Title
FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND GEORGIA
Preamble
Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation (hereinafter referred to as the "EFTA States"), and
Georgia,
Hereinafter each individually referred to as a "Party" or collectively as the "Parties",
RECOGNISING the common wish to strengthen the links between the EFTA States and Georgia by establishing close and lasting relations;
DESIRING to create favourable conditions for the development and diversification of trade between the Parties and for the promotion of commercial and economic cooperation in areas of common interest on the basis of equality, mutual benefit, nondiscrimination and international law;
DETERMINED to promote and further strengthen the multilateral trading system, building on their respective rights and obligations under the Marrakesh Agreement establishing the World Trade Organization (hereinafter referred to as the "WTO Agreement") and the other agreements negotiated thereunder, thereby contributing to the harmonious development and expansion of world trade;
REAFFIRMING their commitment to democracy, the rule of law, human rights and fundamental freedoms in accordance with their obligations under international law, including as set out in the United Nations Charter and the Universal Declaration of Human Rights;
AIMING to create new employment opportunities, improve living standards along with high levels of protection of health and safety and of the environment;
REAFFIRMING their commitment to pursue the objective of sustainable development and recognising the importance of coherence and mutual supportiveness of trade, environment and labour policies in this respect;
DETERMINED to implement this Agreement in line with the objectives to preserve and protect the environment through sound environmental management and to promote an optimal use of the world's resources in accordance with the objective of sustainable development;
RECALLING their rights and obligations under multilateral environmental agreements to which they are a party, and the respect for the fundamental principles and rights at work, including the principles set out in the relevant International Labour Organisation (hereinafter referred to as the "ILO") Conventions to which they are a party;
RECOGNISING the importance of ensuring predictability for the trading communities of the Parties;
AFFIRMING their commitment to prevent and combat corruption in international trade and investment and to promote the principles of transparency and good public governance;
ACKNOWLEDGING the importance of good corporate governance and corporate social responsibility for sustainable development, and affirming their aim to encourage enterprises to observe internationally recognised guidelines and principles in this respect, such as the Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises, the OECD Principles of Corporate Governance and the United Nations (UN) Global Compact;
CONVINCED that this Agreement will enhance the competitiveness of their firms in global markets and create conditions encouraging economic, trade and investment relations between the Parties;
HAVE AGREED, in pursuit of the above, to conclude the following Free Trade Agreement (hereinafter referred to as this "Agreement"):
Body
Chapter 1. General Provisions
Article 1.1. Objectives
1. The EFTA States and Georgia hereby establish a free trade area in accordance with the provisions of this Agreement, which is based on trade relations between market economies and on the respect for democratic principles and human rights, with a view to spurring prosperity and sustainable development.
2. The objectives of this Agreement are:
(a) to liberalise trade in goods, in conformity with Article XXIV of the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as the "GATT 1994");
(b) to liberalise trade in services, in conformity with Article V of the General Agreement on Trade in Services (hereinafter referred to as the "GATS");
(c) to mutually enhance investment opportunities;
(d) to prevent, eliminate or reduce unnecessary technical barriers to trade and unnecessary sanitary and phytosanitary measures;
(e) to promote competition in their economies, particularly as it relates to the economic relations between the Parties;
(f) to achieve further liberalisation on a mutual basis of the government procurement markets of the Parties;
(g) to ensure adequate and effective protection of intellectual property rights, in accordance with international standards;
(h) to develop international trade in such a way as to contribute to the objective of sustainable development and to ensure that this objective is integrated and reflected in the Parties' trade relations; and
(i) to contribute to the harmonious development and expansion of world trade.
Article 1.2. Geographical Scope
1. This Agreement shall, except as otherwise specified in Annex I, apply to:
(a) the land territory, internal waters and the territorial sea of a Party, and the air-space above the territory of a Party, in accordance with international law; and
(b) the exclusive economic zone and the continental shelf of a Party, in accordance with international law.
2. This Agreement shall not apply to the Norwegian territory of Svalbard, with the exception of trade in goods.
Article 1.3. Trade and Economic Relations Governed by this Agreement
1. This Agreement applies to the trade and economic relations between, on the one side, the individual EFTA States and, on the other side, Georgia, but not to the trade and economic relations between individual EFTA States, unless otherwise provided for in this Agreement.
2. As a result of the customs union established by the Customs Treaty of 29 March 1923 between Switzerland and Liechtenstein, Switzerland shall represent Liechtenstein in matters covered thereby.
Article 1.4. Relation to other International Agreements
1. The Parties confirm their rights and obligations under the WTO Agreement and the other agreements negotiated thereunder to which they are party, and any other international agreement to which they are party.
2. If a Party considers that the maintenance or establishment of a customs union, free trade area, arrangement for frontier trade or another preferential agreement by another Party has the effect of altering the trade regime provided for by this Agreement, it may request consultations. The Party concluding such agreement shall afford adequate opportunity for consultations with the requesting Party.
Article 1.5. Fulfilment of Obligations
1. Each Party shall take any general or specific measures required to fulfil its obligations under this Agreement.
2. Each Party shall ensure the observance of all obligations and commitments under this Agreement by its respective central, regional and local governments and
Authorities, and by non-governmental bodies in the exercise of governmental powers delegated to them by central, regional and local governments or authorities.
Article 1.6. Transparency
1. The Parties shall publish, or otherwise make publicly available, their laws, regulations, judicial decisions, administrative rulings of general application as well as their respective international agreements, that may affect the operation of this Agreement.
2. The Parties shall promptly respond to specific questions and provide, upon request, information to each other on matters referred to in paragraph 1.
3. Nothing in this Agreement shall require any Party to disclose information which is confidential under its domestic legislation or the disclosure of which would impede law enforcement or otherwise be contrary to the public interest or which would prejudice the legitimate commercial interests of any economic operator.
4. In case of any inconsistency between this Article and provisions relating to transparency in other parts of this Agreement, the latter shall prevail to the extent of the inconsistency.
Chapter 2. Trade In Non-agricultural Products
Article 2.1. Scope
This Chapter applies to trade between the Parties relating to products covered by Annex I.
Article 2.2. Rules of Origin and Methods of Administrative Cooperation
The rules of origin and methods of administrative cooperation are set out in Annex II.
Article 2.3. Import Duties
1. Upon entry into force of this Agreement, the Parties shall abolish all customs duties and charges having equivalent effect to customs duties on imports of products originating in a Party covered by Article 2.1. No new customs duties and charges having equivalent effect to customs duties shall be introduced.
2. Import duties and charges having equivalent effect to import duties include any duty or charge of any kind imposed in connection with the importation of products, including any form of surtax or surcharge, but does not include any charge imposed in conformity with Articles III and VIII of the GATT 1994.
Article 2.4. Export Duties
1. The Parties shall, upon entry into force of this Agreement, eliminate all customs duties and other charges, including any form of surcharges and other forms of contributions, in connection with the exportation of products to another Party.
2. No new export duties or charges in connection with the exportation of products shall be introduced by the Parties.
Article 2.5. Customs Valuation (1)
Article VII of the GATT 1994 and Part I of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 shall apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.6. Quantitative Restrictions
Paragraph 1 of Article XI of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.7. Fees and Formalities
Article VIII of the GATT 1994 shall apply, and is hereby incorporated into and made part of this Agreement, mutatis mutandis, subject to Article 9 of Annex III.
Article 2.8. Internal Taxation and Regulations
Article III of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.9. Technical Barriers to Trade
1. Except as otherwise provided for in this Article, with respect to technical regulations, standards and conformity assessments, the WTO Agreement on Technical Barriers to Trade (hereinafter referred to as the "TBT Agreement") shall apply and is hereby incorporated and made part of this Agreement, mutatis mutandis.
2. Each Party shall designate a contact point, in order to facilitate communication and the exchange of information in the field of technical barriers to trade.
3. Without prejudice to paragraph 1, the Parties agree to hold technical consultations where a Party considers that another Party has taken or is considering a measure not in conformity with the TBT Agreement in order to find an appropriate solution in conformity with the TBT Agreement. Such consultations shall take place within 40 days from the receipt of the request. The consultations shall take place in the Joint Committee if a Party so requests. If consultations are held outside the framework of the Joint Committee, the latter should be informed thereof. Such consultations may be conducted by any agreed method
4. The Parties shall inform each other in advance of potential significant changes in treatment accorded to the EU. Provided that equivalent treatment with regard to technical regulations, standards and conformity assessments has been mutually agreed between the EU and each Party, the Parties shall without undue delay agree on an arrangement extending such treatment to each other. (2)
5. The Parties shall inform each other in advance of potential significant changes in treatment affecting the other Parties in areas other than those addressed in paragraph 4. A Party shall, upon request by another Party and subject to paragraph 1 of Article 6 of the TBT Agreement, promptly consider granting products from the requesting Party compliant with EU legislation similar treatment to that accorded to products from the EU.
Article 2.10. Trade Facilitation
With the aim to facilitate trade between the EFTA States and Georgia, the Parties shall, in accordance with Annex III:
(a) simplify, to the greatest extent possible, procedures for trade in goods and related services;
(b) promote multilateral cooperation between the Parties in order to enhance their participation in the development and implementation of international conventions and recommendations on trade facilitation; and
(c) cooperate on trade facilitation within the Joint committee.
Article 2.11. Sub-committee on Trade In Goods
1. A Sub-Committee on Trade in Goods (hereinafter referred to as "Subcommittee") is hereby established.
2. The mandate of the Sub-Committee is set out in Annex IV.
Article 2.12. State Trading Enterprises
Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the General Agreement on Tariffs and Trade 1994 shall apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.13. Subsidies and Countervailing Measures
1. The rights and obligations of the Parties relating to subsidies and countervailing measures shall be governed by Articles VI and XVI of the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures, except as provided for in paragraph 2.
2. Before a Party initiates an investigation to determine the existence, degree and effect of any alleged subsidy in another Party, as provided for in Article 11 of the WTO Agreement on Subsidies and Countervailing Measures, the Party considering initiating an investigation shall notify in writing the Party whose products are subject to an investigation and allow for a 45 day period for consultations with a view to finding a mutually acceptable solution. The consultations shall take place in the Joint Committee if a Party so requests within 20 days from the receipt of the notification.
Article 2.14. Anti-dumping
1. The Parties shall endeavour to refrain from initiating anti-dumping procedures under Article VI of the GATT 1994 and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as the "Anti-dumping Agreement") against each other.
2. When a Party receives a properly documented application and before initiating an investigation under the Anti-dumping Agreement, the Party shall notify in writing the other Party whose products are allegedly being dumped and allow for a 60 day period for consultations with a view to finding a mutually acceptable solution. The consultations shall take place in the Joint Committee if a Party so requests within 20 days from the receipt of the notification.
3. If an anti-dumping measure is applied by a Party, the measure shall be terminated no later than five years from its imposition.
4. A Party shall not initiate an anti-dumping investigation with regard to the same product from the same Party within one year from a determination which resulted in the non-application or revocation of anti-dumping measures or from the termination of a measure pursuant to paragraph 3.
5. If a Party decides to impose an anti-dumping duty, the Party shall apply the "lesser duty" rule by determining a duty which is less than the dumping margin, if such lesser duty would be adequate to remove the injury to the domestic industry.
6. Five years after the entry into force of this Agreement, the Joint Committee shall review whether there is a need to maintain the possibility to take anti-dumping measures between them. If the Parties decide after the first review to maintain this possibility, biennial reviews shall thereafter be conducted by the Joint Committee.
Article 2.15. Global Safeguard Measures
Each Party retains its rights and obligations under Article XIX of the GATT 1994 and the WTO Agreement on Safeguards. In taking measures under these WTO provisions, a Party shall, consistent with WTO law and jurisprudence and in accordance with its domestic legislation, exclude imports of an originating product from one or several Parties if such imports do not in and of themselves cause or threaten to cause serious injury.
Article 2.16. Transitional Safeguard Measures
1. Where, as a result of the reduction or elimination of a customs duty under this Agreement, any product originating in a Party is being imported into the territory of another Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to constitute a substantial cause of serious injury or threat thereof to the domestic industry of like or directly competitive products in the territory of the importing Party, the importing Party may take transitional safeguard measures to the minimum extent necessary to remedy or prevent the injury, subject to paragraphs 2 to 9.
2. Transitional safeguard measures shall only be taken upon clear evidence that increased imports have caused or are threatening to cause serious injury pursuant to an investigation in accordance with the procedures laid down in the WTO Agreement on Safeguards.
3. If the conditions set out in paragraph 1 are met, the importing Party may take measures consisting in increasing the rate of customs duty for the product to a level not to exceed the lesser of:
(a) the MFN rate of duty applied at the time the transitional safeguard measure is taken; or
(b) the MFN rate of duty applied on the day immediately preceding the date of the entry into force of this Agreement.
4. Transitional safeguard measures shall be taken for a period not exceeding one year. In very exceptional circumstances, the importing Party may extend the measures up to a total maximum period of three years. The exporting Parties that are affected by the extended transitional safeguard measure shall be offered compensation in the form of substantially equivalent trade liberalisation. No transitional safeguard measures shall be applied to the import of a product, which has previously been subject to such a measure.
5. The Party intending to take or extend a transitional safeguard measure under this Article shall immediately, and in any case before taking or extending a measure, notify the other Parties. The notification shall contain all pertinent information, including evidence of serious injury or threat thereof caused by increased imports, a precise description of the product concerned, and the proposed measure, as well as the proposed date of introduction, expected duration and timetable for the progressive removal of the measure. In case of extension of the measure pursuant to paragraph 4, the notification shall also specify the intended compensation.
6. The Joint Committee shall, within 30 days from the receipt of the notification, examine the information provided under paragraph 5 in order to facilitate a mutually acceptable solution. In the absence of such solution, the importing Party may adopt or extend a transitional safeguard measure pursuant to paragraph 3 to remedy the problem. In the absence of mutually agreed compensation pursuant to paragraph 4, the Party against whose product the transitional safeguard measure is taken may take compensatory action. The transitional safeguard measure and the compensatory action shall be immediately notified to the other Parties. In the selection of the transitional safeguard measure and the compensatory action, priority must be given to the action or measure which least disturbs the functioning of this Agreement. The Party taking compensatory action shall apply the action only for the minimum period necessary to achieve the substantially equivalent trade effects and in any event, only during the extension of the transitional safeguard measure.
7. In critical circumstances, where delay would cause damage which would be difficult to repair, a Party may take a provisional transitional safeguard measure pursuant to a preliminary determination that there is clear evidence that increased imports constitute a substantial cause of serious injury, or threat thereof, to the domestic industry. The Party intending to take such a measure shall immediately notify the other Parties thereof. Within 30 days from the receipt of the notification, the procedures set out in this Article shall be initiated.
8. Any provisional transitional safeguard measure shall be terminated within 200 days at the latest. The period of application of any such provisional transitional safeguard measure shall be counted as part of the duration, and any extension thereof, of the transitional safeguard measure, set out in paragraphs 3 and 4 respectively. Any tariff increases shall be promptly refunded if the investigation described in paragraph 2 does not result in a finding that the conditions of paragraph 1 are met.
9. A transitional safeguard measure may be applied no later than five years from the entry into force of this Agreement.
Article 2.17. General Exceptions
Article XX of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.18. Security Exceptions
Article XXI of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.19. Balance-of-payments
1. A Party in serious balance of payments difficulties, or under imminent threat thereof, may, in accordance with the conditions established under the GATT 1994 and the WTO Understanding on the Balance of Payments Provisions of the General Agreement on Tariffs and Trade 1994, adopt trade restrictive measures, which shall be of limited duration and non-discriminatory, and may not go beyond what is necessary to remedy the balance of payments situation.
2. The Party introducing a measure under this Article shall promptly notify the Joint Committee.
Chapter 3. Trade In Agricultural Products
Article 3.1. Scope
This Chapter applies to trade between the Parties relating to products other than those covered by Annex I, hereinafter referred to as "agricultural products".
Article 3.2. Tariff Concessions
1. Georgia shall grant tariff concessions to agricultural products originating in an EFTA State as specified in Annexes V to VII.
2. Each EFTA State shall grant tariff concessions to agricultural products originating in Georgia as specified in Annexes V to VII.
Article 3.3. Other Provisions
With respect to trade in agricultural products, the following provisions of Chapter 2 shall apply, mutatis mutandis: Articles 2.2 on Rules of Origin and Methods of Administrative Cooperation, 2.4 on Export Duties, 2.5 on Customs Valuation, 2.6 on Quantitative Restrictions, 2.7 on Fees and Formalities, 2.8 on Internal Taxation and Regulations, 2.9 on Technical Barriers to Trade, 2.10 on Trade Facilitation, 2.12 on State Trading Enterprises, 2.14 on Anti-dumping, 2.15 on Global Safeguard Measures, 2.16 on Transitional Safeguard Measures, 2.17 on General Exceptions, 2.18 on Security Exceptions and 2.19 on Balance-of-Payments.
Article 3.4. Dialogue
The Parties shall examine any difficulties that might arise in their trade in agricultural products and shall endeavour to seek appropriate solutions through dialogue and consultations.
Article 3.5. Further Liberalisation
The Parties undertake to continue their efforts with a view to achieving further liberalisation of their trade in agricultural products, taking account of the arrangements for processed agricultural products, the pattern of trade in agricultural products between the Parties, the particular sensitivities of such products, the development of each Party's agricultural policy and developments in bilateral and multilateral fora. With a view to achieving this objective, the Parties may consult in the Joint Committee meetings.
Chapter 4. Sanitary and Phytosanitary Measures
Article 4.1. Objectives
The objectives of this Chapter are to:
(a) further the implementation of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (hereinafter referred to as the "SPS Agreement");
(b) strengthen cooperation between the Parties in the field of sanitary and phytosanitary measures to facilitate trade and access to their respective markets;
(c) facilitate information exchange between the Parties and enhance mutual understanding of each Party's regulatory system; and
(d) effectively solve trade concerns affecting trade between the Parties within the scope of this Chapter.
Article 4.2. Scope
This Chapter applies to sanitary and phytosanitary measures which may, directly or indirectly, affect trade between the Parties.
Article 4.3. Affirmation of the Sps Agreement
Except as otherwise provided for in this Chapter, the SPS Agreement shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 4.4. International Standards
For the purposes of this Chapter, "international standards" means the standards, guidelines and recommendations of the Codex Alimentarius Commission (CAC), the World Organisation for Animal Health (OIE) and the relevant international and regional
Organisations operating within the framework of the International Plant Protection Convention (IPPC).
Article 4.5. Inspections, Certification System and System Audits
1. An importing Party shall base assessments of the inspection and certification system of the exporting Party on international standards. (3)
2. The Parties agree to use system audits as the preferred assessment method. The need to perform on-site inspections shall be justified.