WORLD TRADE
ORGANIZATIONWT/REG125/1
27 August 2001
(01-4114)
Committee on Regional Trade Agreements Original: Spanish
FREE TRADE AGREEMENT BETWEEN CHILE AND MEXICO
The following text reproduces the Free Trade Agreement.1
_______________
FREE TRADE AGREEMENT BETWEEN CHILE AND MEXICO
PREAMBLE
The Government of the Republic of Chile (Chile) and the Government of the United Mexican
States (Mexico), resolved to :
Strengthen  the special bonds of friendship and cooperation between their nations;
Fortify the Latin American integration process to achieve the objectives envisaged in the
Montevideo Treaty 1980;
Achieve  a better balance in trade relations between their countries;
Contribute  to the harmonious development and expansion of world trade and broader
international cooperation;
Create  an expanded and secure market for the goods and services produced in their territories;
Reduce  distortions to trade;
Establish  clear and mutually advantageous rules governing their trade;
Ensure  a predictable commercial framework for business planning and investment;
Build on their respective rights and obligations under the Marrakesh Agreement Establishing
the World Trade Organization, the Montevideo Treaty 1980 and other multilateral and bilateral
instruments of integration and cooperation;
Enhance  the competitiveness of their firms in global markets;
Encourage  innovation and creativity through the protection of intellectual property rights;
                                                     
1 The annexes (Annex 4-03;  Annexes I-VI) have b een remitted to the Secretariat (Despatch 3006) so
that interested Members can consult them. They are also available at the web site of the Department ofEconomic Affairs of Mexico at http://www.economia-snci.gob.mx/tratados/tlcchile/frame3.htmWT/REG125/1
Page 2
Create  new employment opportunities and improve working conditions and living standards
in their respective territories;
Undertake  each of the preceding in a manner consistent with environmental protection and
conservation;
Promote  sustainable development;
Preserve  their capacity to safeguard the public welfare;
Promote  dynamic participation by the different economic agents, particularly the private
sector, in the effort to enhance economic relations between the Parties and to develop and cultivate to
the greatest extent possible the opportunities for their joint presence on international markets;  and
Contribute to hemispheric integration;
Have agreed as follows:
PART ONE - GENERAL PART
CHAPTER 1. INITIAL PROVISIONS
Article 1-01
Establishment of the Free Trade Area
The Parties to this Agreement, consistent wi th Article XXIV of the General Agreement on
Tariffs and Trade 1994 and Article V of the General Agreement on Trade in Services, which are part
of the Marrakesh Agreement Establishing the World Trade Organization, and the Montevideo Treaty
1980, hereby establish a free trade area.
Article 1-02
Objectives
1. The objectives of this Agreement, as elaborated more specifically through its principles and
rules, including national treatment, most-favoured-nation treatment and transparency, are to:
(a) encourage the expansion and diversification of trade between the Parties;(b) eliminate barriers to trade and facilitate the movement of goods and services in the
free trade area;
(c) promote conditions of fair competition in the free trade area;(d) increase substantially investment opportunities in the free trade area;
(e) protect and appropriately and effectively enforce intellectual property rights in the
free trade area;
(f) establish a framework for further bilateral, regional and multilateral cooperation to
expand and enhance the benefits of this Agreement;  andWT/REG125/1
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(g) establish effective procedures for the application and observance of this Agreement,
for its joint administration and for dispute settlement.
2. The Parties shall interpret and apply the provisions of this Agreement in the light of its
objectives set out in paragraph 1 and in accordance with applicable rules of international law.
Article 1-03
Relation to Other International Agreements
1. The Parties affirm their existing rights and ob ligations with respect to each other under the
Agreement Establishing the World Trade Organization, the Montevideo Treaty 1980  and other
agreements to which they are party.
2. In the event of any inconsistency between this Agreement and the agreements and treaties
mentioned in paragraph 1, this Agreement shall prevail to the extent of the inconsistency.
Article 1-04
Observance of the Agreement
The Parties shall ensure that all necessary measures are taken for observance of the provisions
of this Agreement in their territories by their national or federal, state and municipal governments,
except as otherwise provided in this Agreement.
Article 1-05
Successor Agreements
All references to any other international agreem ent or treaty shall be understood to be made in
the same terms to a successor agreement or treaty to which the Parties are party.
Article 1-06
Relation to Environmental and Conservation Agreements
In the event of any inconsistency between this Agreement and the specific trade obligations
set out in:
(a) the Convention on International Trade in Endangered Species of Wild Fauna and
Flora, done at Washington, 3 March 1973, as amended 22 June 1979;
(b) the Montreal Protocol on Substances that  Deplete the Ozone Layer, done at Montreal,
16 September 1987, as amended 29 June 1990;  or
(c) the Basel Convention on the Control of Transboundary Movements of Hazardous
Wastes and Their Disposal, done at Basel, 22 March 1989;
such obligations shall prevail to the extent of th e inconsistency, provided that where a Party has a
choice among equally effective and reasonably available means of complying with such obligations,
the Party chooses the alternative that is the least inconsistent with the other provisions of this
Agreement.WT/REG125/1
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CHAPTER 2. GENERAL DEFINITIONS
Article 2-01
Definitions of General Application
For purposes of this Agreement, unless otherwise specified:
customs duty  includes any customs or import duty and a charge of any kind imposed in
connection with the importation of a good, including any form of surtax or surcharge in connection
with such importation, but does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article III:2 of the
GATT 1994, in respect of goods from which the imported good has been
manufactured or produced in whole or in part;
(b) anti-dumping or countervailing duty that is applied pursuant to a Party’s domestic
law;
(c) fee or other charge in connection with importation commensurate with the cost of
services rendered;  and
(d) 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;
Commission  means the Free Trade Commission established under Article 17-01(1) (The Free
Trade Commission);
Customs Valuation Code  means the Agreement on Implementation of Article VII of the
General Agreement on Tariffs and Trade 1994, including its interpretative notes, which is part of the
WTO Agreement;
days  means calendar days;
ECA No. 17 means the Economic Complementation Agreement between Chile and Mexico
of 22 September 1991;
enterprise  means any entity constituted or organized under applicable law, whether or not for
profit, and whether privately-owned or governme ntally-owned, including any foundation, corporation,
trust, partnership, sole proprietorship, joint venture or other association;
enterprise of a Party  means an enterprise constituted or organized under the law of a Party;
existing  means in effect on the date of entry into force of this Agreement;
GATS means the General Agreement on Trade in Services, which is part of the WTO
Agreement;
GATT  1994  means the General Agreement on Tariffs and Trade 1994, which is part of the
WTO Agreement;WT/REG125/1
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goods of a Party  means domestic products as these are understood in the GATT 1994 or such
goods as the Parties may agree, and includes originating goods of that Party. Goods of a party may
incorporate materials from non-Party countries;
Harmonized System  means the Harmonized Commodity Description and Coding System,
including its General Rules of Interpretation, Section Notes and Chapter Notes, as adopted and
implemented by the Parties in their respective tariff laws;
heading  means the first four digits in the tariff classification number under the Harmonized
System;
LAIA  means the Latin American Integration Association created under the Montevideo
Treaty 1980;
measure  includes any law, regulation, procedure, requirement or practice;
Montevideo Treaty 1980  means the Treaty of Montevideo Establishing the Latin American
Integration Association;
national  means a natural person who is a citizen of a Party as established in Annex 2-01.  The
term also includes persons who are permanent residents in the territory of that Party under its law;
NAFTA  means the North American Free Trad e Agreement, done on 17 December 1992;
originating  means qualifying under the rules of origin set out in Chapter 4 (Rules of Origin);
Party  means a State in which this Agreement has entered into force;
person  means a natural person or an enterprise;
person of a Party  means a national, or an enterprise of a Party;
Secretariat  means the Secretariat established under Article 17-02 (The Secretariat);
states includes the municipal governments in a state, except as otherwise provided in this
Agreement;
State enterprise  means an enterprise that is owned or  controlled through ownership interests
by a Party;
subheading means the first six digits in the tariff classification number under the Harmonized
System;
Tariff Reduction Programme means the programme established in Article 3-04(3) (Tariff
Elimination);
territory  means for a Party the territory of that Party as set out in Annex 2-01;
TRIPS Agreement  means the Agreement on Trade-Related Aspects of Intellectual Property
Rights, which is part of the WTO Agreement;
Uniform Regulations  means the regulations established pursuant to Article 5-12 (Uniform
Regulations); andWT/REG125/1
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WTO Agreement  means the Marrakesh Agreement Establishing the World Trade
Organization, done on 15 April 1994.
ANNEX 2-01
Country-Specific Definitions
For purposes of this Agreement, unless otherwise specified:
citizen  means:
(a) with respect to Chile, a Chilean as defined in Article 10 of the Political Constitution
of the Republic of Chile (“Constitución Política de la República de Chile”);  and
(b) with respect to Mexico, a Mexican as defined in Article 30 of the Political
Constitution of the United Mexican States (“Constitución Política de los Estados
Unidos Mexicanos”); and
territory  means:
(a) with respect to Chile, the land, maritime, a nd air space under its sovereignty, and the
exclusive economic zone and the continental shelf over which it exercises sovereignrights and jurisdiction in accordance with international law and its domestic law;  and
(b) with respect to Mexico:
(i) the states of the Federation and the Federal District;(ii) the islands, including the reefs and keys, in adjacent seas;(iii) the islands of Guadalupe and Revillagigedo situated in the Pacific Ocean;(iv) the continental shelf and the submarine shelf of such islands, keys and reefs;
(v) the waters of the territorial seas, in accordance with international law, and its
interior maritime waters;
(vi) the space located above the national territory, in accordance with
international law;  and
(vii) any areas beyond the territorial seas of Mexico within which, in accordance
with international law, including the United Nations Convention on the Law
of the Sea, and its domestic law, Mexico may exercise rights with respect to
the seabed and subsoil and their natural resources.WT/REG125/1
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PART TWO – TRADE IN GOODS
CHAPTER 3. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Section A – Definitions, Scope and Coverage
Article 3-01
Definitions
For the purposes of this Chapter:
advertising films  means recorded visual media, with or without sound-tracks, consisting
essentially of images showing the nature or operation of goods or services offered for sale or lease by
a person established or resident in the territory of a Party, provided that the films are of a kind suitable
for exhibition to prospective customers but not for broadcast to the general public, and provided that
they are imported in packets that each contain no more than one copy of each film and that do notform part of a larger consignment;
agricultural good means a good classified in one of the following chapters, headings or
subheadings of the Harmonized System:
(The descriptions are provided for purposes of reference)
Chapters 1 through 24 (other than a fish or fish product)
Subheading 2905.43 Manitol
Subheading 2905.44 Sorbitol
Subheading 2918.14 Citric acid
Subheading 2918.15 Salts and esters of citric acid
Subheading 2936.27 Vitamin C and its derivatives
Heading 33.01 Essential oils
Headings 35.01 to 35.05 Albuminoidal substances, modified starches
Subheading 3809.10 Finishing agents
Subheading 3824.60 Sorbitol, except in subheading 2905.44
Headings 41.01 to 41.03 Hides and skins
heading 43.01 Raw furskins
headings 50.01 to 50.03 Raw silk and silk waste
headings 51.01 to 51.03 Wool and animal hair
headings 52.01 to 52.03 Raw cotton, co tton waste and cotton carded or combed
heading 53.01 Raw flax
heading 53.02 Raw hemp
commercial samples of negligible value  means commercial samples having a value,
individually or in the aggregate as shipped, of not more than one U.S. dollar, or the equivalent amountin the currency of either of the Parties, or so mark ed, torn, perforated or otherwise treated that they are
unsuitable for sale or for use except as commercial samples;
consumed  means:
(a) actually consumed;  or
(b) further processed or manufactured so as to result in a substantial change in value,
form or use of the good or in the production of another good;WT/REG125/1
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export of goods means the export or temporary export of goods;
export subsidies  refer to:
(a) the provision by governments or their agencies of direct subsidies, including
payments in kind, to a firm, to an industry, to producers of an agricultural product, to
a cooperative or other association of such producers, or to a marketing board;
(b) the sale or disposal for export by governments or their agencies of non-commercial
stocks of agricultural products at a price lower than the comparable price charged for
the like product to buyers in the domestic market;
(c) payments on the export of an agricultural product that are financed by virtue of
governmental action, whether or not a charge on the public account is involved,
including payments that are financed from the proceeds of a levy imposed on the
agricultural product concerned or on an agricultural product from which the exported
product is derived;
(d) the provision of subsidies to reduce the costs of marketing exports of agricultural
products (other than widely available export promotion and advisory services)
including handling, upgrading and other processing costs, and the costs of
international transport and freight;
(e) internal transport and freight charges on export shipments, provided or mandated by
governments, on terms more favourable than for domestic shipments;  and
(f) subsidies on agricultural products contingent on their incorporation in exported
products;
first come first served means the mechanism for assigning quotas, in accordance with the
administrative procedures established in the Uniform Regulations in this Chapter;
fish and fish products means fish, crustaceans, molluscs and all other aquatic invertebrates,
marine mammals and by-products thereof, classified in one of the following chapters, headings orsubheadings of the Harmonized System:
(The descriptions are provided for purposes of reference)
Chapter 03 Fish and crustaceans, molluscs and other aquatic invertebrates
Heading 05.07 Ivory, tortoise-shell, marine mammals,  horns, antlers, shells, hooves, nails, claws and
beaks, and products thereof
Heading 05.08 Coral and similar materials
Heading 05.09 Natural sponges of animal origin
Heading 05.11 Products of fish or crustaceans, mollus cs or other aquatic invertebrates; dead animals of
chapter 3
Heading 15.04 Fats and oils and their fractions, of fish or marine mammals
Heading 16.03 Extracts and juices other than of meat
Heading 16.04 Prepared or preserved fish
Heading 16.05 Prepared or preserved crustaceans,  molluscs and other aquatic invertebrates
Subheading 2301.20 Flours, meals, pellets, of fish
goods imported for sports purposes  means sports requisites for use in sports contests,
demonstrations or training in the territory of the Party into whose territory such goods are imported;WT/REG125/1
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goods intended for display or demonstration  includes their component parts, ancillary
apparatus and accessories;
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, publicize or advertise
a good or service and are supplied free of charge;
repair or alteration  does not include an operation or process that either destroys the essential
characteristics of a good or creates a new or commercially different good. An operation or process
that is part of the production or assembly of an unfinished good into a finished good is not a repair or
alteration of the unfinished good; a component of a good is a good that may be subject to repair oralteration;
solicitation of orders means the solicitation or drawing up of orders;
temporary admission of goods means temporary admission of goods or temporary
importation of goods; and
used vehicle means a “used vehicle” as defined in Annex 3-01.
Article 3-02
Scope and Coverage
This Chapter applies to trade in goods of a Party.
Section B – National Treatment
Article 3-03
National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with
Article III of the GATT 1994, includin g its interpretative notes, and to this end Article III of the
GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement.
2. The provisions of paragraph 1 regarding national treatment shall mean, with respect to a state,
treatment no less favourable than the most favourab le treatment accorded by such state to any like,
directly competitive or substitutable goods, as the case may be, of the Party of which it forms a part.
“Goods of the Party” includes goods produced in a state of that Party.
3. Paragraphs 1 and 2 do not apply to the measures set out in Annex 3-03.
Section C - Tariffs
Article 3-04
Tariff Elimination
1. Except as provided in Annexes 3-04(3) and 3-04(4), the Parties shall eliminate all customs
duties on originating goods on the date of entry into force of this Agreement.WT/REG125/1
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2. Except as otherwise provided in this Agreement, neither Party may increase any existing
customs duty, or adopt any new duty, on a good.
3 Except as otherwise provided in this Agreemen t, each Party shall progressively eliminate its
customs duties on originating goods in accordance with its Tariff Reduction Programme inAnnex 3-04(3).
4. Notwithstanding paragraphs 1, 2 and 3, a Party may adopt or maintain customs duties in
accordance with its rights and duties under the GATT 1994 on the originating goods included in
Annex 3-04(4) until such time as the parties agree otherwise in accordance with paragraph 5.
5. On the request of a Party, the Parties shall consult to consider accelerating the elimination of
customs duties set out in Annex 3-04(3) or include goods covered in Annex 3-04(4) in their Tariff
Reduction Programme. An agreement between the Parties, reached pursuant to Article 17-01(3) (Free
Trade Commission) to accelerate the elimination of a customs duty on a good or to include a good in
their Tariff Reduction Programmes shall supersede any duty rate or staging category determined
pursuant to their Schedules for such good.
6. When this Agreement comes into force, the preferences negotiated or granted between the
Parties under the Montevideo Treaty 1980 shall be rescinded.
7. Except as otherwise provided in this Agreemen t, either Party may adopt or maintain import
measures to allocate in-quota imports made pursuant to a tariff rate quota set out in Annexes 3-04(3)
or 3-04(4), provided that such measures do not have trade restrictive effects on imports additional to
those caused by the imposition of the tariff rate quota.
8. On written request of either Party, a Party applying or intending to apply measures pursuant
to paragraph 7 shall consult to review the administration of those measures.
9. Paragraphs 1, 2 and 3 are not intended to prevent a Party from maintaining or raising a
customs duty that may be permitted under a dispute settlement ruling under the WTO Agreement or
any other agreement negotiated under the WTO Agreement.
Article 3-05
Customs Valuation Code
The Customs Valuation Code shall govern the customs valuation rules applied by the Parties
to their reciprocal trade. The Parties agree that they will not make use in their reciprocal trade of theoptions and reservations permitted under Article 20 and paragraphs 2, 3 and 4 of Annex III of the
Customs Valuation Code.
Article 3-06
Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission, including exemption from fees as
specified in Annex 3-06 for:
(a) professional equipment necessary for carrying out the business activity, trade or
profession of a business person who qualifies for temporary entry pursuant to
Chapter 13 (Temporary Entry for Business Persons);WT/REG125/1
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(b) equipment for the press or for sound or television broadcasting and cinematographic
equipment;
(c) goods imported for sports purposes and goods intended for display or demonstration;
and
(d) commercial samples and advertising films;
imported from the territory of the other Party, regardless of their origin and regardless of whether like,
directly competitive or substitutable goods are available in the territory of the Party.
2. Except as otherwise provided in this Agreement, neither Party may condition the duty-free
temporary admission of a good referred to in paragraph 1(a), (b) or (c), other than to require that such
good:
(a) be imported by a national or resident of the other Party who seeks temporary entry;
(b) be used solely by or under the personal supervision of such person in the exercise of
the business activity, trade or profession of that person;
(c) not be sold or leased while in its territory;
(d) be accompanied by a bond in an amount no greater than 110 per cent of the charges
that would otherwise be owed  on final importation, or by another form of security,
releasable on exportation of the good, except that a bond for customs duties shall not
be required for an originating good;
(e) be capable of identification when exported;
(f) be exported on the departure of that person or within such other period of time as is
reasonably related to the purpose of the temporary admission; and
(g) be imported in no greater quantity than is reasonable for its intended use.
3. Except as otherwise provided in this Agreement, neither Party may condition the duty-free
temporary admission of a good referred to in paragraph 1(d), other than to require that such good:
(a) be imported solely for the solicitation of orders for goods, or services provided from
the territory, of the other Party or a non-Party;
(b) not be sold, leased or put to any use other than exhibition or demonstration while in
its territory;
(c) be capable of identification when exported;(d) be exported within such period as is reasonably related to the purpose of the
temporary admission;  and
(e) be imported in no greater quantity than is reasonable for its intended use.
4. Where a good is temporarily admitted duty free under paragraph 1 and any condition the
Party imposes under paragraph 2 and 3 has not been fulfilled, a Party may impose:WT/REG125/1
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(a) the customs duty and any other charge that would be owed on final importation of the
good;  and
(b) any applicable criminal, civil or administrative penalties that the circumstances may
warrant.
5. Subject to Chapters 9 (Investment) and 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 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 takessuch container to the territory of the other Party.
6. For purposes of paragraph 5, “vehicle” means a truck, a truck tractor, tractor, trailer unit or
trailer, a locomotive, or a railway car or other railroad equipment.
Article 3-07
Duty-Free Entry of Certain Commercial Samples 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.
Article 3-08
Goods Re-Entered after Repair or Alteration
1. Neither Party may apply a customs duty to a good, regardless of its origin, that re-enters its
territory after that good has been exported from its territory to the territory of the other Party for repairor alteration, regardless of whether such repair or alteration could be performed in its territory.
2. Neither Party may apply a customs duty to a good, regardless of its origin, imported
temporarily from the territory of the other Party for repair or alteration.WT/REG125/1
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Section D – Non-Tariff Measures
Article 3-09
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 the GATT 1994, including its interpretative notes. To this end Article XI of the GATT
1994 and its interpretative notes are incorporated into and made a part of this 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, export
price requirements and, except as permitted in enforcement of countervailing and antidumping orders
and undertakings, import price requirements.
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;  or
(b) requiring as a condition of export of such good to the territory of the other Party, that
the good not be re-exported to the non-Party, directly or indirectly, without beingconsumed 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 request of the other Party, shall consult with a view to
avoiding undue interference with or distortion of pricing, marketing and distribution arrangements in
the other Party.
5. Paragraphs 1 through 4 shall not apply to the measures set out in Annex 3-09.
Article 3-10
Customs User Fees
Effective 30 June 1999, the Parties shall eliminate all their customs user fees on originating
goods, including those established in Annex 3-10. From the time this Agreement comes into force
until 30 June 1999, neither Party may increase or es tablish new customs user fees for originating
goods.
Article 3-11
Export Taxes
Except as provided in Annex 3-11, 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.WT/REG125/1
Page 14
Article 3-12
International Obligations
A Party, prior to adopting a measure under an inter-governmental agreement on commodities
pursuant to Article XX(h) of the GATT 1994, which may affect the trade in commodities between the
Parties, shall consult the other Party to prevent the nullification or impairment of a concession granted
by that Party under Article 3-04.
Article 3-13
Export Subsidies on Agricultural Goods
1. The Parties share the objective of the multilateral elimination of export subsidies for
agricultural goods and shall cooperate in an effort  to achieve such an agreement under the framework
of the WTO Agreement.
2. Effective 1 January 2003, neither Party shall introduce or maintain any export subsidy on
agricultural goods in their reciprocal trade. As of that date, the Parties also renounce the rights
conferred under the GATT 1994 to use export subsidies and the rights with respect to the use of such
subsidies in their reciprocal trade that may arise from multilateral negotiations on trade in agricultureunder the framework of the WTO Agreement.
3. Notwithstanding paragraph 2, if at the request of the importing Party, the Parties agree to an
export subsidy on an agricultural good to the territory of the importing Party, the exporting Party may
adopt or maintain such subsidy.
4. Where a 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
other Party, consult with it with a view to agreeing on specific measures that the importing Party may
adopt to counter the effect of any such subsidized imports. During the period before 1 January 2003, if
the importing Party adopts the agreed-upon measures, the other Party shall refrain from applying, or
immediately cease to apply, any export subsidy to exports of such good to the territory of theimporting Party.
5. Until 1 January 2003, should a Party introduce, re-introduce or increase a subsidy on the
export of an agricultural good, the other Party may increase the rate of duty applicable to such exports
up to the level of the most-favoured-nation tariff.
Article 3-14
Domestic Support
With respect to domestic support for agricultu ral goods, the Parties shall comply with the
Agreement on Agriculture, which forms part of the WTO Agreement.WT/REG125/1
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Section E – Automotive Sector
Article 3-15
Automotive Sector
For trade in automotive vehicles, the Parties sh all comply with the provisions of Annex 3-15.
Section F - Consultations
Article 3-16
Committee on Trade in Goods
1. The Parties hereby establish a Committee on Trade in Goods, comprising representatives of
each Party.
2. The Committee shall be established within three months after the date on which this
Agreement comes into force. The Committee sha ll adopt its decisions by mutual agreement.
3. The Committee shall convene on the request of either Party or the Commission to oversee the
effective implementation of this Chapter, Chapter 4 (Rules of Origin), Chapter 5 (Customs
Procedures) and the Uniform Regulations.
4. The Committee shall:
(a) coordinate activities and oversee the functioning of the Sub-Committees on Non-
Agricultural Goods, Agriculture, Rules of Origin and Customs, in accordance with
paragraphs 5, 6 and 7 and Articles 4-18 (Sub-Committee on Rules of Origin) and
5-14 (Customs Sub-Committee), for which purpose it may meet with the chairs of
those sub-committees;
(b) request periodic reports from the Sub-Committees on matters in their sphere of
competence;
(c) at the request of either of the Parties, evaluate and recommend proposals for
modifications, rectifications or additions to the applicable provisions for better
application of paragraph 3;
(d) propose to the Commission the review of measures in effect in the Parties, necessary
for application of the Chapters and Regulations mentioned in paragraph 3;  and
(e) carry out the other tasks agreed on by the Parties or the Commission under this
Agreement and other instruments deriving from it.
5. The Parties establish the following Sub-Committees: Non-Agricultural Goods, Agriculture,
Rules of Origin and Customs, comprising representatives of each Party.  The Sub-Committees shall:
(a) monitor application of the provisions of this Agreement linked, directly or indirectly,
to their spheres of competence;
(b) recommend to the Committee the adoption of measures to further free trade between
the Parties;WT/REG125/1
Page 16
(c) report periodically to the Committee and, when pertinent, to related Sub-Committees,
on the agreements reached and the activities performed in exercise of their functions;
(d) convene at least once a year and whenever so requested by a Party or the
Commission;
(e) consider any matter in their sphere of competence submitted or consulted by a Party,
the Committee or another Sub-Committee;
(f) refer to the Committee any matter on which it has been unable to reach agreement
within 60 days after it has begun to examine that matter; and
(g) carry out the other tasks referred to it by the Committee under this Agreement and
other instruments deriving from it.
6. Notwithstanding paragraph 5, the Sub-Committee on Non-Agricultural Goods shall:
(a) support technical studies for the application of Article 3-17(5);
(b) carry out consultations and studies to include the non-agricultural goods listed in
Annex 3-04(4) in the Tariff Reduction Programme;
(c) refer to the Committee matters that impede access by non-agricultural goods to the
territory of the Parties, particularly relating to the application of non-tariff measures;
and
(d) conduct studies to define the administrative processes of the quota-allocation
mechanism established in Annex 3-15.
7. Notwithstanding paragraph 5, the Sub-Committee on Agriculture shall:
(a) support technical studies for the application of Article 3-17(5) with respect to
agricultural goods;
(b) refer to the Committee difficulties in applying the provisions in its sphere of
competence that affect trade in agricultural goods;
(c) promote trade in agricultural goods through consultations and studies to accelerate the
elimination of tariffs on the agricultural goods in Annex 3-04(3) and to include the
agricultural goods listed in Annex 3-03(4) in the Tariff Reduction Programme;
(d) refer to the Committee matters that impede access by agricultural goods to the
territory of the Parties, particularly relating to the application of non-tariff measures;and
(e) conduct studies to define the administrative processes of the quota-allocation
mechanism established in Annex 3-04(3).WT/REG125/1
Page 17
Article 3-17
Information and Consultations
1. At the request of one Party, the other Party shall provide information and respond promptly to
questions regarding any existing or planned measure related to the application of this Chapter.
2. If, during the Agreement, a Party considers that a measure in the other Party affects the
effective application of this Chapter, that party may refer the matter to the Committee.
3. Within 30 days after submission of the request, the Committee may request technical reports
from the competent authorities and take s steps to help resolve the matter.
4. If the Committee has met as established in Article 3-16 but fails to reach agreement within the
established time or considers that the matter is outside its sphere of competence, either Party may
request in writing that the Commission meet as es tablished in Article 17-01 (Free Trade Commission).
5. The Parties undertake within a year after this Agreement comes into force to identify, in terms
of tariff item and nomenclature under their respective tariffs, the measures, restrictions or prohibitions
on the importation or exportation of goods for reasons of national security, public health, preservation
of wildlife, the environment, animal health, standards, labels, international commitments,
requirements of public order or any other regulation. The Parties shall update that information andcommunicate it to the Committee, whenever necessary.
ANNEX 3-01
Used Vehicles
For the purposes of this Chapter, used vehicle means:
1. In the case of Chile, all vehicles that do not correspond to the definition established in
Article 1 (ñ) of Law 18.483, in accordance with the provisions of Article 21 of that law. References to
that law shall be understood as referring to any equivalent successor legislation.
2. In the case of Mexico, any of the goods included in headings 87.01 to 87.06 that:
(a) have been sold or leased;(b) have been driven for more than
(i) 1,000 kilometres if the vehicle has a gross weight of less than five metric
tons;  or
(ii) 5,000 kilometres if the vehicle has a gross weight of five metric tons or more;
or
(c) were manufactured prior to the current year and at least 90 days have elapsed since
the date of manufacture.WT/REG125/1
Page 18
ANNEX 3-03
Exceptions to National Treatment
Mexican Measures
Notwithstanding Article 3-03, Mexico may maintain until 1 January 2004 the provisions of
the Decree for the Development and Modernization of the Automotive Industry (“Decreto para el
Fomento y Modernización de la Industria Automotriz”) of 11 December 1989 and the amendments
thereto of 31 May 1995, and any renewal or amendment thereto that may be inconsistent with this
Agreement.
ANNEX 3-04(3)
Tariff Reduction Programme
Section A –Chilean Products
1. The customs duty applicable to apples (tariff item 0808.10.00) originating in Mexico shall be
reduced in accordance with the following timetable:
Year Customs duty
1999 8.6%
2000 7.3%
2001 6.1%
2002 4.9%
2003 3.7%
2004 2.4%
2005 1.2%
Effective 1/1/2006 0.0%
2. The customs duties referred to in paragraph 1 shall apply only to imports of apples under aninitial annual quota of 2,264.5 metric tonnes, which shall be increased annually starting in 2000 andup to 2005, inclusive, by five per cent over the quota applicable in the preceding year.
3. For quantities in excess of the quota established in paragraph 2, in the period between 1999
and 2005, inclusive, Chile may apply a tariff no higher than its most-favoured-nation tariff in effect at
the time of the imports.
4. Effective 1 January 2006, imports of fresh apples (tariff item 0808.10.00) originating in
Mexico shall be duty free and not subject to quotas.
5. The first come first served mechanism shall be used for allocating import quotas for apples.
Section B –Mexican Products
1. The customs duty for apples (tariff item 0808.10.01) originating in Chile shall be reduced in
accordance with the following timetable:WT/REG125/1
Page 19
Year Customs duty
1999 11.7%
2000 10.0%
2001 8.3%
2002 6.7%
2003 5.0%
2004 3.3%
2005 1.7%
Effective 1/1/2006 0.0%
2. The customs duties referred to in paragraph 1 shall apply only to imports of apples under an
initial annual quota of 2,264.5 metric tonnes, which shall be increased annually starting in 2000 and
up to 2005, inclusive, by five per cent over the quota applicable in the preceding year.
3. For quantities in excess of the quota established in paragraph 2, in the period between 1999
and 2005, inclusive, Mexico may apply a tariff no higher than its most-favoured-nation tariff in effect
at the time of the imports.
4. Effective 1 January 2006, imports of fresh apples (tariff item 0808.10.01) originating in Chile
shall be duty free and not subject to quotas.
5. The first come first served mechanism shall be used for allocating import quotas for apples.
ANNEX 3-04(4)
Exceptions
Section A –Chilean Products
Harmonized
System of ChileDescription Legal Regime Percentage margin
of preference over
the MFN duty
0306.11.00 Rock lobster (Palinurus spp., Panulirus spp.,
Jasus spp.)Free importation 12
0306.12.00 Lobster (Homarus spp.) Free importation 12
0306.13.10 Shrimp Free importation 12
0306.13.20 Prawns Free importation 12
0306.13.90 Other Decapodes natantia Free importation 12
0306.21.00 Rock lobster (Palinurus spp., Panulirus spp. and
Jasus spp.)Free importation 12
0306.22.00 Lobster (Homarus spp.) Free importation 12
0306.23.10 Shrimp Free importation 12
0306.23.20 Prawns Free importation 12
0306.23.90 Other Decapodes natantia Free importation 12
0402.10.00 In powder, granules or other solid forms, of a fat
content, by weight, not exceeding 1.5%.Exclusively in powdered or solid form.Free importation 0
0402.21.10 Fat content exceeding 1.5% but not exceeding
6%. Exclusively in powdered or solid form.Free importation 0
0402.21.20 Fat content exceeding 6% but not exceeding
12%. Exclusively in powdered or solid form.Free importation 0
0402.21.30 12% fat content. Exclusively in powdered or
solid form.Free importation 0WT/REG125/1
Page 20
Harmonized
System of ChileDescription Legal Regime Percentage margin
of preference over
the MFN duty
0402.21.40 Fat content exceeding 12% but not exceeding
18%. Exclusively in powdered or solid form.Free importation 0
0402.21.50 18% fat content. Exclusively in powdered or
solid form.Free importation 0
0402.21.70 Fat content of 24% but not exceeding 26%.
Exclusively in powdered or solid form.Free importation 0
0402.21.80 26% fat content and over. Exclusively in
powdered or solid form.Free importation 0
0402.91.10 Milk in liquid or semi-solid state. Exclusively
evaporated milk.Free importation 0
0406.10.00 Fresh (unripened or uncured) cheese, including
whey cheese, and curdFree importation 0
0406.30.00 Processed cheese, not grated or powdered Free importation 0
0406.90.00 Other cheese. The following are excluded from
this list:
- hard paste cheese named “sardo” when itspresentation so indicates– hard paste cheese named Reggiano orReggianito, when its presentation so indicates– hard or semihard paste cheeses with a fat
content of 40% or less and a moisture content by
weight of non-fatty matter of 47% (namedGrana, Parmigiano or Reggiano) or a moisturecontent by weight of non-fatty matter exceeding47% but not exceeding 72% (named Danbo,
Edam, Fontal, Fontina, Fymbo, Gouda, Havarti,
Maribo, Samsoe, Esrom, Italian, Karnhem, Saint-Nectaire, Saint-Paulin or Taleggio).Free importation 0
0713.33.90 Other Free importation 12
0806.10.00 Grapes. (during the period from 15/04 to 31/05
each year)Free importation 12
1001.10.00 Hard wheat Free importation 0
1001.90.00 Other Free importation 0
1003.00.00 Barley, except for seed Free importation 12
1005.90.00 Other, except popping corn and corn-on-the-cob. Free importation 0
1101.00.00 Wheat or meslin flour Free importation 0
1107.10.00 Not roasted Free importation 12
1107.20.00 Roasted Free importation 12
1507.10.00 Crude oil, including degummed Free importation 30
1507.90.00 Other Free importation 0
1508.10.00 Crude oil Free importation 30
1508.90.00 Other Free importation 12
1509.10.00 Virgin Free importation 12
1509.90.00 Other Free importation 12
1510.00.00 Other oils and their fractions, obtained solely
from olives, whether or not refined, but notchemically modified, including blends of theseoils and fractions with oils or fractions ofheading 1509Free importation 12
1511.10.00 Crude oil Free importation 12
1511.90.00 Other Free importation 12
1512.11.10 Sunflower-seed oil Free importation 30
1512.11.20 Safflower oil Free importation 30
1512.19.10 Sunflower-seed oil Free importation 0WT/REG125/1
Page 21
Harmonized
System of ChileDescription Legal Regime Percentage margin
of preference over
the MFN duty
1512.19.20 Safflower oil Free importation 0
1512.21.00 Crude oil, whether or not gossypol has been
removedFree importation 30
1512.29.00 Other Free importation 0
1513.11.00 Crude oil Free importation 50
1513.19.00 Other Free importation 50
1513.21.00 Crude oil Free importation 71
1513.29.00 Other Free importation 12
1514.10.00 Crude oil Free importation 0
1514.90.00 Other Free importation 0
1515.21.00 Crude oil Free importation 30
1515.29.00 Other Free importation 0
1515.50.00 Sesame oil and its fractions Free importation 30
1515.90.00 Other. Exclusively crude oiticica. Exclusively
edible.Free importation
1701.11.00 Cane sugar Free importation 0
1701.12.00 Beet sugar Free importation 0
1701.91.00 Containing added flavouring or colouring matter Free importation 0
1701.99.00 Other Free importation 0
1702.90.00 Other, including invert sugar. Exclusively refined
liquid sugar and invert sugar.Free importation 0
2402.10.00 Cigars, cheroots and cigarillos, containing
tobaccoFree importation 12
2402.20.00 Cigarettes containing tobacco Free importation 0
2402.90.00 Other Free importation 0
2403.10.00 Smoking tobacco, whether or not containing
tobacco substitutes in any proportionFree importation 12
2403.91.00 “Homogenized” or “reconstituted” tobacco Free importation 0
2403.99.00 Other Free importation 0
2709.00.00 Petroleum oils and oils obtained from bituminous
minerals, crudeFree importation 0
2710.00.10 Petroleum ethers (naphtha solvent, benzene
extracts)Free importation 0
2710.00.21 For aviation engines Free importation 0
2710.00.29 Other uses Free importation 0
2710.00.31 For turbine engines Free importation 0
2710.00.32 Kerosene Free importation 0
2710.00.33 White spirits Free importation 0
2710.00.40 Distilled edible oils (gas oil and diesel oil) Free importation 0
2710.00.51 Fuel oil Free importation 0
2710.00.61 Lubricating oils, basic Free importation 0
2710.00.63 Lubricating oils, finished Free importation 0
2710.00.64 Lubricants for leather Free importation 0
2711.11.00 Natural gas Free importation 12
2711.12.00 Propane Free importation 12
2711.13.00 Butanes Free importation 12
2711.19.00 Other except: alkanes, used for cutting and
soldering (even if blended)Free importation 12
2711.21.00 Natural gas Free importation 12
2711.29.00 Other Free importation 12
6309.00.10 Overcoats, jackets, and raincoats Free importation 0
6309.00.20 Parkas and jackets Free importation 0WT/REG125/1
Page 22
Harmonized
System of ChileDescription Legal Regime Percentage margin
of preference over
the MFN duty
6309.00.30 Suits Free importation 0
6309.00.40 Trousers Free importation 0
6309.00.50 Dresses and skirts Free importation 0
6309.00.60 Ensembles including for sports and recreation Free importation 0
6309.00.70 Shirts and blouses Free importation 0
6309.00.80 Underwear Free importation 0
6309.00.91 Bed linen Free importation 0
6309.00.92 Footwear Free importation 0
6309.00.93 Socks, hosiery and similar articles Free importation 0
6309.00.94 Sweaters, pullovers and cardigans Free importation 0
6309.00.99 Other Free importation 0
ANNEX 3-04(4)
Exceptions
Section B – Mexican Products
Harmonized
System of
MexicoDescription Legal regime Percentage margin
of preference over
the MFN duty
0306.11.01 Rock lobster (Palinurus spp., Panulirus spp., Jasus
spp.)Free importation 0
0306.12.01 Lobster (Homarus spp.) Free importation 0
0306.13.01 Shrimp, prawns and other Decapodes natantia Free importation 0
0306.21.01 Rock lobster (Palinurus spp., Panulirus spp., Jasus
spp.)Free importation 0
0306.22.01 Lobster (Homarus spp.) Free importation 0
0306.23.01 Broodstock and postlarvae of peneid shrimp and
prawns for aquacultureFree importation 0
0306.23.99 Other Free importation 0
0402.10.01 Milk in powdered or solid forms Licence required 30
0402.21.01 Milk in powdered or solid forms Licence required 30
0402.91.01 Evaporated milk Free importation 0
0406.10.01 Fresh (unripened or uncured) cheese, including
whey cheese and curdFree importation 0
0406.30.01 Processed (process) cheese, not grated or powered,
with a fat content by weight of 36% or less and a fatcontent measured in weight of dry extract of over48%, presented in containers with a net content over1 kgFree importation 0
0406.30.99 Other Free importation 0
0406.90.03 Soft paste cheese, Colonia type: moisture content
between 35.5% and 37.7%, ash between 3.2% and3.3%, fat between 29.0% and 30.8%, protein 25%
and 27.5%, salts between 1.3% and 2.7% and
acidity between 0.8% and 0.9% expressed in lacticacidFree importation 0
0406.90.05 Petit Suisse type cheese: moisture content between
68% and 70%, fat between 6% and 8% (on a wetbasis), dry extract between 30% and 32%, minimumFree importation 0WT/REG125/1
Page 23
Harmonized
System of
MexicoDescription Legal regime Percentage margin
of preference over
the MFN duty
protein 6%, and ferments whether or not with the
addition of fruit, sugar, vegetables, chocolate or
honey
0406.90.06 Egmont type cheese: minimum fat (in dry matter)
45%, maximum moisture 40%, minimum dry matter60%, minimum salt in the moisture 3.9%Free importation 28
0406.90.99 Other Free importation 0
0713.33.99 Other Licence required 100
0806.10.01 Grapes, fresh (during the period from 15 April to 31
May each year)Free importation 0
1001.10.01 Hard wheat Free importation 0
1001.90.99 Other Free importation 0
1003.00.02 Grains, with hull, except for item 1003.00.01 Licence required 30
1003.00.99 Other Free importation 0
1005.90.99 Other Free importation 0
1101.00.01 Wheat or meslin flour Free importation 28
1107.10.01 Not roasted Licence required 70
1107.20.01 Roasted Licence required 70
1507.10.01 Crude oil, including degummed Free importation 0
1507.90.99 Other Free importation 0
1508.10.01 Crude oil Free importation 0
1508.90.99 Other Free importation 0
1510.00.99 Other oils and their fractions, obtained solely from
olives, whether or not refined, but not chemicallymodifiedFree importation 28
1511.10.01 Crude oil Free importation 28
1511.90.99 Other Free importation 28
1512.11.01 Crude oil Free importation 0
1512.19.99 Other Free importation 0
1512.21.01 Crude oil, whether or not gossypol has been
removedFree importation 0
1512.29.99 Other Free importation 0
1513.11.01 Crude oil Free importation 0
1513.19.99 Other Free importation 0
1513.21.01 Crude oil Free importation 28
1513.29.99 Other Free importation 0
1514.10.01 Crude oil Free importation 0
1514.90.99 Other Free importation 0
1515.21.01 Crude oil Free importation 0
1515.29.99 Other Free importation 0
1515.50.01 Sesame oil and its fractions Free importation 0
1515.90.02 Copaiba oil, crude Free importation 50
1515.90.03 Almond oil Free importation 28
1515.90.99 Other Free importation 0
1701.11.01 Sugar whose content in sucrose in the dry state
corresponds to a polarimetre reading of 99.3degrees or more and less than 99.5 degreesFree importation 0
1701.11.99 Other Free importation 0
1701.12.01 Sugar whose content in sucrose in the dry state
corresponds to a polarimetre reading of 99.3degrees or more and less than 99.5 degreesFree importation 0WT/REG125/1
Page 24
Harmonized
System of
MexicoDescription Legal regime Percentage margin
of preference over
the MFN duty
1701.12.99 Other Free importation 0
1701.91.01 With the addition of flavouri ng or colouring matter Free importation 0
1701.99.01 Sugar whose content in sucrose in the dry state
corresponds to a polarimetre reading of 99.5degrees or more and less than 99.7 degreesFree importation 0
1701.99.99 Other Free importation 0
1702.90.01 Refined liquid sugar and inverted sugar Free importation 0
2402.10.01 Cigars, cheroots and cigarillos, containing tobacco Free importation 0
2402.20.01 Cigarettes containing tobacco Free importation 0
2402.90.99 Other Free importation 0
2403.10.01 Smoking tobacco, whether or not containing
tobacco substitutes in any proportionFree importation 0
2403.91.01 Tobacco used as wrapper tobacco Free importation 0
2403.91.99 Other Free importation 0
2403.99.01 Chewing tobacco Free importation 0
2403.99.99 Other Free importation 0
2709.00.01 Petroleum oils and oils obtained from bituminous
minerals, crudeFree importation 0
2710.00.01 Pure petroleum mineral oils, without additives
(basic lubricating oils), in tanker-car, tanker-ship ortanker-truckFree importation 0
2710.00.02 Greases or lubricating oils obtained from petroleum
minerals, with additives (finished lubricating oils)Free importation 28
2710.00.03 Lubricating greases Free importation 28
2710.00.04 Aviation fuel Licence required 28
2710.00.05 Gasoline, except for item 2710.00.04 Licence required 28
2710.00.06 Kerosene Licence required 0
2710.00.07 Gas oil or diesel oil Licence required 28
2710.00.08 Fuel oil Licence required 28
2710.00.99 Other. Exclusively white spirits Free importation 28
2711.11.01 Natural gas Licence required 28
2711.12.01 Propane Licence required 28
2711.13.01 Butanes Licence required 28
2711.19.01 Blended butane and propane, liquefied Licence required 0
2711.19.99 Other Licence required 28
2711.21.01 Natural gas Licence required 0
2711.29.99 Other Licence required 28
6309.00.01 Clothing Free importation 0
ANNEX 3-06
Temporary Admission of Goods
The temporary admission of goods from Mexico specified Article 3-06(1) shall not be subject
to payment of the fee established in Article 139  of the Chilean Customs Ordinance (“Ordenanza de
Aduanas”) contained in Decree with Force of Law 30 of the Ministry of Finance, Official Gazette,
13 April 1983 (“Decreto con Fuerza de Ley 30 del Ministerio de Hacienda, Diario Oficial,
13 abril 1983”).WT/REG125/1
Page 25
ANNEX 3-09
Import and Export Measures
Section A – Chilean Measures
1. Notwithstanding Article 3-09, Chile may adopt or maintain measures relating to the domestic
sale of domestically-produced copper and other metals, in accordance with the provisions of
Articles 7, 8 and 9 of Law 16.624.
2. Notwithstanding Articles 3-03 and 3-09, Chile may adopt or maintain measures relating to the
importation of used vehicles.
Section B – Mexican Measures
1. Notwithstanding Article 3-09, Mexico may adopt or maintain prohibitions or restrictions on
the importation of goods in heading 63.09.
2. Notwithstanding Article 3-09, Mexico may rest rict the granting of import and export permits
on the goods listed below, for the sole purpose of reserving foreign trade in those goods for itself:
Heading or subheading Description
2707.50 Other aromatic hydrocarbon mixtures of which 65 per cent or more by volume
(including losses) distils at 250° C by the ASTM D 86 method
2707.99 Only with respect to solvent naphtha, rubber extender oils and carbon black
feedstocks
27.09 Petroleum oils and oils obtained from bituminous minerals, crude
27.10 Aviation gasoline; gasoline and motor fuel blending stocks (except aviation
gasoline) and reformates when used as motor fuel blending stocks; kerosene; gasoil and diesel oil; petroleum ether; fuel oil; paraffinic oils other than forlubricating purposes; pentanes; carbon black feedstocks; hexanes; heptanes andnaphthas
27.11 Petroleum gases and other gaseous hydrocarbons other than: ethylene, propylene,
butylene and butadiene, in purities over 50 per cent
2712.90 Only paraffin wax containing by weight more than 0.75 per cent of oil, in bulk
(Mexico classifies these goods under HS 2712.90.02) and only when imported to
be used for further refining
2713.11 Petroleum coke, not calcinated
2713.20 Petroleum bitumen (except when used for road surfacing purposes under HS
2713.20.01)
2713.90 Other residues of petroleum oils or of oils obtained from bituminous materials
27.14 Bitumen and asphalt, natural; bituminous or oil shale and tar sands, asphaltites
and asphaltic rocks (except when used for road surfacing purposes under HS2714.90.01)
2901.10 Only ethane, butane, pentane, hexane and heptane
3. Notwithstanding Article 3-09, Mexico may adopt or maintain until 1 January 2004
prohibitions or restrictions on imports of the used goods described in the following tariff items in the
Tariff Schedule of the General Import Duty Act (“Ley del Impuesto General de Importación”):
(The descriptions are provided for purposes of reference)WT/REG125/1
Page 26
Item Description
8426.91.02 Cranes with hydraulic working, with articulated or rigid booms,
with capacity up to 9.9 tons at 1 meter radius
8426.91.03 Isolated elevating cranes, basket type, with carrying capacity
equal to or less than 1 ton and up to 15 meters lift
8427.20.01 Fork lift, with explosion or internal combustion engine, with carrying
capacity up to 7,000 kilograms, measured at 620 millimetres from thefrontal surface of the forks
8429.20.01 Graders
8452.29.04 Machines or heads for industrial use, with straight seams, straight needle and a
rotating and oscillating thread linking device, double backstitching, flat bed,
and transportation only by impellers (teeth), except alternating footdifferential, by triple accompanying needle or intermittent wheel
8471.10.01 Analogue or hybrid automatic data processing machines
8471.30.01 Portable digital automatic data processing machines, weighing not more than
10 kg, consisting of at least a central processing unit, a keyboard and a display
8471.41.01 Comprising in the same housing at least a central processing unit and an input
and output unit, whether or not combined
8471.49.01 Other, presented in the form of systems
8471.50.01 Digital processing units, except those in subheading 8471.41 and 8471.49,
whether or not containing in the same housing one or two of the following
types of unit: storage units, input units, output units
8471.60.02 Colour cathode-ray tube monitors
8471.60.03 Laser printers capable of producing more than 20 pages a minute
8471.60.04 Printers, light bar electronic type
8471.60.05 Ink-jet printers
8471.60.06 Thermal transfer printers
8471.60.07 Iconographic printers
8471.60.08 Other laser printers
8471.60.09 Combined input/output units
8471.60.10 Display units with monochrome cathode-ray tubes; display units with flat
panels exceeding 30.5 cm (14 inches); other display units excluding those initem 8471.60.02
8471.60.11 Display units without a cathode-ray tube having a display diagonal not
exceeding 30.5 cm (14 inches)
8471.60.12 Optical scanners and magnetic ink recognition devices
8471.60.13 Dot matrix printers
8471.60.99 Other
8471.70.01 Storage units
8471.80.01 Other units suitable for physical incorporation into automatic data processing
machines
8471.80.02 Local area network devices
8471.80.03 Control or adapter units, except those included in item 8471.80.02
8471.80.99 Other
8471.90.99 Other
8474.20.02 Crushing or grinding machines
8474.20.05 Drawer cone crushing, with diameter no more than 1200 millimetres
8474.20.06 Grinding hammer percussion
8504.40.12 Power supplies for the automatic data processing machines of heading 84.71
8701.90.02 Railroad tractors, on tires with mechanical mechanism for pavement
8702.90.01 Trolley busses
8703.10.01 With electric motors
8703.90.01 Electric
8705.10.01 Mobile cranes
8705.20.99 Other
8705.90.01 Street sweepersWT/REG125/1
Page 27
Item Description
8705.90.99 Other
8708.70.01 For trolley busses only: when presented with used tires
8708.70.02 For use with item 8701.90.01. Only when presented with used tires
8708.70.03 Wheel rims of metal alloys, spoked or sports-type, wide base, only when
presented with used tires
8708.70.07 Wheel rims of aluminium or alum inium alloys having a diameter exceeding
57.15 cm (22.5 inches). Only when presented with used tires
8708.70.99 Other. Only when presented with used tires
8711.10.01 With reciprocating internal combustion piston engine of a cylinder capacity
not exceeding 50 cc
8711.20.01 With reciprocating internal combustion piston engine of a cylinder capacity
exceeding 50 cc but not exceeding 250 cc
8711.30.01 With reciprocating internal combustion piston engine of a cylinder capacity
exceeding 250 cc but not exceeding 500 cc
8711.40.01 With reciprocating internal combustion piston engine of a cylinder capacity
exceeding 500 cc but not exceeding 550 cc
8711.90.99 Other
8712.00.04 Bicycles, except those included in items 8712.00.01 and 8712.00.02
8712.00.99 Other
8716.10.01 Trailers and semi-trailers for housing or camping of the caravan type
8716.20.01 Trailers or semi- trailers, closed hopper, pneumatic discharge line for the
transportation of bulk products
8716.20.03 Open dump with hydraulic piston
8716.20.99 Other
8716.31.01 Thermal trailers for the transportation of milk
8716.31.02 Steeltank type tankers, including cryogenic or hoppers
8716.31.99 Other
8716.39.01 Trailers or semitrailers of the platform type, with or without stakes, including
those accepted for the transport of boxes or metal baskets for cans and bottlesor container carriers, or low beds, except those with hydraulic or pneumaticsuspension and collapsible gooseneck
8716.39.02 Trailers or semitrailers for the transport of vehicles
8716.39.04 Trailers of the modular platform type with directional axis, including
transporter bridge section, hydraulic couplings and/or gooseneck and/or motorfor hydraulic conditioning of the equipment
8716.39.05 Semitrailers of the lowbed type, with pneumatic or hydraulic suspension and
collapsible gooseneck
8716.39.06 Trailers and semitrailers of the closedbox type, including refrigerated
8716.39.07 Trailers and semitrailers of the steeltank type, including cryogenic and hoppers
8716.39.99 Other
8716.40.99 Other trailers and semi-trailers
8716.80.99 Other
4. Notwithstanding Article 3-09, Mexico may maintain until 1 January 2004, prohibitions or
restrictions on the import of goods described in the following headings and subheadings:
(The descriptions are provided for purposes of reference)
Heading or subheading Description
8407.34 Reciprocal internal combustion piston engines of a cylinder capacity exceeding 1000cc,
for vehicles of Chapter 87
8701.20 Road tractors for semi-trailers
87.02 Motor vehicles for the transport of ten or more persons
87.03 Motor cars and other motor vehicles principally designed for the transport of
persons (other than those of heading 87.02), including station wagons and racing carsWT/REG125/1
Page 28
Heading or subheading Description
87.04 Motor vehicles for the transport of goods
8705.20 Mobile drilling derricks
8705.40 Concrete mixers
87.06 Chassis fitted with engines, for the motor vehicles of headings 87.01 to 87.05
5. Notwithstanding Article 3-09, Mexico may adopt or maintain prohibitions or restrictions onthe import of used goods described in the following headings and subheadings:
(The descriptions are provided for purposes of reference)
Heading or subheading Description
8407.34 Reciprocal internal combustion piston engines of a cylinder capacity
exceeding 1000cc, for vehicles of Chapter 87
8701.20 Road tractors for semi-trailers
87.02 Motor vehicles for the transport of ten or more persons.
87.03 Motor cars and other motor vehicles principally designed for the transport
of persons (other than those of heading 87.02), including station wagonsand racing cars
87.04 Motor vehicles for the transport of goods
8705.20 Mobile drilling derricks
8705.40 Concrete mixers
87.06 Chassis fitted with engines, for the motor vehicles of headings 87.01 to
87.05
ANNEX 3-10
Customs User Fees
For Chile, the fees established in:
(a) Article 190 of Law 16.464;  or
(b) Article 62 of Supreme Decree 172 of the Undersecretariat of Aviation, Official
Gazette, 10 April 1974, Regulation of Aeronautical Rates and Taxes, (“Decreto
Supremo 172 de la Subsecretaría de Aviación, Diario Oficial, abril 10, 1974,
Reglamento de Tasas Aeronáuticas e Impuestos”).
ANNEX 3-11
Export Taxes
1. Mexico may adopt or maintain a duty, tax or other charge on the export of those basic
foodstuffs set out in paragraph 3, on their ingredients or on the goods from which such foodstuffs are
derived, if such duty, tax or other charge and is used:
(a) to limit to domestic consumers the benefits of a domestic food assistance programme
with respect to such foodstuff; or
(b) to ensure the availability of sufficient quantities of such foodstuff to domestic
consumers or of sufficient quantities of its ingredients, or of the goods from which
such foodstuffs are derived, to a domestic processing industry, when the domesticWT/REG125/1
Page 29
price of such foodstuff is held below the world price as part of a governmental
stabilization plan, provided that such duty, tax, or other charge
(i) does not operate to increase the protection afforded to such domestic
industry;  and
(ii) is maintained only for such period of  time as is necessary to maintain the
integrity of the stabilization plan.
2. Notwithstanding paragraph 1, Mexico may adopt or maintain a duty, tax or other charge on
the export of any foodstuff to the territory of the other Party if such duty, tax or other charge is
temporarily applied to relieve critical shortages of that foodstuff. For purposes of this paragraph,“temporarily” means up to one year, or such longer period as the Parties may agree.
3. For purposes of paragraph 1, “basic foodstuffs” means:
• Beans
• Beef steak or pulp
• Beef liver
• Beef remnants and bones (“retazo con hueso”)
• Beer
• Bread
• Brown sugar
• Canned sardines
• Canned tuna
• Canned peppers
• Chicken broth
• Condensed milk
• Cooked ham
• Corn tortillas
• Corn flour
• Corn dough
• Crackers
• Eggs
• Evaporated milk
• French rolls (“pan blanco”)
• Gelatine
• Ground beef
• Instant coffee
• Low-priced cookies (“galletas dulces populares”)
• Margarine
• Oat flakes
• Pasteurized milk
• Powdered chocolate
• Powdered milk for children
•
 Powdered milk
• Rice
• Roasted coffee
• Salt
• Soft drinks
• Soup pasteWT/REG125/1
Page 30
• Tomato puree
• Vegetable oil
• Vegetable fat
• Wheat flour
• White sugar
ANNEX 3-15
Automotive Sector
1. Notwithstanding Annex 3-09, Section B, para graph 4, Mexico shall automatically grant
import permits for originating automotive vehicles from Chile classified in headings 87.01, 87.02,
87.03, 87.04, 87.05 and 87.06.
2. For non-originating goods in heading 87.03 that have a minimum regional content of 16 per
cent under the transaction value method or 13 per cent under the net cost method, which comply with
the pertinent provisions of Chapter 4 (Rules of Origin), the Parties shall establish import quotas as
follows:
(a) Mexico shall permit 5,000 units to be imported from Chile duty free and shall
automatically grant the import permits specif ied in Annex 3-09 for those units, as set
out in paragraph 6;  and
(b) Chile shall permit an annual number of units not to surpass 50 per cent of the units
imported from Mexico in the preceding year to be imported duty free, as set out in
paragraph 6.
3. The non-originating goods of paragraph 2 shall be subject to the same rights and obligations
established in this Agreement for originating goods, with the exception established in paragraph 1.
4. The goods described in paragraph 2 shall be subject to the provisions of Chapter 5 (Customs
Procedures), except for Article 5-02 (Statement and Certification of Origin), 5-03(1)(d) and (2)
(Obligations Regarding Importations), 5-04 (O bligations Regarding Exportations) and 5-05
(Exceptions).
5. Notwithstanding Article 5-07(11) (Origin Verifications), if as the result of a verification
process Mexico determines, through its customs administration, that a person subject to verification
has not complied with the regional value content requirements established in paragraph 2, the use of
the mechanism mentioned in that paragraph shall be suspended until the competent authorities are
satisfied that the regional content requirements have been complied with.
6. The first come first served mechanism shall be  used by the Parties for the administration and
allocation of the quotas mentioned in paragraph 2.WT/REG125/1
Page 31
CHAPTER 4:  RULES OF ORIGIN
Article 4-01
Definitions
For the purposes of this Chapter:direct costs and expenses of manufacture means the costs and expenses incurred during a
period that are directly related to the good, but different from the cost or value of direct materials and
the cost of direct labour;
F.O.B . means free on board, regardless of the mode of transportation, at the point of shipment
abroad;
fungible goods or materials means goods or materials that are interchangeable for
commercial purposes and whose properties are essentially identical, which cannot be differentiated bya simple visual examination;
Generally Accepted Accounting Principles  means the recognized consensus or substantial
authoritative support in the territory of a Party w ith respect to the recording of revenues, expenses,
costs, assets and liabilities, disclosure of information and preparation of financial statements. Thesestandards may be broad guidelines of general application as well as detailed standards, practices and
procedures;
good means any merchandise, product, article or matter;
goods wholly obtained or produced entirely in the territory of one or both Parties means:
(a) mineral goods extracted in the territory of one or both Parties;
(b) vegetable goods harvested in the territory of one or both Parties;
(c) live animals born and raised in the territory of one or both Parties;
(d) goods obtained from hunting or fishing in the territory of one or both Parties;
(e) goods (fish, shellfish and other marine life) taken from the sea by vessels registered
or recorded with a Party and flying its flag;
(f) goods produced on board factory ships from the goods referred to in subparagraph (e)
provided such factory ships are registered or recorded with that Party and fly its flag;
(g) goods taken by a Party or a person of a Party from the seabed or marine subsoil
outside territorial waters, provided that a Party has rights to exploit such seabed or
marine subsoil;
(h) waste and scrap derived from:
(i) production in the territory of one or both Parties;  or
(ii) used goods collected in the territory of one or both Parties, provided such
goods are fit only for the recovery of raw materials;  andWT/REG125/1
Page 32
(i) goods produced in the territory of one or both Parties exclusively from goods
referred to in subparagraphs (a) through (h), or from their derivatives, at any
stage of production;
identical or similar goods means “identical goods” and “similar goods”, respectively, as
defined in the Customs Valuation Code;
indirect costs and expenses of manufacture means the costs and expenses incurred in a
period, other than the direct costs and expenses of manufacture, the cost of direct labour, and the cost
or value of direct materials;
indirect material  means a good used in the production, testing or inspection of a good but
not physically incorporated into the good, or a good used in the maintenance of buildings or the
operation of equipment associated with the production of a good, including:
(a) fuel and energy;
(b) tools, dies and moulds;
(c) spare parts and materials used in the maintenance of equipment and buildings;(d) lubricants, greases, compounding materials and other materials used in production or
to operate equipment and buildings;
(e) gloves, glasses, footwear, clothing, safety equipment and supplies;(f) equipment, devices, and supplies used for testing or inspecting the goods;(g) catalysts and solvents;  and(h) any other goods that are not incorporated into the good but whose use in the
production of the good can reasonably be demonstrated to be a part of that
production;
intermediate material  means a material that is self-produced and used in the production of a
good, and designated pursuant to Article 4-07;
location of the producer in relation to a good means the plant that produces such good;
material  means a good that is used in the production of another good;
net cost  means total cost minus sales promotion, marketing and after-sales service costs,
royalties, shipping and repacking costs;
originating material  means a material that qualifies as originating under this Chapter;
packing materials and containers for shipment  means goods used to used to protect a good
during transport, other than the packaging and materials for retail sale;
producer  means a person who grows, mines, harvests, fishes, hunts, manufactures, processes
or assembles a good;
production  means growing, mining, harvesting, fishing, hunting, manufacturing, processing
or assembling a good;WT/REG125/1
Page 33
related person  means a person related to another person on the basis that:
(a) they are officers or directors of one another’s businesses;
(b) they are legally recognized partners in business;
(c) they are employer and employee;(d) any person who directly or indirectly owns, controls or holds 25 per cent or more of
the outstanding voting stock or shares of each of them;
(e) one of them directly or indirectly controls the other;
(f) both of them are directly or indirectly controlled by a third person;(g) together they directly or indirectly control a third person; or(h) they are members of the same family (children, brothers, sisters, grandparents, or
spouses);
royalties  means payments of any kind, including payments under technical assistance or
similar agreements, made as consideration for the use or right to use any copyright, literary, artistic, or
scientific work, patent, trademark, design, model, plan, secret formula or process, excluding those
payments under technical assistance or similar agreements that can be related to specific services such
as:
(a) personnel training, without regard to where performed;  and
(b) if performed in the territory of one or both of the Parties, engineering, tooling, die-
setting, software design and similar computer services or other services;
sales promotion, marketing and after-sales service costs means the following costs related
to sales promotion, marketing and aftersales service:
(a) sales and marketing promotion; media advertising; advertising and market research;
promotional and demonstration materials, exhibits; sales conferences, trade shows
and conventions; banners; marketing displays; free samples; sales, marketing and
after sales service literature (product brochures, catalogues, technical literature, pricelists, service manuals, sales aid information); establishment and protection of logos
and trademarks; sponsorships; wholesale and retail restocking charges; entertainment;
(b) sales and marketing incentives; consumer, retailer or wholesaler rebates;
(c) salaries and wages, sales commissions, bonuses, benefits (for example, medical,
insurance, pension), travelling and living expenses, membership and professional
fees, for sales promotion, marketing and aftersales service personnel;
(d) recruiting and training of sales promotion, marketing and aftersales service personnel,
and aftersales training of customers’ employees, where such costs are identified
separately for sales promotion, marketing and aftersales service of goods on the
financial statements or cost accounts of the producer;
(e) product liability insurance;WT/REG125/1
Page 34
(f) office supplies for sales promotion, marketing and aftersales service of goods, where
such costs are identified separately for sales promotion, marketing and aftersales
service of goods on the financial statements or cost accounts of the producer;
(g) telephone, mail and other communications, where such costs are identified separately
for sales promotion, marketing and aftersales service of goods on the financial
statements or cost accounts of the producer;
(h) rent and depreciation of sales promotion, marketing and aftersales service offices and
distribution centres;
(i) property insurance premiums, taxes, cost of utilities, and repair and maintenance of
sales promotion, marketing and after-sales service offices and distribution centres,
where such costs are identified separately for sales promotion, marketing and
aftersales service of goods on the financial statements or cost accounts of the
producer;  and
(j) payments by the producer to other persons for warranty repairs;
self-produced material  means a material that is produced by the producer of a good and used
in the production of that good;
shipping and repacking costs means the costs incurred in repacking a good and shipping the
good outside the territory where the producer or exporter of the good is located;
total cost means the sum of the following:
(a) the cost or value of the direct materials used in the production of the good;(b) the cost of the direct labour used in production of the good;(c) a reasonable amount for direct and indirect costs of manufacturing the good,
excluding the following:
(i) the costs and expenses of a service provided by the producer of a good to a
third party, when the service is not related to the good,
(ii) the costs and losses resulting from the sale of part of the company of the
producer, which constitutes a discontinued operation,
(iii) the costs related to the cumulative effect of changes in the application of
accounting principles,
(iv) the costs or losses resulting from the sale of a capital good of the producer,
(v) the costs and expenses related to Acts of God or force majeure ,
(vi) the earnings obtained by the producer of the good, regardless of whether they
were retained by the producer or paid to other persons as dividends and the
taxes on those earnings, including the capital gains tax, and
(vii) the interest costs agreed to by related persons in excess of the interest paid at
market rates;WT/REG125/1
Page 35
transaction value  of a good means the price actually paid or payable for a good with respect
to a transaction of the producer of the good, adjusted in accordance with the principles of Article 1
and paragraphs 1, 3 and 4 of Article 8 of the Customs Valuation Code, regardless of whether the good
is sold for export. For the purposes of this definition, the vendor referred to in the Customs ValuationCode shall be the producer of the good;
transaction value of a material  means the price actually paid or payable for a material with
respect to a transaction of the producer of the good, adjusted in accordance with the principles of
Article 1 and paragraphs 1, 3 and 4 of Article 8 of the Customs Valuation Code, regardless of whether
the good or material is sold for export. For the purposes of this definition, the vendor referred to in the
Customs Valuation Code shall be the supplier of the material and the buyer referred to in the Customs
Valuation Code shall be the producer of the good; and
used means used or consumed in the production of goods;
Article 4-02
Interpretation and Application
1. For the purposes of this Chapter:
(a) the basis for tariff classification is the Harmonized System;
(b) the transaction value of a good or material shall be determined on the basis of the
principles of the Customs Valuation Code; and
(c) all the costs referred to in this Chap ter shall be recorded and maintained in
accordance with the Generally Accepted Accounting Principles applicable in the
territory of the Party in which the good is produced.
2. In applying the Customs Valuation Code under this Chapter to determine the origin of a good:
(a) the principles of the Customs Valuation Code shall apply to domestic transactions,
with such modifications as may be required by the circumstances, as would apply to
international transactions; and
(b) the provisions of this Chapter shall take precedence over the Customs Valuation Code
to the extent of any difference.
Article 4-03
Originating Goods
1. Except as otherwise provided in this Chapter, a good shall originate in the territory of a Party
where:
(a) the good is wholly obtained or produced entirely in the territory of one or both of the
Parties, as defined in Article 4-01;
(b) the good is produced entirely in the territory of one or both of the Parties exclusively
from originating materials as defined in this Chapter;WT/REG125/1
Page 36
(c) the good is produced in the territory of one or both of the Parties from non-originating
materials that undergo a change in tariff classification and meet other requirements,
as set out in Annex 4-03, and the good satisfies all other applicable provisions of this
Chapter;
(d) the good is produced in the territory of one or both of the Parties from non-originating
materials that undergo a change in tariff classification and meet other requirements
and the good satisfies the regional value content, as set out in Annex 4-03, and all
other applicable provisions of this Chapter;
(e) the good is produced in the territory of one of both of the Parties and satisfies the
regional value content as specified in Annex 4-03 and all other applicablerequirements of this Chapter; or
(f) except for a good provided for in Chapters 61 through 63 of the Harmonized System,
the good is produced entirely in the territory of one or both of the Parties but one or
more of the non-originating materials that are used in the production of the good donot undergo a change in tariff classification because:
(i) the good was imported into the territory of a Party in an unassembled or a
disassembled form but was classified as an assembled good pursuant to
Rule 2(a) of the General Rules of Interpretation of the Harmonized System, or
(ii) the heading for the good provides for and specifically describes both the good
itself and its parts and is not further subdivided into subheadings, or the
subheading for the good provides for and specifically describes both the good
itself and its parts,
provided that the regional value content of the good, determined in accordance with
Article 4-04, is not less than 50 per cent where the transaction value method is used, or
is not less than 40 per cent where the net cost method is used, and that the good
satisfies all other applicable requirements of this Chapter, unless the applicable rule of
Annex 4-03 under which it is classified specifies a different regional value content
requirement, in which case that requirement is to be applied.
2. For the purposes of this Chapter, a good produced from non-originating materials that
undergo a change in tariff classification and satisfy the other requirements set out in Article 4-03 shall
have been produced entirely in the territory of one or both Parties and the entire regional value content
of the good shall be met in the territory of one or both Parties.
Article 4-04
Regional Value Content
1. Except as provided in paragraph 5, each Party shall provide that the regional value content of
a good shall be calculated, at the choice of the exporter or producer of the good, on the basis of either
the transaction value method set out in paragraph 2 or the net cost method set out in paragraph 4.
2. The regional value content of a good may be calculated on the basis of the following
transaction value method:WT/REG125/1
Page 37
TV - VNM
RVC =  -------------- x 100
  TV
where
RVC is the regional value content, expressed as a percentage;TV is the transaction value of the good adjusted to a F.O.B. basis, except as
provided in paragraph 3;  and
VNM is the value of non-originating materials used by the producer in the
production of the good, determined in accordance with Article 4-05.
3. For the purposes of paragraph 2, where the producer of the good does not export it directly,
the transaction value shall be adjusted to the point at which the purchaser receives the good within theterritory where the producer is located.
4. The regional value content of a good may be calculated on the basis of the following net cost
method:
NC - VNM
RVC = -------------- x 100
  NC
where
RVC is the regional value content, expressed as a percentage;NC is the net cost of the good;  andVNM is the value of non-originating materials used by the producer in the
production of the good, determined in accordance with Article 4-05.
5. Each Party shall provide that an exporter or producer shall calculate the regional value content
of a good solely on the basis of the net cost method set out in paragraph 4 where:
(a) there is no transaction value for the good because it is not for sale;
(b) the transaction value of the good cannot be determined owing to restrictions on the
assignment or use of the good by the bu yer with the exception of those that:
(i) are imposed or required by the law or the authorities of the Party in which the
purchaser of the good is located,
(ii) limit the geographical territory in which the good can be resold, or
(iii) do not substantially affect the value of the good;
(c) the sale or the price depends on a condition or consideration whose value cannot be
determined in relation to the good;WT/REG125/1
Page 38
(d) part of the proceeds from the resale of the product or from any subsequent assignment
or use of the good by the buyer reverts directly or indirectly to the vendor, unless the
necessary adjustment can be made in accordance with Article 8 of the Customs
Valuation Code;
(e) the buyer and the vendor are related persons and the relationship between them
influences the price, except as provided in paragraph 2, Article 1, of the Customs
Valuation Code;
(f) the good is sold by the producer to a related person and the volume, by units of
quantity, of sales of identical or similar goods sold to related persons during the six-
month period immediately preceding the m onth in which the good is sold by the
producer exceeds 85 per cent of the producer’s total sales of such goods during that
period;
(g) the exporter or producer chooses to accumulate the regional value content of the good
in accordance with Article 4-08;  or
(h) the good is designated as an intermediate material under Article 4-07 and is subject to
a regional value-content requirement.
6. If an exporter or producer of a good calculates the regional value content of the good on the
basis of the transaction value method set out in paragraph 2 and a Party subsequently notifies the
exporter or producer, during the course of a verifi cation pursuant to Chapter 5 (Customs Procedures),
that the transaction value of the good, or the value of any material used in the production of the good,
is required to be adjusted or is unacceptable under paragraph 5, the exporter or producer may then also
calculate the regional value content of the good on the basis of the net cost method set out inparagraph 4.
7. With the exception of the goods covered in Article 4-15, a producer may average the regional
value content of one or all of the goods included in the same subheading, that are produced by the
same plant or in different plants in the territory of a Party, either taking as the base all the goods
produced by the producer or only the goods that are exported to the other Party:
(a) in the fiscal year or period;  or
(b) in any monthly, bimonthly, quarter ly, four-monthly or semiannual period.
8. Article 20-10 (Revocations and Transitory Provisions) shall apply to goods classified in
subheadings 8422.40 and 8431.43.
Article 4-05
Value of Materials
1. The value of a material shall:
(a) be the transaction value of the material; or
(b) in the event that there is no transaction value or the transaction value of the material is
unacceptable under Article 1 of the Customs Valuation Code, be determined in
accordance with Articles 2 through 7 of the Customs Valuation Code.
2. Where not included under paragraph 1 (a) or (b), the value of a material shall include:WT/REG125/1
Page 39
(a) freight, insurance, packing and all other costs incurred in transporting the material
from the port of importation in the territory of the Party where the producer is located,
except as provided in paragraph 3;
(b) the cost of waste and spoilage resulting from the use of the material in the production
of the good, less any costs recovered, provided the recovery does not exceed 30 per
cent of the value of the material, determ ined in accordance with paragraph 1.
3. Where the producer of a good buys a non-originating material in the territory of the Party
where the producer is located, the value of the non-originating material shall not include freight,
insurance, packing or any other cost incurred in transporting the material from the warehouse of thesupplier to the location of the producer.
4. To calculate the regional value content under Article 4-04, the value of the non-originating
materials used by the producer in the production of a good shall not include the value of the non-
originating materials used by:
(a) another producer in the production of an originating material that is purchased and
used by the producer of the good in its production; or
(b) the producer of the good in the production of a self-manufactured originating
material, designated by the producer as an intermediate material in accordance with
Article 4-07.
Article 4-06
De Minimis
1. A good shall be considered to be an originating good if the value of all non-originating
materials used in the production of the good that do not undergo an applicable change in tariff
classification set out in Annex 4-03 is not more than eight per cent of the transaction value of the
good, adjusted on the basis of Article 4-04 (2) or (3) as appropriate, or in the cases referred to in
Article 4-04 (5), if the value of all non-originating materials is not more than eight per cent of the totalcost of the good.
2. If a good mentioned in paragraph 1 is also subject to a regional value content requirement, the
value of such non-originating materials shall be ta ken into account in calculating the regional value
content of the good and the good must satisfy all other applicable requirements of this Chapter.
3. A good that is subject to a regional value-content requirement established in Annex 4-03 shall
not be required to satisfy such requirement if the value of all non-originating materials is not more
than eight per cent of the transaction value of the good, adjusted on the basis of Article 4-04 (2) or (3)
as appropriate, or in the cases referred to in Article 4-04 (5), if the value of all non-originatingmaterials is not more than eight per cent of the total cost.
4. Paragraph 1 does not apply to:
(a) goods provided for in Chapter 50 through 63 of the Harmonized System; or(b) a non-originating material used in the production of a good provided for in Chapter 1
through 27 of the Harmonized System unless the non-originating material is provided
for in a different subheading than the good for which origin is being determined under
this Article.WT/REG125/1
Page 40
Article 4-07
Intermediate Materials
1. For the purposes of calculating the regional value content under Article 4-04, the producer of
a good may designate as an intermediate material, any self-produced material used in the production
of the good, provided such material is an originating good as established in Article 4-03.
2. Where an intermediate material is subject to a regional value content under Annex 4-03, the
value shall be calculated on the basis of the net cost method established in Article 4-04 (4).
3. For the purposes of calculating the regional value content of a good, the value of the
intermediate material shall be the total cost that  can reasonably be assigned to that intermediate
material as established in the Uniform Regulations of this Chapter.
4. If a material designated as an intermediate material is subject to a regional value content, no
other self-produced material subject to a regional value content used in the production of that
intermediate material may be designated by the producer as an intermediate material.
5. Except where two or more producers accumulate their production under Article 4-08, the
restriction established in paragraph 4 shall not apply to an intermediate material used by anotherproducer in the production of a material that is subsequently purchased and used in the production of a
good by the producer mentioned in paragraph 4.
Article 4-08
Accumulation
1. For the purposes of determining whether a good is an originating good, the producer of a
good may choose to accumulate own production with that of one or more producers in the territory of
one or both Parties of materials that are incorporated into that good, so that the production of the
materials is considered to have been performed by that producer, provided the good complies with the
requirements of Article 4-03.
2. In cases in which the accumulated good is subject to a regional value-content requirement, the
calculation shall be performed on the basis of the net cost method.
Article 4-09
Fungible Goods and Materials
1. For the purposes of determining whether a good is an originating good when originating and
non-originating fungible materials are commingled in the inventory, the origin of the materials may be
determined on the basis of any of the inventory management methods set out in the Uniform
Regulations.
2. Where originating and non-originating fungible goods are commingled in the inventory and
do not undergo any productive process or any other operation in the territory of the Party in whichthey were commingled, other than unloading, relo ading or any other movement necessary to maintain
the goods in good condition or ship them to the territory of the other Party, the origin of the good may
be determined on the basis of any of the inventory management methods set out in the Uniform
Regulations.WT/REG125/1
Page 41
3. Once one of the inventory management methods set out in the Uniform Regulations has been
selected, it shall be used during the entire fiscal year or period.
Article 4-10
Sets and Assortments
1. Sets and assortments of goods classified as provided in Rule 3 of the General Rules of
Interpretation, of the Harmonized System and goods whose description under the nomenclature of the
Harmonized System is specifically that of a set or assortment shall qualify as originating, provided
that each of the goods in the set or assortment complies with the rule of origin established for each of
the goods in this Chapter.
2. Notwithstanding paragraph 1, a set or assortment of goods shall be considered originating if
the value of all the non-originating goods used to form the set or assortment does not exceed eight per
cent of the transaction value of the set or assortment, adjusted on the basis of paragraph 2 or 3 of
Article 4-04 as applicable or, in the cases referred to in Article 4-04 (5), if the value of all the non-originating goods does not exceed eight per cent of the total value of the set or assortment.
3. The provisions of this Article shall take precedence over the specific rules established in
Annex 4-03.
Article 4-11
Indirect Materials
An indirect material shall be considered to be an originating material without regard to where
it is produced and the value of such material shall be the cost reported in the accounting records of the
producer of the good.
Article 4-12
Accessories, Spare Parts and Tools
1. Accessories, spare parts or tools delivered with the good that form part of the good’s standard
accessories, spare parts, or tools shall be disregarded in determining whether all the non-originating
materials used in the production of the good undergo the applicable change in tariff classification set
out in Annex 4-03, provided that:
(a) the accessories, spare parts or tools are not invoiced separately from the good,
regardless of whether they are listed separately in the invoice;  and
(b) the quantities and value of the accessories, spare parts or tools are customary for the
good.
2. If the good is subject to a regional value-content requirement, the value of the accessories,
spare parts or tools shall be taken into account as originating or non-originating materials, as the case
may be, in calculating the regional value content of the good.
3. For the purposes of paragraph 2, where the accessories, spare parts or tools are self-produced,
the producer may opt to designate them as intermediate materials under Article 4-07.WT/REG125/1
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Article 4-13
Packaging Materials and Containers for Retail Sale
1. Packaging materials and containers in which a good is packaged for retail sale shall, if
classified with the good in the Harmonized System, be disregarded in determining whether all the
non-originating materials used in the production of the good undergo the applicable change in tariff
classification set out in Annex 4-03.
2. If the good is subject to a regional value-content requirement, the value of such packaging
materials and containers shall be taken into account as originating or non-originating materials, as the
case may be, in calculating the regional value content of the good.
3. For the purposes of paragraph 2, when the packaging materials and containers are self-
produced, the producer may designate them as intermediate materials under Article 4-07.
Article 4-14
Packing Materials and Containers for Shipment
Packing materials and containers in which a good is packed for shipment shall be disregarded
in determining whether:
(a) the non-originating materials used in the production of the good undergo an
applicable change in tariff classification set out in Annex 4-03;  and
(b) the good satisfies a regional value-content requirement.
Article 4-15
Automotive Goods
1. For the purposes of this Article:
class of motor vehicles  means any one of the following categories of motor vehicles:
(a) motor vehicles in subheading 8701.20, 8702.10. or 8702.90 (vehicles for the transport
of 16 or more persons), or subheading 8704.10, 8704.22, 8704.23, 8704.32 or
8704.90 or heading 87.05 or 87.06;
(b) motor vehicles in subheading 8701.10 or 8701.30 through 8701.90;(c) motor vehicles in subheading 8702.10 or 8702.90 (vehicles for the transport of 15 or
fewer persons), or subheading 8704.21 or 8704.31;  or
(d) motor vehicles in subheading 8703.21 through 8703.90;model line  means a group of motor vehicles having the same platform or model name;
model name means the word, group of words, letter, number or similar designation assigned
to a motor vehicle by a marketing division of a motor vehicle assembler:
(a) to differentiate the motor vehicle from other motor vehicles that use the same
platform design;WT/REG125/1
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(b) to associate the motor vehicle with other motor vehicles that use a different platform
design;  or
(c) to denote a platform design;
motor vehicle  means a good included in heading 87.01, 87.02, 87.03, 87.04, 87.05 or 87.06;
platform means the platform primary load-bearing structural assembly of a motor vehicle
determining the basic size of the motor vehicle, and is the structural base that supports the driveline
and links the suspension components of the motor vehicle for various types of frames, such as the
body-on-frame or space-frame, and monocoques; and
underbody  means the floor pan of a motor vehicle.
2. For purposes of calculating the regional value content of a motor vehicle, the producer may
average its calculation over its fiscal year, using any one of the following categories, on the basis ofeither all motor vehicles in the category or only those motor vehicles in the category that are exported
to the territory of the other Party:
(a) the same model line of motor vehicles in the same class of vehicles produced in the
same plant in the territory of a Party;
(b) the same class of motor vehicles produced in the same plant in the territory of a Party;
(c) the same model line of motor vehicles produced in the territory of a Party; or
(d) the same class of motor vehicles produced in the territory of a Party.
Article 4-16
Non-Qualifying Operations and Practices
A good shall not be considered to be an originating good merely by reason of:(a) dilution with water or another substance that does not materially alter the
characteristics of the good;
(b) simple operations for conserving the good during transport or storage, such as airing,
refrigeration, removal of damaged parts, drying or the addition of substances;
(c) dusting, screening, classification, selection, washing, cutting;(d) packing, repacking or packaging for retail sale;(e) the collection of goods to make series, sets or assortments;(f) application of marks, labels or similar distinguishing signs;
(g) cleaning, including the removal of rust, grease, paint or other coverings; and
(h) the simple collection of parts and components classified as a good under Rule 2(a) of
the General Rules of Interpretation of the Harmonized System.  This shall not applyWT/REG125/1
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to goods that were already assembled and subsequently disassembled for convenient
packing, handling or shipping.
2. Any activity or pricing practice in respect of which it may be demonstrated, on the basis of a
preponderance of evidence, that the object was to circumvent this Chapter shall not confer origin.
3. The provisions of this Article shall take precedence over the specific rules established in
Annex 4-03.
Article 4-17
Transhipment and Direct Shipment
A good shall not be considered to be an originating good by reason of having undergone
production that satisfies the requirements of Article 4-03 if, subsequent to that production:
(a) the good undergoes further production or any other operation outside the territories of
the Parties, other than unloading, reloading or any other operation necessary to
preserve it in good condition or to transport the good to the territory of the other
Party;
(b) the good does not remain under the control or supervision of the customs authority in
the territory of a non-party country.
Article 4-18
Sub-Committee on Rules of Origin
1. Notwithstanding Article 3-16(5) (Committee of Trade in Goods), the Sub-Committee on
Rules of Origin shall have the following functions:
(a) cooperate in applying this Chapter in accordance with Chapter 5 (Customs
Procedures);
(b) on the request of a Party, consider duly-substantiated proposals to modify the rules of
origin to reflect changes in production processes or other aspects related to the
determination of origin of a good;
(c) propose to the Committee on Trade in Goods modifications and additions to this
Chapter, the Uniform Regulations and to matters in its sphere of competence;
(d) conduct technical studies to fulfil the objective established in Article 20-09
(Cooperation on Rules of Origin); and
(e) determine, where appropriate, the influence of interest costs incurred by a producer of
one Party on the production of a good, in order to avoid undue use of such costs in
determining the origin of that good.
2. Paragraph 1 shall not be construed to prevent a Party from issuing a determination of origin or
an advance ruling or from taking such other action as it considers necessary.WT/REG125/1
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CHAPTER 5 – CUSTOMS PROCEDURES
Article 5-01
Definitions
1. For the purposes of this Chapter:
commercial importation  means the importation of a good into the territory of a Party for the
purpose of sale, or any commercial, industrial or other like use;
customs administration  means the competent authority that is responsible under the law of a
Party for the administration of customs laws and regulations;
determination of origin  means a determination as to whether a good qualifies as an
originating good in accordance with Chapter 4 (Rules of Origin);
exporter means an exporter located in the territory of a Party from which the good is
exported, required under this Chapter to maintain the records in the territory of that Party referred to
in Article 5-06(a);
identical goods  means “identical goods” as defined in the Customs Valuation Code;
importer  means an importer located in the territory of a Party to which the good is imported,
required under this Chapter to maintain the records in the territory of that Party referred to in
Article 5-06(b);
preferential tariff treatment  means the duty rate applicable to an originating good in
accordance with the Tariff Reduction Programme;
producer  means a “producer” as defined in Article 4-01 (Definitions), located in the territory
of a Party, required maintain the records in the territory of that Party referred to in Article 5-06(a); and
value  means the value of a good or material for the purposes of calculating customs tariffs or
the application of Chapter 4 (Rules of Origin).
2. Unless otherwise specified in this Article, this Chapter includes the definitions established in
Chapter 4 (Rules of Origin).
Article 5-02
Declaration and Certification of Origin
1. For the purposes of this Chapter, on the date on which this Agreement comes into force, the
Parties shall prepare a single form for the Certificate of Origin and a single form for the declaration of
origin, which may be modified by mutual agreement.
2. The Certificate of Origin referred to in paragraph 1 shall serve to certify that a good exported
from the territory of one Party to the territory of the other Party qualifies as an originating good. Thecertificate shall remain valid for up to two years after it is signed.
3. Each Party shall require its exporters to complete and sign a Certificate of Origin for any
exportation of a good for which an importer may claim preferential tariff treatment.WT/REG125/1
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4. Each Party shall require that:
(a) where an exporter is not the producer of the good, the exporter may complete and
sign a Certificate of Origin on the basis of:
(i) its knowledge of whether the good qualifies as an originating good,
(ii) its reasonable reliance on the producer’s written representation that the good
qualifies as an originating good, or
(iii) the declaration of origin referred to in paragraph 1;
(b) the declaration of origin applicable to the good to be exported shall be completed and
signed by the producer of the good and given voluntarily to the exporter. The
statement shall remain valid for up to two years after it is signed.
5. Each Party shall provide that a Certificate of Origin that has been completed and signed by an
exporter in the territory of the other Party is applicable to:
(a) a single importation of one or more goods;  or(b) multiple importations of identical goods within a specified period, not exceeding
12 months, set out in the certificate by the exporter.
Article 5-03
Obligations Regarding Importations
1. Each Party shall require an importer in its territ ory that claims preferential tariff treatment for
a good imported into its territory from the territory of the other Party to:
(a) make a written statement, based on a valid Certificate of Origin, that the good
qualifies as an originating good;
(b) have the certificate in its possession at the time the statement is made;
(c) provide, on the request of that Party’s customs administration, a copy of the
certificate;  and
(d) promptly make a corrected statement an d pay any duties owing where the importer
has reason to believe that a certificate on which a statement was based contains
information that is not correct. If the importer complies with the above obligation, it
shall not be subject to penalties.
2. Each Party shall provide that when an importer in  its territory fails to comply with any of the
requirements established in this Chapter it shall be denied the preferential tariff treatment claimed for
the good imported into the territory of the other Party.
3. Each Party shall provide that, where a good would have qualified as an originating good when
it was imported into the territory of that Party but no claim for preferential tariff treatment was made
at that time, the importer of the good may, no later than one year after the date on which the good was
imported, apply for a refund of any excess duties paid as the result of the good not having been
accorded preferential tariff treatment, on presentation of:WT/REG125/1
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(a) a written statement that the good qualified as an originating good at the time of
importation;
(b) a copy of the Certificate of Origin; and
(c) such other documentation relating to the importation of the good as that Party may
require.
Article 5-04
Obligations Regarding Exportations
1 Each Party shall provide that an exporter or a producer in its territory that has completed and
signed a certificate or declaration of origin, shall provide a copy of the certificate or declaration to its
customs administration on request.
2. Each Party shall provide that an exporter or a producer in its territory that has completed and
signed a certificate or declaration of origin, and that has reason to believe that the certificate contains
information that is not correct, shall promptly notif y in writing all persons to whom the certificate or
declaration was given of any change that could affect the accuracy or validity of the certificate or
declaration and its customs administration. In such cases, the exporter or producer shall not be subject
to penalties for having presented an incorrect certificate or declaration.
3. Each Party shall provide that a false certification or statement by an exporter or a producer in
its territory that a good to be exported to the territory of the other Party qualifies as an originating
good shall have the same legal consequences, with appropriate modifications, as would apply to an
importer in its territory for a contravention of its customs laws and regulations regarding the makingof a false statement or representation. Each party may apply such measures as the circumstances may
warrant where an exporter or a producer in its territory fails to comply with any requirement of this
Chapter.
4. The customs administration of the exporting Party shall inform the customs administration of
the importing Party in writing of the notification referred to in paragraph 2.
Article 5-05
Exceptions
Provided that an importation does not form part of two or more importations that may
reasonably be considered to have been undertaken or arranged for the purpose of avoiding the
certification requirements of Articles 5-02 and 5-03, the Parties shall not require a Certificate of
Origin in the following cases:
(a) a commercial importation of a good whose value does not exceed US$1,000 or its
equivalent amount in the Party’s currency, or such higher amount as it may establish,
except that it may require that the invoice accompanying the importation include a
statement by the importer or exporter certifying that the good qualifies as an
originating good;
(b) a non-commercial importation of a good whose value does not exceed US$1,000 or
its equivalent amount in the Party’s currency, or such higher amount as it may
establish;  orWT/REG125/1
Page 48
(c) an importation of a good for which the Party into whose territory the good is imported
has waived the requirement for a Certificate of Origin.
Article 5-06
Accounting Records
Each Party shall provide that:
(a) an exporter or a producer in its territory that completes and signs a certificate or
declaration of origin shall maintain, for a minimum of five years after the date on
which the certificate or declaration was signed, all records and documents relating tothe origin of a good, including records and documents associated with:
(i) the purchase of, cost of, value of, and payment for, the good that is exported
from its territory,
(ii) the purchase of, cost of, value of, and payment for, all materials, including
indirect materials, used in the production of the good that is exported from its
territory, and
(iii) the production of the good in the form in which the good is exported from its
territory;  and
(b) an importer claiming preferential tariff treatment for a good imported into the Party’s
territory from the territory of the other Party shall maintain, for a minimum of five
years after the date of importation of the good, the Certificate of Origin and alldocumentation relating to the importation of the good, as the importing Party may
require.
Article 5-07
Origin Verifications
1. The importing Party may request information from the exporting Party on the origin of a
good.
2. For purposes of determining whether a good imported into its territory from the territory of
the other Party under preferential tariff treatment qualifies as an originating good, a Party may,through its customs administration, conduct a verification solely by means of:
(a) written questionnaires to exporters or producers in the territory of the other Party;(b) visits to the premises of an exporter or a producer in the territory of the other Party to
review the records and documents accrediting compliance with the rules of origin in
accordance with Article 5-06 (a) and observe the facilities used in the production of
the materials;  or
(c) such other procedure as the Parties may agree.
3. Prior to conducting a verification visit pursuant to paragraph (2)(b), the importing Party shall,
through its customs administration, deliver a written notification of its intention to conduct the visit.
The notification shall be sent to the exporter or producer whose premises are to be visited, to the
customs administration of the Party in whose territory the visit is to be conducted and, if requested byWT/REG125/1
Page 49
the latter, to the embassy of the other Party in the territory of the importing Party. The customs
administration of the importing Party shall obtain the written consent of the exporter or producer
whose premises are to be visited.
4. The notification referred to in paragraph 3 shall include:
(a) the identity of the customs administration issuing the notification;(b) the name of the exporter or producer whose premises are to be visited;(c) the date and place of the proposed verification visit;
(d) the object and scope of the proposed verification visit, including specific reference to
the good that is the subject of the verification;
(e) the names, identification and titles of the officials performing the verification visit;
and
(f) the legal authority for the verification visit.
5. Where an exporter or a producer has not given its written consent to a proposed verification
visit within 30 days of receipt of notification pursuant to paragraph 3, the notifying Party may denypreferential tariff treatment to the good that would have been the subject of the visit.
6. Each Party shall provide that, where its customs administration receives notification pursuant
to paragraph 3, the customs administration may, within 15 days of receipt of the notification, postpone
the proposed verification visit for a period not exceeding 60 days from the date of such receipt, or forsuch longer period as the Parties may agree.
7. A Party shall not deny preferential tariff treatment to a good based solely on the
postponement of a verification visit pursuant to paragraph 6.
8. Each Party shall permit an exporter or a produc er whose good is the subject of a verification
visit to designate two observers to be present during the visit, provided that the observers do notparticipate in a manner other than as observers. The failure of the exporter or producer to designate
observers shall not result in the postponement of the visit.
9. Each Party shall, through its customs administration, where conducting a verification of
origin involving a regional value content, de minimis calculation or any other provision in Chapter 4(Rules of Origin) to which Generally Accepted Accounting Principles may be relevant, apply such
principles as are applicable in the territory of the Party from which the good was exported.
10. After the verification visit, the customs administration shall provide the exporter or producer
whose good is the subject of the verification with a written determination of whether the goodqualifies as an originating good, including findings of fact and the legal basis for the determination.
11. Where a verification by a Party establishes that an exporter or a producer has made a false or
unsupported certification or declaration on more than one occasion that a good imported into its
territory qualifies as an originating good, the importing Party may withhold preferential tarifftreatment to identical goods exported or produced by such person until that person establishes
compliance with Chapter 4 (Rules of Origin).
12. Each Party shall provide that where its customs administration determines that a good
imported into its territory does not qualify as an originating good based on a tariff classification or aWT/REG125/1
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value applied by the Party to one or more materials used in the production of the good, which differs
from the tariff classification or value applied to the materials by the Party from whose territory the
good was exported, the importing Party’s determination shall not become effective until it notifies in
writing both the importer of the good and the person that completed and signed the Certificate of
Origin for the good of its determination.
13. A Party shall not apply a determination made under paragraph 12 to an importation made
before the effective date of the determination where:
(a) the customs administration of the exporting Party has issued an advance ruling under
Article 5-09 or any other ruling on the tariff classification or on the value of such
materials, on which a person is entitled to rely; and
(b) such rulings were given prior to notification of the verification of origin.
Article 5-08
Confidentiality
1. Each Party shall maintain, in accordance with its law, the confidentiality of confidential
information collected pursuant to this Chapter and shall protect that information from disclosure that
could prejudice the person providing the information.
2. The confidential information collected pursuant to this Chapter may only be disclosed to
those authorities responsible for the administration and enforcement of determinations of origin and of
customs and revenue matters, as appropriate.
Article 5-09
Advance Rulings
1. Each Party shall, through its customs administration, provide for the expeditious issuance of
written advance rulings, prior to the importation of a good into its territory. The advance rulings shall
be issued by the customs administration of the territory of the importing Party to an importer in itsterritory or an exporter or a producer in the territory of the other Party, on the basis of the facts and
circumstances presented by them, concerning:
(a) whether a good qualifies as an originating good under Chapter 4 (Rules of Origin);
(b) whether non-originating materials used in the production of a good undergo a change
in tariff classification set out in Annex 4-03 (Specific Rules of Origin);
(c) whether a good satisfies a regional value-content established in Chapter 4 (Rules of
Origin);
(d) whether the method applied by an exporter or a producer in the territory of the other
Party, in accordance with the principles of the Customs Valuation Code, for
calculating the transaction value of the good or of the materials used in the production
of the good for which an advance ruling is requested is suitable for determiningwhether the good complies with the regional value content under Chapter 4 (Rules of
Origin);
(e) whether the method applied by an exporter or a producer in the territory of the other
Party for reasonably allocating costs, in accordance with the methods set out in theWT/REG125/1
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Uniform Regulations for calculating the net cost of the good or the value of an
intermediate material, is suitable for determining whether the good complies with the
regional value content under the Chapter referred to;
(f) whether a good that re-enters its territory after the good has been exported from its
territory to the territory of the other Party for repair or alteration qualifies for duty-
free treatment in accordance with Article 3-08 (Goods Re-Entered after Repair or
Alteration);  and
(g) such other matters as the Parties may agree.
2. Each Party shall adopt or maintain procedures for the issuance of advance rulings, including:
(a) the information reasonably required to process an application for a ruling;
(b) the authority of its customs administration, at any time during the course of an
evaluation of an application, to request supplemental information from the personrequesting the ruling;
(c) the obligation of its customs administration to issue an advance ruling, after it has
obtained all necessary information from the person requesting an advance ruling; and
(d) the obligation of its customs administration to provide a full explanation of the
reasons for the advance ruling.
3. Each Party shall apply an advance ruling to importations into its territory beginning on the
date of its issuance or such later date as may be specified in the ruling, unless the advance ruling is
modified or revoked under paragraph 5.
4. Each Party shall provide to any person reque sting an advance ruling the same treatment,
including the same interpretation and application of provisions of Chapter 4 (Rules of Origin)
regarding a determination of origin, as it provided  to any other person to whom it issued an advance
ruling, provided that the facts and circumstances are identical in all material respects.
5. An advanced ruling may be modified or revoked in the following cases:
(a) if the ruling is based on an error:
(i) of fact,(ii) in the tariff classification of a good or a material that is the subject of the
ruling,
(iii) in the application of a regional value-content requirement under Chapter 4
(Rules of Origin), or
(iv) in the application of the rules for determining whether a good that re-enters
its territory after the good has been exported from its territory to the territory
of the other Party for repair or alteration qualifies for duty-free treatmentunder Article 3-08 (Goods Re-Entered after Repair or Alteration);
(b) if the ruling is not in accordance with an  interpretation agreed by the Parties regarding
Chapter 3 (National Treatment and Market Access for Goods) or Chapter 4 (Rules of
Origin);WT/REG125/1
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(c) if there is a change in the material facts or circumstances on which the ruling is based;
(d) to conform with a modification of Chapter 3 (National Treatment and Market Access
for Goods), Chapter 4 (Rules of Origin), this Chapter or the Uniform Regulations;  or
(e) to conform with an administrative or judici al decision or a change in the domestic law
of the Party that issued the advance ruling.
6. Each Party shall provide that any modification or revocation of an advance ruling shall be
effective on the date on which it is issued, or on such later date as may be specified therein, and shall
not be applied to importations of a good that have occurred prior to that date, unless the person towhom the advance ruling was issued has not acted in accordance with its terms and conditions.
7. Each Party shall provide that where its customs administration examines the regional value
content of a good for which it has issued an advance ruling , it shall evaluate whether:
(a) the exporter or producer has complied with the terms and conditions of the advance
ruling;
(b) the exporter’s or producer’s operations are consistent with the material facts and
circumstances on which the advance ruling is based;  and
(c) the data and computations used in applying the basis or method for calculating value
or allocating cost were correct in all material respects.
8. Each Party shall provide that where its customs administration determines that any
requirement in paragraph 7 has not been satisfied, the customs administration may modify or revoke
the advance ruling as the circumstances may warrant.
9. Each Party shall provide that where its cust oms administration determines that an advance
ruling was based on incorrect information, the person to whom it was issued shall not be subject to
penalties provided the person demonstrates that it used reasonable care and acted in good faith in
presenting the facts and circumstances on which the ruling was based.
10. Each Party shall provide that where an ad vance ruling is issued to a person that has
misrepresented or omitted material facts or circumstances on which the ruling is based or has failed to
act in accordance with the terms and conditions of  the ruling, the customs administration that issued
the ruling may apply such measures as the circumstances may warrant.
11. The Parties shall provide that the person to whom an advance ruling has been issued shall
only use it for as long as the facts or circumstances on which the ruling is based continue. Should they
no longer apply, the person to whom the advance ru ling was issued may present information to enable
the administration that issued the ruling to proceed under paragraph 5.
12. No good subject to a verification of origin or to a review or appeal body in the territory of
either of the Parties shall be the subject of an advance ruling.
Article 5-10
Penalties
1. Each Party shall establish or maintain measures imposing criminal, civil or administrative
penalties for violations of its laws and regulations relating to this Chapter.WT/REG125/1
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2. Nothing in Article 5-03(1)(d), 5-03(2), 5-04(2)  or 5-07(7) shall be construed to prevent a
Party from applying such measures as the circumstances may warrant.
Article 5-11
Review and Appeal
1. Each Party shall grant the same rights of review and appeal of determinations of origin and
advance rulings as it provides to its importers to exporters or producers in the other Party:
(a) who complete and sign a certificate or declaration of origin for a good that has been
the subject of a determination of origin pursuant to Article 5-07(10); or
(b) who has received an advance ruling pursuant to Article 5-09.
2. The rights referred to in paragraph 1 shall include access to at least one level of administrative
review independent of the official or office respon sible for the determination or advance ruling under
review, and access to a judicial or quasi-judicial review of the determination or decision taken at the
final level of administrative review, in accordance with its domestic law.
Article 5-12
Uniform Regulations
1. The Parties shall establish, and implement through their respective laws and regulations by
the date of entry into force of this Agreement, and at any time thereafter, upon express agreement of
the Parties, Uniform Regulations regarding the interpretation, application and administration of
Chapter 3 (National Treatment and Market Access fo r Goods), Chapter 4 (Rules of Origin) and other
matters as may be agreed by the Parties.
2. Each Party shall implement any modification of or addition to the Uniform Regulations no
later than 180 days after the Parties agree on such modification or addition, or such other period as theParties may agree.
Article 5-13
Cooperation
1. Each Party shall notify the other Party of the following determinations, measures and rulings,
including to the greatest extent practicable those that are prospective in application:
(a) a determination of origin issued as the result of a verification conducted pursuant to
Article 5-07, after the avenues for review and appeal mentioned in Article 5-11 have
been exhausted;
(b) a determination of origin that the Party cons iders to be contrary to a ruling issued by
the customs administration of the other Party with respect to the tariff classification orvalue of a good, or of materials used in the production of a good, or the reasonable
allocation of costs where calculating the net cost of a good, that is the subject of a
determination of origin;WT/REG125/1
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(c) a measure establishing or significantly modifying an administrative policy that is
likely to affect future determinations of origin; and
(d) an advance ruling, or a ruling modifying an advance ruling, pursuant to Article 5-09.
2. The Parties shall cooperate:
(a) in the enforcement of their respective customs-related laws or regulations
implementing this Agreement, and under an y customs mutual assistance agreement or
other customs-related agreement to which they are party;
(b) to the extent practicable and for purposes of facilitating the flow of trade between
them, in such customs-related matters as the collection and exchange of statistics
regarding the importation and exportation of goods, the harmonization of
documentation used in trade, the standardization of data elements, the acceptance of
an international data syntax a nd the exchange of information;
(c) to the extent practicable, in the storage and transmission of customs-related
documentation;
(d) to the extent practicable, in the verification of origin of a good, for which purpose the
customs administration of the importing Party may request the customsadministration of the other Party to carry out determined operations or measures for
that purpose in its territory and to issue the respective reports;  and
(e) in seeking mechanisms for the detection and prevention of unlawful transhipments of
goods from a non-Party.
Article 5-14
Customs Sub-Committee
1. Notwithstanding Article 3-16 (Committee on Trade in Goods), The Customs Sub-Committee
shall have the following functions:
(a) endeavour to agree on:
(i) tariff classification and valuation matters relating to determinations of origin,
(ii) equivalent procedures and criteria for the request, approval, modification,
revocation and implementation of advance rulings,
(iii) the revisions to the certificate or declaration of origin mentioned in
Article 5-02,
(iv) the interpretation, application and uniform administration of Article 3-06
(Temporary Admission of Goods), 3- 07 (Duty-Free Entry of Certain
Commercial Samples and Printed Advertising Materials) and 3-08 (GoodsRe-Entered after Repair or Alteration), Chapter 4 (Rules of Origin), this
Chapter and the Uniform Regulations, and
(v) any other customs-related matter arising under this Agreement;WT/REG125/1
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(b) propose to the Committee on Trade in Goods modifications or additions to Chapter 4
(Rules of Origin), this Chapter, the Uniform Regulations and customs-related matters
in its sphere of competence;  and
(c) examine proposals for administrative or operational modifications in customs-related
matters that could affect trade flows between the Parties.
2. Nothing in this Chapter shall be construed to prevent a Party from issuing a determination of
origin or an advance ruling or from taking such other action as it considers necessary, pending a
resolution of a matter submitted to this Sub-Committee for consideration.
CHAPTER 6 – EMERGENCY ACTION
Article 6-01
Definitions
For the purposes of this Chapter:Agreement on Safeguards means the Agreement on Safeguards of the WTO Agreement;
competent investigating authority means “competent investigating authority” as defined in
Annex 6-01;
contribute importantly  means an important cause, but not necessarily the most important
cause;
critical circumstances  means circumstances where delay would cause damage that would be
difficult to repair;
domestic industry  means the producers as a whole of the like or directly competitive good
operating in the territory of a Party;
emergency action  does not include any emergency action pursuant to a proceeding instituted
prior to the entry into force of this Agreement;
serious injury, threat of and causal relationship  means that the provisions in that regard
established in the Agreement on Safeguards will be applied;
surge  means a significant increase in imports over the trend for a recent representative base
period; and
transition period means the period during which a good is in the process of tariff
elimination.
Article 6-02
Bilateral Emergency Actions
1. Subject to paragraphs 2 through 4, and during the transition period only, if a good originating
in the territory of a Party, as a result of the reduction or elimination of a duty provided for in this
Agreement, is being imported into the territory of the other Party in such increased quantities, in
relation to domestic production, and under such conditions that the imports of the good from thatWT/REG125/1
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Party alone constitute a substantial cause of serious injury, or threat thereof, to a domestic industry
producing a like or directly competitive good, the Party into whose territory the good is being
imported may, to the minimum extent necessary to remedy or prevent the injury or threat thereof:
(a) suspend the further reduction of any rate of duty provided for under this Agreement
on the good;
(b) increase the rate of duty on the good to a level not to exceed the lesser of
(i) the most-favoured-nation applied rate of duty in effect at the time the action
is taken, and
(ii) the most favoured nation applied rate of duty in effect on the day
immediately preceding the date of entry into force of this Agreement.
2. The following conditions and limitations shall apply to a proceeding that may result in
emergency action under paragraph 1:
(a) a Party shall, without delay, deliver to the other Party written notice of the institution
of a proceeding that could result in emergency action against a good originating in the
territory of the other Party;
(b) any such action shall be initiated no later than one calendar year after the date of
institution of the proceeding;
(c) no action may be maintained
(i) for a period exceeding one year, or
(ii) beyond the expiration of the transition period, except with the consent of the
Party against whose good the action is taken;
(d) no action may be taken by a Party against any particular good originating in the
territory of the other Party more than once during the transition period; and
(e) on the termination of the action, the rate of duty shall be the rate that, according to the
Party’s Schedule to Annex 3-04(3) (Tariff Reduction Programme) for the staged
elimination of the tariff, would have been in  effect one year after the initiation of the
action, and beginning January 1 of the year following the termination of the action, atthe option of the Party that has taken the action
(i) the rate of duty shall conform to the applicable rate set out in its Schedule to
Annex 3-04(3), or
(ii) the tariff shall be eliminated in equal annual stages ending on the date set out
in its Schedule to Annex 3-04(3) (Tariff Reduction Programme).
3. A Party may take a bilateral emergency action after the expiration of the transition period to
deal with cases of serious injury, or threat thereof, to a domestic industry arising from the operation ofthis Agreement only with the consent of the other Party.
4. The Party taking an action under this Article shall provide to the other Party 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 action. If theWT/REG125/1
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Parties are unable to agree on compensation, the Party against whose good the action is taken may
take tariff action having trade effects substantially equivalent to the action taken under this Article.
The Party taking the tariff action shall apply the action only for the minimum period necessary to
achieve the substantially equivalent effects.
Article 6-03
Global Emergency Actions
1. Each Party retains its rights and obligations under Article XIX of the GATT 1994 and the
Agreement on Safeguards, except those regarding compensation or retaliation and exclusion from an
action to the extent that such rights or obligations are inconsistent with this Article. Any Party takingan emergency action under Article XIX of the GATT 1994 and the Agreement on Safeguards shall
exclude imports of a good from the other Party from the action unless:
(a) imports from the other Party account for a substantial share of total imports;  and
(b) imports from the other Party contribute importantly to the serious injury, or threat
thereof, caused by total imports.
2. In determining whether:
(a) imports from the other Party account for a substantial share of total imports, those
imports normally shall not be considered to be substantial if that Party is not among
the top five suppliers of the good subject to the proceeding, measured in terms of
import share during the most recent three-year period; and
(b) imports from the other Party contribute importantly to the serious injury, or threat
thereof, the competent investigating author ity shall consider such factors as the
change in the total import share of the other Party, and the level and change in the
level of imports of the other Party.  Imports from a Party normally shall not be
deemed to contribute importantly to serious injury, or the threat thereof, if the growth
rate of such imports during the period in which the injurious surge in imports
occurred is appreciably lower than the grow th rate of total imports from all sources
over the same period.
3. A Party taking such action, from which a good from the other Party is initially excluded
pursuant to paragraph 1, shall have the right subsequently to include that good in the action in the
event that the competent investigating authority de termines that a surge in imports of such good
undermines the effectiveness of the action.
4. A Party shall, without delay, deliver written notice to the other Party of the institution of a
proceeding that may result in emergency action under paragraph 1 or 3.
5. Neither Party may impose restrictions on a good in an action under paragraph 1 or 3:
(a) without delivery of prior written notice to the Commission, and without adequate
opportunity for consultation with the other Party, as far in advance of taking the
action as practicable;  and
(b) that would have the effect of reducing imports of such good from the other Party
below the trend of imports of the good over a recent representative base period with
allowance for reasonable growth.WT/REG125/1
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6. A Party taking global emergency action pursuant to this Article against goods originating in
the other Party shall limit that action solely and exclusively to tariff measures.
7. The measures mentioned in paragraph 6 shall consist of increasing the rate of duty on the
originating good to a level not to exceed the lesser of:
(a) the most-favoured-nation applied rate of duty in effect at the time the action is taken;
and
(b) the most favoured nation applied rate of duty in effect on the day immediately
preceding the date of entry into force of this Agreement.
8. The Party taking an action pursuant to this Article shall provide to the other Party 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 action.
9. If the Parties are unable to agree on compensation, the Party against whose good the action is
taken may take action having trade effects substantially equivalent to the action taken under
paragraph 1 or 3.
Article 6-04
Administration of Emerge ncy Action Proceedings
1. Each Party shall ensure the consistent, impartial and reasonable administration of its laws,
regulations, decisions and rulings governing all emergency action proceedings.
2. Each Party shall entrust determinations of serious injury, or threat thereof, in emergency
action proceedings to a competent investigating authority, subject to review by judicial or
administrative tribunals, to the extent provided by domestic law. Negative injury determinations shall
not be subject to modification, except by such review.  The competent investigating authority
empowered under domestic law to conduct such proc eedings shall be provided with the necessary
resources to enable it to fulfil its duties.
3. Each Party shall adopt or maintain equitable, timely, transparent and effective procedures for
emergency action proceedings, in accordance with the requirements set out in Annex 6-04.
Article 6-05
Dispute Settlement in Emergency Action Matters
Neither Party may request the establishment of an arbitral panel under Article 18-06 (Request
for an Arbitral Panel) regarding any emergency action that has simply been proposed.
ANNEX 6-01
Investigating Authority
For the purposes of this Chapter, the competent investigating authority shall be:
1. In the case of Chile, the National Commission in Charge of the Investigation of the Existence
of Price Distortions in Imported Goods (“Comisión Nacional Encargada de Investigar la Existencia de
Distorsiones en el Precio de las Mercaderías Importadas”), or its successor.WT/REG125/1
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2. In the case of Mexico, the Department of Trade and Industrial Development (“Secretaría de
Comercio y Fomento Industrial”), or its successor.
ANNEX 6-04
Administration of Emergency Action Proceedings
Institution of a Proceeding
1. An emergency action proceeding may be instituted by the competent investigating authority
on its own motion or by a petition by entities specified in domestic law. The entity filing the petition
shall demonstrate that it is representative of the domestic industry producing a good like or directlycompetitive with the imported good.
Contents of a Petition2. Where the basis for an investigation is a petition filed by an entity representative of a
domestic industry, the petitioning entity shall, in its petition, provide the following information to the
extent that such information is publicly availa ble from governmental or other sources, or best
estimates and the basis therefor if such information is not available:
(a) product description: the name and description of the imported good concerned, the
tariff subheading under which that good is classified, its current tariff treatment and
the name and description of the like or directly competitive domestic good;
(b) representativeness:
(i) the names and addresses of the entities filing the petition, and the locations of
the establishments in which they produce the domestic good concerned,
(ii) the percentage of domestic production of the like or directly competitive
good that such entities account for and the basis for claiming that they are
representative of an industry, and
(iii) the names and locations of all other domestic establishments in which the like
or directly competitive good is produced;
(c) import data: import data for each of the five most recent full years that form the basis
of the claim that the good concerned is being imported in increased quantities, eitherin absolute terms or relative to domestic production, as appropriate;
(d) domestic production data: data on total domestic production of the like or directly
competitive good for each of the five most recent full years;
(e) data showing injury: quantitative and objective data indicating the nature and extent
of injury to the concerned industry, such  as data showing changes in the level of
sales, prices, production, productivity, capacity utilization, market share, profits or
losses, and employment;
(f) cause of injury: an enumeration and description of the alleged causes of the injury, or
threat thereof, and a summary of the basis for the assertion that increased imports
relative to domestic production are causing or threatening to cause serious injury,
supported by pertinent data;  andWT/REG125/1
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(g) criteria for inclusion: quantitative and objective data indicating the share of imports
accounted for by imports from the territory of the other Party and the petitioner’s
views on the extent to which such imports are contributing importantly to the serious
injury, or threat thereof, caused by imports of that good.
3. Petitions, except to the extent that they contain confidential business information, shall
promptly be made available for public inspection on being filed.
Consultations4. As soon as possible after a petition is filed pursuant to paragraph 2 and in all events prior to
the institution of an investigation, the Party intending to undertake it shall notify the other Party andinvite it to hold consultations to clarify the situation.
5. The Party whose goods are under investigation shall be given adequate opportunity to
continue the consultations during the entire investigation period.
6. During the consultations, the Parties may discuss, among other things, matters pertaining to
the investigation procedure, elimination of the measur e, the matters referred to in Article 6-02(4) and,
in general, exchange opinions on the measure.
7. Notwithstanding the obligation to provide adequate opportunity for consultations, the
provisions established in 4, 5 and 6 are not intended to impede the authorities of either Party from
proceeding expeditiously with the institution of the investigation or making preliminary or definitive
determinations, positive or negative, or to impede them from applying measures in accordance with
this Agreement.
8. The party that proposes to institute or is carrying out an investigation shall, if so requested,
give the Party whose goods are under investigation access to the public file, including the non-
confidential summary of the confidential informati on used to institute the investigation or during its
course.
Notice Requirement
9. On instituting an emergency action proceeding, the competent investigating authority shall
publish notice of the institution of the proceeding in the official journal of the Party within 30 days
after presentation of the petition.  The other Party shall be informed of the publication in writing
without delay.  The notice shall identify the petitioner, the imported good that is the subject of the
proceeding and its tariff item number, the nature and timing of the determination to be made, the timeand place of the public hearing, dates of deadlines for filing briefs, statements and other documents,
the place at which the petition and any other documents filed in the course of the proceeding may be
inspected, and the name, address and telephone number of the office to be contacted for more
information.
10. With respect to an emergency action proceeding instituted on the basis of a petition filed by
an entity asserting that it is representative of  the domestic industry, the competent investigating
authority shall not publish the notice required by pa ragraph 9 without first assessing carefully that the
petition meets the requirements of paragraph 2, including representativeness.
Public Hearing
11. In the course of each proceeding, the competent investigating authority shall:WT/REG125/1
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(a) without prejudice to its domestic law of a Party, hold a public hearing, after providing
reasonable notice, to allow all interested parties, and any association whose purpose is
to represent the interests of consumers in the territory of the Party instituting the
proceeding, to appear in person or by counsel, to present evidence and to be heard on
the questions of serious injury, or threat thereof, and the appropriate remedy;  and
(b) provide an opportunity to all interested parties and any such consumer association
appearing at the hearing to cross-question interested parties making presentations at
that hearing.
Confidential Information
12. For the purposes of Article 6-02, the competent investigating authority shall adopt or maintain
procedures for the treatment of confidential information, protected under domestic law, that is
provided in the course of a proceeding, including a requirement that interested parties and consumer
associations providing such information furnish non-confidential written summaries thereof, or where
they indicate that the information cannot be summarized, the reasons why a summary cannot beprovided. The authorities may determine not to take that information into account unless it is
convincingly demonstrated by an appropriate source that the information is correct.
Evidence of Injury
13. In conducting its proceeding the competent investigating authority shall gather, to the best of
its ability, all relevant information appropriate to the determination it must make. It shall evaluate all
relevant factors of an objective and quantifiable nature having a bearing on the situation of that
industry, including the rate and amount of the increase in imports of the good concerned, the share of
the domestic market taken by increased imports, and changes in the level of sales, production,productivity, capacity utilization, profits or losses, and employment. In making its determination, the
competent investigating authority may also consider other economic factors, such as changes in prices
and inventories, and the ability of firms in the industry to generate capital.
14. Identical goods shall be considered together with goods that, while not being identical in all
aspects, have similar characteristics.
Deliberation and Report
15. Except in critical circumstances and in global actions involving perishable agricultural goods,
the competent investigating authority, before maki ng an affirmative determination in an emergency
action proceeding, shall allow sufficient time to gath er and consider the relevant information, hold a
public hearing and provide an opportunity for all interested parties and consumer associations to
prepare and submit their views.
16. The competent investigating authority shall pr omptly publish the final determination in the
official journal of the Party, setting out its findings and reasoned conclusions on all pertinent issues oflaw and fact. The determination shall describe the imported good and its tariff item number, the
standard applied and the finding made. The statement of reasons shall set out the basis for the
determination, including a description of:
(a) the domestic industry seriously injured or threatened with serious injury;(b) information supporting a finding that imports are increasing, the domestic industry is
seriously injured or threatened with serious injury, and increasing imports are causing
or threatening serious injury;  andWT/REG125/1
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(c) if provided for by domestic law, any finding or recommendation regarding the
appropriate remedy and the basis therefor.
17. In relation to paragraph 16, the competent investigating authority shall not disclose any
confidential information provided pursuant to an y undertaking concerning confidential information
that may have been made in the course of the proceedings.
PART THREE – TECHNICAL STANDARDS
CHAPTER 7:  SANITARY AND PHYTOSANITARY MEASURES
Article 7-01
Definitions
For the purposes of this Chapter, the Parties shall use the definitions and terms established:(a) in the Agreement on the Application of Sanitary and Phytosanitary Measures of the
WTO Agreement (Agreement on Sanitary and Phytosanitary Measures);
(b) by the International Office of Epizootics (OIE);
(c) in the International Convention on Phytosanitary Protection;  and
(d) by the Codex Alimentarius Commission.
Article 7-02
General Provisions
1. This Chapter applies to the principles, rules and procedures relating to the sanitary and
phytosanitary measures which regulate or which may, directly or indirectly, affect trade in
agricultural, fish and forest products between the Parties and other trade in plants and animals, theirproducts and byproducts.
2. Through mutual cooperation, the Parties shall facilitate trade in agricultural, fish and forest
products that present no sanitary or phytosanitary risks and undertake to prevent the introduction or
spread of pests or diseases and to improve plant and animal health and food safety.
3. The competent authorities shall be the authorities with legal responsibility for enforcing
compliance with the sanitary and phytosanitary requirements established in this Chapter.
4. The Parties revoke the document mentioned in Annex 7-02.WT/REG125/1
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Article 7-03
Rights of the Parties
The Parties may:(a) adopt, maintain or apply any sanitary or phytosanitary measure in their territory only
to the extent necessary to protect human, animal or plant life or health, in accordance
with this Chapter;
(b) apply their sanitary and phytosanitary measures only to the extent necessary to
achieve an appropriate level of protection, taking into account technical and economicfeasibility;  and
(c) verify that plants, animals and plant and animal products for export are subject to
strict sanitary and phytosanitary monitoring, certifying compliance with the
requirements of the importing Party.
Article 7-04
Obligations of the Parties
1. Sanitary and phytosanitary measures shall not constitute a disguised restriction on trade or
create unnecessary obstacles to trade between the Parties.
2. Sanitary and phytosanitary measures shall be based on scientific principles, be maintained
only where there are sufficient grounds and be based on an appropriate risk assessment.
3. Where identical or similar conditions exist, a sanitary or phytosanitary measure shall not
discriminate arbitrarily or unjustifiably between its goods and similar goods of the other Party or
between the goods of the other Party and similar goods of a non-Party.
4. The Parties shall provide the necessary facilities to verify control, inspection and approval
procedures and sanitary and phytosanitary programmes.
Article 7-05
International Standards and Harmonization
1. Each Party shall use international standards, guidelines or recommendations as the basis for
its sanitary and phytosanitary measures, in order to harmonize them or make them compatible with
those of the other Party.
2. Notwithstanding paragraph 1, the Parties may adopt a sanitary or phytosanitary measure that
offers a level of protection different from that which would be achieved by measures based on an
international standard, guideline or recommendation, or which is higher, if there is scientific
justification.
3. To achieve closer harmonization, the Parties shall follow the guidelines of the competent
international organizations: the International Conv ention on Phytosanitary Protection for plant health;
the OIE for animal health; and the standards of the Codex Alimentarius  Commission with respect to
food safety and tolerance limits.WT/REG125/1
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4. The parties shall also take into consideration the standards and guidelines of other
international organizations of which they are members.
5. The Parties shall establish sanitary and phytosanitary harmonization systems for sampling,
diagnosis, inspection and certification of animals, plants, their products and byproducts and foodsafety.
Article 7-06
Equivalence
1. Without reducing the appropriate level of protection, the Parties shall accept to the fullest
extent possible, their sanitary and phytosanitary measures as equivalent.
2. Each Party shall accept the sanitary and phytosanitary measures of the other Party as
equivalent, even if they differ from its own, pr oviding scientific information is furnished to
demonstrate that they achieve the appropriate level of protection of the other Party.
3. To establish equivalencies between sanitary and phytosanitary measures, the Parties shall
adopt reasonable procedures to facilitate access to their territory for the purposes of inspection, tests
and other pertinent measures.
Article 7-07
Assessment of Risk and Determination of the Appropriate Level of Sanitary or Phytosanitary
Protection
1. The Parties shall ensure that their sanitary and phytosanitary measures are based on an
adequate assessment, as appropriate to the circumst ances, of the risks to human and animal life and
health and to the preservation of plant health and shall prevent harmful effects of the inputs used in
protection and production, taking into account the guidelines and risk assessment techniques
established by the competent international organizations.
2. On assessment of risk and determination of the appropriate level of protection, the Parties
shall take account of the existence of specific diseases or pests; recognition of pest- or disease-free
areas and areas of low pest or disease prevalence, programmes for eradication or control, the structure
and organization of sanitary and phytosanitary services, procedures for protection, surveillance,
diagnoses and treatments to ensure the safety of the product.
3. In establishing their appropriate level of protection, the Parties shall take into account the
objective of minimizing the negative effects on trade and, with the purpose of achieving consistency
in protection levels, shall avoid arbitrary or unjustifiable distinctions that could lead to discrimination
or which constitute a disguised restriction on trade between the Parties.
4. Where a Party performs a risk assessment and concludes that the scientific information is
insufficient, it may adopt a sanitary or phytosanitary measure on the basis of available information,
including information from the competent international organizations as well as from sanitary or
phytosanitary measures applied by the other Party. Once the necessary information becomes
available, the Party shall conclude the assessment and, when warranted, shall proceed to modify thesanitary or phytosanitary measure.WT/REG125/1
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Article 7-08
Recognition of Pest- or Disease-Free Areas and Areas of Low Pest or Disease Prevalence
1. The Parties shall recognize pest- or disease-free areas and areas of low pest or disease
prevalence on the basis of geographic location, ecosystems, epidemiological surveillance and the
effectiveness of sanitary or phytosanitary controls in such areas, among the main factors.
2. A Party that declares an area in its territory to be free from a given pest or disease shall
demonstrate that condition objectively to the satisfaction of the other Party and give it assurances that
the area shall be maintained as such, based on the protection measures adopted by the heads of the
sanitary or phytosanitary services.
3. A Party interested in obtaining recognition of an area that is free from a given pest or disease
shall make application to the other Party and provide it with the corresponding scientific and technical
information.
4. The Party receiving the application for recognition shall decide on it within a period agreed
upon in advance with the other Party and may conduct verifications with respect to inspections, tests
and other procedures. In the event it refuses the application, it shall give the technical grounds for its
decision in writing.
5. The Parties shall agree on specific requirements whose compliance shall permit a good
produced in an area of low pest or disease prevalence to be imported, if the appropriate level of
protection is provided.
Article 7-09
Control, Inspection and Approval Procedures
Pursuant to this Chapter, the Parties shall apply the provisions of Annex C of the Agreement
on Sanitary and Phytosanitary Measures relating to control, inspection and approval procedures,
including systems for approving the use of additives or for establishing tolerances for contaminants in
foods, beverages or feedstuffs.
Article 7-10
Transparency
Each Party, when proposing the adoption or modification of a sanitary or phytosanitary
measure for general application on the central or federal level, shall notify through its competent
authorities:
(a) the adoption and modification of such measures and facilitate information on them, in
accordance with Annex B of the Agreement on Sanitary and Phytosanitary Measures,
and shall make the pertinent adaptations;
(b) changes or modifications in sanitary or phytosanitary measures with a significant
effect on trade between the Parties, no less than 60 days prior to the entry into forceof the new provision, to permit the other Party to comment. In emergency situations
the term shall be waived, in accordance with Annex B of the Agreement on Sanitary
and Phytosanitary Measures;WT/REG125/1
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(c) changes in the field of animal health and the appearances of exotic diseases and
diseases of List A of the OIE, within 24 hours after detection of the problem;
(d) changes in the field of plant health, such as the appearance of quarantine pests or the
spread of pests under official control, within 72 hours after verification;  and
(e) findings of epidemiological importance and significant changes in relation to diseases
and pests not included in (b) or (c) that could affect trade between the Parties, within
a maximum of 10 days.
Article 7-11
Committee on Sanitary and Phytosanitary Measures
1. The Parties establish a Committee on Sanitary and Phytosanitary Measures Committee
comprised of representatives of each of them, with responsibilities for sanitary and phytosanitary
matters. The Committee shall be established within 30 days after this Agreement comes into force.
2. The Committee shall coordinate and apply the provisions of this Chapter, oversee the
fulfilment of its objectives, facilitate consultations or negotiations on specific sanitary and
phytosanitary matters and issue the pertinent recommendations.
3. The Committee’s functions shall include:
(a) establishing adequate terms and conditions for the coordination and expeditious
solution of matters submitted to it;
(b) immediately examining possible discrepancies that may arise in the application of this
Chapter;
(c) promoting the facilities needed for the training and specialization of technical staff;
and
(d) promoting cooperation and exchanges of technical staff, including cooperation in the
development, application and observance of sanitary or phytosanitary measures.
4. The Committee shall establish the following sub-committees, inter alia : animal health, plant
health, food safety, fisheries and agricultural chemicals. The members of the sub-committees shall be
appointed by the competent authorities in their respective fields.
5. The sub-committees’ functions shall include:
(a) preparing terms of reference for activities in their spheres of competence and
reporting on their results to the Committee;
(b) establishing specific agreements on matters of interest involving greater technical and
operational detail, for presentation to the Committee; and
(c) establishing mechanisms for expeditious exchanges of information in response to
consultations by the Parties.
6. The Committee shall convene once a year, unless otherwise agreed, and shall report on the
results of its work to the Commission. The sub-committees shall convene at least once a year, or as
often as necessary, depending on the requirements of their programme of activities.WT/REG125/1
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Article 7-12
Technical Consultations
1. Nothing in the Chapter shall prevent a Part y from consulting the other Party when it has
questions about the application or interpretation of its content.
2. Where one Party considers that a sanitary or phytosanitary measure of the other Party is
interpreted or applied in a manner that is inconsistent with the provisions of this Chapter, it shall be
required to demonstrate that inconsistency.
3. Where one Party requests consultations and notifies the Committee of its request, the
Committee shall facilitate the consultations and may remit them to an ad hoc  working group or some
other forum for advice or non-binding technical recommendations.
4. Where the Parties have held consultations under this Article without achieving satisfactory
results, those consultations, if agreed by the Parties, shall constitute the consultations envisaged in
Article 18-04 (Consultations).
Article 7-13
Relation to Other Chapters
The provision of Article XX(b) of the GATT 1994, included in Article 19-02(1) (General
Exceptions), does not apply to any sanitary or phytosanitary measure.
ANNEX 7-02
Revocation of the Document on Protocol Support
The Protocol Support Document for Trade in Fruit and Vegetables on Phytosanitary Bases
signed on 8 March 1991 by the Agriculture and Live stock Service of the Ministry of Agriculture of
Chile (“Servicio Agrícola y Ganadero del Ministerio de Agricultura”) and the Directorate General ofPlant Health of the Department of Agriculture a nd Water Resources of Mexico (“Dirección General
de Sanidad Vegetal de la Secretaría de Agricultura y Recursos Hidráulicos”) is hereby revoked.
CHAPTER 8 - STANDARDS-RELATED MEASURES
Article 8-01
Definitions
For the purposes of this Chapter:approval procedure  means any registration, notification or other mandatory administrative
procedure for granting permission for a good or service to be produced, marketed or used for a stated
purpose or under stated conditions;
assessment of risk means evaluation of the potential for adverse effects ;
conformity assessment procedure means any procedure used, directly or indirectly, to
determine that a technical regulation or standard is  fulfilled, including sampling, testing, inspection,WT/REG125/1
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evaluation, verification, assurance of conformity, registration, accreditation and approval, separately
or in different combinations;
international standard means a standards-related measure, or other guide or
recommendation, adopted by an international standardizing body and made available to the public;
international standardizing body means a standardizing body whose membership is open to
the relevant bodies of at least all the parties to the Agreement on Technical Barriers to Trade,
including the International Organization for Standardization, the International Electrotechnical
Commission, Codex Alimentarius Commission, the World Health Organization, the United Nations
Food and Agriculture Organization, the Internat ional Telecommunication Union, or any other body
that the Parties designate;
legitimate objective includes the guarantee for safety or protection of human, animal or plant
life or health, the environment, or the prevention of practices which may mislead or deceive
consumers, including issues related to identifying goods or services, considering, among other things,
where appropriate, fundamental climatic or other geographical factors, technological or infrastructuralfactors, or scientific justification;
make compatible means bring different standards-related measures of the same scope
approved by different standardizing bodies to a level such that they are either identical, equivalent or
have the effect of permitting goods or services to be used in place of one another or fulfil the samepurpose;
services means any of the cross-border services sectors or subsectors set out in Annex 8-01;
standard  means a document, approved by a recognized body, that provides, for common and
repeated use, rules, guidelines or characteristics for goods or related processes and production
methods, or for services or related operating methods, with which compliance is not mandatory. It
may also include or deal exclusively with termi nology, symbols, packaging, marking or labelling
requirements as they apply to a good, process, or production or operating method;
standardizing body means a body having recognized activities in standardization;
standards-related measure  means a standard, technical regulation or conformity assessment
procedure;
TBT Agreement means the Agreement on Agreement on Technical Barriers to Trade, which
forms part of the WTO Agreement;  and
technical regulation  means a document which lays down goods’ characteristics or their
related processes and production methods, or services’ characteristics or their related operating
methods, including the applicable administrative provisions, with which compliance is mandatory. It
may also include or deal exclusively with termi nology, symbols, packaging, marking or labelling
requirements as they apply to a good, process, or production or operating method.
Article 8-02
General Provision
Apart from the provisions of the TBT Agreement, the Parties shall apply the provisions of this
Chapter.WT/REG125/1
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Article 8-03
Scope and Coverage
1. This Chapter applies to the standards-related measures of the Parties and measures that may,
directly or indirectly, affect trade in goods or services between them.
2. This Chapter does not apply to sanitary and phytosanitary measures, which are covered by
Chapter 7 (Sanitary and Phytosanitary Measures).
Article 8-04
Basic Rights and Obligations
1. Each Party may, in pursuing its legitimate objectives, establish the levels of protection that it
considers appropriate and may develop, adopt, apply or maintain any standards-related measure to
ensure fulfilment of its legitimate objectives, and measures for the application of and compliance with
standards-related measures, including approval procedures.
2. Each Party shall comply with this Chapter and adopt measures to ensure compliance and,
within its ability, measures to that end with respect to non-governmental standardization organizations
that are duly accredited in its territory.
3. With respect to standards and technical regulations, each Party shall accord the goods and
service providers of the other Party national treatment and treatment no less favourable than that it
accords to similar goods and service providers of a non-Party country.
4. No Party may prepare, adopt, maintain or apply any standards-related measure with a view to
or with the effect of creating an unnecessary obstacle to trade between the Parties. To that end,
standards-related measures shall not restrict trade more than is necessary to fulfil a legitimate
objective, taking into account the risks that not fulfilling it would create. An unnecessary obstacle to
trade shall not be deemed to be created where:
(a) the demonstrable purpose of the measure is to achieve a legitimate objective;(b) it conforms to an international standard; and(c) the measure does not operate to exclude goods of the other Party that meet that
legitimate objective.
5. Each Party shall use existing international standards or standards whose adoption is imminent
as the basis for its own standards-related measures, unless such standards are not an effective or
appropriate means of fulfilling its legitimate objectives.
Article 8-05
Compatibility
1. Recognizing the central role of standards-related measures in achieving legitimate objectives,
the Parties shall, in accordance with this Chapter and the TBT Agreement, work jointly to enhance the
level of safety and of protection of human, animal and plant life and health, the environment and
consumers.WT/REG125/1
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2. Without reducing the level of safety or of protection of human, animal or plant life or health,
the environment or consumers, without prejudice to the rights of either Party under this Chapter, and
taking into account international standardization activities, the Parties shall, to the greatest extent
practicable, make compatible their respective standards-related measures.
3. A Party shall, on request of the other Party, seek as far as practicable through appropriate
measures, to promote the compatibility of a specific stan dard that is maintained in its territory with the
standards maintained in the territory of the other Party.
4. On the express and written request of a Party, setting forth its reasons, the other Party shall
give favourable consideration to the possibility of accepting technical regulations of that Party as
equivalents, even if they differ from its own, prov ided that, in cooperation with that Party, it is
convinced that the regulations comply with the legitimate objectives of its own regulations.
5. On the request of a Party, the other Party shall inform it in writing of its reasons for not
accepting a technical regulation as equivalent.
Article 8-06
Assessment of Risk
1. A Party may, in pursuing its legitimate objectives, conduct an assessment of risk. In
conducting an assessment, a Party may take into account, among other factors relating to a good or
service:
(a) assessments of risks performed by international standardization organizations;
(b) available scientific evidence or technical information;
(c) intended end use;
(d) processes or production methods provided they influence the nature of the end good
or service;
(e) operating, inspection, sampling or testing processes or methods;  or
(f) environmental conditions.
2. Where a Party establishes a level of protection that it considers appropriate to achieve its
legitimate objectives and conducts an assessment of risk, it should avoid arbitrary or unjustifiable
distinctions between similar goods or services in the level of protection it considers appropriate,
where the distinctions:
(a) result in arbitrary or unjustifiable discrimination against goods or service providers of
the other Party;
(b) constitute a disguised restriction on trade between the Parties;  or(c) discriminate between similar goods or services for the same use under the same
conditions that pose the same level of risk and provide similar benefits.
3. Where a Party conducting an assessment of risk determines that available scientific evidence
or other information is insufficient to complete the assessment, it may adopt a provisional technical
regulation on the basis of available relevant information and in accordance with the TBT Agreement.WT/REG125/1
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The Party shall, within a reasonable period after info rmation sufficient to complete the assessment of
risk is presented to it, complete its assessment, review and, where appropriate, revise the provisional
technical regulation in the light of that assessment.
4. A Party shall provide the other Party upon request with documentation on its risk-assessment
processes and the factors it takes into account in conducting the assessment and in establishing the
level of protection it considers appropriate in accordance with Article 8-04.
Article 8-07
Conformity Assessment Procedures
1. Conformity assessment procedures shall be prepared, adopted and applied so as to grant
access for goods and services originating in the territory of the other Party under conditions no less
favourable than those accorded to suppliers of like good or service of the Party or of a non-Party in a
comparable situation.
2. With respect to its conformity assessment procedures, each Party shall ensure that:
(a) procedures are initiated and completed as expeditiously as possible, in non-
discriminatory order;
(b) the normal processing period for each such procedure is published or the anticipated
processing period is communicated to the applicant upon request;
(c) when receiving an application, the competent body or authority promptly examines
the completeness of the documentation and informs the applicant in a precise andcomplete manner of all deficiencies; the competent body transmits as soon as possible
the results of the assessment in a precise and complete manner to the applicant so that
corrective action may be taken if necessary; even when the application has
deficiencies, the competent body proceeds as far as practicable with the conformity
assessment if the applicant so requests; and that, upon request, the applicant is
informed of the stage of the procedure, with any delay being explained;
(d) information requirements are limited to what is necessary to assess conformity and
determine fees;
(e) the confidentiality of information about a good or service originating in the territory
of the other Party arising from or supplied in connection with such conformityassessment procedures is respected in the same way as for a domestic good or service
and in such a manner that legitimate commercial interests are protected;
(f) any fees imposed for assessing the conformity of a good or service originating in the
territory of the other Party are equitable in relation to any fees chargeable forassessing the conformity of like goods or services of national origin, taking into
account communication, transportation and other costs arising from differences
between the location of facilities of the applicant and the conformity assessment
body;
(g) the siting of facilities used in conformity assessment procedures and the selection of
samples are not such as to cause unnecessary inconvenience to applicants or their
agents;WT/REG125/1
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(h) whenever specifications of a good or service are changed subsequent to the
determination of its conformity to the applicable technical regulations or standards,
the conformity assessment procedure for the modified good or service is limited to
what is necessary to determine whether adequate confidence exists that the good or
service still meets the technical regulations or standards concerned;  and
(i) a procedure exists to review complaints concerning the operation of a conformity
assessment procedure and to take corrective action when a complaint is justified.
3. To facilitate trade, a Party shall give sympathetic consideration to a request by the other Party
to negotiate agreements for the mutual recogniti on of the results of their respective conformity
assessment procedures.
4. Each Party shall, as far as practicable, accept the results of conformity assessment procedures
in the other Party, provided they offer satisfactory  guarantees, equivalent to those provided by the
procedures carried out by the accepting Party in its territory or which are carried out in its territory
and whose results it accepts, that the pertinent good or service conforms to the applicable technical
regulation or standard adopted or maintained in the territory of that Party.
5. Before accepting the results of a conformity assessment procedure, as provided in
paragraph 4, and with the aim of enhancing the sustained reliability of the results of the conformity
assessment of each Party, the Parties may consult on aspects such as the technical capacity ofconformity assessment bodies, including verified c onformity with relevant international standards
through methods such as accreditation.
6. Recognizing that this should be to the mutual advantage of the Parties, each Party shall
accredit, approve or otherwise recognize the conformity assessment bodies in the territory of the otherParty under conditions no less favourable than it accords to such bodies in its territory.
Article 8-08
Approval Procedures
Each Party shall apply the pertinent provisions of Article 8-07(2) to its approval procedures,
with the appropriate modifications.
Article 8-09
Notification, Publication and Transparency
1. A Party proposing to adopt or modify a technical regulation or a conformity assessment
procedure applied to a technical regulation, except where the urgent circumstances established in
Articles 2.10 and 5.7 of the TBT Agreement exist, shall publish a notice and notify the other Party in
writing of the proposed measure at least 60 days prior to the adoption or modification of the measure,other than a law, as to enable interested persons to become acquainted with it.
2. Where a standardizing body of one Party proposes to adopt or modify a standard or
conformity assessment procedure applied to a standard, that Party shall publish a notice and notify the
other Party in writing of the proposed measure at an early appropriate stage, to enable interestedpersons to become acquainted with it.
3. The Parties shall make notifications under paragraphs 1 and 2 in accordance with the formats
established in the TBT Agreement or such formats as are agreed to by the Parties.WT/REG125/1
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4. Each Party shall notify the other annually of its standardization plans and programmes.
5. Each Party shall keep a list of its standardization measures which, upon request, shall be made
available to the other Party, and shall ensure that where copies of documents are requested by the
other Party or by interested persons of that Party, they are supplied at the same price, apart from theactual cost of delivery, as the price for domestic purchase.
6. Where a Party allows non-governmental persons in its territory to be present during the
process of development of standards-related measures, it shall also allow non-governmental persons
from the territory of the other Party to be present. The non-governmental persons of the territory of
the other Party shall be permitted to express opinions and make comments on the standardization
measure being developed.
7. For the purposes of this Article, the authorities named in Annex 8-09 shall be responsible for
making the notifications.
Article 8-10
Limitations on the Provision of Information
Nothing in this Chapter shall be construed to require a Party to furnish any information the
disclosure of which would impede law enforcement or otherwise be contrary to the public interest.
Article 8-11
Committee on Standards-Related Measures
1. The Parties hereby establish a Committee on Standards-Related Measures, comprising
representatives of each Party, in accordance with Annex 8-11.
2. The Committee’s functions shall include:
(a) monitoring the implementation, compliance and administration of this Chapter;
(b) considering particular matters on standardization-related measures and measurement
systems of the other Party or measures related thereto, when a Party has questions
regarding the interpretation or application of this Chapter, in order to provide
technical advice or non-binding recommendations;
(c) facilitating the process by which the Parties make compatible their standards-related
measures and measurement systems;
(d) providing a forum for the Parties to cons ult on issues relating to standards-related
measures and measurement systems;
(e) promoting technical cooperation between the Parties;(f) helping to develop and strengthen the standardization, technical regulation,
conformity assessment and measurement systems of the Parties;
(g) reporting annually to the Commission on the application of this Chapter;(h) facilitating the negotiation of agreements on mutual recognition;WT/REG125/1
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(i) on the request of a Party, evaluating and recommending to the Commission for
approval, the inclusion of specific servic es sectors or subsectors in Annex 8-01, such
inclusion to be made through a d ecision of the Commission;  and
(j) establishing relevant sub-committees and determining the scope of their activities and
mandate.
3. The Committee shall meet at least once a year, unless the Parties otherwise agree.4. The Parties establish a Telecommunications Standards Sub-Committee comprised of
representatives of each Party. The Sub-Committee’s functions shall be to:
(a) develop a work programme, within twelve m onths of the date of entry into force of
this Agreement, including a timetable, for making compatible to the greatest extent
possible, the standards-related measures of the Parties for authorized equipment as
defined in Chapter 12 (Telecommunications);
(b) address other matters respecting the standardization of telecommunications
equipment or services and such other matters as it considers appropriate;  and
(c) take into account relevant work carried out by the Parties in other fora, and that of
non-governmental standardizing bodies.
Article 8-12
Technical Cooperation
1. A Party shall, on the request of the other Party:
(a) provide to that Party information and technical assistance on mutually agreed terms
and conditions to enhance that Party’s standards-related measures, and related
activities, processes and systems; and
(b) provide to that Party information on its technical cooperation programmes regarding
standards-related measures relating to specific areas of interest.
2. Each Party shall encourage standardizing bodi es in its territory to cooperate with the
standardizing bodies in the territory of the other Party, such as through membership in international
standardizing bodies.
3. To the extent practicable, each Party shall inform the other Party of the international
agreements, conventions or programmes it has entered into on standardization measures.
ANNEX 8-01
Services Sectors or Subsectors
1. The Parties shall use the Central Product Classification (CPC) as established by the United
Nations Statistics Division, Statistical Papers, Series M, No. 77, Provisional Central Product
Classification , 1991, and updates.
2. The services sectors or subsectors subject to this Chapter are:
(a) computer and related services (Division 84);  andWT/REG125/1
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(b) any other established in accordance with Article 8-11(2)(i).
ANNEX 8-09
Authorities Responsible for Notification
For the purposes of Article 8-09, the authorities responsible for notification shall be:
1. For Chile, the Ministry of Economic Affairs (“Ministerio de Economía”), through the
Department of Foreign Trade (“Departamento de Comercio Exterior”) or its successor.
2. For Mexico, the Department of Trade and Industrial Development (“Secretaría de Comercio y
Fomento Industrial”) through the Directorate General of Standards (“Dirección General de Normas”)
or its successor.
ANNEX 8-11
Members of the Committee on Standards-Related Measures
For the purposes of Article 8-11, the Committee shall be composed of:
1. For Chile, the Ministry of Economic Affairs (“Ministerio de Economía”), through the
Department of Foreign Trade (“Departamento de Comercio Exterior”) or its successor.
2. For Mexico, the Department of Trade and Industrial Development (“Secretaría de Comercio y
Fomento Industrial”) through the International Trade Negotiations Branch (“Subsecretaría deNegociaciones Comerciales Internacionales”) or its successor.
PART FOUR - INVESTMENT, SERVICES AND RELATED MATTERS
CHAPTER 9:  INVESTMENT
Section A - Definitions
Article 9-01
Definitions
For the purposes of this Chapter:disputing investor  means an investor that makes a claim under Section C;
disputing parties  means the disputing investor and the disputing Party;
disputing Party  means a Party against which a claim is made under Section C;
disputing party  means the disputing investor or the disputing Party;
enterprise  means an “enterprise” as defined in Article 2-01 (Definitions of General
Application), and a branch of an enterprise;WT/REG125/1
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enterprise of a Party  means an enterprise constituted or organized under the law of a Party
and a branch located in the territory of a Party and carrying out business activities there;
equity or debt securities  includes voting and non-voting shares, bonds, convertible
debentures, stock options and warrants;
existing  means in effect on 14 January 1997;
financial institution  means any financial intermediary or other enterprise that is authorized to
do business and regulated or supervised as a financial institution under the law of the Party in whose
territory it is located;
G7 currency  means the currency of Canada, France, Germany, Italy, Japan, the United
Kingdom of Great Britain and Northern Ir eland or the United States of America;
ICSID Convention  means the Convention on the Settlement of Investment Disputes between
States and Nationals of other States, done at Washington, 18 March 1965;
ICSID  means the International Centre for Settlement of Investment Disputes;
Inter-American Convention  means the Inter-American Convention on International
Commercial Arbitration, done at Panama, 30 January 1975;
investment  means:
(a) an enterprise;
(b) an equity security of an enterprise;
(c) a debt security of an enterprise:
(i) where the enterprise is an affiliate of the investor, or(ii) where the original maturity of the debt security is at least three years,
but does not include a debt security, regardless of original maturity, of a State or a State enterprise;
(d) a loan to an enterprise:
(i) where the enterprise is an affiliate of the investor, or
(ii) where the original maturity of the loan is at least three years,
but does not include a loan, regardless of original maturity, to a State enterprise;
(e) an interest in an enterprise that entitles th e owner to share in income or profits of the
enterprise;
(f) an interest in an enterprise that entitles  the owner to share in the assets of that
enterprise on dissolution, other than a debt security or a loan excluded from
subparagraph (c) or (d);
(g) real estate or other property, tangible or intangible, acquired in the expectation or
used for the purpose of economic benefit or other business purposes;  andWT/REG125/1
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(h) interests arising from the commitment of capital or other resources in the territory of
the other Party to economic activity, such as under:
(i) contracts involving the presence of an investor’s property in the territory of
the other Party, including concessions or construction or turnkey contracts, or
(ii) contracts where remuneration depends substantially on the production,
revenues or profits of an enterprise;
but investment does not mean,
(i) claims to money that arise solely from:
(i) commercial contracts for the sale of goods or services by a national or
enterprise in the territory of a Party to  an enterprise in the territory of the
other Party, or
(ii) the extension of credit in connection with a commercial transaction, such as
trade financing, other than a loan covered by subparagraph (d); or
(j) any other claims to money,
that do not involve the kinds of interests set out in subparagraphs (a) through (h); or
(k) with respect to “loans” and “debt securities” referred to in subparagraphs (c) and (d)
as it applies to investors of the other Party, and investments of such investors, infinancial institution in the Party’s territory
(i) a loan or debt security issued by a financial institution that is not treated as
regulatory capital by the Party in whose territory the financial institution is
located,
(ii) a loan granted by or debt security owned by a financial institution, other than
a loan to or debt security of a financial institution referred to in
subparagraph (i), and
(iii) a loan to, or debt security issued by, a Party or a State enterprise thereof;
investment of an investor of a Party  means an investment owned or controlled directly or
indirectly by an investor of such Party;
investor of a non-Party means an investor other than an investor of a Party, that seeks to
make, is making or has made an investment;
New York Convention  means the United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958;
investor of a Party  means a Party or State enterprise thereof, or a national or an enterprise of
such Party, that seeks to make, is making or has made an investment;WT/REG125/1
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person of a Party  means “person of a Party” as defined in Chapter 2 (General Definitions)
except that with respect to Article 9-02(3) and (4), “person of a Party” does not include a branch of an
enterprise of a non-Party;
Secretary-General  means the Secretary-General of ICSID;
transfers  means transfers and international payments;
Tribunal  means an arbitration tribunal established under Article 9-21 or 9-27; and
UNCITRAL Arbitration Rules  means the arbitration rules of the United Nations Commission on
International Trade Law, approved by the United Nations General Assembly on 15 December 1976.
Section B – Investment
Article 9-02
Scope and Coverage
1. This Chapter applies to measures adopted or maintained by a Party relating to:
(a) investors of the other Party;
(b) investments of investors of the other Party in the territory of the Party; and(c) with respect to Articles 9-07 and 9-15, all investments in the territory of the Party.
2. This Chapter applies to investments existing on the date this Agreement enters into force and
to investments made or acquired after that date.
3. This Chapter does not apply to measures adopted or maintained by a Party relating to
investors of the other Party, and investments of such investors, in financial institutions in the Party’s
territory.
4. The Parties agree:
(a) notwithstanding paragraph 3, Articles 9-10, 9-11 and Section C for breaches by a
Party of Articles 9-10 and 9-11 shall apply to investors of the other Party, andinvestments of such investors, in financial institutions in the Party’s territory, which
have obtained the appropriate authorization; and
(b) to seek further liberalization as set out in Annex 20-08(a) (Future Negotiations).
5. A Party has the right to exclusively perform the economic activities set out in Annex III and
to refuse to authorize investments in those activities. Should a Party permit an investment to be made
in an activity set out in Annex III, that investment shall be protected under this Chapter.
6. Nothing in this Chapter shall be construed to prevent a Party from providing a service or
performing a function such as law enforcement, correctional services, income security or insurance,
social security, social welfare, public education, public training, health and child care, in a manner
that is not inconsistent with this Chapter.WT/REG125/1
Page 79
Article 9-03
National Treatment
1. Each Party shall accord to investors of the othe r Party treatment no less favourable than that it
accords, in like circumstances, to its own investor s with respect to the establishment, acquisition,
expansion, management, conduct, operation, and sale or other disposition of investments.
2. Each Party shall accord to investments of investors of the other Party treatment no less
favourable than that it accords, in like circumstance s, to investments of its own investors with respect
to the establishment, acquisition, expansion, management, conduct, operation, and sale or other
disposition of investments.
3. The treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a state,
treatment no less favourable than the most favour able treatment accorded, in like circumstances, by
that state to investors, and to investments of investors, of the Party of which it forms a part.
4. For greater certainty, no Party may:
(a) impose on an investor of the other Party a requirement that a minimum level of equity
in an enterprise in the territory of the Party be held by its nationals, other than
nominal qualifying shares for directors or incorporators of corporations;  or
(b) require an investor of the other Party, by reason of its nationality, to sell or otherwise
dispose of an investment in the territory of the Party.
Article 9-04
Most-Favoured Nation Treatment
1. Each Party shall accord to investors of the othe r Party treatment no less favourable than that it
accords, in like circumstances, to investors of any non-Party with respect to the establishment,
acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
2. Each Party shall accord to investments of investors of the other Party treatment no less
favourable than that it accords, in like circumstan ces, to investments of investors of any non-Party
with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or
other disposition of investments.
Article 9-05
Standard of Treatment
Each Party shall accord to investors of the other Party and the investments of investors of the
other Party the better of the treatment required by Articles 9-03 and 9-04.
Article 9-06
Minimum Standard of Treatment
1. Each Party shall accord to investments of inve stors of the other Party treatment in accordance
with international law, including fair and equitable treatment and full protection and security.WT/REG125/1
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2. Without prejudice to paragraph 1 and notwithstanding Article 9-09(6)(b), each Party shall
accord to investors of the other Party, and to  investments of investors of the other Party,
non-discriminatory treatment with respect to meas ures it adopts or maintains relating to losses
suffered by investments in its territory owing to armed conflict or civil strife.
3. Paragraph 2 does not apply to existing measures relating to subsidies or grants that would be
inconsistent with Article 9-03 but for Article 9-09(6)(b).
Article 9-07
Performance Requirements
1. Neither Party may impose or enforce any of the following requirements, or enforce any
commitment or undertaking, in connection with the establishment, acquisition, expansion,
management, conduct or operation of an investment of an investor of a Party or of a non-Party in its
territory:
(a) to export a given level or percentage of goods or services;
(b) to achieve a given level or percentage of domestic content;(c) to purchase, use or accord a preference to goods produced or services provided in its
territory, or to purchase goods or services from persons in its territory;
(d) to relate in any way the volume or value of  imports to the volume or value of exports
or to the amount of foreign exchange in flows associated with such investment;
(e) to restrict sales of goods or services in its territory that such investment produces or
provides by relating such sales in any way to the volume or value of its exports or
foreign exchange earnings;
(f) to transfer technology, a production process or other proprietary knowledge to a
person in its territory, except when the requirement is imposed or the commitment or
undertaking is enforced by a court, administrative tribunal or competition authority toremedy an alleged violation of competition laws or to act in a manner not inconsistent
with other provisions of this Agreement;  or
(g) to act as the exclusive supplier of the goods it produces or services it provides to a
specific region or world market.
2. A measure that requires an investment to use a technology to meet generally applicable
health, safety or environmental requirements shall not be construed to be inconsistent with
paragraph 1(f).  For greater certainty, Articles 9-03 and 9-04 apply to the measure.
3. Neither Party may condition the receipt or continued receipt of an advantage, in connection
with an investment in its territory of an investor of a Party or of a non-Party, on compliance with any
of the following requirements:
(a) to achieve a given level or percentage of domestic content;(b) to purchase, use or accord a preference to goods produced in its territory, or to
purchase goods from producers in its territory;WT/REG125/1
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(c) to relate in any way the volume or value of  imports to the volume or value of exports
or to the amount of foreign exchange infl ows associated with such investment;  or
(d) to restrict sales of goods or services in its territory that such investment produces or
provides by relating such sales in any way to the volume or value of its exports orforeign exchange earnings.
4. Nothing in paragraph 3 shall be construed to prevent a Party from conditioning the receipt or
continued receipt of an advantage, in connection with an investment in its territory of an investor of a
Party or of a non-Party, on compliance with a requ irement to locate production, provide a service,
train or employ workers, construct or expand particular facilities, or carry out research and
development, in its territory.
5. Paragraphs 1 and 3 do not apply to any requirement other than the requirements set out in
those paragraphs.
6. Provided that such measures are not applied in an arbitrary or unjustifiable manner, or do not
constitute a disguised restriction on international trade or investment, nothing in paragraph 1(b) or (c)
or 3(a) or (b) shall be construed to prevent a Party from adopting or maintaining measures, including
environmental measures:
(a) necessary to secure compliance with laws and regulations that are not inconsistent
with the provisions of this Agreement;
(b) necessary to protect human, animal or plant life or health;  or(c) necessary for the conservation of living or non-living exhaustible natural resources.
7. This Article does not preclude enforcement of any commitment, undertaking or requirement
between private parties.
Article 9-08
Senior Management and Boards of Directors
1. Neither Party may require that an enterprise of that Party that is an investment of an investor
of the other Party appoint to senior management positions individuals of any particular nationality.
2. A Party may require that a majority of the board of directors, or any committee thereof, of an
enterprise of that Party that is an investment of an investor of the other Party, be of a particular
nationality, or resident in the territory of the Party, provided that the requirement does not materially
impair the ability of the investor to exercise control over its investment.
Article 9-09
Reservations and Exceptions
1. Articles 9-03, 9-04, 9-07 and 9-08 do not apply to:
(a) any existing non-conforming measure that is maintained by:
(i) a Party at the national or federal or state level, as pertinent, as set out in its
Schedule to Annex I or III, orWT/REG125/1
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(ii) a local government;
(b) the continuation or prompt renewal of any non-conforming measure referred to in
subparagraph (a);  or
(c) an amendment to any non-conforming measure referred to in subparagraph (a) to the
extent that the amendment does not decrease the conformity of the measure, as it
existed immediately before the amendment, with Articles 9-03, 9-04, 9-07 and 9-08.
2. Articles 9-03, 9-04, 9-07 and 9-08 do not appl y to any measure that a Party adopts or
maintains with respect to sectors, subsectors or activities, as set out in its Schedule to Annex II.
3. Neither Party may, under any measure adopted after the date of entry into force of this
Agreement and covered by its Schedule to Annex II, require an investor of the other Party, by reason
of its nationality, to sell or otherwise dispose of an investment existing at the time the measure
becomes effective.
4. Articles 9-03 and 9-04 do not apply to any meas ure that is an exception to, or derogation
from, a Party’s obligations under the TRIPS Agreement, as specifically provided for in that
agreement.
5. Article 9-04 does not apply to treatment accorded by a Party pursuant to agreements, or with
respect to sectors, set out in its Schedule to Annex IV.
6. Articles 9-03, 9-04 and 9-08 do not apply to:
(a) procurement by a Party or a State enterprise;  or(b) subsidies or grants provided by a Party or a State enterprise, including government-
supported loans, guarantees and insurance.
7. The provisions of:
(a) Article 9-07(1)(a), (b) and (c), and (3)(a) and (b) do not apply to qualification
requirements for goods or services with respect to export promotion and foreign aid
programmes;
(b) Article 9-07(1)(b), (c), (f) and (g), and (3)(a) and (b) do not apply to procurement by
a Party or a State enterprise;  and
(c) Article 9-07(3)(a) and (b) do not apply to requirements imposed by an importing
Party relating to the content of goods necessary to qualify for preferential tariffs or
preferential quotas.
Article 9-10
Transfers
1. Except as provided in Annex 9-10, each Party shall permit all transfers relating to an
investment of an investor of the other Party in the territory of the Party to be made freely and without
delay. Such transfers include:WT/REG125/1
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(a) profits, dividends, interest, capital gains, royalty payments, management fees,
technical assistance and other fees, returns in kind and other amounts derived from
the investment;
(b) proceeds from the sale of all or any part of the investment or from the partial or
complete liquidation of the investment;
(c) payments made under a contract entered into by the investor, or its investment,
including payments made pursuant to a loan agreement;
(d) payments made pursuant to Article 9-11;  and
(e) payments arising under Section C.
2. Each Party shall permit transfers to be made in a freely usable currency at the market rate of
exchange prevailing on the date of transfer with re spect to spot transactions in the currency to be
transferred.
3. Neither Party may require its investors to transfer, or penalize its investors that fail to transfer,
the income, earnings, profits or other amounts derive d from, or attributable to, investments in the
territory of the other Party.
4. Notwithstanding paragraphs 1 and 2, a Party may prevent a transfer through the equitable,
non-discriminatory and good faith application of its laws relating to:
(a) bankruptcy, insolvency or the protection of the rights of creditors;
(b) issuing, trading or dealing in securities;
(c) criminal offences;(d) reports of transfers of currency or other monetary instruments;  or(e) ensuring the satisfaction of judgements in adjudicatory proceedings.
5. Paragraph 3 shall not be construed to prevent a Party from imposing any measure through the
equitable, non-discriminatory and good faith application of its laws relating to the matters set out in
subparagraphs (a) through (e) of paragraph 4.
6. Notwithstanding paragraph 1, a Party may restrict transfers of returns in kind in circumstances
where it could otherwise restrict such transfers under this Agreement, including as set out in
paragraph 4.
Article 9-11
Expropriation and Compensation
1. Neither Party may directly or indirectly nationalize or expropriate an investment of an
investor of the other Party in its territory or take a measure tantamount to nationalization orexpropriation of such an investment (“expropriation”), except:
(a) for a public purpose;(b) on a non-discriminatory basis;WT/REG125/1
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(c) in accordance with due process of law and Article 9-06(1);  and
(d) on payment of compensation in accordance with paragraphs 2 through 6.
2. Compensation shall be equivalent to the fair market value of the expropriated investment
immediately before the expropriation took place (“da te of expropriation”), and shall not reflect any
change in value occurring because the intended expropriation had become known earlier.  Valuation
criteria shall include going concern value, asset value including declared tax value of tangible
property, and other criteria, as appropriate, to determine fair market value.
3. Compensation shall be paid without delay and be fully realizable.4. If payment is made in a G7 currency, comp ensation shall include interest at a commercially
reasonable rate for that currency from the date of expropriation until the date of actual payment.
5. If a Party elects to pay in a currency other than a G7 currency, the amount paid on the date of
payment, if converted into a G7 currency at the market rate of exchange prevailing on that date, shall
be no less than if the amount of compensation owed on the date of expropriation had been converted
into that G7 currency at the market rate of exchange prevailing on that date, and interest had accrued
at a commercially reasonable rate for that G7 currency from the date of expropriation until the date of
payment.
6. On payment, compensation shall be freely transferable as provided in Article 9-10.7. This Article does not apply to the issuance of compulsory licences granted in relation to
intellectual property rights, or to the revocation, limitation or creation of intellectual property rights,to the extent that such issuance, revocation, limitation or creation is consistent with the TRIPS
Agreement.
8. For purposes of this Article and for greater certainty, a non-discriminatory measure of general
application shall not be considered a measure tantamount to an expropriation of a debt security or loan
covered by this Chapter solely on the ground that the measure imposes costs on the debtor that cause
it to default on the debt.
Article 9-12
Special Formalities and Information Requirements
1. Nothing in Article 9-03 shall be construed to prevent a Party from adopting or maintaining a
measure that prescribes special formalities in connection with the establishment of investments by
investors of the other Party, such as a requirement that investments be legally constituted under the
laws or regulations of the Party, provided that such formalities do not materially impair the protection
afforded by the Party pursuant to this Chapter.
2. Notwithstanding Articles 9-03 or 9-04, a Party ma y require an investor of the other Party, or
its investment in its territory, to provide routine information concerning that investment solely for
informational or statistical purposes.  The Party shall protect such business information that is
confidential from any disclosure that would prejudic e the competitive position of the investor or the
investment.  Nothing in this paragraph shall be construed to prevent a Party from otherwise obtaining
or disclosing information in connection with the equitable and good faith application of its law.WT/REG125/1
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Article 9-13
Relation to Other Chapters
1. In the event of any inconsistency between this Chapter and another Chapter, the other Chapter
shall prevail to the extent of the inconsistency.
2. A requirement by a Party that a service provider of the other Party post a bond or other form
of financial security as a condition of providing a service into its territory does not of itself make this
Chapter applicable to the provision of that cross-bor der service. This Chapter applies to that Party’s
treatment of the posted bond or financial security.
Article 9-14
Denial of Benefits
1. A Party may deny the benefits of this Chapter to an investor of the other Party that is an
enterprise of such Party and to investments of such  investor if investors of a non-Party own or control
the enterprise and the denying Party:
(a) does not maintain diplomatic relations with the non-Party;  or
(b) adopts or maintains measures with respect to the non-Party that prohibit transactions
with the enterprise or that would be violat ed or circumvented if the benefits of this
Chapter were accorded to the enterprise or to its investments.
2. Subject to prior notification and consultation in accordance with Articles 16-04 (Notification
and Provision of Information) and 18-04 (Consultations), a Party may deny the benefits of this
Chapter to an investor of the other Party that is an enterprise of such Party and to investments of such
investors if investors of a non-Party own or control the enterprise and the enterprise has no substantial
business activities in the territory of the Party under whose law it is constituted or organized.
Article 9-15
Environmental Measures
1. Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining or
enforcing any measure otherwise consistent with this Chapter that it considers appropriate to ensure
that investment activity in its territory is undertaken in a manner sensitive to environmental concerns.
2. The Parties recognize that it is inappropriate to encourage investment by relaxing domestic
health, safety or environmental measures. Accordingly, a Party should not waive or otherwise
derogate from, or offer to waive or otherwise derogate from, such measures as an encouragement for
the establishment, acquisition, expansion or retention in  its territory of an investment of an investor. If
a Party considers that the other Party has offered such an encouragement, it may request consultations
with the other Party and the two Parties shall consult with a view to avoiding any such
encouragement.WT/REG125/1
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Section C - Settlement of Disputes between a Party and an Investor of the Other Party
Article 9-16
Purpose
Without prejudice to the rights and obligations of the Parties under Chapter 18 (Dispute
Settlement), this Section establishes a mechanism for the settlement of investment disputes that
assures both equal treatment among investors of the Parties in accordance with the principle of
international reciprocity and due process before an impartial tribunal.
Article 9-17
Claim by an Investor of  a Party on Its Own Behalf
1. An investor of a Party may submit to arbitration under this Section a claim that the other Party
has breached an obligation under:
(a) Section B or Article 14-04(2) (State Enterprises), or(b) Article 14-03(4)(a) (Monopolies and State Enterprises) where the monopoly has acted
in a manner inconsistent with the Party’s obligations under Section B,
and that the investor has incurred loss or damage by reason of, or arising out of, that breach.2. An investor may not make a claim if more than three years have elapsed from the date on
which the investor first acquired, or should have first acquired, knowledge of the alleged breach andknowledge that the investor incurred loss or damage.
Article 9-18
Claim by an Investor of a Pa rty on Behalf of an Enterprise
1. An investor of a Party, on behalf of an enterprise of the other Party that is a juridical person
that the investor owns or controls directly or indirectly, may submit to arbitration under this Section a
claim that the other Party has breached an obligation under:
(a) Section B or Article 14-04(2) (State Enterprises), or
(b) Article 14-03(4)(a) (Monopolies and State Enterprises) where the monopoly has acted
in a manner inconsistent with the Party’s obligations under Section B,
and that the enterprise has incurred loss or damage by reason of, or arising out of, that breach.
2. An investor may not make a claim on behalf of an enterprise described in paragraph 1 if more
than three years have elapsed from the date on which the enterprise first acquired, or should have first
acquired, knowledge of the alleged breach and knowledge that the enterprise incurred loss or damage.
3. Where an investor makes a claim under this Article and the investor or a non-controlling
investor in the enterprise makes a claim under Article 9-17 arising out of the same events that gave
rise to the claim under this Article, and two or more of the claims are submitted to arbitration under
Article 9-21, the claims should be heard together by a Tribunal established under Article 9-27, unless
the Tribunal finds that the interests of a disputing party would be prejudiced thereby.WT/REG125/1
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4. An investment may not make a claim under this Section.
Article 9-19
Settlement of a Claim through Consultation and Negotiation
The disputing parties should first attempt to settle a claim through consultation or negotiation.
Article 9-20
Notice of Intent to Submit a Claim to Arbitration
The disputing investor shall deliver to the disputing Party written notice of its intention to
submit a claim to arbitration at least 90 days before the claim is submitted, which notice shall specify:
(a) the name and address of the disputing investor and, where a claim is made under
Article 9-18, the name and address of the enterprise;
(b) the provisions of this Agreement alleged to have been breached and any other
relevant provisions;
(c) the issues and the factual basis for the claim;  and(d) the relief sought and the approximate amount of damages claimed.
Article 9-21
Submission of a Claim to Arbitration
1. Except as provided in paragraphs 2 and 3, and provided that six months have elapsed since
the events giving rise to a claim, a disputing investor may submit the claim to arbitration under:
(a) the ICSID Convention, provided that both the disputing Party and the Party of the
investor are parties to the Convention;
(b) the Additional Facility Rules of ICSID, prov ided that either the disputing Party or the
Party of the investor, but not both, is a party to the ICSID Convention; or
(c) the UNCITRAL Arbitration Rules.
2. Where a claim is submitted under Article 9-17, the investor and the enterprise that is a
juridical person owned or controlled directly or indirectly by the investor shall have not submitted the
same claim to a court or administrative tribunal of the disputing party.
3. Where a claim is submitted under Article 9-18, both the investor and the enterprise that is a
juridical person owned or controlled directly or indirectly by the investor, shall have not submitted the
same claim to a court or administrative tribunal of the disputing Party.
4. The applicable arbitration rules shall govern the arbitration except to the extent modified by
this Section.WT/REG125/1
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Article 9-22
Conditions Precedent to Submission of a Claim to Arbitration
1. A disputing investor may submit a claim under Article 9-17 to arbitration only if:
(a) the investor consents to arbitration in accordance with the procedures set out in this
Agreement;  and
(b) the investor and, where the claim is for loss  or damage to an interest in an enterprise
of the other Party that is a juridical person that the investor owns or controls directly
or indirectly, the enterprise, waive their right to initiate or continue before anyadministrative tribunal or court under the law of the disputing Party, or other dispute
settlement procedures, any proceedings with respect to the measure of the disputing
Party that is alleged to be a breach referred to in Article 9-17, except for proceedings
for injunctive, declaratory or other extrao rdinary relief, not involving the payment of
damages, before an administrative tribunal or court under the law of the disputingParty.
2. A disputing investor may submit a claim under Article 9-18 to arbitration only if both the
investor and the enterprise:
(a) consent to arbitration in accordance with the procedures set out in this Agreement;
and
(b) waive their right to initiate or continue  before any administrative tribunal or court
under the law of a Party, or other dispute settlement procedures, any proceedings with
respect to the measure of the disputing Party that is alleged to be a breach referred to
in Article 9-18, except for proceedings for injunctive, declaratory or other
extraordinary relief, not involving the paym ent of damages, before an administrative
tribunal or court under the law of the disputing Party.
3. A consent and waiver required by this Article shall be in writing, shall be delivered to the
disputing Party and shall be included in the submission of a claim to arbitration.
4. Only where a disputing Party has deprived a disputing investor of control of an enterprise:
(a) a waiver from the enterprise under paragraph 1(b) or 2(b) shall not be required;  and
(b) Annex 9-21(3) shall not apply.
Article 9-23
Consent to Arbitration
1. Each Party consents to the submission of a claim to arbitration in accordance with the
procedures set out in this Agreement.
2. The consent given by paragraph 1 and the submission by a disputing investor of a claim to
arbitration shall satisfy the requirement of:
(a) Chapter II of the ICSID Convention (Jur isdiction of the Centre) and the Additional
Facility Rules for written consent of the parties;WT/REG125/1
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(b) Article II of the New York Convention for an agreement in writing;  and
(c) Article I of the Inter-American Convention for an agreement.
Article 9-24
Number of Arbitrators and Method of Appointment
Except in respect of a Tribunal established under Article 9-27, and unless the disputing parties
otherwise agree, the Tribunal shall comprise three arbitrators, one arbitrator appointed by each of the
disputing parties and the third, who shall be the presiding arbitrator, appointed by agreement of the
disputing parties.
Article 9-25
Constitution of a Tribunal When a Party Fails to A ppoint an Arbitrator or the Disputing Parties Are
Unable to Agree on a Presiding Arbitrator
1. The Secretary-General shall serve as appointing authority for an arbitration under this
Section.
2. If a Tribunal, other than a Tribunal established under Article 9-27, has not been constituted
within 90 days from the date that a claim is submitted to arbitration, the Secretary-General, on the
request of either disputing party, shall appoint, in his discretion, the arbitrator or arbitrators not yet
appointed, except that the presiding arbitrator shall be appointed in accordance with paragraph 3.
3. The Secretary-General shall appoint the presiding arbitrator from the roster of presiding
arbitrators referred to in paragraph 4, provided that the presiding arbitrator shall not be a national of a
Party. In the event that no such presiding arbitrator is available to serve, the Secretary-General shall
appoint, from the ICSID Panel of Arbitrators, a presid ing arbitrator who is not a national of either of
the Parties.
4. On the date of entry into force of this Agreement, the Parties shall establish, and thereafter
maintain, a roster of 30 presiding arbitrators meeting the qualifications of the Convention and rulesreferred to in Article 9-21 and experienced in international law and investment matters. The roster
members shall be appointed by mutual agreement.
Article 9-26
Agreement to Appointment of Arbitrators
For purposes of Article 39 of the ICSID Conven tion and Article 7 of Schedule C to the ICSID
Additional Facility Rules, and without prejudice to an objection to an arbitrator based on
Article 9-25(3) or on a ground other than nationality:
(a) the disputing Party agrees to the appointment of each individual member of a
Tribunal established under the ICSID Convention or the ICSID Additional Facility
Rules;
(b) a disputing investor referred to in Article 9-17 may submit a claim to arbitration, or
continue a claim, under the ICSID Convention or the ICSID Additional Facility
Rules, only on condition that the disputing investor agrees in writing to the
appointment of each individual member of the Tribunal;  andWT/REG125/1
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(c) a disputing investor referred to in Article 9-18(1) may submit a claim to arbitration,
or continue a claim, under the ICSID Convention or the ICSID Additional Facility
Rules, only on condition that the disputing investor and the enterprise agree in writing
to the appointment of each individual member of the Tribunal.
Article 9-27
Consolidation
1. A Tribunal established under this Article shall be established under the UNCITRAL
Arbitration Rules and shall conduct its proceedings in accordance with those Rules, except as
modified by this Section.
2. Where a Tribunal established under this Article is satisfied that claims have been submitted to
arbitration under Article 9-21 that have a question of law or fact in common, the Tribunal may, in the
interests of fair and efficient resolution of the claims, and after hearing the disputing parties, by order,
assume jurisdiction over, and hear and determine:
(a) all or part of the claims together;  or(b) one or more of the claims, the determination of which it believes would assist in the
resolution of the others.
3. A disputing party that seeks an order under paragraph 2 shall request the Secretary-General to
establish a Tribunal and shall specify in the request:
(a) the name of the disputing Party or disputing investors against which the order is
sought;
(b) the nature of the order sought;  and(c) the grounds on which the order is sought.
4. The disputing party shall deliver to the disputing Party or disputing investors against which
the order is sought a copy of the request.
5. Within 60 days of receipt of the request, the Secretary-General shall establish a Tribunal
comprising three arbitrators. The Secretary-General shall appoint the presiding arbitrator from the
roster referred to in Article 9-25(4). In the event th at no such presiding arbitrator is available to serve,
the Secretary-General shall appoint, from the ICSID Panel of Arbitrators, a presiding arbitrator who is
not a national of either Party. The Secretary-General shall appoint the two other members from the
roster referred to in Article 9-25(4), and to the ex tent not available from that roster, from the ICSID
Panel of Arbitrators, and to the extent not available from that Panel, in the discretion of the Secretary-
General. One member shall be a national of the disputing Party and one member shall be a national ofthe Party of the disputing investors.
6. Where a Tribunal has been established under this Article, a disputing investor that has
submitted a claim to arbitration under Article 9-17 or 9-18 and that has not been named in a request
made under paragraph 3 may make a written request to the Tribunal that it be included in an ordermade under paragraph 2, and shall specify in the request:
(a) the name and address of the disputing investor;(b) the nature of the order sought;  andWT/REG125/1
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(c) the grounds on which the order is sought.
7. A disputing investor referred to in paragraph 6 shall deliver a copy of its request to the
disputing parties named in a request made under paragraph 3.
8. A Tribunal established under Article 9-21 shall not have jurisdiction to decide a claim, or a
part of a claim, over which a Tribunal establ ished under this Article has assumed jurisdiction.
9. On application of a disputing party, a Tribunal established under this Article, pending its
decision under paragraph 2, may order that the proceedings of a Tribunal established under
Article 9-21 be stayed, unless the latter Tribunal has already adjourned its proceedings.
Article 9-28
Notice
1. A disputing Party shall deliver to the Secretariat, within 15 days of receipt by the disputing
Party, a copy of:
(a) a request for arbitration made under paragraph (1) of Article 36 of the ICSID
Convention;
(b) a notice of arbitration made under Article 2 of Schedule C of the ICSID Additional
Facility Rules;  or
(c) a notice of arbitration given und er the UNCITRAL Arbitration Rules.
2. A disputing Party shall deliver to the Secretariat a copy of a request made under
Article 9-27(3):
(a) within 15 days of receipt of the request, in the case of a request made by a disputing
investor;  and
(b) within 15 days of making the request, in the case of a request made by the disputing
Party.
3. A disputing Party shall deliver to the Secretariat a copy of a request made under
Article 9-27(6) within 15 days of receipt of the request.
4. The Secretariat shall maintain a public register of the documents referred to in paragraphs 1, 2
and 3.
5. A disputing Party shall deliver to the other Party:
(a) written notice of a claim that has been submitted to arbitration no later than 30 days
after the date that the claim is submitted; and
(b) copies of all pleadings filed in the arbitration.WT/REG125/1
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Article 9-29
Participation by a Party
On written notice to the disputing parties, a Pa rty may make submissions to a Tribunal on a
question of interpretation of this Agreement.
Article 9-30
Documents
1. A Party shall be entitled to receive from the disputing Party, at the cost of the requesting
Party, a copy of:
(a) the evidence that has been tendered to the Tribunal;  and(b) the written argument of the disputing parties.
2. A Party receiving information pursuant to paragraph 1 shall treat the information as if it were
a disputing Party.
Article 9-31
Place of Arbitration
Unless the disputing parties agree otherwise, a Tribunal shall hold an arbitration in the
territory of a Party that is a party to the New York Convention, selected in accordance with:
(a) the ICSID Additional Facility Rules if the arbitration is under those Rules or the
ICSID Convention;  or
(b) the UNCITRAL Arbitration Rules if the arbitration is under those Rules.
Article 9-32
Governing Law
1. A Tribunal established under this Section shall decide the issues in dispute in accordance with
this Agreement and applicable rules of international law.
2. An interpretation by the Commission of a provision of this Agreement shall be binding on a
Tribunal established under this Section.
Article 9-33
Interpretation of Annexes
1. Where a disputing Party asserts as a defence that the measure alleged to be a breach is within
the scope of a reservation or exception set out in  Annex I, Annex II, Annex III or Annex IV, on
request of the disputing Party, the Tribunal shal l request the interpretation of the Commission on the
issue. The Commission, within 60 days of delivery of the request, shall submit in writing its
interpretation to the Tribunal.WT/REG125/1
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2. Further to Article 9-32(2), a Commission interpretation submitted under paragraph 1 shall be
binding on the Tribunal. If the Commission fails to submit an interpretation within 60 days, the
Tribunal shall decide the issue.
Article 9-34
Expert Reports
Without prejudice to the appointment of other kinds of experts where authorized by the
applicable arbitration rules, a Tribunal, at the request of a disputing party or, unless the disputing
parties disapprove, on its own initiative, may appoint one or more experts to report to it in writing on
any factual issue concerning environmental, health, safety or other scientific matters raised by adisputing party in a proceeding, subject to such terms and conditions as the disputing parties may
agree.
Article 9-35
Interim Measures of Protection
A Tribunal may order an interim measure of prot ection to preserve the rights of a disputing
party, or to ensure that the Tribunal’s jurisdic tion is made fully effective, including an order to
preserve evidence in the possession or control of a disputing party or to protect the Tribunal’sjurisdiction. A Tribunal may not order attachment or enjoin the application of the measure alleged to
constitute a breach referred to in Article 9-17 or 9-18. For purposes of this Article, an order includes a
recommendation.
Article 9-36
Final Award
1. Where a Tribunal makes a final award against a Party, the Tribunal may award, separately or
in combination, only:
(a) monetary damages and any applicable interest;(b) restitution of property, in which case the award shall provide that the disputing Party
may pay monetary damages and any applicable interest in lieu of restitution.
2. A Tribunal may also award costs in accordance with the applicable arbitration rules.3. Subject to paragraphs 1 and 2, where a claim is made under Article 9-18(1):
(a) an award of restitution of property shall provide that restitution be made to the
enterprise;
(b) an award of monetary damages and any applicable interest shall provide that the sum
be paid to the enterprise; and
(c) the award shall provide that it is made without prejudice to any right that any person
may have in the relief under applicable domestic law.
4. A Tribunal may not order a Party to pay punitive damages.WT/REG125/1
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Article 9-37
Finality and Enforcement of an Award
1. An award made by a Tribunal shall have no binding force except between the disputing
parties and in respect of the particular case.
2. Subject to paragraph 3 and the applicable review procedure for an interim award, a disputing
party shall abide by and comply with an award without delay.
3. A disputing party may not seek enforcement of a final award until:
(a) in the case of a final award made under the ICSID Convention:
(i) 120 days have elapsed from the date the award was rendered and no disputing
party has requested revision or annulment of the award, or
(ii) revision or annulment proceedings have been completed;  or
(b) in the case of a final award under the ICSID Additional Facility Rules or the
UNCITRAL Arbitration Rules:
(i) three months have elapsed from the date the award was rendered and no
disputing party has commenced a proceeding to revise, set aside or annul the
award, or
(ii) a court has dismissed or allowed an application to revise, set aside or annul
the award and there is no further appeal.
4. Each Party shall provide for the enfo rcement of an award in its territory.
5. If a disputing Party fails to abide by or  comply with a final award, the Commission, on
delivery of a request by a Party whose investor was a party to the arbitration, shall establish a panel
under Article 18-06 (Request for an Arbitral Panel).  The requesting Party may seek in suchproceedings:
(a) a determination that the failure to abide by or comply with the final award is
inconsistent with the obligations of this Agreement; and
(b) a recommendation that the Party abid e by or comply with the final award.
6. A disputing investor may seek enforcement of an arbitration award under the ICSID
Convention, the New York Convention or the Inte r-American Convention regardless of whether
proceedings have been taken under paragraph 5.
7. A claim that is submitted to arbitration under this Section shall be considered to arise out of a
commercial relationship or transaction for purpose s of Article I of the New York Convention and
Article I of the Inter-American Convention.WT/REG125/1
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Article 9-38
General
Time when a Claim is Submitted to Arbitration1. A claim is submitted to arbitration under this Section when:
(a) the request for arbitration under paragraph 1 of Article 36 of the ICSID Convention
has been received by the Secretary-General;
(b) the notice of arbitration under Article 2 of Schedule C of the ICSID Additional
Facility Rules has been received by the Secretary-General; or
(c) the notice of arbitration given under the UNCITRAL Arbitration Rules has been
received by the disputing Party.
Service of Documents
2. Delivery of notice and other documents on a Party shall be made to the place named for that
Party in Annex 9-38(2).
Receipts under Insurance or Guarantee Contracts
3. In an arbitration under this Section, a Party shall not assert, as a defence, counterclaim, right
of setoff or otherwise, that the disputing investor has received or will receive, pursuant to an insurance
or guarantee contract, indemnification or other compensation for all or part of its alleged damages.
Publication of an Award4. Annex 9-38(4) applies to publication of an award.
Article 9-39
Exclusions
1. Without prejudice to the applicability or non-applicability of the dispute settlement provisions
of this Section or of Chapter 18 (Dispute Settlement) to other actions taken by a Party pursuant to
Article 19-03 (National Security), a decision by a Party to prohibit or restrict the acquisition of aninvestment in its territory by an investor of the other Party, or its investment pursuant to that Article,
shall not be subject to such provisions.
2. The dispute settlement provisions of this Section and of Chapter 18 (Dispute Settlement) shall
not apply to the matters referred to in Annex 9-39.
Section D – Committee on Investment and Cross-Border Trade in Services
Article 9-40
Committee on Investment and Cross-Border Trade in Services
1. The Parties establish a Committee on Invest ment and Cross-Border Trade in Services
comprising representatives of each Party, in accordance with Annex 9-40.WT/REG125/1
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2. The Committee shall convene at least once a year and whenever so requested by either Party
or the Commission.
3. The Committee’s functions shall include:
(a) monitoring the implementation and administration of this Chapter and of Chapter 10
(Cross-Border Trade in Services);
(b) discussing matters relating to cross-border services and bilateral investments;  and(c) examining bilaterally issues related to these matters discussed in other international
fora.
ANNEX 9-10
Transfers 1
1. For the purposes of this Annex:
Chilean juridical person  means an enterprise that is constituted or organized in Chile for
profit in a form which under Chilean law is recognized as being a juridical person;
date of transfer  means the settlement date when the funds that constitute the investment were
converted into Chilean pesos, or the date of the importation of the equipment and technology;
existing  means in effect on 24 October 1996;
foreign credit  means any type of debt financing originating in foreign markets whatever its
nature, form or maturity period;
foreign direct investment  means an investment of an investor of Mexico, other than a
foreign credit, made in order:
(a) to establish a Chilean juridical person or to increase the capital of an existing Chilean
juridical person with the purpose of producing an additional flow of goods or
services, excluding purely financial flows; or
(b) to acquire equity of an existing Chilean juridical person and to participate in its
management, but excludes such an investment that is of a purely financial character
and that is designed only to gain indirect access to the financial market of Chile;
Formal Exchange Market  means the market constituted by the banking entities and other
institutions authorized by the competent authority; and
payments for current international transactions  means “payments for current international
transactions” as defined under the Articles of Agreement of the International Monetary Fund, and for
greater certainty, does not include payments of principal pursuant to a loan which are not made in
accordance with the maturity dates origin ally agreed upon in the loan agreement.
2. For the purpose of preserving the stability of its currency, Chile reserves the right:WT/REG125/1
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(a) to maintain existing requirements that transfers from Chile of proceeds from the sale
of all or any part of an investment of an investor of Mexico or from the partial or
complete liquidation of the investment may not take place until a period not to exceed
(i) in the case of an investment made pursuant to Law 18.657, Foreign Capital
Investment Fund Law (“Ley 18.657, Ley Sobre Fondo de Inversiones de
Capitales Extranjeros”), five years has elapsed from the date of transfer to
Chile, or
(ii) subject to subparagraph (c)(iii), in all other cases, one year has elapsed from
the date of transfer to Chile;
(b) to apply a reserve requirement pursuant to Article 49 No. 2 of Law 18.840, Organic
Law of the Central Bank of Chile (“ Ley 18.840, Ley Orgánica del Banco Central de
Chile”), on an investment of an investor of Mexico, other than foreign direct
investment, and on foreign credits relating to an investment, provided that such a
reserve requirement shall not exceed 30 per cent of the amount of the investment, orthe credit, as the case may be;
(c) to adopt:
(i) measures imposing a reserve requirement referred to in (b) for a period which
shall not exceed two years from the date of transfer to Chile,
(ii) any reasonable measure consistent with paragraph 4 necessary to implement
or to avoid circumvention of the measures under (a) or (b), and
(iii) measures, consistent with Article 9-10 and this Annex, establishing future
special voluntary investment programmes in addition to the general regime
for foreign investment in Chile, except that any such measures may restrict
transfers from Chile of proceeds from the sale of all or any part of an
investment of an investor of Mexico or from the partial or complete
liquidation of the investment for a period not to exceed five years from the
date of transfer to Chile; and
(d) to apply, pursuant to Law 18.840, measures with respect to transfers relating to an
investment of an investor of Mexico that:
(i) require that foreign exchange transact ions for such transfers take place in the
Formal Exchange Market,
(ii) require authorization for access to the Formal Exchange Market to purchase
foreign currency, at the rate agreed upon by the parties to the transaction,
which access shall be granted without delay when such transfers are:
(A) payments for current international transactions,
(B) proceeds from the sale of all or any part, and from the partial or
complete liquidation of, an investment of an investor of Mexico, or
(C) payments pursuant to a loan provided they are made in accordance
with the maturity dates originally agreed upon in the loan agreement,
andWT/REG125/1
Page 98
(iii) require that foreign currency be converted into Chilean pesos, at the rate
agreed upon by the parties to the transaction, except for transfers referred to
in (ii) (A) through (C) which are exempt from this requirement.
3. Where Chile proposes to adopt a measure referred to in paragraph 2(c), Chile shall, to the
extent practicable:
(a) provide in advance to Mexico the reasons for the proposed adoption of the measure as
well as any relevant information in relation to the measure;  and
(b) provide Mexico with a reasonable opportunity to comment on the proposed measure.
4. A measure that is consistent with this Annex but inconsistent with Article 9-03, shall be
deemed not to contravene Article 9-03 provided that, as required under existing Chilean law, it does
not discriminate among investors that enter into transactions of the same nature.
5. This Annex applies to Law 18.840, to the Decree Law 600 of 1974 (“Decreto Ley 600 de
1974”) to Law 18.657 and any other law establishing a future special voluntary investment
programme consistent with sub-paragraph 2(c)(iii) and to the continuation or prompt renewal of such
laws, and to amendments to those laws, to the extent that any such amendment does not decrease the
conformity of the amended law with Article 9-10(1) as it existed immediately before the amendment.
ANNEX 9-38(2)
Place for Delivery
For the purposes of Article 9-38(2), the place for delivery of notice and other documents
under Section C is:
1. For Chile
Dirección de Asuntos Jurídicos del Ministerio de Relaciones
Exteriores de la República de Chile
Morandé 441Santiago, Chile
2. For Mexico
Dirección General de Inversión Extranjera
Secretaría de Comercio y Fomento Industrial
Insurgentes Sur 1940, Piso 8,
Colonia Florida,
C.P. 01030, México, D.F.
ANNEX 9-38(4)
Publication of an Award
For the purposes of Article 9-38(4):
1. Where Chile is the disputing Party, either Chile or a disputing investor that is a party to
arbitration may make an award public.WT/REG125/1
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2. Where Mexico is the disputing Party, the rules of procedure shall be applied to publication of
an award.
ANNEX 9-39
Exclusions from Dis pute Settlement. Mexico
A decision by the National Foreign Investment Commission (“Comisión Nacional de
Inversiones Extranjeras”) following a review of an investment in accordance with Annex I, page I-M-
F-4, with respect to whether or not to permit an acquisition that is subject to review shall not be
subject to the dispute settlement mechanism established in Chapter 18 (Dispute Settlement).
ANNEX 9-40
Members of the Committee on Investment and Cross-Border Trade in Services
For the purposes of Article 9-40, the Committee shall be composed of:
1. For Chile, the Directorate General of International Economic Relations (“Dirección General
de Relaciones Económicas Internacionales”) of the Ministry of Foreign Relations (“Ministerio de
Relaciones Exteriores”) or its successor.
2. For Mexico, the Department of Trade and Industrial Development (“Secretaría de Comercio y
Fomento Industrial”) or its successor.
CHAPTER 10: CROSS-BORDER TRADE IN SERVICES
Article 10-01
Definitions
1. For the purposes of this Chapter:
cross-border provision of a service  or cross-border trade in services  means the provision
of a service:
(a) from the territory of a Party into the territory of the other Party;
(b) in the territory of a Party by a person of that Party to a person of the other Party;  or
(c) by a national of a Party in the territory of the other Party,
but does not include the provision of a service in the territory of a Party by an investment, as defined
in Article 9-01 (Definitions), in that territory;
enterprise  means an “enterprise” as defined in Article 2-01 (Definitions of General
Application), and a branch of an enterprise;
enterprise of a Party  means an enterprise constituted or organized under the law of a Party,
and a branch located in the territory of a Party and carrying out business activities there;
existing  means in effect on 14 January 1997;WT/REG125/1
Page 100
professional services  means services, the provision of which requires specialized post-
secondary education, or equivalent training or experience, and for which the right to practice is
granted or restricted by a Party, but does not include services provided by trades-persons or vessel and
aircraft crew members;
quantitative restriction  means a non-discriminatory measure that imposes limitations on:
(a) the number of service providers, whether in the form of a quota, a monopoly or an
economic needs test, or by any other quantitative means; or
(b) the operations of any service provider, whether in the form of a quota or an economic
needs test, or by any other quantitative means;
service provider of a Party  means a person of a Party that seeks to provide or provides a
service; and
specialty air services  means aerial mapping, aerial surveying, aerial photography, forest fire
management, fire fighting, aerial advertising, glider towing, parachute jumping, aerial construction,
heli-logging, aerial sightseeing, flight training, aerial inspection and surveillance, and aerial spraying
services.
2. A reference to a national or federal or state government includes any non-governmental body
in the exercise of any regulatory, administrative or other governmental authority delegated to it by
that government.
Article 10-02
Scope and Coverage
1. This Chapter applies to measures adopted or maintained by a Party relating to cross-border
trade in services by service providers of the other Party, including measures respecting:
(a) the production, distribution, marketing, sale and delivery of a service;
(b) the purchase or use of, or payment for, a service;
(c) the access to and use of distribution and transportation systems in connection with the
provision of a service;
(d) the presence in its territory of a service provider of the other Party;  and
(e) the provision of a bond or other form of financial security as a condition for the
provision of a service.
2. For the purposes of this Chapter, measures adopted or maintained by a Party are measures
adopted or maintained by:
(a) the national or federal or state governments;
(b) any non-governmental body in the exercise of any regulatory, administrative or other
governmental authority delegated to it by that government.
3. This Chapter does not apply to:WT/REG125/1
Page 101
(a) cross-border trade in financial services;
(b) air services, including domestic and international air transportation services, whether
scheduled or non-scheduled, and related services in support of air services, other than
(i) aircraft repair and maintenance services during which an aircraft is
withdrawn from service,
(ii) specialty air services, and
(iii) computerized reservation systems;
(c) procurement by a Party or a State enterprise;  or
(d) subsidies or grants provided by a Party or a State enterprise, including government-
supported loans, guarantees and insurance.
4. Nothing in this Chapter shall be construed to:
(a) impose any obligation on a Party with respect to a national of the other Party seeking
access to its employment market, or employed on a permanent basis in its territory, or
to confer any right on that national with respect to that access or employment;  or
(b) prevent a Party from providing a service or performing a function such as law
enforcement, correctional services, income security or insurance, social security,
social welfare, public education, public training, health, and child care, in a manner
that is not inconsistent with this Chapter.
Article 10-03
National Treatment
1. Each Party shall accord to service providers of the other Party treatment no less favourable
than that it accords, in like circumstances, to its own service providers.
2. The treatment accorded by a Party under paragraph 1 means, with respect to a state, treatment
no less favourable than the most favourable treatment accorded, in like circumstances, by that state to
service providers of the Party of which it forms a part.
Article 10-04
Most-Favoured-Nation Treatment
Each Party shall accord to service providers of the other Party treatment no less favourable
than it accords, in like circumstances, to service providers of a non-Party country.
Article 10-05
Standard of Treatment
Each Party shall accord to service providers of  the other Party the better of the treatment
required by Articles 10-03 and 10-04.WT/REG125/1
Page 102
Article 10-06
Local Presence
Neither Party may require a service provider of the other Party to establish or maintain a
representative office or any form of enterprise, or to be resident, in its territory as a condition for the
cross-border provision of a service.
Article 10-07
Reservations
1. Articles 10-03, 10-04 and 10-06 do not apply to:
(a) any existing non-conforming measure that is maintained by:
(i) a Party at the national or federal or state level, as set out in its Schedule to
Annex I, or
(ii) a local government;
(b) the continuation or prompt renewal of any non-conforming measure referred to in
subparagraph (a);  or
(c) an amendment to any non-conforming measure referred to in subparagraph (a) to the
extent that the amendment does not decrease the conformity of the measure, as it
existed immediately before the amendment, with Articles10-03, 10-04 and 10-06.
2. Articles 10-03, 10-04 and 10-06 do not apply to an y measure that a Party adopts or maintains
with respect to sectors, subsectors or activ ities, as set out in its Schedule to Annex II.
Article 10-08
Quantitative Restrictions
1. Each Party shall set out in its Schedule to Annex V any quantitative restriction that it
maintains at the national or federal or state level.
2. Each Party shall notify the other Party of any quantitative restriction that it adopts after the
date of entry into force of this Agreement and shall set out the restriction in its Schedule to Annex V.
3. The Parties shall periodically, but in any event at least every two years, endeavour to
negotiate the liberalization or removal of the quantitative restrictions set out in Annex V pursuant to
paragraphs 1 and 2.
Article 10-09
Future Liberalization
Through future negotiations to be arranged by the Commission, the Parties shall seek further
liberalization in the different services sectors, with  a view to eliminating the remaining restrictions in
the Schedules mentioned in Article 10-07(1) and (2).WT/REG125/1
Page 103
Article 10-10
Liberalization of Non-Discriminatory Measures
Each Party shall set out in its Schedule to Annex VI its commitments to liberalize quantitative
restrictions, licensing requirements, performance requirements or other non-discriminatory measures.
Article 10-11
Procedures
The Parties shall establish procedures for:(a) a Party to notify and include in its relevant Schedule:
(i) commitments pursuant to Article 10-10,(ii) amendments of measures referred to in Article 10-07(1) and (2), and(iii) quantitative restrictions in accordance with Article 10-08;  and
(b) consultations on reservations, quantitative restrictions or commitments with a view to
further liberalization.
Article 10-12
Licensing and Certification
1. With a view to ensuring that any measure adopted or maintained by a Party relating to the
licensing or certification of nationals of the other Party does not constitute an unnecessary barrier to
trade, each Party shall endeavour to ensure that any such measure:
(a) is based on objective and transparent criteria, such as competence and the ability to
provide a service;
(b) is not more burdensome than necessary to ensure the quality of a service;  and
(c) does not constitute a disguised restriction on the cross-border provision of a
service.
2. Where a Party recognizes, unilaterally or by agreement, education, experience, licences or
certifications obtained in the territory of the other Party or of a non-Party:
(a) nothing in Article 10-4 shall be construed to require the Party to accord such
recognition to education, experience, licences or certifications obtained in the
territory of the other Party; and
(b) the Party shall afford the other Party an adequate opportunity to demonstrate that
education, experience, licences or certifications obtained in the other Party’s territory
should also be recognized or to conclude an agreement or arrangement of comparable
effect.WT/REG125/1
Page 104
3. Each Party shall, after the date of entry into force of this Agreement, eliminate any citizenship
or permanent residency requirement set out in its Schedule to Annex I that it maintains for the
licensing or certification of professional service providers of the other Party. Where a Party does not
comply with this obligation with respect to a particular sector, the other Party may, in the same sector
and for such period as the non-complying Party maintains its requirement, solely have recourse toadopting or maintaining an equivalent requirement.
4. The Parties shall consult periodically with a view to determining the feasibility of removing
any remaining citizenship or permanent residency requirement for the licensing or certification of
each other’s service providers.
5. Annex 10-12 establishes procedures for the recognition of education, experience and other
standards and requirements governing professional service providers.
Article 10-13
Denial of Benefits
Subject to prior notification and consultation in accordance with Articles 16-04 (Notification
and Provision of Information) and 18-04 (Consultations), a Party may deny the benefits of this
Chapter to a service provider of the other Party where the Party establishes that the service is being
provided by an enterprise that is owned or controlled by persons of a non-Party and that has nosubstantial business activities in the territory of the other Party.
Article 10-14
Committee on Investment and Cross-Border Trade in Services
The Committee on Investment and Cross-Border Trade in Services shall perform the
functions established in Article 9-40 (Committee on Investment and Cross-Border Trade in Services).
ANNEX 10-12
Professional Services
Purpose1. This Annex establishes the rules to be observed by the Parties to reduce and gradually
eliminate in their territory barriers to the provision of professional services.
Processing of Applications for Licences and Certifications2. Each Party shall ensure that its competent authorities, within a reasonable time after the
submission by a national of the other Party of an application for a licence or certification:
(a) where the application is complete, make a determination on the application and
inform the applicant of that determination; or
(b) where the application is not complete, inform the applicant without undue delay
of the status of the application and the additional information that is required
under the Party’s law.WT/REG125/1
Page 105
Development of Professional Standards
3. The Parties shall encourage the relevant bodies in their respective territories to develop
mutually acceptable standards and criteria for licensing and certification of professional service
providers and to provide recommendations on mutual recognition to the Committee.
4. The standards and criteria referred to in paragraph 3 may be developed with regard to the
following matters:
(a) education - accreditation of schools or academic programmes;(b) examinations - qualifying examinations for licensing, including alternative methods
of assessment such as oral examinations and interviews;
(c) experience - length and nature of experience required for licensing;(d) conduct and ethics - standards of professional conduct and the nature of disciplinary
action for non-conformity with those standards;
(e) professional development and re-certification - continuing education and ongoing
requirements to maintain professional certification;
(f) scope of practice - extent of, or limitations on, permissible activities;
(g) local knowledge - requirements for knowledge of such matters as local laws,
regulations, language, geography or climate; and
(h) consumer protection - alternatives to residency requirements, including bonding,
professional liability insurance and client restitution funds, to provide for the
protection of consumers.
5. On receipt of a recommendation referred to in paragraph 3, the Committee shall review the
recommendation within a reasonable time to determine whether it is consistent with this Agreement.
Based on the Committee’s review, each Party shall encourage its respective competent authorities,where appropriate, to implement the recommendation within a mutually agreed time.
Temporary Licensing6. Where the Parties agree, each Party shall encourage the relevant bodies in its territory to
develop procedures for the temporary licensing of professional service providers of the other Party.
Review7. The Committee shall periodically, and at least once every three years, review the
implementation of this Annex .WT/REG125/1
Page 106
CHAPTER 11:  AIR TRANSPORTATION SERVICES
Article 11-01
Definitions
For the purposes of this Chapter, Convention means the Convention on Air Transportation
between the Government of the Republic of Chile and the Government of the United Mexican States
signed on 14 January 1997, or its successor.
Article 11-02
Scope and Coverage
Except as provided in this Chapter, Chapter 17 (Administration of the Agreement),
Chapter 19 (Exceptions) and Chapter 20 (Final Provisions), this Agreement does not apply to air
transportation services and the Parties shall abide by the provisions of the Convention.
Article 11-03
Consolidation
No modification made in accordance with Article 17 (Consultation and Modification) of the
Convention shall restrict rights with respec t to the situation existing in the Convention.
Article 11-04
Dispute Settlement
1. Disputes between the Parties regarding the interp retation or application of this Chapter or the
Convention shall be settled in accordance with Chap ter 18 (Dispute Settlement) of this Agreement,
with the modifications established in this Article.
2. Where one Party claims that a dispute has arisen under paragraph 1, Article 18-09 (Panel
Selection) shall be applicable, except that:
(a) the arbitral panel shall comprise three members;(b) all members of the arbitral panel shall comp ly with the requisites established in (c)
and (d);
(c) the Parties shall establish by consensus, no later than 1 January 1999, a roster of up to
10 individuals, who are willing and able to serve as panellists in air transportation
services disputes. The roster may be modified every three years; and
(d) the roster members shall:
(i) have specialized knowledge of or practical experience in air transportation
services,
(ii) be chosen strictly on the basis of their objectivity, reliability and sound
judgement, andWT/REG125/1
Page 107
(iii) comply with the requirements established in Article 18-07(2)(c) and
(d) (Roster).
3. Until such time as the roster referred to in Article 11-04(2)(c) is established, the Parties shall
apply Article 20-10(3) (Revocati ons and Transitory Provisions).
Article 11-05
Committee on Air Transportation
1. The Parties establish a Committee on Air Transportation comprised of the representatives of
each Party mentioned in Annex 11-05.
2. The Committee shall convene at least once a year to ensure the application of this Chapter and
shall prepare a report to be presented to the Free Trade Commission.
3. The Committee may discuss other matters related to scheduled and non-scheduled air
transportation between the Parties and any other appropriate matter.
Article 11-06
Convention
The Parties set aside the following provisions of the Convention:(a) those relating to dispute settlement, including Article 18 (Dispute Settlement);  and
(b) Article 20 (Termination).
Article 11-07
Entry into Force
The rights and obligations of this Chapter shall enter into force when the Parties have
complied with Article 21 (Entry into Force) of the Convention.
ANNEX 11-05
Members of the Committee on Air Transportation
For the purposes of Article 11-05, the Committee shall comprise:
1. For Chile, the Civil Aeronautics Board (“Junta de Aeronáutica Civil”) or its successor.
2. For Mexico, the Directorate General of Civil Aeronautics (“Dirección General de Aeronáutica
Civil”) or its successor.WT/REG125/1
Page 108
CHAPTER 12:  TELECOMMUNICATIONS
Article 12-01
Definitions
For the purposes of this Chapter:
authorized equipment  means terminal or other equipment that has been approved for
attachment to the public telecommunications transport network in accordance with a Party’s
conformity assessment procedures;
conformity assessment procedure  means “conformity assessment procedure” as defined in
Article 8-01 (Definitions) and includes th e procedures referred to in Annex 12-01;
enhanced or value-added services  means those telecommunications services employing
computer processing applications that:
(a) act on the format, content, code, protocol or similar aspects of a customer’s
transmitted information;
(b) provide a customer with additional, different or restructured information;  or
(c) involve customer interaction with stored information;intracorporate communications  means telecommunications through which an enterprise
communicates:
(a) internally or with or among its subsidiaries, branches or affiliates, as defined by each
Party;  or
(b) on a non-commercial basis with other persons that are fundamental to the economic
activity of the enterprise and that have a continuing contractual relationship with it,
but does not include telecommunications services provided to persons other than those described
herein;
monopoly  means an entity, including a consortium or government agency, that in any
relevant market in the territory of a Party maintains or is designated as the sole provider of public
telecommunications transport networks or services;
network termination point  means the final demarcation of the public telecommunications
transport network at the customer’s premises;
private telecommunications transport network  means a telecommunications transport
network that is used exclusively for intracorporate communications or between predetermined
individuals;
protocol  means a set of rules and formats that govern the exchange of information between
two peer entities for purposes of transferring signalling or data information;
public telecommunications transport network  means the telecommunications transport
network used to commercially operate telecommunications services to meet the needs of the publicWT/REG125/1
Page 109
generally, not including the terminal equipment of customers or telecommunications transport
networks beyond the network termination point;
public telecommunications transport service  means any telecommunications transport
service required by a Party, explicitly or in effect, to be offered to the public generally, includingtelegraph, telephone, telex and data transmission, that typically involves the real-time transmission of
customer-supplied information between two or more  points without any end-to-end change in the
form or content of the customer’s information;
standards-related measure  means a “standards related measure” as defined in Article 8-01
(Definitions);
telecommunications  means the transmission, emission or reception of signs, signals, written
words, images, sounds and information of any type by wire, radio, optical means or other
electromagnetic systems;
telecommunications  service  means a service provided by means of the transmission and
reception of signals by any electromagnetic means, but does not mean the cable, broadcast or other
electromagnetic distribution of radio or television programming; and
terminal equipment  means any digital or analogue device capable of processing, receiving,
switching, signalling or transmitting signals by electromagnetic means and that is connected by radioor wire to a public telecommunications transport network at a termination point.
Article 12-02
Scope and Coverage
1. This Chapter applies to:
(a) measures adopted or maintained by a Party relating to access to and use of public
telecommunications transport networks or services by persons of the other Party,
including access and use by such persons operating private networks forintracorporate communications;
(b) measures adopted or maintained by a Party relating to the provision of enhanced or
value-added services by persons of the other Party in the territory, or across the
borders, of a Party; and
(c) standards-related measures relating to attachment of terminal or other equipment to
public telecommunications transport networks.
2. Except to ensure that persons operating broadcast stations and cable systems have continued
access to and use of public telecommunications transport networks and services, this Chapter does not
apply to any measure adopted or maintained by a Party relating to broadcast or cable distribution of
radio or television programming.
3. Nothing in this Chapter shall be construed to:
(a) require a Party to authorize a person of the other Party to establish, construct, acquire,
lease, operate or provide telecommunications transport networks or
telecommunications transport services;WT/REG125/1
Page 110
(b) require a Party, or require a Party to compel any person, to establish, construct,
acquire, lease, operate or provide telecommunications transport networks or
telecommunications transport services not offered to the public generally;
(c) prevent a Party from prohibiting persons operating private networks from using their
networks to provide public telecommunications transport networks or services to third
persons;  or
(d) require a Party to compel any person engaged in the broadcast or cable distribution of
radio or television programming to make available its cable or broadcast facilities as a
public telecommunications transport network.
Article 12-03
Access to and Use of Public Tele communications Transport Networks
and Services
1. For purposes of this Article, “non-discriminatory” means on terms and conditions no less
favourable than those accorded to any other customer or user of like public telecommunications
transport networks or services in like circumstances.
2. Each Party shall ensure that persons of the other Party have access to and use of any public
telecommunications transport network or service, including private leased circuits, offered in its
territory or across its borders for the conduct of their business, on reasonable and non-discriminatory
terms and conditions, including as set out in the other paragraphs of this Article.
3. Subject to paragraphs 7 and 8, each Party shall ensure that such persons are permitted to:
(a) purchase or lease, and attach terminal or other equipment that interfaces with the
public telecommunications transport network;
(b) interconnect private leased or owned circuits with public telecommunications
transport networks in the territory, or across the borders, of that Party, including for
use in providing dial-up access to and from their customers or users, or with circuitsleased or owned by another person on terms and conditions mutually agreed by those
persons, as established in Annex 12-03;
(c) perform switching, signalling and processing functions;  and
(d) use operating protocols of their choice, in accordance with the technical plans of each
Party.
4. Each Party shall ensure that the pricing of public telecommunications transport services
reflects economic costs directly related to providing the services. Nothing in this paragraph shall beconstrued to prevent cross-subsidization between  public telecommunications transport services.
5. Each Party shall ensure that persons of the other Party may use public telecommunications
transport networks or services for the movement of information in its territory or across its borders,
including for intracorporate communications, and for access to information contained in data bases orotherwise stored in machine-readable form in the territory of the other Party.
6. Further to Article 19-02 (General Exceptions), nothing in this Chapter shall be construed to
prevent a Party from adopting or enforcing any measure necessary to:WT/REG125/1
Page 111
(a) ensure the security and confidentiality of messages;  or
(b) protect the privacy of subscribers to public telecommunications transport networks or
services.
7. Further to Article 12-05, each Party shall ensure that no condition is imposed on access to and
use of public telecommunications transport networks or services, other than that necessary to:
(a) safeguard the public service responsibilities of providers of public
telecommunications transport networks or services, in particular their ability to make
their networks or services available to the public generally; or
(b) protect the technical integrity of public telecommunications transport networks or
services.
8. Provided that conditions for access to and use of public telecommunications transport
networks or services satisfy the criteria set out in paragraph 7, such conditions may include:
(a) a restriction on resale or shared use of such services;(b) a requirement to use specified technical interfaces, including interface protocols, for
interconnection with such networks or services;
(c) a restriction on interconnection of private leased or owned circuits with such
networks or services or with circuits leased or owned by another person;  and
(d) a licensing, permit, concession, registration or notification procedure which, if
adopted or maintained, is transparent and applications filed thereunder are processed
expeditiously.
Article 12-04
Conditions for the Provision of Enhanced or Value-Added Services
1. Each Party shall ensure that:
(a) any licensing, permit, concession, registration or notification procedure that it adopts
or maintains relating to the provision of enhanced or value-added services is
transparent and non-discriminatory, and that applications filed thereunder areprocessed expeditiously; and
(b) information required under such procedures is limited to that necessary to
demonstrate that the applicant has the financial solvency to begin providing services
or to assess conformity of the applicant’s terminal or other equipment with the Party’sapplicable standards or technical regulations.
2. Neither Party may require a person providing enhanced or value-added services to:
(a) provide those services to the public generally;(b) cost-justify its rates;(c) file a tariff;WT/REG125/1
Page 112
(d) interconnect its networks with any particular customer or network;  or
(e) conform with any particular standard or technical regulation for interconnection other
than for interconnection to a public telecommunications transport network.
3. Notwithstanding paragraph 2(c), a Party may require the filing of a tariff by:
(a) such provider to remedy a practice of that provider that the Party has found in a
particular case to be anti-competitive under its law; or
(b) a monopoly to which Article 12-06 applies.
Article 12-05
Standards-Related Measures
1. Each Party shall ensure that its standards-related measures relating to the attachment of
terminal or other equipment to the public telecommunications transport networks, including those
measures relating to the use of testing and measuring equipment for conformity assessment
procedures, are adopted or maintained only to the extent necessary to:
(a) prevent technical damage to public telecommunications transport networks;
(b) prevent technical interference with, or degradation of, public telecommunications
transport services;
(c) prevent electromagnetic interference, and ensure compatibility, with other uses of the
electromagnetic spectrum;
(d) prevent billing equipment malfunction;(e) ensure users’ safety and access to public telecommunications transport networks or
services;  or
(f) ensure efficient use of the electromagnetic spectrum.
2. A Party may require approval for the attachment to the public telecommunications transport
network of terminal or other equipment that is not authorized, provided that the criteria for that
approval are consistent with paragraph 1.
3. Each Party shall ensure that the network termination points for its public telecommunications
transport networks are defined on a reasonable and transparent basis.
4. Neither Party may require separate authorization for equipment that is connected on the
customer’s side of authorized equipment that serves as a protective device fulfilling the criteria of
paragraph 1.
5. Each Party shall:
(a) ensure that its conformity assessment procedures are transparent and
non-discriminatory and that applications filed thereunder are processed expeditiously;
(b) permit any technically qualified entity to perform the testing required under the
Party’s conformity assessment procedures for terminal or other equipment to beWT/REG125/1
Page 113
attached to the public telecommunications tr ansport network, subject to the Party’s
right to review the accuracy and completeness of the test results; and
(c) ensure that any measure that it adopts or maintains requiring persons to be authorized
to act as agents for suppliers of telecommunications equipment before the Party’srelevant conformity assessment bodies is non-discriminatory.
6. No later than eighteen months after the date of entry into force of this Agreement, each Party
shall adopt, as part of its conformity assessment procedures, provisions necessary to accept the test
results from laboratories or testing facilities in the territory of the other Party for tests performed in
accordance with the accepting Party’s standards-related measures and procedures.
7. The Sub-Committee on Telecommunications Standards shall perform the functions set out in
Article 8-11(4) (Committee on Standards-Related Measures).
Article 12-06
Monopolies
1. Where a Party maintains or designates a monopoly to provide public telecommunications
transport networks or services, and the monopoly, di rectly or through an affiliate, competes in the
provision of enhanced or value-added services or other telecommunications-related services ortelecommunications-related goods, the Party shall ensure that the monopoly does not use its
monopoly position to engage in anti-competitive conduct in those markets, either directly or through
its dealings with its affiliates, in such a manner as to affect adversely a person of the other Party. Such
conduct may include cross-subsidization, predator y conduct and the discriminatory provision of
access to public telecommunications transport networks or services.
2. To prevent such anti-competitive conduct, ea ch Party shall adopt or maintain effective
measures, such as:
(a) accounting requirements;(b) requirements for structural separation;(c) rules to ensure that the monopoly accords its competitors access to and use of its
public telecommunications transport networks or services on terms and conditions no
less favourable than those it accords to itself or its affiliates; or
(d) rules to ensure the timely disclosure of technical changes to public
telecommunications transport networks and their interfaces.
Article 12-07
Transparency
Further to Article 16-03 (Publication), each Party shall make publicly available its measures
relating to access to and use of public telecommunications transport networks or services, including
measures relating to:
(a) tariffs and other terms and conditions of service;(b) specifications of technical interfaces with the networks or services;WT/REG125/1
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(c) information on bodies responsible for the preparation and adoption of standards-
related measures affecting such access and use;
(d) conditions applying to attachment of terminal or other equipment to the networks;
and
(e) notification, permit, registration, certification, licensing or concession requirements.
Article 12-08
Relation to Other Chapters
In the event of any inconsistency between this Chapter and another Chapter, this Chapter shall
prevail to the extent of the inconsistency.
Article 12-09
Relation to International Organizations and Agreements
The Parties recognize the importance of internat ional standards for global compatibility and
interoperability of telecommunication networks or services and undertake to promote those standards
through the work of relevant international bodies, including the International TelecommunicationUnion and the International Organization for Standardization.
Article 12-10
Technical Cooperation and Other Consultations
1. To encourage the development of interoperable telecommunications transport services
infrastructure, the Parties shall cooperate in the exchange of technical information, the development of
government-to-government training programmes and other related activities. In implementing this
obligation, the Parties shall give special emphasis to existing exchange programmes.
2. The Parties shall consult with a view to determ ining the feasibility of further liberalizing trade
in all telecommunications services, including public telecommunications transport networks and
services.
ANNEX 12-01
Conformity Assessment Procedures
For the purposes of this Chapter, conformity assessment procedures include:
1. For Chile:
Undersecretariat of Telecommunications, Ministry of Transport and Telecommunications
(“Subsecretaría de Telecomunicaciones, Ministerio de Transportes y Telecomunicaciones”)
Law 18.168, General Law on Telecommunications  (“Ley General de Telecomunicaciones”)
Law 18.838, Law on the National Television Committee (“Consejo Nacional de Televisión”)
and amendments thereto
Law 16.643, Law on Abuse of Publicity (“Ley sobre Abusos de Publicidad”)WT/REG125/1
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Supreme Decree 220 of the Ministry of Transport and Telecommunications of 1981,
Regulation on the Homologation of Telephone Equipment (“Reglamento de Homologación
de Aparatos Telefónicos”)
2. For Mexico:
Undersecretariat of Communications, Depart ment of Communications and Transport
(“Subsecretaría de Comunicaciones, Secret aría de Comunicaciones y Transportes”)
Federal Telecommunications Commission (“Co misión Federal de Telecomunicaciones”)
Federal Telecommunications Law ( “Ley Federal de Telecomunicaciones”) and its legal and
administrative provisions
ANNEX 12-03
Interconnection of Private Circuits
For the purposes of Article 12-03, for Chile, the interconnection of private circuits to public
telecommunications transport networks shall not provide access to traffic from such private circuits to
public networks or vice versa, regardless of whether the private circuits are leased or owned.
CHAPTER 13: TEMPORARY ENTRY FOR BUSINESS PERSONS
Article 13-01
Definitions
For the purposes of this Chapter:business person means a citizen of a Party who is engaged in trade in goods, the provision of
services or the conduct of investment activities;
citizen means “citizen” as defined in Article 2-01 (Definitions of General Application) but
does not include permanent residents; and
temporary entry means entry into the territory of a Party by a business person of the other
Party without the intent to establish permanent residence.
Article 13-02
General Principles
Further to Article 1-02 (Objectives), this Chapter reflects the preferential trading relationship
between the Parties, the desirability of facilitating temporary entry on a reciprocal basis and of
establishing transparent criteria and procedures for temporary entry, and the need to ensure border
security and to protect the domestic labour force and permanent employment in their respectiveterritories.WT/REG125/1
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Article 13-03
General Obligations
1. Each Party shall apply its measures relating to the provisions of this Chapter in accordance
with Article 13-02 and, in particular, shall apply those measures expeditiously so as to avoid unduly
impairing or delaying trade in goods or services or conduct of investment activities under this
Agreement.
2. The Parties shall endeavour to develop and adopt common criteria, definitions and
interpretations for the implementation of this Chapter.
Article 13-04
Grant of Temporary Entry
1. Each Party shall grant temporary entry to business persons who are otherwise qualified for
entry under applicable measures relating to public health and safety and national security, in
accordance with this Chapter, including the provisions of Annex 13-04 and 13-04(1).
2. A Party may refuse to issue an immigration document authorizing employment to a business
person where the temporary entry of that person might affect adversely:
(a) the settlement of any labour dispute that is in progress at the place or intended place
of employment;  or
(b) the employment of any person who is involved in such dispute.
3. When a Party refuses pursuant to paragraph 2 to issue an immigration document authorizing
employment, it shall:
(a) inform in writing the business person of the reasons for the refusal;  and
(b) promptly notify in writing the other Party of the reasons for the refusal.
4. Each Party shall limit any fees for processing  applications for temporary entry of business
persons to the approximate cost of services rendered.
Article 13-05
Provision of Information
1. Further to Article 16-03 (Publication), each Party shall:
(a) provide to the other Party such materials as will enable it to become acquainted with
its measures relating to this Chapter;  and
(b) no later than one year after the date of entry into force of this Agreement, prepare,
publish and make available in its own territory, and in the territory of the other Party,explanatory material in a consolidated document regarding the requirements for
temporary entry under this Chapter in such a manner as will enable business persons
of the other Party to become acquainted with them.WT/REG125/1
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2. Each Party shall collect and maintain, and make available to the other Party in accordance
with its domestic law, data respecting the granting  of temporary entry under this Chapter to business
persons of the other Party who have been issued immigration documentation, including data specific
to each occupation, profession or activity.
Article 13-06
Temporary Entry Working Group
1. The Parties hereby establish a Temporary Entry Working Group, comprising representatives
of each Party, including immigration officials, for the purpose of considering implementation and
administration of this Chapter and measures of mutual interest.
2. The Working Group shall meet at least once each year to consider:
(a) the implementation and administration of this Chapter;
(b) the development of measures to further facilitate temporary entry of business persons
on a reciprocal basis;
(c) the waiving of labour certification tests or procedures of similar effect for spouses of
business persons who have been granted temporary entry for more than one yearunder Section B, C or D of Annex 13-04; and
(d) proposed modifications of or additions  to Annex 13-04 and 13-04(1) which, by
consensus, shall be presented to the Commission in accordance with
Article 17-01(3)(c) (Free Trade Commission).
Article 13-07
Dispute Settlement
1. A Party may not initiate proceedings under Article 18-05 (Commission - Good Offices,
Conciliation and Mediation) regarding a refusal to  grant temporary entry under this Chapter or a
particular case arising under Article 13-03 unless:
(a) the matter involves a pattern of practice;  and(b) the business person has exhausted the available administrative remedies regarding the
particular matter.
2. The remedies referred to in paragraph (1)(b) shall be deemed to be exhausted if a final
determination in the matter has not been issued by the competent authority within one year of the
institution of an administrative proceeding, and the failure to issue a determination is not attributableto delay caused by the business person.
Article 13-08
Relation to Other Chapters
Except for this Chapter, Chapters 1 (Initial Provisions), 2 (General Definitions), 17
(Administration of the Treaty), 18 (Dispute Settle ment) and 20 (Final Provisions) and Article 16-02
(Contact Points), 16-03 (Publication), 16-04 (Notific ation and Provision of Information) and 16-05WT/REG125/1
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(Administrative Proceedings), no provision of this Agreement shall impose any obligation on a Party
regarding its immigration measures.
ANNEX 13-04
Temporary Entry for Business Persons
Section A - Business Visitors
1. Each Party shall grant temporary entry to a business person seeking to engage in a business
activity set out in Appendix 13-04(A)(1), without requiring that person to obtain an employment
authorization, provided that the business person otherwise complies with existing immigrationmeasures applicable to temporary entry, on presentation of:
(a) proof of citizenship of a Party;
(b) documentation demonstrating that the business person will be so engaged and
describing the purpose of entry;  and
(c) evidence demonstrating that the proposed business activity is international in scope
and that the business person is not seeking to enter the local labour market.
2. Each Party shall provide that a business person may satisfy the requirements of paragraph 1(c)
by demonstrating that:
(a) the primary source of remuneration for the proposed business activity is outside the
territory of the Party granting temporary entry; and
(b) the business person’s principal place of business and the actual place of accrual of
profits, at least predominantly, remain outside such territory.
A Party shall normally accept an oral declaration as to the principal place of business and the
actual place of accrual of profits. Where the Party requires further proof, it shall normally consider a
letter from the employer attesting to these matters as sufficient proof.
3. Each Party shall grant temporary entry to a business person seeking to engage in a business
activity other than those set out in Appendix 13-04( A)(1), without requiring that person to obtain an
employment authorization, on a basis no less favourable than that provided under the existing
provisions of the measures set out in Appendix  13-04(A)(3), provided that the business person
otherwise complies with existing immigration measures applicable to temporary entry.
4. No Party may:
(a) as a condition for temporary entry under paragraph 1 or 3, require prior approval
procedures, petitions, labour certification tests or other procedures of similar effect;
or
(b) impose or maintain any numerical restriction relating to temporary entry under
paragraph 1 or 3.
5. Notwithstanding paragraph 4, a Party may require a business person seeking temporary entry
under this Section to obtain a visa or its equivalent prior to entry. Before imposing a visa requirement,
the Party shall consult with the other Party with a view to avoiding the imposition of the requirement.WT/REG125/1
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With respect to an existing visa requirement, a Party shall consult with the other Party, on request,
with a view to its removal.
Section B - Traders and Investors
1. Each Party shall grant temporary entry and provide confirming documentation to a business
person in a capacity that is supervisory, executive or involves essential skills, provided that the
business person otherwise complies with existing immigration measures applicable to temporary
entry, seeking to:
(a) carry on substantial trade in goods or services principally between the territory of the
Party of which the business person is a citizen and the territory of the other Party intowhich entry is sought;  or
(b) establish, develop, administer or provide advice or key technical services to the
operation of an investment to which the business person or the business person’s
enterprise has committed, or is in the process of committing, a substantial amount ofcapital.
2. No Party may:
(a) as a condition for temporary entry under paragraph 1, require labour certification tests
or other procedures of similar effect;  or
(b) impose or maintain any numerical restriction relating to temporary entry under
paragraph 1.
3. Notwithstanding paragraph 2, a Party may require a business person seeking temporary entry
under this Section to obtain a visa or its equivalent prior to entry.
Section C - Intra-Company Transferees
1. Each Party shall grant temporary entry and provide confirming documentation to a business
person employed by an enterprise who seeks to render services to that enterprise or a subsidiary oraffiliate thereof, in a capacity that is managerial, executive or involves specialized knowledge,
provided that the business person otherwise complies with existing immigration measures applicable
to temporary entry. A Party may require the business person to have been employed continuously by
the enterprise for one year within the three-year period immediately preceding the date of the
application for admission.
2. No Party may:
(a) as a condition for temporary entry under paragraph 1, require labour certification tests
or other procedures of similar effect; or
(b) impose or maintain any numerical restriction relating to temporary entry under
paragraph 1.
3. Notwithstanding paragraph 2, a Party may require a business person seeking temporary entry
under this Section to obtain a visa or its equivalent prior to entry. Before imposing a visa requirement,
the Party shall consult with the other Party with a view to avoiding the imposition of the requirement.
With respect to an existing visa requirement, a Party shall consult with the other Party, on request,
with a view to its removal.WT/REG125/1
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Section D – Professionals
1. Each Party shall grant temporary entry and provide confirming documentation to a business
person seeking to engage in a business activity at a professional level in a profession set out in
Appendix 13-04(D)(1), if the business person otherw ise complies with existing immigration measures
applicable to temporary entry, on presentation of:
(a) proof of citizenship of a Party; and
(b) documentation demonstrating that the business person will be so engaged and
describing the purpose of entry.
2. No Party may:
(a) as a condition for temporary entry under paragraph 1, require prior approval
procedures, petitions, labour certification tests or other procedures of similar effect;
or
(b) impose or maintain any numerical restriction relating to temporary entry under
paragraph 1.
3. Notwithstanding paragraph 2, a Party may require a business person seeking temporary entry
under this Section to obtain a visa or its equivalent prior to entry. Before imposing a visa requirement,
the Party shall consult with the other Party with a view to avoiding the imposition of the requirement.
With respect to an existing visa requirement, a Party shall consult with the other Party, on request,
with a view to its removal.
ANNEX 13-04(1)
Country-Specific Rules for the Temporary Entry of Business Persons
For the purposes of Article 13-04:
1. For Chile:
(a) business persons who enter Chile in any of the categories set out in Annex 13-04 shall
be considered to engage in activities that are useful or beneficial for the country;
(b) business persons who enter Chile in any of the categories set out in Annex 13-04 shall
be in possession of a temporary residence visa, which may be renewed for
consecutive periods, provided the conditions under which it was granted are
maintained. Such persons may not apply for permanent residence or change their
immigration status, unless they comply with the general immigration requirements
established in Decree Law 1.094 of 1975 (“Decreto Ley 1.094 de 1975”) andSupreme Decree 597 of 1984 (“Decreto Supremo 597 de 1984”); and
(c) business persons entering Chile may also obtain an identity card for foreigners.
2. For Mexico:
(a) business persons who enter Mexico in any of the categories set out in Annex 13-04
shall be considered to engage in activit ies to further national development;  andWT/REG125/1
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(b) business persons who enter Mexico in any of the categories set out in Annex 13-04
shall have the status of non-immigrant visitors and may apply for extensions provided
the conditions under which they originally entered are maintained. Such persons may
apply to change their immigration status under domestic law (the General Population
Law) (“Ley General de Población”) (Article 42 (III) and Article 59).
APPENDIX 13-04(A)(1): BUSINESS VISITORS
Definitions
For the purposes of this Appendix, territory of the other Party means the territory of the
Party that is not the Party into which temporary entry is sought.
Research and Design
- Technical, scientific and statistical researchers conducting independent research or research
for an enterprise located in the territory of the other Party.
Growth, Manufacture and Production
- Purchasing and production management personnel conducting commercial transactions for an
enterprise located in the territory of the other Party.
- Harvester owners supervising a harvesting crew admitted under applicable law.
Marketing
- Market researchers and analysts conducting research or analysis independently or for an
enterprise located in the territory of the other Party.
- Trade fair and promotional personnel attending a trade convention.
Sales
- Sales representatives and agents taking orders or negotiating contracts for goods or services
for an enterprise located in the territory of the other Party but not delivering goods or
providing services.
- Buyers purchasing for an enterprise located in the territory of the other Party.
Distribution
- Customs brokers providing consulting services regarding the facilitation of the import or
export of goods.
After-Sales Service
- Installers, repair and maintenance personnel, and supervisors, possessing specialized
knowledge essential to a seller’s contractual obligation, performing services or trainingworkers to perform services, pursuant to a warranty or other service contract incidental to the
sale of commercial or industrial equipment or machinery, including computer software,
purchased from an enterprise located outside th e territory of the Party into which temporary
entry is sought, during the life of the warranty or service agreement.WT/REG125/1
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General Service
- Professionals engaging in a business activity at a professional level in a profession set out in
Appendix 13-04(D)(1).
- Management and supervisory personnel engaging in a commercial transaction for an
enterprise located in the territory of the other Party.
- Financial services personnel (insurers, bankers or investment brokers) engaging in
commercial transactions for an enterprise located in the territory of the other Party.
- Public relations and advertising personnel cons ulting with business associates, or attending or
participating in conventions.
- Tourism personnel (tour and travel agents, tour guides or tour operators) attending or
participating in conventions or conducting a tour that has begun in the territory of the other
Party.
- Translators or interpreters performing services as employees of an enterprise located in the
territory of the other Party.
APPENDIX 13-04(A)(3):  EXISTING IMMIGRATION MEASURES
For the purposes of Annex 13-04(A)(3), existing immigration measures are:
1. In the case of Chile, Section I, paragraph 6 of Decree Law 1.094, Official Gazette
19 July 1975 (“Decreto Ley 1.094, Diario Oficial, 19 de julio de 1975”), the Immigration Law (“Leyde Extranjería”) and Section III of Supreme Decr ee 597 of the Ministry of the Interior, Official
Gazette 24 November 1984, Immigration Regulati ons (“Decreto Supremo 597 del Ministerio del
Interior, Diario Oficial, 24 de noviembre de 1984, Reglamento de Extranjería”).
2. In the case of Mexico, Chapter III of the General Demography Law, 22 July 1992 (“Ley
General de Población, 22 de julio de 1992”) and amendments thereto, including the amendment of
8 November 1996, and Chapter VII of the Regulations of the same Law, 17 November 1976.
APPENDIX 13-04(D)(1):  PROFESSIONALS
PROFESSION MINIMUM EDUCATION REQUIREMENTS AND
ALTERNATIVE CREDENTIALS
Scientist
Agriculturist (including Agronomist) Licenciatura Degree
Animal Breeder Licenciatura Degree
Animal Scientist Licenciatura Degree
Apiculturist Licenciatura Degree
Astronomer Licenciatura Degree
Biochemist Licenciatura Degree
Biologist Licenciatura Degree
Chemist Licenciatura Degree
Dairy Scientist Licenciatura DegreeWT/REG125/1
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PROFESSION MINIMUM EDUCATION REQUIREMENTS AND
ALTERNATIVE CREDENTIALS
Entomologist Licenciatura Degree
Epidemiologist Licenciatura Degree
Geneticist Licenciatura Degree
Geologist Licenciatura Degree (University Title)
Geochemist Licenciatura Degree
Geophysicist Licenciatura Degree
Horticulturist Licenciatura Degree
Meteorologist Licenciatura Degree
Oceanographer Licenciatura Degree (University Title)
Pharmacologist Licenciatura Degree
Physicist Licenciatura Degree
Plant Breeder Licenciatura Degree
Poultry Scientist Licenciatura Degree
Soil Scientist Licenciatura Degree
Zoologist Licenciatura Degree
General
Accountant Licenciatura Degree; or Audit Accountant or
Public Accountant (University Title)
Architect Licenciatura Degree
Computer Systems Analyst Licenciatura Degree; or Post-Secondary
Certificate and three years experience
Disaster Relief Insurance Claims Adjuster(employed by an insurance company located in the
territory of a Party, or an independent claimsadjuster)Licenciatura Degree, and successful completion
of training in the appropriate areas of insurance
adjustment pertaining to disaster relief claims;or three years experience in claims adjustmentand successful completion of training in theappropriate areas of insurance adjustment
pertaining to disaster relief claims
Economist Licenciatura Degree
Engineer Licenciatura Degree
Forester Licenciatura Degree
Graphic Designer Licenciatura Degree; or Post-Secondary
Certificate and three years experience
Hotel Manager Licenciatura Degree in hotel/restaurant
management; or Post-Secondary Certificate inhotel/restaurant management, and three years
experience in hotel/restaurant management
Industrial Designer Licenciatura Degree; or Post-Secondary
Certificate and three years experience
Interior Designer Licenciatura Degree; or Post-SecondaryWT/REG125/1
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PROFESSION MINIMUM EDUCATION REQUIREMENTS AND
ALTERNATIVE CREDENTIALS
Certificate and three years experience
Land Surveyor Licenciatura Degree
Landscape Architect Licenciatura Degree
Lawyer Licenciatura Degree
Librarian Licenciatura Degree
Management Consultant Licenciatura Degree; or equivalent professional
experience as established by statement orprofessional credential attesting to five yearsexperience in a field of specialty related to
management consulting
Mathematician (including Statistician) Licenciatura Degree
Range Manager Licenciatura Degree
Research Assistant
(working in a post-secondary educational
institution)Licenciatura Degree
Scientific Technician/Technologist Possession of theoretical knowledge of any of
the following disciplines: agricultural sciences,astronomy, biology, chemistry, engineering,forestry, geology, geophysics, meteorology orphysics; and the ability to solve practicalproblems in any of those disciplines, or the
ability to apply principles of any of those
disciplines to basic or applied research
Social Worker Licenciatura Degree (University Title)
Sylviculturist (including Forestry Specialist) Licenciatura Degree
Technical Publications Writer Licenciatura Degree; or Post-Secondary
Certificate and three years experience
Urban Planner (including Geographer) Licenciatura Degree
Vocational Counsellor Licenciatura Degree
Medical/Allied Professional
Dentist Licenciatura Degree or Doctor en Odontología
Dietician Licenciatura Degree; Nutritional Dietician
(University Title)
Medical Laboratory TechnologistLicenciatura Degree
Nutritionist Licenciatura Degree
Occupational Therapist Licenciatura Degree
Pharmacist Licenciatura Degree
Physician (teaching or research only) Licenciatura Degree or Médico
Cirujano/Médico (University Title)
Physiotherapist/Physical Therapist Licenciatura Degree (University Title)
PsychologistLicenciatura DegreeWT/REG125/1
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PROFESSION MINIMUM EDUCATION REQUIREMENTS AND
ALTERNATIVE CREDENTIALS
Recreational Therapist Licenciatura Degree (University Title)
Registered NurseLicenciatura Degree (University Title)
Veterinarian Licenciatura Degree (University Title)
Teacher Licenciatura Degree
CHAPTER 14: COMPETITION POLICY, MONOPOLIES AND STATE ENTERPRISES
Article 14-01
Definitions
For the purposes of this Chapter:
commercial considerations  means consistent with normal business practices of privately-
held enterprises in the relevant business or industry;
designate  means to establish, designate or authorize, or to expand the scope of a monopoly to
cover an additional good or service, after the date of entry into force of this Agreement ;
discriminatory provision  includes treating:
(a) a parent, a subsidiary or other enterprise with common ownership more favourably
than an unaffiliated enterprise, or
(b) one class of enterprises more favourably than another, in like circumstances;government monopoly  means a monopoly that is owned, or controlled through ownership
interests, by the national government of a Party or by another such monopoly;
market  means the geographic and commercial market for a good or service;
monopoly  means an entity, including a consortium or government agency, that in any
relevant market in the territory of a Party is designated as the sole provider or purchaser of a good orservice, but does not include an entity that has been granted an exclusive intellectual property right
solely by reason of such grant;
non-discriminatory treatment  means the better of national treatment and most-favoured-
nation treatment, as set out in the relevant provisions of this Agreement; and
State enterprise  means “State enterprise” as defined in Article 2-01 (Definitions of General
Application), except as set out in Annex 14-01.
Article 14-02
Competition Law
1. Each Party shall adopt or maintain measures to proscribe anti-competitive business conduct
and take appropriate action with respect thereto, recognizing that such measures will enhance theWT/REG125/1
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fulfilment of the objectives of this Agreement. To this end, the Parties shall consult from time to time
about the effectiveness of measures undertaken by each Party.
2. Each Party recognizes the importance of cooperation and coordination among their authorities
to further effective competition law enforcement in the free trade area. The Parties shall cooperate onissues of competition law enforcement policy, including mutual legal assistance, communication,
consultation and exchange of information relating to the enforcement of competition laws and policies
in the free trade area.
3. Neither Party may have recourse to dispute settlement under this Agreement for any matter
arising under this Article.
4. No investor may have recourse to arbitration under Section C (Settlement of Disputes
between a Party and an Investor of the Other Party) of Chapter 9 (Investment) for any matter arising
under this Article.
Article 14-03
Monopolies and State Enterprises
1. For the purposes of this Article:
delegation  includes a legislative grant, and a government order, directive or other act
transferring to the monopoly, or authorizing the ex ercise by the monopoly of, governmental authority;
and
maintain  means established prior to the date of entry into force of this Agreement and
existing on that date.
2. Nothing in this Agreement shall be construed to prevent a Party from designating a
monopoly.
3. Where a Party intends to designate a monopoly and the designation may affect the interests of
persons of the other Party, the Party shall:
(a) wherever possible, provide prior written notification to the other Party of the
designation;  and
(b) endeavour to introduce at the time of the designation such conditions on the operation
of the monopoly as will minimize or eliminate any nullification or impairment ofbenefits in the sense of Annex 18-02 (Nullification and Impairment).
4. Each Party shall ensure, through regulatory  control, administrative supervision or the
application of other measures, that any privat ely-owned monopoly that it designates and any
government monopoly that it maintains or designates:
(a) acts in a manner that is not inconsistent with the Party’s obligations under this
Agreement wherever such a monopoly exercises any regulatory, administrative or
other governmental authority that the Party has delegated to it in connection with the
monopoly good or service, such as the power to grant import or export licences,approve commercial transactions or impose quotas, fees or other charges;
(b) except to comply with any terms of its designation that are not inconsistent with
subparagraph (c) or (d), acts solely in accordance with commercial considerations in
its purchase or sale of the monopoly good or service in the relevant market, includingWT/REG125/1
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with regard to price, quality, availability , marketability, transportation and other terms
and conditions of purchase or sale. Differences in pricing between classes of
customers, between affiliated and non-affiliated firms, and cross-subsidization are not
in themselves inconsistent with the provision; rather, they are subject to this
subparagraph when they are used as instruments of behaviour contrary to competitionlaw;
(c) provides non-discriminatory treatment to investments of investors, to goods and to
service providers of the other Party in its purchase or sale of the monopoly good or
service in the relevant market;  and
(d) does not use its monopoly position to engage, either directly or indirectly, including
through its dealings with its parent, its subsidiary or other enterprise with common
ownership, in anti-competitive practices in a non-monopolized market in its territory
that adversely affect an investment of an investor of the other Party, including
through the discriminatory provision of the monopoly good or service, cross-
subsidization or predatory conduct.
5. Paragraph 4 does not apply to procurement by governmental agencies of goods or services for
governmental purposes and not with a view to commercial resale or use in the production of goods or
the provision of services for commercial sale.
6. Nothing in this Article shall be construed to prevent a monopoly from charging different
prices in different geographic markets, where such differences are based on normal commercial
considerations, such as taking account of s upply and demand conditions in those markets.
Article 14-04
State Enterprises
1. Nothing in this Agreement shall be construed to prevent a Party from maintaining or
establishing a State enterprise.
2. Each Party shall ensure, through regulatory  control, administrative supervision or the
application of other measures, that any State enterprise that it maintains or establishes acts in a
manner that is not inconsistent with the Party’s obligations under Chapter 9 (Investment) wherever
such enterprise exercises any regulatory, administrative or other governmental authority that the Party
has delegated to it, such as the power to expropriate, grant licences, approve commercial transactions
or impose quotas, fees or other charges.
3. Each Party shall ensure that any State enterpri se that it maintains or establishes accords non-
discriminatory treatment in the sale of its goods or services to investments in the Party’s territory of
investors of the other Party.
Article 14-05
Committee on Trade and Competition
The Commission shall establish a Committee on Trade and Competition comprising
representatives of each Party, which shall convene a least once a year. The Committee shall report and
make recommendations to the Commission on matters regarding the relation between competition
laws and policies and trade in the free trade zone.WT/REG125/1
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ANNEX 14-01
Specific Definitions of State Enterprises
For the purposes of Article 14-04(3), for Mexico, State enterprise does not include Compañía
Nacional de Subsistencias Populares and its subsidiaries or any successor enterprise and its
subsidiaries, for the purpose of the sale of maize, beans and powered milk.
PART FIVE – INTELLECTUAL PROPERTY
CHAPTER 15
Section A – Definitions and General Provisions
Article 15-01
Definitions
For the purposes of this Chapter:
Berne Convention means the Berne Convention for the Protection of Literary and Artistic
Works, Paris Act of 24 July 1971;
Geneva Convention  means the Geneva Convention for the Protection of Producers of
Phonograms Against Unauthorized Duplication of Their Phonograms, adopted in Geneva on
29 October 1971;
Paris Convention  means the Paris Convention for the Protection of Industrial Property,
Stockholm Act of 14 July 1967;  and
Rome Convention  means the Rome Convention for the Protection of Performers, Producers
of Phonograms and Broadcasting Organizati ons adopted in Rome on 26 October 1961.
Article 15-02
Protection of Intellectual Property Rights
1. The intellectual property rights regulated in this Chapter are the copyrights, related rights,
trademarks and designations of origins referred to in this Chapter.
2. Each Party shall grant in its territory to nationals of the other Party adequate and effective
protection of the intellectual property rights referred to in this Chapter and ensure that measures to
enforce those rights do not themselves become barriers to legitimate trade.
3. Each Party may implement in its domestic law more extensive protection of intellectual
property rights than is required under this Agreement, provided that such protection is not inconsistent
with this Agreement.WT/REG125/1
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Article 15-03
Relation to Other Intellectual Property Agreements
1. No provision of this Chapter, relating to intellectual property rights, shall derogate from
existing obligations that the Parties may have to each other under the Paris Convention, the Berne
Convention, the Rome Convention and the Geneva Convention.
2. For the purpose of granting adequate and effective protection and enforcement of the
intellectual property rights referred to in this Chapter, the Parties shall give effect to, at a minimum,
the substantive provisions of the Paris Conventio n, the Berne Convention, the Rome Convention and
the Geneva Convention.
Article 15-04
National Treatment
1. Each Party shall accord to nationals of the other Party treatment no less favourable than that it
accords to its own nationals with regard to the protection and enforcement of the intellectual property
rights referred to in this Chapter, subject to the exceptions already provided in, respectively, the Paris
Convention, the Berne Convention, the Rome  Convention and the Geneva Convention.
2. Each Party may avail itself of the exceptions permitted under paragraph 1 in relation to
judicial and administrative procedures, including the designation of an address for service or the
appointment of an agent within the jurisdicti on of a Party, only where such exemptions:
(a) are necessary to secure compliance with laws and regulations that are not inconsistent
with the provisions this Chapter;  and
(b) are not applied in a manner that would constitute a disguised restriction on trade.
3. No Party may, as a condition of according national treatment under this Article, require right
holders to comply with any formalities or conditions in order to acquire rights in respect of copyright
and related rights.
Article 15-05
Most Favoured-Nation Treatment
With regard to the protection of the intellectual pr operty rights referred to in this Chapter, any
advantage, favour, privilege or immunity granted by a Party to the nationals of any non-Party country
shall be accorded immediately and unconditionally to the nationals of the other Party. Exempted from
this obligation are any advantage, favour, privilege or immunity accorded by a Party:
(a) deriving from international agreements on judicial assistance or law enforcement of a
general nature and not particularly confined to the protection of intellectual property;
(b) granted in accordance with the provisions of the Berne Convention or the Rome
Convention authorizing that the treatment accorded be a function not of nationaltreatment but of the treatment accorded in another country; or
(c) in respect of the rights of performers, producers of sound recordings and broadcasting
organizations not provided under this Chapter.WT/REG125/1
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Article 15-06
Control of Abusive or Anticompetitive Practices or Conditions
1. The Parties agree that some licensing practices or conditions pertaining to the intellectual
property rights referred to in this Chapter which restrain competition may have adverse effects on
trade and may impede the transfer and dissemination of technology.
2. Nothing in this Chapter shall prevent the Partie s from specifying in their legislation licensing
practices or conditions that may in particular cases constitute an abuse of intellectual property rights
having an adverse effect on competition in the relevant market. As established in paragraph 1, a Party
may adopt, consistently with the other provisions of this Chapter, appropriate measures to prevent orcontrol such practices, which may include exclusive grantback conditions, conditions preventing
challenges to validity and coercive package licensing, in the light of the relevant laws and regulations
of that Party.
Article 15-07
Cooperation to Eliminate Trade in Infringing Goods
Each Party shall establish a competent office or  authority to exchange information on trade in
goods or services infringing the intellectual property rights referred to in this Chapter, with a view to
eliminating illegal trade in such goods or services.
Article 15-08
Scope of the Cooperation
The cooperation mentioned in Article 15-07, shall exclude, if required by a Party, matters that
have been submitted to the competent courts of each Party.
Section B – Copyright and Related Rights
Article 15-09
Copyright
1. Each Party shall protect the works covered by Article 2 of the Berne Convention, including
any other works that embody original expression within the meaning of that Convention.
2. Each Party shall provide to authors and their su ccessors in interest those rights enumerated in
the Berne Convention in respect of works covered by paragraph 1.
3. Computer programmes, whether in source or object code, shall be protected as literary works
under the Berne Convention.
4. Compilations of data or other material, whether in machine readable or other form, which by
reason of the selection or arrangement of their contents constitute intellectual creations, shall be
protected as such. Such protection shall not extend to the data or material itself, or prejudice anycopyright subsisting in that data or material.
5. In respect of at least computer programmes and cinematographic works, the Parties shall
provide authors and their successors in title the righ t to authorize or to prohibit the commercial rental
to the public of originals or copies of their copyright works. A Party shall be excepted from thisWT/REG125/1
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obligation in respect of cinematographic works unless such rental has led to widespread copying of
such works which is materially impairing the exclus ive right of reproduction conferred in that Party
on authors and their successors in title. In respect of computer programmes, this obligation does not
apply to rentals where the programme itself is not the essential object of the rental.
Article 15-10
Performers
1. Each Party shall grant performers the rights referred to the Rome Convention.2. Notwithstanding the above, where a performer has consented to the visual or audiovisual
fixation of a performance, Article 7 of the Rome Convention shall cease to be applicable.
Article 15-11
Producers of Sound Recordings
1. Each Party shall grant producers of sound recordings the rights referred to in the Rome
Convention and the Geneva Convention, including the right to authorize or prohibit the first
distribution to the public of the original and each copy of the sound recording through sale, rental or
any other means.
2. Each Party shall grant producers of sound recordings, in accordance with its law, the right to
authorize or prohibit commercial rental to the public of the originals or copies of protected sound
recordings.
Article 15-12
Protection of Programme-Carrying Satellite Signals
Within five years from the date of entry into fo rce of this Agreement, the Parties shall make it
a civil offence to manufacture, import, sell, lease or perform a commercial act to make available
devices that are primarily of assistance in decoding an encrypted programme-carrying satellite signalor to use such devices for commercial purposes without the authorization of the lawful provider or
distributor of the service, in accordance with each Party’s law.
Article 15-13
Provision for Copyright and Related Rights
1. Each Party shall provide that for copyright an d related rights, any person acquiring or holding
economic rights:
(a) may freely and separately transfer such rights on any terms;  and
(b) may exercise those rights in its own name and fully enjoy the benefits derived from
those rights.
2. Each Party shall confine limitations or exceptions to copyright and related rights to certain
special cases that do not conflict with normal exploitation of the work and do not unreasonably
prejudice the legitimate interests of the right holder.WT/REG125/1
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Article 15-14
Term of Protection of Copyright and Related Rights
1. The term of protection of an author’s work shall last for life and for a minimum of 50 years
after the author’s death.
2. Where the term of protection of a work is to be calculated on a basis other than the life of a
natural person, the term shall be not less than 50 years counted from the end of the calendar year of
the authorized publication of the work or, failing such authorized publication, 50 years from the
making of the work counted the end of the calendar year of making.
3. The term of protection for the rights of performers and producers of sound recordings shall
not be less than 50 years counted from the end of the calendar year of interpretation or fixation.
4. The term of protection for broadcasting organizations shall be a minimum of 25 years counted
from the end of the calendar year in which the first broadcast was made.
Section C - Trademarks
Article 15-15
Protection
1. A trademark consists of any sign, or any combination of signs, capable of distinguishing the
goods or services of one enterprise from those of another. Such signs may be registered as trademarks,
particularly words, including personal names, letters, numerals, figurative elements, combinations ofcolours and any combination of signs. Where the signs are not intrinsically capable of distinguishing
the relevant goods or services, each Party may make their registration contingent on the distinctive
character they have acquired through use. A Party may require, as a condition for registration, that a
sign be visually perceptible.
2. The Parties may refuse to register trademarks that are contrary to morality or decorum,
reproduce national symbols or mislead the public.
3. The nature of the goods or services to which a trademark is to be applied shall in no case form
an obstacle to the registration of the trademark.
4. Each Party shall publish a trademark either before it is registered or promptly after it is
registered and shall afford a reasonable opportunity for petitions to cancel the registration. In addition,
each Party may afford an opportunity for the registration of a trademark to be opposed.
Article 15-16
Rights Conferred
The owner of a registered trademark shall have the exclusive right to prevent all third parties
not having the owner’s consent from using in the co urse of trade identical or similar signs for goods
or services which are identical or similar to those in respect of which the trademark is registeredwhere such use would result in a likelihood of confusion. In case of the use of an identical sign for
identical goods or services, a likelihood of confusion shall be presumed. The rights described above
shall not prejudice any existing prior rights, nor shall they affect the possibility of the Parties making
rights available on the basis of use.WT/REG125/1
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Article 15-17
Well-Known Trademarks
1. Each Party shall apply Article 6 bis of the Paris Convention to service marks.
2. A trademark shall be considered well known in a Party when a given sector of the public or of
commercial circles in the Party knows the trademark as a consequence of commercial activities
undertaken within or outside that Party by a person using the trademark in relation to its goods or
services, and when the mark is known in the territory of the Party as a consequence of promotion or
publicity of the mark.
3. Each Party shall, under its law, provide the means to deny or invalidate registration as a
trademark of signs or figures that are identical or similar to a well-known trademark to be applied to a
good or service in any case in which use of the mark by the person applying for registration could
cause confusion or the risk of association with the person mentioned in paragraph 2, or which takes
unfair advantage of the prestige of the mark. This prohibition shall not apply when the applicant forregistration is the person referred to in paragraph 2.
4. To demonstrate that a trademark is well known, all evidence admitted by the Party in which
the intention is to show that it is well known may be used.
Article 15-18
Exceptions
The Parties may provide limited exceptions to the rights conferred by a trademark, such as
fair use of descriptive terms, provided that such exceptions take account of the legitimate interests of
the owner of the trademark and of third parties.
Article 15-19
Term of Protection
Initial registration, and each renewal of registration of a trademark shall be for a term of no
less than ten years counted from the date on which the application was filed or the date on which it
was granted. The registration of a trademark shall be renewable indefinitely.
Article 15-20
Requirement of Use
1. If use is required by a Party to maintain the registration of a trademark, the registration may
be cancelled only after an uninterrupted period of at least three years of non-use, unless valid reasons
based on the existence of obstacles to such use are shown by the trademark owner. Circumstances
arising independently of the will of  the owner of the trademark which constitute an obstacle to the use
of the trademark, such as import restrictions on or other government requirements for goods or
services protected by the trademark, shall be recognized as valid reasons for non-use.
2. When subject to the control of its owner, use of a trademark by another person shall be
recognized as use of the trademark for th e purpose of maintaining the registration.WT/REG125/1
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Article 15-21
Renewal of a Trademark
Subject to Annex 15-21, if use is required by a Party to renew a trademark, registration shall
not be renewed without evidence of use of the trademark in accordance with the law of each Party.
Article 15-22
Other Requirements
The use of a trademark in the course of trade shall not be unjustifiably encumbered by special
requirements, such as use with another trademark, use in a special form or use in a manner detrimental
to its capability to distinguish the goods or services of one enterprise from those of other enterprises.
Article 15-23
Licensing and Assignment
Each Party may determine conditions on the licensing and assignment of trademarks, it being
understood that the compulsory licensing of trademarks shall not be permitted and that the owner of a
registered trademark shall have the right to assign the trademark with or without the transfer of the
enterprise to which the trademark belongs.
Section D – Designations of Origin
Article 15-24
Designations of Origin
1. Designations of origin shall be governed by the provisions of Annex 15-24.2. The provisions of Article 23 of the TRIPS Agreement shall apply to the designations of origin
set out in Annex 15-24.
Section E – Enforcement of Intellectual Property Rights
Article 15-25
Definitions
For the purposes of this Section:
counterfeit trademark goods  means any goods, including packaging, bearing without
authorization a trademark which is identical to th e trademark validly registered in respect of such
goods, or which cannot be distinguished in its essential aspects from such a trademark, and which
thereby infringes the rights of the owner of the tr ademark in question under the law of the country of
importation;
pirated copyright goods  means any goods which are copies made without the consent of the
right holder or person duly authorized by the right holder in the country of production and which are
made directly or indirectly from an Article where the making of that copy would have constituted an
infringement of a copyright or a related right under the law of the country of importation; andWT/REG125/1
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right holder  includes federations and associations having legal standing to assert such rights.
Article 15-26
General Obligations
1. The Parties shall ensure that enforcement procedures as provided in this Section, regarding
the intellectual property rights referred to in this Chapter, are available under their law so as to permit
effective action to be taken against any act of infringement of such rights, including expeditious
remedies to prevent infringements and remedies which constitute an effective deterrent to further
infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers
to legitimate trade and to provide for safeguards against their abuse.
2. Procedures concerning the enforcement of intellectual property rights shall be fair and
equitable. They shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or
unwarranted delays.
3. Decisions on the merits of a case shall preferably be in writing and state the reasons. They
shall be made available at least to the parties to the proceeding without undue delay. Decisions shall
be based only on evidence in respect of which parties were offered the opportunity to be heard.
4. Parties to a proceeding shall have an opportunity for review by a judicial authority of final
administrative decisions and, subject to jurisdictional provisions in a Party’s law concerning the
importance of a case, of at least the legal aspects of initial judicial decisions on the merits of a case.
However, there shall be no obligation to provide an  opportunity for review of acquittals in criminal
cases.
5. It is understood that this Section does not create any obligation to put in place a judicial
system for the enforcement of intellectual property rights distinct from that for the enforcement of law
in general, nor does it affect the capacity of the Pa rties to enforce their law in general. Nothing in this
Section creates any obligation with respect to the distribution of resources as between enforcement of
intellectual property rights and the enforcement of law in general.
Civil and Administrative Procedure and Remedies
Article 15-27
Fair and Equitable Procedures
The Parties shall make available to right holders civil judicial procedures concerning the
enforcement of any intellectual property right covered by this Chapter. Defendants shall have the right
to written notice which is timely and contains sufficient detail, including the basis of the claims.
Parties shall be allowed to be represented by independent legal counsel, and procedures shall not
impose overly burdensome requirements concerning mandatory personal appearances. All parties tosuch procedures shall be duly entitled to substantiate their claims and to present all relevant evidence.
The procedure shall provide a means to identify and protect confidential information, unless this
would be contrary to existing constitutional requirements.WT/REG125/1
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Article 15-28
Evidence
1. The judicial authorities shall have the authority, where a party has presented reasonably
available evidence sufficient to support its claims and has specified evidence relevant to substantiation
of its claims which lies in the control of the opposing party, to order that this evidence be produced by
the opposing party, subject in appropriate cases to conditions which ensure the protection of
confidential information.
2. In cases in which a party to a proceeding voluntarily and without good reason refuses access
to, or otherwise does not provide necessary information within a reasonable period, or significantlyimpedes a procedure relating to an enforcement action, the Parties may accord judicial authorities the
authority to make preliminary and final determinatio ns, affirmative or negative, on the basis of the
information presented to them, including the complaint or the allegation presented by the party
adversely affected by the denial of access to information, subject to providing the parties an
opportunity to be heard on the allegations or evidence.
Article 15-29
Injunctions
1. The judicial authorities shall have the authority to order a party to desist from an
infringement, inter alia to prevent the entry into the channels of commerce in their jurisdiction of
imported goods that involve the infringement of an intellectual property right, immediately after
customs clearance of such goods. The Parties are not obliged to accord such authority in respect of
protected subject matter acquired or ordered by a person prior to knowing or having reasonablegrounds to know that dealing in such subject matte r would entail the infringement of an intellectual
property right.
2. Notwithstanding the other provisions of this Section and provided that the provisions of
Sections B and C specifically addressing use by governments, or by third parties authorized by a
government, without the authorization of the right holder are complied with, the Parties may limit the
remedies available against such use to payment of adequate compensation to the right holder, basedon the circumstances of each case and taking account of the economic value of the authorization. In
other cases, the remedies under this Section shall apply or, where these remedies are inconsistent with
domestic law, declaratory judgements and adequate compensation shall be available.
Article 15-30
Damages
1. The judicial authorities shall have the authorit y to order the infringer to pay the right holder’s
damages adequate to compensate for the injury  the right holder has suffered because of an
infringement of that person’s intellectual property right by an infringer who knowingly, or with
reasonable grounds to know, engaged in infringing activity.
2. The judicial authorities shall also have the authority to order the infringer to pay the right
holder expenses, which may include appropriate attorney’s fees. In appropriate cases, the Parties mayauthorize the judicial authorities to order recovery of profits or payment of pre-established damages,
or both, even where the infringer did not knowingl y, or with reasonable grounds to know, engage in
infringing activity.WT/REG125/1
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Article 15-31
Other Remedies
In order to create an effective deterrent to infringement, the judicial authorities shall have the
authority to order that goods that they have found to be infringing be, without compensation of any
sort, disposed of outside the channels of commerce in such a manner as to avoid any harm caused to
the right holder, or, unless this would be contrary to existing constitutional requirements, destroyed.
The judicial authorities shall also have the auth ority to order that materials and implements the
predominant use of which has been in the creation of the infringing goods be, without compensation
of any sort, disposed of outside the channels of commerce in such a manner as to minimize the risks
of further infringements. In considering such re quests, the need for proportionality between the
seriousness of the infringement and the remedies ordered as well as the interests of third parties shall
be taken into account. In regard to counterfeit trademark goods, the simple removal of the trademark
unlawfully affixed shall not be sufficient, other than in exceptional cases, to permit release of the
goods into the channels of commerce.
Article 15-32
Right of Information
The Parties may provide that the judicial au thorities shall have the authority, unless this
would be out of proportion to the seriousness of the infringement, to order the infringer to inform the
right holder of the identity of third persons involved in the production and distribution of the
infringing goods or services and of their channels of distribution.
Article 15-33
Indemnification of the Defendant
1. The judicial authorities shall have the authority to order a party at whose request measures
were taken and who has abused enforcement procedures to provide to a party wrongfully enjoined or
restrained adequate compensation for the injury suffered because of such abuse. The judicial
authorities shall also have the authority to order the applicant to pay the defendant expenses, whichmay include appropriate attorney’s fees.
2. In respect of the administration of any law pertaining to the protection or enforcement of
intellectual property rights, the Parties shall only exempt both public authorities and officials from
liability to appropriate remedial measures where actions are taken or intended in good faith in thecourse of the administration of that law.
Article 15-34
Administrative Procedures
To the extent that any civil remedy can be ordered as a result of administrative procedures on
the merits of a case, such procedures shall conform to principles equivalent in substance to those set
forth in Articles 15-27 to 15-33.WT/REG125/1
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Article 15-35
Provisional Measures
1. The judicial authorities shall have the authority to order prompt and effective provisional
measures:
(a) to prevent an infringement of any intellectual property right covered in this Chapter
from occurring, and in particular to preven t the entry into the channels of commerce
in their jurisdiction of goods, including imported goods, immediately after customs
clearance; and
(b) to preserve relevant evidence in regard to the alleged infringement.
2. The judicial authorities shall have the authority to adopt provisional measures inaudita altera
parte where appropriate, in particular where any delay is likely to cause irreparable harm to the rightholder, or where there is a demonstrable risk of evidence being destroyed.
3. The judicial authorities shall have the auth ority to require the applicant to provide any
reasonably available evidence in order to satisfy themselves with a sufficient degree of certainty that
the applicant is the right holder and that the ap plicant’s right is being infringed or that such
infringement is imminent, and to order the applican t to provide a security or equivalent assurance
sufficient to protect the defendant and to prevent abuse.
4. Where provisional measures have been adopted inaudita altera parte, the parties affected shall
be given notice, without delay after the execution of the measures at the latest. A review, including aright to be heard, shall take place upon request of the defendant with a view to deciding, within a
reasonable period after the notification of the measures, whether these measures shall be modified,
revoked or confirmed.
5. The applicant may be required to supply other information necessary for the identification of
the goods concerned by the authority that will execute the provisional measures.
6. Without prejudice to paragraph 4, provisional measures taken on the basis of paragraphs 1
and 2 shall, upon request by the defendant, be revoked or otherwise cease to have effect, if
proceedings leading to a decision on the merits of the case are not initiated within a reasonable period,
to be determined by the judicial authority ordering the measures where a Party’s law so permits or, in
the absence of such a determination, not to exceed 20 working days or 31 calendar days, whichever islonger.
7. Where the provisional measures are revoked or where they lapse due to any act or omission
by the applicant, or where it is subsequently found that there has been no infringement or threat of
infringement of an intellectual property right, the judicial authorities shall have the authority to order
the applicant, upon request of the defendant, to provide the defendant appropriate compensation for
any injury caused by these measures.
8. To the extent that any provisional measure can be ordered as a result of administrative
procedures, such procedures shall conform to principles equivalent in substance to those set forth inthis Article.WT/REG125/1
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Special Requirements Related to Border Measures
Article 15-36
Suspension of Release by Customs Authorities
1. The Parties shall adopt procedures to enable a right holder, who has valid grounds for
suspecting that the importation of counterfeit trademark or pirated copyright goods may take place in
contravention of the holder’s rights, to lodge an application in writing with competent authorities,
administrative or judicial, for the suspension by the customs authorities of the release into free
circulation of such goods. There shall be no obligation to apply such procedures to imports of goods
put on the market in the other Party or in a non-Party country by or with the consent of the rightholder, or to goods in transit.
2. The Parties may enable such an application to be made in respect of goods which involve
other infringements of intellectual property rights, provided that the requirements of Articles 15-36
through 15-45 are met. The Parties may also provide for corresponding procedures concerning thesuspension by the customs authorities of the release of infringing goods destined for exportation from
their territories.
Article 15-37
Application
Any right holder initiating the procedures under Article 15-36 shall be required to provide
adequate evidence to satisfy the competent authorities that, under the laws of the country of
importation, there is prima facie an infringement of the right holder’s intellectual property right and tosupply a sufficiently detailed description of the goods to make them readily recognizable by the
customs authorities. The competent authorities shal l inform the applicant within a reasonable period
whether they have accepted the application and, where determined by the competent authorities, the
period for which the customs authorities will take action.
Article 15-38
Security or Equivalent Assurance
The competent authorities shall have the authority to require an applicant to provide a security
or equivalent assurance sufficient to protect the defendant and the competent authorities and to
prevent abuse. Such security or equivalent assurance shall not unreasonably deter recourse to theseprocedures.
Article 15-39
Notice of Suspension
The importer and the applicant shall be promptly notified of the suspension of the release of
goods pursuant to Article 15-36.
Article 15-40
Duration of Suspension
If, within a period not exceeding 10 working days after the applicant has been served notice
of the suspension, the customs authorities have not  been informed that proceedings leading to aWT/REG125/1
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decision on the merits of the case have been initiated by a party other than the defendant, or that the
duly empowered authority has taken provisional measures prolonging the suspension of the release of
the goods, the goods shall be released, provided that all other conditions for importation or
exportation have been complied with. In appropriate cases, this time-limit may be extended by
another 10 working days. If proceedings leading to a decision on the merits of the case have beeninitiated, a review, including a right to be heard, shall take place upon request of the defendant with a
view to deciding, within a reasonable period, whether these measures shall be modified, revoked or
confirmed. Notwithstanding the above, where the suspension of the release of goods is carried out or
continued in accordance with a provisional judicial measure, the provisions of paragraph 6 of
Article 15-35(6) shall apply.
Article 15-41
Indemnification of the Importer and of the Owner of the Goods
Relevant authorities shall have the authority to  order the applicant to pay the importer, the
consignee and the owner of the goods appropriat e compensation for any injury caused to them
through the wrongful detention of goods or thr ough the detention of goods released pursuant to
Article 15-40.
Article 15-42
Right of Inspection and Information
Without prejudice to the protection of confidential information, the Parties shall provide the
competent authorities the authority to give the ri ght holder sufficient opportunity to have any goods
detained by the customs authorities inspected in or der to substantiate the right holder’s claims. The
competent authorities shall also have authority to give the importer an equivalent opportunity to have
any such goods inspected. Where a positive determination has been made on the merits of a case, the
Parties may provide the competent authorities the au thority to inform the right holder of the names
and addresses of the consignor, the importer and the consignee and of the quantity of the goods in
question.
Article 15-43
Ex Officio Action
Where the Parties require competent authorities to act upon their own initiative and to
suspend the release of goods in respect of which they have acquired prima facie evidence that anintellectual property right is being infringed:
(a) the competent authorities may at any time seek from the right holder any information
that may assist them to exercise these powers;
(b) the importer and the right holder shall be promptly notified of the suspension. Where
the importer has lodged an appeal against the suspension with the competent
authorities, the suspension shall be subject to the conditions set out in Article 15-40;
and
(c) the Parties shall only exempt both public authorities and officials from liability to
appropriate remedial measures where actions are taken or intended in good faith.WT/REG125/1
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Article 15-44
Remedies
Without prejudice to other rights of action open to the right holder and subject to the right of
the defendant to seek review by a judicial authority, the competent authorities shall have the authority
to order the destruction or disposal of infringing goods in accordance with the principles set out in
Article 15-31. In regard to counterfeit trademark goods, the authorities shall not allow the re-
exportation of the infringing goods in an unaltered state or subject them to a different customs
procedure, other than in exceptional circumstances.
Article 15-45
De Minimis Imports
The Parties may exclude from the application of the above provisions small quantities of
goods of a non-commercial nature contained in travellers’ personal luggage or sent in small
consignments.
Article 15-46
Criminal Procedures
The Parties shall provide for criminal procedures and penalties to be applied at least in cases
of wilful trademark counterfeiting or copyright pi racy on a commercial scale. Remedies available
shall include imprisonment and/or monetary fines sufficient to provide a deterrent, consistently with
the level of penalties applied for crimes of a corresponding gravity. In appropriate cases, remediesavailable shall also include the seizure, forfeiture and destruction of the infringing goods and of any
materials and implements the predominant use of which has been in the commission of the offence.
The Parties may provide for criminal procedures and penalties to be applied in other cases of
infringement of intellectual property rights, in particular where they are committed wilfully and on a
commercial scale.
Section F – Final Provisions
Article 15-47
Application of this Chapter
1. This Chapter does not give rise to obligations in respect of acts which occurred before the
date of entry into force of this Agreement.
2. Except as otherwise provided for in this Chap ter, this Chapter gives rise to obligations in
respect of all subject matter existing at the date of entry into force of this Agreement, and which isprotected in a Party on the said date. In respect of this paragraph and paragraph 3, copyright
obligations with respect to existing works shall be  solely determined under Article 18 of the Berne
Convention.
3. There shall be no obligation to restore protection to subject matter which on the date this
Agreement enters into force has fallen into the public domain.WT/REG125/1
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ANNEX 15-21
Renewal of a Trademark
Chile shall adapt its legislation to apply Article 15-21 within no more than five years after this
Agreement enters into force.
ANNEX 15-24
Designations of Origin
1. Chile shall recognize “Tequila” and “Mezcal” as designations of origin to be used exclusively
for originating Mexican products. Accordingly, Chile shall not permit the import, manufacture or sale
of products under the designation of origin “Tequila” or “Mezcal”, unless they have been prepared
and certified in Mexico under the applicable Mexican laws, regulations and standards.
2. Mexico shall recognize “Pisco”, “Pajarete” and “Vino Asoleado” as designations of origin to
be used exclusively for originating Chilean products and wines with a Chilean designation of origin
determined by a bipartite committee, on the basi s of Appendix 15-24, within one year after this
Agreement enters into force. Acco rdingly, Mexico shall not permit the import, manufacture or sale of
products under those designations of origin, unless they have been prepared and certified in Chile
under the applicable Chilean laws. The above is without detriment to rights that Mexico mayrecognize exclusively to Peru, in addition to Chile, with regard to “Pisco”.
APPENDIX 15-24
WINE-PRODUCING
REGIONSUBREGION ZONE AREA
1. Atacama Region Valle de Copiapó
Valle del Huasco
2. Coquimbo Region Valle del Elqui Vicuña
Paiguano
Valle del Limarí Ovalle
Monte Patria
Punitaqui
Río Hurtado
Valle del Choapa Salamanca
Illapel
3. Aconcagua Region Valle del Aconcagua Panquehue
Valle Casablanca
4. Valle Central Region Valle del Maipo Santiago (Peñalolén, La
Florida)
Pirque
Puente Alto
Buin (Paine, San Bernardo)
Isla de Maipo
Talagante (Peñaflor, ElMonte)
Melipilla
Valle del Rapel Valle del Cachapoal Rancagua (Graneros,
Mostazal, Codegua, Olivar)
Requínoa
Rengo (Malloa, Quinta de
Tilcoco)
Peumo (Pichidegua, Las
Cabras, San Vicente)
Valle de Colchagua San FernandoWT/REG125/1
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WINE-PRODUCING
REGIONSUBREGION ZONE AREA
Chimbarongo
Nancagua (Placilla)
Santa Cruz (Chépica)
Palmilla
Peralillo
Valle del Curicó Valle del Teno Rauco (Hualañé)
Romeral (Teno)
Valle del Lontué Molina (Río Claro, Curicó)
Sagrada Familia
Valle del Maule Valle del Claro Talca (Maule, Pelarco)
Pencahue
San Clemente
Valle Loncomilla San Javier
Villa Alegre
Parral (Retiro)
Linares (Yerbas Buenas)
Valle del Tutuvén Cauquenes
5. Southern Region Valle del Itata Chillán (Bulnes, San Carlos)
Quillón (Ranquil, Florida)
Portezuelo (Ninhue,
Quirihue, San Nicolás)
Coelemu (Treguaco)
Valle del Bío-Bío Yumbel (Laja)
Mulchén (Nacimiento,Negrete)
PART SIX – ADMINISTRATIVE AND INSTITUTIONAL PROVISIONS
CHAPTER 16: TRANSPARENCY
Article 16-01
Definitions
For the purposes of this Chapter, an administrative ruling of general application means an
administrative ruling or interpretation that applies to all persons and fact situations that fall generally
within its ambit and that establishes a norm of conduct but does not include:
(a) a determination or ruling made in an administrative proceeding that applies to a
particular person, good or service of the other Party in a specific case;  or
(b) a ruling that adjudicates with respect to a particular act or practice.
Article 16-02
Contact Points
1. Each Party shall designate a contact point to facilitate communications between the Parties on
any matter covered by this Agreement.
2. On the request of the other Party, the contact point shall identify the office or official
responsible for the matter and assist, as necessary, in facilitating communication with the requesting
Party.WT/REG125/1
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Article 16-03
Publication
1. Each Party shall ensure that its laws, regulations, procedures and administrative rulings of
general application respecting any matter covered by this Agreement are promptly published or
otherwise made available in such a manner as to enable the other Party and interested persons to
become acquainted with them.
2. To the extent possible, each Party shall:
(a) publish in advance any such measure that it proposes to adopt; and(b) provide interested persons and the other Party a reasonable opportunity to comment
on such proposed measures.
Article 16-04
Notification and Provision of Information
1. To the extent possible, each Party shall notify the other Party of any proposed or actual
measure that the Party considers might affect or substantially affects the other Party’s interests underthis Agreement.
2. On request of the other Party, a Party shall provide information and respond promptly to
questions pertaining to any actual or proposed measure, whether or not the other Party has been
previously notified of that measure.
3. Any notification or information provided under this Article shall be without prejudice as to
whether the measure is consistent with this Agreement.
Article 16-05
Administrative Proceedings
With a view to administering in a consistent, impartial and reasonable manner all measures of
general application affecting matters covered by this  Agreement, each Party shall ensure that in its
administrative proceedings applying measures referred to in Article 16-03 to particular persons, goods
or services of the other Party in specific cases that:
(a) wherever possible, persons of the other Party that are directly affected by a
proceeding are provided reasonable notice, in accordance with domestic procedures,
when a proceeding is initiated, including a description of the nature of the proceeding,
a statement of the legal authority under which the proceeding is initiated and ageneral description of any issues in controversy;
(b) such persons are afforded a reasonable opportunity to present facts and arguments in
support of their positions prior to any final administrative action, when time, the
nature of the proceeding and the public interest permit; and
(c) its procedures are in accordance with domestic law.WT/REG125/1
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Article 16-06
Review and Appeal
1. Each Party shall establish or maintain judicial or administrative tribunals or procedures for the
purpose of the prompt review and, where warran ted, correction of final administrative actions
regarding matters covered by this Agreement. Such tribunals shall be impartial and independent of the
office or authority entrusted with administrative enforcement and shall not have any substantial
interest in the outcome of the matter.
2. Each Party shall ensure that, in any such tri bunals or procedures, the parties to the proceeding
are provided with the right to:
(a) a reasonable opportunity to support or defend their respective positions; and(b) a decision based on the evidence and submissions of record or, where required by domestic
law, the record compiled by the administrative authority.
3. Each Party shall ensure, subject to appeal or further review as provided in its domestic law,
that such decisions shall be implemented by the offices or authorities.
CHAPTER 17:  ADMINISTRATION OF THE AGREEMENT
Article 17-01
Free Trade Commission
1. The Parties hereby establish the Free Trade Commission, comprising the officials mentioned
in Annex 17-01(1) or their designees.
2. The Commission shall:
(a) supervise the adequate implementation of this Agreement;
(b) evaluate the results of the implementation of this Agreement;
(c) resolve disputes that may arise regarding its interpretation or application;(d) supervise the work of all committees, sub-committees and working groups
established under this Agreement, referred to in Annex 17-01(2); and
(e) consider any other matter that may affect the operation of this Agreement and any
other matter referred to it by the Parties.
3. The Commission may:
(a) establish, and delegate responsibilities to, ad hoc or standing committees or expert
groups;
(b) seek the advice of non-governmental persons or groups;
(c) modify the following in accordance with Annex 17-01(3):
(i) the rules of origin set out in Annex 4-03 (Specific Rules of Origin),WT/REG125/1
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(ii) the terms set out in Annex 3-04(3) (Tariff Reduction Programme) to
accelerate tariff elimination,
(iii) the schedule of products of a Party set out in Annex 3-04(4) (Exceptions) to
include one or more goods on that schedule in Annex 3-04(3) (Tariff
Reduction Programme),
(iv) the Uniform Regulations;  and
(d) take such other action in the exercise of its functions as the Parties may agree.
4. The Commission shall establish its rules and procedures. All decisions of the Commission
shall be taken by mutual agreement.
5. The Commission shall convene at least once a year. The meetings shall be chaired alternately
by each Party.
Article 17-02
The Secretariat
1. The Commission shall establish and oversee a Secretariat comprising national Sections.2. Each Party shall:
(a) establish a permanent office of its Section;(b) be responsible for:
(i) the operation and costs of its Section, and(ii) the remuneration and payment of expenses of panellists, their assistants,
experts and members of the scientific review boards established under thisAgreement, as set out in Annex 17-02;
(c) designate an individual to serve as Secretary for its Section, who shall be responsible
for its administration and management;  and
(d) notify the Commission of the location of its Section’s office.
3. The Secretariat shall:
(a) provide assistance to the Commission;(b) provide administrative assistance to panels established under Chapter 18 (Dispute
Settlement), in accordance with procedures established pursuant to Article 18-10
(Model Rules of Procedure);
(c) as the Commission may direct, support the work of other committees, sub-committees
and groups of experts established under this Agreement;  andWT/REG125/1
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(d) carry out other functions referred by the Commission.
ANNEX 17-01(1)
Members of the Free Trade Commission
For the purposes of Article 17-01, the members of the Free Trade Commission are:
1. For Chile, the Minister of Foreign Relations or his successor.2. For Mexico, the Secretary of Trade and Industrial Development or his successor.
ANNEX 17-01(2)
Committees and Sub-Committees
Committee on Trade in Goods (Article 3-16)
Sub-Committee on Customs (Article 3-16)
Sub-Committee on Agriculture (Article 3-16)
Sub-Committee on Rules of Origin (Article 3-16)
Sub-Committee on Non-Agricultural Goods (Article 3-16)
Committee on Sanitary and Phytosanitary Measures (Article 7-11)
Sub-Committee on Agricultural Chemicals (Article 7-11)
Sub-Committee on Food Safety (Article 7-11)
Sub-Committee on Fisheries (Article 7-11)Sub-Committee on Animal Health (Article 7-11)
Sub-Committee on Plant Health (Article 7-11)
Committee on Standards-Related Measures (Article 8-11)
Sub-Committee on Telecommunications Standards (Article 8-11)
Committee on Investment and Cross-Border Trade in Services (Article 9-40)Committee on Air Transportation (Article 11-04)Committee on Temporary Imports (Article 13-06)
Committee on Trade and Competition (Article 14-05)
Advisory Committee on Private Commercial Disputes (Article 18-19)
ANNEX 17-01(3)
Implementation of Modifications Approved by the Commission
The Parties shall implement the decisions of the Commission referred to in
Article 17-01(3)(c) under their domestic law, through the following procedure:
1. For Chile, under a supreme decree formalized through the Office of the Comptroller General
(“Contraloría General de la República”) and published in the official journal.WT/REG125/1
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2. For Mexico, through publication in the official journal.
ANNEX 17-02
Remuneration and Payment of Expenses
1. The Commission shall establish the amounts of remuneration and expenses that will be paid
to the panellists, their assistants, experts and members of scientific review boards.
2. The remuneration of panellists, their assistants, experts and members of scientific review
boards, their travel and lodging expenses, and all general expenses of panels shall be borne equally bythe Parties.
3. Each panellist, assistant, expert and member of scientific review boards shall keep a record
and render a final account of the person’s time and expenses, and the panel shall keep a similar record
and render a final account of all general expenses.
CHAPTER 18: DISPUTE SETTLEMENT
Section A – Dispute Settlement
Article 18-01
Cooperation
The Parties shall at all times endeavour to agree on the interpretation and application of this
Agreement, and shall make every attempt through cooperation and consultations to arrive at a
mutually satisfactory resolution of any matter that might affect its operation.
Article 18-02
Scope and Coverage
Except as otherwise provided in this Agreement, the provisions of this Chapter shall apply:(a) with respect to the avoidance or settlement of all disputes between the Parties
regarding the application or interpretation of this Agreement; and
(b) wherever a Party considers that an actual or proposed measure of the other Party is or
would be inconsistent with the obligations of this Agreement or cause nullification or
impairment in the sense of Annex 18-02.
Article 18-03
WTO Dispute Settlement
1. Any matter arising under both this Agreement, the WTO Agreement and any agreement
negotiated thereunder may be settled in either forum at the discretion of the complaining Party.
2. Once dispute settlement proceedings have been initiated under Article 18-05 or under the
WTO Agreement, the forum selected shall be used to  the exclusion of the other, unless a Party makes
a request pursuant to paragraph 3.WT/REG125/1
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3. In any dispute referred to in paragraph 1, where the responding Party claims that its action is
subject to Article 1-06 (Relation to Environmental and Conservation Agreements) and requests in
writing that the matter be considered under this Ag reement, the complaining Party may, in respect of
that matter, thereafter have recourse to dispute settlement procedures solely under this Agreement.
4. The responding Party shall deliver a copy of a request made pursuant to paragraph 3 to the
other Party and its Section of the Secretariat. Where the complaining Party has initiated dispute
settlement proceedings regarding any matter subject to paragraph 3, the responding Party shall deliver
its request no later than 15 days thereafter. On re ceipt of such request, the complaining Party shall
promptly withdraw from participation in thos e proceedings and may initiate dispute settlement
procedures under Article 18-05.
5. For purposes of this Article, dispute settlement proceedings under the WTO Agreement are
deemed to be initiated by a Party’s request for a panel, such as under Article 6 of the Understanding
on Rules and Procedures Governing the Settlement of Disputes, which is part of the WTO Agreement.
Consultations
Article 18-04
Consultations
1. A Party may request in writing consultations with the other Party regarding any actual or
proposed measure or any other matter that it considers might affect the operation of this Agreement.
2. The requesting Party under paragraph 1 shall deliver the request to its Section of the
Secretariat and the other Party.
3. Consultations on matters regarding perishab le agricultural goods shall commence within
15 days of the date of delivery of the request.
4. The Parties shall:
(a) provide information to enable an examination of how the actual or proposed measure
or other matter might affect the operation of this Agreement;  and
(b) treat any confidential information exchanged in the course of consultations on the
same basis as the Party providing the information.
5. The Parties, by mutual agreement, may directly request that the Commission meet in
accordance with Article 18-05, even where the consultations provided for in this Article have not been
held.
Initiation of Procedures
Article 18-05
Commission - Good Offices, C onciliation and Mediation
1. If the Parties fail to resolve a matter pursuant to Article 18-04 within:
(a) 30 days of delivery of a request for consultations,WT/REG125/1
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(b) 15 days of delivery of a request for consultations in matters regarding perishable
agricultural goods, or
(c) such other period as they may agree,
either Party may request in writing a meeting of the Commission.
2. A Party may also request in writing a meeting of the Commission where:
(a) it has initiated dispute settlement proceedings under the WTO Agreement regarding
any matter subject to Article 18-03(3) and has received a request pursuant to
Article 18-03(4) for recourse to dispute sett lement procedures under this Chapter; or
(b) consultations have been held pursuant to Article 7-12(4) (Technical Consultations).
3. The requesting Party shall state in the request the measure or other matter complained of and
indicate the provisions of this Agreement that it considers relevant, and shall deliver the request to itsSection of the Secretariat and the other Party.
4. Unless it decides otherwise, the Commission shall convene within 10 days of delivery of the
request and shall endeavour to resolve the dispute promptly.  The Commission may:
(a) call on such technical advisers or create such expert groups as it deems necessary,
(b) have recourse to good offices, conciliation, mediation or such other dispute resolution
procedures, or
(c) make recommendations,
as may assist the Parties to reach a mutually satisfactory resolution of the dispute.5. Unless it decides otherwise, the Commission shall consolidate two or more proceedings
before it pursuant to this Article regarding th e same measure. The Commission may consolidate two
or more proceedings regarding other matters before it pursuant to this Article that it determines areappropriate to be considered jointly.
Panel Proceedings
Article 18-06
Request for an Arbitral Panel
1. If the Commission has convened pursuant to Article 18-05(4) and the matter has not been
resolved within:
(a) 30 days thereafter,
(b) 30 days after the Commission has convened in respect of the matter most recently
referred to it, where proceedings have been consolidated pursuant to Article 18-05(5),
or
(c) such other period as the Parties may agree,
a Party may request in writing the establishment of  an arbitral panel. The requesting Party shall
deliver the request to its Section of the Secretariat and the other Party.WT/REG125/1
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2. On delivery of the request, the Commission shall establish an arbitral panel.
3. Unless otherwise agreed by the Parties, the panel shall be established and perform its
functions in a manner consistent with the provisions of this Chapter.
Article 18-07
Roster
1. By agreement, the Parties shall establish by 1 October 1998 at the latest a roster of up to
20 individuals, four whom must not be citizens of either of the Parties, who are willing and able toserve as panellists. The roster may be modified every three years.
2. Roster members shall:
(a) have expertise or experience in law, international trade, other matters covered by this
Agreement or the resolution of disputes arising under international trade agreements;
(b) be chosen strictly on the basis of objectivity, reliability and sound judgement;
(c) be independent of, and not be affiliated with or take instructions from, any Party; and(d) comply with a code of conduct to be established by the Commission.
Article 18-08
Qualifications of Panellists
1. All panellists shall meet the qualifications set out in Article 18-07(2).
2. Individuals may not serve as panellists for a dispute in which they have participated pursuant
to Article 18-05(4).
Article 18-09
Panel Selection
1. The panel shall comprise five members.2. The Parties shall endeavour to agree on the chair of the panel within 15 days of the delivery of
the request for the establishment of the panel. If th e Parties are unable to agree on the chair within this
period, the Party chosen by lot shall select within five days as chair an individual who is not a citizen
of the Party making the selection.
3. Within 15 days of selection of the chair, each Party shall select two panellists who are citizens
of the other Party.
4. If a Party fails to select its panellists within the period established in paragraph 3, such
panellists shall be selected by lot from among the roster members who are citizens of the other Party.
5. Panellists shall normally be selected from the roster. A Party may exercise a peremptory
challenge against any individual not on the roster who is proposed as a panellist by the other Party
within 15 days after the individual has been proposed.WT/REG125/1
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6. If a Party believes that a panellist is in violation of the code of conduct, the Parties shall
consult and if they agree, the panellist shall be removed and a new panellist shall be selected in
accordance with this Article.
Article 18-10
Model Rules of Procedure
1. The Commission shall establish, by 1 October 1998 at the latest, Model Rules of Procedure,
in accordance with the following principles:
(a) the procedures shall assure a right to at least one hearing before the panel as well as
the opportunity to provide initial and rebuttal written submissions;  and
(b) the panel’s hearings, deliberations and initial report, and all written submissions to
and communications with the panel shall be confidential.
2. Unless the Parties otherwise agree, the panel shall conduct its proceedings in accordance with
the Model Rules of Procedure.
3. The Commission may amend from time to time the Model Rules of Procedure referred to in
paragraph 1.
4. Unless the Parties otherwise agree within 20 days from the date of the delivery of the request
for the establishment of the panel, the terms of reference shall be:
“To examine, in the light of the relevant prov isions of the Agreement, the matter referred to
the Commission, as set out in the request for a Commission meeting, and to issue the reports
referred to in Articles 18-13 and 18-14.”
5. If the complaining Party wishes to argue that a matter has nullified or impaired benefits, the
terms of reference shall so indicate.
6. If a Party wishes the panel to make findings as to the degree of adverse trade effects on a
Party of any measure found not to conform with the obligations of the Agreement or to have caused
nullification or impairment in the sense of Annex 18-02, the terms of reference shall so indicate.
Article 18-11
Role of Experts
On request of a Party, or on its own initiative, the panel may seek information and technical
advice from any person or body that it deems appropriate.
Article 18-12
Scientific Review Boards
1. On request of a Party or, unless the Parties disapprove, on its own initiative, the panel may
request a written report of a scientific review board on any factual issue concerning environmental,
health, safety or other scientific matters raised by a Party in a proceeding, subject to such terms and
conditions as the Parties may agree.WT/REG125/1
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2. The board shall be selected by the panel from among highly qualified, independent experts in
the scientific matters, after consultations with the Parties and in accordance with the Model Rules of
Procedure.
3. The Parties shall be provided:
(a) advance notice of, and an opportunity to provide comments to the panel on, the
factual issues to be referred to the board;  and
(b) a copy of the board’s report and an opportunity to provide comments on the report to
the panel.
4. The panel shall take the board’s report and any comments by the Parties on the report into
account in the preparation of its report.
Article 18-13
Initial Report
1. Unless the Parties otherwise agree, the panel shall base its initial report on the submissions
and arguments of the Parties and on any information before it pursuant to Articles 18-11 and 18-12.
2. Unless the Parties otherwise agree, the panel shall, within 90 days after the last panellist is
selected, present to the Parties an initial report containing:
(a) findings of fact, including any findings pursuant to a request under Article 18-10(6);
(b) its determination as to whether the measure at issue is or would be inconsistent with
the obligations of this Agreement or cause nullification or impairment in the sense of
Annex 18-02, or any other determination requested in the terms of reference; and
(c) its recommendations, if any, for resolution of the dispute.
3. Panellists may furnish separate opinions on matters not unanimously agreed.4. A Party may submit written comments to the panel on its initial report within 14 days of
presentation of the report.
5. In such an event, and after considering such written comments, the panel, on its own initiative
or on the request of a Party, may:
(a) make any further examination that it considers appropriate; and
(b) reconsider its report.
Article 18-14
Final Report
1. The panel shall present to the Commission a final report, including any separate opinions on
matters not unanimously agreed, within 30 days of presentation of the initial report, unless the Parties
otherwise agree.
2. The Parties may send written comments on the final report to the Commission.WT/REG125/1
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3. No panel may, either in its initial report or its final report, disclose which panellists are
associated with majority or minority opinions.
4. Unless the Commission decides otherwise, the final report of the panel shall be published
15 days after it is transmitted to the Commission.
Implementation of Panel Final Reports
Article 18-15
Implementation of Final Reports
1. The final report of the panel shall be binding on the Parties. Unless the Parties otherwise
agree, they shall implement the final report in the terms and conditions ordered in it.
2. Where a final report by an arbitral panel finds that the measure is non-conforming with this
Agreement or causes nullification or impairment in the sense of Annex 18-02., the Party complained
against shall, wherever possible, not implement the measure or remove it.
Article 18-16
Non-Implementation - Suspension of Benefits
1. The complaining Party may suspend application of benefits of equivalent effect to the Party
complained against if the panel determines:
(a) that a measure is inconsistent with the obligations of this Agreement and the Party
complained against fails to comply with the final report within 30 days of its receipt;
or
(b) that a measure is the cause nullification or impairment in the sense of Annex 18-02
and the Parties are unable to reach a mutually satisfactory settlement of the dispute
within 30 days of receipt of the final report.
2. Benefits shall be suspended until such time as the Party complained against complies with the
final report of the arbitral panel or until the Parties reach a mutually satisfactory settlement of the
dispute.
3. In considering what benefits to suspend pursuant to paragraph 1:
(a) the complaining Party should first seek to suspend benefits in the same sector or
sectors as that affected by the measure or other matter that the panel has found to be
inconsistent with the obligations of this Agreement or to have caused nullification orimpairment in the sense of Annex 18-02; and
(b) if the complaining Party considers that it is not practicable or effective to suspend
benefits in the same sector or sectors, it may suspend benefits in other sectors.
4. On the written request of a Party delivered to the other Party and its Section of the Secretariat,
the Commission shall establish a panel to determine whether the level of benefits suspended by a
Party pursuant to paragraph 1 is manifestly excessive.WT/REG125/1
Page 155
5. The panel proceedings under paragraph 4 shall be conducted in accordance with the Model
Rules of Procedure. The panel shall present its determination within 60 days after the last panellist is
selected or such other period as the Parties may agree.
Section B - Domestic Proceedings and Private Commercial Dispute Settlement
Article 18-17
Referrals of Matters from Judicial or Administrative Proceedings
1. If an issue of interpretation or application of this Agreement arises in any domestic judicial or
administrative proceeding of a Party, that the other Party considers would merit its intervention, or if a
court or administrative body of a Party solicits the views of the other Party, the Party in whose
territory the body is located shall notify the other Party and its Section of the Secretariat.  The
Commission shall endeavour to agree on an appropriate response as expeditiously as possible.
2. The Party in whose territory the court or administrative body is located shall submit any
agreed interpretation of the Commission to the court or administrative body in accordance with the
rules of that forum.
3. If the Commission is unable to agree, each Party may submit its own views to the court or
administrative body in accordance with the rules of that forum.
Article 18-18
Private Rights
Neither Party may provide for a right of action under its domestic law against the other Party
on the ground that a measure of the other Party is inconsistent with this Agreement.
Article 18-19
Alternative Dispute Resolution
1. Each Party shall, to the maximum extent possible, encourage and facilitate the use of
arbitration and other means of alternative dispute resolution for the settlement of international
commercial disputes between private parties in the free trade area.
2. Each Party shall provide appropriate procedures to ensure observance of agreements to
arbitrate and for the recognition and enforcement of arbitral awards in such disputes.  To this end, the
Parties shall conform to the 1958 United Nations Convention on the Recognition and Enforcement of
Foreign Arbitral Awards or the 1975 Inter-Amer ican Convention on International Commercial
Arbitration.
3. The Commission shall establish an Advisory Committee on Private Commercial Disputes
comprising persons with expertise or experience in the resolution of private international commercial
disputes. The Committee shall report and provide recommendations to the Commission on general
issues referred to it by the Commission respecting the availability, use and effectiveness of arbitrationand other procedures for the resolution of such disputes in the free trade area.WT/REG125/1
Page 156
ANNEX 18-02 NULLIFICATION AND IMPAIRMENT
1. If a Party considers that any benefit it could reasonably have expected to accrue to it under
any provision of:
(a) Part Two (Trade in Goods),
(b) Part Three (Technical Standards),
(c) Chapter 10 (Cross-Border Trade in Services), or
(d) Chapter 15 (Intellectual Property),
is being nullified or impaired as a result of the application of any measure that is not inconsistent with
this Agreement, the Party may have recourse to dispute settlement under this Chapter.
2. A Party may not invoke:
(a) paragraph 1(a) or (b), to the extent that the benefit arises from any cross-border trade
in services provision of Part Two (Trade in Goods) or Three (Technical Standards),
(b) paragraph 1(c), or(c) paragraph 1(d),
with respect to any measure subject to an ex ception under Article 19-02 (General Exceptions).
CHAPTER 19: EXCEPTIONS
Article 19-01
Definitions
For the purposes of this Chapter:international capital transactions  means “international capital transactions” as defined
under the Articles of Agreement of the IMF;
IMF  means the International Monetary Fund;
payments for current international transactions  means “payments for current international
transactions” as defined under the Articles of Agreement of the IMF;
tax convention  means a convention for the avoidance of double taxation or other
international taxation agreement or arrangement;
taxes  and taxation measures  do not include:
(a) a “customs duty” as defined in Article 2-01 (Definitions of General Application);  or(b) the measures listed in exceptions (b), (c) and (d) of that definition;  and
transfers means international transactions and related international transfers and payments.WT/REG125/1
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Article 19-02
General Exceptions
1. Article XX of the GATT 1994 and its interpretative notes are incorporated into and made part
of this Agreement for the purposes of:
(a) Part Two (Trade in Goods), except to the extent that a provision of that Part applies to
services or investment;
(b) Chapter 7 (Sanitary and Phytosanitary Measures), except to the extent that a provision
of that Chapter applies to services or investment; and
(c) Chapter 8 (Standardization-Related Measures), except to the extent that a provision of
that Chapter applies to services.
2. Article XIV (a), (b) and (c) of GATS, is incorporated into and made part of this Agreement
for the purposes of:
(a) Part Two (Trade in Goods), to the extent that a provision of that Part applies to
services;
(b) Part Three (Technical Standards);
(c) Chapter 10 (Cross-Border Trade in Services);(d) Chapter 11 (Air Transportation Services); and(e) Chapter 12 (Telecommunications).
Article 19-03
National Security
1. Nothing in this Agreement shall be construed:
(a) to require either Party to furnish or allow access to any information the disclosure of
which it determines to be contrary to its essential security interests;
(b) to prevent either Party from taking any actions that it considers necessary for the
protection of its essential security interests:
(i) relating to the traffic in arms, ammunition and implements of war and to such
traffic and transactions in other goods, materials, services and technologyundertaken directly or indirectly for the purpose of supplying a military or
other security establishment,
(ii) taken in time of war or other emergency in international relations, or
(iii) relating to the implementation of national policies or international agreements
respecting the non-proliferation of nuclear weapons or other nuclear
explosive devices;  orWT/REG125/1
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(c) to prevent either Party from taking action in pursuance of its obligations under the
United Nations Charter for the maintenance of international peace and security.
Article 19-04
Exceptions to Disclosure of Information
Nothing in this Agreement shall be construed to require a Party to furnish or allow access to
information the disclosure of which would impede co mpliance with or be contrary to its Constitution
or laws protecting personal privacy or the financial affairs and accounts of individual customers of
financial institutions.
Article 19-05
Taxation
1. Except as set out in this Article, nothing in this Agreement shall apply to taxation measures.2. Nothing in this Agreement shall affect the rights and obligations of either Party under any tax
convention. In the event of any inconsistency betw een this Agreement and any such convention, that
convention shall prevail to the extent of the inconsistency.
3. Notwithstanding paragraph 2:
(a) Article 3-03 (National Treatment) and such other provisions of this Agreement as are
necessary to give effect to that Article shall apply to taxation measures to the same
extent as does Article III of the GATT 1994;  and
(b) Article 3-11 (Export Taxes) shall apply to taxation measures.
4. Article 9-11 (Expropriation and Compensation) shall apply to taxation measures except that
no investor may invoke that Article as the basis for a claim under Article 9-17 (Claim by an Investor
of a Party on Its Own Behalf) or 9-18 (Claim by an Investor of a Party on Behalf of an Enterprise),
where it has been determined pursuant to this paragraph that the measure is not an expropriation. Theinvestor shall refer the issue of whether the measure is not an expropriation for a determination to the
appropriate competent authorities set out in Annex 19-05 at the time that it gives notice under
Article 9-20 (Notice of Intent to Submit a Claim to Arbitration). If the competent authorities do not
agree to consider the issue or, having agreed to consider it, fail to agree that the measure is not an
expropriation within a period of six months of such referral, the investor may submit its claim toarbitration under Article 9-21 (Submi ssion of a Claim to Arbitration).
Article 19-06
Balance of Payments
1. Nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining
measures that restrict transfers where the Party experiences serious balance of payments difficulties,
or the threat thereof, and such restrictions are consistent with this Article.
2. As soon as practicable after a Party imposes a measure under this Article, the Party shall:
(a) submit any current account exchange restrictions to the IMF for review under
Article VIII of the Articles of Agreement of the IMF;WT/REG125/1
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(b) enter into good faith consultations with the IMF on economic adjustment measures to
address the fundamental underlying economic problems causing the difficulties;  and
(c) adopt or maintain economic policies consistent with such consultations.
3. A measure adopted or maintained under this Article shall:
(a) avoid unnecessary damage to the commercial, economic or financial interests of the
other Party;
(b) not be more burdensome than necessary to deal with the balance of payments
difficulties or threat thereof;
(c) be temporary and be phased out progressively as the balance of payments situation
improves;
(d) be consistent with paragraph 2(c) and with the Articles of Agreement of the IMF;
and
(e) be applied on a national treatment or most-favoured-nation treatment basis,
whichever is better.
4. A Party may adopt or maintain a measure under this Article that gives priority to services that
are essential to its economic programme, provided that a Party may not impose a measure for the
purpose of protecting a specific industry or sector unless the measure is consistent with paragraph 2(c)
and with Article VIII(3) of the Articles of Agreement of the IMF.
5. Restrictions imposed on transfers:
(a) where imposed on payments for current international transactions, shall be consistent
with Article VIII(3) of the Articles of Agreement of the IMF;
(b) where imposed on international capital transactions, shall be consistent with
Article VI of the Articles of Agreement of the IMF and be imposed only inconjunction with measures imposed on current international transactions under
paragraph 2(a);
(c) where imposed on transfers covered by Article 9-10 (Transfers) and transfers related
to trade in goods, may not substantially impede transfers from being made in a freelyusable currency at a market rate of exchange; and
(d) may not take the form of tariff surcharges, quotas, licences or similar measures.
ANNEX 19-05
Competent Authorities
For purposes of Article 19-05 competent authority  means:
1. In the case of Chile, the Director of the Internal Revenue Service, Ministry of Finance
(“Director del Servicio de Impuestos Internos, Ministerio de Hacienda”) or his successor.
2. In the case of Mexico, the President of the Tax Administration System (“Presidente del
Sistema de Administración Tributaria”) or his successor.WT/REG125/1
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CHAPTER 20:  FINAL PROVISIONS
Article 20-01
ANNEXES
The Annexes constitute integral parts of this Agreement.
Article 20-02
Amendments
1. The Parties may agree on any modification of or addition to this Agreement.2. When so agreed, and approved in accordance with the applicable legal procedures of each
Party, a modification or addition shall enter into force and constitute an integral part of this
Agreement.
Article 20-03
Convergence
The Parties shall promote the convergence of this Agreement with other integration
agreements of the Latin American countries, in ac cordance with the mechanisms established in the
Montevideo Treaty 1980.
Article 20-04
Duration and Entry into Force
1. This Agreement shall have an indefinite duration.
2 The Parties shall undertake the necessary legal procedures, including an exchange of
communications accrediting that the legal formalit ies have concluded, to enable this Agreement to
enter into force on 1 October 1998. Otherwise, the Ag reement shall enter into force 30 days after the
exchange.
Article 20-05
Reservations
This Agreement shall not be subject to reservations or interpretative statements on the
occasion of ratification.
Article 20-06
Accession
1. In compliance with the Montevideo Treaty 1980, this Agreement is open to accession, after
negotiation, to the other member countries of the Latin American Integration Association.
2. Accession shall be formalized once the terms have been negotiated by the Parties and the
acceding country, through an Additional Protocol to this Agreement, which shall enter into force
30 days after it is deposited at the General Secretariat of the Latin American Integration Association.WT/REG125/1
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Article 20-07
Termination
1. Either Party may terminate this Agreement. Termination shall be effective 180 days after
notice to the other Party unless the Parties agree to a different period.
2. Regardless of whether a Party has terminated the Agreement, in the event of accession by a
country or group of countries, as established in Article 20-06, it shall remain in force for the other
Parties.
Article 20-08
Future Negotiations
Unless otherwise agreed, the Commission shall:
(a) begin negotiations on a chapter on financial services no later than 30 June 1999, at
which time it shall appoint negotiators and establish appropriate procedures;
(b) begin negotiations to reciprocally eliminate antidumping duties, one year after this
Agreement comes into force at which time it shall appoint negotiators and establishappropriate procedures;  and
(c) begin negotiations on a chapter on government procurement one year after this
Agreement comes into force, at which time it shall appoint negotiators and establish
appropriate procedures.
Article 20-09
Cooperation on Rules of Origin
For closer trade integration and in accordance with Article 1-01 (Establishment of the Free
Trade Zone), 1-03 (Relation to Other Interna tional Agreements) and 1-04 (Observance of the
Agreement), the Parties shall seek to hold negotiations with non-member countries with which both
Parties have entered into trade agreements similar to this Agreement, to study and establish
mechanisms to achieve joint harmonization of the rules of origin.
Article 20-10
Revocations and Transitory Provisions
1. The Parties revoke ECA No. 17. However, with  respect to Chapter 5 (Customs Procedures),
importers may request that ECA No. 17 be applied for 30 days after this Agreement enters into force.
To that effect, the certificates of origin issued  under ECA No. 17 shall have been completed prior to
the entry into force of this Agreement, be in effect and be made use of within that period.
2. With regard to Chapter 4 (Rules of Origin), for goods classified in subheadings 8422.40 and
8431.43, the applicable regional value content shall be determined in accordance with the following
timetable:
(a) during the first year this Agreement is in force, forty-five per cent based on the
transaction value method or thirty-six per cent based on the net cost method;WT/REG125/1
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(b) during the second year this Agreement is in force, forty-six and one half per cent
based on the transaction value method or thirty-eight per cent based on the net cost
method;  and
(c) during the third year this Agreement is in  force, the regional value content established
in Annex 4-03 (Specific Rules of Origin) shall be applied.
3. In the event that the roster referred to in Article 11-04(2)(c) (Dispute Settlement) has not been
established, each Party shall appoint one panellist and the third shall be appointed by mutual
agreement. Where a panel is not established in accordance with this paragraph within the term set out
in Article 18-09 (Panel Selection), on the request of either of the Parties, the President of the Council
of the International Civil Aviation Organization shall appoint the remaining panellists, following thatorganization’s procedures.
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