Title
FREE TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE REPUBLIC OF PERU
Preamble
The Government of the People's Republic of CHINA ("China") on one side, and the Government of the Republic of PERU ("Peru") on the other side, collectively referred to as "the Parties" and individually referred to as "Party", resolved to:
ACKNOWLEDGE AND HONOR their strong and long standing cultural influence;
STRENGTHEN the special bonds of friendship and cooperation between the Parties;
RECOGNIZE that this Agreement should be implemented with a view toward raising the standard of living, creating new employment opportunities, reducing poverty and promoting sustainable development in a manner consistent with environmental protection and conservation;
ESTABLISH clear and mutually advantageous rules governing their trade;
ENSURE a predictable legal framework for trade and business and investment;
PROMOTE reciprocal trade through the establishment of clear and mutually advantageous trade rules and the avoidance of trade barriers, unjustified discrimination and distortions to their reciprocal trade;
PROMOTE AND PRESERVE their ability to safeguard public welfare;
SHARE the belief that a free trade agreement shall produce mutual benefits to each Party and contribute to the expansion and development of international trade; and
REAFFIRM their consent to strengthen and enhance the multilateral trading system as reflected by the World Trade Organization (WTO) and other multilateral, regional and bilateral instruments of cooperation regarding trade;
HAVE AGREED as follows:
Body
Chapter 1. Initial Provisions
Article 1. Objectives
The Parties conclude this Agreement, among others, for purposes of:
(a) Encouraging expansion and diversification of trade between the Parties;
(b) Eliminating the barriers to trade in, and facilitate the cross-border movement of goods and services between the Parties;
(c) Promoting fair competition in the Parties' markets;
(d) Creating new employment opportunities;
(e) Creating framework for furthering bilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement; and
(f) Providing forum and approach for resolution of disputes amiably.
Article 2. Establishment of a Free Trade Area
The Parties to this Agreement, consistent with Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and Article V of the General Agreement on Trade in Services (GATS), hereby establish a free trade area.
Article 3. Relation to other International Agreements
1. The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and any other agreements related to trade to which the Parties are party (1).
2. In the event of any inconsistency between this Agreement and any other agreement to which the Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution in accordance with rules of interpretation of public international law.
3. If any provision of the WTO Agreement that the Parties have been incorporated to this Agreement is amended and accepted by the Parties at the WTO, such amendment shall be deemed incorporated automatically to this Agreement.
(1) The agreements mentioned in paragraph 1 shall include treaties, conventions, agreements, protocols, and memorandums of understanding entered into by the Parties or government agencies of the Parties.
Article 4. Extent of Obligations
The Parties shall ensure that all necessary measures are taken in order to give effect to the provisions of this Agreement in their respective territories, including ensuring that their respective regional and local governments and authorities, and non-governmental bodies in the exercise of governmental powers delegated to them by central, regional and local governments or authorities observe all obligations and commitments under this Agreement.
Article 5. Definitions of General Application
For purposes of this Agreement, unless otherwise specified:
Agreement means the Free Trade Agreement between the Government of the People's Republic of China and the Government of the Republic of Peru;
Commission means the Free Trade Commission established under Article 170 (Free Trade Commission) of Chapter 14 (Administration of the Agreement);
Customs authority means the authority that is responsible under the law of a Party for the administration and enforcement of customs laws and regulations;
Customs duty includes any duty or charge of any kind imposed in connection with the importation of goods, but does not include any:
(a) Charge equivalent to an internal tax imposed consistently with Article III.2 of the GATT 1994;
(b) Antidumping or countervailing duty that is applied pursuant to Article VI of the GATT 1994, the WTO Agreement on Implementation of Article VI of the GATT 1994, or the WTO Agreement on Subsidies and Countervailing Measures; or
(c) Fee or other charge in connection with importation commensurate with the cost of services rendered;
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the GATT 1994 which is a part of the WTO Agreement;
Days means calendar days;
Existing means in effect on the date of entry into force of this Agreement;
GATS means the WTO General Agreement on Trade in Services which is a part of the WTO Agreement;
GATT 1994 means the WTO General Agreement on Tariffs and Trade 1994 which is a part of the WTO Agreement;
Goods of a Party means the domestic products as these understood in the GATT 1994 or such goods as the Parties may agree and includes originating goods of that Party;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System adopted by the World Customs Organization including its General Rules of Interpretation, and its Section and Chapter Notes;
Heading means the first four digits in the tariff classification number under the HS;
Juridical person means an entity constituted or organized under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including a corporation, trust, partnerhsip, sole proprietorship, joint venture or association;
Measure includes any law, regulation, procedure, requirement or practice;
National means:
(a) For China, a natural person who has the nationality of China according to the laws of China; and
(b) For Peru, a Peruvian by birth, naturalization or option in accordance with Articles 52 and 53 of the Constitución Política del Perú (Political Constitution of Peru) who has the nationality of Peru or is a permanent resident of Peru;
Originating means qualifying pursuant to the rules of origin established under Chapter 3 (Rules of Origin and Operational Procedures Related to Origin);
Person means a national or a juridical person;
Person of a Party means a national or a juridical person of a Party;
Safeguards Agreement means the Agreement on Safeguards which is a part of the WTO Agreement;
SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures which is a part of the WTO Agreement;
Subheading means the first six digits in the tariff classification number under the HS;
Territory means:
(a) With respect to China, the entire customs territory of People's Republic of China, including land, maritime and air space, 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) With respect to Peru, the mainland territory, the islands, the maritime zones and the air space above them, over which Peru exercises sovereignty or sovereign rights and jurisdiction, in accordance with its domestic law and international law;
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights which is a part of the WTO Agreement;
WTO means the World Trade Organization, created by the Marrakesh Agreement Establishing the World Trade Organization, done on April 15th, 1994; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15th, 1994.
Chapter 2. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Chapter 6. Scope and Coverage
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods between the Parties.
Section A. National Treatment
Article 7. National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, including its interpretative notes, and to this end Article III of the GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. Paragraph 1 shall not apply to the measures set out in Annex 1 (Exceptions to National Treatment and Import and Export Restrictions).
Section B. Tariff Elimination
Article 8. Tariff Elimination
1. Except as otherwise provided in this Agreement, no 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, each Party shall eliminate its customs duties on originating goods of the other Party, in accordance with its Schedule to Annex 2 (Tariff Elimination).
3. The tariff elimination program established in this Chapter shall not apply to used goods, including those identified as such in headings or subheadings of the HS. Used goods also include those goods that are reconstructed, repaired, remanufactured or any other similar name given to goods that, after having been used, have been subject to some kind of process to restore their original characteristics or specifications, or to restore the functionality they had when they were new.
4. On the request of a Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in their Schedules to Annex 2 (Tariff Elimination).
5. Notwithstanding Article 170 (Free Trade Commission) of Chapter 14 (Administration of the Agreement), an agreement between the Parties to accelerate the elimination of a customs duty on a good, shall supersede any duty rate or staging category determined pursuant to their Schedules to Annex 2 (Tariff Elimination) for such good, when approved by the Parties in accordance with its applicable legal procedures.
6. For greater certainty, a Party may:
(a) raise a customs duty to the level established in its Schedule to Annex 2 (Tariff Elimination) following a unilateral reduction, for the year respective; or
(b) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO or in accordance with Chapter 15 (Dispute Settlement).
7. Except for the goods included in Article 19 (Price Band System), the Parties agree that the base rates for tariff elimination are the Parties’ applied customs duties on January 1st, 2008, which are established in their Schedules to Annex 2 (Tariff Elimination).
Section C. Special Regimes
Article 9. Waiver of Customs Duties
1. No Party may adopt any new waiver of customs duties, or expand with respect to existing recipients or extend to any new recipient the application of an existing waiver of customs duties, where the waiver is conditioned, explicitly or implicitly, on the fulfillment of a performance requirement.
2. No Party may, explicitly or implicitly, condition on the fulfillment of a performance requirement the continuation of any existing waiver of customs duties.
Article 10. Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission for the following goods, regardless of their origin:
(a) professional equipment, such as for scientific research, pedagogical or medical activities, the press or television, and cinematographic purposes necessary for a person who qualifies for temporary entry pursuant to the laws of the importing Party;
(b) goods intended for display or demonstration at exhibitions, fairs, meetings, or similar events;
(c) commercial samples; and
(d) goodsadmittedforsportspurposes.
2. Each Party, at the request of the person concerned and for reasons its customs authority considers valid, shall extend the time limit for temporary admission beyond the period initially fixed in accordance with the domestic law.
3. No Party may condition the duty-free temporary admission of a good referred to in paragraph 1, other than require that the good:
(a) be used solely by or under the personal supervision of a national or resident of the other Party in the exercise of business, trade, profession or sport activity of that person;
(b) notbesoldorleasedwhileinitsterritory;
(c) be accompanied by the deposit of bond or security in an amount no greater than the charges that would otherwise be owed on entry or final importation, releasable on exportation of the good;
(d) be capable of identification when exported;
(e) be exported on the departure of the person referenced in subparagraph (a), or within such other period related to the purpose of the temporary admission as the Party may establish, or 6 months, unless extended;
(f) be admitted in no greater quantity than is reasonable for its intended use; and
(g) beotherwiseadmissibleintotheParty’sterritoryunderitslaw.
4. If any condition that a Party imposes under paragraph 3 has not been fulfilled, the Party may apply the customs duty and any other charge that would normally be owed on the good plus any other charges or penalties provided for under its law.
5. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than that through which it was admitted.
6. Each Party shall provide that its customs authority or other competent authority relieves the importer or another person responsible for a good admitted under this Article of any liability for failure to re-export the good on presentation of proof to the satisfaction of the customs authority of the importing Party that the good has been destroyed by reason of force majeure.
Section D. Non-Tariff Measures
Article 11. Import and Export Restrictions
1. Except as otherwise provided in this Agreement, no Party may adopt or maintain any non-tariff measures that prohibits or restricts on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of the GATT 1994 and its interpretative notes, and to this end Article XI of the GATT 1994 and its interpretative notes are incorporated into and made a part of this Agreement, mutatis mutandis.
2. The Parties understand that the GATT 1994 rights and obligations incorporated in paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:
(a) export and import price requirements, except as permitted in enforcement of countervailing and antidumping duty orders and undertakings; or
(b) voluntary export restraints inconsistent with Article VI of the GATT 1994, as implemented under Article 18 of the SCM Agreement and Article 8.1 of the AD Agreement.
3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 1 (Exceptions to National Treatment and Import and Export Restrictions).
Article 12. Import Licensing
1. No Party may adopt or maintain a measure that is inconsistent with the Import Licensing Agreement.
2. Each Party shall notify the other Party of any existing import licensing procedure before the entry into force of this Agreement.
3. Each Party shall publish any new import licensing procedures and any modification to its existing import licensing procedures or list of products, whenever practicable, 21 days prior to the effective day of the requirement but in all events no later than such effective date.
4. Each Party shall notify the other Party of any other new import licensing procedures and any modifications to its existing import licensing procedures within 60 days of publication. Such publication shall be in accordance with the procedures as set out in the Import Licensing Agreement.
5. Notification provided under paragraphs 2 and 4 shall include the information specified in Article 5 of the Import Licensing Agreement.
Article 13. Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with Article VIII.1 of the GATT 1994 and its interpretative notes, that all fees and charges of whatever character (other than customs duties, charges equivalent to an internal tax or other internal charge applied consistently with Article III.2 of the GATT 1994, and antidumping and countervailing duties) imposed on or in connection with importation or exportation are limited to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.
2. No Party may require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.
3. Each Party shall make available and maintain through the Internet or a comparable computer based telecommunications network a current list of the fees and charges it imposes in connection with importation or exportation.
Section E. Other Measures
Article 14. Customs Valuation
The Customs Valuation Agreement and the Decisions taken by the WTO Committee on Customs Valuation are incorporated into and shall form part of this Agreement, which the custom laws of the Parties shall comply with.
Section F. Agriculture
Article 15. Scope and Coverage
1. This section applies to the measures adopted or maintained by the Parties related to agricultural trade.
2. For purposes of this Agreement, agricultural goods mean those goods referred in Article 2 of the WTO Agreement on Agriculture.
Article 16. Agricultural Export Subsidies
1. The Parties share the objective of the multilateral elimination of export subsidies for agricultural goods, and shall work together toward an agreement in the WTO to eliminate those subsidies, and avoid its reintroduction in any form.
2. No Party may maintain, introduce or reintroduce any export subsidy on any agricultural good destined for the territory of the other Party.
3. If either Party considers that the other Party has failed to carry out its obligations under this Agreement by maintaining, introducing or re-introducing an export subsidy, such Party may request consultations with the other Party according to Chapter 15 (Dispute Settlement) with a view to arriving at a mutually satisfactory solution.
Article 17. State Trading Enterprises
The rights and obligations of the Parties in respect of state trading enterprises shall be governed by Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994, which are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 18. Domestic Support Measures for Agricultural Products
In order to establish a fair and market-oriented agriculture trading system, the Parties agree to cooperate in the WTO agricultural negotiations on domestic support measures to provide for substantial progressive reduction in agriculture support and protection, resulting in correcting and preventing restrictions and distortions in world agricultural markets.
Article 19. Price Band System
Peru may maintain its Price Band System established in the D.S. N° 115-2001-EF and its amendments, respect to the products subject to the application of the system and provided in Annex 3 (Price Band System).
Section G. Institutional Provisions
Article 20. Committee on Trade In Goods
1. The Parties hereby establish a Committee on Trade in Goods, comprising representatives of each Party.
2. The Committee shall meet on the request of a Party or the Free Trade Commission to consider matters arising under this Chapter, Chapter 3 (Rules of Origin and Operational Procedures Related to Origin) or Chapter 4 (Customs Procedures and Trade Facilitation).
3. The Committee on Trade in Goods shall be coordinated by:
(a) for China, the Ministry of Commerce, or its successor; and
(b) for Peru, the Ministry of Foreign Trade and Tourism, or its successor.
4. The Committee’s functions shall include, inter alia: