WT/REG303/1  
20 March 2013  
(13-1525)  Page: 1/42  
Committee on Regional Trade Agreements   
  
  FACTUAL PRESENTATION 
FREE TRADE AGREEMENT BETW EEN CHILE AND HONDURAS 
(GOODS AND SERVICES) 
REPORT BY THE SECRETARIAT 
This report, prepared for the consideration of the Free Trade Agreement between Chile 
and Honduras has been drawn up by the WTO Secretariat on its own responsibility 
and in full consultation with the Parties. The report has been drawn up in accordance 
with the rules and procedures contained in the Decision for a Transparency Mechanism for Regional Trade Agreements (WT/L/671). 
Any technical questions arising from this report may be addressed to Jean-Daniel Rey 
(tel: +41 22 739 5264). 
 
 
 
 
 
           
 
           
 
     WT/REG303/1 
 
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  TABLE OF CONTENTS 
Page 
 
1   TRADE ENVIRONMENT ................................................................................................. 4  
1.1   Overview .................................................................................................................. 4  
1.2   Merchand ise trade ..................................................................................................... 4  
1.3   Trade in servic es and inve stment ................................................................................. 6  
2   CHARACTERISTIC ELEMEN TS OF THE AG REEMENT ...................................................... 8  
2.1   Background  Information ............................................................................................. 8  
2.2   Structure of the Agreement ......................................................................................... 8  
3   PROVISIONS ON TRADE IN GOODS ............................................................................. 9  
3.1   Import duties and charges, and quantitative restrictions ................................................. 9  
3.1.1   General provisions .................................................................................................. 9  
3.1.2   Liberalization of  trade and ta riff lines ........................................................................ 10 
3.1.3   Liberaliza tion schedules .......................................................................................... 10 
3.1.3.1   Chile ............................................................................................................... .. 11 
3.1.3.2   Honduras ........................................................................................................... 12 
3.1.4   Tariff rate quotas ................................................................................................... 14 
3.1.5   Import restrictions ................................................................................................. 15 
3.2   Rules of origin .......................................................................................................... 15 
3.3   Export duties and charges,  and quantitative  restrictions ................................................. 17 
3.4   Regulatory provisions on trade in goods ....................................................................... 17 
3.4.1   Standards ............................................................................................................. 17 
3.4.1.1   Sanitary and phytosanitary measures .................................................................... 17 
3.4.1.2   Technical barriers to trade .................................................................................... 17 
3.4.2   Safeguard mechanisms ........................................................................................... 18 
3.4.2.1   Bilateral safeguards ............................................................................................. 18 
3.4.2.2   Global safeguards ............................................................................................... 19 
3.4.2.3   Safeguard measures related to  balance of payment (BOP) difficulties ......................... 19 
3.4.3   Anti-dumping and countervailing measures ............................................................... 19 
3.4.4   Subsidie s and State-aid .......................................................................................... 20 
3.4.5   Customs-re lated procedures .................................................................................... 20 
4   PROVISIONS ON TRADE IN SERVICES ....................................................................... 20  
4.1   Scope and definition ................................................................................................. 20 
4.2   Denial of benefits ..................................................................................................... 21 
4.3   General provisions on trade in services ........................................................................ 21 
4.3.1   Mark et acce ss ....................................................................................................... 21 
4.3.2   National and MFN tr eatment .................................................................................... 21 
4.3.3   Local Presence ...................................................................................................... 22 
4.3.4   Temporary moveme nt of busine ss persons ................................................................ 22 WT/REG303/1 
 
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  4.3.5   Performanc e requirements ...................................................................................... 23 
4.3.6   Senior managers and board of direct ors .................................................................... 23 
4.3.7   Provisions  on investment ........................................................................................ 23 
4.4   Liberalization commitments ........................................................................................ 24 
4.4.1   Chile's liberalization commitments ............................................................................ 24 
4.4.2   Honduras liberalization commitments ........................................................................ 25 
4.5   Sector specific commit ments on trade in services .......................................................... 25 
4.5.1   Business services ................................................................................................... 28 
4.5.2   Communica tion services ......................................................................................... 29 
4.5.3   Construction and related engineering services ............................................................ 29 
4.5.4   Distribution services ............................................................................................... 29 
4.5.5   Educatio nal services ............................................................................................... 29 
4.5.6   Environmental services ........................................................................................... 29 
4.5.7   Financial services ................................................................................................... 30 
4.5.8   Health related and social services ............................................................................. 30 
4.5.9   Tourism and trav el related services .......................................................................... 30 
4.5.10   Recreational, cultural and sporting services .............................................................. 30 
4.5.11   Transport services ................................................................................................ 30 
4.5.12   Other services not included elsewhere ..................................................................... 30 
4.6   Sector specific provisions in trade in services ................................................................ 30 
4.6.1   Air Transport ......................................................................................................... 30 
4.6.2   Telecommuni cation services .................................................................................... 31 
4.7   Regulatory provisions ................................................................................................ 31 
4.7.1   Domestic regulation ............................................................................................... 31 
4.7.2   Recognition ........................................................................................................... 31 
4.7.3   Subsidies .............................................................................................................. 31 
4.7.4   Tran sparen cy ........................................................................................................ 31 
4.7.5   Safeguards ........................................................................................................... 32 
5   GENERAL PROVISIONS  OF THE AGREEMENT ............................................................. 32  
5.1   Tran sparency ........................................................................................................... 32 
5.2   Exceptions ............................................................................................................... 32 
5.3   Accession and Withdrawal .......................................................................................... 33 
5.4   Government  procurement .......................................................................................... 33 
5.5   Intellectual property rights ......................................................................................... 34 
5.6   Ot hers .................................................................................................................. .. 34 
5.6.1   Competition .......................................................................................................... 34 
5.7   Institutio nal framework ............................................................................................. 34 
5.8   Disput e settlement ................................................................................................... 35 
5.9   Relationship with other agr eements concluded by the Parties .......................................... 36 
ANNEX 1 ....................................................................................................................... . 39 WT/REG303/1 
 
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Key Facts 
 
Parties to the Agreement: Honduras and Chile.  
 
Date of Signature: 21 June 2011 (Treaty), 
 22 November 2005 (Bilateral Protocol) 
 
Date of Entry into Force: 19 July 2008 
 
Date of Notification: 28 November 2011 
 
Full implementation: 1 January 2017 
 
 
1  TRADE ENVIRONMENT 
1.1  Overview1 
1.1.  The Free Trade Agreement (hereinafter refe rred to as the Agreement) between Honduras and 
Chile is Honduras' 8th and Chile's 18th RTA.2  
1.2.  In 2011, with a population of over 7.7 million, Honduras' GDP was estimated at US$17 billion 
while that of Chile, with a population of 17 million was estimated at US$249 billion. While Chile 
mainly exports mining products and fuels (61.8%  of Chile's global exports), Honduras' main 
exports are manufacturing goods (62.4% of Hond uras' global exports). Both Parties import 
globally essentially manufactured goods (64.7% of Honduras' and 65.5% of Chile's global 
imports). Averaged over the period 2009-2011, Honduras' trade (goods and services) to GDP ratio 
(108.9) is substantially higher than Chile's (68.8). 
1.2  Merchandise trade 
1.3.  In 2011, Honduras' share in total world exports and imports was 0.04% and 0.06% 
respectively, while Chile's shares were 0.45% for exports and 0.41% for imports. With total merchandise exports of US$7.2 billion and imports of US$10.3 billion (both increasing during recent years), Honduras ranked 77
th in the world as exporter and 68th as importer compared to 
Chile's rankings at 33rd for exports and 27th for imports (with global exports and imports of 
US$81 billion and US$75 billion). 
1.4.  In 2011, Honduras was Chile's 72nd largest source of imports and 60th destination for export, 
accounting for respectively 0.01% of its total imports and 0.04% of its total exports.3 For 
Honduras, Chile represented 0.55% of its total imports, making Chile Honduras' 18th largest source 
of imports - while it was also Honduras' 20th largest destination for exports, accounting for 0.2% of 
Honduras' total exports.4 
                                               
1 Source for this section: WTO Trade Profiles 2012 (2 011 data) Export figures are calculated f.o.b. and 
import figures are calculated c.i.f. Ranking in world trade excluding intra-EU trade. For bilateral trade, the figures as based on UNSD Co mtrade for Chile, and statis tics reported by the nati onal Directorate of Trade 
Statistics for Honduras. 
2 Agreements in goods and services counted as one an d only agreements in force, notified to the WTO, 
counted. Agreements concluded by Chile with each Central American State counted as one. 
3 In 2011 the five top sources of imports for Chile were: the US (20.2%), China (16.9%), the EU27 
(13.8%), Brazil (8.3%), and Argentin a (6.3%); the five top export destinations from Chile were: China 
(22.8%); the EU27 (17.7%); the US (11. 2%); Japan (11.1%); and Brazil (5.5%). 
4 In 2011, the five top sources of imports for Honduras were: the U.S. (46.3%), Guatemala (8.8%), 
Mexico (5.7%), El Salvador (5.5%), and the EU27 (4.9%) ; the five top destinations  of exports from Honduras 
were: the US (33.3%), the EU27 (27.8%), El Salvad or (7.3%), Guatemala (6.2 %), and Nicaragua (3.9%). WT/REG303/1 
 
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  1.5.  Developments in global and intra-Part y trade are presented in Charts 1.1 and 1.2.5 Bilateral 
trade between Honduras and Chile and their global  trade, patterns were similar with an overall 
progression during the period marked however by a sharp decline both globally and bilaterally in 
connection with the financial crises. Since 2009 trade has recovered, although at a slower pace bilaterally than globally. Chile runs a trade surplus both globally and with Honduras, while 
Honduras experienced a trade deficit both globally and with Chile.  
Chart 1.1 Chile: Merchandise trade with world and Honduras, 2000-2011 
050100150200
0102030405060708090
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011US$ billion US$ millionImports from  Honduras
Exports to HondurasTotal imports
Total exportsLeft hand scale: Right hand scale:
 
 
Chart 1.2 Honduras: Merchandise trade with world and Chile, 2000-2011 
050100150200
0246810
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011US$ billion US$ millionImports from Chile
Exports to ChileTotal imports
Total exportsLeft hand scale: Right hand scale:
 
 
1.6.  The commodity structure of trade among the Pa rties, as well as with the world in the period 
2005-2007, is shown in Chart 1.3 on the basis of Harmonized System (HS) sections. Textiles and 
apparel accounted for 43.1% of Chile's imports from Honduras, while this sector only represented 4.7% of Chile's global imports, and only 2% of Honduras' global exports. Vegetable and prepared 
                                               
5 The Charts are constructed on data extracted from UNSD, Comtrade database (for Chile), and The 
national Directorate for Trade Statistics (for Honduras).  WT/REG303/1 
 
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  foodstuffs, Chile's second and third largest imports from Honduras (respectively 19.5% and 18.4% 
of Chile's imports from Honduras), were Honduras' first and third largest exports to Chile 
(respectively 35.8% and 8.9%) but represented only 2.5% and 2% of Chile's global imports. These figures tend to show that Chile's profile of  imports from Honduras is not representative of 
Chile's global import profile. For Honduras however, the largest bilateral import, minerals (47.7% 
of Honduras' imports from Chile) is also Honduras' largest global import (21.3% of Honduras global imports), and corresponds to Chile's second largest global export (28.7%). Together with 
prepared foodstuffs (13.6% of Honduras' imports from Chile), it constitutes more than half of 
Honduras' imports from Chile (61.3%). Chile's largest global import, base metals (representing 36.9% of Chile's global exports) represents only 7.7% of Honduras imports from Chile.  
Chart 1.3 Chile and Honduras: product co mposition of merchandise trade, annual 
average (2005-2007) 
36.9 
28.7 6.0 6.0 4.8 3.9 3.8 3.4 6.7 
47.7 
13.6 8.4 8.0 7.9 7.7 2.0 4.6 35.8 
11.7 
8.9 8.8 8.6 4.2 3.9 3.5 3.2 2.5 2.3 2.0 4.6 
26.6 
22.2 
13.3 7.6 5.5 5.2 4.7 2.5 2.0 10.5 
21.3 
16.6 
12.8 8.1 7.7 7.5 6.0 4.5 4.0 2.9 2.0 6.7 43.1 
19.5 18.4 9.3 4.8 4.9 Chile's imports from Honduras
Honduras' imports from ChilePer cent
Total:  US$ 0.89
Total:  US$ 63 millionTotal:  US $39.8 billion
Total: US $ 5 billionTotal:  US $ 1.9 billion
Total:  US$ 56.6 billionHonduras' global exports
Chile's global exportsChile's global imports
Honduras' global imports
VegetablesPrepared 
foods
Minerals
ChemicalsPlastics, 
rubberTextiles
Precious stonesMachinery
VehiclesOther
MiscellaneousArticles of 
woodAnimal products
Fats and oils Wood pulpBase metals
 
 
Source: UNSD, Comtrade database. 
 
1.3  Trade in services and investment 
1.7.  In 2011, Honduras' share of total commercial services exports and imports was 0.03% and 
0.04% respectively. Chile's shares represented respectively 0.29% and 0.35% of world exports and imports. With total commercial services exports of US$1 billion, and imports of US$1.5 billion, 
Honduras was the world 90
th largest exporter and importer compared to Chile's ranking as 
31st largest exporter and 33rd largest importer (with commercial services exports of US$12.2 billion 
and imports of US$13.6 billion).  
1.8.  Tables 1.1A and 1.1B below show the breakdown of trade in commercial services and 
investment for Honduras and Chile, based on data for the period 2005-2010. Trade in commercial services data shows, for Chile and Honduras, a regular increase of both exports- and imports 
values, throughout the period with the exception of 2008. While transportation services constitute 
more than half of Chile's imports and exports of commercial services, for Honduras, travel represents the largest sector. For both imports an d exports, the value of Chile's global trade in WT/REG303/1 
 
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  commercial services is tenfold the value of Honduras global trade in services. On investment, FDI 
stocks and flows have regularly increased for both Parties with global outward and inward stocks in 
2010 at respectively US$49 billion and US$139 billio n for Chile, and US$42 million and US$6 billion 
for Honduras.  
Table 1.1 Trade in commercial services and investment with world, 2005-2010  
A. Chile 
Unit: in million US$ 
Service Item World  
Exports  Imports 
2005 2006 2007 2008  2009  2010  2005  2006  2007 2008 2009  2010  
Total 
commercial services 7,040 7,726 8,851 10,351 
 8,144  10,397  7,572  8,250  9,733 10,891  9,527  11,618  
Transportation 
services 4,301 4,695 5,213 6,456  4,720  6,394  4,135  4,571  5,274 6,646  4,778  6,571  
Travel 1,109 1,213 1,477 1,657  1,604  1,620  1,051  1,239  1,660 983  1,167  1,281  
Communication 
services 148 143 151 220  153  146  158 137 164 203  161  173  
Construction 0 0 0 0  0 0 0 0 0 0 0  0 
Insurance 
services   163 189 224 233  228  286  463 431 506 646  869  1,127  
Financial 
services 34 37 40 0  0 0 256 319 368 0 0  0 
Computer and 
information 
services 74 78 82 127 143 116 71 73 58 273 312   
258  
Royalties and 
licence fees 54 55 61 64  59 64 348 384 448 539 597    
701  
Other business 
services 1,087 1,236 1,518 1,577  1,222  1,751  1,037  1,040  1,215 1,580  1,628  1,485  
Personal, 
cultural and recreation services 69 78 84 17
 15 21 53 55 42 21  15  21  
 World  
 Outward  Inward 
 2005 2006 2007 2008  2009  2010  2005  2006  2007 2008 2009  2010  
Total FDI stocks 21,35
9 26,025 31,688 31,820  41,339  49,838  74,196  80,297  99,413 99,359 121,395  139,538  
Total FDI flows 2,183 2,171 2,573 8,041  8,061  8,744  6,984  7,298  12,534 15,150 12,874  15,095  
 
Source: National authorities, WTO Statistics database and OECD (for FDI). 
 
Table 1.1 Trade in commercial services and investment with world, 2005-2010  
B. Honduras 
Unit: in million US$ 
Service Item World  
Exports  Imports 
2005  2006 2007  2008  2009  2010  2005  2006  2007 2008 2009  2010  
Total commercial 
services 684 727 770  901 947.8  1,003.5  923 1,027  1,058 1,213 1,086.6  1,311.9  
Transportation 
services 39 39 50 54 52.3  48.6  500 532 625 697 459.8  587.6  
Travel 463  515 546  619 615.9  650.0  262 355 212 291 296.0  320.7  
Communication 
services 144 137 138 195 251.4  253.4  19 36 57 91 229.3  219.7  
Construction and 
installation 0.1 0 0  0 0 0 38 0 0 0 0  3.1  
Insurance services 18 21 24 25 21.1  25.0  9 10 80 73 50.1  90.4  
Financial services 6  0.02 0.4  0 0.0  0.0  13 14 7 10 9.2   17.5  
Computer and 
information 
services 0.1 1 0.3 0 0.1  4.5  5 12 15 1 0.8  3.2  
Royalties and 
licence fees 0.00 0 0  0 0 0 21 27 28 25 25.7  30.4  
Other business 
services 14 14 13 7 4.5  10.3  51 35 25 15 9.7  33.4  WT/REG303/1 
 
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  Service Item World  
Exports  Imports 
2005  2006 2007  2008  2009  2010  2005  2006  2007 2008 2009  2010  
Personal, cultural 
and recreation 
services 0.3 0.1 0.05  0 2.5  11.7  6 6 8 10 6.0  6.0  
 World  
 Outward  Inward 
 2005  2006 2007  2008  2009  2010  2005  2006  2007 2008 2009  2010  
Total FDI stocks 28 30 33 40  44 42 2,870  3,539  4,466 5,473 5,996  6,793  
Total FDI flows 2,135  2,212 4,852  9,151  7,233  9,231  -1.0 -.6 -1.5 1.0 -0.7 1.4 
 
Source: National authorities, WTO Statis tics database and UNCTAD (for FDI). 
 
2  CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
2.1  Background Information 
2.1.  The Treaty on Free Trade between Chile and Central America6 (hereinafter referred to as the 
Treaty) was signed on 19 October 1999 between Ch ile and each of the five Central American 
States.7 It establishes the basis for a Free Trade Area between the six Parties. The bilateral 
protocol between Chile and Honduras, which forms an integral part of the Treaty and contains, 
inter alia , the lists of concessions granted bilaterally on trade in goods and in services, was signed 
on 22 November 2005. As the Chile/Central Americ a Treaty applies bilaterally between Chile and 
each of the Central American States8, the present Factual Presentation  only presents the features 
of the Chile/Central America Treaty which apply to bilateral relations between Chile and Honduras and which constitute the Free Trade Agreement be tween Chile and Honduras (hereinafter called 
the Agreement). The Agreement entered into force on 19 July 2008.  
2.2.  The Parties notified the goods and serv ices aspects of the Agreement to the WTO on 
28 November 2011, in document WT/REG303/N/1–S/C/N/612. The notification was made pursuant 
to Article XXIV:7(a) of the GATT 1994 for goods, and to Article V:7(a) of GATS for services. The 
text of the Agreement, together with its Annexes,  is available on the Parties' official websites: 
 Honduras :  http://www.sic.gob.hn/ 
 
 Chile :  http://www.direcon.cl/ 
 2.2  Structure of the Agreement 
2.3.  The Agreement, covering trade relations be tween Chile and the Central American States, is 
composed of twenty-one Chapters, organized in se ven Parts. It is complemented by the Bilateral 
Protocol between Chile and Honduras, as well as Annexes and Appendices, related to specific 
Chapters of the Agreement and which include the Parties' Schedules for liberalization in goods and 
in services.  
2.4.  Box 2.1 below summarizes the legal framework established by the Agreement. Box 2.1 Structure of the Agreement 
Chapters, Annexes, 
and Appendixes Title/description 
PART I: GENERAL PROVISIONS 
Chapter 1 Initial provisions 
Chapter 2 General Definitions 
                                               
6 Original name in Spanish: "Tratado de Libre Comercio entre Chile y Centroamérica". 
7 Costa Rica, El Salvador, Guatem ala, Honduras, and Nicaragua. 
8 Article 1.01. WT/REG303/1 
 
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  Chapters, Annexes, 
and Appendixes Title/description 
PART II: TRADE IN GOODS 
Chapter 3 National Treatment and Market Access 
Chapter 4 Rules of Origin 
Chapter 5 Customs Procedures  
Chapter 6 Safeguard Measures 
Chapter 7 Unfair Trade Practices 
PART III: TECHNICAL BARRIERS TO TRADE 
Chapter 8 Sanitary and Phytosanitary Measures 
Chapter 9 Standardization and Metrological Meas ures, and Authorization Procedures  
PART IV: INVESTMENT, SERV ICES AND RELATED MATTERS 
Chapter 10 Investment 
Chapter 11 Cross-Border Trade in Services 
Chapter 12 Air Transport 
Chapter 13 Telecommunications 
Chapter 14 Temporary Entry of Business Personal 
PART V: COMPETITION POLICIES 
Chapter 15 Competition Policies 
PART VI: GOVERNMENT PROCUREMENT 
Chapter 16 Government Procurement 
PART VII: ADMINISTRATIVE AND INSTITUTIONAL PROVISIONS 
Chapter 17 Transparency 
Chapter 18 Administration of the Agreement 
Chapter 19 Dispute Settlement 
Chapter 20 Exceptions 
Chapter 21 Final Provisions 
  
Annex I Parties' Lists of non-conforming measures (existing measures) 
Annex II Parties' Lists of non-conforming measures (future measures) 
Annex III Parties' Lists of non-discriminatory quanti tative restrictions maintained (Services) 
 
Source: WTO Secretariat based on the Agreement. 
 
3  PROVISIONS ON TRADE IN GOODS 
3.1  Import duties and charges,  and quantitative restrictions 
3.1.1  General provisions 3.1.  Preferential trade in goods between the Pa rties is governed by Chapters 3 to 9 of the 
Agreement.
9 Chapters 15 to 21 are applicable to both trade in goods and trade in services, as 
appropriate.  
                                               
9 Chapter 9 also covers some elemen ts relevant for trade in services. WT/REG303/1 
 
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  3.2.  The Parties agree to apply national treatment to each others' goods in accordance with 
Article III of the GATT 1994 and other relevant WTO Agreements (Article 3.03). Annex 3.10(6) 
foresees however that Chile may adopt or maintain measures related to the import of used vehicles.
10 
3.1.2  Liberalization of trade and tariff lines 
3.3.  The tariff elimination programme agreed by the Parties is contained in Annex 3.04(2) to the 
Agreement, attached to the Bilateral Protocol. The Bilateral Protocol establishes the modalities 
applicable to the liberalization programme for Chile (Section A) and for Honduras (Section B). 
During the tariff elimination process, the Parties commit to apply in their bilateral trade the lower of the MFN duty or the duty resulting from the tariff elimination programme.  
3.4.  Articles 3.05 through 3.07 of the Agreement contain special disciplines applicable to 
temporary admission of goods
11, duty-free import of commercial samples of negligible value as 
well as the import of printed advertising material s, and treatment applicable to goods re-imported 
after having been repaired or altered. 
3.5.  Upon request by either Party, the Part ies shall consult to consider accelerating the 
implementation of the tariff elimination programme (Article 3.04, paragraph 4).  
3.1.3  Liberalization schedules 
3.6.  The customs duties resulting from the tariff elimination programme are established on an 
ad valorem  basis. The Parties are however authorized to use price bands mechanisms according to 
the modalities contained in Annex 3.04(6), which foresees that the tariff elimination programme does not apply to specific duties derived from the price bands mechanisms. In the case of Chile, 
the products which may continue to be subject to the price bands are: some wheat products and 
flour
12; some vegetable oils and fats13; and some cane or beet sugar products.14 In the case of 
Honduras, some cereals and milling industry products may also remain subject to price bands.15 
3.7.  Chile's Schedule defines four categories . Category A covers products for which tariff 
elimination takes place immediately at the entry into force of the Bilateral Protocol. Category B covers products
16 whose tariffs are progressively eliminated, with duty free treatment granted on 
1 January 2010. Category C covers products17 that will be granted duty free treatment by 
1 January 2015, after ten successive reductions. Finally, Category "EXCL" contains products18 
which are excluded from the liberalization programme . In relation with the category of excluded 
products, Chile grants Honduras a tariff rate quota for sugar (see below). 
3.8.  Honduras' Schedule19 defines four categories. Category A covers products for which tariff 
elimination takes place immediately at the entry into force of the Protocol. Category B covers products
20 whose tariffs were to be originally eliminated in five steps, with duty free treatment to 
                                               
10 As an exception to the national treatment principle and if in conformity with Chile's Law 18.483. 
11 Including the tax exemption by Chile for such prod ucts as established by Article 106 of the Customs 
Ordinance, contained in the Decree No 2 from the Ministry of Finance, dated 21 July 1998 (Annex 3.05). 
12 Sub-heading 1001.90 and Heading 1101. 
13 Part of Headings 1507 through 1515.  
14 Part of Heading 1701. 
15 Part of Headings 1005, 1102, 1103, and 1108. 
16 Some cereals and products of the milling industry, some oil seeds and grain, some vegetable fats and 
oil, some foodstuffs, and some mi neral fuels and oil products as we ll as some chemical products.  
17 Some lime and cement (2522.20.00, 2522.30.00, 2523.10.00, 2523.29.00, 2523.30.00, and 
2523.90.00), and some used tires (4012.11.00 to 4012.19.00, and 4012.90.10 to 4012.90.90). 
18 Including some cereals (SACH 1001.90.00), so me flour (1101.00.00), some sugar and sugar 
confectionery (1701.11.00 to 1702.90.90), some food preparations (2106.90.90), some used tires (4012.20.10, and 4012.20.90), worn clothing and other worn  textile articles (6309), and some used or new 
rags, scrap twine of textile material (6310.10.00).  
19 The Schedule of Honduras shall be interpreted purs uant to the Central American Tariff System (SAC). 
20 Some bovine animals and bovine meat (HS 01 and 02), natural honey (0409.00.00), some plants 
(0602.20.10, and 0602.90.10), some vegetables (in HS 07 and 14), some fruits (in HS 08), some flour (1105.20.20), some animal fats (1503.00.10), some food pr eparations, including juices, sauces and soups (in WT/REG303/1 
 
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  be granted on 1 January 2010. Category C covers products21 that will be granted duty free 
treatment by 1 January 2015, after (originally) ten successive reductions. Vehicles22, covered by 
Category "TV", will also be granted duty free tr eatment by 1 January 2015, though the progressive 
elimination of customs duties applicable to such products differ from those applicable to Category C. Category D covers products
23 that will be granted duty free treatment by 1 January 2017. 
Moreover, a number of products24 in Honduras' Schedule under Category "EXCL" are excluded 
from the liberalization programme. Furthermore a tariff rate quota is granted by Honduras to Chile for sugar (see below). 
3.9.  The Tables below present the liberalization programme applicable to the Parties.  
3.1.3.1  Chile 3.10.  Chile's applied tariff in 2008 consisted of 7,902 lines at the HS eight-digit level (HS 2002). 
99.9% of the tariffs were ad valorem  and 8 lines had non- ad valorem  tariffs. 35 lines were duty 
free, representing 0.4% of Chile's total tariff, co rresponding to 0.3% of its imports from Honduras 
during 2005-07. Table 3.1 shows the scheduled duty elimination in terms of tariff lines and trade, 
as applied by Chile to imports from Honduras. Following the entry into force of the Agreement, an 
additional 7,682 lines (97.2% of Chile's tariff) became duty-free for imports from Honduras. As a 
result, 97.7% of Chile's tariff were duty free for imports from Honduras (in 2008), corresponding 
to 72.7% of imports by value from Honduras. By  the end of the implementation period (2017), 
7,858 tariff lines, or 99.4% of Chile's tariff w ill be duty free for imports from Honduras, 
corresponding to 98.9% of its imports from Honduras. 44 tariff lines (corresponding to less than 0.6% of Chile's tariff) will remain dutiable, repr esenting 1.1% of Chile's imports from Honduras. 
Table 3.1 Tariff elimination commitments under the Agreement and corresponding 
average trade 
Duty phase-out 
period Number of 
lines % of total lines 
in Chile's tariff 
schedule Value of Chile's 
imports from 
Honduras 
(2005-2007) in 
million US$ % of Chile's 
total imports 
from Honduras 
2005-2007 
MFN duty free (2008)  35 0.4 49.8 0.3 
2008 7,682 97.2 10,302.3 72.4 
2012 126 1.6 3,584.5 25.2 
2016 9 0.1 10.2 0.1 
                                                                                                                                               
HS 19, 20 and 21), some lime products (2522.10.00 - 2522.30.00), some chemicals (2804.10.00 and 
2804.40.00), some pigments (3212.90.90 and 3215.19.20), some cosmetics and soap (in HS 33 and 34), some glues (in HS 35), some insecticides, other chemical  products, and some plastics (in HS 38 and 39), used 
tires and rubber (in HS 40), some apparel (in HS 42), a number of paper, paper pulp articles , and printed 
books (in HS 48 and 49), some fabrics (in HS 55), some footwear (in HS 64), some abrasive powder (in HS 68), some glass mirrors (in HS 70), some articles of iron and steel (in HS 73), so me aluminium and articles 
thereof (in HS 76), some knives (8211.10.00 through 8211.92.00), miscellaneous base metal articles (8309.90.40 and 8310.00.00), some machinery, mechanical appliances, and electrical machinery (in HS 84, 85, and 87), and some toys and manufactured articles (in HS 95 and 96). 
21 S o m e  m e at  pr o d u c t s  ( i n  H S 0 2 ) ,  s o m e  d ai r y  p r o d u c t s  ( i n  H S  0 4 ) ,  s om e  v e ge t ab l e s  a n d  f r u i t s  ( i n 
HS 07 and 08), some vegetable oils and fats (in HS 15) , some cocoa and cocoa preparations (in HS 18), some 
food preparations and beverages (in HS 19 - 22), some  residues from food indust ries and animal feed (in 
HS 23), some mineral products (in HS 25), some paints (in HS 32), some soaps and waxes (in HS 34), matches and some pyrophoric alloys (3605.00.00, and 36 06.90.90), some chemical products and insecticides 
(3805.10.00 through 3806.90.00, 3808.40, 3917.32, and 3917.33.20), some plastics (3925.20 and 3225.30), some rubbers, including used tires (in HS 40), some le ather articles (in HS 42), some made-up textiles (in 
HS 64), some articles of stone, plaster and cement and some ceramic and glass products (in HS 68 - 70), some iron and steel and articles thereof (in HS 72 and 73), some aluminium products (in HS 76), some tools of 
base metal (in HS 82 and 83), some machinery and electrical equipment (in HS 84 and 85), some vehicles and parts thereof (in HS 87), and some furniture, toys, an d miscellaneous manufactures articles (in HS 95 - 97). 
22 Forty tariff lines are covered by the special treatmen t for vehicles, including most products classified 
under 8702.10.10 - 8705.30.00, 8711.00.00 - 8711.50.00, and 8716.10.00 - 8716.80.10. 
23 Some products from Chapters 02, 04, 07, 09, 10, 15, 16, and 19 - 21. 
24 Some live animals (swine: 0103.91 and 0103.92; chicken: 0105.92, 0105.93, 0105.99), some meat 
(0203.11 through 0203.29, and parts of HS 0206 - 0208), some dairy products (HS 0404 - 0408), some vegetables (in HS 07), some cereals (in HS 10 and 11), so me vegetable oils (in HS 15), some sugar and sugar 
confectionery (in HS 17), precooked rice (1904.90.10), some ice creams (HS 2105), beer made from malt (HS 2203), some tobaccos (part of HS 2403), some wood products (HS 4407 - 4421). WT/REG303/1 
 
- 12 - 
 
 
  Duty phase-out 
period Number of 
lines % of total lines 
in Chile's tariff 
schedule Value of Chile's 
imports from 
Honduras 
(2005-2007) in 
million US$ % of Chile's 
total imports 
from Honduras 
2005-2007 
2017 15 0.1 126.4 0.9 
Remain dutiable 44 0.6 159.4 1.1 
Total 7,902 100.0 14,232.6 100.0 
 
Note:  Based on the HS 2002 nomenclature.  Source:  WTO estimates based on data provided by Chile. 
 
3.11.  Table 3.2 shows Chile's tariff elimination, by HS section. The 44 lines that will remain subject to duties once implementation is completed are found in sections II (Vegetable products), 
IV (Mineral products), VII (Raw hides, skins, leat her and furs), and XI (Stone and Glass), with final 
average tariffs at 6%, equal to the MFN applied rate.  
Table 3.2 Chile: Tariff elimination und er the Agreement, by HS section 
HS 
section MFN 
average 
% Total 
No. of 
lines MFN 
duty-free 
(2008) Number of duty-free lines 
under the Agreement No. of 
lines 
remaining 
dutiable Avg. Final 
Tariff 
(Dutiable) 
% 2008 2012 2016 2017 
I 6.2 567  566 1     
II 6.0 397  374 20  1 2 6.0 
III 6.0 65  36 29     
IV 6.0 398  324 48 9  26 6.0 
V 6.0 191  158 27  6   
VI 6.0 1,190  1,189 1     
VII 6.0 307  297   8 2 6.0 
VIII 6.0 86  86      
IX 6.0 142  142      
X 5.9 235 4 231      
XI 6.0 1,171  1,157    14 6.0 
XII 6.0 115  115      
XIII 6.0 180  180      
XIV 6.0 59  59      
XV 6.0 657  657      
XVI 6.0 1,266 2 1,264      
XVII 5.5 343 29 314      
XVIII 6.0 290  290      
XIX 6.0 23  23      
XX 6.0 213  213      
XXI 6.0 7  7      
Total 6.0 7,902 35 7,682 126 9 15 44 6.0 
 
Note:  Tariff lines subject to in-quota rates are ex cluded in the computation; for the calculation of 
averages, specific rates are excluded and the ad valorem  parts of alternate rates are included. 
Based on the HS 2002 nomenclature.  
Source: WTO Secretariat estimates based on data provided by Chile. 
 
3.1.3.2  Honduras 
3.12.  Honduras' applied tariff in 2008 consisted of 6,559 lines at the HS eight-digit level with 
2 lines with non ad valorem  rates of duty. Table 3.3 shows the scheduled duty elimination in terms 
of tariff lines and trade, as applied by Honduras to  imports from Chile. Before the entry into force 
of the Agreement (in 2008), 3,094 tariff lines (47.2%  of Honduras' tariff) were already duty-free 
for all products. On the entry into force of the Agreement (2008), an additional 2,339 lines (35.7% 
of Honduras' tariff) became duty-free for imports from Chile. As a result, 82.9% of Honduras' tariff 
was duty free for imports from Chile, corresponding to 91.8% of its imports from Chile. Two further phases of duty elimination are sched uled for 2012 and 2017. By the end of the 
implementation period (2017), 6,298 tariff lines, co rresponding to 96% of Honduras' tariff will be 
duty free for imports from Chile. At the end of the transition period, 261 tariff lines, for which WT/REG303/1 
 
- 13 - 
 
  duties are currently levied on an MFN basis, will remain dutiable, representing 3.1% of imports by 
value from Chile. 
Table 3.3 Tariff elimination commitments under the Agreement and corresponding 
average trade 
Duty phase-out 
period Number of 
lines % of total lines 
in Honduras's 
tariff schedule Value of Honduras 
imports from Chile 
(2005-2007) in 
million US$ % of Honduras's 
total imports 
from Chile 
2005-2007 
MFN duty free (2008)  3,094 47.2 44.9 71.9 
2008 2,339 35.7 12.4 19.9 
2012 397 6.0 1.6 2.5 
2017 468 7.1 1.6 2.6 
Remain dutiable 261 4.0 1.9 3.1 
Total 6,559 100.0 62.4 100.0 
 
Note:  Based on the HS 2007 nomenclature.  Source: WTO estimates based on data provided by Honduras.  
3.13.  Table 3.4 shows Honduras' tariff elimination,  by HS section. The 261 lines that will remain 
subject to duties once implementation is completed are found in sections I (Animal and animal products), II (Vegetable products), III (Foodstuffs),  IV (Mineral products), and IX (Textiles), with 
final average tariffs ranging from 7.8% to 26.8%, while average MFN applied rates for these entire 
sections range between 8.1% to 14%.
25  
Table 3.4 Honduras: Tariff elimination under the Agreement, by HS section 
HS 
section MFN 
average
% Total 
no. of 
lines MFN duty-
free 
(2008) Number of duty-free 
lines No. of lines 
remaining 
dutiable Avg. Final Tariff 
(Dutiable) % 
2008 2012 2017 
I 14.0 299 42 169 8 5 75 26.8 
II 9.8 371 105 190 25 25 26 15.7 
III 8.1 54 9 22 1 10 12 7.8 
IV 12.2 274 33 113 15 66 47 8.6 
V 2.9 178 113 57 3 5   
VI 1.9 961 776 103 51 31   
VII 4.5 335 148 128 44 15   
VIII 8.3 108 19 72 12 5   
IX 8.6 138 26 11   101 10.1 
X 5.1 294 149 27 118    
XI 9.7 920 115 796 4 5   
XII 12.7 64 2 31 10 21   
XIII 6.4 176 79 57 5 35   
XIV 6.9 54 15 39     
XV 3.1 696 466 138 36 56   
XVI 2.4 974 770 129 52 23   
XVII 6.1 234 51 69 1 113   
XVIII 3.9 237 150 87     
XIX 12.6 21  21     
XX 10.6 162 26 71 12 53   
XXI 7.8 9  9     
Total 6.0 6,559 3,094 2,339 397 468 261 15.1 
 
Note:  For the calculation of averages , specific rates are excluded and the ad valorem  parts of alternate 
rates are included. 
Based on the HS 2007 nomenclature.  Source:  WTO Secretariat estimates ba sed on data provided by Honduras. 
 
                                               
25 The MFN averages are calculated on the basis of th e total number of tariff lines for each section, as 
opposed to the averages calculated for the remaining dutiable lines, which only take into consideration the number of lines that remain dutiable  after the tariff elimination programme has been fully implemented, thus 
explaining why remaining dutiable tari ffs may, on average, be higher than  the corresponding MFN applied rate 
for a given section. WT/REG303/1 
 
- 14 - 
 
 
  3.14.  Chart 3.1 shows the average of dutiable rates for Honduras. The 261 lines that remain 
subject to duties once implementation is co mpleted are distributed between 15 chapters 
corresponding to agricultural products, and one chapter corresponding to wood and wood 
products. While average remaining dutiable rates are identical to the corresponding average MFN 
applied rates for Chapters 1, 11, 17, 22, 24, and 44, average dutiable rates resulting from the 
liberalization programme are lower than the M FN applicable rates for products falling under 
Chapters 2, 4, 7, 9, 10, 15, 16, 19, and 20. The average preferential rates range from 3.6% 
(21.3% MFN average) in HS 20, to 33.6% (36. 6% MFN average) for HS2. Relatively high 
preferential averages are also found in HS 10 (28.6% compared to average MFN of 35%), 
21 (18.8% compared to average MFN rate of 25%), and HS4 (20.6% compared to average MFN rate of 21.2%). 
Chart 3.1 Honduras: Average of du tiable rates, by HS Chapter 
010203040
01 02 04 07 09 10 11 15 16 17 19 20 21 22 24 44
HS Chapter
MFN PreferentialAverage rate of duty (%)  
 
 
Source: WTO Secretariat estimates base d on data provided by Honduras. 
 
3.1.4  Tariff rate quotas 
3.15.  Chile, in conformity with its legislation in force, grants Honduras a global preferential tariff 
rate quota of 1,000 metric tonnes for cane or beet sugar26, with a duty free in-quota rate.27 No 
phase out period is foreseen and the TRQ quanti ty does not increase overtime. The products 
subject to Chile's tariff rate quota are excl uded from the tariff elimination programme.  
3.16.  Similarly, Honduras grants Chile a tariff rate quota for cane sugar and certain sugar 
confectionery.28 Such products originating in Chile are granted a cumulated preferential tariff rate 
quota of 250 metric tonnes, with a duty free in-quota rate. No phase out period is foreseen and 
the TRQ quantity does not increase overtime. 
                                               
26 The covered products are classified under the Sub-heading 1701.91.00, 1701.99.10, 1701.99.20, and 
1701.99.90. 
27 The Base rate for these products, as contained in Chile's Schedule, is 98%. 
28 Products classified under tariff lines 1701.1100, 1704.10.00, and 1704.90.00. WT/REG303/1 
 
- 15 - 
 
  3.1.5  Import restrictions 
3.17.  The Parties commit to eliminate and not to introduce any non-tariff barriers to trade, except 
(i) if those are in conformity with Articles XX or XXI of GATT 1994, and (ii) those regulated by 
Chapters 8 and 9 of the Agreement (respectively SPS measures and measures related to normalization and metrology, as well as authorization procedures. 
3.18.  The Parties commit not to maintain or introduce any new import restriction or prohibition, 
unless provided for by Article XI of GATT 1994, which is incorporated into and forms an integral part of the Agreement (Article 3.10). Except as  provided for by the provisions related to 
antidumping and countervailing measures, the Agre ement prohibits import price requirements. In 
case a Party adopts or maintains an import prohibition or restriction, consultations shall take place between the Parties with a view to avoid undue distortions of price mechanisms, sale and distribution of goods in either of the Parties.  
3.19.  Annex 3.10(6) foresees, as an exception to the prohibition of import restrictions, that Chile 
may adopt or maintain measures related to the import of used vehicles. 
3.2  Rules of origin 
3.20.  Disciplines regarding rules of origin are set out in Chapter 4 of the Agreement.
29  
3.21.  Articles 4.02 through 4.05 provide the substantive rules. A good30 is considered as 
originating when: 
a. it is wholly obtained or produced entirely in the territory of one or more Parties;  
b. it is produced in the territory of one or more Parties, using exclusively originating 
material (as defined in Chapter 4); 
c. it is produced in the territory of one or more Parties, using non-originating materials, 
which comply with a change of classification  (CTC), a regional value content (RVC), or 
other requirement, as specified in Annex 4.03, which contains the Specific Rules; 
d. it complies with the RVC31, determined in Article 4.07, and it is produced in the territory 
of one or more Parties, though one or more non-originating parts or materials do not 
comply with the CTC requirement, if such lack of compliance is the result of: 
i. the good being imported once, but without assembly; 
ii. the good and its parts being classified under the same Heading because the division 
into Sub-headings is not possible; or 
iii. the good and its parts being classified under the same Heading but distinguished 
through specific descriptions. 
3.22.  For goods covered by d) above, which comply with the Specific Rules contained in 
Annex 4.03, RVC compliance shall not be necessary. 
3.23.  When goods are not wholly obtained or prod uced in one or more Parties, or when they are 
not entirely produced in one or more Parties exclusively from originating materials of one or more 
Parties, they must satisfy the product specific ru les in Annex 4.03. Its Section A contains general 
interpretative notes, while Section B lists the specific rules of origin applicable between the 
                                               
29 Article 4.01 defines the terms used in Chapter 4. 
30 A set of goods is originating only if each good in the set is originating and meet the requirements 
established in Chapter 4. 
31 The RVC is determined in Article 4.07. It shall, in principle, not be lower than 30%, unless specifically 
provided for in Annex 4.03. This specific requirement does not apply to goods contained in HS Chapters 61 to 63 (Apparel and clothing accessories, made-up textiles articles and worn clothing, in particular). WT/REG303/1 
 
- 16 - 
 
 
  Parties.32 Section C, attached to the 2005 Bilateral Protocol between Chile and Honduras, 
complements Annex 4.03. In most cases, the specific rules require a change to a specified 
HS heading (four digit) or subheading (six digit), sometimes with exceptions (in the case of 20 Headings
33). For a number of products, no CTC change is required provided that a RVC (usually 
of no less than 30%34) is reached. In a few cases, the product specific rules define a 
manufacturing or processing operation that confers origin. This is particularly the case for some agricultural goods, some chemical and pharmaceutical products as well as plastics, and for some 
goods with a historical value.  
3.24.  As a principle, and according to paragraph 3 of Article 4.02, a Party may cumulate origin in 
relation to goods from countries for which the Treaty on Free Trade between Chile and Central 
America (hereinafter referred to as "the Treaty") is in force. Moreover, goods originating from the 
territory of one Party of the Treaty, incorporating goods from the territory of another Party, shall 
be considered as originating from the latter (Article 4.06). However, in cases involving Chilean goods, the Parties shall, two years after the entr y into force of the Agreement, establish a work 
programme to examine the possibility for material originating in Chile to benefit from cumulation 
with a view to comply with the intra-Central American rules of origin standards
35, provided the 
final goods which incorporate such materials enjoy free trade, both between Chile and each 
Central American country as well as between them36 (Article 4.02, paragraph 5).  
3.25.  For the determination of origin, the princi ples of the WTO Agreement on Customs Valuation 
apply to the internal transactions, unless otherwis e provided for in the Agreement. In case of 
conflict, the specific provisions of the Agreement would prevail (Article 4.02, paragraph 2).  
3.26.  Additional disciplines on minimum operations  not conferring origin, the treatment of indirect 
materials, the de minimis  level under which non originating materials not complying with rules 
conferring origin may still be determined as originating for the purposes of the Agreement37, 
fungible goods, sets or assortments of goods, accessories, spare parts and tools, containers and 
packaging materials in which a good is packaged for retail, containers for shipment, and transhipment, direct shipment or international transit are contained in Articles 4.05 to 4.14. 
3.27.  Moreover, Chapter 5 on customs procedures contains a series of administrative rules 
applicable to, inter alia , the certification and declaration of origin, which shall conform to a single 
certificate which has been elaborated by the Parties (Article 5.02).
38 Disciplines related to the 
claim for preferential treatment, the production of supporting documents and other obligations 
related to importations, the validity of proof of origin, advance ruling are contained in Articles 5.03 
to 5.11. In particular, a detailed verification process is also established by the Agreement (Article 5.08); penalties against violation of each Party's customs-related laws and regulation shall 
be maintained or adopted (Article 5.11); and confidentiality rules are established (Article 5.07). 
                                               
32 These rules are also applicable between Chile and the other Central American States. 
33 In relations with some specific rules related to Chapters 17, 18, 20-22, 24, 30, 50, 52, 54, 55, 61-64, 
72, 84, and 85. 
34 The RVC is defined in Article 4.07. RVCs are requested, usually as an alternative to change in 
classification, in particular for some products clas sified in Chapters 09 (Coffee), 20 (some foodstuffs), 
32 (pigments), 39 (plastics), 64 (footwear), 73 (articles of iron and steel), 83 (miscellaneous articles of base metal), 84 and 85 (Machinery and electrical equipment), 90 (mechanical instruments), 94 (furniture), and 96 (miscellaneous manufactured articles). In one case, the RVC is set at 20% (HS 8418.50; refrigerators). In four cases, the RVC is set at 35% (HS 2007, 2008.11 through 2008.91, 2008.92 through 1008.99, and 2009.90). In three cases, the RVC is set at 40% (HS 64.01 through 64.05, 6406.10, and 9403.10 through 9403.80).  
35 Such work programme had not yet been established at the time the factual presentation was drafted. 
36 In case such treatment is granted to a third party before it is granted to Chile, Chile should 
immediately benefit from a similar trea tment (Article 4.02, paragraph 6). 
37 The de minimis  rule is not applicable to material used in the production of goods classified under 
HS Chapters 01 to 27 (Agricultural and mineral products). 
38 The single certificate of origin has been developed jointly by the Parties. It has been published in the 
Official Gazette of Chile and can be viewed under Honduras' official website at: http://www.sic.gob.hn/dgiepc/files/Certificado-de-Origen-TLC-Chile.pdf . WT/REG303/1 
 
- 17 - 
 
  3.3  Export duties and charges,  and quantitative restrictions 
3.28.  The Parties commit not to maintain or introduce any new export restriction or prohibition, 
unless provided for by Article XI of GATT 1994 (Art icle 3.10). The Agreement prohibits export price 
requirements. In case a Party adopts or maintains an export prohibition or restriction, consultations shall take place between the Parties with a view to avoid undue distortions of price 
mechanisms, sale and distribution of goods in either of the Parties.  
3.29.  Moreover, a Party may not maintain or adopt an export tax on goods destined to the other 
Party unless such taxes are imposed for internal consumption (Article 3.14). In the case of 
Honduras, this export tax prohibition does not apply to trade in bananas, export taxes on which 
had to be progressively reduced to US$0.04 per box of 40 net pounds
39, as indicated in 
Annex 3.14 of the Agreement.  
3.4  Regulatory provisions on trade in goods 
3.4.1  Standards 
3.4.1.1  Sanitary and phytosanitary measures 3.30.  Chapter 8 of the Agreement covers Sanitary and Phytosanitary Measures (SPS). The 
Agreement establishes a framework, based on the WTO SPS Agreement, concerning the principles, 
standards and procedures related to SPS measures which affect, directly or indirectly, trade between the Parties. Through mutual co-operation, th e Parties shall facilitate trade, while avoiding 
that it creates a SPS risk. They also commit to prevent the introduction or dissemination of pests 
or diseases and to improve plant and animal life or health as well as food safety (Article 8.02). 
3.31.  The Agreement reaffirms the Parties' rights (Article 8.03) and obligations (Article 8.04) 
based on the disciplines contained in the WTO SPS Agreement.
40 
3.32.  The Agreement underlines that the Parties will base their SPS measures on international 
standards and guidelines, in particular those of the IPPC, OIE, and Codex, but that they may introduce or maintain SPS measures which result in a different level of SPS protection if there is a 
scientific justification (Article 8.05). The Parties also commit to establish harmonized systems in 
SPS-related areas, such as sampling methods; testing; inspection and certification of animals, plants, and their products and by-products; as well as food safety. Other provisions in Chapter 8 
highlight certain aspects of provisions in the WTO SPS Agreement. This is in particular the case for 
equivalence (Article 8.06), risk assessment and determination of the appropriate level of protection (Article 8.07), and recognition of pest- or disease-free areas or areas of low pest or disease prevalence (Article 8.08). Annex C of the WTO SPS Agreement is applicable to the Parties 
in relation to control, inspection and approval procedures (Article 8.09). 
3.33.  The Agreement contains transparency provisions (Article 8.10), which are essentially based 
on disciplines in Annex B of the WTO SPS Agreement. The Parties shall use the Enquiry points 
established under the WTO SPS Agreement as communication channels.  
3.34.  A specific mechanism for regional co-operation is established through a Committee on 
SPS measures (Article 8.11).
41 The Committee shall, inter alia , elaborate a roster of qualified 
specialists in the areas of food safety, plant and animal health, who may serve in the context of ad 
hoc expert groups. 
3.4.1.2  Technical barriers to trade 3.35.  Chapter 9 of the Agreement covers standardization and metrological measures, and 
authorization procedures. It addresses essentially measures related to Technical Barriers to Trade 
                                               
39 A net pound corresponds to 454 grams of bananas.  
40 The definitions of terms used in  this Chapter refer directly to those in Annex A of the WTO SPS 
Agreement, as well as those in the glossary of harm onized terms from the International Office of Epizootics 
(OIE), the International Plant Protection Convention (IPPC), and the Codex Alimentarius (Codex). 
41 Annex 8.11 lists the authorities of both Parties competent on SPS matters. WT/REG303/1 
 
- 18 - 
 
 
  (TBT), but also expands coverage to other areas of  trade. While it reaffirms the Parties' existing 
rights and obligations under the WTO TBT Agreement, it also adds to them specific disciplines. 
Chapter 9 does not apply to SPS measures. 
3.36.  The Agreement recognizes each Party's right to elaborate, adopt and apply standardization 
and metrological measures, and authorization procedures, as well as technical regulations and 
procedures for assessment of conformity, which pe rmit the fulfilment of legitimate objectives. 
Consistent with WTO rules, such measures and procedures shall not create unnecessary obstacles 
to trade between the Parties, national treatment shall be granted to products from the other Party, 
and international standards shall be taken into account, as appropriate, when elaborating such measures (Article 9.04). When elaborating standards and technical regulations, the Parties shall conduct a risk assessment, taking into account Article 9.05. 
3.37.  When possible, the Parties shall endeavour to ensure compatibility between their respective 
standardization measures, without reducing the level of security and protection of human, animal or plant life and health, and the environment and consumer protection. A Party shall accept the 
other Party's technical regulations, provided the objectives of its own regulations are fulfilled. In 
case equivalence is not granted, the Parties' deci sions shall be explained (Article 9.06). Moreover, 
with a view to facilitating trade, positive consideration shall be given to requests by a Party to 
negotiate with the other Party agreements on the mutual recognition of conformity assessment 
results (Article 9.07). Similar rules apply in relation to authorization procedures.
42 
3.38.  Each Party shall ensure, as far as possible, the traceability of its metrological standards as 
recommended by the International Bureau of Weig hts and Measures (BIPM) and the International 
Organization of Legal Metrology (OIML). 
3.39.  Transparency provisions contain notificati on obligations, using WTO formats, and at the 
entry into force of the Agreement, each Party shall designate an entity to carry out notification 
obligations as well as to function as an information centre and to respond to enquiries on matters 
covered by Chapter 9 (Article 9.10).  
3.40.  Technical co-operation and exchange of information between the Parties are also 
encouraged (Article 9.13) and bilateral co-operation is strengthened through the establishment of 
a Committee on Standardization, metrology and authorization procedures43 to, inter alia , monitor 
the implementation and operation of Chapter 9 (Article 9.12). 
3.4.2  Safeguard mechanisms 
3.41.  Chapter 6 of the Agreement contains discipl ines on safeguards. While Articles 6.02 and 6.03 
establish the fundamental rights and obligations of the Parties related to the use of bilateral and global safeguards, the procedures applicable to such safeguard measures are regulated by 
Articles 6.04.  
3.42.  According to Article 6.05, in case of a dispute about a safeguard measure, a Party may not 
request the establishment of a panel (under the dispute settlement mechanism established by the 
Agreement in Chapter 19), as long as a safeguard measure is merely proposed.  
3.4.2.1  Bilateral safeguards 3.43.  Under Article 6.02, bilateral safeguards may be introduced only if, as a result of the 
reduction or elimination of a tariff under the Agreement, an originating good is imported in such 
increased quantities, either in absolute terms or relative to domestic production, and under such 
circumstance that the imports are a substantial cause of serious injury or threat thereof to the domestic industry of the importing Party producing a like or directly competitive good. This 
possibility to use bilateral safeguards is limited to a transitional period of two years from the end 
                                               
42 The terms "authorization procedure" refers to all mandatory administrative processes for obtaining a 
registration, permit, license or other au thorization, for a product or a service to be produced, sold or used for 
specific purposes or under stated conditions. 
43 The national authorities representing the Parties in the Committee are listed in Annex 9.12. WT/REG303/1 
 
- 19 - 
 
  of the period foreseen, for liberalization of tariffs on each good as established in the tariff 
elimination programme. 
3.44.  The safeguard measure may consist of either a suspension of a future tariff reduction 
foreseen in the tariff elimination programme; or an increase in the rate of duty on the product back to a level that does not exceed the lesser of (i) the MFN applied rate of duty in effect at the 
time the measure is applied; and (ii) the MFN applied rate of duty in effect on the day immediately 
preceding the date of entry into force of th is Agreement. The start of an investigation
44 shall be 
notified to the other Party. A measure may not be kept for more than three years, with a 
possibility to prolong it for an additional year, but not after the end of the transitional period, 
unless the other Party agrees. Moreover, a bilateral safeguard may not be applied on a given product more than twice, and in the case of a second application, a safeguard-free period 
equivalent to half of the duration of the initial measure shall be respected. Article 6.02 foresees 
the possibility of imposing provisional safeguar d measures, with certain limitations. A Party 
applying a bilateral safeguard measure shall also offer compensation to the other Party. Should a mutual agreement not be found on compensation, the other Party may impose tariff measures that 
are substantially equivalent to losses caused by the imposition of a bilateral safeguard measure. 
3.4.2.2  Global safeguards 3.45.  Each Party maintains its rights and obligations to take global safeguard measures, 
consistent with Article XIX of GATT 1994 and th e WTO Agreement on Safeguards, except those 
regarding compensation or retaliation and excl usion of a safeguard measure that would be 
incompatible with the provisions of Article 6.03. Unless imports from a Party constitute a substantial part of total imports
45 of the other Party and an important contribution to the serious 
injury or threat thereof46, a Party imposing a global safeguard shall exclude from such measure 
the imports from the other Party. General safeguards may only take the form of tariff measures. A Party imposing a general safeguard to imports from  the other Party shall offer compensation to the 
other Party. As in the case of bilateral safegu ards, should a mutual agreement not be found on 
compensation, the other Party may impose tariff measures with effect substantially equivalent to losses caused by the imposition of a safeguard measure. 
3.4.2.3  Safeguard measures related to  balance of payment (BOP) difficulties 
3.46.  In the event of serious BOP and external fina ncial difficulties, the Parties' right to adopt or 
maintain restrictions on trade in goods or in trade in services are preserved in accordance with conditions in Article 20.04, which mirrors to a large extent the BOP provisions of the WTO 
Agreements and the constitutive text of the International Monetary Fund.  
3.4.3  Anti-dumping and countervailing measures 3.47.  In Chapter 7 (Unfair trade practices), the Agreement confirms the Parties' rights and 
obligations under Article VI of the GATT 1994 and the WTO Agreements on Antidumping and on 
Subsidies and Countervailing measures (Article 7.01). The Parties also indicate their shared objective to promote important reforms in that matter and commit to join efforts to achieve such 
reforms in the context of the WTO and the Free Trade Area of the Americas. Two years after the 
Treaty between Chile and the Central American States has entered into force for all the Parties, the Parties will establish a work programme to ex amine the possibility to promote such reforms in 
the framework of their reciprocal trade. 
                                               
44 The Parties have identified their in vestigation authorities in Annex 9.11. 
45 The "substantial part of total imports" condition is met when a Party is one of the five largest 
exporters of a given product into the territory of the Party envisaging the measure, based on data for the three previous years. 
46 When determining if a Party's imports would constitute an "important contribution to the serious 
injury or threat thereof", the investigating authorities of the other Party would consider factors such as the changes in the participation of the other Party in total imports, as well as the volume of imports of that other Party and changes that such volume has suffered. Generally , if a Party's growth rate during the period that saw 
the injurious surge of imports is significantly lower than the growth rate of total imports from all sources over the same period, the contribution to the serious injury is not considered "important". WT/REG303/1 
 
- 20 - 
 
 
  3.4.4  Subsidies and State-aid 
3.48.  According to Annex 3.09, which was agreed as part of the 2005 Bilateral Protocol, Chile and 
Honduras 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. Chile and Honduras may not maintain or introduce any export 
subsidy on any agricultural good in their reciprocal trade. 
3.4.5  Customs-related procedures 
3.49.  The WTO Customs Valuation Agreement is applicable for customs valuation under the 
Agreement (Article 3.08). The Parties commit not to  base the determination of goods values on 
minimal values.  
3.50.  In relation to bilateral trade or originating goods, customs and consular fees may not be 
collected by the Parties (Article 3.11). 
3.51.  The provisions on marks of origin contained in Article IX of GATT 1994 are incorporated into 
and made an integral part of the Agreement.  
3.52.  In addition to aspects specifically related to the implementation of rules of origin disciplines, 
Chapter 5 of the Agreement covers customs procedures at large, related to both imports and exports procedures. Obligations related to imports and exports are contained in Articles 5.03 and 
5.04. Disciplines and commitments on the simplification of certain customs procedures 
(Article 5.05), confidentiality rules (Article 5.07), advance ruling (Article 5.09), review and appeal of administrative decisions (Article 5.10), sanctions (Article 5.11), uniform application (Article 5.12), and co-operation in customs-related matters, including through notification of 
relevant laws, regulations, and decisions (Article 5.13) establish a set of common rules on customs 
procedures.  
4  PROVISIONS ON TRADE IN SERVICES 
4.1  Scope and definition 
4.1.  Rules governing trade in Cross-border trade in services
47 are found in Chapter 11. Specific 
disciplines on temporary entry of business personal are contained in Chapter 14. Investment, 
encompassing GATS mode 3 (covered investment) bu t not limited to services-related investments, 
is dealt with in Chapter 10. To complement the more general disciplines on services, Chapter 12, on air transport, and Chapter 13, on telecommunications, establish rules and enhance the regulatory disciplines specific to these two services sectors, as compared with the general 
provisions on services. Certain provisions of Chapter 9 (on standardization, metrological measures, 
and procedures of authorization
48), and of Chapter 16 (on government procurement) refer to 
certain services only. In addition, Chapters 1, 2, and 17-21 of the Agreement, as well as the 
related Annexes, contains provisions of general application which may also be applicable to trade 
in services.  
4.2.  The measures covered by Chapter 11 include: (i) the production, distribution, marketing, sale 
and delivery of cross-border services; (ii) the purc hase, payment or use of a cross-border service; 
(iii) the access to and use of distribution and transportation systems related to cross-border 
service provision; (iv) the presence in its territory  of a service provider of the other Party; and (v) 
the provision of a bond or other form of financial security as a condition for the provision of a 
cross-border service. Chapter 11 however does not cover the provision of services in the territory 
of one Party, through investment in such territory. Moreover, (i) governmental subsidies; (ii) most 
                                               
47 The term "cross-border services" covers services (i ) from the territory of one Party to the territory of 
another party (mode 1); (ii) in the te rritory of a Party to a consumer of another Party (mode 2), and (iii) by a 
service provider through the presence of natural person s of a Party in the territo ry from elsewhere (mode 4). 
48 Applicable to computer and computer-related services. WT/REG303/1 
 
- 21 - 
 
  air transport services49, including traffic rights and some auxiliary services; (iii) governmental 
service or functions50, (iv) cross-border financial services; and (v) government procurement 
(Article 11.02) are excluded from the coverage of Chapter 11. 
4.3.  Non-conforming measures are listed in Annexes I and II, which contain the Parties' 
reservations on national and MFN treatments, and local presence, while Annex III lists their non-
discriminatory quantitative restrictions, in relation to market access. 
4.4.  The Parties agreed to deepen the liberalization of bilateral trade in services through future 
negotiations to be initiated under the auspices of the Free Trade Commission, with a view to 
eliminate the remaining non-conforming measures listed in Annexes I and II (Article 11.11). 
4.2  Denial of benefits 4.5.  Under Article 11.10, a Party may deny the benefits of the relevant chapters to a service 
supplier or investor of the other Party if that person is an enterprise owned or controlled by 
persons of a third party and if the service supp lier or investor has no substantive business 
activities in the territory of the other Party.  
4.3  General provisions on trade in services 
4.3.1  Market access  
4.6.  No provision of the type under GATS Arti cle XVI exists in the Agreement. Article 11.09 on 
non-discriminatory quantitative restrictions
51 does not specifically prevent the Parties from taking 
quantitative restrictions, and thus does not guarantee preferential access to each others' markets. 
It however requests each Party to list, in Annex III of the Agreement, existing52 measures that 
constitute non-discriminatory quantitative restrictions. Moreover, non-discriminatory quantitative restrictions that have been or will be adopted af ter the entry into force of the Agreement shall be 
notified by one Party to the other and added to Annex III.  
4.7.  Periodically, but at least once every two ye ars, the Parties shall endeavour to negotiate the 
liberalization or the elimination of existing quantitative restrictions or restrictions that have been 
adopted by a Party after the entry into force of the Agreement.  
4.3.2  National and MFN treatment 4.8.  Under Article 11.03 on National Treatment, each Party shall accord to (cross-border) service 
suppliers of the other Party treatment no less favourable than that it accords, in like 
circumstances, to its own service suppliers.  
4.9.  Under Articles 11.04 on MFN treatment, each  Party shall accord to service suppliers of the 
other Party treatment no less favourable than that it accords, in like circumstances, to service 
suppliers of non-parties to the Agreement.  
4.10.  The Parties' reservations on non-conf orming measures related to national and MFN 
treatments are contained in Annexes I and II of the Agreement. 
                                               
49 The following air transport services are howeve r covered by the Agreement: (i) maintenance and 
repair services; (ii) specialized air transport services; and (iii) co mputerized reservation systems. 
50 Such as: law enforcement, correctional services, pension or unemployment insurance or social 
security services, social welfare, publ ic education, public health and child attention or protection of children. 
51 The term "quantitative restrictions" means measures that imposes limitations on (i) the number of 
service providers, whether in the form of numerical qu otas, monopolies, the requirement of an economic needs 
test, or through any other quantitative form; or (ii) th e number of service operations, whether in the form of 
numerical quotas, the requirement of an economic  needs test, or any other quantitative form. 
52 The term "existing" refers to the date of entry into force of the Bilateral Protocol between Chile and 
Honduras (19 July 2008). WT/REG303/1 
 
- 22 - 
 
 
  4.3.3  Local Presence 
4.11.  Under Article 11.06, a Party shall not requir e that a service provider from the other Party 
establishes or maintain a representative office or is a resident in the Party where it provides services.  
4.12.  The Parties' non-conforming measures related to local presence requirements are contained 
in Annexes I and II of the Agreement. 
4.3.4  Temporary movement of business persons
53 
4.13.  Chapter 14 of the Agreement reflects th e preferential trading relationship between the 
Parties existing at the time of the conclusion of the Agreement, their mutual objective to facilitate temporary entry of business people of both Parties, according to the principle of reciprocity, and the need to establish transparent criteria and procedures for temporary entry.
54 I t als o re fle c ts  
their need to ensure border security and to protect the domestic labour force and permanent 
employment in their respective territories (Article 14.02).  
4.14.  Each Party commits to grant temporary entry to business persons for the categories of 
personnel identified in Annexes 14.04 and 14.04(1), which comply with the national regulations 
related to health and public security, as well as for the protection of national security (Article 14.04). The categories of personnel covered are: (i) business visitors involved in specific 
activities; (ii) traders and investors; and (iii) personnel transferred within an enterprise. Business 
persons contained in the above-mentioned categories shall be considered, both by Chile and Honduras, as performing activities useful and beneficiary for the respective countries. They shall be granted a temporary resident visa, possibly extendible (Annex 14.04(1)). 
4.15.  In the case of business visitors seekin g to engage in a business activity listed in 
Appendix 14.04(A)(1)
55, a Party may require proof of nationality of the applicant, details of the 
activity to be conducted in the other Party, and its international character. Proof that the main 
source of revenue and the registered place of such an activity are located outside the Party 
concerned, and that the principal place of business and the place where most of the profit is made 
is located outside the territory of the Party granting temporary entry are also required. Neither 
Party may require, as a condition for temporary entry, prior approval procedures or petitions. 
4.16.  In the case of traders and investors, each Party shall authorize temporary entry of business 
persons with supervisory, executive or specialized  knowledge, provided that the person seeks to 
conduct a substantial trade in goods or services, principally between the territory of the two 
Parties, or to establish, develop, administer or provide technical advice in order to manage a key 
investment in which the person or enterprise is committing a substantial amount of capital.  
4.17.  In the case of personnel transferred within an enterprise, each Party shall grant temporary 
entry to a business person that seeks to carry out managerial or executive functions or that 
possess specialized knowledge. Each Party may require that the person has been employed by the company, continuously, during one year, within three years immediately preceding the date of 
filing of the application.  
4.18.  For the three above-mentioned categories of personnel, neither Party may require labour 
certification tests as a condition for temporary entry of traders and investors, or impose any numerical restriction relating to temporary entry.  
                                               
53 "Business persons" are nationals from a Party pa rticipating in trade of goods or services, or 
investment activities. "Temporary movement" refers to the entry of a business person from a Party in the 
territory of the other Party without the intention to establish permanent residence.  
54 The existing immigration measures applicable by  the Parties are listed in Appendix 14.04(A)(3). 
55 The business activities covered by Appendix 14.04(A)(1) are the following: research and Design; 
agriculture, manufacture and production; marketing; sales; distribution; after-sales services; general 
services (consultants, managers, superv isors, financial services  personnel, public rela tions staff, advertising 
staff, travel agents, tour guides, tour op erators, translators,  and interpreters). WT/REG303/1 
 
- 23 - 
 
  4.19.  The Parties agree to jointly develop criteria, definitions, and interpretations for the proper 
implementation of Chapter 14. Moreover, in addi tion to the provisions on transparency in 
Chapter 17, each Party shall provide the other Party such materials that will enable it to be aware 
of measures relating to Chapter 14. Furthermore, no later than one year after the date of entry 
into force of this Agreement, the Parties will pr epare, publish and make available to interested 
parties a consolidated document with explanatory material regarding the requirements for 
temporary entry (Article 14.05).  
4.20.  In case temporary entry to the territory of a Party is denied, the Dispute Settlement 
Mechanism in Chapter 19 may be used by a Party only if there is a recurrent pattern of practice, 
and if the affected business person has exhausted all internal administrative recourse available to him/her (Article 14.06). 
4.3.5  Performance requirements 
4.21.  Article 11.07 establishes general principles th at the Parties shall endeavour to apply if they 
adopt measures relating to the requirements and procedures for granting permits, authorizations, licenses or certifications to nationals of the other Party. In particular, such measures shall be 
based on objective and transparent criteria, not more burdensome than necessary to ensure the 
quality of the service, and shall not constitute  a disguised restriction on trade in services. 
4.22.  Annex 11.13 of the Agreement contains the ru les to be followed in the professional services 
sector in the context of the harmonization of the requirements and procedures for granting 
licences.  
4.3.6  Senior managers and board of directors 4.23.  The Agreement does not contain specific provisions concerning the nationality of senior 
managers and of the Board of Directors. Howeve r, some non-conforming measures listed in 
Annex I contain requirements related to senior managers and/or board of directors (nationality and/or residence).  
4.3.7  Provisions on investment 
4.24.  Chapter 10 covers investment. It states that the Agreement between Chile and Honduras 
for the promotion and reciprocal protection of investments signed on 11 November 1996 
(hereinafter referred to as the Investment Agreement
56) constitutes an integral part of the 
Agreement. However, in case of conflict betw een the Agreement and the Investment Agreement, 
the Agreement shall prevail except for matters related to initial provisions (Chapter 1), administration of the Agreement (Chapter 18) , dispute settlement (Chapter 19), and final 
provisions (Chapter 21). The Investment Agreement states, inter alia , that "if a Party grants 
special advantages to investors of any third party under an agreement establishing a free trade area, a customs union, a common market, an economic union or any other form of regional 
economic organization, or under an agreement partly or wholly related to taxation, a Party shall 
not be obliged to accord such advantages to the investors of the other Party" (Article IV of the Investment Agreement). 
4.25.  Within two years from the entry into forc e of the Agreement, the Parties shall examine the 
possibility to develop and expend the rules and disciplines contained in the Investment Agreement
57, which would then become part of the Agreement (Article 10.02).  
4.26.  The Agreement establishes a Committee on investment and cross-border services. 
                                               
56 The Investment Agreement contains provisions on  the following matters: promotion, admission and 
protection of investments; treatment of investme nts; free transfer; expropriation and compensation; 
subrogation; dispute settlement between the Parties and an investor of the other Party; dispute settlement between the Parties; and consultations. 
57 Negotiation, as such, had not started at the time the factual presentation was drafted. However, in 
2012, the Chilean Investment and Services' Committee and authorities of Central America met. On that 
occasion, both Parties exchanged positions about possible future work schedule of the RTA in relation to investment. WT/REG303/1 
 
- 24 - 
 
 
  4.4  Liberalization commitments 
4.27.  Liberalization modalities for Chapter 11 follow a "negative list" approach which assumes that 
all sectors or sub-sectors covered by these chapters  are liberalized, in terms of the disciplines of 
national treatment, MFN, and local presence, unless otherwise provided in the Parties' 
non-conforming measures in Annexes I and II. A phasing out calendar is foreseen for some 
non-conforming measures58 that were applied prior to the entry into force of the Agreement 
(Annex I). The phasing out takes the form of a gradual reduction of the aspects of the measures 
that are not in conformity with the general commitments contained in Articles 11.03 (national 
treatment), 11.04 (MFN treatment), and/or 11.06 (local presence).  
4.28.  The Agreement does not guarantee pr eferential access to each Party's market. 
Nevertheless, the obligation to list the measures that constitute non-discriminatory quantitative 
restrictions, in Annex III to the Agreement, give s an indication of the types of market access 
restrictions that may be applied in the context of bilateral trade in services.  
4.4.1  Chile's liberalization commitments 
4.29.  In its GATS schedule, Chile has made commitments in 42 out of 155 services sectors, 
essentially on mode 3, with some commitments  on modes 1 and 2 in telecom and tourism.  
4.30.  Chile's GATS MFN exemptions cover measures establishing dispute settlement procedures in 
bilateral treaties on the protection of investment; reciprocal measures related to maritime 
transport - in particular freight; national treatment for suppliers from signatories of the 1977 International Land Transport Convention
59; and national treatment for certain co-produced 
cinematographic works. Under the Agreement, Chile takes MFN reservations on existing measures 
related to printing, publishing and associated industries, as well as certain communication services 
(telecommunication, press agencies, television and radio broadcasting). MFN reservations are also made in fisheries-related services, legal services and transport services (by air, road, and 
maritime), also subject to authorizations and licences. Moreover, MFN-related general reservations 
are registered for future measures in the applicatio n of treaties granting preferential treatment on 
aviation, fishing and maritime services, including salvage. A general reservation is also registered 
for preferences granted to economically or social ly disadvantaged minorities as well as to the 
original ethnic groups. Chile also registered MFN reservations for certain communication services, education, fishing related services, social services, environmental services; and cultural industries (linked to products, publishing and distribution of books; periodicals; movies; videos; music; as 
well as activities related to radio, television, cable, and satellite transmissions). 
4.31.  Under the GATS, Chile's horizontal limitations cover essentially mode 3 (the other modes 
not being covered in most cases) with limitations on the form and modalities applicable to 
commercial presence and foreign investment, including on the repatriation of capital by foreign 
companies established in Chile. An economic needs test is applicable and residency required for foreign managers. Specialists are also subject to residency requirements. National treatment 
limitations are also contained in Chile's GATS specific commitments in relation with land ownership 
in border zones. Under the Agreement, Chile re corded some horizontal limitations, covering 
national treatment and/or local presence in addition to some of the above-mentioned MFN reservations. In particular, a general reservation, applicable for all sectors, requires of companies 
established in Chile and employing over 25 person s that at least 85% of their staff are Chilean
60 
(the competent authorities may however determine that 85% does not apply for certain technicians). Horizontal reservations related to th e adoption of existing and/or future measures 
establishing rights or preferences to original ethn ic groups, and the protecti on of minority groups 
are also made for national treatment and local presence . 
                                               
58 Applicable to Honduras (in tele communications in particular). 
59 Argentina, Bolivia, Brazil, Paraguay, Peru, and Uruguay. 
60 A similar reservation may also be applicable to local presence. WT/REG303/1 
 
- 25 - 
 
  4.4.2  Honduras liberalization commitments 
4.32.  In its GATS schedule, Honduras has made commitments in 20 out of 155 services sectors, 
essentially on mode 2 and 3, with some commitmen ts on modes 1 and, to a limited extent, 4.  
4.33.  Honduras' GATS MFN exemptions cover progressive integration of services implemented in 
the context of the Treaty of Central American Economic Integration (for all sectors, including in 
relation with the Central American integration of the financial sector, and the regional integration 
in the telecommunications sector)61; and certain measures designed to ensure reciprocity for 
certain professional services as well as land transport services.62 Under the Agreement, Honduras 
registers MFN reservations on existing measures related to private education; recreational, cultural 
and sporting services (football); some activities related to transport (maritime, in particular 
cabotage, air, and road); and certain professional services63, inter alia  in connection with the 
recognition of diplomas (based on reciprocity). MFN-related reservations are made for future 
measures in relation with air transport; fisheries; maritime transport, including salvage; the 
protection of minorities, as well as in matters related to social services; services relating to the chemical and pharmaceutical industries; agrono mic engineering, and for social workers.  
4.34.  Under the GATS, Honduras' horizontal limitations cover mainly modes 3 with limitations 
registered in relation to the engagement in sm all-scale industry and commerce, and establishment 
in a 40km belt in border areas (for mode 3). Mode 4 is unbound, except for measures affecting the 
entry and temporary stay of specific personnel. Under the Agreement, Honduras registers a 
horizontal limitation, covering national treatment and/or local presence in addition to some of the above-mentioned MFN reservations, for all sectors, requiring that companies established in Honduras employ at least 90% of Honduran staff, representing at least 85% of the total payroll of 
the company. These ratios may be reduced, by 10%, in specified cases. In all cases, no more than 
two members of the senior direction may be non-Honduran nationals. All companies operating in Honduras shall have a permanent representative in Honduras. Horizontal reservations related to 
the adoption of existing and/or future measures establishing rights or preferences for the 
protection of minority groups are also made for national treatment and local presence. 
4.5  Sector specific commitments on trade in services 
4.35.  Structural differences between the GATS and the trade in services provisions of the 
Agreement have to be taken into account when considering this section.  
4.36.  Tables 4.1 and 4.2 below summarize the specific commitments made by the Parties under 
the Agreement, by main sectors and subsectors, and compare them with the Parties' GATS 
Schedules. The Tables also indicate in which sector or subsector Parties have made reservations. 
Improvements in existing GATS commitments are either a reduction in the limitations applicable to national treatment, additional sub-sectors in which commitments are made, and/or new 
commitments. In that context, the approach ch osen by the Parties to address market access 
commitments (through the listing of discriminatory quantitative restrictions) and investments, including for the establishment of commercial presence by a Party in the other Party have also to 
be taken into account when examining each Party's commitments. Moreover, horizontal limitations 
in the GATS Schedules of Specific Commitments and reservations covering all sectors in Annexes I-III of the Agreement, as well as MFN re servations or exemptions, are not captured in 
the following Tables but have been summarized in the previous section. Mode 4 commitments are 
also excluded from the Tables. 
4.37.  A more detailed examination of the Parties' sector-specific non-conforming measures that 
are different from their GATS commitments follows the Tables, which should also be read in 
conjunction with the Parties' Schedules in  Annexes I, II, and III of the Agreement. 
                                               
61 Exemption applicable in the context of Honduras  trade with Guatemala, El Salvador, Nicaragua, 
Costa Rica, and Panama. The MFN exemption for tele communications services does not cover Panama. 
62 In relation with financial services, an MFN exemption was registered for the opening of branches or 
agencies of foreign banks, which may be subject to reciprocity. 
63 Specific limitations exist for consultancy servic es, engineering services, and veterinary services. WT/REG303/1 
 
- 26 - 
 
 
  Table 4.1 Chile: comparison between the GATS  and Agreement specific commitments in 
trade in services  
Sectors (CPC Classification) GATS FTA 
Sectoral 
Commitments  Compared 
to the 
GATS Existing  
non-conforming 
measure(s) Reservation(s)  
for future 
measures 
1. Business services 	    
A. Professional Services Partial	 Improved  (*)  
B. Computer and Related Services  ‐‐‐	 New   
C. Research and Development Services  ‐‐‐	 New   
D. Real Estate Services  ‐‐‐	 New   
E. Rental/Leasing Serv ices without Operators  Partial	 Improved   
F. Other Business Services ‐‐‐	 New  (*)  
2. Communication services      
A. Postal services ‐‐‐	 New (*)  
B. Courier services ‐‐‐	 New   
C. Telecommunication services  Partial	 Similar (*)  
D. Audiovisual services ‐‐‐	 New   
3. Construction and related engineering 
services  	    
A. General construction work for buildings ‐‐‐	 New   
B. General construction work for civil 
Engineering ‐‐‐	 New (*)  
C. Installation and assembly work  ‐‐‐	 New   
D. Building completion and finishing work  ‐‐‐	 New   
E. Other ‐‐‐	 New   
4. Distribution services     
A. Commission ag ents' services ‐‐‐	 New   
B. Wholesale trade services ‐‐‐	 New   
C. Retailing services ‐‐‐	 New   
D. Franchising ‐‐‐	 New   
5. Education services     
A. Primary education services ‐‐‐	 New   
B. Secondary education services  ‐‐‐	 New   
C. Higher education services  ‐‐‐	 New   
D. Adult education ‐‐‐	 New   
E. Other education services  ‐‐‐	 New   
6. Environmental services     
A. Sewage services ‐‐‐	 New (*)  
B. Refuse disposal services ‐‐‐	 New   
C. Sanitation and similar services  ‐‐‐	 New   
D. Other ‐‐‐	 New   
7. Financial services 	    
A. All insurance and insurance-
related services  Partial	 Improved   
B. Banking and other financial services Partial	 Improved   
8. Health related and social services 	    
A. Hospital services ‐‐‐	 New   
B. Other Human Health Services ‐‐‐	 New   
C. Social Services ‐‐‐	 New   
D. Other ‐‐‐	 New   
9. Tourism and travel related services     
A. Hotels and restaurants (including catering)  Partial	 Improved   
B. Travel agencies and tour operators 
services Partial	 Improved   
C. Tourist guides services Partial	 Improved   
10. Recreational and cultural and 
sporting services     
A. Entertainment services ‐‐‐	 New   
B. News agency services ‐‐‐	 New   
C. Libraries, archives, museums and other 
cultural services ‐‐‐	 New   
D. Sporting and other recreational services  ‐‐‐	 New   
11. Transport services      
A. Maritime Transport Services ‐‐‐	 New   
B. Internal Waterways Transport ‐‐‐	 New   
C. Air Transport Services Partial	 Similar   WT/REG303/1 
 
- 27 - 
 
  Sectors (CPC Classification) GATS FTA 
Sectoral 
Commitments  Compared 
to the 
GATS Existing  
non-conforming 
measure(s) Reservation(s)  
for future 
measures 
D. Space Transport  ‐‐‐	 New   
E. Rail Transport Services ‐‐‐	 New   
F. Road Transport Services ‐‐‐	 New   
G. Pipeline Transport  ‐‐‐	 New   
H. Services auxiliary to all modes of transport  ‐‐‐	 New   
I. Other Transp ort Services  ‐‐‐	 New   
Note:  
Partial:   GATS commitments subject to some limitation(s) under market access or national treatment, 
 under any of the three modes. 
Full:   GATS commitments not subject to limitation(s) under market access or national treatment, 
 under any of the three modes. 
---:  No commitments under GATS. New:  New commitments made under the Agreement (Full or partial, with or without limitations). "New" 
 can always be seen as "improved". 
Improved: Overall improved commit ments made under the Agreement as compared to those under the 
 GATS. 
Similar:  Similar commitments (Agreement vs GATS); though possibly with limited improvements and/or 
limited additional reservations. 
:   Reservation listed in Annexes I or II of a FTA Party's Schedule (existing or future non-conforming 
 measures). 
(*):   Reservation listed in Annex III of a Party's Schedule (existing non-discriminatory quantitative 
 restriction). 
 
Source:  Draft Consolidated GATS Schedule of Spec ific Commitments (S/DCS/W/CHL), prepared by the 
Secretariat (in 2003) and Chile Schedules annexed to the Agreement.  
Table 4.2 Honduras: comparison between the GATS and the Agreement specific 
commitments in trade in services  
Sectors (CPC Classification) GATS FTA 
Sectoral 
Commitments  Compared 
to the 
GATS Existing  
non-
conforming 
measure(s) Reservation(s)  
for future 
measures 
1. Business services     
A. Professional Services --- New   
B. Computer and Related Services  Partial Improved   
C. Research and Development Services  --- New   
D. Real Estate Services  --- New   
E. Rental/Leasing Servic es without Operators  --- New   
F. Other Business Services Partial Improved (*)  
2. Communication services      
A. Postal services --- New (*)  
B. Courier services --- New   
C. Telecommunication services  Partial Similar  (*)  
D. Audiovisual services --- New   
3. Construction and related engineering 
services      
A. General construction work for buildings --- New   
B. General construction wo rk for civil Engineering --- New  (*)  
C. Installation and assembly work  --- New   
D. Building completion and finishing work  --- New   
E. Other --- New   
4. Distribution services     
A. Commission ag ents' services --- New   
B. Wholesale trade services --- New  (*)  
C. Retailing services --- New  (*)  
D. Franchising --- New   
5. Education services     
A. Primary education services --- New   
B. Secondary education services  --- New   
C. Higher education services  --- New  (*)  
D. Adult education --- New   
E. Other education services  --- New   
6. Environmental services     WT/REG303/1 
 
- 28 - 
 
 
  Sectors (CPC Classification) GATS FTA 
Sectoral 
Commitments  Compared 
to the 
GATS Existing  
non-
conforming 
measure(s) Reservation(s)  
for future 
measures 
A. Sewage services --- New   
B. Refuse disposal services --- New   
C. Sanitation and similar services  --- New   
D. Other --- New   
7. Financial services     
A. All insurance and insu rance-related services  Partial Improved   
B. Banking and other financial services Partial Improved   
8. Health related and social services     
A. Hospital services --- New   
B. Other Human Health Services --- New   
C. Social Services --- New   
D. Other --- New   
9. Tourism and travel related services      
A. Hotels and restaurants (including catering) Partial Improved   
B. Travel agencies and tour operators services --- New   
C. Tourist guides services --- New   
10. Recreational and cultural and sporting 
services     
A. Entertainment services --- New   
B. News agency services --- New   
C. Libraries, archives, mu seums and other cultural 
services --- New   
D. Sporting and other recreational services  --- New  (*)  
11. Transport services      
A. Maritime Transport Services --- New   
B. Internal Waterways Transport --- New   
C. Air Transport Services Partial Improved   
D. Space Transport  --- New   
E. Rail Transport Services --- New   
F. Road Transport Services Partial Improved   
G. Pipeline Transport  --- New   
H. Services auxiliary to all modes of transport  --- New   
I. Other Transp ort Services  --- New   
 
Note:  Partial:  GATS commitments subject to some limitation (s) under market access or national treatment, under 
 any of the three modes. Full: GATS commitments not subject to limitation(s) under market access or national treatment, under 
 any of the three modes. 
---: No commitments under GATS. New: New commitments made under the Agreement (Full or partial, with or without limitations). "New" 
can always be seen as "improved". 
Improved: Overall improved commitments made under the Agreement as compared to those under the GATS. Similar:  Similar commitments (Agreement vs GATS); though possibly with limited improvements and/or 
limited additional reservations. 
: Reservation listed in Annexes I or II of a FTA Party's Schedule (existing or future non-conforming 
measures). 
(*): Reservation listed in Annex III of a Party's Schedule (existing non- discriminatory quantitative 
restriction). 
 Source: GATS Schedule of Specific Commitments (G ATS/SC/38, and Suppl.1, and Suppl.2), dated 1994 and 
1998 respectively and Honduras' Schedules annexed to the Agreement.  
  
4.5.1  Business services 
4.38.  Chile builds on its GATS Schedule by expanding the coverage of its commitments to 
Guatemala, though registering a number of limitations for existing measures as well as reservations for possible future measures in: (i) some professional services, such as accounting 
and auditing, engineering services, integrated engi neering services, and legal services; (ii) some 
research and development services; and (iii) some other business services, such as printing and publishing, services incidental to fishing, and investigation and security. It also lists some market WT/REG303/1 
 
- 29 - 
 
  access (MA) restrictions in certain professional services and some services incidental to energy 
distribution. 
4.39.  Honduras, which has only partially bound computer and related services and advertising 
services under GATS, fully covers this sector und er the Agreement, though registering limitations 
for existing measures in professional services, research and development services and some other 
business services64, partly mirroring Chile's limitations. 
4.40.  In addition, and as indicated, Annex 11.13 es tablished the rules applicable in the context of 
a harmonization of measures regulating the recognition of qualification by and the practice in the 
other Party.  
4.5.2  Communication services 4.41.  Under the Agreement, postal services (unbound under the GATS) are covered, though both 
Parties have MA restrictions. Telecommunication services (partly committed by both Parties in the 
GATS) are subject to reservations by both Part ies, including in MA (though not introducing a 
substantially preferential treatment applicable to bilateral trade). Courier services are fully liberalized for both Parties without reservations. The Parties also make commitments in audiovisual 
services (not covered under the GATS for both Parties), though Chile has certain limitations on 
existing and future measures. Chile's reservation in the Agreement with a view to maintaining its 
rights to take future measures on basic telecommunications does not always match with, and 
potentially goes further than, Chile's limitations in the GATS. On audio-visual services (not covered 
by the Parties under the GATS) Honduras does not have any specific limitations, while Chile registers existing and possibly future limitations.  
4.42.  Additionally, Chapter 13 of the Agreement contains rules and disciplines specific to 
telecommunications (see below). 
4.5.3  Construction and related engineering services 4.43.  No commitments were made by the Part ies under the GATS. Under the Agreement, Chile 
and Honduras cover the sector albeit with the listin g by Chile of an existing MA restriction (related 
to general construction work for some civil engineering) as well as a reservation for future measures, and the registration of existing limitations by Honduras, including MA restrictions for the 
construction of airports.  
4.5.4  Distribution services 4.44.  Neither Party have commitments under the GATS. Under the Agreement, they both cover 
the entire sector but register reservations, in the case of Chile, for future measures related to the 
distribution of films and music, and, in the case of Honduras, for existing measures, including on 
the distribution of arms.  
4.5.5  Educational services 
4.45.  This sector which is not included by the Parties' GATS commitments is covered under the 
Agreement, with existing non-conforming measures  listed by Honduras, including some restrictions 
related to higher education services, while Chile makes a general reservation for possible future 
measures in this sector.  
4.5.6  Environmental services 4.46.  Neither Party took commitments under the GATS. Under the Agreement, they both register 
non-conforming measures (existing for Honduras, and possibly future for Chile) limited to sewage 
services-related measures. In this context, Honduras also lists an existing MA restriction. 
                                               
64 For business services, through the listing of exis ting MA restrictions, an d additionally through a 
reservation for possible future measures in this subsector. WT/REG303/1 
 
- 30 - 
 
 
  4.5.7  Financial services 
4.47.  The financial services sector (bound by both Parties under GATS with some limitations) is 
included in the Agreement and not subject to any specific non-conforming measures.  
4.5.8  Health related and social services 
4.48.  Under the Agreement, this sector (for  which there are no GATS commitments by the 
Parties), is fully covered. Chile, nevertheless, regi sters a reservation for future measures related to 
social services; though their coverage under this sector may be debatable. 
4.5.9  Tourism and travel related services 
4.49.  Under the GATS, Chile had fully covered the sector, but only for mode 3, and Honduras has 
partly covered it (for hotels and restaurants on ly). Under the Agreement, the Parties make full 
commitments, without any limitation. 
4.5.10  Recreational, cultur al and sporting services 
4.50.  Under the Agreement, the whole sector (not covered under the GATS for both Parties) is 
covered through the negative list approach, but Ch ile and Honduras reserve existing measures for 
some entertainment services, news agency services , and sporting and other recreational services. 
Honduras also lists some gambling services that may remain subject to MA restrictions.  
4.5.11  Transport services 
4.51.  Both Parties have included certain services auxiliary to air transport under the GATS, as well 
as, in the case of Honduras only, some services related to road transport. Under the Agreement, the sector is covered, though only to a limited extend for air transport. Chile and Honduras list 
existing non-conforming measures related to maritime and internal waterways transport services 
with new measures that could also be introduced. While Chile's GATS limitations are replicated 
under the Agreement, Honduras now covers this su bsector, though with some limitations. Existing 
non-conforming measures are also listed by both Parties for some road transport services and for 
certain services auxiliary to all modes of transport.  
4.52.  Chapter 12 of the Agreement also contains certain disciplines specific to air transport 
services (see below). 
4.5.12  Other services not included elsewhere  
4.53.  No reservations were made by the Parties, under the GATS, for other services not included 
elsewhere in the services sectoral classification list. Under the Agreement, Honduras lists a MA restriction applicable to the opening of private cemeteries and crematoria. 
4.6  Sector specific provisions in trade in services 
4.54.  In addition to the provisions contained in Chapter 11 of the Agreement on cross-border 
trade in services, the Agreement establishes specific disciplines for air transport services 
(Chapter 12) and for telecommunication services (Chapter 13). 
4.6.1  Air Transport 4.55.  Chapter 12 of the Agreement contains rules an d disciplines specific to air transport services. 
Accordingly, bilateral agreements on air transport concluded bilaterally between Chile and a 
Central American State are incorporated into and shall form part of the Agreement. In case of conflict between such a bilateral agreement an d the Agreement, the Agreement shall prevail. 
Moreover, disputes related to air-transport matters, including in relation with provisions contained 
in bilateral agreements, shall be settled according to the dispute settlement mechanism 
established under Chapter 19 of the Agreement. WT/REG303/1 
 
- 31 - 
 
  4.56.  A Committee on Air Transport is establishe d to monitor the implementation of Chapter 12.  
4.6.2  Telecommunication services  
4.57.  Chapter 13 of the Agreement contains disciplines applicable to (i) measures adopted or 
maintained by a Party relating to the provision of public telecommunications; (ii) measures adopted or maintained by a Party relating to access to and use of networks or public 
telecommunications services by persons of anot her Party, including access and use by such 
persons operating private networks to carry out their internal communications business; (iii) measures adopted or maintained by a Party relating to the provision of value added services 
by persons of another Party in the territory or across its borders; and (iv) measures relating to 
standardization regarding the attachment of terminal or other equipment to public telecommunications networks.
65  
4.58.  Chapter 13 covers topics such as acce ss and use of public telecommunications transport 
networks and services (Article 13.04), conditions for the provision of value added or improved 
services (Article 13.05), measures related to standardization66 (Article 13.06), monopolies and 
anti-competitive practices (Article 13.07), transpar ency (Article 13.08), relation to international 
organizations (Article 13.10), as well as technical cooperation and consultations (Article 13.11). 
The disciplines of Chapter 13 replicate some of the WTO rules contained in the Annex on telecommunications, and adapt to the telecommunications sector some of the disciplines on 
domestic regulations, on monopolies and exclus ive service suppliers, and on business practices 
contained in the GATS. In the event of any inco nsistency between Chapter 13 and other chapters 
of the Agreement, Chapter 13 shall prevail to the extent of the inconsistency.  
4.7  Regulatory provisions  
4.7.1  Domestic regulation 
4.59.  The Agreement does not contain any specific disciplines in relation to domestic regulations, 
as such. However, certain telecommunications pr ovisions relate to domestic regulations. 
4.7.2  Recognition 
4.60.  Annex 11.13, applicable specifically to pr ofessional services, contains provisions on the 
recognition of qualifications. Where a Party recognizes, autonomously or by agreement or 
arrangement, the qualification obtained in the territory of a non-party, that Party is not required to 
accord such recognition to the qualification obtained in the territory of the other Party. A Party shall however afford the other Party adequate opportunity to demonstrate that qualification obtained in that other Party’s territory should also be recognized, or to negotiate or enter into an 
agreement or arrangement of comparable effect. Annex 11.13 also establishes the basis for the 
recognition of qualifications and authorization to practice. Besides these, the Agreement does not contain any specific disciplines in relation to recognition. 
4.7.3  Subsidies 
4.61.  The Agreement does not contain any specific disciplines on subsidies in trade in services. 4.7.4  Transparency  
4.62.  In addition to the general provisions contained in Chapter 17, the Parties shall establish 
procedures to ensure the notification of change s to non-conforming measures listed in Annexes I 
and II, the future quantitative restrictions to market access to be listed in Annex III, as well as the commitments to liberalize quantitative restrictions, licensing requirements, and other 
non-discriminatory measures, as well as consultations on reservations, quantitative restrictions or 
commitments, aimed at achieving furt her liberalization (Article 11.12). 
                                               
65 Chapter 13 of the Chile - Central America Treaty is not applicable to bilateral relations between Chile 
and Costa Rica. 
66 Chile's and Honduras' existing co nformity assessment procedures ar e listed in Annex 13.02 of the 
Agreement. WT/REG303/1 
 
- 32 - 
 
 
  4.7.5  Safeguards 
4.63.  The Agreement does not contain any specific disciplines on safeguards in trade in services. 
5  GENERAL PROVISIONS OF THE AGREEMENT 5.1  Transparency 
5.1.  Chapter 17 of the Agreement refers to  transparency. The provisions include: the 
establishment by each Party of an information centre (Article 17.02); the publication of laws, regulations, and procedures and administrative rulings of general application relating to matters 
covered by the Agreement (Article 17.03); notification and provision of information to the other 
Party (Article 17.04); due process obligations regarding administrative proceedings (Article 17.05); administrative procedures for the adoption of measures of general application (Article 17.06), and review and appeals (Article 17.07). The Agreement also contains provisions 
protecting confidentiality (Articles 5.07, 6.04, and 20.05). 
5.2.  All notification obligations in the Agreement shall be met through the national sections of the 
Secretariat of the Free Trade Commission (see below). Communications related to dispute 
settlement shall also be copied for information to the Secretariat of the Central American Economic 
Integration (SIECA). 
5.3.  Moreover, provisions in the Agreement dealing specifically with customs procedures 
(Chapter 5), safeguards (Chapter 6), SPS measures (Chapter 8), standards and metrology 
(Chapter 9), cross border trade in services, including telecommunications, and temporary movement of persons (Chapters 11, 13, and 14), and government procurement (Chapter 16) also contain transparency obligations. 
5.2  Exceptions 
5.4.  Chapter 20 of the Agreement states the exceptions applicable when measures are taken in 
relation with the Agreement. The Agreement incorporates, through Article 20.02, the Parties' 
rights and obligations in respect of general exceptions which are governed by Article XX of the 
GATT 1994 for trade in goods; technical barriers to trade, including SPS measures; competition policies; and government procurement. Moreover, prior to adopting a measure that would comply 
with obligations under an intergovernmental commo dity agreement, of the kind referred to in 
paragraph h) of Article XX of GATT 1994, a Party shal l consult the other Party to avoid nullification 
or impairment of a tariff concession granted in  the context of the tariff elimination programme 
(Article 3.15). 
5.5.  The Agreement also incorporates the Parties' rights and obligations contained in Article XIV of 
the GATS for trade in services; including services-related aspects covered under Parts 2 and 3 of the Agreement, covering essentially trade in goods as well as technical barriers to trade. 
Article XIV of GATS also applies to services-relat ed aspects of Chapters 15 and 16 (competition 
policies and government procurement). 
5.6.  Through the incorporation, in Article 20.03, of a text similar to that of Articles XXI of the 
GATT 1994 and XIVbis of the GATS, the Agreement al so reserves the application by the Parties of 
measures related to national security.  
5.7.  According to Article 20.06, measures related to taxation are excluded from the coverage of 
the Agreement, except when taxation-related me asures may conflict with the commitment made, 
in the Agreement, by the Parties on national treatment (Article 3.03) in the same manner as 
foreseen in Article III of GATT 1994, and on expo rt duties in the context of the programme of 
liberalization (Article 3.14). The Parties commit to conclude, within a reasonable time, a bilateral WT/REG303/1 
 
- 33 - 
 
  treaty to avoid double taxation (Annex 20.06) pending which time such tax avoidance will be 
regulated through an exchange of letters.67  
5.3  Accession and Withdrawal 
5.8.  There are no specific provisions on third party accession to the Agreement. However, the 
Agreement is part of the Treaty on Free Trade between Chile and Central America and includes six 
parties.  
5.9.  The disciplines governing termination are contained in Article 21.05 and foresee that the 
rights and obligations contracted by a Party notifying its intention to denounce the Agreement will 
cease to exist within 180 days. In case Chile deno unces the Agreement, the Treaty shall cease to 
exist between the other Parties also. 
5.4  Government procurement 5.10.  Government procurement is covered by Chapter 16 of the Agreement, which applies to 
goods and cross-border services.
68 However, a number of government entities69 listed in 
Annex 16.01, are excluded from its coverage. Also excluded are government procurement related to (i) defence and of other strategic nature or national security; (ii) recruitment of personnel 
aimed at fulfilling the functions of the entities; an d (iii) projects funded by States, multilateral or 
regional institutions or individuals that impose conditions inconsistent with the provisions of the Chapter (Annex 16.02). Chapter 16 does not apply either to (i) service-related subsidies; 
(ii) governmental services or functions
70; and (iii) cross-border financial services. 
5.11.  For government procurement that is included in Chapter 16, the Parties guarantee that the 
goods and services providers of the other Party shall participate on an equal footing in public procurement, that the principles of national treatment and non-discrimination will apply 
(Article 16.04), that transparency shall be guaran teed (Article 16.05), and that mechanisms of 
co-operation and technical assistance shall be developed (Article 16.13). 
5.12.  Modifications to the coverage of Chapter 16 may be requested by a Party
71, in particular to 
examine the possibility to incorporate entities list ed in Annex 16.01. Consultations shall take place 
between the Parties to determine if and how such coverage may be expanded (Article 16.09).  
5.13.  Denial of benefits may take place for a service provider of a Party controlled by persons of a 
non-party or not having substantial business activities in the Area of the other Party 
(Article 16.07).  
5.14.  The Agreement defines standards and modalities applicable to matters such as technical 
specifications (Article 16.06), procedures to challenge decisions (Article 16.08), privatization 
(Article 16.10), and the use of information technology (Article 16.11).  
                                               
67 This matter has not yet been addressed at the time the factual presentation was drafted. 
68 For services, subject to the reservations contained in Annexes I and II of the Agreement (containing 
the lists of non-conforming measures). 
69 For Chile: Comptroller General of the Republic; Central bank: Ar med forces; Law enforcement and 
public safety forces; Municipalities; National Television Council; State enterprises; Judiciary power (Tribunal of justice); Legislative power (National Congress); Constitutional court; El ectoral Court; Regional Electoral 
Courts; Higher Education Council; and Public ministry. For Honduras: National Elec tions Tribunal, state-owned 
enterprises, municipalities, Presidency of the Republic, Ministry of National Defence, Ministry of Security, 
Family Assistance Program (PRAF), National Commodity Supplier (NANSUPRO); Standing Committee contingencies (COPECO); public entities, in accordance with law organic or created by other disposition, are 
excluded from the application to public procurement procedures. 
70 Such as: execution of the laws, correctional servic es, pension or unemployment insurance or social 
security services, social welfare, public education, public training, health and child care and child protection. 
71 In January 2013,  
Chile consulted Honduras (and the other Parties of the Treaty) to examine the possibility to expand 
coverage, improve transparency, deepen  co-operation, and facilitate the participation of SMEs in government 
procurement. The matter is, at present, pending. WT/REG303/1 
 
- 34 - 
 
 
  5.15.  A Committee on Government Procurement is established for the monitoring and effective 
implementation and operation of Chapter 9 (Article 16.11). 
5.5  Intellectual property rights 5.16.  The Agreement does not contain a specific section on intellectual property rights, per se . 
5.17.  However, geographical indications (GIs) of  goods from one Party shall be recognized and 
protected by the other Party in conformity with the provisions of Article 3.12 of the Agreement
72, 
and of Article 22, paragraph 1, of the TRIPS Agr eement. In order to be granted protection, GIs 
shall be notified to the other Party. The Parties may however authorize homonymous GIs and 
origin designations, which may rightfully belong to a third party. 
5.6  Others 5.6.1  Competition 
5.18.  Chapter 15 of the Agreement contains specific provisions with regard to competition 
policies, monopolies and State enterprises.  
5.19.  In relation with competition, the Parties sh all ensure that the benefits of the Agreement are 
not undermined by anticompetitive business practice s. Similarly, they shall endeavour to move 
towards the adoption of common measures to avoid them, and seek to establish mechanisms to facilitate and promote the development of compet ition policies and ensure implementation of 
regulations on free competition, in order to avoid negative effects of anti-competitive business 
practices in the Free Trade Area. 
5.20.  Nothing in the Agreement prevents the Part ies from maintaining or establishing monopolies 
or State enterprises. They shall nevertheless ensure that such monopolies or enterprises act in a 
manner compatible with the provisions of th e Agreement, and ensure non-discriminatory 
treatment to investment and investors, goods,  and service providers from the other Party 
(Article 15.02). This provision does not apply in cases of acquisition of goods or services by 
government entities for their own use. 
5.7  Institutional framework 5.21.  Chapter 18 of the Agreement
73 covers institutional arrangements and establishes Free Trade 
Commission to ensure the proper operation of the Agreement and to supervise its implementation 
and application (Article 18.01). It also supervises the work of all the Committees established by the Agreement. To assist the Commission in its technical work, the Agreement establishes a Free Trade Sub-Commission (Article 18.02). A Secretariat, organized in national sections, is established 
to assist the Commission and the Sub-Commission, to administratively support the Panels 
established in conformity with the Agreement-spec ific dispute settlement mechanism, and to carry 
out the circulation of the Parties' communications and notifications (Article 18.03).  
5.22.  A Committee on trade in goods is established by Article 3.16 to, inter alia , consider matters 
related to the implementation of Chapters 3 (National Treatment and Market Access), 4 (Rules of origin), and 5 (Customs Procedures) of th e Agreement. The Committee may also examine 
adjustments related to the Parties' Tariff concessions, as required, including the possible 
acceleration of the tariff elimination programme. 
5.23.  The establishment of Committees, Sub-Committees, and Groups of Experts is also foreseen 
by Chapter 18.  
5.24.  The institutional framework established und er the Agreement is summarized in Chart 5.1. 
                                               
72 Article 3.12 forms part of Chapter 3 covering nati onal treatment and market access (trade in goods). 
73 Annexes 18.01(1) and 18.02 identify the Parties' representatives in the Free Trade Commission and in 
the Free Trade Sub-Commission.  WT/REG303/1 
 
- 35 - 
 
  Chart 5.1 Institutional Framework establis hed by the Treaty on Free Trade between 
Chile and Central America 
 
                
 
  
 
  
 
   
 
  
5.8  Dispute settlement  
5.25.  Chapter 19 sets out the procedures and institutional arrangements that apply in cases of 
disputes between the Parties regarding questions of interpretation or application of the Agreement. 
The dispute settlement mechanism is also applicable in case an action by a Party is considered 
inconsistent with its obligations under the Agreement or in case of nullification or impairment of benefits accruing to a Party under the Agreement.
74 
5.26.  Article 19.04 provides for "forum shopping" as well as "forum exclusion" clauses for matters 
falling under the Agreement and the WTO Agreements. Accordingly, a Party shall be considered to 
have selected a forum when it has requested the establishment of a panel established either under 
the WTO or under the Agreement. 
5.27.  Chapter 19 provides for detailed steps in the process for dispute resolution, the salient 
features of which are described in Chart 5.2 below. If the Parties fail to resolve a dispute through consultations, they may refer the case to the Free Trade Commission with a view to finding a 
mutually satisfactory solution.
75 The Commission may call upon technical experts, establish groups 
of experts, solicit good offices, conciliation or me diation by other persons or groups of persons, or 
formulate recommendations (Article 19.07). Subsequently, the case may be referred, upon request by a Party, to a Panel composed of thr ee independent arbitrators chosen by the Parties 
among a list to be established by consensus by the Parties (Article 19.09). The Panel may decide 
to request scientific information and technical ad vice from experts, as necessary (Article 19.14). 
Majority voting and publication of dissenting opinions are foreseen in cases the Tribunal may not 
decide by consensus. 
                                               
74 Annex 19.03 clarifies the coverage of the Agreement for which a Party may initiate a nullification or 
impairment case. 
75 The Commission may also, when requested, provid e for an interpretation of the Agreement, which 
may be used before national judicial an d administrative instances (Article 19.19). Free Trade Commission i 
(Art. 18.01) 
i  Possibility to create other Committees. 
* Possibility to establish Sub-committees as  well as ad hoc Groups of Experts. 
 
Source: WTO Secretariat based on the Agreement. Panel(s) (Art. 19.11) 
Committee on Trade in Goods (Article 3.16 )* 
Committee on SPS measures (Article 8.11 )* 
Committee on Standardization, Metrology and 
Authorization Procedures (Article 9.12) * 
Committee on Air Transport (Article 12.04) * 
Committee on Government Procurement  
(Article 16.13) * National Sections 
 
- Chile 
- Costa Rica 
- El Salvador 
- Guatemala - Honduras 
- Nicaragua Free Trade Sub-Commission 
(Art. 18.02) 
Secretariat (Art. 18.03) 
Committee on Investment and Cross-border 
Services (Article 11.14 )* WT/REG303/1 
 
- 36 - 
 
 
  5.28.  An Interim report (Article 19.15) shall be issued to the Parties, in principle within 90 days, 
followed by a final ruling within 30 days. The fina l report (Article 19.16), which is binding on the 
Parties, shall be made public within 15 days after it has been transmitted to them. 
5.29.  Unless the Parties agree otherwise, the arbitration ruling shall be complied within 
six months at the most. Where there is a disagreement between the Parties on the consistency of 
the compliance measures with the ruling the original Panel shall rule about the compliance or lack of.  
5.30.  In case of non-compliance, the complaining Party is entitled to temporarily suspend 
concessions either in the same sector as the one affected, or, if this is not feasible, in a different sector. If the Party complained against considers that the level of suspension is not equivalent to the nullification or impairment caused by the violation, it may request the original Panel to rule on 
the matter. A review of measures taken to comply after the suspension of obligations is conducted, 
by the original Panel, upon request by the Party complained against when it considers that it has brought its measures into conformity and that the suspension of obligations must be terminated.  
5.31.  None of the Parties may, in its national legislation, authorize a private party to take a legal 
action alleging that a measure taken by the other Party is incompatible with the Agreement (Article 19.20). 
Chart 5.2 Specific Dispute Settlement Mechanism established by the Treaty on Free 
Trade between Chile and Central America 
 
 
5.32.  In relation to international commercial disputes between private parties within the Free Trade Area, the Parties shall promote and facilitate arbitration through alternative means 
(Article 19.21). They will also ensure the avai lability of appropriate procedures to ensure 
observance of international arbitration conventions they have ratified, as well as the recognition and enforcement of arbitral awards in such disputes. The Commission may also establish an Advisory Committee on Private Commercial Disputes. 
5.9  Relationship with other agreements concluded by the Parties 
5.33.  The Parties confirm the rights and obligations between them in conformity with the WTO 
Agreement, as well as other international agreements they are party to. In case of conflict 
between the Agreement and the other agreements, th e provisions of the Agreement prevail to the Request for consultations and 
consultations (Art. 19.06) 
Request for the establishment  
of a Panel (Art. 19.08) 
Proceedings (Art. 19.12)  
Issuance of Final Report of 
the Panel (Art. 19.16) Preliminary Report to the Parties 
(Art. 19.15) 
Implementation 
Suspension of 
benefits  
(Art. 19.18 ) Determination of compliance 
by the Panel (Art. 19.18) Non-Implementation WT/REG303/1 
 
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  extent of the conflict (Article 1.04, paragraph 2) . However, the Convention on International Trade 
in Endangered Species of Wild Fauna and Flor a (CITES) of 1973, the Montreal Protocol on 
Substances that Deplete the Ozone Layer of 1990 , and the Basel Convention on the Control of 
Trans boundary Movements of Hazardous Wastes and Their Disposal of 1989 prevail over the 
Agreement in case of conflict with it (Article 1.04). 
5.34.  The Parties' regional trade agreements in force (both notified and non-notified) are listed in 
Table 5.1.  
Table 5.1 Chile and Honduras: Participation in  other RTAs (notified and non-notified in 
force), as of 18 March 2013*  
Partner / Agreement Date of 
entry 
into force Type of 
agreement GATT/WTO Notification 
Year WTO Provision 
CHILE 
Malaysia 25.02.12 
(Malaysia) 
18.04.12 
(Chile) Goods 2013 GATT Art. XXIV 
Turkey 01.03.11 Goods 2011 GATT Art. XXIV 
Guatemala (Chile-Central 
America) 23.03.10 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
Colombia 08.05.09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Australia 06.03.09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Peru 01.03.09 Goods & Services 2011 GATT Art. XXIV & GATS Art. V 
Panama 07.03.08 Goods & Services 2008 GATT Art. XXIV & GATS Art. V 
Japan 03.09.07 Goods & Services 2007 GATT Art. XXIV & GATS Art. V 
India 17.08.07 Goods 2009 Enabling Clause 
China 01.10.06 
01.08.10 Goods 
Services 2007 
2010 GATT Art. XXIV 
GATS Art. V 
Brunei, New Zealand, 
Singapore (Trans-Pacific 
SEP) 28.05.06 Goods & Services 2007 GATT Art. XXIV & GATS Art. V 
European Union 01.03.05 
01.02.03 Services 
Goods 2005 
2004 GATS Art. V 
GATT Art. XXIV 
EFTA 01.12.04 Goods & Services 2004 GATT Art. XXIV & GATS Art. V 
Republic of Korea 01.04.04 Goods & Services 2004 GATT Art. XXIV & GATS Art. V 
United States 01.01.04 Goods & Services 2003 GATT Art. XXIV & GATS Art. V 
El Salvador (Chile-
Central America) 01.06.02 Goods & Services 2004 GATT Art. XXIV & GATS Art. V 
Costa Rica  
(Chile-Central America) 15.02.02 Goods & Services 2002 GATT Art. XXIV & GATS Art. V 
Mexico 01.08.99 Goods & Services 2001 GATT Art. XXIV & GATS Art. V 
Canada 05.07.97 Goods & Services 1997 GATT Art. XXIV & GATS Art. V 
GSTP 19.04.89 Goods 1989 Enabling Clause 
LAIA 18.03.81 Goods 1982 Enabling Clause 
PTN 11.02.73 Goods 1971 Enabling Clause 
Nicaragua (Chile-Central 
America) 19.10.12 Goods & Services Not notified 
Ecuador (AAP.CE N°65) 25.01.10 Goods Not notified 
Cuba (AAP.CE N°42) 27.06.08 Goods Not notified 
MERCOSUR (AAP.CE 
N°35) 01.10.96 Goods Not notified 
Bolivia (AAP.CE N°22) 06.04.93 Goods Not notified 
Venezuela (AAP.CE N°23)  02.04.93 Goods Not notified WT/REG303/1 
 
- 38 - 
 
 
  Partner / Agreement Date of 
entry 
into force Type of 
agreement GATT/WTO Notification 
Year WTO Provision 
Argentina (AAP.CE N°16) 02.08.91 Goods Not notified 
LAIA - Accession of 
Panama 10.05.12 Goods Not notified 
LAIA (except Mexico) - 
Seeds (AAP.AG N° 2) 07.06.93 Goods Not notified 
LAIA - Cultural Goods  
(AR.CEYC N°7) 28.07.01 Goods Not notified 
LAIA - Unilateral 
preferences in favour of 
Bolivia (AR.AM N°1) 27.01.84 Goods Not notified 
LAIA - Unilateral 
preferences in favour of 
Ecuador (AR.AM N°2) 27.01.84 Goods Not notified 
LAIA - Unilateral 
preferences in favour of 
Paraguay (AR.AM N°3) 27.01.84 Goods Not notified 
HONDURAS 
EU - Central America a Goods & Services 2013 GATT Art. XXIV & GATS Art. V 
Colombia  
(Colombia-Northern Triangle) 12.11.09 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
Panama (Panama-Central  
America) 09.01.09 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Honduras/El Salvador - 
TPKM 01.03.08 Goods & Services 2010 GATT Art. XXIV & GATS Art. V 
DR-CAFTA 01.07.06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
Dominican Republic-
Central America 04.10.01 Goods & Services 2012 GATT Art. XXIV & GATS Art. V 
Mexico (Mexico-Northern 
Triangle)b 01.06.01 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
CACM 04.06.61 Goods 1961 GATT Art. XXIV 
Mexico-Central America b 01.01.13  Goods & Services Not notified 
Venezuela  
(AAP.A25TM N°16) 22.09.86 Goods Not notified 
Source: WTO Secretariat. 
 a  Provisional application of the Agreement by all si gnatory parties is expected in the course of the 
 second quarter 2013. 
b   According to Honduras, this Agreement has b een replaced by the Free Trade Agreement between 
 Mexico and Central America, signed on 22 November 2010, and in force for Honduras and Mexico  since 1 January 2013. 
LAIA:  Latin American Integration Association. EFTA:  European Free Trade Association. GSTP:  Global System of Trade Pref erences among developing countries. 
PTN:  Protocol on Trade Negotiations. DR-CAFTA:  Dominican Republic - Central America - United States Free Trade Agreement. CACM:  Central American Common Market. ACE:  Economic Complementarity Agreements. AAP.AG:   Agreements under Article 12 of the Montevideo Treaty on Agricultural Goods. 
AR.CEYC:  Agreements on Co-operation  and Exchange of Cultural Goods. 
AAP.A25TM: Agreements signed under Article 25 of the "1980 Treaty of Montevideo" – Agreements concluded 
with non-LAIA Latin American Countries. 
* For those agreements negotiated under the LAIA frame work, the LAIA reference is  i n c l u d e d  i n  b r a c k e t s .  
Details of these agreements can be found at: http://www.aladi.org .  
"Partial scope" agreements are those RTAs not providin g for the establishment of a free-trade area and/or 
providing for a limited coverage. WT/REG303/1 
 
- 39 - 
 
  ANNEX 1 
INDICATORS OF TRADE LIBERALIZATION UNDER THE AGREEMENT 
The Chilean Market 
1. Annex Table A1.1 provides a comparison between preferential tariff rates as part of the 
scheduled programme of elimination of tariffs a pplied to Chile's imports from Honduras and its 
MFN rates at the entry into force of the Agreement. Chile's average applied MFN rate in 2008 was 6% overall (6.1% for agricultural products and 6%  for non-agricultural products). MFN duty-free 
tariff lines accounted for 0.4% of all tariff lines. At the date of entry into force of the Agreement 
(19 July 2008), Honduran exporters enjoyed an  absolute margin of preference of 5.9% vis-à-vis  
the prevailing MFN tariff; 5.5% for agricultural goods and 6% for non-agricultural products. The 
share of duty free lines applicable to imports from Honduras was 97.7%. At the end of the 
implementation period in 2017, Honduran exporters w ill face zero duties on 99.4% of their exports 
to Chile (97.3% for agricultural products and 99.8% for non-agricultural products). 
Table A1.1 Chile: Indicators of MFN tariff rates and preferential rates for imports from 
Honduras
 
Origin of 
goods Year ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Share of 
duty-free 
tariff lines 
(%) Average applied 
tariff Share of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2008 6.0 6.0 0.4 6.1 6.1 0.0 6.0 6.0 0.5 
Honduras 2008 0.1 5.1 97.7 0.6 5.0 88.0 0.0 5.3 99.2 
 2009 0.1 4.2 97.7 0.5 4.0 88.0 0.0 4.6 99.2 
 2010 0.1 3.2 97.7 0.4 3.0 88.0 0.0 3.8 99.2 
 2011 0.1 2.3 97.7 0.2 2.0 88.0 0.0 3.1 99.2 
 2012 0.0 5.2 99.3 0.2 5.9 97.2 0.0 4.6 99.6 
 2013 0.0 5.1 99.3 0.2 5.9 97.2 0.0 4.3 99.6 
 2014 0.0 4.9 99.3 0.2 5.9 97.2 0.0 4.0 99.6 
 2015 0.0 4.8 99.3 0.2 5.8 97.2 0.0 3.8 99.6 
 2016 0.0 4.4 99.4 0.1 5.7 98.1 0.0 3.5 99.6 
 2017 0.0 6.0 99.4 0.2 6.0 97.3 0.0 6.0 99.8 
 
a WTO Definition. 
 Note: Tariff lines subject to in-quota rates are excl uded in the computation; for the calculation of 
averages, specific rates are excluded and the ad valorem  parts of alternate rates are included. 
Based on the HS 2002 nomenclature.  Source: WTO Secretariat estimates based on data provided by Chile.  
2. Annex Table A1.2 gives an indication of additional market access resulting from the entry 
into force of the Agreement for Honduras' top 25 global exports. During 2005-2007 Honduras' top 
25 exports accounted for 71% of its global exports and corresponding to 66 lines at the eight-digit 
level. Before the entry into force of the Agreement none of these tariff lines were duty free for 
Honduran exporters. However, at the entry into  force of the Agreement, in July 2008, 64 lines 
became duty free. One more line became duty fr ee in 2012. At the end of the implementation 
period for Chile (in 2017), only one tariff line (cane sugar which nevertheless is provided 
preferential treatment under a tariff rate quota) will remain dutiable. WT/REG303/1 
 
- 40 - 
 
 
  Table A1.2 Chile: Market access opportunities  under the agreement for Honduras's top 
25 exports 
Honduras's top export products in 2005-2007  Access Conditions to Chile's import markets  
MFN (2008)Duty-free 
in Remain 
Dutiable  HS number and description of the 
product Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate 
(%) No. of tariff 
lines 
Duty-
free Dutiable  2008 2012 
090111 Not decaffeinated 21.9 6  1 1   
854430 Ignition wiring sets and other 
wiring sets of a kind used in 
vehicles, aircraft or ships 8.1 6  2 2   
080300 Bananas, including plantains, 
fresh or dried. 7.6 6  1 1   
030613 Shrimps and prawns 4.0 6  9 9   
151110 Crude oil 3.0 6  1 1   
260800 Zinc ores and concentrates. 2.4 6  1 1   
240210 Cigars, cheroots and cigarillos, 
containing tobacco 2.3 6  1 1   
710812 Other unwrought forms 2.1 6  1 1   
271112 Propane 2.0 6  1  1  
261690 Other 2.0 6  2 2   
030611 Rock lobster and other sea 
crawfish (palinurus spp., panulirus spp., jasus spp.) 1.9 6  4 4   
080719 Other 1.7 6  1 1   
340119 Other 1.5 6  1 1   
440710 Coniferous 1.4 6  3 3   
170111 Cane sugar 1.2 6  1   1 
080430 Pineapples 1.1 6  1 1   
030420 Frozen fillets 0.9 6  19 19   
151190 Other 0.9 6  1 1   
240220 Cigarettes containing tobacco 0.8 6  1 1   
190590 Other 0.8 6  4 4   
760200 Aluminium waste and scrap. 0.8 6  1 1   
854459 Other 0.8 6  2 2   
260700 Lead ores and concentrates. 0.7 6  1 1   
261610 Silver ores and concentrates 0.6 6  1 1   
392330 Carboys, bottles, flasks and 
similar articles 0.6 6  5 5   
Total of above 71.0   66 64 1 1 
 
Note: Based on HS 2002 nomenclature.  Source: WTO estimates based on data provid ed by Chile and UNSD, Comtrade database. 
 
The Honduran Market 
3. Annex Table A1.3 provides a comparison between preferential tariff rates as part of the 
scheduled programme of elimination of tariffs applied to Honduras' imports from Chile and its MFN rates at the entry into force of the Agreement. Honduras' average applied MFN rate in 2008 was 
6% overall (11.1% for agricultural products and 5.1% for non-agricultural products). MFN 
duty-free tariff lines accounted for 47.2% of all tariff  lines. At the date of entry into force of the 
Agreement (19 July 2008), Chilean exporters enjoye d an absolute margin of preference of 3.9% 
vis-à-vis  the prevailing MFN tariff; 5.1% for agricultural goods and 3.6% for non-agricultural 
products. The share of duty free lines applicable to imports from Chile was 82.8%. At the end of the implementation period in 2017, Chilean exporters will face zero duties on 96% of their exports 
to Honduras (82.9% for agricultural products  and 98.2% for non-agricultural products). WT/REG303/1 
 
- 41 - 
 
  Table A1.3 Honduras: Indicators of MFN tari ff rates and preferential rates for imports 
from Chile  
Origin of 
goods Year ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Share of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share of 
duty-
free 
tariff 
lines 
(%) Average applied 
tariff Share of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) Overall 
(%) On 
dutiable 
(%) 
MFN 2008 6.0 11.3 47.2 11.1 14.6 24.0 5.1 10.5 51.0 
Chile 2008 2.1 12.3 82.8 6.0 17.6 66.2 1.5 10.2 85.6 
 2009 1.9 10.9 82.8 5.6 16.4 66.2 1.3 8.7 85.6 
 2010 1.6 9.5 82.8 5.2 15.2 66.2 1.0 7.3 85.6 
 2011 1.4 8.1 82.8 4.8 14.1 66.2 0.8 5.8 85.6 
 2012 1.2 10.4 88.9 4.4 15.3 71.5 0.6 7.5 91.8 
 2013 1.1 9.5 88.9 4.1 14.5 71.5 0.5 6.6 91.8 
 2014 1.0 8.6 88.9 3.9 13.6 71.5 0.5 5.7 91.8 
 2015 0.8 7.6 88.9 3.6 12.7 71.5 0.4 4.6 91.8 
 2016 0.7 6.6 88.9 3.4 11.8 71.5 0.3 3.5 91.8 
 2017 0.6 15.1 96.0 3.1 18.2 82.9 0.2 10.1 98.2 
a WTO Definition. 
 Note: For the calculation of averages, specific rates are excluded and the ad valorem  parts of alternate 
rates are included. 
Based on the HS 2007 nomenclature.  Source: WTO Secretariat estimates base d on data provided by Honduras. 
 
4. Annex Table A1.4 gives an indication of additional market access resulting from the entry 
into force of the Agreement for Chile's top 25 global exports. During 2005-2007 Chile's top 
25 exports accounted for 76.4% of its global exports; these corresponded to 44 lines at the eight-digit level. Before the entry into force of  the Agreement 25 of these tariff lines were duty 
free for Chilean exporters. However, at the entr y into force of the Agreement, in July 2008, 
16 additional lines became duty free. At the end of the implementation period for Honduras (in 
2017), three tariff lines relating to wood and pork products will remain dutiable. 
Table A1.4 Honduras: Market access opportunities under the agreement for Chile's top 
25 exports
 
Chile's top export products in 2005-2007  Access Conditions to Honduras's import markets  
MFN (2008) Duty-
free in  
2008  Remain 
Dutiable  HS number and description of the 
product  Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate 
(%) No. of tariff lines  
Duty-free  Dutiable 
740311 -- cathodes and sections of 
cathodes 27.5 0.0 1    
260300 Copper ores and concentrates. 20.5 0.0 1    
740200 Unrefined copper; copper anodes 
for electrolytic refining. 4.3 0.0 1    
261310 - roasted 2.8 0.0 1    
261390 - other 2.0 0.0 1    
080610 - fresh 1.7 15.0  1 1  
470321 -- coniferous 1.6 0.0 1    
220421 -- in containers holding 2 l or less 1.6 15.0  1 1  
740319 -- other 1.4 0.0 1    
440710 - coniferous 1.3 5.0  1  1 
290511 -- methanol (methyl alcohol) 1.2 0.0 1    
271019 -- other 1.1 4.6 8 5 5  
720270 - ferro-molybdenum 1.0 0.0 1    
470329 -- non-coniferous 1.0 0.0 1    
271011 -- light oils and preparations 0.9 7.1 3 4 4  
230120 - flours, meals and pellets, of fish 
or of crustaceans, molluscs or 
other aquatic invertebrates 0.9 2.5 1 1 1  
710812 -- other unwrought forms 0.8 5.0  1 1  
080810 - apples 0.8 15.0  1 1  
740400 Copper waste and scrap. 0.7 0.0 1    
740811 -- of which the maximum cross-
sectional dimension exceeds 6 mm 0.6 0.0 1    WT/REG303/1 
 
- 42 - 
 
 
  Chile's top export products in 2005-2007  Access Conditions to Honduras's import markets  
MFN (2008) Duty-
free in  
2008  Remain 
Dutiable  HS number and description of the 
product  Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate 
(%) No. of tariff lines  
Duty-free  Dutiable 
020329 -- other 0.5 15.0  1  1 
280120 - iodine 0.5 0.0 1    
710691 -- unwrought 0.5 10.0  1 1  
030319 -- other 0.5 10.0  1 1  
440910 - coniferous: 0.5 10.0  1  1 
Total of above 76.4  25 19 16 3 
 
Note: Based on HS 2007 nomenclature.  Source: WTO estimates based on data provided  by Honduras and UNSD, Comtrade database. 
 
__________