Title
Costa Rica-Peru Free Trade Agreement
Preamble
PREAMBLE
The Govemment of the Republic of Peru, on the one hand, and the Government of the Republic of Costa Rica, on the other hand, determined to:
STRENGTHEN the special ties of friendship and cooperation between them and promote regional economic integration;
PROPOSE the creation of a larger and more secure market for goods and services produced in their respective territories;
PROMOTE comprehensive economic development to reduce poverty,
PROMOTE the creation of new employment opportunities and improve working conditions and living standards in their respective territories;
ESTABLISH clear and mutually beneficial rules governing their commercial exchange; ENSURE a predictable legal and commercial framework for business and investment,
RECOGNIZE that the promotion and protection of investments of one Party in the territory of the other Party will contribute to an increase in the flow of investments and stimulate mutually beneficial business activity;
AVOID distortions in their reciprocal trade; PROMOTE the competitiveness of its companies in global markets;
FACILITATE trade by promoting efficient and transparent customs procedures that ensure predictability for importers and exporters;
STIMULATE creativity and innovation and promote trade in the innovative sectors of their economies; PROMOTE transparency in international trade and investment, PRESERVE its ability to safeguard the public welfare; and
DEVELOP their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization and other treaties to which they are party,
HAVE AGREED as follows:
Body
Chapter 1. Initial Provisions and General Definitions
Section A. Initial Provisions
Article 1.1. Establishment of the Free Trade Zone
The Parties to this Agreement, in accordance with Article XXIV of the WTO General Agreement on Tariffs and Trade 1994 and Article V of the WTO General Agreement on Trade in Services, establish a free trade area.
Article 1.2. Objectives
The objectives of this Treaty are as follows:
(a) stimulate the expansion and diversification of trade between the Parties;
(b) eliminate unnecessary baniers to trade and facilitate the cross-border movement of goods and services between the Parties;
({c) promote conditions of free competition in the free trade zone; (d) increase investment opportunities in the territories of the Parties;
(e) adequately and effectively protect and enforce intellectual property rights in the territory of each Party, taking into consideration the balance of rights and obligations arising therefrom, and
(f) create effective procedures for the implementation and enforcement of this Agreement, for its joint administration, and for preventing and resolving disputes.
Article 1.3. Relationship to other Intemational Agreements
1. The Parties confirm the rights and obligations existing between them under the WTO Agreement and other agreements to which the Parties are parties.
2. In the event of any inconsistency between this Agreement and the agreements referred to in paragraph 1, this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement.
Article 1.4. Scope of Obligations
Each Party shall ensure the adoption of all measures necessary to give effect to the provisions of this Agreement in its territory and at all levels of government.
Section B. General Definitions
Article 1.5. Definitions of General Application
For the purposes of this Agreement, unless otherwise specified:
WTO TRIPS Agreement means the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (1);
WTO Antidumping Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 of the WTO;
WTO Customs Valuation Agreement means the Agreement on implementation of Article Vil of the General Agreement on Tariffs and Trade 1994 of the WTO;
GATS of the WTO means the Genera! Agreement on Trade in Services of the WTO; WTO SPS Agreement means the WTO Agreement on the Application of Sanitary and Phytosanitary Measures; WTO TBT Agreement means the WTO Agreement on Technical Barriers to Trade;
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, dated April 15, 1994;
WTO Agreement on Safeguards means the WTO Agreement on Safequards;
WTO Subsidies Agreement means the Agreement on Subsidies and Countervailing Measures. of the WTO;
customs duty means any import tax or duty and charge of any kind levied in connection with the importation of goods, including any form of surcharge or additional charge on imports, except any:
{a) charge equivalent to an internal tax established in accordance with Article III.2 of GATT 1994;
(b) anti-dumping duty or countervailing measure that is applied in accordance with a Party's domestic law and in conformity with Article VI of the GATT 1994, the WTO Agreement on Subsidies and Countervailing Measures and the WTO Agreement on implementation of Article Vi of the GATT 1994; or
(c) duty or other charge related to the importation, proportional to the cost of the services rendered; Chapter means the first two digits of the Harmonized System tariff classification number; Commission means the Free Trade Commission established under Article 17.1 (The Free Trade Commission);
procurement means the process by which a govemment acquires the use of or acquires goods or services, or any combination thereof, for governmental purposes and not with a view to commercial sale or resale or with a view to use in the production or supply of goods or services for commercial sale or resale;
days means calendar days;
corporation means any entity organized or organized under applicable law, whether or not for profit, or whether privately or governmentally owned, including corporations, trusts, partnerships, sole proprietorships, joint ventures, and other forms of associations;
GATT 1994 means the General Agreement on Tariffs and Trade 1994 of the WTO;
measure includes any law, regulation, procedure, requirement or practice; commodity means any product, article or material;
goods of a Party means domestic products as understood in the GATT 1994 or such other goods as the Parties may agree, and includes goods originating in that Party;
originating good means that it qualifies under the rules of origin set out in Chapter 3 (Rules of Origin and Origin Procedures);
national means a natural person who has the nationality of a Party in accordance with Annex 1.5 or a permanent resident of a Party;
central level of government means the national level of govemment, regional level of government means for:
(a) Peru: regional goverment in accordance with the Political Constitution of the Republic of Peru and other applicable legislation; and
(b) Costa Rica: "regional level of government" is not applicable; local level of government means for:
(a) Peru: provincial and local municipalities; and
(b) Costa Rica: municipalities; WTO means the World Trade Organization;
Party means the Republic of Peru, on the one hand, and the Republic of Costa Rica, on the other hand, jointly referred to as the Parties;
heading means the first four digits of the Harmonized System tariff classification number, person means a natural person or a company;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes and Chapter Notes;
subheading means the first six digits of the tariff classification number under the Harmonized System; and
territory means, for a Party, the territory of that Party as set out in Annex 1.5.
Annex 1.5. Country-Specific Definitions
For the purposes of this Agreement, unless otherwise specified in this Agreement:
natural person who has the nationality of a Party means:
(a) with respect to the Republic of Peru, Peruvians by birth, naturalization or option in accordance with the provisions of the Political Constitution of Peru and the relevant domestic legislation; and
(b) with respect to the Republic of Costa Rica, a Costa Rican as defined in Articles 13 and 14 of the Political Constitution of the Republic of Costa Rica.
Territory (2) means:
(a) with respect to the Republic of Peru, the continental territory, the islands, the maritime spaces and the air space that covers them, under sovereignty or sovereign rights and jurisdiction of Peru, in accordance with its Intemal Law and International Law; and
(b) with respect to the Republic of Costa Rica, the national territory including air and maritime space, where the State exercises complete and exclusive sovereignty or special jurisdiction in accordance with Articles 5 and 6 of the Political Constitution of the Republic of Costa Rica and International Law.
Chapter 2. Access to Commodity Markets
Article 2.1. Scope of Application
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods of a Party.
Section A. National Treatment
Article 2.2. 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, and to this end, Article Ill of the GATT 1994 and its interpretative notes are incorporated into and made an integral part of this Agreement, mutatis mutandis.
2. Paragraph 1 shall not apply to the measures listed in Annex 2.2.
Section B. Tariff Elimination
Article 2.3. Tariff Elimination
1. Except as otherwise provided in this Agreement, neither Party may 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, each Party shall eliminate its customs duties on originating goods of the other Party in accordance with Annex 2.3 (Tariff Elimination Program).
3. The tariff elimination program provided for in this Chapter shall not apply to used goods, including goods that are identified as such in headings or subheadings of the Harmonized System. Used goods also include those goods that have been rebuilt, remanufactured, remanufactured or any other similar appellation given to goods that after having been used have undergone some process to restore their original characteristics or specifications, or to retum them to the functionality they had when new (1).
4. At the request of any Party, consultations shall be held to consider the improvement of tariff conditions for market access in accordance with Annex 2.3 (Tariff Elimination Program).
5. Notwithstanding Article 17.1 (The Free Trade Commission), an agreement between the Parties to improve the tariff terms for market access for a good shall prevail over any customs duty or category defined in Annex 2.3 (Tariff Elimination Program) for such good, when approved by the Parties in accordance with their applicable legal procedures.
6. For greater certainty, a Party may:
(a) increase a customs tariff to the level set forth in Annex 2.3 (Tariff Elimination Program), following a unilateral reduction; or
(b) maintain or increase a customs tariff when authorized by the WTO Dispute Settlement Body.
Section C. Special Regimes
Article 2.4. Exemption from Customs Duties
1. No Party may adopt a new exemption from customs duties, or extend the application of an existing exemption from customs duties with respect to existing beneficiaries, or extend it to new beneficiaries, where the exemption is conditioned, explicitly or implicitly, on compliance with a performance requirement.
2. No Party may condition, explicitly or implicitly, the continuation of any existing customs duty exemption on compliance with a performance requirement.
Article 2.5. Temporary Admission of Goods
1. Each Party shall authorize temporary admission free of customs duties for the following goods, irrespective of their origin:
(a) professional equipment, including equipment for scientific research, medical activities, press or television, computer software, and broadcasting and cinematographic equipment necessary for the exercise of the business, trade or profession of a person who qualifies for temporary entry under the legislation of the importing Party;
(b) goods intended for display or demonstration at exhibitions, fairs, meetings or similar events;
(c) commercial samples, films and advertising recordings; and
(d) goods admitted for sporting purposes.
2. Each Party shall, at the request of the person concemed and for reasons deemed valid by its customs authority, extend the period for temporary admission beyond the period initially fixed in accordance with national legislation.
3. No Party may condition the temporary duty-free admission of a good referred to in paragraph 1 on conditions other than that the good:
(a) is used solely by or under the personal supervision of a national or resident of the other Party in the exercise of that person's business, trade, professional or sporting activity;
(b) is not subject to sale or lease while it remains in its territory,
(c) is accompanied by a bond or guarantee in an amount not exceeding the charges that would otherwise be due for entry or final importation, refundable at the time of departure of the merchandise;
(d) is susceptible to identification when exported;
(e) is exported upon the departure of the person referred to in subparagraph (a), or within such period corresponding to the purpose of the temporary admission as the Party may establish, or within one year, unless extended;
(f) is admitted in quantities no greater than is reasonable in accordance with its intended use; and (g) otherwise admissible in the territory of the Party in accordance with its national legislation.
4. If any of the conditions imposed by a Party under paragraph 3 have not been met, 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 established in accordance with its national legislation.
5. Each Party shall adopt and maintain procedures to facilitate the expeditious release of goods admitted under this Article. To the extent possible, such procedures shall provide that when such merchandise accompanies a national or resident of the other Party who is requesting temporary entry, the merchandise shall be cleared simultaneously with the entry of that national or resident.
6. Each Party shall allow a good temporarily admitted under this Article to be exported through a customs port other than the port through which it was admitted.
7. Each Party shall provide that the importer or other person responsible for a good admitted pursuant to this Article shall not be liable for the inability to export the good upon presentation of evidence satisfactory to the importing Party that the good has been destroyed within the original time limit set for temporary admission or any lawful extension.
8. Subject to Chapter 12 (Investment) and Chapter 13 (Cross-Border Trade in Services), no Party may:
(a) prevent a vehicle or container used in intemational transport from entering its territory from the other Party, leaves its territory by any route that has a reasonable relation to the prompt and economical departure of such vehicle or container,
(b) The port of entry of the vehicle or container is different from the port of departure, and no bond shall be required and no penalty or charge shall be imposed solely on the grounds that the port of entry of the vehicle or container is different from the port of departure;
(c) condition the release of any obligation, including any bond, which it has applied to the entry of a vehicle or container into its territory, to its departure through a particular port, and
(d) require that the vehicle or canier bringing a container into its territory from the territory of the other Party be the same vehicle or carrier bringing it into the territory of the other Party.
9. For the purposes of paragraph 8, vehicle means a truck, tractor-trailer, tractor, trailer or trailer unit, locomotive or wagon or other railway equipment.
Article 2.6. Goods Reimported after Repair or Alteration
1. No Party may apply a customs duty to a good, regardless of its origin, that has been re-entered into its territory after having been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repairs or alterations could have been carried out in the territory of the Party from which the good was exported for repair or alteration.
2. Neither Party may apply a customs duty to a good that, regardless of its origin, is temporarily admitted from the territory of the other Party for the purpose of being repaired or altered.
3. For the purposes of this Article, repair or alteration does not include an operation or process that (a) destroys the essential characteristics of a good or creates a new or commercially different good; or (b) transforms an unfinished good into a finished good.
Article 2.7. Duty-Free Importation for Commercial Samples of Insignificant Value and Printed Advertising Materials
Each Party shall allow duty-free importation of commercial samples of negligible value and printed advertising materials imported from the territory of the other Party, regardless of their origin, but may require that:
(a) such samples are imported solely for the purpose of soliciting orders for goods or services supplied from the territory of the other Party or another non-Party; or
(b) such advertising materials are imported in packages containing not more than one printed copy each and that neither the materials nor the packages are part of a larger consignment.
Section D. Non-Tariff Measures
Article 2.8. Import and Export Restrictions
1. Except as otherwise provided in this Agreement, no Party may adopt or maintain any non-tariff measure that prohibits or restricts 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 as provided in Article XI of the GATT 1994 and its interpretative notes, and to this end, Article XI of the GATT 1994 and its interpretative notes are incorporated into and made an integral part of this Agreement, mutatis mutandis.
2. The Parties understand that the rights and obligations of the GATT 1994 embodied by paragraph 1 prohibit, in any circumstances in which any other type of restriction is prohibited, a Party from adopt or maintain:
(a) export and import price requirements, except as permitted for the enforcement of antidumping and countervailing duty provisions and undertakings;
(b) granting import licenses conditional on compliance with a performance requirement, or
(c) voluntary export restrictions incompatible with Article VI of GATT 1994, implemented under Article 18 of the WTO Subsidies Agreement and Article 8.1 of the WTO Antidumping Agreement.
3. Paragraphs 1 and 2 shall not apply to the measures set forth in Annex 2.2.
4. No Party may require that, as a condition of an import commitment or for the importation of a good, a person of the other Party establish or maintain a contractual or other relationship with a distributor in its territory.
5. For the purposes of paragraph 4, distributor means a person of a Party who is responsible for the commercial distribution, agency, dealership or representation in the territory of that Party of goods of the other Party.
Article 2.9. Import and Export Licensing
1. No Party shall maintain or adopt a measure that is inconsistent with the WTO Agreement on import Licensing Procedures (hereinafter referred to as the WTO Import Licensing Agreement). For this purpose, the WTO Agreement on Import Licensing and its interpretative notes are incorporated into this Agreement and form an integral part thereof, mutatis mutandis.
2. Upon entry into force of this Agreement, each Party shall notify the other Party of any existing import licensing procedures.
3. Each Party shall notify the other Party of any new import licensing procedures and any modifications to its existing import licensing procedures within sixty (60) days prior to their effectiveness. A notification provided under this Article:
{a) shall include the information set forth in Article 5 of the WTO import Licensing Agreement, and (b) shall not prejudge whether the import licensing procedure is compatible with this Agreement.
4. Neither Party may apply an import licensing procedure to a good of the other Party without having provided a notification in accordance with paragraph 2 or 3, as appropriate.
5. With the objective of seeking greater transparency in reciprocal trade, the Party that establishes procedures for the processing of export licenses shall notify the other Party in a timely manner.
Article 2.10. Administrative Burdens and Formalities
1. Each Party shall ensure, in accordance with Article VIII of the GATT 7994 and its interpretative notes, that all fees and charges of any nature (other than customs duties, charges equivalent to an intemal tax or other intemal charges applied in accordance with Article III.2 of the GATT 1994, and anti-dumping and countervailing duties) imposed on or in connection with importation or exportation are limited to the approximate cost of services rendered and do not represent indirect protection. of GATT 1994, and antidumping and countervailing duties), imposed on or in connection with importation or exportation, shall be limited to the approximate cost of services rendered and shall not represent an indirect protection to domestic goods, nor a tax on imports or exports for fiscal purposes. For this purpose, Article VIll of GATT 1994 and its interpretative notes are incorporated into this Agreement and form an integral part thereof, mutatis mutandis.
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, an updated list of fees or charges taxes in connection with importation or exportation.