(a) convergence or equivalence of technical regulations and standards;
(b) alignment with international standards;
(c) reliance on a supplier’s declaration of conformity; and
(d) accreditation of conformity assessment bodies of the Parties, as well as cooperation between conformity assessment bodies.
2. The Parties recognize that a wide range of mechanisms exist to support regulatory harmonization and to eliminate unnecessary technical barriers to trade between the Parties, including mechanisms that promote:
(a) regulatory dialogue and cooperation to, inter alia:
(i) exchange information on regulatory approaches and practices;
(ii) develop good regulatory practices to improve the efficiency and effectiveness of technical regulations, standards, and conformity assessment procedures;
(iii) provide technical advice to the other Party on mutually agreed terms and conditions, on the improvement of practices related to the development, implementation and review of technical regulations, standards, conformity assessment procedures and metrology; or
(iv) build capacity and support for the implementation of this Chapter on mutually agreed terms and conditions;
(b) harmonization of national standards with relevant international standards, except where inappropriate or ineffective;
(c) greater use of relevant international standards, guides, and recommendations as the basis for the Parties’ respective technical regulations and conformity assessment procedures; and
(d) equivalence of technical regulations of the other Party.
3. The Parties shall seek to strengthen their exchange of information and collaboration on mechanisms that facilitate the acceptance of conformity assessment results, to support greater regulatory harmonization and to eliminate unnecessary technical barriers to trade.
4. At the request of a Party, the other Party shall give favourable consideration to any reasonable sector-specific proposal the Party makes for cooperation under this Chapter.
5. The Parties shall encourage cooperation between their respective bodies, including both public and private bodies that are responsible for standardization, conformity assessment, and accreditation, with a view to addressing issues related to this Chapter.
Article Cter-04. International Standards
In determining whether an international standard, guide, or recommendation exists within the meaning of Articles 2 or 5 or Annex 3 of the TBT Agreement, each Party shall consider the principles set out in the Decisions and Recommendations adopted by the WTO Committee on Technical Barriers to Trade since January 1, 1995 (G/TBT/1/Rev. 12, January 21, 2015) , or a successor document issued by the WTO Committee on Technical Barriers to Trade.
Article Cter-05. Technical Regulations
1. If a Party does not accept a technical regulation of the other Party as equivalent to its own, it shall provide the reason for its decision to the other Party at that Party’s request.
2. If a Party detains at a port of entry a good that is imported from the territory of the other Party on the basis that the good may not comply with a technical regulation, it shall notify, without undue delay, the importer of the reasons for the detention of the good.
Article Cter-06. Conformity Assessment
1. The Parties recognize that there is a broad range of mechanisms to facilitate the acceptance in the Party’s territory of the results of conformity assessment procedures that are conducted in the other Party’s territory. These mechanisms may include:
(a) the reliance by the importing Party on a supplier’s declaration of conformity;
(b) voluntary arrangements between conformity assessment bodies to accept the results of each other’s assessment procedures when the bodies are located in the territory of the other Party;
(c) accreditation procedures for qualifying conformity assessment bodies that are located in the territory of the other Party;
(d) designation of conformity assessment bodies that are located in the territory of the other Party; and
(e) recognition of the results of conformity assessment procedures that are conducted in the territory of the other Party.
2. Further to Article 6. 4 of the TBT Agreement, each Party shall accord to conformity assessment bodies located in the territory of the other Party treatment no less favourable than that accorded to bodies located in its own territory or the territory of a non-Party. In order to ensure that it accords such treatment, each Party shall apply to conformity assessment bodies located in the territory of the other Party the same or equivalent procedures, criteria and other conditions that it applies where it accredits, approves, licenses or otherwise recognizes conformity assessment bodies located in its own territory.
3. Paragraph 2 does not preclude a Party from undertaking conformity assessment of specific products solely by government bodies located in its own territory or in the other Party’s territory, nor from verifying the results of conformity assessment procedures undertaken by conformity assessment bodies located outside its territory.
4. If a Party undertakes a conformity assessment procedure pursuant to paragraph 3 and pursuant to Articles 5. 2 and 5. 4 of the TBT Agreement concerning limitation on information requirements, the protection of legitimate commercial interests, and the adequacy of review procedures, the Party shall, at the request of the other Party, explain:
(a) why the information required is necessary to assess conformity and determine fees;
(b) how the Party ensures that the confidentiality of the information is respected in a manner that ensures that legitimate commercial interests are protected; and
(c) the procedure to review complaints concerning the operation of the conformity assessment procedure and to take corrective action if a complaint is justified.
5. Further to Article 5. 2. 5 of the TBT Agreement, each Party shall limit any conformity assessment fees imposed by the Party to the approximate cost of the services rendered to do the assessment.
6. Further to Article 9. 1 of the TBT Agreement, the Parties shall:
(a) consider adopting provisions for accreditation bodies to approve conformity assessment bodies that are signatory to an international or regional mutual recognition arrangement or agreement; and
(b) recognize that such arrangements or agreements can address the key considerations for the approval of conformity assessment bodies, including technical competence, independence, and the avoidance of conflict of interest.
7. If a Party accredits, approves, licenses or otherwise recognizes a body that assesses conformity with a specific technical regulation or standard in its territory and that Party refuses to accredit, approve, license or otherwise recognize a body that assesses conformity with that technical regulation or standard in the territory of the other Party, it shall, on request of the other Party, provide the reasons for its decision.
8. If a Party does not accept the results of a conformity assessment procedure that is conducted in the territory of the other Party it shall, on request of that other Party, provide the reasons for its decision.
9. Further to Article 6. 3 of the TBT Agreement, if a Party declines the other Party’s request to engage in negotiations or to conclude an arrangement or agreement for mutual recognition of the results of the other Party’s conformity assessment procedures it shall, on the request of the other Party, provide the reasons for its decision.
Article Cter-07. Transparency
1. The obligations in this Article supplement those set out in Chapter L (Publication, Notification and Administration of Laws) . In the event of an inconsistency between this Article and the obligations in Chapter L, this Article prevails.
2. A Party shall ensure that transparency procedures for the development of technical regulations and conformity assessment procedures allow an interested person to participate at an early appropriate stage, when amendments can still be introduced and comments taken into account, except when urgent problems of safety, health, environmental protection, or national security arise or threaten to arise. If a consultation process of a Party for the development of technical regulations and conformity assessment procedures is open to the public, each Party shall permit a person of the other Party to participate on terms no less favourable than those accorded to its own persons.
3. A Party shall recommend to standardization bodies in its territory to observe paragraph 2 with respect to the consultation processes for the development of a standard or voluntary conformity assessment procedure.
4. A Party shall allow a period of at least 60 days following its notification to the WTO’s Central Registry of Notifications of proposed technical regulations and conformity assessment procedures for the public and the other Party to provide written comments, except where urgent problems of safety, health, environmental protection or national security arise or threaten to arise.
5. A Party shall, at the request of the other Party, provide information regarding the objectives of, and rationale for, a technical regulation or conformity assessment procedure that the Party has adopted or is proposing to adopt.
6. A Party shall ensure that its adopted technical regulations and conformity assessment procedures are posted on official websites that are publicly accessible without charge.
7. A Party shall provide to the other Party, in print or electronic form, any information or reason requested by that Party pursuant to the provisions of this Chapter within a reasonable time. A Party shall endeavour to respond to a request by the other Party within 60 days.
Article Cter-08. Committee on Technical Barriers to Trade
1. The Parties hereby establish the Committee on Technical Barriers to Trade (the “Committee”) composed of representatives of each Party as follows:
(a) for Chile, the General Directorate of International Economic Relations, Ministry of Foreign Affairs, or its successor; and
(b) for Canada, the Department of Foreign Affairs, Trade and Development, or its successor.
2. The Committee’s functions shall include:
(a) monitoring the implementation and administration of this Chapter;
(b) promptly addressing any issue that a Party raises under this Chapter or the TBT Agreement related to the development, adoption or application of technical regulations, standards, or conformity assessment procedures;
(c) as appropriate, establishing regulatory cooperation initiatives which may include specific sectoral sub-committees with the goal of enhancing mutual understanding and facilitating trade between the Parties;
(d) overseeing enhancement of joint cooperation in the development and improvement of technical regulations, standards, and conformity assessment procedures, as outlined in Article C ter-03(1) ;
(e) exchanging information regarding technical regulations, standards, and conformity assessment procedures;
(f) at a Party’s written request, managing consultations on any matter arising under this Chapter;
(g) reviewing this Chapter in the light of any developments under the TBT Agreement;
(h) taking other steps that the Parties consider will assist them in implementing this Chapter or the TBT Agreement, and in facilitating trade between the Parties; and
(i) developing and maintaining a list of arrangements or agreements referred to in Article C ter-06(6) .
3. Consultations under subparagraph 2
(f) constitute consultations under Article N-06 (Consultations) of Chapter N (Institutional Arrangements and Dispute Settlement Procedures) and are governed by the procedures set out in Section II (Dispute Settlement) of that Chapter.
4. The Committee shall meet as required in order to fulfill its functions as they relate to this Chapter.
5. The representatives of the Committee may communicate by electronic mail, video conference or other means as determined by the Parties.
Article Cter-09. Definitions
1. For the purposes of this Chapter, TBT Agreement means the Agreement on Technical Barriers to Trade contained in Annex 1A to the WTO Agreement.
2. Except where this Agreement, including the incorporated provisions of the TBT Agreement pursuant to Article C ter-02, defines or gives a meaning to specific terms, the general terms applying to standardization and conformity assessment procedures shall normally have the meaning given to them by definitions adopted within the United Nations system and by international standardizing bodies, taking into account their context and in the light of the object and purpose of this Agreement.
Chapter D. Rules of Origin
Article D-01. Originating Goods
Except as otherwise provided in this Chapter, a good shall originate in the territory of a Party where:
(a) the good is wholly obtained or produced entirely in the territory of one or both of the Parties, as defined in Article D-17;
(b) each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification set out in Annex D-01 as a result of production occurring entirely in the territory of one or both of the Parties, or the good otherwise satisfies the applicable requirements of that Annex where no change in tariff classification is required, and the good satisfies all other applicable requirements of this Chapter;
(c) the good is produced entirely in the territory of one or both of the Parties exclusively from originating materials; or
(d) except as provided in Annex D-01 (Specific Rules of Origin) or except for a good of heading 39.01 through 39.15 or Chapter 50 through 63 of the Harmonized System,
1. the good is produced entirely in the territory of one or both of the Parties;
2. one or more of the non-originating materials used in the production of the good cannot satisfy the requirements set out in Annex D-01 (Specific Rules of Origin) because both the good and the non-originating materials are classified in the same subheading, or heading that is not further subdivided into subheadings,
3. the regional value content of the good, determined in accordance with Article D-02 is not less than 35 per cent when the transaction value method is used, or not less than 25 per cent when the net cost method is used, and
4. the good satisfies all other applicable requirements of this Chapter.
Article D-02. Regional Value Content
1. Except as provided in paragraph 5, each Party shall provide that the regional value content of a good shall be calculated, at the choice of the exporter or producer of the good, on the basis of either the transaction value method set out in paragraph 2 or the net cost method set out in paragraph 3.
2. Each Party shall provide that an exporter or producer may calculate the regional value content of a good on the basis of the following transaction value method:
RVC = TV - VNM x 100
TV
where
RVC is the regional value content, expressed as a percentage;
TV is the transaction value of the good adjusted to a F.O.B. basis; and
VNM is the value of non-originating materials used by the producer in the production of the good.
3. Each Party shall provide that an exporter or producer may calculate the regional value content of a good on the basis of the following net cost method:
RVC = NC - VNM x 100
NC
where
RVC is the regional value content, expressed as a percentage;
NC is the net cost of the good; and
VNM is the value of non-originating materials used by the producer in the production of the good.
4. The value of non-originating materials used by the producer in the production of a good shall not, for purposes of calculating the regional value content of the good under paragraph 2 or 3, include the value of non-originating materials used to produce originating materials that are subsequently used in the production of the good (1).
5. Each Party shall provide that an exporter or producer shall calculate the regional value content of a good solely on the basis of the net cost method set out in paragraph 3 where:
(a) there is no transaction value for the good;
(b) the transaction value of the good is unacceptable under Article 1 of the Customs Valuation Agreement;
(c) the good is sold by the producer to a related person and the volume, by units of quantity, of sales of identical or similar goods to related persons during the six-month period immediately preceding the month in which the good is sold exceeds 85 per cent of the producer's total sales of such goods during that period;
(d) the good is
(i) a motor vehicle,
(ii) identified in Annex D-03.1 and is for use in a motor vehicle, or
(iii) provided for in subheading 6401.10 through 6406.10
(e) the exporter or producer chooses to accumulate the regional value content of the good in accordance with Article D-04; or
(f) the good is designated as an intermediate material under paragraph 10 and is subject to a regional value-content requirement.
6. If an exporter or producer of a good calculates the regional value content of the good on the basis of the transaction value method set out in paragraph 2 and a Party subsequently notifies the exporter or producer, during the course of a verification pursuant to Chapter E (Customs Procedures), that the transaction value of the good, or the value of any material used in the production of the good, is required to be adjusted or is unacceptable under Article 1 of the Customs Valuation Agreement, the exporter or producer may then also calculate the regional value content of the good on the basis of the net cost method set out in paragraph 3.
7. Nothing in paragraph 6 shall be construed to prevent any review or appeal available under Article E-10 (Review and Appeal) of an adjustment to or a rejection of:
(a) the transaction value of a good; or
(b) the value of any material used in the production of a good.
8. For purposes of calculating the net cost of a good under paragraph 3, the producer of the good may:
(a) calculate the total cost incurred with respect to all goods produced by that producer, subtract any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs that are included in the total cost of all such goods, and then reasonably allocate the resulting net cost of those goods to the good;
(b) calculate the total cost incurred with respect to all goods produced by that producer, reasonably allocate the total cost to the good, and then subtract any sales promotion, marketing and after-sales service costs, royalties,shipping and packing costs and non-allowable interest costs that are included in the portion of the total cost allocated to the good; or
(c) reasonably allocate each cost that forms part of the total cost incurred with respect to the good so that the aggregate of these costs does not include any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs, provided that the allocation of all such costs is consistent with the provisions regarding the reasonable allocation of costs set out in the Uniform Regulations, established under Article E-11 (Customs Procedures - Uniform Regulations) (2).
9. Except as provided in paragraph 11, the value of a material used in the production of a good shall:
(a) be the transaction value of the material determined in accordance with Article 1 of the Customs Valuation Agreement; or
(b) in the event that there is no transaction value or the transaction value of the material is unacceptable under Article 1 of the Customs Valuation Agreement, be determined in accordance with Articles 2 through 7 of the Customs Valuation Agreement; and
(c) where not included under subparagraph (a) or (b), include
(i) freight, insurance, packing and all other costs incurred in transporting the material to the location of the producer,
(ii) duties, taxes and customs brokerage fees on the material paid in the territory of one or both of the Parties, and
(iii) the cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of renewable scrap or byproduct.
10. Any self-produced material that is used in the production of a good may be designated by the producer of the good as an intermediate material for the purpose of calculating the regional value content of the good under paragraph 2 or 3, provided that where the intermediate material is subject to a regional value-content requirement, no other self-produced material subject to a regional value-content requirement used in the production of that intermediate material may itself be designated by the producer as an intermediate material (3).
11. The value of an intermediate material shall be:
(a) the total cost incurred with respect to all goods produced by the producer of the good that can be reasonably allocated to that intermediate material; or
(b) the aggregate of each cost that forms part of the total cost incurred with respect to that intermediate material that can be reasonably allocated to that intermediate material.
12. The value of an indirect material shall be based on the Generally Accepted Accounting Principles applicable in the territory of the Party in which the good is produced.
13. Notwithstanding the regional value-content requirement specified in an applicable rule in Annex D-01 for the tariff provision under which a good is classified, a good shall be an originating good where:
(a) the good is provided in tariff item 6402.19.aa (sports footwear with rubber or plastic soles and uppers, for golf, hiking, running or curling), subheading 6402.99, tariff item 6403.19.aa (sports footwear with leather uppers, for riding, golf, hiking, climbing, curling, bowling, skating or training), subheading 6403.40 or 6403.91, tariff item 6404.11.aa (hiking footwear with rubber soles and canvas uppers), 6404.11.bb (hiking footwear with plastic soles and canvas uppers) or 6404.19.aa (shoes or sandals with plastic soles and canvas uppers) or subheading 6406.10;
(b) each of the non-originating materials used in the production of the good undergoes the change of tariff classification specified in the applicable rule in Annex D-01 for that tariff provision;
(c) the regional value content of that good is not less than
(i) 40 per cent under the net cost method for the period January 1, 1997, to December 31, 1997,
(ii) 45 per cent under the net cost method for the period January 1, 1998, to December 31, 1998,
(iii) 50 per cent under the net cost method for the period January 1, 1999, to December 31, 1999, and
(iv) 55 per cent under the net cost method on January 1, 2000, and thereafter; and
(d) the good meets any other applicable requirements set out in this Chapter
14. Notwithstanding the regional value-content requirement specified in an applicable rule in Annex D-01 for the tariff provision under which a good is classified, a good shall be an originating good where:
(a) the good is provided for in heading 64.01, subheading 6402.12, tariff item 6402.19.bb (sports footwear with rubber or plastic soles and uppers, for soccer, other football, baseball or bowling), subheading 6402.20 through 6402.91 or 6403.12, tariff item 6403.19.bb (sports footwear with leather uppers, for soccer, other football or baseball) or 6403.19.cc (sports footwear with leather uppers, for other purposes), subheading 6403.20 through 6403.30, 6403.51 through 6403.59 or 6403.99, tariff item 6404.11.cc (sports footwear with rubber soles and canvas uppers, for soccer, training or tennis), 6404.11.dd (sports footwear with plastic solesand canvas uppers, for soccer, training or tennis) or 6404.19.bb (shoes or sandals with rubber soles and canvas uppers), subheading 6404.20, heading 64.05 or subheading 6406.20 through 6406.99;
(b) each of the non-originating materials used in the production of the good undergoes the change of tariff classification specified in the applicable rule in Annex D-01 for that tariff provision;
(c) the regional value content of that good is not less than
(i) 40 per cent under the net cost method for the period January 1, 1997, to December 31, 1997,
(ii) 47.5 per cent under the net cost method for the period January 1, 1998, to December 31, 1998, and
(iii) 55 per cent under the net cost method on January 1, 1999, and thereafter; and
(d) the good meets any other applicable requirements set out in this Chapter
Article D-03. Automotive Goods
1. Notwithstanding the regional value-content requirement specified in an applicable rule in Annex D-01 for the tariff provision under which a good is classified, a good shall be an originating good where: