Title
ADDITIONAL PROTOCOL TO THE FRAMEWORK AGREEMENT OF THE PACIFIC ALLIANCE
Preamble
PREAMBLE
The Republic of Colombia, the Republic of Chile, the United Mexican States and the Republic of Peru, henceforth referred to as "the Parties",
In development of the objectives and principals established in the Framework Agreement for the Pacific Alliance, signed in Paranal, Antofagasta, Republic of Chile on 6 June 2012 with a view to:
STRENGTHENING the ties of friendship, solidarity and cooperation between their peoples;
RATIFYING their desire to build a common space with the purpose of deepening political, economic, social and cultural integration as well as establishing an effective commitment to joint action in order to improve the wellbeing and living standards of their inhabitants and promote sustainable development in their respective territories;
STRENGTHENING regional integration to achieve greater growth, development and competitiveness in their economies and advance progressively towards the free circulation of goods, services, capital and people;
ESTABLISHING clear and mutually beneficial rules with the objective of stimulating the expansion and diversification of the trade of goods and services between the Parties, as well as attracting investment in their territories;
REAFFIRMING the objective of eliminating obstacles to trade with the goal of generating greater dynamism in the flow of trade of goods and services and investment between the Parties;
FACILITATING trade, promoting efficient, transparent and predictable customs procedures for their importers and exporters;
AVOIDING disruption in reciprocal trade and promote conditions for fair competition; STIMULATING trade in the innovation sectors of their economies; PROMOTING transparency in the trade of goods and services and investment;
RECOGNISING that this process of integration is based upon economic and commercial treaties and upon integration at a bilateral, regional and multilateral level between the Parties;
REAFFIRMING the rights and obligations defined in the Treaty of Marrakech which established the World Trade Organisation, the Treaty of Montevideo of 1980 as well as free trade and integration agreements between the Parties;
CONSIDERING the condition of the Members of the Andean Community of Nations the Republic of Colombia and the Republic of Peru and the commitments that concern these States;
FURTHERING greater ties with other regions, in particular Asia Pacific, and
DEEPENING cooperation and intensifying the flow of trade in goods and services and investment with other markets;
HAVE AGREED to this Additional Protocol to the Framework Agreement for the Pacific Alliance (henceforth referred to as "Additional Protocol")
Body
Chapter 1. INITIAL PROVISIONS
Article 1.1. Establishment of a Free Trade Area
The Parties, in accordance with Article XXIV of the General Agreement on Customs Duties and Trade of 1994 and Article V of the General Agreement on the Trade in Services which form part of the Treaty of Marrakech which established the World Trade Organisation, establish a free trade area.
Article 1.2. Relationship to other International Agreements
1. In accordance with the Framework Agreement for the Pacific Alliance and recognising the intent of the Parties that their existing international agreements should coexist alongside this Additional Protocol, the Parties confirm:
(a) Their rights and obligations in regards to the existing international treaties of which all the Parties may be part, including the Treaty of Marrakech which established the World Trade Organisation and,
(b) Their rights and obligations in regards to the existing international treaties of which one Party and at least one other Party are part.
2. If one Party considers a provision of this Additional Protocol to be incompatible (1) with a provision in another treaty of which that Party and at least one other Party are part, the Parties shall, upon request, hold consultations with the objective of reaching a mutually satisfactory resolution. The foregoing is without prejudice to the rights and obligations of the Parties in accordance with Chapter 17 (Dispute Resolution) (2)
Article 1.3. Interpretation of the Additional Protocol
The Parties will interpret and apply the provisions of this Additional Protocol in light of the objectives, principals and other recitals established in the Preamble and in accordance with the applicable norms of international law.
Article 1.4. Observance of the Additional Protocol
Each Party will ensure the adoption of all necessary measures to implement the provisions of this Additional Protocol in its territory and at all levels of government.
Chapter 2. GENERAL DEFINTIONS
Section 2.1. General Definitions
For the purposes of this Additional Protocol, unless otherwise specified: Anti-dumping Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, which is part of the Agreement on the WTO;
WTO Agreement means the Marrakesh Agreement by which the World Trade Organization is established;
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 which is part of the Agreement on the WTO;
SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, which is part of the Agreement on the WTO;
TBT Agreement means Agreement on Technical Barriers to Trade, which is part of the Agreement on the WTO;
GATS means the General Agreement on Trade in Services, which is part of the Agreement on the WTO;
Customs Duties means any import duty or tax, and any charge of any type applied to the import of goods, including any import surcharge or additional fee, but it does not include:
(a) Any fee equivalent to an excise tax applied in compliance with Section III:2 of GATT 1994, with regard of similar, directly competing or substitute goods of one Party, or in respect of goods out of which the imported goods have been manufactured or produced totally or partially;
(b) Any antidumping duty or countervailing measure applied in compliance with Section VI of GATT 1994, the Antidumping Agreement, or the WTO Agreement on Subsidies and Countervailing Measures;
(c) Any premium offered, paid or collected, if any, on imported goods, deriving from any bidding system, with respect to the administration of quantitative restrictions to import or of tariff quota, or tariff preference quotas, and
(d) Any duty or any charge related to import, proportional to the cost of the services rendered;
Customs Authority means the authority that, according to the respective laws of each Party, is responsible for administering, as well as implementing customs laws and regulations:
(a) In the case of Chile, the Servicio Nacional de Aduanas (the National Customs Service), or its succesor;
(b) In the case of Colombia, the Dirección de Impuestos y Aduanas Nacionales, DIAN (Customs and Taxes National Directorate), or its succesor;
(c) In the case of Mexico; the Servicio de Administración Tributaria (Tax and Administration Service) of the Secretaria de Hacienda y Crédito Publico (Department of Finance and Public Credit), or its succesor, and
(d) In the case of Peru: the Superintendencia Nacional de Aduanas y de Administración Tributaria - SUNAT, (National Superintendence of Customs and Tax Administration) or its succesor;
Chapter Means the first two digits of the Tariff Classification Code of the Harmonized System (HS);
Free Trade Commission means the Free Trade Commission established in compliance with Section 16.1 (Free Trade Commission);
Government procurement means the process through which a government obtains goods or services, or any other combination of the two, for governmental purposes, and not with a view of commercial sale or resale or for its use in the production or supply of goods and services for commercial sale or resale;
Days means calendar days, including weekends and holidays;
Company means any entity formed or organized in compliance with the applicable legislation, be it for- profit or for-non-profit, and whether privately owned or governmentally owned, including any corporation, trust, partnership, sole proprietorship, joint venture or other association, and the branch of a company;
Company of a Party means the company formed or organized in compliance with the legislation of a Party and a branch located in the territory of a Party and that carries commercial activities in that territory;
Existing means in effect on the date of the signature of this Additional Protocol;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, which is part of the 2-2 Agreement on the WTO;
Measure means any law, regulation, procedure, provision, requirement, or practice;
Goods means any product, item or material;
Goods of a Party means the national products as understood in GATT 1994 or those goods that the Parties have agreed upon, including the goods originating of that Party. Goods of a
Party may incorporate materials of another Party and of a non-Party country;
Originating goods means goods in compliance with the applicable provisions of Chapter 4 (Rules of Origin and Procedures related to Origin);
National means a natural person who is a national of a Party in accordance with its applicable legislation;
WTO means the World Trade Organization; Party means every State for which this Additional Protocol has come into force;
Heading means the first four digits of the tariff classification code of the Harmonized System (HS),
Person means a natural person, or a company;
Person of a Party means a national or a company of a Party;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, and the notes to its section, chapters and subheadings, in the manner that the Parties have adopted and implemented in their respective legislation;
Subheading means the first six digits of the tariff classification code of the Harmonized System (HS), and
Preferential tariff treatment means the tariff applicable to originating goods established in the Annex 3.4 of this Additional Protocol.
Article 2.2. Specific Definition
Territory means:
(a) With respect to Chile, the land, sea and air space under their sovereignty, and the exclusive economic zone and the continental shelf over which they have sovereignty rights and jurisdiction in accordance with international law and its internal legislation;
(b) With respect to Colombia, in addition to its mainland territory, the Archipelago of San Andrés, Providencia and Santa Catalina, Malpelo Island and all other islands, islets, keys, "morros" and banks, as well as its airspace and maritime areas over which the country has sovereignty, or sovereign rights, or jurisdiction in accordance with domestic legislation and international law, including applicable international treaties;
(c) With respect to Mexico:
(i) The states of the Federation and the Federal District;
(ii) The islands, including the reefs and keys in adjacent seas;
(iii) The islands of Guadalupe and of Revillagigedo, situated in the Pacific Ocean;
(iv) The continental shelf and the submarine shelf of the islands, keys and reefs;
(v) The waters of the territorial seas, to the extent and terms established by the international law and its interior maritime waters;
(vi) The space above the national territory, to the extent and in accordance with the rules established by their own international law, and
(vii) Any areas beyond the territorial seas of Mexico over which Mexico may exercise rights on the seafloor and the sea subsoil, and on the natural resources they have, in accordance with international law, including the United Nations Convention on the Law of the Sea, as well as its national legislation;
(d) With respect to Peru, the mainland territory, the islands, the maritime zones and the airspace above them, over which Peru exercises sovereignty or sovereignty and jurisdiction rights, in accordance with its national legislation and international law.
Chapter 3. MARKET ACCESS
Section A. Definitions and Scope
Article 3.1. Definitions
For the purposes of this Chapter:
Agreement on Import Licensing means the Agreement on Import Licensing Procedures, that is part of the Agreement on WTO;
Subsidies Agreement means the Agreement on Subsidies and Countervailing measures that is part of the WTO Agreement;
Import license or permit means the document issued by the appropriate administrative body, issued under an administrative procedure used for the implementation of import licensing;
Printed advertising materials means those goods classified on Chapter 49 of the Harmonized System (HS), including brochures, prints, flyers, sales catalogs, directories published by business associations, tourism promotional materials and posters used to promote, publicize or advertise a good or service, to be used for publicity of a good or service, and be distributed free of charge;
Goods temporarily admitted for sports purposes means sport equipment for use in sports contests, events or training in the territory of the Party to which they are admitted;
Commercial samples of negligible value means commercial samples valued, individually or as a whole shipment, of not more than one U.S. dollar or the equivalent amount in the currency of a Party, or so marked, broken, perforated or otherwise treated that they are not suitable for sale or for any use other than for samples;
Advertising films and recordings means recorded visual media or recorded audio material consisting essentially of images and/ or sound showing the nature or functioning of goods or services offered for sale or lease by a person established or residing in the territory of a Party, provided that such materials are suitable for exhibition to prospective customers, but not for its dissemination to the general public
Performance requirement means the requirement of:
(a) Exporting a given volume or percentage of goods or services;
(b) Substituting imported goods or services by goods or services of the Party granting the waiver of customs duties or the import license
(c) That a person benefiting from a waiver of customs duties or from 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 the goods produced in the territory of that Party;
(d) That a person who benefits from a waiver of customs duties or from an import license produce goods or 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) Relating in any way the volume or value of the imports to the volume or value of the exports or to the amount of foreign currency inflow;
But does not include a requirement that an imported good be:
(a) Subsequently exported;
(b) Used as a material in the production of other commodity that is subsequently exported;
(c) Substituted by an identical or similar good used as a material in the production of another good that is subsequently exported, or
(d) Substituted by an identical or similar good that is subsequently exported;
Consular requirements or transactions means requirements for the goods of a Party intended for export to the territory of another Party to first be submitted to the supervision of the consul of the importing Party in the territory of the exporting Party to the effect of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, export declarations of the shipper or any other customs document required for import or in connection therewith;
Export subsidies means those mentioned in Section 1 (e) of the Agreement on Agriculture, which is part of the WTO Agreement, including any amendment of this Article, and
Import licensing procedure means an administrative procedure used for the implementation of import licensing regulations that require the submission of an application or other documentation, different from the one required for customs purposes, to the appropriate administrative body as a prior condition for the import to the importing Party.
Article 3.2. Scope and Coverage
Unless otherwise provided in this Additional Protocol, this Chapter applies to the trade in goods between the Parties.
Section B. National Treatment
Article 3.3. National Treatment
1. Each Party shall grant national treatment to the goods of another Party in accordance with Section III of GATT 1994, including its interpretative notes. For such purpose, Section III of GATT 1994 and its interpretative notes are incorporated into this Additional Protocol and are an integral part thereof, mutatis mutandis.
2. The provisions of paragraph 1 mean, with respect to a regional or state or local level government a treatment no less favorable than the most favorable treatment that a regional or state or local level government gives to any of the similar goods, directly competitive or substitutable as applicable, of the Party of which such government is part.
3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 3.3.
Section C. Tariff Elimination
Article 3.4. Elimination of Tariffs
1. Unless otherwise provided in this Additional Protocol, each Party shall eliminate its tariffs on originating goods in accordance with its Tariff Elimination List set out in Annex 3.4.
2. Unless otherwise provided in this Additional Protocol, none of the Parties may increase any existing tariff, or adopt any new customs duty, on originating goods.
3. If at any time after the date of the entry into force of this Additional Protocol, a Party reduces its most-favored-nation- tariff applied, such tariff shall apply only if is less than the tariff resulting from the application of Annex 3.4.
4. At the request of any Party, such Party and one or more Parties shall consult, in accordance with this Chapter, to examine the possibility of improving the tariff market access conditions on originating goods set out in their lists of tariff elimination in Annex 3.4. Such agreements between two or more parties shall be adopted by the decisions of the Free Trade Commission.
5. An agreement between two or more Parties to improve tariff market access conditions on originating goods, based on paragraph 4, shall prevail over any duty rate or tariff relief category set out in their respective lists of tariff elimination in Annex 3.4.
6. When a Party decides to unilaterally accelerate the elimination of customs tariffs on originating goods of the other Parties set out in its own list of tariff elimination in Annex 3.4, the Party shall inform the other Parties before the new customs tariff comes into force.
7. If a party improves tariff market access conditions in accordance with paragraphs 4 or 6, the benefits of this improvement will extend to the other Parties.
8. A Party may: (a) Increase a customs tariff to be applied to originating goods to a level not higher than the one set out in Annex 3.4, after a unilateral reduction of such customs tariff, or
(b) Maintain or increase a customs tariff on an originating good, when authorized by the WTO Dispute Settlement Body.
Article 3.5. Customs Valuation
Customs valuation principles applied to trade between the Parties will be governed by the provisions of the Customs Valuation Agreement. To this end, the Customs Valuation Agreement is incorporated to this Additional Protocol and is an integral part thereof, mutatis mutandis.
Section D. Non-Tariff Measures
Article 3.6. Restrictions on Imports and Exports
1. Unless otherwise provided in this Additional Protocol, no Party may adopt or maintain a non-tariff measure that prohibits or restricts the import of any good of another Party or the export or sale for export of any good destined for the territory of another Party, with the exception of the provisions of Section XI of GATT 1994, and its interpretative notes. To this end Section XI of GATT 1994 and its interpretative notes are incorporated to this Additional Protocol and are an integral part thereof mutatis mutandis.
2. The Parties understand that the rights and obligations of GATT 1994 incorporated in paragraph 1 prohibit, in any circumstances in which it is prohibited any other restriction, that a Party adopt or maintain:
(a) Requirements of export and import prices, except as permitted in the performance of duties and obligations of antidumping rights or countervailing measures;
(b) Import licensing conditioned to the fulfillment of a performance requirement, or
(c) Voluntary restrictions to exports, except the ones permitted in Section VI of GATT 1994,
as were established by Section 8 of the Agreement on Subsidies and Section 8.1 of the Antidumping Agreement.
3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 3.3.
4. No Party may require, as a condition of its commitment to import or to the import of a good, that a person of another Party establish or maintain a contractual or other relationship with a distributor in its territory.
5. Nothing in paragraph 4 shall prevent a Party from requiring the appointment of an agent for the purpose of facilitating communications between regulatory authorities of a Party and a person of other Party.
6. For the purposes of paragraph 4, 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.
Article 3.7. Other Non-Tariff Measures
A measure that could affect the marketing of goods in the territory of a Party shall be in accordance with the obligations of this Additional Protocol. Notwithstanding the foregoing, the Party intending to adopt such measure shall consult with the affected Parties. Measures of this type should be notified to the Parties at least 60 days prior to their implementation and must not diminish the obligations established in this Additional Protocol.
Article 3.8. Import Licenses or Permits
1. No Party shall adopt or maintain a measure inconsistent with the Agreement on Import Licensing.
2. And to this end, the Agreement is incorporated to this Additional Protocol and is an integral part thereof, mutatis mutandis.
3. Unless otherwise provided in this Additional Protocol, licenses or import permits are granted and issued within a maximum period of 20 working days from the date on which the importing Party receives the request, in accordance with the regulating legislation.
4. Upon entry into force of this Additional Protocol, each Party shall notify the other Parties of any existing import licensing procedure.