Rta Developments in the Asia-Pacific Region: State of Play

RTA DEVELOPMENTS IN THE ASIA-PACIFIC REGION: STATE OF PLAY

1. Introduction

In the space of four years the outlook for the configuration of trading arrangements in the Asia-Pacific region has changed dramatically. Upon a previously seemingly stable pattern of existing arrangements there has been superimposed a bewildering kaleidoscope of proposals for new and in some cases overlapping preferential trading arrangements (PTAs) at various stages of negotiation, study or discussion. A small number of these new proposals have resulted in concluded agreements, while many others are advancing at varying speeds, and some have stalled. New proposals continue to emerge at frequent intervals.

Thus the Asia-Pacific region has quickly become enmeshed in the proliferation of PTAs that has already been observed over a longer period in other regions of the global trading system. These new developments in the Asia-Pacific region exhibit many of the tendencies and raise all the same issues (summarised for example in Panagariya 1999, Krueger 1999 and Findlay 2001) that have been identified in the proliferation of PTAs elsewhere. Which of the tendencies will predominate and how the issues raised will be resolved are crucial questions, the answers to which will largely determine the future evolution of Asia-Pacific trading relationships.

The next section of the paper briefly summarises the existing situation and how it has arisen. The focus in the remainder of the paper is on the key tendencies that can be observed in the current developments

2. The State of Play: A Brief Overview

In the years immediately prior to 1998 the Asia-Pacific economies had achieved an apparently stable accommodation between regionalism and multilateralism. Three established PTAs were operating in Asia-Pacific sub-regions: NAFTA in North America, AFTA in Southeast Asia, and ANZCERTA (usually known by its shortened acronym, CER) in Australasia. Two new PTAs, the Canada-Chile and Mexico-Chile could be seen as by-products of NAFTA, partially compensating for the failed attempt to bring Chile into NAFTA. Northeast Asia on the other hand was an “empty-box” in the regional map of PTAs. Japan and Korea maintained their stance of rejecting participation in PTAs in favour of continuing full support for the non-discrimination principle enshrined in GATT Article I, while China was generally viewed as too preoccupied with its transition to a market economy to be seriously interested in participating in new PTAs. There appeared to be a regional consensus that APEC would be the vehicle for further regional trade liberalisation outside the confines of the existing PTAs. APEC’s formulation of its “open regionalism” principle suggested that this further liberalisation would be non- discriminatory rather than preferential and thus fully consistent with the WTO-centred multilateral approach to trade liberalisation. The combination of the apparent consensus around the APEC approach and the continuing rejection of the preferential approach to trade liberalisation by Japan and Korea had been sufficient to ensure that an earlier proposal in 1993 for development of an East Asian trade bloc, tentatively known as the East Asian Economic Grouping (EAEG), failed to attract widespread support in East Asia and consequently did not proceed at that time.

A number of events in 1998 and 1999 were decisive in disrupting this apparently stable scenario. The failure of APEC’s Early Voluntary Sector Liberalisation (EVSL) initiative in 1998, and the collapse of the WTO’s Seattle Ministerial meeting in 1999, undoubtedly dented confidence in the ability of APEC members to reach the Bogor goals through the established channels of APEC and the WTO. East Asian perceptions of the US response to the East Asian economic crisis of 1997/98 appeared to give rise to a growing sense among East Asian leaders of the need to establish an independent East Asian economic identity, a development documented for example in Bergsten (2000 and 2001). The emergence in 1998 of a proposal for a Japan-Korea free trade agreement (FTA) was a dramatic development not only in the context of relations between those two countries but also in signalling a historic shift by Japan and Korea away from their longstanding aversion to involvement in PTAs – and this historic shift was subsequently underlined when each country moved separately to open negotiations for FTAs with selected partners.

Since 1998 the number of PTA proposals in the Asia-Pacific region has reached well over 30, ranging from bilateral PTAs to proposals for a large-scale East Asian trade bloc. A summary of these developments is given in Appendix 2, with the cautionary note that any such list becomes out of date almost as soon as it is produced,

Apart from the Japan-Korea proposal the bilateral proposals generally involve at least one smaller Asia-Pacific economy, attempting to pair with either one of the large economies of the region (Singapore-Japan, Singapore-U.S., Australia – U.S., New Zealand – U.S., Chile – U.S., Chile-Korea, Chile - Japan) or with another small economy (for example Singapore-New Zealand, Singapore-Australia, Chile – New Zealand, Thailand-Australia, Hong Kong – New Zealand). There are also a number of proposals for bilateral PTAs between one of the western Pacific economies and one or other of the US’s NAFTA partners, Canada and Mexico, and there have been a small number of plurilateral proposals such as the “P5” proposal informally floated some years ago for an FTA involving the U.S., Australia, Singapore, Chile and New Zealand, and the current proposal for an FTA between Singapore, New Zealand and Chile. Of all these proposals, only six - Singapore-Japan, Singapore-U.S, Chile-U.S., Chile-Korea, Singapore-New Zealand, Singapore-Australia – have so far culminated in completed agreements.

At the other end of the scale, a proposal emerged within the “ASEAN Plus Three” group – comprising China, Japan, Korean and the ten ASEAN economies – for an FTA based on that group, and an East Asia Vision Group was given the task of developing the concept. An “ASEAN Plus Three” FTA would cover all the East Asian APEC economies except Chinese Taipei, and would thus effectively constitute an “East Asian trade bloc”. The formation of an East Asian trade bloc in parallel with establishment of the proposed Free Trade Area of the Americas would herald the emergence of a “bipolar Pacific”, divided between large scale trade blocs on opposing sides of the ocean. At the global level it would entail the formalisation of a “tripolar” world trading system, based on three “mega-blocs” – the EU, the FTAA, and the East Asian bloc – together accounting for approximately 90% of world GDP.

Initially the proposal for an “ASEAN Plus Three” FTA appeared to be gaining considerable traction. More recently however attention has been diverted to proposals for FTAs between ASEAN and individual Northeast Asian economies, beginning with China’s proposal for a China – ASEAN FTA, to which Japan responded with its own somewhat vaguely defined proposal for an economic partnership agreement with ASEAN, which could potentially include an FTA. The Japanese concept now appears to include bilateral FTAs with individual ASEAN economies as well as an overall framework agreement with ASEAN as a group. Work on the China-ASEAN FTA is proceeding relatively quickly. In November 2002 the U.S. announced an “Enterprise for ASEAN” initiative, which is also envisaged as including an overall framework agreement with ASEAN as a group as well as bilateral FTAs with individual ASEAN countries.

The entry of the U.S. into the field in this way, along with its recent conclusion of FTAs with Singapore and Chile as well as the announcement of FTA negotiations with Australia and possibly later with New Zealand, has highlighted the potential for a “hub- and-spoke” pattern of PTAs to emerge in the Asia-Pacific region as an alternative to the “bipolar Pacific”. This would involve the establishment by the major economies of the region – the U.S., Japan, China and possibly Korea - of networks of bilateral PTAs centred on themselves.

ASEAN’s strategy appears to involve a variation on this theme, whereby ASEAN itself would serve as the “hub”. In addition to the proposed arrangement with China, Japan and the U.S., a proposal was recently floated for an ASEAN-India FTA, and there is also a longstanding proposal to link the AFTA and CER arrangements, although the two groups have not yet been able to agree that the linkage should include the removal of tariffs in a combined AFTA-CER FTA. It is yet to be seen whether ASEAN, essentially a collection of smaller economies, can successfully establish itself as an alternative “hub” in this way. The possibility remains that the “gravitational” force of the larger economies will prove too strong and that the traditional “hub and spoke” architecture will eventually assert itself, with the larger economies in their traditional role as the “hubs”. Already the U.S. and Japan have raised the possibility of establishing PTAs with individual ASEAN countries on a bilateral basis, and some of the latter have signaled a willingness to follow Singapore down the bilateral route. Negotiations are already under way between Japan and Thailand.

In any event, a “hub and spoke” architecture in the region is likely to become increasingly complex. In addition to the potential major “hubs” – the U.S., China, Japan and Korea – and the ambitions of ASEAN to serve as an alternative “hub”, several of the smaller economies in the region could be viewed as setting themselves up as “secondary hubs”. Chile, Mexico and Singapore are obvious examples of “secondary hubs”.

3. A Survey of Asia-Pacific PTAs

Appendix 2 provides a tabulation of the concluded PTAs involving APEC members, arranged so as to allow useful comparisons to be made.

Among other things, a tabulation of this kind can provide a useful basis for assessing the likelihood and possible extent of a “spaghetti bowl” phenomenon in the Asia-Pacific region – a pattern of intersecting and overlapping PTAs, involving multiple PTA membership by individual APEC economies, in which the provisions of the individual agreements may often be inconsistent with each other. A key question is the extent to which the “spaghetti bowl” will raise business transaction costs and in so doing undermine the APEC objective of lowering the cost of doing business in the Asia-Pacific region.

It is also clear that distinct “models” of PTAs have already emerged. Agreements involving the U.S. follow a pattern that can be broadly described as “NAFTA-based”. The agreements of Mexico and Chile with the EU are examples of a distinctive “EU model”. While some features of these models may be benign, other features, especially their rules of origin, are less so, and other provisions may contain potentially controversial elements, for example on intellectual property, trade and labour, trade and environment and capital movements. Outlines can also be discerned of a “CER-based” or “AFTA-based” model. It remains to be seen whether further “models” will emerge in East Asia – a Chinese model for example, or a Japanese model, an ASEAN model, or perhaps even an East Asian model, and whether such “models” will offer advantages over, and establish themselves as competitors to, the existing “models”.

In the case of smaller economies such as Chile, Mexico, and Singapore that are involved in multiple PTAs, it is already clear that there are significant differences between the provisions of the different PTAs that they have concluded. It would also appear that when these smaller economies negotiate PTAs with larger partners, they find themselves obliged to a large extent to follow the “models” of the larger partner.

An important question for APEC members is whether it is possible to draw on the best features of the existing “models” to develop a “best practice model” of PTA. The question of which “model” (if any) to follow will arise whenever negotiations begin between economies that are already involved in PTAs that follow one or more different models.

References

Bergsten, C. F. (2000), “Towards a Tripartite World”, Economist, 15th July Bergsten, C.F. (2001). “America’s Two-Front Economic Conflict”, Foreign Affairs, March/April, pp 16-27

Findlay, C., (2001), “Old Issues in New Regionalism”, paper presented at the International Conference on “The Trade and Monetary System in the Asia-Pacific Region”, 3-4 February

Gilbert, J., Scollay, R. and Bora, B. (2002), “New Regional Trading Developments in the Asia-Pacific: Implications for East Asia”, report prepared for the World Bank project on “East Asia’s Future Economy”, February, 60pp

Krueger, A.O. (1999), “Are Preferential Trading Arrangements Trade-Liberalizing or Protectionist?”, Journal of Economic Perspectives 13:4, 105-124

Panagariya, A. (1999), “The Regionalism Debate: An Overview”, World Economy 22, 477-51

Scollay, R. and Gilbert, J. (2001) New Regional Trading Arrangements in the Asia- Pacific? Institute for International Economics, Washington DC.

Scollay, R., Gilbert, J. and Gonzalez Vigil, F. (2002), Mega-Blocs in East Asia: How Might They Affect Each Other (and the rest of the world)?, paper presented at LACEA conference, Madrid, 11-13 October 2002

Scollay, R.(2001), “The Changing Outlook for Asia-Pacific Regionalism”, World Economy Vol 24 No 9, pp 1135-1160

APPENDIX 1: PROVISIONAL CATALOGUE OF NEW PTA PROPOSALS IN THE ASIA-PACIFIC REGION SINCE 1998

Concluded “New” Agreements (6)

Singapore-New Zealand Singapore-Japan Singapore-Australia Chile-Korea Singapore-U.S.A. Chile-U.S.A.

New Developments in Old Agreements (1)

Bangkok Agreement

Under Negotiation or Negotiations Announced (12)

ASEAN-China ASEAN-Japan U.S. Australia FTAA Singapore-Canada Singapore-Mexico Singapore-Korea Korea-Mexico Japan-Mexico Japan-Thailand Thailand-Australia Singapore-Chile-New Zealand

Proposed and Under Discussion (6)

ASEAN Plus Three (‘East Asian FTA’) Japan-Korea US-ASEAN (“Enterprise for ASEAN”) US-Andean Community Canada- Andean Community Mexico-New Zealand

Previously Proposed But Not Currently Under Active Development (as PTAs) (10)

AFTA-CER Japan-Canada P5 (U.S., Australia, Chile, New Zealand, Singapore) U.S.-New Zealand Japan-Chile Korea-U.S. Korea-New Zealand Hong Kong-New Zealand Chinese Taipei-New Zealand China – Hong Kong

APPENDIX 2:

INVENTORY OF RTAs INVOLVING APEC MEMBERS

CONTENTS:

Table A.1 East Asian Agreements

Table A.2 NAFTA Country Agreements

Table A.3 Chilean and Mexican Agreements

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan Tariffs * Negative list approach * Negative list * Negative list * Negative list * Negative list * Japan’s schedule set * Positive list approach. * Goal of 0% tariffs approach. approach. approach. out as a positive list * On the 4th November * 6 initial approach. * Elimination of all * Elimination of all * Singapore binds all approach. Tariffs on 2002 a framework * Elimination of all tariffs from date of tariffs from date of tariffs at zero Singapore’s imports agreement (FA) was signatories to tariffs achieved in entry into force. entry into force. immediately, the US from Japan will be signed between reach 0% in 1992. will eliminate tari ffs on immediately bound at ASEAN and China to 92% of Singaporean 0%. begin tariff elimination. 2003 (2006 for goods immediately and *The agreement aims * Tariffs will be Vietnam, 2008 will phase out the towards complete tariff reduced, or eliminated remaining tariffs over elimination, with a by 2010 for the original for Lao PDR the next 8 years. * transition period of 10 ASEAN-6 and by 2015 and 2010 for Singapore will benefit years. for Vietnam, Laos, most in the electronics, * Japan maintains some Cambodia and Cambodia). chemicals, processed exceptions, including Myanmar. * The foods and mineral fresh/chilled/frozen *The FA commits products sectors. meat, meat and edible China and ASEAN to agreement * US chewing gum offal of poultry, most reduce tariffs on “early allows each with ‘therapeutic value’ fish including preserved harvest” products, such as sugarless, fish and fish products, which are mainly country to nicotine or teeth dairy products, fruit and agricultural and maintain a whitening will be able vegetables, cane or beet represent about 10% of to be imported into sugar and sucrose in all tariff lines. They temporary Singapore for the first pure form, cocoa include live animals, exclusion list time since 1992. powder and chocolate, meat, fish, dairy, trees, Singapore will also preparations of cereals, vegetables and fruit and (TEL), a harmonise excise taxes flour, starches, milk, nuts (i.e. chapters 1-8 sensitive list on distilled spirits by fruit and vegetables, of the harmonised 2005. articles of leather, system). A country may (SL) and a handbags and specify products to put general footwear. on its exclusion list. *These early harvest exclusion list products will have a (GE). tariff elimination schedule beginning no * Goods on the later than January 1st temporary exclusion list 2004, spanning 3 years. will be phased into the Inclusion list by: *negotiations for non- early harvest goods 2000 for most must be completed by manufactured products 30 June 2004. (2003 Vietnam, 2005 Laos and Myanmar, *Countries can choose 2008 Cambodia) and which products to put on a ‘sensitive track’, 2003 for most but a ceiling on the agricultural products (2006 Vietnam , 2008 number of products Laos and Myanmar, allowed on this track will be imposed. 2010 Cambodia) *WTO requirements to

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan

* Article 9(B) of the eliminate tariffs on CEPT allows products “substantially all trade” to be excluded from shall be met. tariff concessions for reasons of protection of national security, protection of human, animal and plant life and health and protection of articles of artistic, historic or archaeological importance. Malaysia has placed 53 tariff lines on this list – 32 on alcohol and 21 on weapons. Only Thailand, Philippines and Myanmar have not included alcohol on this list. * Malaysia was given the flexibility to delay until 2005 the inclusion of the 218 tariff lines on completely knocked down (CKD) and completely built up (CBU) automotive products, which it has not yet included in the CEPT scheme. * The Protocol on Special Arrangements for Sensitive and Highly Sensitive Products and Unprocessed Agricultural Products signed in 1999 provides that sensitive products will be offered for tariff concessions between January 2001 and January 2003 (Vietnam has until 2013, Laos and Myanmar 2015, and Cambodia until 2017). Highly sensitive

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan

products will be introduced for tariff concessions in 2005, but the ending rate can be determined individually. Sensitive products include poultry and swine products, coffee, tea, copra, manioc and rice. Malaysia has also included tropical fruits, tobacco, tobacco products and sugar. Indonesia, Malaysia and the Philippines have included rice in the highly sensitive list. Malaysia has the right to impose a 20% duty on rice if the need arises. * In December 2002 it was announced that Malaysia would reduce tariffs on automobiles to 20% by 2005, but would offset the concessions with increased excise duties. The current tariffs range between 43% and 300%.

Agriculture *Agricultural products * No special provisions * No special provisions * No special provisions * Not particularly * Most of the * The “early harvest” still make up majority of for agriculture. The for agriculture. The for agriculture. The relevant as Singapore exceptions to Japan’s provision in the those products on the general rules apply to general rules apply to general rules apply to doesn’t have large list of concessions are framework agreement “sensitive lists”. all products. all products. all products. agricultural sector agricultural. deals mostly with * By 2003 87% of * The FTA contains agricultural products. unprocessed agricultural only 14% of the This is a positive step goods will be phased number of Japan’s zero- towards liberalisation, into the CEPT tariff commitments not an exception or agreement. Sensitive compared to its WTO restriction. agricultural goods must commitments. be phased in by 2010

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan Quantitative * Immediate elimination *No quantitative *No quantitative *No quantitative * The US imposes tariff *No quantitative * Subsequent of quantitative restrictions allowed restrictions allowed restrictions allowed rate quotas on beef, restrictions “which are negotiations are to Restrictions restrictions for those dairy products, peanuts, inconsistent with a consider the treatment goods in the CEPT sugar and cotton, which party’s obligations of quantitative scheme, and the will be increased and under the WTO restrictions, import elimination of other eventually phased out agreement” are to be prohibitions and out-of- non-tariff barriers within within 10 years. imposed quota rates. a period of five years upon enjoyment of the CEPT concession.

Other NTBs * The Malaysian - - - * The ‘merchandise *NTBs permitted under - government announced processing fee’ charged the WTO agreement that from the 1st of on all Singaporean may be used, but must January 2005 technical exports will be waived be transparent, with a requirements and road- by the US, while the view to minimising worthiness tests will be US will also trade distortion. required for all immediately eliminate commercial and its ‘vessel repair duty’ passenger cars. A three for Singapore. year age restriction will be imposed on all completely built up (CBU) cars entering Malaysia, however price supervision mechanisms will be discontinued from January 2004.

Anti-dumping - The agreement does not * Both parties are * The parties reaffirm * Antidumping is not * Antidumping is not * Anti-dumping allow for antidumping members of the WTO their commitments to covered by the covered by the measures will be based actions. agreement on the the WTO agreement on agreement. agreement. on the existing GATT implementation of antidumping and have * As of March 2003 the disciplines. Article VI of the GATT agreed as follows: only antidumping duty 1994 (WTO anti- 1. The ‘lesser duty rule’ in place on goods from dumping agreement). should normally be Singapore is as applied They have agreed to a applied when to ball bearings. few changes as follows: antidumping measures 1. The de minimus are to be taken. That is, dumping margin is a duty less than the raised from 2% to 5%, dumping margin, where and applies also to the duty would be refund and review adequate to remove cases. injury to the domestic 2. The ‘reasonable time industry. frame’ for determining 2. The timeframe to be the volume of imported used to determine the goods shall normally be volume of dumped

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan

at least 12 months. imports shall normally 3. The period for be at least 12 months. review and/or termination of antidumping duties, as provided for in the WTO agreement, is reduced from 5 years to 3 years.

Countervailing - * Countervailing * The parties reaffirm * The parties reaffirm * Countervailing * Countervailing * Countervailing duties measures can be taken their commitment to their commitment to measures are not measures are not and subsidies Duties by each party, but must abide by the WTO abide by the WTO covered by the covered by the provisions will be based be in accordance with provisions on subsidies provisions on subsidies agreement. agreement. on the existing GATT the WTO agreement, and countervailing and countervailing disciplines. and when there is no measures. measures. other mutually acceptable solution Subsidies - * There are no export * the parties * The countries agree - * The agreement * The negotiations subsidies or export not to use export includes generic covering trade in goods incentives on goods have agreed to subsidies. provisions on subsidies will also decide on traded in the area. The prohibit * The parties reaffirm applicable to both provisions for parties agreed not to their commitment to goods and services subsidies. make payments to subsidies on all abide by the WTO trade. * Until final industry tied to goods, provisions on subsidies negotiations are production and not to and countervailing completed the products use industry specific including measures. of the Early Harvest measures that have agricultural Program will be adverse effects on covered by WTO competition in the free produce. provisions with respect trade area. * The parties to anti-dumping, * Research and subsidies and development is reaffirm their countervailing duties. excluded. commitment to

abide by the provisions of the WTO Subsidies and Countervailing Duties Agreement in respect of

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan actionable subsidies. Safeguards - * No safeguard * No safeguard * No safeguard * There is a chapter on * The * Products on the Early measures are to be measures are to be bilateral safeguard Harvest Program will applied by either measures are to applied by either measures following the ‘emergency be covered by WTO country. be applied by country. standard format of other measures’ provisions on safeguard US FTA agreements. measures until either country. * Safeguard measures article provides negotiations between may be taken within the that during the the parties are transition period, for no completed. more than two years, (10 year) * ASEAN-China FTA following consultation transition negotiations will and an investigation by consider provisions the competent period a based on the GATT authorities and upon country may principles, covering but payment of not limited to compensation. suspend further transparency, coverage, * There is a safeguard reductions or objective criteria for mechanism in place for action and the concept textile and apparel increase of ‘serious injury or goods. customs duties threat thereof’. * If imports of textile or apparel goods into one to some rate party increase in such below the MFN quantities as to cause, or threaten to cause, level if ‘serious ‘serious damage’ or injury’, or threat thereof to the domestic industry of the substantial importing country, ‘threat of safeguard action may be taken. serious injury’ * Safeguard measures is proven may be taken in the transition period only, (measures may may not exceed the be maintained MFN rate and may not usually be taken for for a maximum more than 2 years. of 3 years) * The agreement also includes an article allowing the parties to impose measures in the event of balance of payments difficulties, as per the WTO

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan

agreement on the same.

Rules of Origin *A product shall be * There are two * Goods may be * For most goods the * Product specific rules * Product specific rules * The negotiations on deemed to be minimum requirements considered as 50% value added rule of origin. of origin apply, or the rules of origin for originating from for goods to be originating from a will apply, as under * The agreement will the originating content trade in goods shall be ASEAN Member States, considered to have member country if : CER. For a limited be NAFTA + must be no less than completed by if at least 40% of its originated in the free - The good is number of electronic * NAFTA rules of 60% of the total value December 2003. content originates from trade zone: wholly produced and electrical goods the origin only consider of the materials. * Interim rules of origin any Member States. - The last process or obtained in the threshold will be 30%. “last process of * The material must applicable to the *The value of of manufacture of party, or * Origin content can be manufacture”, whereas undergo its last products covered in the the good must be - If the last calculated on the basis the US -Singapore FTA production process in Early Harvest Program non-originating in either Australia process of of bilateral will consider the the territory of either will be negotiated by materials, parts or New Zealand manufacturing accumulation, except accumulation of value party. July 2003 but will later - At least half the was performed in for a range of products add of a product at all * Simple cutting, be replaced by more or produce shall factory or works a member country including textiles, different stages of mixing, packaging etc comprehensive rules of be the CIF value cost of the goods and the footwear, clothing, production. For are not considered origin provisions. must be made up expenditure on passenger motive example if the first sufficient at the time of from expenditure materials vehicle items and stage of production is in transformation for rules importation. on originating originating in the jewellery. Singapore, then the of origin purposes. materials, labour member country product is shipped to * Origin can cumulate *cumulative rules of origin state that products or inner is not less than Malaysia for further bilaterally, ie. Either containers. 40% of the manufacture, then back party shall consider the which are used in a factory/ works to Singapore for the production in its Member State as inputs cost of the good. final stages, all territory as the for a finished product eligible for preferential production in Singapore production in the treatment in another will be considered – not territory of the other just the final stage as is party. Member State shall be considered under considered as products originating in the NAFTA. Member State where * Only exports with ‘substantial working or processing transformation’ and of the finished product sufficient value-added has taken place, provided that the in Singapore can qualify as originating aggregate ASEAN under the agreement. content of the final * For some electronic product is not less than 40%. products origin can be conferred if a certain

percentage of value- added, usually about

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan

35-60% is done in Singapore. Chemicals and petro-chemicals are considered to be originating if a specific process is carried out in Singapore. * Overhead activities such as R&D, design, engineering and purchasing can count towards the value added. * The ‘Integrated Sourcing Initiative’ applies to components from non-sensitive sectors which both the US and Singapore already trade freely in. About 100 IT products and certain medical devices are included. These particular components can be considered to be of Singaporean origin when combined into final products and help boost the originating content. * Textiles and apparel will be subject to the ‘yarn forward rule of origin’, whereby products made from US or Singapore originating yarn will be eligible for immediate tariff elimination.

Standards and * ASEAN Cooperation * Work towards the * The principles of * The parties will * The parties are * The countries shall * The framework on Standards and harmonisation of food mutual recognition, wherever possible work discussing a agree to mutual agreement says that Conformance Conformity Assessment standards is being unilateral recognition or towards the cooperative program of recognition of there will be measures is undertaken mainly achieved through the harmonisation shall be harmonisation of information exchange conformity assessment to strengthen through the ASEAN Joint Food Standards, implemented as ‘mandatory on issues covered by procedures. cooperation and aid Consultative Committee mandated by a 1995 appropriate. requirements’, where the WTO Technical * Voluntary standards trade facilitation in the for Standards and agreement and * The Parties shall ’mandatory Barriers to Trade are not subject to areas of standards, Quality (ACCSQ) managed by a bi- exchange information requirements’ refer to Agreement. The mutual recognition conformity assessment

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan

Quality (ACCSQ) managed by a bi- exchange information requirements’ refer to Agreement. The mutual recognition conformity assessment * In 1998 the Hanoi national agency, the concerning their all technical measures agreement covers under the agreement, and other technical Plan of Action directed Australia-New Zealand mandatory and SPS measures as standards, conformity and thus Japan’s barriers to trade. ACCSQ to develop and Food Authority. requirements and set out in each party’s assessments and other voluntary standards implement mutual *A good that can conformity assessment laws, regulations and TBT. No other may still act as a trade recognition agreements legally be sold in one procedures administrative additional obligations barrier. in priority sectors from country can also be sold * Each Party retains all requirements. are being considered. * A Joint Committee on 1999, and to begin in the other, and a authority under its laws * The FTA builds on * The parties are to Mutual Recognition of working towards person who is to interpret and the Australia-Singapore engage in consultation Qualification Standards harmonisation of registered to practise an implement its Mutual Recognition to develop mutually has been established to standards in priority occupation in one mandatory Agreement on acceptable standards facilitate the sectors from 2000. country is entitled to requirements. Conformity and criteria for harmonisation of * Regulated sectors practise an equivalent * There are obligations Assessment. It provides licensing and qualifications should see occupation in the other. set out under the for the development of certification of standards. harmonisation of (Five product areas and articles on Mutual arrangements for the professional service product standards by one occupational group Recognition of acceptance of providers, especially 2005. [medical practitioners] Mandatory equivalence of architects and * In April 2002 the are exempted.) Requirements and mandatory engineers. ASEAN Sectoral *1990 Agreement on Mutual Recognition of requirements. Mutual Recognition Standards, Conformity Requirements for food Arrangement for Accreditation and Assessment. standards and Electrical and Electronic Quality, 1991 Joint * Where regulatory horticulture are Equipment was Accreditation System compliance is required currently under implemented. This for quality accreditation and where there is negotiation. MRA is expected to and the 1997 equivalence of * The parties will give significantly reduce the Arrangement on Food outcomes, each Party favourable cost of doing business in Inspection Measures shall accept the consideration to electronic and electrical have also helped standards of the other accepting the equipment by enabling harmonise standards Party as equivalent to equivalence of the other an ASEAN member between the countries. its own corresponding party’s mandatory country to recognize the * There is a standards requirements. testing and certification commitment towards conducted in the country the harmonisation of of origin or in another standards, technical member country. specifications and mutual acceptance of certification and accreditation.

Other * ASEAN - * Each party shall - * The parties are - - implement the discussing a Technical member principles of mutual cooperative program of Barriers to countries have recognition, unilateral information exchange recognition or on issues covered by Trade agreed to a harmonisation that the WTO Technical mechanism to provide the most Barriers to Trade appropriate or cost- Agreement. The effectively efficient approach to agreement covers

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan address private the removal or standards, conformity reduction of technical assessments and other sector barriers to trade. TBT. No other complaints on * The parties shall additional obligations establish a work are being considered. issues that are program to identify thought to priority sectors with a view to removing constitute non- regulatory barriers to tariff or trade.

technical barriers to trade. Complaints or notifications are to be channelled directly to member countries and to the ASEAN Secretariat.

Quarantine and * In the area of * Members can adopt * Each Party shall, * The parties will work - * There is no specific * The negotiations on aquaculture SPS and quarantine consistent with the towards harmonisation chapter covering trade in goods will SPS development, ASEAN measures under the relevant provisions of and will accept the sanitary and phyto- cover scientifically continued to work on general exception to the WTO Agreement on equivalence of SPS sanitary measures, unjustifiable sanitary the harmonization of CER obligations which Technical Barriers to measures. They will however they are and phytosanitary testing and quarantine allows measures Trade and the WTO also undertake included in the mutual measures, and other procedures. necessary to protect Agreement on the cooperative activities. recognition agreement technical barriers to ASEAN human, animal or plant Application of Sanitary for standards and trade. life or health, as long as and Phytosanitary conformance. countries they are not disguised Measures, use continue to means to restrict trade. international standards, They must be or the relevant parts of work towards scientifically justified. international standards, harmonisation * Members have as a basis for its committed to mandatory of sanitary and harmonisation of requirements phytosanitary quarantine and * There will be mutual inspection standards recognition of regulations. and procedures. equivalence of

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan * With technical * A regular senior mandatory official Biosecurity requirements. assistance from Dialogue was New Zealand, established in 1999 to manage quarantine ASEAN issues. undertook a phytosanitary needs assessments for the four newer ASEAN member countries from May to June 2001.

Customs *ASEAN customs * CER harmonises * The countries * The Parties agree to * Customs cooperation * The countries aim to * The parties will Vision 2020 is a scheme customs policies and conform to the World will be based on make use of negotiate measures to Procedures to promote efficiency, procedures. have agreed to Customs Organisation NAFTA. information technology strengthen cooperation professionalism and * The agreement work together rules and regulations, * Both sides will to simplify customs in the area of customs harmonisation in provides for the parties and will also review exchange information procedures, and will regulations. customs procedures. to adopt common to simplify periodically their own and use risk promote paperless The customs vision policies and practices customs laws with a view to management techniques trading to increase identified 15 areas for for valuation in simplification. to enforce against trade efficiency in this area. cooperation and accordance with the regulations, and * The countries will in illicit goods. * Cooperation, not development. These WTO Customs cooperate in the work towards having * The agreement harmonisation, at this include customs Valuation Agreement. electronic means for all requires customs laws stage valuation, cargo area of customs customs reporting and publications to be processing, tariff related requirements as soon as published on the classification and is practicable. They internet. transit. measures. also agree to exchange * The US pushed for * There is a long-term *In order to information to assist the advanced customs objective to reduce or investigation and cooperation for national eliminate paper facilitate the prevention of breaches security reasons, to transactions in customs clearance of of customs law. combat the procedures and fully transhipment of textile automate the process. low risk goods and the This may take some transactions, movement of pirated time due to differing optical media. starting points and the Parties * Singapore has methodologies existing agree that generally performed within the region. fewer checks on customs imports and exports

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan * ASEAN customs customs imports and exports cooperation was further than most other ports strengthened through the compliance and the US wants to signing of the ASEAN activities increase spot checks Agreement on Customs and information in March 1997 at the should be exchange. first ASEAN Finance focused on high Ministers Meeting. The Agreement provides a risk goods and legal framework by travellers. which cooperative activities in this area will be governed. The objectives of the Agreement include the simplification and harmonization of customs valuation systems, tariff nomenclature systems and customs procedures; ensuring consistency, transparency and the fair application of customs laws and regulations.

Government - * The Government * The Parties agree to * Non-discriminatory * Negative list * Article XXIII of the * No specific Procurement agreement establish a single New national treatment is WTO Agreement on provisions in the Procurement provides for a single Zealand/Singapore guaranteed in tendering approach Government framework agreement. trans-Tasman government for government * The Procurement shall government procurement market, in business for a specified apply, with some procurement market. order to maximise list of agencies in each procurement exceptions. * Tenderers must be competitive country. Australia gains chapter will * 100,000 SDR selected on the basis of opportunities for New access to such treatment threshold value for money. New Zealand/Singapore in procurement by 47 build on the Zealand content is suppliers, and reduce Singapore ministries, WTO treated as equivalent to costs of doing business agencies and statutory Australian for the for both government authorities. government purposes of local and industry. * The governments will procurement content preferences * Each party has a seek to promote e- maintained by the schedule of procurement as part of agreement Australian states. commitments and their initiatives to ensuring government promote e-commerce. procurement * Transparency should transparency, obligations will apply be ensured. non- for procurement above * Disputes settlement the SDR 50,000 may only be used in discrimination, threshold. certain situations. predictability

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan * There is ‘prohibition predictability on offsets’ article whereby measures used and to encourage local accountability, development or improve balance of and provides payment accounts by reciprocal, requiring domestic content are prohibited. competitive * Disputes will be government subject to consultations and if no satisfactory procurement resolution can be opportunities. reached the matter will be referred to the * Transparency ministers involved. must be

maintained through disciplines such as requiring advance public notice of purchases. * The monetary thresholds for government procurement disciplines have been lowered to US$56, 190 for goods and non- construction services, and to US$6,481,000 for construction contracts and are adjusted

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan biennially for inflation.

Services * GATS (positive list) * Negative list * GATS * Negative list * Negative list * GATS (positive list) * The parties will enter approach approach approach. approach into negotiations to * MFN, National approach (positive list) * Both countries are to * Ensures core * The main principles progressively liberalise treatment and market * The basic approach extend national obligations of national of the agreement are trade in services, access provisions apply treatment to the other’s and MFN treatment, national treatment and beyond each county’s * Emergency safeguard principles of * Each party service providers and and market access. improved market GATS commitments. provisions are included, the agreement has set out a list market access * The services acces s. * Negotiations will be but subsidy disciplines provisions are included. * Emergency safeguard undertaken to eliminate are not. are national of specific * Safeguard action may chapter does provisions are not ‘substantially all’ * Government treatment and commitments, not be taken, however not apply to included. There are no discrimination with procurement of services in the event of serious provisions for subsidy respect to trade in is not covered. market access. which shall be balance of payments subsidies and disciplines either. services except for * Treatment of MFN treatment reviewed bi- difficulties, serious grants. * Government measures permitted investment in services is external financial procurement of services under GATS. applies to the annually with a * Government covered as ‘commercial difficulties or threat procurement is included is covered in a separate * China shall accord presence’ in a separate excluded view towards thereof restrictions on chapter. MFN treatment investment chapter. trade in services may be in a separate chapter. * Investment in services consistent with WTO * The third round of sectors only. further taken. * Local presence must is covered as rules to all non-WTO not be required. services liberalisation * Emergency liberalisation. * The services chapter * In the area of ‘commercial presence’ Asean member states. began on the 1st of does not apply to in a separate chapter on * The parties will look January 2002 and will safeguards The countries subsidies and grants. financial services, US investment. at the feasibility of an conclude on the 31st of * All exceptions to banks will be able to set * The ‘right of non- ‘early harvest program’ cannot be shall extend up more branches December 2004. This national treatment and establishment’ is not for trade in services, in applied. Export national within 2 years and can round will cover all market access must be gain access to the included, i.e. local early 2003. services and all modes subsidies are treatment to listed. presence may be of supply. * Australia maintains Singapore ATM required. prohibited and service network in 4 years. * Member States shall reservations on Non-discrimination, * The Singapore-Japan extend to all other all other providers of the telecommunications, MFN treatment and agreement does not Member States medicine, postal apply to maritime additional market preferential treatment in subsidies are other country, services, supply of services, aviation trade in services as set therapeutic goods etc. access commitments services related to air excluded from within those are core provisions of forth in the Schedules of Singapore maintains the financial services traffic rights. Specific Commitments. the agreement sectors. reservations including a Telecommunications chapter * ICT -related services on services. * New reservation saying ‘only are provided for have been included in a service supplier who * There will be separately in Annexes * Government Zealand’s increased market access the third package of is a Singaporean in the insurance sector, IV a and IV b. commitments in the citizen, permanent procurement of schedule of including ‘best negotiations under the resident or employment ASEAN Framework services is not commitments pass holder shall be practices’ for the insurance rule making Agreement on Services. allowed to register a covered. include: 26

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan Agreement on Services. covered. include: allowed to register a process. business without * Exceptions to the * Investment in - No limitations appointing a local services chapter are services is on national manager. Other areas in mainly in sectors which reservations requiring government covered as treatment and remain are architecture, certification or licenses ‘commercial market access financial auditing, tax (lawyers, accountants related services, royalty etc) or sectors which presence’, but in the cross collecting, land involve governmental there are no border, surveying, mailing institutions or national services etc. policy (public hospitals, common consumption * Additional atomic energy etc). disciplines on abroad and commitments are * US companies have included in a separate the right to own equity investment. commercial annex. stakes in entities that * The ‘right of presence modes * ‘Significant progress’ may be created through has been made in the the privatisation of non- of supply for areas of financial Singaporean establishment’ courier services, legal services government-owned and professional services. is granted. services, services. Singapore is * Improved market * New Zealand telecommunicat making full national access opportunities in treatment and market the area of professional retains only two ions (national access commitments for services. Singapore has inscriptions (air treatment does university, adult and agreed to recognise vocational and degrees from 4 US law services and not extend to technical education, schools for admission coastal commercial with only some limited to the Singaporean bar. exceptions. * Excluded service shipping) and presence mode * Singapore has given sectors for Singapore Australia only of supply), full market access and include: national treatment Air and maritime six (air motion picture commitments in a range services, broadcasting, services, projection of other sectors of social security services, interest to Australian financial institutions broadcasting services, exporters, such as extending Singapore and television construction construction, sporting dollar credit facilities, services, computer and public schools, (x2), third party and related related services and operation of insurance, engineering auxiliary transport government hospitals services. etc. The US has postal services services, excluded: and coastal distribution, Air and maritime services, patent shipping). retail, agencies and customs franchising, and brokers licensing, broadcasting, mining, environmental registering securities,

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan services. social services, atomic energy etc. - National treatment and market access obligations are included subject to some conditions. Transport, including air transport, recreational and tourism service commitments have also been made (with limitations). * Service sectors not covered by Singapore include telecommunicat ions, air transport, maritime, archive services and financial services.

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan Labour *For the purposes of * A long history of * The CEP does not * The initial period of * Singaporean * The agreement covers - tourism and business, arrangements, cover immigration or stay granted to the facilitation of the Mobility under the ASEAN collectively known as general access to Australian business citizens who movement of natural tourism agreement of the Trans-Tasman Singapore's labour people and are visiting the persons for the November 2002 visa Travel Arrangement market. However, it professionals visiting purposes of business. exemption arrangements allow Australians and does make it easier for Singapore will be US for business There will also be will be extended on a New Zealanders to New Zealand extended from 1 month purposes are mutual recognition of bilateral basis, the visit, reside and work in professionals to supply to 3 months. professional procedures for issuing each other’s country services on a temporary * Long term business eligible to enter qualifications and under visas to international without restriction. basis in Singapore, residents from Australia the States for human resource travellers will be These arrangements either as business will be granted an development initiatives harmonised, travel have been visitors (services initial 2 year period, up to 90 days there will be a levies and travel taxes supplemented by the providers not selling extendable up to at least without the promotion of the on members of ASEAN Social Security directly to the public), 14years on application. exchange of scholars states will be phased out Agreement, the or as senior or specialist * Conditions for need for a and students. and the states will work Reciprocal Health employees working in spouses of long-term labour market towards the easing of Agreement and the the Singapore offices of business residents travel barriers and Child Support a New Zealand firm. wishing to work will test. issuing of travel Agreement. become more * Under the documents. favourable and are * The project guaranteed the right to FTA separate Promoting Mutual work in managerial, categories are Recognition of Skills as professional and a Means to Enhance specialist occupations. created for Employability and citizens of each Regional Mobility commenced country to implementation in late engage in 2002 under the ASEAN- Australia Development business and Cooperation Programme investment (AADCP) Framework on Strengthening activities, on a ASEAN Economic temporary Integration basis.

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan Investment * Negative list approach * Both countries have * Each party * Investors will be * Each party shall grant * Each country shall * Negotiations on an for investments modified their extended national investors of the other accord the other agreement for * MFN status investment regimes shall extend to treatment with a few party the better of National Treatment, investment shall with respect to the other the exemptions. national treatment or and equal access to the commence in 2003 and must be granted investments from the * Transfers and MFN treatment. courts of justice both in be concluded as quickly to all ASEAN other country so that a better of MFN remittances shall be * Each party shall pursuit of and in as possible. large majority of status or freely allowed, however accord investors of the defence of investor * The agreement will investors. investment proposals a balance of payments other party ‘fair and rights. take into account the * The Framework do not require approval National safeguard article is equitable treatment’ * Neither party is to sensitive sectors of each Agreement on the from the investment Treatment. included. and ‘full protection and impose or enforce of the parties and will ASEAN Investment authority. Neither * Government security’ in accordance performance include special and Area was signed in 1998 country has rejected an * Each party procurement is not with international law. requirements as a differential treatment and aims to establish investment proposal shall allow the covered by the * No unfair condition for the and flexibility for the ASEAN as a from the other country investment chapter. establishment, newer Asean member competitive investment for at least ten years. other party to * Investors are performance expansion management states. area by 2010. The * Investors and freely repatriate protected against related or operation of * Investor protection features of the investments of each expropriation or investments in its will be included into agreement are the member are subject to all investments ‘measures having effect requirements territory of an investor the agreement. extension of national the general foreign and proceeds equivalent to may be of the other party. treatment to ASEAN investment policies and nationalisation or * Temporary safeguard investors by 2010 and to requirements of the from expropriation’ and will imposed. measures may be other investors by 2020, other country. investments be entitled to * Transfers applied in the case of opening all industries to compensation should serious balance of ASEAN investors by * limitations to expropriation or other must be freely payments difficulties. 2010 and 2020 for the provisions loss occur. allowed. * Neither party shall others, exclusion * There in an investor- expropriate or allowed through the on investments state disputes * Both sides nationalise investments Temporary Exclusion can be found in settlement mechanism, agree to grant in its territory, or take List (TEL) until 2010. whereby an investor of “any measure annex 3 to the one party can seek compensation equivalent to agreement. disputes settlement of fair market expropriation or concerning an alleged nationalisation” of * Any legal breach of an obligation value in the investments made by disputes arising of the party which event of an investors of the other causes loss or damage party, except for public between the to the investor or its expropriation or purpose, on a non- investor of one investment nationalisation discriminatory basis and upon the payment party and the for a public of compensation. other party purpose. * The investment chapter does not apply should be * Provides for an investor-state disputes to government settled as far as procurement. settlement mechanism, possible by whereby investors entering into disputes negotiations. If with either government the dispute can take disputes directly to an

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan cannot be directly to an international arbitration settled in this panel to provide a way, then the transparent and impartial procedure for matter will be dispute settlement. passed on for arbitration or conciliation by the International Centre for Settlement of Investment Disputes. Competition - * Each country * The agreement * The two governments * There are * Each party maintains * There is no maintains and promotes cooperation, commit to addressing its own competition framework for an Policy/ Law determines its own but does not provide for anti-competitive conduct policy and laws, but the agreement on competition laws, with harmonisation of business practices and guarantees to countries agree to competition policy yet. some trans-Tasman competition laws or to consult with each cooperate in the field of provisions regarding policy. other. ensure controlling anti- the abuse of dominant * Singapore has only government competitive behaviour. positions in the market recently commenced * There is no recourse place. Domestic developing a general entities will not to disputes settlement competition law competition policy act in an anti- under this chapter. prohibitions on the regime and thus the misuse of market power agreement on competitive have been extended to competition policy will way. trans-Tasman markets be reviewed once * CER provides for the Singapore enacts a * Singaporean harmonisation of generic competition commitment to business law requiring law. governments to enact a harmonise companies competition law and securities law, competition policy and and set up a consumer protection. competition

commission by 2005. * The parties maintain the

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan power to designate monopolies. * There is no recourse to disputes settlement under this chapter. Intellectual * The ASEAN * Intellectual property *The Parties * As well as confirming * Comprehensive ‘IP * The parties have * There are no rights are not covered their WTO protection for the agreed to develop their provisions for IP in the Property Working Group by CER, however work agree that the commitments on digital age’. The cooperation in the field framework agreement, on Intellectual is proceeding in the WTO intellectual property agreement ensures of IP. however cooperation area. protection, Australia disputes between * The cooperation may shall be extended to Property Agreement on and Singapore will trademarks and internet take the form of intellectual property Cooperation is Trade-Related cooperate on domain names involve information sharing and rights in the final eliminating trade in the government. This is joint training initiatives agreement. working on Aspects of goods infringing important to prevent etc. establishing a Intellectual intellectual property ‘cyber-squatting’ of * The parties have rights. They also agree trademarked domain identified areas such as regional filing Property Rights to take measures to names. e-commerce, patents, system on (TRIPS) shall prevent the export of * Better legal tools for trade secrets, goods that infringe enforcing IP rights. trademarks, copyrights trademarks and govern and copyright or trade * The principle of and related rights as patents apply to all marks. ‘first-in-time, first-in- important areas for right’ applies to cooperation. including intellectual trademarks and industrial property issues geographical indicators applied to products, design and arising from whereby the first person identifying this Agreement to apply for the IP rights is granted the areas for first right to use that harmonization name, phrase etc. * Under the agreement, of ASEAN laws only authors, on trademarks. composers and other copyright owners have * Further cooperation includes the fields of the right to make their work available online. copyright and related * Protection of rights, patents, encrypted program- trademarks, industrial designs, geographical carrying satellite signals extends not only

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan

indications, undisclosed signals extends not only information and lay-out to the programming, designs of integrated but also to the signals circuits. themselves. Both parties agree to criminalise the unauthorised reception and redistribution of satellite signals. * Under the FTA trade secrets and test data submitted to the government for product approval are protected against disclosure for 5 years in the case of pharmaceuticals and 10 years for agricultural products. * The obligations are expected to complement the WTO TRIPS agreement and the implementation of the WIPO Copyright Treaty.

E-commerce * The e- * Work is proceeding * With a view to * The countries agree to * The agreement will * Under chapter 14 of * Measures to improve on electronic implementing the continue to not impose contain a separate the agreement the cooperation shall ASEAN transactions law. APEC Blueprint for customs duties on chapter on e-commerce. parties agree to include the promotion framework Action on Electronic electronic transmissions * National treatment cooperate in the field of of e-commerce and Commerce, in between themselves. and MFN obligations ICT and to promote e- information technology. agreement was particular the Paperless * To promote for those products commerce signed in Trading Initiative, the confidence and trust in delivered electronically. customs administrations bilateral e-commerce, * Permanent duty free November 2000 of both Parties are each government will status for those digital in order to developing an maintain e-commerce products delivered electronic environment consumer protection electronically. facilitate the that supports electronic and electronic * For digital products establishment of business applications authentication delivered in hard media between each customs legislation; work form (eg. On CD or the ASEAN administration and its towards the mutual DVD) the duties are to information trading community. recognition of be based on the value of electronic signatures; the media, not the infrastructure, encourage the content (eg. The value promote growth interoperability of of the CD, not the digital certificates by music contained on it). in e–commerce business; and take measures for personal

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan industries, measures for personal data protection. develop an e- society and close the ‘digital divide’ between member countries’. * ASEAN experts have been working on the overall design principles of the technical architecture, network infrastructure, security infrastructure, e-payments infrastructure, and their respective services interoperability frameworks, so that information infrastructures within the region can be developed and

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan linked.

Transport and * Under article 3 of the * The parties are - * Telecoms having * For the * The parties have * Information and ASEAN tourism governed by the major supplier status in telecommunications agreed to cooperate in communications Communications agreement 2002 the ‘Australia-New Zealand a particular segment of market there is the are of broadcasting. technology is one of 5 a member countries agree Single Aviation Market the market must improved market priority areas for to cooperate in Arrangements’ and the provide other suppliers access, with US gaining strengthening promoting accessibility year 2000 Open Skies with interconnection on network access, rights cooperation. by air, to and amongst Agreement with respect terms that are non- of way and access to Member States, through to air transport. discriminatory, in a cable landing stations at the progressive * Telecommunications timely fashion, and at cost-based rates on non- liberalisation of air services are subject to cost-oriented rates. discriminatory terms. services. the general services * There is an article to * Basic * Enhancing provisions under CER. ensure transparency. telecommunications cooperation in They are not listed by * Each party shall interconnection rights developing measures in either country as ensure that service are guaranteed. support of efficient and services exempt from providers of the other * US firms seeking to safe travel, and also obligations in the party may use public build developing policies to services protocol. telecommunications telecommunication encourage travel by networks or services for networks in Singapore ferries and leisure craft the cross border are to be granted non- by providing adequate movement of discriminatory access to infrastructure. information. the buildings containing * The countries commit telephone switches and to enforcing submarine cable heads. competitive safeguards, facilitating consultation and developing industry standards in the field of telecommunications.

Energy * The ASEAN Ministers - - - - - * Cooperation shall be on Energy have extended to energy reaffirmed the important provisions, but this is role of an integrated not a priority. trans-ASEAN energy network of power grid and gas pipelines in creating sustainable energy supply, security, and trade among

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan

ASEAN countries. * The ministers also reaffirmed their commitments to liberalising the energy markets in order to ensure affordable energy prices and attract investment in infrastructure. * There are plans for a Trans-ASEAN Gas Pipeline Project, and in March 2002 a joint cooperation programme between the European Community and ASEAN was launched. *The master plan study to establish the ASEAN Power Grid is expected to be completed in March 2003 Environmental * Under the * No specific * No specific * No specific * The parties will * No specific * No specific environmental environmental maintain their own environmental environmental Issues Resolution on provisions environmental provisions environmental laws, but provisions provisions Environment provisions will cooperate on environmental issues and and ensure that Development environmental standards are not 1994 the lowered in pursuit of ASEAN nations trade. Each party is obliged to effectively will work “ to enforce their domestic establish long environmental laws. * Environmental term goals on disputes are subject to environmental the core disputes settlement provisions of quality and the FTA. The work towards enforcement mechanism includes harmonised monetary penalties. environmental quality

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan standards for the ASEAN region” * Regional initiatives on the environment are guided by ASEAN Vision 2020 and the 15 objectives set out in the Ha Noi Plan of Action (HPA) * The major areas of ASEAN cooperation are: (a) transboundary haze; (b) nature conservation and biodiversity; (c) coastal and marine environment; (d) global environmental issues. * The governments of the ten ASEAN member countries signed the ASEAN Agreement on Transboundary Haze Pollution on 10 June 2002 during the occasion of the World Conference and Exhibition on Land and Forest Fire Hazards on 10-12 June 2002 in Kuala Lumpur. The Agreement contains provisions on monitoring, assessment and prevention, technical co-operation and scientific research,

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan

mechanisms for coordination and lines of communication.

Labour * There are no specific * No specific * No specific * No specific * Both countries are * No specific * No specific provisions for labour provisions on labour provisions on labour provisions on labour committed to enforcing provisions on labour provisions on labour Standards standards under AFTA, standards. standards. standards. their own laws, and will standards. standards. however the ASEAN cooperate. countries are working * Both parties will together in the field of reaffirm their labour. obligations under the * The labour ministers ILO, and will strive of the signatory towards ensuring countries meet annually domestic labour laws to discuss labour related are in accordance with issues and oversee the internationally implementation of recognised labour labour related projects principles. and technical assistance. * Labour disputes come * The countries each under the main disputes have separate settlement mechanism agreements with the of the FTA and International Labour enforcement is enacted Organisation (ILO) with through monetary respect to labour penalties. standards.

Disputes * Member states must * There are no specific * Differences in * The first stage of the * The parties shall first * Each party may * A formal dispute provide adequate dispute resolution disputes settlement seek to settle disputes request consultation settlement mechanism Settlement opportunity for procedures. The ‘close interpretation, procedure is to engage through consultations. with the other party will be agreed upon by consultation with and long-standing implementation in consultations, with a * Where consultations over the interpretation mid 2004. Until then respect to any matter political relationship’ view to reaching a fail the matter may be or application of the any disputes will be affect ing the between Australia and or application mutually acceptable brought before a agreement. settled by either implementation, New Zealand means of the resolution. disputes settlement * If the parties fail to consultation or interpretation or that any issues of * The parties may at panel, comprising 3 resolve this matter mediation. application of the grievance or concern agreement any stage move to members. through consultation it Agreement. are addressed through should as far as mediation, good offices * The panel shall may be brought before * Member discussion between the or conciliation in order consider the situation the consultative two governments. possible be to facilitate an amicable and publish a report of committee which is States which are settled through solution. its findings. The parties made up of party to a * If no resolution has shall then agree on a representatives of each consultation. been reached within 60 resolution, which will party, including one dispute may at * The parties days of commencing normally comply with legal expert from each any time agree consultations either the findings of the party. may at any time party may request the report. * Good offices, to good offices, agree to establishment of an * The disputes conciliation or conciliation or arbitration tribunal settlement process is mediation may be conciliation or consisting of 3 transparent, and requested at any time, mediation. They members. includes open public by either party.

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan mediation. They mediation members. includes open public by either party. * The parties shall hearings, public access * If parties fail to may begin at * If the dispute comply with the to submissions and the resolve the dispute any time and be has not been findings of the opportunity for third through consultation, arbitration panel within parties to make either party may request terminated at settled within a ‘reasonable period of submissions. the establishment of an any time. Once 60 days after time’. * The dispute arbitral tribunal. settlement procedure is * the arbitral tribunal procedures for the date of to focus on cooperation shall be made up of good offices, receipt of the and allows a party to three abitrators – one pay a monetary from each party, and a conciliation or request for assessment into a third who shall chair mediation are consultation common fund, which the panel. will be used for trade * The award of the terminated, a then the parties facilitation. arbitral tribunal shall be complaining may agree to final and binding. party may then appoint an proceed to raise arbitration the matter to the panel Senior consisting of 3 Economic members. Officials * The findings Meeting and rulings of (SEOM). the abitration * The SEOM tribunal shall be may either binding on both establish a parties. panel, or if applicable raise the matter to the special body in charge of special or additional rules and procedures. * Member States, who are

AFTA CER Singapore-NZ Singapore- Singapore-US Singapore- China-ASEAN Australia Japan parties to the dispute, may appeal the ruling by the SEOM to the ASEAN Economic Ministers ("AEM") within thirty (30) days of the ruling * The decision of the AEM on the appeal shall be final and binding on all parties to the dispute.

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community

Tariffs * Negative list approach. * Negative list approach. * Negative list approach. * Negative list approach. * Negative list approach. * Negative list approach. * National treatment *Aiming for complete tariff * Each party will grant * All tariffs will be phased * Duties reduced to 0% * Trade between Bolivia, accorded to goods of the elimination. national treatment to the out within 12 years. * National treatment Colombia, Ecuador and other party. * Scheduled reductions for goods of the other party, * More than 85% or trade in accorded (with some Venezuela is fully * The extension of national each country, 2003 being except for those goods in consumer and industrial exceptions eg. Logs from deregulated. Peru is treatment will not apply to end date for most goods. Annex 3-03. Market access products becomes tariff free Canada) incorporating into the restrictions placed on * There was one provisions are included. immediately. “Most” trade “virtually all” Canada-US Andean Free Trade Zone exports of Canadian logs, acceleration in 1999 * All goods shall become will be tariff free within 4 trade is tariff free, according to a unprocessed fish and some making certain goods duty duty free from the date of years. exceptions include Liberalization Program. alcohol. Costa Rica has free by January 1st 2001. entry into force of this * Tariffs on both US and Canada’s supply managed * It is expected that Peru imposed limitations on the * Few items excluded from treaty – except for goods Chilean wine to be sectors (eg. Dairy and will join fully into the import refining and tariff liberalization, Canada provided for in annex 3- equalised at the existing poultry) as well as sugar, Andean Free Trade Zone in wholesale distribution of maintains 96 items out of 04(3) and 3-04(4) lower US levels, and then dairy peanuts and cotton in 2005. crude oil, fuel derivatives, this process, while Chile * Liberalisation should be eliminated. the US. asphalt and gasoline, the does the same for 75 items. completed within 6 years of * Chile’s ‘luxury tax’ on *As of January 1st 2001 importation of used (Total items for Canada: the agreement being signed automobiles will be phased Mexican tariffs on merchandise, the exporting 8100; for Chile: 6933) i.e. 2004 out over 4 years. Canadian products fell to 0- of logs, coffee and * List of exceptions mostly * Moreover, at * Chile agrees to eliminate 4%, except for some hydrocarbons. involves agricultural goods. immediately the 50% agricultural products * Each country has a tariff Milling wheat, sugar and any time, a surcharge on imports of subject to tariff-rate quotas elimination schedule which beef are exempted. Canada signatory country used goods (eg. Corn, barley and dry breaks tariff liberalisation retains its over-quota tariffs edible beans) and also on down into those goods to be for dairy, poultry and egg that so desires dairy and poultry products. liberalised immediately, products, Chile retains its may transfer a * Mexican tariffs on corn those on longer time frames tariffs on these goods. are to be phased out over 15 (up to 9 years), and those product appearing years. Tariffs between the exempted. on its own list of US and Mexico will be * The countries will allow eliminated over a five or ten for temporary admission of exemptions onto year period. goods necessary to conduct the liberalisation business or for use in cinematography or sports. schedule. * As of January 1st 1996 automobiles originating in either of the member countries are exempt from duties and non- tariff restrictions. * Exempt goods

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community include: - Chile: Seafood (lobster, shrimp, prawn), dairy products, wheat, barley, sugar, oils (palm, sunflower, safflower, olive, sesame), tobacco, fuel oil, worn clothing and worn textile articles - Mexico: Seafood (lobster, shrimp, prawn), dairy products, wheat, barley, sugar, oils (palm, sunflower, safflower, olive, sesame), tobacco, fuel oil.

Agriculture * Beef and the supply * List of exceptions to tariff * Both parties share the * Agricultural products still * Commitments to reduce * Intra-ANDEAN managed sectors, dairy, removals mostly involves goal of achieving the make up the bulk of tariffs are bilateral among poultry and egg products, agricultural goods. elimination of export sensitive products, however the parties. trade of are exempted from tariff * The parties share the goal subsidies for agricultural ¾ of US agricultural * Between the US agricultural goods reduction. of multilateral elimination goods. In that sense, they products will enter Chile * A large number of of export subsidies for will cooperate in order to tariff free within 4 years. and Mexico all is fully fisheries products are also agricultural goods, although complete a WTO- *Agricultural tariffs to be non-tariff deregulated. exempt. they continue to be imposed consistent agreement completely eliminated * Canadian tariffs on sugar by both parties. within 12 years measures affecting * Andean syrups are generally on a 9 * Dairy, poultry and egg * Expected to create agricultural trade countries are year liberalisation schedule products are exempt from improved market access for to be completed in 2011. Canada’s tariff elimination US pork, beef, soybeans, were eliminated in applying a * Costa Rica has exempted schedule. wheat, potatoes, pasta and January 1994. * Common some meat and poultry breakfast cereals etc.

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community some meat and poultry * For Chile, beef will be breakfast cereals etc. All agricultural Agricultural products, and put a large subject to a tariff rate quota, proportion of the rest on starting at 4000 tonnes in tariffs are to be Policy (Política long timeframe tariff 1998, and increasing to phased out over 5, Comín reductions. Dai ry products 10000 tonnes by 2001. are also left out in many Pork, canola oil and 10 and 15 years, Agropecuaria) instances. Many fruits and potassium chloride are also resulting in free whose main vegetables are very subject to tariff rate quotas, sensitive. but without substantial trade by 2008. components are liberalisation. Poultry, * Sensitive areas such as the “Sistema dairy, preserved meats, corn, dried beans, some cereals are all either vegetables, orange juice and Andino de excluded, or on very long sugar receive longer Sanidad time schedules. transition periods. * Between the US and Agropecuaria” Canada agricultural barriers (Andean remain, between Canada and Mexico market access Agricultural provisions apply only to Health System) goods qualifying under the strict rules of origin. and the “Sistema * Members are required to Andino de Franjas consult before additional measures may be taken. de Precios” * The US and Canada (Andean System maintain a ‘snap-back’ provision whereby a of Price Bands). temporary duty can be * The Andean System of applied to fresh fruit and Price Bands aims to vegetables when import stabilize import costs of an prices fall below a certain array of agricultural goods percentage of the monthly inside the Andean market import price and planted (rice, barley, wheat, soy, acreage of the product is yellow corn, white corn, within certain limits. soy oil, palm oil, sugar, milk, pork and poultry [specifically chicken (leg quarters)]) These goods are characterized by their price instability in the international market. Quantitative Restrictions * Import/export restrictions * No import or export * Quantitative restrictions * Quotas are to be *Import and export * Quantitative restrictions as permitted under article restrictions may be imposed are maintained on trade in eliminated. restrictions may only be are not imposed on any XI of GATT 1994, imposed except in accordance with services. Both parties have used in accordance with goods, with no exceptions. by Canada on logs and GATT article XI listed these restrictions in article XI of GATT. unprocessed fish. Costa annex V. At least every two * Members must eliminate Rica’s list of exemptions years the parties will make existing quantitative include crude oil, wood and an effort to negotiate the restrictions unless they are coffee. liberalization of the specifically permitted.

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community

coffee. liberalization of the specifically permitted. * Either party may adopt or restrictions included in this maintain import measures annex. to allocate in-quota imports pursuant to a tariff rate quote as set out in Annex III.3.1 to the agreement.

Other NTBs *Costa Rica may apply * Chile is allowed to keep * Mexico is allowed to * Chile will eliminate its * Customs user fees are to *Decision 506 on export taxes to bananas. No its Band Price System for maintain, until 2004, the price band system. be phased out with no new "Recognition and other export taxes are some products, however dispositions of the ‘Decreto * Meat and dairy inspection fees permitted. Canada acceptance of certificates of permitted. new products may not be para el Fomento y issues, and meat grading doesn’t maintain such fees. products marketed in the added to the list and the Modernizacion de la processes addressed. * Specific provisions for the Andean Community" method by which the price Industria Automotriz’ * USA may impose removal of blending adopted in 2001 to help bands are calculated may (implemented 1989 ans restrictions to exports of requirements for imported reduce technical barriers not be modified in a in a modified in 1995) which is trunks from all-species and and domestically distilled such as the compulsory manner that makes trade incompatible with this trade of goods subject to the spirits mean that the application of conformity more restrictive. agreement. Merchant Marine Act of distilled products of each evaluation rules and * Neither Party may adopt * Chile and Mexico have 1920 and the Passenger member country have been technical or maintain any measure the faculty to restrict the Vessel Act. mutually recognised as requiring that distilled imports of second-hand * Chile may impose distinctive, and can only be spirits imported from the vehicles restrictions on imports of sold when they are territory of the other Party * Mexico can limit export used vehicles. manufactured in their for bottling be blended with and import licenses for country of origin. any distilled spirits of the trading some fuels. Party. * Until January 1st, 2004, * Import and export Mexico is allowed to apply restrictions are prohibited, restrictions to the except in accordance with importation of second-hand GATT 1994.rights and durable goods included in obligations. chapters HS 84, 85, 87 such * Neither party may as office machines, maintain customs user fees vehicles, cranes and trailers. for originating goods. * Neither party may adopt or maintain export taxes (except where the duty is also applied to those goods for domestic consumption). * Other export measures may be adopted or maintained if it is in accordance with GATT so long as the restriction does not reduce the total proportion of the total export shipments of that specific good (compared to that proportion prevailing in

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community

that proportion prevailing in the most recent 36 month period for which data is available). The party may not im pose a higher price on the export of the good than it charges domestically by means of licenses, fees, taxation or minimum price requirements.

Anti-dumping * The WTO agreement on * The CCFTA contains a * In accordance with WTO * In accordance with WTO * Each country maintains * Anti-dumping duties may anti-dumping shall govern mutual exemption from the obligations. obligations. its own regime and be imposed after an the rights and provisions of application of anti-dumping legislation for initiating investigation usually lasting the member countries with laws. For each good, the dumping and countervailing around 6 months, if respect to dumping and exemption takes effect as of actions, however, must evidence of dumping is anti-dumping duties. the final elimination of consult with other members found. * The parties recognise the import duties in both Parties when making * The member countries, or desirability of providing for for that good at the tariff modifications. Amendments any individual or company, the possibility of imposing subheading level, or on must be consistent with the with legitimate interests, are anti-dumping duties that are January 1, 2003. GATT. able to ask the Andean less than the full margin of * NAFTA provides for Community General dumping, in appropriate initiation of actions and for Secretariat for authorization circumstances. dispute settlement between to apply anti-dumping * The parties agree to the member countries over measures when dumping reiterate the importance of dumping or countervailing practices originated inside transparency and procedural actions through bi-national any other member country fairness in the conduct of panels. Any NAFTA are harming or threatening anti-dumping government can seek to harm local production investigations. review of a dumping or that is located in the local * All disputes arising with countervailing decision market or in any other respect to the anti-dumping made by another member country’s market. measures of the agreement government agency. (Decision 456, art. 2) shall be resolved in keeping * Review panels undertake with the WTO agreement. judicial review, as would any domestic court. Actions found to be illegal are referred back to the decision maker for a new determination. * Decisions by a panel are binding and cannot be appealed to a domestic court.

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community

Countervailing Duties * In accordance with WTO * A committee on anti- * In accordance with WTO * In accordance with WTO * Each country maintains * If a country is found to be obligations. dumping and countervailing obligations. obligations. its right to impose using export subsidies and duty measures has been countervailing duties to causing ‘serious harm’ to established to consult with a subsidised agricultural another Andean country’s view to defining subsidy imports. economy countervailing disciplines. It will also duties can be imposed. work in multilateral fora * Any individual or such as the WTO and company, with legitimate NAFTA to try and interests, or the member minimise the impediments countries are able to ask the to trade created by trade Andean Community remedies. General Secretariat for authorization to apply countervailing measures when a subsidy applied in any other member country is harming or threatening to harm local production that is located in the local market or in any other country member’s market. (Decision 457, art. 2)

Subsidies * Costa Rica has an * Effective January 1, * The parties will cooperate * Export subsidies are * The NAFTA countries * If a country is found to be extensive Free Trade Zones 2003, neither Party shall within the WTO framework eliminated on US-Chile recognise that the use of using export subsidies and (FTZ) regime which has the introduce or maintain any to work towards the farm trade, however the export subsidies within the causing ‘serious harm’ to effect of subsidising export subsidy on any multilateral elimination of right to respond is free trade area is another Andean country’s manufacturers on condition agricultural goods export subsidies on preserved, ie. If a third unacceptable, except to economy countervailing of export. For those goods originating in, or shipped agriculture. From January country threatens to counter subsidised imports duties can be imposed. being shipped to Canada from, its territory that are 1st 2003 no export subsidies displace US exports in from another NAFTA from FTZs Canada will exported directly or may be adopted or Chile subsidies can be country. defer the start of tariff indirectly to the territory of maintained on bilateral imposed. * A NAFTA exporting reduction until the subsidy the other Party. trade. country must give 3 days is fully eliminated. * If an importing party notice of its intention to * Each party agrees to requests an export subsidy impose an agricultural eliminate all export be maintained on a export subsidy. subsidies for agricultural particular good, the * The bilateral prohibition goods destined for the exporting party will be on export subsidies in the partner country, however allowed to maintain or US-Canada free trade domestic support remain in adopt such a subsidy. agreement will remain in place for some agricultural * Export subsidies may not place on US-Canada goods in line with WTO be applied to automotive agricultural trade under provisions. goods. NAFTA. * NAFTA does not specifically apply to provincial subsidy programs.

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community Safeguards * In the case of injurious * A chapter on * If as a result of * A special safeguard * NAFTA gives each * Decision 389 regulates import surges a party may mechanism will protect US member the right to take the application of take safeguard actions twice Emergency Action the tariff farmers and ranchers from safeguard action safeguards in a transitory on any one product, over (safeguard reductions import surges from Chile. (emergency controls), to and non-discriminatory way the transition period * In some situations, impose duties on imports, if to intra-regional trade, in (usually 7 years, but up to measures) permits implemented safeguards measures can be increased imports from one the case that member 14 for some products) and the imposition of through this applied to agricultural and member “cause (or in the country experiences for a maximum of 3 years textile goods (art. 3.18 and case of Mexico, imbalances in its global each time. border controls to treaty, a party is 3.19). “threatens”) serious injury” balance of payments. * For textiles and apparel provide relief receiving * Safeguards measures may or hurt the domestic * Decision 406 (art. 109) goods the safeguards are be applied only during industry of the other. provides that one Andean based on NAFTA from increases and quantities of transition period if, as result * Detailed criteria must be member may apply import surges of imports that cause of the reduction or met before any action can safeguards, when imports *Each party elimination of tariffs be taken. from another Andean may, for the imports from the or threaten to agreed, a product is * Actions can be taken member come in amounts other party that cause ‘serious imported from the other bilaterally between NAFTA or conditions that harm agricultural party in quantities that suppliers, but can only be local production. In goods specified are causing, or damage’ to the harms or threaten to harm triggered by a reduction in addition, art. 110 allows by each Party in threaten to cause economy of the local producers. These duties. Alternatively, action member countries to apply measures can be applied for may be taken against all these measures if a Appendix ‘serious injury’ to importing party, a period no longer than 3 suppliers i.e. ‘global devaluation process caused domestic the ‘minimum years (art 8.1 and 8,2). actions’. by one of the Andean III.3.2.1 adopt a * Actions are initiated by members affects normal special safeguard producers. necessary’ the domestic industry, competition conditions. in the form of a * Quantitative safeguard investigated by a tribunal in the member affected, and tariff rate quota, restrictions may measures may be then determination made as be imposed on taken. to whether action may be if the volume of taken. imports of that non-originating * A safeguard good from the textile goods measure may only other Party imported under a be applied in a exceeds the tariff preference non- trigger level for level set out in discriminatory that good. Appendix 5.1, manner. * Trigger levels are to be where the absolute * The party taking increased by 5% a year for 10 years. The safeguard quantity being the safeguard may only be maintained imported has actions must until the end of the calendar year in which it was increased relative notify the other imposed. to domestic parties before * No country may impose an over-quota tariff rate production so as doing so. under a special safeguard to cause ‘serious * Safeguard measures may for goods included in include the suspension of

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community for goods included in injury or actual include the suspension of Appendix III.3.2.1 future tariff reductions, or exceeding the MFN levels. threat thereof’. an increase in tariff rates up * Special provisions for Consultations to the lesser of the clothing and textiles allow country’s MFN rate, or the for bilateral emergency shall take place MFN rate the day before measures to be taken on and if no mutually this agreement was signed. quantitative restrictions * Safeguard measures may where “serious damage or satisfactory only be taken during the threat thereof” can be resolution can be transition period for tariff proven. reductions and may not be reached within 90 maintained for more than 1 days, annual year. * A safeguard measure may quantitative not be applied more than restrictions, once to a single good during the transition phase. subject to some conditions, may be applied.

Rules of Origin * The rules of origin for this * Based * A good can qualify as * Rules of origin are * A good is classified as * LAIA based agreement closely resemble originating if it satisfies the specific to individual originating if it is wholly those of NAFTA and are principally on specific rules of origin products (ie. Specific obtained in the territories of (although some based on the Canada-Chile changes in tariff requirements of change of process), but are designed one or more of the member similarities to agreement. customs heading or regional to be easier to apply than parties, or if it is wholly * Origin is determined classification content requirements. NAFTA ones, except in the produced in the NAFTA NAFTA). using the change of customs under the * In most cases the regional case of some textile goods. territories from originating * Change in tariff heading heading method. Rules are content requirement is 50% * Some rules of origin materials. It can also measurement used, product specific Harmonized where the value of which are reportedly easier qualify as originating if the generally applied across the * The rules of origin for System transaction method is used, to apply than NAFTA ones non-originating materials board. fish and marine products or alternatively 40% when relate to blended juices, used in the production * The CIF value of the non- are more liberal than those * For certain the method of net cost fruit cocktails, leather process undergo sufficient native materials must not for agriculture, agri- manufactured evaluation is used. shoes, bicycles, white ware, change in tariff exceed 50% of the FOB products, textiles, apparel, * The rules of origin allow cotton and wool garment. classification as set out in value of the final products chemicals and plastic products, the rules for bilateral accumulation * Certain products may Annex 401. for Colombia, Venezuela products. of original have within the territories of the qualify as originating if * The NAFTA rules of and Peru, and 60% for parties. * A certificate of they meet the regional value origin are very restrictive. Bolivia and Ecuador. been made less origin is required to prove content requirement which * Products must be made * The General Secretariat restrictive than that rules of origin is usually between 35 and within NAFTA countries or can establish specific rules requirements are met. This 55% depending on the from NAFTA materials, of origin when the current

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community those under the requirements are met. This 55% depending on the from NAFTA materials, of origin when the current certificate is valid for two method of calculation. rather than foreign ones. If guidelines are sufficient or NAFTA. This years from the moment it is they are made of foreign inadequate to classify a allows signed. materials then the final good. product must be * Cumulative origin is manufacturers to significantly processed in a provided for, whereby benefit from the NAFTA country such that it imported native materials meets certain requirements, from another member preferential terms such as a regional value country are considered as of access of the content of a certain native of the member percentage (50 per cent or country. CCFTA without 60 per cent depending on requiring major the method used). * NAFTA also sets out changes to their special rules of origin that current sourcing apply to automotive products, textiles and of materials and clothing and some parts. agricultural products. * There are special, more * Goods can stringent, rules of origin for qualify as automotive goods and textiles and apparel. After a originating if they transition period, comply with automotive and light vehicles will need to be specific change in comprise 62.5 per cent tariff classification NAFTA origin, and other vehicles and automotive requirements, or if parts, 60 per cent. they meet regional * Rules for textiles and apparel dictate that they value content must be produced from requirements as fibre made in a NAFTA country. set out in chapter * The test is a “de D article 2. To minimus” rule, which allows the amount of non- qualify as originating textiles used to originating the be up to 7 per cent. There are several exceptions to the regional value rule such as products with content must be small quantities of non- NAFTA yarn or fabric, or no less than 55% items in “short supply”. under the net cost * Rules of origin for a number of electronic method (January products (eg. Computers,

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community 2000 onwards). telecommunications equipment and tvs) are based strictly on a tariff change structured to require that key processes are carried out in North America. For example television receivers with a picture tube of more than 14 inches in diameter can only be considered to be originating if the picture tube is produced/ assembled in North America. * NAFTA allows for bilateral, but not full accumulation. Absorption applies.

Standards and * Technical barriers to trade * Technical barriers to trade * Technical barriers to * Annex 3.17 establishes * NAFTA standards * The Andean Conformance will be governed by each will be governed by each trade will be governed by commitments from each obligations apply only to Standardisation Networks country’s rights under the country’s rights under the each country’s rights under party to recognize the other standards that affect trade. activities aim to harmonise WTO. WTO. the WTO. party’s grading programs * NAFTA allows members the standards of the region for beef. to maintain standards for and adopt international health, safety and security standards of interest to the reasons, provided they region. don’t discriminate in trade * Some 50 Andean and are based on standards are currently in international standards. effect. * NAFTA does not mandate a scientific assessment in deciding whether discriminatory standards are justified, and allows for potentially wider consideration on environmental and consumer grounds. * NAFTA doesn’t seek to harmonise standards between members, but encourages them to be made compatible.

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community

Other Technical Barriers * Technical barriers to trade * Technical barriers to trade * Technical barriers to trade * Chapter 7 aims to - * Harmonisation of to Trade will be governed by each will be governed by each will be governed by each increase and facilitate trade regulatory technical country’s rights under the country’s rights under the country’s rights under the through the improvement of instruments is currently WTO. WTO WTO. the implementation of the underway through the TBT agreement, the ‘Andean System of elimination of unneces sary Standardisation, TBT and the enhancement Accreditation, Testing, of bilateral cooperation Certification, Technical * The parties agree to Regulations and Metrology’ establish a Committee on TBT, which will be in charge of addressing any issue that a party raises related to the development, adoption, application or enforcement of standards, technical regulations or conformity assessment procedures.

Quarantine and SPS * The parties agree to be * No specific provisions for * Each party will * The parties agree to * NAFTA SPS provisions * Sanitary and governed by their sanitatary and phytosanitary establish a Committee on are based on the WTO SPS phytosanitary measures will obligations under the WTO. measures in agriculture. use internationally Sanitary and Phytosanitary rules imposing disciplines be in accordance with WTO * A committee on sanitary The parties agree to be recognised norms, Matters. Its objectives will on measures taken to obligations (Decision 515). and phyto-sanitary issues governed by their be to enhance the protect human, animal or was established to create a obligations under the WTO. directives or implementation of the SPS plant life or health. They forum for discussion recommendations agreement, protect human, allow members to impose between the two countries. animal and plant life and measures themselves, * The committee may in order to health, enhance provided they are not consider the development harmonise consultation and disguised attempts to of ‘operational guidelines’ cooperation in SPS matters restrict trade. to facilitate the standards with the and facilitate trade between * NAFTA encourages the implementation of mutual other party. Both the parties (art 6.3) member countries to base recognition or equivalence their rules on international agreements, the promotion parties will be standards. Each country of transparency in SPS able to use SPS may determine its own level measures, the promotion of of protection provided the bilateral consultation etc. measures only measures are in accordance when it is with scientific principles and based on a risk necessary in order assessment. to protect human, * The parties are working towards accepting each animal or other’s measures as vegetable life or equivalent where they achieve the same level of health protection. * Where identical

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community

conditions exist sanitary or phyto-sanitary measures may not be used to justify discrimination against the goods of a party. * Sanitary and phytosanitary measures must be based on scientific principles and will be based on appropriate risk evaluation. * Without reducing the appropriate levels of protection, the Parties will accept to the greatest possible degree the equivalence of their respective sanitary and phyto-sanitary measures.

Customs Procedures * The parties shall * The agreement contains a * The countries agree to * Taking into account * Customs provisions relate * The Andean community cooperate in customs chapter on customs cooperate in the field of international standards, primarily to the certificate have a series of agreements related measures such as the procedures and states that customs procedures to each Party’s customs of origin necessary for an covering customs collection and exchange of the parties shall cooperate provide mutual assistance, authority shall endeavour to exporter to obtain so that procedures. These include statistics and information. in the enforcement of their share information and work automise customs rules of origin requirements provisions for classification * The countries shall enter respective customs laws towards the harmonisation operations. can be met. of goods, customs into a Customs Mutual and regulations. of customs documentation. * Customs laws and * There is agreement valuations (plus Assistance Agreement to * The parties may agree to * The parties will regulations must be between the parties to documentation help facilitate the flow of cooperate in the collection published on the internet to develop uniform regulations harmonisation in this area), trade and consider the of statistics and also do whatever ensure full transparency and on rules of origin and a customs traffic, and harmonisation of customs harmonisation of possible to prevent fairness. requirement to grant rights customs crime prevention. related automation documentation. * The parties agree to share of review, equivalent to that requirements and * A customs sub-committee the trafficking of information to combat accorded to importers, for documentation. has been established to illicit substances. illegal shipment of goods. any person completing a investigate further certificate of harmonisation of origin. procedures and any other customs related measures.

Government Procurement * The countries will * No chapter for * Similar to Canada-Chile. * Core principles of non- * Core principles of non- - cooperate in regional and government procurement, No particular chapter on discrimination and national discrimination and national multilateral negotiations however exceptions are procurement, but treatment. treatment. with the aim of achieving allowed for in the reservations within the * Transparency to be * NAFTA requires covered greater transparency in investments chapter investment chapter say that increased through advanced entities to follow government procurement. whereby state enterprises state enterprises are exempt public notice on sales. procedures with respect to * No particular provisions are exempt from particular from certain requirements * The agreement covers 13 awarding contracts, bid for liberalisation, however provisions (national (national treatment, MFN regional governments, 11 challenge, qualification of the issue will be re- treatment, MFN treatment treatment, senior ports and airports and more suppliers, time limits for

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examined within 3 years of and the senior management management and boards of than 350 municipalities in tendering etc. the entry into force of this and boards of directors directors requirements and Chile. * Each party has listed agreement. article). Certain certain performance * Provisions ensure that specific commitments in performance requirements requirements etc) bribery in government terms of covered entities, are not prohibited for procurement is recognised goods and services which government procurement as a criminal offense under the government purposes. both Chilean and US laws. procurement chapter will * Agreed monetary apply to. thresholds (for central level * The applicable thresholds government) are for procurement purposes, US$56,190 for goods and at the Federal government services and US$6,481,000 level are US$50,000 for for construction services. goods and services, and US$6.5 million for construction services.

Services * The parties recognise * Negative list approach * Negative list * Negative list approach * Negative list approach * Negative list approach. their obligations under * Each party shall provide * The chapter covers both * Each party shall accord * All services related GATS (the WTO) the service provider of the approach cross-border services and service providers of another measures are subject to the * The countries shall other part y the better of * MFN treatment the right to invest and NAFTA party the better of agreements on MFN, cooperate with a view to either national treatment or establish local services national treatment or MFN national treatment and developing mutually MFN. and national presence. treatment. market access. acceptable standards for * Market access provisions treatment apply. * There are ‘strong and * Market access provisions * Emergency safeguards licensing of professional included. detailed’ disciplines on are included. may not be imposed. There service providers. * There are no emergency The parties will regulatory transparency * Emergency safeguards are are no provisions for * Cultural industries are safeguards or disciplines on extend the better which requires regulatory not included, although there subsidy disciplines in the exempted (by Canada). subsidies. authorities to transparent is a provision in the services agreement. * There will be discussions * Government procurement of the two to the administrative procedures, financial services chapter * Government procurement on the need for further is also exempt. other parties. conduct consultations allowing Mexico to impose is not covered. disciplines on trade in * Neither Party may require before issuing new market share caps if foreign * ‘right of non- services within 3 years of local presence, ‘right of non * Each party regulations, provide ownership thresholds ( 25% establishment’ is not the implementation of the establishment’ also applies. maintains a list of advance notice and for banks and 30% for included. agreement. * Investment in services is comment periods before securities firms) are reached * Investment in services is covered in a separate services in Annex issuing new rules, and before 2004.Mexico has not covered as ‘commercial chapter. II which are publish regulations. made use of these presence’. * Financial services and air * The financial services provisions to date. * Bolivia and Ecuador are services are excluded from exempted from section contains obligations * Government procurement accorded special treatment the agreement. MFN, national of non-discrimination, of services is covered in a and have longer to remove * Some quantitative MFN treatment and separate chapter. restrictions, they are also restrictions remain but treatment and additional market access * ‘Right of non- allowed some special negotiations shall continue local presence obligations (not national establishment’ is included exemptions. bi-annually to remove these treatment). i.e. local presence is * In October 2001 the restrictions. requirements. * US banks and securities allowed, but not required. agreement on ‘Adoption of * Licensing and * Local presence firms may establish * Obligations for trade in the Inventory of Measures certification must be based branches and subsidiaries services do not apply to Restricting the Trade in on objective and transparent must not be and may invest in local subsidies or grants Services’ was signed. The criteria and must not required. firms without restriction, including government measures contained in the constitute a disguised except in a few support loans, guarantees inventory will be gradually

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community barrier to trade. * Each party has circumstances. and insurance. phased out in annual rounds * As in NAFTA, Canada * All insurance sectors are * Aviation transport, until, concluding 2005. has excluded cultural listed in Annex V opened to US firms for the maritime, and basic * Air transport is not industries from the services any quantitative purpose of establishing telecommunications are included. agreement. Likewise there subsidiaries and joint exempted. Each country * Trade in services among is a broad carve out for restrictions which ventures; Chile has also has a list of sensitive members will be fully social services. they maintain at committed to phase in services, which are also deregulated by 2005. * IN June 2001 a insurance branching rights. excluded. Canada has * Air transport and services Memorandum of the federal or state excluded cultural industries, provided by the Understanding was signed level. while the US has excluded government, or their public between the Chilean maritime transportation institutions in exercise of College of Engineers and * Financial services as well as their faculties, are not the Canadian Council of services were government services included. Professional Engineers. including health and social originally services. excluded but the * Existing quantitative restrictions may be countries agreed maintained, and new ones to being introduced, but they must be listed when at a federal negotiations for level. their inclusion no * Licensing or certification must be based on later than June competence and the ability 30th, 1999. to provide a service so as not to create an unnecessary * Some headway barrier to trade. has been made in * Investment in services is covered in a separate the liberalisation chapter. of audio -visual * The parties recognise the principle that an investor of services, a big step another party should be forward from permitted to establish a financial institution in the many other FTAs. territory of a party, and to * There is a chapter on be allowed to expand aerial transport, but in geographically in that general air transport is not party’s territory. subject to services * Each party shall extend liberalisation. There is a national treatment to treaty signed in 1997 financial service providers between the countries of another party in their governing it. There is a territory. MFN treatment committee on air must also be extended to transportation set up to NAFTA members. review air transport * A Financial Services regulation and other issues. Committee has been

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* In Annex II, ‘reservations established to oversee the relating to future measures’ implementation of this Chile and Mexico reserve chapter, participate in some rights in service disputes settlement and sectors. Chile reserves consider other issues related rights in communications, to financial services. The education, government committee meets annually. finance, social services and construction. Mexico reserves rights in communications, social services, and energy. * There is also a list of services reserved by the Mexican state, in which investment of private capital is not allowed under Mexican law. If the law is changed to allow private investment, the Mexican government still reserves the right to impose exceptions. Labour Mobility * Facilitation of temporary * Chapter K * The chapter on * The agreement contains * Chapter 16 contains * As mandated by the entry will provide for intra- provisions for entry into provisions for the cross Andean Presidential company transfers, the provides for the temporary either country for business border movement of Council and instructed by spouses or common law temporary entry of entrance of visitors, traders and business persons, which the Ministers of Labour, partners of intra-company investors etc. aims to facilitate trade and work is currently being transferees and after sales business people in business people * The US will grant a investment. done to update the Labour service providers directly their capacities as states that each certain number of * Four kinds of business Migration instrument related to the exportation of provisional FTA visas each people are identified – following the guidelines goods. service providers party will year for this purpose, but business visitors, approved by representatives * The existing and future or investors. authorise the reserves the right to amend professionals, intra- of the Member Countries in immigration laws of each immigration laws. company transfers, traders April 2001. country continue to apply. * When temporary temporary * US professionals will be and investors. There are * With a view towards * The developments in this entry is refused entrance of able to enter Chile without slightly different forming a common market area will be reviewed 3 a numerical limit. requirements for each of the community will aim for years after the entry into the Party must business people of these groups. full labour mobility. force of the agreement. inform in writing the other party so * The temporary entry provisions do not impact on the business long as they fulfil the countries’ individual person of the the applicable immigration laws. reason for the criteria (with refusal, as well as relation to notifying the other security,

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community Party promptly of nationality and the reason for public health) refusal. * Temporary business entrants are divided into 4 * Fees for the categories. Business processing of visitors, Investors, intra- company transfers and applications for professionals. There are temporary entry specific requirements for each category, with should be limited minimum qualifications for to the cost of the professionals specified. * Numerical limits are not service provided. imposed. * There is a Temporary Entry committee set up which will effectively administer and apply the chapter.

Investment * The free trade agreement * National treatment and * National * National treatment and * National treatment and * The laws of the does not have specific MFN treatment apply MFN treatment apply. MFN treatment apply and community effectively give provisions for investment * Neither party may impose treatment and * Neither party may impose the parties must accord each the Andean countries full because of the existence of performance requirements MFN treatment performance requirements other a minimum standard freedom to regulate this the FIPA (Foreign on investors of a Party or on investors of a Party or of treatment in accordance field through there own Investment Protection non-Party in its territory must both be non-Party in its territory with international law. national regulations Agreement) of 1998 * No party may require that extended * No party may require that * Performance between Canada and Costa an enterprise of that party an enterprise of that party requirements are prohibited, * Since the 1980s national Rica. Under the FIPA there appoint to senior reciprocally. appoint to senior however these prohibitions legislations have tended to are no obligations to management positions * Specific management positions don’t apply to subsidised eliminate existing individuals of a particular individuals of a particular conditions on requirements move towards facilitating foreign investment, and restrictions on foreign nationality. performance nationality. to locate production, extending national investment, however there * Transfers and remittances requirements are * Transfers and remittances provide a service or employ is a standstill principle must be allowed between must be allowed to be made workers. Som e measures treatment in most cases and whereby countries the parties, however Chile prohibited. freely and without delay requiring domestic content as a consequence the laws of the different countries undertake not to adopt new reserves the right to * No party may between the parties. are permitted providing have converged. or more restrictive maintain existing * The ‘minimum standard they don’t constitute investment measures. A restrictions on the transfers require that an of treatment’ clause, like disguised restrictions on further key principle is that of proceeds from enterprise of that the NAFTA, requires “fair trade. of transparency and all investments in Chile. and equitable treatment” as * Chapter 11 commitments countries must list ‘to the * The concepts of ‘fair and party appoint to well as “full protection and also explicitly permit the extent possible’ their equitable treatment’ and senior security”, with remittance of profits, exceptions to the general ‘full protection and clarifications of these terms dividends and proceeds principles of the FIPA. securi ty’ are required, in management included. when capital is liquidated. accordance with the positions an * Investor protection * Chapter 11 of the minimum standard of provisions include the right NAFTA guarantees full, treatment of aliens under individual of a to receive a fair market swift and fair compensation

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community international law. particular value for property in the to be paid after any * Expropriation and event of expropriation. No government action that compensation articles nationality. party may directly or constitutes (‘is tantamount included. ‘Neither party * Each party shall permit all indirectly expropriate an to’) an expropriation or may directly or indirectly transfers relating to an investment of an investor of nationalisation. However, nationalise or expropriate investment of an investor of the other Party except in a the chapter doesn’t allow an investment of an investor either party. However, non-discriminatory manner, investors to sue simply on of the other party, or take a Chile reserves certain rights for a public purpose and on the basis of diminished measure tantamount to for the purpose of currency payment of compensation. profits. nationalisation or stability. The phrase ‘tantamount to a * The NAFTA investor- expropriation’. * There is a ‘fair and nationalisation or state dispute settlement * An investor-state disputes equitable treatment clause’, expropriation’ is not system bypasses domestic settlement mechanism is requiring that each party included. courts completely and included. provide investors from the * There are ‘open and allows any individual or * Quantitative other party with fair and transparent’ procedures for business that is a resident of equitable treatment as well settling investment disputes a NAFTA country to launch restrictions to as ‘full protection and through the investor-state a claim against any other investment are security’. disputes settlement. NAFTA government * There are provisions for Submissions to disputes through a process of included in Annex expropriation, whereby panels and hearings will be arbitration. The dispute IV. expropriation or open to the public. must have an international nationalisation of an * The agreement prohibits element, for example investment may not take requirements to buy local Canadian investors are not place, either directly or inputs. allowed to lodge a indirectly, except for a complaint against the public purpose, in a non- Canadian government, discriminatory manner and however Mexican or upon the payment of American investors can. compensation The arbitration process is * The chapter includes a closed to public disputes settlement participation. mechanism (arbitration) for * Specifically listed settling disputes between a exceptions are not bound contracting party and an and are not covered by investor. NAFTA. Members retain the right to perform functions such as law enforcement and provide services such as health and social welfare. Other exceptions from chapter 11 obligations include transportation, telecommunications and Canada has also excluded cultural industries. * Coverage of the investment provisions

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extends to investments made by any company incorporated in a NAFTA country, regardless of the country of origin.

Competition Policy/ Law * Each party maintains their * The Agreement * The Parties will cooperate * Each country has * The parties will cooperate * In June 2001 an own competition law, in the application of committed to maintaining a in the area of competition agreement was signed with however they are each requires the competition policy and will competition law that policy, each country the European Commission obliged to adopt or maintain Parties to consult take part in consultation, prohibits anti-competitive maintains and enforces its to help finance a project a law proscribing anti- including exchange of business conduct and a own competition laws. aimed at harmonising competitive activities. on the information relevant to competition agency to * There is no recourse to competition laws in the * The agreement also effectiveness of competition laws. enforce that law. dispute settlement Andean region. contains an obligation for * There is no recourse to * A Party maintains the * The parties may designate each party to establish an their competition disputes settlement with right to designate a monopolies, but if the independent competition laws and to respect to any matter monopoly and to establish designation will affect other authority to ensure effective regarding conformity to the and maintain state NAFTA members written application and cooperate in the article that legislates on enterprises. notification must be given enforcement of such laws. enforcement of competitive matters (Article * There is no recourse to wherever possible and trade * The parties shall 14-02). disputes settlement under distorting effects must be cooperate and consult at competition laws * Monopolies may be this chapter. minimised. least once every 2 years. in the free trade designated and state * A Working Group on enterprises maintained in Trade and Competition, area. accordance with the comprising representatives * These conditions set forth in the of each party, has been chapter. established. The working obligations are not group will make subject to dispute recommendations on competition policies. settlement. * The CCFTA affirms the right of a Party to ‘designate’ monopolies and state enterprises (i.e., establish new monopolies and state enterprises in the future).

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community

Intellectual Property - * No specific intellectual * Each party will accord the * The agreement covers * NAFTA is modelled on * As of December 1st 2000 property provisions, the members of the other party protection of trademarks, the TRIPS agreement and a new intellectual property parties will be governed by protection and suitable and copyrights, patents and commits each member to system came into place their obligations under the effective defence of IP trade secrets including provide protection and incorporating many new WTO Trade Related rights. digital and e-commerce enforcement of intellectual elements such as integrated Intellectual Property Rights * Measures to protect IP related IP. property rights. circuits and border control (TRIPS) agreement. rights should not be an * The provisions for * NAFTA mandates measures against pirates. * The parties have agreed to obstacle to legitimate trademarks apply the minimum standards of * The measures guarantee protect Canadian Whiskey commerce. principle of ‘first-in-time, intellectual property identical implementation and Chilean pisco as special MFN and national first-in-right’, meaning that protection, but doesn’t across the region. geographical indicators treatment. the first person to file for a prevent countries adopting under the agreement. * Protection is extended to trademark is given the right higher ones. authors, computer to use that name or phrase * National treatment shall programmers, satellite etc. be extended for intellectual signals, trademarks etc. * “Protection for copyright property rights with certain works in a digital economy” exceptions recognised by provisions ensure that only the WIPO conventions. authors, composers or other * As well as patents, copyright owners have the trademarks, copyrights, and right to make their works trade secrets, NAFTA also available online. protects satellite broadcasts, * There will be anti- semiconductors and circumvention provisions to industrial designs etc. prevent tampering with * Judicial review, recourse devices used to stop digital to damages and other piracy. remedies as well as interim * There will be tough measures and criminal and penalties to enforce IPRs civil penalties must be including the available. criminalisation of end-user piracy. The Chilean government has guaranteed that it has the authority to seize, forfeit and destroy counterfeit goods and the equipment used to make them.

E-commerce * The ‘Canada-Costa Rica * No specific e-commerce * No specific e-commerce * The countries agreed on * No specific provisions * No specific e-commerce Joint Statement on Global provisions provisions provisions for e-commerce within the text of NAFTA provisions Electronic Commerce’ was to recognise its importance * On the 27th of February signed at the same time as in trade. They agreed not to 2003 Canada and Mexico the FTA, in order to foster impose customs duties on signed a bilateral agreement collaboration and digital products and to to exchange public service cooperation in the area of e- cooperate in related policy administration best practice commerce. areas. and increase connectivity in * For digital products the hemisphere through e- delivered on hard media, learning and the E-campus customs duties will be Americas pilot project.

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customs duties will be Americas pilot project. based on the value of the media (eg CD) not the value of the movie, music or software on the disk.

Transport and * Cooperation in transport * Provisions for * Subject to * Each Party shall ensure * NAFTA provides * In May 1999 the Andean Communications issues will be considered in telecommunications state that members of the other common rules for providers community decided to order to aid trade that the other Party may use certain party have access to and use and users of liberalise all facilitation. public telecommunications requirements each of any public telecommunications and telecommunications with transport networks or telecommunications computer services, and sets the exceptions of sound services for the movement party must services and access to out the way in which radio and tv broadcasting of information in its guarantee that the submarine cable systems, telecommunications firms * In March 2001, the territory or across its on non-discriminatory can gain access to networks Andean Committee of borders. people of the other terms. and services. Telecommunication * Basic interconnection party are allowed * Each party shall ensure * Access to public networks Authorities (CAATEL) rights and obligations are that members of the other and services must be approved the 2001-2006 included. to buy, rent and to party are able to use public available on a non- Strategic Plan for the connect terminal telecommunications discriminatory basis. Cross Development of Andean networks to transport subsidisation between Telecommunications that equipment or information within its public networks is will guide government other equipment territories and across its permitted. Restrictions on decisions for promoting and borders. access must only be to developing this sector. that interfaces * Nothing in the protect public * There are specific with public telecommunications chapter responsibility, the integrity provisions for all modes of should be construed as to of the network, privacy and transport with the aim of telecommunicatio prevent a party adopting confidentiality of messages. improving infrastructure ns networks. measures to protect the * Tariffs on and deregulating. * Each party will ensure security and confidentiality telecommunications that the prices of the of messages, or the privacy equipment must be of network subscribers. The eliminated over 10 years. provision of public technical integrity of the * The Land Transportation telecommunications services reflects the networks and the Standards Subcommittee economic costs directly responsibilities of the was set up under NAFTA to public services must also be address the development of related to the benefit of the protected. more compatible standards services. * The chapter also includes related to truck, bus and rail * Each party will guarantee that people of the other provisions for competitive operations. The safeguards. subcommittee has been party can use the networks meeting annually since or public 1994. telecommunications networks to transmit * The US requires criminal background checks on information in their commercial drivers seeking territory or through its to transport placardable borders. quantities of hazardous

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* Nothing in the quantities of hazardous telecommunications chapter materials. should be construed as to * Liberalisat ion of land prevent a party adopting transportation is now measures to protect the underway after the process security and confidentiality was delayed by American of messages, or the privacy safety concerns in 1995. of network subscribers. The * All motor carriers technical integrity of the operating in any NAFTA networks and the country are subject to the responsibilities of the same federal and public services must also be state/provincial regulations protected. as domestic carriers. * Air transportation is not covered by the agreement. * The members reciprocally agree to grant free access to both public and private cargo arising from foreign trade with vessels flying the flag of either country, or vessels which may fly the national flag of either country under their respective laws. * Interested air transport companies of both countries may conduct regular and non-regular passenger, cargo and mail service between both territories with third, fourth and fifth freedom traffic rights (with the exception of points beyond

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community Santiago and Mexico City), as frequently and using the aircraft they deem appropriate. * Land transport is subject to quantitative restrictions.

Energy * Energy provisions are not * Energy provisions are not * The energy sector is * Energy provisions are not * Chapter 6 addresses * On September 22nd, 2001, included. included. protected under the included. measures relating to energy the country members Mexican constitution, and and basic petrochemical agreed to adapt their therefore is included in the goods. A party may impose domestic rules in order to list of exceptions to services restrictions in keeping with allow free trade of electric liberalisation. GATT, and may administer energy and access to the use * Mexico reserves the right a system of import and of electric energy transport to deny authorization for export licensing provided networks within the investing in the energy such a system is in keeping community. sector. with the rest of the * In December 2002, provisions in this agreement Decision 536 announced eg article 1502, Monopolies the approval of the and State Enterprises. framework which regulates * Energy regulatory the subregional measures are subject to the interconnection of energy disciplines of national systems and the intra- treatment, import and subregional exchange of export restrictions and electricity. export taxes. * Exceptions may be made to agreement on energy for national security reasons eg. To respond to a situation of armed conflict involving the party taking the measure. * Canada and the US are party to a ‘proportional access’ clause that allows them to impose export restrictions for certain reasons, whilst maintaining continued access to the market for the other party. * NAFTA opens the parties up to private investment in nonbasic petrochemicals

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nonbasic petrochemicals and electricity.

Environmental Issues * Modelled on NAFTA, * Modelled on * No particular * Environmental * The North American * Each country maintains there is a side agreement on environmental agreement, obligations are part of the Agreement on their own environmental environmental issues- the NAFTA, there is a except to recognise some core text of the agreement. Environmental Cooperation laws and standards. Canada-Costa Rica side agreement on other international Parties keep their own laws, (NAAEC) supplements the *At the eleventh Andean Agreement on environmental agreements but agree to strive to NAFTA agreement and is Presidential Council in Environmental Cooperation environmental and say measures should be provide high levels of designed to promote Cartagena (1999) efforts to * Each country shall issues- the in keeping with these. environmental protection. environment cooperation. harmonise community maintain their own laws * In a case of * Cooperative projects will * Each country will policies on environmental with regards to the Agreement on incompatibility between the be undertaken, including maintain and enforce their management and environment. Environmental FTA and specific building capacity for own environmental laws, sustainable development * The parties shall obligations in trade matters wildlife protection and recognising the importance were introduced. cooperate to help foster Cooperation included in the Convention resource management of conservation and * On July 3, 2001, the sustainable development * The Agreement confirms on International Trade in through collaboration sustainable development. environmental authorities of and protection of the the right of each country to Endangered Species of efforts, working towards the * NAFTA (like the GATT) the five Andean countries environment. establish its own level of Flora and Fauna; the elimination of methyl includes an exemption that approved the “Guidelines * Each party commits to environmental protection, Montreal Protocol on bromide use and the allows governments to for Environmental effectively enforcing their policies and priorities. It Substances that Deplete the development of Pollutant protect their environments, Management and own environmental laws, does not authorize a Party Ozone Layer and the Basel Release and Transfer even when the necessary Sustainable Development in and will ensure that to undertake activities to Convention on the Control Register (PRTR) in Chile. measures conflict with the the Andean Community,” ‘judicial, quasi-judicial or enforce environmental laws of Transborder Movements * Monetary penalties for agreement. the Subregion’s first administrative enforcement and regulations in the other of Hazardous Wastes and breaching the agreement * The NAAEC imposes collective effort in this proceedings’ are available Party’s territory. Their Disposal, these general obligations in sector. under its law to oversee this obligations will prevail as relation to reporting * These guidelines consist enforcement. Private access far as the party involved emergency environmental of measures to be taken to remedies is provided for choses, however the party measures and promotion of over the next five years in in article 5. should chose a course of environmental education, four major areas: * Implementation will be action which shows the science and technology. Conservation and the through intergovernmental least incompatibility with sustainable use of cooperation. the regulations included in biodiversity, environmental the FTA. quality, trade and the environment, and international environmental forums.

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community Labour Standards * Modelled on * Modelled on * No labour standards * Labour obligations are * The North American * The Twelfth Andean agreement. part of the core text of the Agreement on Labour Presidential Council, NAFTA there is a NAFTA there is a agreement. Cooperation which meeting in Lima in June side agreement on side agreement on * The Parties agreed to supplements the NAFTA 2000, set up the Advisory effectively enforce their agreement is designed to Council of Labour labour standards - labour standards, own labour laws. Both link the enforcement of Ministers, which has been The Canada -Costa which aims to parties reaffirm their labour standards to fair coordinating measures in obligations as members of trade. It aims to promote a five identified areas of Rica Agreement improve working the ILO. set of labour principles and priority: job promotion, on Labour conditions and * The agreement makes cooperation in the field of labour studies and training, clear that it is inappropriate labour issues as well as the social security, job health Cooperation. living standards in to reduce domestic worker effective enforcement of and safety, and labour * Under this agreement the both countries. protection to encourage labour laws. migration. parties shall maintain their trade or investment. * The agreement provides * Each country is own labour laws, but shall responsible for its own Cooperative activities to for a Commission for endeavour to cooperate in labour legislation, however promote workers’ rights Labour Cooperation pursuit of improved will be undertaken. comprising the three labour cooperation on labour working conditions and * Procedural guarantees in ministers and supported by living standards in each matters is promoted. the agreement will ensure a secretariat based in territory. that workers and employers Dallas. * Each country shall will have fair, equitable and monitor compliance or transparent access to labour suspected violations of courts/ tribunals. * labour laws through Monetary penalties for appropriate government breaching the agreement. action. * The countries agree to undertake joint training initiatives, working groups and seminars, joint research projects and provide reciprocal technical assistance where appropriate.

Disputes Settlement * Disputes arising for anti- * A Party may request in * The first stage of the * All core obligations of the * When general disputes * The Court of Justice of dumping measures, writing consultations with disputes settlement agreement, including the concerning the NAFTA are the Andean Community is emergency measures, the other Party regarding procedure is consultation environmental and labour not resolved through the jurisdictional arm of the consultations or sanitary any actual or proposed with the other party. provisions, are subject to consultation within a community. and phyto-sanitary measure or any other matter * If consultations cannot the dispute settlement specified period of time, the * When a dispute arises the measures can be settled that it considers might reach a mutually provisions. matter may be referred at General secretariat is either in the forum of the affect the operation of this satisfactory solution within Emphasis on promoting the request of either Party charged with the WTO or under this Agreement and the Parties 15 days the Administrative compliance through to a non-binding panel administrative investigation agreement. shall make every attempt to committee shall review the consultations and joint under Article 2008. Model (also known as the pre- * The first step under this arrive at a mutually charges and may request action plans. Rules of Procedure for litigation phase) to agreement is for parties to satisfactory resolution. technical reports with a * Includes monetary Chapter 20 Panels have determine whether parties request consultation and to * If the parties fail to view to reaching a mutually penalties to enforce labour been being developed by are responsible for non- make every attempt to reach resolve the dispute within satisfactory resolution, and environmental the Canadian, the United compliance. It is also

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a mutually satisfactory 30 days of delivery of a possibly through mediation. obligations. States and the Mexican charged with monitoring resolution quickly. request for consultation, or * If this procedure also fails * Dispute panel procedures Governments. Chapter 20 the Andean juridical system * If the consultations fail, such other period as they to reach a resolution within are to be open and also allows for scientific to ensure that it remains and unless the parties agree may agree, either party may 30 days an abitral tribunal transparent, with open review boards, which may consistent. to undergo good offices, request in writing a meeting will be set up. public hearings and public be consulted to assist the * Under the treaty creating conciliation or mediation, of the commission (the free * The findings of the release of legal panel in rendering its the Court of Justice of the an arbitral panel shall be trade commission consists arbitration are not able to be submissions. decision. Cartagena Agreement, the established. of cabinet level appealed and are binding. * The process begins with * Under chapter 19, court has jurisdiction over * The arbitral panel shall representatives of the consultations, aimed at regarding anti-dumping and actions of three kinds: release a final report of its Parties). reaching a mutually countervailing duties, a nullification, non- findings and * Unless it decides agreeable resolution. Where Party may request that an compliance and pre-trial recommendations, consultations fail, the amendment to the other interpretation. following which the party otherwise the dispute may be brought Party's AD or CVD statute * The treaty creating the complained against shall commission shall before the Free Trade be referred to a panel for a court of justice also have 30 days within which Commission, and where declaratory opinion on establishes the supra- to notify the other party of meet within 10 there recommendations do whether the amendment is national characteristics of its intentions with respect to days of receiving not lead to an amicable consistent with the GATT the Community allowing, implementing the resolution of the dispute an and the NAFTA. The among other things, recommendations of the the request and arbitration panel (6 NAFTA Article 1904 Panel decisions made by the panel. If it is impracticable shall endeavour to members) may be Rules are designed to result Council of Foreign to comply immediately with established. in final panel decisions Ministers to become the findings, the party shall settle the dispute * On receipt of the within 315 days of the date operative or enter into force have a reasonable period of promptly. on which a request for a without prior-ratification time within which to final report of a panel is made. As a from national parliaments. comply before concessions * If the matter has panel, the Parties safeguard against * The Cochabamba will be suspended. still not been impropriety or gross-panel protocol signed in 1996 * The reasonable period of shall agree on the error that could threaten the gives the court the time shall be either resolved with 30 resolution of the integrity of the process, competence to settle, via mutually agreed upon days a Party may Article 1904 also provides arbitration, any disputes within 45 days, or dispute, which for an "extraordinary which may arise as a result determined through request in writing normally shall challenge procedure". In of the interpretation or arbitration within 90 days. the establishment defined circumstances, a application of contracts, conform with the participating Party can accords or agreements of an arbitral determinations appeal a panel's decision to signed between bodies and panel comprising a three-member committee institutions of the Andean and of judges or former judges. integration system. 5 independent recommendations * A NAFTA investor who * The court and the general experts. alleges that a host secretariat may also settle of the panel government has breached via arbitration any disputes * On receipt of the its investment obligations citizens may submit with final report of a under chapter 11 of the regards to the application or NAFTA agreement has interpretation of private panel, the Parties recourse to one of the contracts regulated by the shall agree on the following arbitral measures: Andean juridical system. the World Bank’s resolution of the International Centre for dispute, which Settlement of Investment Disputes (ICSID), the normally shall

Canada-Costa Chile - Canada Chile- Mexico Chile -US NAFTA ANDEAN Rica Community normally shall ICSID’s additional facility rules, or the United Nations conform with the Commission for determinations International Trade law (UNCITRAL) rules. and Alternatively the investor recommendations may choose the remedies available in the host of the panel country’s domestic courts. * An important feature of the Chapter 11 arbitral provisions is the enforceability in domestic courts of final awards by arbitration tribunals.

Chile -US Chile - Canada Chile - Mexico Chile - Korea Chile -Mercosur Chile-EU Mexico-EU

Tariffs * Negative list approach * Negative list approach * Negative list approach * Negative list approach * Negative list * Negative list approach * Negative list approach * All tariffs will be *Aiming for 0% tariffs * Each party will grant * National treatment *10 year transition * “Substantially phased out within 12 *Scheduled reductions national treatment to the The schedule for tariff approach but period over which time years. for each country, 2003 goods of the other party, elimination establishes there are no 97.1% of trade will be all trade” to be * More than 85% or being end date for most except for those goods that 77.5% of Chilean fully liberalised. liberalised in trade in consumer and goods. in Annex 3-03. Market exports and 66.7% of permanent * End result should see industrial products * There was one access provisions are Korean exports will face exceptions to 100% full liberalisation accordance with becomes tariff free acceleration in 1999 included. immediate and complete of industrial trade, GATT article immediately. “Most” making certain goods * All goods shall liberalization. At the the 80.9% full liberalisation trade will be tariff free duty free by January 1st become duty free from end of the fifth year liberalisation of agricultural trade and XXIV by 2010, within 4 years. 2001. the date of entry into 88.4% of Chilean 90.8% full liberalisation schedules. meaning: * Tariffs on both US * Few items excluded force of this treaty – exports and 83.7% of of fisheries trade. - 100% of trade in and Chilean wine to be from tariff except for goods Korean exports will be * National and MFN * Industrial goods being equalised at the existing liberalization, Canada provided for in annex 3- duty free. treatment applies. imported into the EU industrial goods (by 1- lower US levels, and maintains 96 items out 04(3) and 3-04(4) * Chile maintains 5 * 5 different lists: from Chile will be 1-2003 on the EU side, by 1-1-2007 on then eliminated. of this process, while * Liberalisation should different lists. The first general, sensitive , divided into 2 Mexico's side * Chile’s ‘luxury tax’ on Chile does the same for be completed within 6 list of products are to be special sensitive, highly categories, duties on the - for agricultural automobiles will be 75 items. (Total items years of the agreement liberalised immediately, sensitive and a special first category will be phased out over 4 years. for Canada: 8100; for being signed i.e. 2004 and the other 4 at 5,7,10 dispensation for Chilean eliminated immediately, products, by 2010, 80% of EU imports and 42% * Chile agrees to Chile: 6933) and 13 yrs respectively. wheat and wheat flour the duties on the second * Moreover, at of Mexico's imports eliminate immediately * List of exceptions Korea maintains 6 which has 18 years will be eliminated -for fisheries products, the 50% surcharge on mostly involves any time, the different lists. The first before tariffs must be progressively by 2006. imports of used goods agricultural goods. to be liberalised removed. * Industrial imports by 2010 100% of EU signatory imports and 89% of Milling wheat, sugar immediately and the * Sugar tariff reductions from the EU into Chile country that so Mexico's imports. and beef are exempted. other 5 at 5,7,9,10 and begin in 2007 and are divided into 3 * The EU will not Canada retains its over- desires may 16 yrs. Each country should be completed in categories, with the first quota tariffs for dairy, also has a list of 2016. eliminating duties impose any MFN or GSP customs duties poultry and egg transfer a sensitive products which * Goods in Annex 1 to immediately, the second expressed in ad valorem products, Chile retains product are excluded from the the agreement were progressively by 2008, terms, but may impose its tariffs on these tariff reduction already accorded and the third by 2010. goods. appearing on its program. preferential treatment * There is extensive the MFN or GSP duties expressed in specific * Korea has included 21 under ALADI, and will liberalisation of own list in terms to imports from goods on the exception be freely traded by fisheries products. Annex 1 to the Mexico of yoghurt and list (rice being the most 2004. * Acoording to the other buttermilk, tariff reduction important one), while * Goods in Annex 2 to “Evolution Clause”, Chile has included 54. the agreement include during the third year curdled milk and cream, program, margarine, certain sugar Exports of grapes from meat, poultry, after the entry into force confectionary, malt established in Chile have been given chocolate, furs, cured of the agreement, the extract and prepared 10 years until hides, glass, iron and parties will examine Article 3(b); or liberalisation. Fridges steel, and will have 0% product by product, the foods obtained by washing machines and tariffs by 2006. possibility of deepening swelling or roasting a product cereals. retreaded tyres are on * Gods in Annex 3 tariff concessions for * Mexico shall allow appearing on its Chiles exclusion list, mostly include shoes agricultural and importation of sugar own list in while some textiles, and textiles. These will processed agricultural some steel and new also have 0% tariffs by goods. confectionary with a Annex 3 to its preferential customs tyres have 13 years with 2006, but the tariff duty no greater than own list in 5 years grace. reductions were not

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own list in 5 years grace. reductions were not 16% ad valorem, plus * After 7 years 97% of begun until January 0.39586 US$/kg of Annex 1 or to the value of Chilean 2000. content of sugar. It shall the tariff exports to Korea will * Products such as beef, also allow imports of enter the market duty rice, certain fruits, sorbitol in aqueous reduction free. cooking oils, wooden solution with a program * If the parties furniture, wine and preferential customs special use vehicles duty no greater than described in involved found in Annex 6 are 50% of MFN customs Article 3(b). reduces MFN subject to a tariff duty. reduction program * As of January tariffs for goods beginning in 2006 and 1st 1996 included in the ending with 0% tariffs by 2011. Sugar tariff automobiles agreement, it reductions don’t begin originating in will have to until January 2007, and will not be complete either of the make until 2016. member consultations countries are with the other exempt from party in order to duties and non- consider tariff adjustments to restrictions. tariffs applied * Exempt goods to reciprocal include: trade. - Chile: Seafood (lobster, shrimp, prawn), dairy products, wheat, barley, sugar, oils (palm, sunflower, safflower, olive, sesame), tobacco, fuel oil, worn

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clothing and worn textile articles - Mexico: Seafood (lobster, shrimp, prawn), dairy products, wheat, barley, sugar, oils (palm, sunflower, safflower, olive, sesame), tobacco, fuel oil.

Agriculture * Agricultural products * List of exceptions to * Both parties share the * Many of the exempt * Agricultural goods * The EU has special *Agriculture will be still make up the bulk of tariff removals mostly goal of achieving the goods are agricultural. make up a large provisions for partially liberalised, but sensitive products, involves agricultural elimination of export proportion of those agriculture whereby many restrictions will however ¾ of US goods. subsidies for goods on the sensitive 33% of agr. Trade will still remain. agricultural products * The parties share the agricultural goods. In lists, however they also be liberalised upon *Mexican agriculture will enter Chile tariff goal of multilateral that sense, they will have a time schedule for entry into the will benefit with free within 4 years. elimination of export cooperate in order to liberalisation albeit agreement, a further preferential access for *Agricultural tariffs to subsidies for complete a WTO- longer. 55% in 2007, 12% in exports to the EU of be completely agricultural goods, consistent agreement * Agreement on 2010 and the remaining coffee, avocado, cut eliminated within 12 although they continue agriculture one of most 0.2% in 2012. flowers, fruits and years to be imposed by both comprehensive in the *Chile will extend juices, and honey. * Expected to create parties. region. similar preferential *The EU will gain improved market access * Dairy, poultry and egg * Chile’s most sensitive liberalisation to the EU preferential access for for US pork, beef, products are exempt goods are wheat, (18 resulting in 81.9% of beer, certain vegetables, soybeans, wheat, from Canada’s tariff years) tariffs being eliminated fruits and fruit juices, potatoes, pasta and elimination schedule. by 2012. liquors and spirits breakfast cereals etc. * For Chile, beef will be * It appears that the (vodka, cognac, certain subject to a tariff rate majority of chapter 4 whisky, gin), cut quota, starting at 4000 (‘Dairy produce; birds’ flowers, tomatoes, tonnes in 1998, and eggs; natural honey; pectic substances and increasing to 10000 edible products of tobacco. tonnes by 2001. Pork, animal origin, not * Overall only 62% of canola oil and elsewhere specified or bilateral trade in potassium chloride are included’) is not agriculture will be

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al so subject to tariff rate covered by the liberalised. Sugar, dairy, quotas, but without agreement. Some tariff beef an grains – some of substantial rate quotas are to be the major agricultural liberalisation. Poultry, introduced for cheese, commodities- have been dairy, preserved meats, natural honey is to be left out. some cereals are all liberalised within 7 * The EU will not either excluded, or on years, while ‘other impose any MFN or very long time animal products’ are GSP customs duties schedules. generally included. expressed in ad valorem * For EU imports tariff terms, but may impose rate quotas are to be the MFN or GSP duties used on many expressed in specific agricultural goods and terms to imports from certain fisheries goods, Mexico of yoghurt and within three different other buttermilk, categories, those for curdled milk and cream, which the quota will margarine, certain sugar increase by 10% a year, confectionary, malt those increasing by 5% extract and prepared and no increase. It foods obtained by seems that certain types swelling or roasting of cow, fowl, geese, cereals. ducks, and turkeys are * Mexico shall allow not included in the importation of sugar liberalisation. Ham, pig confectionary with a fat, bacons, common preferential customs wheat, rye and barley, duty no greater than most rice, flour, and 16% ad valorem, plus ‘other cereals’, malt, 0.39586 US$/kg of sugar beet, sugar cane content of sugar. It shall and most other forms of also allow imports of sugar are excluded. sorbitol in aqueous Tropical fruit and nuts, solution with a olive oil and crude oil preferential customs do not appear to be duty no greater than included either. 50% of MFN customs Flavoured or coloured duty. sugar syrups are * The EU’s imports of excluded. agricultural goods are * On the part of Chile, separated into categories dairy products are 1-5, whereby goods excluded, some tariff included in category one rate quotas will be are liberalised introduced for cheeses. immediately upon entry into the agreement, and goods in category 5 are subject to a liberalisation schedule

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which will be completed in 10 years. Certain products in category ‘O’ are not subject to liberalisation as they are protected by the community. These products include certain cheeses, Chios mastic (gum/resin), champagne, avariety of wines – particularly white wines and spirits made from distilled grape juice, Quantitative * Quotas are to be * No import or export * Quantitative * Korea - * Tariff rate quotas * EU will grant Restrictions eliminated. restrictions may be restrictions are imposed by the EU on preferential tariff rate imposed except in maintained on trade in maintains meat, cheese, sugar and quotas for certain accordance with GATT services. Both parties quotas on 24 some fruits. Chile agricultural products not article XI have listed these imposes tariff rate subject to general tariff restrictions in annex V. goods. quotas on olive oil and liberalisation (eggs, At least every two years * Chile can cheese. Preferential certain fresh flowers, the parties will make an treatment will be peas, some melons, effort to negotiate the keep or apply extended bilaterally. strawberries, certain liberalization of the measures * Tariff rate quotas will prepared/preserved fish restrictions included in be introduced on certain including tuna, cane this annex. related to the fisheries products molasses, asparagus, import of originating in Chile, some tropical fruit and managed on a first- nuts and fruit juice) second-hand come, first served basis. *Mexico may restrict vehicles. the granting of import/export licenses for certain oils, petroleum and bitumen products, rubber extended oils and ‘other hydrocarbon mixtures’ * Mexico has made some tariff rate quota concessions on certain preserved fish,. *Mexico may maintain prohibitions or restrictions on imports on automotive goods until 31 December 2003.

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Other NTBs * Chile will eliminate its * Chile is allowed to * Mexico is allowed to * No import or export * Chile may maintain its * Chile may maintain a - price band system. keep its Band Price maintain, until 2004, the restrictions may be price band system, but price band system in * Meat and dairy System for some dispositions of the imposed, except in will not add any new accordance with its inspection issues, and products, however new ‘Decreto para el accordance with GATT products. obligations under the meat grading processes products may not be Fomento y article XI * Titles XII and XIV to WTO, but no new addressed. added to the list and the Modernizacion de la the agreement obligate products may be added * USA may impose method by which the Industria Automotriz’ the signatories to *agreement grants restrictions to exports of price bands are (implemented 1989 ans execute a protocol on reciprocal and exclusive trunks from all-species calculated may not be modified in 1995) physical integration in protection to and trade of goods modified in a in a which is incompatible conjunction with the geographical indications subject to the Merchant manner that makes trade with this agreement. signing of the (like Champagne), Marine Act of 1920 and more restrictive. * Chile and Mexico agreement, with the goal traditional expressions the Passenger Vessel * Neither Party may have the faculty to of establishing a (like "Reserva") and Act. adopt or maintain any restrict the imports of seamless bi-oceanic other protected names * Chile may impose measure requiring that second-hand vehicles corridor from the (for example, Grappa) restrictions on imports distilled spirits imported * Mexico can limit Atlantic to the Pacific. * National treatment on of used vehicles. from the territory of the export and import * Prohibits the internal taxation. other Party for bottling licenses for trading implementation of new * Imported products be blended with any some fuels. trade restrictions and must be given treatment distilled spirits of the * Until January 1st, commits the parties to no less favourable then Party. 2004, Mexico is allowed identify and dismantle domestic producers in * Import and export to apply restrictions to nontariff barriers terms of internal sale, restrictions are the importation of (NTBs) offering for sale, prohibited, except in second-hand durable purchase, transportation accordance with GATT goods included in or distribution. 1994.rights and chapters HS 84, 85, 87 obligations. such as office machines, * Neither party may vehicles, cranes and maintain customs user trailers. fees for originating goods. * Neither party may adopt or maintain export taxes (except where the duty is also applied to those goods for domestic consumption). * Other export measures may be adopted or maintained if it is in accordance with GATT so long as the restriction does not reduce the total proportion of the total export shipments of that specific good (compared to that proportion prevailing in the most

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recent 36 month period for which data is available). The party may not impose a higher price on the export of the good than it charges domestically by means of licenses, fees, taxation or minimum price requirements.

Anti -dumping * In accordance with * The CCFTA contains * In accordance with * In accordance with * In accordance with * In accordance with * In accordance with WTO obligations. a mutual exemption WTO obligations WTO obligations WTO obligations WTO obligations WTO obligations from the application of anti-dumping laws. For each good, the exemption takes effect as of the final elimination of import duties in both Parties for that good at the tariff subheading level, or on January 1, 2003.

Countervailing * In accordance with * A committee on anti- * In accordance with * In accordance with * In accordance with * In accordance with * In accordance with Duties WTO obligations. dumping and WTO obligations WTO obligations. WTO obligations WTO obligations. WTO obligations. countervailing duty measures has been established to consult with a view to defining subsidy disciplines. It will also work in multilateral fora such as the WTO and NAFTA to try and minimise the impediments to trade created by trade remedies.

Subsidies * Export subsidies are * Effective January 1, * The parties will - * Export incentives will * Subsidies may be * Subsidies may be eliminated on US-Chile 2003, neither Party shall cooperate within the be subject to WTO imposed as per the imposed as per the farm trade, however the introduce or maintain WTO framework to obligations. WTO agreements. WTO agreements. right to respond is any export subsidy on work towards the * If one of the * Subsidies may also be preserved, ie. If a third any agricultural goods multilateral elimination signatories considers used as countervailing country threatens to originating in, or of export subsidies on that the other party is duties under the WTO displace US exports in shipped from, its agriculture. From importing from third agreement on anti- Chile subsidies can be territory that are January 1st 2003 no markets in conditions of dumping. imposed. exported directly or export subsidies may be dumping or subsidies, * Subsidy payments

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indirectly to the territory adopted or maintained this signatory can may be made to of the other Party. on bilateral trade. request consultations domestic producers, * If an importing party regarding the conditions including payments to requests an export in which these products domestic producers subsidy be maintained are being introduced. from the proceeds of on a particular good, the internal taxes, and exporting party will be subsidies effected allowed to maintain or through governmental adopt such a subsidy. purchases of domestic * Export subsidies may goods. not be applied to automotive goods. Safeguards * A special safeguard * A chapter on * If as a result * In accordance with * The safeguard * The national security * When an import into mechanism will protect Emergency Action WTO obligations and measures regime came clause allows the one of the parties has US farmers and (safeguard measures) of the tariff GATT article XIX. into effect in September countries to protect increased by such an ranchers from import permits the imposition reductions * There is an 1999. national security secrets, amount as to cause or surges from Chile. of border controls to agricultural safeguard * Safeguards consist on: whilst the article on threaten to cause * In some situations, provide relief from implemented mechanism, whereby if a) suspending the Balance of Payment ‘serious injury’ to the safeguards measures can increases and import through this one of the parties increase of preferences difficulties allows a domestic industry of be applied to surges of imports from imports agricultural as scheduled in the country to impose trade like or directly agricultural and textile the other party that are treaty, a party is goods from the other agreement or b) restrictions in the face competitive products in goods (art. 3.18 and causing, or threaten to receiving party in such quantities reducing or suspending of external financial the importing party, or 3.19). cause ‘serious injury’ to as to cause or threaten the agreed preference difficulties. ‘serious disturbances’ in * Safeguards measures domestic producers. quantities of to cause serious injury margin * Artic le 73 any sector of the may be applied only * Quantitative imports that or disturbance in the * These safeguards economy, or difficulties during transition period restrictions may be markets, that party may measures only can be ‘Emergency which could bring about if, as result of the imposed on non- cause or suspend further applied until the day clause for serious deterioration in reduction or elimination originating textile goods threaten to reductions on tariffs of before the product gets a the economic situation of tariffs agreed, a imported under a tariff the products concerned 100% preference. After agricultural and of a region of the product is imported preference level set out cause ‘serious or increase the tariff to a that, a party can impose processed importing party from the other party in in Appendix 5.1, where damage’ to the level that does not safeguards measures safeguard measures may quantities that harms or the absolute quantity exceed the lesser of the only with the consent of agricultural be taken for a period not threaten to harm local being imported has economy of the MFN rate or the basic the other party. products’ exceeding one year. producers. These increased relative to importing party, customs duty to which * The maximum * In exceptional measures can be applied domestic production so consecutive reductions implementation period allows for circumstances the for a period no longer as to cause ‘serious the ‘minimum are to be applied, for any safeguard “appropriate measures may remain than 3 years (art 8.1 and injury or actual threat necessary’ pursuant to its Tariff measure is 2 years and for up to three years. 8,2). thereof’. Consultations Elimination Schedule. can be renewed just measures” to be * Safeguard measures shall take place and if safeguard once for 1 year taken where a should normally consist no mutually satisfactory measures may of a suspension in the resolution can be product of one reduction of customs reached within 90 days, be taken. party is being duty, or an increase in annual quantitative * A safeguard the duty on that product. restrictions, subject to imported into * The party intending to some conditions, may measure may the other party take safeguard measures be applied. only be applied shall offer the other in such party compensation in a non- quantities as to normally consisting of concessions having

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discriminatory quantities as to concessions having substantially equivalent manner. cause or trade effects. * The party threaten to * Should the offer of compensation not be taking the cause ‘serious agreeable to the other safeguard injury’. party the parties may decide through actions must *‘Serious consultations on notify the other injury’ will be alternative compensation. If an parties before understood to agreement cannot be doing so. mean “a reached, the party against which safeguard * Safeguard measures significant may include the measures are being suspension of future overall applied may take compensatory tariff tariff reductions, or an impairment in action. increase in tariff rates * Where compliance up to the lesser of the the position of country’s MFN rate, or with chapter 1 or article the producers as 12 leads to a critical the MFN rate the day a whole of the shortage of foodstuffs, a before this agreement shortage of essential was signed. like or directly * Safeguard measures domestic materials during a time when may only be taken competitive price of those materials during the transition products is held below world period for tariff reductions and may not operating in a price as part of a government stabilisation be maintained for more party. *Before plan, or re-export to a than 1 year. third party of a product * A safeguard measure safeguard action may not be applied against which the can be taken the exporting party more than once to a issue must be maintains export single good during the restrictions, and this transition phase. br ought before gives rise to major

the Association difficulties for the exporting party, export Committee for restrictions or export further customs duties may be imposed. examination. If * There is a joint either party committee to oversee the application of requests safeguard measures. consultations may be entered

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into and if no mutually acceptable resolution is found within 30 days the importing country may suspend further reductions of import dutie s, or increase the import duties to the lesser of the MFN tariff rate, or the basic customs duty (referred to in article 60-03).

Rules of Origin * Rules of origin are * Based * A good can qualify as * Goods will mainly be * Goods will mainly be * Goods can be * Goods may be specific to individual originating if it satisfies subject to Change in subject to Change in considered as considered as products (ie. Specific principally on the specific rules of Customs Heading Customs Heading originating if they are originating if they are process), but are changes in tariff origin requirements of evaluation in order to evaluation in order to wholly obtained in the either wholly obtained designed to be easier to change of customs qualify as originating, qualify as originating. territory of a party, or if in the territory of one of apply than NAFTA classification heading or regional however in some * Certain products such they contain non- the parties, or if they ones, except in the case under the content requirements. situations specific as vegetable oils, originating materials but have undergone of some textile goods. * In most cases the process, or regional textiles, and kitchen undergo sufficient ‘sufficient working or * Some rules of origin Harmonized regional content content requirement appliances are required transformation as set out processing’ as set out in which are reportedly System requirement is 50% methods of evaluation to not only undergo a in appendices II and the appendices to Annex easier to apply than where the value of may be used. change in tariff II(a) III, using the NAFTA ones relate to * For certain transaction method is * The rules of origin classification heading, * Assembly, washing, harmonised system. blended juices, fruit manufactured used, or alternatively allow for bilateral but also comply with a packing, simple * The rules of origin cocktails, leather shoes, 40% when the method accumulation within the 60% regional content painting, ironing of allow for bilateral bicycles, white ware, products, the of net cost evaluation is territories of the parties. requirement. textiles, husking, accumulation within the cotton and wool rules of original used. * bleaching, polishing, territories of the parties. garment. * The rules of origin peeling, stoning, have been made allow for bilateral Petrochemicals polishing etc are

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* Certain products may have been made allow for bilateral Petrochemicals polishing etc are qualify as originating if accumulation within the considered insufficient they meet the regional less restrictive territories of the parties. and chemical to confer status of value content than those * A certificate of origin products must originating goods. requirement which is is required to prove that * The rules of origin usually between 35 and under the rules of origin undergo a allow for bilateral 55% depending on the NAFTA. This requirements are met. molecular accumulation within the method of calculation. This certificate is valid territories of the parties. allows for two years from the transformation manufacturers moment it is signed. producing a to benefit from substantial the preferential transformation terms of access and creating a of the CCFTA new chemical without identity requiring major * Packaging, filtering and dilution are changes to their explicitly excluded from current sourcing free trade treatment. * No more than 40 of materials and percent of the final parts. product's F.O.B. price can reflect the C.I.F * Goods can value of non-regional qualify as inputs. It should be pointed out, however, originating if that there are some they comply products for which the regional content with specific requirement is 50% or change in tariff 55% until at least January 1, 1999. classification requirements, or if they meet regional value content requirements as set out in chapter D article 2. To

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qualify as originating the regional value content must be no less than 55% under the net cost method (January 2000 onwards).

Standards and * Annex 3.17 * Technical barriers to * Technical barriers to * Standards and norms * The parties are * Cooperation in the * The parties shall Conformance establishes trade will be governed trade will be governed are to implemented on working towards the field of standards and intensify bilateral commitments from each by each country’s rights by each country’s rights the principles of the harmonisation of norms conformance shall take cooperation in this field party to recognize the under the WTO. under the WTO. WTO agreement on and service manuals for place within the and a special committee other party’s grading standards and SPS provisions. framework of the WTO on Standards and programs for beef. conformance, that is * The parties will agreement on technical Technical Regulations standards must be based adhere to the WTO barriers to trade (TBT). shall provide a forum on scientific or technical agreement on Technical * The countries shall for discussion and criteria. Barriers to Trade. cooperate to increase enhance cooperation on * The parties will work * The mutual understanding the development, to make their standards- and recognition of application and related measures Administrative standards. enforcement of compatible Comisión will * Cooperation will seek standards. * There is a committee to promote * The parties have on standards-related develop compatibility of reaffirmed their rights measures set up to regulations for technical regulations on under the WTO monitor, implement, the basis of European Technical Barriers to enforce and administer the notification and international Trade (TBT) Agreement the chapter. of new standards as well as * The agreement technical assistance to essentially addresses technical create a network of cooperative issues, with standards and conformity assessment their respective bodies. standards, technical rules and their * The parties are regulations and subsequent working towards conformity assessment adopting common views procedures based on harmonization. on transparency, international standards. * Each party agrees with enforcement, necessity * The parties will regard to the importance and international consider an MRA for given to the regulations with respect licensing and establishment of to standards. certification of service coordinated criteria for * In order to achieve providers. harmonizing technical this cooperation a standards and rules. Special Committee on

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standards and rules. Special Committee on They agree to make an Technical regulation, effort to identify Standards and productive areas in Conformity Assessment which harmonizing has been established, control and inspection which shall meet at least procedures and once a year. evaluation of conformance is possible. For this task, the parties will take into account the progress made in this area within MERCOSUR. Other Technical * Chapter 7 * Technical barriers to * Technical barriers to * Technical barriers to * The signatory parties * Technical barriers to * Technical barriers to Barriers to Trade trade will be governed trade will be governed trade will be governed will aim to stimulate the trade will be governed trade will be governed (TBT) aims to by each country’s rights by each country’s rights by each country’s rights development of joint by each country’s rights by each country’s rights under the WTO under the WTO. under the WTO. operations to aid under the WTO. under the WTO. increase and cooperation in the area facilitate trade of science and technology. The through the cooperation will be improvement based on knowledge sharing, information of the exchange on implementatio technology, patents and n of the TBT licencing, and the necessary interchange of agreement, the goods, services and elimination of equipment to this effect. The parties will also unnecessary organise conferences and symposiums on the TBT and the subject of knowledge enhancement sharing and of bilateral technological advancement. cooperation * The parties agree to establish a Committee on TBT, which will be in charge of addressing any issue that a party raises related to the development, adoption, application or enforcement of standards, technical

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regulations or conformity assessment procedures.

Quarantine and * The parties agree to * No specific provisions * Each party * The parties agree to * The members agree * The parties agree to * The parties reaffirm Sanitary and establish a Committee for sanitatary and abide by WTO that SPS measures implement the WTO their rights under the Phytosanitary on Sanitary and phytosanitary measures will use principles for SPS should not constitute an agreement on sanitary WTO agreement on the (SPS) Phytosanitary Matters. in agriculture. The internationally measures, that is unjustified barrier to and phytosanitary application of sanitary Its objectives will be to parties agree to be standards must be based trade, and to this end measures to safeguard and phytosanitary enhance the governed by their recognised on scientific principles. they will commit to public, animal and plant measures. implementation of the obligations under the norms, * Each party will base harmonisation of SPS health. * A Special Committee SPS agreement, protect WTO. their measures on measures within the * Annex IV contains the on Sanitary and human, animal and plant directives or international standards framework of the WTO ‘Agreement on Sanitary Phytosanitary measures life and health, enhance recommendatio and principles, and on agreement. and Phytosanitary has been established to consultation and appropriate risk Measures Applicable to provide a forum in cooperation in SPS ns in order to assessments. Trade in Animals and which to discuss matters and facilitate harmonise these * Each party shall Animal Products , problems specifically trade between the accept the SPS Plants, Plant Products relating to sanitary or parties (art 6.3) standards with measures of the other and Other Goods and phytosanitary measures, the other party as equivalent to Animal Welfare’ which to facilitate information their own, as long as the aims to facilitate trade exchange and to parties. Both exporting party can in animals, animal consider as necessary parties will be demonstrate objectively products, plants and the assessment of that its measures plant products. equivalence. able to use SPS achieve the other party’s * The objectives of the measures only standards of protection. agreement are to ensure * A special committee transparency, improve when it is on SPS measures is communication and necessary in created. cooperation between the parties on sanitary and order to protect phytosanitary measures. human, animal * There will be technical assistance for or vegetable life the strengthening of or health SPS systems, with a * Where identical view towards the promotion of conditions exist sanitary equivalence and mutual or phyto-sanitary recognition measures may not be used to justify arrangements. discrimination against the goods of a party. * Sanitary and phyto-

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sanitary measures must be based on scientific principles and will be based on appropriate risk evaluation. * Without reducing the appropriate levels of protection, the Parties will accept to the greatest possible degree the equivalence of their respective sanitary and phyto-sanitary measures.

Customs * Taking into account * The agreement * The countries agree to * The countries aim to * Customs valuation * The parties agree to * The parties have Procedures international standards, contains a chapter on cooperate in the field of facilitate trade through will be subject to WTO cooperate on customs agreed to cooperate with each Party’s customs customs procedures and customs procedures to simplification of principle and procedures related issues including respect to customs authority shall states that the parties provide mutual customs procedures and although the signatories data collection, customs matters. endeavour to automise shall cooperate in the assistance, share by means of agree not to make use of valuation and rules of * Cooperation may customs operations. enforcement of their information and work cooperation. the options and reserves origin related matters. involve things such as * Customs laws and respective customs laws towards the * The parties will in Article 20 and * The countries have information sharing, regulations must be and regulations. harmonisation of exchange information to paragraphs 1 and 2 of also agreed to cooperate technical assistance, published on the * The parties may agree customs documentation. improve transparency, Annex III in GATT. wherever possible on simplification of internet to ensure full to cooperate in the * The parties are committed to the Nothing more specific legislative and formalities etc transparency and collection of statistics automisation of about customs operational issues, * The parties may also fairness. and harmonisation of will also do procedures, will as far procedures. technical assistance, look at introducing the * The parties agree to documentation. whatever as possible apply computerisation of single Administrative share information to * A customs sub- international standards customs procedures and Document (SAD) –EU combat illegal shipment committee has been possible to and rules to tariff as far as possible model. of goods. established to prevent the classification and will establish common * The parties also agree investigate further apply the customs positions in to provide mutual harmonisation of trafficking of valuation agreement of international administrative procedures and any illicit the WTO. organisations in the assistance. other customs related field of customs. * There will be a measures. substances. * The parties have Special Committee on established a Special Customs Cooperation Committee on Customs which will meet at least

Cooperation and Rules once a year to discuss of Origin to monitor the matters related to implementation and customs cooperation. administration of the agreement and to provide a forum for consultation and discussion.

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Government * Core principles of * No chapter for * Similar to Canada- * Core principles of * No government * Each country shall * National treatment is Procurement non-discrimination and government Chile. No particular non-discrimination and procurement chapter. extend national to be extended national treatment. procurement, however chapter on procurement, national treatment. treatment and be non- reciprocally for those * Transparency to be exceptions are allowed but reservations within * The objective of the discriminatory when goods covered by the increased through for in the investments the investment chapter government awarding government agreement. The advanced public notice chapter whereby state say that state enterprises procurement chapter is procurement contracts, principle of non- on sales. enterprises are exempt are exempt from certain to achieve the real and ie no preference is given discrimination also * The agreement covers from particular requirements (national reciprocal opening of to domestic suppliers. applies. 13 regional provisions (national treatment, MFN government * The parties shall * Each party maintains a governments, 11 ports treatment, MFN treatment, senior procurement markets ensure the effective and list of entities covered and airports and more treatment and the senior managem ent and boards and ensure reciprocal opening of by the agreement, while than 350 municipalities management and boards of directors transparency. their government those goods and in Chile. of directors article). requirements and certain * The agreement gives procurement markets, services which the * Provisions ensure that Certain performance performance the exporters and except for broadcasting, government bribery in government requirements are not requirements etc) producers of one party contracts for arbitration procurement chapter procurement is prohibited for non-discriminatory and conciliation, applies to are listed in recognised as a criminal government access to opportunities employment contracts, Annexes VII, VIII and offense under both procurement purposes. to tender for public financial services and IX. Chilean and US laws. procurement contracts. research and * Thresholds for * Agreed monetary * Each country has development services. Mexico, applicable at thresholds (for central listed the entities which * Transparency is the Federal government level government) are will be subject to the ensured by requiring level, are US$100,000 US$56,190 for goods agreement. each party to publish for goods and services and services and * The threshold (at promptly any laws, and US$6,500,000 for US$6,481,000 for central government regulations, judicial construction services. construction services. level) for services and decisions or For the EU these supplies is SDR50,000 administrative rulings thresholds are and for construction on the topic of US$130,000 and services SDR5,000,000. procurement. US$5,000,000 respectively.

Services * Negative list approach * Negative list approach * Negative list * Negative list approach * The agreement * GATS approach. * The list of obligations * The chapter covers * Each party shall * MFN treatment and contains provisions on * National treatment is held at standstill both cross-border provide the service approach national treatment are trade in services in title shall be extended to all pending future GATS services and the right to provider of the other * MFN extended. XIII. Trade in services services contained in negotiations. invest and establish party the better of either * Market access and must be accordance each country’s schedule. * MFN and national local services presence. national treatment or treatment and right of establishment is with the GATS * The chapter for treatment apply. * There are ‘strong and MFN. national guaranteed, local agreement, and the liberalising trade in * No emergency detailed’ disciplines on * Market access presence must not be parties agree to work services applies to all safeguard provisions are regulatory transparency provisions included. treatment apply. required. towards defining aspects services except audio- included. Subsidy which requires * There are no The parties will * The parties shall of a program for the visual services, national disciplines are not regulatory authorities to emergency safeguards periodically make an liberalisation of trade in maritime services and covered by the transparent or disciplines on extend the effort, but in any event services. air transport services. agreement. administrative subsidies. better of the two at least every two years, * Some International maritime * Government procedures, conduct * Government to negotiate the removal services, procurement is covered consultations before procurement is also to the other or liberalization of the headway has * Telecommunications in a separate chapter. issuing new regulations, exempt. parties. quantitative restrictions been made into and financial services * The ‘right of non-

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provide advance notice * Neither Party may parties. included in Annex III. been made into each have their own establishment’ is not and comment periods require local presence, * The services chapter. included. before issuing new ‘right of non * Each party liberalisation does not the * Under the chapter on * Financial services rules, and publish establishment’ also maintains a list apply to cross-border liberalisation of services each party shall liberalisation will take regulations. applies. trade in financial encourage the relevant place with commercial * The financial services * Investment in services of services in services, air transport audio-visual bodies in their presence allowed and section contains is covered in a separate Annex II which services and services services, an area respective territories to MFN and National obligations of non- chapter. provided in the exercise develop mutually treatment extended discrimination, MFN * Financial services and are exempted of governmental usually left out acceptable standards reciprocally. Limitations treatment and additional air services are excluded from MFN, authority. of FTAs. and licensing criteria on the total value of market access from the agreement. * With respect to with respect to financial service obligations (not national * Some quantitative national professional services the certification of transactions, total treatment). restrictions remain but treatment and parties are to encourage professional service number of service * US banks and negotiations shall the relevant bodies in providers. These operations, number of securities firms may continue bi-annually to local presence their territories to standards and criteria natural persons establish branches and remove these requirements. develop mutually may developed with employed or subsidiaries and may restrictions. acceptable standards for regards to education, participation of foreign invest in local firms * Licensing and * Local licensing and experience, capital are not allowed. without restriction, certification must be presence must certification of service examinations, conduct * Cross border except in a few based on objective and providers. and ethics, professional provision of financial circumstances. transparent criteria and not be required. * The agreement will be development, local services is allowed and * All insurance sectors must not constitute a * Each party reviewed one year knowledge and key personnel must not are opened to US firms disguised barrier to following consumer protection. be required to be of a for the purpose of trade. has listed in implementation. particular nationality. establishing subsidiaries * As in NAFTA, Annex V any * There is regulatory and joint ventures, Chile Canada has excluded carve-out, but has committed to phase cultural industries from quantitative regulations must be in insurance branching the services agreement. restrictions transparent and rights. Likewise there is a effective. broad carve out for which they * Specific exceptions social services. maintain at the apply with respect to * IN June 2001 a public retirement plans, Memorandum of federal or state and central banks or Understanding was level. monetary authorities. signed between the * Services trade will be Chilean College of * Financial liberalised in all sectors Engineers and the services were within 10 years, with Canadian Council of the exception of audio- Professional Engineers. originally visual, maritime and air excluded but transport services. * The parties agree to the countries take steps towards agreed to being entering into negotiations for mutual negotiations for recognition agreements their inclusion within 3 years. These agreements will be no later than regarding qualifications, th

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June 30th, 1999. licences and other requirements necessary * Some for service providers of headway has one party to comply with licensing, been made in operation and the certification requirements in the liberalisation of other country . audio-visual * With respect to maritime services each services, a big country will continue to step forward provide the other party with unrestricted, non- from many discriminatory access to other FTAs. the international maritime market, and * There is a chapter on will provide national aerial transport, but in treatment with regards general air transport is not subject to services to access to ports, infrastructure and liberalisation. There is a auxiliary services of treaty signed in 1997 ports as well as related between the countries governing it. There is a customs facilities and user charges. committee on air Commercial presence transportation set up to shall be allowed. review air transport regulation and other issues. * In Annex II, ‘reservations relating to future measures’ Chile and Mexico reserve some rights in service sectors. Chile reserves rights in communications, education, government finance, social services and construction. Mexico reserves rights in communications, social services, and energy. * There is also a list of services reserved by the Mexican state, in which

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investment of private capital is not allowed under Mexican law. If the law is changed to allow private investment, the Mexican government still reserves the right to impose exceptions. Labour Mobility * The agreement * Chapter K * The chapter * Temporary entry for * No chapter on the * Chile and the EU have * No chapter on the contains provisions for business person shall be temporary entry of agreed to cooperate in temporary entry of entry into either country provides for the on temporary granted under the business people. order to prevent illegal business people. for business visitors, temporary entry entrance of categories of ‘business immigration such that a traders and investors visitors’, ‘investors and member country will etc. of business business people traders’ and ‘intra- readmit nationals * The US will grant a people in their states that each company transferees’. * residing illegally in the certain number of Where entry is refused other party’s territory. provisional FTA visas capacities as party will the reason must be sent each year for this service authorise the in writing to the purpose, but reserves business person in the right to amend providers or temporary question, and the other immigration laws. investors. entrance of party must be promptly * US professionals will notified of the reason be able to enter Chile * When business people for refusal. without a numerical temporary entry of the other limit. is refused the party so long as Party must they fulfil the inform in applicable writing the criteria (with business person relation to of the reason for security, the refusal, as nationality and well as public health) notifying the * Temporary business entrants are divided into other Party 4 categories. Business promptly of the visitors, Investors, intra- company transfers and reason for professionals. There are refusal. specific requirements for each category, with * Fees for the minimum qualifications processing of for professionals specified.

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applications for specified. * Numerical limits are temporary entry not imposed. should be * There is a committee set up Temporary Entry limited to the which will effectively cost of the administer and apply the chapter. service provided. Investment * National treatment * National treatment * National * National and MFN * Investment will be * The parties shall allow * Restrictions on and MFN treatment and MFN treatment treatment apply covered by a series of free movement of payments related to apply. apply treatment and * Investment in bilateral agreements capital relating to direct investment shall be * Neither party may * Neither party may MFN treatment financial services is not between the countries of investment in progressively eliminated impose performance impose performance covered by the Mercosur and Chile. accordance with the and no new restrictions requirements on requirements on must both be agreement, but will be * In order to stimulate laws of the host country introduced. investors of a Party or investors of a Party or extended reconsidered for reciprocal investments as well as the * Where investment non-Party in its territory non-Party in its territory inclusion in 4 years. the parties will work liquidation and payments between the * No party may require * No party may require reciprocally. * Neither party towards implementing repatriation of this parties threaten to cause that an enterprise of that that an enterprise of that * Specific double taxation capital as well as serious difficulties for party appoint to senior party appoint to senior may impose or agreements. profits. Payments and the operation of management positions management positions performance enforce those transfers of the current monetary or exchange individuals of a individuals of a requirements account will be freely rate policy the party particular nationality. particular nationality. performance allowed in accordance may take safeguard * Transfers and * Transfers and are prohibited. requirements with the IMF measures for a period remittances must be remittances must be * No party may agreements. not longer than six allowed to be made allowed between the listed in the * Safeguard measures months. freely and without delay parties, however Chile require that an agreement. may be imposed in * The agreement between the parties. reserves the right to enterprise of exceptional provides that the Joint * The ‘minimum maintain existing * Free mobility circumstances, where Council shall adopt standard of treatment’ restrictions on the that party of capital, but a capital movements and measures for the clause, like the NAFTA, transfers of proceeds appoint to payments threaten to progressive requires “fair and from investments in party may cause ‘serious liberalisation of equitable treatment” as Chile. senior prevent a difficulties’ for the investment and related well as “full protection * The concepts of ‘fair management operation of monetary payments. and security”, with and equitable treatment’ transfer through policy or exchange rate * The countries will clarifications of these and ‘full protection and positions an the equitable, policy. These measures abide by their terms included. security’ are required, in individual of a may be taken for a international * Investor protection accordance with the non- period not exceeding commitments with provisions include the minimum standard of particular discriminatory one year. regard to investment, in right to receive a fair treatment of aliens nationality. * The countries aim to particular the OECD market value for under international law. and good faith improve the investment codes of liberalisation * Each party shall property in the event of * Expropriation and permit all transfers application of environment on the and the OECD National expropriation. No party compensation articles basis of the principles of Treatment Instrument. may directly or included. ‘Neither party relating to an its laws related non-discrimination. * There is a review indirectly expropriate an may directly or investment of an * The countries will clause committing the investor of either party. to: (1) investment of an indirectly nationalise or However, Chile reserves develop a legal parties to reviewing the investor of the other expropriate an bankruptcy and framework for the legal framework,

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investor of the other expropriate an certain rights for the bankruptcy and framework for the legal framework, Party except in a non- investment of an purpose of currency Parties which favours investment climate and discriminatory manner, investor of the other stability. insolvency; (2) investment and will reciprocal investment for a public purpose and party, or take a measure * There is a ‘fair and issuing, trading work towards flows within 3 years of on payment of tantamount to equitable treatment concluding bilateral entry into the compensation. The nationalisation or clause’, requiring that or dealing in agreements between the agreement. phrase ‘tantamount to a expropriation’. each party provide securities; (3) member states and Chile Not NAFTA chapter 11 nationalisation or * An investor-state investors from the other to this end. based expropriation’ is not disputes settlement party with fair and criminal * The Parties will included. mechanism is included. equitable treatment as offenses; (4) cooperate in the * There are ‘open and * Quantitative well as ‘full protection development of uniform transparent’ procedures and security’. reports of and simplified for settling investment restrictions to * There are provisions transfer of administration disputes through the investment are for expropriation, procedures, and will investor-state disputes whereby expropriation currency or provide reciprocal settlement. Submissions included in or nationalisation of an other monetary technical assistance in to disputes panels and Annex IV. investment may not take training initiatives. hearings will be open to place, either directly or instruments; (5) * The parties commit to

the public. indirectly, except for a ensuring the reviewing the legal * The agreement public purpose, in a investment framework, prohibits requirements non-discriminatory satisfaction of the investment to buy local inputs. manner and upon the judgments in environment and the payment of flow of investment compensation adjudicatory between them no later * The chapter includes a proceedings than 3 years following disputes settlement the implementation of mechanism (arbitration) * If the movement of this agreement. capital between the for settling disputes parties causes or * The chapter on between a contracting ‘establishment’ applies threatens to cause party and an investor. to all sectors except serious difficulties to service and financial monetary policy or exchange rate policy in service sectors, and requires national either party, the party treatment for members concerned may take of another party safeguards measures performing an economic with regard to capital movements for a period activity in the territory of another member not exceeding one year. party. * The parties must extend investors of the other party the minimum standard of treatment required under international law. * Neither party may directly or indirectly nationalise or

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expropriate an investment of an investor of the other party except for a public purpose, on a non- discriminatory basis and on payment of compensation of fair market value. * There is an investor- state disputes settlement mechanism, under which a claim should first be subject to consultations, and then to arbitration in an international arena. Competition Policy/ * Each country has * The * The Parties will * The parties agree to * Title VI covers * The countries will * The parties maintain Law committed to cooperate in the cooperate in the ‘defence of competition continue to apply their their own competition maintaining a Agreement application of application and and the consumer’. The own competition laws laws but agree to competition law that requires the competition policy and enforcement of their parties agree to apply but will cooperate in cooperate. prohibits anti- will take part in competition laws. * internationally order to minimise anti- * Article 6 of Annex competitive business Parties to consultation, including Cooperation will recognised standards for competitive behaviour. XV provides for conduct and a consult on the exchange of information include information the prevention of anti- * This cooperation consultations when competition agency to relevant to competition exchange, technical compet itive practices. includes consultation, important interests of enforce that law. effectiveness of laws. assistance etc. Cooperation. notification, exchange one party are adversely * A Party maintains the their * There is no recourse * There is no recourse * The parties agree to of non-confidential affected in the territory right to designate a to disputes settlement to disputes settlement. promote the appropriate information and of the other party. monopoly and to competition with respect to any measures to design a technical assistance. establish and maintain laws and to matter regarding normative scheme, Coordination of state enterprises. conformity to the article based on internationally enforcement activities * There is no recourse cooperate in the that legislates on accepted regulations and with respect to to disputes settlement enforcement of competitive matters practice, which competition law shall under this chapter. (Article 14-02). constitutes a proper not prevent a party from competition * Monopolies may be framework to discipline making an autonomous laws in the free designated and state anti-competitive decision. enterprises maintained practices. * There is no recourse trade area. in accordance with the * The parties agree to to dispute settlement * These conditions set forth in develop joint measures under this article. the chapter. in order to establish obligations are specific regulations and not subject to commitments that assure their goods dispute receive treatment no settlement. less favourable than that * The CCFTA affirms given to similar local goods. the right of a Party to ‘designate’ monopolies

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‘designate’ monopolies and state enterprises (i.e., establish new monopolies and state enterprises in the future).

Intellectual * The agreement covers * No specific * Each party will accord * Chile and Korea * The signatory parties * The parties shall * There is a special Property protection of intellectual property the members of the reaffirm their will be governed by the ensure adequate and consultation mechanism trademarks, copyrights, provisions, the parties other party protection commitments under the WTO agreement on effective protection of for the protection of patents and trade secrets will be governed by and suitable and WTO TRIPS intellectual property. intellectual property intellectual property in including digital and e- their obligations under effective defence of IP agreement. rights in accordance the form of a Special commerce related IP. the WTO Trade Related rights. * Each country has set with the TRIPs (WTO) Committee on * The provisions for Intellectual Property * Measures to protect IP out in an annex to the and various other Intellectual Property trademarks apply the Rights (TRIPS) rights should not be an agreement geographical international Matters. The Special principle of ‘first-in- agreement. obstacle to legitimate indicators which will be conventions and Committee shall be time, first-in-right’, * The parties have commerce. recognised and agreements. convened within 30 meaning that the first agreed to protect MFN and national protected by the other days of either party person to file for a Canadian Whiskey and treatment. party. raising a concern with trademark is given the Chilean pisco as special * Protection is extended regards to intellectual right to use that name or geographical indicators to authors, computer property rights, and phrase etc. under the agreement. programmers, satellite shall work towards * “Protection for signals, trademarks etc. reaching mutually copyright works in a satisfactory resolutions. digital economy” * The parties reaffirmed provisions ensure that their commitments to only authors, composers various multi-lateral or other copyright treaties on IP. owners have the right to make their works available online. * There will be anti- circumvention provisions to prevent tampering with devices used to stop digital piracy. * There will be tough penalties to enforce IPRs including the criminalisation of end- user piracy. The Chilean government has guaranteed that it has the authority to seize, forfeit and destroy

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counterfeit goods and the equipment used to make them.

E-commerce * The countries agreed * No specific e- * No specific e- * No specific e- * No specific e- * The parties recognise * There are no specific on provisions for e- commerce provisions commerce provisions commerce provisions commerce provisions the importance of e- provisions for e- commerce to recognise commerce in many commerce, however its importance in trade. areas of trade, and as Article 20 ‘the They agreed not to such agree to cooperate Information Society’ impose customs duties on market access and recognises the on digital products and regulatory issues raised importance of to cooperate in related by it. information and policy areas. communications * For digital products technology and lays out delivered on hard areas in which media, customs duties cooperation in this area will be based on the could be advanced. value of the media (eg * Some of these areas CD) not the value of the include information movie, music or exchanges, technical software on the disk. assistance, dialogues, knowledge dissemination, joint research and training ventures etc

Transport and * Each Party shall * Provisions for * Subject to * The agreement on * The parties agree that * The article on * Cooperation on Communications ensure that members of telecommunications telecommunications transport issues will be telecommunications transport will be aimed the other party have state that the other Party certain follows Chile’s previous governed by the services says that a at supporting the access to and use of any may use public requirements FTA commitments, “Transporte country’s major supplier improvement and public telecommunications allowing access to basic Internacional Terrestre must, where technically restructuring of telecommunications transport networks or each party must telecommunications del Cono Sur” feasible, provide transport systems, services and access to services for the guarantee that networks and agreement and its later interconnection services promoting operating submarine cable movement of interconnection. amendments. The under non- standards, designing systems, on non- information in its the people of * Air transport is signatory parties will be discriminatory terms. economic, legal and discriminatory terms. territory or across its the other party excluded from the able to establish, by * There is an agreement technical training * Each party shall borders. agreement means of additional on international programs and ensure that members of * Basic interconnection are allowed to * If a monopoly protocols to the present maritime transport exchanging information the other party are able rights and obligations buy, rent and to provides public agreements specific which says that each on the Global to use public are included. telecommunications norms and commitments party must extend Navigation Satellite telecommunications connect transport networks or in the areas of national treatment to System (GNSS). networks to transport terminal services and the terrestrial, marine and ships flying the flag of information within its monopoly, itself or by fluvial transport. the other party with territories and across its equipment or an affiliate, competes in * The parties cannot respect to use of ports borders. other equipment providing value-added apply transit restrictions and infrastructure, * Nothing in the telecommunications- which create difficulties auxiliary maritime telecommunications that interfaces related services, the for the free circulation services and related chapter should be with public party shall ensure that of goods produced charges etc.

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construed as to prevent with public the monopoly does not inside Mercosur or * Transport cooperation a party adopting use its power to engage Chilean territory, which will focus on measures to protect the telecommunicat in anti-competitive are being carried to third ‘restructuring and security and ions networks. conduct. markets. modernising’ Chile’s confidentiality of * There is a committee transport systems. There messages, or the privacy * Each party will ensure on telecommunications will also be cooperation that the prices of the of network subscribers. provision of public standards set up to projects for transferring The technical integrity oversee the application European technology in of the networks and the telecommunications and enforcement of that the Global Navigation responsibilities of the services reflects the chapter. Satellite System and economic costs directly public services must related to the benefit of urban public transport also be protected. the services. policies. * The chapter also includes provisions for * Each party will guarantee that people of competitive safeguards. the other party can use the networks or public telecommunications networks to transmit information in their territory or through its borders. * Nothing in the telecommunications chapter should be construed as to prevent a party adopting measures to protect the security and confidentiality of messages, or the privacy of network subscribers. The technical integrity of the networks and the responsibilities of the public services must also be protected. * Air transportation is not covered by the agreement. * The members reciprocally agree to grant free access to both public and private cargo arising from foreign trade with vessels flying the flag of either country, or vessels

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which may fly the national flag of either country under their respective laws. * Interested air transport companies of both countries may conduct regular and non-regular passenger, cargo and mail service between both territories with third, fourth and fifth freedom traffic rights (with the exception of points beyond Santiago and Mexico City), as frequently and using the aircraft they deem appropriate. * Land transport is subject to quantitative restrictions.

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Energy * Energy provisions are * Energy provisions are * The energy sector is * Energy provisions are * The rules of origin * Article 22 of the “EU- * Cooperation in the not included. not included. protected under the not included. concerning the exports Chile Association field of energy will Mexican constitution, of electric energy are Agreement” (signed focus on development and therefore is regulated in the 19th November 2002) covers of the energy sectors in included in the list of Additional Protocol cooperation with each region, promotion exceptions to services (Decimo Noveno regards to energy. This of technology transfer liberalisation. Protocolo Adicional), cooperation is to and information * Mexico reserves the signed in September consolidate economics exchange with respect right to deny 1999. relations in key sectors to legislations. authorization for * It is stated that the such as hydroelectric, * Cooperation will also investing in the energy certification of origin oil and gas, and extend to training of sector. concerning electric renewable energy etc. human resources, energy is not regulated * The cooperation will promoting the rational under the dispositions entail information use of energy, established in Annex 13 sharing, technology promoting recycling and (about rules of origin). transfers and joint the use of renewable research initiatives. energy resources.

Environmental * Environmental * Modelled on * No particular * In chapter 10 * Chile and Argentina * No particular * There is no specific Issues obligations are part of environmental (investment), both signed the “Protocolo agreement on the agreement covering the core text of the NAFTA, there agreement, except to parties agree that it is Específico Adicional al environment. environmental issues, agreement. is a side recognise some other inappropriate to Tratado sobre Medio however the parties * Parties keep their own international encourage the Ambiente, sobre agree that the need to laws, but agree to strive agreement on environmental promotion of investment Conservación de la preserve the to provide high levels of environmental agreements and say by relaxing domestic Flora y Fauna Silvestre” environment and environmental measures should be in health, safety or in which both parties recognise the protection. issues- the keeping with these. environmental agree to take measures importance of * Cooperative projects Agreement on * In a case of measures. related to protecting sustainable development will be undertaken, incompatibility between shared wild flora and should be taken into including building Environmental the FTA and specific fauna account in all capacity for wildlife Cooperation obligations in trade cooperation measures protection and resource matters included in the undertaken. * The Agreement management through confirms the right of Convention on * If deemed appropriate collaboration efforts, International Trade in this environmental working towards the each country to Endangered Species of cooperation may lead to elimination of methyl establish its own level Flora and Fauna; the the signing of a sectoral of environmental bromide use and the protection, policies and Montreal Protocol on agreement on development of Substances that Deplete environmental issues. priorities. It does not Pollutant Release and the Ozone Layer and the Transfer Register authorize a Party to Basel Convention on the undertake activities to (PRTR) in Chile. enforce environmental Control of Transborder * Monetary penalties for laws and regulations in Movements of breaching the agreement Hazardous Wastes and the other Party’s Their Disposal, these territory. obligations will prevail as far as the party involved choses, however the party

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should chose a course of action which shows the least incompatibility with the regulations included in the FTA.

Labour Standards * Labour obligations * Modelled on * No labour standards * No labour standards * No labour standards * There is an article * No labour standards are part of the core text agreement. agreement. agreement. covering social agreement. of the agreement. NAFTA there is cooperation in which * The Parties agreed to a side the parties agree to effectively enforce their cooperate in promoting own labour laws. Both agreement on higher living standards parties reaffirm their labour and compliance with the obligations as members International Labour of the ILO. standards, Organisation. * The agreement makes which aims to clear that it is inappropriate to reduce improve domestic worker working protection to encourage trade or investment. conditions and Cooperative activities to living standards promote workers’ rights will be undertaken. in both * Procedural guarantees countries. in the agreement will ensure that workers and * Each country is employers will have responsible for its own labour legislation, fair, equitable and however cooperation on transparent access to labour matters is labour courts/ tribunals. * Monetary penalties for promoted. breaching the agreement.

Disputes Settlement * All core obligations of * A Party may request * The first stage of the * The disputes * Dispute settlement * The parties shall * The parties will first the agreement, in writing consultations disputes settlement settlement mechanism provision included in firstly attempt to settle try to settle disputes including the with the other Party procedure is follows the standard agreement which creates disputes through through joint environmental and regarding any actual or consultation with the structure of a mechanism for consultation and arrive consultation and will labour provisions, are proposed measure or other party. consultations followed arbitration in the case of at mutually satisfactory endeavour to arrive at a subject to the dispute any other matter that it * If consultations cannot by the appointment of a disagreement. resolutions. mutually satisfactory settlement provisions. considers might affect reach a mutually an arbitration panel (3 * Each party may agreement. Emphasis on promoting the operation of this satisfactory solution people chosen from a * The parties will try to request consultation * Each party may compliance through Agreement and the within 15 days the pre-determined list). with the Association request consultation consultations and joint Parties shall make every Administrative * The findings of the resolve their Committee which is within the joint controversies through a action plans. attempt to arrive at a committee shall review arbitration panel will be comprised of senior committee which shall

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action plans. attempt to arrive at a committee shall review arbitration panel will be mechanism of reciprocal comprised of senior committee which shall * Includes monetary mutually satisfactory the charges and may final and binding, and consultations and direct government officials convene within 30 days penalties to enforce resolution. request technical reports shall not usually be negotiations in order to from both the EU and of delivery of the labour and * If the parties fail to with a view to reaching subject to appeal. Where reach a satisfactory Chile. The committee request and shall environmental resolve the dispute a mutually satisfactory failure to comply with agreement. If this is not shall convene within 30 endeavour to resolve obligations. within 30 days of resolution, possibly the agreement is found possible, both parties days of delivery of the the dispute promptly by * Dispute panel delivery of a request for through mediation. there will be will designate experts to request and shall means of a decision. procedures are to be consultation, or such * If this procedure also commercial sanctions decide the case. endeavour to resolve the * If the dispute cannot open and transparent, other period as they may fails to reach a imposed as a penalty. dispute promptly be be resolved by with open public agree, either party may resolution within 30 * Conciliation or means of a decision. consultation, either hearings and public request in writing a days an abitral tribunal mediation may be used * If the dispute has not party may request the release of legal meeting of the will be set up. at any time to solve a been settled 15 days establishment of an submissions. commission (the free * The findings of the dispute. after the Association arbitration panel. * The process begins trade commission arbitration are not able Committee has * The arbitration panel with consultations, consists of cabinet level to be appealed and are convened a party may should, in general, aimed at reaching a representatives of the binding. request an arbitration submit an initial report mutually agreeable Parties). panel be established. within 3 months of the resolution. Where * Unless it * As a general rule the establishment of the consultations fail, the arbitration panel shall panel, or at the latest dispute may be brought decides transmit its ruling no within 5 months. before the Free Trade otherwise the later than 3 months from * The final report shall Commission, and where the date of be presented to the there recommendations commission establishment of the parties within 30 days of do not lead to an shall meet arbitration panel. the presentation of the amicable resolution of * The ruling is final and initial report. the dispute an within 10 days binding. * Each party is bound to arbitration panel (6 of receiving the take out the measures members) may be presented in the final established. request and report. * On receipt of shall endeavour the final report to settle the of a panel, the dispute Parties shall promptly. agree on the * If the matter resolution of the has still not dispute, which been resolved normally shall with 30 days a conform with Party may the request in determinations writing the and establishment of

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recommendatio an arbitral panel ns of the panel comprising 5 independent

experts. * On receipt of the final report of a panel, the Parties shall agree on the resolution of the dispute, which normally shall conform with the determinations and recommendatio ns of the panel