Title
AGREEMENT ON COMPREHENSIVE ECONOMIC PARTNERSHIP AMONG MEMBER STATES OF THE ASSOCIATION OF SOUTHEAST ASIAN NATIONS AND JAPAN
Preamble
The Governments of Japan, and Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic, Malaysia, the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand and the Socialist
Southeast Asian Nations (hereinafter referred to as "ASEAN");
Recalling the Joint Declaration signed in Phnom Penh, Cambodia on 5 November 2002 and the Framework for Comprehensive Economic Partnership between Japan and the Association of Southeast Asian Nations signed in Bali, Indonesia on 8 October 2003;
Desiring to deepen the relationship between Japan and ASEAN, which is built on mutual confidence and trust in wide-ranging fields covering not only political and economic areas, but also social and cultural areas;
Inspired by the continuous development of ASEAN through economic activities among Japan and ASEAN Member States, and the significant progress in the relationship between Japan and ASEAN which has spanned thirty years of economic ties that have been expanding over a wide range of areas;
Confident that a comprehensive economic partnership between Japan and ASEAN (hereinafter referred to as "AJCEP") will strengthen their economic ties, create a larger and more efficient market with greater opportunities and larger economies of scale, and enhance their attractiveness to capital and talent, for mutual benefit;
Recognising that multi-layered and multi-faceted bilateral and regional efforts towards strengthening economic relations among Japan and ASEAN Member States will facilitate the realisation of such comprehensive economic partnership;
Sharing the view that such comprehensive economic partnership should benefit from, and be complementary to, the economic integration and integrity of ASEAN;
Recognising further the various stages of economic development among the ASEAN Member States;
Confident that this Agreement, covering areas such as trade in goods and services, and investment, would serve as an important building block towards economic integration in East Asia;
Recalling Article XXIV of the General Agreement on Tariffs and Trade 1994 and Article V of the General Agreement on Trade in Services in Annex 1A and Annex 1B, respectively, to the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, 15 April 1994 (hereinafter referred to as "WTO Agreement");
Recognising the role of regional trade agreements as a catalyst in accelerating regional and global liberalisation in the framework of the multilateral trading system;
Reaffirming the rights and obligations of each Party under the WTO Agreement and multilateral, regional and bilateral agreements and arrangements; and
Determined to establish a legal framework for such comprehensive economic partnership among the Parties,
HAVE AGREED as follows:
Body
Chapter 1. General Provisions
Article 1. General Definitions
For the purposes of this Agreement, the term:
(a) "ASEAN Member States" means Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic, Malaysia, the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand and the Socialist Republic of Viet Nam collectively;
(b) "customs authority" means the competent authority that is responsible for the administration and enforcement of customs laws and regulations;
(c) "days" means calendar days, including weekends and holidays;
(d) "GATS" means the General Agreement on Trade in Services in Annex 1B to the WTO Agreement;
(e) "GATT 1994" means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement. For the purposes of this Agreement, references to articles in GATT 1994 include its Notes and Supplementary Provisions;
(f) "Harmonized System" or "HS" means the Harmonized Commodity Description and Coding System set out in the Annex to the International Convention on the Harmonized Commodity Description and Coding System, and adopted and implemented by the Parties in their respective laws;
(g) "newer ASEAN Member States" means the Kingdom of Cambodia, the Lao People's Democratic Republic, the Union of Myanmar and the Socialist Republic of Viet Nam;
(h) "Parties" means Japan and those ASEAN Member States for which this Agreement has entered into force collectively; and
(i) "Party" means either of Japan or one (1) of ASEAN Member States for which this Agreement has entered into force.
Article 2. Principles
The Parties reaffirm the importance of realising the AJCEP through both this Agreement and other bilateral or regional agreements or arrangements, and are guided by the following principles:
(a) the AJCEP shall involve Japan and all ASEAN Member States and includes a broad range of sectors focusing on liberalisation, facilitation and economic cooperation;
(b) the integrity, solidarity and integration of ASEAN shall be maintained in the realisation of the AJCEP;
(c) special and differential treatment is accorded to ASEAN Member States, especially the newer ASEAN Member States, in recognition of their different levels of economic development; additional flexibility is accorded to the newer ASEAN Member States;
(d) recognition shall be given to the provisions of the ministerial declarations of the World Trade Organization on measures in favour of leastdeveloped countries;
(e) flexibility should also be given to address the sensitive sectors in Japan and each ASEAN Member State; and
(f) technical assistance and capacity building are important elements of economic cooperation provided under this Agreement.
Article 3. Objectives
The objectives of this Agreement are to:
(a) progressively liberalise and facilitate trade in goods and services among the Parties;
(b) improve investment opportunities and ensure protection for investments and investment activities in the Parties; and
(c) establish a framework for the enhancement of economic cooperation among the Parties with a view to supporting ASEAN economic integration, bridging the development gap among ASEAN Member States, and enhancing trade and investment among the Parties.
Article 4. Transparency
1. Each Party shall, in accordance with its laws and regulations, make publicly available its laws, regulations, administrative procedures and administrative rulings and judicial decisions of general application as well as international agreements to which the Party is a party, that pertain to or affect the implementation and operation of this Agreement.
2. Each Party shall make publicly available the names and addresses of the competent authorities responsible for laws, regulations, administrative procedures and administrative rulings, referred to in paragraph 1.
3. Each Party shall, upon the request by another Party, respond to specific questions from, and provide information to, the latter, in the English language, with respect to matters referred to in paragraph 1.
Article 5. Confidentiality
1. Nothing in this Agreement shall require a Party to provide confidential information, the disclosure of which would impede law enforcement of the Party, or otherwise be contrary to the public interest, or which would prejudice legitimate commercial interests of any particular enterprise, public or private.
2. Nothing in this Agreement shall be construed to require a Party to provide information relating to the affairs and accounts of customers of financial institutions.
3. Each Party shall, in accordance with its laws and regulations, maintain the confidentiality of information provided as confidential by another Party pursuant to this Agreement.
Article 6. Taxation
1. Unless otherwise provided for in this Agreement, the provisions of this Agreement shall not apply to any taxation measures.
2. Nothing in this Agreement shall affect the rights and obligations of any Party under any tax convention. In the event of any inconsistency between this Agreement and any such convention, that convention shall prevail to the extent of the inconsistency.
3. Articles 4 and 5 shall apply to taxation measures, to the extent that the provisions of this Agreement are applicable to such taxation measures.
Article 7. General Exceptions
For the purposes of Chapters 2 through 5, Article XX of GATT 1994 is incorporated into and forms part of this Agreement, mutatis mutandis.
Article 8. Security Exceptions
Nothing in this Agreement shall be construed:
(a) to require any Party to furnish any information, the disclosure of which it considers contrary to its essential security interests; or
(b) to prevent any Party from taking any action which it considers necessary for the protection of its essential security interests:
(i) relating to fissionable materials or the materials from which they are derived;
(ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;
(iii) taken so as to protect critical public infrastructure, including communications, power and water infrastructures, from deliberate attempts intended to disable or degrade such infrastructure;
(iv) Taken in time of domestic emergency, or war or other emergency in international relations; or
(c) to prevent any Party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
Article 9. Non-governmental Bodies
In fulfilling its obligations and commitments under this Agreement, each Party shall endeavour to ensure their observance by non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities within the Party.
Article 10. Relation to other Agreements
1. Each Party reaffirms its rights and obligations vis-avis another Party under the WTO Agreement and/or other agreements to which these Parties are parties.
2. Nothing in this Agreement shall be construed to derogate from any obligation of a Party vis-a-vis another Party under agreements to which these Parties are parties, if such an obligation entitles the latter Party to treatment more favourable than that accorded by this Agreement.
3. In the event of any inconsistency between this Agreement and the WTO Agreement, the WTO Agreement shall prevail to the extent of the inconsistency.
4. In the event of any inconsistency between this Agreement and any agreement other than the WTO Agreement to which more than one (1) Party are parties, these Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution, taking into consideration general principles of international law.
5. A Party which is not a party to the WTO Agreement shall abide by the provisions of the said Agreement in accordance with its accession commitments to the World Trade Organization.
Article 11. Joint Committee
1. A Joint Committee shall be established under this Agreement.
2. The functions of the Joint Committee shall be to:
(a) Review the implementation and operation of this Agreement;
(b) Submit a report to the Parties on the implementation and operation of this Agreement;
(c) Consider and recommend to the Parties any amendments to this Agreement;
(d) Supervise and coordinate the work of all SubCommittees established under this Agreement;
(e) Adopt:
(i) the Implementing Regulations referred to Rule 11 of Annex 4; and in
(ii) any necessary decisions; and
(f) Carry out other functions as may be agreed by Parties.
The Joint Committee:
(a) Shall be composed of representatives of Japan ASEAN Member States; and
(b) May establish Sub-Committees and delegate its responsibilities thereto.
The Joint Committee shall meet at such venues and times as may be agreed by the Parties.
Article 12. Communications
Each Party shall designate a contact point to facilitate communications among the Parties on, except as otherwise provided for in Article 61, any matter relating to this Agreement. All official communications in this regard shall be done in the English language.
Chapter 2. Trade In Goods
Article 13. Definitions
For the purposes of this Chapter, the term:
(a) “customs duties” means any customs or import duty and a charge of any kind imposed in connection with the importation of a good, but does not include any:
(i) charge equivalent to an internal tax imposed consistently with the provisions of paragraph 2 of Article III of GATT 1994, in respect of the like domestic goods or in respect of goods from which the imported goods have been manufactured or produced in whole or in part;
(ii) anti-dumping or countervailing duty applied consistently with the provisions of Article VI of GATT 1994, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, and the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement; or
(iii) fee or any charge commensurate with the cost of services rendered;
(b) “customs laws” means such laws and regulations administered and enforced by the customs authority of each Party concerning the importation, exportation, and transit of goods, as they relate to customs duties, charges, and other taxes, or to prohibitions, restrictions, and other similar controls with respect to the movement of controlled items across the boundary of the customs territory of each Party;
(c) “customs value of goods” means the value of goods for the purposes of levying ad valorem customs duties on imported goods;
(d) “domestic industry” means the producers as a whole of the like or directly competitive goods operating in a Party, or those whose collective output of the like or directly competitive goods constitutes a major proportion of the total domestic production of those goods;
(e) “originating goods” means goods that qualify as originating in accordance with the provisions of Chapter 3;
(f) “serious injury” means a significant overall impairment in the position of a domestic industry; and
(g) “threat of serious injury” means serious injury that, on the basis of facts and not merely on allegation, conjecture or remote possibility, is clearly imminent.
Article 14. Classification of Goods
The classification of goods in trade between the Parties shall be in conformity with the Harmonized System.
Article 15. National Treatment on Internal Taxation and Regulation
Each Party shall accord national treatment to the goods of the other Parties in accordance with Article III of GATT 1994, which to this end is incorporated into and forms part of this Agreement, mutatis mutandis.
Article 16. Elimination or Reduction of Customs Duties
1. Except as otherwise provided for in this Agreement, each Party shall, in accordance with its Schedule in Annex 1, eliminate or reduce its customs duties on originating goods of the other Parties. Such elimination or reduction shall be applied to originating goods of all the other Parties on a non-discriminatory basis.
2. The Parties shall endeavour to take further steps towards liberalisation of trade in goods through unilateral, bilateral or regional efforts consistent with GATT 1994.
3. The Parties reaffirm that, as is provided for in Article 7, nothing in this Chapter shall be construed to prevent a Party which is a party to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal or other relevant international agreements from adopting or enforcing any measure in relation to hazardous wastes or hazardous substances based on its laws and regulations, in accordance with such international agreements.
Article 17. Customs Valuation
For the purposes of determining the customs value of goods traded between the Parties, the provisions of Part I of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement (hereinafter referred to as “the Agreement on Customs Valuation”) shall apply, mutatis mutandis.
Note: In the case of the Kingdom of Cambodia, the Agreement on Customs Valuation, as implemented in accordance with the provisions of the Protocol on the Accession of the Kingdom of Cambodia to the World Trade Organization, shall apply, mutatis mutandis.
Article 18. Non-tariff Measures
1. Each Party shall not institute or maintain any non- tariff measures including quantitative restrictions on the importation of any good of the other Parties or on the exportation or sale for export of any good destined for another Party, except the same measures as those permitted under the WTO Agreement.
2. Each Party shall ensure transparency of its non-tariff measures permitted under paragraph 1, including quantitative restrictions. Each Party which is a member of the World Trade Organization shall ensure full compliance with the obligations under the WTO Agreement with a view to minimising possible distortions to trade to the maximum extent possible.
Article 19. Modification of Concessions
1. The Parties shall not nullify or impair any of the concessions under this Agreement, except in cases provided for in this Agreement.
2. Any Party may negotiate with any interested Party to modify or withdraw its concession made under this Agreement. In such negotiations, which may include compensatory adjustment with respect to other goods, the Parties concerned shall maintain a general level of reciprocal and mutually advantageous concessions not less favourable to trade than that provided for in this Agreement prior to such negotiations. In reflecting the results of such negotiations to this Agreement, Article 77 shall apply.
Article 20. Safeguard Measures
1. A Party which is a member of the World Trade Organization may apply a safeguard measure to an originating good of the other Parties in accordance with Article XIX of GATT 1994 and the Agreement on Safeguards in Annex 1A to the WTO Agreement (hereinafter referred to as “the Agreement on Safeguards”), or Article 5 of the Agreement on Agriculture in Annex 1A to the WTO Agreement (hereinafter referred to as “Agreement on Agriculture”).
Any action taken pursuant to Article XIX of GATT 1994 and the Agreement on Safeguards, or Article 5 of the Agreement on Agriculture shall not be subject to Chapter 9 of this Agreement.
2. Each Party shall be free to apply a safeguard measure provided for under this Article (hereinafter referred to as “an AJCEP safeguard measure”), to the minimum extent necessary to prevent or remedy the serious injury to a domestic industry of that Party and to facilitate adjustment, if as an effect of the obligations incurred by that Party under this Agreement, including tariff concessions, or if as a result of unforeseen developments and of the effects of the obligations incurred by that Party under this Agreement, an originating good of the other Parties is being imported 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 the domestic industry of the importing Party that produces like or directly competitive goods in the importing Party.
3. An AJCEP safeguard measure shall not be applied against an originating good of a Party which is an ASEAN Member State, as long as its share of imports of the good concerned in the importing Party does not exceed three (3) per cent of the total imports from the other Parties, provided that those Parties with less than three (3) per cent import share collectively account for not more than nine (9) per cent of total imports of the good concerned from the other Parties.
4. A Party shall not apply an AJCEP safeguard measure to Anil originating good imported up to the limit of quota quantities granted under tariff rate quotas applied in accordance with its Schedule in Annex 1.
5. A Party applying an AJCEP safeguard measure may:
(a) suspend the further reduction of any customs duty on the originating good of the other Parties provided for under this Chapter; or
(b) increase the customs duty on the originating good of the other Parties to a level not to exceed the lesser of:
(i) the applied most-favoured-nation rate (hereinafter referred to as “applied MFN rate”) on the good in effect on the day when the AJCEP safeguard measure is applied; and
(ii) the applied MFN rate on the good in effect on the day immediately preceding the date of entry into force of this Agreement pursuant to paragraph 1 of Article 79.
6. (a) A Party may apply an AJCEP safeguard measure only after an investigation has been carried out by the competent authorities of that Party in accordance with the same procedures as those provided for in Article 3 and paragraph 2 of Article 4 of the Agreement on Safeguards.
(b) The investigation referred to in subparagraph (a) shall be completed within one (1) year following its date of initiation.
7. The following conditions and limitations shall apply with regard to an AJCEP safeguard measure:
(a) A Party shall immediately give a written notice to the other Parties upon:
(i) initiating an investigation referred to in subparagraph 6(a) relating to serious injury, or threat of serious injury, and the reasons for it;
(ii) making a finding of serious injury or threat of serious injury caused by increased imports; and
(iii) taking a decision to apply or extend an AJCEP safeguard measure.
(b) The Party giving the written notice referred to in subparagraph (a) shall provide the other Parties with all pertinent information, which shall include:
(i) in the written notice referred to in subparagraph (a)(i), the reason for the initiation of the investigation, a precise description of an originating good subject to the investigation and its heading or subheading of the Harmonized System, on which the Schedules in Annex 1 are based, the period subject to the investigation and the date of initiation of the investigation; and
(ii) in the written notice referred to in subparagraphs (a)(ii) and (iii), the evidence of serious injury or threat of serious injury caused by the increased imports of the originating good, a precise description of the originating good subject to the proposed safeguard measure and its heading or subheading of the Harmonized System, on which the Schedules in Annex 1 are based, a precise description of the AJCEP safeguard measure, the proposed date of its introduction and its expected duration.
(c) A Party proposing to apply or extend an AJCEP safeguard measure shall provide adequate opportunity for prior consultations with those Parties which would be affected by the AJCEP safeguard measure with a view to reviewing the information arising from the investigation referred to in subparagraph (a), exchanging views on the AJCEP safeguard measure and reaching an agreement on compensation set out in paragraph 8.
(d) No AJCEP safeguard measure shall be maintained except to the extent and for such time as may be necessary to prevent or remedy serious injury and to facilitate adjustment, provided that such time shall not exceed a period of three (3) years. An AJCEP safeguard measure may be extended, provided that the conditions set out in this Article are met. The total duration of the AJCEP safeguard measure, including any extensions thereof, shall not exceed four (4) years. In order to facilitate adjustment in a situation where the expected duration of an AJCEP safeguard measure is over one (1) year, the Party maintaining the AJCEP safeguard measure shall progressively liberalise the AJCEP safeguard measure at regular intervals during the period of application.
(e) No AJCEP safeguard measure shall be applied again to the import of a particular originating good which has been subject to such an AJCEP safeguard measure, for a period of time equal to the duration of the previous safeguard measure or one (1) year, whichever is longer.
(f) Upon the termination of an AJCEP safeguard measure on a good, the rate of the customs duty for that good shall be the rate that, in accordance with the Schedule of the Party applying the AJCEP safeguard measure set out in Annex 1, would have been in effect had the AJCEP safeguard measure not been applied.
8. (a) A Party proposing to apply or extend an AJCEP safeguard measure shall provide to the other Parties mutually agreed adequate means of trade compensation in the form of substantially equivalent level of concessions or other obligations to that existing under this Agreement between the Party applying the AJCEP safeguard measure and the exporting Parties which would be affected by such a measure.
(b) In seeking compensation provided for in subparagraph (a), the Parties shall hold consultations in the Joint Committee. Any proceedings arising from such consultations shall be completed within thirty (30) days from the date on which the AJCEP safeguard measure was applied.
(c) If no agreement on the compensation is reached within the time frame specified in subparagraph (b), the Parties other than the one applying the AJCEP safeguard measure shall be free to suspend concessions of customs duties under this Agreement, which is substantially equivalent to the AJCEP safeguard measure, on originating goods of the Party applying the AJCEP safeguard measure. The Parties may suspend the concessions only for the minimum period necessary to achieve the substantially equivalent effects and only while the AJCEP safeguard measure is maintained. The right of suspension provided for in this subparagraph shall not be exercised for the first two (2) years that an AJCEP safeguard measure is in effect, provided that the AJCEP safeguard measure has been applied as a result of an absolute increase in imports and that such an AJCEP safeguard measure conforms to the provisions of this Article.