Title
INTERIM TRADE AGREEMENT BETWEEN THE EUROPEAN UNION AND THE REPUBLIC OF CHILE
Preamble
PREAMBLE
The European Union, hereinafter referred to as "the Union" or "the EU",
and
the Republic of Chile, hereinafter referred to as "Chile",
hereinafter jointly referred to as "the Parties" or individually referred to as "Party",
CONSIDERING the strong cultural, political, economic and cooperation ties which unite them;
MINDFUL of the significant contribution to strengthen these ties made by the Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Chile, of the other part, signed in Brussels on 18 November 2002;
EMPHASISING the comprehensive nature of their relationship and the importance of providing a coherent framework for its further promotion;
CONSIDERING their joint commitment to modernise and replace the existing Association Agreement to reflect new political and economic realities and the advancements made in their partnership;
ACKNOWLEDGING the importance of a strong and effective multilateral system, based upon international law, in preserving peace, preventing conflicts and strengthening international security and in tackling common challenges;
AFFIRMING their commitment to strengthen cooperation on bilateral, regional and global issues of common concern and to use all available cooperation tools for promoting activities designed to develop an active and reciprocal international cooperation;
RECOGNISING the interim character of this Trade Agreement that will strengthen bilateral economic and trade relations between the Parties, subsumed under the Advanced Framework Agreement and that this Agreement will cease to apply once the latter enters into force;
WELCOMING the adoption of the Sendai Framework for Disaster Risk Reduction 2015 - 2030, the Addis Ababa Action Agenda, the 2030 Agenda for Sustainable Development, the Paris Agreement on Climate Change, the New Urban Agenda, as well as the World Humanitarian Summit Commitments, and calling for their implementation;
REAFFIRMING their commitment to promote sustainable development in its economic, social and environmental dimension and to the development of international trade in such a way as to contribute to sustainable development in these three dimensions, which are recognized as deeply interlinked and mutually reinforcing and also to the achievement of the objectives of the 2030 Agenda;
REAFFIRMING their commitment to expand and diversify their trade relation in conformity with the Marrakesh Agreement Establishing the World Trade Organization ("WTO Agreement") and the specific objectives and provisions set out in this Agreement;
DESIRING to strengthen their economic relations, particularly trade and investment, strengthening and improving the current level of access, and contributing to economic growth, bearing in mind the need to raise awareness of the economic and social impact of environmental damage, unsustainable patterns of production, and consumption and its associated impact on human wellbeing;
CONVINCED that this Agreement will create a climate conducive to growth in sustainable economic relations between them, more particularly in the trade and investment sectors which are essential to the realisation of economic and social development and technological innovation and modernisation;
RECOGNISING that the provisions of this Agreement are intended to stimulate mutually- beneficial business activity, without undermining the right of the Parties to regulate in the public interest within their territories;
RECOGNISING the close relationship between innovation and trade, as well as the relevance of innovation for economic growth, and social development;
RECALLING the importance of the different agreements signed by the European Community/European Union and the Republic of Chile, that have fostered political dialogue and cooperation in the different sectoral areas of the relationship between the parties, as well as the increase in trade and investments;
HAVE AGREED AS FOLLOWS:
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. Establishment of a Free Trade Area
The Parties to this Agreement hereby establish a free trade area, in conformity with Article XXIV of GATT 1994 and Article V of GATS.
Article 1.2. Objectives
The objectives of this Agreement are:
(a) the expansion and the diversification of trade in goods, in conformity with Article XXIV of GATT 1994, between the Parties, through the reduction or the elimination of tariff and non-tariff barriers to trade;
(b) the facilitation of trade in goods, in particular, through, the agreed provisions regarding customs and trade facilitation, standards, technical regulations and conformity assessment procedures as well as sanitary and phytosanitary measures, while preserving the right of the Parties to regulate to achieve public policy objectives;
(c) the liberalisation of trade in services, in conformity with Article V of GATS;
(d) the development of a climate conducive to increased investment flows, the improvement of the conditions of establishment on the basis of the principle of non-discrimination while preserving each Party's right to adopt and enforce measures necessary to pursue legitimate policy objectives;
(e) the facilitation of trade and investment among the Parties including through the free transfer of current payments and capital movements;
(f) the effective and reciprocal opening of government procurement markets of the Parties;
(g) the promotion of innovation and creativity by ensuring an adequate and effective protection of all intellectual property rights, in accordance with international obligations applicable between the Parties;
(h) the promotion of conditions fostering undistorted competition in the economic activities, in particular with regard to trade and investment between them;
(i) the development of international trade in a way as to contribute to sustainable development in its economic, social and environmental dimensions;
(j) the establishment of an effective, fair and predictable dispute settlement mechanism to solve disputes on the interpretation and application of this Agreement.
Article 1.3. Definitions of General Application
Unless otherwise specified, for the purposes of this Agreement, the below terms shall have the following meaning:
(a) "Antidumping Agreement" means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, contained in Annex 1A to the WTO Agreement;
(b) "Agreement on Agriculture" means the Agreement on Agriculture, contained in Annex 1A to the WTO Agreement;
(c) "Agricultural good" means a product listed in Annex 1 to the Agreement on Agriculture;
(d) "Customs duty" means any duty or charge of any kind imposed on or in connection with the importation of a good, not including any:
(i) charge equivalent to an internal tax imposed in accordance with Article X.4 (National Treatment on Internal Taxation and Regulation) of the Trade in Goods Chapter;
(ii) anti-dumping, special safeguard, countervailing or safeguard duty applied in conformity with the GATT 1994, the Anti-dumping Agreement, the Agreement on Agriculture, the Agreement on Subsidies and Countervailing Measures and the Agreement on Safeguards, as appropriate; and
(iii) fee or other charge imposed on or in connection with importation that is limited in amount to the approximate cost of the services rendered.
(e) "CPC" means the Provisional Central Product Classification (Statistical Papers Series M No.77, Department of International Economic and Social Affairs, Statistical Office of the United Nations, New York, 1991);
(f) "Days" means calendar days, including weekends and holidays;
(g) "Existing" means in effect on the date of entry into force of this Agreement;
(h) "GATS" means the General Agreement on Trade in Services, contained in Annex 1B to the WTO Agreement;
(i) "GATT 1994" means the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement;
(j) "Good of a Party" means a domestic good as that is understood in the GATT 1994, and includes originating goods of that Party;
(k) "Harmonized System" or "HS" means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, and Chapter Notes developed by the WCO;
(l) "Heading" means the first four digits in the tariff classification number under the Harmonized System;
(m) "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;
(n) "Measure" includes any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, requirement, practice or any other form;
(o) "Measures of a Party" means any measures adopted or maintained by: (1)
(i) governments and authorities at all levels;
(ii) non-governmental bodies in the exercise of powers delegated by governments or authorities at all levels; (2) or
(iii) any entity which is in fact acting on the instructions of or under the direction or the control of a Party with regard to the measure; (3)
(p) "Natural person of a Party" means, for the European Union, a national of a Member State of the European Union, and for Chile, a national of Chile, in accordance with their respective applicable legislation (4);
(q) "Person" means a natural person or a juridical person;
(r) "Safeguards Agreement" means the Agreement on Safeguards, contained in Annex 1A to the WTO Agreement;
(s) "Sanitary or phytosanitary measure" means any measure referred to in paragraph 1 of Annex A to the SPS Agreement;
(t) "SCM Agreement" means the Agreement on Subsidies and Countervailing Measures, contained in Annex 1A to the WTO Agreement;
(u) "SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary Measures, contained in Annex 1A to the WTO Agreement;
(v) "TBT Agreement" means the Agreement on Technical Barriers to Trade, contained in Annex 1 to the WTO Agreement;
(w) "Third country" means a country or territory outside the territorial scope of application of this Agreement;
(x) "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights, contained in Annex 1C to the WTO Agreement
(y) "Vienna Convention on the Law of Treaties" means the Vienna Convention on the Law of Treaties, done at Vienna on 23 May 1969; and
(z) "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.
Article 1.4. Relation to the WTO Agreement and other Agreements
1. The Parties affirm their rights and obligations with respect to each other under the WTO Agreement and other agreements to which they are party.
2. Nothing in this Agreement shall be construed as requiring either Party to act in a manner inconsistent with its obligations under the WTO Agreement.
3. In the event of any inconsistency between this Agreement and any agreement other than the WTO Agreement to which both Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution.
Article 1.5. References to Laws and other Agreements
1. Unless otherwise provided, where reference is made in this Agreement to laws and regulations of a Party, those laws and regulations shall be understood to include amendments thereto.
2. Unless otherwise provided in this Agreement, where international agreements are referred to or incorporated into this Agreement, in whole or in part, they shall be understood to include amendments thereto or their successor agreements entering into force for both Parties on or after the date of signature of this Agreement. If any matter arises regarding the implementation or application of the provisions of this Agreement as a result of such amendments or successor agreements, the Parties may, on request of either Party, consult with each other with a view to finding a mutually satisfactory solution to this matter as necessary.
Article 1.6. Fulfilment of Obligations
1. The Parties shall take any general or specific measures required to fulfil their obligations under this Agreement.
2. If either Party considers that the other Party has failed to fulfil any of the obligations that are described as essential elements in Article 2.2, Article 4.1 of the Advanced Framework Agreement, it may take appropriate measures pursuant to the provisions in Article XX para 2 and 4 of the Advanced Framework Agreement [fulfilment of obligations]. For the purpose of this paragraph, "appropriate measures" may include the suspension, in part or in full, of this Agreement.
3. The right conferred by this paragraph may be exercised by either Party, irrespective of whether the relevant provisions of the Advanced Framework Agreement have entered into force or are being applied provisionally.
Chapter 2. TRADE IN GOODS
Article 2.1. Objective
The Parties shall progressively and reciprocally liberalise trade in goods in accordance with the provisions of this Agreement.
Article 2.2. Scope
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods of a Party.
Article 2.3. Definitions
For the purposes of this Chapter, the following definitions shall apply:
(a) "consular transactions" means the procedure of obtaining from a consul of the importing Party in the territory of the exporting Party, or in the territory of a third party, a consular invoice or a consular visa for a commercial invoice, certificate of origin, manifest, shipper's export declaration or any other customs documentation in connection with the importation of the good;
(b) "Customs Valuation Agreement" means the Agreement on Implementation of Article VII of GATT 1994 contained in Annex 1A to the WTO Agreement;
(c) "customs duty" means any duty or charge of any kind imposed on or in connection with the importation of a good. A "customs duty" does not include any:
(i) charge equivalent to an internal tax imposed consistently with Article 2.4 (National Treatment on Internal Taxation and Regulation);
(ii) anti-dumping, special safeguard, countervailing or safeguard duty applied in conformity with the GATT 1994, the Anti-dumping Agreement, the Agreement on Agriculture, the Agreement on Subsidies and Countervailing Measures and the Agreement on Safeguards, as appropriate; and
(iii) fee or other charge imposed on or in connection with importation that is limited in amount to the approximate cost of the services rendered.
(d) "good of a Party" means a domestic good as this is understood in the GATT 1994, and includes originating goods.
(e) "Harmonized System" means the Harmonized Commodity Description and Coding System, including all legal notes and amendments thereto developed by the World Customs Organization (the "HS").
(f) "Import Licensing Procedure" means an administrative procedure requiring the submission of an application or other documentation (other than that generally required for customs clearance purposes) to the relevant administrative body or bodies as a prior condition for importation into the territory of the importing Party.
(g) "Export Licensing Procedures" means an administrative procedure requiring the submission of an application or other documentation (other than that generally required for customs clearance purposes) to the relevant administrative body or bodies as a prior condition for exportation from the territory of the exporting Party.
(h) "Repair" means any processing operation undertaken on a good to remedy operating defects or material damage and entailing the re-establishment of the good to its original function or to ensure compliance with technical requirements for its use, without which the good could no longer be used in the normal way for the purposes for which they were intended. Repair of goods includes restoration and maintenance but does not include an operation or process that:
(i) destroys the essential characteristics of a good, or creates a new or commercially different good;
(ii) transforms an unfinished good into a finished good; or
(iii) is used to improve or upgrade the technical performance of goods.
(i) "Remanufactured good" means a good classified in HS Chapters 84 through 90 or under heading 94.02 except goods classified under HS headings 84.18, 85.09, 85.10, 85.16 and 87.03 or subheadings 8414.51, 8450.11, 8450.12, 8508.11, and 8517.11 that:
(a) is entirely or partially comprised of parts obtained from goods that have been used;
(b) has similar performance and working conditions compared to the equivalent good in new condition; and
(c) is given the same warranty as the equivalent good in new condition.
(j) "Originating good" means a good qualifying under the rules of origin set out in Chapter 3 (Rules of origin and origin procedures).
(k) "Staging category" means the timeframe for the elimination of customs duties ranging from 0 to 7 years, after which a good is free of customs duty (unless otherwise specified in the Schedules).
Article 2.4. National Treatment on Internal Taxation and Regulation
Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, including its Notes and Supplementary Provisions. To this end, Article II of the GATT 1994 and its Notes and Supplementary Provisions are incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.5. Elimination of Customs Duties
1. Except as otherwise provided for in this Agreement, each Party shall reduce or eliminate customs duties on goods originating in the other Party in accordance with its Schedule in Annex [X-x] (Tariff Elimination Schedules).
2. For the purpose of paragraph 1, the base rate of customs duties shall be the one specified for each good in the Schedules in Annex [X-x] (Tariff Elimination Schedules).
3. If a Party reduces its applied most favoured nation customs duty rate, the Schedule in Annex [X-x] (Tariff Elimination Schedules) of that Party shall apply to the reduced rates. If a Party lowers a MEN applied rate to a level below the base rate in relation to a particular tariff line, the Party shall calculate the preferential applicable rate effecting the tariff reduction on the lowered MFN applied rate, maintaining the relative margin of preference for that particular tariff line for as long as the MFN applied rate is lower than the base rate. The relative margin of preference for any given tariff line in each staging period corresponds to the difference between the base rate set out in the Schedule and the applied duty rate for that tariff line in accordance with the Schedule, divided by that base rate; and expressed in percentage terms.
4. On the request of a Party, the Parties shall consult to consider accelerating the reduction or elimination of customs duties set out in the Schedules in Annex [X-x] (Tariff Elimination Schedules). The [Trade Committee] may take a decision to amend Annex [X-x] (Tariff Elimination Schedules) to accelerate the tariff reduction or elimination.
Article 2.6. Standstill
1. Except as otherwise provided in this Agreement, no Party shall increase any customs duty set as base rate in Annex [X-x] (Tariff Elimination Schedule) or adopt any new customs duty on a good originating in the other Party.
2. For greater certainty, a Party may raise a customs duty to the level set out in Annex [X-x] (Tariff Elimination Schedule) for the respective staging period following a unilateral reduction.
Article 2.7. Export Duties, Taxes or other Charges
1. No Party shall introduce or maintain any duty, tax or other charge of any kind imposed on, or in connection with, the exportation of a good to the other Party; or any internal tax or other charge on a good exported to the other Party that is in excess of the tax or charge that would be imposed on like goods when destined for domestic consumption.
2. Nothing in this Article shall prevent a Party from imposing on the exportation of a good a fee or charge that is permitted under Article 2.8 (Fees and Formalities).
Article 2.8. Fees and Formalities
1. Fees and other charges imposed by a Party on or in connection with importation or exportation of a good of the other Party shall be limited in amount to the approximate cost of services rendered, and shall not represent an indirect protection to domestic goods or taxation of imports or exports for fiscal purposes.
2. No Party shall levy fees or other charges on or in connection with importation or exportation on an ad valorem basis.
3. Each Party may impose charges or recover costs only where specific services are rendered, including the following:
(a) attendance, where requested, by customs staff outside official office hours or at premises other than customs premises;
(b) analyses or expert reports on goods and postal fees for the return of goods to an applicant, particularly in respect of decisions relating to binding information or the provision of information concerning the application of the customs legislation;
(c) the examination or sampling of goods for verification purposes, or the destruction of goods, where costs other than the cost of using customs staff are involved: or
(d) exceptional control measures, where these are necessary due to the nature of the goods or to a potential risk.
4. Each Party shall promptly publish all fees and charges it imposes in connection with importation or exportation in such a manner as to enable governments, traders and other interested parties, to become acquainted with them.
5. No Party shall require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.
Article 2.9. Repaired Goods
1. No Party shall apply a customs duty to a good, regardless of its origin, that re-enters the Party's customs territory after that good has been temporarily exported from its customs territory to the customs territory of the other Party for repair. (1)
2. Paragraph 1 does not apply to a good imported in bond, into free trade zones, or in similar status, that is then exported for repair and is not re-imported in bond, into free trade zones, or in similar status.
3. No Party shall apply a customs duty to a good, regardless of its origin, imported temporarily from the customs territory of the other Party for repair.(2)
Article 2.10. Remanufactured Goods
1. Unless otherwise provided for in this agreement no Party shall accord to remanufactured goods of the other Party a treatment that is less favourable than that it accords to like goods in new condition.
2. For greater certainty, Article 2.11 (Import and Export Restrictions) applies to import and export prohibitions or restrictions on remanufactured goods. If a Party adopts or maintains import and export prohibitions or restrictions to used goods, it shall not apply those measures to remanufactured goods.
3. A Party may require that remanufactured goods be identified as such for distribution or sale in its territory and that they meet all applicable technical requirements that apply to like goods in new condition.