Decision of the Free Trade Commission of the Free Trade Agreement between the Government of the Republic of Costa Rica and the Government of Canada No. 1 on the interpretation of paragraphs 2 and 3 of Note 1 to Chapter 17 of the Schedule of Costa Rica

The Free Trade Commission of the Free Trade Agreement between the Government of the Republic of Costa Rica and the Government of Canada (hereinafter the Commission):

In light of the Free Trade Agreement between the Government of the Republic of Costa Rica and the Government of Canada (hereinafter the Agreement), and in particular Articles XIII.1.2 (c) and XIII.1.3 (a) of the Agreement and paragraphs 2 and 3 of Note 1 to Chapter 17 of the Schedule of Costa Rica to the Agreement;

Considering:

1. The Agreement establishes a tariff-rate quota for imports of Canadian non-originating refined sugar to Costa Rica, classified in tariff subheadings 1701.91 and 1701.99, in paragraphs 2 and 3 of Note 1 to Chapter 17 of the Schedule of Costa Rica to the Agreement;

2. The volume of the tariff-rate quota is based on a predetermined reference volume, which started at 2,000 metric tons in 2003, and gradually increased to 4,000 metric tons from the eighth year of entry into force of the Agreement;

3. Paragraphs 2 and 3 of Note 1 to Chapter 17 of the Schedule of Costa Rica to the Agreement provide for possible deviations from the predetermined reference volume;

4. These possible deviations would be based on the volume of Canadian imports of originating refined sugar from Costa Rica, classified in tariff subheadings 1701.91 and 1701.99, during the year prior to that for which the tariff-rate quota will be made available;

5. The Commission understands that paragraphs 2 and 3 of Note 1 to Chapter 17 of the Schedule of Costa Rica to the Agreement are based on calendar year, such that Canadian imports of originating refined sugar from Costa Rica, classified in tariff subheadings 1701.91 and 1701.99, that would be considered to establish any possible deviation from the predetermined reference volume are those recorded between January 1 and December 31 of the year prior to that for which the tariff-rate quota will be made available;

6. Paragraph 3 of Note 1 to Chapter 17 of the Schedule of Costa Rica to the Agreement provides that the volume of the tariff-rate quota shall be made available for use by importers from January 1 to December 31 of any year;

7. Given that import data corresponding to a specific calendar year usually becomes available during the first quarter of the following calendar year, the Commission acknowledges that it is materially impossible to determine the volume of imports according to paragraph 2 of Note 1 to Chapter 17 of the Schedule of Costa Rica to the Agreement in sufficient time to determine possible deviations from the predetermined reference volume for the tariff-rate quota for the following year;

8. This situation affects the operation of the Agreement, as it prevents due consideration of the volume of imports according to paragraphs 2 and 3 of Note 1 to Chapter 17 of the Schedule of Costa Rica to the Agreement; and

9. The Commission acknowledges the “understanding between the Government of Canada and the Government of the Republic of Costa Rica regarding trade compensation under article 8.1 of the agreement on safeguards of the world trade organization in light of the application of a safeguard measure on imports of refined sugar”.

The Commission adopts a binding interpretation of paragraphs 2 and 3 of Note 1 to Chapter 17 of the Schedule of Costa Rica to the Agreement as follows:

Article 1

The one-year term referred to in paragraph 2 of Note 1 to Chapter 17 of the Schedule of Costa Rica to the Agreement for the purpose of accounting Canadian imports of originating refined sugar from Costa Rica, classified in tariff subheadings 1701.91 and 1701.99, shall be the period of twelve months starting on October 1 and ending on September 30 of the year prior to that for which the tariff-rate quota will be made available.

Article 2

Canada shall submit to Costa Rica the data of the imported volume of originating refined sugar from Costa Rica, classified in tariff subheadings 1701.91 and 1701.99, corresponding to the period indicated in Article 1 of this Decision, no later than November 15 of the year prior to that for which the tariff-rate quota will be made available.

Article 3

This Decision shall apply to the tariff-rate quota corresponding to calendar year 2021 and thereafter. In defining the volume of the tariff-rate quota for calendar year 2021, Costa Rica shall use the official statistics provided by Canada for imports of originating refined sugar from Costa Rica, classified in tariff subheadings 1701.91 and 1701.99, for the period between October 1, 2019 to September 30, 2020, which amounted to 2,505 metric tonnes.

Decided by the Commission at Ottawa and San Jose and signed in duplicate in the Spanish, English and French languages, each version being equally valid. The date of the Decision is deemed to be the date of its last signature by the representatives of each of the Parties on the Commission.

Representative of the Government of Canada on the Commission

Representative of the Government of the Republic of Costa Rica on the Commission