Title
FREE TRADE AGREEMENT BETWEEN CANADA AND THE REPUBLIC OF PERU
Preamble
Canada and the Republic of Peru ("Peru"), 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 Marrakesh Agreement Establishing the World Trade Organization and other multilateral and bilateral instruments of cooperation;
PROMOTE hemispheric economic integration;
CREATE an expanded and secure market for the goods and services produced in their territories, as well as new employment opportunities and improved working conditions and living standards in their respective territories;
REDUCE distortions to trade;
ESTABLISH clear and mutually advantageous rules to govern their trade;
ENSURE a predictable commercial framework for business planning and investment;
ENHANCE the competitiveness of their firms in global markets;
UNDERTAKE each of the preceding in a manner that is consistent with environmental protection and conservation, enhance and enforce environmental laws and regulations and strengthen cooperation on environmental matters;
PROTECT, ENHANCE AND ENFORCE basic workers' rights, strengthen cooperation on labour matters and build on their respective international commitments on labour matters;
PROMOTE sustainable development;
ENCOURAGE enterprises operating within their territory or subject to their jurisdiction, to respect internationally recognized corporate social responsibility standards and principles and pursue best practices;
PROMOTE broad-based economic development in order to reduce poverty;
PRESERVE their flexibility to safeguard the public welfare; and, AFFIRMING their respective rights and obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS Agreement") and other intellectual property agreements to which both Parties are party;
RECOGNIZING the differences in the level of development and the size of the Parties' economies and the importance of creating opportunities for economic development;
RECOGNIZING that the promotion and the protection of investments of investors of one Party in the territory of the other Party will be conducive to the stimulation of mutually beneficial business activity;
AFFIRMING the rights to use, to the full, the flexibilities established in the TRIPS Agreement, including the protection of public health and in particular the promotion of access to medicines for all, as well as their commitment to the General Council Decisions of 30 August 2003 on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health and of 6 December 2005 on the Amendment of the TRIPS Agreement;
RECOGNIZING that states must maintain the ability to preserve, develop and implement their cultural policies for the purpose of strengthening cultural diversity, given the essential role that cultural goods and services play in the identity and diversity of societies and the lives of individuals;
and AFFIRMING their commitment to respect the values and principles of democracy and promotion and protection of human rights and fundamental freedoms as proclaimed in the Universal Declaration of Human Rights;
HAVE AGREED as follows:
Body
Section A. Initial Provisions
Chapter One. Initial Provisions and General Definitions
Article 101. Establishment of the Free Trade Area
The Parties to this Agreement, consistent with Article XXIV of the GATT 1994 and Article V of the GATS, hereby establish a free trade area.
Article 102. Relation to other Agreements
1. The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which such Parties are party.
2. In the event of any inconsistency between this Agreement and such other agreements, this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement.
Article 103. Relation to Multilateral Environmental Agreements
In the event of any inconsistency between this Agreement and the specific trade obligations set out in the Multilateral Environmental Agreements (MEAs) referred to in Annex 103, 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.
Article 104. Extent of Obligations
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 the provisions of this Agreement by the sub-national governments and authorities within its territory.
Section B. General Definitions
Article 105. Definitions of General Application
For purposes of this Agreement, unless otherwise specified:
Agreement on the Environment means the Agreement on the Environment between Canada and the Republic of Peru;
Commission means the Joint Commission established under Article 2001 (Joint Commission);
Coordinators means the Agreement Coordinators established under Article 2002 (Agreement Coordinators);
Customs Valuation Agreement means the WTO Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994;
days means calendar days, including weekends and holidays;
Dispute Settlement Understanding (DSU) means the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes;
enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately-owned or governmentally-owned, including any 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 WTO General Agreement on Trade in Services;
GATT 1994 means the WTO General Agreement on Tariffs and Trade 1994;
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;
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 any number, used in the nomenclature of the Harmonized System;
measure includes any law, regulation, procedure, requirement or practice;
national means a natural person who has the nationality of a Party or is a citizen according to Article 107, or is a permanent resident of a Party;
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, or an enterprise of a Party;
preferential tariff treatment means the application of the respective duty rate under this Agreement pursuant to the tariff elimination schedule to an originating good;
sanitary or phytosanitary measure means any measure referred to in Annex A, paragraph 1 of the SPS Agreement;
SPS Agreement means the WTO Agreement on the Application of Sanitary and Phytosanitary Measures;
state enterprise means an enterprise that is owned, or controlled through ownership interests, by a Party;
subheading means any six-digit number, or the first six digits of any 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;
tariff elimination schedule means the provisions of Annex 203.2;
TRIPS Agreement means the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights;
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on 15 April 1994.
Article 106. Reference to other Agreements
Where this Agreement refers to or incorporates by reference other agreements or legal instruments in whole or in part, such references include related footnotes, interpretative and explanatory notes. Except where the references are by way of affirming existing rights, such references also include, as the case may be, successor agreements to which the Parties are parties or amendments binding on the Parties.
Article 107. Country-specific Definitions
For purposes of this Agreement, unless otherwise specified:
citizen means with respect to Canada, a natural person who is a citizen of Canada under Canadian legislation.
natural person who has the nationality of a Party means with respect to Peru, Peruvians by birth, naturalization or option in accordance with Articles 52 and 53 of the Constitución Política del Perú.
national government means:
(a) with respect to Canada, the Government of Canada; and
(b) with respect to Peru, the national level of government.
sub-national government means:
(a) with respect to Canada, provincial, territorial, or local governments; and
(b) with respect to Peru, regional or local governments.
territory means:
(a) with respect to 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 of 10 December 1982 (UNCLOS); and
(iii) the continental shelf of Canada, as determined by its domestic law, consistent with Part VI of UNCLOS;
(b) with respect to Peru, the mainland territory, the islands, the maritime zones and the air space above them, over which Peru exercises sovereignty or sovereign rights and jurisdiction, in accordance with its domestic law and international law.
Annex 103. 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; and
(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 201. Scope and Coverage
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods of a Party.
Section A. National Treatment
Article 202. 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, including its interpretive notes, and to this end Article III of the GATT 1994 and its interpretive notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. Paragraph 1 does not apply to the measures set out in Annex 202.2.
Section B. Tariff Elimination
Article 203. Tariff Elimination
1. Except as otherwise provided in this Agreement, no Party may increase any existing customs duty, or adopt any new customs duty, on an originating good.
2. Except as otherwise provided in this Agreement, each Party shall eliminate its customs duties on originating goods, in accordance with Annex 203.2.
3. During the tariff elimination process the Parties agree to apply to originating goods traded between them the lesser of the customs duties resulting from a comparison between the rate established in accordance with Annex 203.2 and the existing rate pursuant to Article II of GATT 1994.
4. On the request of a Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in Annex 203.2. Notwithstanding Article 2001 (Administration of this Agreement - The Joint Commission), a joint decision by the Parties to accelerate the elimination of a customs duty on a good shall supersede any duty rate or staging category determined pursuant to Annex 203.2 for that good when approved by each Party in accordance with its applicable legal procedures.
5. For greater certainty, a Party may:
(a) increase a customs duty to the level established in Annex 203.2 following a unilateral reduction; and
(b) maintain or increase a customs duty as authorized by this Agreement, the Dispute Settlement Body of the WTO or any agreement under the WTO Agreement.
Section C. Special Regimes
Article 204. Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission for the following goods, 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 including equipment for the press or television, software, and broadcasting and cinematographic equipment, necessary for carrying out the business activity, trade or profession of a person who qualifies for temporary entry pursuant to Chapter Twelve (Temporary Entry for Business Persons);
(b) goods admitted for sports purposes and goods intended for display or demonstration; and
(c) commercial samples and advertising films and recordings.
2. Each Party, at the request of the person concerned and for reasons its customs authority considers valid, shall extend the time limit for temporary admission beyond the period initially fixed.
3. No Party may condition the duty-free temporary admission of a good referred to in subparagraphs 1 (a) or (b), other than to require that such good:
(a) be imported by a national or resident of the other Party who seeks temporary entry;
(b) be used solely by or under the personal supervision of such 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 security in an amount no greater than the charges that would otherwise be owed on entry or final importation, releasable on exportation of the good;
(e) be capable of identification when exported;
(f) be exported on the departure of that person or within such other period related to the purpose of the temporary admission; and
(g) be admitted in no greater quantity than is reasonable for its intended use.
4. No Party may condition the duty-free temporary admission of a good referred to in subparagraph 1(c), other than to require that such good:
(a) be imported solely 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 any use other than exhibition or demonstration while in its territory;
(c) be capable of identification when exported;
(d) be exported within such period as is reasonably related to the purpose of the temporary importation;
(e) be imported in no greater quantity than is reasonable for its intended use; and
(f) be accompanied by a security in an amount no greater than the charges that would otherwise be owed on entry or final importation, releasable on exportation of the good.
5. Where a good is temporarily admitted duty-free under paragraph 1 and any condition a Party imposes under paragraphs 3 and 4 has not been fulfilled, the 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 penalties provided for under its law.
6. Each Party shall adopt procedures providing for the expeditious release of goods admitted under this Article. To the extent possible, such procedures shall provide that when such a good accompanies a national or resident of the other Party who is seeking temporary entry, the good shall be released with the entry of that national or resident.
7. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than that through which it was admitted.
8. Each Party shall provide that its customs authority or other competent authority refund the security to the importer or another person responsible for a good admitted under this Article and release the importer or the other person of any liability for failure to export the good on presentation of satisfactory proof to the customs authority of the importing Party that the good has been destroyed within the original period fixed for temporary admission or any lawful extension.
9. Except as otherwise provided in this Agreement, no Party:
(a) may prevent a vehicle or container used in international traffic that enters its territory from the territory of the other Party to exit its territory on any route that is reasonably related to the economic and prompt departure of such vehicle or container;
(b) may require any security or impose any penalty or charge solely by reason of any difference between the port of entry and the port of departure of a vehicle or container;
(c) may condition the release of any obligation, including any security, that it imposes in respect of the entry of a vehicle or container into its territory on its exit through any particular port of departure; or
(d) may require that the vehicle or carrier bringing a container from the territory of the other Party into its territory be the same vehicle or carrier that takes such container to the territory of the other Party.
10. For purposes of paragraph 9, "vehicle" means a truck, a truck tractor, a tractor, a trailer unit or trailer, a locomotive, or a railway car or other railroad equipment.
Article 205. Goods Re-entered after Repair or Alteration
1. No Party may apply a customs duty to a good, regardless of its origin, that re-enters its territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in the territory of the Party from which the good was exported for repair or alteration.
2. No Party may apply a customs duty to a good, regardless of its origin, admitted temporarily from the territory of the other Party for repair or alteration.
3. For purposes of this Article, repair or alteration does not include an operation or process that:
(a) destroys the essential characteristics of a good or creates a new or commercially different good; or
(b) transforms an unfinished good into a finished good.
Article 206. Duty-free Entry of Commercial Samples of Negligible Value 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:
(a) such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-Party; or