IMPLEMENT this Agreement in line with the objectives to preserve and protect the environment through promoting high levels of environmental protection, and enforcement of environmental laws and sound environmental management;
RECALL their rights and obligations under multilateral environmental agreements to which they are a party, and the respect for the fundamental principles and rights at work,
including the principles set out in the relevant International Labour Organisation (ILO) Conventions to which they are a party;
REAFFIRM their commitment to promote inclusive economic development and equal opportunities for all;
AFFIRM their commitment to prevent and combat corruption in international trade and investment and to promote the principles of transparency and good public governance;
ACKNOWLEDGE the importance of good corporate governance and responsible business conduct for sustainable development, and affirm their aim to encourage enterprises to observe internationally recognised guidelines and principles in this respect, such as the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, the OECD Principles of Corporate Governance and the UN Global Compact;
REAFFIRM their commitment to democracy, the rule of law, human rights and fundamental freedoms in accordance with their obligations under international law, including the principles and objectives set out in the United Nations Charter and the Universal Declaration of Human Rights; and
CONVINCED that this Agreement will create conditions encouraging economic, trade and investment relations between them;
HAVE AGREED, in pursuit of the above, to conclude the following Free Trade Agreement (Agreement):
Body
Chapter I. Initial Provisions
Article 1. Establishment of a Free Trade Area
The Parties hereby establish a free trade area in accordance with Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994), Article V of the General Agreement on Trade in Services (GATS) and the provisions of this Agreement.
Article 2. Objectives
This Agreement is based on trade relations between market economies and on the respect for democratic principles and human rights, with a view to spurring prosperity and sustainable development. The objectives of this Agreement, as elaborated through its principles and rules, are to:
(a) achieve the liberalisation of trade in goods, in conformity with Article XXIV of the GATT 1994;
(b) achieve the liberalisation of trade in services, in conformity with Article V of the GATS;
(c) achieve the liberalisation on a mutual basis of the government procurement markets of the Parties;
(d) promote conditions of fair competition in the free trade area;
(e) prevent the preparation, adoption and application of technical regulations or sanitary and phytosanitary measures that are more trade restrictive than necessary;
(f) substantially increase investment opportunities in the free trade area;
(g) provide adequate and effective protection and enforcement of intellectual property rights, in accordance with international standards recognised by the Parties;
(h) develop international trade and investment in such a way as to contribute to the objective of sustainable development and to ensure that this objective is integrated and reflected in the Parties’ trade relations; and
(i) establish a framework for further bilateral and multilateral cooperation to expand and enhance the benefits of this Agreement.
Article 3. Territorial Application
1. Without prejudice to Annex I, this Agreement shall apply to the territory of each Party, as well as to areas beyond the territory in which each Party may exercise sovereign rights or jurisdiction in accordance with international law.
2. Annex II shall apply with respect to Norway.
Article 4. Relation to other International Agreements
The Parties confirm their rights and obligations under the Marrakech Agreement establishing the World Trade Organization and the other agreements negotiated thereunder (hereinafter referred to as "the WTO Agreement") to which they are party, and under any other international agreement to which they are a party.
Article 5. Trade and Economic Relations Governed by this Agreement
1. The provisions of this Agreement apply to the trade and economic relations between, on the one side, the individual EFTA States and, on the other side, Chile, but not to the 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 6. Regional and Local Governments
Each Party is fully responsible for the observance of all obligations and commitments under this Agreement and shall ensure their observance by its respective regional and local governments and authorities and by non-governmental bodies in the exercise of governmental powers delegated by central, regional and local governments or authorities within its territory.
Chapter II. Trade In Goods
Article 7. Scope and Coverage
This Chapter applies to trade in goods between the Parties.
Article 8. Rules of Origin and Administrative Co-operation
The rules of origin and administrative cooperation are set out in Annex I (Rules of Origin and Administrative Cooperation).
Article 9. Customs Duties
1. Each Party shall apply customs duties on imports of goods originating in another Party in accordance with Annexes III (Chile Schedule of Tariff Commitments), IV (Iceland Schedule of Tariff Commitments), V (Norway Schedule of Tariff Commitments) and VI (Switzerland Schedule of Tariff Commitments).
2. For the purposes of this Agreement, a “customs duty” means any duties, taxes or charges imposed in connection with the importation or exportation of goods but does not include those imposed in conformity with Articles III and VIII of the GATT 1994.
3. Unless otherwise provided in this Agreement, no Party shall increase customs duties on imports, or introduce new customs duties, on goods originating in another Party covered by Annexes III (Chile Schedule of Tariff Commitments), IV (Iceland Schedule of Tariff Commitments), V (Norway Schedule of Tariff Commitments) and VI (Switzerland Schedule of Tariff Commitments).
4. The Parties shall eliminate all customs duties in connection with the exportation of goods to another Party.
5. The Parties shall not introduce new customs duties on exports.
Article 10. Fees and Formalities
Without prejudice to Article 7 (Fees and charges) of Annex VIIter (Trade Facilitation), Article VIII of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 11. Import and Export Restrictions
Article XI of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis, except as provided for in Annex VII (Import and Export Restrictions).
Article 12. Customs Valuation (1)
Article VII of the GATT 1994 and Part I of the Agreement on Implementation of Article VII of the GATT 1994 apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 13. National Treatment
Article III of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 14. Sanitary and Phytosanitary Measures
1. The rights and obligations of the Parties with respect to sanitary and phytosanitary measures shall be governed by the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement).
2. 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 facilitating access to their respective markets.
3. Upon request of a Party, which considers that a measure of another Party is likely to affect, or has affected, access to its market, expert consultations shall be held. The experts, representing the Parties concerned on specific issues in the field of sanitary and phytosanitary matters, shall aim at finding a mutually acceptable solution. Consultations shall take place within 30 days from the receipt of the request and may be conducted by any method agreed by the consulting Parties.
4. In order to permit the efficient use of resources, the Parties shall, to the extent possible, endeavour to use modern technological means of communication, such as electronic communication, videoconferencing or telephone, or to arrange for the meetings referred to in paragraph 3 to be held in conjunction with the meetings of the Joint Committee or with sanitary and phytosanitary meetings in the framework of the WTO. The results of expert consultations held in accordance with paragraph 3 shall be reported to the Joint Committee.
5. Chile and any of the EFTA States may, for better implementation of this Article, develop bilateral arrangements including agreements between their respective regulatory agencies.
6. Upon request of a Party, the Parties shall, without undue delay, agree on an arrangement extending to each other equivalent (2) treatment related to sanitary and phytosanitary measures mutually agreed between each Party and the European Union (EU).
7. The Parties shall exchange names and addresses of contact points with sanitary and phytosanitary expertise in order to facilitate communication and the exchange of information.
Article 15. Technical Regulations
1. The rights and obligations of the Parties with respect to technical regulations, standards and conformity assessment shall be governed by the WTO Agreement on Technical Barriers to Trade (TBT Agreement).
2. The Parties shall strengthen their cooperation 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.
3. Upon request of a Party, which considers that a technical regulation, standard or conformity assessment procedure of another Party is likely to create, or has created, an obstacle to trade, consultations shall be held with the objective of finding a mutually acceptable solution. Consultations shall take place within 30 days from the receipt of the request and may be conducted by any method agreed by the consulting Parties. The Joint Committee shall be informed thereof.
4. Upon request of a Party, the Parties shall, without undue delay, negotiate a sector specific arrangement with the aim to extend to each other treatment related to technical regulations, standards and conformity assessments each Party has granted to or agreed with the EU. A Party which does not agree to extend to each other such an arrangement shall provide to the other Party, upon request, the rationale for its decision. The Joint Committee shall be informed thereof.
5. The Parties shall exchange names and addresses of contact points for this Article in order to facilitate communication and the exchange of information.
Article 16. Trade Facilitation
Provisions regarding trade facilitation are set out in Annex VIIter (Trade Facilitation).
Article 17. Anti-dumping and Countervailing Measures
1. A Party shall not apply anti-dumping measures as provided for under the WTO Agreement on Implementation of Article VI of the GATT 1994 in relation to goods of a Party.
2. The Parties recognise that the effective implementation of competition rules may address economic causes leading to dumping.
3. The rights and obligations of the Parties related to countervailing measures shall be governed by the WTO Agreement on Subsidies and Countervailing Measures.
Article 18. Global Safeguard Measures
1. The rights and obligations of the Parties with respect to global safeguards shall be governed by Article XIX of the GATT 1994 and the WTO Agreement on Safeguards.
2. Upon request of the exporting Party, the Party initiating a global safeguard investigation shall immediately provide:
(a) the information referred to in Articles 12.2 and 12.6 of the WTO Agreement on Safeguards, in the format prescribed by the WTO Committee on Safeguards; and
(b) the public notice of initiation of an investigation and the public version of the complaint filed by the domestic industry.
3. A Party initiating an investigation to impose global safeguard measures against one or several Parties shall inform them immediately and provide adequate opportunity for consultations.
Article 19. Emergency Action on Imports of Particular Products
1. Where any product originating in a Party, as a result of the reduction or elimination of a customs duty under this Agreement, is being imported into the territory of another Party in such increased quantities and under such conditions as to constitute a substantial cause of serious injury or threat thereof to the domestic industry of like or directly competitive products in the territory of the importing Party, the importing Party may take emergency measures to the minimum extent necessary to remedy or prevent the injury.
2. Such measures may consist in:
(a) suspending the further reduction of any rate of duty provided for under this Agreement on the product; or
(b) increasing the rate of duty on the product to a level not to exceed the lesser of:
(i) the most-favoured nation rate of duty in effect at the time the action is taken;
(ii) the most-favoured nation rate of duty in effect on the day immediately preceding the date of the entry into force of this Agreement.
3. The Parties shall not take emergency measures for a period exceeding one year. In very exceptional circumstances, after review by the Joint Committee, measures may be taken up to a total maximum period of three years. In this case, the Party taking such measures shall present a schedule leading to their progressive elimination. The Parties shall not apply measures to the import of a product which has previously been subject to such a measure for a period of, at least, five years since the expiry of the measure.
4. The Parties shall only take emergency measures upon clear evidence that increased imports have caused or are threatening to cause serious injury pursuant to an investigation in accordance with the procedures laid down in the WTO Agreement on Safeguards.
5. The Party intending to take emergency measures under this Article shall promptly make a notification to the other Parties, containing all pertinent information which shall include evidence of serious injury caused by increased imports, precise description of the product involved, the proposed measure, the proposed date of introduction and expected duration of the measures. Any Party that may be affected shall simultaneously be offered compensation in the form of substantially equivalent trade liberalisation in relation to the imports from any such Party.
6. The Joint Committee shall, within 30 days from the date of notification to the Parties, meet to examine the information provided under paragraph 5, in order to facilitate a mutually acceptable solution of the matter. In the absence of such solution, the importing Party may adopt a measure pursuant to paragraph 2 to remedy the problem, and, in the absence of mutually agreed compensation, the Party against whose product the measure is taken may take retaliatory action. The emergency measure and any compensatory or retaliatory action shall be immediately notified to the Joint Committee. The retaliatory action shall consist of the suspension of concessions having substantially equivalent trade effects or concessions substantially equivalent to the value of the additional duties expected to result from the emergency action. In the selection of the emergency measure and the retaliatory action, priority must be given to the action which least disturbs the functioning of this Agreement.
7. In critical circumstances where delay would cause damage which would be difficult to repair, a Party may take a provisional emergency measure not exceeding 120 days pursuant to a preliminary determination that there is clear evidence that increased imports have caused or are threatening to cause serious injury. The Party intending to take such a measure shall immediately notify the other Parties thereof and, within 30 days of the date of such notification, the pertinent procedures set out in paragraphs 5 and 6, including for compensatory and retaliatory action, shall be initiated. Any compensation shall be based on the total period of application of the provisional measure. The period of application of any such provisional measure shall be counted as part of the duration of the definitive measure and any extension thereof.
Article 20. State Trading Enterprises
Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994 apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 21. Export Subsidies
No Party may adopt or maintain export subsidies, as defined in the WTO Agreement on Agriculture, in connection with the exportation of agricultural products to another Party.
Article 22. General Exceptions
1. For the purposes of this Chapter, Article XX of the GATT 1994 and its interpretative notes apply and are incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties understand that the measures referred to in Article XX(b) of the GATT 1994 include environmental measures necessary to protect human, animal or plant life or health, and that Article XX(g) of the GATT 1994 applies to measures relating to the conservation of living and non-living exhaustible natural resources.
Article 23. Preference Utilisation
1. For the purposes of monitoring the functioning of this Agreement and calculating preference utilisation rates, the Parties shall annually exchange import statistics and preferential tariff rates under this Agreement as well as applied most-favoured-nation (MFN) tariff rates.
2. Import statistics exchanged shall pertain to the three most recent years available and comprise all imports from the Party concerned, including trade values and volumes listed at the level of national tariff line. The Parties shall exchange separate statistics for imports benefitting from preferential treatment under this Agreement, for imports benefiting from other preferential treatment than under this Agreement as well as those that did not receive preferential treatment (MFN treatment). The preferential tariff rates and applied MFN tariff rates exchanged shall pertain to the same year as the import statistics. Upon request, the Parties shall exchange additional information and explanations in English.
3. The exchange of import statistics, preferential tariff rates and applied MFN tariff rates shall start one year after the entry into force of this Agreement.
4. Notwithstanding paragraph 2, no Party shall be obliged to exchange data that is confidential in accordance with its domestic laws and regulations.
Article 24. Technical Amendments
1. The Parties shall jointly decide, as a result of amendments to the Harmonized Commodity Description and Coding System (HS) nomenclature or other technical amendments to a Party’s customs tariff, whether Annexes III (Chile Schedule of Tariff Commitments), IV (Iceland Schedule of Tariff Commitments), V (Norway Schedule of Tariff Commitments) and VI (Switzerland Schedule of Tariff Commitments) and Appendix I (Product-Specific Rules) to Annex I (Rules of Origin and Administrative Cooperation) will be amended accordingly.
2. Amendments pursuant to paragraph 1 shall be made without impairing existing tariff commitments or product-specific rules. Consequently, the customs duty applicable to the corresponding goods under a new tariff line shall be equal to or lower than the customs duty of the corresponding original tariff line and any other agreed tariff commitments, such as tariff dismantling periods, shall not deteriorate. Product-specific rules applicable to the corresponding goods under the new HS classification shall be equal to or less stringent than the product-specific rule of the corresponding original HS classification.
3. The version of the HS and the year shall be indicated in the schedules of tariff commitments and product-specific rules referred to in paragraph 1.
Article 25. Sub-Committee on Trade In Goods
1. A Sub-Committee on trade in goods is hereby established.
2. The mandate of the Sub-Committee on trade in goods is set out in Annex VIIbis (Mandate of the Sub-Committee on trade in goods).
Chapter III. Trade In Services and Establishment
Section I. Trade In Services
Article 26. Coverage
1. This Section applies to measures affecting trade in services taken by central, regional or local governments and authorities as well as by non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities.
2. This Section applies to measures affecting trade in all services sectors with the exception of air services, including domestic and international air transportation services, whether scheduled or non-scheduled, and related services in support of air services, other than:
(a) aircraft repair and maintenance services;
(b) the selling and marketing of air transport services;
(c) computer reservation system (CRS) services. (1)
(d) ground handling services (2)
(e) airport operation services (3)
3. Nothing in this Section shall be construed to impose any obligation with respect to government procurement, which is subject to the Chapter V.
4. This Section shall not apply to trade in financial services, which is subject to Section II.
Article 27. Definitions
For the purposes of this Section:
(a) "trade in services" is defined as the supply of a service:
(i) from the territory of a Party into the territory of another Party (mode 1);
(ii) in the territory of a Party to the service consumer of another Party (mode 2);
(iii) by a service supplier of a Party, through commercial presence in the territory of another Party (mode 3);
(iv) by a service supplier of a Party, through presence of natural persons in the territory of another Party (mode 4).
(b) "measure" means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action or any other form;
(c) "supply of a service" includes the production, distribution, marketing, sale and delivery of a service;
(d) "measures by a Party affecting trade in services" include measures in respect of:
(i) the purchase, payment or use of a service;
(ii) the access to and use of, in connection with the supply of a service, services which are required by that Party to be offered to the public generally;
(iii) the presence, including commercial presence, of persons of another Party for the supply of a service in the territory of that Party;
(e) "commercial presence" means any type of business or professional establishment, including through:
(i) the constitution, acquisition or maintenance of a juridical person; or
(ii) the creation or maintenance of a branch or a representative office; within the territory of a Party for the purpose of supplying a service;
(f) "service supplier" means any person that seeks to supply or supplies a service; (2)
(g) "natural person of a Party" is, in accordance with its legislation, a national or a permanent resident of that Party if he or she is accorded substantially the same treatment as nationals in respect of measures affecting trade in services;
(h) "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;
(i) "services" includes any service in any sector except services supplied in the exercise of governmental authority;
(j) "juridical person of a Party" means a juridical person which is either:
(i) constituted or otherwise organised under the law of Chile or an EFTA State, and that is engaged in substantive business operations in Chile or in the EFTA State concerned, or (ii) in the case of the supply of a service through commercial presence, owned or controlled by:
(A) natural persons of that Party; or