Title
FREE TRADE AGREEMENT BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE REPUBLIC OF COSTA RICA
Preamble
THE GOVERNMENT OF CANADA and THE GOVERNMENT OF THE REPUBLIC OF COSTA RICA, resolved to:
STRENGTHEN the special bonds of friendship and cooperation among their peoples;
CONTRIBUTE to the harmonious development and expansion of world and regional trade and provide a catalyst to broader international cooperation;
CREATE new employment opportunities and improve working conditions and living standards in their respective territories;
RECOGNIZE the differences in the level of development and the size of the Parties= economies and create opportunities for economic development;
CREATE an expanded and secure market for the goods and services produced in their territories;
REDUCE distortions to trade;
ESTABLISH clear and mutually advantageous rules governing their trade;
ENSURE a predictable commercial framework for business planning and investment; RECOGNIZE the importance of trade facilitation in promoting efficient and transparent procedures to reduce costs, and to ensure predictability, for importers and exporters of the Parties;
BUILD on their respective rights and obligations under the WTO Agreement and other multilateral and bilateral instruments of cooperation;
PROMOTE regional integration with an instrument that will contribute to the establishment of the Free Trade Area of the Americas (FTAA);
ENHANCE the competitiveness of their firms in global markets;
ENSURE that the benefits of trade liberalization are not undermined by anticompetitive activities;
PROMOTE sustainable development;
UNDERTAKE each of the preceding in a manner consistent with environmental protection and conservation;
PRESERVE their flexibility to safeguard the public welfare;
RECOGNIZE that States have the ability to preserve, develop and implement their cultural policies for the purpose of strengthening cultural diversity; and
RECOGNIZE the increased cooperation between our countries on labour and environmental cooperation;
HAVE AGREED as follows:
Body
Part One. GENERAL PART
Chapter I. Objectives
Article I.1. Establishment of the Free Trade Area
The Parties to this Agreement, consistent with Article XXIV of the General Agreement on Tariffs and Trade 1994 which is part of the Marrakesh Agreement Establishing the World Trade Organization, hereby establish a free trade area.
Article I.2. Objectives
1. The objectives of this Agreement are to:
(a) establish a free trade area in accordance with this Agreement;
(b) promote regional integration through an instrument that contributes to the establishment of the Free Trade Area of the Americas (FTAA) and to the progressive elimination of barriers to trade and investment;
(c) create opportunities for economic development;
(d) eliminate barriers to trade in, and facilitate the cross-border movement of goods between the territories of the Parties;
(e) increase substantially investment opportunities in the territories of the Parties;
(f) facilitate trade in services and investment with a view to developing and deepening the Parties' relations under this Agreement;
(g) promote conditions of fair competition in the free trade area;
(h) establish a framework for further bilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement; and
(i) create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes.
2. The Parties shall interpret and apply the provisions of this Agreement in the light of its objectives set outin paragraph 1 and in accordance with applicable rules of international law.
Article I.3. Relation to other Agreements
1. The Parties affirm their existing rights and obligations with respect to each other under the Marrakesh Agreement Establishing the World Trade Organization and other agreements to which such Parties are party.
2. In the event of any inconsistency between this Agreement and such other agreements, this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement.
Article I.4. Relation to Environmental and Conservation Agreements
In the event of any inconsistency between this Agreement and the specific trade obligations set out in:
(a) the Convention on International Trade in Endangered Species of Wild Fauna and Flora, done at Washington, March 3, 1973, as amended June 22, 1979;
(b) the Montreal Protocol on Substances that Deplete the Ozone Layer, done at Montreal, September 16, 1987, as amended June 29, 1990; or
(c) the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, done at Basel, March 22, 1989,
such obligations shall prevail to the extent of the inconsistency, provided that where a Party has a choice among equally effective and reasonably available means of complying with such obligations, the Party chooses the alternative that is the least inconsistent with the other provisions of this Agreement.
Article I.5. Extent of Obligations
Each Party is fully responsible for the observance of all provisions of this Agreement and shall take such reasonable measures as may be available to it to ensure observance of the provisions of this Agreement by the regional and local governments and authorities within its territory.
Chapter II. General Definitions
Article II.1. Definitions of General Application
1 . For purposes of this Agreement, unless otherwise specified:
Citizen means a Citizen as defined in Annex II.1.1 for the Party specified in that Annex;
Commission means the Free Trade Commission established under Article XIII.1 (The Free Trade Commission);
Coordinators means the Free Trade Coordinators established under Article XIII.2.1 (The Free Trade Coordinators);
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, including its interpretative notes, which is part of the WTO Agreement;
days means calendar days, including weekends and holidays;
Dispute Settlement Understanding (DSU) means the Understanding on Rules and Procedures Governing the Settlement of Disputes, which is part of the WTO Agreement;
enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, sole proprietorship, joint venture or other association;
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;
goods of a Party means domestic products as these are understood in the GATT 1994 or such goods as the Parties may agree, and includes originating goods of that Party;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes and Chapter Notes;
heading means the four first digits in the tariff classification number under the Harmonized System;
measure includes any law, regulation, procedure, requirement or practice; national means a natural person who is a citizen or permanent resident of a Party;
originating means qualifying under the rules of origin set out in Chapter IV (Rules of Origin);
person means a natural person or an enterprise; person of a Party means a national, or an enterprise of a Party;
province means a province of Canada, and includes the Yukon Territory and the Northwest Territories and Nunavut and their successors;
Secretariat means the Secretariat established under Article XIII.3.1 (The Secretariat);
subheading means the first six digits in the tariff classification number under the Harmonized System;
tariff classification means the classification of a good or material under a chapter, heading or subheading or tariff subheading;
tariff elimination schedule means the provisions of Annex II.2.2 (Tariff Elimination Schedule);
territory means for a Party the territory of that Party as set out in Annex II.1.1 (Country- Specific Definitions); and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15, 1994, or any successor agreement to which both Parties are a party.
2. For purposes of this Agreement, unless otherwise specified, a reference to a province includes local governments of that province.
3. Country-specific definitions of national government are set out in Annex II.1.1 (Country-Specific Definitions).
Annex II.1.1. Country-Specific Definitions
For purposes of this Agreement, unless otherwise specified:
citizen means:
(a) with respect to Canada, a natural person who is a citizen of Canada under the Citizenship Act, R.S.C. 1985, c. C-29, as amended from time to time or under any successor legislation; and
(b) with respect to Costa Rica, the Costa Ricans by birth, according to Article 13 of the Political Constitution of the Republic of Costa Rica and the Costa Ricans by naturalization, according to Article 14 of the Political Constitution of the Republic of Costa Rica;
national government means:
(a) with respect to Canada, the Government of Canada; and
(b) with respect to Costa Rica, the Government of the Republic of Costa Rica; and
territory means:
(a) with respect to Canada, the territory to which its customs laws apply, including any areas beyond the territorial seas of Canada within which, in accordance with international law and its domestic law, Canada may exercise tights with respect to the seabed and subsoil and their natural resources; and
(b) with respect to Costa Rica, the territory and air space, and the maritime areas, including the seabed and subsoil adjacent to the outer limit of the territorial sea, over which it exercises, in accordance with international law and its domestic law, sovereign rights with respect to the natural resources of such areas.
Part Two. TRADE IN GOODS
Chapter III. National Treatment and Market Access of Goods
Article III.1. Scope and Coverage
This Chapter applies to trade in goods of a Party, including goods covered by Annex III.1 (Textile and Apparel Goods), except as provided in such Annex.
Section I. National Treatment
Article III.2. National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, including its interpretative notes, and to this end Article III of the GATT 1994 and its interpretative notes, or any equivalent provision of a successor agreement to which both Parties are party, are incorporated into and made part of this Agreement.
2. The provisions of paragraph 1 regarding national treatment shall mean, with respect to a province, treatment no less favourable than the most favourable treatment accorded by such province to any like, directly competitive or substitutable goods, as the case may be, of the Party of which it forms a part. (1)
3. Paragraphs 1 and 2 do not apply to the measures set out in Annex II.2 (Exceptions to Articles I.2 and II.7).
Section II. Tariffs
Article III.3. Tariff Elimination (2)
1. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty, or adopt any customs duty, on a good. (3)
2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on goods in accordance with its Schedule to Annex H1.3.1 (Tariff Elimination) (4) and Annex III.3.2 (Special Safeguards).
3. During the tariff elimination process, the Parties agree to apply to originating goods traded between them, the lesser of the customs duties resulting from a comparison between the rate established in accordance with the Tariff Elimination Schedule, and the existing rate pursuant to Article II of GATT 1994.
4. On the request of a Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in their Schedules or incorporating into one Party's Tariff Elimination Schedule goods that are not subject to the elimination schedule. An agreement between the Parties to accelerate the elimination of a customs duty on a good or to include a good in the Tariff Elimination Schedule shall supersede any duty rate or staging category determined pursuant to their Schedules for such good when approved by each such Party in accordance with its applicable legal procedures.
5. Except as otherwise provided in this Agreement, either Party may adopt or maintain import measures to allocate in-quota imports made pursuant to a tariff rate quota set out in Annex II.3.1 (Tariff Elimination), provided that such measures do not have trade restrictive effects on imports additional to those caused by the imposition of the tariff rate quota.
6. On written request of either Party, a Party applying or intending to apply measures pursuant to paragraph 5 shall consult to review the administration of those measures.
Article III.4. Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission for:
(a) professional equipment necessary for carrying out the business activity, trade or profession of a business person who qualifies for temporary entry pursuant to Chapter X (Temporary Entry);
(b) equipment for the press or for sound or television broadcasting and cinematographic equipment;
(c) goods imported for sports purposes and goods intended for display or demonstration; and
(d) commercial samples and advertising films;
imported from the territory of the other Party, regardless of their origin and regardless of whether like, directly competitive or substitutable goods are available in the territory of the Party.
2. Except as otherwise provided in this Agreement, neither Party may condition the duty-free temporary admission of a good referred to in paragraph 1(a), (b) or (c), other than to require that such good:
(a) be imported by a national or resident of the other Party who seeks temporary entry;
(b) be used solely by or under the personal supervision of such person in the exercise of the business activity, trade or profession of that person;
(c) not be sold or leased while in its territory;
(d) be accompanied by a bond in an amount no greater than 110 per cent of the charges that would otherwise be owed on entry or final importation, or by another form of security, releasable on exportation of the good, except that a bond for customs duties shall not be required for an originating good; (5)
(e) be capable of identification when exported;
(f) be exported on the departure of that person or within such other period of time as is reasonably related to the purpose of the temporary admission; and
(g) be imported in no greater quantity than is reasonable for its intended use.
3. Except as otherwise provided in this Agreement, neither Party may condition the duty-free temporary admission of a good referred to in paragraph 1(d), other than to require that such good:
(a) be imported solely for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-Party;
(b) not be sold, leased or put to any use other than exhibition or demonstration while in its territory;
(c) be capable of identification when exported;
(d) be exported within such period as is reasonably related to the purpose of the temporary admission; and
(e) be imported in no greater quantity than is reasonable for its intended use.
4. Where a good is temporarily admitted duty-free under paragraph 1 and any condition the Party imposes under paragraph 2 and 3 has not been fulfilled, a Party may impose:
(a) the customs duty and any other charge that would be owed on entry or final importation of the good; and
(b) any applicable criminal, civil or administrative penalties that the circumstances may warrant.
5. Neither Party:
(a) shall prevent a vehicle or container used in international traffic that enters its territory from the territory of the other Party to exit its territory on any route that is reasonably related to the economic and prompt departure of such vehicle or container;
(b) may require any bond or impose any penalty or charge solely by reason of any difference between the port of entry and the port of departure of a vehicle or container;
(c) may condition the release of any obligation, including any bond, that it imposes in respect of the entry of a vehicle or container into its territory on its exit through any particular port of departure; and
(d) may require that the vehicle or carrier bringing a container from the territory of the other Party into its territory be the same vehicle or carrier that takes such container to the territory of the other Party.
6. For purposes of paragraph 5, "vehicle" means a truck, a truck tractor, tractor, trailer unit or trailer, a locomotive, or a railway car or other railroad equipment.
Article III.5. Duty-Free Entry of Certain Commercial Samples and Printed Advertising Materials
Each Party shall grant duty-free entry to commercial samples of negligible value, and to printed advertising materials, imported from the territory of the other Party, regardless of their origin, but may require that:
(a) such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-Party; or
(b) such advertising materials be imported in packets that each contain no more than one copy of each such material and that neither such materials nor packets form part of a larger consignment.
Article III.6. Goods Re-Entered after Repair or Alteration
1. Neither Party may apply a customs duty to a good, regardless of its origin, that re- enters its territory after that good has been exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in its territory.(6)
2. Neither Party may apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of the other Party for repair or alteration.