Central America Completes Third Round of FTA with Peru

At the end of the round chapters were closed on Sanitary and Health Certifications, Investment, Services and Customs Procedures.

Monday, March 7, 2011

Subjects discussed were policy issues related to market access for goods, rules of origin, customs procedures, customs cooperation, sanitary and health certifications, investment, services, temporary visas for businessmen, intellectual property and government purchases. Also discussed were specific rules of origin and annexes on purchases, services and investment. In the case of Costa Rica, the schedule for progressive tariff reduction was agreed for products in the areas of: live animals, rubber, resins, tobacco, minerals, fuels, chemicals, pharmaceuticals, fertilizers, paints, leather, jewelry, vehicles, watches and musical instruments. Meanwhile, chapters on specific rules of origin were agreed for chemicals, fertilizers, glue, cork, publishing products, ceramic products, leather, copper, aluminum, lead and zinc, among others.

The Director General of Foreign Trade of Costa Rica, Federico Valerio, said that "among major progress made, stands out conclusion of chapters on Sanitary and Health Certifications, Investment, Services and Customs Procedures. In general, wording is about 90% completed. As preparation for the fourth round in Lima we will hold videoconferences and a small scale round in Panama."

Completed Chapters on this round:

Sanitary and Health Certifications: establishing regulatory framework which will allow application of measures to animal products and plants to be exchanged with Peru, so to ensure protection of sanitary and health issues without applying unnecessary trade restrictions.

Investment: regulate country´s investments and investors, particularly treatment to be received under conditions of predictability, certainty and transparency as well as related to cases of investment expropriation, transfers resulting from an investment and the subrogation of investor rights. Disputes which may arise between a member country and investors will be resolved through a dispute resolution mechanism included in the chapter.

Services: regulates treatment to service providers with respect to national service providers and third-country nationals. It also states that countries cannot impose measures to limit access to markets, such as number of suppliers, assets, transactions, operations or service output, nor conditions to constitute a business or be resident of the country in order to provide services across borders.

Customs Procedures: facilitate trade among countries and among others, through publication of customs regulations over the Internet, efficient clearance of goods, and automation of customs procedures, adoption or maintenance of risk analysis systems, tariff classification, customs valuation and origin of goods.

Progress was made in discussions of the following topics:

Market Access: wording was agreed on pending only exemptions and refund of customs duties. It was agreed that goods produced under the free zone regime will be benefited by the Treaty´s tariff preferences.

Temporary Businessmen Entry: provisions were agreed to facilitate the temporary entry of business visitors, traders, investors and intra-corporate transfer of managers, executives and specialists in accordance with national law, including immigration and labor laws.

Intellectual Property: Important progress was made regarding basic principles and general provisions, pending references to resolutions by the World Health Organization on public health, innovation and intellectual property, and the reaffirmation of rights and obligations of other multilateral treaties. Additionally, it was agreed to include provisions ensuring protection of traditional knowledge and biodiversity, consistent with the Convention on Biological Diversity. Regarding geographical indications there was an overall exchange of views and a conceptual agreement to add additional indications in the future.

Rules of Origin: exceptions to presentation of the certificate of origin were agreed as well as reviews and appeals. Discussion will continue regarding certification and verification of origin and return of customs duties.

Customs Cooperation: provisions were agreed on cooperation and mutual assistance between customs authorities or competent authorities of each country. The purpose of these provisions is to enable authorities to exchange information to prevent and investigate customs violations, facilitate and expedite the flow of goods and promote mutual understanding of customs legislation and procedures among countries.

Public Procurement: agreed were exceptions to regulations included on the chapter, assumptions allowing the use of direct contracting and use of electronic or printed media to publish information on measures and public procurement. These provisions reflect the reality of each country and comply with domestic legislation on the subject. The only issues left refer to the application of general exceptions, conditions which do not constitute restrictions on trade as well as the publication of annual procurement plans and deadlines.

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On November 12th, in the Peruvian capital, the parties concluded the first round of negotiations for an FTA between Peru and the region.

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