Title
FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF COLOMBIA AND THE REPUBLICS OF EL SALVADOR, GUATEMALA AND HONDURAS
Preamble
PREAMBLE
The Government of the Republic of El Salvador, the Government of the Republic of Guatemala, the Government of the Republic of Honduras and the Government of the Republic of Colombia determined to:
STRENGTHEN regional economic integration, aware that it represents 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;
STRENGTHEN the traditional bonds of friendship and the spirit of cooperation between their peoples;
RECOGNIZE the strategic and geographic position of each nation in its respective regional market;
ACHIEVE a better balance in its commercial relations;
CREATE a larger and more secure market for goods and services produced in their respective territories;
RECOGNIZE the differences in the levels of development and size of their economies and the need to create opportunities for economic development, through special and differential treatment to be agreed upon by the Parties to this Treaty;
AVOID distortions in their reciprocal trade;
ESTABLISH clear and mutually beneficial rules for the commercial exchange of their goods and services, as well as for the promotion and protection of investments in their territories;
RESPECT their respective rights and obligations under the Marrakesh Agreement establishing the World Trade Organization (WTO), as well as other bilateral and multilateral cooperation instruments;
STRENGTHEN the competitiveness of its companies in world markets;
CREATE employment opportunities and improve the living standards of their people in their respective territories;
PROMOTE economic development in a manner consistent with environmental protection and conservation, as well as sustainable development;
PRESERVE its ability to safeguard public welfare and public order;
ENCOURAGE the dynamic participation of the various economic agents, particularly the private sector, in efforts to deepen trade relations between their nations;
TO RECOGNIZE that the Republic of Colombia is a member of the Andean Community and that the Republic of El Salvador, the Republic of Guatemala and the Republic of Honduras are part of the Central American Integration System (SICA);
HAVE AGREED as follows:
Body
Part ONE. GENERAL ASPECTS
Chapter 1. INITIAL PROVISIONS
Article 1.1. Establishment of the Free Trade Area
1. The Parties to this Agreement, in accordance with Article XXIV of the General Agreement on Tariffs and Trade 1994 and Article V of the General Agreement on Trade in Services, establish a free trade area.
2. This Agreement does not apply between the Republic of El Salvador, the Republic of Guatemala and the Republic of Honduras.
Article 1.2. Objectives
1. The objectives of this Treaty are as follows:
(a) promote the expansion and diversification of trade in goods and services between the Parties;
(b) eliminate barriers to trade and facilitate the cross-border movement of goods and services within the Free Trade Zone;
(c) promote conditions of fair competition for trade between the Parties;
(d) promote, protect and substantially increase investment in each Party;
(e) create effective procedures for the implementation and enforcement of this Agreement, for its joint administration and for the settlement of disputes; and
(f) establish guidelines for bilateral cooperation aimed at expanding and enhancing the benefits of this Agreement.
2. The Parties shall interpret and apply the provisions of this Treaty in the light of the objectives set forth in paragraph 1 and in accordance with the general principles of public international law.
Article 1.3. Relationship to other International Agreements
1. The Parties confirm the rights and obligations in force between them under the WTO Agreement and other agreements to which they are party.
2. It shall be understood that any reference in this Agreement to any other International Agreement shall include its modifications, amendments and superseding Agreements to which the Parties are party.
3. If any provision of the WTO Agreement that the Parties have incorporated into this Agreement is amended, the Parties shall consult with a view to amending the corresponding provision of this Agreement, as appropriate, in accordance with Article 21.2 (Amendments).
Article 1.4. Enforcement
Each Party shall ensure, in accordance with its constitutional and other provisions of its domestic law, the adoption of all measures necessary to give effect to the provisions of this Agreement within its territory and at all levels of government.
Chapter 2. GENERAL DEFINITIONS
Article 2.1. Definitions of General Application
For the purposes of this Agreement, unless otherwise provided:
GATS Agreement means the General Agreement on Trade in Services. which is part of the WTO Agreement;
Customs Valuation Agreement means the Agreement on Implementation of Article Vil of the General Agreement on Tariffs and Trade 1994, including its interpretative notes, which forms part of the WTO Agreement;
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, dated April 15, 1994;
Agreement on Safeguards means the Agreement on Safeguards, which is part of the WTO Agreement;
customs duty means any import tax or duty and any charge of any kind, imposed in connection with the importation of goods, including any form of surcharge or additional charge in respect of such importation, except:
(a) charges equivalent to an internal tax established in accordance with Article Ill (2) of GATT 1994;
(b) duties or other charges related to importation, proportionate to the cost of services rendered; or
(c) antidumping duties or countervailing measures that are applied in a manner consistent with the provisions of Chapter 8 (Antidumping Duties and Countervailing Measures) of this Agreement;
customs authority means the authority which, under the respective laws of each Party, is responsible for administering and enforcing customs laws and regulations;
chapter means the first two digits of the Harmonized System;
Commission means the Administrative Commission for the Treaty established pursuant to Article 17.1 (Administrative Commission for the Treaty);
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;
Agreement of the International Monetary Fund means the Articles of Agreement of the Intemational Monetary Fund, effective as of December 27, 1945;
days means calendar days;
enterprise means any legal entity constituted or organized under the applicable law of a Party, whether or not for profit and whether privately or governmentally owned, including companies, partnerships, foundations, trusts, participations, sole proprietorships, joint ventures or other associations;
existing means in effect on the date of entry into force of this Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
measure means any law, regulation, procedure, requirement, provision or practice;
goods means any article, material, matter, product or part;
originating good means a good that qualifies as an originating good pursuant to Chapter 4 (Rules of Origin);
MSMEs means micro, small and medium-sized enterprises;
national means a natural person of a Party under Annex 2.1, or a permanent resident of a Party;
WTO means the World Trade Organization, created by the WTO Agreement;
Party means a State that has consented to be bound by this Treaty and with respect to which the Treaty is in force;
heading means the first four digits of the Harmonized System;
person means a natural person or a company;
person of a Party means a national or company of a Party;
production means methods of obtaining goods including growing, harvesting,
raising, breeding, birthing, hunting, gathering, fishing, trapping, trapping, trapping, mining, extracting, manufacturing, assembling or processing;
producer means a person who engages in the production of a good in the territory of a Party;
Tariff Relief Program means "Tariff Relief Program", as set forth in Annex 3.4 (Tariff Relief Program);
Harmonized System means the Harmonized Commodity Description and Coding System, including its general rules of interpretation and its section, chapter, heading and subheading legal notes, as adopted and applied by the Parties in their respective customs legislation;
subheading means the first six digits of the Harmonized System;
territory means, in accordance with its national legislation and international law, the land, sea and air space of each Party, as well as its exclusive economic zone and continental shelf, over which it exercises sovereign rights and jurisdiction; and preferential tariff treatment means the application of the appropriate tariff rate to an originating good under the Tariff Relief Program set out in Article 3.4 (Tariff Relief) of this Agreement.
Annex 2.1. ANNEX 2.1 Country-Specific Definitions
For purposes of this Agreement, unless otherwise provided:
national means:
(a) with respect to the Republic of El Salvador, a Salvadoran as defined in Articles 90 and 92 of the Constitution of the Republic of El Salvador;
(b) with respect to the Republic of Guatemala, a Guatemalan as defined in Articles 144, 145 and 146 of the Political Constitution of the Republic of Guatemala;
(c) with respect to the Republic of Honduras, a Honduran as defined in Articles 23 and 24 of the Constitution of the Republic of Honduras; and
(d) with respect to the Republic of Colombia, Colombians by birth and by adoption, as determined by Article 96 of the Political Constitution of the Republic of Colombia.
Part TWO. TRADE IN GOODS
Chapter 3. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Article 3.1. Definitions
For the purposes of this Chapter:
essential character of the good means when a good does not lose its original manufacturing characteristic, and the good does not undergo any change that would make it a different or commercially different good;
printed advertising materials means brochures, leaflets, printed matter, loose sheets, trade catalogs, trade association yearbooks, tourism promotion materials and posters, classified in Chapter 49 of the Harmonized System, used to promote, publish or advertise a good or service, originating in one of the Parties and distributed free of charge;
goods admitted for sporting purposes means sporting equipment that is temporarily admitted for use in competitions, events or training in the territory of one of the Parties;
goods for exhibition or demonstration means goods that temporarily enter the territory of a Party for exhibition or demonstration purposes. It includes their components, auxiliary apparatus and accessories;
remanufactured goods means remanufactured goods, salvaged goods or any other similar appellation given to goods that after having been used have undergone some process to restore their original characteristics or specifications, or to restore them to the functionality they had when new;
used goods means used goods that have not undergone any further processing after use;
samples of negligible commercial value means commercial samples valued, individually or in the aggregate as shipped, at not more than one United States dollar (US $1.00) or the equivalent amount in the currency of another Party; or which are marked, torn, punctured or otherwise treated in a manner that disqualifies them for sale or for any use other than as samples; and
advertising films and recordings means visual media or recorded audio materials consisting essentially of images and/or sounds depicting the nature or performance of goods or services originating in any Party, offered for sale or hire by a person established or resident in the territory of any Party, provided that such materials 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 or recording, and are not part of a larger consignment.
Article 3.2. Scope of Application.
Except as otherwise provided, this Chapter applies to trade between the Parties in new originating goods. For greater certainty, this Chapter does not apply to trade in used or remanufactured goods.
Section I. National Treatment
Article 3.3. National Treatment
1. Each Party shall accord National Treatment to goods of another Party in accordance with Article Ill of the GATT 1994, including its interpretative notes, and to that end 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 relating to National Treatment mean, with respect to a Party, including its departments or municipalities, treatment no less favorable than the most favorable treatment that such Party, including its departments or municipalities, accords to any directly competitive or substitutable goods of domestic origin.
3. Paragraphs 1 and 2 do not apply to the measures listed in Annex 3.3.
Section II. Customs Tariff Relief Program
Article 3.4. Tariff Relief
1. Except as otherwise provided In this Agreement, each Party shall progressively eliminate its duties on originating goods in accordance with its tariff discharge schedule set out in Annex 3.4.
2. Except as otherwise provided in this Agreement, no Party may increase an existing customs duty or adopt a new customs duty on originating goods.
3. Paragraphs 1 and 2 are not intended to prevent a Party from disaggregating a tariff item, provided that the customs duty applicable to the new tariff openings is not higher than the tariff applied to the tariff item before it was disaggregated.
4. At the request of any Party, the requesting Party and one or more of the Parties shall consult through the Market Access Committee to examine the possibility of accelerating or improving the tariff treatment provided for in the Annex.
An agreement between the Parties on the tariff treatment of a good shall prevail over any customs duties or preferences provided for in the schedules of relief for that good once approved by the Parties, in accordance with the applicable legal procedures.
5. For greater certainty, a Party may:
(a) following a unilateral reduction, increase a customs duty to the level set out in its Schedule to Annex 3.4; or
(b) maintain or increase a customs duty when authorized by the WTO Dispute Settlement Body or the Dispute Settlement Mechanism of Chapter 18 (Dispute Settlement).
6. The Parties agree to fix the customs duties of goods under the Tariff Relief Program on an ad-valorem basis only.
7. In trade in goods between the Parties, the classification of goods shall be governed by the nomenclature of the Harmonized Commodity Description and Coding System and its future updates, which shall not modify the scope and conditions of access negotiated.
8. In case of inconsistencies between the provisions of this Treaty and the Decree for its implementation, this Treaty shall prevail.
Section III. Special Regimes
Article 3.5. Temporary Admission of Goods
1. Each Party shall authorize duty-free temporary admission for the following goods, irrespective of their origin:
(a) professional equipment, including press and television equipment, computer software, and broadcasting and cinematographic equipment, necessary for the exercise of the business activity, trade or profession of the business person that qualifies for temporary entry under the legislation of the importing Party;
(b) goods intended for exhibition or demonstration;
(c) commercial samples, films and advertising recordings; and
(d) goods admitted for sporting purposes.
2. Each Party shall, at the request of the person concerned and for reasons deemed valid by its customs authority, extend the period for temporary admission beyond the period initially fixed, in accordance with its national legislation.
3. No Party shall condition the temporary duty-free admission of a good referred to in paragraph 1 on conditions other than that the good:
(a) is used solely by or under the personal supervision of a national or resident of another Party in the exercise of that person's business, trade, professional or sporting activity;
(b) is not subject to sale or lease while it remains in its territory;
(c) is accompanied by a bond or guarantee in an amount not to exceed the charges that would otherwise be due for entry or final importation, refundable upon departure;
(d) is susceptible to identification at the time of departure;
(e) is re-exported upon the departure of the person referred to in subparagraph (a) or within a period corresponding to the purpose of the temporary admission that the Party may establish or within one (1) year unless extended on the basis of the provisions of its national legislation;
(f) is admitted in quantities no greater than is reasonable for its intended use; and
(g) otherwise admissible in the territory of the Party under its law.
4. If any of the conditions imposed by a Party under paragraph 3 have not been met, the Party may apply the customs duty and any other charges that would normally be due on the good plus any other charges or penalties established under its law.
5. Each Party shall allow a good temporarily admitted under this Article to be re-exported through a customs office other than the customs office through which it was admitted.
6. Each Party shall provide that its customs authority or other competent authority shall exempt the importer or other person responsible for a good admitted pursuant to this Article from any liability for the inability to re-export the good upon presentation of satisfactory evidence to the customs authority of the importing Party that the good has been destroyed in accordance with the national legislation of each Party within the original time limit set for temporary admission or any lawful extension.
7. Subject to Chapters 12 (Investment) and 13 (Cross-Border Trade in Services):
(a) each Party shall permit a vehicle or container used in international transportation that has entered its territory from the other Party to leave its territory by any route that has a reasonable relation to the prompt and economical departure of such vehicle or container;
(b) no Party shall require a bond or impose any penalty or charge solely on the grounds that the port of entry of the vehicle or container is different from the port of departure;
(c) no Party shall condition the release of any obligation, including any bond, which it has applied to the entry of a vehicle or container into its territory, on its departure through a particular port; and
(d) No Party shall require that the vehicle or carrier bringing a container into its territory from the territory of another Party be the same vehicle or carrier bringing the container into the territory of another Party.
8. For purposes of paragraph 7, vehicle means a truck, tractor-trailer, van, tractor, trailer or trailer unit, locomotive or railcar or other railroad equipment.
9. Each Party shall adopt procedures to facilitate the expeditious clearance of goods admitted under this Article. To the extent possible, where such merchandise accompanies a national or resident of another Party who is requesting temporary entry, such procedures shall allow the merchandise to be cleared simultaneously with the entry of that national or resident.
Article 3.6. Duty-Free Importation of Commercial Samples of Insignificant Value and Printed Advertising Materials
1. Each Party shall allow duty-free importation of commercial samples of negligible value and printed advertising materials imported from the territory of another Party, regardless of their origin, but may require that:
(a) such samples are imported solely for the purpose of soliciting orders for goods or services from the territory of another Party or non-Party; or
(b) such advertising materials are imported in packages containing not more than one copy of each form and that neither the materials nor the packages are part of a larger consignment.