Title
FREE TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF KOREA AND THE GOVERNMENT OF THE REPUBLIC OF CHILE
Preamble
The Government of the Republic of Korea ("Korea") and the Government of the Republic of Chile ("Chile"), hereinafter referred to as "the Parties";
Committed to strengthening the special bonds of friendship and cooperation between their countries;
Sharing the belief that a free trade agreement shall produce mutual benefits to each Party and contribute to the expansion and development of world trade under the multilateral trading system embodied in the Marrakesh Agreement Establishing the World Trade Organization ("the WTO Agreement");
Building on their respective rights and obligations under the WTO Agreement and other multilateral, regional and bilateral instruments of cooperation, including APEC;
Resolved to promote reciprocal trade and investment through the establishment of clear and mutually advantageous trade rules and the avoidance of trade and investment barriers;
Recognizing that this Agreement should be implemented with a view toward raising the standard of living, creating new work opportunities, and promoting sustainable development in a manner consistent with environmental protection and conservation;
Committed to promoting the public welfare within each of their countries; and
Desiring to strengthen the parallel development of market economy and democracy within their countries;
HAVE AGREED as follows:
Body
Part I. GENERAL ASPECTS
Chapter 1. INITIAL PROVISIONS
Article 1.1. Establishment of the Free Trade Area
The Parties to this Agreement, consistent with Article XXIV of the General Agreement on Tariffs and Trade 1994 ("GATT") and Article V of the General Agreement on Trade in Services ("GATS"), which are part of the WTO Agreement, hereby establish a free trade area.
Article 1.2. Objectives
1. The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favoured-nation treatment and transparency, are to:
(a) encourage expansion and diversification of reciprocal trade between the Parties;
(b) eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the Parties;
(c) promote conditions of fair competition in the free trade area;
(d) substantially increase investment opportunities between the territories of the Parties;
(e) provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory;
(f) create effective procedures for the implementation and application of this Agreement, for its joint administration, and for the resolution of disputes; and
(g) establish a framework for further bilateral and multilateral cooperation in order to expand and enhance the benefits of this Agreement.
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 the applicable rules of international law.
Article 1.3. Relation to other International Agreements
1. The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other international agreements to which both Parties are party.
2. In the event of any inconsistency between this Agreement and such other agreements under paragraph 1, this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement.
Article 1.4. Succession of Treaties or International Agreements
Any reference in this Agreement to any other treaty or international agreement shall be made in the same terms to its successor treaty or international agreement to which the Parties are party.
Article 1.5. 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.
Chapter 2. GENERAL DEFINITIONS
Article 2.1. Definitions of General Application
For purposes of this Agreement, unless otherwise specified:
Agreement means the free trade agreement between the Parties;
APEC means Asia-Pacific Economic Cooperation;
citizen means a citizen as defined in Annex 2.1 for the Party specified in that Annex; Commission means the Free Trade Commission established under Article 18.1;
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, including its interpretative notes, which is part of the WTO Agreement;
days means calendar days;
enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, sole proprietorship, joint venture and other association;
enterprise of a Party means an enterprise constituted or organized under the law of a Party;
existing means in effect on the date of entry into force of this Agreement;
GATS means the General Agreement on Trade in Services, which is part of the WTO Agreement;
GATT means the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
Generally Accepted Accounting Principles means the recognized consensus or substantial authoritative support in the territory of a Party with respect to the recording of revenues, expenses, costs, assets and liabilities, disclosure of information and preparation of financial statements. These standards may be broad guidelines of general application as well as detailed standards, practices and procedures;
goods of a Party means domestic products as these are understood in the GATT or such goods as the Parties may agree upon, including originating goods of that Party. The goods of the Parties may incorporate materials of other countries;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes and Chapter Notes, as adopted and implemented by the Parties in their respective tariff laws;
heading means a code of tariff classification of the Harmonized System at the level of four digits;
measure means, inter alia, any law, regulation, procedure or administrative action, requirement or practice;
national means a natural person who is a citizen or permanent resident of a Party; originating good means a good qualifying under the rules of origin set out in Chapter 4; person means a natural person or an enterprise;
person of a Party means a national or an enterprise of a Party;
Secretariat means the Secretariat established under Article 18.2;
standards-related measures means a standard, technical regulation or conformity assessment procedure;
state enterprise means an enterprise that is owned or controlled through ownership interests by a Party;
subheading means a code of tariff classification of the Harmonized System at the level of six digits;
Tariff Elimination Schedule means the Tariff Elimination Schedule referred to in Article 3.4; territory means for a Party, the territory of that Party as set out in Annex 2.1;
TBT Agreement means the Agreement on Technical Barriers to Trade, which is part of the WTO Agreement;
TRIPS Agreement means the Agreement on Trade Related Aspects of Intellectual Property Rights, which is part of the WTO Agreement;
Uniform Regulations means the regulations established under Article 5.12; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15, 1994.
Annex 2.1. Country-Specific Definitions
For purposes of this Agreement, unless otherwise specified:
citizen means: (a) with respect to Chile, a Chilean as defined in Article 13 of the Political Constitution of the Republic of Chile ("Constitucién Politica de la Reptblica de Chile); and (b) with respect to Korea, a Korean as defined in Article 2 of the Constitution of the Republic of Korea and its relevant law.
territory means:
(a) with respect to Chile, the land, maritime, and air space under its sovereignty, and the exclusive economic zone and the continental shelf over which it exercises sovereign rights and jurisdiction in accordance with international law and its domestic law; and
(b) with respect to Korea, the land, maritime, and air space under its sovereignty, and those maritime areas, including the seabed and subsoil adjacent to the outer limit of the territorial sea over which it exercises sovereign rights or jurisdiction in accordance with international law and its domestic law.
Part II. TRADE IN GOODS
Chapter 3. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Section A. Definitions and Scope and Coverage
Article 3.1. Definitions
For purposes of this Chapter:
advertising films means recorded visual media, with or without sound-tracks, consisting essentially of images showing the nature or operation of goods or services offered for sale or lease by a person established or resident in the territory of any Party, provided that the films are of a kind suitable for exhibition to prospective customers but not for broadcast to the general public, and provided that they are imported in packets that each contain no more than one copy of each film and that do not form part of a larger consignment;
agricultural goods means those goods referred to in Article 2 of the Agreement on Agriculture, which is part of the WTO Agreement;
commercial samples of negligible value means commercial samples having a value, individually or in the aggregate as shipped, of not more than one U.S. dollar, or the equivalent amount in the currency of either of the Parties, or so marked, torn, perforated or otherwise treated that they are unsuitable for sale or for use except as commercial samples;
consumed means:
(a) actually consumed; or
(b) further processed or manufactured so as to result in a substantial change in value, form or use of the good or in the production of another good;
customs duty means any customs or import duty and a charge of any kind imposed in connection with the importation of a good, including any form of surtax or surcharge in connection with such importation, but does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article II:2 of GATT, or any equivalent provision of a successor agreement to which both Parties are party;
(b) anti-dumping or countervailing duty that is applied pursuant to a Party's domestic law and consistently with Chapter 7;
(c) fee or other charge in connection with importation commensurate with the cost of services rendered; and
(d) premium offered or collected on an imported good arising out of any tendering system in respect of the administration of quantitative import restrictions, tariff rate quotas or tariff preference levels;
goods imported for sports purposes means sports requisites for use in sports contests, demonstrations or training in the territory of the Party into whose territory such goods are imported;
goods intended for display or demonstration includes their component parts, ancillary apparatus and accessories;
printed advertising materials means those goods classified in Chapter 49 of the Harmonised System, including brochures, pamphlets, leaflets, trade catalogues, yearbooks published by trade associations, tourist promotional materials and posters, that are used to promote, publicise or advertise a good or service, are essentially intended to advertise a good or service, and are supplied free of charge; and
repair or alteration does not include an operation or process that either destroys the essential characteristics of a good or creates a new or commercially different good. (1)
Article 3.2. Scope and Coverage
This Chapter shall be applied to the trade in goods between the Parties.
Section B. National Treatment
Article 3.3. National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT, including its interpretative notes, and to this end, Article III of GATT and its interpretative notes, or any equivalent provision of a successor agreement to which both Parties are party, are incorporated into and made part of this Agreement.
2. For the purpose of paragraph 1, each Party shall grant to the goods of the other Party a treatment no less favourable than the most favourable treatment granted by that Party to its own like or directly competitive or substitutable goods of national origin.
Section C. Tariffs
Article 3.4. Tariff Elimination
1. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty or adopt any customs duty on a good.
2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods in accordance with its Tariff Elimination Schedule set out in Annex 3.4.
3. If at any moment a Party reduces its most-favoured-nation customs duties to non-Parties for one or more goods included in the Agreement, the Parties shall consult to consider adjusting the customs duties applicable to reciprocal trade.
4. Upon request of a Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in their Tariff Elimination Schedules.
5. The agreement reached pursuant to paragraph 4 regarding the accelerated elimination of customs duties on an originating good shall be put into effect in accordance with Article 18.1 and each Party's applicable legal procedures, and shall prevail over any other duty rate or staging category, determined pursuant to its Tariff Elimination Schedule for the good.
6. Except as otherwise provided in this Agreement, either Party may adopt or maintain import measures to allocate in-quota imports made pursuant to a tariff rate quota set out in Annex 3.4, provided that such measures do not have trade restrictive effects on imports additional to those caused by the imposition of the tariff rate quota.
Article 3.5. Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission, including exemption from fees as specified in Annex 3.5 for: (a) professional equipment necessary for carrying out the business activity, trade or profession of a business person who qualifies for temporary entry pursuant to Chapter 13.
(b) equipment for the press or for sound or television broadcasting and cinematographic equipment,
(c) goods imported for sports purposes and goods intended for display or demonstration, and
(d) commercial samples and advertising films, admitted from the territory of the other Party, regardless of their origin and regardless of whether like or directly competitive or substitutable goods are available in the territory of the Party.
2. Except as otherwise provided in this Agreement, neither Party may impose any condition upon the duty-free temporary admission of a good referred to in subparagraph 1(a), (b) or (c), other than the requirement that such a good:
(a) be admitted by a national or resident of the other Party who seeks temporary entry;
(b) be used solely by or under the personal supervision of such a person in the exercise of the business activity, trade or profession of that person;
(c) not be sold or leased while in its territory;
(d) be accompanied by a bond in an amount no greater than 110 per cent of the charges that would otherwise be owed on entry or final importation, or by another form of security, releasable on exportation of the good, except that a bond for customs duties shall not be required for an originating good;
(e) be capable of identification when exported;
(f) be exported on the departure of that person or within such other period of time as is reasonably related to the purpose of the temporary admission; and
(g) be imported in no greater quantity than is reasonable for its intended use.
3. Except as otherwise provided in this Agreement, neither Party may impose any condition upon the duty-free temporary admission of a good referred to in subparagraph 1(d), other than the requirement that such a good:
(a) be admitted solely for the solicitation of orders for goods or services provided from the territory of the other Party or a non-Party;
(b) not be sold, leased or put to any use other than exhibition or demonstration while in its territory;
(c) be capable of identification when exported;
(d) be exported within such a period as is reasonably related to the purpose of the temporary admission; and
(e) be admitted in no greater quantity than is reasonable for its intended use.
4. Where a good is temporarily admitted duty-free under paragraph 1 and any condition the Party imposes under paragraphs 2 and 3 has not been fulfilled, a Party may impose:
(a) the customs duty and any other charge that would be owed on entry or final importation of the good; and
(b) any applicable criminal, civil or administrative responsibilities that the circumstances may warrant.
5. Subject to Chapters 10 and 11:
(a) each Party shall allow a container used in international traffic, which enters its territory from the territory of the other Party, to exit its territory on any route that is reasonably related to the economic and prompt departure of such a container;
(b) neither Party may require any bond or impose any penalty or charge solely by reason of any difference between the port of entry and the port of departure of a container;
(c) neither Party may condition the release of any obligation, including any bond, that it imposes in respect of the entry of a container into its territory on its exit through any particular port of departure; and
(d) neither Party may require that the carrier bringing a container from the territory of the other Party into its territory be the same carrier that takes the container to the territory of the other Party.
Article 3.6. Duty-Free Entry of Certain Commercial Samples of Negligible Value and Printed Advertising Materials
Each Party shall grant duty-free entry to commercial samples of negligible or non- commercial value, and to printed advertising materials, imported from the territory of the other Party, regardless of their origin, but may require that:
(a) such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-Party, regardless of whether they are originating goods, or whether services are provided from the territory of the other Party or a non-Party; or
(b) such advertising materials be imported in packets that each contain no more than one copy of each of such materials and that neither such materials nor packets form part of a larger consignment.
Article 3.7. Goods Re-Entered after Repair or Alteration
1. Neither Party may apply a customs duty to a good, regardless of its origin, that re-enters its territory after that good has been exported or if it was under a temporary exit from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in its territory.
2. Neither Party may apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of the other Party for repair or alteration.
Article 3.8. Customs Valuation
The Customs Valuation Agreement shall govern the customs valuation rules applied by the Parties to their reciprocal trade.
Section D. Non-Tariff Measures
Article 3.9. Import and Export Restrictions
1. Except as otherwise provided in this Agreement, neither Party may adopt or maintain any prohibition or restriction 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 GATT, including its interpretative notes, and to this end, Article XI of GATT and its interpretative notes, or any equivalent provision of a successor agreement to which both Parties are party, are incorporated into and made part of this Agreement.
2. The Parties understand that the rights and obligations under GATT, incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, export price requirements and, except as permitted in enforcement of countervailing and antidumping orders and undertakings, import price requirements.
3. Inthe event that a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, nothing in this Agreement shall be construed to prevent the Party from:
(a) limiting or prohibiting the importation from the territory of the other Party of such a good of that non-Party; or
(b) requiring as a condition of export of such a good of the Party to the territory of the other Party, that the good not be re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.
4. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, the Parties, upon request of the other Party, shall consult with a view to avoiding undue interference with or distortion of pricing, marketing and distribution arrangements in the other Party.
5. Paragraphs 1 through 4 shall not apply to the measures set out in Annex 3.9.