PROTOCOL TO UPGRADE THE FREE TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF NEW ZEALAND
PREAMBLE
The Government of the People's Republic of China ("China") and the Government of New Zealand ("New Zealand") hereinafter referred to collectively as "the Parties":
REAFFIRMING their Comprehensive Strategic Partnership and strong bilateral economic and trade relationship;
RECALLING the Free Trade Agreement between the Government of the People’s Republic of China and the Government of New Zealand done at Beijing on 7 April 2008, and which entered into force on 1 October 2008, as amended (“the Agreement”);
DESIRING to modernise, expand and enhance the scope of the Agreement, and to further facilitate trade and create new opportunities for their exporters;
RECOGNIZING their existing strong cooperation across a range of issues, and seeking to expand upon this to include new areas and mechanisms for dialogue and collaboration;
OBSERVING the challenges for traders in meeting compliance requirements due to the changing nature of international trade, including increased specialization in production and expanded supply chains, AND RECOGNIZING the benefits of utilizing technology to meet these compliance requirements;
SHARING the belief that a free trade agreement produces mutual benefits to each Party and contributes to the expansion and development of international trade;
SEEKING to facilitate and further grow trade between the Parties by promoting efficient and transparent customs procedures that reduce costs and ensure predictability for traders;
DESIRING to facilitate expansion of trade in services under conditions of transparency and progressive liberalization;
OBSERVING the increasing role of electronic commerce, the economic growth opportunities it provides, AND SEEKING to establish a framework that provides certainty for businesses, protection for consumers and builds trust in electronic commerce;
RECOGNIZING the importance of establishing a framework for promoting transparency in government procurement systems and enabling closer cooperation in government procurement;
REAFFIRMING their commitment to enhancing economic efficiency, innovation, consumer welfare, trade and investment by adopting policies that promote open, transparent and competitive markets;
RECOGNIZING 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;
BUILDING ON their rights, obligations and undertakings under the Marrakesh Agreement Establishing the World Trade Organization (“WTO”) and other multilateral, regional and bilateral agreement and arrangements;
REITERATING their commitment to pursuing free and open global trade and supporting the rules based system with the WTO at its centre, AND RECOGNIZING the positive contribution that bilateral and regional trade agreements can have in supporting this multilateral system;
RECOGNIZING the contribution that predictable trade rules can make to encouraging the growth of regional and bilateral trade;
REAFFIRMING the rights of their Governments to regulate in order to meet national policy objectives, and preserving their flexibility to safeguard the public welfare; and
DESIRING to further economic integration and trade liberalization between the Parties,
HAVE AGREED AS FOLLOWS:
1. Amendment of Chapter 4 (Rules of Origin and Operational Procedures) of the Agreement
Chapter 4 (Rules of Origin and Operational Procedures) of the Agreement shall be replaced by a new Chapter 4 (Rules of Origin and Operational Procedures), as set out in Appendix 1 to this Protocol.
2. Amendment of Chapter 5 (Customs Procedures and Cooperation) of the Agreement
Chapter 5 (Customs Procedures and Cooperation) of the Agreement shall be replaced by a new Chapter 5 (Customs Procedures and Trade Facilitation), as set out in Appendix 2 to this Protocol.
3. Amendment of Chapter 8 (Technical Barriers to Trade) of the Agreement
Chapter 8 (Technical Barriers to Trade) of the Agreement shall be replaced by a new Chapter 8 (Technical Barriers to Trade), as set out in Appendix 3 to this Protocol.
4. Amendment of Chapter 9 (Trade In Services) of the Agreement
Chapter 9 (Trade in Services) of the Agreement shall be replaced by a new Chapter 9 (Trade in Services), as set out in Appendix 4 to this Protocol.
5. Amendment of Chapter 14 (Cooperation) of the Agreement
Chapter 14 (Cooperation) of the Agreement shall be replaced by a new Chapter 14 (Cooperation), as set out in Appendix 5 to this Protocol.
6. Additional Chapter 19 (Electronic Commerce)
The Agreement shall be amended by inserting new Chapter 19 (Electronic Commerce), as set out in Appendix 6 to this Protocol.
7. Additional Chapter 20 (Government Procurement)
The Agreement shall be amended by inserting new Chapter 20 (Government Procurement), as set out in Appendix 7 to this Protocol.
8. Additional Chapter 21 (Competition Policy)
The Agreement shall be amended by inserting new Chapter 21 (Competition Policy), as set out in Appendix 8 to this Protocol.
9. Additional Chapter 22 (Environment and Trade)
The Agreement shall be amended by inserting new Chapter 22 (Environment and Trade), as set out in Appendix 9 to this Protocol.
10. Amendment of Annex 8 (Schedules of Specific Commitments on Services) to the Agreement
Annex 8 (Schedules of Specific Commitments on Services) of the Agreement shall be replaced by new Annex 8 (Schedules of Specific Commitments on Services), as set out in Appendix 10 to this Protocol.
11. Amendment of Annex 9 (Sectoral Coverage Under Article 107) to the Agreement
Annex 9 (Sectoral Coverage under Article 107) of the Agreement shall be replaced by new Annex 9 (Sectoral Coverage under Article 5 of Chapter 9 (Trade in Services)), as set out in Appendix 11 to this Protocol.
12. Additional Annex 16 (Necessary Elements In a Declaration of Origin by an Approved Exporter)
The Agreement shall be amended by inserting new Annex 16 (Necessary Elements in a Declaration of Origin by an Approved Exporter), as set out in Appendix 12 to this Protocol.
13. Additional Annex 17 (Subsequent Negotiations on Trade In Services)
The Agreement shall be amended by inserting new Annex 17 (Subsequent Negotiations on Trade in Services), as set out in Appendix 13 to this Protocol.
14. Additional Annex 18 (Electronic Means Utilized by Parties for the Publication of Transparency Information)
The Agreement shall be amended by inserting new Annex 18 (Electronic Means Utilized by Parties for the Publication of Transparency Information), as set out in Appendix 14 to this Protocol.
15. Upgrade to Annex 14 (the Agreement between the Government of the People’s Republic of China and the Government of New Zealand on Cooperation In the Field of Conformity Assessment In Relation to Electrical and Electronic Equipment and Components)
The Parties shall promote the completion of an upgrade to Annex 14 of the Agreement (The Agreement between the Government of the People’s Republic of China and the Government of New Zealand on Cooperation in the Field of Conformity Assessment in Relation to Electrical and Electronic Equipment and Components), taking due account of any institutional and regulatory reforms of each Party.
16. General Provisions
1. This Protocol shall enter into force 60 days after the Parties exchange written notification that the necessary domestic legal procedures for entry into force have been completed or after such other period as the Parties may agree in the written notification, in accordance with Article 212 of the Agreement.
2. This Protocol shall form an integral part of the Agreement.
3. This Protocol shall be done in English and Chinese. The two texts of this Protocol are equally authentic.
Conclusion
IN WITNESS whereof, the undersigned, being duly authorised by their respective Governments, have signed this Protocol.
DONE at and respectively on this of by representatives of the Government of the People’s Republic of China and the Government of New Zealand.
For the Government of the People’s Republic of China
H.E. Wang Wentao Minister of Commerce
For the Government of New Zealand
Hon Damien O’Connor Minister for Trade and Export Growth
Attachments
Appendix 1. NEW CHAPTER 4 (RULES OF ORIGIN AND OPERATIONAL PROCEDURES)
Chapter 4. RULES OF ORIGIN AND OPERATIONAL PROCEDURES
Section 1. Rules of Origin
1. Definitions
For the purposes of this Chapter:
authorized body means any government authority or other entity authorized under the domestic legislation of a Party to issue a Certificate of Origin;
Certificate of Origin means a form issued by an authorized body of the exporting Party, identifying the goods being consigned between the Parties and certifying that the goods to which the certificate relates originate in a Party;
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 country of importation;
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
Declaration of Origin based on an Advance Ruling means a statement as to the origin of the goods made by the holder of an advance ruling in accordance with a Party’s domestic laws and regulations;
Declaration of Origin by an Approved Exporter means a statement as to the origin of the goods made by an exporter approved pursuant to Article 20 of this Chapter;
FOB means the value of the good free on board inclusive of the cost of transport to the port or site of final shipment abroad;
generally accepted accounting principles means the recognized accounting standards of a Party with respect to the recording of revenues, expenses, costs, assets and liabilities, the disclosure of information and the preparation of financial statements. Those standards may encompass broad guidelines of general application as well as detailed standards, practices and procedures;
Harmonized System means the Harmonized Commodity Description and Coding System of the WCO, which is set out in the Annex to the International Convention on the Harmonized Commodity Description and Coding System, done at Brussels on 14 June 1983, as amended;
Joint Electronic Verification System means the system developed by the Parties to exchange electronic data of origin under the Agreement for the purpose of verifying the accuracy or authenticity of an origin document;
materials means any matter or substance used in the production or transformation of another good, including a part or ingredient;
origin document means a Certificate of Origin, a Declaration of Origin by an Approved Exporter, a Declaration of Origin based on an Advance Ruling, or any other document demonstrating the origin status that the importing Party may decide to accept;
originating materials or originating goods means materials or goods which qualify as originating in accordance with the provisions of this Section;
other documentary evidence of origin means any other documentary evidence sufficient to substantiate the origin of the goods;
packing materials and containers for shipment means goods used to protect a good during its transportation, other than containers or packaging materials used for retail sale;
producer means a person who engages in the production of a good;
production means methods of obtaining goods, including growing, raising, mining, harvesting, fishing, farming, trapping, hunting, capturing, gathering, collecting, breeding, extracting, manufacturing, processing or assembling a good.
2. Preferential Tariff Treatment
Preferential tariff treatment under this Agreement shall be applied to goods that satisfy the requirements of this Chapter and which are consigned directly between the Parties.
3. Originating Goods
Unless otherwise indicated in this Section, a good shall be considered as originating in a Party when:
(a) the good is wholly obtained or produced in the territory of a Party as set out and defined in Article 4 of this Chapter, including where required to be so under Annex 5;
(b) the good is produced entirely in the territory of one or both Parties, exclusively from materials whose origin conforms to the provisions of this
Section; or
(c) the good is produced in the territory of one or both Parties, using non- originating materials that conform to a change in tariff classification, a regional value content, a process requirement or other requirements specified in Annex 5, and the good meets the other applicable provisions of this Section.
4. Goods Wholly Obtained
Within the meaning of Article 3(a) of this Chapter, the following goods shall be considered as wholly obtained or produced in the territory of a Party:
(a) plant products harvested, picked or gathered in the territory of a Party;
(b) live animals born and raised in the territory of a Party;
(c) goods obtained from live animals raised in the territory of a Party;
(d) goods obtained from hunting, trapping, fishing, farming, gathering or capturing conducted in the territory of a Party;
(e) minerals and other naturally occurring substances, not included in paragraphs (a) to (d) above, extracted or taken from its soil, waters, seabed or beneath its seabed;
(f) goods extracted or taken by a Party, or a person of a Party, from the waters, seabed or subsoil beneath the seabed outside the territorial waters of that Party, provided that the Party has the right to exploit such waters, seabed or subsoil beneath the seabed under that Party's applicable domestic law in accordance with relevant international agreements to which that Party is a party;
(g) goods (fish, shellfish, plant and other marine life) taken within the territorial waters or the Exclusive Economic Zone of a Party seaward of the territorial sea under that Party’s applicable laws in accordance with relevant international agreements to which that Party is a party, or taken from the high seas, by a vessel registered or recorded with a Party and flying or entitled to fly the flag of that Party;
(h) goods processed and/or made on board factory ships registered or recorded with a Party and flying or entitled to fly the flag of that Party, exclusively from goods referred to in paragraph (g) above;
(i) scrap and waste derived from processing operations in the territory of a Party and fit only for the recovery of raw materials, or used goods
collected in the territory of a Party provided that such goods are fit only for the recovery of raw materials;
(j) goods obtained or produced in the territory of a Party solely from goods referred to in paragraphs (a) to (i) above.
5. Change In Tariff Classification
A change in tariff classification under Annex 5 requires that the non- originating materials used in the production of the goods undergo a change of tariff classification as a result of processes performed in the territory of one or both Parties.
6. Regional Value Content
1. Where Annex 5 refers to a Regional Value Content (“RVC”), the RVC shall be calculated as follows:
RVC = FOB – VNM /FOB x 100
where:
RVC is the regional value content, expressed as a percentage;
FOB is the FOB value of the goods; and
VNM is the value in CIF terms of non-originating materials (including materials of undetermined origin).
2. The value of the non-originating materials shall be:
(a) the CIF value at the time of importation of the material; or
(b) the earliest ascertained price paid or payable for the non-originating materials in the territory of the Party where the working or processing takes place. When the producer of a good acquires non- originating materials within that Party the value of such materials shall not include freight, insurance, packing costs, and any other costs incurred in transporting the material from the supplier’s warehouse to the producer’s location.
3. Both the FOB and CIF values referred to above shall be determined pursuant to the Customs Valuation Agreement.
7. Accumulation
Where originating goods or materials of a Party are incorporated into a good in the other Party's territory, the goods or materials so incorporated shall be regarded to be originating in the latter's territory.
8. Minimal Operations or Processes
1. For purposes of this Article, “simple” generally describes activities which need neither special skills nor special machines, apparatus or equipment specially produced or installed for carrying out the activity.
2. Operations or processes which contribute minimally to the essential characteristics of the goods, either by themselves or in combination, are considered to be minimal operations or processes and do not confer origin. These include:
(a) operations to ensure the preservation of goods in good condition during transport and storage, such as drying, freezing, ventilation, chilling and like operations;
(b) simple operations consisting of sifting, sorting, grading, screening, classifying, washing, cutting, slitting, bending, coiling, or uncoiling;
(c) breaking-up and assembly of consignments;
(d) packing, unpacking or repackingoperations;
(e) simple packaging operations, such as simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards;
(f) affixing or printing marks, labels, logos or other like distinguishing signs on products or their packaging;
(g) mere dilution with water or another substance that does not materially alter the characteristics of the goods;
(h) husking, partial or total bleaching, polishing, and glazing of cereals other than rice;
(i) operations to colour sugar or form sugar lumps.
9. Direct Consignment
1. For the purposes of Article 2 of this Chapter, the following shall be considered as consigned directly from the exporting Party to the importing Party:
(a) goods that are transported without passing through the territory of a non-Party;
(b) goods whose transport involves transit through one or more non- Parties with or without trans-shipment or temporary storage of up to 12 months in such non-Parties, provided that:
(i) the goods are subject to controls by the customs administration of a non-Party to ensure compliance with the domestic laws and regulations which that customs administration of a non-Party is responsible for enforcing; and
(ii) the goods do not undergo any operation there other than unloading and reloading, repacking, splitting, labelling or marking required by the importing Party, or any operation necessary to preserve it in good condition.
2. The importing Party may require the importer to present evidence to prove compliance with this Article, such as transport documents or other commercial documents that demonstrate the route of the goods and, if applicable, the storage of the goods. If the customs administration of the importing Party is not satisfied by the aforementioned documents to demonstrate compliance with this Article, the importing Party may require additional documents to be provided.
10. Packing and Containers for Transportation
Containers and packing materials used for the transport of goods shall not be taken into account in determining the origin of the goods.
11. Packaging Materials and Containers for Retail Sale
Where goods are subject to a change in tariff classification criterion set out in Annex 5, the origin of the packaging materials and containers in which goods are packaged for retail sale shall be disregarded in determining the origin of the goods, provided that the packaging materials and containers are classified with the goods. However, if the goods are subject to an RVC requirement, the value of the packaging materials and containers used for retail sale shall be taken into account as originating materials or non-originating materials as the case may be when determining the origin of the goods.
12. Accessories, Spare Parts and Tools
1. With regard to the change in tariff classification requirements for origin specified in Annex 5, accessories, spare parts, tools, instructional and information materials presented with the good upon importation shall be disregarded in the determination of the origin of the good, provided that these are classified with and not invoiced separately from the good.
2. Where the goods are subject to an RVC requirement, the value of the accessories, spare parts, tools, instructional and information materials shall be taken into account as originating materials or non-originating materials, as the case may be, in calculating the RVC of the goods.
3. This Article applies only where the quantities and values of said accessories, spare parts, tools, instructional and information materials are customary for the good.
13. Neutral Elements
1. In determining whether a good is an originating good, the origin of any neutral elements as defined in paragraph 2 shall be disregarded.