Title
FREE TRADE AGREEMENT BETWEEN THE UNITED MEXICAN STATES AND THE EASTERN REPUBLIC OF URUGUAY
Preamble
The Governments of the United Mexican States and the Oriental Republic of Uruguay, determined to:
REAFFIRM the special ties of friendship and cooperation between their nations;
STRENGTHEN regional economic integration, which is one of the essential instruments for Latin American countries to advance in their economic and social development, ensuring a better quality of life for their peoples;
DEVELOP their respective rights and obligations under World Trade Organization agreements;
ESTABLISH a legal framework that fosters the necessary conditions for the growth and diversification of trade flows, in a manner compatible with existing potential;
PROVIDE economic agents with clear and predictable rules for the development of trade and investment, in order to encourage their active participation in economic and trade relations between the two countries;
CREATE a larger and more secure market for goods and services produced in their territories;
ENCOURAGE innovation and creativity and promote trade in goods and services that are protected by intellectual property rights;
TO ENSURE a predictable business framework for the planning of productive and investment activities;
HAVE AGREED:
Body
Chapter I. INITIAL ARRANGEMENTS
Article 1-01. Establishment of the Free Trade Zone.
The Parties establish a free trade area in accordance with the provisions of Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and Article V of the General Agreement on Trade in Services.
Article 1-02. Objectives.
1. The objectives of this Agreement, specifically developed through its principles and rules, including those of national treatment, most-favored-nation treatment, and transparency, are as follows:
a) stimulate the expansion and diversification of trade between the Parties;
b) eliminate barriers to trade and facilitate the movement of goods and services between the Parties;
c) promote conditions of fair competition in trade between the Parties;
d) substantially increase investment opportunities in the territories of the Parties;
e) adequately and effectively protect and enforce intellectual property rights in the territory of each Party;
f) to establish guidelines for further cooperation between the Parties, as well as at the regional and multilateral levels to expand and enhance the benefits of this Agreement; and
g) create effective procedures for the implementation and enforcement of this Agreement, for its joint administration and for the settlement of disputes.
The Parties shall interpret and apply the provisions of this Agreement in the light of the objectives set forth in paragraph 1 and in accordance with the applicable rules of international law.
Article 1-03. Relationship with other Treaties and International Agreements.
1. The Parties confirm the rights and obligations in force between them under the WTO Agreement and other treaties and agreements to which they are party.
2. In case of incompatibility between the provisions of the treaties and agreements referred to in paragraph 1 and the provisions of this Treaty, the latter shall prevail to the extent of the incompatibility.
Article 1-04. Compliance with the Treaty.
Each Party shall ensure, in accordance with its constitutional requirements, compliance with the provisions of this Agreement in its territory at the federal or central, state or departmental, and municipal levels, respectively, except as otherwise provided in this Agreement. A federal or central, state or departmental, or municipal government includes any non-governmental body in the exercise of any regulatory, administrative or other powers delegated to it by the federal or central, state or departmental, or municipal government.
Article 1-05. Succession of Treaties.
Any reference to any other treaty or intemational agreement shall be understood to be made in the same terms to a successor treaty or agreement to which the Parties are parties.
Article 1-06. Petroleum.
Trade in petroleum is exempted from the provisions contained in this Treaty and shall be govemed by the respective regulations in force in both Parties.
Article 1-07. Automotive Sector.
Trade in automotive goods covered by ACE 55 and its additional protocols shall be governed exclusively by the provisions of said instruments.
Chapter II. GENERAL DEFINITIONS
Article 2-01. General Definitions.
For the purposes of this Agreement, unless otherwise specified, the following shall mean:
TRIPS Agreement: the Agreement on Trade-Related Aspects of Intellectual Property Rights, which is part of the WTO Agreement;
WTO Agreement: the Marrakesh Agreement Establishing the World Trade Organization, dated April 15, 1994;
ALADI: the Latin American Integration Association;
customs duty: any tax, duty or import tax and any charge of any kind applied in connection with the importationof goods, including any form of surcharge or additional charge on imports, except:
a) any charge equivalent to an internal tax established in accordance with Article IIl2 of the GATT 1994, with respect to like goods, direct competitors or substitutes of the Party, or with respect to goods from which the imported good has been manufactured or produced in whole or in part;
b) any countervailing duty;
c) any duties or other charges related to the importation, proportionate to the cost of the services rendered; and
d) any premium offered or collected on imported goods, derived from any bidding system, with respect to the administration of quantitative import restrictions or tariff-quota or tariff preference quotas;
good of a Party: a domestic good as understood in the GATT 1994, or such good as the Parties may agree, and includes a good originating in that Party. A good of a Party may incorporate materials from other countries;
originating good: refers to a good that complies with the rules of origin established in Chapter IV (Rules of Origin);
Customs Valuation Code: the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, including its interpretative notes, which forms part of the WTO Agreement;
Commission: the Administrative Commission established in accordance with Article 17-01;
days: calendar days or calendar days;
enterprise: an entity incorporated or organized under applicable law, whether or not for profit and whether privately or governmentally owned, including foundations, corporations, trusts, partnerships, sole proprietorships, joint ventures, or other associations;
State enterprise: an enterprise owned or controlled by a Party; enterprise of a Party: an enterprise incorporated or organized under the laws of a Party; states: includes the municipal governments of such states, unless otherwise specified; existing: in effect on the date of entry into force of this Agreement; GATS: the General Agreement on Trade in Services, which is part of the WTO Agreement;
GATT 1994: the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement; measure: any law, regulation, procedure, provision or practice, among others;
national: A natural person who has the nationality of a Party in accordance with its legislation. The term also includes persons who, in accordance with the legislation of that Party, have the status of permanent residents in the territory of that Party;
Party: any State with respect to which this Treaty has entered into force; heading: a Harmonized System tariff classification code at the four-digit level; person: a natural person, a legal entity, or a company;
person of a Party: a natural person or legal person or an enterprise of a Party; Duty-Free Program: the one established in Article 3-03 (Tariff elimination);
Uniform Regulations: those established in accordance with Article 5-13 (Uniform Regulations); Secretariat: the Secretariat established in accordance with Article 17-02 (Secretariat);
Harmonized System: the Harmonized Commodity Description and Coding System in force, including its general rules and its section, chapter and subheading legal notes, as adopted and applied by the Parties in their respective foreign trade tax laws;
subheading: a Harmonized System tariff classification code at the six-digit level; territory: the territory of each Party as defined in Annex 2-01; and Treaty of Montevideo 1980: the Agreement establishing the Latin American Integration Association.
Annex 2-01. Country-Specific Definitions
For the purposes of this Agreement, unless otherwise specified, shall mean:
territory:
a) with respect to Mexico:
i. the states of the Federation and the Federal District,
ii. islands, including reefs and cays in adjacent seas,
iii. the islands of Guadalupe and Revillagigedo, located in the Pacific Ocean,
iv. the continental shelf and the submarine sockets of islands, cays and reefs,
v. the waters of the territorial seas, to the extent and under the terms established by international law, and the internal maritime waters,
vi. the space located on the national territory, with the extension and modalities established by international law itself, and
vii. any area beyond the territorial seas of Mexico within which Mexico may exercise rights over the seabed and subsoil and the natural resources contained therein, in accordance with international law, including the United Nations Convention on the Law of the Sea, as well as its domestic law; and
b) with respect to Uruguay: the waters, the land, maritime and air space under its sovereignty, the exclusive economic zone, the common fishing zone established by Article 73 of the Rio de la Plata Treaty and its Maritime Front and the continental shelf over which it exercises sovereign rights and jurisdiction in accordance with international law and its domestic law.
Chapter III. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Section A. Definitions and Scope
Article 3-01. Definitions
For the purposes of this Chapter, the following definitions shall apply:
tariff - quota: the mechanism whereby a certain tariff rate is applied to imports of a particular product up to a certain quantity (in-quota quantity), and a different rate is applied to imports of that product in excess of that quantity;
goods imported for sporting purposes: sporting equipment for use in competitions, sporting events or training in the territory of the Party to which it is imported;
agricultural good: a good classified in any of the following chapters, headings or subheadings of the Harmonized System:
(Descriptions are provided for reference purposes only.)
| Chapters 01 to 24 | (except Fish and Fish Products) |
| Subheading 2905.43 | Mannitol |
| Subheading 2905.44 | Sorbitol |
| Item 33.01 | essential oils |
| Items 35.01 to 35.05 | albuminoid materials, modified starch products, modified starch-based products |
| Subheading 3809.10 | finishing and finishing products |
| Subheading 3824.60 | sorbitol, other than that of subheading 2905.44 |
| Headings 41.01 to 41.03 | hides and skins Item 43.01 raw furskin |
| Items 50.01 to 50.03 | raw silk and silk waste |
| Items 51.01 to 51.03 | wool and hair |
| Items 52.01 to 52.03 | seed cotton, cotton waste and carded or combed cotton |
| Item 53.01 | raw linen |
| Item 53.02 | raw hemp |
goods for exhibition or demonstration: those entering or leaving the territory of a Party, the characteristics of which are to be made known by demonstration or exhibition, including components, auxiliary apparatus and accessories;
consumed:
a) actually consumed; or
b) processed or manufactured so as to result in a substantial change in the value, form or use of a good or in the production of another good;
printed advertising materials: goods classified in Chapter 49 of the Harmonized System, including brochures, leaflets, printed matter, loose sheets, trade catalogs, trade association yearbooks, tourism promotion materials and posters, used to promote, publish or advertise a good or service and distributed free of charge;
commercial samples of negligible value: commercial samples valued (individually or in the aggregate shipped) at not more than one U.S. dollar or the equivalent amount in the currency of either Party or which are marked, torn, punctured or treated in a manner that disqualifies them for sale or for any use other than as samples;
advertising films: recorded visual media, with or without sound, consisting essentially of images showing the nature or functioning of goods or services offered for sale or rental by a person established or resident in the territory of a Party, provided that the films are suitable for exhibition to potential customers, but not for dissemination to the general public, and are imported in packages each containing not more than one copy of each film and not forming part of a larger consignment;
fish and fish products: fish, crustaceans, mollusks or any other aquatic invertebrates, marine mammals and their derivatives, classified in any of the following chapters, headings or subheadings of the Harmonized System:
(Descriptions are provided for reference purposes only.)
| Chapter 03 | Fish and Crustaceans, Mollusks, and other Aquatic Invertebrates |
| item 05.07 | Ivory, tortoise shell, marine mammals, horns, antlers, hooves, hoofs, claws, claws and beaks, and their products |
| item 05.08 | Coral and similar products |
| item 05.09 | Natural sponges of animal origin |
| item 05.11 | Products of fish or crustaceans, mollusks or any other marine invertebrate; dead animals of Chapter 03 |
| item 15.04 | Fats or oils and their fractions, of fish or marine mammals. |
| item 16.03 | Non-meat extracts and juices |
| item 16.04 | Prepared or canned fish |
| item 16.05 | Prepared or preserved crustaceans or mollusks and other marine invertebrates |
| Subheading 2301.20 | Flours, feed, fish pellets; |
repairs or alterations: exclude operations or processes that destroy the essential characteristics of the good or convert it into a new or commercially different good. For these purposes, it shall be understood that an operation or process that is part of the production or assembly of an unfinished good to transform it into a finished good is not a repair or alteration of the unfinished good; the component part of a good is a good that may be subject to repair or alteration, and
agricultural export subsidies: subsidies contingent upon export performance, including those listed below:
a) the granting of direct export subsidies, including payments in kind, by governments or public agencies, to an enterprise, an industry, producers of an agricultural good, a cooperative or other association of such producers, or a marketing board;
b) the sale or placement for export of non-commercial stocks of agricultural goods by governments or public agencies at a price lower than the comparable price charged to buyers in the domestic market for a similar agricultural good;
c) payments for the export of agricultural goods financed by virtue of governmental action, whether or not they involve a debit in the public accounts, including payments financed out of income from a levy imposed on the agricultural good in question or on an agricultural good from which the exported agricultural good is obtained;
d) the provision of subsidies to reduce the costs of marketing exports of agricultural goods (except for readily available export promotion and advisory services), including handling, processing and other processing costs, and international transportation and freight costs;
e) domestic transportation and freight costs for export shipments established or imposed by governments on more favorable terms than for domestic shipments; or
f} subsidies on agricultural goods subject to their incorporation into exported goods.
Section B. National Treatment
Article 3-02. National Treatment.
1. Each Party shall accord national treatment to goods of the other Party in accordance with Article III of the GATT 1994, including its interpretative notes. For this purpose, Article Ill of the GATT 1994 and its interpretative notes are incorporated into and made an integral part of this Agreement.
2. The provisions of paragraph 1 concerning national treatment mean, with respect to a state or department, treatment no less favorable than the most favorable treatment accorded by such state or department to any like goods, direct competitors or substitutes, as the case may be.
Section C. Tariffs
Article 3-03. Tariff Elimination.
1. Except as provided in Annexes 3-03(3) and 3-03(4) and ACE-55 (1), the Parties shall eliminate all customs duties on originating goods as of the date of entry into force of this Agreement.
2. 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).
3. Except as otherwise provided in this Agreement, each Party shall reduce or eliminate its customs duties on originating goods in accordance with the Schedule of Duty Drawback, incorporated in Annex 3-03(3).
4. Notwithstanding paragraphs 1, 2 and 3, a Party may adopt or maintain customs duties in accordance with its rights and obligations under the GATT 1994 on originating goods covered by Annex 3-03(4), while preserving the preferences set out therein, until such time as the Parties agree otherwise in accordance with paragraph 5.
5. The Parties shall consult, at the request of either Party, to examine the possibility of accelerating the elimination of customs duties provided for in Annex 3-03(3), or incorporating goods covered by Annex 3-03(4) into a Party's Schedule of Duty-Free Treatment. Where the Parties approve an agreement on the accelerated elimination of customs duties on a good or on the inclusion of a good in the Schedule, that agreement shall prevail over any customs duties or periods of relief specified in accordance with their schedules for that good.
6. Paragraphs 1, 2 and 3 are not intended to prevent a Party from maintaining or increasing a customs duty on the other Party as may be permitted under a dispute settlement provision of the WTO Agreement.
7. As of the entry into force of this Agreement, the preferences negotiated or granted between the Parties to the PAR pursuant to the Treaty of Montevideo 1980 are no longer in effect.
Article 3-04. Customs Valuation.
In the application of customs valuation, the Parties shall be governed by the provisions of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, which forms part of the WTO Agreement. For this purpose, the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 is incorporated into and made an integral part of this Agreement.
Article 3-05. Temporary Importation of Goods.
1. Each Party shall authorize the temporary importation free of customs duty to:
a) professional equipment necessary for the exercise of the activity, trade or profession of a business person;
b) press equipment or equipment for on-air transmission of radio or television signals and cinematographic equipment;
c) goods imported for sporting purposes or for exhibition or demonstration; and
d) commercial samples and advertising films;
that are introduced into the territory of the other Party, regardless of whether they are originating goods and regardless of whether like, directly competitive or substitutable goods are available in the territory of that Party.
2. Except as otherwise provided in this Agreement, the temporary importation free of customs duty of a good of the type referred to in paragraph 1(a), (b) or (c) may not be subject to conditions other than the following:
a) the good is imported by a national or resident of the other Party requesting temporary entry;
b) the property is used exclusively by the visitor, or under his or her personal supervision, in the performance of his or her activity, trade or profession;
c) that the property shall not be sold or leased while it remains in its territory,
d) the good is accompanied by a bond not exceeding 110 percent of the charges that would otherwise be due for the definitive importation, or other form of guarantee, refundable at the time of departure of the good. No bond shall be required for customs duties on a good if the good is originating;
e) that the asset is susceptible to identification upon exit;
f) that the good leaves together with that person or within a period fixed by the competent authority, which reasonably corresponds to the purpose of the temporary importation; and
g) that the good is imported in amounts no greater than is reasonable in accordance with its intended use.
3. Except as otherwise provided in this Agreement, the temporary importation free of customs duty of a good referred to in paragraph 1(d) may not be subject to conditions other than the following:
a) the good is imported only for the purpose of lifting orders for goods from the other Party or from another non-Party, or the services are supplied from the territory of the other Party or from another non-Party;
b) that the property is not for sale or lease, and is only used for demonstration or exhibition while it remains in its territory;
c) that the property is susceptible to identification upon departure;
d) the good leaves within a period of time that reasonably corresponds to the purpose of the temporary importation, and
e) that the good is imported in amounts no greater than is reasonable in accordance with its intended use.
4. Without prejudice to any penalties that may apply, where a good that is temporarily imported free of customs duty pursuant to paragraph 1 fails to comply with any of the conditions that a Party imposes pursuant to paragraphs 2 and 3, that Party may apply the customs duties and any other charges that would be due on the final importation of the good.
Article 3-06. Duty-free Import for Some Commercial Samples and Printed Advertising Materials.
Each Party shall authorize the importation free of customs duty of samples of no commercial value from the territory of the other Party.
Article 3-07. Goods Reimported or Re-exported after Having Been Repaired or Altered.
1. No Party may apply a customs duty to a good, regardless of its origin, that is reimported into its territory, after having been exported or having gone out to the territory of the other Party to be repaired or altered, regardless of whether such repairs or alterations could have been carried out in its territory.
2. Neither Party may apply customs duties to goods which, regardless of their origin, are temporarily imported from the territory of the other Party for the purpose of being repaired or altered.
Section D. Non-Tariff Measures
Article 3-08. Import and Export Restrictions.
1. Except as otherwise provided in this Agreement, neither Party may adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except as provided in Article XI of the GATT 1994, including its interpretative notes. For this purpose, Article XI of the GATT 1994 and its interpretative notes are incorporated into this Agreement and are an integral part thereof.
2. The Parties understand that the rights and obligations of the GATT 1994 embodied in paragraph 1 prohibit, in all circumstances in which any other type of restriction is prohibited, export price requirements and, except as permitted for the enforcement of anti-dumping and countervailing duty orders and undertakings, import price requirements.