Comparative Guide Chile - U.S. FTA and DR - CAFTA - Chapter15: Electronic Commerce

A Comparative Guide to the Chile-United States Free Trade Agreement and the
Dominican Republic-Central America-United States Free Trade Agreement


Chapter Fifteen: Electronic Commerce


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There is a great deal of similarity as between the two Agreements with respect to the substance of the six Articles in the text. Under both Agreements, the Parties in the Article establishing the General provisions, recognize the economic growth opportunities provided by electronic commerce and the importance of avoiding unnecessary barriers to its use and development. Both Agreements also provide that nothing in the Chapter shall be construed to prevent a Party from imposing internal taxes, directly or indirectly, on digital products, provided they are imposed in a manner consistent with the respective Agreements. The General Article in both Agreements also recognizes the applicability of the Chapter on Electronic Commerce to measures adopted or maintained by a Party affecting the electronic supply of services. The Article in DR-CAFTA contains an additional provision that specifically recognizes the applicability of the WTO rules to electronic commerce.

Substantively, both Agreements contain the same provisions related to the Electronic Supply of Services, Customs Duties on Digital Products, Non-Discrimination for Digital Products and Cooperation. However, there are also a few notable differences.

Electronic Supply of Services: in the Article covering the Electronic Supply of Services, the provisions are identical to the extent that they both recognize that the supply of a service using electronic means falls within the scope of the obligations contained in the relevant provisions of their respective Chapters on Cross- Border Trade in Services and Financial Services subject to any nonconforming measures or exceptions applicable to such obligations. However, DR-CAFTA also specifically refers to the Chapter on Investment.

Customs Duties on Digital Products: both Agreements provide that neither Party may apply customs duties on digital products of the other Party. However DR-CAFTA refers to “other duties” including “fees, or charges on or in connection with the importation or exportation of digital products by electronic transmission”.

Non-Discrimination for Digital Products: both Agreements contain identical provisions regarding Non-Discrimination for Digital Products, save that:

The Chile-U.S. FTA provides that a Party:

“may maintain an existing measure that does not conform with paragraph 1 or 2 for one year after the date of entry into force of this Agreement. A Party may maintain the measure thereafter, if the treatment the Party accords under the measure is no less favorable than the treatment the Party accorded under the measure on the date of entry into force of this Agreement, and the Party has set out the measure in its Schedule to Annex 15.4. A Party may amend such a measure only to the extent that the amendment does not decrease the conformity of the measure, as it existed immediately before the amendment, with paragraphs 1 and 2.”

DR-CAFTA provides that:

“Paragraphs 3 and 4 do not apply to any non-conforming measure described in Articles 10.13 (Non-Conforming Measures), 11.6 (Non-Conforming Measures), or 12.9 (Non-Conforming Measures).”

Transparency: only DR-CAFTA contains a specific Article that addresses the issue of transparency and provides that each Party shall publish or otherwise make available to the public its laws, regulations, and measures of general application which pertain to electronic commerce.

Cooperation: both DR-CAFTA and the Chile-U.S. FTA contain identical Cooperation provisions under Articles 15.5 and 14.5 respectively. Having in mind the global nature of electronic commerce, both Parties recognize the importance of: (a) working together to overcome obstacles encountered by small and medium enterprises in the use of electronic commerce; (b) sharing information and experiences; (c) working to maintain cross-border flows of information; (d) encouraging the development by the private sector of methods of selfregulation; and (e) actively participating in international fora with the purpose of promoting the development of electronic commerce.

Definitions: nearly identical in both Agreements (Chile-U.S. FTA Art.15.6 and DR-CAFTA Art.14.6), sets out the same definitions for the following terms:

· digital products (save that the Chile-U.S. FTA provides further that the identified products shall be defined as digital products “regardless of whether a Party treats such products as a good or a service under its domestic law”)

· electronic means

· electronic transmission

Additionally, there is a definition for ‘carrier medium” in DR-CAFTA.

Annex on Non-Discrimination for Digital Products: contained only in the Chile-U.S. FTA, sets out the Schedule of a Party which sets out the non-conforming measures maintained by that Party pursuant to Article 15.4.3.

Chapter 14 Chapter 16

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