WT/REG403/2  
 
20 October  2020 
(20-7264) Page: 1/6 
Committee on Regional Trade Agreements  Original: English /Spanish  
 
 
COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT BETWEEN  
CHILE  AND INDONESIA (GOODS ) 
QUESTIONS AND REPLIES  
 The following communication, dated 16 October  2020, is being circulated at the request of the 
delegations of  Chile and Indonesia . 
 
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Question s from the delegation of  Brazil  
 
Structure of the Agreement  
 
1.1.  Concerning paragraph 2.4, do the Parties also plan to include a chapter on 
investments?  
Response from the Parties  
 
 Article 14.6 of the Agreement provides the possibility  to negotiate an Investment Chapter.  
The Parties do not intend at the present time to initiate negotiation on investment.  
 
Liberalization of trade and tariff lin es 
 
1.2.  Regarding paragraph 3.8, could the Parties please clarify if there has been any 
unilateral acceleration of the liberalization programme so far, or if they intend to do so?  
Response from the Parties  
 
 The Parties have not executed any unilateral acceleration from its Tariff Reduction/Elimination 
Schedule. There is no intention from the Parties at present to do so.  
 
Rules of origin  
 
1.3.  Regarding paragraph 3.23, have the Parties already started negotiations with other 
countries with the aim of establishing provisions regarding accumulation with third 
parties? If they have, with which countries?  
Response from the Parties  
 
 The Parties have not started any discussion or negotiation to start negotiations with ot her 
countries regarding paragraph 3.23.  
 
Technical barriers to trade  
 
1.4.  Regarding paragraph 3.34, have the Parties concluded implementing arrangements 
for TBT issues? If so, are they publicly available?  
 
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  Response from the Parties  
 
 The Parties have not yet initiated any discussions for implementing arrangements for TBT 
issues.  
 
Customs -related procedures and trade facilitation  
 
1.5.  Regarding section 3.5.5, could the Parties specify which provisions of the Agreement 
are TFA plus?  
Response from the Parties  
 
 It is important to note that the TFA entered into force on 22 February 2017 after two -thirds 
of the WTO membership completed thei r domestic ratification process. Chile ratified on November 
2016 and Indonesia ratified in December 2017. Meanwhile, CEPA negotiations were initiated in 2014, 
resumed in March 2017, and was finally signed in December 2017. This means that the TFA was not 
necessarily a worldwide benchmark at the time that the negotiation of the Agreement took place.  
 
 The main objective of the Chapter on Customs Procedures and Cooperation are to: (a) simplify 
and harmonize to extent possible customs procedures  of the Parties, (b) ensure  consistency, 
predictability and transparency in the application of customs laws  of the Parties, (c) ensure efficient 
and expeditious release and clearance of goods; and (d) facilitate trade between the Parties. Among 
others, the Chapter contains disciplines on risk assessment, advance rulings, as well as cooperation. 
Furthermore, the disciplines contained in the Agreement ensure that the customs -related procedures 
of each Party are consistent and transparent, as well as promote th at the procedures adopted by 
each Customs Authority comply with the standards and practices of the World Customs Organization.  
 
Competition  
 
1.6.  In regard to paragraph 4.25, why is there no Chapter or Section on Competition 
themes? Do the Parties intend to inc lude Competition in the Agreement, in the future? If 
so, under which approach?  
Response from the Parties  
 
 There is no particular chapter regarding Competition in the Agreement. However, in reference 
to Article 9.4 (l): fields of cooperation, the Parties a re open to any cooperation in the area 
competition policy in the future . 
 
Question s from the delegation of  Canada  
 
Structure of the Agreement  
 
1.7.  Paragraph 2.4 of the factual presentation states: " According to Article 14.6, and 
unless agreed otherwise by them, the Parties shall negotiate trade in services and 
investment after the entry into force of the Agreement. The result of these negotiations 
shall form an integral part of the Agreement .7" 
 Footnote 7: "The Parties indicate that they have agreed to hold the first round of 
negotiations on updating the Agreement to include a trade in services Chapter no later 
than the fourth quarter of 2020."  
 
a. Are the Parties on track to begin negotiations on a trade in services chapter in 
2020 as mentioned?  
Response from the Parties  
 
 The Parties are preparing a Joint Statement to launch a bilateral trade in services negotiations. 
The launching of the trade in services negotiations is scheduled to be held on the last quarter of 
2020. The first round of negotiation will be conducted after the launching and both Parties will start 
discussing a draft of scoping paper to be agreed upon.  
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  b. Given that the commitment in Article 14.6 of the agreement is to nego tiate 
services and investment chapters following the entry into force of the CEPA, is 
there also a set timeline for the first round of negotiations towards an investment 
chapter and, if not, what is the rationale to move ahead with the services 
discussions  first?  
Response from the Parties  
 
 The Parties do not intend at the present time to initiate negotiation on investment . The Parties 
agreed to start the Trade in Services Chapter negotiations, considering the opportunities and benefits 
of liberalizing the cross-border trade in services. This process is relevant in a post -pandemic scenario 
where the trade in services has been highlighted as a priority for economic recovery.  
 
c. Have the Parties had a discussion to date regarding the scope and types of 
provision s that will be negotiated to liberalize trade in services and investment? 
For instance, will these discussions cover area such as the movement of natural 
persons, telecommunications, electronic -commerce and financial services?  
Response from the Parties  
 
 At this stage the Parties have not initiated discussions for the content of the scoping paper for 
the Trade in Services negotiation.  These issues may be discussed  by the Parties at the first services 
negotiation meeting . 
 
Sanitary and phytosanitary measures  
 
1.8.  Paragraph 3.30 of the factual presentation states: "On request by a Party, 
consultations on any SPS matter are to take place under the Sub -Committee on sanitary 
and phytosanitary measures established under Article 6.10. Assistance i s provided by the 
contact points established under Article 6.11. If consultations fail to resolve the matter, 
the dispute settlement procedure contained in Chapter 12 may be used."  
 Canada would be interested in knowing whether any issues have been referre d to 
the Dispute Settlement procedure.  
 
Response from the Parties  
 
 The Parties have not raised issues regarding SPS matters.  
 
Environment  
 
1.9.  Paragraph 4.26 of the factual presentation – Environment (Article 9.5): Canada 
welcomes the inclusion of language on trade and environment in the Chile -Indonesia 
CEPA. Canada understands this is a major milestone for Indonesia as it is the first time 
Indon esia includes such provisions . 
 Could Indonesia please indicate if this Agreement is representative of its approach 
on environment in its future FTAs?  
 
Response from the delegation of Indonesia  
 
 Indonesia recognizes the importance of trade and environment, and open to discuss the 
matter in future cooperation, as appropriate.   
 
Question s from the delegation of  Ecuador  
 
Taxation measures  
 
1.10.   Article 13.3, paragraph 1 , of the Agreement defines the concept of a tax convention , 
which also includes the c oncept of taxes and tax ation  measures (scope). In light of the 
definitions set forth , this Ministry is concerned as to  whether the tax generated by trade WT/REG403/2  
 
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  in services would be included in  the taxes on consumption. If so, would a distinction be 
made for the service sectors covered by a tax convention, or would this apply to all?  
 If not, would such a  possibility be contemplated in the tax conventions  under the 
RTA? Will the chapter on services include a  specific reference  to the matter , once included , 
as well as the eligible sectors ? 
 
Response from the Parties  
 
 Consumption taxes generated by trade in services are included within the definition of taxes 
in IC-CEPA. However, these are outside the scope of  application of  tax conventions, since tax 
conven tions apply to income taxes and do not fall on consumption taxes. Indonesia holds the position 
that provisions on taxes and taxation measures in Trade in Services Chapter shall be consistent with 
those provided in GATS. Finally, i t should be noted that the  negotiation of a service s chapter with 
Indonesia has not started.  
 
Question from the delegation of  Japan  
 
Rules of origin  
 
1.11.   Paragraph 3.25 of the factual presentation states : "The Parties shall implement an 
electronic verification system of certificate of origin and shall recognize digital 
signatures. " 
 Could the Parties  provide us with more detailed information about the electronic 
verification system of certificate of origin? Is it related to the ASW or the Indonesian 
NSW? How does the syst em function between the CO issuing agencies and the importing 
customs offices?  
 
Response from the Parties  
 
 This system works through a website provided by each Party where Customs Officials and 
interested authorities can review the accuracy of the informa tion included and the validity of the 
certificate of origin. It is not related to the use or exchange of certificates through single windows. 
Chile and Indonesia may explore this possibility in the future.  
 
 In the case of Chile, the website is managed by the entities authorized to issue certificates of 
origin:  
 
 (i) Central Unit of Origin Certification (UCCO):  
http://segco.edinet.cl/SEGCOApp -war/public/consult a/SearchCertificateOrigin.view  (no username 
or password required)  
 
 (ii) Federation of Chilean Industry (SOFOFA):  
 https://informedirecon.sofofa.cl/auth/users/sign_in  (for it s use, requires a username and 
password provided by the competent authority)  
 
 In the case of Indonesia, the authorized entity on issuing and verifying for certificates  of origin 
can be accessed vi a: https://e -ska.kemendag.go.id/cms.php   
 
Question s from the delegation of  Thailand  
 
Rules of origin  
 
1.12.   According to Para graph  3.23 of the factual presentation , bilateral cumulation 
between Indonesia and Chile is one of originating criteria and both sides agree to 
endeavour to establish provisions regarding accumulation with third parties and its 
implementation. It would be appreciated if the Parties could clari fy the following.  
a. What types of accumulation would be extended to third parties?  
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  Response from the Parties  
 
 Extended Accumulation will apply as provided in paragraph 1 of Article 4.8, for materials 
imported from third parties complying with the requireme nts that Chile and Indonesia will agree 
once this topic is discussed bilaterally.  
 
b. To be eligible for origin accumulation, does a third party have to sign a Free Trade 
Agreement with Indonesia or Chile?  
Response from the Parties  
 
 The requirements to apply  to this extended accumulation will be bilaterally discussed by 
Indonesia and Chile once the Parties have decided to enable this extended accumulation.  
 
Question s from the delegation of  the United States  
 
Annex 1 of the factual presentation  
 
1.13.   We note that at the end of the liberalization period in 2029, about 90% of Chile's 
tariff on imports from Indonesia are going to be duty free. Likewise, at the end of the 
liberalization period in 2031, 86% of Indonesia's tariff lines on imports from Chile will be 
duty free. Overall, this agreement facilitates significant trade liberalization between the 
parties.  
 In Table A1.2  of the factual presentation states that : "Chile: Market access 
opportunities under the agreement for Indonesia's top 25 exports to the world ," we note 
that Indonesia's top 25 exports to the world accounted for about 49% of its global exports 
in 2016 -18, corresponding to 45 lines of Chile's tariff schedule none of which were duty 
free. By 2025, none of the 45 tariff lines will remain dutiable ". 
 
 In Table A1.4  of the factual presentation states that : "Indonesia: Market access 
opportunities under the agreement for Chile's top exports to the world," we note that 
Chile's top 25 exports to the world accounted for 72% of its global exports in 2016 -2018, 
corresponding to 46 lines of Indonesia's tariff schedule. Of these 46 lines, 20 were duty 
free on an MFN basis before the entry into force of the agreement. By the end of the 
liberalization period in 2031, 10  of Indonesia's tariff lines on Chilean wine  and certain 
Chilean salmon products will continue to remain dutiable. [The average MFN rate in 2019 
for these products ranged from 5% and 10% for salmon and 90% for wine.] " 
 
 Can the Parties explain why tariff lines on well -known Chilean products like sal mon 
and wine remain dutiable at the end of the liberalization process in 2031?  
 
Response from the Parties  
 
 The negotiation process, carried out in 2017, involved different variables for a more balanced 
outcome such as tariffs rate levels, bilateral trade and productive interests.  Some products or sectors 
were committed to be liberalized in exchange of lower tariffs granted by the other party on different 
products or sectors. On the other hand, the Parties also agreed to maintain some degree  of import 
duty for products or sectors which are highly sensitive for their industries or consumers . Nonetheless, 
the Trade in Goods Chapter includes a provision which enable the Parties to initiate discussions to 
improve or accelerate their tariff elimin ation schedule, or to conduct unilateral tariff reductions at 
any time.  
 
General provisions  
 
1.14.   Paragraph 3.5 of the factual presentation (Section 3 "Provisions on Trade in 
Goods") states that "Each Party shall, to the extent possible, make a list of current fees 
and charges that it imposes in connection with importation and exportation, and make 
such information publicly available on the in ternet or other similar means."  
 When does Indonesia expect that it will make publicly available its list of current 
fees and charges that it imposes in connection with importation and exportation?  WT/REG403/2  
 
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  Response from the delegation of Indonesia  
 
 Applied rates  of duties and taxes of any kind imposed on or in connection with importation or 
exportation can be accessed via http://intr.insw.go.id/ . 
 
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