Title
FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND THE REPUBLIC OF KOSOVO
Preamble
PREAMBLE
Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation (EFTA States),
and the Republic of Kosovo, hereinafter each individually referred to as a "Party" or collectively as the "Parties",
RECOGNISING the common wish to strengthen the links between the Parties 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, non-discrimination and international law;
DETERMINED to promote and further strengthen the multilateral trading system, building on the principles and rules of the Marrakesh Agreement establishing the World Trade Organization (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 the principles of 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 and ensure 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 coherent and mutually supportive trade, environmental 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 (ILO) Conventions to which they are a party;
RECOGNISING the importance of ensuring predictability for the trading communities of the Parties;
REAFFIRMING their commitment to promote inclusive economic growth by ensuring equal opportunities for all;
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 OECD Guidelines for Multinational Enterprises, the OECD Principles of Corporate Governance and the 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 (Agreement):
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. Objectives
1. The Parties hereby establish a free trade area in accordance with the provisions of this Agreement, 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 (GATT 1994);
(b) to liberalise trade in services, in conformity with Article V of the General Agreement on Trade in Services (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 ensure adequate and effective protection of intellectual property rights, in accordance with international standards;
(g) 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 Partiesâ trade relations; and
(h) to contribute to the harmonious development and expansion of world trade.
Article 1.2. Geographical Scope
1. Except as otherwise specified in Annex I (Rules of Origin and Administrative Cooperation) this Agreement applies 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, the Republic of Kosovo. This Agreement shall not apply to the economic relations between individual EFTA States, unless otherwise provided 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
1. The Parties confirm the principles and rules of 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.
2. Ifa 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. Each Party 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. Each Party shall promptly respond to specific questions and provide, upon request, information to the other Parties on matters referred to in paragraph 1.
3. Nothing in this Agreement shall require a Party to disclose confidential information, 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 GOODS
Article 2.1. Scope
This Chapter applies to trade in goods between the Parties.
Article 2.2. Import Duties
1. Unless otherwise provided for in this Agreement, the Parties shall apply import duties on goods originating in another Party in accordance with Annex I (Rules of Origin and Administrative Cooperation) and Annexes II to V (Schedules of Tariff Commitments).
2. Unless otherwise provided for in this Agreement, no Party shall introduce new import duties, or increase those already applied on goods originating in another Party in accordance with its Schedule of Tariff Commitments.
3. For the purposes of this Agreement, âimport dutiesâ means any duties, taxes or charges imposed in connection with the importation of goods, except those imposed in conformity with:
(a) Article III of the GATT 1994, including the interpretative notes thereon; (b) Articles 2.16 (Subsidies and Countervailing Measures), 2.17 (Anti- Dumping), 2.18 (Global Safeguard Measures) or 2.19 (Bilateral Safeguard Measures); or
(c) Article VII of the GATT 1994, including the interpretative notes thereon.
Article 2.3. Export Duties
No Party shall adopt or maintain any duties, taxes or charges in connection with the exportation of goods to another Party.
Article 2.4. Rules of Origin and Administrative Cooperation
The rules of origin and administrative cooperation are set out in Annex I (Rules of Origin and Administrative Cooperation).
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 apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.6. Classification of Goods
The classification of goods shall be in conformity with the International Convention on the Harmonized Commodity Description and Coding System (Harmonized System) or (HS), as regularly amended in the framework of the World Customs Organisation.
Article 2.7. Technical Amendments
1. The Parties shall, as a result of amendments to the HS nomenclature or other technical amendments to a Party's customs tariff, amend Annexes II-V (Schedules of Tariff Commitments).
2. Amendments subject to paragraph 1 shall be carried out without impairing existing tariff commitments or product specific rules. Consequently, the customs duty applicable to the corresponding goods under a new tariff line shall be equal to or lower than the customs duty of the corresponding original tariff line and any other agreed tariff commitments, such as tariff dismantling periods, shall not deteriorate. Product specific tules applicable to the corresponding goods under the new HS classification shall be equal to or less stringent than the product specific rule of the corresponding original HS classification.
3. In Annexes II-V (Schedules of Tariff Commitments), the version of the Harmonized System and the year shall be indicated.
Article 2.8. Sanitary and Phytosanitary Measures
1. With respect to sanitary and phytosanitary measures, the WTO Agreement on the Application of Sanitary and Phytosanitary Measures applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties shall strengthen their cooperation in the field of sanitary and phytosanitary measures, with a view to increasing the mutual understanding of their respective systems and facilitating access to their respective markets.
3. Upon request of a Party, which considers that a sanitary or phytosanitary measure of another Party is likely to create, or has created, an obstacle to trade, or that the other Party has not fulfilled its obligations under this Article, consultations shall be held with the objective of finding a mutually acceptable solution. The consultations shall take place within 30 days from the receipt of the request and may be conducted by any method agreed by the consulting Parties. In case of perishable goods, consultations between the competent authorities shall be held without undue delay. The Joint Committee shall be informed thereof.
4. Upon request of a Party, the Parties shall without undue delay agree on an arrangement extending to each other treatment related to sanitary and phytosanitary measures which all Parties have agreed with the European Union.
5. The Parties shall exchange names and addresses of contact points with sanitary and phytosanitary expertise in order to facilitate communication and the exchange of information.
Article 2.9. Technical Regulations
1. With respect to technical regulations, standards and conformity assessments, the WTO Agreement on Technical Barriers to Trade (TBT Agreement) applies and is hereby incorporated and made part of this Agreement, mutatis mutandis.
2. The Parties shall strengthen their cooperation in the field of technical regulations, standards and conformity assessment, with a view to increasing the mutual understanding of their respective systems and facilitating access to their respective markets.
3. Upon request of a Party, which considers that a technical regulation, standard or conformity assessment procedure of another Party is likely to create, or has created, an obstacle to trade, consultations shall be held with the objective of finding a mutually acceptable solution. Consultations shall take place within 30 days from the receipt of the request and may be conducted by any method agreed by the consulting Parties. The Joint Committee shall be informed thereof.
4. Upon request of a Party, the Parties shall without undue delay agree on an arrangement extending to each other treatment related to technical regulations, standards and conformity assessments which all Parties have agreed with the European Union.
5. The Parties shall exchange names and addresses of contact points for this Article in order to facilitate communication and the exchange of information.
6. The extent of the Partiesâ obligations to notify draft technical regulations shall be governed by the provisions of the TBT Agreement. The Republic of Kosovo shall notify draft technical regulations, draft national standards and conformity assessment procedures to the EFTA States.
Article 2.10. Import Licensing
The WTO Agreement on Import Licensing Procedures applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.11. Quantitative 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. A notification by a Party in accordance with Article XI ofthe GATT 1994 shall be deemed equivalent to a notification under this Agreement.
3. Any measure applied in accordance with this Article shall be of limited duration, non-discriminatory, transparent and may not go beyond what is necessary to remedy circumstances described in paragraph 2 of Article XI of the GATT 1994 and may not create unnecessary obstacles to trade between the Parties. ARTICLE 2.12 Fees and Formalities Article VII of the GATT 1994, including the interpretative notes thereon, apply
and are hereby incorporated into and made part of this Agreement, mutatis mutandis, subject to Article 7 (Fees and Charges) of Annex VI (Trade Facilitation).
Article 2.13. National Treatment on 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 2.14. Trade Facilitation
The provisions on trade facilitation are set out in Annex VI (Trade Facilitation).
Article 2.15. WTO Agreement on Agriculture
The WTO Agreement on Agriculture applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.16. Subsidies and Countervailing Measures
1. Articles VI and XVI of the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
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. Consultations shall take place in the Joint Committee, unless the Parties making and receiving the request for consultations agree otherwise.
Article 2.17. Anti-dumping
1. The Parties shall 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 (WTO Anti-dumping Agreement) against each other, unless there is proven evidence dumping is taking place.
2. When a Party receives a properly documented application and before initiating an investigation concerning imports of another Party, the Party shall immediately notify in writing the other Party whose products are allegedly being dumped and allow for a 45- day period for consultations with a view to finding a mutually acceptable solution. Consultations shall take place in the Joint Committee, unless the Parties making and receiving the notifications agree otherwise, 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 three 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 the termination of an anti-dumping measure or a determination which resulted in the non-application or revocation of anti- dumping measures.
5. The âde minimis levelâ referred to in Article 5.8 of the WTO Anti-dumping Agreement shall be 5%, expressed as a percentage of the export price. The volume of dumped imports shall be regarded as negligible, and no measure shall be applied, if the volume of imports from a Party is 5% or less of total imports of the like product.
6. An anti-dumping investigation shall not be initiated unless the application has been made by or on behalf of the domestic industry. The application shall be considered to be made "by or on behalf of the domestic industry" if it is supported by those domestic producers whose collective output constitutes more than 50 percent of the total production of the like product produced by the domestic industry. For the purpose of this Article, "domestic industry" means the domestic producers as a whole of the like products. In the case of an application made or supported by a trade association, only the production of those member producers who support the application shall count towards the standing threshold.
7. 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.
8. If a Party decides to apply an anti-dumping duty, the Party shall apply the "lesser duty" rule if such lesser duty would be adequate to remove the injury to the domestic industry.
9. Five years from the entry into force of this Agreement, the Joint Committee shall review whether there is a need to maintain the possibility to apply anti-dumping measures between the Parties. If the Parties decide after the first review to maintain this possibility, biennial reviews shall thereafter be conducted in the Joint Committee.
Article 2.18. Global Safeguard Measures
1. The rights and obligations of the Parties with respect to 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, consistent with the obligations under the WTO agreements, 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.
2. A Party intending to adopt definitive global safeguard measures against one or several Parties, shall inform them and offer consultations. It shall allow for a 45-day period from the date of the offer to hold consultations before adopting any definitive global safeguard measures.
3. A Party adopting global safeguard measures shall impose them in a way that least affects bilateral trade.
Article 2.19. 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 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 bilateral safeguard measures to the minimum extent necessary to remedy or prevent the 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 intending to take a bilateral safeguard measure pursuant to this Article shall immediately, and in any case before taking 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. A Party that may be affected by the bilateral safeguard measure shall be offered compensation in the form of substantially equivalent trade liberalisation in relation to the imports from any such Party.
4. 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 oft
(a) the most-favoured-nation (MFN) rate of duty applied at the time the bilateral safeguard measure is taken; or
(b) the MEN rate of duty applied on the day immediately preceding entry into force of this Agreement.
5. Bilateral safeguard measures shall be taken for a period not exceeding one year. In very exceptional circumstances, after a review by the Joint Committee, measures may be taken up to a total maximum period of three years. No bilateral safeguard measures shall be applied to the import of a product, which has previously been subject to such a measure.
6. The Joint Committee shall, within 30 days from the receipt of the notification, examine the information provided under paragraph 3 in order to facilitate a mutually acceptable solution. In the absence of such solution, the importing Party may adopt a bilateral safeguard measure pursuant to paragraph 4 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 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 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 while the bilateral safeguard measure under paragraph 4 is being applied.
7. Upon the termination of the bilateral safeguard measure, the rate of customs duty shall be the rate which would have been in effect but for the measure.
8. 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 procedures set out in paragraphs 2 to 6, 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.
9. 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 bilateral safeguard measure, set out in paragraphs 4 and 5 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.
10. Five years from 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. If the Parties decide after the first review to maintain this possibility, biennial reviews shall thereafter be conducted by the Joint Committee.
Article 2.20. 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 apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.21. General Exceptions
For the purposes of this Chapter, Article XX of the GATT 1994 and its interpretative notes apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.22. Security Exceptions
For the purposes of this Chapter, Article XXI of the GATT 1994 and its interpretative notes apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.23. Balance-of-Payments
1. A Party in serious balance-of-payments difficulties, or under imminent threat thereof, may, in accordance with the conditions as set out in 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.
Article 2.24. Preference Utilisation
1. For the purposes of monitoring the functioning of this Agreement and calculating preference utilisation rates, the Parties shall annually exchange import statistics, tariff rates under this Agreement, and MFN (2) tariff rates.
2. Import statistics comprise all imports from the Party concerned, including trade values and volumes listed at the most detailed level of the national tariff structure. Each Party shall exchange separate statistics for imports from the other Parties:
(a) benefiting from preferential treatment under this Agreement;
(b) benefiting from any other reduced tariff rates; or
(c) under MFN tariff rates.
The Parties shall exchange import statistics on the trade with the individual Parties. Import statistics shall pertain to the three most recent years available.
3. The tariff rates exchanged shall include preferential tariff rates under this Agreement as well as applied MFN tariff rates. They shall pertain to the same year as the import statistics.
4. Upon request, the Parties shall exchange additional information and explanations
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