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Trade Agreement between the Government of Canada and the Government of the Republic of Kazakhstan [1997] CATSer 3 (10 January 1997)

E100670 - CTS 1997 No. 19

TRADE AGREEMENT BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN

THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN (hereinafter referred to collectively as "Parties" and individually as "Party"),

CONVINCED that the development of bilateral trade in goods and services will contribute to increased mutual understanding and cooperation between the people of Canada and of the Republic of Kazakhstan;

CONSCIOUS that trade and commercial relations are an important element of bilateral relations between Canada and the Republic of Kazakhstan;

RECOGNIZING that economic restructuring and the switch to a market economy in the Republic of Kazakhstan are creating additional possibilities for the expansion of bilateral trade;

NOTING that the Republic of Kazakhstan has observer status in and Canada is one of the contracting parties of the General Agreement on Tariffs and Trade (GATT);

REAFFIRMING their desire to further expand commercial relations in accordance with the principles and conditions of the Final Act signed in Helsinki on August l, 1975 and other documents of the Conference on Security and Cooperation in Europe, notably the Document of the Bonn Conference on Economic Cooperation convened in accordance with the relevant provisions of the Concluding Document of the Vienna Meeting of the Conference on Security and Cooperation in Europe;

TAKING INTO CONSIDERATION the Declaration on Economic Cooperation between Canada and the Republic of Kazakhstan of July 10, 1992;

REFERRING TO the Long Term Agreement to Facilitate Economic, Industrial, Scientific and Technical Cooperation of July 14, 1976, and the Agreement for the Promotion and Reciprocal Protection of Investments of November 20, 1989;

HAVE AGREED ON THE FOLLOWING:

ARTICLE I

Objective

The objective of this Agreement is to establish a framework of balanced rights and obligations and agreed rules for the conduct of trade and commercial relations between Canada and the Republic of Kazakhstan.

ARTICLE II

Definitions

Territory

"Territory" means:

with respect to Canada, the territory to which its customs laws apply, including any areas beyond its territorial seas within which, in accordance with International Law and its Domestic Laws, it may exercise rights with respect to the seabed and subsoil and their natural resources;

with respect to the Republic of Kazakhstan, the territory to which its customs laws apply.

Person

"Person" of a country means a citizen or permanent resident of the country or a body corporate constituted under the laws applicable in, or principally carrying on its business within, the territory of the country.

Third country

"Third country" means any country other than Canada or the Republic of Kazakhstan.

Transit

"Transit" means the passage across the territory of a country, with or without transshipment, warehousing, breaking bulk, or change in the mode or means of transport, when such passage is only a portion of a complete journey beginning and terminating beyond the frontier of the country across whose territory the traffic passes.

Textile products

"Textile products" means tops, yarns, piece-goods, made-up articles, garments and other textile manufactured products (being products which derive their chief characteristics from their textile components) of cotton, wool, man-made fibres, or blends thereof, in which any or all of those fibres in combination represent either the chief value of the fibres or fifty (50) percent or more by weight (or seventeen (17) percent or more by weight of wool) of the product; artificial and synthetic staple fibre, tow, waste, simple mono- and multi-filaments, as well as textiles made of vegetable fibres, blends of vegetable fibres with fibres specified above, and blends containing silk, which are directly competitive with textiles made of fibres specified above and for which any or all of those fibres in combination represent either the chief value of the fibres or 50 (fifty) per cent or more by weight of the products.

ARTICLE III

Most-Favoured-Nation Treatment

1. Each Party shall accord to the like product of the other Party immediately and unconditionally, and irrespective of the nationality of the carrier, any advantage, favour, privilege or immunity that has been or may hereafter be accorded by it to any product originating in or destined for the territory of any third country with respect to:

(a) customs duties and charges of any kind imposed on or in connection with importation or exportation of products or imposed on the international transfer of payments for imports or exports;

(b) the methods of levying the duties and charges referred to in clause a) of this paragraph;

(c) the rules and formalities connected with its importation or exportation;

(d) all internal taxes or internal charges of any kind imposed in connection with imported or exported products; and

(e) all laws, regulations and requirements affecting sale, offering for sale, purchase, transportation or distribution of imported products within the territory of the Party.

2. No prohibition or restriction, whether made effective through quotas, import or export licenses or other measures, shall be instituted or maintained by either Party on the importation of any product of the other Party or on the exportation or sale for export of any product destined for the territory of the other Party unless the importation of the like product of all third countries or the exportation of the like product to the territory of all third countries is similarly prohibited or restricted.

3. Each Party shall accord to the other Party and persons of the other Party treatment no less favourable than it accords to any third country or the persons of any third country in all matters relating to the allocation of foreign exchange for transactions involving the importation and exportation of products and in the administration of foreign exchange regulations in relation to such transactions.

4. The most-favoured-nation treatment provisions of this Agreement shall not apply to advantages now accorded, or which may hereafter be accorded, by either Party resulting from:

(a) membership in a customs union or free trade area to which either Party is now or may become a party;

(b) preferences or advantages granted to other countries and authorized under the General Agreement on Tariffs and Trade (GATT) or under other international agreements consistent with the GATT;

(c) advantages accorded by Canada to countries and their overseas dependencies that are entitled to benefits of the British Preferential Tariff (BPT);

(d) advantages that are or may be accorded by the Republic of Kazakhstan to other countries that are members of the Commonwealth of Independent States, or which were located within the customs territory of the former Union of Soviet Socialist Republics (USSR); or

(e) advantages that are accorded to third countries on a reciprocal basis in accordance with instruments negotiated within the Uruguay Round and subsequent arrangements concluded under the GATT.

ARTICLE IV

Transit Facilitation

1. In accordance with applicable laws and regulations, each Party shall facilitate the freedom of transit, via the established routes most convenient for international transit, of products of the other Party across its territory. Products in transit across the territory of a Party that are not released from customs control and have not entered into the commerce of such Party shall not be subject to any unnecessary delays or restrictions and shall be exempt from all duties, taxes and other charges, except charges for transportation, administrative expenses or services rendered in relation to transit.

2. With respect to all charges, regulations and formalities applicable to products in transit, each Party shall accord to products of the other Party in transit across its territory treatment no less favourable than the treatment accorded to products of any third country in transit across its territory.

3. Each Party shall accord to the products of the other Party, which have been in transit across the territory of any third country and have not been released from customs control or entered into the commerce of such third country, treatment no less favourable than that which would have been accorded to such products had they been transported from their place of origin to their destination without going across the territory of such third country.

ARTICLE V

State Trading Enterprises

1. Each Party undertakes that if it establishes or maintains a state enterprise wherever located, or grants to any enterprise, formally or in effect, exclusive or special privileges, such enterprise shall, in its purchases of imports or sales of exports, act in a manner consistent with the principles of non-discriminatory treatment provided for in the present Agreement. To this end, such enterprises shall make any purchases of imports or sales of exports solely in accordance with commercial considerations including price, quality, availability and other conditions, and shall afford to the enterprises of the other Party adequate opportunity in accordance with customary business practice to compete for participation in such transactions.

2. The provisions of paragraph 1 of this Article shall not apply to imports of products for immediate or ultimate consumption in governmental use and not otherwise for resale or use in the production of goods for sale.

ARTICLE VI

Disruptive Trade Practices

1. Nothing in this Agreement prejudices or qualifies the right of either Party to enact and administer laws and regulations:

(a) consistent with the requirements of Article VI of the GATT and the related codes or successor Agreements concluded under the GATT; or

(b) applicable to products imported in such increased quantities and under such conditions as to cause or threaten to cause serious injury to domestic producers of like or directly competitive products.

2. As soon as possible after a request for initiation of an investigation is accepted by the authorities of one Party pursuant to a law or regulation referred to in paragraph 1 of this article, and in any event before the initiation of any investigation, the other Party shall be afforded an adequate opportunity for consultations with the aim of clarifying the situation and arriving at a mutually agreed solution. Furthermore, throughout the period of investigation, the other Party shall be afforded an adequate opportunity to continue consultations, with a view to clarifying the factual situation and to arriving at a mutually agreed solution.

3. The Party which intends to initiate any investigation or is conducting such an investigation shall permit, upon request, access to non-confidential evidence and data being used for initiating or conducting the investigation.

4. Each Party shall ensure that its laws and regulations referred to in paragraph 1 of this Article are transparent and afford affected parties an opportunity to submit their views. Such laws and regulations shall not be applied in a manner that discriminates arbitrarily or unjustifiably between products of the other Party and products of any third country.

5. Notwithstanding paragraphs 1 and 2 of Article III or subparagraph 1 (b) of this Article, paragraphs 6 to 9 of this Article shall apply to trade in textile products.

6. The Parties agree to consult promptly at the request of either Party that considers that an actual or prospective increase in imports of a textile product of the other Party is causing or threatening to cause market disruption in its market.

7. The consultations provided for in paragraph 6 shall be concluded within sixty days from the date of request by the importing Party for such consultations, unless the Parties otherwise agree.

8. If, during such consultations, the Parties do not agree upon a means to prevent or to remedy the market disruption, the importing Party may restrain the imports of the product of the other Party, based on the date of import.

9. In critical circumstances, where delay would cause damage that would be difficult to repair, the importing Party may take action to restrain imports of a textile product on a provisional basis, provided that a request for consultations shall be effected by the importing Party within 30 days of taking action.

ARTICLE VII

Transparency of Information

1. Each Party shall make available publicly on a timely basis all laws and regulations related to commercial activity, including trade, investment, taxation, banking, insurance, financial services, transport and labour.

2. Each Party shall provide interested persons of the other Party access to available non-confidential, non-proprietary data on the national economy, and specific industrial, agricultural, commodity or service sectors, including data on foreign trade and investment.

3. Each Party shall allow the other Party, when interested, the opportunity to consult on the formulation of laws and regulations which govern the conduct of business activities.

ARTICLE VIII

Services

The Parties will enter into consultations with a view to broadening the scope of this Agreement to include provisions concerning trade in services, consistent with multilateral principles adopted as a result of the negotiations on the General Agreement on Trade in Services.

ARTICLE IX

Merchant Vessels, Waterborne Cargoes and Intermodal Services

1. In relation to products transported between Canada and the Republic of Kazakhstan, neither Party shall create or maintain discriminatory measures of any kind to marketing the services of, securing cargoes for, and transferring payments related to:

(a) the merchant vessels of the other Party or merchant vessels chartered by persons of the other Party; or

(b) the international intermodal cargo services provided by persons of the other Party.

2. Each Party shall permit the other Party, on the basis of reciprocity, to establish and operate offices to act as agents for the international intermodal cargo services provided by persons of the other Party, for merchant vessels of the other Party, and for merchant vessels chartered by persons of the other Party.

3. In international traffic, the merchant vessels of the Republic of Kazakhstan, merchant vessels chartered by persons of the Republic of Kazakhstan, and the cargoes of such vessels shall during arrival, stay at and departure from the seaports of Canada, enjoy most-favoured-nation treatment, including access to harbour services. This provision shall not apply to pilotage.

ARTICLE X

Terms of Payments

1. Subject to the laws and regulations in force in Canada and the Republic of Kazakhstan, all payments in respect of trade between the two countries shall be made on terms agreed upon by the persons who signed the commercial contracts on the basis of which that trade is performed, in any form accepted in international banking practice.

2. Neither party shall require or encourage persons subject to its jurisdiction to engage in barter or countertrade transactions as a condition of bilateral trade between Canada and the Republic of Kazakhstan.

ARTICLE XI

Trade-Related Finance

The Parties shall endeavour to enhance the relationship between the Export Development Corporation of Canada, or its successor or successors, and the authorized agency of the Republic of Kazakhstan, or its successor or successors, especially in relation to financing trade in capital goods and services based on reasonable assessments of commercial risk and, where appropriate, based on sovereign or state risk guarantees.

ARTICLE XII

Law Applicable to Contracts and Settlement of Commercial Disputes

1. Neither Party shall interfere with the freedom of persons subject to its jurisdiction to agree with persons of the other Party on the choice of law to govern the conclusion and performance of contracts between them.

2. Persons of Canada, on the one hand, and persons of the Republic of Kazakhstan, on the other hand, may agree to settle disputes arising out of commercial transactions by arbitration.

3. Such persons, involved in disputes arising out of individual commercial transactions may agree to arbitration in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL), adopted in 1976.

4. Without prejudice to their ability to decide otherwise, the persons party to commercial transactions may agree on a place for conducting the arbitration in a country, other than Canada or the Republic of Kazakhstan, that is a party to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done in New York on June 10, 1958.

5. Nothing in the present Agreement shall be interpreted in such a way as to hamper, nor shall either Party prevent, the parties to commercial transactions from agreeing on any other form of arbitration for the settling of commercial disputes, which they mutually prefer and which, in their opinion, best answers their commercial interests.

6. The persons of Canada and of the Republic of Kazakhstan shall enjoy access to the courts of the other Party on the same basis as persons of any third country.

ARTICLE XIII

National Security

The provisions of this Agreement shall not limit the right of either Party to take any action for the protection of its national security interests.

ARTICLE XIV

Other Exceptions

Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prohibit the adoption or enforcement by either Party of:

(a) measures necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement, or

(b) any other measure referred to in Article XX of the GATT.

ARTICLE XV

Consultations

1. The Parties shall consult with each other from time to time regarding questions relating to the operation of this Agreement or of any provision thereof.

2. The consultations provided for by paragraph 1 of this Article shall be carried out with a view to:

(a) reviewing the possibility of broadening this Agreement;

(b) considering matters affecting trade and commercial relations between Canada and the Republic of Kazakhstan;

(c) exchanging information and views on matters that might adversely affect either party's existing levels or future development of trade;

(d) reviewing multilateral trade matters of common interest; and

(e) reviewing progress towards expanding bilateral trade and examining, where appropriate, proposals designed to stimulate further growth in trade or to overcome hindrances to such growth.

3. Consultations pursuant to this Article may be initiated at the request of either Party on reasonable notice to the other Party.

4. Meetings provided for by the present article shall be held alternately in Canada and the Republic of Kazakhstan unless a different agreement is reached in this regard. Meetings shall be chaired by a representative of the host Party.

ARTICLE XVI

Amendments and Expansions

The present Agreement may be amended or expanded with the mutual, written Agreement of the Parties. Such amendments and expansions must be in written form.

ARTICLE XVII

Entry into Force, Term and Termination

1. For the purpose of the entry into force of this Agreement, the Parties will inform each other by an exchange of diplomatic notes that their respective legal requirements have been met in full. This Agreement shall enter into force on the date of the Exchange of Notes or, in the event that the Exchange of Notes is not simultaneous, on the day on which the later Note is dated.

2. This Agreement shall remain in force unless terminated by either Party upon six months' notice to the other Party. Should this Agreement be terminated, both Parties will do everything possible to minimize disruption to their trade relations.

3. The rights and obligations arising out of contracts entered into between persons of the Parties shall be the responsibility of such persons only. Termination of this Agreement shall not affect the fulfilment of obligations or undertakings arising from contracts entered into during the period the Agreement was in force until all obligations arising therefrom have been fulfilled.

4. Except as expressly provided herein, nothing in this Agreement overrides or modifies Agreements already in force between the Parties.

IN WITNESS WHEREOF, the undersigned, being duly authorized, have signed this Agreement in duplicate, in the English, French, Kazakh and Russian languages, all four texts being equally authentic.

DONE at Ottawa this 29th day of March, 1995.

Raymond Chan

FOR THE GOVERNMENT OF CANADA

Kasymzhomart K. Tokayev

FOR THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN