Title
FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF PERU AND THE EFTA STATES
Preamble
The Republic of Peru (hereinafter referred to as Peru) on one part, and Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation (hereinafter referred to as the EFTA States) on the other, each individual State referred to as a Party or collectively referred to as the Parties:
RESOLVED to strengthen the special bonds of friendship and co-operation between them and desirous, by way of the removal of obstacles to trade, to contribute to the harmonious development and expansion of world trade and provide a catalyst for broader international co-operation, in particular between Europe and South America;
CONSIDERING the important links existing between Peru and the EFTA States, in particular the Joint Declaration on Co-operation signed in Geneva on 24 April 2006, and wishing to strengthen these links through the creation of a free trade area, thus establishing close and lasting relations;
REAFFIRMING their commitment to democracy, the rule of law, human rights and fundamental freedoms in accordance with their obligations under international law, including the principles set out in the United Nations Charter and the Universal Declaration of Human Rights;
ACKNOWLEDGING the relationship between good corporate and public sector governance and sound economic development, and affirming their support to the principles of corporate governance in the United Nations Global Compact, as well as their intent to promote transparency and prevent and combat corruption;
BUILDING on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization (hereinafter referred to as the WTO Agreement) and the other agreements negotiated thereunder and other multilateral and bilateral instruments of co-operation;
REAFFIRMING their commitment to economic and social development and the respect for the fundamental rights of workers, including the principles set out in the International Labour Organisation (ILO) Conventions to which the Parties are party;
AIMING to create new employment opportunities, improve health and living standards and ensure a large and steadily growing volume of real income in their respective territories through the expansion of trade and investment flows, thereby promoting broad-based economic development in order to reduce poverty and generating opportunities for sustainable economic alternatives to drug-crop production;
WILLING to preserve their ability to safeguard the public welfare;
INTENDING to enhance the competitiveness of their firms in global markets;
DETERMINED to create an expanded and secure market for goods and services in their territories and to ensure a predictable legal framework and environment for trade, business and investment by establishing clear and mutually advantageous rules;
RECOGNISING that the gains from trade liberalisation should not be offset by anticompetitive practices;
RESOLVED to foster creativity and innovation by protecting intellectual property rights while maintaining a balance between the rights of the holders and the interests of the public in general, particularly in education, research, public health and access to information;
DETERMINED to implement this Agreement in a manner consistent with environmental protection and conservation, promote sustainable development, and strengthen their co-operation on environmental matters;
HAVE AGREED, in pursuit of the above, to conclude the following Free Trade Agreement (hereinafter referred to as this Agreement):
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. Establishment of a Free Trade Area
The Parties to this Agreement, consistent with Article XXIV of the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as the GATT 1994) and Article V of the General Agreement on Trade in Services (hereinafter referred to as the GATS), hereby establish a free trade area by means of this Agreement and the complementary Agreements on Agriculture, concurrently concluded between Peru and each individual EFTA State.
Article 1.2. Objectives
The objectives of this Agreement are:
(a) to achieve the liberalisation of trade in goods, in conformity with Article XXIV of the GATT 1994;
(b) to achieve the liberalisation of trade in services, in conformity with Article V of the GATS;
(c) to substantially increase investment opportunities in the free trade area to contribute to the sustainable development of the Parties;
(d) to achieve further liberalisation on a mutual basis of the government procurement markets of the Parties;
(e) to promote competition in their economies, particularly as it relates to economic relations between the Parties;
(f) to ensure adequate and effective protection of intellectual property rights;
(g) to contribute, by the removal of barriers to trade and investment, to the harmonious development and expansion of world trade; and
(h) to ensure co-operation related to trade capacity building, in order to expand and improve the benefits of this Agreement, and to reduce poverty and foster competitiveness and economic development.
Article 1.3. Svalbard
This Agreement shall not apply to the territory of Svalbard, with the exception of trade in goods.
Article 1.4. Relation to other International Agreements
The provisions of this Agreement shall be applied without prejudice to the rights and obligations of the Parties under the WTO Agreement and the other agreements negotiated thereunder to which they are a party and any other international agreement to which they are a party.
Article 1.5. Trade and Economic Relations Covered by this Agreement
1. The provisions of this Agreement apply to the trade and economic relations between on the one side Peru and on the other side each individual EFTA State, but not to trade relations between individual EFTA States, unless otherwise provided for in this Agreement.
2. As a result of the customs union established by the Treaty of 29 March 1923 between Switzerland and the Principality of Liechtenstein, Switzerland shall represent the Principality of Liechtenstein in matters covered thereby.
Article 1.6. Central, Regional and Local Government
Each Party shall ensure within its territory the observance of all obligations and commitments under this Agreement by its respective central, regional and local governments and authorities, and by non-governmental bodies in the exercise of governmental powers delegated to them by central, regional and local governments or authorities.
Article 1.7. Taxation
1. This Agreement shall not restrict a Partys fiscal sovereignty to adopt taxation measures, (1) except for the disciplines referred to hereafter:
(a) Article 2.11 (National Treatment) and such other provisions of this Agreement as are necessary to give effect to that Article to the same extent as does Article III of the GATT 1994;
(b) Article 5.3 (National Treatment), subject to Article 5.8 (Exceptions).
2. Notwithstanding paragraph 1, this Agreement shall not affect the rights and obligations of a Party under any tax convention. In the event of any inconsistency between this Agreement and such convention, the latter shall prevail to the extent of the inconsistency.
Article 1.8. Electronic Commerce
The Parties recognise the growing role of electronic commerce for trade between them. With a view to supporting provisions of this Agreement related to trade in goods and services, the Parties undertake to intensify their co-operation on electronic commerce for their mutual benefit. For that purpose the Parties have established the framework contained in Annex I (Electronic commerce).
Article 1.9. Definitions of General Application
For the purposes of this Agreement, unless otherwise specified:
(a) days means calendar days;
(b) goods means any merchandise, product, article or material;
(c) juridical 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;
It is understood that taxation measures do not include: customs duties on imports or measures listed in subparagraphs (b) (ii) and (iii) of Article 2.2 (Definitions).
(d) measure means any law, regulation, procedure, requirement, provision or practice;
(e) national means a natural person who has the nationality of a Party or is a permanent resident of a Party in accordance with its domestic law;
(f) person means a natural person or a juridical person.
Chapter 2. TRADE IN GOODS
Article 2.1. Scope
This chapter applies to the following goods traded between the Parties:
(a) goods classified under chapters 25 to 97 of the Harmonized Commodity Description and Coding System (hereinafter referred to as the HS), excluding the products listed in Annex II (Excluded Products);
(b) processed agricultural products specified in Annex III (Processed Agricultural Products), with due regard to the arrangements provided for in Chapter 3 (Processed Agricultural Products); and
(c) fish and other marine products as provided for in Annex IV (Fish and Other Marine Products).
Article 2.2. Definitions
For the purposes of this Chapter, unless otherwise specified:
(a) customs authority means the authority that according to the legislation of a Party is responsible for the administration of its customs legislation;
(b) customs duties on imports means any duty or a charge of any kind imposed on, or in connection with, the importation of goods, including any form of surtax or surcharge, except:
(i) charges equivalent to an internal tax imposed consistently with paragraph 2 of Article III of the GATT 1994;
(ii) antidumping or countervailing duties that are applied pursuant to Article VI of the GATT 1994; or
(iii) fees or other charges in connection with importation commensurate with the cost of services rendered.
(c) customs legislation means any legal or regulatory provision adopted by a Party, governing the import, export or transit of goods and their placing under any customs procedure, including measures of prohibition, restriction and control.
Article 2.3. Rules of Origin and Mutual Assistance In Customs Matters
1. The provisions on rules of origin and administrative co-operation are set out in Annex V (Rules of Origin and Administrative Co-operation).
2. The provisions on mutual assistance in customs matters are set out in Annex VI (Mutual Administrative Assistance in Customs Matters).
Article 2.4. Trade Facilitation
With the aim to facilitate trade between Peru and the EFTA States, the Parties Shall:
(a) simplify, to the greatest extent possible, procedures for trade in goods and related services;
(b) promote multilateral co-operation among them in order to enhance their participation in the development and implementation of international conventions and recommendations on trade facilitation; and
(c) co-operate on trade facilitation within the framework of the Joint Committee, in accordance with the provisions set out in Annex VII (Customs Procedures and Trade Facilitation).
Article 2.5. Establishment of a Sub-Committee on Trade In Goods, Rules of Origin and Customs Matters
1. The Sub-Committee of the Joint Committee on Trade in Goods, Rules of Origin and Customs Matters is hereby established.
2. Unless otherwise provided for in this Agreement, the functions of the SubCommittee shall be to exchange information, review developments, endeavour to resolve any technical differences that may arise among the Parties, prepare technical amendments to Annexes II (Excluded Products), III (Processed Agricultural Products), IV (Fish and Other Marine Products), V (Rules of Origin and Administrative Cooperation), VI (Mutual Administrative Assistance in Customs Matters), VII (Customs Procedures and Trade Facilitation) and VIII (Industrial Goods), and to assist the Joint Committee.
3. The Sub-Committee shall be chaired alternately by a representative of Peru or an EFTA State for an agreed period of time. The chairperson shall be elected at the first meeting of the Sub-Committee. The Sub-Committee shall act by consensus.
4. The Sub-Committee shall report to the Joint Committee. The Sub-Committee may make recommendations to the Joint Committee on matters related to its functions.
5. The Sub-Committee shall meet as often as required. It may be convened by the Joint Committee, by the chairperson of the Sub-Committee on his or her own initiative, or upon request of a Party. The venue shall alternate between Peru and an EFTA State.
6. A provisional agenda for each meeting shall be prepared by the chairperson in consultation with the Parties, and forwarded to them, as a general rule, no later than two weeks before the meeting.
Article 2.6. Dismantling of Import Duties
1. Upon entry into force of this Agreement, Peru shall dismantle its customs duties on imports of goods originating in an EFTA State, as provided for in Annexes III (Processed Agricultural Products), IV (Fish and Other Marine Products) and VIII (Industrial Goods).
2. Upon entry into force of this Agreement, the EFTA States shall eliminate all customs duties on imports of goods covered by Article 2.1 (Scope) originating in Peru, unless otherwise provided for in Annexes III (Processed Agricultural Products) and IV (Fish and Other Marine Products).
3. At the request of a Party, consultations shall be held to consider accelerating the elimination of the customs duties on imports set out in the respective Annexes. An agreement between the Parties to accelerate the elimination of a customs duty on imports shall supersede any duty rate or dismantling category set out in Annexes III (Processed Agricultural Products), IV (Fish and other Marine Products) and VIII (Industrial Goods), if approved by the Parties in accordance with their internal legal requirements.
4. No new customs duties on imports or other charges in relation to the importation of originating goods to a Party shall be introduced nor shall those already applied be increased, except as provided for in this Agreement.
5. The Parties recognise that they may:
(a) following a unilateral tariff reduction, raise a customs duty to the level established in the tariff dismantling schedules of each Party, for the respective year; or
(b) increase a customs duty pursuant to Article 12.17 (Non-Implementation and Suspension of Benefits).
Article 2.7. Base Rate
1. The base rate of customs duty for goods, to which the successive reductions set out in Annexes III (Processed Agricultural Products), IV (Fish and other Marine Products) and VIII (Industrial Goods) are to be applied, shall be the most-favoured nation rate of duty applied on 1 April 2007.
2. If at any moment after the date of entry into force of this Agreement a Party reduces its applied most favoured nation (hereinafter referred to as MFN) customs duty on imports that customs duty shall apply only if it is lower than the customs duty calculated in accordance with the relevant Annexes.
Article 2.8. Duties, Taxes or other Charges on Exports
No Party may adopt or maintain any duty, tax or other charge on exports of goods to another Party, unless the duty, tax or charge is also adopted for or maintained on these goods when they are destined for domestic consumption.
Article 2.9. Import and Export Restrictions
1. Prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licenses or other measures, shall be eliminated in trade between the Parties in accordance with Article XI of the GATT 1994, which is hereby incorporated into and made part of this Agreement.
2. The Parties understand that paragraph 1 prohibits a Party from adopting or maintaining:
(a) export and import price requirements, except as permitted in enforcement of countervailing and antidumping duties and undertakings; or
(b) import licensing conditioned on the fulfilment of a performance requirement.
3. No Party shall adopt or maintain a measure that is inconsistent with the WTO Agreement on Import Licensing Procedures. Any new import licensing procedure and any modification to its existing import licensing procedures or list of products shall be published, whenever practicable, 21 days prior to the date when the requirement becomes effective but in any event no later than that date.
4. Paragraphs 1 and 2 shall not apply to the measures set out in Annex IX (Used Goods).
Article 2.10. Administrative Fees and Formalities
1. Each Party shall ensure that all fees and charges of whatever character other than import and export duties and other than taxes referred to in Article III of the GATT 1994, are applied in accordance with paragraph 1 of Article VIII of the GATT 1994 and its interpretative notes.
2. No Party shall require consular transactions, including related fees and charges, in connection with the importation of goods of another Party. For the purposes of this Agreement, consular transaction means any act by consular authorities of the importing Party in the exporting Party for the purpose of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, shippers export declarations, or any other customs documentation required on or in connection with imports.
3. Each Party shall make available and maintain through the Internet updated information about the fees and charges it imposes in connection with importation or exportation.
Article 2.11. National Treatment
Except as provided for in Annex IX (Used Goods), the Parties shall apply national treatment in accordance with Article III of the GATT 1994, including its interpretative notes, which are hereby incorporated and made part of this Agreement, mutatis mutandis.
Article 2.12. State Trading Enterprises
The rights and obligations of the Parties in respect of state trading enterprises shall be governed by Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994, which are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.13. Sanitary and Phytosanitary Measures
1. The Parties confirm their rights and obligations under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (hereinafter referred to as the SPS Agreement) and by the decisions on the application of the SPS Agreement adopted by the WTO Committee on Sanitary and Phytosanitary Measures. For the purposes of this Chapter and for any communication on sanitary or phytosanitary related matters between the Parties, the definitions in Annex A of the SPS Agreement, as well as the glossary of harmonised terms of the relevant international organisations, shall apply.
2. The Parties shall work together in the effective implementation of the SPS Agreement and of the provisions set forth in this Article for the purpose of facilitating bilateral trade, without prejudice to the right to adopt measures necessary to protect human, animal or plant health and to achieve the appropriate level of sanitary or phytosanitary protection.
3. The Parties shall not use their sanitary or phytosanitary measures related to control, inspection, approval or certification to restrict market access without scientific justification, without prejudice to paragraph 7 of Article 5 of the SPS Agreement.
4. The Parties shall strengthen their co-operation in the field of sanitary and phytosanitary measures, with a view to increasing the mutual understanding of their respective systems and to improving their sanitary and phytosanitary systems.
5. Peru and any of the EFTA States shall, whenever necessary, for facilitating access to their respective markets, develop bilateral agreements including those between their respective regulatory authorities.
6. The Parties agree to designate and notify to each other, upon entry into force of this Agreement, contact points for notification and information exchange on issues related to sanitary and phytosanitary matters.
7. The Parties hereby establish a forum for SPS experts. The forum shall meet when requested by one of the Parties. In order to permit the efficient use of resources, the Parties shall, to the extent possible, endeavour to use technological means of communication, such as electronic communication, video or phone conference, or arrange for meetings to take place in conjunction with Joint Committee meetings or with meetings of the WTO Committee on Sanitary and Phytosanitary Measures. The forum shall inter alia:
(a) overview and ensure the implementation of this Article;
(b) consider measures that are likely to affect, or have affected, access to markets of another Party with the aim of finding appropriate and timely solutions in conformity with the SPS Agreement;
(c) assess progress on market access interests of the Parties;
(d) discuss further developments of the SPS Agreement;
(e) consider the Parties obligations related to sanitary and phytosanitary matters in other international Agreements; and
(f) establish technical expert groups, as needed.
Article 2.14. Technical Regulations
1. The rights and obligations of the Parties in respect of technical regulations, standards and conformity assessment shall be governed by the WTO Agreement on Technical Barriers to Trade (hereinafter referred to as the TBT Agreement) which is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties shall strengthen their co-operation in the field of technical regulations, standards and conformity assessment, with a view to increasing the mutual understanding of their respective systems and facilitating access to their respective markets. To this end, they shall in particular co-operate in:
(a) reinforcing the role of international standards as a basis for technical regulations, including conformity assessment procedures;
(b) promoting the accreditation of conformity assessment bodies on the basis of relevant Standards and Guides of the International Standards Organisation (ISO) and the International Electrotechnical Commission (IEC);
(c) promoting mutual acceptance of conformity assessment results of conformity assessment bodies, which have been recognised under appropriate multilateral agreements between their respective accreditation systems or bodies; and
(d) reinforcing the transparency in the development of technical regulations and conformity assessment procedures of the Parties, among others, to ensure that all adopted technical regulations are published on official websites with free and public access. Where a Party detains at a port of entry, goods originating in another Party due to a perceived failure to comply with a technical regulation, it shall immediately notify the importer of the reasons for the detention.
3. The Parties shall exchange names and addresses of designated contact points for technical barriers to trade related matters in order to facilitate technical consultations and the exchange of information on all matters that may arise from the application of specific technical regulations, standards and conformity assessment procedures.
4. If a Party requests any information or explanation pursuant to the provisions of this Article, the requested Party shall provide such information or explanation in print or electronically within a reasonable time. The requested Party shall endeavour to respond to such request within 60 days.
5. If a Party considers that another Party has taken measures, not in conformity with the TBT Agreement, which are likely to affect or have affected access to its market that Party may request, through the designated contact point established according to paragraph 3, technical consultations with a view to finding an appropriate solution in conformity with the TBT Agreement. Such consultations, which can take place both within and outside the framework of the Joint Committee, shall be held within 40 days following the date of the receipt of the request. Consultations may also be held by phone-conference or video-conference. Consultations within the Joint Committee shall constitute consultations pursuant to Article 12.5 (Consultations).
Article 2.15. Subsidies and Countervailing Measures
1. The rights and obligations relating to subsidies and countervailing measures shall be governed by Articles VI and XVI of the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures, subject to paragraph 2.
2. Before a Party initiates an investigation to determine the existence, degree and effect of any alleged subsidy in Peru or an EFTA State, as provided for in Article 11 of the WTO Agreement on Subsidies and Countervailing Measures, the Party considering initiating an investigation shall notify in writing to the Party whose goods may be subject to investigation and allow a 30 days period for consultations with a view to finding a mutually acceptable solution. The consultations shall take place within 15 days following the date of the receipt of the notification, among the competent authorities of the Parties, if any Party so requests.
3. Chapter 12 (Dispute Settlement) shall not apply to this Article, except to paragraph 2.
Article 2.16. Anti-Dumping
1. The rights and obligations relating to anti-dumping measures shall be governed by Article VI of the GATT 1994 and the WTO Agreement on the implementation of Article VI of the GATT 1994 (hereinafter referred to as the WTO Anti-dumping Agreement), subject to paragraph 2.
2. When a Party receives a properly documented application and before initiating an investigation under the WTO Anti-Dumping Agreement, the Party shall notify in writing to the other Party whose product is allegedly being dumped and allow a 20 days period for consultations with a view to finding a mutually acceptable solution. If a solution cannot be reached, each Party retains its rights and obligations under Article VI of the GATT 1994 and the WTO Anti-Dumping Agreement.
3. The Joint Committee shall review this Article in order to determine whether its content is still necessary to achieve the policy objectives of the Parties.
4. Chapter 12 (Dispute Settlement) shall not apply to this Article, except to paragraph 2.
Article 2.17. Global Safeguard Measures
1. The Parties confirm their rights and obligations under Article XIX of the GATT 1994 and the WTO Agreement on Safeguards (hereinafter referred to as the Safeguards Agreement).