Title
FREE TRADE AGREEMENT BETWEEN CANADA AND THE REPUBLIC OF PANAMA
Preamble
CANADA and THE REPUBLIC OF PANAMA ("Panama"), hereinafter referred to as "the Parties", resolved to:
STRENGTHEN the special bonds of friendship and cooperation between their peoples;
CONTRIBUTE to the harmonious development and expansion of world and regional trade and to provide a catalyst to broader international cooperation;
BUILD on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization and other multilateral and bilateral instruments of cooperation;
PROMOTE hemispheric economic integration;
CREATE an expanded and secure market for the goods and services produced in their territories, as well as new employment opportunities and improved working conditions and living standards in their respective territories;
REDUCE distortions to trade;
ESTABLISH clear, transparent and mutually advantageous rules to govern their trade;
ENSURE a predictable commercial framework for business planning and investment;
ENHANCE the competitiveness of their firms in global markets;
UNDERTAKE each of the preceding in a manner that is consistent with environmental protection and conservation;
ENHANCE AND ENFORCE environmental laws and regulations, and strengthen their cooperation on environmental matters;
PROTECT, ENHANCE AND ENFORCE basic workersâ rights, strengthen cooperation on labour matters and build on their respective international commitments on labour matters;
PROMOTE sustainable development;
ENCOURAGE enterprises operating within their territory or subject to their jurisdiction to respect internationally recognized corporate social responsibility standards and principles and pursue best practices;
PROMOTE broad-based economic development in order to reduce poverty;
PRESERVE their flexibility to safeguard the public welfare;
and
AFFIRMING their rights and obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and other intellectual property agreements to which both Parties are party;
AFFIRMING the right to fully avail themselves of the flexibilities established in the TRIPS Agreement, including those related to the protection of public health and in particular the promotion of access to medicines for all, and taking note of the WTO General Council Decision on the implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health adopted 30 August 2003 and the Protocol amending the TRIPS Agreement of 6 December 2005;
RECOGNIZING the differences in the level of development and the size of the Parties' economies and the importance of creating opportunities for economic development;
RECOGNIZING that the promotion and the protection of investments of investors of one Party in the territory of the other Party will be conducive to the stimulation of mutually beneficial business activity;
RECOGNIZING that states must maintain the ability to preserve, develop and implement their cultural policies for the purpose of strengthening cultural diversity, given the essential role that cultural goods and services play in the identity and diversity of societies and the lives of individuals; and AFFIRMING their commitment to respect the values and principles of democracy and to promote and protect human rights and fundamental freedoms as proclaimed in the Universal Declaration of Human Rights;
HAVE AGREED as follows:
Body
Chapter One. INITIAL PROVISIONS AND GENERAL DEFINITIONS
Section A. General Definitions
Article 1.01. Definitions of General Application
1. For purposes of this Agreement, unless otherwise specified:
Agreement on the Environment means the Agreement on the Environment between Canada and the Republic of Panama;
Commission means the Joint Commission established under Article 21.01 (Administration of the Agreement - Joint Commission);
Coordinators means the Agreement Coordinators established under Article 21.02 (Administration of the Agreement - Agreement Coordinators);
customs duty includes a customs or import duty and a charge of any kind imposed on or in connection with the importation of a good, including a form of surtax or surcharge in
connection with that importation, but does not include:
(a) a charge equivalent to an internal tax imposed consistently with Article III:2 of the GATT 1994, in respect of like, directly competitive or substitutable goods of the Party, or in respect of goods from which the imported good has been manufactured or produced in whole or in part;
(b) an anti-dumping or countervailing duty that is applied pursuant to a Partyâs domestic law;
(c) a fee or other charge imposed consistent with Article 2.11 (National Treatment and Market Access for Goods - Customs User Fees and Similar Charges); and
(d) a premium offered or collected on an imported good arising out of any tendering system in respect of the administration of quantitative import restrictions, tariff rate quotas or tariff preference levels;
Customs Valuation Agreement means the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994;
days means calendar days, including weekends and holidays;
enterprise means an entity constituted or organized under applicable law, whether or not for profit, and whether privately owned or governmentally owned, including a corporation, trust, partnership, sole proprietorship, joint venture or other association;
existing means in effect on the date of entry into force of this Agreement;
GATS means the WTO General Agreement on Trade in Services;
GATT 1994 means the WTO General Agreement on Tariffs and Trade 1994;
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;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, Chapter Notes and subheading notes;
heading means a four-digit number, or the first four digits of a number, used in the nomenclature of the Harmonized System;
measure includes a law, regulation, procedure, requirement or practice;
national means a natural person who has the nationality of a Party or is a citizen according to Article 1.02, or is a permanent resident of a Party;
New York Convention means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958;
originating means qualifying under the rules of origin set out in Chapter Three (Rules of Origin);
person means a natural person or an enterprise;
person of a Party means a national, or an enterprise of a Party;
sanitary or phytosanitary measure means a measure referred to in Annex A, paragraph 1 of the SPS Agreement;
SPS Agreement means the WTO Agreement on the Application of Sanitary and Phytosanitary Measures;
state enterprise means an enterprise that is owned, or controlled through ownership interests, by a Party;
subheading means a six-digit number, or the first six digits of a number, used in the nomenclature of the Harmonized System;
tariff classification means the classification of a good or material under a chapter, heading or subheading of the Harmonized System;
tariff elimination schedule means Annex 2.04 (National Treatment and Market Access for Goods - Tariff Elimination);
telecommunications means the transmission and reception of signals by electromagneticmeans;
Tribunal means an arbitration tribunal established under Article 9.23 or 9.27 (Investment - Submission of a Claim to Arbitration and Consolidation);
TPA means the Trade Promotion Agreement between Panama and the United States of America, done on June 28, 2007;
TRIPS Agreement means the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights;
Uniform Regulations means "Uniform Regulations" established under Article 4.12 (Customs Procedures - Uniform Regulations); and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on 15 April 1994.
2. For purposes of this Agreement, a word in the singular includes that word in the plural, except where otherwise indicated.
Article 1.02. Country-specific Definitions
For purposes of this Agreement, unless otherwise specified:
citizen means, with respect to Canada, a natural person who is a citizen of Canada under Canadian legislation;
national government means:
(a) with respect to Canada, the Government of Canada; and
(b) with respect to Panama, the national level of government;
natural person who has the nationality of a Party means, with respect to Panama, Panamanians by birth, naturalization or adoption, in accordance with Articles 9, 10, and 11 of the Constitution of the Republic of Panama;
sub-national government means:
(a) with respect to Canada, provincial, territorial, or local governments; and
(b) with respect to Panama, local governments;
territory means:
(a) with respect to Canada, (i) the land territory, air space, internal waters and territorial sea of Canada; (ii) the exclusive economic zone of Canada, as determined by its domestic law, consistent with Part V of the United Nations Convention on the Law of the Sea done at Montego Bay on 10 December 1982 (UNCLOS); and (iii) the continental shelf of Canada, as determined by its domestic law, consistent with Part VI of UNCLOS;
(b) with respect to Panama, the land, maritime, and air space under its sovereignty; the exclusive economic zone, and the continental shelf within which it exercises sovereign rights and jurisdiction in accordance with its domestic law and international law.
Section B. Initial Provisions
Article 1.03. Establishment of the Free Trade Area
The Parties to this Agreement, consistent with Article XXIV of the GATT 1994 and Article V of the GATS, hereby establish a free trade area.
Article 1.04. Relation to other Agreements
1. The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which the Parties are party.
2. In the event of any inconsistency between this Agreement and the agreements referred to in paragraph 1, this Agreement shall prevail, except as otherwise provided in this Agreement.
3. The WTO Agreement exclusively governs the rights and obligations of the Parties regarding subsidies and the application of anti-dumping and countervailing measures, including the settlement of any disputes about those matters. This paragraph does not apply to Articles 2.04(5) and 2.13 (National Treatment and Market Access for Goods - Tariff Elimination and Agricultural Export Subsidies).
Article 1.05. Extent of Obligations
Each Party is fully responsible for the observance of all provisions of this Agreement and shall take such reasonable measures as may be available to it to ensure observance of the provisions of this Agreement, except as otherwise provided in this Agreement, by the sub-national governments and authorities within its territory.
Article 1.06. Relation to Environmental and Conservation Agreements
In the event of an inconsistency between an obligation in this Agreement and an obligation of a Party under an agreement listed in Annex 1.06, the latter obligation shall prevail provided that the measure taken is necessary to comply with that obligation, and is not applied in a manner that would constitute, where the same conditions prevail, arbitrary or unjustifiable discrimination or a disguised restriction on international trade.
Article 1.07. Reference to other Agreements
Where this Agreement refers to or incorporates by reference other agreements or legal instruments in whole or in part, those references include related footnotes, interpretative and explanatory notes. Except where the reference affirms existing rights, such references also include, as the case may be, successor agreements to which the Parties are party or amendments binding on the Parties.
Annex 1.06. Multilateral Environmental Agreements
(a) The Convention on International Trade in Endangered Species of Wild Fauna and Flora, done at Washington on 3 March 1973, as amended on 22 June 1979.
(b) The Montreal Protocol on Substances that Deplete the Ozone Layer, done at Montreal on 16 September 1987, as amended 29 June 1990, as amended 25 November 1992, as amended 17 September 1997, as amended 3 December 1999.
(c) The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, done at Basel on 22 March 1989.
(d) The Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, done at Rotterdam on 10 September 1998.
(e) The Stockholm Convention on Persistent Organic Pollutants, done at Stockholm on 22 May 2001.
Chapter Two. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Article 2.01. Definitions
For purposes of this Chapter:
advertising films and recordings means recorded visual media or audio materials, consisting essentially of images or sound, showing the nature or operation of a good or service offered for sale or lease by a person established or resident in the territory of a Party, provided that those materials are of a kind suitable for exhibition to a prospective customer but not for broadcast to the general public, and provided that they are imported in a packet that contains no more than one copy of each film or recording and that does not form part of a larger consignment;
agricultural good means a product listed in Annex 1 of the WTO Agreement on Agriculture;
commercial sample means:
(a) a good that is:
(i) representative of a particular category of good produced outside the territory of a Party, and
(ii) imported only for the purpose of being exhibited or demonstrated to solicit orders for a similar good to be supplied from outside the territory of a Party; or
(b) a film, chart, projector, scale model or similar item, imported only for the purpose of illustrating a particular category of good produced outside the territory of a Party to solicit orders for a similar good to be supplied from outside the territory of a Party;
commercial sample of negligible value means a commercial sample having a value, individually or in the aggregate as shipped, of not more than 1 USD, or the equivalent amount in the currency of either of the Parties, or so marked, torn, perforated or otherwise treated that it is unsuitable for sale or for use except as a commercial sample;
consumed means:
(a) actually consumed; or
(b) further processed or manufactured so as to result in a substantial change in value, form or use of the good or in the production of another good;
duty-free means free of customs duties;
good imported for sports purposes means a good required for use in sports contests, demonstrations or training in the territory of the Party into whose territory the good is imported;
good intended for display or demonstration includes the good's component parts, ancillary apparatus and accessories;
printed advertising material means a good classified in Chapter 49 of the Harmonized System, including a brochure, pamphlet, leaflet, trade catalogue, yearbook published by a trade association, tourist promotional material or poster, that is:
(a) used to promote, publicize or advertise a good or service;
(b) essentially intended to advertise a good or service; and
(c) supplied free of charge;
SCM Agreement means the WTO Agreement on Subsidies and Countervailing Measures; and
TRQ means a tariff-rate quota described in Article 2.16.
Article 2.02. Scope of Application
This Chapter applies to trade in goods of a Party, except as otherwise provided in this Agreement.
Section I. National Treatment
Article 2.03. National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article I of the GATT 1994, and to this end Article III of the GATT 1994 is incorporated into and made part of this Agreement.
2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a sub-national government, treatment no less favourable than the most favourable treatment accorded by that sub-national government to a like, directly competitive or substitutable good, as the case may be, of the Party of which it forms a part.
3. Paragraphs 1 and 2 do not apply to a measure set out in Annex 2.03 (Exceptions to Articles 2.03 and 2.08).
Section II. Tariffs
Article 2.04. Tariff Elimination
1. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty, or adopt any customs duty, on an originating good.
2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods in accordance with its Schedule to Annex 2.04.
3. During the tariff elimination process, each Party shall apply to originating goods traded between the Parties the lesser of the customs duties resulting from a comparison between the rate established in the Partyâs Schedule to Annex 2.04 and the existing rate under Article II of GATT 1994.
4. On the request of a Party, the Parties shall discuss accelerating the elimination of customs duties set out in their Schedules to Annex 2.04 or incorporating into a Schedule a good that is not subject to elimination. An agreement between the Parties to accelerate the elimination of a customs duty on a good or to include a good in a Schedule to Annex 2.04 shall supersede a rate of duty or staging category determined pursuant to a Schedule for such good when approved by each Party in accordance with its applicable legal procedures.
5. The Parties acknowledge Panama's rights and obligations under Article 27.4 of the SCM Agreement and note the Decision of the General Council, WTO document WT/L/691 of July 31, 2007. However, if Panama enters or has entered into an agreement with a non-Party, in which it undertakes to eliminate a program permitted under Article 27.4 of the SCM Agreement and note the Decision of the General Council, WTO document WT/L/691 of July 31, 2007. However, if Panama enters or has entered into an agreement with a non-Party, in which it undertakes to eliminate a program permitted under Article 27.4 of the SCM Agreement as it applies to a good manufactured in its territory and exported to the non-Party, it shall also eliminate the program as it applies to a good manufactured in its territory and exported to Canada.
6. For greater certainty, a Party may:
(a) modify a tariff outside this Agreement on a good for which no tariff preference is claimed under this Agreement;
(b) raise a customs duty to the level established in its Schedule to Annex 2.04 following a unilateral reduction; or
(c) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO Agreement or an Agreement under the WTO Agreement.
Article 2.05. Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission for the following goods, regardless of their origin and regardless of whether like, directly competitive or substitutable goods are available in the territory of the Party:
(a) professional equipment necessary for carrying out the business activity, trade or profession of a person qualifying for temporary entry pursuant to Chapter Thirteen (Temporary Entry for Business Persons);
(b) equipment for the press or for sound or television broadcasting and cinematographic equipment;
(c) good admitted for sports purposes and good intended for display or demonstration; and
(d) commercial sample and advertising films and recordings.
2. A Party may not impose a condition on the duty-free temporary admission of a good referred to in paragraph 1(a), (b) or (c), other than to require that the good:
(a) be imported by a national or resident of the other Party seeking temporary entry;