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CHAPTER 2

NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS


Section A: Definitions and Scope

Article 2.1: Definitions

For the purposes of this Chapter:

advertising films and recordings means recorded visual media or audio
materials, consisting essentially of images or sound, showing the nature or
operation of goods or services offered for sale or lease by a person of a Party, that
are of a kind suitable for exhibition to prospective customers but not for broadcast
to the general public;

Agreement on Agriculture means the Agreement on Agriculture, set out in
Annex 1A to the WTO Agreement;

commercial samples of negligible value means commercial or trade samples:
having a value, individually or in the aggregate as shipped, of not more than one
U.S. dollar or the equivalent amount in the currency of another Party; or so
marked, torn, perforated or otherwise treated that they are unsuitable for sale or
for use except as commercial samples;

consular transactions means requirements that goods of a Party intended for
export to the territory of another Party must first be submitted to the supervision
of the consul of the importing Party in the territory of the exporting Party for the
purpose of obtaining consular invoices or consular visas for commercial invoices,
certificates of origin, manifests, shippers’ export declarations, or any other
customs documentation required on or in connection with importation;

consumed means, with respect to a good:

(a)
actually consumed; or

(b)
further processed or manufactured:

(i)
so as to result in a substantial change in the value, form or
use of the good; or

(ii)
in the production of another good;

duty-free means free of customs duty;

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goods admitted for sports purposes means sports requisites admitted into the
territory of the importing Party for use in sports contests, demonstrations or
training in the territory of that Party;

goods intended for display or demonstration includes their component parts,
ancillary apparatuses and accessories;

import licensing means an administrative procedure requiring the submission of
an application or other documentation, other than that generally required for
customs clearance purposes, to the relevant administrative body of the importing
Party as a prior condition for importation into the territory of that Party;

Import Licensing Agreement means the Agreement on Import Licensing
Procedures, set out in Annex 1A to the WTO Agreement;

performance requirement means a requirement that:

(a)
a given level or percentage of goods or services be exported;

(b)
domestic goods or services of the Party granting a waiver of
customs duties or an import licence be substituted for imported
goods;

(c)
a person benefiting from a waiver of customs duties or a
requirement for an import licence purchase other goods or services
in the territory of the Party that grants the waiver of customs duties
or the import licence or accord a preference to domestically
produced goods;

(d)
a person benefiting from a waiver of customs duties or a
requirement for an import licence produce goods or supply services
in the territory of the Party that grants the waiver of customs duties
or the import licence, with a given level or percentage of domestic
content; or

(e)
relates in any way the volume or value of imports to the volume or
value of exports or to the amount of foreign exchange inflows,

but does not include a requirement that an imported good be:


(f)
subsequently exported;

(g)
used as a material in the production of another good that is
subsequently exported;


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(h)
substituted by an identical or similar good used as a material in the
production of another good that is subsequently exported; or

(i)
substituted by an identical or similar good that is subsequently
exported; and

printed advertising materials means those goods classified in Chapter 49 of the
Harmonized System, including brochures, pamphlets, leaflets, trade catalogues,
yearbooks published by trade associations, tourist promotional materials and
posters, that are used to promote, publicise or advertise a good or service, are
essentially intended to advertise a good or service, and are supplied free of charge.


Article 2.2: Scope


Unless otherwise provided in this Agreement, this Chapter applies to trade
in goods of a Party.


Section B: National Treatment and Market Access for Goods

Article 2.3: National Treatment

1.
Each Party shall accord national treatment to the goods of the other Parties
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.

2.
For greater certainty, the treatment to be accorded by a Party under
paragraph 1 means, with respect to a regional level of government, treatment no
less favourable than the most favourable treatment that the 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.
Paragraph 1 shall not apply to the measures set out in Annex 2-A
(National Treatment and Import and Export Restrictions).


Article 2.4: Elimination of Customs Duties

1.
Unless otherwise provided in this Agreement, no Party shall increase any
existing customs duty, or adopt any new customs duty, on an originating good.

2.
Unless otherwise provided in this Agreement, each Party shall
progressively eliminate its customs duties on originating goods in accordance with
its Schedule to Annex 2-D (Tariff Commitments).


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3.
On request of any Party, the requesting Party and one or more other Parties
shall consult to consider accelerating the elimination of customs duties set out in
their Schedules to Annex 2-D (Tariff Commitments).

4.
An agreement between two or more of the Parties to accelerate the
elimination of a customs duty on an originating good shall supersede any duty rate
or staging category determined pursuant to those Parties’ Schedules to Annex 2-D
(Tariff Commitments) for that good once approved by each Party to that
agreement in accordance with its applicable legal procedures. The parties to that
agreement shall inform the other Parties as early as practicable before the new rate
of customs duty takes effect.

5.
A Party may at any time unilaterally accelerate the elimination of customs
duties set out in its Schedule to Annex 2-D (Tariff Commitments) on originating
goods of one or more of the other Parties. A Party shall inform the other Parties
as early as practicable before the new rate of customs duty takes effect.

6.
For greater certainty, no Party shall prohibit an importer from claiming for
an originating good the rate of customs duty applied under the WTO Agreement.

7.
For greater certainty, a Party may raise a customs duty to the level set out
in its Schedule to Annex 2-D (Tariff Commitments) following a unilateral
reduction for the respective year.


Article 2.5: Waiver of Customs Duties

1.
No Party shall adopt any new waiver of a customs duty, or expand with
respect to an existing recipient or extend to any new recipient the application of an
existing waiver of a customs duty, that is conditioned, explicitly or implicitly, on
the fulfilment of a performance requirement.

2.
No Party shall, explicitly or implicitly, condition the continuation of any
existing waiver of a customs duty on the fulfilment of a performance requirement.


Article 2.6: Goods Re-entered after Repair and Alteration

1.
No Party shall apply a customs duty to a good, regardless of its origin, that
re-enters the Party’s territory after that good has been temporarily exported from
the Party’s territory to the territory of another Party for repair or alteration,
regardless of whether that repair or alteration could have been performed in the
territory of the Party from which the good was exported for repair or alteration or
increased the value of the good.1

1
For Canada, this paragraph shall not apply to certain ships of Chapter 89 that have been repaired
or altered. These ships will be treated in a manner consistent with the notes associated with the
relevant tariff items in Canada’s Schedule to Annex 2-D (Tariff Commitments).

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2.
No Party shall 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 the 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 2.7: Duty-Free Entry of Commercial Samples of Negligible Value and
Printed Advertising Material


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

(a)
commercial samples of negligible value 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)
printed advertising material be imported in packets that each
contain no more than one copy of the material and that neither that
material nor those packets form part of a larger consignment.


Article 2.8: Temporary Admission of Goods

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, that is necessary for carrying out the business activity,
trade or profession of a 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.


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2.
Each Party shall, at the request of the person concerned and for reasons its
customs authority considers valid, extend the time limit for duty-free temporary
admission beyond the period initially fixed.

3.
No Party shall condition the duty-free temporary admission of the goods
referred to in paragraph 1, other than to require that those goods:

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

(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 goods;


(d)
be capable of identification when imported and exported;

(e)
be exported on the departure of the national referred to in
subparagraph (a), or within any other period reasonably related to
the purpose of the temporary admission that 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.

4.
Each Party shall grant duty-free temporary admission for containers and
pallets regardless of their origin, that are in use or to be used in the shipment of
goods in international traffic.

(a)
For the purposes of this paragraph, container means an article of
transport equipment that is: fully or partially enclosed to constitute
a compartment intended for containing goods; substantial and has
an internal volume of one cubic metre or more; of a permanent
character and accordingly strong enough to be suitable for repeated
use; used in significant numbers in international traffic; specially
designed to facilitate the carriage of goods by more than one mode
of transport without intermediate reloading; and designed both for
ready handling, particularly when being transferred from one mode
of transport to another, and to be easy to fill and to empty, but does

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not include vehicles, accessories or spare parts of vehicles or
packaging.2

(b)
For the purposes of this paragraph, pallet means a small, portable
platform, which consists of two decks separated by bearers or a
single deck supported by feet, on which goods can be moved,
stacked and stored, and which is designed essentially for handling
by means of fork lift trucks, pallet trucks or other jacking devices.

5.
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 in addition to any other charges or penalties
provided for under its law.

6.
Each Party shall adopt and maintain procedures providing for the
expeditious release of goods admitted under this Article. To the extent possible,
those procedures shall provide that when a good admitted under this Article
accompanies a national of another Party who is seeking temporary entry, the good
shall be released simultaneously with the entry of that national.

7.
Each Party shall permit a good temporarily admitted under this Article to
be exported through a customs port other than the port through which it was
admitted.

8.
Each Party shall, in accordance with its law, provide that the importer or
other person responsible for a good admitted under this Article shall not be liable
for failure to export the good on presentation of satisfactory proof to the importing
Party that the good was destroyed within the period fixed for temporary
admission, including any lawful extension.

9.
Subject to Chapter 9 (Investment) and Chapter 10 (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
economical and prompt departure of that vehicle or container;3


2
Each Party shall eliminate customs duties on containers classified in HS 86.09 that have an
internal volume of less than one cubic metre on the date of entry into force of this Agreement for
that Party as set out in that Party’s Schedule to Annex 2-D (Tariff Commitments).

3
For greater certainty, nothing in this subparagraph shall be construed to prevent a Party from
adopting or maintaining highway and railway safety measures of general application, or from
preventing a vehicle or container from entering or exiting its territory in a location where the Party
does not maintain a customs port.

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

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

(d)
no Party shall 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 that container to the territory
of that other Party, or to the territory of any other Party.

10.
For the purposes of paragraph 9, vehicle means a truck, a truck tractor, a
tractor, a trailer unit or trailer, a locomotive, or a railway car or other railroad
equipment.


Article 2.9: Ad hoc Discussions

1.
Each Party shall designate and notify a contact point in accordance with
Article 27.5 (Contact Points), to facilitate communications between the Parties on
any matter covered by this Chapter, including any request or information
conveyed under Article 26.5 (Provision of Information) relating to a measure of a
Party that may affect the operation of this Chapter.

2.
A Party (the requesting Party) may request ad hoc discussions on any
matter arising under this Chapter (including a specific non-tariff measure) that the
requesting Party believes may adversely affect its interests in trade in goods,
except a matter that could be addressed under a Chapter-specific consultation
mechanism established under another Chapter, by delivering a written request to
another Party (the requested Party) through its contact point for this Chapter. The
request shall be in writing and identify the reasons for the request, including a
description of the requesting Party’s concerns and an indication of the provisions
of this Chapter to which the concerns relate. The requesting Party may provide all
the other Parties with a copy of the request.

3.
If the requested Party considers that the matter that is the subject of the
request should be addressed under a Chapter-specific consultation mechanism
established under another Chapter, it shall promptly notify the contact point for
this Chapter of the requesting Party and include in its notice the reasons it
considers that the request should be addressed under the other mechanism. The
requested Party shall promptly forward the request and its notice to the overall
contact points of the requesting and requested Parties designated under Article
27.5 (Contact Points) for appropriate action.


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4.
Within 30 days of receipt of a request under paragraph 2, the requested
Party shall provide a written reply to the requesting Party. Within 30 days of the
requesting Party’s receipt of the reply, the requesting and requested Parties (the
discussing Parties) shall meet in person or via electronic means to discuss the
matter identified in the request. If the discussing Parties choose to meet in person,
the meeting shall take place in the territory of the requested Party, unless the
discussing Parties decide otherwise.

5.
Any Party may submit a written request to the discussing Parties to
participate in the ad hoc discussions. If the matter has not been resolved prior to
the receipt of a Party’s request to participate and the discussing Parties agree, the
Party may participate in these ad hoc discussions subject to any conditions that
the discussing Parties may decide.

6.
If the requesting Party believes that the matter is urgent, it may request
that ad hoc discussions take place within a shorter time frame than that provided
for under paragraph 4. Any Party may request urgent ad hoc discussions if a
measure:

(a)
is applied without prior notice or without an opportunity for a Party
to avail itself of ad hoc discussions under paragraphs 2, 3 and 4;
and

(b)
may threaten to impede the importation, sale or distribution of an
originating good which is in the process of being transported from
the exporting Party to the importing Party, or has not been released
from customs control, or is in storage in a warehouse regulated by
the customs administration of the importing Party.

7.
Ad hoc discussions under this Article shall be confidential and without
prejudice to the rights of any Party, including being without prejudice to rights
pertaining to dispute settlement proceedings under Chapter 28 (Dispute
Settlement).


Article 2.10: Import and Export Restrictions

1.
Unless otherwise provided in this Agreement, no Party shall 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 GATT 1994 and its
interpretative notes, and to this end Article XI of GATT 1994 and its
interpretative notes are incorporated into and made part of this Agreement,
mutatis mutandis.


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2.
The Parties understand that 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 fulfilment of a performance
requirement; or

(c)
voluntary export restraints inconsistent with Article VI of GATT
1994, as implemented under Article 18 of the SCM Agreement and
Article 8.1 of the AD Agreement.

3.
For greater certainty, paragraph 1 applies to the importation of commercial
cryptographic goods.

4.
For the purposes of paragraph 3:

commercial cryptographic goods means any good
implementing or
incorporating cryptography, if the good is not designed or modified specifically
for government use and is sold or otherwise made available to the public.

5.
Paragraphs 1 and 2 shall not apply to the measures set out in Annex 2-A
(National Treatment and Import and Export Restrictions).

6.
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, no provision of this
Agreement shall be construed to prevent that Party from:

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

(b)
requiring, as a condition for exporting the good of that 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.

7.
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.


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8.
No Party shall, as a condition for engaging in importation or for the
importation of a good, require a person of another Party to establish or maintain a
contractual or other relationship with a distributor in its territory.4

9.
For greater certainty, paragraph 8 does not prevent a Party from requiring
a person referred to in that paragraph to designate a point of contact for the
purpose of facilitating communications between its regulatory authorities and that
person.

10.
For the purposes of paragraph 8:

distributor means a person of a Party who is responsible for the commercial
distribution, agency, concession or representation in the territory of that Party of
goods of another Party.


Article 2.11: Remanufactured Goods

1.
For greater certainty, Article 2.10.1 (Import and Export Restrictions) shall
apply to prohibitions and restrictions on the importation of remanufactured goods.

2.
If a Party adopts or maintains measures prohibiting or restricting the
importation of used goods, it shall not apply those measures to remanufactured
goods.5, 6


Article 2.12: Import Licensing

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

2.
Promptly after this Agreement enters into force for a Party, that Party shall
notify the other Parties of its existing import licensing procedures, if any. The
notice shall include the information specified in Article 5.2 of the Import
Licensing Agreement and any information required under paragraph 6.


4
This paragraph shall not apply to the importation or distribution of rice and paddy in Malaysia.
5
For greater certainty, subject to its obligations under this Agreement and the WTO Agreement, a
Party may require that remanufactured goods:

(a)
be identified as such for distribution or sale in its territory; and

(b)
meet all applicable technical requirements that apply to equivalent goods in new
condition.

6
This paragraph shall not apply to the treatment of certain remanufactured goods by Viet Nam as
set out in Annex 2-B (Remanufactured Goods).

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3.
A Party shall be deemed to be in compliance with the obligations in
paragraph 2 with respect to an existing import licensing procedure if:

(a)
it has notified that procedure to the WTO Committee on Import
Licensing provided for in Article 4 of the Import Licensing
Agreement together with the information specified in Article 5.2 of
that agreement;

(b)
in the most recent annual submission due before the date of entry
into force of this Agreement for that Party to the WTO Committee
on Import Licensing in response to the annual questionnaire on
import licensing procedures described in Article 7.3 of the Import
Licensing Agreement, it has provided, with respect to that
procedure, the information requested in that questionnaire; and

(c)
it has included in either the notice described in subparagraph (a) or
the annual submission described in subparagraph (b) any
information required to be notified to the other Parties under
paragraph 6.

4.
Each Party shall comply with Article 1.4(a) of the Import Licensing
Agreement with respect to any new or modified import licensing procedure. Each
Party shall also publish on an official government website any information that it
is required to publish under Article 1.4(a) of the Import Licensing Agreement.

5.
Each Party shall notify the other Parties of any new import licensing
procedures it adopts and any modifications it makes to its existing import
licensing procedures, if possible, no later than 60 days before the new procedure
or modification takes effect. In no case shall a Party provide the notification later
than 60 days after the date of its publication. The notification shall include any
information required under paragraph 6. A Party shall be deemed to be in
compliance with this obligation if it notifies a new import licensing procedure or a
modification to an existing import licensing procedure to the WTO Committee on
Import Licensing in accordance with Article 5.1, 5.2 or 5.3 of the Import
Licensing Agreement, and includes in its notification any information required to
be notified to the other Parties under paragraph 6.

6. (a)
A notice under paragraph 2, 3 or 5 shall state if, under any import
licensing procedure that is a subject of the notice:

(i)
the terms of an import licence for any product limit the
permissible end users of the product; or

(ii)
the Party imposes any of the following conditions on
eligibility for obtaining a licence to import any product:

(A)
membership in an industry association;

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(B)
approval by an industry association of the request
for an import licence;

(C)
a history of importing the product or similar
products;

(D)
minimum importer or end user production capacity;

(E)
minimum importer or end user registered capital; or

(F)
a contractual or other relationship between the
importer and a distributor in the Party’s territory.

(b)
A notice that states, under subparagraph (a), that there is a
limitation on permissible end users or a licence-eligibility condition
shall:

(i)
list all products for which the end-user limitation or licence-
eligibility condition applies; and

(ii)
describe the end-user limitation or licence-eligibility
condition.

7.
Each Party shall respond within 60 days to a reasonable enquiry from
another Party concerning its licensing rules and its procedures for the submission
of an application for an import licence, including the eligibility of persons, firms
and institutions to make an application, the administrative body or bodies to be
approached and the list of products subject to the licensing requirement.

8.
If a Party denies an import licence application with respect to a good of
another Party, it shall, on request of the applicant and within a reasonable period
after receiving the request, provide the applicant with a written explanation of the
reason for the denial.

9.
No Party shall apply an import licensing procedure to a good of another
Party unless it has, with respect to that procedure, met the requirements of
paragraph 2 or 4, as applicable.


Article 2.13: Transparency in Export Licensing Procedures7

1.
For the purposes of this Article:

export licensing procedure means a requirement that a Party adopts or maintains
under which an exporter must, as a condition for exporting a good from the

7
The obligations in this Article shall apply only to procedures for applying for an export licence.

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Party’s territory, submit an application or other documentation to an
administrative body or bodies, but does not include customs documentation
required in the normal course of trade or any requirement that must be fulfilled
prior to introduction of the good into commerce within the Party’s territory.

2.
Within 30 days of the date of entry into force of this Agreement for a Party,
that Party shall notify the other Parties in writing of the publications in which its
export licensing procedures, if any, are set out, including addresses of relevant
government websites. Thereafter, each Party shall publish in the notified
publications and websites any new export licensing procedure, or any
modification of an export licensing procedure, that it adopts as soon as practicable
but no later than 30 days after the new procedure or modification takes effect.

3.
Each Party shall ensure that it includes in the publications it notifies under
paragraph 2:

(a)
the texts of its export licensing procedures, including any
modifications it makes to those procedures;

(b)
the goods subject to each licensing procedure;

(c)
for each procedure, a description of:

(i)
the process for applying for a licence; and

(ii)
any criteria an applicant must meet to be eligible to apply
for a licence, such as possessing an activity licence,
establishing or maintaining an investment, or operating
through a particular form of establishment in a Party’s
territory;

(d)
a contact point or points from which interested persons can obtain
further information on the conditions for obtaining an export
licence;

(e)
the administrative body or bodies to which an application for a
licence or other relevant documentation must be submitted;

(f)
a description of or a citation to a publication reproducing in full
any measure or measures that the export licensing procedure is
designed to implement;

(g)
the period during which each export licensing procedure will be in
effect, unless the procedure will remain in effect until withdrawn or
revised in a new publication;


2-15
(h)
if the Party intends to use a licensing procedure to administer an
export quota, the overall quantity and, if practicable, value of the
quota and the opening and closing dates of the quota; and

(i)
any exemptions or exceptions available to the public that replace
the requirement to obtain an export licence, how to request or use
these exemptions or exceptions and the criteria for them.

4.
Except where doing so would reveal business proprietary or other
confidential information of a particular person, on request of another Party that
has a substantial trade interest in the matter, a Party shall provide, to the extent
possible, the following information regarding a particular export licensing
procedure that it adopts or maintains:

(a)
the aggregate number of licences that the Party has granted over a
recent period that the requesting Party has specified; and

(b)
measures, if any, that the Party has taken in conjunction with the
licensing procedure to restrict domestic production or consumption
or to stabilise production, supply or prices for the relevant good.

5.
Nothing in this Article shall be construed in a manner that would require a
Party to grant an export licence, or that would prevent a Party from implementing
its obligations or commitments under United Nations Security Council
Resolutions, as well as multilateral non-proliferation regimes, including: the
Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-
Use Goods and Technologies; the Nuclear Suppliers Group; the Australia Group;
the Convention on the Prohibition of the Development, Production, Stockpiling
and Use of Chemical Weapons and on Their Destruction, done at Paris, January
13, 1993; the Convention on the Prohibition of the Development, Production and
Stockpiling of Bacteriological (Biological) and Toxin Weapons and on Their
Destruction, done at Washington, London, and Moscow, April 10, 1972; the
Treaty on the Non-Proliferation of Nuclear Weapons, done at London, Moscow
and Washington, July 1, 1968; and the Missile Technology Control Regime.


Article 2.14: Administrative Fees and Formalities

1.
Each Party shall ensure, in accordance with Article VIII:1 of GATT 1994
and its interpretative notes, that all fees and charges of whatever character (other
than export taxes, 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.


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2.
No Party shall require consular transactions, including related fees and
charges, in connection with the importation of a good of another Party.

3.
Each Party shall make publicly available online a current list of the fees
and charges it imposes in connection with importation or exportation.

4.
No Party shall levy fees and charges on or in connection with importation
or exportation on an ad valorem basis.8

5.
Each Party shall periodically review its fees and charges, with a view to
reducing their number and diversity if practicable.


Article 2.15: Export Duties, Taxes or Other Charges

Except as provided for in Annex 2-C (Export Duties, Taxes or Other
Charges), no Party shall 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 that good when destined for domestic
consumption.


Article 2.16: Publication

Each Party shall promptly publish the following information in a non-
discriminatory and easily accessible manner, in order to enable interested parties
to become acquainted with it:

(a)
importation, exportation and transit procedures, including port,
airport and other entry-point procedures, and required forms and
documents;

(b)
applied rates of duties, and taxes of any kind imposed on or in
connection with importation or exportation;

(c)
rules for the classification or the valuation of products for customs
purposes;

(d)
laws, regulations and administrative rulings of general application
relating to rules of origin;


8
The Merchandise Processing Fee (MPF) shall be the only fee or charge of the United States to
which this paragraph shall apply. In addition, this paragraph shall not apply to any fee or charge
of the United States until three years after the date of entry into force of this Agreement for the
United States. Further, this paragraph shall not apply to any fee or charge of Mexico on or in
connection with the importation or exportation of a non-originating good until five years after the
date of entry into force of this Agreement for Mexico.

2-17
(e)
import, export or transit restrictions or prohibitions;

(f)
fees and charges imposed on or in connection with importation,
exportation or transit;

(g)
penalty provisions against breaches of import, export or transit
formalities;

(h)
appeal procedures;

(i)
agreements or parts of agreements with any country relating to
importation, exportation or transit;

(j)
administrative procedures relating to the imposition of tariff
quotas; and

(k)
correlation tables showing correspondence between any new
national nomenclature and the previous national nomenclature.


Article 2.17: Trade in Information Technology Products

Each Party shall be a participant in the WTO Ministerial Declaration on
Trade in Information Technology Products (Information Technology Agreement),
13 December 1996, and have completed the procedures for modification and
rectification of its Schedule of Tariff Concessions set out in the Decision of 26
March 1980, L/4962, in accordance with paragraph 2 of the Information
Technology Agreement.9, 10


Article 2.18: Committee on Trade in Goods

1.
The Parties hereby establish a Committee on Trade in Goods (Committee),
composed of government representatives of each Party.

2.
The Committee shall meet as necessary to consider any matters arising
under this Chapter. During the first five years after entry into force of this
Agreement, the Committee shall meet no less than once a year.

3.
The Committee’s functions shall include:


9
This Article shall not apply to Brunei Darussalam until one year after the date of entry into force
of this Agreement for Brunei Darussalam.

10
Notwithstanding this Article, Chile and Mexico shall endeavour to become participants in the
Information Technology Agreement. The eventual participation of Chile and Mexico in that
agreement shall be subject to the completion of their respective internal legal procedures.

2-18
(a)
promoting trade in goods between the Parties, including through
consultations on accelerating tariff elimination under
this
Agreement and other issues as appropriate;

(b)
addressing barriers to trade in goods between the Parties, other
than those within the competence of other committees, working
groups or any other subsidiary bodies established under this
Agreement, especially those related to the application of non-tariff
measures and, if appropriate, refer these matters to the Commission
for its consideration;

(c)
reviewing the future amendments to the Harmonized System to
ensure that each Party’s obligations under this Agreement are not
altered, including by establishing, as needed, guidelines for the
transposition of Parties’ Schedules to Annex 2-D (Tariff
Commitments) and consulting to resolve any conflicts between:

(i)
amendments to the Harmonized System and Annex 2-D
(Tariff Commitments); or

(ii)
Annex
2-D
(Tariff Commitments)
and
national
nomenclatures;

(d)
consulting on and endeavouring to resolve any differences that
may arise between the Parties on matters related to the
classification of goods under the Harmonized System and Annex
2-D (Tariff Commitments); and

(e)
undertaking any additional work that the Commission may assign
to it.

4.
The Committee shall consult, as appropriate, with other committees
established under this Agreement when addressing issues of relevance to those
committees.

5.
The Committee shall, within two years of the date of entry into force of
this Agreement, submit to the Commission an initial report on its work under
paragraphs 3(a) and 3(b). In producing this report, the Committee shall consult,
as appropriate, with the Committee on Agricultural Trade established under
Article 2.25 (Committee on Agricultural Trade) and the Committee on Textile and
Apparel Trade Matters established under Chapter 4 (Textile and Apparel Goods)
of this Agreement on portions of the report of relevance to those committees.





2-19
Section C: Agriculture

Article 2.19: Definitions

For the purposes of this Section:

agricultural goods means those goods referred to in Article 2 of the Agreement
on Agriculture;

export subsidies shall have the meaning assigned to that term in Article 1(e) of
the Agreement on Agriculture, including any amendment of that Article;

modern biotechnology means the application of:

(a)
in vitro nucleic acid
techniques,
including
recombinant
deoxyribonucleic acid (rDNA) and direct injection of nucleic acid
into cells or organelles; or

(b)
fusion of cells beyond the taxonomic family,

that overcome natural physiological reproductive or recombinant barriers and that
are not techniques used in traditional breeding and selection; and

products of modern biotechnology means agricultural goods, as well as fish and
fish products11 , developed using modern biotechnology, but does not include
medicines and medical products.


Article 2.20: Scope

This Section shall apply to measures adopted or maintained by a Party
relating to trade in agricultural goods.


Article 2.21: Agricultural Export Subsidies

1.
The Parties share the objective of the multilateral elimination of export
subsidies for agricultural goods and shall work together to achieve an agreement
in the WTO to eliminate those subsidies and prevent their reintroduction in any
form.

2.
No Party shall adopt or maintain any export subsidy on any agricultural
good destined for the territory of another Party.12


11
For the purposes of Article 2.27 (Trade of Products of Modern Biotechnology) and the
definition of “products of modern biotechnology”, “fish and fish products” are defined as products
in Chapter 3 of the Harmonized System.


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Article 2.22: Export Credits, Export Credit Guarantees or Insurance
Programmes

Recognising the ongoing work in the WTO in the area of export
competition and that export competition remains a key priority in multilateral
negotiations, Parties shall work together in the WTO to develop multilateral
disciplines to govern the provision of export credits, export credit guarantees and
insurance programmes, including disciplines on matters such as transparency,
self-financing and repayment terms.


Article 2.23: Agricultural Export State Trading Enterprises

The Parties shall work together toward an agreement in the WTO on
export state trading enterprises that requires:

(a)
the elimination of trade distorting restrictions on the authorisation
to export agricultural goods;

(b)
the elimination of any special financing that a WTO Member grants
directly or indirectly to state trading enterprises that export for sale
a significant share of the Member’s total exports of an agricultural
good; and

(c)
greater transparency regarding the operation and maintenance of
export state trading enterprises.


Article 2.24: Export Restrictions – Food Security
1.
Parties recognise that under Article XI:2(a) of GATT 1994, a Party may
temporarily apply an export prohibition or restriction that is otherwise prohibited
under Article XI:1 of GATT 1994 on foodstuffs13 to prevent or relieve a critical
shortage of foodstuffs, subject to meeting the conditions set out in Article 12.1 of
the Agreement on Agriculture.
2.
In addition to the conditions set out in Article 12.1 of the Agreement on
Agriculture under which a Party may apply an export prohibition or restriction,
other than a duty, tax or other charge, on foodstuffs:
(a)
a Party that:
(i)
imposes such a prohibition or restriction on the exportation
or sale for export of foodstuffs to another Party to prevent

12
For greater certainty and without prejudice to any Party’s position in the WTO, this Article does
not cover measures referred to in Article 10 of the Agreement on Agriculture.
13
For the purpose of this Article, foodstuffs include fish and fisheries products, intended for
human consumption.

2-21
or relieve a critical shortage of foodstuffs, shall in all cases
notify the measure to the other Parties prior to the date it
takes effect and, except when the critical shortage is caused
by an event constituting force majeure, shall notify the
measure to the other Parties at least 30 days prior to the date
it takes effect; or
(ii)
as of the date of entry into force of this Agreement for that
Party, maintains such a prohibition or restriction, shall,
within 30 days of that date, notify the measure to the other
Parties.
(b)
A notification under this paragraph shall include the reasons for
imposing or maintaining the prohibition or restriction, as well as an
explanation of how the measure is consistent with Article XI:2(a)
of GATT 1994, and shall note alternative measures, if any, that the
Party considered before imposing the prohibition or restriction.
(c)
A measure shall not be subject to notification under this paragraph
or paragraph 4 if it prohibits or restricts the exportation or sale for
export only of a foodstuff or foodstuffs of which the Party
imposing the measure has been a net importer during each of the
three calendar years preceding the imposition of the measure,
excluding the year in which the Party imposes the measure.
(d)
If a Party that adopts or maintains a measure referred to in
subparagraph (a) has been a net importer of each foodstuff subject
to that measure during each of the three calendar years preceding
imposition of the measure, excluding the year in which the Party
imposes the measure, and that Party does not provide the other
Parties with a notification under subparagraph (a), the Party shall,
within a reasonable period of time, provide to the other Parties
trade data demonstrating that it was a net importer of the foodstuff
or foodstuffs during these three calendar years.
3.
A Party that is required to notify a measure under paragraph 2(a) shall:
(a)
consult, on request, with any other Party having a substantial
interest as an importer of the foodstuffs subject to the measure,
with respect to any matter relating to the measure;
(b)
on the request of any Party having a substantial interest as an
importer of the foodstuffs subject to the measure, provide that
Party with relevant economic indicators bearing on whether a
critical shortage within the meaning of Article XI:2(a) of GATT
1994 exists or is likely to occur in the absence of the measure, and
on how the measure will prevent or relieve the critical shortage;
and

2-22
(c)
respond in writing to any question posed by any other Party
regarding the measure within 14 days of receipt of the question.

4.
A Party which considers that another Party should have notified a measure
under paragraph 2(a) may bring the matter to the attention of that other Party. If
the matter is not satisfactorily resolved promptly thereafter, the Party which
considers that the measure should have been notified may itself bring the measure
to the attention of the other Parties.
5.
A Party should ordinarily terminate a measure subject to notification under
paragraph 2(a) or 4 within six months of the date it is imposed. A Party
contemplating continuation of a measure beyond six months from the date it is
imposed shall notify the other Parties no later than five months after the date the
measure is imposed and provide the information specified in paragraph 2(b).
Unless the Party has consulted with the other Parties that are net importers of any
foodstuff the exportation of which is prohibited or restricted under the measure,
the Party shall not continue the measure beyond 12 months from the date it is
imposed. The Party shall immediately discontinue the measure when the critical
shortage, or threat thereof, ceases to exist.
6.
No Party shall apply any measure that is subject to notification under
paragraph 2(a) or 4 to food purchased for non-commercial humanitarian purposes.


Article 2.25: Committee on Agricultural Trade
1.
The Parties hereby establish a Committee on Agricultural Trade,
composed of government representatives of each Party.

2.
The Committee on Agricultural Trade shall provide a forum for:

(a)
promoting trade in agricultural goods between the Parties under
this Agreement and other issues as appropriate;

(b)
monitoring and promoting cooperation on the implementation and
administration of this Section, including notification of export
restrictions on foodstuffs as stipulated in Article 2.24 (Export
Restrictions – Food Security), and discussing the cooperative work
identified in Article 2.21 (Agricultural Export Subsidies), Article
2.22 (Export Credits, Export Credit Guarantees or Insurance
Programmes) and Article 2.23 (Agricultural Export State Trading
Enterprises);

(c)
consultation among the Parties on matters related to this Section in
coordination with other committees, working groups or any other
subsidiary bodies established under this Agreement; and


2-23
(d)
undertaking any additional work that the Committee on Trade in
Goods and the Commission may assign.

3.
The Committee on Agricultural Trade shall meet as necessary. During the
first five years after entry into force of this Agreement, the Committee on
Agricultural Trade shall meet no less than once a year.


Article 2.26: Agricultural Safeguards

Originating agricultural goods from any Party shall not be subject to any
duties applied by a Party pursuant to a special safeguard taken under the
Agreement on Agriculture.


Article 2.27: Trade of Products of Modern Biotechnology

1.
The Parties confirm the importance of transparency, cooperation and
exchanging information related to the trade of products of modern biotechnology.

2.
Nothing in this Article shall prevent a Party from adopting measures in
accordance with its rights and obligations under the WTO Agreement or other
provisions of this Agreement.

3.
Nothing in this Article shall require a Party to adopt or modify its laws,
regulations and policies for the control of products of modern biotechnology
within its territory.

4.
Each Party shall, when available and subject to its laws, regulations and
policies, make available publicly:

(a)
any documentation requirements for completing an application for
the authorisation of a product of modern biotechnology;

(b)
a summary of any risk or safety assessment that has led to the
authorisation of a product of modern biotechnology; and

(c)
a list or lists of the products of modern biotechnology that have
been authorised in its territory.

5.
Each Party shall designate and notify a contact point or contact points for
the sharing of information on issues related to low level presence (LLP) 14
occurrences, in accordance with Article 27.5 (Contact Points).

14
For the purposes of this Article, “LLP occurrence” means the inadvertent low level presence in
a shipment of plants or plant products, except for a plant or plant product that is a medicine or
medical product, of rDNA plant material that is authorised for use in at least one country, but not
in the importing country, and if authorised for food use, a food safety assessment has been done

2-24

6.
In order to address an LLP occurrence, and with a view to preventing a
future LLP occurrence, on request of an importing Party, an exporting Party shall,
when available and subject to its laws, regulations and policies:

(a)
provide a summary of the risk or safety assessment or assessments,
if any, that the exporting Party conducted in connection with an
authorisation of a specific plant product of modern biotechnology;

(b)
provide, if known to the exporting Party, contact information for
any entity within its territory that received authorisation for the
plant product of modern biotechnology and which the Party
believes is likely to possess:

(i)
any validated methods that exist for the detection of the
plant product of modern biotechnology found at a low level
in a shipment;

(ii)
any reference samples necessary for the detection of the
LLP occurrence; and

(iii)
relevant information that can be used by the importing Party
to conduct a risk or safety assessment or, if a food safety
assessment is appropriate, relevant information for a food
safety assessment in accordance with Annex 3 of the Codex
Guideline for the Conduct of Food Safety Assessment of
Foods Derived from Recombinant-DNA Plants (CAC/GL
45-2003); and

(c)
encourage an entity referred to in subparagraph (b) to share the
information referred to in subparagraphs (b)(i), (b)(ii) and (b)(iii)
with the importing Party.

7.
In the event of an LLP occurrence, the importing Party shall, subject to its
laws, regulations and policies:

(a)
inform the importer or the importer’s agent of the LLP occurrence
and of any additional information that the importer will be required
to submit to allow the importing Party to make a decision on the
disposition of the shipment in which the LLP occurrence has been
found;

(b)
if available, provide to the exporting Party a summary of any risk
or safety assessment that the importing Party has conducted in
connection with the LLP occurrence; and

based on the Codex Guideline for the Conduct of a Food Safety Assessment of Foods Derived from
Recombinant-DNA Plants (CAC/GL 45-2003).

2-26
Section D: Tariff-Rate Quota Administration


Article 2.28: Scope and General Provisions

1.
Each Party shall implement and administer tariff-rate quotas (TRQs16) in
accordance with Article XIII of GATT 1994, including its interpretative notes, the
Import Licensing Agreement and Article 2.12 (Import Licensing). All TRQs
established by a Party under this Agreement shall be incorporated into that Party’s
Schedule to Annex 2-D (Tariff Commitments).

2.
Each Party shall ensure that its procedures for administering its TRQs are
made available to the public, are fair and equitable, are no more administratively
burdensome than absolutely necessary, are responsive to market conditions and
are administered in a timely manner.

3.
The Party administering a TRQ shall publish all information concerning its
TRQ administration, including the size of quotas and eligibility requirements; and,
if the TRQ will be allocated, application procedures, the application deadline, and
the methodology or procedures that will be used for the allocation or reallocation,
on its designated publicly available website at least 90 days prior to the opening
date of the TRQ concerned.


Article 2.29: Administration and Eligibility

1.
Each Party shall administer its TRQs in a manner that allows importers the
opportunity to utilise TRQ quantities fully.

2. (a)
Except as provided in subparagraphs (b) and (c), no Party shall
introduce a new or additional condition, limit or eligibility
requirement on the utilisation of a TRQ for importation of a good,
including in relation to specification or grade, permissible end-use
of the imported product or package size, beyond those set out in its
Schedule to Annex 2-D (Tariff Commitments).17

(b)
A Party seeking to introduce a new or additional condition, limit or
eligibility requirement on the utilisation of a TRQ for importation
of a good shall notify the other Parties at least 45 days prior to the
proposed effective date of the new or additional condition, limit or

16
For the purposes of this Section, TRQs means only TRQs that are established under this
Agreement as set out in a Party’s Schedule to Annex 2-D (Tariff Commitments). For greater
certainty, this Section shall not apply to TRQs set out in a Party’s Schedule to the WTO
Agreement.

17
For greater certainty, this paragraph shall not apply to conditions, limits or eligibility
requirements that apply regardless of whether or not the importer utilises the TRQ when importing
the good.

2-27
eligibility requirement.
Any Party with a demonstrable
commercial interest in supplying the good may submit a written
request for consultations to the Party seeking to introduce the new
or additional condition, limit or eligibility requirement. On receipt
of such a request for consultations, the Party seeking to introduce
the new or additional condition, limit or eligibility requirement
shall promptly undertake consultations with the Party that
submitted the request,
in accordance with Article 2.32.6
(Transparency).

(c)
The Party seeking to introduce the new or additional condition,
limit or eligibility requirement may do so if:

(i)
it has consulted with any Party with a demonstrable
commercial interest in supplying the good that has
submitted a written request for consultations pursuant to
subparagraph (b); and

(ii)
no Party with a demonstrable commercial interest in
supplying the good that submitted a written request for
consultations pursuant to subparagraph (b) objected, after
the consultation, to the introduction of the new or additional
condition, limit or eligibility requirement.

(d)
A new or additional condition, limit or eligibility requirement that
is the outcome of any consultation held pursuant to subparagraph
(c), shall be circulated to the Parties prior to its implementation.


Article 2.30: Allocation18

1.
In the event that access under a TRQ is subject to an allocation
mechanism, each importing Party shall ensure that:

(a)
any person of a Party that fulfils the importing Party’s eligibility
requirements is able to apply and to be considered for a quota
allocation under the TRQ;

(b)
unless otherwise agreed, it does not allocate any portion of the
quota to a producer group, condition access to an allocation on the
purchase of domestic production or limit access to an allocation to
processors;


18
For the purposes of this Section, “allocation mechanism” means any system where access to the
TRQ is granted on a basis other than first-come first-served.

2-28
(c)
each allocation is made in commercially viable shipping quantities
and, to the maximum extent possible, in the amounts that importers
request;

(d)
an allocation for in-quota imports is applicable to any tariff lines
subject to the TRQ and is valid throughout the TRQ year;

(e)
if the aggregate TRQ quantity requested by applicants exceeds the
quota size, allocation to eligible applicants shall be conducted by
equitable and transparent methods;

(f)
applicants have at least four weeks after the opening of the
application period to submit their applications; and

(g)
quota allocation takes place no later than four weeks before the
opening of the quota period, unless the allocation is based in whole
or in part on import performance during the 12-month period
immediately preceding the quota period. If the Party bases the
allocation in whole or in part on import performance during the 12-
month period immediately preceding the quota period, the Party
shall make a provisional allocation of the full quota amount no later
than four weeks before the opening of the quota period. All final
allocation decisions, including any revisions, shall be made and
communicated to applicants by the beginning of the quota period.

2.
During the first TRQ year that this Agreement is in force for a Party, if
less than 12 months remain in the TRQ year on the date of entry into force of this
Agreement for that Party, the Party shall make available to quota applicants,
beginning on the date of entry into force of this Agreement for that Party, the
quota quantity established in its Schedule to Annex 2-D (Tariff Commitments),
multiplied by a fraction the numerator of which shall be a whole number
consisting of the number of months remaining in the TRQ year on the date of
entry into force of this Agreement for that Party, including the entirety of the
month in which this Agreement enters into force for that Party, and the
denominator of which shall be 12. The Party shall make the entire quota quantity
established in its Schedule to Annex 2-D (Tariff Commitments) available to quota
applicants beginning on the first day of each TRQ year thereafter that the quota is
in operation.

3.
The Party administering a TRQ shall not require the re-export of a good as
a condition for application for, or utilisation of, a quota allocation.

4.
Any quantity of goods imported under a TRQ under this Agreement shall
not be counted towards, or reduce the quantity of, any other TRQ provided for

2-29
such goods in a Party’s Schedule to the WTO Agreement or under any other trade
agreements.19


Article 2.31: Return and Reallocation of TRQs

1.
When a TRQ is administered by an allocation mechanism, a Party shall
ensure that there is a mechanism for the return and reallocation of unused
allocations in a timely and transparent manner that provides the greatest possible
opportunity for the TRQ to be filled.

2.
Each Party shall publish on a regular basis on its designated publicly
available website all information concerning amounts allocated, amounts returned
and, if available, quota utilisation rates. In addition, each Party shall publish on
the same website amounts available for reallocation and the application deadline,
at least two weeks prior to the date on which the Party will begin accepting
applications for reallocations.


Article 2.32: Transparency

1.
Each Party shall identify the entity or entities responsible for administering
its TRQs and designate and notify at least one contact point, in accordance with
Article 27.5 (Contact Points), to facilitate communications between the Parties on
matters relating to the administration of its TRQs. Each Party shall promptly
notify the other Parties of any amendments to the details of its contact point.

2.
When a TRQ is administered by an allocation mechanism, the name and
address of allocation holders shall be published on the designated publicly
available website.

3.
When a TRQ is administered on a first-come, first-served basis, over the
course of each year, the importing Party’s administering authority shall publish, in
a timely and continually on-going manner on its designated publicly available
website, utilisation rates and remaining available quantities for each TRQ.

4.
When a TRQ of an importing Party that is administered on a first-come,
first-served basis fills, that Party shall publish a notice to this effect on its
designated publicly available website within 10 days.


19
For greater certainty, nothing in this paragraph shall prevent a Party from applying a different
in-quota rate of customs duty to goods from other Parties, as set out in that Party’s Schedule to
Annex 2-D (Tariff Commitments), than that applied to the same goods of non-Parties under a TRQ
established under the WTO Agreement. Further, nothing in this paragraph requires a Party to
change the in-quota quantity of any TRQ established under the WTO Agreement.

2-30
5