WT/REG387/2  
22 March  2019 
(19-1475) Page: 1/4 
Committee on Regional Trade Agreements  Original:  English/Spanish  
 
  
FREE TRADE AGREEMENT BETWEEN CHILE AND THAILAND  
(GOODS  AND SERVICES)  
QUESTIONS AND REPLIES  
 The following communication, dated 4 March  2019, is being circulated at the request of the 
delegations of Chile and Thailand . 
 
_______________  
 
 
Questions from the delegation of Ecuador  
 
1.1.  According to section 3, "Provisions on trade in goods", subsection 3.1, "Import duties 
and charges, and quantitative  restrictions", paragraph 3.3, Chile may maintain its price 
band system provided it is applied consistent with its rights and obligations under the 
WTO and shall not incorporate any new products in it (Article 3.6 ).1 
a. Could you please indicate whether there  is any reduction process for the tariff 
levels under the price band system ? If so, would the reduction concern the 
applied tariff or the additional duty?  
Response from the delegation of Chile  
 
 Products in the price band system are identified in Chile's S chedule with a base rate of "6% + 
Price Band" . The tariff reduction schedule for these products corresponds to the category SL, which 
is applied on the base rate . 
 
b. What is meant by the following sentence in the report by the Secretariat : "Chile 
may maintain its price band system provided it is applied consistent with its 
rights and obligations under the WTO"?  
Response from the delegation of Chile  
 
 This sentence is taken from  Article 3.6 of the Agreement . 
 
Questions from the delegation of the Europea n Union  
 
Provisions on trade in services  
Liberalization commitments  
Chile  
Horizontal c ommitments  
 
1.2.  Paragraph 4.13 : "4.13. Chile has improved its commitments regarding the movement 
of natural persons by liberalizing the requirement that companies established  in Chile 
employ at least 85 % of Chilean staff for companies employing over 15 persons in the GATS 
to 25 under the Agreement . There is no similar threshold for professional services . Finally 
                                                
1 The products covered by the price band system are HS (2007) 1001.9000, 1101.0000, 
1701.1100, 1701.1200, 1701.9100, 1701.9910, 1701.9920 and 1701.9990. Once tariff liberalization 
on these products is complete the price band mechanism no longer applies.  WT/REG387/2  
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  Chile has added two new categories to its mode 4 commitments : natural persons seeking 
temporary entry for the purpose of participating in business meetings, performing market 
or investment studies, generating business contacts or participating in negotiations 
related to the supply of services in the future, including th e setting up of a business or 
enterprise in the territory of Chile ; and persons responsible for the setting up of the 
commercial presence of a service provider in Chile."  
 Is it correct to infer that companies established in Chile and supplying professiona l 
services are entitled to employ as many non -citizens as they see fit?  
 
Response from the delegation of Chile  
 
 No. All companies established in Chile are subject to the 15 % cap of foreign workers, 
regardless the activity they carry out, since this limita tion is established in the Chilean Labour Code 
(Article 19) . However, certain workers may be exempted from the calculation of the cap, as it is 
established in Article 20 of our Labour Code . Additionally, our Labour authority has ruled 
(Ruling  No. 4382/2014 ) that, in the case of the exception contained in Article 20 of our Labour Code, 
within the concept of specialist technical personnel, all qualified personnel of the company must be 
included.  
 
 The same Ruling establishes that specialist technical personne l must be understood as every 
worker providing services as a result of the application of a knowledge or a technique having a 
significant level of specialization or having a study (study as a degree whether technical or 
professional).  
 
 The Schedule of com mitments presented by Chile recognizes this situation, expressing for its 
mode 4 commitments that "In any case, foreign natural persons may not represent more than 
fifteen  per cent (15%) of the total staff employed in Chile, when the employer hires more than 
twenty -five (25) persons."  
 
Sector specific provisions on trade in services  
Financial s ervices  
 
1.3.  Paragraph 4.42 : "4.42. In sectors where specific commitments are undertaken, each 
Party shall permit a financial service supplier of the other Party to tra nsfer information in 
electronic or other forms, into and out of its territory, for data processing where such 
processing is required in the ordinary course of bu siness (Article  10.7)."  
 Is there in the agreement any exception, which could apply to this obligation dealing 
specifically with personal data protection?  
 
Yes. The text corresponds to paragraph 1 of Article 10.7 . In addition to the general exceptions 
to the chapter and to the Agreement, paragraph 2 of Article 10.7 states that nothing in paragrap h 1 
shall:  
 
a. restrict the right of a Party to protect personal data, personal privacy and the 
confidentiality of individual records and accounts including in accordance with its domestic 
laws and regulations so long as such right shall not be used as a means of avoiding the 
Party's commitments or obligations under this Agreement;  
 
b. prevent a regulator of a Party for regulatory or prudential reasons from requiring a financial 
service supplier in its territory to comply with domestic regulation in relation to data 
management and storage, and system maintenance, as well as to retain within its territory 
copies of records ; or 
 
c. be construed to require a Party to allow the cross -border supply or the consumption abroad 
of services in relation to which it has not made specific commitments including to allow 
non-resident suppliers of financial services to supply, as a principal, through an 
intermediary or as an intermediary, the provision and transfer of financial information and 
financial data processing as referre d to in subparagraph (o) of Article 10.1.  WT/REG387/2  
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  Questions from the delegation of Japan  
 
1.4.  While commitments are generally the same or improved in all sectors in FTAs in 
comparison to the GATS, according to Table 4.2, Thailand made "less" commitments in 
some sector s. Why did Thailand lower its commitments level in those sectors?  
Response from the delegation of Thailand  
 
 Technically, it is not so accurate to conclude that Thailand did make "less" commitments when 
considering in respect of the levels of commitments a nd scope of activities of service sectors in FTAs 
in comparison with the GATS . For instance, in environmental services, even though there are a few 
subsectors we committed under the GATS but did not so under the Chile – Thailand FTA, we did 
commit addition al subsector, namely D . M arine environmental protection services 
(CPC 1.1: 94900**) under the latter.  
 
 Furthermore, in terms of the levels of foreign equity participation, those of all subsectors we 
committed under the Chile – Thailand FTA are more libera lized than those under the GATS . In 
particular, under GATS the committed level of foreign equity participation in the horizontal 
commitment is at 49 % of the registered capital, while under the Chile – Thailand FTA it is at 70 % 
of the registered capital.  
 
Environmental Services  
 
Committed under GATS and  
Chile – Thailand FTA  GATS only  Chile – Thailand FTA only  
A. Sewage removal services 
usually provided using equipment 
such as waste pipes, sewers or 
drains  
(CPC 1.1 : 94110**)  
 
 
 
B. Refuse Disposal Services  
Hazardous waste treatment and 
disposal services  
(CPC 1.1: 94222)  
 
C. Sanitation and Similar Services  
Beach cleaning services  
drain unblocking services  
(CPC 1.1 : 94390**)  A. Environmental consultancy on 
sewage system, refuse disposal, 
hazardous waste management, air 
pollution and noise management, 
sanitation and other environmental 
management services (CPC 9401)  
 
A. Environmental protection and 
environmental abatement services 
(CPC 9401)  
 
D. Other 
Cleaning services of exhaust gases  
(including industrial emission 
abatement)  
(CPC 9404)  
 
Noise abatement services  
(CPC 9405)  
 
Nature and landscape protection 
services (CPC 9406)  
 
Other environmental  
protection services (CPC 9409)  D. Marine environmental 
protection services  
(CPC 1.1: 94900**)  
 
1.5.  Could you elaborate on outcome or current status of the review process based on 
Article  9.12? We would like to know how the chapter will be revised.  
Response from the delegation of Thailand  
 
 Article 9.12 requires that, after three years from the entry into force of this Agreement or 
upon request of a Party, the Commission may review this Chapter, taking into account the 
developments and regulations on trade in services of the Parties as well a s the progress made at 
the WTO, including discussions regarding Emergency Safeguard Measures and other specialized 
forums, where both Parties are members.  
 
 Up to this date, no Party has requested the review of this Chapter and no discussion on 
reviewing i t (or the methodology to review it) has been held.  WT/REG387/2  
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  Questions from the delegation of Mexico  
 
Provisions on trade in services  
Liberalization commitments  
 
1.6.  Paragraph 4.11 : "The Parties' schedules of commitments are laid out in Annex  9.6. 
The Annex follows a po sitive list approach whereby the obligations of market access 
(Article  9.3) and national treatment (Article 9.4) apply only to the sectors listed therein, 
subject to the limitations and conditions inscribed . Any additional commitments agreed 
between the Pa rties shall be inscribed in their Schedules (Article 9.5). " 
Mexico would like to know why this list approach was selected.  
Joint response from the Parties  
 
 The parties decided to negotiate with a positive list approach at the request of Thailand, which 
expressed its preference for this approach at the time of initiating the negotiation.  
 
Regulatory provisions  
Investment  
 
1.7.  Paragraph 4.38 : No later than two years after the entry into force of the Agreement 
the Parties agree to initiate negotiations on inves tment (Article 16.4).2 
Mexico would like to know the status of the negotiations on investment . 
Joint response from the Parties  
 
 So far, no investment negotiations have been initiated.  
 
Question from the delegation of the Separate Customs Territory of Taiwan, Penghu , 
Kinmen, and Matsu  
 
General provisions of the a greement  
Intellectual property rights  
 
1.8.  Paragraph 5.20 : The Parties agree to ensure protection of GIs with regard to any 
goods in accordance with their laws and regulations and in accordance with  the WTO 
TRIPS Agreement (Article 11.9).  
 Regarding the protection of GIs, have the Parties harmonized their respective 
registration mechanism?  
 
Joint response from the Parties  
 
 Registration mechanisms for geographical indications have not been harmonized  between the 
Parties . Both Chile and Thailand are allowed to protect the geographical indications, including the 
ones listed in Annex 11.9, in accordance with their own national law.  
 
__________  
                                                
2 The Parties have indicated that contact points have been set up to facilitate a discussion on 
investment issues.