Article 2.9. Import Licensing
1. No Party may adopt or maintain a measure that is inconsistent with the Import Licensing Agreement.
2. Promptly after entry into force of this Agreement, each Party shall notify the other Parties of any existing import licensing procedures, and thereafter shall notify the other Parties of any new import licensing procedure and any modification to its existing import licensing procedures, within 60 days before it takes effect. A notification provided under this Article shall:
(a) include the information specified in Article 5 of the Import Licensing Agreement; and
(b) be without prejudice as to whether the import licensing procedure is consistent with this Agreement.
3. No Party may apply an import licensing procedure to a good of another Party unless it has provided notification in accordance with paragraph 2.
Article 2.10. Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with Article VII:1 of the GATT 1994 and its interpretive notes, that all fees and charges of whatever character (other than customs duties, charges equivalent to an internal tax or other internal charge applied consistently with Article Ill:2 of the GATT 1994, and antidumping and countervailing duties) imposed on or in connection with importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.
2. No Party may require consular transactions, including related fees and charges, in connection with the importation of any good of another Party.
3. Each Party shall make available and maintain through the Internet a current list of the fees and charges it imposes in connection with importation or exportation.
4. The United States shall eliminate its Merchandise Processing Fee on originating goods of Peru upon the entry into force of this Agreement.
Article 2.11. Export Taxes
Except as otherwise provided in this Agreement, no Party may adopt or maintain any duty, tax, or other charge on the export of any good to the territory of another Party, unless the duty, tax, or charge is also adopted or maintained on the good when destined for domestic consumption.
Section E. Other Measures
Article 2.12. Distinctive Products
1. Peru shall recognize Bourbon Whiskey and Tennessee Whiskey, which is a straight Bourbon Whiskey authorized to be produced only in the State of Tennessee, as distinctive products of the United States. Accordingly, Peru shall not permit the sale of any product as Bourbon Whiskey or Tennessee Whiskey, unless it has been manufactured in the United States in accordance with the laws and regulations of the United States governing the manufacture of Bourbon Whiskey and Tennessee Whiskey.
2. The United States shall recognize "Pisco Perú" as a distinctive product of Peru. Accordingly, the United States shall not permit sale of any product as "Pisco Perú", unless it has been manufactured in Peru in accordance with the laws and regulations of Peru governing Pisco. (2)
3. At the request of a Party, the Committee on Trade in Goods shall consider whether to recommend that the Parties amend the Agreement to designate a good as a distinctive product for the purposes of this Article.
Section F. Institutional Provisions
Article 2.13. Committee on Trade In Goods
1. The Parties hereby establish a Committee on Trade in Goods, comprising representatives of each Party.
2. The Committee shall meet on the request of a Party or the Commission to consider any matter arising under this Chapter, Chapter Four (Rules of Origin and Origin Procedures), or Chapter Five (Customs Administration and Trade Facilitation).
3. The Committee's functions shall include, inter alia:
(a) promoting trade in goods between the Parties, including through consultations on accelerating tariff elimination under this Agreement and other issues as appropriate;
(b) addressing barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures, and, if appropriate, referring such matters to the Commission for its consideration;
(c) providing to the Committee on Trade Capacity Building advice and recommendations on technical assistance needs regarding matters relating to this Chapter, Chapter Four (Rules of Origin and Origin Procedures), or Chapter Five (Customs Administration and Trade Facilitation);
(d) reviewing conversion to the Harmonized System 2007 nomenclature and its subsequent revisions to ensure that each Party's obligations under this Agreement are not altered, and consulting to resolve any conflicts between:
(i) the Harmonized System 2007 or subsequent nomenclature and Annex 2.3; and
(ii) Annex 2.3 and national nomenclatures; and consulting on and endeavoring to resolve any difference that may arise among the
(e) Parties on matters related to the classification of goods under the Harmonized System.
Section G. Agriculture
Article 2.14. Scope and Coverage
This Section applies to measures adopted or maintained by a Party relating to trade in agricultural goods.
Article 2.15. Administration and Implementation of Tariff-Rate Quotas
1. Each Party shall implement and administer the tariff-rate quotas for agricultural goods set out in Appendix I to its Schedule to Annex 2.3 (hereafter "TRQs") in accordance with Article XIU of the GATT 1994, including its interpretive notes, and the Import Licensing Agreement.
2. Each Party shall ensure that:
(a) its procedures for administering its TRQs are transparent, made available to the public, timely, nondiscriminatory, responsive to market conditions, and minimally burdensome to trade;
(b) subject to subparagraph (c), any person of a Party that fulfills the Party's legal and administrative requirements shall be eligible to apply and to be considered for an in-quota quantity allocation under the Party's TRQs;
(c) it does not, under its TRQs:
(i) allocate any portion of an in-quota quantity to a producer group;
(ii) condition access to an in-quota quantity on purchase of domestic production; or
(iii) limit access to an in-quota quantity only to processors;
(d) solely government authorities administer its TRQs and government authorities do not delegate administration of its TRQs to producer groups or other non- governmental organizations, except as otherwise provided in this Agreement; and
(e) it allocates in-quota quantities under its TRQs in commercially viable shipping quantities and, to the maximum extent possible, in the amounts that importers request.
3. Each Party shall make every effort to administer its TRQs in a manner that allows importers to fully utilize them.
4. No Party may condition application for, or use of, an in-quota quantity allocation under a TRQ on the re-export of an agricultural good.
5. No Party may count food aid or other non-commercial shipments in determining whether an in-quota quantity under a TRQ has been filled.
6. On request of the exporting Party, the importing Party shall consult with the exporting Party regarding the administration of the importing Party's TRQs.
Article 2.16. Agricultural Export Subsidies
1. The Parties share the objective of the multilateral elimination of export subsidies for agricultural goods and shall work together toward an agreement in the WTO to eliminate those subsidies and prevent their reintroduction in any form.
2. Except as provided in paragraph 3, no Party may adopt or maintain any export subsidy on any agricultural good destined for the territory of another Party.
3. Where the exporting Party considers that a non-Party is exporting an agricultural good to the territory of another Party with the benefit of export subsidies, the importing Party shall, on written request of the exporting Party, consult with the exporting Party with a view to agreeing on specific measures that the importing Party may adopt to counter the effect of such subsidized imports. If the importing Party adopts the agreed-on measures, the exporting Party shall refrain from applying any subsidy to its exports of the good to the territory of the importing Party.
Article 2.17. Export State Trading Enterprises
The Parties shall work together toward an agreement on export state trading enterprises in the WTO that:
(a) eliminates restrictions on the right to export;
(b) eliminates any special financing granted directly or indirectly to state trading enterprises that export for sale a significant share of their country's total exports of an agricultural good; and
(c) ensures greater transparency regarding the operation and maintenance of export state trading enterprises.
Article 2.18. Agricultural Safeguard Measures
1. Notwithstanding Article 2.3, a Party may apply a measure in the form of an additional import duty on an originating agricultural good listed in that Party's Schedule to Annex 2.18, provided that the conditions in paragraphs 2 through 8 are met. The sum of any such additional import duty and any other customs duty on such good shall not exceed the least of:
(a) the base tariff rate provided in the Schedule to Annex 2.3;
(b) the most-favored-nation (MFN) applied rate of duty in effect on the day immediately preceding the date of entry into force of this Agreement;
(c) the prevailing MFN applied rate of duty; or
(d) the level of duty described in subparagraph 2(c) of Appendix I to Peru's Schedule to Annex 2.3, if applicable.
2. A Party may apply an agricultural safeguard measure during any calendar year (or, in the case of a good provided for in the subheadings listed in subparagraph 7(d) of Appendix I to Peru's Schedule to Annex 2.3, during any marketing year) on an originating agricultural good if the quantity of imports of the good during such year exceeds the trigger level for that good set out in its Schedule to Annex 2.18.
3. The additional duty under paragraph 1 shall be set according to each Party's Schedule to Annex 2.18.
4. No Party may apply an agricultural safeguard measure and at the same time apply or maintain:
(a) a safeguard measure under Chapter Eight (Trade Remedies); or
(b) a measure under Article XIX of GATT 1994 and the Safeguards Agreement; with respect to the same good.
5. No Party may apply or maintain an agricultural safeguard measure on a good:
(a) on or after the date that the good is subject to duty-free treatment under the Party's Schedule to Annex 2.3; or
(b) that increases the in-quota duty on a good subject to a TRQ.
6. A Party shall implement an agricultural safeguard measure in a transparent manner. Within 60 days after applying such a measure, the Party applying the measure shall notify the Party whose good is subject to the measure, in writing, and shall provide it relevant data concerning the measure. On request, the Party applying the measure shall consult with the Party whose good is subject to the measure regarding application of the measure.
7. A Party may maintain an agricultural safeguard measure only until the end of the calendar year or marketing year, as applicable, in which the Party imposes the measure.
8. Originating goods from any Party shall not be subject to any duties applied pursuant to any agricultural safeguard measure taken under the WTO Agreement on Agriculture or any successor provisions thereof.
9. For purposes of this Article and Annex 2.18, agricultural safeguard measure means a measure described in paragraph 1.
Article 2.19. Sugar Compensation Mechanism
1. In any year, the United States may, at its option, apply a mechanism that results in compensation to a Party's exporters of sugar goods in lieu of according duty-free treatment to some or all of the duty-free quantity of sugar goods established for that Party in Appendix I to the Schedule of the United States to Annex 2.3. Such compensation shall be equivalent to the estimated economic rents the Party's exporters would have obtained on exports to the United States of any such amounts of sugar goods and shall be provided within 30 days after the United States exercises this option. The United States shall notify the Party at least 90 days before it exercises this option and, on request, shall enter into consultations with the Party regarding application of the mechanism.
2. For purposes of this Article, sugar good means a good provided for in the subheadings listed in subparagraph 5(c) of Appendix I to the Schedule of the United States to Annex 2.3.
Article 2.20. Consultations on Trade In Chicken
The Parties shall consult on, and review the implementation and operation of the Agreement as it relates to, trade in chicken in the ninth year after the date of entry into force of this Agreement.
Article 2.21. Committee on Agricultural Trade
1. No later than 180 days after the date of entry into force of this Agreement, the Parties shall establish a Committee on Agricultural Trade, comprising representatives of each Party.
2. The Committee shall provide a forum for:
(a) monitoring and promoting cooperation on the implementation and administration of this Section;
(b) consultation between the Parties on matters related to this Section in coordination with other committees, subcommittees, working groups, or other bodies established under this Agreement; and
(c) undertaking any additional work that the Commission may assign.
3. The Committee shall meet at least once a year unless it decides otherwise. Meetings of the Committee shall be chaired by the representatives of the Party hosting the meeting.
4. All decisions of the Committee shall be taken by consensus, unless the Committee otherwise decides.
Section H. Definitions
Article 2.22. Definitions
For purposes of this Chapter:
AD Agreement means the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994;
advertising films and recordings means recorded visual media or audio materials, consisting essentially of images and/or sound, showing the nature or operation of goods or services offered for sale or lease by a person established or resident in the territory of a Party, provided that such materials are of a kind suitable for exhibition to prospective customers but not for broadcast to the general public;
agricultural goods means those goods referred to in Article 2 of the WTO Agreement on Agriculture;
commercial samples of negligible value means commercial samples having a value, individually or in the aggregate as shipped, of not more than one U.S. dollar, or the equivalent amount in the currency of another Party, or so marked, torn, perforated, or otherwise treated that they are unsuitable for sale or use except as commercial samples;
consular transactions means requirements that goods of a Party intended for export to the territory of another Party must first be submitted to the supervision of the consul of the importing Party in the territory of the exporting Party for the purpose of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, shippers' export declarations, or any other customs documentation required on or in connection with importation;
consumed means
(a) actually consumed; or
(b) further processed or manufactured so as to result in a substantial change in the value, form, or use of the good or in the production of another good;
duty-free means free of customs duty;
export subsidies shall have the meaning assigned to that term in Article 1(e) of the WTO Agreement on Agriculture, including any amendment of that article;
goods intended for display or demonstration includes their component parts, ancillary apparatus, and accessories;
goods temporarily admitted for sports purposes means sports requisites for use in sports contests, demonstrations, or training in the territory of the Party into whose territory such goods are admitted;
import licensing means an administrative procedure requiring the submission of an application or other documentation (other than that generally required for customs clearance purposes) to the relevant administrative body as a prior condition for importation into the territory of the importing Party;
Import Licensing Agreement means the WTO Agreement on Import Licensing Procedures,
performance requirement means a requirement that:
(a) a given level or percentage of goods or services be exported;
(b) domestic goods or services of the Party granting a waiver of customs duties or an import license be substituted for imported goods;
(c) a person benefiting from a waiver of customs duties or an import license purchase other goods or services in the territory of the Party granting the waiver of customs duties or the import license, or accord a preference to domestically produced goods;
(d) a person benefiting from a waiver of customs duties or an import license produce goods or supply services, in the territory of the Party granting the waiver of customs duties or the import license, with a given level or percentage of domestic content; or
(e) relates in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows;
but does not include a requirement that an imported good be:
(f) subsequently exported; used as a material in the production of another good that is subsequently exported;
(g) substituted by an identical or similar good used as a material in the production of another good that is subsequently exported; or
(h) substituted by an identical or similar good that is subsequently exported;
(i) printed advertising materials means those goods classified in Chapter 49 of the Harmonized System, including brochures, pamphlets, leaflets, trade catalogues, yearbooks published by trade associations, tourist promotional materials, and posters, that are used to promote, publicize, or advertise a good or service, are essentially intended to advertise a good or service, and are supplied free of charge; and
SCM Agreement means the WTO Agreement on Subsidies and Countervailing Measures.
Chapter Three. Textiles and Apparel (1)
Article 3.1. Textile Safeguard Measures
1. Subject to the following paragraphs, and during the transition period only, if, as a result of the reduction or elimination of a duty provided for in this Agreement, a textile or apparel good benefiting from preferential tariff treatment is being imported into the territory of another Party in such increased quantities, in absolute terms or relative to the domestic market for that good, and under such conditions as to cause serious damage, or actual threat thereof, to a domestic industry producing a like or directly competitive good, the importing Party may, to the extent necessary to prevent or remedy such damage and to facilitate adjustment, apply a textile safeguard measure to that good, consisting of an increase in the rate of duty on the good to a level not to exceed the lesser of:
(a) the most-favored-nation (MFN) applied rate of duty in effect at the time the measure is applied; and
(b) the MFN applied rate of duty in effect on the date of entry into force of this Agreement.
2. In determining serious damage, or actual threat thereof, the importing Party:
(a) shall examine the effect of increased imports of the good of the exporting Party or Parties on the particular industry, as reflected in changes in such relevant economic variables as output, productivity, utilization of capacity, inventories, market share, exports, wages, employment, domestic prices, profits and losses, and investment, none of which, either alone or combined with other factors, shall necessarily be decisive; and
(b) shall not consider changes in consumer preference or changes in technology in the importing Party as factors supporting a determination of serious damage or actual threat thereof.
3. The importing Party may apply a textile safeguard measure only following an investigation by its competent authority.
4. The investigations referred to in this Article shall be carried out according to procedures established by each Party, which shall be notified to the Parties upon entry into force of this Agreement or before a Party initiates an investigation.
5. The importing Party shall deliver to the exporting Party or Parties, without delay, written notice of the initiation of the investigation, as well as of its intent to apply or extend a textile safeguard measure and, on request of the exporting Party or Parties, shall enter into consultations with that Party or Parties.
6. The following conditions and limitations apply to any textile safeguard measure:
(a) no Party may maintain a textile safeguard measure for a period exceeding two years, except that the period may be extended for up to one year;
(b) no Party may apply a textile safeguard measure to the same good of another Party more than once;
(c) on termination of the textile safeguard measure, the Party applying the measure shall apply the rate of duty set out in its Schedule to Annex 2.3 (Tariff Elimination) as if the measure had never been applied; and
(d) no Party may maintain a textile safeguard measure beyond the transition period.
7. The Party applying a textile safeguard measure shall provide to the Party or Parties against whose good the measure is taken mutually agreed trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the textile safeguard measure. Such concessions shall be limited to textile or apparel goods, unless the consulting Parties otherwise agree.
8. If the consulting Parties are unable to agree on compensation within 30 days of application of a textile safeguard measure, the Party or Parties against whose good the measure is taken may take tariff action having trade effects substantially equivalent to those of the textile safeguard measure. Such tariff action may be taken against any good of the Party applying the textile safeguard measure. The Party taking the tariff action shall apply it only for the minimum period necessary to achieve the substantially equivalent trade effects. The importing Party's obligation to provide trade compensation and the exporting Party's or Parties' right to take tariff action shall terminate when the textile safeguard measure terminates.
9. (a) Each Party maintains its rights and obligations under Article XIX of the GATT 1994 and the Safeguards Agreement.
(b) No Party may apply, with respect to the same good at the same time, a textile safeguard measure and:
(i) a safeguard measure under Chapter Eight (Trade Remedies); or
(ii) a measure under Article XIX of the GATT 1994 and the Safeguards Agreement.
Article 3.2. Customs Cooperation and Verification of Origin
1. The competent authorities of the Parties shall cooperate for purposes of:
(a) enforcing or assisting in the enforcement, and deterring circumvention, of the laws, regulations, and procedures of each Party, and international agreements affecting trade in textile or apparel goods, and;
(b) ensuring the accuracy of claims of origin for textile or apparel goods.
The Parties recognize that, in accordance with paragraph 10, providing technical or other assistance to advance these purposes is an essential part of this Article.
2. A Party's request for cooperation under this Article shall identify the relevant laws, regulations, or procedures pertaining to that request.
3. (a) On the written request of the importing Party, an exporting Party shall conduct a verification for purposes of enabling the importing Party to determine:
(i) that a claim of origin for a textile or apparel good is accurate; or
(ii) that the exporter or producer is complying with applicable customs laws, regulations, and procedures regarding trade in textile or apparel goods, including:
(A) laws, regulations, and procedures that the exporting Party adopts and maintains pursuant to this Agreement; and
(B) laws, regulations, and procedures of the importing Party and the exporting Party implementing other international agreements regarding trade in textile or apparel goods.