A Comparative Guide to the Chile-United States Free Trade Agreement and the
Dominican Republic-Central America-United States Free Trade Agreement
A STUDY BY THE TRIPARTITE COMMITTEE

Chapter Three: National Treatment and Market Access for Goods

Comparative Study

Table of Contents
CHILE – U.S.
Date of Signature: June 6, 2003
Chapter Three:
National Treatment and Market Access for Goods		 DR - CAFTA
Date of Signature: August 5, 2004
Chapter Three:
National Treatment and Market Access for Goods

Article 3.1: Scope and Coverage

Article 3.1: Scope and Coverage
Except as otherwise provided, this Chapter applies to trade in goods of a Party. Except as otherwise provided, this Chapter applies to trade in goods of a Party. 

Section A - National Treatment
Article 3.2: National Treatment

Section A: National Treatment
Article 3.2: National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its interpretative notes, and to this end Article III of GATT 1994, and its interpretative notes, are incorporated into and made part of this Agreement, mutatis mutandis. 1. Each Party shall accord national treatment to the goods of another Party in accordance with Article III of the GATT 1994, including its interpretive notes, and to this end Article III of the GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
 2. The provisions of paragraph 1 regarding national treatment shall mean, with respect to a regional level of government, treatment no less favorable than the most favorable treatment that regional level of government accords to any like, directly competitive, or substitutable goods, as the case may be, of the Party of which it forms a part.1

1 For greater certainty, “goods of the Party” includes goods produced in a state or region of that Party.

 2. The provisions of paragraph 1 regarding national treatment shall mean, with respect to a regional level of government, treatment no less favorable than the most favorable treatment that regional level of government accords to any like, directly competitive, or substitutable goods, as the case may be, of the Party of which it forms a part.
3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 3.2. 3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 3.2.
Section B - Tariff Elimination
Article 3.3: Tariff Elimination		 Section B: Tariff Elimination
Article 3.3: Tariff Elimination
1. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty, or adopt any customs duty, on an originating good. 1. Except as otherwise provided in this Agreement, no Party may increase any existing customs duty, or adopt any new customs duty, on an originating good.
2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods in accordance with Annex 3.3. 2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods, in accordance with Annex 3.3. 1

1 For greater certainty, except as otherwise provided in this Agreement, each Central American Party and the Dominican Republic shall provide that any originating good is entitled to the tariff treatment for the good set out in its Schedule to Annex 3.3, regardless of whether the good is imported into its territory from the territory of the United States or any other Party. An originating good may include a good produced in a Central American Party or the Dominican Republic with materials from the United States.
3. The United States shall eliminate customs duties on any non-agricultural originating goods that, after the date of entry into force of this Agreement, are designated as articles eligible for duty-free treatment under the U.S. Generalized System of Preferences, effective from the date of such designation. 3. For greater certainty, paragraph 2 shall not prevent a Central American Party from providing identical or more favorable tariff treatment to a good as provided for under the legal instruments of Central American integration, provided that the good meets the rules of origin under those instruments.
4. On the request of either Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in their Schedules to Annex 3.3. An agreement between the Parties to accelerate the elimination of a customs duty on a good shall supercede any duty rate or staging category determined pursuant to their Schedules to Annex 3.3 for such good when approved by each Party in accordance with Article 21.1(3)(b) (The Free Trade Commission) and its applicable legal procedures.

 

 4. On the request of any Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in their Schedules to Annex 3.3. Notwithstanding Article 19.1.3(b) (The Free Trade Commission), an agreement between two or more Parties to accelerate the elimination of a customs duty on a good shall supercede any duty rate or staging category determined pursuant to their Schedules to Annex 3.3 for such good when approved by each such Party in accordance with its applicable legal procedures. Promptly after two or more Parties conclude an agreement under this paragraph they shall notify the other Parties of the terms of that agreement.
 5. For greater certainty, a Party may:

(a) raise a customs duty back to the level established in its Schedule to Annex 3.3 following a unilateral reduction; or

 (b) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.

 5. For greater certainty, a Party may:

(a) raise a customs duty back to the level established in its Schedule to Annex 3.3 following a unilateral reduction; or

 (b) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.
  6. Annex 3.3.6 applies to the Parties specified in that Annex.

Chile General Notes
Chile Tariff Schedule

Costa Rica General Notes and Appendix I
Schedule of Costa Rica to Annex 3.3

 

Dominican Republic General Notes and Appendix I
Schedule of Dominican Republic to Annex 3.3

 

El Salvador General Notes and Appendix I
Schedule of El Salvador to Annex 3.3

 

Guatemala General Notes and Appendix I
Schedule of Guatemala to Annex 3.3

 

Honduras General Notes and Appendix I
Schedule of Honduras to Annex 3.3

 

Nicaragua General Notes and Appendix I
Schedule of Nicaragua to Annex 3.3

US General Notes
US Tariff Schedule

US General Notes and Appendix I
Schedule of U.S. to Annex 3.3

Article 3.4: Used Goods

  
On entry into force of this Agreement, Chile shall cease applying the 50 percent surcharge established in the Regla General Complementaria N° 3 of Arancel Aduanero with respect to originating goods of the other Party that benefit from preferential tariff treatment. NO CORRESPONDING ARTICLE

Article 3.5: Customs Valuation of Carrier Media

  
1. For purposes of determining the customs value of carrier media bearing content, each Party shall base its determination on the cost or value of the carrier media alone.

2. For purposes of the effective imposition of any internal taxes, direct or indirect, each Party shall determine the tax basis according to its domestic law. 

NO CORRESPONDING ARTICLE
Section C - Special Regimes
Article 3.6: Waiver of Customs Duties		 Section C: Special Regimes
Article 3.4: Waiver of Customs Duties
1. Neither Party may adopt any new waiver of customs duties, or expand with respect to existing recipients or extend to any new recipient the application of an existing waiver of customs duties, where the waiver is conditioned, explicitly or implicitly, on the fulfillment of a performance requirement. 1. No Party may adopt any new waiver of customs duties, or expand with respect to existing recipients or extend to any new recipient, the application of an existing waiver of customs duties, where the waiver is conditioned, explicitly or implicitly, on the fulfillment of a performance requirement.
2. Neither Party may, explicitly or implicitly, condition on the fulfillment of a performance requirement the continuation of any existing waiver of customs duties.

3. This Article shall not apply to measures subject to Article 3.8.

 2. No Party may, explicitly or implicitly, condition on the fulfillment of a performance requirement the continuation of any existing waiver of customs duties.
NO CORRESPONDING PARAGRAPH 3. Costa Rica, the Dominican Republic, El Salvador, and Guatemala may each maintain existing measures inconsistent with paragraphs 1 and 2, provided it maintains such measures in accordance with Article 27.4 of the SCM Agreement. Costa Rica, the Dominican Republic, El Salvador, and Guatemala may not maintain any such measures after December 31, 2009.

4. Nicaragua and Honduras may each maintain measures inconsistent with paragraphs 1 and 2 for such time as it is an Annex VII country for purposes of the SCM Agreement. Thereafter, Nicaragua and Honduras shall maintain any such measures in accordance with Article 27.4 of the SCM Agreement.
Article 3.7: Temporary Admission of Goods Article 3.5: Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission for:

(a) professional equipment, including equipment for the press or television, software and broadcasting and cinematographic equipment, necessary for carrying out the business activity, trade or profession of a business person who qualifies for temporary entry pursuant to the laws of the importing Party;

(b) goods intended for display or demonstration;

(c) commercial samples and advertising films and recordings; and

 (d) goods admitted for sports purposes, regardless of their origin.

 1. Each Party shall grant duty-free temporary admission for the following goods, regardless of their origin:

(a) professional equipment, including equipment for the press or television, software and broadcasting and cinematographic equipment, necessary for carrying out the business activity, trade, or profession of a business person who qualifies for temporary entry pursuant to the laws of the importing Party;

(b) goods intended for display or demonstration;

 (c) commercial samples and advertising films and recordings; and

 (d) goods admitted for sports purposes.
 2. Each Party shall, at the request of the person concerned and for reasons deemed valid by its customs authority, extend the time limit for temporary admission beyond the period initially fixed. 2. Each Party shall, at the request of the person concerned and for reasons its customs authority considers valid, extend the time limit for temporary admission beyond the period initially fixed.
3. Neither Party may condition the duty-free temporary admission of goods referred to in paragraph 1, other than to require that such goods:

(a) be used solely by or under the personal supervision of a national or resident of the other Party in the exercise of the business activity, trade, profession, or sport of that person;

(b) not be sold or leased while in its territory;

(c) be accompanied by a security in an amount no greater than the charges that would otherwise be owed on entry or final importation, releasable on exportation of the good;

(d) be capable of identification when exported;

(e) be exported on the departure of the person referenced in subparagraph (a), or within such other period, related to the purpose of the temporary admission, as the Party may establish, or within one year, unless extended;

(f) be admitted in no greater quantity than is reasonable for their intended use; and

(g) be otherwise admissible into the Party’s territory under its laws.

 3. No Party may condition the duty-free temporary admission of a good referred to in paragraph 1, other than to require that such good:

(a) be used solely by or under the personal supervision of a national or resident of another Party in the exercise of the business activity, trade, profession, or sport of that person;

 (b) not be sold or leased while in its territory;

 (c) be accompanied by a security in an amount no greater than the charges that would otherwise be owed on entry or final importation, releasable on exportation of the good;

 (d) be capable of identification when exported;

 (e) be exported on the departure of the person referenced in subparagraph (a), or within such other period related to the purpose of the temporary admission as the Party may establish, or within one year, unless extended;

 (f) be admitted in no greater quantity than is reasonable for its intended use; and

 (g) be otherwise admissible into the Party’s territory under its law.
4. If any condition that a Party imposes under paragraph 3 has not been fulfilled, the Party may apply the customs duty and any other charge that would normally be owed on the good plus any other charges or penalities provided for under its domestic law. 4. If any condition that a Party imposes under paragraph 3 has not been fulfilled, the Party may apply the customs duty and any other charge that would normally be owed on the good plus any other charges or penalties provided for under its law.
5. Each Party, through its customs authority, shall adopt procedures providing for the expeditious release of goods admitted under this Article. To the extent possible, such procedures shall provide that when such a good accompanies a national or resident of the other Party who is seeking temporary entry, the good shall be released simultaneously with the entry of that national or resident. 5. Each Party, through its customs authority, shall adopt procedures providing for the expeditious release of goods admitted under this Article. To the extent possible, such procedures shall provide that when such a good accompanies a national or resident of another Party who is seeking temporary entry, the good shall be released simultaneously with the entry of that national or resident.
6. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than that through which it was admitted. 6. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than that through which it was admitted.
7. Each Party, through its customs authority, consistent with domestic law, shall relieve the importer or other person responsible for a good admitted under this Article from any liability for failure to export the good on presentation of satisfactory proof to customs authorities that the good has been destroyed within the original period fixed for temporary admission or any lawful extension. 7. Each Party shall provide that its customs authority or other competent authority shall relieve the importer or other person responsible for a good admitted under this Article from any liability for failure to export the good on presentation of satisfactory proof to the importing Party’s customs authority that the good has been destroyed within the original period fixed for temporary admission or any lawful extension.
8. Subject to Chapters Ten (Investment) and Eleven (Cross-Border Trade in Services):

(a) each Party shall allow a vehicle or container used in international traffic that enters its territory from the territory of the other Party to exit its territory on any route that is reasonably related to the economic and prompt departure of such vehicle or container;

(b) neither Party may require any bond or impose any penalty or charge solely by reason of any difference between the port of entry and the port of departure of a vehicle or container;

(c) neither Party may condition the release of any obligation, including any bond, that it imposes in respect of the entry of a vehicle or container into its territory on its exit through any particular port of departure; and

 (d) neither Party may require that the vehicle or carrier bringing a container from the territory of the other Party into its territory be the same vehicle or carrier that takes such container to the territory of the other Party.

 8. Subject to Chapters Ten (Investment) and Eleven (Cross-Border Trade in Services):

(a) each Party shall allow a vehicle or container used in international traffic that enters its territory from the territory of another Party to exit its territory on any route that is reasonably related to the economic and prompt departure of such vehicle or container; 

(b) no Party may require any bond or impose any penalty or charge solely by reason of any difference between the port of entry and the port of departure of a vehicle or container;

(c) no Party may condition the release of any obligation, including any bond, that it imposes in respect of the entry of a vehicle or container into its territory on its exit through any particular port of departure; and

 (d) no Party may require that the vehicle or carrier bringing a container from the territory of another Party into its territory be the same vehicle or carrier that takes such container to the territory of another Party.
9. For purposes of paragraph 8, vehicle means a truck, a truck tractor, tractor, trailer unit or trailer, a locomotive, or a railway car or other railroad equipment. 9. For purposes of paragraph 8, vehicle means a truck, a truck tractor, tractor, trailer unit or trailer, a locomotive, or a railway car or other railroad equipment.

Article 3.8: Drawback and Duty Deferral Programs

  
1. Except as otherwise provided in this Article, neither Party may refund the amount of customs duties paid, or waive or reduce the amount of customs duties owed, on a good imported into its territory, on condition that the good is:

(a) subsequently exported to the territory of the other Party;

 (b) used as a material in the production of another good that is subsequently exported to the territory of the other Party; or

(c) substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of the other Party.

 NO CORRESPONDING ARTICLE
2. Neither Party may, on condition of export, refund, waive, or reduce:

(a) an antidumping or countervailing duty;

(b) a premium offered or collected on an imported good arising out of any tendering system in respect of the administration of quantitative import restrictions, tariff rate quotas, or tariff preference levels; or

 (c) customs duties paid or owed on a good imported into its territory and substituted by an identical or similar good that is subsequently exported to the territory of the other Party.

 NO CORRESPONDING ARTICLE
3. Where a good is imported into the territory of a Party pursuant to a duty deferral program and is subsequently exported to the territory of the other Party, or is used as a material in the production of another good that is subsequently exported to the territory of the other Party, or is substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of the other Party, the Party from whose territory the good is exported shall assess the customs duties as if the exported good had been withdrawn for domestic consumption. NO CORRESPONDING ARTICLE
4. This Article does not apply to:

(a) a good entered under bond for transportation and exportation to the territory of the other Party;

 (b) a good exported to the territory of the other Party in the same condition as when imported into the territory of the Party from which the good was exported (testing, cleaning, repacking, inspecting, sorting, marking, or preserving a good shall not be considered to change the good’s condition).

Where such a good has been commingled with fungible goods and exported in the same condition, its origin for purposes of this subparagraph may be determined on the basis of such inventory management methods as first-in, first-out or last-in, first-out. Nothing in this subparagraph shall be construed to permit a Party to waive, refund, or reduce a customs duty contrary to paragraph 2(c);

(c) a good imported into the territory of a Party that is deemed to be exported from its territory, or used as a material in the production of another good that is deemed to be exported to the territory of the other Party, or is substituted by an identical or similar good used as a material in the production of another good that is deemed to be exported to the territory of the other Party, by reason of

(i) delivery to a duty-free shop,

 (ii) delivery for ship's stores or supplies for ships or aircraft, or

 (iii) delivery for use in joint undertakings of the Parties and that will subsequently become the property of the Party into whose territory the good was deemed to be exported;

(d) a refund of customs duties by a Party on a particular good imported into its territory and subsequently exported to the territory of the other Party, where that refund is granted by reason of the failure of such good to conform to sample or specification, or by reason of the shipment of such good without the consent of the consignee; or

(e) an originating good that is imported into the territory of a Party and is subsequently exported to the territory of the other Party, or used as a material in the production of another good that is subsequently exported to the territory of the other Party, or is substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of the other Party.

 NO CORRESPONDING ARTICLE
5. This Article shall take effect beginning eight years after the date of entry into force of this Agreement, and thereafter a Party may refund, waive, or reduce duties paid or owed under the Party’s duty drawback or deferral programs according to the following schedule:

(a) no more than 75 percent in year nine;

(b) no more than 50 percent in year 10;

 (c) no more than 25 percent in year 11; and

(d) zero in year 12 and thereafter.

  
6. For purposes of this Article:

good means “good” as defined in Article 4.18 (Definitions);

identical or similar goods means “identical goods” and “similar goods”, respectively, as defined in the Customs Valuation Agreement; 

material means “material” as defined in Article 4.18 (Definitions); and

used means used or consumed in the production of goods.

  
Article 3.9: Goods
Re-entered after Repair or Alteration		 Article 3.6: Goods
Re-entered after Repair or Alteration
1. Neither Party may apply a customs duty to a good, regardless of its origin, that reenters its territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in its territory. 1. No Party may apply a customs duty to a good, regardless of its origin, that re-enters its territory after that good has been temporarily exported from its territory to the territory of another Party for repair or alteration, regardless of whether such repair or alteration could be performed in the territory of the Party from which the good was exported for repair or alteration.
2. Neither Party may apply a customs duty to a good, regardless of its origin, admitted temporarily from the territory of the other Party for repair or alteration. 2. No Party may apply a customs duty to a good, regardless of its origin, admitted temporarily from the territory of another Party for repair or alteration.
3. For purposes of this Article, repair or alteration does not include an operation or process that:

(a) destroys a good’s essential characteristics or creates a new or commercially different good; or

(b) transforms an unfinished good into a finished good.

 3. For purposes of this Article, repair or alteration does not include an operation or process that:

(a) destroys a good’s essential characteristics or creates a new or commercially different good; or

(b) transforms an unfinished good into a finished good.

Article 3.10: Duty-Free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials

Article 3.7: Duty-Free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials
Each Party shall grant duty-free entry to commercial samples of negligible value, and to printed advertising materials, imported from the territory of the other Party, regardless of their origin, but may require that:

(a) such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-Party; or

 (b) such advertising materials be imported in packets that each contain no more than one copy of each such material and that neither such materials nor packets form part of a larger consignment.

Each Party shall grant duty-free entry to commercial samples of negligible value and to printed advertising materials, imported from the territory of another Party, regardless of their origin, but may require that:

(a) such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of another Party or a non-Party; or

 (b) such advertising materials be imported in packets that each contain no more than one copy of each such material and that neither such materials nor packets form part of a larger consignment.
 Section D - Non-Tariff Measures
Article 3.11: Import and Export Restrictions		 Section D: Non-Tariff Measures
Article 3.8: Import and Export Restrictions
1. Except as otherwise provided in this Agreement, neither Party may adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of GATT 1994 and its interpretative notes and to this end Article XI of GATT 1994 and its interpretative notes are incorporated into and made a part of this Agreement, mutatis mutandis. 1. Except as otherwise provided in this Agreement, no Party may adopt or maintain any prohibition or restriction on the importation of any good of another Party or on the exportation or sale for export of any good destined for the territory of another Party, except in accordance with Article XI of the GATT 1994 and its interpretative notes, and to this end Article XI of the GATT 1994 and its interpretative notes are incorporated into and made a part of this Agreement, mutatis mutandis.2

2 For greater certainty, this paragraph applies, inter alia, to prohibitions or restrictions on the importation of remanufactured goods.
2. The Parties understand that the GATT rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:

(a) export and import price requirements, except as permitted in enforcement of countervailing and antidumping orders and undertakings; 

(b) import licensing conditioned on the fulfilment of a performance requirement; or

 (c) voluntary export restraints not consistent with Article VI of GATT 1994, as implemented under Article 18 of the SCM Agreement and Article 8.1 of the AD Agreement.

 2. The Parties understand that the GATT 1994 rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:

(a) export and import price requirements, except as permitted in enforcement of countervailing and antidumping duty orders and undertakings;

 (b) import licensing conditioned on the fulfillment of a performance requirement, except as provided in a Party’s schedule to Annex 3.3; or

 (c) voluntary export restraints inconsistent with Article VI of the GATT 1994, as implemented under Article 18 of the SCM Agreement and Article 8.1 of the AD Agreement.
3. In the event that a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, nothing in this Agreement shall be construed to prevent the Party from:

(a) limiting or prohibiting the importation from the territory of the other Party of such good of that non-Party; or

 (b) requiring as a condition of export of such good of the Party to the territory of the other Party, that the good not be re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.

 3. In the event that a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, nothing in this Agreement shall be construed to prevent the Party from:

(a) limiting or prohibiting the importation from the territory of another Party of such good of that non-Party; or

 (b) requiring as a condition of export of such good of the Party to the territory of another Party, that the good not be re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.
4. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, the Parties, on the request of either Party, shall consult with a view to avoiding undue interference with or distortion of pricing, marketing, and distribution arrangements in the other Party. 4. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, the Parties, on the request of any Party, shall consult with a view to avoiding undue interference with or distortion of pricing, marketing, or distribution arrangements in another Party.
5. Paragraphs 1 through 4 shall not apply to the measures set out in Annex 3.2.  5. Paragraphs 1 through 4 shall not apply to the measures set out in Annex 3.2.
 NO CORRESPONDING PARAGRAPH 6. Neither a Central American Party nor the Dominican Republic may, as a condition for engaging in importation or for the import of a good, require a person of another Party to establish or maintain a contractual or other relationship with a dealer in its territory.
 NO CORRESPONDING PARAGRAPH 7. Neither a Central American Party nor the Dominican Republic may remedy a violation or alleged violation of any law, regulation, or other measure regulating or otherwise relating to the relationship between any dealer in its territory and any person of another Party, by prohibiting or restricting the importation of any good of another Party.
NO CORRESPONDING DEFINITION 8. For purposes of this Article:

dealer means a person of a Party who is responsible for the distribution, agency, concession, or representation in the territory of that Party of goods of another Party; and

NO CORRESPONDING DEFINITION remedy means to obtain redress or impose a penalty, including through a provisional, precautionary, or permanent measure.
 

Article 3.9: Import Licensing

NO CORRESPONDING ARTICLE

 1. No Party may adopt or maintain a measure that is inconsistent with the Import Licensing Agreement.

 2. Promptly after entry into force of this Agreement, each Party shall notify the other Parties of any existing import licensing procedures, and thereafter shall notify the other Parties of any new import licensing procedure and any modification to its existing import licensing procedures, within 60 days before it takes effect. A notification provided under this Article shall:

 (a) include the information specified in Article 5 of the Import Licensing Agreement; and

 (b) be without prejudice as to whether the import licensing procedure is consistent with this Agreement.

 3. No Party may apply an import licensing procedure to a good of another Party unless it has provided notification in accordance with paragraph 2.
Article 3.12: Administrative Fees and Formalities Article 3.10: Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with Article VIII:1 of GATT 1994 and its interpretive notes, that all fees and charges of whatever character (other than customs duties, charges equivalent to an internal tax or other internal charge applied consistently with Article III:2 of GATT 1994, and antidumping and countervailing duties) imposed on or in connection with importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes. 1. Each Party shall ensure, in accordance with Article VIII:1 of the GATT 1994 and its interpretive notes, that all fees and charges of whatever character (other than customs duties, charges equivalent to an internal tax or other internal charge applied consistently with Article III:2 of the GATT 1994, and antidumping and countervailing duties) imposed on or in connection with importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purposes.
2. Neither Party may require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party. 2. No Party may require consular transactions, including related fees and charges, in connection with the importation of any good of another Party.
3. Each Party shall make available through the Internet or a comparable computerbased telecommunications network a current list of the fees and charges it imposes in connection with importation or exportation. 3. Each Party shall make available and maintain through the Internet a current list of the fees and charges it imposes in connection with importation or exportation.
4. The United States shall eliminate its merchandise processing fee on originating goods of Chile. 4. The United States shall eliminate its merchandise processing fee on originating goods.
Article 3.13: Export Taxes Article 3.11: Export Taxes
Neither Party may adopt or maintain any duty, tax, or other charge on the export of any good to the territory of the other Party, unless such duty, tax, or charge is adopted or maintained on any such good when destined for domestic consumption. Except as provided in Annex 3.10, no Party may adopt or maintain any duty, tax, or other charge on the export of any good to the territory of another Party, unless such duty, tax, or charge is adopted or maintained on any such good:

(a) when exported to the territories of all other Parties; and

 (b) any such good when destined for domestic consumption.

Article 3.14: Luxury Tax

  
Chile shall eliminate the Luxury Tax established in Article 46 of Decreto Ley 825 of 1974, according to the schedule set out in Annex 3.14. NO CORRESPONDING ARTICLE

 

Section E - Other Measures
Article 3.15: Distinctive Products		 Section E: Other Measures
Article 3.12: Distinctive Products
1. Chile shall recognize Bourbon Whiskey and Tennessee Whiskey, which is a straight Bourbon Whisky authorized to be produced only in the State of Tennessee, as distinctive products of the United States. Accordingly, Chile shall not permit the sale of any product as Bourbon Whiskey or Tennessee Whiskey, unless it has been manufactured in the United States in accordance with the laws and regulations of the United States governing the manufacture of Bourbon Whiskey and Tennessee Whiskey. 1. Each Central American Party and the Dominican Republic shall recognize Bourbon Whiskey and Tennessee Whiskey, which is a straight Bourbon Whiskey authorized to be produced only in the State of Tennessee, as distinctive products of the United States. Accordingly, those Parties shall not permit the sale of any product as Bourbon Whiskey or Tennessee Whiskey, unless it has been manufactured in the United States in accordance with the laws and regulations of the United States governing the manufacture of Bourbon Whiskey and Tennessee Whiskey.
2. The United States shall recognize Pisco Chileno (Chilean Pisco), Pajarete, and Vino Asoleado, which is authorized in Chile to be produced only in Chile, as distinctive products of Chile. Accordingly, the United States shall not permit the sale of any product as Pisco Chileno (Chilean Pisco), Pajarete, or Vino Asoleado, unless it has been manufactured in Chile in accordance with the laws and regulations of Chile governing the manufacture of Pisco, Pajarete, and Vino Asoleado. 2. At the request of a Party, the Committee on Trade in Goods shall consider whether to recommend that the Parties amend the Agreement to designate a good as a distinctive product for purposes of this Article.

Section F - Agriculture

 Section F: Agriculture
Article 3.13: Administration and Implementation of Tariff-Rate Quotas
NO CORRESPONDING ARTICLE 1. Each Party shall implement and administer the tariff-rate quotas for agricultural goods set out in Appendix I or, if applicable, Appendix II or III to its Schedule to Annex 3.3 (hereafter “TRQs”) in accordance with Article XIII of the GATT 1994, including its interpretive notes, and the Import Licensing Agreement.

 2. Each Party shall ensure that:

(a) its procedures for administering its TRQs are transparent, made available to the public, timely, nondiscriminatory, responsive to market conditions, minimally burdensome to trade, and reflect end user preferences;

 (b) any person of a Party that fulfills the Party’s legal and administrative requirements shall be eligible to apply and to be considered for an import license or quota allocation under the Party’s TRQs;

 (c) it does not allocate any portion of a quota to an industry association or nongovernmental organization, except as otherwise provided in this Agreement;

 (d) solely government authorities administer its TRQs, except as otherwise provided in this Agreement; and

 (e) it allocates quotas under its TRQs in commercially viable shipping quantities and, to the maximum extent possible, in the amounts that importers request.

3. Each Party shall strive to administer its TRQs in a manner that allows importers to fully utilize import quotas.

 4. No Party may condition application for, or utilization of, import licenses or quota allocations under its TRQs on the re-export of an agricultural good.

 5. No Party may count food aid or other non-commercial shipments in determining whether an import quota under its TRQs has been filled.

6. On request of any Party, an importing Party shall consult with the requesting Party regarding the administration of its TRQs.

Article 3.16: Agricultural Export Subsidies

Article 3.14: Agricultural Export Subsidies
1. The Parties share the objective of the multilateral elimination of export subsidies for agricultural goods and shall work together toward an agreement in the World Trade Organization to eliminate those subsidies and prevent their reintroduction in any form. 1. The Parties share the objective of the multilateral elimination of export subsidies for agricultural goods and shall work together toward an agreement in the WTO to eliminate those subsidies and prevent their reintroduction in any form.  
2. Except as provided in paragraph 3, neither Party shall introduce or maintain any export subsidy on any agricultural good destined for the territory of the other Party. 2. Except as provided in paragraph 3, no Party may introduce or maintain any export subsidy on any agricultural good destined for the territory of another Party.
3. Where an exporting Party considers that a non-Party is exporting an agricultural good to the territory of the other Party with the benefit of export subsidies, the importing Party shall, on written request of the exporting Party, consult with the exporting Party with a view to agreeing on specific measures that the importing Party may adopt to counter the effect of such subsidized imports. If the importing Party adopts the agreed-upon measures, the exporting Party shall refrain from applying any export subsidy to exports of such good to the territory of the importing Party. 3. Where an exporting Party considers that a non-Party is exporting an agricultural good to the territory of another Party with the benefit of export subsidies, the importing Party shall, on written request of the exporting Party, consult with the exporting Party with a view to agreeing on specific measures that the importing Party may adopt to counter the effect of such subsidized imports. If the importing Party adopts the agreed-on measures, the exporting Party shall refrain from applying any subsidy to its exports of the good to the territory of the importing Party. If the importing Party does not adopt the agreed-on measures, the exporting Party may apply an export subsidy on its exports of the good to the territory of the importing Party only to the extent necessary to counter the trade-distorting effect of subsidized exports of the good from the non-Party to the importing Party’s territory.

Article 3.17: Agricultural
Marketing and Grading Standards

 NO CORRESPONDING ARTICLE
1. Where a Party adopts or maintains a measure respecting the classification, grading, or marketing of a domestic agricultural good, or a measure to expand, maintain, or develop its domestic market for an agricultural good, it shall accord treatment to a like good of the other Party that is no less favorable than it accords under the measure to the domestic agricultural good, regardless of whether the good is intended for direct consumption or for processing.

2. Paragraph 1 shall be without prejudice to the rights of either Party under the WTO Agreement or under this Agreement regarding measures respecting the classification, grading, or marketing of an agricultural good.

 3. The Parties hereby establish a Working Group on Agricultural Trade, comprising representatives of the Parties, which shall meet annually or as otherwise agreed. The Working Group shall review, in coordination with the Committee on Technical Barriers to Trade established in Article 7.8 (Committee on Technical Barriers to Trade), the operation of agricultural grade and quality standards and programs of expansion and development that affect trade between the Parties, and shall resolve any issues that may arise regarding the operation of those standards and programs. The Group shall report to the Committee on Trade in Goods established in Article 3.23.

 4. Each Party shall recognize the other Party’s grading programs for beef, as set out in Annex 3.17.

Annex 3.17
Mutual Recognition of Grading Programs For the Purpose of Marketing Beef

NO CORRESPONDING ANNEX

 

 
Further to Article 3.17(4), this Annex sets out commitments of each Party to recognize the other Party’s grading programs for beef.

Background on the Chilean and U.S. Grading Programs

The Official Chilean “Norms” for grading beef (Norma Chilena 1306-2002) provide for five categories (V, C, U, N, and O) that differentiate the beef carcass population based on a combination of yield and palatability characteristics. Those characteristics include sex class, maturity as determined by dentition, and a subjective overall fat covering score. The “V” and “C” classifications are perceived as highest in “value,” while the “U” and “N” classifications are considered the lowest in “value.” The “O” classification applies only to calves. Bulls in Chile are only eligible for the “U” and “N” categories.

 The Official United States Standards for Grades of Carcass Beef outline two distinct types of beef grades for use in the United States – quality grades and yield grades. Beef carcasses may carry a quality grade, a yield grade, both a quality and a yield grade, or may be left ungraded. USDA quality grades indicate expected palatability or eating satisfaction of the meat and USDA yield grades are estimates of the percentage of a carcass that yields boneless, closely trimmed retail cuts from the round, loin, rib and chuck.

 USDA beef quality grades are USDA Prime, USDA Choice, USDA Select, USDA Standard, USDA Commercial, USDA Utility, USDA Cutter, and USDA Canner. Beef steers and heifers are eligible for all the quality grade designations. Cows are eligible for all but the USDA Prime grade. Bullocks may only be graded USDA Prime, USDA Choice, USDA Select, USDA Standard, and USDA Utility. Bulls may not be quality graded.

 Because grading is voluntary in the United States, not all carcasses are quality graded. Beef products merchandised as ungraded in the United States usually originate from those carcasses that did not qualify for one of the highest three grades (USDA Prime, USDA Choice, and USDA Select). The U.S. industry generally terms ungraded beef carcasses and their resulting cuts as "No Roll" beef, because a grade stamp has not been rolled on the carcass. For the USDA quality grade standards, maturity and marbling are the major considerations in beef quality grading.

Because most beef that packers market in the United States is not in carcass form, but instead is in the form of vacuum packaged subprimal cuts, only the quality grade is routinely used as a value determining trait in the marketing of beef products in the United States and ultimately passed on to the consumer. Accordingly, Article 3.17 and this Annex do not apply to USDA yield grades. 

Commitments Regarding Mutual Recognition of the Chilean and U.S. Grading Programs

The Parties confirm their shared understanding that:

1. Chile acknowledges that USDA’s Agricultural Marketing Service (AMS) is a competent entity of grading quality, certifying all materials referred to in Article No. 5 of Regulation No. 19.162, with respect to meats exported to Chile from the United States. 

2. The United States recognizes the competency of certification entities inscribed in the Registro de Certificadores de Carne division of the Servicio Agrícola y Ganadero of Chile (SAG) to certify Chilean meats destined toward that market. 

3. AMS and SAG shall recognize each other’s respective beef grading systems for the purposes of:

(a) the marketing of USDA graded beef in Chile;2 and 

2 The table comparing Chilean beef norms and USDA quality grades is intended to serve as a reference for consumers in Chile by describing USDA beef quality grade names in terms that are easily and already understood. However, this comparison is not intended to denote equivalency between the two grading systems for the purposes of reciprocal grading or the marketing of SAG classified beef under USDA grade names in the United States.

 (b) the marketing of beef classified by SAG to Chilean norms in the United States.

4. The comparative beef cut nomenclature table set out in Appendix 3.17-A shall serve as a reference for the labeling of beef traded between the two markets under the terms of Article 3.17 and this Annex.

5. The standards of grading systems employed by Chile and the United States are described in Appendix 3.17-B. The Parties may modify Appendix 3.17-B by means of exchanges of letters between the USDA, AMS and the SAG. Furthermore, by means of written communications, the USDA, AMS, and the SAG may institute and modify standards of Chilean meat cuts and North American meat cuts. 

6. USDA graded beef (e.g., USDA Prime, USDA Choice, and USDA Select) produced in the United States may be exported to Chile provided that a label indicates its Chilean equivalent and its country of origin. 

7. Beef produced in Chile may be exported to the United States provided that the label or sticker indicates the applicable Chilean norm and country of origin. 

8. AMS and SAG shall work cooperatively to assist the beef industries of the United States and Chile in following these procedures. 
Appendix 3.17-A
Comparative Beef Cut Nomenclature Table / Equivalencia De Cortes
 NO CORRESPONDING APPENDIX

Comparative Beef Cut Nomenclature Table / Equivalencia De Cortes

Appendix 3.17-B
Comparison of Chilean Beef Norms and USDA Beef Quality Grades

 NO CORRESPONDING APPENDIX

Comparison of Chilean Beef Norms and USDA Beef Quality Grades

Article 3.18: Agricultural Safeguard Measures

Article 3.15: Agricultural Safeguard Measures
1. Notwithstanding Article 3.3(2), each Party may impose a safeguard measure in the form of additional import duties, consistent with paragraphs 2 through 7, on an originating agricultural good listed in its section of Annex 3.18. The sum of any such additional duty and any import duties or other charges applied pursuant to Article 3.3(2) shall not exceed the lesser of:

(a) the prevailing most-favored-nation (MFN) applied rate; or

(b) the MFN applied rate of duty in effect on the day immediately preceding the date of entry into force of this Agreement.

 1. Notwithstanding Article 3.3, each Party may apply a measure in the form of an additional import duty on an agricultural good listed in that Party’s Schedule to Annex 3.15, provided that the conditions in paragraphs 2 through 7 are met. The sum of any such additional import duty and any other customs duty on such good shall not exceed the lesser of:

(a) the prevailing most-favored-nation (MFN) applied rate of duty; or

(b) the MFN applied rate of duty in effect on the day immediately preceding the date of entry into force of this Agreement.
2. A Party may impose a safeguard measure only if the unit import price of the good enters the Party’s customs territory at a level below a trigger price for that good as set out in that Party’s section of Annex 3.18.

(a) The unit import price shall be determined on the basis of the C.I.F. import price of the good in U.S. dollars for goods entering Chile, and on the basis of the F.O.B. import price of the good in U.S. dollars for goods entering the United States.

 (b) The trigger prices for the goods eligible for a safeguard measure, which reflect historic unit import values for the products concerned, are listed in Annex 3.18. The Parties may mutually agree to periodically evaluate and update the trigger prices.

 2. A Party may apply an agricultural safeguard measure during any calendar year if the quantity of imports of the good during such year exceeds the trigger level for that good set out in its Schedule to Annex 3.15.
3. The additional duties under paragraph 2 shall be set in accordance with the following schedule:

(a) if the difference between the unit import price of the item expressed in terms of domestic currency (the “import price”) and the trigger price as defined under paragraph 2(b) is less than or equal to 10 percent of the trigger price, no additional duty shall be imposed;

(b) if the difference between the import price and the trigger price is greater than 10 percent but less than or equal to 40 percent of the trigger price, the additional duty shall equal 30 percent of the difference between the MFN rate applicable under paragraph 1 and the preferential tariff rate;

(c) if the difference between the import price and the trigger price is greater than 40 percent but less than or equal to 60 percent of the trigger price, the additional duty shall equal 50 percent of the difference between the MFN rate applicable under paragraph 1 and the preferential tariff rate; 

(d) if the difference between the import price and the trigger price is greater than 60 percent but less than or equal to 75 percent, the additional duty shall equal 70 percent of the difference between the MFN rate applicable under paragraph 1 and the preferential tariff rate; and  

(e) if the difference between the import price and the trigger price is greater than 75 percent of the trigger price, the additional duty shall equal 100 percent of the difference between the MFN rate applicable under paragraph 1 and the preferential tariff rate. 

 3. The additional duty under paragraph 1 shall be set according to each Party’s Schedule to Annex 3.15.
4. Neither Party may, with respect to the same good, at the same time:

(a) impose a safeguard measure under this Article; and

(b) take a safeguard action under Section A of Chapter Eight (Trade Remedies).

 4. No Party may apply an agricultural safeguard measure and at the same time apply or maintain:

(a) a safeguard measure under Chapter Eight (Trade Remedies); or

 (b) a measure under Article XIX of the GATT 1994 and the Safeguards Agreement; with respect to the same good.
5. Neither Party may impose a safeguard measure on a good that is subject to a measure that the Party has imposed pursuant to Article XIX of GATT 1994 and the Safeguards Agreement, and neither Party may continue maintaining a safeguard measure on a good that becomes subject to a measure that the Party imposes pursuant to Article XIX of GATT 1994 and the Safeguards Agreement. 5. No Party may apply or maintain an agricultural safeguard measure:

(a) on or after the date that a good is subject to duty-free treatment under the Party’s Schedule to Annex 3.3; or

(b) that increases the in-quota duty on a good subject to a TRQ.
6. A Party may impose a safeguard measure only during the 12-year period beginning on the date of entry into force of this Agreement. Neither Party may impose a safeguard measure on a good once the good achieves duty-free status under this Agreement. Neither Party may impose a safeguard measure that increases a zero in-quota duty on a good subject to a tariff-rate quota.  6. Each Party shall implement an agricultural safeguard measure in a transparent manner. Within 60 days after applying a measure, a Party shall notify any Party whose good is subject to the measure, in writing, and shall provide it relevant data concerning the measure. On request, the Party applying the measure shall consult with any Party whose good is subject to the measure regarding application of the measure.
7. Each Party shall implement any safeguard measure in a transparent manner. Within 60 days after imposing a measure, a Party shall notify the other Party, in writing, and shall provide it relevant data concerning the measure. On request, the Party imposing the measure shall consult with the other Party with respect to the conditions of application of the measure. 7. A Party may maintain an agricultural safeguard measure only until the end of the calendar year in which the Party applies the measure.
8. The general operation of the agricultural safeguard provisions and the trigger prices for their implementation may be the subject of discussion and review in the Committee on Trade in Goods. 8. The Commission and the Committee on Agricultural Trade may review the implementation and operation of this Article.

 
9. For purposes of this Article, safeguard measure means an agricultural safeguard measure described in paragraph 1. 9. For purposes of this Article and Annex 3.15, agricultural safeguard measure means a measure described in paragraph 1.

Annex 3.18
Product Lists and Trigger Prices for Agricultural Safeguard

 NO CORRESPONDING ANNEX

Product Lists and Trigger Prices for Agricultural Safeguard
 NO CORRESPONDING ANNEX

Annex 3.15
Agricultural Safeguard Measures
General Notes

1. For each good listed in a Party’s Schedule to this Annex for which the agricultural safeguard trigger level is set out in that Schedule as a percentage of the applicable tariff-rate quota (TRQ), the trigger level in any year shall be determined by multiplying the in-quota quantity for that good for that year, as set out in Appendix I or, if applicable, Appendix II or III to the Party’s Schedule to Annex 3.3, by the applicable percentage. For each good listed in a Party’s Schedule to this Annex for which the trigger level is set out as a fixed initial amount in the Party’s Schedule, the trigger level set out in the Schedule shall be the trigger level in year one. The trigger level in any subsequent year shall be determined by adding to that amount the quantity derived by applying the applicable simple annual trigger growth rate to that amount. For purposes of this Annex, the term “year one” shall have the meaning given to that term in Annex 3.3.

2. For purposes of this Annex, prime and choice beef shall mean prime and choice grades of beef as defined in the United States Standards for Grades of Carcass Beef, promulgated pursuant to the Agricultural Marketing Act of 1946 (7 U.S.C. §§ 1621-1627), as amended.

3. (a) Costa Rica and the Dominican Republic shall conclude negotiations on the agricultural safeguard trigger levels to be applied to originating goods classified under tariff items 0207.13.91 and 0207.14.91 and subheadings 0402.10, 0402.21, and 0402.29 that are imported directly into the territory of Costa Rica from the territory of the Dominican Republic no later than one year after the date on which this Agreement enters into force with respect to Costa Rica and the Dominican Republic and any agreed trigger levels shall form part of this Annex.18

18 For greater certainty, Costa Rica shall apply note 7(b) of Costa Rica’s General Notes to Annex 3.3 to such goods.

(b) At the expiration of the one-year period, if Costa Rica and the Dominican Republic have not reached an agreement with respect to the agricultural safeguard trigger levels for goods classified under the tariff items and subheadings listed in subparagraph (a), Costa Rica may apply an agricultural safeguard trigger level for such goods in an amount equivalent to 130 percent of the in-quota quantity of the applicable tariff-rate quota set out in Appendix II of Costa Rica’s General Notes to Annex 3.3.

4. (a) Costa Rica and the Dominican Republic shall conclude negotiations on the agricultural safeguard trigger levels to be applied to originating goods classified under tariff items 0207.13.91 and 0207.14.91 and subheadings 0402.10, 0402.21, and 0402.29 that are imported directly into the territory of the Dominican Republic from the territory of Costa Rica no later than one year after the date on which this Agreement enters into force with respect to Costa Rica and the Dominican Republic and any agreed trigger levels shall form part of this Annex.19

19 For greater certainty, the Dominican Republic shall apply note 7(b) of the Dominican Republic’s General Notes to Annex 3.3 to such goods.

(b) At the expiration of the one-year period, if Costa Rica and the Dominican Republic have not reached an agreement with respect to the agricultural safeguard trigger levels for goods classified under the tariff items and subheadings listed in subparagraph (a), the Dominican Republic may apply an agricultural safeguard trigger level for such goods in an amount equivalent to 130 percent of the in-quota quantity of the applicable tariff-rate quota set out in Appendix II of the Dominican Republic’s General Notes to Annex 3.3.

5. (a) The Dominican Republic and Nicaragua shall conclude negotiations on the agricultural safeguard trigger levels to be applied to originating goods classified under tariff items 0207.13.91 and 0207.14.91 that are imported directly into the territory of Nicaragua from the territory of the Dominican Republic no later than one year after the date on which this Agreement enters into force with respect to the Dominican Republic and Nicaragua and any agreed trigger levels shall form part of this Annex.20

20 For greater certainty, Nicaragua shall apply note 7(b) of Nicaragua’s General Notes to Annex 3.3 to such goods.

(b) At the expiration of the one-year period, if the Dominican Republic and Nicaragua have not reached an agreement with respect to the agricultural safeguard trigger levels for goods classified under the tariff items listed in subparagraph (a), Nicaragua may apply an agricultural safeguard trigger level for such goods in an amount equivalent to 130 percent of the in-quota quantity of the applicable tariff-rate quota set out in Appendix II of Nicaragua’s General Notes to Annex 3.3.

6. (a) The Dominican Republic and Nicaragua shall conclude negotiations on the agricultural safeguard trigger levels to be applied to originating goods classified under tariff items 0207.13.91 and 0207.14.91 that are imported directly into the territory of the Dominican Republic from the territory of Nicaragua no later than one year after the date on which this Agreement enters into force with respect to the Dominican Republic and Nicaragua and any agreed trigger levels shall form part of this Annex.21

 21 For greater certainty, the Dominican Republic shall apply note 11(b) of the Dominican Republic’s General Notes to Annex 3.3 to such goods.

(b) At the expiration of the one-year period, if the Dominican Republic and Nicaragua have not reached an agreement with respect to the agricultural safeguard trigger levels for goods classified under the tariff items listed in subparagraph (a), the Dominican Republic may apply an agricultural safeguard trigger level for such goods in an amount equivalent to 130 percent of the in-quota quantity of the applicable tariff-rate quota set out in Appendix III of the Dominican Republic’s General Notes to Annex 3.3.

7. For purposes of this Annex:

Central America or Dominican Republic good shall mean a good that satisfies the requirements of Chapter Four (Rules of Origin and Origin Procedures), except that operations performed in or material obtained from the United States shall be considered as if the operations were performed in a non-Party and the material was obtained from a non-Party; and United States good shall mean a good that satisfies the requirements of Chapter Four (Rules of Origin and Origin Procedures), except a good produced entirely in and exclusively of materials obtained from the territory of a Central American Party, the Dominican Republic, or a non-Party. 

Schedule of Costa Rica

Schedule of the Dominican Republic

Schedule of El Salvador

Schedule of Guatemala

Schedule of Honduras

Schedule of Nicaragua

Schedule of the United States22

 22 For purposes of determining the country-specific application of agricultural safeguard measures, the United States shall apply the non-preferential rules of origin that it applies in the normal course of trade. 
NO CORRESPONDING ARTICLE 

Article 3.16: Sugar Compensation Mechanism
1. In any year, the United States may, at its option, apply a mechanism that results in compensation to a Party’s exporters of sugar goods in lieu of according duty-free treatment to some or all of the duty-free quantity of sugar goods established for that Party in Appendix I to the Schedule of the United States to Annex 3.3. Such compensation shall be equivalent to the estimated economic rents that the Party’s exporters would have obtained on exports to the United States of any such amounts of sugar goods and shall be provided within 30 days after the United States exercises this option. The United States shall notify the Party at least 90 days before it exercises this option and, on request, shall enter into consultations with the Party regarding application of the mechanism.

2. For purposes of this Article, sugar good means a good provided for in the subheadings listed in subparagraph 3(c) of Appendix I to the Schedule of the United States to Annex 3.3.
NO CORRESPONDING ARTICLE

Article 3.17: Consultations on Trade in Chicken
The Parties shall consult on, and review the implementation and operation of the Agreement as it relates to, trade in chicken in the ninth year after the date of entry into force of this Agreement.
NO CORRESPONDING ARTICLE

Article 3.18: Agriculture Review Commission
The Parties shall establish an Agriculture Review Commission in the 14th year after the date of entry into force of this Agreement to review the implementation and operation of the Agreement as it relates to trade in agricultural goods. The Agriculture Review Commission shall evaluate the effects of trade liberalization under the Agreement, the operation of Article 3.15 and possible extension of agricultural safeguard measures under that Article, progress toward global agricultural trade reform in the WTO, and developments in world agricultural markets. The Agriculture Review Commission shall report its findings and any recommendations to the Commission.
  Article 3.19: Committee on Agricultural Trade
 see Article 3.17.3

 

 1. Not later than 90 days after the date of entry into force of this Agreement, the Parties shall establish a Committee on Agricultural Trade, comprising representatives of each Party.

 2. The Committee shall provide a forum for:

 (a) monitoring and promoting cooperation on the implementation and administration of this Section;

 (b) consultation between the Parties on matters related to this Section in coordination with other committees, subcommittees, working groups, or other bodies established under this Agreement; and

 (c) undertaking any additional work that the Commission may assign.

 3. The Committee shall meet at least once a year unless it decides otherwise. Meetings of the Committee shall be chaired by the representatives of the Party hosting the meeting.

 4. All decisions of the Committee shall be taken by consensus, unless the Committee otherwise decides. 
Section G - Textiles and Apparel Section G: Textiles and Apparel
Article 3.20: Refund of Customs Duties
NO CORRESPONDING ARTICLE 1. On request of an importer, a Party shall refund any excess customs duties paid in connection with the importation into its territory of an originating textile or apparel good between January 1, 2004 and the date of entry into force of this Agreement for that Party. For purposes of applying this Article, the importing Party shall consider a good to be originating if the Party would have considered the good to be originating had it been imported into its territory on the date of entry into force of this Agreement for that Party.

2. Paragraph 1 shall not apply with respect to textile or apparel goods imported into, or imported from, the territory of a Party if it provides written notice to the other Parties by no later than 90 days before the date of entry into force of this Agreement for that Party that it will not comply with paragraph 1.

3. Notwithstanding paragraph 2, paragraph 1 shall apply with respect to textile or apparel goods imported from the territory of a Party if it provides written notice to the other Parties by no later than 90 days before the date of entry into force of this Agreement for that Party that it shall provide a benefit for textile or apparel goods imported into its territory that the importing and exporting Parties have agreed is equivalent to the benefit provided in paragraph 1.

 4. This Article shall not apply to a textile or apparel good that qualifies for preferential tariff treatment under Article 3.21, 3.27, or 3.28. 
NO CORRESPONDING ARTICLE

Article 3.21: Duty-Free Treatment for Certain Goods

1. An importing and an exporting Party may identify at any time particular textile or apparel goods of the exporting Party that they mutually agree fall within:

(a) hand-loomed fabrics of a cottage industry;

 (b) hand-made cottage industry goods made of such hand-loomed fabrics; or

 c) traditional folklore handicraft goods.

2. The importing Party shall grant duty-free treatment to goods so identified, if certified by the competent authority of the exporting Party.
NO CORRESPONDING ARTICLE

Article 3.22: Elimination of Existing Quantitative Restrictions
Not later than the date of entry into force of this Agreement, the United States shall eliminate the existing quantitative restrictions it maintains under the Agreement on Textiles and Clothing as set out in Annex 3.22.
Article 3.19: Bilateral Emergency Actions Article 3.23: Textile Safeguard Measures
1. If, as a result of the elimination of a duty provided for in this Agreement, a textile or apparel good benefiting from preferential tariff treatment under this Agreement is being imported into the territory of a Party in such increased quantities, in absolute terms or relative to the domestic market for that good, and under such conditions as to cause serious damage, or actual threat thereof, to a domestic industry producing a like or directly competitive good, the importing Party may, to the extent and for such time as may be necessary to prevent or remedy such damage and to facilitate adjustment, take emergency action, consisting of an increase in the rate of duty on the good to a level not to exceed the lesser of:

(a) the most-favored-nation (MFN) applied rate of duty in effect at the time the action is taken; and 

(b) the MFN applied rate of duty in effect on the date of entry into force of this Agreement. 

 

 1. Subject to the following paragraphs, and during the transition period only, if, as a result of the reduction or elimination of a duty provided for in this Agreement, a textile or apparel good of another Party is being imported into the territory of a Party in such increased quantities, in absolute terms or relative to the domestic market for that good, and under such conditions as to cause serious damage, or actual threat thereof, to a domestic industry producing a like or directly competitive good, the importing Party may, to the extent necessary to prevent or remedy such damage and to facilitate adjustment, apply a textile safeguard measure to that good, consisting of an increase in the rate of duty on the good to a level not to exceed the lesser of:

(a) the most-favored-nation (MFN) applied rate of duty in effect at the time the measure is applied; and

(b) the MFN applied rate of duty in effect on the date of entry into force of this Agreement.
2. In determining serious damage, or actual threat thereof, the importing Party:

(a) shall examine the effect of increased imports from the other Party on the particular industry, as reflected in changes in such relevant economic variables as output, productivity, utilization of capacity, inventories, market share, exports, wages, employment, domestic prices, profits and investment, none of which is necessarily decisive; and  

(b) shall not consider changes in technology or consumer preference as factors supporting a determination of serious damage or actual threat thereof.

 2. In determining serious damage, or actual threat thereof, the importing Party:

(a) shall examine the effect of increased imports of the good of the other Party on the particular industry, as reflected in changes in such relevant economic variables as output, productivity, utilization of capacity, inventories, market share, exports, wages, employment, domestic prices, profits, and investment, none of which, either alone or combined with other factors, shall necessarily be decisive; and 

(b) shall not consider changes in technology or consumer preference as factors supporting a determination of serious damage or actual threat thereof.  
3. The importing Party may take an emergency action under this Article only following an investigation by its competent authorities. 3. The importing Party may apply a textile safeguard measure only following an investigation by its competent authority.
4. The importing Party shall deliver to the other Party, without delay, written notice of its intent to take emergency action, and, on request of the other Party, shall enter into consultations with that Party. 4. If, on the basis of the results of the investigation under paragraph 3, the importing Party intends to apply a textile safeguard measure, the importing Party shall promptly provide written notice to the exporting Party of its intent to apply a textile safeguard measure, and on request shall enter into consultations with that Party. The importing Party and the exporting Party shall begin the consultations without delay and shall complete them within 60 days of the date of receipt of the request. The importing Party shall make a decision on whether to apply a safeguard measure within 30 days of completion of the consultations.
5. The following conditions and limitations shall apply to any emergency action taken under this Article:

(a) no emergency action may be maintained for a period exceeding three years;

 (b) no emergency action may be taken or maintained beyond the period ending eight years after duties on a good have been eliminated pursuant to this Agreement;

 (c) no emergency action may be taken by an importing Party against any particular good of the other Party more than once; and

 (d) on termination of the action, the good will return to duty-free status.

 5. The following conditions and limitations apply to any textile safeguard measure:

(a) no Party may maintain a textile safeguard measure for a period exceeding three years;

(b) no Party may apply a textile safeguard measure to the same good of another Party more than once;

(c) on termination of the textile safeguard measure, the Party applying the measure shall apply the rate of duty set out in its Schedule to Annex 3.3, as if the measure had never been applied; and

 (d) no Party may maintain a textile safeguard measure beyond the transition period.
6. The Party taking an emergency action under this Article shall provide to the Party against whose good the action is taken mutually agreed trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the emergency action. Such concessions shall be limited to textile and apparel goods, unless the Parties otherwise agree.  If the Parties are unable to agree on compensation, the Party against whose good the emergency action is taken may take tariff action having trade effects substantially equivalent to the trade effects of the emergency action taken under this Article. Such tariff action may be taken against any goods of the Party taking the emergency action. The Party taking the tariff action shall apply such action only for the minimum period necessary to achieve the substantially equivalent trade effects. The importing Party's obligation to provide trade compensation and the exporting Party's right to take tariff action shall terminate when the emergency action terminates.

 

 6. The Party applying a textile safeguard measure shall provide to the Party against whose good the measure is taken mutually agreed trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the textile safeguard measure. Such concessions shall be limited to textile or apparel goods, unless the consulting Parties otherwise agree. If the consulting Parties are unable to agree on compensation within 30 days of application of a textile safeguard measure, the Party against whose good the measure is taken may take tariff action having trade effects substantially equivalent to the trade effects of the textile safeguard measure. Such tariff action may be taken against any goods of the Party applying the measure. The Party taking the tariff action shall apply such action only for the minimum period necessary to achieve the substantially equivalent trade effects. The importing Party’s obligation to provide trade compensation and the exporting Party’s right to take tariff action shall terminate when the textile safeguard measure terminates.
7. Nothing in this Agreement shall be construed to limit a Party's right to restrain imports of textile and apparel goods in a manner consistent with the Agreement on Textiles and Clothing or the Safeguards Agreement. However, a Party may not take or maintain an emergency action under this Article against a textile or apparel good that is subject, or becomes subject, to a safeguard measure that a Party takes pursuant to either such WTO agreement.

7. (a) Each Party retains its rights and obligations under Article XIX of the GATT 1994 and the Safeguards Agreement.

 (b) No Party may apply, with respect to the same good at the same time, a textile safeguard measure and:

 (i) a safeguard measure under Chapter Eight (Trade Remedies); or

 (ii) a measure under Article XIX of the GATT 1994 and the Safeguards Agreement. 

Article 3.20: Rules of Origin and Related Matters

Article 3.25: Rules of Origin and Related Matters
Application of Chapter Four

1. Except as provided in this Section, Chapter Four (Rules of Origin and Origin Procedures) applies to textile and apparel goods.

 2. The rules of origin set forth in this Agreement shall not apply in determining the country of origin of a textile or apparel good for non-preferential purposes.

 NO CORRESPONDING PARAGRAPH
Consultations

3. On the request of either Party, the Parties shall consult to consider whether the rules of origin applicable to particular textile and apparel goods should be revised to address issues of availability of supply of fibers, yarns or fabrics in the territories of the Parties.

 Consultations on Rules of Origin

1. On request of a Party, the Parties shall, within 30 days after the request is delivered, consult on whether the rules of origin applicable to a particular textile or apparel good should be modified.
4. In the consultations referred to in paragraph 3, each Party shall consider all data presented by the other Party showing substantial production in its territory of the particular good. The Parties shall consider that substantial production has been shown if a Party demonstrates that its domestic producers are capable of supplying commercial quantities of the good in a timely manner. 2. In the consultations referred to in paragraph 1, each Party shall consider all data that a Party presents demonstrating substantial production in its territory of the good. The Parties shall consider that there is substantial production if a Party demonstrates that its domestic producers are capable of supplying commercial quantities of the good in a timely manner.
5. The Parties shall endeavor to conclude consultations within 60 days of a request. An agreement between the Parties resulting from the consultations shall supersede any prior rule of origin for such good when approved by the Parties in accordance with Article 24.2 (Amendments). 3. The Parties shall endeavor to conclude the consultations within 90 days after delivery of the request. If the Parties reach an agreement to modify a rule of origin for a particular good, the agreement shall supersede that rule of origin when approved by the Parties in accordance with Article 19.1.3(b) (The Free Trade Commission).
NO CORRESPONDING PARAGRAPH Fabrics, Yarns, and Fibers Not Available in Commercial Quantities

4. (a) At the request of an interested entity, the United States shall, within 30 business days of receiving the request, add a fabric, fiber, or yarn in an unrestricted or restricted quantity to the list in Annex 3.25, if the United States determines, based on information supplied by interested entities, that the fabric, fiber, or yarn is not available in commercial quantities in a timely manner in the territory of any Party, or if no interested entity objects to the request.

 (b) If there is insufficient information to make the determination in subparagraph (a), the United States may extend the period within which it must make that determination by no more than 14 business days, in order to meet with interested entities to substantiate the information.

 (c) If the United States does not make the determination in subparagraph (a) within 15 business days of the expiration of the period within which it must make that determination, as specified in subparagraph (a) or (b), the United States shall grant the request.

 (d) The United States may, within six months after adding a restricted quantity of a fabric, fiber, or yarn to the list in Annex 3.25 pursuant to subparagraph (a), eliminate the restriction.

 (e) If the United States determines before the date of entry into force of this Agreement that any fabrics or yarns not listed in Annex 3.25 are not available in commercial quantities in the United States pursuant to section 112(b)(5)(B) of the African Growth and Opportunity Act (19 U.S.C. § 3721(b)), section 204(b)(3)(B)(ii) of the Andean Trade Preference Act (19 U.S.C.§ 3203(b)(3)(B)(ii)), or section 213(b)(2)(A)(v)(II) of the Caribbean Basin Economic Recovery Act (19 U.S.C. § 2703(b)(2)(A)(v)(II)), the United States shall add such fabrics or yarns in an unrestricted quantity to the list in Annex 3.25.

 5. At the request of an interested entity made no earlier than six months after the United States has added a fabric, yarn, or fiber in an unrestricted quantity to Annex 3.25 pursuant to paragraph 4, the United States may, within 30 business days after it receives the request:

(a) delete the fabric, yarn, or fiber from the list in Annex 3.25; or

 (b) introduce a restriction on the quantity of the fabric, yarn, or fiber added to Annex 3.25, if the United States determines, based on the information supplied by interested entities, that the fabric, yarn, or fiber is available in commercial quantities in a timely manner in the territory of any Party. Such deletion or restriction shall not take effect until six months after the United States publishes its determination.

 6. Promptly after the date of entry into force of this Agreement, the United States shall publish the procedures it will follow in considering requests under paragraphs 4 and 5.
De Minimis

6. A textile or apparel good provided for in Chapters 50 through 63 of the Harmonized System that is not an originating good, because certain fibers or yarns used in the production of the component of the good that determines the tariff classification of the good do not undergo an applicable change in tariff classification set out in Annex 4.1 (Specific Rules of Origin), shall nonetheless be considered to be an originating good if the total weight of all such fibers or yarns in that component is not more than seven percent of the total weight of that component. Notwithstanding the preceding sentence, a good containing elastomeric yarns in the component of the good that determines the tariff classification of the good shall be considered to be an originating good only if such yarns are wholly formed in the territory of a Party.

 

 

 

 

 

 

 De Minimis

 7. A textile or apparel good that is not an originating good because certain fibers or yarns used in the production of the component of the good that determines the tariff classification of the good do not undergo an applicable change in tariff classification set out in Annex 4.1 (Specific Rules of Origin), shall nonetheless be considered to be an originating good if the total weight of all such fibers or yarns in that component is not more than ten percent of the total weight of that component.4

 4 For greater certainty, when the good is a fiber, yarn, or fabric, the “component of the good that determines the tariff classification of the good” is all of the fibers in the yarn, fabric, or group of fibers. 

8. Notwithstanding paragraph 7, a good containing elastomeric yarns5 in the component of the good that determines the tariff classification of the good shall originate only if such yarns are wholly formed in the territory of a Party.6 

5 For greater certainty, the term “elastomeric yarns” does not include latex.

 6  For purposes of this paragraph, “wholly formed” means that all the production processes and finishing operations, starting with the extrusion of filaments, strips, film, or sheet, and including slitting a film or sheet into strip, or the spinning of all fibers into yarn, or both, and ending with a finished yarn or plied yarn, took place in the territory of a Party.
Treatment of Sets

 7. Notwithstanding the good specific rules in Annex 4.1 (Specific Rules of Origin), textile and apparel goods classifiable as goods put up in sets for retail sale as provided for in General Rule of Interpre