Title
Central America Free Trade Agreement and Panama
Preamble
The Government of the Republic of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, on the one hand, and the Government of the Republic of Panama, on the other,
Determined to:
To facilitate the regional and hemispheric integration;
Strengthen the traditional ties of friendship and spirit of cooperation between their peoples;
To achieve a better balance in their trade relationship;
Promote a wider market and insurance for the facilitation of trade in goods, services and capital flows and technology in their territories;
Prevent distortions in their reciprocal trade;
Establish clear rules and mutual benefits for the promotion and protection of investments, as well as for trade in goods and services;
Respecting their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization (WTO and other bilateral and multilateral instruments of cooperation and integration;
Strengthen the competitiveness of their enterprises in global markets;
Creating job opportunities and to improve the standard of living of its peoples in their respective territories;
To promote economic development in a manner consistent with the protection and conservation of the environment and sustainable development;
Preserving its ability to safeguard the public welfare; and
Promoting the active participation of the various economic operators, in particular the private sector, in efforts to deepen trade relations between the parties and to develop and to maximize the opportunities for its joint presence in international markets;
This held Free Trade Agreement
Body
Article 1.01. Establishment of the Free Trade Area
1. Through the present Treaty, the parties establish the basis for establishing and implementing a free trade area in accordance with Article XXIV of GATT 1994 and the Article V of the GATS.
2. Except as otherwise provided, the Republics of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua individually, shall apply the rules and procedures of this Treaty bilaterally with the Republic of Panama.
Article 1.02. Objectives
1. The main objectives of this Treaty is as follows:
a) The Free Trade Area;
b) Encourage expansion and diversification of trade in goods and services between the parties;
c) Promote conditions of fair competition in the Free Trade Area;
d) Eliminate barriers to trade and facilitate the movement of goods and services in the Free Trade Area;
e) To promote, protect and substantially increase investment in each party; and
f) Create effective procedures for the implementation and application of this Treaty, its joint administration and for the resolution of disputes.
2. The Parties shall interpret and apply the provisions of this Treaty in the light of the objectives set out in paragraph 1 and in accordance with applicable rules of international law.
Article 1.03. Compliance
Each Party shall ensure, in accordance with its constitutional rules, to take all necessary measures to implement the provisions of this Treaty in its territory and at all levels of government.
Article 1.04. Relation to other International Agreements
1. The Parties confirm their rights and obligations existing between them under the WTO Agreement and other agreements to which they are party.
2. In the event of any inconsistency between the provisions of the agreements referred to in paragraph 1 and the provisions of this Treaty, the latter shall prevail to the extent of the inconsistency, except as otherwise provided in this Treaty.
3. In the event of any inconsistency between this Agreement and the specific trade obligations contained in:
a) The Convention on International Trade in Endangered Species of Wild Fauna and Flora, in Washington on 3 March 1973 with its amendment of 22 June 1979;
b) The Montreal Protocol on Substances that Deplete the Ozone Layer, 16 September 1987. as amended on 29 June 1990; or
c) The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, on 22 March 1989; such obligations shall prevail to the extent of the inconsistency, provided that where a Party has a choice among equally effective and reasonably available means at its disposal to comply with such obligations, choose to submit the lesser degree of inconsistency with the other provisions of this Treaty.
Article 1.05. Succession of Treaties
Any reference to any other international treaty shall be made on the same terms for a successor agreement to which the parties are party.
Chapter 2. General Definitions
Article 2.01. Definitions of General Application
For purposes of this Treaty, except as otherwise provided in another chapter:
Substantial business activity: that an enterprise in the territory of a party if such enterprise performs an ascertainable and stable economic activity, which it may verify with any of the following criteria:
a) Be registered as a source of income tax, the territory of that Party;
b) Payroll or possess a spreadsheet duly registered with the relevant authority of the territory of that Party; or
c) Having a local or facilities or permanent office in the territory of that party but not limited to the receipt of notification;
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;
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, dated 15 April 1994;
The TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights related to trade, which is part of the WTO agreement;
GATS means the General Agreement on Trade in Services, which is part of the WTO agreement;
Tariff: any customs import duty or tax or charge of any other kind imposed in connection with the importation of goods, including any form of surtax or surcharge on imports, except any:
a) Charge equivalent to an internal tax established in accordance with paragraph 2 of article III of the GATT 1994;
b) Anti-dumping or countervailing measures to be applied in accordance with the legislation of each party and is not applied inconsistently with chapter 7 (unfair trading practices);
c) Duty or other charge in connection with importation commensurate with the cost of services rendered;
d) Premium offered or collected on imported goods, arising out of any tendering system in respect of the administration of quantitative import restrictions or preference or aranceles-cuota tariff quotas;
Chapter means the first two digits of the Harmonized System;
Central America: the Republics of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua;
The Commission: administering the Treaty Commission established in accordance with article 19.01 (commission administering the treaty);
- calendar days means calendar days; or
Enterprise means any entity constituted or organized under the applicable law of a party, whether or not for profit and whether private or government owned, including companies, corporations, foundations, trusts, shares, firms, sole proprietorship enterprise co-investments or other associations;
State ENTERPRISE means an enterprise that is owned by a party or under the control of the same through ownership rights;
Understanding: the Understanding on Rules and Procedures Governing the Settlement of Disputes, which is part of the WTO agreement;
Existing means in effect on the date of Entry into Force of this Treaty;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, which is part of the WTO agreement;
Measure means any law, regulation, procedural provision, requirement or practice, among others;
Goods, means any material or product part;
Goods of a Party means a national product as understood in GATT 1994 or goods such as the parties agree to confer the nature and includes originating goods of that Party. A good of a Party may include materials of other countries;
Goods originating a good means that qualifies as originating in accordance with chapter 4 (rules of origin);
National means a natural person or a party according to annex 2.01; Central American country: a Central American country;
A Party: each individual country in Central America and Panama, over which has entered into force this Treaty;
Heading means the first four digits of the Harmonized System;
Person means a natural person or an enterprise; or
Party means a person of a national or an enterprise of a party;
Producer means a person who cultivate, extract, harvest, farming, fishing, hunting, manufacture, processing or assembles a good;
Programme of tariff relief ": schedule of tariff relief", established in accordance with Annex (3.04 tariff relief);
Uniform regulations: "" uniform regulations, established in accordance with article 5.12 (uniform regulations);
Secretarial: "" secretariat established in accordance with article 19.03 (Secretariat);
Harmonized System (HS) means the Harmonized Commodity Description and Coding System of goods which is in force, including its general rules of interpretation and their legal notes, of section, chapter headings and subheadings, in the form in which the parties have adopted and implemented in their respective laws;
Subheading means the first six digits of the Harmonized System; and
Territory: the land, sea and air space of each party as well as the exclusive economic zone and continental shelf over which it exercises sovereign rights and jurisdiction in accordance with its legislation and international law.
Country-specific definitions
For purposes of this Treaty, except as otherwise provided in another chapter:
National:
In the case of Costa Rica:
a) Costa Ricans by birth according to article 13 of the Political Constitution of the Republic of Costa Rica;
b) Costa Ricans by naturalization according to article 14 of the Political Constitution of the Republic of Costa Rica; and
c) A person who, in accordance with the legislation, having the character of a permanent resident;
In the case of El Salvador:
a) Salvadorans by birth, as defined in article 90 of the Constitution of the Republic of El Salvador;
b) Salvadorans by naturalization, as defined in article 92 of the Constitution of the Republic of El Salvador; and
c) A person who, in accordance with the legislation, having the character of a permanent resident;
In the case of Guatemala:
a) Those born in the territory of the Republic of Guatemala, Guatemalan ships and aircraft and Guatemalan, born abroad, with the exception of diplomatic officials and their legally equated;
b) Nationals by birth republics that formed the Federation of Central America, if they acquire domicile in Guatemala and sworn statement, by a competent authority, would be Guatemalans. In this case shall retain their nationality of origin without prejudice to what is established in Central American treaties or conventions; and
c) Who obtain naturalization according to law; in the case of Honduras:
a) The Honduran by birth, as defined in article 23 of the Constitution of the Republic of Honduras; and
b) The Honduran by naturalization, as defined in article 24 of the Constitution of the Republic of Honduras;
In the case of Nicaragua:
a) A Nicaraguan pursuant to article 15 of the Political Constitution of the Republic of Nicaragua;
b) Notwithstanding the above, foreigners with permanent resident status, within the meaning of article 9 of the Migration Act, Act No 153, published in the Official Journal, No. 80 of 30 April 1993 shall enjoy the benefits, rights and obligations that this treaty accorded to nationals, only in relation to the implementation of the Treaty; and
In the case of Panama:
a) The Panamanian by birth according to article 9 of the Political Constitution of the Republic of Panama;
b) The Panamanian naturalization by according to article 10 of the Political Constitution of the Republic of Panama;
c) The Panamanian by adoption according to article 11 of the Constitution of the Republic of Panama; and
d) A person who, in accordance with the law, having the character of a permanent resident or final.
Part two. Trade In Goods
Chapter three. National Treatment and Market Access of Goods
Section A. Definitions and Scope of Application
Article 3.01. Definitions
For the purposes of this chapter, the following definitions shall apply:
Temporary admission of goods: the temporary admission of temporary admission of goods or goods;
Used:
a) Actually consumed; or
b) Processed or manufactured so as to result in a substantial change in value, form or use of the good or good in the production of another;
Printed materials advertising: brochures, pamphlets, leaflets, yearbooks trade catalogues, business associations, materials and posters tourism promotion, used to promote or publish, advertise a good or service and distributed free of charge, classified in chapter 49 of the Harmonized System;
Goods admitted for sports purposes means sports equipment for use in competitions, sports events or training in the territory of the Party to which is imported;
Agricultural goods: goods classified in chapters, any of the following headings or subheadings of the harmonized system according to the 1996 amendment:
(note: the description is provided for purposes of reference)
Tariff classification description
Chapters 01 to 24 (except fish and fish products)
Subheading 2905.43 manitol
Subheading 2905.44 Sorbitol
Heading 33.01 Essential oils
Headings 35.01 to 35.05 Albuminoidal substances, modified starch or starch based products
Subheading 3809.10 Finishes and finishing products
Subheading 3824.60 Sorbitol, except that of subheading 2905.44
Headings 41.01 to 41.03 Leather and skins
Item 43.01 Raw furrings
Headings 50.01 to 50.03 Raw silk and silk waste
Headings 51.01 to 51.03 Wool and hair
Headings 52.01 to 52.03 Cotton, twigs, cotton and cotton waste carded or combed
Heading 53.01 Unbleached linen
Heading 53.02 Raw hemp
Goods intended for display or demonstration, ancillary apparatus: includes components and accessories;
Commercial samples of negligible value: the commercial or non-commercial samples valued (individually or in the aggregate sent) in no more than one United States dollar (US) or the equivalent amount in the currency of either parties or that are marked, broken, perforated or treated so that the disqualifying for sale or for any use that is not the samples;
Advertising films: recorded visual media, with or without sound which are essentially images showing the nature or operation of goods or services offered for sale or lease or established by a person resident in the territory of a Party, provided that the motion pictures suitable for exhibition to prospective customers but not for broadcast to the general public, which are imported in each packets that contain no more than one copy of each film and do not form part of a larger consignment;
Fish and fish products: fish, crustaceans, molluscs or any other aquatic invertebrates, marine mammals and their derivatives, classified in any of the following chapters, headings or subheadings of the Harmonized System, according to the 1996 amendment:
(Note: descriptions are provided for reference purposes)
Tariff classification Description
Chapter 03 Fish and crustaceans, molluscs and other aquatic invertebrates
Heading 05.07 Ivory, turtle shell, marine mammals, horns, antlers, hooves, hooves, claws, claws and their products
Heading 05.08 Coral and similar products
Heading 05.09 Natural sponges of animal origin
Subheading 0511.91 Products of fish or crustaceans, molluscs or any other invertebrate seafarer; the dead animals of chapter 03
Heading 15.04 Fats or oils and their fractions, of fish or marine mammals
Heading 16.03 Extracts and juices other than meat
Heading 16.04 Prepared or preserved fish