Title
MALAYSIA – CHILE FREE TRADE AGREEMENT
Preamble
Malaysia and The Republic of Chile, hereinafter referred to as "the Parties":
Inspired by their longstanding friendship and cooperation and growing trade relationship;
Desiring to enlarge the framework of relations between them through further liberalising trade;
Recognising that the strengthening of their economic partnership will bring economic and social benefits, create new opportunities for employment and improve the living standards of their people;
Building on their respective rights and obligations under the World Trade Organization (WTO);
Recalling the Asia-Pacific Economic Cooperation (APEC) goals;
Confirming their shared commitment to trade-facilitation through removing non-tariff barriers to trade between them;
Desiring to strengthen the cooperative framework for the conduct of economic relations to ensure it is dynamic and encourages broader and deeper economic cooperation;
Aware that economic development, social development and environmental protection are components of sustainable development and that free trade agreements can play an important role in promoting sustainable development; and
Resolved to promote bilateral trade through the establishment of clear and mutually advantageous trade rules and the avoidance of trade barriers,
Have agreed as follows:
Body
Chapter 1. Initial Provisions
Article 1.1. Establishment of a Free Trade Area
The Parties, consistent with Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994) hereby establish a free trade area.
Article 1.2. Relation to other Agreements
1. The Parties affirm their existing rights and obligations with respect to each other under the Marrakesh Agreement Establishing the World Trade Organisation (WTO Agreement) and other agreements to which both Parties are party.
2. In the event of any inconsistency between this Agreement and any agreement other than the WTO Agreement, to which both Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution, taking into consideration general principles of international law.
Chapter 2. General Definitions
Article 2.1. Definitions of General Application
For the purposes of this Agreement, unless otherwise specified:
(a) Agreement on Customs Valuation means the Agreement on Implementation of Article VII of the General Agreement on Tariff and Trade 1994, contained in Annex 1A to the WTO Agreement;
(b) Customs Authority means the authority that, according to the legislation of each Party, is responsible for the administration and enforcement of its customs laws:
(i) in the case of Chile, the Chile Customs Service, and
(ii) in the case of Malaysia, the Royal Malaysian Customs;
(c) customs duties means duties imposed in connection with the importation of a good provided that such customs duties shall not include:
(i) charges equivalent to internal taxes, including excise duties, sales tax, and goods and services taxes imposed in accordance with a Party's commitments under paragraph 2 of Article III of the GATT 1994;
(ii) anti-dumping or countervailing duty or safeguards duty applied in accordance with Chapter 8 (Trade Remedies); or
(iii) fees or other charges that are limited in amount to the approximate cost of services rendered, and do not represent a direct or indirect protection for domestic goods or a taxation of imports for fiscal purposes;
(d) days means calendar days, including weekends and holidays;
(e) GATT 1994 means the General Agreement on Tariffs and Trade 1994, contained in Annex 1A of the WTO Agreement;
(f) Harmonised System (HS) means the Harmonized Commodity Description and Coding System governed by The International Convention on the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, and Chapter Notes, and their amendments, as adopted and implemented by the Parties in their respective tariff laws;
(g) heading means the first four digits in the tariff classification number under the Harmonised System (HS);
(h) measure means any measure by a Party, whether in the form of a law, regulation, rule, procedure, practice, decision, administrative action or any other form;
(i) originating goods means the goods that qualify as originating goods in accordance with Chapter 4 (Rules of Origin);
(j) person means both natural and legal persons;
(k) publish includes publication in written form or on the internet;
(l) subheading means the first six digits in the tariff classification number under the Harmonised System (HS);
(m) territory means:
(i) with respect to Chile, the land, maritime, and air space under its sovereignty, and the exclusive economic zone and the continental shelf within which it exercises sovereign rights and jurisdiction in accordance with international law and its domestic law;
(ii) with respect to Malaysia,
(A) the territories of the Federation of Malaysia;
(B) the territorial waters of Malaysia and the seabed and subsoil of the territorial waters, and the air space above such areas over which Malaysia has sovereignty; and
(C) any area extending beyond the limits of the territorial waters of Malaysia, and the seabed and subsoil of any such area, which has been or may hereafter be designated under the laws of Malaysia and in accordance with international law as an area over which Malaysia has sovereign rights or jurisdiction for the purposes of exploring and exploiting the natural resources, whether living or non-living;
(n) TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, contained in Annex 1C of the WTO Agreement;
(o) WTO means the World Trade Organization, and
(p) WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15, 1994.
Chapter 3. Trade In Goods
Article 3.1. Definitions
For the purposes of this Chapter:
(a) agricultural goods means those goods referred to in Article 2 of the WTO Agreement on Agriculture;
(b) commercial samples of negligible value means commercial samples having a value, individually or in the aggregate as shipped, or so marked, torn, perforated or otherwise treated that they are unsuitable for sale or for use except as commercial samples (1);
(c) consular transactions means requirements that goods of a Party intended for export to the territory of the other Party must first be submitted to the supervision of the consul of the importing Party in the territory of the exporting Party for the purpose of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, shippers' export declarations or any other customs documentation required on or in connection with importation;
(d) duty-free means free of customs duty;
(e) goods of a Party means domestic products as these are understood in the GATT 1994 or such goods as the Parties may agree, and includes originating goods of that Party. A good of a Party may include materials of other countries, complying with the provisions of Chapter 4 (Rules of Origin);
(f) printed advertising materials means those goods classified in Chapter 49 of the Harmonised System (HS), including brochures, pamphlets, leaflets, trade catalogues, yearbooks published by trade associations, trade and tourist promotional materials and posters, that are used to promote, publicise or advertise a good or service, are essentially intended to advertise a good or service, and/or are supplied free of charge.
Article 3.2. Scope and Coverage
Except as otherwise provided, this Chapter applies to trade in goods between the Parties.
Article 3.3. 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 interpretative notes, and to this end, Article III of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. Paragraph 1 shall also apply to a regional level of government.
Article 3.4. Reduction and/or Elimination of Customs Duties
1. Customs duties which are levied at zero percent or nil on the date of signing of this Agreement shall be kept at zero percent or nil by the Parties.
2. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty or adopt any customs duty on a good of the other Party covered by this Agreement.
3. Except as otherwise provided in this Agreement, each Party shall progressively reduce and/or eliminate its customs duties on originating goods in accordance with its schedule in Annex 3.
4. If a Party reduces its applied most-favoured nation customs duties rate after the entry into force of this Agreement and before the end of the tariff reduction and/or elimination period, the tariff reduction and/or elimination schedule established in Annex 3 shall apply with respect to the new most-favoured nation customs duties rate.
5. On the request of either Party, the Parties shall consult to consider accelerating the reduction and/or elimination of customs duties set out in their schedules in Annex 3. An agreement between the Parties to accelerate the reduction and/or elimination of a customs duty on a good, shall supersede any duty rate determined pursuant to their schedules in Annex 3 for such good when approved by each Party in accordance with their applicable domestic legal procedures.
Article 3.5. Classification of Goods
For the purposes of this Agreement, the classification of goods in trade between the Parties shall be in conformity with the Harmonised System (HS).
Article 3.6. Customs Valuation
For the purposes of determining the customs value of goods traded between the Parties, Part I of the Agreement on Customs Valuation, as may be amended, shall be incorporated into and made part of this Agreement, mutatis mutandis.
Article 3.7. Duty-free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials
Each Party shall grant duty-free entry to commercial samples of negligible value and to printed advertising materials imported from the territory of the other Party regardless of their origin, but may require that such samples or advertising materials be imported solely for the solicitation of orders for goods or services provided from the territory of the other Party or a non-Party.
Article 3.8. Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with Article VIII:1 of GATT 1994 and its interpretative notes, that all fees and charges of whatever character (other than customs duties, charges equivalent to an internal tax or other internal charge applied consistently with Article III:2 of GATT 1994, and anti-dumping and countervailing duties) imposed on or in connection with importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.
2. Neither Party may require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.
3. Each Party shall make available through the internet or a comparable computer-based telecommunications network, a current list of the fees and charges it imposes in connection with importation or exportation.
Article 3.9. Price Band System
Chile may maintain its price band system as established under its Law Nº 18.525 or succeeding system for the products covered by that law (2) , provided it is applied consistent with Chile's rights and obligations under the WTO Agreement.
Article 3.10. Agricultural Export Subsidies
The Parties share the objective of the multilateral elimination of export subsidies for agricultural goods and shall work together towards an agreement in the WTO to eliminate those subsidies and prevent their reintroduction in any form.
Article 3.11. Non-tariff Measures
1. Except as otherwise provided in this Agreement, neither Party shall adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of GATT 1994 and its interpretative notes, and to this end, Article XI of GATT 1994 and its interpretative notes are incorporated into and made a part of this Agreement, mutatis mutandis.
2. Each Party shall ensure the transparency of its non-tariff measures permitted under paragraph 1 and that they are not constituted, adopted or applied with a view to or with the effect of creating unnecessary restrictions to trade between the Parties.
3. Paragraphs 1 and 2 shall not apply with respect to Chile, to measures concerning the importation of used vehicles, as provided in Law Nº 18.483 or its successor.
Article 3.12. Committee on Trade In Goods
1. The Parties hereby establish a Committee on Trade in Goods, comprising of representatives of each Party.
2. For the purposes of the effective implementation and operation of this Chapter, the functions of the Committee on Trade in Goods shall be:
(a) reviewing and monitoring the implementation and operation of this Chapter;
(b) discussing any issues related to this Chapter;
(c) reporting the findings and the outcome of discussions to the Joint Committee;
(d) carrying out other functions as may be delegated by the Joint Committee in accordance with subparagraph 4(e) of Article 11.1;
(e) promoting trade in goods between the Parties, including through consultations on accelerating tariff elimination under this Agreement and other issues as appropriate; and
(f) addressing barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures, and, if appropriate, referring such matters to the Joint Committee for its consideration.
3. The Committee on Trade in Goods shall meet at such venue and time as may be agreed by the Parties.
Article 3.13. Wine and Spirits
1. Malaysia recognises, in accordance with its domestic legislation, the geographical indication CHILEAN PISCO, that falls within the scope of protection established in Article 22 of the TRIPS Agreement.
2. This shall in no way prejudice the rights that Malaysia may recognise, in addition to Chile, to the geographical indication PISCO, exclusively for Peru, that falls within the scope of protection established in Article 22 of the TRIPS Agreement (3).
3. Chilean geographical indications for wines are established by Decree 464 of the Ministry of Agriculture of December 14, 1994, and its amendments, and by the Law 18.455.
Chapter 4. Rules of Origin
Article 4.1. Definitions
For the purposes of this Chapter:
(a) CIF means the value of the good imported and includes the cost of insurance and freight up to the port or place of entry in the country of importation;
(b) Competent Authority means bodies or private entities authorised by the Governmental Authority for issuance of the Certificate of Origin;
(c) FOB means the free-on-board value of the good, inclusive of the cost of transport to the port or site of final shipment abroad;
(d) fungible goods or materials mean goods or materials that are interchangeable for commercial purposes and whose properties are essentially identical;
(e) goods means any materials and products which can be wholly obtained or produced, or manufactured, even if they are intended for later use in another manufacturing operation;
(f) Governmental Authority means the authority of each respective Party responsible for the certification of origin. In the case of Chile, such authority is the General Directorate of International Economic Affairs, Ministry of Foreign Affairs; and in the case of Malaysia, the Ministry of International Trade and Industry;
(g) indirect materials means a good used in the production, testing or inspection of another good but not physically incorporated into the good, or a good used in the maintenance of buildings or the operation of equipment associated with the production of a good, including:
(i) fuel, energy, catalysts and solvents;
(ii) equipment, devices and supplies used for testing or inspection of the goods;
(iii) gloves, glasses, footwear, clothing, safety equipment and supplies;
(iv) tools, dies and moulds;
(v) spare parts and materials used in the maintenance of equipment and buildings;
(vi) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings; and
(vii) any other materials which are not incorporated into the good but whose use in the production of the good can reasonably be demonstrated to be a part of that production.
(h) material means a good or any matter or substance such as raw materials, ingredients, parts, components, sub-components or sub-assemblies that are used or consumed in the production of goods or transformation of another good;
(i) packing materials and containers for shipment means goods used to protect a good during its transportation, other than containers and packaging materials used for retail sale;
(j) preferential treatment means the rate of customs duties applicable to an originating good of the exporting Party; and
(k) production means methods of obtaining goods including, but not limited to growing, raising, mining, harvesting, fishing, farming, trapping, hunting, capturing, aquaculture, gathering, collecting, breeding, extracting, manufacturing, processing or assembling a good.
Article 4.2. Origin Criteria
Except as otherwise provided in this Chapter, a good shall be considered as originating in a Party when:
(a) the good is wholly obtained or produced entirely in the territory of a Party as defined in Article 4.3;
(b) the good is produced in the territory of a Party, using non-originating materials that conform to a qualifying value content or a change in tariff heading as defined in Articles 4.4 and 4.5 respectively; or
(c) the good satisfies the product specific rules as specified in Annex 4-B (Product Specific Rules).
Article 4.3. Wholly Obtained or Produced Goods
The following goods shall be considered as wholly obtained or produced entirely in the territory of a Party:
(a) plants, plant goods and vegetable goods harvested, picked or gathered in the territory of the Party;
(b) live animals born and raised in the territory of the Party;
(c) goods obtained from live animals referred to in subparagraph (b);
(d) goods obtained from hunting, trapping, fishing, aquaculture, gathering or capturing and farming conducted in the territory of the Party;
(e) minerals and other naturally occurring substances, not included in subparagraphs (a) to (d), extracted or taken from its soil, water, seabed or beneath the seabed of the Party;
(f) goods taken from the waters, seabed or beneath the seabed outside the territorial waters of that Party, provided that Party has the rights to exploit such waters, seabed and beneath the seabed in accordance with international law;
(g) goods such as fish, shellfish and other marine life or marine goods taken from the high seas by vessels registered or entitled to fly the flag of that Party;
(h) goods obtained, processed or produced on board a factory ship registered or recorded with that Party or entitled to fly the flag of that Party, exclusively from products referred to in subparagraph (f);
(i) waste, scrap or used goods collected in the territory of the Party which can no longer perform their original purpose nor are capable of being restored or repaired and are fit only for the recovery of raw materials; and
(j) goods obtained or produced in the territory of a Party solely from goods referred to in subparagraphs (a) to (i) or from their derivatives, at any stage of production.
Article 4.4. Qualifying Value Content
1. The qualifying value content of a good shall be calculated as follows:
QVC = V -VNM / V x 100
where:
QVC -is the qualifying value of a good content expressed as a percentage;
V -is the FOB value of the final good; and
VNM -is the CIF value of the non-originating materials.