1. The Parties maintain their rights and obligations under Article XIX of GATT l994 and the Safeguards Agreement.
2. Actions taken pursuant to Article XIX of GATT 1994 and the Safeguards Agreement shall not be subject to Chapter X (Dispute Settlement) of this Agreement.
Article 27. Bilateral Safeguard Measures
1. For purposes of this Section:
(a) Competent investigating authority means:
(i) in the case of China, Ministry of Commerce, or its successor; and
(ii) in the case of Pakistan, National Tariff Commission, or its successor;
(b) Domestic industry means "the producers as a whole of the like or directly competitive product operating within the territory of the Party, or those producers whose collective production of the like or directly competitive product constitutes a major proportion of the total domestic production of such product";
(c) Serious injury means "a significant overall impairment in the position of a domestic industry";
(d) Threat of serious injury means "serious injury that, on the basis of facts and not merely on allegation, conjecture or remote possibility, is clearly imminent"; and
(e) Transition period means "five-year period in the first phase of customs duty reduction or elimination". With regard to transition period in the second phase, the Parties shall meet to determine it in the review of this Article.
2. During the transition period only, if as a result of the reduction or elimination of a customs duty under this Agreement, an originating good of a Party is being imported into the other party's territory in such increased quantities, in absolute terms, and under such conditions as to constitute a substantial cause of serious injury or threat of serious injury to domestic industry producing a like or directly competitive product, the importing Party may:
(a) suspend the further reduction of any rate of customs duty on the good provided for under this Agreement; or
(b) increase the rate of customs duty on the good to a level not to exceed the lesser of
(i) The MFN applied rate of customs duty on the good in effect at the time the measure is taken; and
(ii) The MFN applied rate of customs duty on the good in effect on date of entry into force of this agreement; or
(c) in the case of a customs duty applied to a good on a seasonal basis, increase the rate of customs duty to a level not to exceed the lesser of
(i) the MFN applied rate of customs duty on the good in effect for the immediately preceding corresponding season; and
(ii) the MFN applied rate of customs duty on the good in effect on the date of entry into force of this agreement.(1)
3. The following conditions and limitations shall apply to an investigation or a measure described in Paragraph 1(a).
(a) A party shall immediately deliver written notice to the other Party upon:
(i) initiating an investigatory process relating to serious injury or threat thereof and the reasons for it;
(ii) making a finding of serious injury or threat thereof caused by increased imports; and
(iii) taking a decision to apply a safeguard measure.
(b) in making the notification referred to in paragraph (a)(ii) and (a)(iii), the Party proposing to apply or extend a safeguard measure shall provide the other Party with all pertinent information, which shall include evidence of serious injury or threat thereof caused by the increased imports, precise description of the good involved and the proposed measure, proposed date of introduction and expected duration; the Party proposing to apply a measure shall also provide any additional information which the other Party considers pertinent;
(c) a Party proposing to apply a measure shall provide adequate opportunity for prior consultations with the other Party as far in advance of taking any such measure as practicable, with a view to reviewing the information arising from the investigation, exchanging views on the measure and reaching an agreement on compensation set out in Paragraph 4. The Parties shall in such consultations, review, inter alia, the information provided under paragraph (b), to determine:
(i) compliance with the other provisions of this Article;
(ii) whether any proposed measure should be taken; and
(iii) the appropriateness of the proposed measure, including consideration of alternative measures;
(d) a Party shall apply the measure only following an investigation by the competent authorities of such Party in accordance with Articles 3 and 4.2(c) of the WTO Agreement on Safeguards; and to this end, Articles 3 and 4.2(c) of the WTO Agreement on Safeguards are incorporated into and made a part of this Agreement, mutatis mutandis;
(e) in undertaking the investigation described in paragraph (d), a Party shall comply with the requirements of Article 4.2(a) and (b) of the WTO Agreement on Safeguards; and to this end, Article 4.2(a) and (b) are incorporated into and made a part of this Agreement, mutates mutandis;
(f) the investigation shall in all cases be completed within one year following its date of initiation;
(g) no bilateral safeguard measure shall be maintained:
(i) except to the extent and for such time as may be necessary to remedy serious injury and to facilitate adjustment;
(ii) for a period exceeding two years, except that in exceptional circumstances, the period may be extended by up to an additional one year, to a total maximum of three years from the date of first imposition of the measure if the investigating authorities determine in conformity with procedures set out paragraphs (a) through (g), that the safeguard measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment and that there is evidence that the industry is adjusting;
(iii) beyond the expiration of the transition period, regardless of its duration or whether it has been subject to extension;
(h) no bilateral safeguard measure taken under this Article shall be applied again to the import of a product which has been subject to such a measure for a period of time equal to that during which such measure had been previously applied, provided that the period of non-application is at least two years;
(i) no bilateral safeguard measure shall be taken against a particular good while a global safeguard measure in respect of that good is in place; in the event that a global safeguard measure is taken in respect of a particular good, any existing bilateral safeguard measure which is taken against that good shall be terminated;
(j) upon the termination of the safeguard measure under this Article, the rate of duty shall be duty set out in the Party's schedule to Annex I of this Agreement as if the measure had never been applied; and (k) within 5 years after entry into force of this Agreement, the Parties shall meet to review this Article with a view to determining whether there is a need to maintain any bilateral safeguard mechanism.
4. The party proposing to apply a measure described in Paragraph 2 shall provide to the other party mutually agreed adequate means of trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the measure. If the Parties are unable to agree on compensation within 30 days in the consultations under Paragraph 3 (c), the Party against whose originating goods the measure is applied may take action having trade effects substantially equivalent to the measure applied under this Article. This action shall be applied only for the minimum period necessary to achieve the substantially equivalent effects. The right of suspension described in this paragraph shall not be exercised for the first 18 months that a bilateral safeguard measure is in effect, provided that such a measure conforms to the provisions of this Article.
5. In applying measures under this Article, each Party shall:
(a) ensure the consistent, impartial and reasonable administration of its laws, regulations, decisions and rulings governing all safeguard investigation proceedings.
(b) entrust determinations of serious injury or threat thereof in safeguard investigation proceedings to a competent investigating authority.
(c) adopt or maintain equitable, timely, transparent and effective procedures for safeguard investigation proceedings.
Chapter VI. Sanitary and Phyto-sanitary Measures (SPS)
Article 28. Definition
1. The definitions in Annex A of the SPS Agreement shall be applied in the implementation of this Chapter.
2. SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures of the World Trade Organization.
Article 29. Objectives
The objectives of this Chapter are to:
1. Promote and facilitate the trade of animals, products of animal origin, plants and products of plant origin between the Parties, protecting at the same time the human, animal or plant life or health;
2. Reaffirm the rights and obligations of both parties with respect to each other under the SPS Agreement, which is considered as an integral part of this text;
3. Ensure that the Parties' SPS measures do not arbitrarily or unjustifiably discriminate between two Parties where identical or similar conditions prevail; and
4. provide a forum to discuss SPS measures of each other, to solve the problems of trade in this field in a prompt and efficient manner to ensure trade expansion between the parties.
Article 30. Scope
This Chapter applies to all sanitary and phytosanitary measures of the Parties which may, directly or indirectly, affect trade between the Parties.
Article 31. Competent Authority
1. The competent authorities of the Parties are the authorities competent in the respective countries for the implementation of the measures referred to in this Chapter,
2. The Parties shall inform each other of any significant changes in the structure, organization and division of responsibility within its competent authorities.
3. For the suitable implementation of the Chapter, bilateral contact between the homologous sanitary and phytosanitary agencies will be promoted and strengthened.
Article 32. Transparency
1. The Parties shall undertake cooperation as per transparency requirements set out in WTO/SPS Agreement. The sanitary and phytosanitary enquiry points of the Parties established under the SPS Agreement shall set up a bilateral mechanism for further communication, including the sanitary and phytosanitary measures that needs to be undertaken as well as information regarding noncompliance with sanitary and phytosanitary requirements of importing Party without undue delay.
2. The Parties will, whenever a need arises, exchange information related to the sanitary and phytosanitary condition in their territories and will provide the necessary information to develop risk assessment and equivalence processes.
Article 33. Cooperation on Harmonization, Equivalency and Certificate Recognition
1. To achieve harmonization both Parties shall base their SPS measures on international standards ,guidelines or recommendations, or base the measures on risk assessment, and shall cooperate in this regard.
2. Both Parties shall consider to accept the SPS measures of each other as equivalent even if it differs from their own or from those used by other members trading in the same product, if the exporting party objectively demonstrates to the importing party that its measures achieve the importing party's appropriate level of sanitary and phytosanitary procedure. For this purpose, reasonable access shall be given, upon request, to the importing party for inspection, testing and other relevant procedures.
3. Both Parties shall cooperate for mutual recognition of SPS certificates.
Article 34. Committee on Sanitary and Phytosanitary Matters
1. The Parties hereby agree to establish a Committee on Sanitary and Phytosanitary Matters composed of each Party's representatives who have responsibility for sanitary and phytosanitary matters. the Committee shall be coordinated by:
(a) in the case of China, the Director General of Department of International Cooperation of AQSIQ, or its designated person and
(b) in the case of Pakistan, Additional Secretary, Ministry of Food, Agriculture and Livestock or its designated person.
2. In order to facilitate the communication and ensure the proper functioning of the Committee, the Parties will designate a contact person no later than two months following the date of entry into force of this Agreement.
3. The Parties shall establish the Committee in a period not longer than two months after the date of entry into force of this Agreement.
4. The objectives of the Committee shall be to ensure the achievement of the objectives stated in this Chapter.
5. The Committee shall seek to enhance any present or future relationship between the Parties' agencies with responsibility for sanitary and phytosanitary matters.
6. The Committee shall be responsible for:
(a) enhancing mutual understanding of each Party's sanitary and phytosanitary measures and the regulatory processes related to those measures;
(b) consultations on matters related to the development or application of sanitary and phytosanitary measures that affect, or may affect, trade between the Parties;
(c) consultations on issues, positions, and agendas for meetings of the WTO/ SPS Committee, the various Codex committees (including the Codex Alimentarius Commission), the International Plant Protection Convention, the World Organization for Animal Health, and other international and regional fora on food safety and human, animal, and plant health;
(d) coordination of technical cooperation programs on sanitary and phytosanitary matters;
(e) improving bilateral understanding related to specific implementation issues concerning the SPS Agreement; and
(f) reviewing progress on addressing sanitary and phytosanitary matters that may arise between the competent authorities of both Parties.
7. The Committee shall meet once a year unless the Parties otherwise agree.
8. The Committee may agree to establish ad hoc technical working groups in accordance with the Committee's terms of reference.
Chapter VII. Technical Barriers to Trade (TBT)
Article 35. Definitions
1. "WTO/TBT Agreement" means the Agreement on Technical Barriers to Trade of the World Trade Organization.
2. The definitions of Annex I of the WTO/TBT Agreement shall apply.
Article 36. Objectives
The objectives of this Chapter are to:
1. Increase and facilitate trade through furthering the implementation of the WTO TBT Agreement;
2. Reduce, wherever possible, unnecessary transaction costs associated with trade between the Parties.
Article 37. Scope and Coverage
This Chapter applies to all standards, technical regulations and conformity assessment procedures that may, directly or indirectly, affect the trade in goods between the Parties, except sanitary and phyto-sanitary measures which are covered by Chapter VI of this Agreement.
Article 38. Reaffirmation
The rights and obligations of the Parties in respect of technical regulations, standards and conformity assessment procedures shall be governed by the WTO Agreement on Technical Barriers to Trade (TBT).
Article 39. Cooperation Area
1. The Parties shall intensify their joint work in the field of technical regulations, standards and conformity assessment procedures with a view to facilitating bilateral trade. The Parties shall, through consultation, seek to identify specific preferential cooperation areas and products, and arrange for cooperative implementation initiatives that are appropriate for trade needs and practical capacity step by step.
2. The Parties shall use international standards, or the relevant parts of international standards, as a basis for their technical regulations and related conformity assessment procedures where relevant international standards exist or their completion is imminent, except when such international standards or their relevant parts are ineffective or inappropriate to fulfill legitimate regulatory objectives.
3. The Parties shall encourage appropriate institutions in their jurisdiction to strengthen their technical cooperation aimed at achieving full and effective compliance with the obligations set forth in the WTO Agreement and with a view to increase the mutual understanding of their respective systems and facilitating access to their respective markets. To this end, they shall encourage their competent authorities in the areas of standards to cooperate in:
(i) reinforcing the role of international standards as a basis for technical regulations;
(ii) promoting bilateral institutions and regulatory information exchange and technical cooperation; and
(iii) promoting bilateral coordination by appropriate agencies in multilateral and international fora on standards.
4. The Parties shall, within the context of this Article, encourage appropriate institutions in their jurisdiction to:
(i) exchange information; and
(ii) give favourable consideration to any written request for cooperation.
Article 40. Transparency
1. In order to enhance the opportunity for persons to provide comments, a Party publishing a notice under Article 2.9 or 5.6 of the WTO/TBT Agreement shall: (a) include in the notice a statement describing the objective of the proposal and the rationale for the approach the Party is proposing; and (b) transmit electronically the proposal to the other Party through the inquiry point established under Article 10 of the WTO/TBT Agreement at the same time as it notifies WTO Members of the proposal pursuant to the TBT Agreement.
2. Where a Party makes a notification under Article 2.10 or 5.7 of the WTO/TBT Agreement, it shall at the same time transmit the notification to the other Party, electronically, through the inquiry point referred to in subparagraph (b) of paragraph1.
3. The Parties shall undertake cooperation as per transparency requirements set out in WTO/TBT Agreement, and establish cooperation mechanism between enquiry points of the parties.
4. Each Party shall provide and keep updated information about the competent authorities and will communicate any significant change in their structure, organization and division.
5. Each Party shall notify each other upon request the conformity assessment procedure and related list of products stipulated by relevant technical regulations.
Article 41. Implementation
1. The Parties hereby establish the Joint Committee on Technical Barriers to Trade, comprising representatives of each Party. The Committee shall be coordinated by:
(a) in the case of China, the Director General of Department of International Cooperation of AQSIQ, or its designated person; and
(b) in the case of Pakistan, the Director General of Pakistan Standards and Quality Control Authority (PSQCA), or its designated person.
2. In order to facilitate the communication and ensure the proper functioning of the Committee, the Parties will designate a contact person no later than two months following the date of entry into force of this Agreement.
3. The Committee's functions shall include:
(i) monitoring the implementation and administration of this TBT Chapter;
(ii) promptly addressing any issue that a Party raises related to the development, application, or enforcement of technical regulations and conformity assessment procedures;
(iii) enhancing cooperation in the development and improvement of technical regulations and conformity assessment procedures;
(iv) taking any other steps which the Parties consider would assist them in implementing the WTO/TBT Agreement and in facilitating trade in goods between them;
(v) consulting on any matter arising under this Chapter, upon either Party's request.
4. A Party shall, upon request, give favorable consideration to any sector-specific proposal the other Party makes to further cooperation under this Chapter.
5. The Committee shall meet once a year unless the Parties otherwise agree. These meetings may be held via teleconference, videoconference, or through any other means, as mutually determined by the Parties. By mutual agreement, ad hoc working groups may be established if necessary.
Chapter VIII. Transparency
Article 42. Contact Points
1. Each Party shall designate a contact point to facilitate communications between the Parties on any matter covered by this Agreement.
2. Upon request of the other Party, the contact point shall identify the office or official responsible for the matter and assist, as necessary, in facilitating communication with the requesting Party.
Article 43. Publication
Each Party shall ensure that its measures respecting any matter covered by this Agreement are promptly published or otherwise made available to the other Party so as to enable the other Party to become familiarized with them.
Article 44. Notification and Provision of Information
1. To the extent possible, each Party shall notify the other Party of any actual measure that the Party considers might materially affect the operation of this Agreement or otherwise substantially affect the other Party's legitimate interests under this Agreement.
2. Upon request of the other Party, to the extent possible, a Party shall promptly provide information and respond to questions pertaining to any actual or proposed measure, that the other Party considers might materially affect the operation of this Agreement or otherwise substantially affect its legitimate interests under this Agreement, whether or not the other Party has been previously notified of that measure.
3. Any notification or information provided under this Article shall be without prejudice as to whether the measure is consistent with this Agreement.
4. The information referred to under this Article shall be considered to have been provided when it has been made available by appropriate notification to the WTO or when it has been made available on the official, public and free of cost accessible website of the Party concerned.
Article 45. Confidential Information
Nothing in this Agreement shall be construed to require a Party to furnish or allow access to confidential information the disclosure of which would impede law enforcement or would be contrary to the public interests, the laws of the Party protecting the privacy or the financial affairs and accounts of individual customers or financial institutions or which prejudice legitimate commercial interests of particular enterprises, public or private.
Chapter IX. Investment
Article 46. Definitions
For the purpose of this Chapter,
1. The term "investment" means every kind of asset invested by investors of one Party in accordance with the laws and regulations of the other Party in the territory of the latter, and particularly, though not exclusively, includes:
(a) movable and immovable property and other property rights such as mortgages, pledges and similar rights;
(b) shares, debentures, stock and any other kind of participation in companies;
(c) claims to money or to any other performance having an economic value associated with an investment;
(d) intellectual property rights, in particular copyrights, patents, trade-marks, trade-names, technical process, know-how and good-will;
(e) business concessions conferred by law or under contract permitted by law, including concessions to search for, cultivate, extract or exploit natural resources.
2. Any change in the form in which assets are invested does not affect their character as investments provided that such a change is in accordance with the laws and regulations of the Party in whose territory the investment has been made.
3. The term "investor" means,