Title
FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF CHINA (TAIWAN) AND THE REPUBLIC OF NICARAGUA
Preamble
PREAMBLE
The Government of the Republic of China (Taiwan) and the Government of the Republic of Nicaragua resolved to:
STRENGTHEN the special bonds of friendship and cooperation between their nations and promote bilateral economic integration;
ACHIEVE a free trade zone by means of the creation of new and greater opportunities in terms of access for the current and potential exportable supply of goods and services;
PROMOTE economic complementarities between the Republic of China (Taiwan) and the Republic of Nicaragua by strengthening mutual cooperation and implementing specific projects on issues of priority to each of the two countries;
CONTRIBUTE to the harmonious development and expansion of world trade and provide a catalyst to broader international cooperation;
CREATE an expanded and secure market for the goods and services produced in their respective territories while recognizing the differences in their levels of development and the size of their economies;
AVOID distortions to their reciprocal trade;
ESTABLISH clear and mutually advantageous rules governing their trade, by the establishment of mechanisms that avoid the application of unilateral and discretionary measures that unnecessarily affect the flow of trade;
ENSURE a predictable commercial framework for business planning and investment, by promoting and strengthening efforts to attract Taiwanese investments to the Republic of Nicaragua, and for the purpose of transferring technology that contributes to the development of the competitiveness of the Republic of Nicaragua's productive sectors;
BUILD on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization and other multilateral and bilateral instruments of cooperation;
SEEK to facilitate bilateral trade by promoting efficient and transparent customs procedures that reduce costs and ensure predictability for their importers and exporters;
ENHANCE the competitiveness of their firms in global markets;
FOSTER creativity and innovation, and promote trade in goods and services that are the subject of intellectual property rights;
PROMOTE transparency and eliminate bribery and corruption in international trade and investment;
PROMOTE the economic and social development of their countries through the consolidation of economic liberalization, with the aim of generating economic growth and improving the population's standard of living;
PROTECT, enhance, and enforce basic workers' rights and strengthen their cooperation on labor matters;
CREATE new employment opportunities, improve working conditions and enhance the overall quality of life for their respective citizens;
IMPLEMENT this Agreement in a manner consistent with environmental protection and conservation, promote sustainable development, and strengthen their cooperation on environmental matters;
PROTECT and preserve the environment and enhance the means for doing so, including through the conservation of natural resources in their respective territories;
PRESERVE their flexibility to safeguard the public welfare; and
RECOGNIZE the interest of the Republic of Nicaragua in strengthening and deepening their regional economic integration;
HAVE AGREED as follows:
Body
Part One. General Aspects
Chapter 1. Initial Provisions
Article 1.01. Establishment of a Free Trade Area
The Parties to this Agreement, consistent with Article XXIV of the General Agreement on Tariffs and Trade 1994 and Article V of the General Agreement on Trade in Services, hereby establish a free trade area.
Article 1.02. Objectives
1. The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favored-nation treatment, and transparency, are to:
(a) encourage expansion and diversification of 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 in 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, regional, and multilateral cooperation 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 its objectives set out in paragraph 1 and in accordance with applicable rules of international law.
Article 1.03. Relation to other Agreements
The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which the Parties are party. In the event of any inconsistency between the provisions of this Agreement and the provisions of the WTO agreement or other agreements to which both Parties are party, event of any inconsistency between the provisions of this Agreement and the provisions of the WTO agreement or other agreements to which both Parties are party, the provisions of this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement.
Article 1.04. Relation to other International Agreement In Environment and Conservation
In the event of any inconsistency between this Agreement and the specific trade obligations set forth in:
(a) the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), done at Washington, March 3, 1973, as amended June 22, 1979;
(b) the Montreal Protocol on Substances that Deplete the Ozone Layer, done at Montreal, September 16, 1987, as amended June 29, 1990 and November 25, 1992; or
(c) the Basel Convention on the Control of Trans-boundary Movements of Hazardous Wastes and Their Disposal, done at Basel, March 22, 1989.
these obligations shall prevail to the extent of the inconsistency, provided that where a Party has a choice among equally effective and reasonably available means of complying with such obligations, the Party chooses the alternative that is the least inconsistent with the other provisions of this Agreement. For this purpose, the Parties shall enforce the provisions set out in the instruments in subparagraph (a), (b) and (c).
Article 1.05. Extent of Obligations
The Parties shall ensure that all necessary measures are taken in order to give effect to the provisions of this Agreement, including the observance by all levels of their governments in each of their territories, except otherwise provided in this Agreement.
Article 1.06. Successor Agreement
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.
Chapter 2. General Definitions
Article 2.01. Definitions of General Application
For purposes of this Agreement, unless otherwise specified:
AD Agreement means the WTO Agreement on Implementation of Article VI of the GATT 1994;
Commission means the Free Trade Commission established under Article 21.01 (The Free Trade Commission);
covered investment means, with respect to a Party, an investment, as defined in Article 10.28 (Definitions), in its territory by an investor of the other Party in existence as of the date of entry into force of this Agreement or established, acquired, or expanded thereafter;
customs authority means the competent authority that is responsible under the law of a Party for the administration of customs laws and regulations;
customs duty includes 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 III:2 of the GATT 1994, in respect of like, directly competitive, or substitutable goods of the Party, or in respect of goods from which the imported good has been manufactured or produced in whole or in part;
(b) antidumping or countervailing duty that is applied pursuant to a Partyâs domestic law;
(c) fee or other charge in connection with importation commensurate with the cost of services rendered; or
(d) premium offered or collected on or in connection with 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;
Customs Valuation Agreement means the WTO Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994;
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, or 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 WTO General Agreement on Trade in Services; GATT 1994 means the WTO General Agreement on Tariffs and Trade 1994;
goods of a Party means domestic products as these are 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, 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 the first four digits in the tariff classification number under the Harmonized System;
measure means any measure by a Party including law, regulation, procedure, requirement, or practice;
national means a natural person who has the nationality of a Party according to Annex 2.01 or a permanent resident of a Party;
originating means qualifying under the rules of origin set out in Chapter 4 (Rules of Origin and Related Customs Procedures);
Party means the Republic of China (Taiwan) or the Republic of Nicaragua; person means a natural person or an enterprise; person of a Party means a national or an enterprise of a Party;
preferential tariff treatment means the rate of a customs duty applicable under this Agreement to an originating good;
sanitary or phytosanitary measure means any measure referred to in Annex A, paragraph 1 of the SPS Agreement;
SCM Agreement means the WTO Agreement on Subsidies and Countervailing Measures;
state enterprise means an enterprise that is owned or controlled through ownership interests, by a Party;
subheading means the first six digits in the tariff classification number under the Harmonized System;
territory means the land, maritime, and air space under a Partyâs sovereignty 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;
TRIPS Agreement means the WTO Agreement on Trade Related Aspects of Intellectual Property Rights;
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15, 1994.
Annex 2.01. Country-Specific Definitions
For purposes of this Agreement: natural person who has the nationality of a Party means:
(a) with respect to Republic of Nicaragua, a nicaragiiense as defined in Article 15 of the Constituci6n Politica de la Republica de Nicaragua; and
(b) with respect to the Republic of China (Taiwan) a person who has the nationality of the Republic of China (Taiwan) by birth or naturalization according to Article 3 of the Constitution and Article 2 of the Nationality Law of the Republic of China (Taiwan).
Part Two. Trade In Goods
Chapter 3. National Treatment and Market Access for Goods
Article 3.01. Scope and Coverage
Except as otherwise provided, this Chapter applies to trade in goods of a Party.
Section A. National Treatment
Article 3.02. National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article Ill 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. For purposes of paragraph 1, each Party shall grant the goods of the other Party the treatment no less favorable than the most favorable treatment granted by this Party to the like, directly competitive or substitutable goods of its national origin.
3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 3.03.7.
Section B. Customs Tariff Article
Article 3.03. Customs Tariff Elimination Schedule
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.
2. Except as otherwise provided in this Agreement, on the date of entry into force of this Agreement the Parties shall progressively eliminate its customs duties on imported goods originating from the other Party, in accordance with Annex 3.03.
3. Paragraph 1 does not prevent a Party from increasing a customs duty to a level no higher than the one established in the Customs Tariff Elimination Schedule, when it has previously been reduced unilaterally to a level below the one established on the Customs Tariff Elimination Schedule. During the customs tariff elimination process the Parties shall undertake to apply in their trade of originating goods the lower customs tariff obtained by comparing the level established in accordance with its respective Customs Tariff Elimination Schedule and the level in force according to Article I of GATT 1994.
4. For greater certainty, a Party may:
(a) raise a customs duty back to the level established in its Schedule to Annex 3.03 following a unilateral reduction; or
(b) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.
5. No party may apply or maintain an agricultural safeguard measure:
(a) onor after the date that a good is subject to duty-free treatment under the Partyâs Schedule to Annex 3.03; or
(b) that increases in the in-quota duty on a good subject to a TRQ.
6. Except as otherwise provided in paragraph 1 through 4, a Party could maintain, adopt or modify customs duties on goods excluded from the Customs Tariff Elimination Schedule as provided in Annex 3.03.
Article 3.04. Waiver of Customs Duties
A Party may maintain or 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 for such time as it is in Annex VII countries for purposes of the SCM Agreement. Thereafter, a Party shall maintain any such measures in accordance with Article 27.04 of the SCM Agreement.
Article 3.05. Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission for the following goods, regardless of their origin:
(a) professional equipment, including equipment for the press or television, software and broadcasting and cinematographic equipment, necessary for carrying out the business, trade, or professional activities;
(b) goods intended for display or demonstration;
(c) commercial samples and advertising films and recordings; and
(d) goods admitted for sporting purposes.
2. Each Party shall, at the request of the person concerned and for reasons its customs authority considers valid, extend the time limit for temporary admission beyond the period initially fixed pursuant to the laws of the importing country.
3. No Party may condition the duty-free temporary admission of a good referred to in paragraph 1, other than to require that such good:
(a) not be sold or leased while in its territory;
(b) be accompanied by a security in an amount no greater than the duties and charges that would otherwise be owed on entry or final importation, reimbursable at the time the product leaves the country;
(c) be capable of identification wnen exported;
(d) be exported according to the national legislation of the Party; and
(e) be admitted in no greater quantity than is reasonable for its intended use.
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.
Article 3.06. Duty-Free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials
A Party shall grant duty-free entry to commercial samples of negligible 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; or
(b) the entry of such samples and advertisement materials shall be governed by respective import regulations of the Parties.
Article 3.07. Goods Re-imported after Repair or Alteration
1. No Party may apply a customs duty to a good, regardless of its origin, that is re- imported into its territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration.
2. No 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.
3. The terms "re-imported into its territory" referred to in paragraph 1, and "imported temporarily" referred to in paragraph 2, shall be understood under the respective laws of the Parties.
4. For purposes of this Article, repair or alteration does not include an operation or process that:
(a) destroys a good's essential characteristics or creates a new or commercially different good; or
(b) transforms an unfinished good into a finished good. Article 3.08 Customs Valuation
Upon the entry into force of this Agreement, the principles of customs valuation applied to regulating trade between the Parties shall be those established in the Customs Valuation Agreement of WTO, including its annexes. Besides, the Parties shall not determine the customs value of the goods based on the officially established minimum value.
Section C. Non-Tariff Measures
Article 3.09. Domestic Supports
1. The Parties recognize that domestic support measures could be of vital importance for their respective agricultural sectors, but also distort trade and affect production. In this respect, the Parties shall apply domestic supports in accordance with the WTO Agriculture Agreement and any other successor agreements to which the Parties are signatories. Where a Party decides to support its agricultural producers, it shall endeavor to achieve an domestic support policy that:
(a) has a minimal or no effect at all that distorts trade or production; or
(b) is in conformity with its respective agreements within the WTO.
2. In order to ensure transparency in their policies of support to agriculture, the Parties agree to undertake studies of such policies on an ongoing basis. For such purposes, the information acquired shall be used as the main reference in their respective annual notifications to the Committee on Agriculture of the WTO and copies of the notifications may be exchanged upon request of a Party. Without prejudice to the foregoing, each Party may request additional information and explanations from the other Party. Such requests shall be immediately answered. The resulting information and evaluations may be, at the request of the other Party, subject to consultation with the Committee on Trade in Goods.
Article 3.10. Exports Subsidies
Except as otherwise provided in article 3.04, no Party may adopt or maintain export subsidies on goods in their reciprocal trade.
Article 3.11. Import and Export Restrictions
1. The Parties commit themselves to eliminate the non-tariff barriers to trade, with exception of the Parties' rights in accordance with Articles XX and XXI of GATT 1994.
2. Except as otherwise provided in this Agreement, neither Party may adopt or maintain any prohibition or restriction on the importation of any goods 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 1994 and its interpretative notes, and to this end Article XI of GATT 1994 and its interpretative notes are incorporated into and form an integral part of this Agreement, mutatis mutandis.