Title
FREE TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF ECUADOR AND THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA
Preamble
Preamble
The Government of the Republic of Ecuador ("Ecuador") and The Government of the People's Republic of China ("China"), hereinafter referred to as "the Parties";
Committed to strengthening the ties of friendship and cooperation, as well as the comprehensive strategic partnership between their countries;
Sharing the belief that a free trade agreement will produce mutual benefits for each Party and contribute to the expansion and development of world trade under the multilateral trading system embodied in the Marrakesh Agreement Establishing the World Trade Organization ("the WTO Agreement");
Based on their respective rights and obligations under the WTO Agreement and other multilateral, regional and bilateral cooperation instruments;
Resolved to promote reciprocal trade by establishing clear and mutually advantageous trade rules, eliminating trade barriers and strengthening cooperation in the digital economy and e-commerce;
Sharing their consent to strengthen and improve global and regional supply chains, particularly in the Asia-Pacific area;
Recognizing that this Treaty should be implemented with a view to raising the standard of living, creating new employment opportunities and promoting sustainable development consistent with the protection and conservation of the environment; and
Committed to promoting public welfare in each of their countries;
They have agreed as follows:
Body
Chapter 1. Initial Arrangements
Article 1.1. Establishment of a Free Trade Zone
The Parties to this Agreement, in accordance with Article XXIV of the General Agreement on Tariffs and Trade 1994, establish a free trade area.
Article 1.2. Objectives
1. The objectives of this Agreement, developed more specifically through its principles and rules, including national treatment, most favored nation treatment (hereinafter referred to as "MFN") and transparency, are:
(a) encourage the expansion and diversification of trade between the Parties;
(b) eliminate barriers to trade and facilitate the cross-border movement of goods between the Parties;
(c) promote conditions of fair competition in the free trade zone;
(d) establish understandable rules to ensure a regulated and transparent environment for trade in goods between the Parties;
(e) create new employment opportunities;
(f) create effective procedures for the implementation and application of this Agreement, for its joint administration and for the settlement 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 light of its objectives set forth in paragraph 1 and in accordance with customary rules of interpretation of public international law.
Article 1.3. Geographic Scope
For China, this Agreement shall apply to the entire customs territory of the People's Republic of China, including the land territory, territorial airspace, internal waters, the territorial sea, as well as its seabed and subsoil, and any area outside its territorial sea within which it may exercise sovereign rights and/or jurisdiction in accordance with international law and its domestic law.
For Ecuador, the continent and adjacent islands; the Galapagos Islands; the subsoil; the territorial sea and other maritime spaces; and the respective airspace, over which it exercises sovereignty and jurisdiction in accordance with international law and its internal legislation.
Article 1.4. Relationship with other Agreements
1. The Parties affirm their existing rights and obligations to each other under the WTO Agreement and other agreements to which a Party is a Party.
2. If any provision of the WTO Agreement that the Parties have incorporated into this Agreement is amended and accepted by the Parties to the WTO, such amendment shall be deemed to be automatically incorporated into this Agreement.
Article 1.4. Scope of Obligations
The Parties shall ensure that all necessary measures are taken to give effect to the provisions of this Agreement in their respective territories.
Chapter 2. General Definitions
Article 2.1. Generally Applicable Definitions
For purposes of this Agreement, unless otherwise specified:
Commission means the Free Trade Commission established pursuant to Article 14.1 (The Free Trade Commission);
customs authorities means the competent authority responsible for the application of national customs legislation;
days means calendar days;
existing means in effect on the date of entry into force of this Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
goods of a Party means domestic products as understood in the GATT 1994 or such products as the Parties may agree and includes products originating in that Party;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, adopted by the World Customs Organization;
heading means the first four digits of the Harmonized System tariff classification code;
subheading means the first six digits of the Harmonized System tariff classification code;
Customs duty includes any duty or charge of any kind imposed in connection with the importation of a good, but does not include:
(a) any charge equivalent to an internal tax established in accordance with Article II, paragraph 2 of GATT 1994;
(b) any anti-dumping or countervailing duty applied in accordance with the provisions of Article VI of GATT 1994, the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 or the WIO Agreement on Subsidies and Countervailing Measures, any duty applied in accordance with Article XIX of GATT 1994 and the WTO Agreement on Safeguards, and
(c) any duties or other charges related to importation proportionate to the cost of services rendered;
base tariff means the MFN applied tariff rate on January 1, 2021 provided by each Party;
goods and products shall be understood to have the same meaning, unless the context requires otherwise;
measure includes any law, regulation, procedure, requirement or practice;
originating means that it qualifies under the Rules of Origin set forth in Chapter 4 (Rules of Origin and Implementation Procedures),
person means a natural or legal person, or any other entity established in accordance with national law;
preferential tariff means the rate of import duty applicable under this Agreement to an originating good;
SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, which is part of the WTO Agreement;
TBT Agreement means the Agreement on Technical Barriers to Trade, which is part of the WTO Agreement;
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15, 1994.
Chapter 3. National Treatmentand Market Access of Goods
Article 3.1. Scope of Application
Except as otherwise provided in this Agreement, this Chapter shall apply to trade in goods between the Parties.
Article 3.2. Classification of the Goods
The classification of goods in trade between the Parties shall be carried out in accordance with the Harmonized System.
Article 3.3. National Treatment
1. Each Party shall accord National Treatment to goods of the other Party in accordance with Article III of the GATT 1994, including its interpretative notes.
To this end, Article II of GATT 1994 and its interpretative notes are incorporated into and form an integral part of this Agreement, mutatis mutandis.
2. Paragraph 1 shall not apply to the measures set out in Annex 1 (Exceptions to National Treatment and Import and Export Restrictions), including the extension, renewal or modification of the measure.
Article 3.4. Reduction or Elimination of Customs Duties
1. Except as otherwise provided in this Agreement, neither Party shall increase any existing customs duty or adopt any new customs duty on a good originating in the other Party.
2. Except as otherwise provided in this Agreement, cach Party shall reduce or eliminate its customs duties on originating goods of the other Party in accordance with its Schedule in Annex 2 (Schedule of Tariff Commitments).
3. For each product, the prime rate of customs duties, to which the successive elimination set forth in Annex 2 (Schedule of Undertakings) shall be applied, shall be as set forth in Annex 2 (Schedule of Tariffs Undertakings), will be the MFN tariff rate applied on January 1, 2021.
4. If at any time a Party reduces its applied MFN tariff rate after the entry into force of this Agreement, that tariff rate shall apply with respect to trade covered by this Agreement provided that it is less than the tariff rate calculated in accordance with its Schedule to Annex 2 (Schedule of Tariff Commitments).
5. At the request of cither Party, the Parties shall consult to consider accelerating or improving the elimination and reduction of customs duties on originating goods as set out in their Schedules in Annex 2 (Schedule of Tariff Commitments).
6. Notwithstanding Article 14.1 (The Free Trade Commission), an agreement of the Parties to accelerate the elimination of customs duties on originating goods shall supersede any tariff rates determined in accordance with their Schedules in Annex 2 (Schedule of Tariff Commitments) for such goods and shall enter into force upon approval by each Party in accordance with their respective applicable legal procedures.
7. A Party may at any time unilaterally accelerate the elimination of customs duties on originating goods of the other Party set out in its Schedule to Annex 2 (Schedule of Tariff Commitments). A Party that considers doing so shall inform the other Party as soon as practicable before the new rate of customs duty becomes effective.
8. For greater certainty, a Party may:
(a) raise a customs duty to the level set forth in its Schedule in Annex 2 (Schedule of Tariff Commitments) after a unilateral reduction, for the respective year; or
(b) maintain or increase a customs tariff authorized by the WTO Dispute Settlement Body or under Chapter 13 (Dispute Settlement).
9. The Tariff Relief Program established in this Chapter shall not apply to used goods, even those identified as such in HS headings or subheadings. Used goods also include those reconstructed, repaired, remanufactured or any other similar name given to goods that after having been used have undergone some process to restore their original characteristics or specifications, or to return them to the functionality they had when they were new.
Article 3.5. Import and Export Restrictions
1. Except as otherwise provided in this Agreement, neither Party shall adopt or maintain non-tariff measures that prohibit or restrict the importation of any good of the other Party, or the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of the GATT 1994 and its interpretative notes. To this end, Article XI of the GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties understand that the rights and obligations of the GATT 1994 embodied in paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:
(a) export and import price requirements, except as permitted in the application of countervailing duty and antidumping measures and undertakings; or
(b) voluntary export restraints inconsistent with Article VI of GATT 1994, as applied pursuant to Article 18 of the SCM Agreement and Article 8.1 of the Anti- Dumping Agreement.
3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 1 (Exceptions to National Treatment and Import and Export Restrictions).
Article 3.6. Import Licensing Procedures
1. Each Party shall ensure that all automatic and non-automatic import licensing procedures are applied in a transparent and predictable manner and are applied in accordance with the Agreement on Import Licensing. No Party shall adopt or maintain a measure that is inconsistent with the Agreement on Import Licensing.
2. Each Party shall notify the other Party of any new import licensing procedures and any modifications it makes to its existing import licensing procedures, to the extent possible 30 days before the new procedure or modification becomes effective. In no case shall a Party provide the notification later than 60 days after the date of its publication. The notification under this paragraph shall include the information specified in Article 5 of the Import Licensing Agreement. A Party shall be deemed to be in compliance with this paragraph if it notifies a new import licensing procedure or a new import licensing procedure or a modification of an existing procedure for the processing of import licenses to the WTO Committee on Import Licensing provided for in Article 4 of the Agreement on Import Licensing (hereinafter referred to as the "WTO Committee on Import Licensing" in this Chapter) in accordance with Article 5.1, 5.2 or 5.3 of the Agreement on Import Licensing.
3. Each Party shall, immediately after the date of entry into force of this Agreement for that Party, notify the other Party of its existing import licensing procedures. The notification shall include the information specified in paragraph 2 of Article 5 of the Import Licensing Agreement. A Party shall be deemed to be in compliance with this paragraph if:
(a) has notified the procedures to the WIO Committee on Import Licensing, together with the information specified in Article 5.2 of the Import Licensing Agreement; and
(b) in the most recent annual submission prior to the date of entry into force of this Agreement for that Party to the WTO Committee on Import Licensing in response to the annual questionnaire on import licensing procedures described in Article 7.3 of the Agreement on Import Licensing, has provided, with respect to such existing import licensing procedures, the information requested in that questionnaire.
4. Before implementing any new or modified import licensing procedure, a Party shall publish the new procedure or modification on an official government website. To the extent possible, the Party shall do so at least 21 days before the new procedure or modification becomes effective.
5. Each Party shall, to the extent possible, respond within 60 days to all reasonable inquiries from another Party regarding the criteria used by their respective licensing authorities to grant or deny import licenses. The importing Party shall publish sufficient information for other Parties and traders to know the basis for granting or allocating import licenses.
Article 3.7. Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with Article VIII:1 of the GATT 1994 and its interpretative notes, that all duties and charges of any nature (other than customs duties on imports, charges equivalent to an internal tax or other internal charge applied in accordance with Article III:2 of the GATT 1994, and anti-dumping and countervailing duties) imposed on or in connection with the importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic products or an indirect protection to domestic products or a tax on imports or exports for tax purposes.
2. Neither Party shall require consular transactions, including related fees and charges, in connection with the importation of any goods of the other Party.
3. Each Party shall make available and maintain, through the Internet or a comparable computer telecommunications network, an updated list of duties and charges it imposes in connection with importation or exportation.
Article 3.8. Temporary Admission or Import of Goods
1. Each Party shall grant temporary admission free of customs duty for the following goods, regardless of their origin:
(a) professional equipment, such as equipment used for scientific research, educational or medical activities, press or television and cinematographic purposes, necessary for a person who qualifies for temporary entry under the laws of the importing Party;
(b) products intended to be exhibited or demonstrated at exhibitions, fairs, meetings or similar events;
(c) commercial samples; and
(d) goods admitted for sporting purposes.
2. Each Party shall, at the request of the person concerned and for reasons deemed valid by its customs administration, extend the period for temporary admission beyond the period initially fixed in accordance with its domestic legislation.
3. No Party may condition the temporary admission free of customs duty of a good referred to in paragraph 1, except to require that the good:
(a) is used solely by or under the personal supervision of a national or resident of the other Party in the conduct of that person's business, trade, profession or sport;
(b) is not sold or leased while in its territory;
(c) is accompanied by the posting of a bond or guarantee in an amount not to exceed the charges that would otherwise be due upon entry or final importation, releasable upon exportation of the merchandise;
(d) is capable of being identified when exported;
(e) is exported upon the departure of the person referred to in subparagraph (a), or within any other period related to the purpose of the temporary admission that the Party may establish, or within 6 months, unless extended;
(f) His not admitted in greater quantity than is reasonable for its intended use; and
(g) is admissible in the territory of the Party in accordance with its domestic legislation.
4. If any condition that a Party imposes under paragraph 3 has not been complied with, the Party may apply the customs duty and any other charges that would normally be due on the good, plus any other charges or penalties provided for in its law.
5. Each Party shall allow a good temporarily admitted under this Article to be re- exported through a customs port other than that through which it was admitted.
6. Each Party shall provide that its customs administration or other competent authority shall exempt the importer or other person responsible for a good admitted under this Article from any liability for failure to re-export the good upon presentation of evidence to the satisfaction of the customs administration of the importing Party that the good has been destroyed by force majeure.
Article 3.9. Duty-Free Entry of Samples of No Commercial Value
Each Party shall grant duty-free entry to samples of no commercial value imported from the territory of another Party, subject to its laws and regulations, irrespective of their origin.
Article 3.10. Scope and Coverage of Trade In Agricultural Products.
For the purposes of this Agreement, agricultural goods shall mean the goods referred to in Article 2 of the WTO Agreement on Agriculture.
Article 3.11. Export Subsidies for Agricultural Products.
1. The Parties reaffirm the commitments made in the 19 December 2015 Ministerial Decision on Export Competition (WT/MIN(15)/45, WT/L/980), adopted in Nairobi on 19 December 2015, including the elimination of scheduled export subsidy duties on agricultural products.
2. Neither Party shall maintain, introduce or reintroduce export subsidies on any agricultural commodity destined for the territory of the other Party.
3. If a Party considers that the other Party has not fulfilled its obligations under this Agreement by maintaining, introducing or reintroducing an export subsidy, that Party may request consultations with the other Party in accordance with Chapter 13 (Dispute Settlement) with the objective of reaching a mutually satisfactory solution.
Article 3.12. Domestic Support Measures for Agricultural Products
In order to establish a fair and market-oriented agricultural trading system, the Parties agree to cooperate in the WTO agricultural negotiations on domestic support measures to provide a substantial and progressive reduction in agricultural support and protection, resulting in the correction and prevention of restrictions and distortions in world agricultural markets.
Article 3.13. Andean Price Band System
Ecuador will continue to apply the Andean Price Band System established in Decision No. 371 of the Andean Community and its amendments, or successor systems for the agricultural products listed in Annex 3 (Andean Price Band System).
Article 3.14. Committee on Trade In Goods
1. The Parties establish a Committee on Trade in Goods composed of representatives of each Party.
2. The Committee on Merchandise Trade will be coordinated by:
(a) In the case of China, the Ministry of Commerce, or its successor, and
(b) In the case of Ecuador, the Ministry of Production, Foreign Trade, Investment and Fisheries or its successor.
3. The resolutions of the Committee shall be adopted by consensus and shall be communicated to the competent bodies.
4. The Committee shall meet at least once a year. When special circumstances arise, the Parties shall meet at any time at the request of a Party after agreement.
5. The functions of the Committee shall include, but are not limited to:
(a) monitor compliance with, and the application and proper interpretation of, the provisions of this Chapter and its Annexes to ensure each Party's obligations under this Agreement;
(b) review future amendments to the HS to ensure that cach Party's obligations under this Agreement are not altered, and consult to resolve any conflicts between:
(i) subsequent amendments to the Harmonized System 2021 and Annex 2 (Schedule of Tariff Commitments); or
(ii) Annex 2 (Schedule of tariff commitments) and national nomenclatures;
(c) promote trade in goods between the Parties, including through consultations on the acceleration of tariff elimination under this Agreement and other matters as appropriate;
(d) address barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures and, if appropriate, refer such matters to the Free Trade Commission for consideration;
(e) coordinate the exchange of information on trade in goods between the Parties;
(f) consult and attempt to resolve any differences that may arise between the Parties on matters relating to the classification of goods under the HS;
(g) establishing ad-hoc working groups with specific mandates; and
(h) The Committee shall establish an Ad-Hoc Working Group on trade in agricultural and fishery products. In order to resolve any obstacles to trade in agricultural and fishery products between the Parties, the Working Group shall meet within 30 days of its agreement between the Parties.
Article 3.15. Transposition of Tariff Commitment Schedules
Each Party shall ensure that the transposition of its Schedule in Annex 2 (Schedule of Tariff Commitments), made for the purpose of implementing Annex 2 (Schedule of Tariff Commitments) into the revised HS nomenclature following periodic HS amendments, is carried out without prejudice to the tariff commitments set out in Annex 2 (Schedule of Tariff Commitments).