Title
Peru - United States Trade Promotion Agreement
Preamble
The Government of the United States of America and the Government of the Republic of Peru, resolved to:
STRENGTHEN the special bonds of friendship and cooperation between them and promote regional economic integration;
PROMOTE broad-based economic development in order to reduce poverty and generate opportunities for sustainable economic alternatives to drug-crop production;
CREATE new employment opportunities and improve labor conditions and living standards in their respective territories;
ESTABLISH clear and mutually advantageous rules governing their trade;
ENSURE a predictable legal and commercial framework for business and investment;
AGREE that foreign investors are not hereby accorded greater substantive rights with respect to investment protections than domestic investors under domestic law where, as in the United States, protections of investor rights under domestic law equal or exceed those set forth in this Agreement;
RECOGNIZE that Article 63 of Peru's Political Constitution provides that "domestic and foreign investment are subject to the same conditions";
AVOID distortions to their reciprocal trade;
FOSTER creativity and innovation and promote trade in the innovative sectors of our economies;
PROMOTE transparency and prevent and combat corruption, including bribery, in international trade and investment;
PROTECT, enhance, and enforce basic workers' rights, strengthen their cooperation on labor matters, and build on their respective international commitments on labor matters;
IMPLEMENT this Agreement in a manner consistent with environmental protection and conservation, promote sustainable development, and strengthen their cooperation on environmental matters;
PRESERVE their ability to safeguard the public welfare;
CONTRIBUTE to hemispheric integration and provide an impetus toward establishing the Free Trade Area of the Americas;
BUILD on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization and agreements to which they are both parties; and
RECOGNIZE that Peru is a member of the Andean Community and that Decision 598 of the Andean Community requires Andean countries negotiating trade agreements to preserve Andean Legal System in relations between the Andean Community Member Countries under the Cartagena Agreement;
HAVE AGREED as follows:
Body
Chapter One. Initial Provisions and General Definitions
Section A. Initial Provisions
Article 1.1. Establishment of a 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 1.2. Relation to other Agreements
The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which such Parties are party.
Section B. General Definitions
Article 1.3. Definitions of General Application
For purposes of this Agreement, unless otherwise specified:
central level of government means:
(a) for Peru, the national level of government; (1) and
(b) for the United States, the federal level of government;
Commission means the Free Trade Commission established under Article 20.1 (The Free Trade Commission);
covered investment means, with respect to a Party, an investment, as defined in Article 10.28 (Definitions), in its territory of an investor of another Party in existence as of the date of entry into force of this Agreement or established, acquired, or expanded thereafter;
customs authority means the competent authority that is responsible under the law of a Party for the administration of customs laws and regulations;
customs duty includes any customs or import duty and a charge of any kind imposed in connection with the importation of a good, including any form of surtax or surcharge in connection with such importation, but does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article IM: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) antidumping or countervailing duty that is applied pursuant to a Party's domestic law; or
(c) fee or other charge in connection with importation commensurate with the cost of services rendered;
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;
enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, sole proprietorship, joint venture, or other association;
enterprise of a Party means an enterprise constituted or organized under the law of a Party; 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, and Chapter Notes, as adopted and implemented by the Parties in their respective tariff laws;
heading means the first four digits in the tariff classification number under the Harmonized System;
measure includes any law, regulation, procedure, requirement, or practice;
national means a natural person who has the nationality of a Party according to Annex 1.3 ora permanent resident of a Party;
originating means qualifying under the rules of origin set out in Chapter Three (Textiles and Apparel) and Chapter Four (Rules of Origin and Origin Procedures);
person means a natural person or an enterprise;
person of a Party means a national or an enterprise of a Party;
preferential tariff treatment means the duty rate applicable under this Agreement to an originating good;
procurement means the process by which a government obtains the use of or acquires goods or services, or any combination thereof, for governmental purposes and not with a view to commercial sale or resale or with a view to use in the production or supply of goods or services for commercial sale or resale;
regional level of government means for the United States, a state of the United States, the District of Columbia, or Puerto Rico. For Peru, as a unitary Republic, the term "regional level of government" is not applicable;
Safeguards Agreement means the WTO Agreement on Safeguards;
sanitary or phytosanitary measure means any 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 the first six digits in the tariff classification number under the Harmonized System;
territory means for a Party the territory of that Party as set out in Annex 1.3;
TRIPS Agreement means the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights; (2)
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15, 1994.
Country-specific Definitions
For purposes of this Agreement, unless otherwise specified:
natural person who has the nationality of a Party means:
(a) with respect to Peru, Peruvians by birth, naturalization, or choice in accordance with Articles 52 and 53 of the Constitucién Politica del Pert; and
(b) with respect to the United States, "national of the United States" as defined in the existing provisions of the Immigration and Nationality Act; and
territory means:
(a) with respect to Peru, the continental territory, the islands, the maritime areas and the air space above them, in which Peru exercises sovereignty and jurisdiction or sovereign rights in accordance with its domestic law and international law;
(b) with respect to the United States,
(i) the customs territory of the United States, which includes the 50 states, the District of Columbia, and Puerto Rico,
(ii) the foreign trade zones located in the United States and Puerto Rico, and
iii) any areas beyond the territorial seas of the United States within which, in accordance with international law and its domestic law, the United States may exercise rights with respect to the seabed and subsoil and their natural resources.
Chapter Two. National Treatment and Market Access for Goods
Article 2.1. Scope and Coverage
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods of a Party.
Section A. National Treatment
Article 2.2. National Treatment
1. Each Party shall accord national treatment to the goods of another Party in accordance with Article II of the GATT 1994, including its interpretive notes, and to this end Article II of the GATT 1994 and its interpretive notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a regional level of government, treatment no less favorable than the most favorable treatment that regional level of government accords to any like, directly competitive, or substitutable goods, as the case may be, of the Party of which it forms a part.
3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 2.2.
Section B. Tariff Elimination
Article 2.3. Tariff Elimination
1. Except as otherwise provided in this Agreement, no Party may increase any existing customs duty, or adopt any new 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 2.3.
3. For greater certainty, paragraph 2 shall not prevent Peru from granting identical or more favorable tariff treatment to a good as provided for under the legal instruments of the Andean integration, provided that the goods meet the rules of origin under those instruments.
4. On the request of any Party, the requesting Party and one or more other Parties shall consult to consider accelerating the elimination of customs duties set out in their Schedules to Annex 2.3. The consulting Parties shall notify the other Parties of the goods that will be subject to the consultations, and shall afford the other Parties an opportunity to participate in the consultations. Notwithstanding Article 20.1.3(b) (Free Trade Commission), an agreement between two or more Parties to accelerate the elimination of a customs duty on a good shall supercede any duty rate or staging category determined pursuant to their Schedules to Annex 2.3 for that good when approved by each involved Party in accordance with its applicable legal procedures. Within 30 days after two or more Parties conclude an agreement under this paragraph, they shall notify the other Parties of the terms of the agreement.
5. For greater certainty, a Party may:
(a) raise a customs duty to the level established in its Schedule to Annex 2.3 following a unilateral reduction; or
(b) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.
Section C. Special Regimes
Article 2.4. Waiver of Customs Duties
1. No Party may adopt any new waiver of customs duties, or expand with respect to existing recipients or extend to any new recipient the application of an existing waiver of customs duties, where the waiver is conditioned, explicitly or implicitly, on the fulfillment of a performance requirement.
2. No Party may, explicitly or implicitly, condition on the fulfillment of a performance requirement the continuation of any existing waiver of customs duties.
Article 2.5. Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission for the following goods, regardless of their origin:
(a) professional equipment, including equipment for the press or television, software, and broadcasting and cinematographic equipment, necessary for carrying out the business activity, trade, or profession of a person who qualifies for temporary entry pursuant to the laws of the importing Party;
(b) goods intended for display or demonstration;
(c) commercial samples and advertising films and recordings; and
(d) goods admitted for sports purposes.
2. Each Party shall, at the request of the person concerned and for reasons its customs authority considers valid, extend the time limit for temporary admission beyond the period initially fixed.
3. No Party may condition the duty-free temporary admission of a good referred to in paragraph 1, other than to require that the good:
(a) be used solely by or under the personal supervision of a national or resident of another Party in the exercise of the business activity, trade, profession, or sport of that person;
(b) not be sold or leased while in its territory;
(c) be accompanied by a security in an amount no greater than the charges that would otherwise be owed on entry or final importation, releasable on exportation of the good;
(d) be capable of identification when exported;
(e) be exported on the departure of the person referenced in subparagraph (a), or within such other period related to the purpose of the temporary admission as the Party may establish, or within one year, unless extended;
(f) be admitted in no greater quantity than is reasonable for its intended use; and
(g) be otherwise admissible into the Party's territory under its law.
4. If any condition that a Party imposes under paragraph 3 has not been fulfilled, the Party may apply the customs duty and any other charge that would normally be owed on the good plus any other charges or penalties provided for under its law.
5. Each Party shall adopt and maintain procedures providing for the expeditious release of goods admitted under this Article. To the extent possible, such procedures shall provide that when such a good accompanies a national or resident of the other Party who is seeking temporary entry, the good shall be released simultaneously with the entry of that national or resident.
6. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than that through which it was admitted.
7. Each Party shall provide that the importer or other person responsible for a good admitted under this Article shall not be liable for failure to export the good on presentation of satisfactory proof to the importing Party that the good has been destroyed within the original period fixed for temporary admission or any lawful extension.
8. Subject to Chapters Ten (Investment) and Eleven (Cross-Border Trade in Services):
(a) each Party shall allow a vehicle or container used in international traffic that enters its territory from the territory of another Party to exit its territory on any route that is reasonably related to the economic and prompt departure of such vehicle or container;
(b) no Party may require any security or impose any penalty or charge solely by reason of any difference between the port of entry and the port of departure of a vehicle or container;
(c) no Party may condition the release of any obligation, including any security, that it imposes in respect of the entry of a vehicle or container into its territory on its exit through any particular port of departure; and
(d) no Party may require that the vehicle or carrier bringing a container from the territory of another Party into its territory be the same vehicle or carrier that takes the container to the territory of another Party.
9. For purposes of paragraph 8, vehicle means a truck, a truck tractor, a tractor, a trailer unit or trailer, a locomotive, or a railway car or other railroad equipment.
Article 2.6. Goods Re-entered after Repair or Alteration
1. No Party may apply a customs duty to a good, regardless of its origin, that re-enters its territory after that good has been temporarily exported from its territory to the territory of another Party for repair or alteration, regardless of whether such repair or alteration could be performed in the territory of the Party from which the good was exported for repair or alteration.
2. No Party may apply a customs duty to a good, regardless of its origin, admitted temporarily from the territory of another Party for repair or alteration.
3. For purposes of this Article, repair or alteration does not include an operation or process that:
(a) destroys a good's essential characteristics or creates a new or commercially different good; or
(b) transforms an unfinished good into a finished good.
Article 2.7. 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 another Party, regardless of their origin, but may require that:
(a) such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of another Party or a non-Party; or
(b) such advertising materials be imported in packets that each contain no more than one copy of each such material and that neither such materials nor packets form part of a larger consignment.
Section D. Non-Tariff Measures
Article 2.8. Import and Export Restrictions
1. Except as otherwise provided in this Agreement, no Party may adopt or maintain any prohibition or restriction on the importation of any good of another Party or on the exportation or sale for export of any good destined for the territory of another Party, except in accordance with Article XI of the GATT 1994 and its interpretative notes, and to this end Article XI of the GATT 1994 and its interpretive notes are incorporated into and made a part of this Agreement, mutatis mutandis. (1)
2. The Parties understand that the GATT 1994 rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:
(a) export and import price requirements, except as permitted in enforcement of countervailing and antidumping duty orders and undertakings;
(b) import licensing conditioned on the fulfillment of a performance requirement, except as provided in a Party's Schedule to Annex 2.3; or
(c) voluntary export restraints inconsistent with Article VI of the GATT 1994, as implemented under Article 18 of the SCM Agreement and Article 8.1 of the AD Agreement.
3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 2.2.
4. In the event that a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, no provision of this Agreement shall be construed to prevent the Party from:
(a) limiting or prohibiting the importation from the territory of another Party of such good of that non-Party; or
(b) requiring as a condition of export of such good of the Party to the territory of another Party, that the good not be re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.
5. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, the Parties, on the request of any Party, shall consult with a view to avoiding undue interference with or distortion of pricing, marketing, or distribution arrangements in another Party.
6. No Party may, as a condition for engaging in importation or for the import of a good, require a person of another Party to establish or maintain a contractual or other relationship with a distributor in its territory.
7. Nothing in paragraph 6 prevents a Party from requiring the designation of an agent for the purpose of facilitating communications between regulatory authorities of the Party and a person of another Party.
8. For purposes of paragraph 6:
distributor means a person of a Party who is responsible for the commercial distribution, agency, concession, or representation in the territory of that Party of goods of another Party;