WT/REG312/2  
28 June 2013  
(13-3376)  Page: 1/8  
Committee on Regional Trade Agreements  Original: English/Spanish  
 
  FREE TRADE AGREEMENT BETWEEN CHILE AND GUATEMALA 
(GOODS AND SERVICES) 
QUESTIONS AND REPLIES 
 The following communication, dated 24 June 2013,  is being circulated at the request of the 
delegations of Chile and Guatemala.  
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   This document reproduces the questions addressed to the Parties and the responses 
submitted. 
  
Questions from the Delegation of Australia 
 
General comment 
  Tables 4.1 and 4.2 clearly show the significant improvements in the level 
of commitments made by Chile and Guatem ala on services compared with both 
countries' GATS commitments. Australia supp orts ongoing liberalization of services 
trade and the reduction in gaps between co mmitments on services and actual levels 
of market openness, and commends both Chile and Guatemala on their efforts. 
 
1.1.  Paragraph 4.2: Why are cross-border financia l services excluded from the coverage 
of Chapter 11 (cross-border trade in services)? 
 During the negotiations, the Parties concluded that it was both necessary and important 
to negotiate financial services as part of a specific and self-contained chapter covering the four 
modes of financial service delivery within a single regulatory framework. For this reason, the Agreement does not include commitments on cross-border trade in financial services, which will be examined by the Parties once the Agreement is implemented and in effect. 
 
 Furthermore, at the time of the negotiation of the Agreement, Guatemala was in the process of reforming its national financial system, which included the introduction of a new Banking Law 
and a new Insurance Law, and it was therefore felt that commitments in this sector could not 
be included, as doing so may have consolidated situations that were later modified.  
1.2.  Paragraph 4.6: Why did Chile and Guatemala decide not to include a provision 
of the type under GATS Article XVI (marke t access)? Why did Chile and Guatemala opt 
to have an article on non-discriminatory quantitative restrictions? 
 This approach produces the same effect as a market access provision, in the effect there 
is no difference. 
 Since their first negotiated FTA, Guatemala and all Central American countries have 
managed market access and national treatment reservations using a negative list approach rather 
than a market access approach. Guatemala considers this approach far more suitable for achieving 
liberation from restrictions, both for services and investment, as the country has few reservations. WT/REG312/2 
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   As regards having an article on non-discriminatory quantitative restrictions, this was due 
to a reservation held by Guatemala at the time of negotiation: a special temporary situation concerning the handling of containers by shipping companies. This restriction no longer exists and risked being consolidated if left as a non-conforming measure. 
1.3.  Paragraph 4.5.1: Australia notes the Agreem ent contains a specific Chapter on air 
transport services, which is not a chapter ty pically contained in FTAs. Could the Parties 
elaborate on the types of provis ions covered in this chapter? 
 This chapter applies to measures that one party adopts or maintains in air 
transport services. Also, air transport agreements signed or to be signed between Chile and a Central American country, Party to the agr eement, are incorporated into this agreement 
and form an integral part of it. 
 It should be noted that the statutory part of the FTA with Chile is multilaterally 
applicable for all Central American countries and, as a whole, seeks to cover all aspects relating to trade in goods and services. The specific issue of air transport services was included in case 
any Central American country maintained or was interested in negotiating a special agreement 
of this kind (open skies). Since Guatemala does not have this kind of agreement with Chile, this chapter does not apply; however, it would apply if an open skies agreement were concluded 
in the future. 
1.4.  Paragraph 4.58: Why did the Parties decide  not to include any general disciplines 
on domestic regulation (except those cove red in Chapter 13 (Telecommunications))? 
 It was not necessary to include such disciplines, as the reference is always domestic 
legislation; under a negative list approach, the reference is always domestic legislation. 
  However, the Parties included Article 11.07, which established regulation on granting 
permits, authorizations, licenses or certifications. 
 Questions from the Delegation of Colombia 
 1.5.  The FTA entered into force on 13 March 2010 and was notified to the WTO 
on 30 March 2012. It would be much apprecia ted if the Members involved could explain 
the reasons why the notification took so lo ng in the light of Articles XXIV:7(a) 
of the GATT and Article V:7(a) of the GATS (paragraph 2.2). 
 Regional trade agreements should be notified  to the WTO Secretariat as soon as possible. 
On this occasion, however, the Parties failed to ensure prompt notification due to a lack 
of coordination. 
  Both countries are aware of the obligation to notify all free trade agreements to which they 
are party, and aim to make such notifications as promptly as possible in accordance with 
the technical capacity and human resources of the government bodies concerned.  Technical barriers to trade 
1.6.  With reference to Article 3.36 of documents WT/REG303/1 and WT/REG312/1 
of 20 March 2013 and paragraph 4 of Article 9. 04, and taking account of the definitions 
of "international standard" and "international  standardizing body" provided in Chapter 9 
of the FTA: 
a. What is the international standardizin g body that fits this definition? 
 The Parties agreed to apply international st a n d a r d s .  A s  M e m b e r  c o u n t r i e s  o f  t h e  W T O ,  
Guatemala and Chile would apply the standards adopted by the relevant standardizing bodies, 
unless such standards did not constitute an effect ive means of meeting their legitimate objectives. 
  Guatemala and Chile, like many other countries, use the current reference standards 
of international bodies as a reference when developing national standards; in this case the WT/REG312/2 
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  definition may cover the standards of the relevant bodies of at least all the Members of the TBT 
Agreement, including the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC), the Codex Alimentarius Commission, the International Organization of Legal Metrology (OIML) and the International Commission on Radiation Units 
and Measurements (ICRU) or any other body designated by the Parties. 
 Paragraph 3.36 of document WT/REG303/1 only reaffirms the core principle 
of the TBT Agreement, in that no unnecessary obst acles to trade shall be created when developing 
national standards. 
b. Are the Parties already using the inte rnational standards adopted by that 
international standardizing body? 
 The Parties are in effect using, as a reference for the development of their national technical 
standards, the international technical standards de veloped by ISO, insofar as they exist for the 
various areas of interest of each Party in terms of standardization. They are also used as a reference for the development of th e corresponding technical regulations. 
 Chile adheres to the principles and obligations established in the WTO TBT Agreement. When 
developing technical standards, the National Standardization Institute (INN) therefore uses international standards as a reference wherever possible; should no international standards exist, 
relevant regional standards or standards of other countries or companies are consulted. 
1.7.  With reference to paragraph 3.37 of documents WT/REG303/1 and WT/REG312/1 
of 20 March 2013 and to paragraph 4 of Articl e 9.07, in order to facilitate the free 
movement of goods between the Partie s was any consideration given during 
the negotiating process to: 
a. Acceptance by the importing Party of th e supplier's declaration of conformity? 
 The Parties agreed to accept the supplier's declaration of conformity, as established 
in Article 9.07 of the FTA, in order to facilita te the free movement of goods between the Parties.  
 
b. Designation of conformity assessment bo dies in the territory of the other 
Party? 
 During the negotiating process, the designat ion of conformity assessment bodies in the 
territory of the other Party was indeed given consideration.  
c. If so, will the supplier's declaration of conformity be accepted 
as a demonstration of compliance with  the Technical Regulations between 
the Parties? 
 Yes. The Parties agreed to accept the supplier' s declaration of conformity as a demonstration 
of compliance with the Technical Regulations between the Parties, as established in Article 9.07 of the FTA, in order to facilitate the free movement of goods between the Parties.  
 
d. Will it be possible to designate conformi ty assessment bodies in the territory 
of the other Party? 
 The procedure followed in this respect is that established under point 7 of Article 9.07 
("Conformity Assessment"): "For conformity a ssessment procedures, the Parties may use the 
capacity and technical infrastructure of accredited bodies established in the territory of the Parties". 
 
 In conclusion, it may be noted that there is no explicit mention of this or other mechanisms; however, the aforementioned Article establishes sufficient flexibility to enable the Parties 
to recognise, unilaterally and bilaterally, th e results of conformity assessment procedures, 
and certain desirable principles pertaining to such conformity assessment procedures (transparency, efficiency, national treatmen t, etc.), with a view to reducing TBTs. WT/REG312/2 
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  1.8.  Regarding paragraph 3.39 of documents WT/REG303/1 and WT/REG312/1 
of 20 March 2013 and in relation to Article 9.10, was any consideration given during the 
negotiating process to the recommendation made in 2000 by the Committee on Technical Barriers to Trade, which stated that "[a]ny Member which 
is able to provide a time-limit beyond 60 days , such as 90 days, is encouraged to do so"; 
and if so, why was the minimum period of 90 days not adopted? 
 The FTA between Central America and Chile was signed on 18 October 1999 and it was 
therefore not possible to consider the recommendation made in 2000 by the 
Committee on Technical Barriers to Trade.  
When the TBT section was negotiated, domestic legislation in some countries did not 
consider time-limits beyond 60 days, which is why the provision was agreed as established 
in the WTO TBT Agreement. However, it is each Pa rty's choice as to whether to extend the period 
to 90 days when requested to do so by an interested party. Chile is required (under domestic 
regulations) to allow 60 days for comments, and if a country requests an extension, Chile will 
generally extend this period to 90 days.  
1.9.  Finally, with regard to paragrap h 3.39 of documents WT/REG303/1 
and WT/REG312/1 of 20 March 2013 and in rela tion to Article 9.11, why was it not 
pointed out that the "entity designated as the information centre" was not the same as the one established under Article 10 of  the WTO Agreement on Technical Barriers 
to Trade (document G/TBT/ENQ/)? 
 Chile designates the official TBT/WTO contact point to avoid the duplication of functions. 
 
 The entity designated as the informatio n centre is the MINISTRY OF THE ECONOMY 
OF GUATEMALA, in accordance with Article 10 of the WTO Agreement on Technical Barriers to Trade, as indicated in document G/TBT/ENQ/38 of 30 May 2011. This remains unchanged. 
 
Services 
1.10.  Are we to understand that the GATS Articl e V:1(a) substantial sectoral coverage 
requirement was met when Chile libera lized 42 of 152 services sectors? 
(paragraph 4.29). 
 The interpretation of "substantial sectoral coverage" is broad, and any opening beyond the 
access granted multilaterally within the WTO framework is important. However, the trade 
agreement provided for future negotiations with a view to deepening the level of access, since, 
at the time, for various reasons, including those relating to national economic development policies and a lack of domestic legislation, it was not possi ble to request greater access in the negotiations 
as reciprocity could not be granted. 
  GATS Article V:1(a) establishes the notion of "substantial sectoral coverage", a requirement understood in terms of number of sectors, volume of trade affected and modes of supply. In order 
to meet this requirement, agreements should not provide for the a priori  exclusion of any mode 
of supply.  
 Chile did not determine the a priori exclusion of any mode of supply and 
liberalized 42 sectors. It therefore fully meets this requirement.  
1.11.  What are the criteria for establishing na tional treatment limitations in relation 
to personal services and local pr esence? (paragraphs 4.31 and 4.34). 
 The national treatment limitations listed by Chile in Annex I of the FTA with Guatemala are 
based on domestic legislation, on which the reservations are based, and numerous sectors are 
covered, not just those relating sp ecifically to personal services. 
 
For Guatemala, the temporariness of the person 's stay and the non-substitution of jobs 
in respect of activities that may be carried out by nationals (the provision would only apply 
to Mode 4). Immigration legislation provides for temporary entry of 90 days, renewable for the WT/REG312/2 
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  same amount of time. Under its legislation, Guatemala does not apply non-discriminatory 
quantitative restrictions, and, within the GATS framework, the limitation is horizontal.  1.12.  With regard to trade remedies, Chile agreed with Honduras and Guatemala 
on three types of safeguards: global, b ilateral and balance of payments. Can the 
safeguard measures be applied simultaneo usly, or are they mutually exclusive? 
 Article 6.02 establishes the conditions for applying a bilateral safeguard measure where 
the tariff elimination established in the Agreement causes an increase in imports that causes 
injury.   Article 6.03 provides that the Parties shall maintain their rights and obligations in relation 
to the application of global safeguard measures, in accordance with WTO rules. It also provides 
that imports from the other Party shall be excluded from a safeguard measure if they do not account for a substantial share of total imports and do not contribute significantly to the injury 
or threat thereof to the domestic industry. 
  Consequently, both safeguard measures have their own conditions of application, 
which correspond to different trade situations. Chapter 6 does not contain any clause excluding 
the simultaneous application of these measur es. In other words, they may be applied 
simultaneously if so required. Balance-of-payments safeguards constitute a horizontal issue and are relevant to situations of national emergency. 
 
 In informal language, the term "safeguard" is sometimes applied to any exceptional trade restriction measure; in this respect, this concep t resembles that of "escape clause", "emergency 
clause" or "exceptional measure". However, in the FTA, the Parties agreed to use the 
term "safeguard" for the measures described in Chapter 6. Exceptional measures related 
to balance-of-payment difficulties are found in a separate chapter on exceptions, Chapter 20, 
in which the Parties do not use the term "safeguard". Nor is there a clause in this section providing 
for exclusion criteria in respect of the possibili ty of applying these measures simultaneously. 
 Questions from the Delegation of the European Union 
 Provisions on trade in goods 
Liberalization schedules 
 1.13.  According to paragraph 3.13 and Table 3. 3, by the end of the implementation 
period (2024), 85.9% of Chile's import s from Guatemala will remain dutiable. 
a. Could the Parties provide clarification of  the very low coverage and explain how 
this agreement fulfils the criteria of covering 'substantial trade'? 
 GATT Article XXIV does not specify a quantitative criterion for determining what 
is considered "substantial trade", however, the FTA has been in effect for three years and, 
according to official import statistics, currently more than 85% of total exports to Chile benefit 
from free trade and enter with a 0% preferen ce. It is also estimated that by the end 
of the elimination period, in terms of items, Chile's offer will stand at 93% (92.93%) 
and Guatemala's at 93% (92.7%). 
  In terms of trade, to make an assessment, consideration must be given to the distorting 
effect of sugar. Upon the conclusion of the nego tiation of the Protocol (2006), sugar's trade share 
was 27.6%. In 2011 and 2012, the value of sugar imports tripled, and this product is now the main Chilean import from this market (over 70% of the total).  
 It should be noted that the Secretariat, when conducting the analysis, did not take into 
consideration Note 8 of Annex I of the elimination programme, which specifies the total elimination of the ad valorem  tariff for sugar, maintaining only the specific component. It can therefore not be 
considered a total exclusion. Taking this elem ent into consideration, coverage exceeds 90%, 
with the ad valorem  component standing at 0% in 2012. 
 WT/REG312/2 
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  b. Could the Parties clarify what steps have be en already taken, if any, to increase 
the coverage of the agreement and/or do  the party envisage any future plan 
to decrease the proportion of the dutiable trade under the FTA? 
 At the level of the Agreement's Administrative Commission and the Technical Committees, 
the Parties have been working to strengthen the measures that allow for the elimination 
of substantial barriers to trade and have studied the possibility of improving market access. Guatemala is currently examining a formal request for improvement made by Chile. 
 
1.14.  According to paragraph 3.10 and Table 3. 1, by the end of the implementation 
period 95% of Guatemala's import s from Chile will be duty free. 
 Could the Parties clarify why there is th is big asymmetry in terms of tariff 
liberalization between the two Parties? 
  In accordance with what was negotiated, by the end of the elimination period 95% 
of Guatemala's imports from Chile will be duty free. 
  At the end of the same period, Chile's import s from Guatemala will constitute 98% of total 
negotiated tariff lines. Furthermore, Guatemal a benefited from the number of years set for 
elimination, which were given line by line: in Chile's case, its longest schedule is 15 years, while Guatemala's is 20 years.  
Regulatory provisions on trade in goods 
Subsidies and State-aid 
 1.15.  According to paragraph 3.48, the Parties agreed on the shared objective 
of the multilateral elimination of export subsidies for agricultural goods and committed 
to work together in view of achieving an  agreement in the WTO to eliminate export 
subsidies. In this respect: 
 Could the Parties explain which action s have been taken for the elimination 
of export subsidies for agricultural g oods and which are the results achieved?  
 
 Both Guatemala and Chile participate actively in various coalitions of WTO Members that 
support the elimination of export subsidies for agricultural products.  
Provisions on trade in services 
General provisions on trade in services 
Provisions on investment 
 
1.16.  According to paragraph 4.25 the Parties, within two years from the entry into 
force of the Agreement, shall examine the possibility to develop and expand the rules 
and disciplines in relation to the provisions on investment. 
 Could the Parties clarify if the Parties ha ve undertaken any step forward on the 
expansion of the rules and disciplines contai ned in the Investment Agreement? In this 
case, could the Parties submit details? 
 
 The Parties agreed that it would be possible to take steps forward in the future in respect of rules and disciplines contained in the Investment Agreement. To date, however, there has been 
no expansion of rules and disciplines in this area. 
 General provisions of the Agreement 
Intellectual Property Rights (Paragraph 5.17) 
 1.17.  According to the last sentence of pa ragraph 5.17, the Parties may authorize 
homonymous GIs and origin designations, whic h may rightfully belong to a third party. 
In this respect: WT/REG312/2 
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  a. Could you please clarify on how the Partie s will, in practical terms, differentiate 
between/among homonymous GIs and DOs? 
 The FTA does not indicate how the Parties should differentiate in practice 
between homonymous geographical indications and designations of origin. Therefore, each Party 
may address the matter through its own domestic legislation and in accordance with 
the TRIPS Agreement.  
 In Guatemala's case, the difference lies in the territory to which the quality is linked and in 
which the country of origin is recognized.   Chilean legislation regarding geographical indi cations (GI) and designations of origin (DO) 
provides for a register for such indications and designations under the responsibility of the National 
Industrial Property Office. Inclusion in this register is preceded by an examination, both of form and substance, conducted by the Office, and ends  with a resolution granting applicants the 
exclusive use of the GI or DO requested. The re solution of incorporation into the register may 
indicate, in accordance with the provisions of  Article 97bis A of Law No. 19.039 on industrial 
property, that when the Office "is satisfied that  co-existence between the marks and geographical 
indications or designations of origin, or the latter between themselves, is possible, the final 
resolution [through which the incorporation into the register is made] shall determine the conditions applicable to geographical indications, designations of origin or marks to prevent the consuming public from being misled". The Law also stipulates that the conditions of use shall be 
incorporated into the register and that non-comp liance with these shall deprive the holder of the 
authority to take recourse to the measures provided for by the Law for the exercise of these rights. Where the analysis of the possibility of co-existence concerns agroforestry 
or agro-industrial products, a report must be requested from the Ministry of Agriculture. 
 
b. Could the Parties clarify on what criter ia are used and what conditions are 
required to define what is 'rightfu l' when referring to a third party 
(in 'rightfully' belonging to the third party)? 
 The FTA does not define what should be understood as "rightful". This is something that 
each Party may address through its domestic legislation in accordance with the provisions of the 
TRIPS Agreement. In this context a Member of the FTA is not obliged to protect geographical 
indications which are not or cease to be protected in their country of origin, or which have fallen into disuse in that country (Article 24.9 of the TRIPS Agreement). 
 
 In Guatemala's case, pursuant to Article 16 of the Industrial Property Law (Decree No. 57-2000), marks may consist of national or foreign geographical indications, provided 
that they are distinctive in respect of the produc ts or services to which they apply and their use 
is not likely to create confusion or give rise to association with regard to the origin, qualities or characteristics of the products or services for which the marks are used. The Congress of the Republic recently approved a number of am endments to this Law, which provide improved 
protection to geographical indications or design ations of origin recognized in their country 
of origin.  
 In Chile's case, Article 96 of Law No. 19.039 on Industrial Property provides for the 
possibility of registering foreign geographical indications and designations of origin in Chile.  
Relationship with other agreements concluded by the Parties 
Table 5.1 
 
1.18.  According to the information contained in Table 5.1, several agreements have not 
been notified. In particular, Chile has not no tified several bilateral agreements falling 
under the umbrella of LAIA. WT/REG312/2 
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  a. Could the relevant party (either Chile or Guatemala, depending on 
the agreement) clarify why those agreemen ts have not been formally notified? 
 Please note the following with regard to agreements that have not yet been notified: 
 
 FTA Central America – Panama: the WTO Secretariat published the relevant notification 
in document WT/REG336/N/1/Rev.1- S/C/N/692/Rev.1 on 26 April 2013.  
 Regarding the Partial Scope Agreement betw een Guatemala and Cuba, a bilateral meeting 
of the Commission of both Parties is to be held to agree on the terms of the relevant notification to the WTO.  
 With regard to the Partial Scope Agreement between Guatemala and Venezuela, 
Venezuela grants Guatemala certain tariff preferences, which is why Guatemala did not notify it to the WTO. 
 
b. Could the Parties clarify whether they en visage to notify them in the near 
future? 
Reply from the delegation of Chile 
 
 Chile, in full respect of its commitments under the Transparency Mechanism for Regional Trade Agreements, is currently in bilateral consultations with its counterparts on how and when 
to notify jointly the regional trade agreements mentioned. 
 Reply from the delegation of Guatemala 
  As regards the Central America - Panama FTA, the notification was submitted to the WTO Secretariat and distributed to Members on 26 April 2013 in document WT/REG336/N/1/Rev.1 - 
S/C/N/692/Rev.1. 
 
c. With reference to the agreements under the umbrella of LAIA, could Chile 
submit for each agreement the list of a dditional concessions granted bilaterally 
on goods? 
 This question is closely related to the question in point (b) above and therefore 
whatever Chile notifies in accordance with the WTO transparency mechanism must be agreed 
bilaterally with the respective counterpart and presented in the corresponding review. 
 
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