(ii) increase communications between the Parties regarding new authorisations of plants and plant products of modern biotechnology so as to improve global information exchange.
9. The Parties hereby establish a working group on products of modern biotechnology (Working Group) under the Committee on Agricultural Trade for information exchange and cooperation on trade-related matters associated with products of modern biotechnology. The Working Group shall be comprised of government representatives of Parties that inform, in writing, the Committee on Agricultural Trade that they will participate in the Working Group and name one or more government representatives to the Working Group.
10. The Working Group shall provide a forum to:
(a) exchange, subject to a Party's laws, regulations and policies, information on issues, including on actual and proposed laws, regulations and policies, related to the trade of products of modern biotechnology; and
(b) further enhance cooperation between two or more Parties, when there is mutual interest, related to the trade of products of modern biotechnology.
Section D. Tariff-Rate Quota Administration
Article 2.28. Scope and General Provisions
1. Each Party shall implement and administer tariff-rate quotas (TRQs) (16) in accordance with Article XIII of GATT 1994, including its interpretative notes, the Import Licensing Agreement and Article 2.12 (Import Licensing). All TRQs established by a Party under this Agreement shall be incorporated into that Party's Schedule to Annex 2-D (Tariff Commitments).
2. Each Party shall ensure that its procedures for administering its TRQs are made available to the public, are fair and equitable, are no more administratively burdensome than absolutely necessary, are responsive to market conditions and are administered in a timely manner.
3. The Party administering a TRQ shall publish all information concerning its TRQ administration, including the size of quotas and eligibility requirements; and, if the TRQ will be allocated, application procedures, the application deadline, and the methodology or procedures that will be used for the allocation or reallocation, on its designated publicly available website at least 90 days prior to the opening date of the TRQ concerned.
Article 2.29. Administration and Eligibility
1. Each Party shall administer its TRQs in a manner that allows importers the opportunity to utilise TRQ quantities fully.
2. (a) Except as provided in subparagraphs (b) and (c), no Party shall introduce a new or additional condition, limit or eligibility requirement on the utilisation of a TRQ for importation of a good, including in relation to specification or grade, permissible end-use of the imported product or package size, beyond those set out in its Schedule to Annex 2-D (Tariff Commitments). (17)
(b) A Party seeking to introduce a new or additional condition, limit or eligibility requirement on the utilisation of a TRQ for importation of a good shall notify the other Parties at least 45 days prior to the proposed effective date of the new or additional condition, limit or eligibility requirement. Any Party with a demonstrable commercial interest in supplying the good may submit a written request for consultations to the Party seeking to introduce the new or additional condition, limit or eligibility requirement. On receipt of such a request for consultations, the Party seeking to introduce the new or additional condition, limit or eligibility requirement shall promptly undertake consultations with the Party that submitted the request, in accordance with Article 2.32.6 (Transparency).
(c)The Party seeking to introduce the new or additional condition, limit or eligibility requirement may do so if:
(i) it has consulted with any Party with a demonstrable commercial interest in supplying the good that has submitted a written request for consultations pursuant to subparagraph (b); and
(ii) no Party with a demonstrable commercial interest in supplying the good that submitted a written request for consultations pursuant to subparagraph (b) objected, after the consultation, to the introduction of the new or additional condition, limit or eligibility requirement.
(d) A new or additional condition, limit or eligibility requirement that is the outcome of any consultation held pursuant to subparagraph (c), shall be circulated to the Parties prior to its implementation.
Article 2.30. Allocation (18)
1. In the event that access under a TRQ is subject to an allocation mechanism, each importing Party shall ensure that:
(a) any person of a Party that fulfils the importing Party's eligibility requirements is able to apply and to be considered for a quota allocation under the TRQ;
(b) unless otherwise agreed, it does not allocate any portion of the quota to a producer group, condition access to an allocation on the purchase of domestic production or limit access to an allocation to processors;
(c) each allocation is made in commercially viable shipping quantities and, to the maximum extent possible, in the amounts that importers request;
(d) an allocation for in-quota imports is applicable to any tariff lines subject to the TRQ and is valid throughout the TRQ year;
(e) if the aggregate TRQ quantity requested by applicants exceeds the quota size, allocation to eligible applicants shall be conducted by equitable and transparent methods;
(f) applicants have at least four weeks after the opening of the application period to submit their applications; and
(g) quota allocation takes place no later than four weeks before the opening of the quota period, unless the allocation is based in whole or in part on import performance during the 12-month period immediately preceding the quota period. If the Party bases the allocation in whole or in part on import performance during the 12- month period immediately preceding the quota period, the Party shall make a provisional allocation of the full quota amount no later than four weeks before the opening of the quota period. All final allocation decisions, including any revisions, shall be made and communicated to applicants by the beginning of the quota period.
2. During the first TRQ year that this Agreement is in force for a Party, if less than 12 months remain in the TRQ year on the date of entry into force of this Agreement for that Party, the Party shall make available to quota applicants, beginning on the date of entry into force of this Agreement for that Party, the quota quantity established in its Schedule to Annex 2-D (Tariff Commitments), multiplied by a fraction the numerator of which shall be a whole number consisting of the number of months remaining in the TRQ year on the date of entry into force of this Agreement for that Party, including the entirety of the month in which this Agreement enters into force for that Party, and the denominator of which shall be 12. The Party shall make the entire quota quantity established in its Schedule to Annex 2-D (Tariff Commitments) available to quota applicants beginning on the first day of each TRQ year thereafter that the quota is in operation.
3. The Party administering a TRQ shall not require the re-export of a good as a condition for application for, or utilisation of, a quota allocation.
4. Any quantity of goods imported under a TRQ under this Agreement shall not be counted towards, or reduce the quantity of, any other TRQ provided for such goods in a Party's Schedule to the WTO Agreement or under any other trade agreements. (19)
Article 2.31. Return and Reallocation of TRQs
1. When a TRQ is administered by an allocation mechanism, a Party shall ensure that there is a mechanism for the return and reallocation of unused allocations in a timely and transparent manner that provides the greatest possible opportunity for the TRQ to be filled.
2. Each Party shall publish on a regular basis on its designated publicly available website all information concerning amounts allocated, amounts returned and, if available, quota utilisation rates. In addition, each Party shall publish on the same website amounts available for reallocation and the application deadline, at least two weeks prior to the date on which the Party will begin accepting applications for reallocations.
Article 2.32. Transparency
1. Each Party shall identify the entity or entities responsible for administering its TRQs and designate and notify at least one contact point, in accordance with Article 27.5 (Contact Points), to facilitate communications between the Parties on matters relating to the administration of its TRQs. Each Party shall promptly notify the other Parties of any amendments to the details of its contact point.
2. When a TRQ is administered by an allocation mechanism, the name and address of allocation holders shall be published on the designated publicly available website.
3. When a TRQ is administered on a first-come, first-served basis, over the course of each year, the importing Party's administering authority shall publish, in a timely and continually on-going manner on its designated publicly available website, utilisation rates and remaining available quantities for each TRQ.
4. When a TRQ of an importing Party that is administered on a first-come, first-served basis fills, that Party shall publish a notice to this effect on its designated publicly available website within 10 days.
5. When a TRQ of an importing Party that is administered by an allocation mechanism fills, that Party shall publish a notice to this effect on its designated publicly available website as early as practicable.
6. On written request of an exporting Party or Parties, the Party administrating a TRQ shall consult with the requesting Party or Parties regarding the administration of its TRQ.
Chapter 3. RULES OF ORIGIN AND ORIGIN PROCEDURES
Section A. Rules of Origin
Article 3.1. Definitions
For the purposes of this Chapter:
aquaculture means the farming of aquatic organisms, including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants from seed stock such as eggs, fry, fingerlings or larvae, by intervention in the rearing or growth processes to enhance production such as regular stocking, feeding or protection from predators;
fungible goods or materials means goods or materials that are interchangeable for commercial purposes and whose properties are essentially identical;
Generally Accepted Accounting Principles means those principles recognised by consensus or with substantial authoritative support in the territory of a Party with respect to the recording of revenues, expenses, costs, assets and liabilities; the disclosure of information; and the preparation of financial statements. These principles may encompass broad guidelines for general application, as well as detailed standards, practices and procedures;
good means any merchandise, product, article or material;
indirect material means a material used in the production, testing or inspection of a good but not physically incorporated into the good; or a material used in the
maintenance of buildings or the operation of equipment, associated with the production of a good, including:
(a) fuel, energy, catalysts and solvents;
(b) equipment, devices and supplies used to test or inspect the good;
(c) gloves, glasses, footwear, clothing, safety equipment and supplies;
(d) tools, dies and moulds;
(e) spare parts and materials used in the maintenance of equipment and buildings;
(f) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings; and
(g) any other material that is not incorporated into the good but the use of which in the production of the good can reasonably be demonstrated to be a part of that production;
material means a good that is used in the production of another good;
non-originating good or non-originating material means a good or material that does not qualify as originating in accordance with this Chapter,
originating good or originating material means a good or material that qualifies as originating in accordance with this Chapter,
packing materials and containers for shipment means goods used to protect another good during its transportation, but does not include the packaging materials or containers in which a good is packaged for retail sale;
producer means a person who engages in the production of a good;
production means operations including growing, cultivating, raising, mining, harvesting, fishing, trapping, hunting, capturing, collecting, breeding, extracting, aquaculture, gathering, manufacturing, processing or assembling a good; transaction value means the price actually paid or payable for the good when sold for export or other value determined in accordance with the Customs Valuation Agreement; and
value of the good means the transaction value of the good excluding any costs incurred in the international shipment of the good.
Article 3.2. Originating Goods
Except as otherwise provided in this Chapter, each Party shall provide that a good is originating if it is:
(a) wholly obtained or produced entirely in the territory of one or more of the Parties as established in Article 3.3 (Wholly Obtained or Produced Goods);
(b) produced entirely in the territory of one or more of the Parties, exclusively from originating materials; or
(c) produced entirely in the territory of one or more of the Parties using non-originating materials provided the good satisfies all
applicable requirements of Annex 3-D (Product-Specific Rules of Origin),
and the good satisfies all other applicable requirements of this Chapter.
Article 3.3. Wholly Obtained or Produced Goods
Each Party shall provide that for the purposes of Article 3.2 (Originating Goods), a good is wholly obtained or produced entirely in the territory of one or more of the Parties if it is:
(a) a plant or plant good, grown, cultivated, harvested, picked or gathered there;
(b) a live animal born and raised there;
(c) a good obtained from a live animal there;
(d) an animal obtained by hunting, trapping, fishing, gathering or capturing there;
(e) a good obtained from aquaculture there;
(f) a mineral or other naturally occurring substance, not included in subparagraphs (a) through (c), extracted or taken from there;
(g) fish, shellfish and other marine life taken from the sea, seabed or subsoil outside the territories of the Parties and, in accordance with international law, outside the territorial sea of non-Parties! by vessels that are registered, listed or recorded with a Party and entitled to fly the flag of that Party;
(h) a good produced from goods referred to in subparagraph (g) on board a factory ship that is registered, listed or recorded with a Party and entitled to fly the flag of that Party;
(i) a good other than fish, shellfish and other marine life taken by a Party or a person of a Party from the seabed or subsoil outside the territories of the Parties, and beyond areas over which non-Parties exercise jurisdiction provided that Party or person of that Party has the right to exploit that seabed or subsoil in accordance with international law;
(j) a good that is:
(i) waste or scrap derived from production there; or
(ii) waste or scrap derived from used goods collected there, provided that those goods are fit only for the recovery of raw materials; and
(k) a good produced there, exclusively from goods referred to in subparagraphs (a) through (j), or from their derivatives.
Article 3.4. Treatment of Recovered Materials Used In Production of a Remanufactured Good
1. Each Party shall provide that a recovered material derived in the territory of one or more of the Parties is treated as originating when it is used in the production of, and incorporated into, a remanufactured good.
2. For greater certainty:
(a) a remanufactured good is originating only if it satisfies the applicable requirements of Article 3.2 (Originating Goods); and
(b) a recovered material that is not used or incorporated in the production of a remanufactured good is originating only if it satisfies the applicable requirements of Article 3.2 (Originating Goods).
Article 3.5. Regional Value Content
1. Each Party shall provide that a regional value content requirement specified in this Chapter, including related Annexes, to determine whether a good is originating, is calculated as follows:
(a) Focused Value Method: Based on the Value of Specified Non- Originating Materials
RVC = Value of the Good - FVNM / Value of the Goofd x 100
(b) Build-down Method: Based on the Value of Non-Originating Materials
RVC = Value of the Good - VNM / Value of the Good x 100
(c) Build-up Method: Based on the Value of Originating Materials
RVC = VOM / Value of the Good x 100 or
(d) Net Cost Method (for Automotive Goods Only)
RVC = NC - VNM / NC x 100
where:
RVC is the regional value content of a good, expressed as a percentage;
VNM is the value of non-originating materials, including materials of undetermined origin, used in the production of the good;
NC is the net cost of the good determined in accordance with Article 3.9 (Net Cost);
FVNM is the value of non-originating materials, including materials of undetermined origin, specified in the applicable product-specific-rule (PSR) in Annex 3-D (Product-Specific Rules of Origin) and used in the production of the good. For greater certainty, non-originating materials that are not specified in the applicable PSR in Annex 3-D (Product-Specific Rules of Origin) are not taken into account for the purpose of determining FVNM; and
VOM is the value of originating materials used in the production of the good in the territory of one or more of the Parties.
2. Each Party shall provide that all costs considered for the calculation of regional value content are recorded and maintained in conformity with the Generally Accepted Accounting Principles applicable in the territory of a Party where the good is produced.
Article 3.6. Materials Used In Production
1. Each Party shall provide that if a non-originating material undergoes further production such that it satisfies the requirements of this Chapter, the material is treated as originating when determining the originating status of the subsequently produced good, regardless of whether that material was produced by the producer of the good.
2. Each Party shall provide that if a non-originating material is used in the production of a good, the following may be counted as originating content for the purpose of determining whether the good meets a regional value content requirement:
(a) the value of processing of the non-originating materials undertaken in the territory of one or more of the Parties; and
(b) the value of any originating material used in the production of the non-originating material undertaken in the territory of one or more of the Parties.
Article 3.7. Value of Materials Used In Production
Each Party shall provide that for the purposes of this Chapter, the value of a material is:
(a) for a material imported by the producer of the good, the transaction value of the material at the time of importation, including the costs incurred in the international shipment of the material;
(b) for a material acquired in the territory where the good is produced:
(i) the price paid or payable by the producer in the Party where the producer is located;
(ii) the value as determined for an imported material in subparagraph (a); or
(iii) the earliest ascertainable price paid or payable in the territory of the Party; or
(c) for a material that is self-produced:
(i) all the costs incurred in the production of the material, which includes general expenses; and
(ii) an amount equivalent to the profit added in the normal course of trade, or equal to the profit that is usually reflected in the sale of goods of the same class or kind as the self-produced material that is being valued.
Article 3.8. Further Adjustments to the Value of Materials
1. Each Party shall provide that for an originating material, the following expenses may be added to the value of the material, if not included under Article 3.7 (Value of Materials Used in Production):
(a) the costs of freight, insurance, packing and all other costs incurred to transport the material to the location of the producer of the good;
(b) duties, taxes and customs brokerage fees on the material, paid in the territory of one or more of the Parties, other than duties and taxes that are waived, refunded, refundable or otherwise recoverable, which include credit against duty or tax paid or payable; and
(c) the cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of reusable scrap or by-product.
2. Each Party shall provide that, for a non-originating material or material of undetermined origin, the following expenses may be deducted from the value of the material:
(a) the costs of freight, insurance, packing and all other costs incurred in transporting the material to the location of the producer of the good;
(b) duties, taxes and customs brokerage fees on the material paid in the territory of one or more of the Parties, other than duties and taxes that are waived, refunded, refundable or otherwise recoverable, which include credit against duty or tax paid or payable; and
(c) the cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of reusable scrap or by-product.
3. If the cost or expense listed in paragraph 1 or 2 is unknown or documentary evidence of the amount of the adjustment is not available, then no adjustment is allowed for that particular cost.
Article 3.9. Net Cost
1. If Annex 3-D (Product-Specific Rules of Origin) specifies a regional value content requirement to determine whether an automotive good of subheading 8407.31 through 8407.34, 8408.20, subheading 8409.91 through 8409.99, heading 87.01 through 87.09 or heading 87.11 is originating, each Party shall provide that the requirement to determine the origin of that good based on the Net Cost Method is calculated as set out under Article 3.5 (Regional Value Content).
2. For the purposes of this Article:
(a) net cost means total cost minus sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs that are included in the total cost; and
(b) net cost of the good means the net cost that can be reasonably allocated to the good, using one of the following methods:
(i) calculating the total cost incurred with respect to all automotive goods produced by that producer, subtracting any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs that are included in the total cost of all those goods, and then reasonably allocating the resulting net cost of those goods to the good;
(ii) calculating the total cost incurred with respect to all automotive goods produced by that producer, reasonably allocating the total cost to the good, and then subtracting any sales promotion, marketing and after-sales service costs; royalties, shipping and packing costs, and non- allowable interest costs that are included in the portion of the total cost allocated to the good; or
(iii) reasonably allocating each cost that forms part of the total cost incurred with respect to the good, so that the aggregate of these costs does not include any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs, provided that the allocation of all those costs is consistent with the provisions regarding the reasonable allocation of costs set out in Generally Accepted Accounting Principles.
3. Each Party shall provide that, for the purposes of the Net Cost Method for motor vehicles of heading 87.01 through 87.06 or heading 87.11, the calculation may be averaged over the producer's fiscal year using any one of the following categories, on the basis of all motor vehicles in the category or only those motor vehicles in the category that are exported to the territory of another Party:
(a) the same model line of motor vehicles in the same class of motor vehicles produced in the same plant in the territory of a Party;