3. The Parties shall strengthen communications and coordination with each other, where appropriate, in the context of discussions on international standards and related issues in other international fora, such as the WTO Committee on Technical Barriers to Trade ("WTO TBT Committee").
4. The Parties shall exchange information on:
(a) the Parties' use of standards in connection with technical regulation;
(b) the Parties' standardisation processes and the extent of usage of international standards as a base for their national or local standards; and
(c) cooperation agreements used by either Party in standardisation, for example on standardisation issues in free trade agreements with third parties.
5. At the request of a Party that has an interest in developing a standard similar to that of the other Party, the other Party shall provide, to the extent practicable, relevant information, studies, or other documents, except for confidential information, on which it or its standardizing bodies has relied in the development of such standards.
Article 7.7. Technical Regulations
1. Each Party shall give positive consideration for accepting as equivalent, technical regulations of the other Party, even if these regulations differ from its own, provided that those technical regulations produce outcomes that are equivalent to those produced by its own technical regulations in meeting its legitimate objectives and achieving the same level of protection.
2. Each Party shall, within thirty working days of a request from the other Party for acceptance of equivalence of technical regulations, commence consideration. Each Party shall conclude decisions regarding equivalence within six months of the request from the other Party. Where a Party declines a request from the other Party to engage in consideration of equivalence, it shall, on request of that other Party, explain the reasons for its decision, and explain the requirements under which consideration of equivalence can be commenced.
3. The list of products for which the technical regulations of the exporting Party is accepted by the importing Party as equivalent shall be recorded and attached as Annex 7-1 (List of Products for which Equivalence of Technical Regulations Has Been Accepted).
4. At the request of a Party that has an interest in developing a technical regulation similar to that of the other Party, the other Party shall provide, to the extent practicable, relevant information, studies, or other documents, except for confidential information, which it has relied on for the development of the technical regulations.
5. As a general rule, the Parties shall not base their technical regulations on non-product-related process and production methods based standards. In exceptional cases, if such a regulation is required by either Party, the Party requiring such technical regulations shall, upon request by the other Party, provide justification for the same and consult the other Party before promulgating such a regulation.
Article 7.8. Conformity Assessment Procedures
1. The Parties agree to seek to increase efficiency, avoid duplication and ensure cost effectiveness through an appropriate range of mechanisms in order to facilitate the acceptance of the results of conformity assessment procedures conducted in the other Party. In this regard, the Parties recognise that a broad range of mechanisms exist to facilitate the acceptance in a Party's territory of the results of conformity assessment procedures conducted in the other Party's territory, including any or all of the following:
(a) adoption of accreditation procedures for qualifying conformity assessment bodies located in the territory of the other Party;
(b) recognizing the results of certain conformity assessment procedures conducted in the territory of the other Party;
(c) agreement with the other Party to accept the results of conformity assessment procedures that bodies located in the other Partyâs territory conduct with respect to specific technical regulations;
(d) designation or recognition of conformity assessment bodies located in the territory of the other Party;
(e) facilitation of acceptance of results of each otherâs assessment procedures through agreements between conformity assessment bodies in their territories;
(f) adoption of procedures for accepting supplier's declaration of conformity or any registration scheme based on the same; and
(g) utilising the existing regional and international mutual recognition agreements ("MRA") of which both Parties are parties.
2. The Parties shall exchange information on mechanisms in paragraphs 1(a) to (g) and other similar mechanisms with a view to facilitating acceptance of conformity assessment results.
3. The Parties shall seek to ensure that conformity assessment procedures applied between them facilitate trade by ensuring that they are no more restrictive than is necessary to provide an importing Party with confidence that products conform with the applicable technical regulations, taking into account the risk that non-conformity would create.
4. Upon the request of a Party, Parties shall enter into negotiations for accepting results of conformity assessment procedures of the other Party, even if these procedures differ from its own, provided that those procedures offer an assurance of conformity with applicable technical regulations or standards equivalent to their own conformity assessment procedures. The Parties may conclude agreements or arrangements on mutual recognition in accordance with Article 7.9 (Mutual Recognition Agreements).
5. The Parties shall cooperate by:
(a) exchanging information on the range of mechanisms that exist to facilitate the acceptance in a Party's territory of the results of conformity assessment procedures conducted in the other Party's territory;
(b) promoting the accreditation of conformity assessment bodies on the basis of relevant international standards and guides;
(c) promoting the acceptance of results of conformity assessment bodies that have been recognized under a relevant multilateral agreement or an arrangement between their respective accreditation systems or bodies; and
(d) encouraging their conformity assessment bodies, including accreditation bodies, to participate in cooperation arrangements, including mutual recognition agreements, that promote the acceptance of conformity assessment results.
6. Each Party shall accredit, approve, or otherwise recognise conformity assessment bodies in the territory of the other Party on terms no less favourable than those it accords to conformity assessment bodies in its territory. Where a Party accredits, approves, or otherwise recognises a body assessing conformity with a specific technical regulation or standard in its territory and refuses to accredit, approve, or otherwise recognise a body assessing conformity with that technical regulation or standard in the territory of the other Party, it shall, on request of that other Party, explain the reasons for its decision, and the basis on which such accreditation, approval, or recognition may be achieved.
7. Each Party shall, within thirty working days of a request from the other Party for acceptance in its territory of results of conformity assessment procedures conducted by bodies in the other Party's territory, commence such negotiations. Each Party shall take a decision regarding acceptance of conformity assessment procedures within six months of the request from the other Party. Where a Party declines a request from the other Party to engage in negotiations or conclude an agreement on facilitating acceptance in its territory of the results of conformity assessment procedures conducted by bodies in the other Party's territory, it shall, on request of that other Party, explain the reasons for its decision.
8. The Parties agree to exchange information on accreditation policy and promote the use of accreditation to facilitate acceptance of conformity assessment results and consider how to make best use of international standards for accreditation and international agreements involving the Parties' accreditation bodies, for example, through the International Laboratory Accreditation Cooperation Mutual Recognition Arrangement ("ILAC MRA") or the International Accreditation Forum Multilateral Arrangement ("IAF MLA"). For the purpose of complying with the requirements of the importing Party, the Parties shall consider accepting results of conformity assessment procedures by conformity assessment bodies accredited by the national accreditation body of the other Party, which is a member of the ILAC MRA or IAF MLA.
9. At the request of a Party that has an interest in developing conformity assessment procedures similar to that of the other Party, the other Party shall provide, to the extent practicable, relevant information, studies, or other documents, except for confidential information, on which it or its conformity assessment bodies has relied in the development of such procedures.
10. Where a Party does not accept the results of a conformity assessment procedure conducted in the territory of the other Party, it shall, on request of the other Party, explain the reasons for its decision so that necessary corrective actions may be taken, by the requesting Party to secure such acceptance.
Article 7.9. Mutual Recognition Agreements
1. The Parties shall, within sixty days upon the request of the other Party, enter into negotiations for possible MRAs on the results of conformity assessment procedures, conducted by conformity assessment bodies of the exporting Party to assess conformity to importing Party's requirements, in the sectors which both Parties agree upon. Both Parties shall take a decision on the conclusion of such agreements within twelve months of commencement of negotiations.
2. With a view to facilitating the negotiation for possible MRA referred to in paragraph 1:
(a) the Parties shall take into consideration that a broad range of mechanisms exist to facilitate the acceptance of the results of conformity assessment procedures;
(b) the Parties shall, recognizing the existence of differences in the structure and operation of conformity assessment procedures in their respective territories, endeavour to make compatible the conformity assessment procedures to the greatest extent practicable; and
(c) in order to build confidence in the reliability of results of conformity assessment procedures conducted by conformity assessment bodies of the other Party, a Party may consult with the other Party, as appropriate, on such matters as the technical competence of the conformity assessment bodies of the other Party.
3. Any MRAs concluded between the Parties shall be attached as Annex 7-2 (Mutual Recognition Agreements).
Article 7.10. Fees and Processing Periods
1. In regard to fees charged and processing periods for assessing the conformity of products, both Parties reaffirm their obligations under Article 5.2 of the TBT Agreement. Each Party shall also ensure that any fees imposed for assessing the conformity of products originating in the territory of the other Party are proportionate to the costs of the authorities conducting such assessment, taking into account communication, transportation and the costs arising from differences between location of facilities of the applicant and the conformity assessment body.
2. The Parties shall mutually discuss and resolve issues relating to the quantum of fees and ensure that fees and processing times reflect the actual costs incurred and processing activities required.
3. The Parties, on request, shall notify each other of: (a) any fees imposed for mandatory conformity assessments; and (b) the processing period for any mandatory conformity assessments.
Article 7.11. Trade Facilitation
1. The Parties reaffirm Article V of GATT 1994 and agree that there shall be freedom of transit for goods in transit. The inspection of goods may be carried out only in the event of identifiable risks.
2. Wherever appropriate, the importer or his representative should be given the opportunity to contribute any relevant information to assist the importing Party in taking a decision concerning the consignment that are subject to technical regulations and conformity assessment procedures.
3. The importing Party may return, seize or destroy any consignment not in compliance with its technical regulations and conformity assessment procedures. The destruction shall take place only in cases of clearly identifiable risk to human, animal or plant life or health or of environment.
Article 7.12. Labelling
1. The Parties recognize that labelling requirements may be necessary to inform consumers of certain essential characteristics of products, and consistent with the TBT Agreement, shall not be used to create unnecessary obstacles to trade.
2. The Parties agree that where a Party requires mandatory labelling of products:
(a) the Party shall endeavour to minimise its requirement for labelling relevant to consumers or users of the product. Where labelling for other purposes is required, such requirement shall be formulated in a manner that is not more trade restrictive than necessary to fulfil the legitimate objective;
(b) where a Party requires the use of a unique identification number by economic operators, the Party shall issue such a number to the other Party's economic operators without undue delay and under conditions no less favourable than those applied to domestic operators;
(c) the Party shall accept that labelling and corrections to labelling takes place in customs warehouses at the point of import and prior to distribution and sales, subject to the responsibility of the exporter or of the importer, as an alternative to labelling in the country of origin; and
(d) where permanent labels are required, Parties shall ensure that such labelling requirements are consistent with the legitimate objectives of the Parties in accordance with Article 2.2 of the TBT Agreement.
Article 7.13. Implementation
The Sub-Committee on Technical Barriers to Trade established under Article 15.2 (Sub-Committees) shall consider matters relating to the implementation of this Chapter.
Article 7.14. Transparency
In addition to the Parties' affirmation in Article 7.4 (Affirmation of the TBT Agreement), the Parties shall endeavour to inform each other at an early stage of proposals to modify or introduce technical regulations, conformity assessment procedures or standards that are especially relevant to trade between the Parties.
Article 7.15. Technical Consultations
1. Either Party may request technical consultations on issues relating to this Chapter. Unless the Parties mutually determine otherwise, the Parties shall hold technical consultations within thirty days from the request for technical consultations by e-mail, by teleconference, by video-conference, or through any other means, as mutually determined by the Parties.
2. Where a Party has requested technical consultations on the application of any technical regulations or conformity assessment procedures, the Parties may, with mutual consent agree to establish a technical working group with a view to identify a workable and practical solution. The Parties may, subject to mutual agreement, establish any mechanisms as deemed necessary to resolve any issues that arise.
3. Technical consultations held pursuant to this Article are without prejudice to the rights and obligations of the Parties under Chapter 14 (Dispute Settlement).
Chapter 8. TRADE IN SERVICES
Article 8.1. Scope and Coverage
1. This Chapter applies to measures by a Party affecting trade in services.
2. This Chapter shall not apply to:
(a) a service supplied in the exercise of governmental authority;
(b) a juridical person which is not a juridical person of the other Party, and a natural person who is not a natural person of the other Party;
(c) any measures by a Party with respect to government procurement;
(d) subsidies or grants provided by a Party, including government- supported loans, guarantees, and insurance, or to any conditions attached to the receipt or continued receipt of such subsidies or grants, whether or not such subsidies or grants are offered exclusively to domestic services, service consumers or service suppliers, except as provided for in Article 8.14 (Subsidies);
(e) cabotage in maritime transport services; and
(f) measures affecting natural person seeking access to the employment market of a Party, nor shall it apply to measures regarding citizenship, residence or employment on a permanent basis.
3. This Chapter shall not apply to measures affecting air traffic rights, however granted, or services directly related to the exercise of air traffic rights, except measures affecting:
(a) aircraft repair and maintenance services;
(b) the selling and marketing of air transport services; and
(c) computer reservation system services.
Paragraph 1 and the definitions of paragraph 6 of the GATS Annex on Air Transport Services are hereby incorporated mutatis mutandis and made part of this Chapter.
4. Nothing in this Chapter shall prevent a Party from applying measures to regulate the entry of natural persons of the other Party into, or their temporary stay in, its territory, including those measures necessary to protect the integrity of, and to ensure the orderly movement of natural persons across its borders, provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing to the other Party under the terms of this Chapter as well as the terms of specific commitments undertaken.
5. New services shall be considered for possible incorporation into this Chapter at future reviews held in accordance with Article 8.8 (Review), or at the request of either Party immediately. The supply of services which are not technically or not technologically feasible when this Agreement comes into force shall, when they become feasible, also be considered for possible incorporation at future reviews or at the request of either Party immediately.
Article 8.2. Definitions
For the purposes of this Chapter:
(a) a service supplied in the exercise of governmental authority means any service which is supplied neither on a commercial basis nor in competition with one or more service suppliers;
(b) commercial presence means any type of business or professional establishment, including through:
(i) the constitution, acquisition or maintenance of a juridical person; or
(ii) the creation or maintenance of a branch or a representative office, within the territory of a Party for the purpose of supplying a service;
(c) direct taxes comprise all taxes on total income, on total capital or on elements of income or of capital, including taxes on gains from the alienation of property, taxes on estates, inheritances and gifts, and taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation;
(d) juridical pe rson 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, association, or cooperative (1);
(e) juridical person of the other Party means a juridical person which is either:
(i) constituted or otherwise organised under the law of the other Party, and is engaged in substantive business operations in the territory of that Party; or
(ii) in the case of the supply of a service through commercial presence, owned or controlled by:
(AA) natural persons of that other Party; or
(BB) juridical persons of that other Party as identified under subparagraph (e)(i);
a juridical person is:
(i) owned by persons of a Party if more than fifty per cent of the equity interest in it is beneficially owned by persons of that Party;
(ii) controlled by persons of a Party if such persons have the power to name a majority of its directors or otherwise to legally direct its actions;
(iii) affiliated with another person when it controls, or is controlled by, that other person, or when it and the other person are both controlled by the same person;
(g) licensing requirements means substantive requirements, other than qualification requirements, with which a natural or a juridical person is required to comply in order to obtain, amend or renew authorisation to supply a service;
(h) licensing procedures means administrative or procedural rules that a natural or a juridical person, seeking authorisation to supply a service, including amendment or renewal of a license, must adhere to in order to demonstrate compliance with licensing requirements;
(i) measures by Parties affecting trade in services include measures in respect of:
(i) the purchase, payment or use of a service;
(ii) the access to and use of, in connection with the supply of a service, services which are required by a Party to be offered to the public generally;
(iii) the presence, including commercial presence, of persons of a Party for the supply of a service in the territory of the other Party;
(j) monopoly supplier of a service means any person, public or private, which in the relevant market of the territory of a Party is authorised or established formally or in effect by that Party as the sole supplier of that service;
(k) natural person of the other Party means a natural person who resides in the territory of that other Party or elsewhere, and who under the law of that other Party:
(i) is a citizen of that other Party; or
(ii) has the right of permanent residence in that other Party, provided that such other Party accords substantially the same treatment to its permanent residents as it does to its citizens in respect of measures affecting trade in services, provided that the Party is not obligated to accord to such permanent residents treatment more favourable than would be accorded by that other Party to such permanent residents;
(l) person means either a natural person or a juridical person;
(m) qualification requirements means substantive requirements relating to the competence of a natural person to supply a service, and which are required to be demonstrated for the purpose of obtaining authorization to supply a service;
(n) qualification procedures means administrative or procedural rules that a natural person must adhere to in order to demonstrate compliance with qualification requirements, for the purpose of obtaining authorization to supply a service;
(o) services includes any service in any sector except services supplied in the exercise of governmental authority;
(p) service consumer means any person that receives or uses a service;
(q) service of the other Party means a service which is supplied:
(i) from or in the territory of the other Party, or in the case of maritime transport, by a vessel registered under the laws of the other Party, or by aperson of the other Party which supplies the service through the operation of a vessel and/or its use in whole or in part; or
(ii) in the case of the supply of a service through commercial presence or through the presence of natural persons, by a service supplier of the other Party;
(r) service supplier means any person that supplies a service (2);
(s) supply of a service includes the production, distribution, marketing, sale and delivery of a service;
(t) technical standards means measures that lay down characteristics of a service or the manner in which it is supplied. Technical standards also include the procedures relating to the enforcement of such standards; and
(u) trade in services is defined as the supply of a service:
(i) from the territory of a Party into the territory of the other Party;
(ii) in the territory of a Party to the service consumer of the other Party;
(iii) by a service supplier of a Party, through commercial presence in the territory of the other Party;
(iv) by a service supplier of a Party, through presence of natural persons of a Party in the territory of the other Party.
Article 8.3. Market Access
1. With respect to market access through the modes of supply defined in paragraph (u) of Article 8.2 (Definitions), each Party shall accord services and service suppliers of the other Party treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule of Specific Commitments. (3)
2. In sectors where market access commitments are undertaken, the measures which a Party shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule of Specific Commitments, are defined as:
(a) limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;
(b) limitations on the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(c) limitations on the total number of service operations or on the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test; (4)
(d) limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test;
(e) measures which restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service; and
(f) limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment.
Article 8.4. National Treatment
1. In the sectors inscribed in its Schedule of Specific Commitments, and subject to any conditions and qualifications set out therein, each Party shall accord to services and service suppliers of the other Party, in respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and service suppliers. (5)
2. A Party may meet the requirement of paragraph 1 by according to services and service suppliers of the other Party, either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers.
3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of competition in favour of services or service suppliers of a Party compared to like services or service suppliers of the other Party.
Article 8.5. Additional Commitments
The Parties may negotiate commitments with respect to measures affecting trade in services not subject to scheduling under Articles 8.3 (Market Access) or 8.4 (National Treatment), including those regarding qualifications, standards or licensing matters. Such commitments shall be inscribed in a Party's Schedule of Specific Commitments.
Article 8.6. Schedule of Specific Commitments
1. Each Party shall set out in a schedule the specific commitments it undertakes under Articles 8.3 (Market Access), 8.4 (National Treatment) and 8.5 (Additional Commitments). With respect to sectors where such commitments are undertaken, each Schedule of Specific Commitments shall specify:
(a) terms, limitations and conditions on market access;
(b) conditions and qualifications on national treatment;
(c) undertakings relating to additional commitments;
(d) where appropriate the time frame for implementation of such commitments; and