1. Except as otherwise provided in this Agreement, no Party shall 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 as provided in Article XI of the GATT 1994 and its interpretative notes, and to that end, Article XI of the GATT 1994 and its interpretative notes are incorporated into this Agreement and made an integral part hereof, mutatis mutandis.
2. The Parties understand that the rights and obligations of the GATT 1994 embodied in paragraph 1 prohibit in any circumstances in which any other type of restriction that a Party adopts or maintains on reciprocal trade is prohibited:
(a) export and import price requirements, except as permitted for the enforcement of antidumping and countervailing duty provisions and undertakings;
(b) The granting of import licenses except as provided for in a Party's Schedule to Annex 3.3;
(c) voluntary export restrictions inconsistent with Article VI of GATT 1994, as applied under Article 18 of the WTO Agreement on Subsidies and Countervailing Measures and Article 8 of the WTO Agreement on Agriculture; or
(d) minimum, estimated, indicative, reference or any other valuation price, in cases where these prices replace the transaction value of the goods.
3. No Party shall require as a condition or commitment for the importation of a good that a person of another Party establish or maintain a contractual or other relationship with a distributor in its territory.
4. Nothing in the preceding paragraph precludes a Party from requiring the appointment of an agent for the purpose of facilitating communications between the regulatory authorities of the Party and a person of the other Party.
5. For purposes of paragraph 3, distributor means an individual, natural or juridical 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.
6. Paragraphs 1 and 2 shall not apply to the measures set forth in Annex 3.3.
Article 3.8. Customs Valuation
The Customs Valuation Agreement and any successor agreement shall regulate the customs valuation rules applied by the Parties to reciprocal trade.
Article 3.9. Import Licenses
1. No Party shall maintain or adopt a measure that is inconsistent with the WTO Agreement on Import Licensing Procedures (WTO Import Licensing Agreement).
2. Following the entry into force of this Agreement, each Party shall promptly notify the other Parties of any existing import licensing procedures and thereafter notify the other Parties of any new import licensing procedures and any modifications to its existing import licensing procedures within sixty (60) days prior to their entry into force. A notification established under this Article:
(a) include the information set forth in Article 5 of the WTO Import Licensing Agreement; and
(b) shall not prejudge whether the import licensing procedure is compatible with this Agreement.
3. No Party shall apply an import licensing procedure to a good of another Party without having provided a notification in accordance with paragraph 2.
Article 3.10. Administrative Burdens and Formalities
1. Each Party shall ensure, in accordance with Article VIII.1 of the GATT 1994 and its interpretative notes, that all fees and charges of any nature (other than customs duties, charges equivalent to an internal tax or other internal charges applied in accordance with Article III.2 of the GATT 1994, and antidumping and countervailing duties) imposed on or in connection with importation or exportation are limited to the approximate cost of services rendered and do not represent indirect protection. of GATT 1994, and anti-dumping and countervailing duties) imposed on or in connection with importation or exportation shall be limited to the approximate cost of services rendered and shall not represent an indirect protection to domestic goods or a tax on imports or exports for taxation purposes.
2. No Party shall 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, an updated list of fees or charges imposed in connection with importation or exportation.
Article 3.11. Export Taxes
Except as provided in Annex 3.3, no Party shall adopt or maintain any tax, levy or charge on the exportation of goods to the territory of another Party.
Article 3.12. Distinctive Products
At the request of a Party, the Committee on Trade in Goods shall consider amending the Agreement to designate a good as a distinct product.
Section V. Agriculture
Article 3.13. Definitions
For purposes of this Section:
agricultural products includes those goods included in Annex 1 of Article 2 of the WTO Agreement on Agriculture; and
export subsidies on agricultural products means those included in the WTO Agreement on Agriculture, including any subsequent modifications.
Article 3.14. Scope of Application
This Section applies to measures adopted or maintained by the Parties relating to reciprocal trade in agricultural products.
Article 3.15. Export Subsidies for Agricultural Products
1. The Parties share the objective of achieving the multilateral elimination of export subsidies on agricultural products. In this regard, they will cooperate in the effort to reach an agreement within the framework of the WTO Agreements.
2. The Parties undertake not to maintain, reintroduce or introduce export subsidies on agricultural products in their reciprocal trade, from the entry into force of this Agreement.
Article 3.16. Tariff Rate Quota Administration and Implementation
1. Tariff quotas for agricultural products will be administered in accordance with Article XIll of GATT 1994, including its interpretative notes and the WTO Import Licensing Agreement.
2. Each Party shall ensure that:
(a) unless otherwise provided, the procedures for administering tariff rate quotas are transparent, made available to the public in a timely, non- discriminatory manner, consistent with market conditions, and involve a minimum burden on trade;
(b) any natural or juridical person of a Party that complies with the legal and administrative requirements of that Party shall be eligible to apply for and be considered for allocation of a quota quantity within the Party's tariff rate quotas;
(c) only governmental authorities and their related entities administer their tariff rate quotas and, in this regard, that governmental authorities do not delegate the administration of their tariff rate quotas to producer groups or other non-governmental organizations; and
(d) allocate quantities within tariff-rate quotas, in commercially viable shipping quantities and, to the extent possible, in the amounts requested by importers.
3. Each Party shall administer its tariff rate quotas in a manner that allows importers to make full use of them.
4. No Party may condition the application or use of a quota quantity within a tariff quota on the re-export of an agricultural product.
5. At the request of the exporting Party, the importing Party shall report on the administration of its tariff quotas.
Article 3.17. Agricultural Trade Committee
1. The Parties establish the Committee on Agricultural Trade, composed of a representative and an alternate designated by each Party. The representatives appointed by the Parties shall be officials responsible for handling matters related to this Section.
2. The Committee shall be integrated upon entry into force of the Treaty, and the Parties shall notify each other of the designation of their representatives.
3. The Committee shall report the results of its work and meetings to the Commission. 4. The Committee shall meet ordinarily once a year, and extraordinarily at the request of any Party, to ensure the effective execution and administration of this Section.
5. The ordinary meetings of the Committee shall be chaired successively by each Party, and the Party hosting the meeting shall be responsible for calling the meeting at least thirty (30) days in advance; it shall propose the agenda of the topics to be discussed and shall act as rapporteur.
6. The Committee shall meet at any time for extraordinary meetings, at the request of one of the Parties, convened at least thirty (30) days in advance.
7. The Agricultural Trade Committee shall have among its functions:
(a) to oversee the execution and compliance with the regulations contained in this Section;
(b) consider any other matter related to the implementation and enforcement of this Agreement that has a bearing on trade in agricultural products between the Parties;
(c) recommend to the competent authority the establishment of subcommittees or technical groups, when appropriate; and
(d) others assigned to it by this Agreement or the competent authority with respect to trade in agricultural products.
Section VI. Institutional Arrangements
Article 3.18. Committee on Trade In Goods
1. The Parties establish the Committee on Trade in Goods, composed of a representative and an alternate representative appointed by each Party.
2. The Committee shall be integrated upon entry into force of the Treaty, and the Parties shall notify each other of the designation of their representatives.
3. The Committee shall meet ordinarily once a year, and extraordinarily at the request of any Party, to ensure the effective implementation and administration of this Chapter.
4. The ordinary meetings of the Committee shall be chaired successively by each Party, and the Party hosting the meeting shall be responsible for calling the meeting at least thirty (30) days in advance and shall propose the agenda of the topics to be discussed. It shall also act as rapporteur.
5. The Committee shall meet at any time for extraordinary meetings, at the request of one of the Parties, convened within twenty (20) days in advance. The request shall specify the purpose of the meeting. The meeting shall take place in the country to which the request for consultation was made.
6. The Party summoned shall respond its consent within ten (10) days of receipt of the request for an extraordinary meeting. If no response is received, it may proceed in accordance with the provisions of Chapter 18 (Dispute Settlement) of this Agreement.
7. The Commodity Trade Committee shall have among its functions:
(a) promote trade in goods between the Parties, including the improvement or acceleration of the tariff treatment provided for in Annex 3.4 under this Agreement and such other matters as may be appropriate;
(b) address barriers to trade in goods between the Parties and, if appropriate, submit these matters to the Commission for its consideration;
(c) to oversee the execution and compliance with this Chapter;
(d) evaluate, at the request of either Party, modifications or additions to this Chapter and, if appropriate, submit such matters to the Commission for its consideration;
(e) review updates and conversions of the nomenclature of the Harmonized Commodity Description and Coding System to ensure that each Party's obligations under this Agreement are not altered;
(f) consider any other matter relating to the implementation and enforcement of this Chapter, or trade in goods between the Parties;
(g) recommend to the competent authority the establishment of subcommittees or technical groups, when appropriate; and
(h) others assigned to it by this Agreement or the competent authority with respect to trade in goods.
8. A Party may request the participation of representatives of relevant governmental institutions for the purpose of addressing specific matters related to the implementation of this Chapter.
Chapter 4. RULES OF ORIGIN
Article 4.1. Definitions
For the purposes of this Chapter:
to allocate reasonably means to allocate in the appropriate manner in accordance with Generally Accepted Accounting Principles;
CIF means the value of the imported merchandise including insurance and freight costs to the port or place of introduction in the country of importation;
class of motor vehicles means any of the following categories of motor vehicles:
(a) vehicles for the transportation of passengers up to sixteen (16) persons, including the driver; and vehicles for the transportation of goods of a total weight with maximum load less than or equal to four thousand five hundred thirty seven (4,537) tons or ten thousand (10,000) American pounds, as well as their chassis with cabins;
(b) vehicles covered by heading 87.02, except those covered in (a) above;
(c) motor vehicles of subheading 8701.10 or subheadings 8701.30 to 8701.90;
(d) includes other vehicles not included in categories (a) and (b);
shipping containers and packing materials means goods used to protect merchandise during transportation and does not include containers and materials in which merchandise is packaged for retail sale;
net cost means total cost less sales promotion, marketing and after-sales service costs, royalties, packing and shipping costs, as well as ineligible interest costs that are included in total cost;
net cost of merchandise means the net cost that can be reasonably assigned to the merchandise using one of the following methods:
(a) by calculating the total cost incurred in respect of all goods produced by that producer, subtracting any costs of sales promotion, marketing, after-sales services, royalties, packing and shipping costs and ineligible interest costs included in the total cost of all such goods, and then reasonably allocating the resulting net cost of those goods to the merchandise;
(b) calculating the total cost incurred in respect of all goods produced by that producer by reasonably allocating the total cost to the merchandise and then subtracting any costs of sales promotion, marketing, after-sales services, royalties, packing and shipping costs and unallowable interest costs included in the portion of the total cost allocated to the merchandise; or
(c) reasonably allocating each cost that forms part of the total cost incurred in respect of the merchandise, so that the sum of these costs does not include any sales promotion, marketing, after-sales service, royalties, packing and shipping costs and unallowable interest costs, provided that the allocation of such costs is consistent with the reasonable cost allocation provisions of Generally Accepted Accounting Principles;
ineligible interest costs means interest costs incurred by a producer in excess of seven hundred (700) basis points over yields on debt obligations of comparable maturities issued by the central level of government of the Party in which the producer is located;
total cost means all direct and indirect costs and expenses of manufacture of the good, costs and expenses of a period and other costs and expenses for a good incurred in the territory of one or more of the Parties;
FOB means free on board, regardless of the means of transport, at the point of direct shipment from the seller to the buyer;
model line means a group of motor vehicles having the same platform or the same model name;
material means a good that is used in the production of another good and includes ingredients, parts or components;
self-produced material means originating material that is produced by the producer of a good and used in the production of that good;
indirect material means a good used in the production, verification or inspection of another good, but not physically incorporated therein; or a good that is used in the maintenance of buildings or in the operation of equipment related to the production of another good, including:
(a) fuel, energy, solvents and catalysts;
(b) equipment, apparatus and attachments used for the verification or inspection of goods;
(c) gloves, goggles, footwear, clothing, safety equipment and attachments;
(d) tools, dies and molds;
(e) spare parts and materials used in the maintenance of equipment and buildings;
(f) lubricants, greases, composites and other materials used in the production, operation of equipment or maintenance of buildings; and
(g) any other goods that are not incorporated into the goods, but whose use in the production of the goods can be reasonably demonstrated to be part of such production;
fungible goods or materials means goods or materials interchangeable for commercial purposes whose properties are essentially identical and which cannot be distinguished from one another by simple visual examination;
non-originating good or non-originating material means a good or material that does not comply with the provisions of this Chapter;
goods wholly obtained or produced entirely in the territory of one or more of the Parties means
(a) minerals extracted or obtained in the territory of one or more of the Parties;
(b) plants and plant products harvested, collected or gathered in the territory of one or more of the Parties;
(c) live animals, born and raised in the territory of one or more of the Parties;
(d) goods obtained from hunting, trapping, fishing, aquaculture, gathering or capture in the territory of one or more of the Parties;
(e) goods obtained from live animals in the territory of one or more of the Parties;
(f) fish, crustaceans and other marine species taken from the sea outside the territory of the Parties by fishing vessels registered or registered by a Party and flying the flag of that Party or by fishing vessels leased by enterprises established in the territory of a Party;
(g) goods obtained or produced on board factory ships, from the goods identified in subparagraph (f), provided that the factory ships are registered or registered in a Party and that they fly the flag of that Party or are leased by enterprises established in the territory of a Party;
(h) goods obtained from the seabed or subsoil outside the territorial waters of a Party, by a Party or a person of a Party, provided that the Party has rights to exploit that seabed or subsoil;
(i) wastes and residues from manufacturing or processing operations in the territory of one or more of the Parties and which are suitable for the recovery of raw materials; or
(j) goods produced in the territory of one or more of the Parties, exclusively from the goods mentioned in the previous paragraphs;
Generally accepted accounting principles means those on which there is a recognized consensus or which enjoy substantial and authoritative support, in the territory of a Party and at a given time, with respect to the recording of revenues, expenses, costs, assets and liabilities, the disclosure of information and the preparation of financial statements. Generally accepted accounting principles may include broad guidelines of general application as well as detailed standards, practices and procedures;
value means the value of a good or material for purposes of the assessment of customs duties or the application of this Chapter;
transaction value of a material means the price actually paid or payable for a good in connection with the transaction made by the producer of the material, in accordance with the rules of Articles 1 through 8 and Article 15 of the Customs Valuation Agreement, adjusted in accordance with the rules of paragraphs 1, 3 and 4 of Article 8 of the same Agreement, without regard to whether the good is sold for export. For purposes of this definition, the seller referred to in the same Agreement shall be the producer of the material; and
transaction value of a good means the price actually paid or payable for a good in connection with the transaction made by the producer of the good, in accordance with the rules of Articles 1 through 8 and Article 15 of the Customs Valuation Agreement, adjusted in accordance with the rules of paragraphs 1, 3 and 4 of Article 8 of the same Agreement, without regard to whether the good is sold for export. For purposes of this definition, the seller referred to in the same Agreement shall be the producer of the merchandise.
Article 4.2. Instruments of Application and Interpretation
1. For the purposes of this Chapter:
(a) the tariff classification of goods shall be based on the Harmonized System; and
(b) the rules of the Customs Valuation Agreement shall be used to determine the value of a good or material.
2. For the purposes of this Chapter, the Customs Valuation Agreement shall be applied to determine the origin of a good as follows:
(a) the rules of the Customs Valuation Agreement shall apply to domestic transactions, with such modifications as circumstances may require, as they would apply to international transactions; and
(b) the provisions of this Chapter shall prevail over those of the Customs Valuation Agreement, when there is incompatibility.
Article 4.3. Original Merchandise
Except as otherwise provided in this Chapter, a good shall be considered as originating in the territory of a Party when:
(a) is wholly obtained or produced entirely in the territory of one or more of the Parties;
(b) is produced entirely in the territory of one or more of the Parties exclusively from materials that qualify as originating under this Chapter; or
(c) is produced entirely in the territory of one or more of the Parties from non-originating materials that meet a change in tariff classification, a regional value content or other requirements, as specified in Annex 4.3, and the good complies with the other applicable provisions of this Chapter.
Article 4.4. Minimum Operations or Processes
Unless the specific rules of origin in Annex 4.3 indicate otherwise, the minimum operations or processes that individually or in combination do not confer origin to a good are the following:
(a) operations necessary for the preservation of the goods during transportation or storage, including aeration, ventilation, drying, refrigeration, freezing, removal of damaged parts, application of oil, anti-corrosive paint or protective coatings, application of salt, sulfur dioxide or any other aqueous solution;
(b) simple operations consisting of cleaning, washing, sifting, screening, sieving or shaking, sorting, grading or grading, threshing; peeling, shelling or shucking, shelling, boning, crushing or squeezing, rinsing, removal of dust or defective or damaged parts, sorting, breaking bulk shipments, grouping of packages, affixing of distinguishing marks, labels or signs on products and their packaging, packing, unpacking or repacking;
(c) the simple assembly or assembly of parts of products to constitute a complete good;
(d) operations of simple dilution in water or other solvents, ionization or salting, which do not alter the nature of the goods; or
(e) slaughter of animals.
Article 4.5. Indirect Materials
Indirect materials shall be considered as originating regardless of their place of production or processing.
Article 4.6. Accumulation
1. Originating materials or goods originating in the territory of a Party, incorporated into a good in the territory of one or more of the Parties, shall be considered as originating in the territory of the latter.
2. A good is originating when it is produced in the territory of one or more of the Parties by one or more producers, provided that the goods comply with the requirements set out in Article 4.3 and with the other requirements applicable to this Chapter.
3. For purposes of the cumulation of an originating good excluded from the Tariff Relief Program, the Party that excluded that good shall be considered a non-Party for purposes of compliance with the origin regime until such time as the Parties agree to include it in the Tariff Relief Program.
4. For purposes of extended cumulation of origin for goods classified in Chapters 50 through 63 of the Harmonized System with non-Parties to this Agreement with which they have trade agreements in common, the Parties shall enter into discussions within ninety (90) days after the date of entry into force of this Agreement or such other date as the Parties may determine, with a view to having materials produced in such non-Parties considered as originating under this Agreement, subject to consultations with the sectors and consensus of the Parties.
5. For other goods in which the Parties show a common interest in having extended cumulation with countries not Party to this Agreement, with which they have trade agreements in common, the Parties shall enter into consultations with such countries for the purpose of jointly arranging such cumulation of origin.