Title
FREE TRADE AGREEMENT BETWEEN HONG KONG, CHINA AND CHILE
Preamble
The Governments of the Hong Kong Special Administrative Region of the People's Republic of China ("Hong Kong, China") and the Republic of Chile ("Chile"), hereinafter individually referred to as a "Party" or collectively as the "Parties":
Inspired by their longstanding friendship and cooperation and growing economic, trade and investment relationship;
Recognising that the strengthening of their economic partnership will bring economic and other benefits, create new opportunities for employment and improve the living standards of their people;
Creating an expanded and secure market for the goods and services of the Parties;
Resolved to promote bilateral trade through the establishment of clear and mutually advantageous trade rules and the avoidance or removal of trade barriers;
Promoting a predictable, transparent and consistent business environment that will assist enterprises to plan effectively and use resources efficiently;
Building on their respective rights, obligations and undertakings under the WTO, and other multilateral, plurilateral and bilateral agreements and arrangements applicable to them;
Recalling the APEC goal of free and open trade and investment; Aware of the growing importance of trade and investment for the economies of the Asia-Pacific region;
Desiring to strengthen the bilateral relationship through further liberalising trade in goods, services and investment; and
Mindful that economic development, social development and environmental protection are interdependent and mutually reinforcing components of sustainable development and that closer economic partnership can play an important role in promoting sustainable development;
Have agreed as follows:
Body
Chapter 1. Initial Provisions
Article 1.1. Establishment of a Free Trade Area
The Parties, consistent with Article XXIV of GATT 1994 and Article V of GATS, hereby establish a free trade area.
Article 1.2. Relation to other Agreements
1. Nothing in this Agreement shall derogate from the existing rights and obligations of either Party under the WTO Agreement or any other international agreement to which it is a party or which is applicable to its Area.
2. In the event of any inconsistency between this Agreement and any other international agreement to which the Parties are party or which is applicable to the Areas of the Parties, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution in accordance with customary rules of public international law.
Chapter 2. General Definitions and Interpretations
Article 2.1. Definitions of General Application
For the purposes of this Agreement, unless otherwise specified:
Agreement means the Free Trade Agreement between Hong Kong, China and Chile;
APEC means Asia-Pacific Economic Cooperation;
Area in respect of:
(a) Chile means the land, maritime, and air space under its sovereignty, and the exclusive economic zone and the continental shelf within which it exercises sovereign rights and jurisdiction in accordance with international law and its domestic law; and
(b) Hong Kong, China means the Hong Kong Special Administrative Region of the People's Republic of China, together with such other area(s) over which the Hong Kong Special Administrative Region may be authorised to exercise jurisdiction in accordance with laws of the Hong Kong Special Administrative Region;
Commission means the Free Trade Commission established under Article 16.1;
Committee on Trade in Goods means the Committee on Trade in Goods established under Article 3.11;
Customs authority means the authority that, according to the legislation of each Party, is responsible for the administration and enforcement of its customs laws and regulations and:
(a) In the case of Chile, means the Chile Customs Service; and
(b) In the case of Hong Kong, China, means the Customs and Excise Department;
Customs duties means duties or charges of any kind imposed in connection with the importation of goods but shall not include:
(a) Charges equivalent to internal taxes, including excise duties, sales tax, and goods and services taxes, imposed in accordance with Article III.2 of GATT1994;
(b) Anti-dumping, countervailing or safeguards duty applied in accordance with Chapter 8 (Trade Remedies); or
(c) Fees or other charges that are covered by Article VIII of GATT 1994;
Days means calendar days, including weekends and holidays;
GATS mean the General Agreement on Trade in Services, which is part of the WTO Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade1994, which is part of the WTO Agreement;
Harmonized System or HS means the Harmonized Commodity Description and Coding System governed by the International Convention on the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, and Chapter Notes, and their amendments, as applied by the Parties in their respective laws;
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;
Juridical person of a Party means a juridical person organised or constituted under the laws of a Party, and a branch located in the Area of a Party;
Measure means any measure by a Party, whether in the form of a law, regulation, rule, procedure, practice, decision, administrative action or any other form;
Natural person means:
(a) In the case of Chile, a natural person who has the Chilean nationality as defined in Article 10 of the Constitución Política de la República de Chile or a permanent resident of Chile; and
(b) In the case of Hong Kong, China, a permanent resident of the Hong Kong Special Administrative Region of the People's Republic of China under its domestic law; originating means qualifying under the rules of origin set out in Chapter 4 (Rules of Origin);
SCM Agreement means the Agreement on Subsidies and Countervailing Measures, which is part of the WTO Agreement;
SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, which is part of the WTO Agreement;
State enterprise means an enterprise that is owned or controlled through ownership interests by a Party;
WTO means the World Trade Organization;
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15, 1994; and
WTO Dispute Settlement Understanding means the Understanding on Rules and Procedures Governing the Settlement of Disputes, which is part of the WTO Agreement.
Article 2.2. Interpretations
In this Agreement, unless the context otherwise requires:
(a) In the case of Hong Kong, China, where an expression is qualified by the term "national", such expression shall be interpreted as pertaining to Hong Kong, China; and
(b) Where anything under this Agreement is to be done within a number of days after, before or of a specified date or event, the specified date or the date on which the specified event occurs shall not be included in calculating that number of days.
Chapter 3. TRADE IN GOODS
Article 3.1. Definitions
For the purposes of this Chapter:
Agreement on Agriculture means the Agreement on Agriculture, which is part of the WTO Agreement;
agricultural goods means those goods referred to in Article 2 of the Agreement on Agriculture;
export subsidies shall have the meaning assigned to that term in Article 1(e) of the Agreement on Agriculture;
goods of the other Party means domestic products of that Party as understood in GATT 1994 or such goods as the Parties may agree, and includes originating goods of that Party. A good of the other Party may include materials of other countries; and
import licensing means administrative procedures requiring the submission of an application or other documentation (other than that generally required for customs clearance purposes) to the relevant administrative body as a prior condition for importation into the Area of the importing Party.
Article 3.2. Scope
Except as otherwise provided, this Chapter shall apply to trade in all goods between the Parties.
Article 3.3. National Treatment
Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its interpretative notes. To this end, Article III of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
Article 3.4. Elimination of Customs Duties
1. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty, or adopt any new customs duty, on an originating good of the other Party.
2. Except as otherwise provided in this Agreement, and subject to each Party’s Tariff Schedule in Annex 3.4, as at the date of entry into force of this Agreement, each Party shall eliminate its customs duties on originating goods of the other Party.
3. If a Party reduces its applied most-favoured-nation customs duty rate after the entry into force of this Agreement and before the end of the tariff elimination period, the Tariff Schedule in Annex 3.4 of that Party shall apply with respect to the new most-favoured-nation customs duty rate.
4. At the request of either Party, the Parties shall consult each other to consider accelerating the reduction or elimination of customs duties set out in their Tariff Schedules in Annex 3.4. An agreement between the Parties to accelerate the reduction or elimination of a customs duty on a good shall supersede any duty rate or staging category determined pursuant to their Tariff Schedules in Annex 3.4 for such good. Such agreement shall be subject to the amendment procedures under Article 16.1.4 (b) (i).
Article 3.5. Fees and Charges Connected with Importation and Exportation
1. The Parties agree that fees, charges, formalities and requirements imposed in connection with the importation and exportation of goods shall be consistent with their obligations under GATT 1994.
2. Each Party shall make available through the internet or a comparable computer-based telecommunications network details of the fees and charges it imposes in connection with importation and exportation.
3. Neither Party may require legalisation of:
(a) commercial invoices;
(b) certificates of origin; or
(c) other customs documentation,
including related fees or charges, in connection with the importation of any good of the other Party.
Article 3.6. Non-Tariff Measures
1. Except as otherwise provided in this Agreement, neither Party shall adopt or maintain any non-tariff measures on the importation of any good of the other Party or on the exportation of any good destined for the Area of the other Party except in accordance with its WTO rights and obligations.
2. For greater certainty, neither Party shall adopt or maintain any prohibition or restriction on the importation or exportation of any good except in accordance with Article XI of GATT 1994 and its interpretative notes.
3. Each Party shall ensure its non-tariff measures permitted in paragraph 1 are not prepared, adopted or applied with a view to, or with the effect of, creating unnecessary obstacles to trade between the Parties.
4. The non-tariff measures referred to in paragraphs 1, 2 and 3 include:
(a) export and import price requirements, except as permitted in enforcement of countervailing and anti-dumping orders and undertakings;
(b) import licensing conditioned on the fulfilment of a performance requirement; or
(c) voluntary export restraints.
5. Paragraphs 1, 2, 3 and 4 shall not apply, with respect to Chile, to measures concerning the importation of used vehicles, as provided in Law No 18.483 or its successor.
Article 3.7. Price Band System
Chile may maintain its price band system as established under its Law No 18.525 or succeeding system for the products covered by that law, (1) to be applied in a manner consistent with Chile’s rights and obligations under the WTO Agreement.
Article 3.8. Subsidies
The Parties maintain their rights and obligations regarding subsidies under Article XVI of GATT 1994 and the SCM Agreement.
Article 3.9. Agricultural Export Subsidies
1. The Parties share the objective of the multilateral elimination of all forms of export subsidies for agricultural goods and shall cooperate in an effort to achieve such an objective and prevent their reintroduction in any form.
2. Neither Party shall introduce or maintain any forms of export subsidy on any agricultural good destined for the Area of the other Party.
Article 3.10. Geographical Indications
1. Each Party shall ensure in its domestic law adequate and effective means to protect geographical indications with regard to all goods in a manner consistent with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.
2. Each Party shall provide the means for any person, including natural persons, corporate entities or government agencies of the other Party, to apply for protection of geographical indications. Each Party shall accept applications without the requirement for intercession by the other Party on behalf of its persons.
3. The terms listed in Annex 3.10 are geographical indications under the domestic laws and regulations of Chile.
4. Subject to the domestic laws and regulations of Hong Kong, China, a term listed in Annex 3.10 may receive relevant protection on intellectual property in Hong Kong, China. (2)
For greater certainty, any application for the registration of the terms listed in Annex 3.10 will be processed in accordance with the domestic laws and regulations of Hong Kong, China.
This Article shall also not preclude Hong Kong, China from accepting an application for trade mark registration of a mark consisting of or similar to a term listed in Annex 3.10 where the relevant requirements for registration are fulfilled.
Further, this Article shall not be construed to impose any obligation on Hong Kong, China to amend its domestic laws and regulations or affect its international position in relation to intellectual property.
Article 3.11. Committee on Trade In Goods
1. The Parties hereby establish a Committee on Trade in Goods (“the Committee”), comprising representatives of each Party.
2. The Committee shall meet at the request of either Party or the Commission to consider any matter arising under this Chapter, Chapter 4 (Rules of Origin), Chapter 5 (Customs Procedures and Cooperation) or Chapter 8 (Trade Remedies). Meetings of the Committee may be conducted in person or via teleconference, videoconference or any other means agreed by the Parties.
3. The Committee’s functions shall include:
(a) reviewing and monitoring the implementation of the Chapters referred to in paragraph 2;
(b) addressing barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures other than measures covered under Chapter 6 (Sanitary and Phytosanitary Measures) and Chapter 7 (Technical Barriers to Trade);
(c) establishing any working groups, as and when necessary;
(d) referring matters considered by the Committee to the Commission where the Committee considers this appropriate;
(e) carrying out other functions as may be delegated by the Commission in accordance with Chapter 16 (Administration); and
(f) reporting the findings and the outcome of discussions to the Commission.
4. The Committee will consider reports issued by the Sub-Committees established under Article 6.10 and Article 7.11.
Chapter 4. RULES OF ORIGIN
Section 1. RULES OF ORIGIN
Article 4.1. Definitions
For the purposes of this Chapter:
aquaculture means the farming of aquatic organisms, including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants from seedstock such as eggs, fry, fingerlings and larvae, by intervention in the rearing or growth processes to enhance production such as regular stocking, feeding or protection from predators;
CIF means the value of the good imported inclusive of the cost of insurance and freight up to the port or place of entry in the importing Party;
Declaration of Origin means a statement as to the origin of the goods made by the exporter of the exporting Party for the purposes of this Agreement, in the form specified in Annex 4.15;
FOB means free-on-board value of the good inclusive of the cost of transport to the port or site of final shipment abroad;
generally accepted accounting principles means the accounting standards of a Party with respect to:
(a) the recording of revenues, expenses, costs, assets and liabilities; (b) the disclosure of information; and
(c) the preparation of financial statements.
These standards may encompass broad guidelines of general application as well as detailed standards, practices and procedures;
good means any merchandise, product, article or material;
identical or interchangeable materials are goods or materials which are interchangeable for commercial purposes, whose properties are essentially identical, and between which it is impractical to differentiate by a mere visual examination;
material means a good or any matter or substance used or consumed in the production or transformation of a good or physically incorporated into a good subjected to a process in the production of another good;
non-originating good or non-originating material means a good or material which does not qualify as originating under this Chapter;
originating good or originating material means a good or material which qualifies as originating in accordance with Article 4.2;
preferential tariff treatment means the rate of customs duties of the importing Party applicable to originating goods of the exporting Party;
producer means a person who grows, cultivates, mines, raises, harvests, fishes, traps, hunts, farms, captures, gathers, collects, breeds, extracts, manufactures, processes or assembles a good; and
production means methods of obtaining goods, including growing, cultivating, mining, harvesting, raising, breeding, extracting, gathering, collecting, capturing, fishing, farming, trapping, hunting, manufacturing, processing or assembling a good.
Article 4.2. Originating Goods
For the purposes of this Chapter, a good shall qualify as an originating good if it:
(a) is wholly obtained or produced in the Area of a Party as provided for in Article 4.4;
(b) is produced entirely in the Area of one or both Parties exclusively from originating materials from one or both Parties; or
(c) is produced in the Area of one or both Parties using non-originating materials that conform to a change in tariff classification requirement, a regional value content requirement (as provided for in Article 4.5) or other requirements as specified in Annex 4.2;
and the good meets the other applicable provisions of this Chapter.
Article 4.3. Preferential Tariff Treatment
Preferential tariff treatment provided for in this Agreement shall be applied to goods that qualify as originating goods in accordance with Article 4.2 and other applicable provisions of this Chapter.
Article 4.4. Wholly Obtained or Produced Goods
For the purposes of Article 4.2 (a), the following goods shall be considered as wholly obtained or produced:
(a) plant and plant goods, including fruit, flowers, vegetables, trees, seaweed, fungi and live plants, grown, harvested, picked or gathered in the Area of a Party;
(b) live animals born and raised in the Area of a Party;
(c) goods obtained from live animals in the Area of a Party;
(d) goods obtained from hunting, trapping, fishing, farming, aquaculture, gathering or capturing in the Area of a Party;