Title
COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT BETWEEN THE REPUBLIC OF INDONESIA AND THE EFTA STATES
Preamble
Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation (hereinafter referred to as the "EFTA States"),
and The Republic of Indonesia, hereinafter each individually referred to as a "Party" or collectively as the "Parties",
RECOGNISING the common wish to strengthen the links between the EFTA States and Indonesia by establishing this Comprehensive Economic Partnership Agreement (hereinafter referred to as "Agreement") based on the principles of sovereign equality, mutual respect, constructive spirit and common benefit;
ACKNOWLEDGING the importance of cooperation and capacity building, based on the Parties' capabilities, with a view to promoting the implementation of this Agreement;
REAFFIRMING their commitment to the principles and objectives set out in the United Nations Charter and the Universal Declaration of Human Rights, including democracy, the rule of law, human rights and fundamental freedoms;
RECOGNISING that economic development, social development, and environmental protection are interdependent and mutually supportive components of sustainable development;
REAFFIRMING their commitment to support and promote the development objectives of the United Nations 2030 Agenda for Sustainable Development, including the objective to eradicate poverty in all its forms and dimensions, and the need for holistic and integrated approaches to achieve economic growth, social development and environmental sustainability, at national, regional and global levels, and recalling in this context their rights and obligations under applicable environmental agreements and those deriving from membership of the International Labour Organisation (hereinafter referred to as the "ILO");
DETERMINED to implement this Agreement in line with the objective to preserve and protect the environment through sound environmental management and to promote an optimal use of the world's natural resources in accordance with the objective of sustainable development;
AIMING at creating new employment opportunities, improving living standards and raising levels of protection of health and safety and of the environment;
DESIRING to create favourable conditions for the development and diversification of trade between them and for the promotion of commercial and economic cooperation in areas of common interest on the basis of equality, mutual benefit, non-discrimination and international law;
RECOGNISING the importance of trade facilitation in promoting efficient and transparent procedures to reduce costs and to ensure predictability for the trading communities of the Parties;
DETERMINED to promote and further strengthen the multilateral trading system, building on their respective rights and obligations under the Marrakesh Agreement establishing the World Trade Organisation (hereinafter referred to as the "WTO Agreement") and the other agreements concluded thereunder, thereby contributing to the harmonious development and expansion of world trade;
AFFIRMING their commitment to prevent and combat corruption in international trade and investment and to promote the principles of transparency and good public governance;
ACKNOWLEDGING the importance of the Paris Declaration on Aid Effectiveness;
ACKNOWLEDGING the importance of good corporate governance and corporate social responsibility for sustainable development, and affirming their aim to encourage enterprises to observe internationally recognised guidelines and principles in this respect, such as the OECD Guidelines for Multinational Enterprises, the OECD Principles of Corporate Governance and the UN Global Compact;
CONVINCED that this Agreement, along with the cooperation and capacity building projects undertaken in conjunction with it, will enhance the competitiveness of their enterprises, including small and medium enterprises in global markets and create conditions encouraging economic, trade and investment relations between them;
DETERMINED to establish a legal framework for a comprehensive economic partnership between the Parties;
HEREBY AGREE, in pursuit of the above, to conclude this Agreement:
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. Establishment of a Comprehensive Economic Partnership
The Parties hereby establish a comprehensive economic partnership, including a free trade area, by means of this Agreement, which is based on trade relations between market economies, with a view to contributing to the harmonious development and expansion of world trade and to spurring prosperity and sustainable development.
Article 1.2. Objectives
The objectives of this Agreement are:
(a) to achieve the liberalisation of trade in goods, in conformity with Article XXIV of the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as the "GATT 1994");
(b) to achieve the liberalisation of trade in services, in conformity with Article V of the General Agreement on Trade in Services (hereinafter referred to as the "GATS");
(c) to mutually enhance investment opportunities;
(d) to ensure adequate and effective protection of intellectual property rights, in accordance with international standards;
(e) to enhance cooperation and explore possible liberalisation in the field of government procurement;
(f) to promote fair competition in their economies, particularly as it relates to economic relations between the Parties;
(g) to ensure cooperation and capacity building in order to enhance and expand the benefits of this Agreement, thereby reducing poverty and fostering competitiveness and sustainable economic development; and
(h) to develop international trade in such a way as to contribute to the objective of sustainable development as it is integrated and reflected in the Parties' trade relations.
Article 1.3. Geographical Scope
1. Except as otherwise specified in Annex I (Rules of Origin and Administrative Cooperation), this Agreement shall apply:
(a) to the land territory, internal waters, archipelagic waters and the territorial sea of a Party, and the air-space above the territory of a Party, in accordance with international law including the United Nations Convention on the Law of the Sea, done at Montego Bay, December 10, 1982; and
(b) beyond the territorial sea, with respect to measures taken by a Party in the exercise of its sovereign rights and jurisdiction in accordance with international law, including the United Nations Convention on the Law of the Sea, done at Montego Bay, December 10, 1982.
2. This Agreement shall not apply to the Norwegian territory of Svalbard, with the exception of trade in goods.
Article 1.4. Economic Partnership Governed by this Agreement
1. This Agreement shall apply to Indonesia on the one side and the individual EFTA States on the other side but not to the trade and economic relations between individual EFTA States, unless otherwise provided for in this Agreement.
2. In accordance with the Customs Treaty of 29 March 1923 between Switzerland and Liechtenstein, Switzerland shall represent Liechtenstein in matters covered thereby.
Article 1.5. Relationship to other International Agreements
1. The Parties confirm their rights and obligations under the WTO Agreement and the other agreements concluded thereunder to which they are a party, and any other international agreements to which they are a party.
2. If a Party considers that the maintenance or establishment of customs unions, free trade areas, arrangements for frontier trade or other preferential agreements by another Party has the effect of altering the trade regime provided for by this Agreement, it may request consultations. The Party concluding such agreement shall afford adequate opportunity for consultations with the requesting Party.
3. If any international agreement, referred to in this Agreement is amended, the Parties may consult on whether it is necessary to amend this Agreement.
Article 1.6. Fulfilment of Obligations
The Parties shall take any general or specific measures required to fulfil their obligations under this Agreement. Each Party shall ensure within its territory the observance of all obligations and commitments under this Agreement by its respective central, regional and local governments and authorities, and by non-governmental bodies in the exercise of governmental powers delegated to them.
Article 1.7. Transparency and Confidential Information
1. Laws, regulations, judicial decisions, administrative rulings of general application of the Parties, as well as their respective international agreements, that may affect the operation of this Agreement, shall be published or otherwise made publicly available by the Parties.
2. Each Party shall respond to a request with respect to specific questions, and provide information requested by another Party on matters referred to in paragraph 1 in a timely manner.
3. Nothing in this Agreement shall require any Party to disclose confidential information that would impede law enforcement, or otherwise be contrary to the public interest or that would prejudice the legitimate commercial interests of any economic operator.
4. Each Party shall treat as confidential the information submitted by another Party, which has been designated as confidential by the Party submitting the information.
5. In case of any inconsistency between this Article and provisions relating to transparency in other parts of this Agreement, the latter shall prevail to the extent of the inconsistency.
Article 1.8. Taxation Exception
1. Except as provided in this Article, nothing in this Agreement shall apply to taxation measures.
2. Nothing in this Agreement shall affect the rights and obligations of a Party under a tax convention applicable between the relevant EFTA State and Indonesia. In the event of any inconsistency between this Agreement and any such tax convention, that tax convention shall prevail to the extent of the inconsistency. The competent authorities under that tax convention shall have the sole responsibility to determine whether an inconsistency exists between this Agreement and that tax convention.
3. Notwithstanding paragraph 1, the provisions referred to hereafter shall apply to taxation measures:
(a) Article 2.9 (Internal Taxation and Regulations) and such other provisions of this Agreement as are necessary to give effect to that Article to the same extent as does Article II of the GATT 1994; and
(b) Articles 3.16 (General Exceptions) and 4.11 (General Exceptions) to the same extent as does Article XIV of the GATS.
4. For the purposes of this Article, taxation measures do not include any import duties as defined in Article 2.2 (import Duties) nor export duties as defined in Article 2.3 (Export Duties).
Chapter 2. TRADE IN GOODS
Article 2. Scope
This Chapter shall apply to trade in goods between the Parties.
Article 2. Import Duties
1. Each Party shall apply import duties on goods originating in another Party in accordance with Annexes II to V (Schedules on Tariff Commitments on Goods).
2. Unless otherwise provided in this Agreement, no Party shall increase import duties, or introduce new import duties, on goods originating in another Party covered by Annexes II to V (Schedules on Tariff Commitments on Goods).
3. For the purposes of this Agreement, âimport dutiesâ means any customs duties and charges of any kind, including taxes and surcharges, imposed in connection with the importation of goods, except duties and charges imposed in conformity with Articles II and VIII of the GATT 1994 as well as anti-dumping duties that are applied pursuant to Article VI of the GATT 1994 and in accordance with Article 2.15 (Anti-dumping Measures).
Article 2.3. Export Duties
If a Party agrees with a non-party to abolish or limit export duties, it shall, upon request by another Party, accord treatment no less favourable to the other Party. ARTICLE 2.4 Rules of Origin and Administrative Cooperation
The rules of origin and administrative cooperation are set out in Annex I (Rules of Origin and Administrative Cooperation).
Article 2.5. Customs Valuation (1)
Article VII of the GATT 1994 and Part I of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 shall apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.6. Import Licensing
1. The WTO Agreement on Import Licensing Procedures shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. In adopting or maintaining import licensing procedures, the Parties shall implement such procedures consistent with this Agreement. In particular, each Party shall ensure that import licensing procedures are implemented in a transparent, non- discriminatory fair and equitable, predictable and least trade-restrictive manner.
3. Subject to the domestic laws and regulations of the importing Party, if the license application is not approved, the applicant shall without undue delay be given the reason in writing and shall have a right to appeal in at least one level of administrative or judicial appeal, and be given a written justification without undue delay if the non- approval is upheld following such appeal.
4. Upon entry into force of this Agreement, each Party shall promptly notify the other Parties of existing import licensing procedures. Each Party shall promptly notify any new import licensing procedures as well as modifications to existing import licensing procedures. Such notification shall include information on the administrative purpose of such licensing procedures and shall be in accordance with Articles 5.2 and 5.3 of the WTO Agreement on Import Licensing Procedures.
5. Each Party shall promptly respond to requests for information on import licensing requirements by another Party.
6. The Parties shall exchange contact points responsible for the issuance of import licenses in order to facilitate communication and exchange of information on a regular basis.
Article 2.7. Quantitative Restrictions
1. Article XI of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. No Party may adopt or maintain any prohibition or restriction on the importation of a product of another Party or on the exportation of a product to another Party, except for measures in accordance with paragraph 2 of Article XI of the GATT 1994.
3. A Party introducing a measure in accordance with paragraph 2 of Article XI of the GATT 1994 shall promptly notify the Joint Committee. A notification by a Party in accordance with Article XI of the GATT 1994 shall be deemed equivalent to a notification under this Agreement.
4. Any measure applied in accordance with this Article shall be temporary and may not go beyond what is necessary to deal with the circumstances described in paragraph 2. The Parties shall endeavour to terminate measures no later than three years after their imposition.
5. Each Party shall ensure non-discriminatory administration and transparency of its measures in accordance with paragraph 2 of Article XI of the GATT 1994 and that such measures are not prepared, adopted or applied with the view to or with the effect of creating unnecessary obstacles to trade between the Parties.
Article 2.8. Fees and Formalities
Article VIII of the GATT 1994 shall apply, and is hereby incorporated into and made part of this Agreement, mutatis mutandis, subject to Article 9 (Fees and Charges) of Annex VI (Trade Facilitation).
Article 2.9. Internal Taxation and Regulations
Article I of the GATT 1994 shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.10. Agricultural Export Subsidies
No Party may adopt or maintain export subsidies, as defined in the WTO Agreement on Agriculture, in connection with the exportation of agricultural products to another Party.
Article 2. Standards, Technical Regulations and Conformity Assessment Procedures
1. Except as otherwise provided for in this Article, with respect to standards, technical regulations and conformity assessments, the WTO Agreement on Technical Barriers to Trade (hereinafter referred to as the "TBT Agreement") shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties shall exchange names and addresses of contact points with expertise on technical regulations in order to facilitate communication and exchange of information.
3. The Parties agree to hold technical consultations if a Party considers that another Party has applied or is considering applying a measure not in conformity with the TBT Agreement, in order to find an appropriate solution in conformity with the TBT Agreement. Such consultations, which may be held within or outside the framework of the Joint Committee, shall take place within 40 days from the date of receipt of the request. If consultations are held outside the framework of the Joint Committee, it should be informed thereof. Such consultations may be conducted by any agreed method.
4. Upon request of a Party, the Parties shall, without undue delay, agree on an atrangement extending to each other equivalent treatment related to technical regulations, standards and conformity assessments mutually agreed between each Party and a non-party.
5. The Parties may amend this Agreement or conclude other agreements to prevent, eliminate, or reduce technical barriers to trade, including mutual recognition agreements designed to avoid duplicative and unnecessarily burdensome conformity assessment procedures in specific product sectors.
Article 2. Sanitary and Phytosanitary Measures
1. Except as otherwise provided for in this Article, the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (hereinafter referred to as the âSPS Agreementâ) shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. An importing Party shall ensure free movement of goods complying with its relevant sanitary and phytosanitary requirements and applicable domestic laws and regulations once placed on its market. Sanitary and phytosanitary requirements and domestic laws and regulations shall be applied in a non-discriminatory manner.
3. The Parties agree to use system audits as the preferred assessment method. The need to perform on-site inspections shall be justified and agreed by the Parties.
4. The Parties agree to minimise the number of model SPS-certificates as far as possible. Where official certificates are required, these should be in line with the principles laid down in international standards. When a Party introduces or modifies a certificate, information on the proposed new or revised certificate shall be notified, in English, as early as possible. The Parties shall explain and justify introduction or modification of a certificate. The exporting Party shall be given sufficient time to adapt to the new requirements.
5. Import control should be carried out according to international standards, guidelines and recommendations issued by the relevant international organisations, such as Codex Alimentarius Commission (CAC), including Codex Committee on Food Import and Export Inspection and Certification Systems (CCFICS), International Plant Protection Convention (IPPC) and the World Organisation for Animal Health (OIE).
6. The import requirements and checks applied to imported products covered by this Article shall be based on the risk that is associated with such products and shall be applied in a non-discriminatory manner. Import checks and border controls shall be carried out as expeditiously as possible in a manner that is no more trade-restrictive than necessary.
7. Information about the frequency of import checks or changes in this frequency shall be exchanged upon request between competent authorities.
8. Each Party shall ensure that adequate procedures exist to allow the person or entity responsible for the consignment whose goods are subject to sampling and analysis to apply for a supplementary expert opinion as part of the official sampling.
9. Products subject to random and routine checks upon importation should be cleared while awaiting results of the tests if no perceived or verified risk is associated with the products.
10. If a product is detained at the border due to a perceived risk, the clearance decision shall be issued as soon as possible. Every effort shall be made to avoid deterioration of perishable goods. (2)
11. If a product is rejected at a port of entry due to a verified serious sanitary or phytosanitary issue, the competent authority in the exporting Party shall be informed immediately. The factual basis and scientific justification shall, upon request, be provided to the exporting Party in writing, as soon as possible, but no later than within 14 days.
12. Where a Party detains, at a port of entry, a product exported from another Party due to a perceived failure to comply with a sanitary or phytosanitary measure, the factual justification for the detention shall be promptly notified to the person or entity responsible for the consignment. If a product is rejected at a port of entry, each Party shall ensure that appropriate administrative or legal procedures exist to file a complaint to appeal the decision in accordance with their domestic laws and regulations.
13. Consultations shall be held upon request of a Party which considers that another Party has taken a measure which is likely to create, or has created, an obstacle to trade. Such consultations shall take place within 30 days from the date of receipt of the request with the objective of finding a mutually acceptable solution. If consultations are not taking place in the Joint Committee, it should be informed thereof. In case of perishable goods, consultations between the competent authorities shall be held without undue delay. Such consultations may be conducted by any agreed method.
14. Upon request by a Party, the Parties shall, without undue delay, agree on an arrangement extending to each other equivalent (3) treatment related to sanitary and phytosanitary measures mutually agreed between each Party and a non-party.
15. The Parties shall exchange names and addresses of contact points in order to facilitate communication and exchange of information. They shall notify any substantial change in structure, organisation and division of responsibilities of the competent authorities and contact points to each other.
Article 2.13. Trade Facilitation
The rights and obligations of the Parties regarding Trade Facilitation are set out in Annex VI (Trade Facilitation).
Article 2.14. Subsidies and Countervailing Measures
1. The rights and obligations of the Parties relating to subsidies and countervailing measures shall be governed by Articles VI and XVI of the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures.
2. Upon receipt of a properly documented countervailing duty application with respect to imports from another Party, and before initiating an investigation, the Party considering initiating an investigation shall provide written notification to the Party whose goods are subject to investigation at least 30 days in advance of the date of initiation and invite the Party whose goods are subject to investigation for consultations, with the view to finding a mutually acceptable solution. The notifying Party shall allow for a 30-day period for consultations. The consultations may take place in the Joint Committee if the Parties agree and should not prevent the competent authorities of a Party from proceeding expeditiously with regard to initiating the investigation.
Article 2.15. Anti-dumping Measures
1. The rights and obligations of the Parties with regard to anti-dumping measures shall be governed by Article VI of the GATT 1994 and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, subject to paragraphs 2 to 5.
2. Subject to paragraph 1 and considering the comprehensive economic partnership established by this Agreement, the Parties will consider to refrain from initiating anti- dumping procedures or applying anti-dumping measures against each other.
3. Upon receipt of a properly documented application for the initiation of an anti-dumping investigation concerning imports from another Party, the Party considering initiating an investigation shall provide written notification to the Party whose goods are subject to investigation of the application 30 days in advance of the date of initiation of such investigation. Under very exceptional circumstances, the aforementioned notice of 30 days may be reduced to a minimum of seven days. Upon request of the Party whose goods are subject to investigation, the notifying Party shall allow for a 30-day period for consultations. The consultations may take place in the Joint Committee if the Parties agree. These consultations should not prevent the competent authorities of a Party from proceeding expeditiously with regard to initiating the investigation.
4. Unless the circumstances have changed, a Party shall not initiate an anti-dumping investigation with regard to the same product from the same Party after a determination which resulted in the non-application or revocation of anti-dumping measures or after the termination of a measure. In such case, the Parties agree to undertake a special examination on any application for an anti-dumping investigation.
5. The Parties shall, upon request of a Party, exchange views about the application of this Article and its effect on trade between the Parties at the meetings of the Joint Committee.
Article 2.16. WTO Safeguard Measures
1. The rights and obligations of the Parties with respect to global safeguards shall be governed by Article XIX of the GATT 1994, the WTO Agreement on Safeguards, and Article V of the WTO Agreement on Agriculture.
2. In taking measures under Article XIX of the GATT 1994 and the WTO Agreement on Safeguards, a Party will, consistent with its obligations under the WTO Agreement, consider to exclude imports of an originating product from one or several Parties if such imports do not in and of themselves cause or threaten to cause serious injury.
Article 2.17. Bilateral Safeguard Measures
1. Where, as a result of the reduction or elimination of a customs duty under this Agreement, any product originating in a Party is being imported into the territory of another Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to constitute a substantial cause of serious injury or threat thereof to the domestic industry of like or directly competitive goods in the territory of the importing Party, the importing Party may take bilateral safeguard measures to the minimum extent necessary to remedy or prevent the injury, subject to the provisions of paragraphs 2 to 11.
2. If the conditions set out in paragraph 1 are met, the importing Party may take measures consisting in:
(a) suspending the further reduction of any rate of customs duty for the product provided for under this Agreement; or
(b) increasing the rate of customs duty for the product to a level not to exceed the lesser of:
(i) the MFN rate of duty applied at the time the bilateral safeguard measure is taken; or
(ii) the MFN rate of duty applied on the day immediately preceding the date of the entry into force of this Agreement.
3. Bilateral safeguard measures shall be taken for a period not exceeding one year. In exceptional circumstances, after consultations pursuant to paragraph 7, measures may be taken up to a total maximum period of three years. After a period of non-application of three years and in an emergency situation only, a Party may apply another bilateral safeguard measure in accordance with this Article.
4. Bilateral safeguard measures shall only be taken upon clear evidence that increased imports have caused or are threatening to cause serious injury pursuant to an investigation in accordance with the procedures laid down in the WTO Agreement on Safeguards.
5. A Party intending to take a bilateral safeguard measure under this Article shall immediately, and in any case before taking such measure, notify the other Parties. The notification shall contain all pertinent information, which shall include evidence of serious injury or threat thereof caused by increased imports, a precise description of the product involved, and the proposed measure, as well as the proposed date of introduction, expected duration and timetable for the progressive removal of the measure.
6. A Party that may be affected by a bilateral safeguard measure may request any adequate means of trade compensation in the form of substantially equivalent trade liberalisation in relation to its imports.
7. The Party intending to apply or extend a bilateral safeguard measure shall provide adequate opportunity for prior consultations with the Party that may be affected by the measure, with a view to reviewing the information arising from the investigation referred to in paragraph 4, exchanging views on the intended application or extension of a bilateral safeguard measure and reaching an understanding on compensation. The consultations shall take place in the Joint Committee if the Parties agree.
8. In the absence of a mutually acceptable solution within 30 days from the first day of consultations pursuant to paragraph 7, the importing Party may adopt a bilateral safeguard measure pursuant to paragraph 2 to remedy the problem, and, in the absence of mutually agreed compensation, the Party against whose product the bilateral safeguard measure is taken may take compensatory action. The bilateral safeguard measure and the compensatory action shall be immediately notified to the other Parties. In the selection of the bilateral safeguard measure and the compensatory action, priority must be given to the action which least disturbs the functioning of this Agreement. The Party taking compensatory action shall apply the action only for the minimum period necessary to achieve the substantially equivalent trade effects and in any event, only while the measure according to paragraph 2 is being applied.
9. Upon the termination of the measure, the rate of customs duty shall be the rate which would have been in effect but for the bilateral safeguard measure.
10. In critical circumstances, where delay would cause damage, which would be difficult to repair, a Party may take a provisional bilateral safeguard measure in accordance with paragraph 2, pursuant to a preliminary determination that there is clear evidence that increased imports constitute a substantial cause of serious injury, or threat thereof, to the domestic industry. The Party intending to take such measure shall immediately notify the other Parties. Within 30 days from the date of receipt of the notification, the procedures set out in this Article shall be initiated. Any compensation shall be based on the total period of application of the provisional bilateral safeguard measure and of the bilateral safeguard measure.
11. Any provisional bilateral safeguard measure shall be terminated within 200 days at the latest. The period of application of any such provisional bilateral safeguard measure shall be counted as part of the duration, and any extension thereof, of the measure, set out in paragraphs 3 and 7 respectively. Any tariff increases shall be promptly refunded if the investigation described in paragraph 4 does not result in a finding that the conditions of paragraph 1 are met.
12. The Parties shall, upon request of a Party, exchange views about the application of this Article and its effect on trade between the Parties at the meetings of the Joint Committee.