Title
INTERIM AGREEMENT ON TRADE BETWEEN THE EUROPEAN UNION AND THE UNITED MEXICAN STATES
Preamble
PREAMBLE
The European Union, hereinafter referred to as "the Union" or "the EU",
and
the United Mexican States, hereinafter referred to as "Mexico",
hereinafter jointly referred to as "the Parties" or individually referred to as "Party",
CONSIDERING the strong cultural, political and economic ties which unite them;
MINDFUL of the significant contribution to strengthen those ties made by the Economic Partnership, Political Coordination and Cooperation Agreement between the European Community and its Member States, of the one part, and the United Mexican States, of the other part, signed in Brussels on 8 December 1997;
CONSIDERING their joint commitment expressed in the Santiago Declaration of 27 January 2013 to modernise and replace the existing Economic Partnership, Political Coordination and Cooperation Agreement to reflect new political and economic realities and the advancements made in their strategic partnership;
EMPHASISING the comprehensive nature of their relationship and the importance of providing a coherent framework for its further promotion;
AFFIRMING their status as strategic partners and their determination to further enhance and deepen their partnership and their international cooperation and dialogue in order to advance their shared interests and values;
AFFIRMING their commitment to strengthen cooperation on bilateral, regional, bi-regional, and international issues of common concern;
RECOGNISING the interim character of this Agreement that will strengthen bilateral economic and trade relations between the Parties, subsumed under the Modernised Global Agreement and that this Agreement will cease to apply once the latter enters into force;
ACKNOWLEDGING the importance of a strong and effective multilateral system, based upon international law, in preserving peace, preventing conflicts and strengthening international security and in tackling common challenges;
REAFFIRMING their commitment to expand and diversify their trade relation in conformity with the Marrakesh Agreement Establishing the World Trade Organization (hereinafter referred to as the "WTO Agreement") and the specific objectives and provisions set out in this Agreement;
CONVINCED that this Agreement will create a climate conducive to growth in sustainable economic relations between them, in particular in terms of trade and investment, which are essential to the realisation of economic and social development and technological innovation and modernisation;
WELCOMING the adoption of the Resolution 70/1 adopted by the General Assembly of the United Nations on 25 September 2015 containing the outcome document "Transforming our world: the 2030 Agenda for Sustainable Development" (hereinafter referred to as the "2030 Agenda"), the Paris Agreement under the United Nations Framework Convention on Climate Change, done at Paris on 12 December 2015 (hereinafter referred to as the "Paris Agreement"), as well as the Sendai Framework for Disaster Risk Reduction 2015-2030, adopted at the Third UN World Conference in Sendai on 18 March 2015, the Addis Ababa Action Agenda of the Third International Conference on Financing for Development, adopted at Addis Ababa on 13-16 July 2015, the World Humanitarian Summit Commitments, adopted at the World Humanitarian Summit in Istanbul on 23-24 May 2016, and the New Urban Agenda, adopted during the UN Conference on Housing and Sustainable Urban Development (Habitat III) in Quito on 20 October 2016 (hereinafter referred to as the "New Urban Agenda"), and calling for their swift implementation;
REAFFIRMING their commitment to overcome global challenges by promoting sustainable development in its economic, social and environmental dimensions, by contributing to the achievement of the Sustainable Development Goals (hereinafter referred to as the "SDGs") and targets of the 2030 Agenda;
REAFFIRMING their commitment to promote international trade in such a way as to contribute to sustainable development in its economic, social and environment dimensions, through partnerships involving all relevant stakeholders, including civil society and the private sector, and to implement this Agreement in a manner consistent with their respective laws and international labour and environmental commitments;
RECOGNISING the importance of strengthening their economic, trade and investment relations, and of promoting the liberalisation of trade and investment between them, to bring economic growth, create new opportunities for workers and the business communities of each Party, in particular small and medium-sized enterprises;
RECOGNISING that this Agreement contributes to enhancing consumer welfare and to ensuring a high level of living standards and consumer protection;
ENCOURAGING enterprises operating within their territory or subject to their jurisdiction to respect internationally recognised guidelines and principles of corporate social responsibility, including the OECD Guidelines for Multinational Enterprises, and to pursue best practices of responsible business conduct;
RECOGNISING that the provisions of this Agreement preserve the right of the Parties to regulate within their territories in conformity with their internal legislation and the Parties' flexibility to achieve legitimate policy objectives, such as public health, safety, environment, public morals and the promotion and protection of cultural diversity, among others;
RECOGNISING the importance of transparency, good governance and the rule of law in international trade and investment to the benefit of all stakeholders;
RESOLVED to contribute to the harmonious development and expansion of international trade and investment by removing obstacles thereto through this Agreement and to avoid creating new barriers to trade or investment between the Parties that could reduce the benefits of this Agreement;
HAVE AGREED AS FOLLOWS:
Body
Chapter 1. GENERAL PROVISIONS
ARTICLE 1.1
Establishment of a Free Trade Area
The Parties establish by virtue of this Agreement a free trade area, consistent with Article XXIV of GATT 1994 and Article V of GATS.
ARTICLE 1.2
Objectives
The objectives of this Agreement are:
(a) the expansion and diversification of trade in goods, in conformity with Article XXIV of GATT 1994, between the Parties through the reduction or the elimination of customs duties and non-tariff barriers to trade;
(b) the facilitation of trade in goods, in particular through the provisions regarding customs and trade facilitation, standards, technical regulations and conformity assessment procedures as well as sanitary and phytosanitary measures, while preserving the right of each Party to regulate within its territory and to achieve public policy objectives;
(c) the liberalisation of trade in services, in conformity with Article V of GATS;
(d) the development of a framework conducive to increased investment flows by providing transparent, stable and predictable rules governing the conditions for establishment and operation of enterprises and the related movement of capital, and guaranteeing an appropriate balance between the liberalisation of investments and the right of each Party to regulate in order to achieve legitimate policy objectives;
(e) the effective and reciprocal opening of government procurement markets of the Parties;
(f) the promotion of innovation and creativity by ensuring an adequate and effective protection of intellectual property rights, in accordance with international obligations in force between the Parties, and the balance between this protection and the public interest;
(g) the conduct of trade and investment relations between the Parties in conformity with the principle of free and undistorted competition;
(h) the promotion of sustainable development and of the development of international trade in a manner that contributes to sustainable development, encompassing economic development, social development and environmental protection;
(i) the establishment of an effective, fair and predictable dispute settlement mechanism to solve disputes between the Parties on the interpretation or application of this Agreement.
ARTICLE 1.3
Definitions of General Application
For the purposes of this Agreement, and unless otherwise specified:
(a) "administrative ruling of general application" means an administrative ruling or interpretation that applies to all persons and factual situations that fall generally within the scope of that administrative ruling or interpretation and that establishes a norm of conduct, but does not include:
(i) a determination or ruling made in administrative or quasi-judicial proceedings that applies to a particular person, good or service of the other Party in a specific case; or
(ii) any other ruling that adjudicates with respect to a particular act or practice;
(b) "Agreement on Agriculture" means the Agreement on Agriculture in Annex 1A to the WTO Agreement;
(c) "agricultural good" means a product listed in Annex 1 to the Agreement on Agriculture;
(d) "aircraft repair and maintenance services during which an aircraft is withdrawn from service" means repair and maintenance activities undertaken on an aircraft or a part thereof while it is withdrawn from service and do not include line maintenance;
(e) "Anti-dumping Agreement" means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(f) "computer reservation system services" means services provided by computerised systems that contain information about air carriers' schedules, availability, fares and fare rules, and through which reservations can be made or tickets may be issued;
(g) "customs duty" means any duty or charge of any kind imposed on or in connection with the importation of a good, it includes any surtax or surcharge imposed in connection with such importation; but does not include any:
(i) charge equivalent to an internal tax imposed in accordance with Article 2.3;
(ii) anti-dumping or countervailing 1 duty applied in accordance with GATT 1994, the Anti‑dumping Agreement and the SCM Agreement, as appropriate;
(iii) fee or other charge imposed on or in connection with the importation of a good that is limited in amount to the approximate cost of services rendered; and
(iv) premium offered or collected on an imported good arising out of a tendering system authorised for the administration of tariff rate quotas pursuant to Appendix 2-A-4 (Tariff Rate Quotas of Mexico);
(h) "Customs Valuation Agreement" means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(i) "days" means calendar days, including weekends and holidays;
(j) "DSU" means the Understanding on Rules and Procedures Governing the Settlement of Disputes, contained in Annex 2 to the WTO Agreement;
(k) "enterprise" means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately owned or governmentally owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
(l) "existing" means in effect on the date of entry into force of this Agreement;
(m) "freely convertible currency" means a currency which is widely traded in international foreign exchange markets and widely used in international transactions;
(n) "GATS" means the General Agreement on Trade in Services in Annex 1B to the WTO Agreement;
(o) "GATT 1994" means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(p) "goods" means both materials and products;
(q) "good of a Party" means a domestic good as this is understood in GATT 1994, and includes originating goods of that Party;
(r) "ground handling services" means the supply at an airport, on a fee or contract basis, of airline representation, administration and supervision services, passenger handling, baggage handling, ramp services, catering, 2 air cargo and mail handling, fuelling of an aircraft, aircraft servicing and cleaning, surface transport, and flight operation, crew administration and flight planning services; but does not include self-handling, security, line maintenance, aircraft repair and maintenance; and management or operation of essential centralised airport infrastructure such as de-icing facilities, fuel distribution systems, baggage handling systems and fixed intra-airport transport systems;
(s) "Harmonized System" or "HS" means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, Chapter Notes and Subheading Notes and amendments thereto;
(t) "measure" includes any law, regulation, rule, procedure, decision, administrative action, requirement or practice; 3
(u) "Modernised Global Agreement" or "MGA" means the Political, Economic and Cooperation Strategic Partnership Agreement between the European Union and its Member States, of the one part and the United Mexican States, of the other part, to be concluded;
(v) "national" means a natural person who has the nationality of one of the Member States of the European Union or of Mexico according to their respective law or is a permanent resident of a Party;
(w) "natural person" means 4 :
(i) in the case of the European Union, a person having the nationality of one of the Member States of the European Union according to its legislation; 5 and
(ii) in the case of Mexico, a person having the nationality of Mexico according to its legislation;
a natural person who is a national of Mexico and has the nationality of one of the Member States of the European Union is deemed to be exclusively a natural person of the Party of his or her dominant and effective nationality;
(x) "OECD" means the Organization for Economic Co-operation and Development;
(y) "originating good" means a good qualifying as originating under the rules of origin set out in Chapter 3 (Rules of Origin and Origin Procedures);
(z) "person" means a natural person or an enterprise;
(aa) "person of a Party" means a national or an enterprise of a Party;
(bb) "preferential tariff treatment" means the rate of customs duty applicable to an originating good pursuant to Article 2.4 (Elimination or Reduction of Customs Duties);
(cc) "Safeguards Agreement" means the Agreement on Safeguards in Annex 1A to the WTO Agreement;
(dd) "SCM Agreement" means the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement;
(ee) "selling and marketing of air transport services" means opportunities for the air carrier concerned to sell and market freely its air transport services, including all aspects of marketing such as market research, advertising and distribution, but does not include the pricing of air transport services or the applicable conditions;
(ff) "service supplier" means a person that supplies or seeks to supply a service;
(gg) "SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A to the WTO Agreement;
(hh) "state enterprise" means an enterprise that is owned or controlled by a Party;
(ii) "TBT Agreement" means the Agreement on Technical Barriers to Trade in Annex 1A to the WTO Agreement;
(jj) "territory" means the territory where this Agreement applies pursuant to Article 33.7 (Territorial Application);
(kk) "third country" means a country or territory outside the territorial scope of application of this Agreement;
(ll) "Trade Council" means the Trade Council established pursuant to Article 33.1 of this Agreement;
(mm) "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1C to the WTO Agreement;
(nn) "Vienna Convention on the Law of Treaties" means the Vienna Convention on the Law of Treaties, done at Vienna on 23 May 1969;
(oo) "TEU" means the Treaty on European Union;
(pp) "TFEU" means the Treaty on the Functioning of the European Union;
(qq) "WTO" means the World Trade Organization; and
(rr) "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.
ARTICLE 1.4
Relation to the WTO Agreement
The Parties affirm their rights and obligations with respect to each other under the WTO Agreement.
ARTICLE 1.5
References to Laws and other Agreements
1. Unless otherwise indicated, any reference in this Agreement to laws, either generally or by reference to a specific statute, regulation or directive, shall be construed as a reference to the laws, as they may be amended.
2. Unless otherwise indicated, any reference, or incorporation by means of a reference in this Agreement to other agreements or legal instruments in whole or in part shall be construed as including:
(a) related annexes, protocols, footnotes, interpretative notes and explanatory notes; and
(b) successor agreements to which the Parties are party or amendments that are binding on the Parties, except where the reference affirms existing rights and obligations.
ARTICLE 1.6
Fulfilment of Obligations
1. Each Party shall adopt any general or specific measures required to fulfil the obligations under this Agreement, including those required to ensure observance thereof by central, regional or local governments and authorities, as well as non-governmental bodies in the exercise of powers delegated to them.
2. If either Party considers that the other Party
– has failed to respect any of the principles, rights or fundamental freedoms referred to in Article 2 of Part I of the Modernised Global Agreement; or
– has failed to comply with and implement any of its existing obligations under international disarmament and non-proliferation treaties and agreements or other international obligations referred to in Article 1.4 of Part II of the Modernised Global Agreement
it may take appropriate measures pursuant to the provisions in Article 2.3 paragraph 3 of Part IV of the Modernised Global Agreement (fulfilment of obligations). For the purpose of this paragraph, "appropriate measures" may include the suspension, in part or in full, of this Agreement.
The right conferred by this paragraph may be exercised by either Party, irrespective of whether the relevant provisions of the Modernised Global Agreement have entered into force or are being applied provisionally.
3. “Appropriate measures” referred to in paragraph 2 above shall be taken in full respect of international law and shall be proportionate to the failure to implement the obligations referred to in paragraph 2. Priority must be given to those which least disturb the functioning of this Agreement. It is understood that suspension, in part or in full, of this Agreement would be a measure of last resort.
Chapter 2. TRADE IN GOODS
SECTION A
General Provisions
ARTICLE 2.1
Definitions
For the purposes of this Chapter:
(a) "consular transactions" means the procedure of obtaining from a consul of the importing Party in the territory of the exporting Party or in the territory of a third party a consular invoice or a consular visa for a commercial invoice, certificate of origin, manifest, shipper's export declaration or any other customs documentation required on or in connection with the importation of a good;
(b) "export licensing procedure" means an administrative procedure requiring the submission of an application or other documentation, other than that generally required for customs clearance purposes, to the relevant administrative body or bodies of the exporting Party as a prior condition for exportation from the territory of the exporting Party;
(c) "Import Licensing Agreement" means the Agreement on Import Licensing Procedures, set out in Annex 1A to the WTO Agreement.
(d) "import licensing procedure" means an administrative procedure requiring the submission of an application or other documentation, other than that generally required for customs clearance purposes, to the relevant administrative body or bodies of the importing Party as a prior condition for importation into the territory of the importing Party;
ARTICLE 2.2
Scope
Unless otherwise provided for in this Agreement, this Chapter applies to trade in goods of a Party.
ARTICLE 2.3
National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its Notes and Supplementary Provisions. To that end, Article III of GATT 1994 and its Notes and Supplementary Provisions are incorporated into and made part of this Agreement, mutatis mutandis.
2. For greater certainty, national treatment means, with respect to a level of government in Mexico other than at the federal level, or a level of government of or in a Member State of the European Union, treatment no less favourable than that accorded by that level of government to like, directly competitive or substitutable goods of Mexico or the Member State, respectively.
ARTICLE 2.4
Elimination or Reduction of Customs Duties
1. Unless otherwise provided for in this Agreement, each Party shall eliminate or reduce its customs duties on originating goods in accordance with Annex 2-A and shall not apply any customs duty upon the entry into force of this Agreement to originating goods classified in tariff lines of Chapters 1 to 97 of the Harmonized System other than those included respectively in Appendices 2‑A-1or 2-A-2 to Annex 2-A.
2. Unless otherwise provided for in this Agreement, a Party shall not increase any existing customs duty, or adopt any new customs duty, on an originating good of the other Party. 6
3. If a Party reduces its applied most-favoured-nation customs duty rate, that duty rate shall apply to originating goods of the other Party for as long as it is lower than the customs duty rate determined pursuant to Annex 2-A.
4. On request of a Party, the Parties shall consult to consider the possibility of improving the tariff treatment for market access of originating goods set out in Annex 2-A. The Trade Council may take a decision to modify Annex 2-A. 7
5. For greater certainty, a Party may maintain or increase a customs duty on the originating good as authorised by the Dispute Settlement Body of the WTO.
ARTICLE 2.5
Export Duties, Taxes or Other Charges
1. A Party shall not adopt or maintain any tax or charge on the exportation of a good to the territory of the other Party that is in excess of that imposed on that good when destined for domestic consumption.
2. A Party shall not adopt or maintain any duty or charge of any kind imposed on, or in connection with, the exportation of a good to the territory of the other Party that is in excess of that imposed on that good when destined for domestic consumption.
3. Nothing in this Article shall prevent a Party from imposing on the exportation of a good a fee or charge that is permitted under Article 2.6.
ARTICLE 2.6
Fees and Formalities