(a) "serious injury and threat of serious injury" shall be understood in accordance with subparagraphs 1(a) and 1(b) of Article 4 of the Safeguards Agreement and to that end, subparagraphs 1 (a) and 1(b) of Article 4 of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis, and
(b) "transition period" means a period of ten years from the entry into force of this Agreement.
Article 3.10. Application of Bilateral Safeguard Measure
1. If, as a result of the reduction or elimination of a customs duty under this Agreement, originating goods of a Party are being imported into the territory of the other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to a domestic industry producing like or directly competitive goods, the importing Party may, during the transition period only, adopt measures provided for in paragraph 2 in accordance with the conditions and procedures laid down in this Section.
2. The importing Party may take a bilateral safeguard measure which: (a) suspends further reductions of the rate of customs duty on the good concerned provided for under Annex 2-A; or (b) increases the rate of customs duty on the good concerned to a level which does not exceed the lesser of:
(i) the MFN applied rate of customs duty on the good in effect at the time the measure is taken; or
(i) the base rate of customs duty specified in the Schedules included in Annex 2-A pursuant to paragraph 2 of Article 2.6 (Reduction or Elimination of Customs Duties on Imports).
Article 3.11. Conditions and Limitations
1. A Party shall notify the other Party in writing of the initiation of an investigation described in paragraph 2 and consult with the other Party as far in advance of applying a bilateral safeguard measure as practicable, with a view to:
(a) reviewing the information arising from the investigation and whether the conditions laid out in this Article are met;
(b) exchanging views on the measure and its appropriateness in light of the objectives of this Section to remove serious injury or threat thereof to domestic industry caused by an increase in imports as set out in paragraph 1 of Article 3.10 (Application of Bilateral Safeguard Measure); and
(c) exchanging preliminary views on compensation as set out in Article 3.13 (Compensation).
2. A Party shall only apply a bilateral safeguard measure following an investigation by its competent authorities in accordance with Articles 3, 4.2(a) and 4.2(c) of the Safeguards Agreement. To that end, Articles 3, 4.2(a) and 4.2(c) of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis.
3. The determination referred to in Article 3.10 (Application of Bilateral Safeguard Measure) shall not be made unless the investigation demonstrates on the basis of objective evidence the existence of a causal link between increased imports from the other party and serious injury or the threat thereof. In this respect, due consideration shall be given to other factors, including imports of the same product from other countries.
4. Each Party shall ensure that its competent authorities complete any such investigation within one year of the date of its initiation.
5. Neither Party shall apply a bilateral safeguard measure as set out in paragraph 1 of Article 3.10 (Application of Bilateral Safeguard Measure):
(a) except to the extent, and for such time, as may be necessary to prevent or remedy serious injury and to facilitate adjustment;
(b) for a period exceeding two years, except that that period may be extended by up to two years if the competent authorities of the importing Party determine, in conformity with the procedures specified in this Article, that the measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment and that there is evidence that the industry is adjusting, provided that the total period of application of a safeguard measure, including the period of initial application and any extension thereof, shall not exceed four years; or
(c) beyond the expiration of the transition period, except with the consent of the other Party.
6. No measure shall be applied again to the import of the same good during the transition period, unless a period of time equal to half of the period during which the safeguard measure was applied previously has elapsed. In this case, paragraph 3 of Article 3.13 (Compensation) shall not apply.
7. When a Party terminates a bilateral safeguard measure, the rate of customs duty shall be the rate that, according to its Schedule included in Annex 2-A, would have been in effect but for the measure.
Article 3.12. Provisional Measures
1. In critical circumstances where delay would cause damage that would be difficult to repair, a Party may apply a bilateral safeguard measure on a provisional basis pursuant to a preliminary determination that there is clear evidence that imports of an originating good from the other Party have increased as the result of the reduction or elimination of a customs duty under this Agreement, and that such imports cause serious injury, or the threat thereof, to the domestic industry. The duration of any provisional measure shall not exceed 200 days, during which time the Party shall comply with the requirements of paragraphs 2 and 3 of Article 3.11 (Conditions and Limitations). The Party shall promptly refund any tariff increases if the investigation described in paragraph 2 of Article 3.11 (Conditions and Limitations) does not result in a finding that the requirements of Article 3.10 (Application of Bilateral Safeguard Measure) are met. The duration of any provisional measure shall be counted as part of the period prescribed by subparagraph 5(b) of Article 3.11 (Conditions and Limitations).
2. Ifa Party takes a provisional measure pursuant to this Article, that Party shall notify the other Party in writing prior to taking such measure, and shall initiate consultations with the other Party immediately after such measure is taken.
Article 3.13. Compensation
1. A Party applying a bilateral safeguard measure shall consult with the other Party in order to mutually agree on appropriate trade liberalising compensation in the form of concessions having substantially equivalent trade effects or in the form of concessions equivalent to the value of the additional duties expected to result from the safeguard measure. The Party applying a bilateral safeguard measure shall provide an opportunity for such consultations no later than 30 days after the application of the bilateral safeguard measure.
2. If the consultations under paragraph 1 do not result in an agreement on trade liberalising compensation within 30 days after the consultations begin, the Party whose goods are subject to the safeguard measure may suspend the application of substantially equivalent concessions to the Party applying the safeguard measure. The exporting Party shall notify the other Party in writing at least 30 days before suspending concessions under this paragraph.
3. The right of suspension referred to in paragraph 2 shall not be exercised for the first 24 months during which a bilateral safeguard measure is in effect, provided that the safeguard measure conforms to the provisions of this Agreement.
Chapter FOUR. TECHNICAL BARRIERS TO TRADE
Article 4.1. Objectives
The objective of this Chapter is to facilitate and increase trade in goods between the Parties, by providing a framework to prevent, identify and eliminate unnecessary barriers to trade within the scope of the TBT Agreement.
Article 4.2. Scope and Definitions
1. This Chapter applies to the preparation, adoption and application of all standards, technical regulations and con- formity assessment procedures, as defined in Annex 1 of the TBT Agreement, which may affect trade in goods between the Parties, regardless of the origin of those goods.
2. Notwithstanding paragraph 1, this Chapter does not apply to:
(a) purchasing specifications prepared by governmental bodies for production or consumption requirements of such bodies; or
(b) sanitary and phytosanitary measures, as defined in Annex A of the SPS Agreement, which are covered by Chapter Five of this Agreement.
3. For the purposes of this Chapter, the definitions of Annex 1 to the TBT Agreement shall apply.
Article 4.3. Affirmation of the TBT Agreement
The Parties affirm their existing rights and obligations with respect to each other under the TBT Agreement, which is incorporated into and made part of this Agreement, mutatis mutandis.
Article 4.4. Joint Cooperation
1. The Parties shall strengthen their cooperation in the field of standards, technical regulations and conformity assessment procedures, with a view to increasing the mutual understanding of their respective systems and to facilitating access to their respective markets.
2. The Parties shall seek to identify and develop regulatory cooperation initiatives appropriate for the particular issues or sectors, which may include but are not limited to:
(a) exchanging information and experiences on the preparation and application of their technical regulations and the use of good regulatory practice;
(b) simplifying, where appropriate, technical regulations, standards, and conformity assessment procedures;
(c) avoiding unnecessary divergence in their approaches to technical regulations and conformity assessment procedures, and working towards the possibility of convergence or alignment of technical regulations with international standards,
(d) encouraging cooperation between their respective bodies, whether public or private, that are responsible for metrol- ogy, standardisation, testing, certification and accreditation;
(e) ensuring efficient interaction of regulatory authorities at national, regional and international levels, for instance, by referring enquiries from a Party to the appropriate regulatory authorities; and
(f) exchanging information on developments in relevant regional and multilateral fora related to standards, technical regulations and conformity assessment procedures.
3. Upon request, a Party shall give appropriate consideration to proposals that the other Party makes for cooperation under the terms of this Chapter.
Article 4.5. Standards
1. The Parties affirm their obligations under Article 4.1 of the TBT Agreement to ensure that their standardising bodies accept and comply with the Code of Good Practice for the Preparation, Adoption and Application of Standards in Annex 3 to the TBT Agreement.
2. With a view to harmonising standards on as wide a basis as possible, each Party shall encourage its standardising bodies, as well as the regional standardising bodies of which they or their standardising bodies are Members, to cooper- ate with the relevant standardisation bodies of the other Party in international standardisation activities.
3. The Parties undertake to exchange information on:
(a) their use of standards in support of technical regulations;
(b) each other's standardisation processes, and the extent of use of international standards or regional standards as a base for their national standards; and
(c) cooperation agreements implemented by either Party on standardisation, provided the information can be made available to the public.
Article 4.6. Technical Regulations
The Parties agree to make best use of good regulatory practice with regard to the preparation, adoption and application of technical regulations, as provided for in the TBT Agreement including:
(a) considering, when developing a technical regulation, inter alia, the impact of the envisaged technical regulation and the available regulatory and non-regulatory alternatives to the proposed technical regulation which may fulfil the Party's legitimate objectives;
(b) using, consistent with Article 2.4 of the TBT Agreement and to the maximum extent possible, relevant international standards as a basis for their technical regulations, except when such international standards would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued; where international standards have not been used as a basis, to explain upon request to the other Party the reasons why such standards have been considered inappropriate or ineffective for the aim pursued; and
(c) specifying, consistent with Article 2.8 of the TBT Agreement and wherever appropriate, technical regulations based on product requirements in terms of performance rather than in terms of design or descriptive characteristics.
Article 4.7. Conformity Assessment Procedures
1. The Parties recognise that a broad range of mechanisms exist to facilitate the acceptance of the results of conformity assessment procedures, including:
(a) the importing Party's reliance on a supplier's declaration of conformity;
(b) agreements on mutual acceptance of the results of conformity assessment procedures with respect to specific technical regulations conducted. by bodies located in the territory of the other Party;
(c) the use of accreditation procedures to qualify conformity assessment bodies;
(d) government designation of conformity assessment bodies, including bodies located in the territory of the other Party;
(e) unilateral recognition by a Party of the results of conformity assessment procedures conducted in the territory of the other Party;
(f) voluntary arrangements between conformity assessment bodies in the respective territories of each Party; and
(g) the use of regional or international multilateral recognition agreements and arrangements of which the Parties are parties.
2. Having regard, in particular, to those considerations, the Parties shall:
(a) intensify their exchange of information regarding these and other mechanisms, with a view to facilitating the acceptance of conformity assessment results;
(b) exchange information on the criteria used to select appropriate conformity assessment procedures for specific products and, in line with Article 5.1.2 of the TBT Agreement, require that conformity assessment procedures shall not be more strict or be applied more strictly than is necessary to give the importing Party adequate confidence that products conform with the applicable technical regulations or standards, taking account of the risks non-conformity would create;
(c) exchange information on accreditation policies and consider how to make the best use of international standards for accreditation and the best use of international agreements involving the Partiesâ accreditation bodies, for example through the mechanisms of the International Laboratory Accreditation Co-operation and the International Accreditation Forum; and
(d) ensure that, insofar as two or more conformity assessment bodies are authorised by a Party to carry out conformity assessment procedures required for placing the product on the market, economic operators may choose among them.
3. The Parties reaffirm their obligation under Article 5.2.5 of the TBT Agreement that fees imposed for mandatory conformity assessment of imported products shall be equitable in relation to any fees chargeable for assessing the conformity of like products of national origin or originating in any other country, taking into account communication, transportation and other costs arising from differences between location of facilities of the applicant and the conformity assessment body.
4. Upon request by either Party, the Parties may decide to engage in consultations with a view to defining sectoral initiatives regarding the use of conformity assessment procedures or the facilitation of acceptance of conformity assess- ment results that are appropriate for the respective sectors. The Party making the request should substantiate it with relevant information on how this sectoral initiative would facilitate trade between the Parties. In these consultations, all mechanisms described in paragraph 1 may be considered. Where a Party declines such a request from the other Party, it shall, upon request, explain its reasons.
Article 4.8. Transparency
The Parties reaffirm their transparency obligations under the TBT Agreement with regard to the preparation, adoption and application of standards, technical regulations and conformity assessment procedures, and agree:
(a) where a part of the process of developing a technical regulation is open to public consultation, to take the other Party's views into account and, without discrimination, to provide reasonable opportunities for the other Party and its interested persons to make comments;
(b) when making notifications in accordance with Article 2.9 of the TBT Agreement, to allow at least 60 days following the notification for the other Party to provide comments in writing on the proposal and where practicable, to give appropriate consideration to reasonable requests for extending the comment period;
(c) to allow sufficient time between the publication of technical regulations and their entry into force for economic operators of the other Party to adapt, except where urgent problems of safety, health, environmental protection or national security arise or threaten to arise; and
(d) to make available to the other Party or its economic operators relevant information (for example through a public website, if available) on technical regulations, standards and conformity assessment procedures in force and, as appropriate and available, written guidance on compliance with its technical regulations, upon request and without undue delay.
Article 4.9. Market Surveillance
The Parties undertake to exchange information on market surveillance and enforcement activities.
Article 4.10. Marking and Labelling
1. The Parties note that, according to paragraph 1 of Annex 1 of the TBT Agreement, a technical regulation may include or deal exclusively with marking or labelling requirements, and they agree, where their technical regulations contain mandatory marking or labelling, to ensure that such regulations are not prepared with a view to, or with the effect of, creating unnecessary obstacles to international trade, and that such regulations are not more trade restrictive than necessary to fulfil a legitimate objective, as referred to under Article 2.2 of the TBT Agreement.
2. The Parties agree that where a Party requires the mandatory marking or labelling of products:
(a) that Party shall endeavour to restrict its requirements only to those which are relevant for consumers or users of the product or are relevant to indicate the product's conformity with the mandatory requirements;
(b) that Party may specify the information to be provided on the label, and may require compliance with certain regulatory requirements for the affixing of the label, but shall not require any prior approval or certification of labels and markings as a precondition for sale of the products on its market, unless this is deemed necessary in the light of the risk of the product to human, animal or plant health or life;
(c) where that Party requires the use of a unique identification number by economic operators, that Party shall ensure that such numbers are issued to the relevant economic operators without undue delay and on a non-discriminatory basis;
(d) provided it is not misleading, contradictory or confusing in relation to the information required in the importing Party of the goods, that Party shall permit the following to be used in the marking or labelling of products:
(i) information in other languages in addition to the information in the language required by the importing Party of the goods;
(ii) internationally-accepted nomenclatures, pictograms, symbols or graphics; and
(ii) additional information to that required in the importing Party of the goods;
(e) that Party shall accept that labelling, including re-labeling and corrections to labelling, may take place, where relevant, in authorised premises (for example, in customs warehouses at the point of import) in the territory of the importing Party prior to the distribution and sale of the product, as an alternative to labelling in the place of origin, unless such labelling in the place of origin is required for reasons of public health or safety; and
(f) that Party shall endeavour, in cases where it considers that legitimate objectives under the TBT Agreement are not compromised thereby, to accept non-permanent or detachable labels, or marking or labelling in the accompanying documentation rather than physically attached to the product.
3. Without prejudice to the Parties' rights and obligations under the WTO Agreement, paragraph 2 shall apply to agricultural products, industrial products, and processed agricultural food products, including beverages and spirits.
Article 4.11. Contact Points
The functions of the contact points designated in accordance with Article 13.4 (Enquiries and Contact Points) shall include:
(a) monitoring the implementation and administration of this Chapter;
(b) promptly addressing any issue that the other Party raises related to the development, adoption, application or enforcement of standards, technical regulations or conformity assessment procedures;
(c) enhancing cooperation in the development and improvement of standards, technical regulations, and conformity assessment procedures;
(d) exchanging information on standards, technical regulations, and conformity assessment procedures,
(e) facilitating cooperation activities, as appropriate, in accordance with paragraph 2 of Article 4.4 (Joint Cooperation); an
(f) arranging the establishment of ad hoc working groups at the request of either Party, in order to explore ways to facilitate trade between the Parties.
Article 4.12. Final Provisions
1. The Parties may discuss, in the Committee on Trade in Goods established pursuant to Article 16.2 (Specialised Committees), any implementing arrangements arising from this Chapter. The Parties may adopt, by decision in that Committee, any implementing measure required to this effect.
2. The Parties have undertaken further commitments on sector-specific non-tariff measures on goods as set out in Annex 4-A and the Appendices pertaining thereto.
Chapter FIVE. SANITARY AND PHYTOSANITARY MEASURES
Article 5.1. Objectives
The objectives of this Chapter are:
(a) to protect human, animal or plant life or health in the respective territories of the Parties while facilitating trade between the Parties in the area of sanitary and phytosanitary measures (hereinafter referred to as "SPS measures");
(b) to collaborate on the further implementation of the SPS Agreement; and
(c) to provide a means to improve communication, cooperation and resolution of issues related to the implementation of SPS measures affecting trade between the Parties.
Article 5.2. Scope
1. This Chapter applies to all SPS measures of a Party that may directly or indirectly affect trade between the Parties.
2. This Chapter shall also apply to collaboration between the Parties on animal welfare matters of mutual interest to the Parties.
3. Nothing in this Chapter shall affect the rights of the Parties under the TBT Agreement with respect to measures not within the scope of this Chapter.
Article 5.3. Definitions
For the purposes of this Chapter: (a) the definitions contained in Annex A of the SPS Agreement shall apply; and
(b) the Parties may agree on other definitions to be used in the application of this Chapter, taking into consideration the glossaries and definitions of relevant international organisations, such as the CODEX Alimentarius Commission (hereinafter referred to as "Codex Alimentarius"), the World Organisation for Animal Health (hereinafter referred to as "OIE") and under the International Plant Protection Convention (hereinafter referred to as "IPPC").
Article 5.4. Rights and Obligations
The Parties affirm their rights and obligations under the SPS Agreement.
Article 5.5. Competent Authorities
The competent authorities of the Parties responsible for the implementation of this Chapter are set out in Annex 5-A. The Parties shall notify each other of any changes to those competent authorities.
Article 5.6. General Principles
When implementing this Chapter, the Parties:
(a) shall ensure the consistency of SPS measures with the principles established by Article 3 of the SPS Agreement;
(b) shall not use SPS measures to create unjustified barriers to trade;
(c) shall ensure that procedures established under this Chapter are undertaken and completed without undue delay, and that such procedures are not applied in a manner which would constitute an arbitrary or unjustifiable discrimination against the other Party, where identical or similar conditions exist; and
(d) shall use neither the procedures referred to in subparagraph (c), nor any requests for additional information, to delay access to their respective markets without scientific and technical justification.
Article 5.7. Import Requirements
1. The import requirements of a Party shall apply to the entire territory of the other Party.
2. The exporting Party shall ensure that products exported to the importing Party meet the sanitary and phytosanitary requirements of the importing Party.
3. The importing Party shall ensure that its import requirements are applied to products imported from the exporting Party in a proportionate and non-discriminatory manner.
4. Any fees imposed for the procedures for products imported from the exporting Party shall be equitable in relation to any fees charged for like domestic products and shall not be higher than the actual cost of the service.
5. The importing Party shall have the right to carry out import checks on products imported from the exporting Party for the purpose of implementing SPS measures.
6. The import checks carried out on products imported from the exporting Party shall be based on the sanitary and phytosanitary risk associated with such imports. They shall be carried out without undue delay and with minimum effect on trade between the Parties.
7. The importing Party shall make available to the exporting Party, upon request by the exporting Party, information about the frequency of import checks carried out on products from the exporting Party. The importing Party may change the frequency of physical checks on consignments, where appropriate, as a consequence of (i) verifications, (i) import checks, or (ii) a mutual agreement between the Parties, including following the consultations provided for in this Chapter.
8. In the event that the import checks demonstrate that products do not comply with the relevant import require- ments of the importing Party, any action taken by the importing Party should be proportionate to the sanitary and phytosanitary risk associated with the importation of the non-compliant product.
Article 5.8. Verifications
1. In order to build and maintain confidence in the effective implementation of this Chapter, the importing Party shall have the right to carry out verifications at any time, including:
(a) through verification visits to the exporting Party, to verify all or part of the inspection and certification system of the exporting Party's competent authorities, in accordance with the relevant international standards, guidelines and recommendations of the Codex Alimentarius, OJE and IPPC; and
(b) by requiring the exporting Party to provide information about its inspection and certification system and by obtain- ing the results of the controls carried out thereunder.
2. The importing Party shall share with the exporting Party the results and conclusions of the verifications carried out pursuant to paragraph 1. The importing Party may make those results publicly available.
3. If the importing Party decides to carry out a verification visit to the exporting Party, the importing Party shall notify the exporting Party of this verification visit at least 60 calendar days before the verification visit is to be carried out, except in emergency cases or where the Parties agree otherwise. Any modification to such a visit shall be agreed by the Parties.
4. The costs incurred in carrying out the verification of all or part of the exporting Party's competent authorities' inspection and certification systems and the costs incurred in carrying out any inspections of individual establishments shall be borne by the importing Party.
5. The importing Party shall provide information in writing of a verification to the exporting Party within 60 calendar days. The exporting Party shall have 45 calendar days to comment on such information. The exporting Party's comments shall be attached to and, where appropriate, included in the final outcome document.
6. Notwithstanding paragraph 5, where a significant risk to human, animal or plant life or health has been identified during a verification, the importing Party shall inform the exporting Party as quickly as possible, and in any case within ten calendar days following the end of the verification.