|
|
|
[TRANSLATION]
The governments of the Republics of Panama and Costa Rica, desirous of
strengthening the long-standing ties of fraternal friendship between the two countries and
sharing the view that there is a need to broaden their markets, increase output in a way
that will best promote trade between them while creating shared economic benefits and
ensuring as far as possible that the scope of those benefits is similar for both in order
to best foster their active, voluntary and ongoing participation and to improve the
standard of living and employment opportunities of their peoples, have decided to enter
into this Treaty on Free Trade and Preferential Trade Practices.
Article 1
The Contracting Parties agree to continue the free trade and
preferential trade practices system established by the treaty they signed on 2 August 1961
and extended through the Protocol of 22 June 1972, in accordance with the provisions that
follow. They also agree to take measures to regulate the movement and transport of goods
between the two countries.
Article 2
The natural or manufactured goods originating in the respective
territories of the Contracting Parties that figure in the lists annexed to this Treaty, or
that are added to such lists in the future, shall be freely traded, enjoy preferential
treatment or be subject to quantitative controls. Products that are merely assembled,
packed, packaged, mixed, cut or diluted in the exporting country shall not be considered
to originate there. Notwithstanding, whenever any doubt arises concerning the origin of a
good and that doubt cannot be resolved bilaterally, the Joint Standing Committee (JSC)
established through later provisions of this Treaty will be charged with making a final
determination.
The lists annexed to this treaty and any additions or modifications to
them shall be considered parts of the Treaty and shall be duly classified with seven digit
code numbers in accordance with the tariff classifications officially used by both
countries.
Article 3
Goods coming under the free trade system will be exempt from all import
and export duties.
Article 4
Goods traded under the preferential trade system shall be subject to
only a percentage of the customs duties established in the countries’ respective
general tariffs. The exact percentage shall be specified in the lists annexed to this
Treaty and in any additions to them. Any preferential treatment must be established on a
product by product basis.
Article 5
Goods traded under either the free trade or preferential trade system
shall be exempt from consular duties and any other taxes, surcharges or fees attached to
the act of importing or exporting or that is levied on imports or exports.
Article 6
The exemptions mentioned in the preceding articles do not include fees
or duties for barge transport, docking, storage and handling of goods, or any other such
fees that are legally payable for port, storage, security, transport or similar services.
Article 7
The Parties agree to review the trade situation every two years through
the JSC, which will examine the evolution of trade over the previous biennium, evaluate
the results of the system established by the Treaty and review the lists so that, if
necessary, any measures needed to increase reciprocal trade or to ensure compliance with
the spirit of equity at the heart of the Treaty can be instituted.
Article 8
A Contracting Party wanting to add one or more products to the lists
mentioned in Article 3, or wanting to modify preferential treatment previously agreed
upon, shall present a written request to the other Party at least thirty days before the
matter is to be taken up by the JSC. If the Committee accepts the request, it shall inform
the governments of the products to be added to the lists or of the modification in
preferential treatment. Such addition or modification will enter into force after the
corresponding exchange of notes between the Ministries of Foreign Affairs has been
verified.
Article 9
When one of the Signatory States finds serious problems of competition
for a specific enterprise or branch of industry, it shall submit the matter to the JSC for
consideration. The JSC may agree to impose quantitative measures or modify those already
existing for goods included on the list, or it may delete the items in question from the
list.
Such changes will take effect as of the date established by the
JSC.
Upon the request of one of the Contracting Parties, the JSC shall meet
within a period of 30 calendar days to rule on the adoption of the measures referred to in
this article. If the Committee does not meet within that period, the requesting Party
shall take it that it was not possible to reach an agreement and can impose unilateral
measures.
If the JSC should meet but not reach agreement, the affected Party may
resort to provisional measures, such as suspension of free trade for the good in question
or the establishment of a quota or other restriction, until such time as the JSC takes
pertinent action.
In the case of a suspension of free trade, the suspension shall enter
into force one year after it has been announced.
Quotas or other restrictions shall enter into force 60 calendar days
after the date on which they were announced. Such measures shall in no way move toward
eliminating trade that is being carried out between the Parties.
Article 10
Products originating in the territory of one of the Contracting Parties
and deposited in a duty-free zone located in the territory of the other Party will be
treated according to the regime figuring in the lists referred to in Article 3 once their
admission to the customs area of the importing country is final.
Article 11
A customs form signed by the exporter must accompany goods traded under
the provisions of this Treaty. Said form must include a declaration of origin and will be
subject to examination and approval by customs officials of both countries.
Article 12
With the exception stated in Article 13, the natural goods or
manufactured products originating in the territory of one Signatory State shall be treated
as domestic goods in the territory of the other for purposes of national or municipal
taxes and fees on production, sale, trade or consumption. They shall not be subjected to
any kind of quantitative measures except for health, security or law enforcement controls
applicable in the territories of the Contacting Parties.
In regard to domestic taxes already existing or that may be imposed in
the future on specific goods not produced in the importing country, efforts will be made
to ensure that such taxes do not become de facto import duties that tend toward
eliminating trade. In such cases, the importing country should impose the same tax for at
least the same amount on similar imported goods originating in third countries.
Article 13
The participation of the Republic of Panama in this Treaty is subject
to the condition that the Treaty will apply to all the territory of the Republic of Panama
except for those land and water-covered areas that the Republic of Panama has placed under
the jurisdiction of the United States of America for the effective periods of treaties and
conventions signed with that country for the construction, maintenance and cleaning,
running and protection of the Panama Canal.
Article 14
The Contracting Parties agree not to grant, through a most favored
nation clause, the concessions they grant to each other through this Treaty now or in the
future to third countries from outside Central America with whom they may sign trade
treaties or conventions.
Article 15
Given that unfair trade practices go against the very purpose of this
Treaty, each Contracting Parties shall use the legal means at its disposal to keep goods
from being exported at a price below normal value. The purpose of this is to avoid
distorting production and commerce in the importing country.
When either of the Contacting Parties believes there is evidence of
unfair practices, it shall submit the case to the JSC for consideration. Within five days
of receiving such a request, the JSC shall give a ruling or authorize a temporary
suspension of the Free Trade or Preferential Treatment regime, as appropriate. In the
latter case, trade would be allowed only after a security deposit equal to the customs
duties in effect in the pertinent general tariff is made. Suspension will be granted for a
maximum of 30 days. During that period the JSC will have to resolve the question. If a
country receives no initial decision from the JSC in the five days mentioned above, it may
proceed to demand the above-mentioned security deposit. If the JSC rules that unfair trade
practices do in fact exist, the affected Party will be entitled to the security deposit
and moreover can charge the relevant customs duties retroactively to one month prior to
the date on which it lodged the complaint.
If the unfair trade practice continues, the duties set in the pertinent
tariff go on being charged.
Article 16
The Contracting Parties agree to provide the facilities needed to
ensure that present and future trade between them can be carried out smoothly and
discriminatory practices of an administrative or customs nature are avoided.
Article 17
To facilitate trade growing out of this Treaty and to improve
competitiveness between the two countries, the Contracting Parties shall appropriately
establish any mechanisms needed to achieve full use of financial, transport, storage and
duty-free zone facilities. They shall also implement a payment clearance system.
Article 18
If one of the Parties modifies its exchange system, it shall notify the
other Party as expeditiously as possible.
If one of the Parties believes that an enterprise or branch of industry
is affected by such measures, it shall so inform the JSC so that pertinent measures to
correct the situation may be adopted. Such corrective measures can be provisional and
shall never go beyond what is strictly necessary to re-establish the competitive
relationship that existed prior to the implementation of the exchange measures.
Article 19
Each Signatory State shall grant full freedom of transit through its
territory for goods going to or coming from the other State. Such transit shall not be
subject to any discrimination or quantitative restriction.
When faced with freight back up or situations of force majeur, the
Contracting Parties will provide equitable treatment for the movement of goods to its own
population and to goods in transit to the other State.
Transit operations will be effected through the legally approved
channels and be subject to the laws and customs regulations in effect in the transit
territory. Nonetheless, efforts will be made to streamline procedures for goods in
transit.
Goods in transit, wherever they are going and even if not included in
the free trade and preferential treatment agreement, will be exempted from payment of any
kind of duties, taxes or national and municipal fees. They will, however, be subject to
fees for services and to compliance with all health, security and law enforcement
requirements.
Article 20
The Signatory States commit to improving their communications systems
as far as possible in order to facilitate and increase traffic between them. They also
agree to negotiate the levelling of transport rates between their respective territories
and related legal and regulatory provisions.
Article 21
Commercial and private seagoing vessels and airplanes of one
Contracting Party shall receive the same treatment as domestic ships and airplanes in the
ports and airports of the other Party. In like manner, any land vehicles registered in one
of the Signatory States shall receive equal treatment in the territory of the other.
Cabotage vessels will also receive equal treatment in ports of both
Parties. Presentation of the bill of lading by the ship’s captain shall be sufficient
for customs purposes and a visa issued by a consulate will not be required.
Article 22
The stipulations of Article 21 do not imply that the registration and
control procedures that a country has in place regarding the entry, circulation, stay or
exit of ships, air planes and vehicles for health, security, law enforcement and
protection of public interest reasons need not be complied with. Equally it does not imply
that air planes have the right to make commercial stopovers without the corresponding
authorization and it in no way affects Article VII of the Chicago Convention on
International Civil Aviation.
Article 23
This Treaty and any regulations growing out of it will be administered
by a Joint Standing Committee (JSC) made up of the Ministers of Industry and Commerce or
their representatives and any advisors from the public and private sectors that the
Contracting Parties may name. Decisions of the JSC shall be binding on the Signatory
States.
Article 24
The Joint Standing Committee shall have the following powers and
duties:
To approve the lists of goods to be put under the free trade regime and
any additions to them;
To approve the lists and percentages for goods subject to preferential
tariffs, and any additions or changes to them;
To examine and approve import quotas or controls and other quantitative
measures for products that benefit from the free trade regime or preferential tariffs;
To study and resolve any problems and conflicts related to the
implementation of this treaty and any unfair trade practices that may affect the trade
regime established by the treaty;
To propose to the Signatory States: (1) modifications to or broadening
of the treaty; (2) adaptation of the Rules of Procedure signed on 12 October 1969 to bring
them into line with this treaty;
To meet whenever convened by one of the Parties, but to meet on its own
every two years in accordance with the provisions of Article 7;
To set the criteria and standards to be used for determining the origin
of goods;
To recommend ways to promote joint investments in order to develop new
activities of special interest to both countries. It should also foster complementary
industries agreements to facilitate and increase reciprocal trade;
To enact within 120 days of this treaty entering into force the Rules
of Procedure that will govern its own organization and work;
To carry out any functions, tasks and studies assigned to it by the
Signatory States, as well as those emanating directly from this treaty.
Article 25
The Signatory States agree to resolve any differences that may come up
regarding the interpretation or implementation of any of the clauses of this treaty within
the spirit of the treaty and in accordance with the provisions of its Rules of Procedure.
If they do not reach an agreement through the steps set out in the
Rules of Procedure, the Contracting Parties agree to name an Arbitration Board and accept
its ruling. While waiting for such a ruling, the matter in dispute will be put on hold for
all effects and purposes.
Article 26
This treaty will enter into force upon the exchange of the instruments
of ratification and will remain in force until renounced by one of the Signatory States.
Renunciation will take effect three years after it is declared.
Article 27
The Signatory States agree to review this treaty every five years.
Article 28
This Treaty will be submitted for ratification in accordance with the
procedures existing in each of the Signatory States. The instruments of ratification shall
be exchanged in Panama City, Republic of Panama, and a certified copy will be sent to the
General Secretariat of the United Nations for registration, as stipulated in Article 102
of the United Nations Charter.
Article 29
The lists of goods in force between the countries by virtue of the
treaty signed on 22 August 1961 and extended by the Protocol of 22 June 1972 shall be part
of the treaty as of the exchange of the instruments of ratification referred to in Article
28.
Nonetheless, some goods are hereby provisionally added to the list
subject to the free trade regime and others are to be subject to provisional quotas equal
to the average level of imports in 1971 and 1972. Within a reasonable period of time, the
JSC will decide upon the definitive treatment of said goods.
GOODS TO BE SUBJECTED TO THE PROVISIONAL TRADE REGIME:
To be included provisionally in the free trade regime:
- Orange and lemon pulp
- Tuna and shrimp nets
- Trunks, suitcases and small cases
- Steel posts
- Cast aluminium and aluminium sheet and accessories
- Everyday candles and all classes of ornamental, special, votive and
liturgical candles
Provisional quotas in both directions equal the average trade levels of
1971 and 1972:
- Fluorescent lamps
- Polyurethane foam
- Yeast
The respective Plenipotentiaries hereby sign this treaty, in two exact
copies, in Panama City on the eighth day of June, Nineteen Hundred and Seventy Three (8
June 1973).
|
