws and beaks, and products thereof |
| Heading 05.08 | Coral and similar materials |
| Heading 05.09 | Natural sponges of animal origin |
| Heading 05.11 | Products of fish or crustaceans, molluscs or other aquatic invertebrates; dead animals of chapter 3 |
| Heading 15.04 | Fats and oils and their fractions, of fish or marine mammals |
| Heading 16.03 | Extracts and juices other than of meat |
| Heading 16.04 | Prepared or preserved fish |
| Heading 16.05 | Prepared or preserved crustaceans, molluscs and other aquatic invertebrates |
| Subheading 2301.20 | Flours, meals, pellets, of fish |
goods imported for sports purposes means sports requisites for use in sports contests, demonstrations or training in the territory of the Party into whose territory such goods are imported;
goods intended for display or demonstration includes their component parts, ancillary apparatus and accessories;
printed advertising materials means those goods classified in Chapter 49 of the Harmonized System, including brochures, pamphlets, leaflets, trade catalogues, yearbooks published by trade associations, tourist promotional materials and posters that are used to promote, publicize or advertise a good or service and are supplied free of charge;
repair or alteration does not include an operation or process that either destroys the essential characteristics of a good or creates a new or commercially different good. An operation or process that is part of the production or assembly of an unfinished good into a finished good is not a repair or alteration of the unfinished good; a component of a good is a good that may be subject to repair or alteration;
solicitation of orders means the solicitation or drawing up of orders;
temporary admission of goods means temporary admission of goods or temporary importation of goods; and
used vehicle means a "used vehicle" as defined in Annex 3-01.
Article 3-02. Scope and Coverage
This Chapter applies to trade in goods of a Party.
Section B. National Treatment
Article 3-03. National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article Ill of the GATT 1994, including its interpretative notes, and to this end Article Ill of the GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement.
2. The provisions of paragraph 1 regarding national treatment shall mean, with respect to a state, treatment no less favourable than the most favourable treatment accorded by such state to any like, directly competitive or substitutable goods, as the case may be, of the Party of which it forms apart. "Goods of the Party" includes goods produced in a state of that Party.
3. Paragraphs 1 and 2 do not apply to the measures set out in Annex 3-03.
Section C. Tariffs
Article 3-04. Tariff Elimination
1. Except as provided in Annexes 3-04(3) and 3-04(4), the Parties shall eliminate all customs duties on originating goods on the date of entry into force of this Agreement.
2. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty, or adopt any new duty, on a good.
3. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods in accordance with its Tariff Reduction Programme in Annex 3-04(3).
4. Notwithstanding paragraphs 1, 2 and 3, a Party may adopt or maintain customs duties in accordance with its rights and duties under the GATT 1994 on the originating goods included in Annex 3-04(4) until such time as the parties agree otherwise in accordance with paragraph 5.
5. On the request of a Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in Annex 3-04(3) or include goods covered in Annex 3-04(4) in their Tariff Reduction Programme. An agreement between the Parties, reached pursuant to Article 17-01(3) (Free Trade Commission) to accelerate the elimination of a customs duty on a good or to include a good in their Tariff Reduction Programmes shall supersede any duty rate or staging category determined pursuant to their Schedules for such good.
6. When this Agreement comes into force, the preferences negotiated or granted between the Parties under the Montevideo Treaty 1980 shall be rescinded.
7. Except as otherwise provided in this Agreement, either Party may adopt or maintain import measures to allocate in-quota imports made pursuant to a tariff rate quota set out in Annexes 3-04(3) or 3-04(4), provided that such measures do not have trade restrictive effects on imports additional to those caused by the imposition of the tariff rate quota.