Title
Free Trade Agreement between the United Mexican States and the Republic of Bolivia
Preamble
The Government of the United Mexican States and the Government of the Republic of Bolivia, DECIDED TO
RENEW the special bonds of friendship, solidarity and cooperation among their peoples;
ACCELERATE and promote the revitalization of American integration schemes;
STRENGTHEN the Latin American Integration Association as a center for the articulation and convergence of Latin American integration schemes;
ACHIEVE a better balance in trade relations between their countries, taking into account their levels of economic development;
CONTRIBUTE to harmonious development, the expansion of world trade and the expansion of international cooperation;
CREATE a more extensive and secure market for the goods produced and the services provided in their territories;
REDUCE the distortions in their reciprocal trade;
ESTABLISH clear and mutually beneficial rules for their commercial exchange;
ENSURE a predictable commercial framework for the planning of productive activities and investment;
DEVELOP their respective rights and obligations derived from the General Agreement on Tariffs and Trade (GATT), the Treaty of Montevideo 1980, as well as other bilateral and multilateral integration and cooperation instruments;
STRENGTHEN the competitiveness of their companies in world markets;
ENCOURAGE innovation and creativity through the protection of intellectual property rights;
CREATE new employment opportunities, improve working conditions and living standards in their respective territories;
PROTECT the fundamental rights of its workers;
UNDERTAKE all of the above in a manner consistent with the protection and conservation of the environment;
STRENGTHEN the development and application of laws and regulations in environmental matters;
PROMOTE sustainable development;
PRESERVE their capacity to safeguard the public welfare; and
TO PROMOTE the dynamic participation of the different economic agents, in particular of the private sector, in the efforts aimed at deepening the economic relations between the Parties and to develop and maximize the possibilities of their joint presence in international markets;
CELEBRATE THIS TREATY OF FREE TRADE
In accordance with the GATT and with the nature of an Agreement of Partial Scope of Economic Complementation for the effects of the Treaty of Montevideo 1980 and Resolution 2 of the Council of Foreign Ministers of the contracting parties of that treaty.
Body
Part I. General Aspects
Chapter I. Initial Provisions
Article 1-01. Objectives
1. The objectives of this Agreement, specifically developed through its Principles and Rules, including the national treatment and most favoured nation treatment and transparency, are the following:
a) Encourage expansion and diversification of trade between the parties;
b) Eliminate barriers to trade and facilitate the movement of goods between the parties;
c) Promote conditions of fair competition in the trade between the parties;
d) Establish guidelines for further cooperation between the parties, as well as at the regional and multilateral cooperation to expand and enhance the benefits of this Agreement; and
e) Create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes.
2. The Parties shall interpret and apply the provisions of this Agreement in the light of the objectives set out in paragraph 1 and in accordance with applicable rules of international law.
Article 1-02. Relationship with other International Treaties and Agreements
1. The Parties confirm their rights and obligations existing between them in accordance with the WTO Agreement, the Montevideo Treaty 1980 and other treaties and agreements to which they are party.
2. In the event of any inconsistency between the provisions of the treaties and agreements referred to in paragraph 1 and the provisions of this Agreement, the latter shall prevail to the extent of the inconsistency.
Article 1-03. Implementation of the Agreement
Each Party shall ensure, in accordance with its constitutional rules, the implementation of the provisions of this Agreement in its territory at the central or local or federal, state, municipal and, unless this agreement provides otherwise.
Article 1-04. Succession of Agreements
Any reference to any other international agreement or treaty shall be made on the same terms for a successor treaty or agreement to which the parties are party.
Chapter II. General Definitions
Article 2-01. Definitions of General Application
1. For the purposes of this Agreement, unless otherwise specified:
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, dated 15 April 1994;
Customs tariff: a tax, tariff and import duty or charge of any kind imposed in connection with the importation of goods, including any form of surtax or surcharge on imports, except:
a) A charge equivalent to an internal tax established in accordance with article III: 2 of the GATT with respect to similar goods, direct competitors or replacement of the party or in respect of goods from which has been manufactured or produced in whole or in part the imported goods;
b) A compensatory amount to be applied in accordance with the legislation of each party;
c) A fee or other charge in connection with importation commensurate with the cost of services rendered; and
d) A premium offered or collected on imported goods, arising out of any tendering system in respect of the administration of quantitative import restrictions or preference or aranceles-cuota tariff quotas;
Goods of a Party means domestic products as understood in GATT, those goods that the parties agree, and includes originating goods. A good of a Party may include materials of other countries;
Originating a good means good which complies with the rules of origin set out in chapter V (rules of origin);
Customs valuation code means the Agreement on Implementation of article VII of the GATT, including its interpretative notes, which is part of the WTO agreement;
Commission: administering the Commission established under article 1101 (commission administering);
Quota: compensatory duties quotas or anti-dumping and countervailing duties according to the legislation of each party;
Calendar days means calendar days; or
Enterprise means any legal person constituted or organized under the applicable law, whether or not for profit and whether privately-owned or governmental and other organizations or economic units which are duly constituted or otherwise organized under the legislation, including branches, foundations, companies, trusts, shares, firms, sole proprietorship enterprise co-investments or other associations;
State enterprise means an enterprise that is owned by a party or under its control through participation in the capital;
Enterprise of a party constituted means an enterprise or organized under the law of a party;
Tariff: the percentage breakdown of a code of tariff classification of the harmonized system for more than six digits;
GATT: General Agreement on Tariffs and Trade 1994, which is part of the WTO agreement;
Measure means any law, regulation, provision or practice, procedure
Administrative, among others;
National means a natural person who has the nationality of a Party according to its legislation. It is understood that the term also extends to persons who, in accordance with the legislation of that Party, having the character of permanent residents in the territory of the same;
Any State Party: for which this Agreement has entered into force;
Exporting Party: the Party from whose territory the good was exported;
Importing Party means the party into whose territory the good is imported;
Heading: a code of tariff classification of the Harmonized System at the 4-digit level;
Person means a natural person or an enterprise;
Party means a person of a national or an enterprise of a party;
Secretarial: the secretariat established under article 11-02 (Secretariat);
Harmonized System (HS) means the Harmonized Commodity Description and Coding System of goods, including its general rules of classification and its explanatory notes;
Subheading: a code of tariff classification six-digit HS level; and
Territory: for each Party, as defined in the annex to this article.
Unless otherwise specified, for the purpose of this Agreement:
Territory:
a) With respect to Bolivia:
i) Departments, provinces and cantons;
ii) The territories over which it exercises administrative control;
iii) The space on the national territory to the extent and in accordance with international law;
iv) Any maritime area within which it may exercise rights with respect to the seabed and subsoil and the natural resources therein, in accordance with international law, including the United Nations Convention on the Law of the Sea; and
v) The soil and subsoil with all their natural wealth, sea, river and lake medicinal as well as the elements and natural forces may use;
b) With respect to Mexico:
i) The States of the Federation and the Federal District;
ii) The islands and cays, including the reefs in adjacent seas;
iii) The islands of Guadalupe revillagigedo and situated in the Pacific Ocean;
iv) The continental shelf and the submarine shelf, islands and cays reefs;
v) The waters of the territorial seas, in the extension and terms set by international law, and inland waters;
vi) The space on the national territory to the extent and modalities that establishes the International Law; and
vii) Any areas beyond the territorial seas of Mexico within which it may exercise rights with respect to the seabed and subsoil and the natural resources therein, in accordance with international law, including the United Nations Convention on the Law of the Sea, as well as with its domestic legislation.
Part II. TRADE IN GOODS
Chapter III. National Treatment and Market Access for Goods
Section A. Scope of Application and National Treatment
Article 3-01. Scope of Application
This Chapter applies to trade in goods between the Parties, except as otherwise provided in this Agreement.
Article 3-02. National Treatment
Each Party shall accord national treatment to goods of the other Party in accordance with Article III of the GATT, including its interpretative notes. For this purpose, Article III of the GATT and its interpretative notes are incorporated into and form an integral part of this Agreement.
2. The provisions of paragraph 1 mean, with respect to a state or department, including local governments, treatment no less favorable than the most favorable treatment accorded by that state or department to any like goods, direct competitors or substitutes, as the case may be, of the Party of which they are members.
3. Paragraphs 1 and 2 do not apply to the measures set out in the Annex to Articles 3-02 and 3-08.
Section B. Customs Duties
Article 3-03. Tariff Elimination
1. En la fecha de entrada en vigor de este Acuerdo, las Partes eliminarán todos los aranceles aduaneros sobre las mercancías originarias, excepto para los productos incluidos en los anexos del artículo 3-03.
2. Salvo que se disponga otra cosa en este Tratado, ninguna Parte podrá incrementar los aranceles aduaneros existentes, ni adoptar nuevos aranceles aduaneros, sobre los bienes originarios. Este párrafo no prohíbe a una Parte aumentar un arancel aduanero cuando dicho aumento se autorice como resultado de un procedimiento de solución de controversias en el marco del GATT.
3. No obstante el párrafo 1 de este artículo, una Parte podrá adoptar o mantener aranceles aduaneros de conformidad con sus derechos y obligaciones en el marco del GATT sobre los bienes originarios cubiertos por los anexos del artículo 3-03.
4. Este Acuerdo es el único instrumento que rige el comercio de bienes entre las Partes bajo el Tratado de Montevideo 1980.
Article 3-04. Restrictions on Drawback of Customs Duties on Exported Products and on Programs for Deferral or Suspension of Payment of Customs Duties.
1. For purposes of this Article, the following definitions shall apply:
Customs duties: those that would be applicable to a good that is imported for consumption in the customs territory of a Party if the good were not exported to the territory of the other Party;
Fungible goods: fungible goods as defined in Chapter V (Rules of Origin);
Identical or similar goods: goods that are alike in all respects, including their physical characteristics, quality and commercial prestige, as well as goods that, although not alike in all respects, have similar characteristics and composition, enabling them to perform the same functions and to be commercially interchangeable;
Material: a material as defined in Chapter V (Rules of Origin);
Tariff deferral or suspension programs: measures governing free or duty-free zones, temporary imports under bond, temporary imports for export, bonded warehouses, maquiladora and other export processing programs, among others.
2. No Party may refund the amount of customs duties paid, or waive, suspend or reduce the amount of customs duties owed, on a good imported into its territory that is:
(a) used as a material in the production of another good subsequently exported to the territory of the other Party; or
(b) replaced by an identical or similar good used as a material in the production of another good subsequently exported to the territory of the other Party; in an amount that exceeds the total amount of customs duties paid or owed on that quantity of that imported good that is materially incorporated into the good exported to the territory of the other Party, or replaced by identical or similar goods materially incorporated into the good exported to the territory of the other Party, with an appropriate allowance for waste.
3. No Party may, on condition of exporting, refund, waive, suspend, or reduce:
(a) countervailing duties applied in accordance with the Party's legislation;
(b) premiums offered or collected on imported goods under any tendering system relating to the application of quantitative import restrictions, tariff-rate quotas, or tariff preference quotas; or
c) customs duties paid or owed in respect of a good imported into its territory and replaced by an identical or similar good that is subsequently exported to the territory of the other Party.
4. Except as otherwise provided in this Article, on or after the date and in the circumstances set out in paragraph 7, a Party may not date and in the circumstances set out in paragraph 7, a Party may not refund the amount of customs duties paid, or waive, suspend or reduce the amount of customs duties owed, on a good imported into its territory, provided that the good is:
(a) used as a material in the production of an originating good subsequently exported to the territory of the other Party; or
(b) replaced by an identical or similar good used as a material in the production of an originating good subsequently exported to the territory of the other Party.
5. Effective on the date and in the circumstances set out in paragraph 7, where a good is imported into the territory of a Party pursuant to a tariff deferral or suspension program and any of the conditions set out in subparagraphs (a) and (b) of paragraph 4 are met, the Party from whose territory the good was exported shall
(a) determine the amount of customs duties as if the exported good had been destined for domestic consumption; and
(b) within 60 days of the date of exportation, collect the amount of customs duties as if the exported good had been destined for domestic consumption.
6. Paragraphs 3 through 5 do not apply to:
(a) a good that, under the law of each Party, is imported under bond or guarantee to be transported and exported to the territory of the other Party;
b) a good that is exported to the territory of a Party in the same condition in which it was imported into the territory of the Party from which it is exported. Processes such as testing, cleaning, repackaging, inspection or preservation of the good in the same condition shall not be considered as changes in the condition of the good. Where a good has been commingled with fungible goods and exported in the same condition, its origin, for the purposes of this paragraph, may be determined on the basis of the inventory methods set out in Chapter V (Rules of Origin);
(c) a good imported into the territory of a Party, which is subsequently deemed to be exported from its territory, or is used as a material in the production of another good, which is subsequently deemed to be exported to the territory of the other Party, or is replaced by an identical or similar good used as a material in the production of another good which is subsequently deemed to be exported to the territory of the other Party, by reason of:
(i) its shipment to a store free of customs duties; or (ii) its shipment to stores on board vessels or as supplies for vessels or aircraft;
(d) a refund by a Party of customs duties paid on a specific good imported into its territory and subsequently exported to the territory of the other Party, where such refund is granted on the grounds that the good does not correspond to the samples or specifications of the good that was intended to be imported, or on account of the shipment of that good without the consent of the consignee; or
e) an originating good imported into the territory of a Party that is subsequently exported to the territory of the other Party, or used as a material in the production of another good subsequently exported to the territory of the other Party, or replaced by an identical or similar good used as a material in the production of another good subsequently exported to the territory of the other Party.
7. Paragraphs 4 and 5 shall apply:
(a) from the time that Bolivia applies provisions similar to those contained in those paragraphs to a non-Party; or
(b) for 3 years, with respect to a good imported into the territory of a Party that meets the conditions in subparagraphs (a) and (b) of paragraph 4, where it is demonstrated that the reimbursement, exemption, suspension, or reduction of customs duties simultaneously
(i) creates a significant distortion of the general tariff treatment applied by the Party granting the refund, exemption, suspension or reduction of customs duties in favor of the export of goods from the territory of that Party; and
ii) causes injury or threat of injury to a domestic industry producing identical, like or directly competitive goods of the other Party.
8. For purposes of paragraph 7, significant distortion of the general tariff treatment applied by a Party granting a refund, exemption, suspension or reduction of duties in favor of the export of goods from the territory of that Party shall be presumed to exist where:
(a) the amount of duties refunded, exempted, suspended or reduced on goods imported into the territory of that Party that satisfy the conditions set out in subparagraphs (a) and (b) of paragraph (4) exceeds 5 percent of the total value of imports, during a year, of originating goods provided for in a tariff item of the Party to whose territory those originating goods are exported; or
(b) a Party refunds, exempts, suspends, or reduces customs duties on goods or materials imported from the territory of a non-Party on the importation of which it maintains quantitative restrictions, and those goods or materials are subsequently exported to the other Party, used in the production of goods subsequently exported to the other Party, or replaced by identical or similar materials used in the production of goods subsequently exported to the other Party, or substituted with identical or similar materials used in the production of goods subsequently exported to the other Party.
9. A Party that refunds, exempts, suspends or reduces customs duties shall, on request of the other Party, provide the information required to verify the existence of the conditions set out in paragraph 7, including with respect to each and every import on which it grants refunds, exemptions, suspensions or reductions of customs duties with respect to a good exported to the territory of the other Party.
10. For the purposes of paragraph 7, the following definitions shall apply:
(a) threat of injury: clearly imminent injury, based on the facts and not merely on allegation, conjecture or remote possibility;
(b) injury: a significant impairment of a domestic industry; and
c) domestic industry: the producer or producers of identical or similar goods or direct competitors operating within the territory of a Party.
11. Each Party shall establish clear and strict procedures for the implementation of paragraphs 4 and 5, in accordance with the following:
(a) the Party that decides to initiate an investigation to implement paragraphs 4 and 5 shall publish the initiation of the investigation in the appropriate official media and shall notify the exporting Party in writing on the day following publication;
(b) for purposes of determining significant distortion and injury or threat of injury under paragraph 7(b)(i) and (ii), the competent authorities shall evaluate all factors of an objective and quantifiable nature;