Title
FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND THE SOCIALIST REPUBLIC OF VIET NAM
Preamble
PREAMBLE
Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation (EFTA States),
and
the Socialist Republic of Viet Nam (Viet Nam),
hereinafter individually
referred to as a "Party" or collectively as the "Parties",
RECOGNISING the common wish to strengthen the links between the EFTA States on the one part and Viet Nam on the other by establishing close and lasting relations;
DESIRING to create favourable conditions for the development and diversification of trade between them and for the promotion of commercial and economic cooperation in areas of common interest on the basis of equality, mutual benefit, non-discrimination and international law;
AIMING to create new employment opportunities, improve the living standards along with high levels of protection of health and safety of their people and of the environment;
RECALLING their respective rights and obligations under international law, includingthose set out in the Charter of the United Nations, signed in San Francisco on 26 June1945; and the principles articulated in the Universal Declaration of Human Rights,adopted by the General Assembly of the United Nations on 10 December 1948;
DETERMINED to promote and further strengthen the multilateral trading system,building on their respective rights and obligations under the Marrakesh Agreementestablishing the World Trade Organization (the WTO Agreement) and the otheragreements negotiated thereunder, thereby contributing to the harmonious developmentand expansion of world trade;
DETERMINED to strengthen their economic, trade, and investment relations and topromote trade and investment under this Agreement in line with the objective ofsustainable development in its economic, social, and environmental dimensions,recalling in this context their rights and obligations under multilateral environmentalagreements to which they are a party, and the respect for the fundamental principles andrights at work, including the principles set out in the relevant International LabourOrganisation (ILO) Conventions to which they are a party;
RECOGNISING the importance of trade facilitation in promoting efficient and transparent procedures to reduce costs and to ensure predictability for the trading communities of the Parties;
RECALLING their respective commitments to combat corruption in international trade and to promote the principles of transparency and good governance;
ACKNOWLEDGING the importance of good corporate governance and corporate social responsibility, and affirming their commitment to encourage their enterprises to observe the same;
CONVINCED that this Agreement will enhance the competitiveness of their firms in global markets and create conditions encouraging economic, trade and investment relations between them and thereby improving the business environment;
HAVE AGREED, in pursuit of the above, to conclude the following Free Trade Agreement (Agreement):
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. Objectives
1. The EFTA States and Viet Nam hereby establish a free trade area in accordance with the provisions of this Agreement, which is based on trade relations between market economies.
2. The objectives of this Agreement are to:
(a) achieve the liberalisation of trade in goods, in conformity with Article XXIV of the General Agreement on Tariffs and Trade 1994 (the GATT 1994);
(b) achieve the liberalisation of trade in services, in conformity with Article V of the General Agreement on Trade in Services (the GATS);
(c) mutually enhance investment opportunities;
(d) ensure adequate and effective protection of intellectual property rights;
(e) promote competition in their economies, particularly as it relates to economic relations between the Parties;
(f) promote transparency, enhance cooperation between the Parties and facilitate participation by suppliers with respect to government procurement;
(g) 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 relationship;
(h) enhance closer cooperation under this Agreement;
and contribute thereby to the harmonious development and expansion of world trade.
Article 1.2. Geographical Scope
1. Except as otherwise specified in Annex 2F (Rules of Origin), this Agreement shall apply:
(a) to 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 domestic law and international law; and
(b) to the exclusive economic zone and the continental shelf, with respect to measures taken by a Party in the exercise of its sovereign right or jurisdiction in accordance with domestic law and 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 shall apply to the trade and economic relations between, on the one side, Viet Nam and, on the other side, the individual EFTA States, but not to the trade relations between individual EFTA States, unless otherwise provided for in this Agreement.
2. In accordance with 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
The Parties reaffirm their rights and obligations under the WTO Agreement and the other agreements negotiated thereunder to which they are a party, and any other international agreement to which they are a party.
Article 1.5. Central, Regional and Local Government
Each Party shall ensure within its territory 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 domestic laws, regulations, judicial decisions and administrative rulings of general application as well as their respective international agreements that may affect the implementation and operation of this Agreement.
2. The Parties shall promptly respond to specific questions and provide, upon request, information to each other with respect to matters referred to in paragraph 1.
3. In case of any inconsistency between the provisions of this Article and other provisions of this Agreement relating to transparency, the latter shall prevail to the extent of the inconsistency.
Article 1.7. Confidentiality
1. Each Party shall maintain the confidentiality of information which the Party submitting the information has designated as confidential.
2. Nothing in this Agreement shall require any Party to provide confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest or that would prejudice the legitimate commercial interests of any economic operator.
Chapter 2. TRADE IN GOODS
Article 2.1. Scope
This Chapter applies to trade in goods between the Parties.
Article 2.2. Customs Duties
1. The Parties shall apply customs duties on goods originating in another Party in accordance with Annexes 2A, 2B, 2C and 2D (Schedules of Tariff Commitments on Goods).
2. Unless otherwise provided in this Agreement, no Party shall increase customs duties, or introduce new customs duties, on goods originating in another Party covered by Annexes 2A, 2B, 2C and 2D (Schedules of Tariff Commitments on Goods).
3. For the purposes of this Agreement, “customs duties” means any duties, taxes or charges imposed in connection with the importation of goods, except those imposed in conformity with Articles III and VIII of the GATT 1994, and the Articles 2.13 to 2.16 on Trade Remedies of this Chapter.
Article 2.3. Export Duties
1. Viet Nam shall, upon entry into force of this Agreement, eliminate or reduce export duties and other charges of any kind (1) in relation to the exportation of goods destined for domestic use in the EFTA States, in accordance with Annex 2E (Export Duty Schedule of Viet Nam).
2. With respect to a good not covered by Annex 2E (Export Duty Schedule of Viet Nam), Viet Nam shall, in accordance with its domestic laws and regulations, as soon as possible notify the Joint Committee in writing and make publicly available any measure introducing a new export duty and other charges of any kind, or any measure increasing the applied rate of an existing export duty imposed on or in connection with the exportation of that product. Upon request of a Party, Viet Nam shall endeavour to afford the requesting Party a reasonable opportunity, including in the form of consultations, to present its views and shall give due consideration to those views.
3. Paragraph 2 shall apply only to goods not covered by Annex 2E (Export Duty Schedule of Viet Nam) and shall not affect Viet Nam’s obligations under paragraph 1.
4. Within five years from entry into force of this Agreement, the Parties shall review this Article in the Joint Committee with a view to further eliminating or reducing export duties for tariff lines in which a Party has expressed interest.
Article 2.4. Rules of Origin and Administrative Cooperation
The rules of origin and administrative cooperation are set out in Annex 2F (Rules of Origin).
Article 2.5. Customs Valuation (2)
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. Import Licensing
1. The WTO Agreement on Import Licensing Procedures (the Import Licensing Agreement) shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. Each Party shall notify the other Parties of its existing import licensing procedures, including the legal basis and the relevant official websites within 30 days of the entry into force of this Agreement unless they were already notified or provided under Article 5 or paragraph 3 of Article 7 of the Import Licensing Agreement. The notification shall contain the same information as referred to in Article 5 or paragraph 3 of Article 7 of the Import Licensing Agreement.
3. If a Party denies an import licence application with respect to a good of another Party, it shall, on request of the applicant and promptly after receiving the request, provide the applicant with a written explanation of the reason for the denial. The applicant shall have the right of appeal in accordance with the domestic laws, regulations or procedures of the importing Party.
4. Each Party shall ensure that all automatic and non-automatic import licensing procedures do not have trade restrictive effects and are applied in accordance with the Import Licensing Agreement. No Party shall adopt or maintain a measure that is inconsistent with the Import Licensing Agreement. Switzerland applies customs duties based on weight and quantity rather than ad valorem duties.
5. A Party adopting or amending regulations related to import licensing that are likely to affect trade between the Parties shall notify the other Parties no later than 45 days before the new procedure or modification takes effect. In no case shall a Party provide such notification later than 60 days following the date of the publication of the introduction or modification unless this was already notified in accordance with Article 5 of the Import Licensing Agreement. The notification shall clearly state the purpose of such licensing procedures.
Article 2.7. Import and Export Restrictions
1. Article XI of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. A Party introducing a measure in accordance with paragraph 2 of Article XI of the GATT 1994 shall promptly notify the Joint Committee, unless it already was notified in accordance with Article XI of the GATT 1994.
3. Any measure applied in accordance with this Article may not create unnecessary obstacles to trade between the Parties.
4. Without prejudice to the Parties’ rights and obligations under the WTO Agreement, paragraphs 1 and 2 shall not apply to the goods listed in Annex 2G (Goods to Which Viet Nam May Apply Specific Measures). Any amendment of Viet Nam's domestic laws and regulations that reduces the scope of the goods listed in Annex 2G (Goods to Which Viet Nam May Apply Specific Measures) shall automatically apply under this Agreement. Viet Nam shall notify the EFTA States of any amendment referred to in this paragraph.
Article 2.8. Fees and Formalities
Article VIII of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis, subject to Article 11 (Administrative Fees and Charges) of Annex 2H (Trade Facilitation).
Article 2.9. Internal Taxation and Regulations
Article III of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.10. Standards, Technical Regulations, and Conformity Assessments
1. The Parties affirm their rights and obligations with respect to each other under the WTO Agreement on Technical Barriers to Trade (the TBT Agreement), which applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties shall exchange names and addresses of contact points, including information on telephone, email and other relevant details, with expertise on all matters covered under this Article in order to facilitate communication and the exchange of information.
3. Without prejudice to paragraph 1, the Parties agree to hold technical consultations on issues relating to the implementation of this Article, where a Party considers that another Party has taken or is considering a measure that is likely to create, or has created, an unnecessary obstacle to trade. Such consultations shall take place within 40 days from the request, and the Joint Committee should be informed thereof. The Parties shall conduct the consultations through the respective contact points designated pursuant to paragraph 2 and by any agreed method.
4. With a view to increasing mutual understanding of their respective systems and facilitating bilateral trade, the Parties shall strengthen their cooperation through:
(a) reinforcing the role of international standards as a basis for technical regulations and conformity assessment procedures;
(b) promoting the accreditation of conformity assessment bodies on the basis of relevant standards and guidelines of the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC);
(c) promoting the mutual acceptance of conformity assessment results of bodies accredited in accordance with subparagraph (b), which have been recognised under an appropriate multilateral agreement or arrangement; and
(d) other activities as agreed upon by the Parties.
5. A Party may request to negotiate an arrangement extending to each other equivalent treatment related to the use of technical regulations, standards, and conformity assessment procedures which all Parties have agreed with the European Union (EU). The receiving Party shall positively consider such a request in accordance with its domestic laws and regulations.
Article 2.11. Pharmaceutical Products and Medical Devices
The provisions regarding pharmaceutical products and medical devices are set out in Annex 2I (Pharmaceutical Products and Medical Devices).
Article 2.12. Trade Facilitation
The provisions regarding trade facilitation are set out in Annex 2H (Trade Facilitation).
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, the WTO Agreement on Subsidies and Countervailing Measures and the WTO Agreement on Agriculture, 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 goods are subject to investigation and allow for a 45-day period with a view to finding a mutually acceptable solution. The consultations shall take place in the Joint Committee if any Party so requests within 20 days from the receipt of the written 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 GATT 1994 (the WTO Anti-Dumping Agreement) against each other.
2. When a Party receives a properly documented application and before initiating an investigation under the WTO Anti-Dumping Agreement, the Party shall notify in writing the other Party whose goods are allegedly being dumped and allow for a 30-day period for consultations. Such consultations shall not delay or impede the initiation of investigation and its subsequent proceedings by the Party in accordance with Article VI of the GATT 1994 and the WTO Anti-Dumping Agreement. The consultations shall normally take place in the Joint Committee, unless the Parties concerned agree otherwise. -
3. A Party shall not initiate an anti-dumping investigation within 12 months of a determination regarding the same product from the same Party which resulted in the non-application or revocation of anti-dumping measures.
4. If a Party decides to impose an anti-dumping duty, the Party shall endeavour to apply the “lesser duty” rule by determining a duty which is less than the dumping margin, when such lesser duty would be adequate to remove the injury to the domestic industry.
5. When anti-dumping margins are established, assessed or reviewed under Articles 2, 9.3, 9.5, and 11 of the WTO Anti-Dumping Agreement regardless of the comparison bases under Article 2.4.2 of the WTO Anti-Dumping Agreement, all individual margins, whether positive or negative, shall be counted toward the average.
6. Five years after the entry into force of this Agreement, the Parties shall in the Joint Committee review whether there is a need to maintain the possibility to take antidumping measures between them. If the Parties decide after the first review to maintain this possibility, biennial reviews shall thereafter be conducted in the Joint Committee.
Article 2.15. Global Safeguard Measures
The rights and obligations of the Parties in respect of global safeguards shall be governed by Article XIX of the GATT 1994 and the WTO Agreement on Safeguards. In taking measures under these WTO provisions, a Party shall exclude imports of an originating product from one or several Parties if such imports are not a substantial cause of serious injury or threat thereof.
Article 2.16. Bilateral 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 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 bilateral safeguard measures, during the transition period only, to the extent necessary to remedy or prevent the serious injury, subject to paragraphs 2 to 10.
2. Bilateral 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. The Party upon initiating an investigation, taking a decision to apply or extend a bilateral safeguard measure or modifying a bilateral safeguard measure pursuant to this Article shall immediately, and in any case before taking a bilateral safeguard measure, make written notification to 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 bilateral safeguard measure, as well as the proposed date of introduction, expected duration and timetable for the progressive removal of the bilateral safeguard measure. In the case of an extension of a bilateral safeguard measure, evidence shall be provided that the continued application of the bilateral safeguard measure is necessary to remedy or prevent serious injury and that the industry is adjusting.
4. A Party that may be affected by the bilateral safeguard measure shall be offered compensation. The Party proposing to apply or extend a bilateral safeguard measure shall endeavour to offer such compensation in the form of substantially equivalent trade liberalisation in relation to the imports from any such Party.
5. If the conditions set out in paragraph 1 are met, the importing Party may:
(a) suspend the further reduction of any rate of duty provided for under this Agreement on the product; or
(b) increase the rate of duty for the product to a level not to exceed the lesser of:
(i) the MFN applied rate of duty at the time the bilateral safeguard measure is taken; or
(ii) the MFN applied rate of duty on the day immediately preceding the entry into force of this Agreement.
6. Bilateral safeguard measures may only be taken during the transition period, which shall be a period of five years beginning on the date of entry into force of this Agreement. In the case of a product subject to tariff dismantling as set out in Annexes 2A, 2B, 2C and 2D (Schedules of Tariff Commitments on Goods) that lasts more than five years, the transition period shall be extended to the end of the tariff dismantling period for that product. Bilateral safeguard measures shall not be taken for a period exceeding two years. In very exceptional circumstances, after consultations in the Joint Committee, the Party may extend the bilateral safeguard measure up to a total maximum period of three years if the continued application of the bilateral safeguard measure is necessary to remedy or prevent serious injury and there is evidence that the industry is adjusting. Regardless of its duration, such measure shall terminate at the end of the transition period. No bilateral safeguard measures shall be applied to the import of a product, which has previously been subject to such a measure.
7. No Party may apply, with respect to the same product, at the same time a measure in accordance with:
(a) this Article; and
(b) Article XIX of the GATT 1994 and the WTO Agreement on Safeguards.
8. In order to facilitate adjustment in a situation where the expected duration of a bilateral safeguard measure is over one year, the Party applying the bilateral safeguard measure shall progressively liberalise it at regular intervals during the period of application.
9. There shall be an opportunity for consultations in the Joint Committee within 30 days from the receipt of the notification where the information provided under paragraph 3 shall be examined in order to facilitate a mutually acceptable resolution of the matter. In the absence of such resolution, the importing Party may adopt a bilateral safeguard measure pursuant to paragraph 5 to remedy the problem, and, in the absence of mutually agreed compensation, the Party against whose product the bilateral safeguard measure is taken may take compensatory action. The compensatory action shall normally consist of a suspension of concessions having substantial equivalent trade effects or being substantially equivalent to the value of the additional duties expected to result from the bilateral safeguard measure. The bilateral safeguard measure and the compensatory action shall be immediately notified to the other Parties. In the selection of the bilateral safeguard measure and the compensatory action, priority must be given to the action 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 while the measure under paragraph 5 is being applied.
10. Upon the termination of the measure, the rate of duty shall be the rate which would have been in effect but for the bilateral safeguard measure.
11. In critical circumstances, where delay would cause damage which would be difficult to repair, a Party may take a provisional bilateral 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 pertinent procedures set out in paragraphs 2 to 7, including for compensatory action, shall be initiated. Any compensation shall be based on the total period of application of the provisional bilateral safeguard measure and of the bilateral safeguard measure.
12. Any provisional bilateral safeguard measure shall be terminated within 200 days at the latest. The period of application of any such provisional bilateral safeguard measure shall be counted as part of the duration, and any extension thereof, of the measure, set out in paragraphs 5 and 6 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.
13. Five years from the date of entry into force of this Agreement, the Parties shall review whether there is a need to maintain the possibility to take safeguard measures between them. Following the review, the Parties may decide whether they want to apply this Article any longer.
Article 2.17. Agricultural Export Subsidies
The Parties shall not apply export subsidies, as defined in the WTO Agreement on Agriculture, contained in Annex 1A of the WTO Agreement, to trade in originating agricultural products in accordance with the Annexes 2A, 2B, 2C and 2D (Schedules of Tariff Commitments on Goods).
Article 2.18. 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 2.19. General Exceptions
Article XX of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.20. Security Exceptions
Article XXI of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.21. 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 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.
Article 2.22. Preference Utilisation
1. After one year from the date of entry into force of this Agreement, the Parties shall exchange each year annual import statistics and tariff rates for the previous full calendar year, in respect of trade in goods between them at the most detailed tariff-line level available.
2. Such statistics shall include, for each tariff line, trade value and, where applicable, volume. The information exchanged shall cover imports benefitting from:
(a) preferential tariff treatment under this Agreement;
(b) applied most-favoured-nation (MFN) tariff treatment (i.e. nonpreferential treatment); and
(c) any other reduced tariff rates, where applicable.
3. The tariff rates exchanged shall include:
(a) preferential tariff rates under this Agreement; and