Title
COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT BETWEEN THE EFTA STATES AND THE REPUBLIC OF ECUADOR
Preamble
PREAMBLE
Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation (EFTA States),
and The Republic of Ecuador (Ecuador), 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 Ecuador by establishing close and lasting relations;
DESIRING to create favourable conditions for the development and diversification of trade between the Parties 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;
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 Organization (WTO Agreement) and the other agreements negotiated thereunder, thereby contributing to the harmonious development and expansion of world trade;
REAFFIRMING their commitment to democracy, the rule of law, human rights and fundamental freedoms in accordance with their obligations under international law, including as set out in the United Nations (UN) Charter and the Universal Declaration of Human Rights;
AIMING to promote comprehensive economic development with the objective of reducing poverty, to create new employment opportunities, to improve living standards, and to ensure high levels of protection of health and safety and of the environment;
REAFFIRMING their commitment to pursue the objective of sustainable development and recognising the importance of coherent and mutually supportive trade, environmental and labour policies in this respect;
DETERMINED to implement this Agreement in line with the objectives to preserve and protect the environment through sound environmental management and to promote an optimal use of the worldâs resources in accordance with the objective of sustainable development;
RECALLING their rights and obligations under multilateral environmental agreements to which they are a party, and the respect for the fundamental principles and rights at work, including the principles set out in the relevant International Labour Organisation (ILO) Conventions to which they are a party;
RECOGNISING the importance of ensuring predictability for the trading communities of the Parties, while ensuring the protection of public interest;
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 good corporate governance and corporate social responsibility for sustainable development, and affirming their aim to encourage enterprises to observe and adhere to internationally recognised guidelines and principles in this respect, such as the UN Global Compact;
CONVINCED that this Agreement will enhance the competitiveness of their firms in global markets and create conditions encouraging economic, trade and investment relations between the Parties;
HAVE AGREED, in pursuit of the above, to conclude the following Comprehensive Economic Partnership Agreement (Agreement):
Body
Chapter 1. GENERAL PROVISIONS
Article 1.1. Objectives
1. The EFTA States and Ecuador hereby establish a free trade area in accordance with the provisions of this Agreement, which is based on trade relations between market economies and on the respect for democratic principles and human rights, with a view to spurring prosperity and sustainable development.
2. The objectives of this Agreement are:
(a) to liberalise trade in goods, in conformity with Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994);
(b) to liberalise trade in services, in conformity with Article V of the General Agreement on Trade in Services (GATS);
(c) to mutually enhance investment opportunities;
(d) to prevent, eliminate or reduce unnecessary technical barriers to trade and unnecessary sanitary and phytosanitary measures;
(e) to promote competition in their economies, particularly as it relates to the economic relations between the Parties;
(f) to achieve further liberalisation on a mutual basis of the government procurement markets of the Parties;
(g) to ensure adequate and effective protection of intellectual property rights, in accordance with the principles and objectives of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement);
(h) to develop international trade in such a way as to contribute to the objective of sustainable development and to ensure that this objective is integrated and reflected in the Parties' trade relations;
(i) to foster cooperation in order to contribute to the implementation of this Agreement, and to improve the benefits thereof; and
(j) to contribute to the harmonious development and expansion of world trade.
Article 1.2. Coverage and Application
1. This Agreement applies, except as otherwise specified in Annex I (Rules of Origin and Mutual Administrative Cooperation in Customs Matters), to:
(a) the land territory, internal waters and the territorial sea of a Party, and the ait-space above the territory of a Party, in accordance with domestic and international law; and
(b) the exclusive economic zone and the continental shelf of a Party, in accordance with domestic and international law.
2. This Agreement shall not apply to the Norwegian territory of Svalbard, with the exception of trade in goods.
Article 1.3. Trade and Economic Relations Governed by this Agreement
1. This Agreement applies to the trade and economic relations between, on the one side, the individual EFTA States and, on the other side, Ecuador, but not to the trade and economic relations between individual EFTA States, unless otherwise provided 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 1.4. Relation to other International Agreements
1. The Parties confirm their rights and obligations under the WTO Agreement and the other agreements negotiated thereunder to which they are a party, and any other international agreement to which they are a party.
2. If a Party considers that the maintenance or establishment of a customs union, free trade area, arrangement for frontier trade or another preferential agreement 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.
Article 1.5. Fulfilment of Obligations
1. Each Party shall take any general or specific measures required to fulfil its obligations under this Agreement.
2. Each Party shall ensure 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 by central, regional and local governments or authorities.
Article 1.6. Transparency
1. The Parties shall publish, or otherwise make publicly available, their laws, regulations, judicial decisions, administrative rulings of general application as well as their respective international agreements, that may affect the operation of this Agreement.
2. The Parties shall promptly respond to specific questions and provide, upon request, information to each other on matters referred to in paragraph 1.
3. Nothing in this Agreement shall require any Party to disclose confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of any economic operator.
4. 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 1.7. Taxation
1. This Agreement shall not restrict a Partyâs fiscal sovereignty to adopt measures related to taxes.
2. Notwithstanding paragraph 1:
a) Article 2.8 (National Treatment on 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 Article II of the GATT 1994, apply to taxation measures;
b) Articles 3.4 (Most-Favoured-Nation Treatment) and 3.6 (National Treatment) to the extent relevant for taxation according to Article 3.17 (Exceptions) apply to taxation measures;
c) Article 4.3 (National Treatment) to the extent relevant for taxation according to Article 4.10 (General Exceptions) applies to taxation measures; and
d) Article 6.4 (National Treatment and Non-Discrimination) applies to taxation measures.
3. Nothing in this Agreement shall affect the rights and obligations of a Party under a tax convention applicable between an EFTA State and Ecuador. In the event of an inconsistency between this Agreement and such tax convention, that 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. If a Party considers that a taxation measure pursuant to a tax convention adversely affects trade between the Parties, the Parties shall consult in the Joint Committee with a view to finding a mutually satisfactory solution, but shall not have recourse to dispute settlement.
4. For the purposes of this Article, taxation measures shall 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 2.1. Scope
This Chapter applies to trade in goods between the Parties.
Article 2.2. Import Duties
1. Unless otherwise provided for in this Agreement, each Party shall grant tariff concessions on goods originating in another Party in accordance with Annexes II to V (Schedules on Tariff Commitments on Goods).
2. Unless otherwise provided for in this Agreement, a Party shall not 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. Paragraph 2 shall not preclude a Party from:
(a) raising an import duty to the level established in Annexes II to V (Schedules on Tariff Commitments on Goods) following a unilateral reduction; or
(b) maintaining or increasing an import duty as authorised by the Dispute Settlement Body of the WTO.
4. If a Party, after the entry into force of this Agreement, reduces its applied most favoured nation (MFN) import duty, that import duty shall apply to trade in goods originating in another Party if it is lower than the import duty calculated in accordance with Annexes II to V (Schedules on Tariff Commitments on Goods).
5. Consultations may be held in the Joint Committee to consider further improvements of the tariff concessions set out in the respective Annexes II to V (Schedules on Tariff Commitments on Goods), taking account of the pattern of trade between the Parties and the sensitivities of the goods.
6. For the purposes of this Agreement, "import duties" means any duties, taxes or charges applied in connection with the importation of goods, except those applied in conformity with:
(a) Article II of the GATT 1994;
(b) Articles 2.14 (Subsidies and Countervailing Measures), 2.15 (Anti- dumping), 2.16 (Global Safeguard Measures) or 2.17 (Bilateral Safeguard Measures);
(c) Article VIII of the GATT 1994.
Article 2.3. Export Duties
A Party shall not adopt or maintain any duties, taxes or charges other than internal charges applied in conformity with Article 2.8 (National Treatment on Internal Taxation and Regulations), in connection with the exportation of goods to another Party.
Article 2.4. Rules of Origin and Administrative Cooperation In Customs Matters
1. The rules of origin and administrative cooperation in customs matters are set out in Annex I (Rules of Origin and Mutual Administrative Cooperation in Customs Matters).
2. For the purposes of this Agreement, "originating product" is that which qualifies under the rules of origin set out in Annex I (Rules of Origin and Mutual Administrative Cooperation in Customs Matters).
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 GATT 1994 apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.6. Quantitative Restrictions
1. Article XI of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. A Party intending to apply a measure in accordance with paragraph 2 of Article XI of the GATT 1994, which may affect trade between the Parties, shall notify the Joint Committee.
3. A measure applied in accordance with this Article may be discussed in the Joint Committee with a view to mitigating the effects on trade between the Parties.
4. Paragraph 1 shall not apply to the measures set out in Annex VI (National Treatment and Quantitative Restrictions).
Article 2.7. Fees and Formalities
Without prejudice to Article 9 (Fees and Charges) of Annex VII (Trade Facilitation), Article VII of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.8. National Treatment on Internal Taxation and Regulations
1. Article I of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. Paragraph 1 shall not apply to the measures set out in Annex VI (National Treatment and Quantitative Restrictions).
Article 2.9. Andean Price Band System
Ecuador may maintain the Andean Price Band System established in 1994 by Decision 371 of the Andean Community and its modifications, or subsequent systems for agricultural goods covered by such Decision.
Article 2.10. Agricultural Export Subsidies
1. The Parties shall not apply export subsidies, as defined in the WTO Agreement on Agriculture, to trade in originating goods for which tariff concessions are granted in accordance with this Agreement.
2. If a Party adopts, maintains, introduces or re-introduces export subsidies on a product subject to a tariff concession in accordance with Article 2.2 (Import Duties), the other Parties may increase the duty rate on imports of that product to the applied MFN tariff duty rate. The Party increasing its duty rate shall notify the other Parties within 30 days from the date the duty is applied.
Article 2.11. Technical Regulations
1. With respect to technical regulations, standards and conformity assessments, the WTO Agreement on Technical Barriers to Trade (TBT Agreement) applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties shall ensure that all adopted technical regulations are officially published.
3. Upon request of a Party, the Parties shall initiate negotiations with a view to extend to each other equivalent treatment related to technical regulations, standards and conformity assessments, mutually agreed between each Party and a non-party. (2)
4. Upon request of a Party, which considers that another Party has taken a measure relating to technical regulations, standards or conformity assessments procedures, which is likely to create, or has created, an obstacle to trade, consultations shall be held with the objective of finding a mutually acceptable solution. Such consultations shall take place within 30 days from the receipt of the request and may be conducted by any technical method agreed by the consulting Parties. The Joint Committee shall be informed thereof.
5. The Parties shall exchange names and addresses of contact points in order to facilitate communication and the exchange of information regarding technical regulations, standards and conformity assessments and the implementation of this Article.
Article 2.12. Sanitary and Phytosanitary Measures
1. Except as otherwise provided for in this Article, the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis. The Parties acknowledge and bear in mind the decisions and reference documents adopted by the WTO Committee on Sanitary and Phytosanitary Measures.
2. The Parties shall jointly work towards the effective implementation of the SPS Agreement and this Article with the purpose of facilitating trade between them.
3. In accordance with the SPS Agreement, the application of sanitary and phytosanitary measures related to inter alia control, inspection, approval or certification shall be based on scientific justification.
4. To facilitate trade between them, the Parties shall, when agreed, develop bilateral arrangements or agreements, including between regulatory authorities in the field of sanitary and phytosanitary measures.
5. If the importing Party has decided to carry out a risk assessment process in accordance with its domestic laws and regulations, or has detained a consignment at the border due to a perceived serious non-compliance with the relevant import requirements, the importing Party shall notify, as soon as possible, the exporting Party that a risk assessment process has been initiated and provide all relevant information.
6. If a Party rejects a product at a port of entry due to a verified serious sanitary or phytosanitary issue, it shall inform the competent authority of the exporting Party as soon as possible about the reasons for the rejection. Upon request, the factual basis and scientific justification for the rejection shall be provided.
7. If a Party detains a product at the border due to a perceived risk, it shall take a decision on clearance as soon as possible and shall make every effort to avoid deterioration of perishable goods. That Party shall promptly inform the importer about the factual justification for the detention.
8. Goods subject to random and routine checks should not be detained at the border pending test results.
9. Upon request of a Party, which considers that another Party has taken or is considering taking a sanitary or phytosanitary measure not in conformity with the SPS Agreement or this Article, which is likely to create, or has created, an obstacle to trade, consultations shall be held with the objective of finding a mutually acceptable solution. Such consultations shall take place within 30 days from the request and may be conducted by any technical method agreed by the consulting Parties. The Joint Committee shall be informed thereof.
10. Upon request of a Party, the Parties shall initiate negotiations, without undue delay, to extend to each other equivalent (3) treatment related to sanitary and phytosanitary measures mutually agreed between each Party and the European Union (EU).
11. The Parties shall exchange names and addresses of contact points in order to facilitate communication and the exchange of information regarding sanitary and phytosanitary measures and the implementation of this Article.
Article 2.13. Trade Facilitation
The provisions regarding Trade Facilitation are set out in Annex VII (Trade Facilitation).
Article 2.14. Subsidies and Countervailing Measures
1. The rights and obligations of the Parties with respect 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. Before a Party initiates an investigation to determine the existence, degree and effect of an alleged subsidy in another Party, as provided for in Article 11 of the WTO Agreement on Subsidies and Countervailing Measures, the Party considering initiating an investigation shall notify in writing the Party whose products are subject to an investigation and allow for a 30 day period for consultations with a view to finding a mutually acceptable solution. Consultations may take place in the Joint Committee, if the Parties agree.
Article 2.15. Anti-dumping
1. The rights and obligations of the Parties with respect to anti-dumping measures shall be governed by Article VI of the GATT 1994 and the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (WTO Anti-dumping Agreement), subject to paragraphs 2 to 6.
2. When a Party receives a properly documented application and before initiating an investigation concerning imports of another Party, the Party shall immediately notify in writing the other Party whose goods are allegedly being dumped and allow for a 30 day period for consultations with a view to finding a mutually acceptable solution. Consultations may take place in the Joint Committee, if the Parties agree.
3. If an anti-dumping measure is applied by a Party, the measure shall be terminated no later than five years from its imposition.
4. A Party shall not initiate an anti-dumping investigation with regard to the same product from the same Party within one year from the termination of an anti-dumping measure or a determination, which resulted in the non-application or revocation of anti- dumping measures.
5. When anti-dumping margins are established, assessed or reviewed under Articles 2, 9.3, 9.5, and 11 of the WTO Anti-dumping Agreement regardless of the comparison bases under Article 2.4.2 of the WTO Anti-dumping Agreement, all individual margins, whether positive or negative, shall be counted toward the average.
6. The Parties shall exchange views about the application of this Article and its effects on trade between the Parties at the meetings of the Joint Committee.
Article 2.16. Global Safeguard Measures
The rights and obligations of the Parties with respect to global safeguards shall be governed by Article XIX of the GATT 1994 and the WTO Agreement on Safeguards. In taking measures under these WTO provisions, a Party shall, consistent with its obligations under the WTO Agreements, endeavour 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 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 cause or threaten to cause serious injury to the domestic industry of like or directly competitive products 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 paragraphs 2 to 10 (4).
2. 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.
3. The Party intending to take a bilateral safeguard measure pursuant to this Article shall immediately, and in any case before taking a measure, notify the other Parties. The notification shall contain all pertinent information, including evidence of serious injury or threat thereof caused by increased imports, a precise description of the product concerned, and the proposed measure, as well as the proposed date of introduction, expected duration and timetable for the progressive removal of the measure. A Party that may be affected by the bilateral safeguard measure shall be offered compensation in the form of substantially equivalent trade liberalisation in relation to the imports from such Party.
4. 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 provided for under this Agreement for the product; 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.
5. Bilateral safeguard measures shall be taken for a period not exceeding two years. In very exceptional circumstances measures may be taken up to a total maximum period of three years. No bilateral safeguard measures shall be applied to the import of a product, which has previously been subject to such a measure, except for a single time, provided that the period of non-application is at least one year.
6. The Parties shall, within 30 days from the receipt of the notification, examine the information provided under paragraph 3 in order to facilitate a mutually acceptable solution. In the absence of such solution, the importing Party may adopt a bilateral safeguard measure pursuant to paragraph 4 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 or measure 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 bilateral safeguard measure pursuant to paragraph 4 is being applied.
7. The right of taking compensatory action shall not be exercised for the first two years that a bilateral safeguard measure is in effect. (5)
8. Upon the termination of the bilateral safeguard measure, the rate of customs duty shall be the rate, which would have been in effect but for the measure.
9. In critical circumstances, where delay would cause damage, which would be difficult to repair, a Party may take a provisional bilateral safeguard measure 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 a measure shall immediately notify the other Parties thereof. Within 30 days from the receipt of the notification, the pertinent procedures set out in paragraphs 2 to 6 shall be initiated.
10. A provisional bilateral safeguard measure shall be terminated within 200 days at the latest. The period of application of such provisional bilateral safeguard measure shall be counted as part of the duration, and any extension thereof, of the bilateral safeguard measure, set out in paragraphs 4 and 5 respectively. Tariff increases shall be promptly refunded if the investigation described in paragraph 2 does not result in a finding that the conditions of paragraph 1 are met.
11. Five years from the date of entry into force of this Agreement, the Parties shall review the possibility to take safeguard measures between them and may decide not to apply this Article any longer. If the Article continues to apply, biennial reviews shall take place thereafter in the Joint Committee. 12. For the purposes of this Article, notifications shall be sent to: