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diff --git a/89-Contents-8.txt b/89-Contents-8.txt new file mode 100644 index 0000000..30df4ec --- /dev/null +++ b/89-Contents-8.txt @@ -0,0 +1,21460 @@ +The Project Gutenberg EBook of North American Free Trade Agreement, 1992 +Oct. 7, by Canada + +This eBook is for the use of anyone anywhere at no cost and with +almost no restrictions whatsoever. You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: North American Free Trade Agreement, 1992 Oct. 7 + Table of Contents + +Author: Canada + +Posting Date: December 23, 2011 [EBook #89] +Release Date: November, 1993 + +Language: English + +Character set encoding: ISO-8859-1 + +*** START OF THIS PROJECT GUTENBERG EBOOK NAFTA, 1992 OCT. 7 *** + + + + + + + + + + + + + + +NAFTA TABLE OF CONTENTS + + +PREAMBLE + + +PART ONE: GENERAL PART + + Chapter 1: Objectives + + Chapter 2: General Definitions + + +PART TWO: TRADE IN GOODS + + Chapter 3: National Treatment and Market Access + + Annex 300 - A: Automotive Sector + Annex 300 - B: Textiles and Apparel + + Chapter 4: Rules of Origin + + Chapter 5: Customs Procedures + + Chapter 6: Energy + + Chapter 7: Agriculture + + Subchapter A: Market Access + Subchapter B: Sanitary and Phytosanitary Measures + + Chapter 8: Emergency Action + + +============================================================================= + +PART THREE: TECHNICAL BARRIERS TO TRADE + + Chapter 9: Standards-Related Measures + + +PART FOUR: GOVERNMENT PROCUREMENT + + Chapter 10: Government Procurement + + +PART FIVE: INVESTMENT, SERVICES + AND RELATED MATTERS + + Chapter 11: Investment + + Chapter 12: Cross-Border Trade in Services + + Chapter 13: Telecommunications + + Chapter 14: Financial Services + + Chapter 15: Competition Policy, Monopolies + and State Enterprises + + Chapter 16: Temporary Entry for Business Persons + + +PART SIX: INTELLECTUAL PROPERTY + + Chapter 17: Intellectual Property + + +PART SEVEN: ADMINISTRATIVE AND INSTITUTIONAL + PROVISIONS + + Chapter 18: Publication, Notification + and Administration of Laws + + Chapter 19: Review and Dispute Settlement in Antidumping + and Countervailing Duty Matters + + Chapter 20: Institutional Arrangements + and Dispute Settlement Procedures + + +PART EIGHT: OTHER PROVISIONS + + Chapter 21: Exceptions + + Chapter 22: Final Provisions + + + + +ANNEXES I THROUGH VII + + Reservations: + + Chapter Eleven (Investment) + Chapter Twelve (Cross-Border Trade in Services) + Chapter Fourteen (Financial Services) + + + + + ** NORTH AMERICAN FREE TRADE AGREEMENT ** + + -- Text prepared September 6, 1992 -- + + +Note: This text is currently undergoing legal review in order +to ensure the Agreement's overall consistency and +clarity. The three countries will initial the +Agreement when legal drafting is completed. + + + PREAMBLE + +The Government of Canada, the Government of the United Mexican +States and the Government of the United States of America, +resolved to: + + STRENGTHEN the special bonds of friendship and cooperation + among their nations; + + CONTRIBUTE to the harmonious development and expansion of + world trade and provide a catalyst to broader international + cooperation; + + CREATE an expanded and secure market for the goods and + services produced in their territories; + + REDUCE distortions to trade; + + ESTABLISH clear and mutually advantageous rules governing + their trade; + + ENSURE a predictable commercial framework for business + planning and investment; + + BUILD on their respective rights and obligations under the + General Agreement on Tariffs and Trade and other + multilateral and bilateral instruments of cooperation; + + ENHANCE the competitiveness of their firms in global + markets; + + FOSTER creativity and innovation, and promote trade in goods + and services that are the subject of intellectual property + rights; + + CREATE new employment opportunities and improve working + conditions and living standards in their respective + territories; + + UNDERTAKE each of the preceding in a manner consistent with + environmental protection and conservation; + + PRESERVE their flexibility to safeguard the public welfare; + + PROMOTE sustainable development; + + STRENGTHEN the development and enforcement of environmental + laws and regulations; and + + PROTECT, enhance and enforce basic workers' rights; + +HAVE AGREED as follows: + + + + +NAFTA PART ONE GENERAL PART + + Chapter One + + Objectives + + + +Article 101: Establishment of the Free Trade Area + + The Parties to this Agreement, consistent with Article XXIV +of the General Agreement on Tariffs and Trade, hereby establish a +free trade area. + + +Article 102: Objectives + +1. The objectives of this Agreement, as elaborated more +specifically through its principles and rules, including national +treatment, most-favored-nation treatment and transparency are to: + + (a) eliminate barriers to trade in, and facilitate the + cross border movement of, goods and services between + the territories of the Parties; + + (b) promote conditions of fair competition in the free + trade area; + + (c) increase substantially investment opportunities in + their territories; + + (d) provide adequate and effective protection and + enforcement of intellectual property rights in each + Party's territory; + + (e) create effective procedures for the implementation and + application of this Agreement, and for its joint + administration and the resolution of disputes; and + + (f) establish a framework for further trilateral, regional + and multilateral cooperation to expand and enhance the + benefits of this Agreement. + +2. The Parties shall interpret and apply the provisions of this +Agreement in the light of its objectives set out in paragraph 1 +and in accordance with applicable rules of international law. + + +Article 103: Relation to Other Agreements + +1. The Parties affirm their existing rights and obligations +with respect to each other under the General Agreement on Tariffs +and Trade and other agreements to which such Parties are party. + +2. In the event of any inconsistency between the provisions of +this Agreement and such other agreements, the provisions of this +Agreement shall prevail to the extent of the inconsistency, +except as otherwise provided in this Agreement. + + +Article 104: Relation to Environmental and Conservation +Agreements + +1. In the event of any inconsistency between this Agreement and +the specific trade obligations set out in: + + (a) Convention on the International Trade in Endangered + Species of Wild Fauna and Flora, done at Washington, + March 3, 1973; + + (b) the Montreal Protocol on Substances that Deplete the + Ozone Layer, done at Montreal, September 16, 1987, as + amended June 29, 1990; + + (c) Basel Convention on the Control of Transboundary + Movements of Hazardous Wastes and Their Disposal, done + at Basel, March 22, 1989, upon its entry into force for + Canada, Mexico and the United States; or + + (d) the agreements set out in Annex 104.1, + +such obligations shall prevail to the extent of the +inconsistency, provided that where a Party has a choice among +equally effective and reasonably available means of complying +with such obligations, the Party chooses the alternative that is +the least inconsistent with the other provisions of this +Agreement. + +2. The Parties may agree in writing to modify Annex 104.1 to +include any amendment to the agreements listed in paragraph 1, +and any other environmental or conservation agreement. + + +Article 105: Extent of Obligations + + The Parties shall ensure that all necessary measures are +taken in order to give effect to the provisions of this +Agreement, including their observance, except as otherwise +provided in this Agreement, by state and provincial governments. + +============================================================================= + + ANNEX 104 + + Bilateral and Other Environmental and Conservation Agreements + + +1. The Agreement Between the Government of Canada and the +Government of the United States of America Concerning the +Transboundary Movement of Hazardous Waste, signed at Ottawa, +October 28, 1986. + +2. The Agreement between the United States of America and the +United Mexican States on Cooperation for the Protection and +Improvement of the Environment in the Border Area, signed at +La Paz, Baja California Sur, August 14, 1983. +NAFTA Chapter Two + + General Definitions + + + +Article 201: Definitions of General Application + +1. For purposes of this Agreement, unless otherwise specified: + +Commission means the Free Trade Commission established under +Article 2001; + +Customs Valuation Code means the Agreement on Implementation of +Article VII of the General Agreement on Tariffs and Trade, +including its interpretative notes; + +days means calendar days, including weekends and holidays; + +enterprise means any entity constituted or organized under +applicable law, whether or not for profit, and whether privately- +owned or governmentally-owned, including any corporation, trust, +partnership, sole proprietorship, joint venture or other +association; + +enterprise of a Party means an enterprise constituted or +organized under the laws of, or principally carrying on its +business in the territory of, a Party; + +existing means in effect at the time of entry into force of this +Agreement; + +Generally Accepted Accounting Principles means the recognized +consensus or substantial authoritative support in the territory +of a Party with respect to the recording of revenues, expenses, +costs, assets and liabilities, disclosure of information and +preparation of financial statements. These standards may be +broad guidelines of general application as well as detailed +standards, practices and procedures; + +Harmonized System means the Harmonized Commodity Description and +Coding System, and its legal notes, as adopted and implemented by +the Parties in their respective tariff laws; + +measure includes any law, regulation, procedure, requirement or +practice; + +national means a natural person who is a citizen or permanent +resident of a Party and any other natural person referred to in +Annex 201.1; + +originating means qualifying under the rules of origin set out in +Chapter Four (Rules of Origin); + +person means a natural person or an enterprise; + +person of a Party means a national, or an enterprise of a Party; + +state enterprise means an enterprise that is owned, or controlled +through ownership interests, by a Party; and + +territory means for a Party the territory of that Party as set +out in Annex 201.1. + +2. For purposes of this Agreement, unless otherwise specified, +a reference to province or state includes local governments. + +============================================================================= + + ANNEX 201.1 + + Country-Specific Definitions + + +For purposes of this Agreement, unless otherwise specified: + +national also includes: + + (a) for Mexico, a national or a citizen according to + Articles 30 and 34, respectively, of the Mexican + Constitution; and + + (b) for the United States, "national of the United States" + as defined in the existing provisions of the United + States Immigration and Nationality Act; + +territory means: + + (a) with respect to Canada, the territory to which its + customs laws apply, including any areas beyond the + territorial seas of Canada within which, in accordance + with international law and its domestic laws, Canada + may exercise rights with respect to the seabed and + subsoil and their natural resources; + + (b) with respect to Mexico, + + (i) the states of the Federation and the Federal + District, + + (ii) the islands, including the reefs and keys, in + adjacent seas, + + (iii) the islands of Guadalupe and Revillagigedo + situated in the Pacific Ocean, + + (iv) the continental shelf and the submarine shelf of + such islands, keys and reefs, + + (v) the waters of the territorial seas, in accordance + with international law and its interior maritime + waters, + + (vi) the space located above the national territory, in + accordance with international law, + + (vii) any areas beyond the territorial seas of + Mexico within which, in accordance with + international law, including the United + Nations Convention on the Law of the Sea, and + its domestic laws, Mexico may exercise rights + with respect to the seabed and subsoil and + their natural resources; and + + (c) with respect to the United States, + + (i) the customs territory of the United States, which + includes the 50 states, the District of Columbia + and Puerto Rico, + + (ii) the foreign trade zones located in the United + States and Puerto Rico, and + + (iii) any areas beyond the territorial seas of the + United States within which, in accordance + with international law and its domestic laws, + the United States may exercise rights with + respect to the seabed and subsoil and their + natural resources. + +NAFTA PART TWO TRADE IN GOODS Chapter Three + + National Treatment and Market Access for Goods + + + + Subchapter A - National Treatment + + +Article 301: National Treatment + +1. Each Party shall accord national treatment to the goods of +another Party in accordance with Article III of the General +Agreement on Tariffs and Trade (GATT), including its +interpretative notes, and to this end Article III of the GATT and +its interpretative notes, or any equivalent provision of a +successor agreement to which all Parties are party, are +incorporated into and made part of this Agreement. + +2. The provisions of paragraph 1 regarding national treatment +shall mean, with respect to a province or state, treatment no +less favorable than the most favorable treatment accorded by such +province or state to any like, directly competitive or +substitutable goods, as the case may be, of the Party of which it +forms a part. + +3. Paragraphs 1 and 2 shall not apply to the measures set out +in Annex 301.3. + + + + Subchapter B - Tariffs + + +Article 302: Tariff Elimination + +1. Except as otherwise provided in this Agreement, no Party may +increase any existing customs duty, or adopt any customs duty, on +an originating good. + +2. Except as otherwise provided in this Agreement, each Party +shall progressively eliminate its customs duties on originating +goods in accordance with its Schedule set out in Annex 302.2 or +as otherwise indicated in Annex 300-B. + +3. At the request of any Party, the Parties shall consult to +consider accelerating the elimination of customs duties set out +in their Schedules. An agreement between any two or more Parties +to accelerate the elimination of a customs duty on a good shall +supersede any prior inconsistent duty rate or staging category in +their Schedules for such good when approved by each such Party in +accordance with Article 2202(2) (Amendments). + + +Article 303: Restriction on Drawback and Duty Deferral Programs + +1. Except as otherwise provided in this Article, no Party may +refund the amount of customs duties paid, or waive or reduce the +amount of customs duties owed, on a good imported into its +territory that is: + + (a) subsequently exported to the territory of another + Party, + + (b) used as a material in the production of another good + that is subsequently exported to the territory of + another Party, or + + (c) substituted by an identical or similar good used as a + material in the production of another good that is + subsequently exported to the territory of another + Party, + +in an amount that exceeds the lesser of the total amount of +customs duties paid or owed on the good on importation into its +territory, or the total amount of customs duties paid to another +Party on the good that has been subsequently exported to the +territory of that other Party. + +2. No Party may, by reason of an exportation described in +paragraph 1, refund, waive or reduce: + + (a) an antidumping or countervailing duty that is applied + pursuant to a Party's domestic law and that is not + applied inconsistently with Chapter Nineteen (Review + and Dispute Settlement in Antidumping and + Countervailing Duty Matters); + + (b) a premium offered or collected on an imported good + arising out of any tendering system in respect of the + administration of quantitative import restrictions, + tariff rate quotas or tariff preference levels; + + (c) a fee applied pursuant to section 22 of the U.S. + Agricultural Adjustment Act, subject to Chapter Seven + (Agriculture); or + + (d) customs duties paid or owed on a good imported into its + territory and substituted by an identical or similar + good that is subsequently exported to the territory of + another Party. + +3. Where a good is imported into the territory of a Party +pursuant to a duty deferral program and is subsequently exported +to the territory of another Party, or is used as a material in +the production of another good that is subsequently exported to +the territory of another Party, or is substituted by an identical +or similar good used as a material in the production of another +good that is subsequently exported to the territory of another +Party, the Party from whose territory the good is exported: + + (a) shall assess the customs duties as if the exported good + had been withdrawn for domestic consumption; and + + (b) may waive or reduce such customs duties to the extent + permitted under paragraph 1. + +4. In determining the amount of customs duties that may be +refunded, waived or reduced pursuant to paragraph 1 on a good +imported into its territory, each Party shall require +presentation of satisfactory evidence of the amount of customs +duties paid to another Party on the good that has been +subsequently exported to the territory of that other Party. + +5. Where satisfactory evidence of the customs duties paid to +the Party to which a good is subsequently exported under a duty +deferral program described in paragraph 3 is not presented within +60 days after the date of exportation, the Party from whose +territory the good was exported: + + (a) shall collect customs duties as if the exported good + had been withdrawn for domestic consumption; and + + (b) may refund such customs duties to the extent permitted + under paragraph 1 upon the timely presentation of such + evidence under the laws and regulations of the Party. + +6. This Article shall not apply to: + + (a) a good entered under bond for transportation and + exportation to the territory of another Party; + + (b) a good exported to the territory of another Party in + the same condition as when imported into the territory + of the Party from which the good was exported + (processes such as testing, cleaning, repacking or + inspecting the good, or preserving it in its same + condition, shall not be considered to change a good's + condition). Where originating and non-originating + fungible goods are commingled and exported in the same + form, the origin of the good may be determined on the + basis of the inventory methods provided for in the + Uniform Regulations; + + (c) a good imported into the territory of the Party that is + deemed to be exported from the territory of a Party, or + used as a material in the production of another good + that is deemed to be exported to the territory of + another Party, or is substituted by an identical or + similar good used as a material in the production of + another good that is deemed to be exported to the + territory of another Party, by reason of + + (i) delivery to a duty-free shop, + + (ii) delivery for ship's stores or supplies for ships + or aircraft, or + + (iii) delivery for use in joint undertakings of two + more of the Parties and that will + subsequently become the property of the Party + into whose territory the good was imported; + + (d) a refund of customs duties by a Party on a particular + good imported into its territory and subsequently + exported to the territory of another Party, where that + refund is granted by reason of the failure of such good + to conform to sample or specification, or by reason of + the shipment of such good without the consent of the + consignee; + + (e) a dutiable originating good that is imported into the + territory of a Party and is subsequently exported to + the territory of another Party, or used as a material + in the production of another good that is subsequently + exported to the territory of another Party, or is + substituted by an identical or similar good used as a + material in the production of another good that is + subsequently exported to the territory of another + Party; or + + (f) a good set out in Annex 303.6. + +7. This Article shall apply as of the date set out in each +Party's section of Annex 303.7. + +8. Notwithstanding any other provision of this Article and +except as specifically provided in Annex 303.8, no Party may +refund the amount of customs duties paid, or waive or reduce the +amount of customs duties owed, on a non-originating good provided +for under tariff provision 8540.xx (cathode-ray color television +picture tubes, including video monitor tubes, with a diagonal +exceeding 14") that is imported into the Party's territory and +subsequently exported to the territory of another Party, or is +used as a material in the production of another good that is +subsequently exported to the territory of another Party, or is +substituted by an identical or similar good used as a material in +the production of another good that is subsequently exported to +the territory of another Party. + + +Article 304: Waiver of Customs Duties + +1. Except as set out in Annex 304.1, no Party may adopt any new +waiver of customs duties, or expand with respect to existing +recipients or extend to any new recipient the application of an +existing waiver of customs duties, where the waiver is +conditioned, explicitly or implicitly, upon the fulfillment of a +performance requirement. + +2. Except as set out in Annex 304.2, no Party may, explicitly +or implicitly, condition on the fulfillment of a performance +requirement the continuation of any existing waiver of customs +duties. + +3. If a waiver or a combination of waivers of customs duties +granted by a Party with respect to goods for commercial use by a +designated person, and thus not generally available to all +importers, can be shown by another Party to have an adverse +impact on the commercial interests of a person of that Party, or +of a person owned or controlled by a person of that Party that is +located in the territory of the Party granting the waiver, or on +the other Party's economy, the Party granting the waiver shall +either cease to grant it or make it generally available to any +importer. + +4. This Article shall not apply to measures covered by Article +303 (Restriction on Drawback and Duty Deferral). + + +Article 305: Temporary Admission of Goods + +1. Each Party shall grant duty-free temporary admission for: + + (a) professional equipment necessary for carrying out the + business activity, trade or profession of a business + person who qualifies for temporary entry pursuant to + Chapter 16 (Temporary Entry for Business Persons), + + (b) equipment for the press or for sound or television + broadcasting and cinematographic equipment, + + (c) goods imported for sports purposes and goods intended + for display and demonstration, and + + (d) commercial samples and advertising films, + +imported from the territory of another Party, regardless of their +origin and regardless of whether like, directly competitive or +substitutable goods are available in the territory of the Party. + +2. Except as otherwise provided in this Agreement, no Party may +condition the duty-free temporary admission of a good referred to +in subparagraph 1(a), (b), or (c), other than to require that +such good: + + (a) be imported by a national or resident of another Party + who seeks temporary entry; + + (b) be used solely by or under the personal supervision of + such person in the exercise of the business activity, + trade or profession of that person; + + (c) not be sold or leased while in its territory; + + (d) be accompanied by a bond in an amount no greater than + 110 percent of the charges that would otherwise be owed + upon entry or final importation, or by another form of + security, releasable upon exportation of the good, + except that a bond for customs duties shall not be + required for an originating good; + + (e) be capable of identification when exported; + + (f) be exported upon the departure of that person or within + such other period of time as is reasonably related to + the purpose of the temporary admission; and + + (g) be imported in no greater quantity than is reasonable + for its intended use. + +3. Except as otherwise provided in this Agreement, no Party may +condition the duty-free temporary admission of a good referred to +in subparagraph 1(d), other than to require that such good: + + (a) be imported solely for the solicitation of orders for + goods, or services provided from the territory, of + another Party or non-Party; + + (b) not be sold, leased, or put to any use other than + exhibition or demonstration while in its territory; + + (c) be capable of identification when exported; + + (d) be exported within such period as is reasonably related + to the purpose of the temporary admission; and + + (e) be imported in no greater quantity than is reasonable + for its intended use. + +4. A Party may impose the customs duty and any other charge on +a good temporarily admitted duty-free under paragraph 1 that +would be owed upon entry or final importation of such good if any +condition that the Party imposes under paragraph 2 or 3 has not +been fulfilled. + +5. Subject to Chapters Eleven (Investment) and Twelve (Cross- +Border Trade in Services): + + (a) each Party shall allow a locomotive, truck, truck + tractor, or tractor trailer unit, railway car, other + railroad equipment, trailer ("vehicle") or container, + used in international traffic, that enters its + territory from the territory of another Party to exit + its territory on any route that is reasonably related + to the economic and prompt departure of such vehicle or + container; + + (b) no Party may require any bond or impose any penalty or + charge solely by reason of any difference between the + port of entry and the port of departure of a vehicle or + container; + + (c) no Party may condition the release of any obligation, + including any bond, that it imposes in respect of the + entry of a vehicle or container into its territory on + its exit through any particular port of departure; and + + (d) no Party may require that the vehicle or carrier + bringing a container from the territory of another + Party into its territory be the same vehicle or carrier + that takes such container to the territory of another + Party. + + +Article 306: Duty-Free Entry of Certain Commercial Samples and + Printed Advertising Materials + + Each Party shall grant duty-free entry to commercial samples +of negligible value, and to printed advertising materials, +imported from the territory of another Party, regardless of their +origin, but may require that: + + (a) such samples be imported solely for the solicitation of + orders for goods of, or services provided from, the + territory of another Party or non-Party; or + + (b) such advertising materials be imported in packets that + each contain no more than one copy of each such + material and that neither such materials nor packets + form part of a larger consignment. + + +Article 307: Goods Re-entered after Repair or Alteration + +1. Except as set out in Annex 307.1, no Party may apply a +customs duty on a good, regardless of its origin, that re-enters +its territory after that good has been exported from its +territory to the territory of another Party for repair or +alteration, regardless of whether such repair or alteration could +be performed in its territory. + +2. Notwithstanding Article 303 (Duty Drawback), no Party shall +apply a customs duty to a good, regardless of its origin, +imported temporarily from the territory of another Party for +repair or alteration. + +3. Each Party shall act in accordance with Annex 307.3 +respecting the repair and rebuilding of vessels. + + +Article 308: Most-Favored-Nation Rates of Duty on Certain Goods + +1. Each Party shall act in accordance with Annex 308.1 +respecting certain automatic data processing goods and their +parts. + +2. Each Party shall act in accordance with Annex 308.2 +respecting certain color television tubes. + +3. Each Party shall accord most-favored-nation duty-free +treatment to Local Area Network (LAN) apparatus imported into its +territory as set out in each Party's section of Annex 308.3. + + + + Subchapter C - Non-Tariff Measures + + +Article 309: Import and Export Restrictions + +1. Except as otherwise provided in this Agreement, no Party +shall adopt or maintain any prohibition or restriction on the +importation of any good of another Party or on the exportation or +sale for export of any good destined for the territory of another +Party, except in accordance with Article XI of the GATT, +including its interpretative notes, and to this end Article XI of +the GATT and its interpretative notes, or any equivalent +provision of a successor agreement to which all Parties are +party, are incorporated into and made part of this Agreement. + +2. The Parties understand that the GATT rights and obligations +incorporated by paragraph 1 prohibit, in any circumstances in +which any other form of restriction is prohibited, export price +requirements and, except as permitted in enforcement of +countervailing and antidumping orders and undertakings, import +price requirements. + +3. In the event that a Party adopts or maintains a prohibition +or restriction on the importation from or exportation to a non- +Party of a good, nothing in this Agreement shall be construed to +prevent the Party from: + + (a) limiting or prohibiting the importation from the + territory of another Party of such good of that non- + Party; or + + (b) requiring as a condition of export of such good of the + Party to the territory of another Party, that the good + not be re-exported to that non-Party, directly or + indirectly, without having been increased in value and + improved in condition [subject to review]. + +4. In the event that a Party adopts or maintains a prohibition +or restriction on the importation of a good from a non-Party, the +Parties, upon request of any Party, shall consult with a view to +avoiding undue interference with or distortion of pricing, +marketing and distribution arrangements in another Party. + +5. Paragraphs 1 through 4 shall: + + (a) not apply to the measures set out in Annex 301.3; + + (b) apply to automotive goods as modified in Annex 300-A + (Trade and Investment in the Automotive Sector); and + + (c) apply to trade in textile and apparel goods, as + modified in Annex 300-B (Textile and Apparel Goods). + +6. For purposes of this Article, goods of another Party shall +mean [under review]. + + +Article 310: Non-Discriminatory Administration of Restrictions + (GATT Article XIII) + +[need for this Article is under review] + + +Article 311: Customs User Fees + +1. No Party may adopt any customs user fee of the type referred +to in Annex 311 for originating goods. + +2. Each Party may maintain existing such fees only in +accordance with Annex 311.2. + + +Article 312: Country of Origin Marking + + Each Party shall comply with Annex 312 with respect to its +measures relating to country of origin marking. + + +Article 313: Blending Requirements + + No Party may adopt or maintain any measure requiring that +distilled spirits imported from the territory of another Party +for bottling be blended with any distilled spirits of the Party. + + +Article 314: Distinctive Products + + Each Party shall comply with Annex 314 respecting standards +and labelling of the distinctive products set out therein. + + +Article 315: Export Taxes + + Except as set out in Annex 315 or Article 604 (Energy - +Export Taxes), no Party may adopt or maintain any duty, tax, or +other charge on the export of any good to the territory of +another Party, unless such duty, tax, or charge is adopted or +maintained on: + + (a) exports of any such good to the territory of all other + Parties; and + + (b) any such good when destined for domestic consumption. + + +Article 316: Other Export Measures + +1. Except as set out in Annex 316, a Party may adopt or +maintain a restriction otherwise justified under the provisions +of Articles XI:2(a) or XX(g), (i) or (j) of the GATT with respect +to the export of a good of the Party to the territory of another +Party, only if: + + (a) the restriction does not reduce the proportion of the + total export shipments of the specific good made + available to that other Party relative to the total + supply of that good of the Party maintaining the + restriction as compared to the proportion prevailing in + the most recent 36-month period for which data are + available prior to the imposition of the measure, or in + such other representative period on which the Parties + may agree; + + (b) the Party does not adopt any measure, such as a + license, fee, tax or minimum price requirement, that + has the effect of raising the price for exports of a + good to that other Party above the price charged for + such good when consumed domestically, except that a + measure taken pursuant to subparagraph (a) that only + restricts the volume of exports shall not be considered + to have such effect; and + + (c) the restriction does not require the disruption of + normal channels of supply to that other Party or normal + proportions among specific goods or categories of goods + supplied to that other Party. + +2. The Parties shall cooperate in the maintenance and +development of effective controls on the export of each other's +goods to a non-Party in implementing this Article. + + + + Subchapter D - Consultations + + +Article 317: Committee on Trade in Goods + +1. The Parties hereby establish a Committee on Trade in Goods, +comprising representatives of each Party. + +2. The Committee shall meet at the request of any Party or the +Commission to consider any matter arising under this Chapter. + + +Article 318: Third-Country Dumping + +1. The Parties affirm the importance of cooperation with +respect to actions under Article 12 of the Agreement on +Implementation of Article VI of the General Agreement on Tariffs +and Trade. + +2. Where a Party presents an application to another Party +requesting anti-dumping action on its behalf, those Parties shall +consult within 30 days respecting the factual basis of the +request, and the requested Party shall give full consideration to +the request. + + + Subchapter E - Definitions + + +Article 319: Definitions + +For purposes of this Chapter: + +advertising films means recorded visual media, with or without +sound-tracks, consisting essentially of images showing the nature +or operation of goods or services offered for sale or lease by a +person established or resident in the territory of any Party, +provided that the films are of a kind suitable for exhibition to +prospective customers but not for broadcast to the general +public, and provided that they are imported in packets that each +contain no more than one copy of each film and that do not form +part of a larger consignment; + +commercial samples of negligible value means commercial samples +having a value (individually or in the aggregate as shipped) of +not more than one U.S. dollar, or the equivalent amount in the +currency of another Party, or so marked, torn, perforated or +otherwise treated that they are unsuitable for sale or for use +except as commercial samples; + +customs duty includes any customs or import duty and a charge of +any kind imposed in connection with the importation of a good, +including any form of surtax or surcharge in connection with such +importation, but does not include any: + + (a) charge equivalent to an internal tax imposed + consistently with Article III:2 of the GATT, or any + equivalent provision of a successor agreement to which + all Parties are party, in respect of like, directly + competitive or substitutable goods of the Party, or in + respect of goods from which the imported good has been + manufactured or produced in whole or in part; + + (b) antidumping or countervailing duty that is applied + pursuant to a Party's domestic law and not applied + inconsistently with Chapter Nineteen (Review and + Dispute Settlement in Antidumping and Countervailing + Duty Matters); + + (c) fee or other charge in connection with importation + commensurate with the cost of services rendered; + + (d) premium offered or collected on an imported good + arising out of any tendering system in respect of the + administration of quantitative import restrictions or + tariff rate quotas or tariff preference levels; and + + (e) fee applied pursuant to section 22 of the U.S. + Agricultural Adjustment Act, subject to Chapter Seven + (Agriculture); + +distilled spirits include distilled spirits and distilled spirit- +containing beverages; + +duty deferral program includes measures such as those governing +foreign-trade zones, temporary importations under bond, bonded +warehouses, "maquiladoras", and inward processing programs; + +duty-free means free of customs duty; + +goods imported for sports purposes means sports requisites for +use in sports contests, demonstrations or training in the +territory of the Party into whose territory such goods are +imported; + +goods intended for display or demonstration includes their +component parts, ancillary apparatus and accessories; + +item means a tariff classification item at the eight- or ten- +digit level set out in a Party's tariff schedule; + +material means "material" as defined in Chapter Four (Rules of +Origin); + +most-favored-nation rate of duty does not include any other +concessionary rate of duty; + +performance requirement means a requirement that: + + (a) a given level or percentage of goods or services be + exported; + + (b) domestic goods or services of the Party granting a + waiver of customs duties be substituted for imported + goods or services; + + (c) a person benefitting from a waiver of customs duties + purchase other goods or services in the territory of + the Party granting the waiver or accord a preference to + domestically produced goods or services; or + + (d) a person benefitting from a waiver of customs duties + produce goods or provide services, in the territory of + the Party granting the waiver, with a given level or + percentage of domestic content; or + + (e) relates in any way the volume or value of imports to + the volume or value of exports or to the amount of + foreign exchange inflows; + +printed advertising materials means those goods classified in +Chapter 49 of the Harmonized System, including brochures, +pamphlets, leaflets, trade catalogues, yearbooks published by +trade associations, tourist promotional materials and posters, +that are used to promote, publicize or advertise a good or +service, are essentially intended to advertise a good or service, +and are supplied free of charge; + +repair or alteration does not include an operation or process +that either destroys the essential characteristics of a good or +creates a new or commercially different good; + +satisfactory evidence means: + + (a) a receipt, or a copy of a receipt, evidencing payment + of customs duties on a particular entry; + + (b) a copy of the entry document with evidence that it was + received by a customs administration; + + (c) a copy of a final customs duty determination by a + customs administration respecting the relevant entry; + or + + (d) any other evidence of payment of customs duties + acceptable under the Uniform Regulations developed in + accordance with Chapter Five (Customs Procedures); + +total export shipments means all shipments from total supply to +users located in the territory of another Party; + +total supply means all shipments, whether intended for domestic +or foreign users, from: + + (a) domestic production; + + (b) domestic inventory; and + + (c) other imports as appropriate; and + +waiver of customs duties means a measure that waives otherwise +applicable customs duties on any good imported from any country, +including the territory of another Party. +============================================================================= + ANNEX 301.3 + + Exceptions to Articles 301 and 309 + + [subject to review] + + +Section A - Canadian Measures + +1. Articles 301 and 309 shall not apply to: + + (a) controls by Canada on the export of logs of all + species; + + (b) controls by Canada on the export of unprocessed fish + pursuant to the following existing statutes: + + (i) New Brunswick Fish Processing Act, R.S.N.B. c. F- + 18.01 (1982), as amended, and Fisheries + Development Act, S.N.B. c. F-15.1 (1977), as + amended; + + (ii) Newfoundland Fish Inspection Act, R.S.N. 1970, c. + 132, as amended; + + (iii) Nova Scotia Fisheries Act, S.N.S. 1977, c. 9, + as amended; + + (iv) Prince Edward Island Fish Inspection Act, + R.S.P.E.I. 1988, c. F-13, as amended; and + + (v) Quebec Marine Products Processing Act, No. 38, + S.Q. 1987, c. 51, as amended; + + (c) measures by Canada respecting the importation of + certain items on the Prohibited Goods List in Schedule + VII of the Customs Tariff, R.S.C. 1985, c. 41 (3rd + supp.), as amended, as of July 1, 1991; + + (d) except as provided in Chapter Seven (Agriculture), + measures by Canada respecting the importation of grains + taken with respect to the United States, (Canadian + Wheat Board Act, R.S.C. 1985, c. C-24, as amended); + + (e) measures by Canada respecting the exportation of liquor + for delivery into any country into which the + importation of liquor is prohibited by law under the + existing provisions of Export Act, R.S.C. 1985, c. E- + 18, as amended; + + (f) measures by Canada respecting the importation and + distribution of imported liquor by designated + government agencies under the existing provisions of + Importation of Intoxicating Liquors Act, R.S.C. 1985, + c. I-3, as amended, to the extent that it creates an + import monopoly consistent with Articles II:4 and XVII + of the GATT and Article 31 of the Havana Charter; + + (g) except as provided in Chapter Seven (Agriculture), + measures by Canada respecting preferential freight + rates for grain originating in certain Canadian + provinces under the existing provisions of Western + Grain Transportation Act, R.S.C. 1985, c. W-8, as + amended; + + (h) measures by Canada respecting preferential rates for + goods originating in certain Canadian provinces under + the existing provisions of Maritime Freight Rate Act, + R.S.C. 1985, c. M-1, as amended; + + (i) Canadian excise taxes on absolute alcohol used in + manufacturing under the existing provisions of Excise + Tax Act, R.S.C. 1985, c. E-15, as amended; + + (j) except as provided for in Chapter Seven (Agriculture), + import restrictions imposed under Section 5(1)(b) and + (d) of the Export and Import Permits Act, R.S.C. 1985, + c. E-19, as amended, as of January 1, 1994, that are in + accordance with the provisions of Article XI:2(c)(i) of + the GATT; and + + (k) quantitative import restrictions on goods that + originate in the territory of the United States, + considering operations performed in, or materials + obtained from, Mexico as if they were performed in, or + obtained from, a non-Party, and that are indicated by + asterisks in Chapter 89 in Annex 401.2 (Tariff Schedule + of Canada) of the Canada - United States Free Trade + Agreement for as long as the measures taken under the + Merchant Marine Act of 1920, (46 U.S.C. App. 883) and + the Merchant Marine Act of 1936, (46 U.S.C. App. 1171, + 1176, 1241 and 1241o) apply with quantitative effect to + comparable Canadian origin goods sold or offered for + sale into the United States market. + +2. Notwithstanding any provision of this Agreement, any measure +related to the internal sale and distribution of wine and +distilled spirits, other than those covered by Article 313 +(Blending Requirements) or Article 314 (Distinctive Products) +shall, as between Canada and the United States, be governed under +this Agreement exclusively in accordance with the relevant +provisions of the Canada - United States Free Trade Agreement +which for this purpose are hereby incorporated into this +Agreement. + +3. In respect of any measure related to the internal sale and +distribution of wine and distilled spirits, the provisions of +Articles 301 and 309 shall not apply as between Canada and Mexico +to: + + (a) a non-conforming provision of any existing measure; + + (b) the continuation or prompt renewal of a non-conforming + provision of any existing measure; + + (c) an amendment to a non-conforming provision of any + existing measure to the extent the amendment does not + decrease its conformity with the provisions of Article + 301 or 309; or + + (d) measures set out in paragraphs 4 and 5. + +4. Further to paragraph 3(d): + + (a) automatic listing measures in the province of British + Columbia may be maintained provided they apply only to + existing estate wineries producing less than 30,000 + gallons of wine annually and meeting the existing + content rule; + + (b) Canada may + + (i) adopt or maintain a measure limiting on-premise + sales by a winery or distillery to those wines or + distilled spirits produced on its premises, and + + (ii) maintain a measure requiring existing private wine + store outlets in the provinces of Ontario and + British Columbia to discriminate in favor of wine + of those provinces to a degree no greater than the + discrimination required by such existing measure; + and + + (c) nothing in this Agreement shall prohibit the Province + of Quebec from requiring that any wine sold in grocery + stores in Quebec be bottled in Quebec, provided that + alternative outlets are provided in Quebec for the sale + of wine of the other Parties, whether or not such wine + is bottled in Quebec. + +5. As between Canada and Mexico: + + (a) any measure related to listing of wine and distilled + spirits of the other Party shall + + (i) conform with Article 301, + + (ii) be transparent, non-discriminatory and provide for + prompt decision on any listing application, prompt + written notification of such decision to the + applicant, and in the case of a negative decision, + provide for a statement of the reason for refusal, + + (iii) establish administrative appeal procedures + for listing decisions that provide for + prompt, fair and objective rulings, + + (iv) be based on normal commercial considerations, + + (v) not create disguised barriers to trade, and + + (vi) be published and made generally available to + persons of Mexico; + + (b) where the distributor is a public entity, the entity + may charge the actual cost-of-service differential + between wine and distilled spirits of the other Party + and domestic wine and distilled spirits. Any such + differential shall not exceed the actual amount by + which the audited cost-of-service for the wine or + distilled spirits of the exporting party exceeds the + audited cost-of-service for the wine and distilled + spirits of the importing party; + + (c) notwithstanding Articles 301 and 309, Article I + (Definitions), Article IV.3 (Wine), and Annexes A, B + and C of the Agreement between Canada and the European + Economic Community Concerning Trade and Commerce in + Alcoholic Beverages dated February 28, 1989 shall apply + with such modifications as may be necessary as between + Canada and Mexico; + + (d) all discriminatory mark-ups on distilled spirits shall + be eliminated immediately upon the date of entry into + force of this Agreement. Cost-of-service differential + mark-ups as described in subparagraph (b) shall be + permitted; + + (e) any other discriminatory pricing measure shall be + eliminated upon the date of entry into force of this Agreement; + + (f) any measure related to distribution of wine or + distilled spirits of the other Party shall conform with + Article 301; and + + (g) unless otherwise specifically provided in this Annex, + the Parties retain their rights and obligations under + the GATT and agreements negotiated under the GATT. + + (The intention of paragraphs 3, 4, and 5 is to +grant Mexico the same concessions granted to the +U.S. under the Canada - United States Free Trade +Agreement respecting wine and distilled spirits.) + +============================================================================= + +Section B - Mexican Measures + + +1. Articles 301 and 309 shall not apply to: + + (a) controls by Mexico on the export of logs of all + species; + + (b) measures under the existing provisions of Articles 192 + through 194 of the General Ways of Communication Act + ("Ley de Vias Generales de Comunicaci¢n") reserving + exclusively to Mexican vessels all services and + operations not authorized for foreign vessels and + empowering the Mexican Ministry of Communications and + Transportation to deny foreign vessels the right to + perform authorized services if their country of origin + does not grant reciprocal rights to Mexican vessels; + + (c) measures taken in accordance with Annex 300-A (Trade in + Automotive Goods) and measures taken in accordance with + existing provisions of Articles 1, 4 and 5 of the + Mexican Foreign Trade Act ("Ley Reglamentaria del + Art¡culo 131 de la Constituci¢n Pol¡tica de los Estados + Unidos Mexicanos en Materia de Comercio Exterior") with + respect to automotive goods referred to in Annex 300-A + (Trade in Automotive Goods); + + (d) measures taken in accordance with Sections 3 (Import + and Export Restrictions), 5 (Bilateral Emergency + Actions-Quantitative Restrictions), 6 (Rules of + Origin), and 8 (Trade in Worn Clothing) of Annex 300-B + (Textile and Apparel Goods) and measures taken in + accordance with existing provisions of Articles 1, 4 + and 5 of the Mexican Foreign Trade Act ("Ley + Reglamentaria del Art¡culo 131 de la Constituci¢n + Pol¡tica de los Estados Unidos Mexicanos en Materia de + Comercio Exterior") with respect to textile and apparel + goods referred to in Annex 300-B; + + (e) measures taken in accordance with Articles 703 (Market + Access) and Annex (permits for Dairy, Poultry and + Eggs) of Chapter Seven (Agriculture) and measures taken + in accordance with existing provisions of Articles 1, 4 + and 5 of the Mexican Foreign Trade Act ("Ley + Reglamentaria del Art¡culo 131 de la Constituci¢n + Pol¡tica de los Estados Unidos Mexicanos en Materia de + Comercio Exterior") with respect to agricultural goods + referred to in Chapter Seven; + + (f) measures covered by Chapter Six (Energy) and measures + taken in accordance with existing provisions of + Articles 1, 4 and 5 of the Mexican Foreign Trade Act + ("Ley Reglamentaria del Art¡culo 131 de la Constituci¢n + Pol¡tica de los Estados Unidos Mexicanos en Materia de + Comercio Exterior") with respect to energy and basic + petrochemical goods referred to in Chapter 6; + + (g) export permit measures taken in accordance with + existing provisions of Articles 1, 4 and 5 of the + Mexican Foreign Trade Act ("Ley Reglamentaria del + Art¡culo 131 de la Constituci¢n Pol¡tica de los Estados + Unidos Mexicanos en Materia de Comercio Exterior") with + respect to goods subject to quantitative restrictions, + tariff rate quotas or tariff preference levels adopted + or maintained by another Party; and + + (h) with respect to existing provisions, the continuation + or prompt renewal of a non-conforming provision of any + of the above provisions or an amendment to a non- + conforming provision of any of the above provisions to + the extent that the amendment does not decrease its + conformity with the provisions of Articles 301 and 309. + +2. Notwithstanding Article 309, and without prejudice to other +rights and obligations under this Agreement concerning import and +export restrictions, for the first 10 years after the date of +entry into force of this Agreement, Mexico may require permits +for the importation of used goods provided for in the following +existing items in the Tariff Schedule of the General Import Duty +Act ("Tarifa de la Ley del Impuesto General de Importaci¢n"). +For purposes of reference, the goods covered by those items are +broadly identified next to the corresponding item. + + +Item Description + + +8407.3499 Gasoline engines of more than 1,000 cm3, except + for motorcycles. + +8413.11.01 Pumps fitted with a measuring device even if + it includes a totalizing mechanism. + +8413.40.01 Concrete pumps for liquids, not fitted with a + measuring device from 36 up to 60 m3/hr + capacity. + +8426.12.01 Mobile lifting frames on tires and straddle carriers. + +8426.19.01 Other (overhead travelling cranes, + transporter cranes, gantry cranes, bridge + cranes, mobile lifting frames and straddle + carriers. + +8426.30.01 Portal or pedestal jib cranes. + +8426.41.01 Derricks, cranes and other lifting machinery + on tires, self-propelled with mechanical + working and carrying capacity less than 55 + tons. + +8426.41.02 Derricks, cranes and other lifting machinery + on tires, self-propelled with hydraulic + working and carrying capacity more than 9.9 + up to 30 tons. + +8426.41.99 Other (Machinery, self propelled, on tires.) + +8426.49.01 Derricks, cranes and other lifting machinery + (other than on tires), self-propelled with + mechanical working and carrying capacity less + than 55 tons. + +8426.49.02 Derricks, cranes sand other lifting machinery + (other than on tires), self-propelled with + hydraulic working and carrying capacity more + than 9.9 up to 30 tons. + +8426.91.01 Derricks, cranes and other lifting machinery + except items 8426.91.02, 03 and 04. + +8426.91.02 Derricks, cranes and other lifting machinery + for mounting on road vehicles, with + hydraulical working and carrying capacity up + to 9.9 tons. + +8426.91.03 Derricks, cranes and other lifting machinery + (basket type) for mounting on road vehicles, + with carrying capacity up to 1 ton and 15 + meters lift. + +8426.91.99 Other (machinery designed for mounting on + road vehicles). + +8426.99.01 Derricks, cranes and other lifting machinery + except items 8426.91.02 + +8426.99.02 Swivel cranes. + +8426.99.99 Other (derricks; cranes, including cable + cranes; mobile lifting frames, straddle + carriers and works trucks fitted with a + crane). + +8427.10.01 Self-propelled work trucks powered by an + electric motor, carrying capacity 3.5 tons. + +8427.20.01 Other self-propelled trucks with combustion + piston engines, carrying capacity up to 7 + tons. + +8428.40.99 Other (escalators and moving walkways). + +8428.90.99 Other (continuous-action elevators and + conveyors, for goods or materials). + +8429.11.01 Self-propelled bulldozers and angledozers, + for track laying. + +8429.19.01 Other (bulldozers and angledozers). + +8429.20.01 Self-propelled graders and levelers. + +8429.30.01 Self-propelled scrapers. + +8429.40.01 Self-propelled tamping machines and road + rollers. + +8429.51.02 Self-propelled front-end shovel loaders, + wheel-type, less than 335 HP. + +8429.51.03 Self-propelled front-end shovel loaders, + wheel-type, other than item 8429.51.01. + +8429.51.99 Other (mechanical shovels, excavators and + shovel loaders). + +8429.52.02 Self-propelled backhoes, shovels, clamshells + and draglines, other than 8429.52.01. + +8429.52.99 Other (machinery with a 360 revolving + superstructure). + +8429.59.01 Excavators. + +8429.59.02 Track laying draglines, carrying capacity up + to 4 tons. + +8429.59.03 Track laying draglines, other than item + 8429.59.04. + +8429.59.99 Other (self-propelled bulldozers, + angledozers, graders, levellers, scrapers, + mechanical shovels, excavators, shovel + loaders, tamping machines and road rollers). + +8430.31.01 Self-propelled tunneling machinery. + +8430.31.99 Other (self-propelled coal or rock cutters + and tunnelling machinery). + +8430.39.01 Sinking or boring shields. + +8430.39.99 Other (coal or rock cutters and tunnelling + machinery). + +8430.41.01 Self-propelled boring or sinking machinery, + other than item 8430.41.02. + +8430.41.99 Other (self-propelled boring or sinking + machinery). + +8430.49.99 Other (boring or sinking machinery). + +8430.50.01 Self-propelled peat excavators, with frontal + carriers and hydraulic mechanism less than + 335 hp capacity. + +8430.50.02 Scrapers. + +8430.50.99 Other (machinery self-propelled). + +8430.61.01 Tamping machinery, not self-propelled. + +8430.61.02 Compacting machinery, not self-propelled. + +8430.61.99 Other (machinery, not self-propelled). + +8430.62.01 Scarificationer machine. + +8430.69.01 Threshers or scrapers machine. + +8430.69.02 Trencher machine, other than 8430.69.03. + +8430.69.99 Other (moving, grading, levelling, scraping, + excavating, tamping, compacting, extracting + or boring machinery). + +8452.10.01 Sewing machines of the household type. + +8452.21.04 Industrial machines, other than 845221.02, 03 + and 05. + +8452.21.99 Other (automatic sewing machines). + +8452.29.05 Pending + +8452.29.06 Industrial machines, other than 84522901, 03 + and 05. + +8452.29.99 Other (sewing machines). + +8452.90.99 Other (parts of sewing machines). + +8471.10.01 Analog or hybrid automatic data processing + machines. + +8471.20.01 Digital automatic data processing machines, + containing in the same housing at least a + central processing unit and an input and + output unit, whether or not combined. + +8471.91.01 Numerical or digital units entered with the + rest of a system, which may contain in the + housing one or two of the following types of + units: storage units, input units, output + unit. + +8471.92.99 Other (input or output units whether or not + entered with the rest of a system and whether + or not containing storage units in the same + housing). + +8471.93.01 Storage units, including the rest of the + system. + +8471.99.01 Other (automatic data processing machines and + units thereof). + +8474.20.02 Crushing jawbone and grinding millstone. + +8474.20.05 Drawer cone crushing, with diameter no more + than 1200 millimeters. + +8474.20.06 Grinding hammer percussion. + +8701.30.01 Track-laying tractors with a net engine power + more than 105 h.p. but less than 380 h.p. + including pushing blade. + +8701.90.02 Rail road tractors, on tires with mechanical + mechanism for pavement. + +8474.20.01 Crushing and grinding with two or more + cylinders. + +8474.20.03 Blades crushing machines. + +8474.20.04 Blades XXX + +8474.20.99 Other (crushing or grinding machines). + +8474.39.99 Other (mixing machines). + +8474.80.99 Other (kneading machines). + +8475.10.01 Machines for assembling electric or + electronic lamps, tubes. + +8477.10.01 Injection-molding machines for working rubber + or plastics, up to 5 kg capacity for one + molding model. + +8711.10.01 Motorcycles, mopeds and cycles fitted with an + auxiliary motor with reciprocating internal + combustion piston engine not exceeding 50 + cm.3. + +8711.20.01 Motorcycles, mopeds and cycles fitted with an + auxiliary motor with reciprocating internal + combustion piston engine over 50 cm.3 but not + over 250 cm.3. + +8711.30.01 Motorcycles, mopeds and cycles fitted with an + auxiliary motor with reciprocating internal + combustion piston engine over 250 cm.3 but + not over 500 cm.3. + +8711.40.01 Motorcycles, mopeds and cycles fitted with an + auxiliary motor with reciprocating internal + combustion piston engine over 500 cm.3 but + less than 550 cm.3. + +8711.90.99 Other (motorcycles, mopeds and cycles fitted + with an auxiliary motor without an internal + combustion piston engine, and sidecars which + are not to be used with motocycles and + velocipedes of any kind). + +8712.00.02 Bicycles, other than of the type for racing. + +8712.00.99 Other (Cycles, not motorized, except + bicycles, and tricycles for the transport of + merchandise). + +8716.10.01 Trailers and semi-trailers for housing and + camping, not mechanically propelled. + +8716.31.02 Tanker trailers and tanker semi-trailers for + the transport of goods, not mechanically + propelled, of the steel-tank type. + +8716.31.99 Other (Tanker trailers and tanker + semi-trailers for the transport of goods, not + mechanically propelled, except of the + steel-tank type, and of the thermal type for + the transportation of milk). + +8716.39.01 Trailers and semi-trailers for the transport + of goods, not mechanically propelled, of the + platform type (more detailed description + pending). + +8716.39.02 Trailers and semi-trailers for the transport + of vehicles, not mechanically propelled. + +8716.39.04 Trailers and semi-trailers for the transport + of goods, not mechanically propelled, of the + modular-platform type (more detailed + description pending). + +8716.39.05 Semi-trailers for the transport of goods, not + mechanically propelled, of the low-bed type + (more detailed description pending). + +8716.39.06 Trailers and semi-trailers for the transport + of goods, not mechanically propelled, of the + closed-box type, including those for + refrigeration. + +8716.39.07 Trailers and semi-trailers for the transport + of goods, not mechanically propelled, of the + steel-tank type. + +8716.39.99 Other. (Trailers and semi-trailers for the + transport of goods, not mechanically + propelled, except those referred to in items + 87163901, 02, 04, 05, 06 and 07, those with + two levels which are recognizable as intended + for use exclusively in the transportation of + cattle, and carriages with solid rubber + wheels). + +8716.40.01 Other trailers and semi-trailers, not + mechanically propelled. (Other than for the + transport of goods). + +8716.80.99 Other. (Vehicles not mechanically propelled, + except trailers and semi-trailers, + hand-wagons, and hand-wagons of hydraulic + operation. + + +3. Notwithstanding Article 309, and without prejudice to other +rights and obligations under this Agreement concerning import and +export restrictions: + + (a) for the first five years after the date of entry into + force of this Agreement, Mexico may require permits for + the importation of new automotive goods provided for in + the following existing items in the Tariff Schedule of + the General Import Duty Act ("Tarifa de la Ley del + Impuesto General de Importaci¢n"). For purposes of + reference, the goods covered by those items are broadly + identified next to the corresponding item; + + +Item Description + + +8701.20.01 Road Tractors for semi-trailers + +8702.10.01 Public-transport type passenger vehicles, with + diesel or semi-diesel engine, with body mounted on + a chassis. + +8702.10.02 Public-transport type passenger vehicles, with + diesel or semi-diesel engine, with an integral + body. + +8702.90.03 Public-transport type passenger vehicles, with + gasoline engine, with an integral body. + +8703.10.99 Other special vehicles. + +8704.22.99 Motor vehicles for the transport of goods with + diesel engine and capacity of cargo of more than 5 + tons but less than 20 tons. + +8704.23.99 Motor vehicles for the transport of goods with + diesel engine and capacity of cargo of more than + 20 tons. + +8704.32.99 Motor vehicles for the transport of goods with + gasoline engine and with capacity of cargo of more + than 5 tons. + +8705.20.01 Mobile drilling derricks. + +8705.40.01 Concrete mixers. + +8706.00.01 Chassis fitted with gasoline engine. + +8706.00.99 Other chassis fitted with gasoline engine. + + (b) for the first 10 years after the date of entry into + force of this Agreement, Mexico may require permits for + the importation of new automotive goods provided for in + the following existing items in the Tariff Schedule of + the General Import Duty Act ("Tarifa de la Ley del + Impuesto General de Importaci¢n"). For purposes of + reference, the goods covered by those items are broadly + identified next to the corresponding item; + + +Item Description + + +8407.34.99 Gasoline engines of more than 1,000 cm3, except + for motorcycles. + +8702.90.02 Public-transport type passenger vehicles, with + gasoline engine, with body mounted on a chassis. + +8703.21.01 Passenger motor vehicles with gasoline engine of + less than or equal to 1,000 cm3. + +8703.22.01 Passenger motor vehicles with gasoline engine of + more than 1,000 cm3 but less than 1,500 cm3. + +8703.23.01 Passenger motor vehicles with gasoline engine of + more than 1,500 cm3 but less than or equal to + 3,000 cm3. + +8703.24.01 Passenger motor vehicles with gasoline engine of + more than 3,000 cm3. + +8703.31.01 Passenger motor vehicles with diesel engine of + less than or equal to 1,500 cm3. + +8703.32.01 Passenger motor vehicles with diesel engine of + more than 1,500 cm3 but less than or equal to + 2,500 cm3. + +8703.33.01 Passenger motor vehicles with diesel engine of + more than 2,500 cm3. + +8703.90.99 Other passenger vehicles. + +8704.21.99 Motor vehicles for the transport of goods with + diesel engine and with capacity of cargo of less + than or equal to 5 tons. + +8704.31.99 Motor vehicles for the transport of goods with + gasoline engine and with capacity of cargo of less + than or equal to 5 tons. + + + (c) for the first 25 years after the date of entry into + force of this Agreement, Mexico may require permits for + the importation of used automotive goods provided for + in the following existing items in the Tariff Schedule + of the General Import Duty Act ("Tarifa de la Ley del + Impuesto General de Importaci¢n"). As of the 26th year + after the date of entry into force of this Agreement, + Mexico may require permits for the importation of + non-originating automotive goods provided for under + such items. For purposes of reference, the goods + covered by those items are broadly identified next to + the corresponding item. + + +Item Description + + +8701.20.01 Road Tractors for semi-trailers + +8702.10.01 Public-transport type passenger vehicles, with + diesel or semi-diesel engine, with body mounted on + a chassis. + +8702.10.02 Public-transport type passenger vehicles, with + diesel or semi-diesel engine, with an integral + body. + +8702.90.01 Trolleys. + +8702.90.02 Public-transport type passenger vehicles, with + gasoline engine, with body mounted on a chassis. + +8702.90.03 Public-transport type passenger vehicles, with + gasoline engine, with an integral body. + +8703.10.01 Special vehicles with electric engine + (snowmobiles, golf cart). + +8703.10.99 Other special vehicles. + +8703.21.01 Passenger motor vehicles with gasoline engine of + less than or equal to 1,000 cm3. + +8703.22.01 Passenger motor vehicles with gasoline engine of + more than 1,000 cm3 but less than 1,500 cm3. + +8703.23.01 Passenger motor vehicles with gasoline engine of + more than 1,500 cm3 but less than or equal to + 3,000 cm3. + +8703.24.01 Passenger motor vehicles with gasoline engine of + more than 3,000 cm3. + +8703.31.01 Passenger motor vehicles with diesel engine of + less than or equal to 1,500 cm3. + +8703.32.01 Passenger motor vehicles with diesel engine of + more than 1,500 cm3 but less than or equal to + 2,500 cm3. + +8703.33.01 Passenger motor vehicles with diesel engine of + more than 2,500 cm3. + +8703.90.01 Electrical motor cars. + +8703.90.99 Other passenger vehicles. + +8704.21.99 Motor vehicles for the transport of goods with + diesel engine and with capacity of cargo of less + than or equal to 5 tons. + +8704.22.99 Motor vehicles for the transport of goods with + diesel engine and capacity of cargo of more than 5 + tons but less than 20 tons. + +8704.23.99 Motor vehicles for the transport of goods with + diesel engine and capacity of cargo of more than + 20 tons. + +8704.31.99 Motor vehicles for the transport of goods with + gasoline engine and with capacity of cargo of less + than or equal to 5 tons. + +8704.32.99 Motor vehicles for the transport of goods with + gasoline engine and with capacity of cargo of more + than 5 tons. + +8705.10.01 Mobile crane vehicles. + +8705.20.01 Mobile drilling derricks. + +8705.20.99 Other drilling derricks. + +8705.40.01 Concrete mixers. + +8705.90.01 Spraying vehicles. + +8705.90.99 Other special purpose vehicles. + +8706.00.01 Chassis fitted with gasoline engine. + +8706.00.99 Other chassis fitted with gasoline engine. + +============================================================================= + +Section C - United States Measures + + + Articles 301 and 309 shall not apply to: + + (a) controls by the United States on the export of logs of + all species; + + (b) taxes on imported perfume containing distilled spirits + under existing provisions of Section 5001(a)(3) and + 5007(b)(2) of the Internal Revenue Code of 1986 (26 + U.S.C. 5001(a)(3), 5007(b)(2)); + + (c) measures under existing provisions of section 27 of the + Merchant Marine Act (46 U.S.C. App. 883), the Passenger + Vessel Act of 1920 (46 U.S.C. App. 289), the Merchant + Ship Sales Act of 1946 (46 U.S.C. App. 292, 316, and 46 + U.S.C. 12108); and + + (d) import restrictions with respect to Canada imposed + under existing provisions of section 22 of the + Agricultural Adjustment Act of 1933 (7 U.S.C. 624). +============================================================================= + ANNEX 302.2 + + Tariff Elimination + + +1. Except as otherwise provided in a Party's Schedule attached +to this Annex, the following staging categories apply to the +elimination of customs duties by each Party pursuant to Article +302(2): + + (a) duties on goods provided for in the items in staging + category A in a Party's Schedule shall be eliminated + entirely and such goods shall be duty-free, effective + January 1, 1994; + + (b) duties on goods provided for in the items in staging + category B in a Party's Schedule shall be removed in 5 + equal annual stages commencing on January 1, 1994, and + such goods shall be duty-free, effective January 1, + 1998; + + (c) duties on goods provided for in the items in staging + category C in a Party's Schedule shall be removed in 10 + equal annual stages commencing on January 1, 1994, and + such goods shall be duty-free, effective January 1, + 2003; + + (d) duties on goods provided for in the items in staging + category C+ in a Party's Schedule shall be removed in + 15 equal annual stages commencing on January 1, 1994, + and such goods shall be duty-free, effective January 1, + 2008; and + + (e) goods provided for in the items in staging category D + in a Party's Schedule shall continue to receive duty- + free treatment. + + (other staging categories will be displayed in the +tariff schedules of each Party and may be incorporated +here.) + +2. The base rate of duty and staging category for determining +the interim rate of duty at each stage of reduction for an item +are indicated for the item in each Party's Schedule attached to +this Annex. These rates generally reflect the rate of duty in +effect on July 1, 1991, including rates under the U.S. +Generalized System of Preferences and the General Preferential +Tariff of Canada. + +3. For the purpose of the elimination of customs duties in +accordance with Article 302, interim staged rates shall be +rounded down, except as set out in each Party's Schedule attached +to this Annex, at least to the nearest tenth of a percentage +point or, if the rate of duty is expressed in monetary units, at +least to the nearest .001 of the official monetary unit of the +Party. + +4. Canada shall apply the rate applicable under the staging +category set out for an item in Annex 401.2, as amended, of the +Canada - United States Free Trade Agreement which Annex is hereby +incorporated into and made part of this Agreement, to an +originating good provided that: + + (a) notwithstanding any provision in Chapter Four of this + Agreement, in determining whether such good is an + originating good, operations performed in or materials + obtained from Mexico are considered as if they were + performed in or obtained from a non-Party; and + + (b) any processing that occurs in Mexico after the good + would qualify as an originating good in accordance with + subparagraph (a) does not increase the transaction + value of the good by greater than seven percent. + +5. Canada shall apply the rate applicable under the staging +category set out for an item contained in column I of section A +of this Annex to an originating good provided that: + + (a) notwithstanding any provision to the contrary in + Chapter Four, in determining whether such good is an + originating good, operations performed in or materials + obtained from the United States are considered as if + they were performed in or obtained from a non-Party; + and + + (b) any processing that occurs in the United States after + the good would qualify as an originating good in + accordance with subparagraph (a) does not increase the + transaction value of the good by greater than seven + percent. + +6. Canada shall apply to an originating good to which neither +paragraph 4 nor paragraph 5 applies, the applicable rate +indicated for an item contained in column II, reduced in +accordance with the staging category of column I of section A of +this Annex except as otherwise indicated, or where there is a +letter "X" (to be replaced with descriptive language) in column +II, the applicable rate of duty for the item shall be the higher +of: + + (a) the General Preferential Tariff rate of duty for that + item applied on July 1, 1991, reduced in accordance + with the applicable staging category set out for that + item in column I of its Schedule; or + + (b) the applicable rate under the staging category for that + item set out in Annex 401.2, as amended, of the Canada - + United States Free Trade Agreement. + +7. Paragraphs 4, 5 and 6 shall not apply to goods provided for +under Chapters 50 through 63 of the Harmonized System and to +other goods identified in Appendix 1.1 of Annex 300-B (Textiles +and Apparel Goods). + +8. Mexico shall apply the rate applicable under the staging +category set out for an item in column II of section B of this +Annex to an originating good when the good qualifies to be marked +as a good of Canada, pursuant to Annex 312, without regard to +whether the good is marked. + +9. Mexico shall apply the rate applicable under the staging +category set out for an item in column I of section B of this +Annex to an originating good when the good qualifies to be marked +as a good of the United States, pursuant to Annex 312, without +regard to whether the good is marked. + +10. The United States shall apply the rate applicable under the +staging category set out for an item in Annex 401.2, as amended, +of the Canada - United States Free Trade Agreement to an +originating good when the good qualifies to be marked as a good +of Canada pursuant to Annex 312, without regard to whether the +good is marked. + +11. The United States shall apply the rate applicable under the +staging category set out for an item in section C of this Annex +to an originating good when the good qualifies to be marked as a +good of Mexico pursuant to Annex 312, whether or not the good is +marked. +============================================================================= + SECTION A - SCHEDULE OF CANADA + + (TARIFF SCHEDULE TO BE ATTACHED) + + + + SECTION B - SCHEDULE OF MEXICO + + (TARIFF SCHEDULE TO BE ATTACHED) + + + + SECTION C - SCHEDULE OF THE UNITED STATES + + (TARIFF SCHEDULE TO BE ATTACHED) + +============================================================================= + + ANNEX 303.6 + + Goods Not Subject to Article 303 + + +1. For exports from the territory of the United States to the +territory of Canada or Mexico, a good, provided for in U.S. +tariff item 1701.11.02, that is imported into the territory of +the United States and used as a material in the production of, or +substituted by an identical or similar good used as a material in +the production of, a good provided for in Canadian tariff item +1701.99.00 or Mexican tariff items 1701.99.01 and 1701.99.99 +(refined sugar). + +2. For trade between Canada and the United States: + + (a) imported citrus products; + + (b) an imported good used as a material in the production + of, or substituted by an identical or similar good used + as a material in the production of, a good provided for + in U.S. tariff items 5811.00.20 (quilted cotton piece + goods), 5811.00.30 (quilted man-made piece goods) or + 6307.90.99 (furniture moving pads) that are subject to + the most-favored-nation rate of duty when exported to + the territory of the other Party; (Canadian tariff + items to be added) and + + (c) an imported good used as a material in the production + of, or substituted by an identical or similar good used + as a material in the production of, apparel that is + subject to the most-favored-nation rate of duty when + exported to the territory of the other Party. + +============================================================================= + ANNEX 303.7 + + Effective Dates for the Application of Article 303 + + +Section A - Canada + +For Canada, Article 303 shall apply to a good imported into the +territory of Canada that is: + + (a) subsequently exported to the territory of the United + States on or after January 1, 1996, or subsequently + exported to the territory of Mexico on or after January + 1, 2001; + + (b) used as a material in the production of another good + that is subsequently exported to the territory of the + United States on or after January 1, 1996, or used as a + material in the production of another good that is + subsequently exported to the territory of Mexico on or + after January 1, 2001; + + (c) substituted by an identical or similar good used as a + material in the production of another good that is + subsequently exported to the territory of the United + States on or after January 1, 1996, or substituted by + an identical or similar good used as a material in the + production of another good that is subsequently + exported to the territory of Mexico on or after January + 1, 2001; or + + (d) substituted by an identical or similar good that is + subsequently exported to the territory of the United + States on or after January 1, 1996, or substituted by + an identical or similar good that is subsequently + exported to the territory of Mexico on or after January + 1, 2001. + + +Section B - Mexico + +For Mexico, Article 303 shall apply to a good imported into the +territory of Mexico that is: + + (a) subsequently exported to the territory of another Party + on or after January 1, 2001; + + (b) used as a material in the production of another good + that is subsequently exported to the territory of + another Party on or after January 1, 2001; + + (c) substituted by an identical or similar good used as a + material in the production of another good that is + subsequently exported to the territory of another Party + on or after January 1, 2001; or + + (d) substituted by an identical or similar good that is + subsequently exported to the territory of another Party + on or after January 1, 2001. + + +Section C - United States + + For the United States, Article 303 shall apply to a good +imported into the territory of the United States that is: + + (a) subsequently exported to the territory of Canada on or + after January 1, 1996, or subsequently exported to the + territory of Mexico on or after January 1, 2001; + + (b) used as a material in the production of another good + that is subsequently exported to the territory of + Canada on or after January 1, 1996, or used as a + material in the production of another good that is + subsequently exported to the territory of Mexico on or + after January 1, 2001; + + (c) substituted by an identical or similar good used as a + material in the production of another good subsequently + exported to the territory of Canada on or after January + 1, 1996, or substituted by an identical or similar good + used as a material in the production of another good + subsequently exported to the territory of Mexico on or + after January 1, 2001; or + + (d) substituted by an identical or similar good that is + subsequently exported to the territory of Canada on or + after January 1, 1996, or substituted by an identical + or similar good that is subsequently exported to the + territory of Mexico on or after January 1, 2001. + +============================================================================= + ANNEX 303.8 + + Exception to Article 303(8) + For Certain Cathode-Ray Picture Tubes + + +Mexico + +Mexico may refund customs duties paid, or waive or reduce the +amount of customs duties owed, on goods provided for in +subheading 8540.xx for a person who, during the period July 1, +1991 through June 30, 1992, imported into its territory no fewer +than 20,000 units of such goods that would not have been +considered to be originating goods had this Agreement been in +force during that period, where the goods are: + + (a) subsequently exported from the territory of Mexico to + the territory of the United States, or are used as + materials in the production of other goods that are + subsequently exported from the territory of Mexico to + the territory of the United States, or are substituted + by identical or similar goods used as materials in the + production of other goods that are subsequently + exported to the territory of the United States, in an + amount, for all such persons combined, no greater than + + (i) 1,200,000 units in 1994, + + (ii) 1,000,000 units in 1995, + + (iii) 800,000 units in 1996, + + (iv) 600,000 units in 1997, + + (v) 400,000 units in 1998, + + (vi) 200,000 units in 1999, and + + (vii) zero units in 2000 and thereafter, + +provided that the number of goods on which such customs duties +may be refunded, waived or reduced in any year shall be reduced, +with respect to that year, by the number of such goods qualifying +as originating goods during the year immediately preceding that +year, considering operations performed in, or materials obtained +from, the territories of Canada and the United States as if they +were performed in, or obtained from, a non-Party; or + + (b) subsequently exported from the territory of Mexico to + the territory of Canada, or used as materials in the + production of other goods that are subsequently + exported from the territory of Mexico to the territory + of Canada, or are substituted by identical or similar + goods used as materials in the production of other + goods that are subsequently exported to the territory + of Canada, in an amount no greater than + + (i) 75,000 units in 1994, + + (ii) 50,000 units in 1995, and + + (iii) zero units in 1996 and thereafter. + +============================================================================= + ANNEX 304.1 + + Exceptions for Existing Waiver Measures + + + Article 304(1) shall not apply in respect of existing +Mexican waivers of customs duties, except that: + + (a) Mexico shall not increase the ratio of customs duties + waived to customs duties owed relative to the + performance required under any such waiver; or + + (b) Mexico shall not add any type of good to those + qualifying on July 1, 1991, in respect of any waiver of + customs duties in effect on that date. + +============================================================================= + ANNEX 304.2 + + Continuation of Existing Waiver Measures + + + For purposes of Article 304(2): + + (a) Canada may condition on the fulfillment of a + performance requirement the waiver of customs duties + under any measure in effect on or before September 28, + 1988, on any goods entered or withdrawn from warehouse + for consumption before January 1, 1998; + + (b) Mexico may condition on the fulfillment of a + performance requirement the waiver of customs duties + under any measure in effect on July 1, 1991, on any + goods entered or withdrawn from warehouse for + consumption before January 1, 2001; + + (c) as between the United States and Canada, Article 405 of + the Canada - United States Free Trade Agreement is + incorporated and made part of this Annex solely with + respect to measures adopted by Canada or the United + States prior to the date of entry into force of this + Agreement; and + + (d) Canada may grant duty waivers as set out in Annex 300- + A. +============================================================================= + ANNEX 307.1 + + Goods Re-Entered after Repair or Alteration + + +Section A - Canada + + Canada may impose customs duties on goods, regardless of +their origin, that re-enter its territory after such goods have +been exported from its territory to the territory of another +Party for repair or alteration as follows: + + (a) for goods set out in section D that re-enter its + territory from the territory of Mexico, Canada shall + apply to the value of the repair or alteration of such + goods the rate of duty for such goods applicable under + its Schedule attached to Annex 302.2; + + (b) for goods other than those set out in section D that + re-enter its territory from the territory of the United + States or Mexico, other than goods repaired or altered + pursuant to a warranty, Canada shall apply to the value + of the repair or alteration of such goods the rate of + duty for such goods applicable under the Tariff + Schedule of Canada attached to Annex 401.2 of the + Canada - United States Free Trade Agreement. + + (c) for goods set out in section D that re-enter its + territory from the territory of the United States, + Canada shall apply to the value of the repair or + alteration of such goods the rate of duty for such + goods applicable under its Schedule attached to Annex + 401.2 of the Canada - United States Free Trade + Agreement. + + +Section B - Mexico + + Mexico may impose customs duties on goods set out in section +D, regardless of their origin, that re-enter its territory after +such goods have been exported from its territory to the territory +of another Party for repair or alteration, by applying to the +value of the repair or alteration of those goods the rate of duty +for such goods that would apply if such goods were included in +staging category B in the Schedule of Mexico attached to Annex +302.2. + + +Section C - United States + +1. The United States may impose customs duties on: + + (a) goods set out in section D, or + + (b) goods that are not set out in section D and that are + not repaired or altered pursuant to a warranty, + +regardless of their origin, that re-enter its territory after +such goods have been exported from its territory to the territory +of Canada for repair or alteration, by applying to the value of +the repair or alteration of such goods the rate of duty +applicable under the Canada-U.S. Free Trade Agreement. + +2. The United States may impose customs duties on goods set out +in section D, regardless of their origin, that re-enter its +territory after such goods have been exported from its territory +to the territory of Mexico for repair or alteration, by applying +to the value of the repair or alteration of such goods a rate of +duty of 50 percent reduced in five equal annual stages +commencing on January 1, 1994, and the value of such repair or +alteration shall be duty-free on January 1, 1998. + + +Section D - List of Goods [description under review] + + Any vessel, including the following goods, documented by a +Party under its law to engage in foreign or coastwise trade, or a +vessel intended to be employed in such trade: + +1. Cruise ships, excursion boats, ferry-boats, cargo ships, +barges and similar vessels for the transport of persons or goods, +including: + + (a) tankers; + + (b) refrigerated vessels, other than tankers; and + + (c) other vessels for the transport of goods and other + vessels for the transport of both persons and goods, + including open vessels. + +2. Fishing vessels, including factory ships and other vessels +for processing or preserving fishery products of a registered +length not exceeding 30.5m. + +3. Light-vessels, fire-floats, dredgers, floating cranes, and +other vessels the navigability of which is subsidiary to their +main function, floating docks, floating or submersible drilling +or production platforms, including drilling ships, drilling +barges and floating drilling rigs. + +============================================================================= + ANNEX 307.3 + + Repair and Rebuilding of Vessels + + +United States + + For the purpose of increasing transparency regarding the +types of repairs that may be performed in shipyards outside the +territory of the United States that do not result in any loss of +privileges for such vessel to: + + (a) remain eligible to engage in coastwise trade or to + access U.S. fisheries, + + (b) transport U.S. government cargo, or + + (c) participate in U.S. assistance programs, including the + "operating difference subsidy", + +the United States shall, no later than the date of entry into +force of this Agreement: + + (d) provide written clarification to the other Parties of + current U.S. Customs and Coast Guard practices that + constitute, and differentiate between, the repair and + the rebuilding of vessels, including, where possible, + clarifications on "jumboizing", vessel conversions, and + emergency repairs, and + + (e) commence a process to define the terms "repairs", + "emergency repairs", and "rebuilding" under U.S. + maritime legislation, including the Merchant Marine Act + of 1920 (codified at 46 U.S.C. App. 883) and the + Merchant Marine Act of 1936 (codified at 46 U.S.C. App. + 1171, 1176, 1241 and 1241(o)). + +============================================================================= + ANNEX 308.1 + + Most-Favored-Nation Rates of Duty on + Certain Automatic Data Processing Goods and Their Parts + + +Section A - General Provisions + +1. Each Party shall reduce its most-favored-nation rate of duty +applicable to the goods provided for under the tariff provisions +set out in Tables 308.1.1 and 308.1.2 in section B of this Annex +to the rate set out therein, or to such reduced rate as the +Parties may agree, in accordance with the Schedule set out in +section B of this Annex, or with such accelerated schedule as the +Parties may agree. + +2. Notwithstanding Chapter 3, when the most-favored-nation rate +of duty applicable to a good provided for under the tariff +provisions set out in Table 308.1.1 in section B of this Annex +has been reduced in accordance with paragraph 1, each Party shall +consider the good, when imported into its territory from the +territory of another Party, to be an originating good. + +3. A Party may reduce in advance of the schedule set out in +Table 308.1.1 or Table 308.1.2 in section B of this Annex, or of +such accelerated schedule as the Parties may agree, its most- +favored-nation rate of duty applicable to any good provided for +under the tariff provisions set out therein, to the rate set out +therein or to such reduced rate as the Parties may agree. + +============================================================================= + +Section B - Rates of Duty and Schedule for Reduction + + + Table 308.1.1 + + Tariff Rate Schedule + +Automatic Data Processing + Machines (ADP): + + 8471.10 3.9% S + + 8471.20 3.9% S + + +Digital Processing Units: + + 8471.91 3.9% S + +Input or Output Units: + + Combined Input/Output Units: + + Canada: + + 8471.92.90.11 3.7% S + 8471.92.90.12 3.7% S + 8471.92.90.19 3.7% S + + Mexico: + + 8471.92.h1 3.7% S + + United States: + + 8471.92.10 3.7% S + + Display Units: + + Canada: + + 8471.92.90.32 3.7% S + 8471.92.90.39.a1 3.7% S + 8471.92.90.39.a2 Free S + + Mexico: + + 8471.92.h2 3.7% S + 8471.92.h3 Free S + + United States: + + 8471.92.30 Free S + 8471.92.40.75 3.7% S +============================================================================= + + Other Input or Output Units: + + Canada: + + 8471.92.10.20 Free S + 8471.92.10.90 Free S + 8471.92.90.20 Free S + 8471.92.90.40 Free S + 8471.92.90.50 3.7% S + 8471.92.90.91 Free S + 8471.92.90.99 Free S + + Mexico: + + 8471.92.h4 3.7% S + 8471.92.h5 Free S + + United States: + + 8471.92.20 Free S + 8471.92.80 Free S + 8471.92.90.20 Free S + 8471.92.90.40 3.7% S + 8471.92.90.60 Free S + 8471.92.90.80 Free S + +============================================================================= + +Storage Units + + 8471.93 Free S + + +Other Units of Automatic Data Processing + Machines + + 8471.99 Free S + + +Parts of Computers + + 8473.30 Free R + + +Computer Power Supplies + + 8504.40.a3 Free S + + 8504.90.a4 Free S + + + Table 308.1.2 + + +Metal Oxide Varistors: + + 8533.40.a4 Free R + + +Diodes, Transistors and Similar +Semiconductor Devices; Photosensitive +Semiconductor Devices; Light Emitting +Diodes; Mounted Piezo-electric Crystals + + 8541.10 Free R + 8541.21 Free R + 8541.29 Free R + 8541.30 Free R + 8541.50 Free R + 8541.60 Free R + 8541.90 Free R + + + Canada: + + 8541.20 Free R + + + Mexico: + + 8541.20 Free R + + + United States: + + 8541.40.20 Free S + 8541.40.60 Free R + 8541.40.70 Free R + 8541.40.80 Free R + 8541.40.95 Free R + + +Electronic Integrated Circuits +and Microassemblies + + 8542 Free R + +============================================================================= + ANNEX 308.2 + + Most-Favored-Nation Rates of Duty + on Certain Color Television Picture Tubes + + +1. Any Party considering the reduction of its most-favored- +nation rate of customs duty for goods provided for in tariff +provision 8540.11.a2 (cathode-ray color television picture tubes, +including video monitor cathode-ray tubes, with a diagonal +exceeding 14 inches) during the first 10 years after the date of +entry into force of this Agreement shall consult with the other +Parties in advance of such reduction. + +2. If any other Party objects in writing to such reduction, and +the Party proceeds with the reduction, any objecting Party may +raise its applicable rate of duty on originating goods provided +for in the corresponding tariff provision set out in its Schedule +attached to Annex 302.2, up to the applicable rate of duty as if +such good had been placed in staging category C for purpose of +tariff elimination. + +============================================================================= + ANNEX 308.3 + + Most-Favored-Nation Duty-Free + Treatment of Local Area Network Apparatus + +Section A - Canada + + Canada shall accord most-favored-nation duty-free treatment +to goods provided for in item(s) [to be provided] of its tariff +schedule. + + +Section B - Mexico + + Mexico shall accord most-favored-nation duty-free treatment +to goods provided for in item(s) [to be provided] of its tariff +schedule. + + +Section C - United States + + The United States shall accord most-favored-nation duty-free +treatment to goods provided for in item(s) [to be provided] of +its tariff schedule. + +For purposes of this Annex: + +local area network apparatus means a good dedicated for use +solely or principally to permit the interconnection of automatic +data processing machines and units thereof for a network that is +used primarily for the sharing of resources such as central +processor units, data storage devices and input or output units, +including in-line repeaters, converters, concentrators, bridges +and routers, and printed circuit assemblies for physical +incorporation into automatic data processing machines and units +thereof suitable for use solely or principally with a private +network, and providing for the transmission, receipt, error- +checking, control, signal conversion or correction functions for +non-voice data to move through a local area network. +============================================================================= + ANNEX 311.2 + + Existing Customs User Fees + + +Section A - Mexico + + Mexico shall not increase its customs processing fee +("derechos de tr mite aduanero") on originating goods, and shall +by June 30, 1999, eliminate such fee on originating goods. + + +Mexico B - United States + +1. The United States shall not increase its merchandise +processing fee and shall eliminate such fee according to the +schedule set out in Article 403 of the Canada - United States +Free Trade Agreement on originating goods where those goods +qualify to be marked as goods of Canada pursuant to Annex 312, +without regard to whether the goods are marked. + +2. The United States shall not increase its merchandise +processing fee and shall by June 30, 1999, eliminate such fee, on +originating goods where those goods qualify to be marked as goods +of Mexico pursuant to Annex 312, without regard to whether the +goods are marked. +============================================================================= + ANNEX 312 + + Country of Origin Marking + + +1. The Parties shall establish by January 1, 1994, rules for +determining whether a good is a good of a Party ("Marking Rules") +for the purposes of this Annex, Annex 300-B and Annex 302.2, and +for such other purposes as may be agreed. + +2. Each Party may require that a good of another Party, as +determined in accordance with the Marking Rules, imported into +its territory bear a country of origin marking that indicates to +the ultimate purchaser of that good the name of its country of +origin. + +3. Each Party shall permit the country of origin marking of a +good of another Party to be indicated in English, French or +Spanish, except that a Party may, as part of its general consumer +information measures, require that an imported good be marked +with its country of origin in the same manner as prescribed for +goods of that Party. + +4. Each Party shall, in adopting, maintaining and administering +any measure relating to country of origin marking, minimize the +difficulties, costs and inconveniences that such measure may +cause to the commerce and industry of the other Parties. + +5. Each Party shall: + + (a) accept any reasonable method of marking, including the + use of stickers, labels, tags or paint, that ensures + that the marking is conspicuous, legible and + sufficiently permanent; + + (b) exempt from a country of origin marking requirement a + good of another Party which + + (i) is incapable of being marked, + + (ii) cannot be marked prior to exportation to the + territory of another Party without causing injury + to the goods, + + (iii) cannot be marked except at an expense which + would materially discourage its exportation + to the territory of another Party, + + (iv) cannot be marked without materially impairing its + function or substantially detracting from its + appearance, + + (v) is in a container that is marked in a manner that + will reasonably indicate the good's origin to the + ultimate purchaser, + + (vi) is a crude substance, + + (vii) is imported for use by the importer and is + not intended for sale in the form in which it + was imported, + + (viii) is to be processed in the importing Party by + the importer, or on its behalf, in a manner + that results in a change of origin for + marking purposes, under the Marking Rules, + + (ix) by reason of its character, or the circumstances + of its importation, the ultimate purchaser would + reasonably know its country of origin even though + it is not marked, + + (x) was produced more than 20 years prior to its + importation, + + (xi) was imported without the required marking and + cannot be marked after its importation except at + an expense that would materially discourage its + importation, provided that the failure to mark the + good before importation was not for the purpose of + avoiding compliance with such requirement, + + (xii) for the purposes of temporary duty-free + admission, is in transit or in bond or + otherwise under customs administration + control, + + (xiii) is an original work of art, or + + (xiv) is provided for in headings 8541 or 8542, and + 6904.10. + +6. Except for a good described in subparagraphs 5(b)(vi),(vii), +(viii), (ix), (x), (xii), (xiii) and (xiv), a Party may provide +that, wherever a good is exempted under subparagraph 5(b), its +outermost container that ordinarily reaches the ultimate +purchaser shall be marked so as to indicate the country of origin +of the good it contains. + +7. Each Party shall provide that: + + (a) a usual container imported empty, whether or not + disposable, shall not be required to be marked with its + own country of origin, but the container in which it is + imported may be required to be marked with the country + of origin of its contents; and + + (b) a usual container imported filled, whether or not + disposable, + + (i) shall not be required to be marked with its own + country of origin, but + + (ii) may be required to be marked with the country of + origin of its contents, unless the contents are + marked with their country of origin and the + container can be readily opened for inspection of + the contents, or the marking of the contents is + clearly visible through the container. + +8. Each Party shall, whenever administratively practicable, +permit an importer to mark a good subsequent to importation but +prior to release of the good from customs control or custody, +unless there have been repeated violations of the country of +origin marking requirements of that Party by the same importer +and that importer has been previously notified in writing that +such good is required to be marked prior to importation. + +9. Each Party shall provide that, except with respect to +importers that have been notified under paragraph 8, no special +duty or penalty shall be imposed for failure to comply with +country of origin marking requirements, unless a good is removed +from customs custody or control without being properly marked, or +a deceptive marking has been used. + +10. The Parties shall cooperate and consult on matters related +to this Annex, including additional exemptions from a country of +origin marking requirement, in accordance with Chapter Five +(Customs Procedures). + +11. For purposes of this Annex: + +conspicuous means capable of being easily seen with normal +handling of the good or container; + +legible means capable of being easily read; + +materially discourage means add a cost to the good that is +substantial in relation to its customs value; + +sufficiently permanent means capable of remaining in place until +the good reaches the ultimate purchaser, unless deliberately +removed; + +the form in which it was imported means the condition of the good +before it has undergone one of the changes in tariff +classification described in the Marking Rules; + +ultimate purchaser means the last person in the territory of the +Party into which the good is imported that purchases the good in +the form in which it was imported; such purchaser need not be the +last person that will use the good; and + +usual container means the container in which a good will +ordinarily reach its ultimate purchaser. + +============================================================================= + ANNEX 314 + + Distinctive Products + + +1. Mexico and Canada shall recognize Bourbon Whiskey and +Tennessee Whiskey, which is a straight Bourbon Whiskey authorized +to be produced only in the State of Tennessee, as distinctive +products of the United States. Accordingly, Mexico and Canada +shall not permit the sale of any product as Bourbon Whiskey or +Tennessee Whiskey, unless it has been manufactured in the United +States in accordance with the laws and regulations of the United +States governing the manufacture of Bourbon Whiskey and Tennessee +Whiskey. + +2. The United States and Mexico shall recognize Canadian +Whiskey as a distinctive product of Canada. Accordingly, the +United States and Mexico shall not permit the sale of any product +as Canadian Whiskey, unless it has been manufactured in Canada in +accordance with the laws and regulations of Canada governing the +manufacture of Canadian Whiskey for consumption in Canada. + +3. The United States and Canada shall recognize Tequila and +Mezcal as distinctive products of Mexico. Accordingly, the +United States and Canada shall not permit the sale of any product +as Tequila or Mezcal, unless it has been manufactured in Mexico +in accordance with the laws and regulations of Mexico governing +the manufacture of Tequila and Mezcal. This provision shall +apply to Mezcal, either on the date of entry into force of this +Agreement, or 90 days after the date when the official standard +for this product is made obligatory by the Government of Mexico, +whichever is later. +============================================================================= + ANNEX 315 + + Export Taxes + + +Mexico + +1. Mexico may adopt or maintain a duty, tax, or other charge on +the export of those basic foodstuffs set out in paragraph 4, on +their ingredients, or on the goods from which such foodstuffs are +derived, if such duty, tax, or other charge is adopted or +maintained on the export of such goods to the territory of all +other Parties, and is used: + + (a) to limit to domestic consumers the benefits of a + domestic food assistance program with respect to such + foodstuff; or + + (b) to ensure the availability of sufficient quantities of + such foodstuff to domestic consumers or of sufficient + quantities of its ingredients, or of the goods from + which such foodstuffs are derived, to a domestic + processing industry, when the domestic price of such + foodstuff is held below the world price as part of a + governmental stabilization plan, provided that such + duty, tax, or other charge + + (i) does not operate to increase the protection + afforded to such domestic industry, and + + (ii) is maintained only for such period of time as is + necessary to maintain the integrity of the + stabilization plan. + +2. Notwithstanding paragraph 1, Mexico may adopt or maintain a +duty, tax, or other charge on the export of any foodstuff to the +territory of another Party if such duty, tax, or other charge is +temporarily applied to relieve critical shortages of that +foodstuff. For purposes of this paragraph, "temporarily" means +up to one year, or such longer period as the Parties may agree. + +3. Mexico may maintain its existing tax on the export of goods +provided for under tariff item 4001.30.02 of the Tariff Schedule +of the General Export Duty Act ("Tarifa de la Ley del Impuesto +General de Exportaci¢n") for up to 10 years after the date of +entry into force of this Agreement. + +============================================================================= +4. For purposes of paragraph 1, "basic foodstuffs" means: + + Beans + Beef steak or pulp + Beef liver + Beef remnants and bones ("retazo con + hueso") + Beer + Bread + Brown sugar + Canned sardines + Canned tuna + Canned peppers + Chicken broth + Condensed milk + Cooked ham + Corn tortillas + Corn flour + Corn dough + Crackers + Eggs + Evaporated milk + French rolls ("pan blanco") + Gelatine + Ground beef + Instant coffee + Low-priced cookies ("galletas dulces + populares) + Margarine + Oat flakes + Pasteurized milk + Powdered chocolate + Powdered milk for children + Powdered milk + Rice + Roasted coffee + Salt + Soft drinks + Soup paste + Tomato puree + Vegetable oil + Vegetable fat + Wheat flour + White sugar + +============================================================================= + ANNEX 316 + + Other Export Measures + + + Article 316 shall not apply as between Mexico and the other + Parties. + +NAFTA Chapter Four Rules of Origin + + + +Article 401: Originating Goods + + Except as otherwise provided in this Chapter, a good shall +originate in the territory of a Party provided that: + + (a) the good is wholly obtained or produced in the + territory of one or more of the Parties as defined in + Article 415; + + (b) each of the non-originating materials used in the + production of the good undergoes an applicable change + in tariff classification described in Annex 401.1 as a + result of production occurring entirely in the + territory of one or more of the Parties, and the good + satisfies all other applicable requirements of this + Chapter; + + (c) the good is produced entirely in the territory of one + or more of the Parties exclusively from originating + materials; or + + (d) with the exception of a good provided for in Chapters + 61 through 63 of the Harmonized System, the good is + produced entirely in the territory of one or more of + the Parties but one or more of the non-originating + parts used in the production of the good does not + undergo a change in tariff classification because + + (i) the good was imported into the territory of a + Party in an unassembled or a disassembled form but + was classified as an assembled good pursuant to + General Rule of Interpretation 2(a) of the + Harmonized System, or + + (ii) the tariff heading for the good provides for both + the good itself and its parts and is not further + subdivided into subheadings, or the tariff + subheading for the good provides for both the good + itself and its parts, + + provided that the good is the good specifically +described by the nomenclature of the heading or +subheading and that the regional value content of the +good, determined in accordance with Article 402, is not +less than 60 percent where the transaction value method +is used, or 50 percent where the net cost method is +used, and that the good satisfies all other applicable +requirements of this Chapter. + + +Article 402: Regional Value Content + +1. Except as provided in paragraph 5, each Party shall provide +that the regional value content of a good shall be calculated, at +the choice of the exporter or producer of the good, on the basis +of either the transaction value method described in paragraph 2 +or the net cost method described in paragraph 3. + +2. The regional value content of a good, where calculated on +the basis of the transaction value method, shall be determined as +follows: + + TV - VNM + RVC = --------- x 100 + TV + + where: + + RVC is the regional value content, expressed as a + percentage; + + TV is the transaction value of the good; + and + + VNM is the value of non-originating materials + used by the producer in the production of the + good. + +3. The regional value content of a good, where calculated on +the basis of the net cost method, shall be determined as follows: + + + NC - VNM + RVC = --------- x 100 + NC + + where: + + RVC is the regional value content, expressed as a + percentage; + + NC is the net cost of the good; and + + VNM is the value of non-originating materials + used by the producer in the production of the + good. + +4. For purposes of paragraphs 2 and 3, and except as provided +in Articles 403(1) and 403(2)(a)(i), the value of non-originating +materials used by the producer in the production of the good +shall not include the value of non-originating materials used to +produce originating materials that are subsequently used in the +production of the good. + +5. The regional value content of a good shall be calculated +solely on the basis of the net cost method described in paragraph +3, where: + + (a) there is no transaction value for the good; + + (b) the transaction value of the good is unacceptable under + Article 1 of the Customs Valuation Code; + + (c) the good is sold by the producer to a related person + and the volume, by units of quantity, of sales of + identical or similar goods to related persons, during + the six-month period immediately preceding the month in + which the good is sold, exceeds 85 percent of the + producer's total sales with respect to such goods; + + (d) the good is + + (i) identified in Article 403(1) or 403(2), + + (ii) provided for in headings 64.01 through 64.05, or + + (iii) provided for in tariff item 8469.10.a1 (word + processing machines); + + (e) the exporter or producer chooses to accumulate the + regional value content of the good in accordance with + Article 404; or + + (f) the good has been designated as an intermediate + material under paragraph 10 and is subject to a + regional value-content requirement. + +6. If an exporter or producer calculates the regional value +content of a good using the transaction value method described in +paragraph 2 and a Party subsequently notifies the exporter or +producer during the course of a verification pursuant to Chapter +Five (Customs Procedures) that the transaction value of the good, +or the value of any material used in the production of the good, +or both, is required to be adjusted or is unacceptable under +Article 1 of the Customs Valuation Code, the exporter or producer +of the good may then calculate the regional value content of the +good using the net cost method described in paragraph 3. + +7. Nothing in paragraph 6 shall be construed to preclude a +review and appeal, pursuant to Chapter Five (Customs Procedures), +of an adjustment or rejection of a transaction value for a good +or the value of any material used in the production of the good, +or both. + +8. For purposes of calculating the net cost of a good pursuant +to paragraph 3, the producer of the good may use any one of the +following methods: + + (a) calculate the total cost incurred with respect to all + goods produced by that producer minus any sales + promotion, marketing and after-sales service costs, + royalties, shipping and packing costs, and non- + allowable interest costs that are included in the total + cost of all goods and then reasonably allocate the + resulting net cost of those goods to the good; + + (b) reasonably allocate the total cost incurred with + respect to all goods produced by that producer to the + good minus any sales promotion, marketing and after- + sales service costs, royalties, shipping and packing + costs and non-allowable interest costs that are + included in the portion of the total cost allocated to + the good; or + + (c) reasonably allocate the individual costs that are part + of the total cost incurred with respect to the good so + that the aggregate of these costs does not include any + sales promotion, marketing and after-sales service + costs, royalties, shipping and packing costs, and non- + allowable interest costs, + +provided that the allocation of all such costs are consistent +with the provisions regarding the reasonable allocation of costs +set out in the Uniform Regulations. + +9. With the exception of an intermediate material described in +paragraph 10 and except as provided in Article 403(1) and +(2)(a)(i), the value of a material used in the production of a +good shall be: + + (a) the price actually paid or payable by the producer for + the material, provided that the price is acceptable + under Article 1 of the Customs Valuation Code; or + + (b) if the price actually paid or payable is unacceptable + under Article 1 of the Customs Valuation Code, the + value shall be determined in accordance with the other + Articles of the Customs Valuation Code; and + + (c) when not included under subparagraph (a) or (b) + + (i) freight, insurance, packing and all other costs + incurred in transporting such materials to the + location of the producer, + + (ii) duties, taxes and customs brokerage fees on such + materials paid in the territory of one or more of + the Parties, + + (iii) the cost of waste and spoilage resulting from + the use or consumption, or both, of such + materials, less the value of renewable scrap + or by-product, and + + (iv) the value of goods and services relating to such + materials determined in accordance with + subparagraph 1(b) of Article 8 of the Customs + Valuation Code. + +10. Except as provided in Article 403, the producer of a good +may designate any self-produced material used in the production +of the good as an intermediate material, provided that, when the +intermediate material is subject to a regional value-content +requirement, no other intermediate material subject to a regional +value-content requirement is used in the production of that +intermediate material. + +11. For purposes of determining the value of an intermediate +material, the producer of the intermediate material may use +either of the following methods: + + (a) calculate the total cost incurred with respect to all + goods produced by that producer and then reasonably + allocate the resulting cost to the intermediate + material; or + + (b) reasonably allocate to the intermediate material the + individual costs that are part of the total cost + incurred with respect to that intermediate material. + + +Article 403: Automotive Goods + +1. Where applying the net cost method under Article 402(3) for +purposes of calculating the regional value content of any one of +the following goods: + + (a) a motor vehicle provided for in subheadings 8702.xx + (vehicles for the transport of 15 or fewer persons), + 8703.21 through 8703.90, 8704.21 or 8704.31; or + + (b) a good provided for in the tariff provisions listed in + Annex 403.1 where the good is subject to a regional + value-content requirement and is for use as original + equipment in the production of a good provided for in + subheadings 8703.21 through 8703.90, 8704.21 or + 8704.31, + +the value of non-originating materials used by the producer in +the production of the good shall be the sum of the customs values +of non-originating materials imported from outside the +territories of the Parties under the tariff provisions listed in +Annex 403.1. + +2. (a) Where applying the net cost method under Article 402(3) + with respect to a good identified in subparagraph (b), + the producer of the good shall include in the value of + non-originating materials used by the producer in the + production of the good the sum of + + (i) for each material used by the producer that is + listed in Annex 403.2, at the choice of the + producer, either + + (A) the value of such material that is non- + originating, or + + (B) the value of non-originating materials + used in the production of such material, + and + + (ii) the value of any non-originating material used by + the producer that is not in listed in Annex 403.2. + + (b) Subparagraph (a) shall apply to the following goods + + (i) a motor vehicle provided for in heading 8701 or + subheading 8702.yy (vehicles for the transport of + 16 or more persons), + + (ii) a motor vehicle provided for in subheadings + 8704.10, 8704.22, 8704.23, 8704.32 or 8704.90, + + (iii) a motor vehicle provided for in headings 8705 + or 8706, and + + (iv) any of the components identified in Annex 403.2 + for use in such motor vehicles. + +3. A producer may designate a self-produced material used in +the production of any material listed in Annex 403.2 as an +intermediate material, provided that, when the intermediate +material is subject to a regional value-content requirement, no +other intermediate material subject to a regional value-content +requirement is used in the production of that intermediate +material. + +4. In calculating the regional value content of a motor vehicle +described in paragraphs 1 and 2, the producer may average its +calculation over its fiscal year, using any one of the following +categories, on the basis of either all motor vehicles in the +category or only those motor vehicles in the category that are +exported to the territory of one or more of the other Parties: + + (a) the same model line of motor vehicles in the same class + of vehicles produced in the same plant in the territory + of a Party; + + (b) the same class of motor vehicles produced in the same + plant in the territory of a Party; + + (c) the same model line of motor vehicles produced in the + territory of a Party; or + + (d) the basis described in Annex 403.4. + +5. In calculating the regional value content for any or all +goods provided for in a tariff provision listed in Annex 403.1 +produced in the same plant, the producer of the good may: + + (a) average its calculation + + (i) over the fiscal year of the motor vehicle producer + to whom the good is sold, or over any quarter or + month, or + + (ii) over its fiscal year, if the good is sold as an + after-market part; + + (b) calculate the average referred to in subparagraph (a) + separately for any or all goods sold to one or more + motor vehicle producers; and + + (c) with respect to any calculation under this paragraph, + calculate separately those goods that are exported to + the territory of one or more of the Parties. + +6. Notwithstanding Annex 401.1, + + (a) the regional value-content requirement shall be, for a + producer's fiscal year beginning nearest to January 1, + 1998 and thereafter, 56 percent under the net cost + method, and for a producers's fiscal year beginning + nearest to January 1, 2002 and thereafter, 62.5 percent + under the net cost method, for the following + + (i) a motor vehicle provided for in subheading 8702.xx + (vehicles for the transport of 15 or fewer + persons), 8703.21 through 8703.90, 8704.21 or + 8704.31, and + + (ii) a good provided for in heading 8407 or 8408 or + subheading 8708.40 which is for use as original + equipment in the production of a motor vehicle + identified in subparagraph (a)(i); and + + (b) the regional value-content requirement shall be, for a + producer's fiscal year beginning nearest to January 1, + 1998 and thereafter, 55 percent under the net cost + method, and for a motor vehicle producers's fiscal year + beginning nearest to January 1, 2002 and thereafter, 60 + percent under the net cost method, for the following + + (i) a motor vehicle provided for in heading 8701, + subheadings 8702.yy (vehicles for the transport of + 16 or more persons), 8704.10, 8704.22, 8704.23, + 8704.32 and 8704.90, and heading 8705 or 8706, + + (ii) a good provided for in heading 8407 or 8408 or + subheading 8708.40 which is for use as original + equipment in the production of a motor vehicle + identified in subparagraph (b)(i), and + + (iii) except for a good identified in subparagraph + (a)(ii) or provided for in subheadings + 8482.10 through 8482.80 or subheadings + 8483.10 through 8483.40, a good identified in + Annex 403.1 which is for use as original + equipment in the production of a motor + vehicle identified in subparagraphs (a)(i) or + (b)(i). + +7. Notwithstanding paragraph 6, + + (a) the regional value content of a motor vehicle referred + to in Article 403(1) or 403(2) shall not be less than + 50 percent for a period of five years from the date on + which the first motor vehicle prototype is produced in + a plant by a motor vehicle assembler, provided that + + (i) it is a motor vehicle of a class, or marque, or, + for a motor vehicle identified in Article + 403(1)(a), size and underbody, not previously + produced by the motor vehicle assembler in the + territory of any of the Parties, + + (ii) the plant consists of a new building in which the + motor vehicle is assembled, and + + (iii) the plant contains substantially all new + machinery that is used in the assembly of the + motor vehicle; + + (b) the regional value content of a motor vehicle referred + to in Article 403(1) or 403(2) shall not be less than + 50 percent for a period of two years from the date on + which the first motor vehicle prototype is produced at + a plant following a refit, provided that it is a + different motor vehicle of a class, or marque, or, for + a motor vehicle identified in Article 403(1)(a), size + and underbody, than was assembled by the motor vehicle + assembler in the plant before the refit; and + + (c) for the purposes of subparagraphs (a) and (b) sizes + means in the case of a motor vehicle identified in + Article 403(1)(a) + + (i) minicompacts -- less than 85 cubic feet of + passenger and luggage volume, + + (ii) subcompacts -- between 85 and 100 cubic feet of + passenger and luggage volume, + + (iii) compacts -- between 100 and 110 cubic feet of + passenger and luggage volume, + + (iv) midsize -- between 110 and 120 cubic feet of + passenger and luggage volume, and + + (v) large -- between 120 or more cubic feet of + passenger and luggage volume. + +Article 404: Accumulation + + For purposes of determining whether a good is an originating +good, the production of the good in the territory of one or more +of the Parties by one or more producers shall, at the choice of +the exporter or producer of the good, be considered to have been +performed in the territory of a Party by that exporter or +producer, provided that: + + (a) the applicable tariff classification change has + occurred, or the regional value-content requirement has + been satisfied, or both, entirely in the territory of + one or more of the Parties; + + (b) the good satisfies all other applicable requirements of + this Chapter; and + + (c) the production of the producer that chooses to + accumulate its production with that of other producers + is deemed to be the production of a single producer for + purposes of Article 402(10). + + +Article 405: De Minimis + +1. Notwithstanding Article 401(b), a good shall be considered +to be an originating good if the value of all non-originating +materials used in the production of the good that do not undergo +the applicable change in tariff classification is not more than +seven percent of the transaction value of the good or, if the +transaction value of the good is unacceptable under Article 1 of +the Customs Valuation Code, seven percent of the total cost of +the good, provided that: + + (a) if the good is subject to a regional value-content + requirement, the value of such non-originating + materials shall be taken into account in calculating + the regional value content of the good; and + + (b) the good satisfies all other applicable requirements of + this Chapter. + +2. A good that is subject to a regional value-content +requirement shall not be required to satisfy such requirement if +the value of all non-originating materials used in the production +of the good is not more than seven percent of the transaction +value of the good or, if the transaction value of the good is +unacceptable under Article 1 of the Customs Valuation Code, the +value of all non-originating materials is not more than seven +percent of the total cost of the good, provided that the good +satisfies all other applicable requirements of this Chapter. + +3. Paragraphs 1 and 2 shall not apply to: + + (a) a material provided for in Chapter 4 of the Harmonized + System or tariff item 1901.90.a1 (dairy preparations + containing over 10 percent by weight of milk solids) + that is used in the production of a good provided for + in Chapter 4 of the Harmonized System; + + (b) a material provided for in Chapter 4 of the Harmonized + System or tariff item 1901.90.a1 (dairy preparations + containing over 10 percent by weight of milk solids) + that is used in the production of a good provided for + in heading 21.05, subheading 2202.90, or tariff items + 1901.10.a1 (infant preparations containing over 10 + percent by weight of milk solids), 1901.20.a1 (mixes + and doughs, containing over 25 percent by weight of + butterfat, not put up for retail sale), 1901.90.a1 + (dairy preparations containing over 10 percent by + weight of milk solids), 2106.90.a4 (preparations + containing over 10 percent by weight of milk solids) or + 2309.90.a1 (animal feeds containing over 10 percent by + weight of milk solids and less than 6 percent by weight + of grain or grain products); + + (c) a material provided for in heading 17.01 that is used + in the production of a good provided for in headings + 17.01 through 17.03; + + (d) a material provided for in Chapter 15 of the Harmonized + System that is used in the production of a good + provided for in headings 15.01 through 15.08, 15.12, + 15.14 or 15.15; + + (e) a material provided for in heading 08.05 and + subheadings 2009.11 through 2009.30 that is used in the + production of a good provided for in subheadings + 2009.11 through 2009.30 or tariff item 2106.90.a2 + (concentrated fruit or vegetable juice of any single + fruit or vegetable, fortified with minerals or + vitamins) or 2202.90.a1 (fruit or vegetable juice of + any single fruit or vegetable, fortified with minerals + or vitamins); and + + (f) a material provided for in headings 22.03 through 22.08 + that is used in the production of a good provided for + in headings 22.07 through 22.08. + +4. Paragraph 1 shall not apply for purposes of calculating the +volume or weight of: + + (a) a non-originating material of Chapter 17 of the + Harmonized System or heading 18.05 that are used in the + production of a good provided for in subheading + 1806.10; + + (b) a non-originating material of Chapter 9 of the + Harmonized System that is used in the production of a + good provided for in tariff item 2101.10.a1 (instant + coffee, not flavored); and + + (c) a non-originating material of heading 20.09 that is + used in the production of a good provided for in + subheading 2009.90, or 2106.90.a3 (concentrated + mixtures of fruit or vegetable juice, fortified with + minerals or vitamins) 2202.90.a2 (mixtures of fruit or + vegetable juices, fortified with minerals or vitamins). + +5. A good of Chapters 50 through 63 of the Harmonized System +that does not originate because certain fibers or yarns used in +the production of the component of the good that gives the good +its essential character do not undergo the applicable change in +tariff classification described in Annex 401.1 for the good, +shall nonetheless be considered to originate if the weight of all +such fibers or yarns in the good is not more than seven percent +of the weight of that component. + +6. Paragraphs 1 and 2 shall not apply to a good of Chapters 1 +through 44 of the Harmonized System unless the non-originating +material is provided for in a different subheading than the good +for which origin is being determined under this Article. + + +Article 406: Fungible Goods and Materials + + For purposes of determining whether a good is an originating +good: + + (a) where originating and non-originating fungible + materials are used in the production of a good, the + origin of the materials need not be determined through + the identification of any specific fungible material, + but may be determined on the basis of any of the + inventory management methods provided for in the + Uniform Regulations; and + + (b) where originating and non-originating fungible goods + are commingled and exported in the same form, the + origin of the good may be determined on the basis of + any of the inventory management methods provided for in + the Uniform Regulations. + + +Article 407: Accessories, Spare Parts, or Tools + + For purposes of determining whether a good, is an +originating good, accessories, spare parts or tools delivered +with the good that form part of the good's standard accessories, +spare parts, or tools, shall be considered as one with the good +and shall be disregarded in determining whether all the non- +originating materials used in the production of the good undergo +the applicable change in tariff classification described in Annex +401.1, provided that: + + (a) the accessories, spare parts or tools are not invoiced + separately from the good; + + (b) the quantities and value of the accessories, spare + parts or tools are customary for the good; and + + (c) if the good is subject to a regional value-content + requirement, the value of the accessories, spare parts + or tools shall be taken into account as either + originating or non-originating materials in calculating + the regional value content of the good. + + +Article 408: Indirect Materials + + An indirect material shall be considered to be an +originating material without regard to where it is produced. + + +Article 409: Packaging Materials and Containers for Retail Sale + + Packaging materials and containers in which a good is +packaged for retail sale shall, if classified as one with the +good, be disregarded in determining whether all the non- +originating materials used in the production of the good undergo +the applicable change in tariff classification described in Annex +401.1, and, if the good is subject to a regional value content +requirement, the value of such packaging materials and containers +shall be taken into account in calculating the regional value +content of the good. + + +Article 410: Packing Materials and Containers for Shipment + + For the purpose of determining whether a good is an +originating good, packing materials and containers in which the +good is packed for shipment shall be disregarded in determining +whether: + + (a) the non-originating materials used in the production of + the good undergo the applicable change in tariff + classification described in Annex 401.1; and + + (b) the good satisfies a regional value-content + requirement. + + +Article 411: Transshipment + + A good shall not be considered to be an originating good by +virtue of having undergone production that satisfies the +requirements of Article 401 if, subsequent to that production, +the good undergoes further production, or any other operation, +outside the territories of the Parties, other than unloading, +reloading, or any other operation necessary to preserve it in +good condition or to transport the good to the territory of a +Party. + + +Article 412: Non-Qualifying Operations + + A good shall not be considered to be an originating good +merely by virtue of having undergone: + + (a) mere dilution with water or another substance that does + not materially alter the characteristics of the good; + or + + (b) any process, work or pricing practice, or any + combination thereof, in respect of which it is + demonstrated, on the basis of a preponderance of + evidence, that the object was to circumvent the + provisions of this Chapter. + + +Article 413: Interpretation + + For purposes of this Chapter, the following rules of +interpretation shall apply: + + (a) the basis for tariff classification in Article 401 is + the Harmonized System; + + (b) a more specific rule in Annex 401.1 shall take + precedence over a general requirement under Article + 401; + + (c) for purposes of applying Article 401(d), when + determining whether a tariff heading or subheading + provides for both a good and its parts, reference shall + be made both to the nomenclature of the heading or + subheading and to any legal note provided in the + Harmonized System; + + (d) the principles of the Customs Valuation Code shall + apply to domestic transactions as well as international + transactions; + + (e) in the event of any inconsistency between the + provisions of this Chapter and the Customs Valuation + Code, the provisions of this Chapter shall prevail to + the extent of the inconsistency; + + (f) in applying Customs Valuation Code under this Chapter, + the definitions in Article 415 shall take precedence + over the definitions of the Customs Valuation Code to + the extent of any difference; and + + (g) all costs referred to in this Chapter shall be recorded + and maintained in accordance with the Generally + Accepted Accounting Principles in the territory of the + Party in which the good is produced. + + +Article 414: Consultation and Revision + +1. The Parties shall consult regularly to ensure that the +provisions of this Chapter are administered effectively, +uniformly and consistently with the spirit and intent of this +Agreement, and shall cooperate in the administration of the +provisions of this Chapter in accordance with the provisions of +Chapter Five (Customs Procedures). + +2. If any Party concludes that the provisions of this Chapter +require revision to take into account developments in production +processes or other matters, the proposed revision along with +supporting rationale and any studies shall be submitted to the +other Parties for consideration and any appropriate action +pursuant to Chapter Five (Customs Procedures). + + +Article 415: Definitions + +For purposes of this Chapter: + +class of motor vehicles means any one of the following categories +of motor vehicles: + + (a) motor vehicles provided for in subheadings 8701.20 and + 8702.yy (vehicles for the transport of 16 or more + persons), subheadings 8704.22, 8704.23, 8704.32 and + 8704.90, and headings 87.05 and 87.06; + + (b) motor vehicles provided for in subheadings 8701.10 and + 8701.30 through 8701.90; + + (c) motor vehicles provided for in subheadings 8702.xx + (vehicles for the transport of 15 or fewer persons) and + 8704.21 and 8704.31; or + + (d) motor vehicles provided for in subheadings 8703.21 + through 8703.90; + +customs value means the value of a good for the purposes of +levying duties of customs on an imported good; + +F.O.B. means free on board, regardless of the mode of +transportation, at the point of direct shipment by the seller to +the buyer; + +fungible goods or fungible materials means goods or materials +that are interchangeable for commercial purposes and whose +properties are essentially identical; + +identical or similar goods has the same meaning as prescribed for +identical goods and similar goods, respectively, in the Customs +Valuation Code; + +indirect material means a good used in the production, testing or +inspection of a good but not physically incorporated into the +good, or used in the maintenance or operation of equipment or +buildings associated with the production of a good, including: + + (a) fuel and energy; + + (b) tools, dies and molds; + + (c) spare parts and materials used in the maintenance of + equipment and buildings; + + (d) lubricants, greases, compounding materials and other + materials used by labor or used to operate equipment + and buildings, or both; + + (e) gloves, glasses, footwear, clothing, safety equipment + and supplies; + + (f) equipment, other devices and supplies used for testing + or inspecting the goods; + + (g) catalysts and solvents; and + + (h) any other goods that are not incorporated into the good + but whose use in the production of the good can + reasonably be demonstrated to be a part of that + production; + +marque means the trade name used by a separate marketing division +of a motor vehicle assembler; + +material means a good, other than an indirect material, that is +used in the production of another good; + +model line means a group of motor vehicles having the same +platform or model name; + +motor vehicle assembler means a producer of motor vehicles and +any related persons or joint ventures in which the producer +participates; + +new building means new construction, including at least the +pouring or construction of new foundations and floors, erection +of new structure and roof, and installation of new plumbing, +electrical and other utilities to house the complete vehicle +assembly process (need definition of complete vehicle assembly +process); + +net cost means total cost minus sales promotion, marketing and +after-sales service costs, royalties, shipping and packing costs, +and non-allowable interest costs that are included in the total +cost; + +net cost of a good means the net cost that can be reasonably +allocated to the good using one of the methods set forth in +Article 402 (8) (a); + +non-allowable interest costs means interest costs actually +incurred by the producer in excess of the applicable federal +government rate identified in the Uniform Regulations for +comparable maturities, plus seven percentage points; + +non-originating good or non-originating material means a good or +material that has not satisfied the rule of origin applicable to +the good or material under this Chapter; + +producer means a person who grows, mines, harvests, manufactures, +processes or assembles a good, or any combination thereof; + +production means growing, mining, harvesting, manufacturing, +processing or assembling a good, or any combination thereof; + +reasonably allocate means to apportion in a manner appropriate to +the circumstances; + +refit means a plant closure for the purposes of plant conversion +or retooling that lasts at least three months; + +related person means persons who are related only if: + + (a) they are officers or directors of one another's + business; + + (b) they are legally recognized partners in business; + + (c) they are employer and employee; + + (d) any person directly or indirectly owns, controls or + holds 25 per cent or more of the outstanding voting + stock or shares of both of them; + + (e) one of them directly or indirectly controls the other; + + (f) both of them are directly or indirectly controlled by a + third person; or + + (g) they are members of the same family (members of the + same family are natural or adoptive children, brothers + sisters, parents, grandparents, or spouses); + +royalties means payments of any kind, including payments under +technical assistance and similar agreements, made as +consideration for the use, or right to use any copyright, +literary, artistic, or scientific work, patent, trademark, +design, model, plan, secret formula or process, excluding those +payments under technical assistance or similar agreements that +can be related to specific services such as: + + (a) personnel training, without regard to where performed; + and + + (b) if performed in the territory of one or more of the + Parties, engineering, tooling, die setting, software + design and similar computer services, or other + services; + +sales promotion, marketing and after-sales service costs means +the following costs related to sales promotion, marketing and +after-sales service: + + (a) sales and marketing promotion; media advertising; + advertising and market research; promotional and + demonstration materials, exhibits; sales conferences, + trade shows and conventions; banners; marketing + displays; free samples; sales, marketing and after- + sales service literature (product brochures, catalogs, + technical literature, price lists, service manuals, + sales aid information); establishment and protection of + logos and trademarks; sponsorships; wholesale and + retail restocking charges; entertainment; + + (b) sales and marketing incentives; consumer, retailer or + wholesaler rebates; merchandise incentives; + + (c) salaries and wages, sales commissions, bonuses, + benefits (e.g., medical, insurance, pension), + travelling and living expenses, membership and + professional fees, for sales promotion, marketing and + after-sales service personnel; + + (d) recruiting and training of sales promotion, marketing + and after-sales service personnel, and after-sales + training customer employees, where such costs are + identified separately for sales promotion, marketing + and after-sales service of goods on the financial + statements or cost accounts of the producer; + + (e) product liability insurance; + + (f) office supplies for sales promotion, marketing and + after-sales service of goods, where such costs are + identified separately for sales promotion, marketing + and after-sales service of goods on the financial + statements or cost accounts of the producer; + + (g) telephone, mail and other communications, where such + costs are identified separately for sales promotion, + marketing and after-sales service of goods on the + financial statements or cost accounts of the producer; + + (h) rent and depreciation of sales promotion, marketing and + after-sales service offices and distribution centers; + + (i) property insurance premiums, taxes, cost of utilities, + and repair and maintenance of sales promotion, + marketing and after-sales service offices and + distribution centers, where such costs are identified + separately for sales promotion, marketing and after- + sales service of goods on the financial statements or + cost accounts of the producer; and + + (j) payments by the producer to other persons for warranty + repairs; + +self-produced material means a material that is produced by the +producer of the good; + +shipping and packing costs means the costs incurred in packing +the good for shipment and shipping the good from the point of +direct shipment to the buyer, excluding costs of preparing and +packaging the good for retail sale; + +total cost means all product costs, period costs and other costs +incurred in the territory of one or more of the Parties; + +transaction value means the price of a good actually paid or +payable to the producer of the good, adjusted to a F.O.B. basis +and in accordance with the principles of paragraphs 1, 3 and 4 of +Article 8 of the Customs Valuation Code; + +used means used or consumed, or both, in the production of goods; +and + +wholly obtained or produced in the territory of one or more of +the Parties means goods that are: + + (a) mineral goods extracted in the territory of one or more + of the Parties; + + (b) goods harvested in the territory of one or more of the + Parties; + + (c) live animals born and raised in the territory of one or + more of the Parties; + + (d) goods (fish, shellfish and other marine life) taken + from the sea by vessels registered or recorded with a + Party and flying its flag; + + (e) goods produced on board factory ships from the goods + referred to in subparagraph (d) provided such factory + ships are registered or recorded with that Party and + fly its flag; + + (f) goods taken by a Party or a person of a Party from the + seabed or beneath the seabed outside territorial + waters, provided that a Party has rights to exploit + such seabed; + + (g) goods taken from outer space, provided they are + obtained by a Party or a person of a Party and not + processed in a non-Party; and + + (h) waste and scrap derived from + + (i) production in the territory of one or more of the + Parties, + + (ii) used goods collected in the territory of one or + more of the Parties, provided such goods are fit + only for the recovery of raw materials, or + + (iii) goods produced in the territory of one or + more of the Parties exclusively from goods + referred to in subparagraphs (a) through (h) + inclusive or from their derivatives, at any + stage of production. + +============================================================================= + ANNEX 403.1 + + List of Tariff Provisions for Article 403(1) + + +INTERIM NOTE: The nomenclature that follows the tariff + provisions is for illustrative purposes only. + + +4009 (tubes, pipes and hoses) +4010.10 (rubber belts) +4011 (tires) +4016.93 (rubber, gaskets, washers and other seals) +4016.99.15.xx (seals) +7007.11 and 7007.21 (laminated safety glass) +7009.10 (mirrors) +8301.20 (locks) +8407.31 (engines of a cylinder capacity not exceeding 50cc) +8407.32 (engines of a cylinder capacity exceeding 50cc but not +exceeding 250cc) +8407.33 (engines of a cylinder capacity exceeding 250cc but not +exceeding 1000cc) +8407.34.xx (engines of a cylinder capacity exceeding 1000 cc but +not exceeding 2,000 cc); +8407.34.yy (engines of a cylinder capacity exceeding 2000 cc) +8408 (diesel engines) +8409 (parts of engines) +8413.30 (pumps) +8414.59 (turbochargers and supercharges) +8415.81 through 8415.83 (air conditioners) +8481.20, 8481.30 and 8481.80 (valves) +8482.10 through 8482.80 (ball bearings) +8483.10 through 8483.40 (transmission shafts) +8483.50 (flywheels) +8501.10 (electric motors) +8501.20 (electric motors) +8501.31 (electric motors) +8501.32.xx (electric motors that provide primary source for +electric powered vehicles of subheading 8703.90) +8507.10.xx, 8507.30.xx, 8507.40.xx and 8507.80.xx (batteries that +provide primary source for electric cars) +8511.30 (distributors) +8511.40 (starter motors) +8511.50 (other generators) +8512.20 (other lighting or visual signalling equipment) +8512.40 (windscreen wipers, defrosters) +8519.91 (cassette decks) +8527.21 (cassette players combined with radios) +8527.29 (radios) +8536.50 (switches) +8536.90 (junction boxes) +8537.10.99.10 (U.S. tariff provision 8537.10.00.40) (motor +control centres) +8539.10 (seal beamed headlamps) +8539.21 (tungsten halogen headlamps) +8544.30 (wire harnesses) +8706 (chassis) +8707 (bodies) +8708.10.xx (bumpers but not parts thereof) +8708.21 (safety seat belts) +8708.29.99.10 (U.S. tariff provision 8708.29.00.10) (body +stampings) +8708.29.xx (inflators and modules for airbags) +8708.39 (brakes and servo-brakes, and parts thereof) +8708.40 (gear boxes, transmissions) +8708.50 (drive axles with differential, whether or not provided +with other transmission components) +8708.60 (non-driving axles, and parts thereof) +8708.70.xx (road wheels, but not parts or accessories thereof) +8708.80 (suspension shock-absorbers) +8708.91 (radiators) +8708.92 (silencers (mufflers) and exhaust pipes) +8708.93.xx (clutches, but not parts thereof) +8708.94 (steering wheels, steering columns and steering boxes) +8708.99.50.xx (airbags) +8708.99.81 (catalytic convertors) +8708.99.99.11 (half-shafts and drive shafts) +8708.99.99.19 (other parts for powertrains) +8708.99.99.20 (parts for suspension systems) +8708.99.99.49 (parts for steering systems) +8708.99.xx (other parts not included above) +9031.80 (monitoring devices) +9031.80.xx (electronic diagnostics for air bag systems) +9032.89 (automatic regulating instruments) +9401.20 (seats) + +============================================================================= + ANNEX 403.2 + + List of Components and Materials for Article 403(2) + + +1. Component: Engines of heading 8407 or 8408 + + Materials: cast block, cast head, fuel nozzle, fuel + injector pumps, glow plugs, turbochargers and superchargers, + electronic engine controls, intake manifold, exhaust + manifold, intake/exhaust valves, crankshaft/camshaft, + alternator, starter, air cleaner assembly, pistons, + connecting rods and assemblies made therefrom (or rotor + assemblies for rotary engines), flywheel (for manual + transmissions), flexplate (for automatic transmissions), oil + pan, oil pump and pressure regulator, water pump, crankshaft + and camshaft gears, and radiator assemblies or charge-air + coolers. + +2. Component: Gear boxes (transmissions) subheading 8708.40 + + Materials: (a) for manual transmissions - transmission case + and clutch housing; clutch; internal shifting mechanism; + gear sets, synchronizers and shafts; and (b) for torque + convertor type transmissions - transmission case and + convertor housing; torque convertor assembly; gear sets and + clutches; and electronic transmission controls. + +============================================================================= + ANNEX 403.4 + + Regional Value-Content Calculation for CAMI + + +1. For purposes of Article 403, when determining the origin of +motor vehicles produced in the territory of Canada and imported +into the territory of the United States, CAMI Automotive, Inc. +("CAMI") may average its calculation of the regional value +content of a class of motor vehicles or a model line of motor +vehicles produced in a fiscal year in the territory of Canada by +CAMI for sale in the territory of one or more of the Parties with +the calculation of the regional value content of the +corresponding class of motor vehicles or model line of motor +vehicles produced in the territory of Canada by General Motors of +Canada Limited in a fiscal year that corresponds most closely to +CAMI's fiscal year, provided that: + + (a) General Motors of Canada Limited owns 50 percent or + more of the voting common stock of CAMI; and + + (b) General Motors of Canada Limited, General Motors + Corporation, General Motors de Mexico S.A., and any + subsidiary directly or indirectly owned by any of them, + or by any combination thereof, ("GM") acquires 75 + percent (75 percent) or more by unit of the class of + motor vehicles or model line of motor vehicles, as the + case may be, that CAMI Automotive Inc. has produced in + the territory of Canada in CAMI's fiscal year for sale + in the territory of one or more of the Parties. + +2. If GM acquires less than 75 percent by unit of the class of +motor vehicles or model line of motor vehicles, as the case may +be, that CAMI has produced in the territory of Canada in CAMI's +fiscal year for sale in the territory of one or more of the +Parties, CAMI may average in the manner described in paragraph 1 +only those motor vehicles that are acquired by GM for +distribution under the GEO marque or other GM marque. + +3. In calculating the regional value content of motor vehicles +produced by CAMI in the territory of Canada, CAMI may choose to +average the calculation in paragraph 1 or 2 over a period of two +fiscal years in the event that any motor vehicle assembly plant +operated by CAMI or any motor vehicle assembly plant operated by +General Motors of Canada Limited with which CAMI is averaging its +regional value content is closed for more than two consecutive +months: + + (a) for the purpose of re-tooling for a model change, or + + (b) as the result of any event or circumstance (other than + the imposition of antidumping and countervailing + duties, or an interruption of operations resulting from + a labour strike, lock-out, labour dispute, picketing or + boycott of or by employees of CAMI or GM), that CAMI or + GM could not reasonably have been expected to avert by + corrective action or by exercise of due care and + diligence, including a shortage of materials, failure + of utilities, or inability to obtain or delay in + obtaining raw materials, parts, fuel or utilities. + +Such averaging may be for CAMI's fiscal year in which a CAMI or +the General Motors of Canada Limited plant with which CAMI is +averaging is closed and either the previous or subsequent fiscal +year. In the event that the period of closure spans two fiscal +year, the averaging may be only for those two fiscal years. + +4. For the purposes of this Article, where by virtue of an +amalgamation, reorganization, division or similar transaction: + + (a) a motor vehicle producer (the "successor producer") + acquires all or substantially all of the assets used by + GM; and + + (b) the successor producer, directly or indirectly + controls, or is controlled by, GM, or both the + successor producer and GM are controlled by the same + person, + +the successor producer shall be deemed to be the same person and +a continuation of GM from which it acquired the assets. +NAFTA Chapter Five Customs Procedures + + + Subchapter A - Certification of Origin + + +Article 501: Certificate of Origin + +1. Upon the date of entry into force of this Agreement, the +Parties shall establish a Certificate of Origin for the purpose +of certifying that a good being exported from the territory of a +Party into the territory of another Party qualifies as an +originating good, and may thereafter revise the Certificate by +agreement. + +2. Each Party may provide that a Certificate of Origin for a +good imported into its territory be completed in a language +required under its laws or regulations. + +3. Each Party shall provide that: + + (a) an exporter in its territory shall complete and sign a + Certificate of Origin for any exportation of a good for + which an importer may claim preferential tariff + treatment upon importation of the good into the + territory of another Party; and + + (b) where an exporter in its territory is not the producer + of the good, such exporter may complete and sign a + Certificate on the basis of + + (i) its knowledge of whether the good qualifies as an + originating good, + + (ii) reasonable reliance upon the producer's written + representation that the good qualifies as an + originating good, or + + (iii) a completed and signed Certificate for the + good voluntarily provided to the exporter by + the producer. + +4. Nothing in paragraph 3 shall be construed to require a +producer to provide a Certificate of Origin to an exporter. + +5. Each Party shall: + + (a) provide that a Certificate of Origin that has been + completed and signed by an exporter or a producer in + the territory of another Party that is applicable to + + (i) a single importation of a good into its territory, + or + + (ii) multiple importations of identical goods imported + into its territory within any specified period, + not exceeding 12 months, set out therein by the + exporter or producer, + + shall be accepted by its customs administration for a +period of four years after the date on which the +Certificate was signed; and + + (b) require an exporter or a producer in its territory that + completes and signs a Certificate pursuant to + subparagraph (a) to notify in writing all persons to + whom such Certificate was given of any change that + could affect its accuracy or validity. + + +Article 502: Obligations Regarding Importations + +1. Except as otherwise provided in this Chapter, each Party, +with respect to an importer in its territory that claims +preferential tariff treatment for a good imported into its +territory from the territory of another Party, shall provide +that: + + (a) the importer shall make a written declaration, based on + a valid Certificate of Origin, that the good qualifies + as an originating good; + + (b) the importer shall have the Certificate in its + possession at the time such declaration is made; + + (c) the importer shall provide, upon the request of that + Party's customs administration, a copy of the + Certificate; + + (d) if the importer fails to comply with any requirement + set out in this Chapter, that Party may deny + preferential tariff treatment to the good; + + (e) the importer, where the importer has reason to believe + that a Certificate on which a declaration was based + contains information that is not correct, shall + promptly make a corrected declaration and pay any + duties owing; and + + (f) the importer, who voluntarily makes a corrected + declaration pursuant to subparagraph (e), shall not be + subject to penalties for the making of an incorrect + declaration. + +2. Each Party shall provide that, where a good would have +qualified as an originating good when it was imported into the +territory of that Party but no claim for preferential tariff +treatment was made at that time, the importer of the good may, +within one year of the date on which the good was imported, apply +for a refund of any excess duties paid as the result of the good +not having been accorded preferential tariff treatment, upon +presentation of: + + (a) a written declaration that the good qualifies as an + originating good at the time of importation; + + (b) a copy of the Certificate of Origin to the same effect; + and + + (c) such other documentation relating to the importation of + the good as that Party may require. + + +Article 503: Exceptions + + Each Party shall provide that a Certificate of Origin shall +not be required for: + + (a) a commercial importation of a good whose value does not + exceed the amount of (US)$1,000 or its equivalent + amount in the Party's currency or such higher amount as + it may establish, except that it may require that the + invoice accompanying such importation include a + statement certifying that such goods qualify as + originating goods; + + (b) a non-commercial importation of a good whose value does + not exceed the amount of (US)$1000 or its equivalent + amount in the Party's currency, or such higher amount + as it may establish; or + + (c) an importation of a good for which the Party into whose + territory the good is imported has waived the + requirement for a Certificate of Origin, + + provided that such importation does not form part of a + series of importations that may reasonably be considered to + have been undertaken or arranged for the purpose of avoiding + the certification requirements set out in Articles 501 and + 502. + + +Article 504: Obligations Regarding Exportations + + Each Party shall provide that: + + (a) upon the request of its customs administration, an + exporter in its territory, or a producer in its + territory that has provided a copy of a Certificate of + Origin to such exporter pursuant to Article + 501(3)(b)(iii), shall provide a copy of the Certificate + to its customs administration; + + (b) a false certification by an exporter or a producer in + its territory that a good to be exported to the + territory of another Party qualifies as an originating + good shall have the same legal consequences, with + appropriate modifications, as would apply to an + importer in its territory with respect to a + contravention of its customs laws and regulations + regarding the making of a false statement or + representation; + + (c) where an exporter or a producer in its territory fails + to comply with any of the requirements set out in this + Chapter, it may apply such measures as the + circumstances may warrant; + + (d) an exporter or a producer in its territory that has + completed and signed a Certificate of Origin, and that + has reason to believe that the Certificate contains + information that is not correct, shall promptly notify + in writing all persons to whom the Certificate was + given of any change that could affect the accuracy or + validity of the Certificate; and + + (e) an exporter or a producer who voluntarily provides + written notification pursuant to subparagraph (d) shall + not be subject to penalties with respect to the making + of an incorrect certification. + + + Subchapter B - Administration and Enforcement + + +Article 505: Records + +1. Each Party shall provide that: + + (a) an exporter or a producer in its territory that + completes and signs a Certificate of Origin shall + maintain in its territory, for a period of five years + from the date the Certificate was signed or for such + longer period as such Party may specify, all records + relating to the origin of a good for which preferential + tariff treatment was claimed in the territory of + another Party, including records associated with + + (i) the purchase of, cost of, value of, and payment + for, the good that is exported from its territory, + and + + (ii) the purchase of, cost of, value of, and payment + for, all materials, including indirect materials, + used in the production of the good that is + exported from its territory, and + + (iii) the production of the good in the form in + which the good is exported from its + territory; and + + (b) an importer claiming preferential tariff treatment for + a good imported into the Party's territory shall + maintain in that territory, for a period of five years + from the date of importation of the good or for such + longer period as the Party may specify, a copy of the + Certificate and all other required documentation + relating to the importation of the good. + + +Article 506: Origin Verifications + +1. For purposes of determining whether a good imported into its +territory from the territory of another Party qualifies as an +originating good, a Party may, through its customs +administration, conduct a verification solely by means of: + + (a) written questionnaires to an exporter or a producer in + the territory of another Party; + + (b) visits to the premises of an exporter or a producer in + the territory of another Party to review the records + and observe the facilities used in the production of + the good; or + + (c) such other procedure as the Parties may agree. + +2. Prior to conducting a verification visit pursuant to +paragraph (1)(b), a Party shall, through its customs +administration: + + (a) deliver a written notification of its intention to + conduct such visit; + + (i) to the exporter or producer whose premises are to + be visited, + + (ii) to the customs administration of the Party in + whose territory the visit is to occur, and + + (iii) to, if requested by the Party in whose + territory the visit is to occur, the embassy + of such Party in the territory of the Party + proposing to conduct the visit; and + + (b) obtain the written consent of the exporter or producer + whose premises are to be visited. + +3. The notification referred to in paragraph 2 shall include: + + (a) the identity of the customs administration issuing the + notification; + + (b) the name of the exporter or producer whose premises are + to be visited; + + (c) the date and place of the proposed verification visit; + + (d) the object and scope of the proposed verification + visit, including specific reference to the good subject + to the verification; + + (e) the names and titles of the officials performing the + verification visit; and + + (f) the legal authority for the verification visit. + +4. Where an exporter or a producer has not given its written +consent to a proposed verification visit within 30 days of +receipt of notification pursuant to paragraph 2, the notifying +Party may deny preferential tariff treatment to the good that +would have been the subject of the visit. + +5. Each Party shall provide that, where its customs +administration receives notification pursuant to paragraph 2, it +may, within 15 days from the date of receipt of such +notification, postpone the proposed verification visit for a +period not exceeding 60 days from the date of such receipt, or +for such longer period as the Parties may otherwise agree. + +6. A Party shall not deny preferential tariff treatment to a +good based solely on the postponement of a verification visit +pursuant to paragraph 5. + +7. Each Party shall permit an exporter or a producer whose good +is the subject of a verification visit by another Party to +designate two observers to be present during such visit, provided +that: + + (a) the observers do not participate in a manner other than + as observers; and + + (b) the failure of such exporter or producer to designate + observers shall not result in the postponement of the + visit. + +8. Each Party shall, through its customs administration, +conduct a verification of a regional value-content requirement in +accordance with the Generally Accepted Accounting Principles +applied in the territory of the Party from which the good was +exported. + +9. The Party conducting a verification shall provide the +exporter or producer whose good is subject to the verification +with a written determination of whether the good qualifies as an +originating good, including findings of fact and the legal basis +for the determination. + +10. Where verifications by a Party indicate a pattern of conduct +by an exporter or a producer of false or unsupported +representations that a good imported into its territory qualifies +as an originating good, such Party may withhold preferential +tariff treatment to identical goods exported or produced by such +person until that person establishes compliance with the +provisions of Chapter Four (Rules of Origin). + +11. Each Party shall provide that where it determines that a +certain good imported into its territory does not qualify as an +originating good based on a tariff classification or a customs +value applied by the Party to one or more materials used in the +production of the good, which differs from the tariff +classification or customs value applied to such materials by the +Party from whose territory the good was exported, the Party's +determination shall not become effective until it notifies in +writing both the importer of the good and the person that +completed and signed the Certificate of Origin for the good of +its determination. + +12. A Party shall not apply a determination made under paragraph +11 to an importation made before the effective date of the +determination, provided that: + + (a) the customs administration of the Party from whose + territory the good was exported has issued an advance + ruling on the tariff classification or on the customs + value of such materials, or has given consistent + treatment to the entry of such materials under the + tariff classification or customs value at issue, on + which a person is entitled to rely; and + + (b) the advance ruling or consistent treatment was given + prior to notification of the determination. + +13. Where a Party denies preferential tariff treatment to a good +pursuant to a determination made under paragraph 11, it shall +postpone the effective date of the denial for a period not +exceeding 90 days, provided that the importer of the good, or the +person who completed and signed the Certificate of Origin for the +good, demonstrates that it has relied in good faith to its +detriment on the tariff classification or customs value applied +to such materials by the customs administration of the Party from +whose territory the good was exported. + + +Article 507: Confidentiality + +1. Each Party shall maintain, in accordance with its laws and +regulations, the confidentiality of confidential business +information collected pursuant to this Chapter and shall protect +that business information from disclosure that could prejudice +the competitive position of the persons providing the +information. + +2. The confidential business information collected pursuant to +this Chapter may only be disclosed to those authorities +responsible for the administration and enforcement of +determinations of origin, and of customs and revenue matters. + + +Article 508: Penalties + +1. Each Party shall maintain measures imposing criminal, civil +or administrative penalties for violations of its laws and +regulations relating to this Chapter. + +2. Nothing in Articles 502(1)(d) and (f), 504(e) and 506(6) +shall be construed to prevent a Party from applying such measures +as the circumstances may warrant. + + + Subchapter C - Advance Rulings + + +Articles 509: Advance Rulings + +1. Each Party shall, through its customs administration, +provide for the expeditious issuance of written advance rulings, +prior to the importation of a good into its territory, to an +importer in its territory or an exporter or a producer in the +territory of another Party, on the basis of the facts and +circumstances presented by such importer, exporter or producer of +the good, concerning: + + (a) whether materials imported from the territory of a non- + Party undergo, as a result of production in the + territory of one or more of the Parties, the applicable + change in tariff classification under Chapter Four + (Rules of Origin) to qualify as an originating good; + + (b) whether a good satisfies a regional value-content + requirement under either the transaction value method + or the net cost method set out in Chapter Four; + + (c) the appropriate basis or method for customs value to be + applied by an exporter or a producer in the territory + of another Party, in accordance with the principles of + the Customs Valuation Code, in calculating the + transaction value of a good, or the value of materials + used in the production of a good, for which an advance + ruling is requested, for the purpose of determining + whether the good satisfies a regional value-content + requirement under Chapter Four; + + (d) the appropriate basis or method for reasonably + allocating costs, in accordance with the allocation + methods set out in the Uniform Regulations, for + calculating the net cost of a good, or the value of an + intermediate material, for which an advance ruling is + requested, for the purposes of determining whether the + good satisfies a regional value-content requirement + under Chapter Four; + + (e) whether a good that re-enters its territory after the + good has been exported from its territory to the + territory of another Party for repair or alteration + qualifies for duty-free treatment in accordance with + Article 307 (Goods Re-entered After Repair or + Alteration); + + (f) whether the proposed or actual marking of a good + satisfies country of origin marking requirements under + Article 312 (Country of Origin Marking); or + + (g) whether a good to be imported qualifies as a good of a + Party under Annexes 300-B or 302.2. + +2. Each Party shall provide that an advance ruling issued +pursuant to paragraph 1 shall be based on: + + (a) for the purpose of determining the origin of a good, + Chapter Four (Rules of Origin), the principles of the + Customs Valuation Code and the Uniform Regulations; + + (b) for the purpose of determining country of origin + marking, Article 312 (Country of Origin Marking); and + + (c) for the purpose of determining whether a good qualifies + as a good of a Party, Annex 302.2. + +3. Each Party shall adopt or maintain procedures for the +issuance of advance rulings, including a detailed description of +the information reasonably required to process an application. + +4. Each Party shall provide that its customs administration: + + (a) may, at any time during the course of an evaluation of + an application for an advance ruling, request + supplemental information from the person requesting the + ruling; + + (b) after it has obtained all necessary information from + the person requesting an advance ruling, shall issue + the ruling in accordance with the time periods + specified in the Uniform Regulations; and + + (c) where the advance ruling is unfavorable to the person + requesting it, shall provide that person with a full + explanation of the reasons for the ruling. + +5. Subject to paragraph 7, each Party shall apply an advance +ruling to importations into its territory of the good for which +the ruling was requested, commencing on the date of its issuance +or such later date as may be specified therein. + +6. Each Party shall provide to any person requesting an advance +ruling the same treatment, including the same interpretation and +application of the provisions of Chapter Four (Rules of Origin) +regarding a determination of origin of a good, as it provided to +any other person to whom it issued an advance ruling, provided +that the facts and circumstances are identical in all material +respects. + +7. The issuing Party may modify or revoke an advance ruling: + + (a) if the ruling is based on an error + + (i) of fact, + + (ii) in the tariff classification of a good or the + materials subject to the ruling, + + (iii) in the application of a regional value- + content requirement under Chapter Four (Rules + of Origin), or + + (iv) in the application of the rules for determining + whether a good qualifies as a good of a Party + under Annexes 300-B or 302.2; + + (b) if the ruling is not in accordance with an + interpretation agreed by the Parties regarding Chapter + Three (National Treatment and Market Access for Goods) + and Chapter Four (Rules of Origin); + + (c) if there is a change in the material facts or + circumstances on which the ruling is based; + + (d) to conform with an amendment of Chapter Three, Chapter + Four, Marking Rules or Uniform Regulations; or + + (e) to conform with a judicial decision or a change in its + domestic law. + +8. Each Party shall provide that any modification or revocation +of an advance ruling shall be effective on the date on which the +modification or revocation is issued, or on such later date as +may be specified therein, and shall not be applied to +importations of a good that have occurred prior to that date, +unless the person to whom the advance ruling was issued has not +acted in accordance with its terms and conditions. + +9. Notwithstanding paragraph 8, the issuing Party shall +postpone the effective date of such modification or revocation +for a period not exceeding 90 days where the person to whom the +advance ruling was issued has in good faith relied to its +detriment on that ruling. + +10. Each Party shall provide that where its customs +administration examines the regional value-content of a good for +which it has issued an advance ruling with respect to an approved +basis or method of customs value under Article 509(1)(c), or with +respect to an approved basis or method for reasonably allocating +costs under Article 509(1)(d), or with respect to whether a good +qualifies for duty-free treatment under Article 509(1)(e), it may +evaluate whether: + + (a) the exporter or producer has complied with the terms + and conditions of the advance ruling; + + (b) the exporter's or producer's operations are consistent + with the material facts and circumstances upon which + the advance ruling is based; and + + (c) the supporting data and computations used in applying + the basis or method of customs valuation were correct + in all material respects. + +11. Each Party shall provide that where its customs +administration determines that any requirement in paragraph 10 +has not been satisfied, it may modify or revoke the advance +ruling as the circumstances may warrant. + +12. Each Party shall provide that, where a person can +demonstrate that it used reasonable care and acted in good faith +in presenting the facts and circumstances on which an advance +ruling was based, and where the customs administration of a Party +determines that the ruling was based on incorrect information, +the person to whom such advance ruling was issued shall not be +subject to penalties. + +13. Where a Party issues an advance ruling to a person that has +misrepresented or omitted material facts or circumstances upon +which the ruling is based or has failed to act in accordance with +the terms and conditions of such ruling, it may apply such +measures as the circumstances may warrant. + + + Subchapter D - Review And Appeal of Origin Determinations and +Advance Rulings + + +Article 510: Review and Appeal + +1. Each Party shall grant substantially the same rights of +review and appeal of determinations of origins and advance +rulings by its customs administration as it provides to importers +in its territory to any person: + + (a) who completes and signs a Certificate of Origin for a + good that has been subject to a determination of + origin; + + (b) whose good has been subject to a country of origin + marking determination pursuant to Article 312 (Country + of Origin Marking); or + + (c) who has received an advance ruling pursuant to Article + 509(1). + +2. Further to Articles 1804 (Administrative Proceedings) and +1805 (Review and Appeal), each Party shall provide that the +rights of review and appeal referred to in paragraph 1 shall +include access to: + + (a) at least one level of administrative review, + independent of the official or office responsible for + the determination under review; and + + (b) in accordance with its domestic law, judicial or quasi- + judicial review of the determination or decision taken + at the final level of administrative review. + + + Subchapter E - Uniform Regulations + + +Article 511: Uniform Regulations + +1. Upon the date of entry into force of this Agreement, the +Parties shall establish, and implement through their respective +domestic laws or regulations, Uniform Regulations regarding the +interpretation, application and administration of the provisions +of Chapter Four (Rules of Origin). + +2. Each Party shall implement any modification of or addition +to the Uniform Regulations no later than 180 days after the +Parties agree on such modification or addition, or such other +period as the Parties may agree. + + + Subchapter F - Cooperation + + +Article 512: Cooperation + +1. Each Party shall notify the other Parties of the following +determinations, measures and rulings, including to the greatest +extent practicable those that are prospective in application: + + (a) a determination of origin issued as the result of a + verification conducted pursuant to Article 506(1); + + (b) a determination of origin that such Party is aware is + contrary to: + + (i) a ruling issued by the customs administration of + another Party with respect to the tariff + classification or customs value of a good, or of + materials used in the production of a good, or the + reasonable allocation of costs where calculating + the net cost of a good, that is the subject of a + determination of origin, or + + (ii) consistent treatment given by the customs + administration of another Party with respect to + the tariff classification or customs value of a + good, or of materials used in the production of a + good, or the reasonable allocation of costs where + calculating the net cost of a good, that is the + subject of a determination of origin; + + (c) a measure establishing or significantly modifying an + administrative policy that is likely to affect future + determinations of origin, country of origin marking + requirements or determinations as to whether a good + qualifies as a good of a Party under the Marking Rules; + and + + (d) an advance ruling, or a ruling modifying or revoking an + advance ruling pursuant to Article 509(1). + +2. The Parties shall cooperate: + + (a) in the enforcement of their respective customs-related + laws or regulations implementing this Agreement, and + under any customs mutual assistance agreements or other + customs-related agreements to which they are party; + + (b) for purposes of the detection and prevention of + unlawful transshipments of textile and apparel goods of + a non-Party in the enforcement of prohibitions or + quantitative restrictions, including the verification + by a Party, in accordance with the procedures set out + in this Chapter, of the capacity for production of + goods by an exporter or a producer in the territory of + another Party, provided that the customs administration + of the Party proposing to conduct such verification, + prior to conducting the verification + + (i) obtains the consent of the Party in whose + territory the verification is to occur, and + + (ii) provides notification to the exporter or producer + whose premises are to be visited, + + except that procedures for notifying the exporter or +producer whose premises are to be visited shall be in +accordance with other procedures as the Parties may +agree; + + (c) to the extent practicable, for purposes of facilitating + the flow of trade between their territories, in + customs-related matters, such as the collection and + exchange of statistics regarding the importation and + exportation of goods, the harmonization of + documentation used in trade, the standardization of + data elements, the acceptance of an international data + syntax and the exchange of information; and + + (d) to the extent practicable, in the storage and + transmission of customs-related documentation. + + +Article 513: Working Group and Customs Subgroup + +1. The Parties hereby establish a Working Group on Rules of +Origin, comprising representatives of each Party, to ensure: + + (a) the effective implementation and administration of + Articles 303, 308 and 312, Chapter Four (Rules of + Origin), this Chapter, the Marking Rules and the + Uniform Regulations; and + + (b) the effective administration of the customs-related + aspects of Chapter Three (National Treatment and Market + Access). + +2. The Working Group shall meet at least four times a year and +at the request of any Party. + +3. The Working Group shall: + + (a) monitor the implementation and administration by the + customs administrations of the Parties of Articles 303, + 308 and 312, Chapter Four, this Chapter, the Marking + Rules and the Uniform Regulations to ensure their + uniform interpretation; + + (b) endeavor to agree, upon the request of any Party, on + any proposed modification of or addition to Articles + 303, 308 and 312, Chapter Four, this Chapter, the + Marking Rules and the Uniform Regulations; + + (c) notify the Commission of any agreed modification of or + addition to the Uniform Regulations; + + (d) propose to the Commission any modification of or + addition to Articles 303, 308 and 312, Chapter Three, + Chapter Four, this Chapter, the Marking Rules, the + Uniform Regulations or other provision of this + Agreement as required to conform with any change to the + Harmonized System; and + + (e) consider any other matter referred to it by a Party, or + by the Customs Subgroup established under paragraph 6. + +4. Each Party shall, to the greatest extent practicable, take +all necessary measures to implement any modification of or +addition to this Agreement within 180 days after the Commission +agrees on any such modification or addition. + +5. If the Working Group fails to resolve a matter referred to +it pursuant to paragraph 2(f) within 30 days of such referral, +any Party may request a meeting of the Commission pursuant to +Article 2007. + +6. The Working Group shall establish, and monitor the work of, +a Customs Subgroup comprising representatives of each Party. The +Subgroup shall meet at least four times a year and on the request +of any Party and shall: + + (a) endeavor to agree on + + (i) the uniform interpretation, application and + administration of the provisions of Articles 303, + 308 and 312, Chapter Four, this Chapter, the + Marking Rules and the Uniform Regulations, + + (ii) tariff classification and valuation matters + relating to determinations of origin, + + (iii) equivalent procedures and criteria for the + request, approval, modification, revocation + and implementation of advance rulings, + + (iv) revisions to the Certificate of Origin, + + (v) any other matter referred to it by a Party, the + Working Group or the Committee on Trade in Goods + established under Chapter Three, and + + (vi) any other customs-related matter arising under + this Agreement; + + (b) consider + + (i) the harmonization of customs-related automation + requirements and documentation, and + + (ii) proposed customs-related administrative and + operational changes that could affect the flow of + trade between the Parties' territories; + + (c) report periodically to the Working Group and notify it + of any agreement reached under this paragraph; and + + (d) refer to the Working Group any matter on which it has + been unable to reach agreement within 60 days after the + matter was referred to it pursuant to subparagraph + (a)(v). + +7. Nothing in this Chapter shall be construed to prevent a +Party from issuing a determination of origin or an advance ruling +related to a matter under consideration by the Customs Subgroup +or the Working Group or from taking such other action as it +considers necessary pending a resolution of the matter pursuant +to this Agreement. + + +Article 514: Definitions + +For purposes of this Chapter: + +advance ruling means a written interpretation issued by the +customs administration of a Party on the application of a measure +to a given set of facts and circumstances regarding a prospective +importation of a good into its territory; + +commercial importation means the importation of a good into the +territory of any Party for the purpose of sale, or any +commercial, industrial, or other like use; + +customs administration means the competent authority that is +responsible under the domestic law of a Party for the +administration of customs laws and regulations; + +customs value means "customs value" as defined in Article 415; + +determination of origin means a determination as to whether a +good qualifies as an originating good in accordance with Chapter +Four (Rules of Origin); + +exporter in the territory of a Party includes an exporter located +in the territory of a Party or an exporter required under this +Chapter to maintain records in the territory of that Party +regarding exportations of a good; + +identical goods means goods that are the same in all respects, +including physical characteristics, quality and reputation, +irrespective of minor differences in appearance that are not +relevant to the determination of origin of such goods under +Chapter Four (Rules of Origin); + +importer in the territory of a Party includes an importer located +in the territory of a Party or an importer required under this +Chapter to maintain records in the territory of that Party +regarding importations of a good; + +preferential tariff treatment means the duty rate applicable to +an originating good; and + +producer includes a person that grows, mines, harvests, +manufactures, processes, or assembles a good, or any combination +thereof. + +NAFTA Chapter Six Energy and Basic Petrochemicals + + + +Article 601: Principles + +1. The Parties confirm their full respect for their +Constitutions. + +2. The Parties recognize that it is desirable to strengthen the +important role that trade in energy and basic petrochemical goods +play in the North American region and to enhance this role +through sustained and gradual liberalization. + +3. The Parties recognize the importance of having viable and +internationally competitive energy and petrochemical sectors to +further their individual national interests. + + +Article 602: Scope and Coverage + +1. This Chapter applies to measures relating to energy and +basic petrochemical goods originating in the territories of the +Parties and to measures relating to investment and services +associated with such energy and basic petrochemical goods, as set +forth in this Chapter. + +2. For purposes of this Chapter, energy and basic petrochemical +goods refer to those goods classified under the Harmonized System +as: + + (a) Chapter 27 (excluding: subheadings 2707.10, 2707.20, + 2707.30, 2707.40, 2707.60, 2707.91, 2707.99 (except + solvent naphtha, rubber extender oils and carbon black + feedstocks), and in subheading 2710.00 (only normal + paraffin mixtures in the range of C9 to C15), and in + heading 2711 (only ethylene, propylene, butylene and + butadiene, in purities over 50 percent)); + + (b) subheading 2612.10; + + (c) subheadings 2844.10 through 2844.50 (only with respect + to uranium compounds classified under those + subheadings); + + (d) subheading 2845.10; + + (e) subheading: 2901.10 (ethane, butanes, pentanes, + hexanes, and heptanes only); + +3. Except as otherwise specified in Annex 602.3, energy and +petrochemical goods and activities shall be governed by the +provisions of this Agreement. + + +Article 603: Import and Export Restrictions + +1. Subject to the further rights and obligations of this +Agreement, the Parties incorporate the provisions of the General +Agreement on Tariffs and Trade (GATT), with respect to +prohibitions or restrictions on trade in energy and basic +petrochemical goods. The Parties agree that this language does +not incorporate their respective protocols of provisional +application to the GATT. + +2. The Parties understand that the provisions of the GATT +incorporated in paragraph 1 prohibit, in any circumstances in +which any other form of quantitative restriction is prohibited, +minimum or maximum export-price requirements and, except as +permitted in enforcement of countervailing and antidumping orders +and undertakings, minimum or maximum import-price requirements. + +3. In circumstances where a Party imposes a restriction on +importation from or exportation to a non-Party of an energy or +basic petrochemical good, nothing in this Agreement shall be +construed to prevent the Party from: + + (a) limiting or prohibiting the importation from the + territory of any Party of such energy or basic + petrochemical good of the non-Party; or + + (b) requiring as a condition of export of such energy or + basic petrochemical good of the Party to the territory + of any other Party that the good be consumed within the + territory of the other Party. + +4. In the event that a Party imposes a restriction on imports +of an energy or basic petrochemical good from non-Party +countries, the Parties, upon request of any Party, shall consult +with a view to avoiding undue interference with or distortion of +pricing, marketing and distribution arrangements in another +Party. + +5. Parties may administer a system of import and export +licensing for energy and basic petrochemical goods provided that +such system is operated in a manner consistent with the +provisions of this Agreement, including paragraph 1 and Article +1502 (Monopolies and State Enterprises). + +6. In addition, the Parties recognize the provisions of +Annex 603.6. + + +Article 604: Export Taxes + + No Party shall maintain or introduce any tax, duty, or +charge on the export of any energy or basic petrochemical good to +the territory of any other Party, unless such tax, duty, or +charge is also maintained or introduced on such energy or basic +petrochemical good when destined for domestic consumption. + + +Article 605: Other Export Measures + + A Party may maintain or introduce a restriction otherwise +justified under the provisions of Articles XI:2(a) and XX(g), (i) +and (j) of the GATT with respect to the export of an energy or +basic petrochemical good to the territory of another Party, only +if: + + (a) the restriction does not reduce the proportion of the + total export shipments of a specific energy or basic + petrochemical good made available to such other Party + relative to the total supply of that good of the Party + maintaining the restriction as compared to the + proportion prevailing in the most recent 36-month + period for which data are available prior to the + imposition of the measure, or in such other + representative period on which the Parties involved may + agree; + + (b) the Party does not impose a higher price for exports of + an energy or basic petrochemical good to such other + Party than the price charged for such energy good when + consumed domestically, by means of any measure such as + licenses, fees, taxation and minimum price + requirements. The foregoing provision does not apply + to a higher price which may result from a measure taken + pursuant to subparagraph (a) that only restricts the + volume of exports; and + + (c) the restriction does not require the disruption of + normal channels of supply to such other Party or normal + proportions among specific energy or basic + petrochemical goods supplied to the other Party such + as, for example, between crude oil and refined products + and among different categories of crude oil and of + refined products. + + +Article 606: Energy Regulatory Measures + +1. The Parties recognize that energy regulatory measures are +subject to the disciplines of: + + (a) national treatment, as provided in Article 301; + + (b) import and export restrictions, as provided in Article + 603; or + + (c) export taxes, as provided in Article 604. + +2. Each Party shall seek to ensure that in the application of +any energy regulatory measure, energy regulatory bodies within +its territory avoid disruption of contractual relationships to +the maximum extent practicable, and provide for orderly and +equitable implementation appropriate to such measures. + + +Article 607: National Security Measures + +1. No Party shall maintain or introduce a measure restricting +imports of an energy or basic petrochemical good from, or exports +of an energy or basic petrochemical good to, another Party under +Article XXI of the GATT or under Article 2102 (National +Security), except to the extent necessary to: + + (a) supply a military establishment of a Party or enable + fulfillment of a critical defense contract of a Party; + + (b) respond to a situation of armed conflict involving the + Party taking the measure; + + (c) implement national policies or international agreements + relating to the non-proliferation of nuclear weapons or + other nuclear explosive devices; or + + (d) respond to direct threats of disruption in the supply + of nuclear materials for defense purposes. + +2. The Parties recognize the provisions of Annex 607.2. + + +Article 608: Miscellaneous Provisions + +1. Canada and the United States shall act in accordance with +the terms of Annexes 902.5 and 905.2 of the Canada - United +States Free Trade Agreement. + +2. The Parties agree to allow existing or future incentives for +oil and gas exploration, development and related activities in +order to maintain the reserve base for these energy resources. + +3. Canada and the United States intend no inconsistency between +the provisions of this Chapter and the Agreement on an +International Energy Program (IEP). In the event of any +unavoidable inconsistency between the IEP and this Chapter, the +provisions of the IEP shall prevail to the extent of that +inconsistency as between Canada and the United States. + + +Article 609: Definitions + +For purposes of this Chapter: + +consumed means transformed so as to qualify under the rules of +origin set out in Chapter Four (Rules of Origin), or actually +consumed; + +restriction means any limitation, whether made effective through +quotas, licenses, permits, minimum or maximum price requirements +or any other means; + +energy regulatory measure means any measure by federal or sub- +federal entities that directly affects the transportation, +transmission or distribution, purchase or sale, of an energy or +basic petrochemical good; + +first hand sale refers to the first commercial transaction +affecting the good in question; + +Independent Power Producer (IPP) means a facility that is used +for the generation of electric energy exclusively for sale to an +electric utility for further resale; + +investment means investment as defined in Chapter Eleven +(Investment); + +total supply means shipments to domestic users and foreign users +from: + + (a) domestic production; + + (b) domestic inventory; and + + (c) other imports, as appropriate; and + +total export shipments means the total shipments from total +supply to users located in the territory of the other Party. + +============================================================================= + + ANNEX 602.3 + + +1. The Mexican State reserves to itself the following strategic +activities and investment in such activities: + + (a) exploration and exploitation of crude oil and natural + gas; refining or processing of crude oil and natural + gas; and production of artificial gas, basic + petrochemicals and their feedstocks; and pipelines; and + + (b) foreign trade; transportation, storage and + distribution, up to and including first hand sales of + the following goods: crude oil; natural and artificial + gas; goods covered by this Chapter obtained from the + refining or processing of crude oil and natural gas; + and basic petrochemicals. + +2. In the event of an inconsistency between Annex 602.3, +paragraphs 1, 5(a) and 6, and another provision of this +Agreement, the provisions of Annex 602.3, paragraphs 1, 5(a) and +6, shall prevail to the extent of that inconsistency. + +3. Natural Gas and Petrochemical Feedstock Trade + + Where end-users and suppliers of natural gas or basic +petrochemical goods consider that cross-border trade in such +goods may be in their interests, the Parties agree that such +end-users and suppliers, and state enterprises of the Parties as +may be required under their domestic law, shall have the right to +negotiate supply contracts. + + The modalities of implementing such arrangements are left to +the end-users, suppliers and state enterprises of the Parties as +may be required under their domestic law and may take the form of +individual contracts between the state enterprise and each of the +other entities. Such contracts may be subject to regulatory +approval. + +4. Performance Contracts + + The Parties shall allow state enterprises to negotiate +performance clauses in their service contracts. + +5. Electricity + + (a) In Mexico the supply of electricity as a public service + is a strategic area reserved to the State. Except as + provided in subparagraph (b) below the activities + encompassed by the supply of electricity as a public + service in Mexico include the generation, transmission, + transformation, distribution and sale of electricity. + + (b) The opportunities for private investment in Mexico in + electricity generating facilities include: + + (i) Production for Own Use + + Enterprises of the other Parties may acquire, +establish, and/or operate an electrical generating +facility to meet its own supply needs. Electricity +generated in excess of the enterprise's own supply +requirements must be sold to CFE and CFE shall +purchase such electricity under terms and +conditions agreed to by CFE and the enterprise. + + (ii) Co-generation + + Enterprises of the other Parties may acquire, +establish, and/or operate co-generation facilities +which generate electricity using heat, steam or +other energy sources associated with an industrial +process. Owners of the industrial facility need +not be the owners of the co-generating facility. +Electricity generated in excess of the +enterprise's own supply requirements must be sold +to CFE and CFE shall purchase such electricity +under terms and conditions agreed to by CFE and +the enterprise. + + (iii) Independent Power Production + + Enterprises of the other Parties may acquire, +establish, and/or operate electricity generating +facilities for independent power production (IPP) +in Mexico. Electricity generated by IPP facilities +for sale in Mexico shall be sold to CFE and CFE +shall purchase such electricity under terms and +conditions agreed to by CFE and the enterprise. +Where an IPP located in Mexico and an electric +utility of another Party consider that cross- +border trade in electricity may be in their +interest, the Parties agree that these entities +and CFE shall have the right to negotiate the +terms and conditions of power purchase and power +sale contracts. The modalities of implementing +such supply arrangements is left to the end-users, +suppliers and CFE and may take the form of +individual contracts between the state enterprise +and each of the other entities. Such contracts +shall be subject to regulatory approval. + +6. Nuclear + + The generation of nuclear energy; the exploration, +exploitation and processing of radioactive minerals; the nuclear +fuel cycle; the use and reprocessing of nuclear fuels and the +regulation of their applications for other purposes; the +transportation and storage of nuclear wastes; and the production +of heavy water, are reserved to the Mexican state. + +7. Pursuant to Article 1101(3), private investment is not +permitted in reserved activities listed above in paragraphs 1, +5(a) and 6. Chapter Twelve (Cross Border Trade in Services) +shall only apply to activities involving the provision of +services covered in paragraphs 1, 5(a) and 6 when Mexico permits +a contract to be granted in respect of such activities and only +to the extent of that contract. + +============================================================================= + + ANNEX 603.6 + + + +United Mexican States: + +1. For only those goods listed below, Mexico may restrict the +granting of import and export licenses for the sole purpose of +reserving foreign trade in these goods to itself. + +2707.50 Other aromatic hydrocarbon mixtures of which 65% or + more by volume (including losses) distills at 250 C by + the ASTM D 86 method. + +2707.99 Rubber extender oils, solvent naphtha and carbon black + feedstocks only. + +2709 Petroleum oils and oils obtained from bituminous +minerals, crude. + +2710 aviation gasoline; gasoline and motor fuel blending +stocks (except aviation gasoline) and reformates when +used as motor fuel blending stocks; kerosene; gas oil +and diesel oil; petroleum ether; fuel oil; paraffinic +oils other than for lubricating purposes; pentanes; +carbon black feedstocks; hexanes; heptanes and +naphthas. + +2711 Petroleum gases and other gaseous hydrocarbons other +than: ethylene, propylene, butylene and butadiene, in +purities over 50 percent. + +2712.90 only paraffin wax containing by weight more than 0.75% + of oil, in bulk (Mexico classifies these goods under HS + 2712.90.02) and only when imported to be used for + further refining. + +2713.11 Petroleum coke not calcined. + +2713.20 Petroleum bitumen (except when used for road surfacing + purposes under HS 2713.20.01). + +2713.90 Other residues of petroleum oils obtained from + bituminous materials. + +2714 Bitumen and asphalt, natural; bituminous or oil shale +and tar sands, asphaltites and asphaltic rocks (except +when used for road surfacing purposes under HS +2714.90.01). + +2901.10 Ethane, butanes, pentanes, hexanes, and heptanes only. + +2. Notwithstanding any other provision of this Chapter, the +provisions of Article 605 shall not apply as between the other +Parties and Mexico. + + +============================================================================= + + ANNEX 607.2 + + + +1. The provisions of Article 607(1) shall impose no obligations +and confer no rights on Mexico. + +2. Nothwithstanding Article 607(1), the provisions of Article +2102 (National Security) shall apply as between the other Parties +and Mexico. + +NAFTA Chapter Seven Agriculture + + + +Article 701: Scope + +1. This Chapter applies to trade in agricultural goods and to +sanitary and phytosanitary measures. + + + Subchapter A - Market access + + +Article 702: Scope + +1. Further to Article 102 (Objectives), the provisions of this +Subchapter address import barriers, domestic support, export +subsidies, and grading and marketing standards and measures that +affect trade of agricultural goods between the Parties. + +2. To the extent of any inconsistency in this Agreement with +the provisions of this Subchapter, this Subchapter shall prevail. + + +Article 703: International obligations + +1. Each Party shall comply with Annex 703.1 with respect to its +agricultural trade under other international agreements, to the +extent set out in that Annex. + +2. When a Party desires to adopt a measure pursuant to any +international commodity agreement with respect to an agricultural +good, it shall consult with the other Parties in order to avoid +nullification or impairment of a concession granted by such Party +in its Schedule set out in Annex 302.2. + +3. Each Party shall comply with Annex 703.3 with respect to +actions taken pursuant to any international coffee agreement. + + +Article 704: Market Access + + General Provisions + +1. In order to facilitate trade in agricultural goods, the +Parties shall work together to improve access to their respective +markets through the reduction or elimination of import barriers. + + Tariffs and Quantitative Restrictions + +2. Each Party shall comply with Annex 704.2 with respect to +tariffs and quantitative restrictions, including GATT market +access requirements and trade in sugar. + + Agricultural Grading and Marketing Standards + +3. Each Party shall comply with Annex 704.3 with respect to +agricultural grading and marketing standards. + + Special Safeguard Provisions + +4. Each Party may, during the applicable period of transition, +adopt or maintain special safeguards in the form of tariff quotas +on specific agricultural goods, as specified in its Schedule set +out in Annex 302.2, and further described in Annex 704.4. + +5. A Party may not apply, at the same time, measures under +paragraph 4 and Chapter 8 (Emergency Action) with respect to the +same agricultural good. + + +Article 705: Domestic Support + + The Parties recognize that domestic support measures can be +of crucial importance to their agricultural sectors but may also +have trade distorting effects and effects on production. The +Parties further recognize that domestic support commitments may +result from the agriculture negotiations in the Uruguay Round of +multilateral trade negotiations under the GATT. Accordingly, to +the extent a Party decides to support its agricultural producers, +such Party should endeavor to move toward domestic support +policies that: + + (a) have minimal or no trade distortion effects or effects + on production; or + + (b) are exempt from domestic support reduction commitments + under the GATT. + +The Parties further recognize that the domestic support +mechanisms of each Party, including those that are subject to +reduction commitments, may be changed at the Party's discretion +so long as such change is in compliance with its GATT rights and +obligations. + + +Article 706: Export Subsidies + +1. The Parties recognize that export subsidies may have serious +prejudicial effects on importing and exporting Parties, and the +Parties share the objective of achieving the multilateral +elimination of export subsidies for agricultural goods. The +Parties shall cooperate in an effort to achieve an agreement in +the General Agreement on Tariffs and Trade which eliminates +export subsidies on agricultural goods. + +2. The Parties also recognize that export subsidies may cause +disruption in the market of an importing Party. Accordingly, the +Parties affirm that it is inappropriate for a Party to provide +export subsidies for the export of an agricultural good to the +territory of another Party when there are no other subsidized +imports of that good into that other Party. + +3. Except as provided in Annex 703.1, where an exporting Party +considers that a non-Party is exporting an agricultural good into +the territory of another Party with the benefit of export +subsidies, the exporting Party may request consultations with the +importing Party with a view toward agreeing on measures that the +importing Party could adopt to counter the effect of such +subsidized imports. If the importing Party adopts the +agreed-upon measures, the exporting Party shall refrain from +applying, or immediately cease to apply, any export subsidy to +exports of such good into the territory of the importing Party. + +4. Except as provided in Annex 703.1, a Party proposing to +introduce an export subsidy on exports of an agricultural good to +the territory of another Party shall notify such Party at least +three days in advance, and shall upon request consult with such +Party, within 72 hours of receipt of the request, with a view to +eliminating the subsidy or minimizing any adverse impact on the +importing Party's market for that good. Another Party may +request to join such consultations. + +5. Each Party shall take into account the interests of the +other Parties in the use of any export subsidy on an agricultural +good exported to a Party or non-Party, recognizing that such +subsidies may have prejudicial effects on the interests of the +other Parties. + +6. The Parties shall establish a Working Group on Agricultural +Subsidies which shall meet at least semi-annually, or at such +other times as the Parties may agree, to work toward elimination +of all export subsidies in connection with trade in agricultural +goods between the Parties. The functions of the Working Group on +Agricultural Subsidies shall include: + + (a) monitoring the volume and price of imports of + agricultural goods that have benefitted from export + subsidies into the territory of any Party; + + (b) providing a forum for the Parties to develop mutually + acceptable criteria and procedures for reaching + agreement on the limitation or elimination of the + provision of export subsidies in connection with + importation of agricultural goods into the territories + of the Parties; and + + (c) reporting annually to the Committee on Agricultural + Trade, established under Article 708, with respect to + implementation of this Article. + +7. Notwithstanding any other provision of this Article: + + (a) if the Parties agree to a particular export subsidy + measure on an agricultural good for export to the + territory of a Party, the exporting Party may adopt or + maintain such measure; and + + (b) each Party shall retain its rights to apply + countervailing duties to subsidized imports from any + source. + + +Article 707: Resolution of Private Commercial Disputes + Regarding Transactions in Agricultural Goods + + The advisory committee established pursuant to Article +2022(4) shall work toward a system for resolving private +commercial disputes that arise in connection with transactions in +agricultural goods. The system of each Party shall be designed +to achieve prompt and effective resolution of such disputes with +attention to special circumstances, including the perishability +of the goods involved. + + +Article 708: Committee on Agricultural Trade + +1. The Parties hereby establish a Committee on Agricultural +Trade, comprising representatives of each Party. + +2. The Committee's functions shall include: + + (a) monitoring and promoting cooperation on the + implementation and administration of this Subchapter; + + (b) providing a forum for the Parties to consult at least + semi-annually and at such other times as the Parties + may agree on issues related to this Subchapter; and + + (c) reporting annually to the Commission on the + implementation of this Subchapter. + + +Article 709: Definitions + +For purposes of this Subchapter: + +agricultural goods means: + + (i) HS Chapters 1 to 24 less fish and fish products, plus + + (ii) HS Code 29.05.43 (manitol) + HS Code 29.05.44 (sorbitol) + HS Heading 33.01 (essential + oils) + HS Headings 35.01 to 35.05 (albuminoidal + substances, modified + starches, glues) + HS Code 38.09.10 (finishing agents) + HS Code 38.23.60 (sorbitol n.e.p.) + HS Headings 41.01 to 41.03 (hides and skins) + HS Heading 43.01 (raw furskins) + HS Headings 50.01 to 50.03 (raw silk and silk waste) + HS Headings 51.01 to 51.03 (wool and animal hair) + HS Headings 52.01 to 52.03 (raw cotton, waste and cotton carded or + combed) + HS Heading 53.01 (raw flax) + HS Heading 53.02 (raw hemp); + +fish and fish products for purposes of the definition of +agricultural goods means fish or crustaceans, molluscs or other +aquatic invertebrates, marine mammals, and their products within +the following headings of the Harmonized System: + + HS Heading 05.07 (tortoise-shell, whalebone and + whalebone hair and those fish or + crustaceans, molluscs or other + aquatic invertebrates, marine mammals, and + their products within this heading) + + HS Heading 05.08 (all goods (coral and similar materials)) + HS Heading 05.09 (all goods (natural sponges of animal origin)) + HS Heading 05.11 (products of fish or crustaceans,molluscs or other + aquatic invertebrates; dead animals of Chapter 3) + HS Heading 15.04 (all goods (fats and oils and their fractions, of + fish or marine mammals)) + HS Heading 16.03 ("non-meat" extracts and juices) + HS Heading 16.04 (all goods (prepared or preserved fish)) + HS Heading 16.05 (all goods (prepared preserved crustaceans, + molluscs and other aquatic invertebrates)); + +net production surplus means the quantity by which a Party's +domestic production of sugar exceeds its total consumption of +sugar for a marketing year; + +net surplus producer means that a Party has been determined to +have a net production surplus in accordance with Schedule +704.2(I)(B)(3); + +plantation white sugar means crystalline sugar which has not been +refined and is intended for human consumption without further +processing or refining; + +raw value means the equivalent of a quantity of sugar in terms of +raw sugar testing 96 degrees by the polariscope, determined as +follows: + + (a) the raw value of plantation white sugar equals the + number of kilograms thereof multiplied by 1.03; + + (b) the raw value of liquid sugar and invert sugar equals + the number of kilograms of the total sugars thereof + multiplied by 1.07; and + + (c) the raw value of other imported sugar and syrup goods + equals the number of kilograms thereof multiplied by + the greater of 0.93, or 1.07 less 0.0175 for each + degree of polarization under 100 degrees (and fractions + of a degree in proportion); + +sugar means raw or refined sugar derived directly or indirectly +from sugar cane or sugar beets, including liquid refined sugar; +and + +sugar and syrup goods means "sugar and syrup goods" as defined in +Annex 709. + ANNEX 703.1 + + Incorporation of Trade Provisions + + +1. Articles 701.1, 701.2, 701.3, 701.5, 702, 704, 705, 706, +707, 708.1, 708.4 710 and 711 [subject to review] of the Canada - + U.S. Free Trade Agreement shall apply to trade in "agricultural +goods", as that term is defined in Article 711 of that Agreement, +between Canada and the United States, which Articles are hereby +incorporated into and made a part of this Agreement for such +purpose. + +2. For purposes of this incorporation, any reference to Chapter +18 of the Canada - U.S. Free Trade Agreement shall be deemed to +be a reference to Chapter 20 of this Agreement. + + ANNEX 703.3 + + International Coffee Agreement + + Neither Canada nor Mexico shall take actions pursuant to any +international coffee agreement and measures authorized thereunder +to restrict trade in coffee between them. + + ANNEX 704.2 + + Market Access + +Each Party shall comply with Sections I and II. + + + Section I + + Mexico and the United States + +1. This Section shall apply only between the United States and +Mexico. + +2. Each Party shall comply with Appendices A and B. + + + Appendix A + + Tariffs, Quantitative Restrictions and GATT Market Access + +1. The Parties recognize that, upon the date of entry into +force of the Agreement, each Party, in accordance with the rights +and obligations set forth in Chapter 3, will not adopt or +maintain measures regarding quantitative restrictions on the +importation of agricultural goods originating in each other's +territory, but may apply tariff quotas as set forth in its +Schedule set out in Annex 302.2. The Parties further recognize +that the over-quota tariff rate applied by a Party in connection +with such tariff quotas will be progressively eliminated in the +manner set forth in its Schedule set out in Annex 302.2. + +2. Each Party agrees to waive its rights under Article XI.2(c) +of the General Agreement on Tariffs and Trade with respect to any +measure taken in connection with the importation of agricultural +goods originating in the territory of the other. + +3. Except as provided in paragraph 4, to the extent a tariff +applied by a Party in accordance with a tariff quota as set forth +in its Schedule set out in Annex 302.2 at any time exceeds the +applicable bound rate of duty for that agricultural good as set +forth in its GATT Schedule of Tariff Concessions as of June 12, +1991, the other Party hereby waives its rights with respect to +the applicable bound rate of duty under GATT Article II, +notwithstanding the provisions of Article 103 of this Agreement. + +4. If the GATT Uruguay Round Agreement on Agriculture enters +into force with respect to a Party, pursuant to which that Party +has agreed to convert its quantitative restrictions into tariff +quotas, that Party shall ensure that the over-quota tariff rates +it applies to agricultural goods of the other Party are not +greater than the lower of (a) the applicable over-quota tariff +rates set out in its Schedule set out in Annex 302.2 or (b) the +applicable over-quota tariff rates set out in its GATT Schedule +of Tariff Concessions. + +5. Market access afforded by a Party in accordance with its +Schedule set out in Annex 302.2 and applied to imports of +agricultural goods of another Party shall count, as between the +Parties, toward the satisfaction of market access commitments +which have been agreed upon under its GATT Schedule of Tariff +Concessions or which may be undertaken by the importing Party as +a result of any GATT agreement entering into force as to that +Party during the applicable transition period under this +Agreement. + +6. Neither Party shall seek a voluntary restraint agreement +from the other Party with respect to the exportation of meat +originating in the territory of that other Party. + +7. Notwithstanding the provisions of Chapter 3 (Market Access), +goods of subheading 2008.11 of the Harmonized System (HS) that +originate in the territory of Mexico shall be subject upon +importation into the territory of the United States to the rate +of duty provided in the Schedule set out in Annex 302.2 for the +United States only if all agricultural goods within heading 12.02 +of the HS used in the production of such goods originate in the +territory of one or more of the Parties. + +8. A good provided for in item 1806.10.a1 or 2106.90.a1 that +is: + + (a) imported into the territory of the United States from + the territory of Mexico; or + + (b) imported into the territory of Mexico from the + territory of the United States, + +shall be eligible for the rate of duty provided in Annex 302.2 +only if all agricultural materials provided for in subheading +1701.99 used in the production of such good are originating +materials. + +9. The United States shall not adopt or maintain, with respect +to imports into its territory of agricultural goods originating +in the territory of Mexico, any fee applied pursuant to Section +22 of the Agricultural Adjustment Act of 1933, or any successor +statute. + +10. Agricultural goods entered into maquiladoras or foreign- +trade zones and re-exported, including subsequent to processing, +shall not count toward the fulfillment of market access +commitments under a Party's Schedule set out in Annex 302.2. + + + + Appendix B + + Trade in Sugar + + +1. The United States and Mexico recognize the importance of +liberalizing trade in sugar and syrup goods while avoiding +conditions of entry that may result in displacement of the +consumption of such goods originating in the territories of the +United States and Mexico by imports from non-Parties. +Accordingly, the United States and Mexico have agreed to the +following provisions to govern trade between them in sugar and +syrup goods. + +2. The over quota customs duty for imports into the territory +of the United States of sugar and syrup goods originating in the +territory of Mexico shall be reduced to zero during a period of +15 years after the date of entry into force of this Agreement as +follows: + + (a) from the first to the sixth year after the date of + entry into force of this Agreement, the customs duty + shall be reduced by a total of 15 percent in equal + annual stages; + + (b) from the seventh to the fifteenth year after the date + of entry into force of this Agreement, the customs duty + shall be removed entirely in equal annual stages; and + + (c) after the end of the sugar transition period, the duty + on all imports of sugar and syrup goods from Mexico + shall be zero. + +3. In addition to the customs duty reductions provided for +under paragraph 2, imports into the territory of the United +States of sugar and syrup goods originating in the territory of +Mexico shall be duty free for a quantity, on a marketing year +(October 1 - September 30) basis, to be determined as follows: + + (a) for each upcoming marketing year in which Mexico is not + projected to be a net surplus producer, the quantity + shall be the greater of 7,258 metric tons raw value or + the quota allocated by the United States for a non- + Party within the category designated "other specified + countries and areas" under paragraph (b)(i) of + additional U.S. note 3 to chapter 17 of the Harmonized + Tariff Schedule of the United States; + + (b) for each upcoming marketing year in which Mexico is + projected to be a net surplus producer of sugar, in + accordance with sub-paragraph (d), the quantity shall + be the greater of (i) the amount specified in sub- + section (a), or (ii) Mexico's projected net production + surplus, but not greater than a maximum quantity as + follows + + (i) for each of the first through sixth marketing + years after the date of entry into force of this + Agreement, 25,000 metric tons raw value, + + (ii) for the seventh marketing year after the date of + entry into force of this Agreement, 150,000 metric + tons raw value, and + + (iii) for each of the eighth through fifteenth + marketing years after the date of entry into + force of this Agreement, 110 percent of the + previous marketing year's maximum quantity; + + (c) in any year after the sixth year after the date of + entry into force of this Agreement, the quantity of + imports of sugar and syrup goods originating in the + territory of Mexico shall not be subject to the + limitations set out in subparagraph (b) if + + (i) Mexico has been a net surplus producer for any two + consecutive marketing years, or + + (ii) Mexico has been a net surplus producer during the + previous marketing year, and Mexico is projected + to be a net surplus producer of sugar, in + accordance with subparagraph (d), in the upcoming + marketing year, unless Mexico ultimately is not a + net surplus producer in that marketing year; and + + (d) prior to the beginning of each marketing year, Mexico + shall make projections of its domestic production and + total consumption of sugar. Mexico and the United + States shall consult by July 1 of each year to jointly + determine whether Mexico is projected to be a net + surplus producer in the upcoming marketing year, in + accordance with the methodology and sources of + information set out in Schedule 704.2(I)(B)(3). + +4. Mexico shall implement a tariff quota to be applied on a +Most Favored Nation basis for sugar and syrup goods with customs +duties equal to those of the United States no later than six +years after the date of entry into force of this Agreement. +Mexico shall thereafter progressively eliminate its over quota +customs duty for imports of sugar and syrup goods originating in +the territory of the United States, in identical fashion as the +reductions provided for United States customs duties in paragraph +2. Mexico shall establish the quantities of imports of sugar and +syrup goods originating in the territory of the United States +that shall be duty-free pursuant to the same procedure by which +the United States shall establish such quantities with respect to +imports of such goods originating in the territory of Mexico in +accordance with sub-paragraph 3(b). The United States shall make +projections of its domestic production and consumption, and the +United States and Mexico shall consult and make the determination +whether the United States is projected to be a net surplus +producer, on the same terms as provided for in subparagraph 3(d). + +5. If the United States eliminates its tariff quota for sugar +and syrup goods imported from non-Parties, at such time the +United States shall grant to Mexico the better of the treatment, +as determined by Mexico, of: + + (a) the treatment provided for in paragraph 3; or + + (b) the Most-Favored-Nation treatment granted by the United + States to non-Parties. + +6. The measurement of the quantity imported shall be based on +the actual weight of the imported sugar and syrup goods, +converted as appropriate to raw value, without regard to the +packaging in which the goods are imported or their presentation. + +7. With respect to imports into the territory of Mexico of +sugar and syrup goods, and products containing sugar or syrup, +from the territory of the United States, + + (a) Mexico shall accord preferential treatment in + accordance with this Agreement when the following + conditions apply + + (i) with respect to sugar and syrup goods no benefits + under any re-export program or any like program + have been or will be granted in connection with + the export of those goods, and + + (ii) with respect to products containing sugar and + syrup goods, no benefits under any re-export + program or any like program have been or will be + granted in connection with the export of those + products; + + (b) the United States shall provide notification to Mexico + of any export to Mexico, within two days of such + export, for which the benefits of any re-export program + or any other like program have been or will be claimed + by the exporter; and + + (c) except as provided for in paragraph 8, Mexico shall + accord Most Favored Nation treatment to all imports + from the territory of the United States of sugar and + syrup goods with respect to which benefits under any + re-export program or any like program shall have been + claimed. + +8. Notwithstanding any other provision of this Article: + + (a) the United States shall grant duty-free treatment to + imports of + + (i) raw sugar originating in the territory of Mexico + that will be refined within the territory of the + United States and re-exported to the territory of + Mexico, and + + (ii) refined sugar originating in the territory of + Mexico that has been refined from raw sugar + previously produced within, and exported from, the + territory of the United States; + + (b) Mexico shall grant duty-free treatment to imports of + + (i) raw sugar originating in the territory of the + United States that will be refined within the + territory of Mexico and re-exported to the + territory of the United States, and + + (ii) refined sugar originating in the territory of the + United States that has been refined from raw sugar + previously produced within, and exported from, the + territory of Mexico; and + + (c) imports qualifying for duty-free treatment pursuant to + subparagraphs (a) and (b) of this paragraph shall not + be subject to, or counted under, any quota of the + importing Party. + + + + Schedule 704.2(I)(B)(3) + + Net Production Surplus Determination + + +1. Methodology + + (a) The size of a Party's net production surplus, shall be + determined in accordance with the following formula: + + (i) If a net production surplus has not been projected + for any previous year, the formula shall be: + + NPS = (PPy - CPy) + + (ii) If a Party is projected to be a net surplus + producer and has been projected to be a net + surplus producer in a previous year, the Party's + projected net production surplus shall be + adjusted, to account for an underestimate or + overestimate, as follows: + + NPS = (PPy - CPy) - ((PPys - CPys) - (PAys - CAys)) + + where: + + NPS = Net production surplus + PP = Projected Domestic Production of + sugar + CP = Projected Total Consumption of + sugar + y = upcoming marketing year + ys = most recent previous marketing year + in which a net production surplus + was projected + PA = Actual Domestic Production of sugar + CA = Actual Total Consumption of sugar + + (b) The net production surplus shall be determined in + metric tons raw value. + + (c) For purpose of determining whether a Party is a net + surplus producer, imported sugar shall not be treated + as part of domestic production. + + (d) The domestic production of a Party shall not include + sugar, that has been either processed or refined from + sugar beets or sugar cane grown, or sugar processed or + refined, outside of the territory of such Party. + + (e) When making projections of its net production surplus, + each Party shall consider adjustments, in appropriate + circumstances, to such projections to take into account + a change in stocks for the current marketing year + exceeding an upper bound calculated in accordance with + the following formula: + + + where: + + B = upper bound, expressed as a percentage + + F = the absolute value of the change in stocks + from the beginning of the marketing year to + the end of the marketing year, expressed as a + percentage of beginning stocks and calculated + in accordance with the following formula: + + ³ Sb - Se ³ + F = ÃÄÄÄÄÄÄÄÄÄÄÄ´ x 100 + ³ Sb ³ + + + Sb = beginning stocks + + Se = ending stocks + + N = previous marketing year, ranging from 1 + (first preceding year) to 5 (fifth preceding + year) + +2. Sources of Information + + (a) For Mexico, statistics on production, consumption and + stocks shall be provided by the Secretaria de + Agricultura y Recursos Hidraulicos, the Secretaria de + Comercio y Fomento Industrial, and the Secretaria de + Hacienda y Credito Publico. + + (b) For the United States, statistics on production, + consumption and stocks shall be provided by the United + States Department of Agriculture (USDA). + + (c) Each Party shall permit representatives from the other + Party to observe and comment on the methodology it uses + to prepare its data. + + + Section II + + Mexico and Canada + +1. This Section shall apply only between Canada and Mexico. + +2. Each Party shall comply with Appendices A and B. + + + Appendix A + + Tariffs, Quantitative Restrictions and GATT Market Access + +1. Subject to the provisions of this Section, the Parties +recognize that, upon the date of entry into force of this +Agreement, each Party, in accordance with the rights and +obligations set forth in Chapter 3, will not adopt or maintain +measures regarding quantitative restrictions on the importation +of agricultural goods originating in each other's territory, but +may apply tariff quotas as set forth in its Schedule set out in +Annex 302.2. The Parties further recognize that the over-quota +tariff rate applied by a Party in connection with such tariff +quotas will be progressively eliminated in the manner set forth +in its Schedule set out in Annex 302.2. + +2. Except as provided in paragraph 3, to the extent a tariff +applied by a Party in accordance with a tariff quota as set forth +in its Schedule set out in Annex 302.2 at any time exceeds the +applicable bound rate of duty for that agricultural good as set +forth in its GATT Schedule of Tariff Concessions as of June 12, +1991, the other Party hereby waives its rights with respect to +the applicable bound rate of duty under GATT Article II, +notwithstanding the provisions of Article 103. + +3. If the GATT Uruguay Round Agreement on Agriculture enters +into force with respect to a Party, pursuant to which that Party +has agreed to convert its quantitative restrictions into tariff +quotas, that Party shall ensure that the over-quota tariff rates +it applies to agricultural goods of the other Party are not +greater than the lower of (a) the applicable over-quota tariff +rates set out in its Schedule set out in Annex 302.2 or (b) the +applicable over-quota tariff rates set out in its GATT Schedule +of Tariff Concessions. + +4. Market access afforded by a Party in accordance with its +Schedule set out in Annex 302.2 and applied to imports of +agricultural goods of another Party shall count, as between the +Parties, toward the satisfaction of market access commitments +which have been agreed upon under its GATT Schedule of Tariff +Concessions or which may be undertaken by the importing Party as +a result of any GATT agreement entering into force as to that +Party during the applicable transition period under this +Agreement. + +5. In respect of the dairy, poultry and egg goods designated in +Schedule 704.2(II)(A)(5), either Party may adopt or maintain +quantitative restrictions or tariffs consistent with its rights +and obligations under the GATT, with respect to such goods +originating in the territory of the other Party. + +6. Without prejudice to the provisions of Chapter 8 of this +Agreement and paragraph 5, neither Party shall introduce, +maintain or seek any quantitative restriction or any other +measure having equivalent effect on any agricultural goods +covered under this Subchapter originating in the territory of the +other Party. + +7. Subject to this Section, Canada and Mexico incorporate their +respective rights and obligations with respect to agricultural +goods under the General Agreement on Tariffs and Trade (GATT) and +agreements negotiated under the GATT, including the rights and +obligations under GATT Article XI. + +8. Notwithstanding paragraph 7 and Annex 301.3(A)(1)(j), the +rights and obligations contained in Article XI:2(c)(i) of the +GATT shall apply only to dairy, poultry and egg goods of Canada +and Mexico designated in Schedule 704.2(II)(A)(5). + +9. A good provided for in item 1806.10.a1 or 2106.90.a1 that +is: + + (a) imported into the territory of Canada from the + territory of Mexico; or + + (b) imported into the territory of Mexico from the + territory of Canada, + +shall be eligible for the rate of duty provided in Annex 302.2 +only if all materials provided in subheading 1701.99 used in the +production of such good are originating materials. + + + Schedule 704.2(II)(A)(5) + + Dairy, Poultry and Egg Goods + +For Canada: a dairy, poultry or egg good under one of the +following subheadings: + + Note: "X" indicates that a new tariff subheading + will be established for this item + + 0105.11.90X Broiler chicks for domestic + production, <185G + + 0105.91.00 Poultry, >185g + + 0105.99.00 Ducks, geese, turkeys, etc, >185g + + 0207.10.00 Poultry not cut in pieces, fresh or chilled + + 0207.21.00 Poultry, not in pieces, frozen + + 0207.22.00 Turkey, not in pieces, frozen + + 0207.39.00 Poultry cuts & offal, fresh + + 0207.41.00 Poultry cuts & offal, frozen + + 0207.42.00 Turkey cuts & offal, frozen + + 0209.00.20 Poultry fat + + 0210.90.10 Poultry meat, salted, dried, etc. + + 0401.10.00 Milk & cream, fat <1% + + 0401.20.00 Milk & cream, fat > 1% < 6% + + 0401.30.00 Milk & cream, fat > 6% + + 0402.10.00 Skim milk powder + + 0402.21.10 Whole milk powder + + 0402.21.20 Whole cream powder + + 0402.29.10 Milk powder fat > 1.5% + + 0402.29.20 Cream powder fat < 1.5% + + 0402.91.00 Milk & cream, conc., n.s. + + 0402.99.00 Milk & cream, not solid, added sweetener + + 0403.10.00 Yogurt + + 0403.90.10 Powdered buttermilk + + 0403.90.90 Curdled milk & cream, etc. + + 0404.10.10 Whey powder + + 0404.10.90 Whey, not powdered + + 0404.90.00 Other + + 0405.00.10 Butter + + 0405.00.90 Fats & oils derived from milk + + 0406.10.00 Fresh cheese + + 0406.20.10 Cheddar cheese + + 0406.20.90 Cheeses, not cheddar + + 0406.30.00 Processed cheese + + 0406.40.00 Blue-veined cheese + + 0406.90.10 Cheddar cheese, not processed + + 0406.90.90 Cheese, not cheddar, not processed + + 0407.00.00 Bird's eggs, in shell + + 0408.11.00 Dried egg yolks + + 0408.19.00 Egg yolks, not dried + + 0408.91.00 Bird's eggs, not in shell, dried + + 0408.99.00 Bird's eggs, not in shell, not dried + + 1601.00.10X Sausages or similar products of poultry meat, poultry + meat offal or blood, in air tight containers + + 1602.31.10 Prep. meals, of meat or meat offal of turkeys + + 1602.31.91 Prep. or preserved meat, meat offal or blood, of turkeys, + other than sausages or prep. meals, in air-tight + containers + + 1602.31.99 Prep. or preserved meat, meat offal or blood, of turkeys, + other than sausages or prep. meals, other than in + air-tight containers + + 1602.39.10 Prep. meals containing meat or meat offal of fowls of the + species (Gallus domesticus) ducks, geese or guinea fowls, + incl. mixtures + + 1602.39.91 Prep. or preserved meat, meat offal or blood, of fowls of + the species (Gallus domesticus), ducks, geese or + guinea fowls, other than sausages, liver or prep. + meals, in air-tight containers + + 1602.39.99 Prep. or preserved meat, meat offal or blood, of ducks, + geese, etc., other than sausages, liver or prep. + meals, in other than air-tight containers + + 2105.00.00 Ice cream & other edible ice, containing cocoa or not + + 2106.90.70 Food preps. not elsewhere specified or incl. Egg preps. + + 2106.90.90X Ice cream or ice milk mixes + + 2309.90.91X Complete feeds & feed supplements, incl. concentrates, + containing more than 50% by weight of dairy products + + 3501.10.00 Casein + + 3501.90.00 Caseinates & other casein derivatives; casein glues + + 3502.10.10 Egg albumin, dried, evaporated, desiccated or powdered + + 3502.10.90 Egg albumin, nes + + +For Mexico: a dairy, poultry or egg good under one of the following + subheadings: + + Note: "X" indicates that a new tariff subheading item will be + established for this item + + MEXICO HTS NUMBER DESCRIPTION + + 0105.11.01 Day old chickens without being fed during its + transportation + + 0105.91.01 Game cocks + + 0105.91.99 Other + + 0105.99.99 Other poultry + + 0207.10.01 Poultry, not cut into pieces, + fresh or chilled + + 0207.21.01 Chickens + + 0207.22.01 Turkey + + 0207.39.01 Chicken offals except liver + + 0207.39.99 Other, poultry cut and offals + + 0207.41.0X Chicken cuts, frozen + + 0207.41.0Y Chicken offals, frozen + + 0207.41.0Z Chicken meat mechanically + deboned, frozen + + 0207.41.ZZ Chicken meat mechanically + deboned, fresh or chilled + + 0207.42.0X Turkey cuts, frozen + + 0207.42.0Y Turkey offals + + 0207.42.0Z Turkey meat, mechanically + deboned, frozen + + 0207.42.ZY Turkey meat, mechanically + deboned, fresh or chilled + + 0207.50.01 Poultry livers, frozen + + 0209.00.0Z Chicken or turkey bacon and + lean parts + + 0210.90.99 Other + + 0401.10.01 In hermetic containers milk + not concentrated + + 0401.10.99 Other + + 0401.20.01 In hermetic containers; + + 0401.20.99 Other + + 0401.30.01 In hermetic containers; + + 0401.30.99 Other + + 0402.10.01 Milk powder + + 0402.10.99 Other + + 0402.21.01 Milk powder + + 0402.21.99 Other + + 0402.29.99 Other + + 0402.91.01 Evaporated milk + + 0402.91.99 Other + + 0402.99.01 Condensed milk + + 0402.99.99 Other + + 0403.10.01 Yogurt + + 0403.90.01 Powdered milk whey with a + protein content less than or + equal to 12 percent + + 0403.90.99 Other butter whey + + 0404.10.01 Whey, concentrated, sweetened + + 0404.90.99 Other + + 0405.00.01 Butter, including the + immediate container, with a + weight less than or equal to 1kg + + 0405.00.02 Butter, including the + immediate container, with a + weight over 1 kg + + 0405.00.03 Butiric fat, dehydrated + + 0405.00.99 Other + + 0406.10.01 Fresh cheese, including whey + cheese + + 0406.20.01 Cheese, grated or powdered + + 0406.30.01 Melted cheese, not grated or + powdered + + 0406.30.99 Other, melted cheese + + 0406.40.01 Blue veined cheese + + 0406.90.01 Hard paste cheese called sardo + + 0406.90.02 Hard paste reggi cheese + + 0406.90.03 Soft paste cologne cheese + + 0406.90.04 Hard or semi-hard cheeses with + a fat content by weight less + than or equal to 40 percent, + and with a water content by + weight in non-fat matter less + than or equal to 47 percent + (called "grana", "parmigiana" + or "reggiano,") or with a non- + fat matter content by weight + over 47 percent without + exceeding 72 percent (called + "danloo, edam, fontan, + fontina, fynbo, gouda, Avarti, + maribo, samsoe, esron, + italico, kernhem, saint- + nactarie, saint paulin, or + talegi”l) + + 0406.90.05 Petit suisse cheese + + 0406.90.06 Egmont cheese + + 0406.90.99 Other hard and semihard cheese + + 0407.00.01 Fresh birds eggs, fertile + + 0407.00.02 Frozen eggs + + 0407.00.99 Other poultry eggs + + 0408.11.01 Dried yolks + + 0408.19.99 Other + + 0408.91.01 Frozen or powdered + + 0408.91.99 Other + + 0408.99.01 Frozen or powdered + + 0408.99.99 Other + + 1601.00.9X Chicken and turkey sausages + + 1602.20.0X Homogenized preparations of + chickens or turkey livers + + 1602.31.01 Prepared or preserved turkey + meat + + 2105.00.01 Ice cream and similar products + + 2106.90.9X Egg preparations + + 2309.90.9X Preparations containing over + 50 percent of milk products + + 3501.10.01 Casein + + 3501.90.01 Casein glues + + 3501.90.02 Caseinates + + 3501.90.99 Other + + 3502.10.01 Egg albumin + + + + + Appendix B + + Trade in Sugar + +1. Mexico's customs duty for imports of sugar and syrup goods +originating in the territory of Canada shall be equal to its +Most-Favored-Nation over-quota customs duty. + +2. Canada may apply a customs duty on sugar and syrup goods +originating in the territory of Mexico equal to the customs duty +applied by Mexico on such goods originating in the territory of +Canada. + + + ANNEX 704.3 + + Agricultural Grading and Marketing Standards + + Each Party shall comply with Sections I and II. + + + Section I + + United States and Mexico + +1. When either the United States or Mexico adopts or maintains +a measure regarding the classification, grading or marketing of a +domestic agricultural good, it shall, with respect to the like +agricultural good imported from the territory of the other +destined for processing, accord treatment no less favorable than +the treatment it accords under the measure to the domestic +agricultural good destined for processing. The importing Party +may also adopt or maintain measures to ensure that such imported +good is processed. + +2. Paragraph 1 shall be without prejudice to the rights of +either the United States or Mexico under the GATT or under +Article 301 of this Agreement with respect to measures concerning +the classification, grading or marketing of an agricultural good +(whether or not destined for processing). + +3. Mexico and the United States agree to form a Working Group +to review, in coordination with the Committee on +Standards-Related Measures established under Chapter 9, the +operation of grade and quality standards regarding agricultural +goods as they affect the other Parties to this Agreement, and to +resolve issues which may arise. This Working Group shall report +to the Committee on Agriculture established under Article 708, +and shall meet at least once a year or as otherwise agreed by the +two Parties. + + + Section II + + Canada and Mexico + + Mexico and Canada agree to form a Working Group to review, +in coordination with the Committee on Standards-Related Measures +established under Chapter Nine (Standards-Related Measures), the +operation of grade and quality standards regarding agricultural +goods as they affect the other Parties to this Agreement, and to +resolve issues which may arise. This Working Group shall report +to the Committee on Agriculture established under Article 708, +and shall meet at least once a year or as otherwise agreed by the +two Parties. ANNEX 704.4 + + Special Safeguards + + Section I + + Mexican Special Safeguard Goods + + MEXICO HTS NUMBER DESCRIPTION + + 0103.91.99 Live swine, weighing less than + 50 kilograms each, except + purebred breeding animals and + those with pedigree or + selected breed certificate + + 0103.92.99 Live swine, weighing 50 + kilograms or more each, except + purebred breeding animals and + those with pedigree or + selected breed certificate + + 0203.11.01 Meat of swine, carcasses and + half-carcasses, fresh or + chilled + + 0203.12.01 Hams, shoulders or cuts + thereof, with bone in, fresh + or chilled + + 0203.19.99 Other swine meat, fresh or + chilled + + 0203.21.01 Meat of swine, carcasses and + half-carcasses, frozen + + 0203.22.01 Hams, shoulders and cuts + thereof, with bone in, frozen + + 0203.29.99 Other swine meat, frozen + + 0210.11.01 Hams, shoulders and cuts + thereof with bone in, salted, + in brine, dried or smoked + + 0210.12.01 Bellies (streaky) and cuts + thereof, salted, in brine, + dried or smoked + + 0210.19.99 Other swine meat, salted, in + brine, dried or smoked + + 0710.10.01 Potatoes, uncooked or cooked + by steaming or boiling in + water, frozen + + 0712.10.01 Dried potatoes, whole cut, + sliced, broken or in powder, + but not further prepared + + 0808.10.01 Apples, fresh + + 2004.10.01 Potatoes prepared or preserved + otherwise than by vinegar or + acetic acid, frozen + + 2005.20.01 Potatoes prepared or preserved + otherwise than by vinegar or + acetic acid, not frozen + + 2101.10.01 Extracts, essences or + concentrates, of coffee, and + preparations with a basis of + these extracts, essences or + concentrates or with a basis + of coffee + + + Section II + + U.S. Special Safeguard Goods + + U.S. HTS NUMBER DESCRIPTION + + Note: A new U.S. HTS number will be established for each item + + 0702.00.XX Tomatoes (except cherry + tomatoes), fresh or chilled; + if entered during the period + from November 15 to the last + day of the following February, + inclusive + + 0702.00.XX Tomatoes (except cherry + tomatoes), fresh or chilled; + if entered during the period + from March 1 to July 14, + inclusive + + 0703.10.XX Onions and shallots, fresh or + chilled (not including onion + sets and not including pearl + onions not over 16 mm in + diameter) if entered January 1 + to April 30, inclusive + + 0709.30.XX Eggplants (aubergines), fresh + or chilled, if entered during + the period from April 1 to + June 30, inclusive + + 0709.60.XX "Chili" peppers; if entered + during the period from October + 1 to July 31, inclusive + (current 0709.60.00.20) + + 0709.90.XX Squash, fresh or chilled; if + entered during the period from + October 1 to the following + June 30, inclusive + + 0807.10.XX Watermelons, fresh; if entered + during the period from May 1 + to September 30, inclusive + + + Section III + + Canadian Special Safeguard Goods + + Canadian HTS NUMBER DESCRIPTION + + 0603.10.90 Fresh cut flowers + 0702.00.91 Tomatoes n.e.s., fresh or + chilled (dutiable period) + 0703.10.31 Onions or shallots, green + (dutiable period), fresh + 0707.00.91 Cucumber, fresh or chilled, + n.e.s. (dutiable period) + 0710.80.20 Broccoli and cauliflowers, + blanched or not, frozen + 0811.10.10 Strawberries, for processing, + frozen + 0811.10.90 Strawberries, frozen, other + than for processing + 2002.90.00 Tomatoes, other than whole + (tomato paste) + + ANNEX 709 + + Country-Specific Definitions + +For purposes of this Subchapter, sugar and syrup goods means: + + (a) for imports into Mexico, goods classifiable under + current subheadings 1701.11.01, 1701.11.99, 1701.12.01, + 1701.12.99, 1701.91 (except those that contain added + flavoring matter), 1701.99.01, 1701.99.99, 1702.90.01, + 1806.10.01 (except those with a sugar content less than + 90 per cent) and 2106.90.05 (except those that contain + flavoring matter) of the Mexican Tariff Schedules; + + (b) for imports into the United States, goods classifiable + under current subheadings 1701.11.03, 1701.12.02, + 1701.91.22, 1701.99.02, 1702.90.32, 1806.10.42, and + 2106.90.12 of the U.S. Harmonized Tariff Schedule, + without regard to the quantity imported; and + + (c) for imports into Canada, goods classifiable under + current subheadings 1701.11.10, 1701.11.20, 1701.11.30, + 1701.11.40, 1701.11.50, 1701.12.00, 1701.91.00, + 1701.99.00, 1702.90.31, 1702.90.32, 1702.90.33, + 1702.90.34, 1702.90.35, 1702.90.36, 1702.90.37, + 1702.90.38, 1702.90.40, 1806.10.00 (except those with a + sugar content less than 90 per cent) and 2106.90.20 + (except those that contain flavoring matter) of the + Canadian Tariff Schedule. + Subchapter B - Sanitary and Phytosanitary Measures + + + +Article 751: Scope + + In order to establish a framework of rules and disciplines +to guide the development, adoption and enforcement of sanitary +and phytosanitary measures, this Subchapter applies to any such +measure of a Party that may, directly or indirectly, affect trade +between the Parties. + + +Article 752: Relation to Other Chapters + + Articles 301 (National Treatment), 309 (Import and Export +Restrictions) and 310 (Non-Discriminatory Administration of +Restrictions), and the provisions of Article XX(b) of the GATT as +incorporated into Article 2101(1), do not apply to any sanitary +or phytosanitary measure. + + +Article 753: Reliance on Non-Governmental Entities + + Each Party shall ensure that any non-governmental entity on +which it relies in applying a sanitary or phytosanitary measure +acts in a manner consistent with this Subchapter. + + +Article 754: Basic Rights and Obligations + + Right to Take Sanitary and Phytosanitary Measures + +1. Each Party may, in accordance with this Subchapter, adopt, +maintain or apply any sanitary or phytosanitary measure necessary +for the protection of human, animal or plant life or health in +its territory, including a measure more stringent than an +international standard, guideline or recommendation. + + Right to Establish Level of Protection + +2. Notwithstanding any other provision of this Subchapter, +each Party may, in protecting human, animal or plant life or +health, establish its appropriate level of protection in +accordance with Article 757. + + Scientific Principles + +3. Each Party shall ensure that any sanitary or phytosanitary +measure that it adopts, maintains or applies is: + + (a) based on scientific principles, taking into account + relevant factors including, where appropriate, + different geographic conditions; + + (b) not maintained where there is no longer a scientific + basis for it; and + + (c) based on a risk assessment, as appropriate to the + circumstances. + + Non-Discriminatory Treatment + +4. Each Party shall ensure that a sanitary or phytosanitary +measure that it adopts, maintains or applies does not arbitrarily +or unjustifiably discriminate between its goods and like goods of +another Party, or between goods of another Party and like goods +of any other country, where identical or similar conditions +prevail. + + Unnecessary Obstacles + +5. Each Party shall ensure that any sanitary or phytosanitary +measure that it adopts, maintains or applies is applied only to +the extent necessary to achieve its appropriate level of +protection, taking into account technical and economic +feasibility. + + Disguised Restrictions + +6. No Party may adopt, maintain or apply any sanitary or +phytosanitary measure with a view to, or with the effect of, +creating a disguised restriction to trade between the Parties. + + +Article 755: International Standards and Standardizing + Organizations + +1. Without reducing the level of protection of human, animal, +or plant life or health, each Party shall use, as a basis for its +sanitary and phytosanitary measures, relevant international +standards, guidelines or recommendations with the objective, +among others, of making its sanitary and phytosanitary measures +equivalent or, where appropriate, identical to those of the other +Parties. + +2. A Party's sanitary or phytosanitary measure that conforms to +a relevant international standard, guideline or recommendation +shall be presumed to be consistent with Article 754. A measure +that results in a level of sanitary or phytosanitary protection +different from that which would be achieved by a measure based on +a relevant international standard, guideline or recommendation +shall not for that reason alone be presumed to be inconsistent +with this Subchapter. + +3. Notwithstanding paragraph 1 and in accordance with the other +provisions of this Subchapter, a Party may adopt, maintain or +apply a sanitary or phytosanitary measure that is more stringent +than the relevant international standard, guideline or +recommendation. + +4. Where a Party has reason to believe that a sanitary or +phytosanitary measure of another Party is adversely affecting or +may adversely affect its exports and the measure is not based on +a relevant international standard, guideline or recommendation, +it may request, and the other Party shall provide in writing, the +reasons for such measure. + +5. Each Party shall, to the greatest extent practicable, +participate in relevant international and North American +standardizing organizations, including the Codex Alimentarius +Commission, the International Office of Epizootics, the +International Plant Protection Convention, and the North American +Plant Protection Organization, with a view to promoting the +development and periodic review of international standards, +guidelines and recommendations. + + +Article 756: Equivalence + +1. Without reducing the level of protection of human, animal, +or plant life or health, the Parties shall, to the greatest +extent practicable and in accordance with this Subchapter, pursue +equivalence of their respective sanitary or phytosanitary +measures. + +2. Each importing Party: + + (a) shall treat a sanitary or phytosanitary measure adopted + or maintained by an exporting Party as equivalent to + its own where the exporting Party, in cooperation with + the importing Party, provides to the importing Party + scientific evidence or other information, in accordance + with risk assessment methodologies agreed upon by those + Parties, to demonstrate objectively, subject to + subparagraph (b), that the exporting Party's measure + achieves the importing Party's appropriate level of + protection; + + (b) may, where it has a scientific basis, determine that + the exporting Party's measure does not achieve the + importing Party's appropriate level of protection; and + + (c) shall, upon the request of the exporting Party, provide + its reasons in writing for a determination under + subparagraph (b). + +3. For purposes of establishing equivalency, each exporting +Party shall, upon the request of an importing Party, take such +reasonable measures as may be available to it to facilitate +access in its territory for inspection, testing, and other +relevant procedures. + +4. Each Party should, in the development of a sanitary or +phytosanitary measure, consider relevant actual or proposed +sanitary or phytosanitary measures of the other Parties. + + +Article 757: Risk Assessment and Appropriate Level of + Protection + +1. In conducting a risk assessment, each Party shall take into +account: + + (a) relevant risk assessment techniques and methodologies + developed by international or North American + standardizing organizations; + + (b) relevant scientific evidence; + + (c) relevant processes and production methods; + + (d) relevant inspection, sampling, and testing methods; + + (e) the prevalence of relevant diseases or pests, including + the existence of pest-free or disease-free areas or + areas of low pest or disease prevalence; + + (f) relevant ecological and other environmental conditions; + and + + (g) relevant treatments, such as quarantines. + +2. Further to paragraph 1, each Party shall, in establishing +its appropriate level of protection regarding the risk associated +with the introduction, establishment or spread of an animal or +plant pest or disease, and in assessing such risk, also take into +account the following economic factors, where relevant: + + (a) loss of production or sales that may result from such + pest or disease; + + (b) costs of control or eradication of the pest or disease + in its territory; and + + (c) the relative cost-effectiveness of alternative + approaches to limiting risks. + +3. Each Party, in establishing its appropriate level of +protection: + + (a) should take into account the objective of minimizing + negative trade effects; and + + (b) shall, with the objective of achieving consistency in + such levels, avoid arbitrary or unjustifiable + distinctions in such levels in different circumstances, + where such distinctions result in arbitrary or + unjustifiable discrimination against a good of another + Party or constitute a disguised restriction on trade + between the Parties. + +4. Notwithstanding paragraphs (1) through (3) and Article +754(3)(c), where a Party conducting a risk assessment determines +that available relevant scientific evidence or other information +is insufficient to complete the assessment, it may adopt a +provisional sanitary or phytosanitary measure on the basis of +available relevant information, including from international or +North American standardizing organizations and from sanitary or +phytosanitary measures of other Parties. Such Party shall, within +a reasonable period after information sufficient to complete the +assessment is presented to it, complete its assessment, review +and where appropriate revise the provisional measure in light of +such assessment. + +5. Where a Party is able to achieve its appropriate level of +protection through the phased application of a sanitary or +phytosanitary measure, it may, upon the request of another Party +and in accordance with this Subchapter, allow for such a phased +application, or grant specified exceptions for limited periods +from such measure, taking into account the requesting Party's +export interests. + + +Article 758: Adaptation to Regional Conditions + +1. Each Party shall adapt any of its sanitary or phytosanitary +measures relating to the introduction, establishment, or spread +of an animal or plant pest or disease, to the sanitary or +phytosanitary characteristics of the area where a good subject to +such measure is produced and the area in its territory to which +such good is destined, taking into account any relevant +conditions, including those relating to transportation and +handling, between such areas. In assessing such characteristics +of an area, including whether an area is, and is likely to +remain, a pest-free or disease-free area or an area of low pest +or disease prevalence, each Party shall take into account, among +other factors: + + (a) the prevalence of relevant pests or diseases in that + area; + + (b) the existence of eradication or control programs in + that area; and + + (c) any relevant international standard, guideline or + recommendation. + +2. Further to paragraph 1, each Party shall, in determining +whether an area is a pest-free or disease-free area or an area of +low pest or disease prevalence, base such determination on +factors such as geography, ecosystems, epidemiological +surveillance, and the effectiveness of sanitary or phytosanitary +controls in that area. + +3. Each importing Party shall recognize that an area in the +territory of the exporting Party is, and is likely to remain, a +pest-free or disease-free area or an area of low pest or disease +prevalence, where the exporting Party provides to the importing +Party scientific evidence or other information sufficient to so +demonstrate to the satisfaction of the importing Party. For this +purpose, each exporting Party shall provide reasonable access in +its territory to the importing Party for inspection, testing and +other relevant procedures. + +4. Each Party may, in accordance with this Subchapter: + + (a) adopt, maintain or apply a different risk assessment + procedure for a pest-free or disease-free area than for + an area of low pest or disease prevalence; or + + (b) make a different final determination for the + disposition of a good produced in a pest-free or + disease-free area than for a good produced in an area + of low pest or disease prevalence, + +taking into account any relevant conditions, including those +relating to transportation and handling. + +5. Each Party shall, in adopting, maintaining or applying a +sanitary or phytosanitary measure relating to the introduction, +establishment, or spread of an animal or plant pest or disease, +accord a good produced in a pest-free or disease-free area in the +territory of another Party no less favorable treatment than it +accords a good produced in a pest-free or disease-free area, in +another country, that poses the same level of risk. Such Party +shall use equivalent risk assessment techniques to evaluate +relevant conditions and controls in the pest-free or disease-free +area and in the area surrounding that area and take into account +any relevant conditions, including those relating to +transportation and handling. + +6. Each importing Party shall pursue an agreement with an +exporting Party, upon request, on specific requirements the +fulfillment of which allows a good produced in an area of low +pest or disease prevalence in the territory of an exporting Party +to be imported into the territory of the importing Party and +achieves the importing Party's appropriate level of protection. + + +Article 759: Control, Inspection and Approval Procedures + +1. Each Party, with respect to any control or inspection +procedure that it conducts: + + (a) shall initiate and complete such procedure as + expeditiously as possible and in no less favorable + manner for a good of another Party than for a good of + such Party or a like good of any other country; + + (b) shall publish the normal processing period for each + such procedure or communicate the anticipated + processing period to the applicant upon request; + + (c) shall ensure that the competent body + + (i) upon receipt of an application, promptly examines + the completeness of the documentation and informs + the applicant in a precise and complete manner of + any deficiency, + + (ii) transmits to the applicant as soon as possible the + results of the procedure in a form that is precise + and complete so that such applicant may take any + necessary corrective action, + + (iii) where the application is deficient, proceeds + as far as practicable with such procedure if + the applicant so requests, and + + (iv) informs the applicant, upon request, of the + status of the application and the reasons for any + delay; + + (d) shall limit the information the applicant is required + to supply to that necessary for conducting such + procedure; + + (e) shall accord confidential or proprietary information + arising from, or supplied in connection with, such + procedure conducted for a good of another Party + + (i) treatment no less favorable than for a good of + such Party, and + + (ii) in any event, treatment that protects the + applicant's legitimate commercial interests, to + the extent provided under the Party's law; + + (f) shall limit any requirement regarding individual + specimens or samples of a good to that which is + reasonable and necessary; + + (g) should not impose a fee for conducting such procedure + that is higher for a good of another Party than is + equitable in relation to any such fee it imposes for + its like goods or for like goods of any other country, + taking into account communication, transportation and + other related costs; + + (h) should use criteria for selecting the location of + facilities at which a procedure is conducted that do + not cause unnecessary inconvenience to an applicant or + its agent; + + (i) shall provide a mechanism to review complaints + concerning the operation of such procedure and to take + corrective action when a complaint is justified; + + (j) should use criteria for selecting samples of goods that + do not cause unnecessary inconvenience to an applicant + or its agent; and + + (k) shall limit such procedure, for a good modified + subsequent to a determination that such good fulfills + the requirements of the applicable sanitary or + phytosanitary measure, to that necessary to determine + that such good continues to fulfill the requirements of + such measure. + +2. Each Party shall apply, with such modifications as may be +necessary, paragraphs 1(a) through (i) to its approval +procedures. + +3. Where an importing Party's sanitary or phytosanitary measure +requires the conduct of a control or inspection procedure at the +level of production, an exporting Party shall, upon the request +of the importing Party, take such reasonable measures as may be +available to it to facilitate access in its territory and to +provide assistance necessary to facilitate the conduct of the +importing Party's control or inspection procedure. + +4. A Party maintaining an approval procedure may require its +approval for the use of an additive, or its establishment of a +tolerance for a contaminant, in a food, beverage or feedstuff, +under such procedure, prior to granting access to its domestic +market for a food, beverage or feedstuff containing such additive +or contaminant. Where such Party so requires, it shall consider +using a relevant international standard, guideline or +recommendation as the basis for granting access until it +completes such procedure. + + +Article 760: Notification, Publication and Provision of + Information + +1. Further to Articles 1802 and 1803, each Party proposing to +adopt or modify a sanitary or phytosanitary measure of general +application at the federal level shall: + + (a) at least 60 days prior to the adoption or modification + of such measure, other than a law, publish a notice and + notify in writing the other Parties of the proposed + measure and provide to the other Parties and publish + the full text of the proposed measure, in such a manner + as to enable interested persons to become acquainted + with the proposed measure; + + (b) identify in such notice and notification the good to + which the proposed measure would apply, and provide a + brief description of the objective and reasons for such + measure; + + (c) provide a copy of such proposed measure to any Party or + interested person that so requests and, wherever + possible, identify any provision that deviates in + substance from relevant international standards, + guidelines or recommendations; and + + (d) without discrimination, allow other Parties and + interested persons to make comments in writing and + shall, upon request, discuss such comments and take the + comments and the results of such discussions into + account. + +2. Each Party shall seek, through appropriate measures, to +ensure, with respect to a sanitary or phytosanitary measure of a +state or provincial government: + + (a) that, at an early appropriate stage, a notice and + notification of the type referred to in paragraphs 1(a) + and (b) are made prior to their adoption; and + + (b) observance of paragraphs 1(c) and (d). + +3. Where a Party considers it necessary to address an urgent +problem relating to sanitary and phytosanitary protection, it may +omit any step set out in paragraph 1 or 2, provided that, upon +adoption of a sanitary or phytosanitary measure, it shall: + + (a) immediately provide to the other Parties a notification + of the type referred to in paragraph 1(b), including a + brief description of the urgent problem; + + (b) provide a copy of such measure to any Party or + interested person that so requests; and + + (c) without discrimination, allow other Parties and + interested persons to make comments in writing and + shall, upon request, discuss such comments and take + such comments and the results of such discussions into + account. + +4. Except where necessary to address an urgent problem referred +to in paragraph 3, each Party shall allow a reasonable period +between the publication of a sanitary or phytosanitary measure of +general application and the date that it becomes effective to +allow time for interested persons to adapt to such measure. + +5. Each Party shall designate a government authority +responsible for the implementation at the federal level of the +notification provisions of this Article, and shall notify the +other Parties thereof. Where a Party designates two or more +government authorities for such purpose, it shall provide to the +other Parties complete and unambiguous information on the scope +of responsibility of each such authority. + +6. Where an importing Party denies entry into its territory of +a good of another Party because it does not comply with a +sanitary or phytosanitary measure, the importing Party shall +provide a written explanation to the exporting Party, upon +request, that identifies the applicable measure and the reasons +that the good is not in compliance. + + +Article 761: Inquiry Points + +1. Each Party shall ensure that there is one inquiry point that +is able to answer all reasonable enquiries from other Parties and +interested persons, and to provide relevant documents, regarding: + + (a) any sanitary or phytosanitary measure of general + application, including any control or inspection + procedure or approval procedure, proposed, adopted or + maintained in its territory at the federal, provincial, + or state government level; + + (b) such Party's risk assessment procedures and factors it + considers in conducting such assessment and in + establishing its appropriate levels of protection; + + (c) the membership and participation of such Party, or its + relevant federal, provincial or state government + authorities in international and regional sanitary and + phytosanitary organizations and systems, and in + bilateral and multilateral arrangements within the + scope of this Subchapter, and the provisions of such + systems and arrangements; and + + (d) the location of notices published pursuant to this + Subchapter or where such information can be obtained. + +2. Each Party shall ensure that where copies of documents are +requested by another Party or by interested persons in accordance +with this Subchapter, they are supplied at the same price, apart +from the actual cost of delivery, as the price for domestic +purchase. + + +Article 762: Technical Cooperation + +1. Each Party shall, upon the request of another Party, +facilitate the provision of technical advice, information and +assistance, on mutually agreed terms and conditions, to enhance +that Party's sanitary and phytosanitary measures and related +activities, including research, processing technologies, +infrastructure and the establishment of national regulatory +bodies. Such assistance may include credits, donations and +grants, for the purpose of acquiring technical expertise, +training and equipment to allow the Party to adjust to and comply +with a Party's sanitary or phytosanitary measure. + +2. Each Party shall, on the request of another Party: + + (a) provide to that Party information on its technical + cooperation programs regarding sanitary or + phytosanitary measures relating to specific areas of + interest; and + + (b) consult with the other Party during the development of, + or prior to the adoption or change in the application + of, any sanitary or phytosanitary measure. + + +Article 763: Limitations on the Provision of Information + +Nothing in this Subchapter shall be construed as requiring a +Party to: + + (a) communicate, publish texts or provide particulars or + copies of documents other than in an official language + of such Party; or + + (b) furnish any information the disclosure of which would + impede law enforcement or otherwise be contrary to the + public interest or would prejudice the legitimate + commercial interests of particular enterprises. + + +Article 764: Committee on Sanitary and Phytosanitary Measures + +1. The Parties hereby establish a Committee on Sanitary and +Phytosanitary Measures, comprising representatives of each Party +who have responsibility for sanitary and phytosanitary matters. + +2. The Committee should facilitate: + + (a) the enhancement of food safety and improvement of + sanitary and phytosanitary conditions in the + territories of the Parties; + + (b) activities of the Parties pursuant to Articles 755 and + 756; + + (c) technical cooperation between the Parties, including + cooperation in the development, application and + enforcement of sanitary or phytosanitary measures; and + + (d) consultations on specific matters relating to sanitary + or phytosanitary measures. + +3. The Committee: + + (a) shall, to the extent possible, in carrying out its + functions, seek the assistance of relevant + international and North American standardizing + organizations to obtain available scientific and + technical advice and minimize duplication of effort; + + (b) may draw upon such experts and expert bodies as it + considers appropriate; + + (c) shall report annually to the Commission on the + implementation of this Subchapter; + + (d) shall meet upon the request of any Party and, unless + the Parties otherwise agree, at least once each year; + and + + (e) may, as it considers appropriate, establish and + determine the scope and mandate of working groups. + + +Article 765: Technical Consultations + +1. A Party may request consultations with another Party on any +matter covered by this Subchapter. + +2. Each Party should use the good offices of relevant +international and North American standardizing organizations, +including those referred to in Article 755(5), for advice and +assistance on sanitary and phytosanitary matters within their +respective mandates. + +3. Where a Party requests consultations regarding the +application of this Subchapter to a Party's sanitary or +phytosanitary measure, and so notifies the Committee, the +Committee may facilitate such consultations, if it does not +consider the matter itself, by referring the matter for +non-binding technical advice or recommendations to a working +group, including an ad hoc working group, or to another forum. + +4. The Committee should consider any matter referred to it +under paragraph 3 as expeditiously as possible, particularly +regarding perishable goods, and promptly forward to the Parties +any technical advice or recommendations that it develops or +receives concerning the matter. The Parties involved shall +provide a written response to the Committee concerning the +technical advice or recommendations within such time as the +Committee may request. + +5. Where the involved Parties have had recourse to +consultations facilitated by the Committee under paragraph 3, +such consultations shall, upon the agreement of the Parties +involved, constitute consultations conducted for purposes of +Article 2006 (Consultations). + +6. The Parties confirm that a Party asserting that a sanitary +or phytosanitary measure of another Party is inconsistent with +the provisions of this Subchapter shall have the burden of +establishing such inconsistency. + + +Article 766: Definitions + +For purposes of this Subchapter: + +animal includes fish and wild fauna; + +appropriate level of protection means the level of protection of +human, animal or plant life or health in the territory of a Party +that the Party considers appropriate; + +approval procedure means any registration, notification or other +mandatory administrative procedure for: + + (a) approving the use of an additive for a stated purpose + or under stated conditions; or + + (b) establishing a tolerance for a stated purpose or under + stated conditions for a contaminant, + +in a food, beverage or feedstuff prior to permitting the use of +such additive or the marketing of a food, beverage or feedstuff +containing such additive or contaminant; + +area means a country, part of a country or all or parts of +several countries; + +area of low pest or disease prevalence means an area in which a +specific pest or disease occurs at low levels; + +contaminant includes pesticide and veterinary drug residues and +extraneous matter; + +control or inspection procedure means any procedure used, +directly or indirectly, to determine that a sanitary or +phytosanitary measure is fulfilled, including sampling, testing, +inspection, evaluation, verification, monitoring, auditing, +assurance of conformity, accreditation, registration, +certification, or other procedure involving the physical +examination of a good, of the packaging of a good, or of the +equipment or facilities directly related to production, marketing +or use of a good, but does not mean an approval procedure; + +international standard, guideline or recommendation means a +standard, guideline or recommendation: + + (a) regarding food safety, adopted by the Codex + Alimentarius Commission, including one regarding + decomposition elaborated by the Codex Committee on Fish + and Fishery Products, food additives, contaminants, + hygienic practice, and methods of analysis and + sampling; + + (b) regarding animal health and zoonoses, developed under + the auspices of the International Office of Epizootics; + + (c) regarding plant health, developed under the auspices of + the Secretariat of the International Plant Protection + Convention in coÄoperation with the North American + Plant Protection Organization; or + + (d) established by or developed under any other + international organization agreed upon by the Parties; + +pest includes a weed; + +pest-free or disease-free area means an area in which a specific +pest or disease does not occur; + +plant includes wild flora; + +risk assessment means an evaluation of: + + (a) the potential for the introduction, establishment or + spread of a pest or disease and associated biological + and economic consequences; or + + (b) the potential for adverse effects on human or animal + life or health arising from the presence of an + additive, contaminant, toxin or disease-causing + organism in a food, beverage or feedstuff; + +sanitary or phytosanitary measure means a measure that a Party +adopts, maintains or applies to: + + (a) protect animal or plant life or health in its territory + from risks arising from the introduction, establishment + or spread of a pest or disease, + + (b) protect human or animal life or health in its territory + from risks arising from the presence of an additive, + contaminant, toxin or disease-causing organism in a + food, beverage or feedstuff, + + (c) to protect human life or health in its territory from + risks arising from a disease-causing organism or pest + carried by an animal or plant, or a product thereof, + + (d) prevent or limit other damage in its territory arising + from the introduction, establishment or spread of a + pest, + +including end product criteria; a product-related processing or +production method; a testing, inspection, certification or +approval procedure; a relevant statistical method; a sampling +procedure; a method of risk assessment; a packaging and labelling +requirement directly related to food safety; and a quarantine +treatment, such as a relevant requirement associated with the +transportation of animals or plants or with material necessary +for their survival during transportation; and + +scientific basis means a reason based on data or information +derived using scientific methods. +NAFTA Chapter Eight Emergency Action + + + +Article 801: Bilateral Actions + +1. Subject to paragraphs 2, 3 and 4 and Annex 801, and during +the transition period only, if a good originating in the +territory of a Party, as a result of the reduction or elimination +of a duty provided for in this Agreement, is being imported into +the territory of another Party in such increased quantities, in +absolute terms, and under such conditions so that the imports of +such good from that Party alone constitute a substantial cause of +serious injury, or threat thereof, to a domestic industry +producing a like or directly competitive good, the Party into +whose territory the good is being imported may, to the minimum +extent necessary to remedy or prevent the injury: + + (a) suspend the further reduction of any rate of duty + provided for under this Agreement on such good; + + (b) increase the rate of duty on such good to a level not + to exceed the lesser of + + (i) the most-favored-nation (MFN) applied rate of duty + in effect at the time the action is taken, or + + (ii) the MFN applied rate of duty in effect on the day + immediately preceding the date of entry into force + of this Agreement; or + + (c) in the case of a duty applied to a good on a seasonal + basis, increase the rate of duty to a level not to + exceed the MFN applied rate of duty that was in effect + on such good for the corresponding season immediately + preceding the date of entry into force of this + Agreement. + +2. The following conditions and limitations shall apply to a +proceeding that may result in emergency action under paragraph 1: + + (a) a Party shall, without delay, deliver to any Party that + may be affected written notice of, and a request for + consultations regarding, the institution of a + proceeding that could result in emergency action + against a good originating in the territory of a Party; + + (b) any such action shall commence not later than one year + from the date of institution of the proceeding; + + (c) no action shall be maintained + + (i) for a period exceeding three years, except where + the good against which the action is taken is + provided for in the items in staging category C+ + of the Tariff Schedule of the Party taking the + action, and that Party determines that the + affected industry has undertaken adjustment and + requires an extension of the period of relief, in + which case the period of relief may be extended + for one year provided that the duty applied during + the initial period of relief is substantially + reduced at the commencement of the extension + period, or + + (ii) beyond the expiration of the transition period, + except with the consent of the Party against whose + good the action is taken; + + (d) no action shall be taken by a Party against any + particular good originating in the territory of another + Party more than once during the transition period; and + + (e) upon the termination of the action, the rate of duty + shall be the rate that, according to the original + Schedule for the staged elimination of the tariff, + would have been in effect a year after the commencement + of the action, and commencing January 1 of the year + following the termination of the action, at the option + of the Party that has taken the action + + (i) the rate of duty shall conform to the schedule in + the Tariff Schedule of the Party, or + + (ii) the tariff shall be eliminated in equal annual + stages ending on the date set forth in the Tariff + Schedule of the Party for the elimination of the + tariff. + +3. A Party may take a bilateral emergency action after the +expiration of the transition period to deal with cases of +serious injury, or threat thereof, to a domestic industry arising +from the operation of this Agreement only with the consent of the +Party against whose good the action would be taken. + +4. The Party taking an action pursuant to this Article shall +provide to the Party against whose good the action is taken +mutually agreed trade liberalizing compensation in the form of +concessions having substantially equivalent trade effects to the +other Party, or equivalent to the value of the additional duties +expected to result from the action. If the Parties are unable to +agree upon compensation, the Party against whose good the action +is taken may take tariff action having trade effects +substantially equivalent to the action taken under paragraph 1. +The Party taking such tariff action shall apply the action only +for the minimum period necessary to achieve such substantially +equivalent effects. + +5. This Article does not apply to emergency actions respecting +goods covered by Annex 300-B (Textile and Apparel Goods). + + +Article 802: Global Actions + +1. Each Party shall retain its rights and obligations under +Article XIX of the GATT or any safeguard agreement pursuant +thereto except those regarding compensation or retaliation and +exclusion from an action to the extent that such rights or +obligations are inconsistent with this Article. Any Party taking +an emergency action under Article XIX or any such agreement shall +exclude imports of a good from each other Party from such action +unless: + + (a) imports from a Party, considered individually, account + for a substantial share of total imports; and + + (b) imports from a Party, considered individually, or in + exceptional circumstances imports from Parties + considered collectively, contribute importantly to the + serious injury, or threat thereof, caused by imports. + +2. In determining whether: + + (a) imports from a Party, considered individually, account + for a substantial share of total imports, such imports + normally shall not be considered to account for a + substantial share of total imports if such Party is not + among the top five suppliers of the good subject to the + proceeding, measured in terms of import share during + the most recent three-year period; and + + (b) imports from a Party or Parties contribute importantly + to the serious injury, or threat thereof, the competent + investigating authority shall consider such factors as + the change in the import share of each Party, and the + level and change in the level of imports of each Party. + In this regard, imports from a Party normally shall not + be deemed to contribute importantly to serious injury, + or the threat thereof, if the growth rate of imports + from a Party during the period in which the injurious + surge in imports occurred is appreciably lower than the + growth rate of total imports from all sources over the + same period. + +3. A Party taking such action, from which a good from another +Party or Parties is initially excluded pursuant to paragraph 1, +shall have the right subsequently to include that good of the +other Party or Parties in the action in the event that the +competent investigating authority determines that a surge in +imports of such good of the other Party or Parties undermines the +effectiveness of such action. + +4. A Party shall, without delay, deliver written notice to the +other Parties of the institution of a proceeding that may result +in emergency action under paragraph 1 or 3. + +5. In no case shall a Party impose restrictions on a good in an +action under paragraph 1 or 3: + + (a) without delivery of prior written notice to the + Commission, and without adequate opportunity for + consultation with the Party or Parties against whose + good the action is proposed to be taken, as far in + advance of taking the action as practicable; and + + (b) that would have the effect of reducing imports of such + good from a Party below the trend of imports of such + good from that Party over a recent representative base + period with allowance for reasonable growth. + +6. The Party taking an action pursuant to this Article shall +provide to the Party or Parties against whose good the action is +taken mutually agreed trade liberalizing compensation in the form +of concessions having substantially equivalent trade effects to +that Party or Parties or equivalent to the value of the +additional duties expected to result from the action. If such +Parties are unable to agree upon compensation, the Party against +whose good the action is taken may take action having trade +effects substantially equivalent to the action taken under +paragraph 1 or 3. + + +Article 803: Administration of Emergency Action Proceedings + +1. Each Party shall ensure the consistent, impartial and +reasonable administration of its respective laws, regulations, +decisions and rulings governing all emergency action proceedings. + +2. Each Party shall entrust determinations of serious injury, +or threat thereof, in emergency action proceedings to a competent +investigating authority, subject to review by judicial or +administrative tribunals, to the extent provided by domestic law. +Negative injury determinations shall not be subject to +modification, except by such review. The competent investigating +authority empowered under domestic law to conduct such +proceedings should be provided with the necessary resources to +enable it to fulfill its duties. + +3. Each Party shall adopt or maintain equitable, timely, +transparent and effective procedures for emergency action +proceedings, in accordance with the requirements set out in Annex +803. + +4. This Article does not apply to emergency actions respecting +goods covered by Annex 300-B (Textile and Apparel Goods). + + +Article 804: Dispute Settlement in Emergency Action Matters + + No party may request the establishment of an arbitral panel +under Article 2008 regarding any proposed emergency action. + + +Article 805: Definitions + +For purposes of this Chapter: + +competent investigating authority means the "competent +investigating authority" of a Party as defined in Annex 804; + +contribute importantly means an important cause, but not +necessarily the most important cause; + +critical circumstances means circumstances where delay would +cause damage that would be difficult to repair; + +domestic industry means the producers as a whole of the like or +directly competitive good operating within the territory of a +Party; + +emergency action means any emergency action proceeding instituted +after the date of entry into force of this Agreement; + +serious injury means a significant overall impairment of a +domestic industry; + +surge means a significant increase in imports over the trend for +a recent representative base period; + +threat of serious injury means serious injury that, on the basis +of facts and not merely on allegation, conjecture or remote +possibility, is clearly imminent; and + +transition period means the 10-year period commencing on the date +of the entry into force of this Agreement, except where the good +against which the action is taken is provided for in the items in +staging category C+ of the Tariff Schedule of the Party taking +the action, in which case the transition period shall be the +period of staged tariff elimination for that good. + +============================================================================= + ANNEX 801 + + Bilateral Actions + + + Notwithstanding Article 801, bilateral emergency actions +between Canada and the United States on goods originating in the +territory of either Party shall be governed in accordance with +the terms of Article 1101 of the Canada-U.S. Free Trade +Agreement, which is hereby incorporated into and made a part of +this Agreement for such purpose. + +============================================================================= + ANNEX 803 + + Administration of Emergency Action Proceedings + + +1. Institution of a Proceeding: + + (a) An emergency action proceeding may be instituted by a + petition or complaint by entities specified in domestic + law. The entity filing the petition or complaint shall + demonstrate that it is representative of the domestic + industry producing a good like or directly competitive + with the imported good. + + (b) A Party may institute a proceeding on its own motion or + request the competent investigating authority to + conduct a proceeding. + +2. Contents of a petition or complaint. When the basis for an + investigation is a petition or complaint filed by an entity + representative of a domestic industry, the petitioning + entity shall, in its petition or complaint, provide the + following information to the extent that such information is + publicly available from governmental and other sources, and + best estimates and the basis therefore if such information + is not available: + + (a) Product description. The name and description of the + imported good concerned, the tariff subheading under + which such good is classified, its current tariff + treatment, and the name and description of the like or + directly competitive domestic good concerned, + + (b) Representativeness: + + (i) The names and addresses of the entities filing the + petition or complaint, and the locations of the + establishments in which they produce the domestic + good, + + (ii) the percentage of domestic production of the like + or directly competitive good that such entities + account for and the basis for claiming that they + are representative of an industry, and + + (iii) the names and locations of all other domestic + establishments in which the like or directly + competitive good is produced; + + (c) Import data. Import data for each of the five most + recent full years that form the basis of the claim that + the good concerned is being imported in increased + quantities, either in absolute terms or relative to + domestic production; + + (d) Domestic production data. Data on total domestic + production of the like or directly competitive good for + each of the five most recent full years; + + (e) Data showing injury. Quantitative and objective data + indicating the nature and extent of injury to the + concerned industry, such as data showing changes in the + level of sales, prices, production, productivity, + capacity utilization, market share, profits and losses, + and employment; + + (f) Cause of injury. An enumeration and description of the + alleged causes of the injury, or threat thereof, and a + summary of the basis for the assertion that increased + imports, either actual or relative to domestic + production, of the imported good are causing or + threatening to cause serious injury, supported by + pertinent data; and + + (g) Criteria for inclusion. Quantitative and objective + data indicating the share of imports accounted for by + imports from the territory of each other Party and the + petitioner's views on the extent to which such imports + are contributing importantly to the serious injury, or + threat thereof, caused by imports of that good. + +3. Petitions or complaints, except to the extent they contain +confidential business information, shall promptly be made +available for public inspection upon being filed. + +4. With respect to an emergency action proceeding instituted on +the basis of a petition or complaint filed by an entity asserting +that it is representative of the domestic industry, the competent +investigating authority shall not publish the notice required by +paragraph 6 without first assessing carefully that the petition +or complaint meets the requirements of paragraph 4, including +representativeness. + +5. Notice requirement. Upon instituting an emergency action +proceeding, the competent investigating authority shall publish +notice of the institution of the proceeding in the official +journal of the Party. The notice shall identify: the petitioner +or other requester; the imported good that is the subject of the +proceeding and its tariff subheading; the nature and timing of +the determination to be made; the time and place of the public +hearing; dates of deadlines for filing briefs, statements, and +other documents; the place at which the petition and any other +documents filed in the course of the proceeding may be inspected; +and the name, address and telephone number of the office to be +contacted for more information. + +6. Public hearing. In the course of each such proceeding, +the competent investigating authority shall: + + (a) hold a public hearing, after providing reasonable + notice, to allow all interested parties, and any + association whose purpose is to represent the interests + of consumers in the territory of the Party instituting + the proceeding, to appear in person or by counsel, to + present evidence, and to be heard on the questions of + serious injury, or threat thereof, and the appropriate + remedy; and + + (b) provide an opportunity to all interested parties and + any such association appearing at the hearing to + cross-question interested parties making presentations + at that hearing. + +7. Confidential information. The competent investigating +authority shall adopt or maintain procedures for the treatment of +confidential information, protected under domestic law, that is +provided in the course of a proceeding, including a requirement +that interested parties and consumer associations providing such +information furnish non-confidential written summaries thereof, +or if they indicate that such information cannot be summarized, +the reasons why a summary cannot be provided. + +8. Evidence of injury and causation: + + (a) In conducting its proceeding the competent + investigating authority shall gather, to the best of + its ability, all relevant information appropriate to + the determination it must make. It shall evaluate all + relevant factors of an objective and quantifiable + nature having a bearing on the situation of that + industry, in particular, the rate and amount of the + increase in imports of the good concerned, in absolute + and relative terms, the share of the domestic market + taken by increased imports, and changes in the level of + sales, production, productivity, capacity utilization, + profits and losses, and employment. In making its + determination, the competent investigating authority + may also consider other economic factors, such as + changes in prices and inventories, and the ability of + firms in the industry to generate capital; + + (b) The competent investigating authority shall not make an + affirmative injury determination unless its + investigation demonstrates, on the basis of objective + evidence, the existence of a clear causal link between + increased imports of the good concerned and serious + injury, or threat thereof. When factors other than + increased imports are causing injury to the domestic + industry at the same time, such injury shall not be + attributed to increased imports; + +9. Time period for deliberation. Except in critical +circumstances and in global actions involving perishable +agricultural products, the competent investigating authority, +before making an affirmative determination in an emergency action +proceeding, shall allow sufficient time to gather and consider +the relevant information, hold a public hearing, and provide an +opportunity for all interested parties and consumer associations +to prepare and submit their views. + +10. The competent investigating authority shall publish promptly +a report, including a summary thereof, in the official journal of +the Party setting forth its findings and reasoned conclusions on +all pertinent issues of law and fact. The report shall describe +the imported good and its tariff item number, the standard +applied and the finding made. The statement of reasons shall set +forth the basis for the determination, including a description +of: the domestic industry seriously injured or threatened with +serious injury; information supporting a finding that imports are +increasing, the domestic industry is seriously injured or +threatened with serious injury, and increasing imports are +causing or threatening serious injury; and, if provided for by +domestic law, any finding or recommendation regarding the +appropriate remedy and the basis therefor. In its report, the +competent investigating authority shall not disclose any +confidential information provided pursuant to any undertakings +concerning confidential information that may have been made in +the course of the proceedings. + +============================================================================= + ANNEX 804 + + Country-Specific Definitions + + +For purposes of this Chapter: + +competent investigating authority means: + + (a) in the case of Canada, the Canadian International Trade + Tribunal, or its successor; + + (b) in the case of the Mexico, the designated authority + within the Ministry of Trade and Industrial Development + ("Secretar¡a de Comercio y Fomento Industrial"), or its + successor; and + + (c) in the case of the United States, the U.S. + International Trade Commission, or its successor. + +NAFTA PART THREE TECHNICAL BARRIERS TO TRADE Chapter Nine Standards-Related Measures + + + +Article 901: Scope + +1. This Chapter applies to any standards-related measure of a +Party, other than those covered by Chapter Seven, Subchapter B +(Sanitary and Phytosanitary Measures), that may, directly or +indirectly, affect trade in goods or services between the +Parties, and to measures of the Parties relating to such +measures. + +2. Purchasing specifications prepared by governmental bodies +for production or consumption requirements of such bodies shall +be governed exclusively by Chapter Ten (Government Procurement). + + +Article 902: Extent of Obligations + +1. Article 105 (Extent of Obligations) does not apply to this +Chapter. + +2. Each Party shall seek, through appropriate measures, to +ensure observance of Articles 904 through 908 by provincial or +state governments and by non-governmental standardizing bodies in +its territory. + + +Article 903: Affirmation of Agreement on Technical Barriers + to Trade and Other Agreements + + Further to Article 104, the Parties affirm with respect to +each other their existing rights and obligations relating to +standards-related measures under the GATT Agreement on Technical +Barriers to Trade and all other international agreements, +including environmental and conservation agreements, to which +such Parties are party. + +Article 904: Basic Rights and Obligations + + Right to Take Standards-Related Measures + +1. Each Party may, in accordance with this Agreement, adopt, +maintain and apply standards-related measures, including those +relating to safety, the protection of human, animal and plant +life and health, the environment, and consumers, and measures to +ensure their enforcement or implementation. Such measures +include those to prohibit the importation of a good of another +Party or the provision of a service by a service provider of +another Party that fails to comply with the applicable +requirements of such measures or to complete its approval +procedures. + + Right to Establish Level of Protection + +2. Notwithstanding any other provision of this Chapter, each +Party may, in pursuing its legitimate objectives of safety or the +protection of human, animal or plant life or health, the +environment, or consumers, establish the levels of protection +that it considers appropriate in accordance with Article 907(3). + + Non-Discriminatory Treatment + +3. Each Party shall, in respect of its standards-related +measures, accord to goods or service providers of another Party: + + (a) national treatment in accordance with Article 301 + (Market Access) or Article 1202 (Cross-Border Trade in + Services); and + + (b) treatment no less favorable than that it accords to + like goods, or in like circumstances to service + providers, of any other country. + + Unnecessary Obstacles + +4. No Party may prepare, adopt, maintain or apply any +standards-related measure with a view to or with the effect of +creating an unnecessary obstacle to trade between the Parties. +An unnecessary obstacle to trade shall not be deemed to be +created if: + + (a) the demonstrable purpose of such measure is to achieve + a legitimate objective; and + + (b) such measure does not operate to exclude goods of + another Party that meet that legitimate objective. + + +Article 905: Use of International Standards + +1. Each Party shall use, as a basis for its standards-related +measures, international standards or international standards +whose completion is imminent, except where such standards would +be an ineffective or inappropriate means to fulfill its +legitimate objectives, for example because of fundamental +climatic, geographical, technological or infrastructural factors, +scientific justification or the level of protection that the +Party considers appropriate. + +2. A Party's standards-related measure that conforms to an +international standard shall be presumed to be consistent with +Article 904(3) and (4). + +3. Paragraph 1 shall not be construed to prevent a Party, in +pursuing its legitimate objectives, from adopting, maintaining, +or applying any standards-related measure that results in a +higher level of protection than would be achieved if such measure +were based on an international standard. + + +Article 906: Compatibility and Equivalence + +1. Recognizing the crucial role of standards-related measures +in promoting and protecting legitimate objectives, the Parties +shall, in accordance with this Chapter, work jointly to enhance +the level of safety and of protection of human, animal and plant +life and health, the environment and consumers. + +2. Without reducing the level of safety or of protection of +human, animal or plant life or health, the environment or +consumers, without prejudice to the rights of any Party under +this Chapter, and taking into account international +standardization activities, the Parties shall, to the greatest +extent practicable, make compatible their respective standards- +related measures, so as to facilitate trade in a good or service +between the Parties. + +3. Further to Articles 902 and 905, a Party shall, upon the +request of another Party, seek, through appropriate measures, to +promote the compatibility of a specific standard or conformity +assessment procedure that is maintained in its territory with the +standards or conformity assessment procedures maintained in the +territory of the other Party. + +4. Each importing Party shall treat a technical regulation +adopted or maintained by an exporting Party as equivalent to its +own where the exporting Party, in cooperation with the importing +Party, demonstrates to the satisfaction of the importing Party +that its technical regulation adequately fulfills the importing +Party's legitimate objectives. + +5. The importing Party shall provide to the exporting Party, +upon request, its reasons in writing for not treating a technical +regulation as equivalent under paragraph 4. + +6. Each Party shall, wherever possible, accept the results of a +conformity assessment procedure conducted in the territory of +another Party, provided that it is satisfied that such procedure +offers an assurance, equivalent to that provided by a procedure +it conducts or a procedure conducted in its territory the results +of which it accepts, that the relevant good or service complies +with the applicable technical regulation or standard adopted or +maintained in the Party's territory. + +7. Prior to acceptance of results of a conformity assessment +procedure pursuant to paragraph 6, and to enhance confidence in +the continued reliability of each other's conformity assessment +results, the Parties may consult on such matters as the technical +competence of the conformity assessment bodies involved, +including verified compliance with relevant international +standards through such means as accreditation. + + +Article 907: Assessment of Risk + +1. A Party may, in pursuing its legitimate objectives, conduct +an assessment of risk. In conducting such assessment, a Party +may consider, among other factors relating to a good or service: + + (a) available scientific evidence or technical information; + + (b) intended end uses; + + (c) processes or production, operating, inspection, + sampling or testing methods; or + (d) environmental conditions. + +2. Where a Party conducting an assessment of risk determines +that available scientific evidence or other information is +insufficient to complete the assessment, it may adopt a +provisional technical regulation on the basis of available +relevant information. The Party shall, within a reasonable +period after information sufficient to complete the assessment of +risk is presented to it, complete its assessment, review and +where appropriate revise the provisional technical regulation in +light of such assessment. + +3. Where a Party pursuant to Article 904(2) establishes the +level of protection that it considers appropriate and conducts an +assessment of risk, it should avoid arbitrary or unjustifiable +distinctions between similar goods or services in the level of +protection it considers appropriate, if such distinctions: + + (a) result in arbitrary or unjustifiable discrimination + against goods or service providers of another Party; + + (b) constitute a disguised restriction on trade between the + Parties; or + + (c) discriminate between similar goods or services for the + same use under the same conditions that pose the same + level of risk and provide similar benefits. + + +Article 908: Conformity Assessment + +1. The Parties shall, further to Article 906 and recognizing +the existence of substantial differences in the structure, +organization, and operation of conformity assessment procedures +in their respective territories, make compatible to the greatest +extent practicable such procedures. + +2. Recognizing that it should be to the mutual advantage of the +Parties concerned and except as set out in Annex 908(2), each +Party shall accredit, approve, license or otherwise recognize +conformity assessment bodies in the territory of another Party on +terms no less favorable than those accorded to such bodies in its +territory. + +3. With respect to a Party's conformity assessment procedure, +such Party shall: + + (a) not adopt or maintain any such procedure that is + stricter, nor apply such procedure more strictly, than + necessary to give it confidence that a good or a + service conforms with an applicable technical + regulation or standard, taking into account the risks + that non-conformity would create; + + (b) initiate and complete such procedure as expeditiously + as possible; + + (c) in accordance with Article 904(3), undertake processing + of applications in non-discriminatory order; + + (d) publish the normal processing period for each such + procedure or communicate the anticipated processing + period to an applicant upon request; + + (e) ensure that the competent body + + (i) upon receipt of an application, promptly + examines the completeness of the documentation + and informs the applicant in a precise and + complete manner of any deficiency, + + (ii) transmits to the applicant as soon as possible + the results of the conformity assessment + procedure in a form that is precise and complete + so that such applicant may take any necessary + corrective action, + + (iii) where the application is deficient, proceeds as + far as practicable with such procedure if the + applicant so requests, and + + (iv) informs the applicant, upon request, of the + status of the application and the reasons for + any delay; + + (f) limit the information the applicant is required to + supply to that necessary to conduct such procedure and + to determine appropriate fees; + + (g) accord confidential or proprietary information arising + from, or supplied in connection with, the conduct of + such procedure for a good of another Party or for a + service provided by a person of another Party + + (i) the same treatment as that for a good of such + Party or a service provided by a person of such + Party, and + + (ii) in any event, treatment that protects an + applicant's legitimate commercial interests to + the extent provided under the Party's law; + + (h) ensure that any fee it imposes for conducting such + procedure is no higher for a good of another Party or a + service provider of another Party than is equitable in + relation to any such fee imposed for its like goods or + service providers or for like goods or service + providers of any other country, taking into account + communication, transportation and other related costs; + + (i) ensure that the location of facilities at which a + conformity assessment procedure is conducted does not + cause unnecessary inconvenience to an applicant or its + agent; + + (j) limit such procedure, for a good or service modified + subsequent to a determination that such good or service + conforms to the applicable technical regulation or + standard, to that necessary to determine that such good + or service continues to conform to such technical + regulation or standard; and + + (k) limit any requirement regarding samples of a good to + that which is reasonable, and ensure that the selection + of samples does not cause unnecessary inconvenience to + an applicant or its agent. + +4. Each Party shall apply, with appropriate modifications, the +relevant provisions of paragraph 3 to its approval procedures. + +5. Each Party shall, upon the request of another Party, take +such reasonable measures as may be available to it to facilitate +access in its territory for conformity assessment activities. + +6. Each Party shall give sympathetic consideration to a request +by another Party to negotiate agreements for the mutual +recognition of the results of that other Party's conformity +assessment procedures. + + +Article 909: Notification, Publication, and Provision of + Information + +1. Further to Articles 1802 (Publication) and 1803 +(Notification and Provision of Information), each Party proposing +to adopt or modify a technical regulation, shall: + + (a) at least 60 days prior to the adoption or modification + of such technical regulation, other than a law, publish + a notice and notify in writing the other Parties of the + proposed measure in such a manner as to enable + interested persons to become acquainted with such + measure, except that in the case of any such measure + related to perishable goods, each Party shall, to the + greatest extent practicable, publish such notice and + provide such notification at least 30 days prior to the + adoption or modification of such measure, but no later + than when notification is provided to domestic + producers; + + (b) identify in such notice and notification the good or + service to which the proposed measure would apply, and + shall provide a brief description of the objective of, + and reasons for, such measure; + + (c) provide a copy of the proposed measure to any Party or + interested person that so requests, and shall, wherever + possible, identify any provision that deviates in + substance from relevant international standards; and + + (d) without discrimination, allow other Parties and + interested persons to make comments in writing and + shall, upon request, discuss such comments and take + such comments and the results of such discussions into + account. + +2. Each Party proposing to adopt or modify a standard or any +conformity assessment procedure not otherwise considered to be a +technical regulation shall, where an international standard +relevant to the proposed measure does not exist or such measure +is not substantially the same as an international standard, and +where the measure may have a significant effect on the trade of +the other Parties: + + (a) at an early appropriate stage, publish a notice and + provide a notification of the type required in + paragraphs 1 (a) and (b); and + + (b) observe paragraphs 1 (c) and (d). + +3. Each Party shall seek, through appropriate measures, to +ensure, with respect to a technical regulation of a state or +provincial government other than a local government: + + (a) that, at an early appropriate stage, a notice and + notification of the type required under paragraphs 1 + (a) and (b) are made prior to their adoption; and + + (b) observance of paragraphs 1 (c) and (d). + +4. Where a Party considers it necessary to address an urgent +problem relating to safety or to protection of human, animal or +plant life or health, the environment or consumers, it may omit +any step set out in paragraphs 1 or 3, provided that upon +adoption of a standards-related measure it shall: + + (a) immediately provide to the other Parties a notification + of the type required under paragraph 1(b), including a + brief description of the urgent problem; + + (b) provide a copy of such measure to any Party or + interested person that so requests; and + + (c) without discrimination, allow other Parties and + interested persons to make comments in writing, and + shall, upon request, discuss such comments and take + such comments and the results of such discussions into + account. + +5. Each Party shall, except where necessary to address an +urgent problem referred to in paragraph 4, allow a reasonable +period between the publication of a standards-related measure and +the date that it becomes effective to allow time for interested +persons to adapt to such measure. + +6. Where a Party allows non-governmental persons in its +territory to be present during the process of development of +standards-related measures, it shall also allow non-governmental +persons from the territories of the other Parties to be present. + +7. Each Party shall notify the other Parties of the development +of, amendment to, or change in the application of its standards- +related measures no later than the time at which it notifies non- +governmental persons in general or the relevant sector in its +territory. + +8. Each Party shall seek, through appropriate measures, to +ensure the observance of paragraphs 6 and 7 by a provincial or +state government, and by non-governmental standardizing bodies in +its territory. + +9. Each Party shall designate a government authority +responsible for the implementation at the federal level of the +notification provisions of this Article, and shall notify the +other Parties thereof. Where a Party designates two or more +government authorities for such purpose, it shall provide to the +other Parties complete and unambiguous information on the scope +of responsibility of each such authority. + + +Article 910: Inquiry Points + +1. Each Party shall ensure that there is an inquiry point that +is able to answer all reasonable inquiries from other Parties and +interested persons, and to provide relevant documents regarding: + + (a) any standards-related measure proposed, adopted or + maintained in its territory at the federal, provincial, + or state government level; + + (b) the membership and participation of such Party, or its + relevant federal, provincial or state government + authorities, in international and regional + standardizing bodies and conformity assessment systems, + and in bilateral and multilateral arrangements + regarding standards-related measures, and the + provisions of such systems and arrangements; + + (c) the location of notices published pursuant to Article + 909, or where such information can be obtained; + + (d) the location of the inquiry points referred to in + paragraph 3; and + + (e) such Party's procedures for assessment of risk, factors + it considers in conducting such assessment and in + establishing, pursuant to Article 904(2), the levels of + protection that it considers appropriate. + +2. Where a Party designates more than one inquiry point, it +shall: + + (a) provide to the other Parties complete and unambiguous + information on the scope of responsibility of each + inquiry point; and + + (b) ensure that any enquiry addressed to an incorrect + inquiry point is promptly conveyed to the correct + inquiry point. + +3. Each Party shall take such reasonable measures as may be +available to it to ensure that there is at least one enquiry +point that is able to answer all reasonable enquiries from other +Parties and interested persons and to provide relevant documents +or information as to where they can be obtained regarding: + + (a) any standard or conformity assessment procedure + proposed, adopted or maintained by non-governmental + standardizing bodies in its territory; and + + (b) the membership and participation of relevant non- + governmental bodies in its territory in international + and regional standardizing bodies and conformity + assessment systems. + +4. Each Party shall ensure that where copies of documents are +requested by another Party or by interested persons in accordance +with this Chapter, they are supplied at the same price, apart +from the actual cost of delivery, as the price for domestic +purchase. + + +Article 911: Technical Cooperation + +1. Each Party shall, upon the request of another Party: + + (a) provide to that Party technical advice, information and + assistance on mutually agreed terms and conditions to + enhance that Party's standards-related measures, and + related activities, processes, and systems; + + (b) provide to that Party information on its technical + cooperation programs regarding standards-related + measures relating to specific areas of interest; and + + (c) consult with that Party during the development of, or + prior to the adoption or change in the application of, + any standards-related measure. + +2. Each Party shall encourage its standardizing bodies to +cooperate with the standardizing bodies of the other Parties in +their participation, as appropriate, in standardizing activities, +such as through membership in international standardizing bodies. + + +Article 912: Limitations on the Provision of Information + + Nothing in this Chapter shall be construed as requiring a +Party to: + + (a) communicate, publish texts, or provide particulars or + copies of documents other than in an official language + of such Party; or + + (b) furnish any information the disclosure of which would + impede law enforcement or otherwise be contrary to the + public interest, or would prejudice the legitimate + commercial interests of particular enterprises. + + +Article 913: Committee on Standards-Related Measures + +1. The Parties hereby establish a Committee on Standards- +Related Measures, comprising representatives of each Party. + +2. The Committee's functions shall include: + + (a) monitoring the implementation and administration of + this Chapter, including the progress of the + subcommittees and working groups established under + paragraph 4, and the operation of the enquiry points + established under Article 910; + + (b) facilitating the process by which the Parties make + compatible their standards-related measures; + + (c) providing a forum for the Parties to consult on issues + relating to standards-related measures, including the + provision of technical advice and recommendations under + Article 914; + + (d) enhancing cooperation on the development, application + and enforcement of standards-related measures; + + (e) considering non-governmental, regional and multilateral + developments regarding standards-related measures, + including under the GATT; and + + (f) reporting annually to the Commission on the + implementation of this Chapter. + +3. The Committee shall meet upon the request of any Party and, +unless the Parties otherwise agree, at least once each year. + +4. The Committee may, as it considers appropriate, establish +and determine the scope and mandate of subcommittees or working +groups, comprising representatives of each Party. Each such +subcommittee or working group may: + + (a) as it considers necessary or desirable, include or + consult with + + (i) representatives of non-governmental bodies, + including standardizing bodies, + + (ii) scientists, and + + (iii) technical experts; and + + (b) determine its work program, taking into account + relevant international activities. + +5. Further to paragraph 4, the Committee shall establish: + + (a) the following subcommittees or working groups + + (i) Land Transportation Standards Subcommittee, in + accordance with Annex 913-A, + + (ii) Telecommunications Standards Subcommittee, in + accordance with Annex 913-B, + + (iii) Automotive Standards Council, in accordance with + Annex 913-C, and + + (iv) Subcommittee on Labelling of Textile and Apparel + Goods, in accordance with Annex 913-D; + + (b) such other subcommittees or working groups as it + considers appropriate to address any topic, including: + + (i) identification and nomenclature for goods + subject to standards-related measures, + + (ii) quality and identity standards and + technical regulations, + + (iii) packaging, labelling, and presentation of + consumer information, including languages, + measurement systems, ingredients, sizes, + terminology, symbols, and related matters, + + (iv) product approval and post-market + surveillance programs, + + (v) principles for the accreditation and + recognition of conformity assessment + bodies, procedures, and systems, + + (vi) development and implementation of a uniform + chemical hazard classification and + communication system, + + (vii) enforcement programs, including training + and inspections by regulatory, analytical, + and enforcement personnel, + + (viii) promotion and implementation of good + laboratory practices, + + (ix) promotion and implementation of good + manufacturing practices, + + (x) criteria for assessment of potential + environmental hazards of goods, + + (xi) methodologies for assessment of risk, + + (xii) guidelines for testing of chemicals, + including industrial and agricultural + chemicals, pharmaceuticals, and + biologicals, + + (xiii) methods by which consumer protection, + including matters relating to consumer + redress, can be facilitated, and + + (xiv) extension of the application of this Chapter to + other services. + +6. Each Party shall, upon the request of another Party, take +such reasonable measures as may be available to it to provide for +the participation in the work of the Committee, where and as +appropriate, of representatives of provincial or state +governments in the activities of the Committee. + +7. A Party requesting technical advice, information, or +assistance pursuant to Article 911 shall notify the Committee +which shall facilitate any such request. + + +Article 914: Technical Consultations + +1. Where a Party requests consultations regarding the +application of this Chapter to a Party's standards-related +measure, and so notifies the Committee, the Committee may +facilitate such consultations, if it does not consider the matter +itself, by referring the matter for non-binding technical advice +or recommendations to a subcommittee or working group, including +an ad hoc subcommittee or working group, or to another forum. + +2. The Committee should consider any matter referred to it +under paragraph 1 as expeditiously as possible and promptly +forward to the Parties any technical advice or recommendations +that it develops or receives concerning the matter. The Parties +involved shall provide a written response to the Committee +concerning the technical advice or recommendations within such +time as the Committee may request. + +3. Where the involved Parties have had recourse to +consultations facilitated by the Committee under paragraph 1, +such consultations shall, if agreed by the Parties involved, +constitute consultations under Article 2006 (Consultations). + +4. The Parties confirm that a Party asserting that a standards- +related measure of another Party is inconsistent with the +provisions of this Chapter shall have the burden of establishing +such inconsistency. + + +Article 915: Definitions + +1. For purposes of this Chapter: + +approval procedure means any registration, notification, or other +mandatory administrative procedure for obtaining permission for a +good or service to be produced, marketed, or used for a stated +purpose or under stated conditions; + +assessment of risk means evaluation of the potential for adverse +effects; + +conformity assessment procedure means any procedure used, +directly or indirectly, to determine that a relevant technical +regulation or standard is fulfilled, including sampling, testing, +inspection, evaluation, verification, monitoring, auditing, +assurance of conformity, accreditation, registration, or approval +used for such a purpose, but does not mean an approval procedure; + +international standard means a standards-related measure, or +other guide or recommendation, adopted by an international +standardizing body and made available to the public; + +international standardizing body means a standardizing body whose +membership is open to the relevant bodies of at least all the +parties to the GATT Agreement on Technical Barriers to Trade, +including the International Organization for Standardization +(ISO), the International Electrotechnical Commission (IEC), Codex +Alimentarius Commission, the World Health Organization (WHO), the +Food and Agriculture Organization (FAO), the International +Telecommunications Union (ITU); or any other body that the +Parties designate; + +land transportation service means a transportation service +provided by means of motor carrier or rail; + +legitimate objective includes an objective such as: + + (a) safety; + + (b) protection of human, animal or plant life or health, + the environment or consumers (including matters + relating to quality and identifiability of goods or + services); or + + (c) sustainable development, + +considering, among other things, where appropriate, fundamental +climatic or other geographical factors, technological or +infrastructural factors, or scientific justification but does not +include the protection of domestic production; + +make compatible means bring different standards-related measures +of the same scope approved by different standardizing bodies to a +level such that they are either identical, equivalent, or have +the effect of permitting goods or services to be used in place of +one another or fulfill the same purpose; + +services means land transportation services and telecommunication +services; + +standard means a document, approved by a recognized body, that +provides, for common and repeated use, rules, guidelines or +characteristics for products, or related processes and production +methods, or for services or related operating methods with which +compliance is not mandatory. It may also include or deal +exclusively with terminology, symbols, packaging, marking or +labelling requirements as they apply to a product, process or +production or operating method; + +standardizing body means a body having recognized activities in +standardization; + +standards-related measure means a standard, technical regulation +or conformity assessment procedure; + +technical regulation means a document which lays down product +characteristics or their related processes and production +methods, or for services or operating methods, including the +applicable administrative provisions, with which compliance is +mandatory. It may also include or deal exclusively with +terminology, symbols, packaging, marking or labelling +requirements as they apply to a product, process or production or +operating method; + +telecommunication service means a service provided by means of +the transmission and reception of signals by any electromagnetic +means. + +2. Except as they are otherwise defined in this Agreement, +other terms in this Chapter shall be interpreted in accordance +with their ordinary meaning in context and in the light of the +objectives of this Agreement, and where appropriate by reference +to the terms presented in the sixth edition of the ISO/IEC Guide +2: 1991, General Terms and Their Definitions Concerning +Standardization and Related Activities. + +============================================================================= + ANNEX 908.2 + + Transitional Rules for Conformity Assessment Procedures + + +1. Except in respect of governmental conformity assessment +bodies, Article 908(2) shall impose no obligation and confer no +right on Mexico until four years after the date of entry into +force of this Agreement. + +2. Where a Party charges a reasonable fee, limited in amount to +the approximate cost of the service rendered, to accredit, +approve, license, or otherwise recognize a conformity assessment +body in the territory of another Party, it need not, prior to +December 31, 1998 or such earlier date as the Parties may agree, +charge such a fee to a conformity assessment body in its +territory. + +============================================================================= + ANNEX 913 - A + + Land Transportation Standards Subcommittee + + +1. The Land Transportation Standards Subcommittee, established +under Article 913, shall comprise representatives of each Party. + +2. The Subcommittee shall implement the following work program +for making compatible the Parties' relevant standards-related +measures for: + + (a) motor carrier operations, + + (i) no later than one and one-half years from the + date of entry into force of this Agreement, for + non-medical standards-related measures + respecting drivers, including measures relating + to the age of and language used by drivers, + + (ii) no later than two and one-half years from the + date of entry into force of this Agreement, for + medical standards-related measures respecting + drivers, + + (iii) no later than three years from the date of entry + into force of this Agreement, for standards- + related measures respecting vehicles, including + measures relating to weights and dimensions, + tires, brakes, parts and accessories, securement + of cargo, maintenance and repair, inspections, + and emissions and environmental pollution levels + not covered by the Automotive Standards work + program established under Annex 913-C, + + (iv) no later than three years from the date of entry + into force of this Agreement, for standards- + related measures respecting each Party's + supervision of motor carriers' safety + compliance, and + + (v) no later than three years from the date of entry + into force of this Agreement, for standards- + related measures respecting road signs; + + (b) rail operations, + + (i) no later than one year from the date of entry + into force of this Agreement, for standards- + related measures respecting operating personnel + that are relevant to cross-border operations, + and + + (ii) no later than one year from the date of entry + into force of this Agreement, for standards- + related measures respecting locomotives and + other rail equipment; and + + (c) transportation of dangerous goods, no later than six + years from the date of entry into force of this + Agreement, using as their basis the United Nations + Recommendations on the Transport of Dangerous Goods, or + such other standards as the Parties may agree. + +3. The Subcommittee may address other related standards-related +measures as it considers appropriate. + +============================================================================= + ANNEX 913 - B + + Telecommunications Standards Subcommittee + + +1. The Telecommunications Standards Subcommittee, established +under Article 913, shall comprise representatives of each Party. + +2. The Subcommittee shall, within six months of the date of +entry into force of this Agreement, develop a work program, +including a timetable, for making compatible the Parties' +standards-related measures for authorized equipment as defined in +Chapter 13 (Telecommunications). + +3. The Subcommittee may address other appropriate standards- +related matters respecting telecommunications equipment or +services and such other matters as it considers appropriate. + +4. The Subcommittee shall take into account relevant work +carried out by the Parties in other forums, and that of non- +governmental standardizing bodies. +============================================================================= + ANNEX 913 - C + + Automotive Standards Council + + +1. The Automotive Standards Council, established under Article +913, shall comprise representatives of each Party. + +2. The purpose of the Council shall be, to the extent +practicable, to facilitate the attainment of compatibility among, +and review the implementation of, national standards-related +measures of the Parties that apply to automotive goods and other +related issues. + +3. To facilitate its objectives, the Council may establish +subgroups, consultation procedures and other appropriate +operational mechanisms. With the agreement of all the Parties, +the Council may include state and provincial government or +private sector representatives in its subgroups. + +4. All Council recommendations shall require agreement of all +the Parties. When the adoption of a new law is not required for +a Party, the Council's recommendations shall be implemented by +the Party within a reasonable period of time in accordance with +the legal and procedural requirements and international +obligations of the Party. Where the adoption of a new law is +required for a Party, the Party shall make best efforts to secure +the passage of such legislation and shall implement any new +legislation within a reasonable period of time. + +5. Recognizing the existing disparity in standards-related +measures, the Council shall develop its work program for making +compatible the national standards-related measures that apply to +automotive goods and other related issues based on the following +criteria: + + (a) the impact on industry integration; + + (b) the extent of the barriers to trade; + + (c) the level of trade affected; and + + (d) the extent of such disparity. + +In developing its work program, the Council may address other +closely related issues, including emissions from on-road and +non-road mobile sources. + +6. Each Party shall take such reasonable measures as may be +available to it to promote the objectives of this Annex with +respect to standards-related measures that are developed or +maintained by state, provincial and local authorities and private +sector organizations. The Council shall make every effort to +assist these entities with these activities, especially the +identification of priorities and the establishment of work +schedules. +============================================================================= + ANNEX 913 - D + + Subcommittee on Labelling of Textile and Apparel Goods + + +1. The Subcommittee on Labelling of Textile and Apparel Goods, +established under Article 913, shall comprise representatives of +each Party. + +2. This Subcommittee shall include, and consult with, technical +experts as well as a broadly representative group from the +manufacturing and retailing sectors in the territory of each +Party. + +3. The Subcommittee shall develop and pursue a Work Program on +the Harmonization of Labelling Requirements, to facilitate trade +in textile and apparel goods between the Parties through the +adoption of uniform labelling provisions. The agenda for this +Work Program should include the following issues: + + (a) pictograms and symbols to replace required written + information where possible as well as other methods to + reduce the need for labels on textile and apparel goods + in multiple languages; + + (b) care instructions for textile and apparel goods; + + (c) fiber content information for textile and apparel + goods; + + (d) uniform methods acceptable for the attachment of + required information to textile and apparel goods; and + + (e) use in the territory of other Parties of each Party's + national registration numbers for manufacturers or + importers of textile and apparel goods. + + +NAFTA Chapter Ten Government Procurement + +Article 1001: Objectives + + The Parties shall strive to achieve the liberalization of +their measures regarding government procurement, as specified by +the obligations in this Chapter, so as to provide balanced, +non-discriminatory, predictable and transparent government +procurement opportunities for the suppliers of each Party. + + +Article 1002: Scope and Coverage + +1. Subject to Annexes 1002.1 through 1002.7, this Chapter applies +to any measure regarding the procurement of goods or services or +any combination thereof, by any entity listed in Annex 1002.1 +(Federal Government Entities), Annex 1002.3 (Government +Enterprises) and, when completed, Annex 1002.2 (State and +Provincial Government Entities), where the value of the contract to +be awarded is estimated, at the time of publication of a notice in +accordance with Article 1010 (Invitation to Participate), to equal +or exceed the applicable threshold as set forth in paragraph 3. + +2. Where the contract to be awarded by the entity is not covered +by this Chapter, this Chapter shall not be construed to cover any +good or service component of that contract. However, no Party shall +prepare, design or otherwise structure any procurement contract in +order to avoid the obligations of this Chapter. + +3. Subject to Annex 1002-A, the applicable thresholds in U.S. +dollars are: + + (a) for entities listed in Annex 1002.1 (Federal Government + Entities), + + (i) $50,000 for goods contracts, + + (ii) $50,000 for services contracts, except for + construction services contracts, and + + (iii) $6.5 million for construction services + contracts; and + + (b) for entities listed in Annex 1002.3 (Government + Enterprises) + + (i) $250,000 for goods contracts, + + (ii) $250,000 for services contracts, except for + construction services contracts, and + + (iii) $8.0 million for construction services + contracts. + +4. Threshold values are denominated in real terms and therefore +shall incorporate the inflation rate of the United States. The +United States shall, every two years, calculate and notify to the +other Parties the threshold values denominated in nominal terms +according to of Annex 1002.8 (1) (Indexation and Conversion of +Thresholds). + +5. Each Party shall comply with Annex 1002.8 with respect to the +calculation and conversion of the value of thresholds into national +currencies. + +6. For purposes of this Chapter, procurement includes procurement +by such methods as purchase, lease or rental, with or without an +option to buy, in accordance with the thresholds and coverage +applicable in this Chapter. Procurement does not include the +acquisition of fiscal agency or depository services, liquidation +and management services for regulated financial institutions and +sale and distribution services for government debt. + +7. As between any Parties who are also party to the GATT +Agreement on Government Procurement or any successor agreement to +which such Parties are party, this Chapter shall prevail to the +extent of any inconsistency between the provisions of such +agreement and this Chapter. + + +Article 1003: Valuation of Contracts + +1. Each Party shall ensure that its entities, in determining +whether any contract is subject to this Chapter, apply paragraphs +2 through 6 in calculating the value of that contract. + +2. An entity, in calculating the value of a contract, shall take +into account all forms of remuneration, including premiums, fees, +commissions and interest. + +3. An entity shall not select a valuation method, or divide +procurement requirements into separate contracts, to avoid the +application of this Chapter. + +4. Where an individual requirement for a procurement results in: + + (a) the award of more than one contract, or + + (b) in contracts being awarded in separate parts, + +the basis for valuation shall be either: + + (c) the actual value of similar recurring contracts concluded + over the previous fiscal year or 12 months adjusted, + where possible, for anticipated changes in quantity and + value over the subsequent twelve months; or + + (d) the estimated value of recurring contracts in the fiscal + year or 12 months subsequent to the initial contract. + +5. In the case of a contract for lease or rental, with or without +an option to buy, or in the case of a contract that does not +specify a total price, the basis for valuation shall be: + + (a) in the case of a fixed-term contract, where the term is + 12 months or less, the total contract value for its + duration or, where the term exceeds 12 months, the total + contract value including the estimated residual value; or + + (b) in the case of a contract for an indefinite period, the + estimated monthly installment multiplied by 48. + +If the entity is uncertain as to whether a contract is for a fixed +or an indefinite term, the entity shall calculate the value of the +contract using the method set forth in subparagraph (b). + +6. In cases in which tender documentation specifies the need for +optional purchases, the basis for valuation shall be the total +value of the maximum permissible procurement, inclusive of all +possible optional purchases. + + +Article 1004: National Treatment and Non-discrimination + +1. With respect to all measures regarding government procurement +covered by this Chapter, each Party shall accord to goods of any +other Party, as determined in accordance with the rules of origin +referred to in Article 1005(1) (Rules of Origin), to services of +any other Party, as determined in accordance with Article 1005(2), +and to the suppliers of such goods or services, treatment no less +favorable than the most favorable treatment that it accords to: + + (a) goods, services and suppliers of that Party; and + + (b) goods, services and suppliers of any other Party. + +2. With respect to all measures regarding government procurement +covered by this Chapter, no Party may: + + (a) treat a locally established supplier less favorably than + another locally established supplier on the basis of + degree of foreign affiliation or ownership; or + + (b) discriminate against a locally established supplier if + the goods or services offered by that supplier for the + particular procurement are goods or services of any other + Party. + +3. Paragraph 1 does not apply to customs duties and charges of +any kind imposed on or in connection with importation, the method +of levying such duties and charges, and other import regulations, +including restrictions and formalities. + +4. Each Party reserves the right to deny to an enterprise of any +other Party the benefits of this Chapter in accordance with the +provisions of Article 1113 (Denial of Benefits), except +subparagraph (a). + + +Article 1005: Rules of Origin + +1. No Party shall apply to goods that are imported from any other +Party for purposes of government procurement covered by this +Chapter, rules of origin that are different from or inconsistent +with the rules of origin the Party applies in the normal course of +trade, which will be the non-preferential rules set out in Chapter +Three (for country of origin marking purposes) at such time as they +become the rules of origin applied in the normal course of trade. + +2. Notwithstanding any other provision of this Chapter, a Party +may deny to an enterprise that is a supplier of services of another +Party the benefits of this Chapter if: + + (a) nationals of any non-Party own or control that + enterprise; and + + (b) that enterprise has no substantial business activities in + the territory of the Party under whose laws it is + constituted. + + +Article 1006: Prohibition of Offsets + + Each Party shall ensure that its entities do not, in the +qualification and selection of suppliers, goods or services, or in +the evaluation of bids and the award of contracts, consider, seek +or impose offsets. + + +Article 1007: Technical Specifications + +1. Each Party shall ensure that its entities do not, with the +purpose or the effect of creating unnecessary obstacles to trade, +prepare, adopt or apply any technical specification laying down: + + (a) the characteristics of the goods or services to be + procured such as quality, performance, safety and + dimensions, symbols, terminology, packaging, marking and + labelling; + + (b) the processes and methods for their production related to + the goods characteristics; or + + (c) requirements relating to conformity assessment. + +2. Each Party shall ensure that any technical specification +prescribed by its entities is, where appropriate: + + (a) specified in terms of performance criteria rather than + design or descriptive characteristics; and + + (b) based on international standards, national technical + regulations, recognized national standards or building + codes. + +3. Each Party shall ensure that the technical specifications +prescribed by its entities do not require or refer to a particular +trademark or name, patent, design or type, specific origin or +producer or service provider unless there is no sufficiently +precise or intelligible way of otherwise describing the procurement +requirements and provided that, in such cases, words such as "or +equivalent" are included in the tender documentation. + +4. Each Party shall ensure that its entities do not seek or +accept, in a manner that would have the effect of precluding +competition, advice that may be used in the preparation or adoption +of any technical specification for a specific procurement from a +person that may have a commercial interest in that procurement. + + +Article 1008:Tendering Procedures + +1. Each Party shall ensure that the tendering procedures of its +entities: + + (a) are applied in a non-discriminatory manner; and + + (b) are consistent with the provisions of this Article and + with Articles 1009 (Qualification of Suppliers) through + 1016 (Limited Tendering). + +2. In this regard, each Party shall ensure that its entities: + + (a) do not provide to any supplier information with regard to + a specific procurement in a manner that would have the + effect of precluding competition; and + + (b) provide all suppliers equal access to information with + respect to a procurement during the period prior to the + issuance of any notice or tender documentation. + + +Article 1009: Qualification of Suppliers + +1. No entity of a Party may, in the process of qualifying +suppliers in tendering procedures, discriminate between suppliers +of the other Parties or between domestic suppliers and suppliers of +the other Parties. + +2. The qualification procedures followed by an entity of a Party +shall be consistent with the following: + + (a) any conditions for participation by suppliers in + tendering procedures shall be published sufficiently in + advance so as to provide the suppliers adequate time to + initiate and, to the extent that it is compatible with + efficient operation of the procurement process, to + complete the qualification procedures; + + (b) any conditions for participation by suppliers in + tendering procedures, including financial guarantees, + technical qualifications and information necessary for + establishing the financial, commercial and technical + capacity of suppliers, as well as the verification of + whether a supplier meets those conditions, shall be + limited to those that are essential to ensure the + fulfillment of the contract in question; + + (c) the financial, commercial and technical capacity of a + supplier shall be judged both on the basis of that + supplier's global business activity and its activity, if + any, in the territory of the Party of the procuring + entity; + + (d) no entity may misuse the process of, including the time + required for, qualification in order to exclude suppliers + of any other Party from a suppliers' list or from being + considered for a particular procurement; + + (e) an entity shall recognize as qualified suppliers those + suppliers of any other Party that meet the conditions for + participation in a particular procurement; + + (f) an entity shall consider for a particular procurement + those suppliers of any other Party that request to + participate in the procurement and that are not yet + qualified, provided there is sufficient time to complete + the qualification procedure; + + (g) an entity that maintains a permanent list of qualified + suppliers shall ensure that suppliers may apply for + qualification at any time, that all qualified suppliers + so requesting are included in the list within a + reasonably short period of time and that all qualified + suppliers included in the list are notified of the + termination of any such list or of their removal from it; + + (h) if, after publication of a notice in accordance with + Article 1010 (Invitation to Participate), a supplier that + is not yet qualified requests to participate in a + particular procurement, the entity shall promptly start + the qualification procedure; + + (i) an entity shall advise any supplier that requests to + become a qualified supplier of its decision as to whether + that supplier has become qualified; and + + (j) where an entity rejects a supplier's application to + qualify or ceases to recognize a supplier as qualified, + the entity shall, upon request of the supplier, promptly + provide pertinent information concerning the entity's + reasons for doing so. + +3. Each Party shall: + + (a) ensure that each of its entities uses a single + qualification procedure, except that an entity may use + additional qualification procedures where the entity + determines the need for a different procedure and is + prepared, upon request of any other Party, to demonstrate + such need; and + + (b) make efforts to minimize differences in the qualification + procedures of its entities. + +4. Nothing in paragraphs 2 and 3 shall prevent an entity from +excluding any supplier on grounds such as bankruptcy or false +declarations. + + +Article 1010: Invitation to Participate + +1. An entity shall, in accordance with paragraphs 2, 3 and 5, +publish an invitation to participate for all procurements, except +as otherwise provided for in Article 1016 (Limited Tendering), in +the appropriate publication listed in Annex 1010.1 (Publications). + +2. The invitation to participate shall take the form of a notice +of proposed procurement, which notice shall contain the following +information: + + (a) a description of the nature and quantity of the goods or + services to be procured, including any options for + further procurement and, if possible + + (i) an estimate of the timing when such options may be + exercised, and + + (ii) in the case of recurring contracts, an estimate of + the timing of the subsequent tender notices for the + goods or services to be procured; + + (b) a statement as to whether the procedure is open or + selective and whether it will involve negotiation; + + (c) any date for starting delivery, or completion of + delivery, of goods or services to be procured; + + (d) the address to which an application to be invited to + tender or to qualify for the suppliers' lists must be + submitted, the final date for receiving such an + application and the language or languages in which it may + be submitted; + + (e) the address to which tenders must be submitted, the final + date for receiving tenders and the language or languages + in which tenders may be submitted; + + (f) the address of the entity that will award the contract + and that will provide any information necessary for + obtaining specifications and other documents; + + (g) a statement of any economic and technical requirements to + be met and of any financial guarantees, information and + documents required from suppliers; + + (h) the amount and terms of payment of any sum payable for + the tender documentation; and + + (i) a statement as to whether the entity is inviting offers + for purchase, lease or rental with or without an option + to buy, or more than one of these methods. + +3. Notwithstanding paragraph 2, any entity listed in Annex 1002.2 +(State and Provincial Government Entities) or Annex 1002.3 +(Government Enterprises) may use, as an invitation to participate, +a notice of planned procurement, which shall contain as much of the +information referred to in paragraph 2 as is available to the +entity but which shall include, at a minimum, the following +information: + + (a) a description of the subject matter of the procurement; + + (b) the time limits set for the receipt of tenders or an + application to be invited to tender; + + (c) the address at which requests for documents relating to + the procurement should be made; + + (d) a statement that interested suppliers should express + their interest in the procurement to the entity; and + + (e) the identification of a contact point within the entity + from which further information may be obtained. + +4. Any entity that uses a notice of planned procurement as an +invitation to participate shall subsequently invite suppliers that +have expressed an interest in the procurement to confirm their +interest on the basis of information provided by the entity, which +information shall include at least the information referred to in +paragraph 2. + +5. Notwithstanding paragraph 2, any entity listed in Annex 1002.2 +(State and Provincial Government Entities) or Annex 1002.3 +(Government Enterprises) may use, as an invitation to participate, +a notice regarding a qualification system. Any entity that uses +such a notice shall, subject to the considerations referred to +Article 1015 (8) (Submission, Receipt and Opening of Tenders and +Awarding of Contracts), provide in a timely manner information that +allows all suppliers that have expressed an interest in +participating in the procurement to have a meaningful opportunity +to assess their interest. The information shall normally include +the information contained in the notices referred to in paragraph +2. Information provided to one interested supplier shall be +provided in a non-discriminatory manner to all other interested +suppliers. + +6. In the case of selective tendering procedures, any entity that +maintains a permanent list of qualified suppliers shall publish +annually in one of the publications listed in Annex 1010.1 +(Publications) a notice containing the following information: + + (a) an enumeration of any lists maintained, including their + headings, in relation to the goods or services or + categories of goods or services to be procured through + the lists; + + (b) the conditions to be fulfilled by suppliers in view of + their inscription on the lists referred to in + subparagraph (a) and the methods according to which each + of those conditions will be verified by the entity + concerned; and + + (c) the period of validity of the lists and the formalities + for their renewal. + +7. If, after publication of an invitation to participate, but +before the time set for the opening or receipt of tenders as +specified in the notices or the tender documentation, an entity +finds that it has become necessary to amend or reissue the notice +or tender documentation, the entity shall ensure that the amended +or reissued notice or tender documentation is given the same +circulation as the original. Any significant information given by +an entity to one supplier with respect to a particular procurement +shall be given simultaneously to all other suppliers concerned and +sufficiently in advance so as to provide all suppliers concerned +adequate time to consider such information and to respond to it. + +8. An entity shall indicate, in the notices referred to in this +Article or in the publication in which the notices appear, that the +procurement is covered by this Chapter. + + +Article 1011: Selective Tendering Procedures + +1. To ensure optimum effective competition between the suppliers +of all Parties under selective tendering procedures, an entity of +a Party shall, for each procurement, invite tenders from the +maximum number of domestic suppliers and suppliers of the other +Parties, consistent with the efficient operation of the procurement +system. + +2. Subject to paragraph 3, any entity that maintains a permanent +list of qualified suppliers may select suppliers to be invited to +tender for a particular procurement from among those listed. In the +process of making any selection, the entity shall provide for +equitable opportunities for suppliers on the list. + +3. Subject to Article 1009 (2)(f) (Qualification of Suppliers), +an entity shall allow any supplier that requests to participate in +a particular procurement to submit a tender and shall consider the +tender. The number of additional suppliers permitted to participate +shall be limited only by the efficient operation of the procurement +system. + +4. If an entity does not invite or admit a supplier to tender, +the entity shall, upon request of the supplier, promptly provide +pertinent information concerning its reasons for not doing so. + + +Article 1012: Time Limits for Tendering and Delivery + +1. An entity of a Party shall: + + (a) in prescribing any time limit, provide adequate time to + allow suppliers of the other Parties to prepare and + submit tenders before the closing of the tendering + procedures; + + (b) in determining any time limit, consistent with its own + reasonable needs, take into account such factors as the + complexity of the procurement, the extent of + subcontracting anticipated, and the time normally + required for transmitting tenders by mail from foreign as + well as domestic points; and + + (c) take due account of publication delays when setting the + final date for receipt of tenders or applications to be + invited to tender. + +2. Subject to paragraph 3, an entity shall provide that: + + (a) in open procedures, the period for the receipt of tenders + is no less than 40 days from the date of publication of + the notice referred to in Article 1010 (Invitation to + Participate); + + (b) in selective procedures not involving the use of a + permanent list of qualified suppliers, the period for + submitting an application to be invited to tender is no + less than 25 days from the date of publication of the + notice referred to in Article 1010 (Invitation to + Participate), and the period for receipt of tenders is no + less than 40 days from the date of issuance of the + invitation to tender; and + + (c) in selective procedures involving the use of a permanent + list of qualified suppliers, the period for receipt of + tenders is no less than 40 days from the date of the + initial issuance of invitations to tender. If the date of + initial issuance of invitations to tender does not + coincide with the date of publication of the notice + referred to in Article 1010 (Invitation to Participate), + there shall not be less than 40 days between those two + dates. + +3. An entity may reduce the periods referred to in paragraph 2 in +accordance with the following: + + (a) where a notice referred to Article 1010 (3) or (5) + (Invitation to Participate) has been published for a + period of no less than 40 days and no more than 12 + months, the 40 day limit for receipt of tenders may be + reduced to no less than 24 days; + + (b) in the case of the second or subsequent publications + dealing with recurring contracts within the meaning of + Article 1010 (2) (Invitation to Participate), the 40 day + limit for receipt of tenders may be reduced to no less + than 24 days; + + (c) where a state of urgency duly substantiated by the entity + renders impracticable the periods in question, the + periods may be reduced to no less than 10 days from the + date of publication of the notice referred to in Article + 1010 (Invitation to Participate); or + + (d) where an entity listed in Annex 1002.2 (State and + Provincial Government Entities) or Annex 1002.3 + (Government Enterprises) is using as an invitation to + participate a notice referred to in of Article 1010 (5) + (Invitation to Participate), the periods may be fixed by + mutual agreement between the entity and all selected + suppliers; but in the absence of agreement, the entity + may fix periods which shall be sufficiently long to + enable responsive bidding and shall not be less than 10 + days. + +4. An entity shall, in establishing any delivery date for goods +or services and consistent with its own reasonable needs, take into +account such factors as the complexity of the procurement, the +extent of subcontracting anticipated and the time realistically +required for production, destocking and transport of goods from the +points of supply. + + +Article 1013: Tender Documentation + +1. Where an entity provides tender documentation to suppliers, +the documentation shall contain all information necessary to permit +suppliers to submit responsive tenders, including information +required to be published in the notice of procurement, except for +Article 1010 (2)(h) (Invitation to Participate). It must also +include the following information: + + (a) the address of the entity to which tenders should be + sent; + + (b) the address where requests for supplementary information + should be sent; + + (c) the language or languages in which tenders and tendering + documents may be submitted; + + (d) the closing date and time for receipt of tenders and the + length of time during which any tender should be open for + acceptance; + + (e) the persons authorized to be present at the opening of + tenders and the date, time and place of the opening; + + (f) a statement of any economic and technical requirement to + be met and of any financial guarantee, information and + documents required from suppliers; + + (g) a complete description of the goods or services required + and any requirements to be fulfilled, including technical + specifications, conformity certification and necessary + plans, drawings and instructional materials; + + (h) the criteria for awarding the contract, including any + factors other than price that are to be considered in the + evaluation of tenders and the cost elements to be + included in evaluating tender prices, such as transport, + insurance and inspection costs, and in the case of goods + or services of any other Party, customs duties and other + import charges, taxes and currency of payment; + + (i) the terms of payment; and + + (j) any other terms or conditions. + +2. An entity shall: + + (a) forward tender documentation at the request of any + supplier that is participating in open procedures or has + requested to participate in selective procedures, and + reply promptly to any reasonable request for explanations + relating thereto; and + + (b) reply promptly to any reasonable request for relevant + information made by a supplier participating in the + tendering procedure, on condition that such information + does not give that supplier an advantage over its + competitors in the procedure for the award of the + contract. + + +Article 1014: Negotiation Disciplines + +1. An entity may conduct negotiations: + + (a) in the context of procurements in which the entity has, + in the notice referred to in Article 1010 (Invitation to + Participate), indicated its intent to negotiate; or + + (b) when it appears from the evaluation of the tenders that + no one tender is obviously the most advantageous in terms + of the specific evaluation criteria set forth in the + notices or tender documentation. + +2. Negotiations shall be used primarily to identify the strengths +and weaknesses in the tenders. + +3. An entity shall treat all tenders in confidence. In +particular, an entity may not provide to any person information +intended to assist any supplier to bring its tender up to the level +of any other tender. + +4. An entity may not, in the course of negotiations, discriminate +between different suppliers. In particular, an entity shall: + + (a) carry out any elimination of suppliers in accordance with + the criteria set forth in the notices and tender + documentation; + + (b) provide in writing all modifications to the criteria or + to the technical requirements to all suppliers remaining + in the negotiations; + + (c) permit all remaining suppliers to submit new or amended + tenders on the basis of the revised criteria or + requirements; and + + (d) when negotiations are concluded, permit all remaining + suppliers to submit final tenders in accordance with a + common deadline. + + +Article 1015: Submission, Receipt and Opening of Tenders and + Awarding of Contracts + +1. An entity shall use procedures for the submission, receipt and +opening of tenders and the awarding of contracts that are +consistent with the following: + + (a) tenders shall normally be submitted in writing directly + or by mail; + + (b) if tenders by telex, telegram, telecopy or other means of + electronic transmission are permitted, the tender made + thereby must include all the information necessary for + the evaluation of the tender, in particular the + definitive price proposed by the supplier and a statement + that the supplier agrees to all the terms, conditions and + provisions of the invitation to tender; + + (c) a tender made by telex, telegram, telecopy or other means + of electronic transmission must be confirmed promptly by + letter or by the dispatch of a signed copy of the telex, + telegram, telecopy or electronic message; + + (d) the content of the telex, telegram, telecopy or + electronic message shall prevail where there is a + difference or conflict between that content and the + content of any documentation received after the time + limit for submission of tenders; + + (e) tenders presented by telephone shall not be permitted; + + (f) requests to participate in selective tendering procedures + may be submitted by telex, telegram or telecopy and if + permitted, may be submitted by other means of electronic + transmission; and + + (g) the opportunities that may be given to suppliers to + correct unintentional errors of form between the opening + of tenders and the awarding of the contract shall not be + permitted to give rise to any discriminatory practice. + +In this paragraph, "means of electronic transmission" consists of +means capable of producing for the recipient at the destination of +the transmission a printed copy of the tender. + +2. An entity may not penalize a supplier whose tender is received +in the office designated in the tender documentation after the time +specified for receiving tenders if the delay is due solely to +mishandling on the part of the entity. An entity may also consider, +in exceptional circumstances, tenders received after the time +specified for receiving tenders if the entity's procedures so +provide. + +3. All tenders solicited by an entity under open or selective +procedures shall be received and opened under procedures and +conditions guaranteeing the regularity of the openings. The entity +shall retain the information on the opening of tenders and the +information shall remain at the disposal of the competent +authorities of the respective Party so that it may be used if +required under the procedures of Article 1017 (Bid Challenge), +Article 1019 (Provision of Information) or Chapter Twenty +(Institutional Arrangements and Dispute Settlement Procedures). + +4. An entity shall award contracts in accordance with the +following: + + (a) to be considered for award, a tender must, at the time of + opening, conform to the essential requirements of the + notices or tender documentation and have been submitted + by a supplier that complies with the conditions for + participation; + + (b) if the entity has received a tender that is abnormally + lower in price than other tenders submitted, the entity + may enquire of the supplier to ensure that it can comply + with the conditions of participation and is or will be + capable of fulfilling the terms of the contract; + + (c) unless the entity decides in the public interest not to + award the contract, the entity shall make the award to + the supplier that has been determined to be fully capable + of undertaking the contract and whose tender is either + the lowest tender or the tender that in terms of the + specific evaluation criteria set forth in the notices or + tender documentation is determined to be the most + advantageous; + + (d) awards shall be made in accordance with the criteria and + essential requirements specified in the tender + documentation; and + + (e) option clauses shall not be used in a manner that + circumvents the provisions of this Chapter. + +5. No entity of a Party shall make it a condition of the awarding +of a contract that the supplier has previously been awarded one or +more contracts by an entity of that Party, or that the supplier has +prior work experience within the territory of that Party. + +6. An entity shall: + + (a) upon request, promptly inform suppliers participating in + tendering procedures of decisions on contract awards and, + if so requested, inform them in writing; and + + (b) upon request of a supplier whose tender was not selected + for award, provide pertinent information to that supplier + concerning the reasons for not selecting its tender and + the characteristics and relevant advantages of the tender + selected, as well as the name of the winning supplier. + +7. An entity shall publish a notice in the appropriate +publication listed in Annex 1010.1 (Publications) no later than 72 +days after the award of a contract, which notice shall contain the +following information: + + (a) a description of the nature and quantity of goods or + services included in the contract; + + (b) the name and address of the entity awarding the contract; + + (c) the date of the award; + + (d) the name and address of each winning supplier; + + (e) the value of the contract, or the highest and lowest + tenders considered in the process of awarding the + contract; and + + (f) the tendering procedure used. + +8. Notwithstanding any other provision of this Article, an entity +may withhold certain information on the award of a contract, where +disclosure of such information would impede law enforcement or +otherwise be contrary to the public interest or would prejudice the +legitimate commercial interest of a particular person, or might +prejudice fair competition between suppliers. + + +Article 1016: Limited Tendering + +1. An entity of a Party may, in the circumstances and subject to +the conditions specified in paragraph 2, deviate from the +provisions of Articles 1008 (Tendering Procedures) through 1015 +(Submission, Receipt and Opening of Tenders and Awarding of +Contracts), provided that such limited tendering is not used with +a view to avoiding maximum possible competition or in a manner that +would constitute a means of discrimination between suppliers of the +other Parties or protection of domestic suppliers. + +2. An entity may use limited tendering in the following +circumstances and subject to the following conditions, as +applicable: + + (a) in the absence of tenders in response to an open or + selective tender, or when the tenders submitted either + have resulted from collusion or do not conform to the + essential requirements of the tender documentation, or + when the tenders submitted come from suppliers who do not + comply with the conditions for participation provided for + in accordance with this Chapter, on condition that the + requirements of the initial procurement are not + substantially modified in the contract as awarded; + + (b) when, for works of art or for reasons connected with the + protection of patents, copyrights or other exclusive + rights, proprietary information, confidential consulting + services or, when there is an absence of competition for + technical reasons, the goods or services can be supplied + only by a particular supplier and no reasonable + alternative or substitute exists; + + (c) in so far as is strictly necessary when, for reasons of + extreme urgency brought about by events unforeseeable by + the entity, the goods or services could not be obtained + in time by means of open or selective tendering + procedures; + + (d) for additional deliveries by the original supplier that + are intended either as replacement parts or continuing + services for existing supplies, services or + installations, or as the extension of existing supplies, + services or installations, when a change of supplier + would compel the entity to procure equipment or services + not meeting requirements of interchangeability with + already existing equipment or services, including + software to the extent that the initial procurement of + the software was covered by this Chapter; + + (e) when an entity procures a prototype or a first good or + service that is developed at its request in the course + of, and for, a particular contract for research, + experiment, study or original development. When such + contracts have been fulfilled, subsequent procurements of + goods or services shall be subject to Articles 1008 + (Tendering Procedures) through 1015 (Submission, Receipt + and Opening of Tenders and Awarding of Contracts). + Original development of a first good may include limited + production in order to incorporate the results of field + testing and to demonstrate that the good is suitable for + production in quantity to acceptable quality standards. + It does not extend to quantity production to establish + commercial viability or to recover research and + development costs; + + (f) for goods purchased on a commodity market; + + (g) for purchases made under exceptionally advantageous + conditions that only arise in the very short term. This + provision is intended to cover unusual disposals by firms + which are not normally suppliers; or disposal of assets + of businesses in liquidation or receivership. It is not + intended to cover routine purchases from regular + suppliers; and + + (h) for a contract awarded to the winner of an architectural + design contest, on condition that the contest + + (i) has been organized in a manner that is consistent + with the principles of this Chapter, notably as + regards the publication, in the sense of Article + 1010 (Invitation to Participate), of an invitation + to suitably qualified suppliers to participate in + the contest, + + (ii) has been organized with a view to awarding the + design contract to the winner, and + + (iii) is to be judged by an independent jury. + +3. An entity shall prepare a report in writing on each contract +awarded by it under the provisions of paragraph 2. Each report +shall contain the name of the procuring entity, indicate the value +and kind of goods or services procured, the name of the country of +origin, and a statement indicating the circumstances and conditions +described in paragraph 2 that justified the use of limited +tendering. Each report shall remain with the entity concerned at +the disposal of the competent authorities of the respective Party, +so that it may be used if required under the procedures of Article +1017 (Bid Challenge), Article 1019 (Provision of Information) or +Chapter 20 (Institutional Arrangements and Dispute Settlement Procedures). + + +Article 1017: Bid Challenge + +1. In order to promote fair, open and impartial procurement +procedures, each Party shall adopt and maintain bid challenge +procedures for procurements covered by this Chapter in accordance +with the following: + + (a) each Party shall allow suppliers of any good or service + of another Party to submit bid challenges concerning any + aspect of the procurement process, which for purposes of + this Article begins after an entity has decided on its + procurement requirement, leading up to and including the + contract award; + + (b) a Party may encourage a supplier to seek a resolution of + any complaint with the entity concerned prior to + initiating a bid challenge; + + (c) each Party shall ensure that its entities accord fair and + timely consideration to any complaint regarding + procurement covered by this Chapter; + + (d) whether or not a supplier has attempted to resolve its + complaint with the entity, or upon an unsuccessful + attempt at such a resolution, no Party shall prevent the + supplier from initiating a bid challenge or seeking any + other relief available to such supplier; + + (e) a Party may require a supplier to notify the entity upon + initiation of a bid challenge; + + (f) a Party may limit the period within which a supplier may + initiate a bid challenge, but in no case shall the period + be less than 10 working days from the time when the basis + of the complaint became known, or reasonably should have + become known, to the supplier; + + (g) each Party shall establish or designate a reviewing + authority with no substantial interest in the outcome of + procurements to receive bid challenges and make findings + and recommendations concerning them; + + (h) upon receipt of a bid challenge, the reviewing authority + shall expeditiously investigate the challenge, and may be + required to limit its considerations to the challenge + itself; + + (i) in investigating the challenge, the reviewing authority + may delay the awarding of the proposed contract pending + resolution of the challenge, except in cases of urgency + or where such a delay would be contrary to the public + interest; + + (j) the reviewing authority shall issue a recommendation to + resolve the challenge, which may include directing the + entity to reevaluate offers, terminate or re-compete the + contract in question; + + (k) entities normally shall follow the recommendations of the + reviewing authority; + + (l) each Party should authorize its reviewing authority, + following the conclusion of a bid challenge, to make + additional recommendations in writing to an entity + respecting any facet of the entity's procurement process + that is identified as problematic during the + investigation of the challenge, including recommendations + for changes in the procurement procedures of the entity + to bring them into conformity with the obligations of + this Chapter; + + (m) the reviewing authority shall provide its findings and + recommendations respecting bid challenges in writing and + in a timely manner, and shall make them available to the + Parties and all interested persons; + + (n) each Party shall specify in writing and shall make + generally available all its bid challenge procedures; and + + (o) each Party shall ensure that each of its entities + maintains complete documentation concerning each of its + procurements, including a written record of all + communications substantially affecting each procurement, + for at least three years from the date the contract was + awarded, to allow verification that the procurement + process was carried out in accordance with the + obligations of this Chapter. + +2. A Party may require that a bid challenge be initiated only +after the notice of procurement has been published or, where a +notice is not published, after tender documentation has been made +available. If a Party imposes such a requirement, the 10 working +day period described in paragraph 1(f) shall begin not earlier than +the date that the notice is published or the tender documentation +is made available. + + +Article 1018: Exceptions + +1. Notwithstanding Article 2102 (National Security), for purposes +of this Chapter nothing shall be construed to prevent a Party from +taking any action or not disclosing any information which it +considers necessary for the protection of its essential security +interests relating to the procurement of arms, ammunition or war +materials, or to procurement indispensable for national security or +for national defense purposes. + +2. Provided that such measures are not applied in a manner that +would constitute a means of arbitrary or unjustifiable +discrimination between Parties where the same conditions prevail or +a disguised restriction on trade between the Parties, nothing in +this Chapter shall be construed to prevent any Party from adopting +or maintaining measures: + + (a) necessary to protect public morals, order or safety; + + (b) necessary to protect human, animal or plant life or + health; + + (c) necessary to protect intellectual property; or + + (d) relating to goods or services of handicapped persons, of + philanthropic institutions or of prison labor. + + +Article 1019: Provision of Information + +1. Each Party shall promptly publish any law, regulation, +precedential judicial decision, administrative ruling of general +application and any procedure, including standard contract clauses, +regarding government procurement covered by this Chapter in the +appropriate publications listed in Annex 1010.1 (Publications). + +2. Each Party shall: + + (a) be prepared, upon request, to explain to any other Party + its government procurement procedures; and + + (b) ensure that its entities, upon request from a supplier, + promptly explain their procurement practices and + procedures. + +3. A Party may seek such additional information on the award of +the contract as may be necessary to determine whether the +procurement was made fairly and impartially, in particular with +respect to unsuccessful tenders and further to Article 1015(6) +(Submission, Receipt and Opening of Tenders and Awarding +Contracts). To this end, the Party of the procuring entity shall +provide information on both the characteristics and relative +advantages of the winning tender and the contract price. In cases +where release of this information would prejudice competition in +future tenders, the information shall not be released except after +consultation with and agreement of the Party which gave the +information to the requesting Party. + +4. Each Party shall provide, upon request, to any other Party, +information available to that Party and its entities concerning +covered procurement of its entities and the individual contracts +awarded by its entities. + +5. No Party shall disclose confidential information the +disclosure of which would prejudice the legitimate commercial +interests of a particular person or might prejudice fair +competition between suppliers, without the formal authorization of +the person that provided the information to that Party. + +6. Nothing in this Chapter shall be construed as requiring any +Party to disclose confidential information the disclosure of which +would impede law enforcement or otherwise be contrary to the public +interest. + +7. With a view to ensuring effective monitoring of procurement +covered by this Chapter, each Party shall collect statistics and +provide to the other Parties each year an annual report in +accordance with the following reporting requirements, unless the +Parties unanimously agree to modify such requirements: + + (a) statistics on the estimated value of all contracts + awarded, both above and below the applicable threshold + values, broken down by entities; + + (b) statistics on the number and total value of contracts + covered by this Chapter above the applicable threshold + values, broken down by entities, categories of goods or + services according to uniform classification systems to + be determined by the Parties, and country of origin of + the contract; + + (c) statistics, broken down by entities, and by categories of + goods or services, on the number and total value of + contracts awarded under each use of the procedures + described in Article 1016 (Limited Tendering), and + country of origin of the contract; and + + (d) statistics, broken down by entities, on the number and + total value of contracts awarded under derogations to the + Chapter listed in the appropriate annexes. + +8. With respect to the reports described in paragraph 7 that +pertain to entities listed in Annex 1002.2 (State and Provincial +Government Entities), each Party may organize such reports by state +or province. + +9. Each Party shall give favorable consideration, where +appropriate, to a request from any other Party for the exchange of +additional information on a reciprocal basis. + +10. The Parties shall undertake and complete by the date of entry +into force of this Agreement further technical work to make +available the complete goods and services classification list to be +used by their entities in procuring goods and services under this +Chapter and develop concordances between each of these systems, +and, if necessary, the agreed uniform system. + + +Article 1020: Technical Cooperation + +1. The Parties shall cooperate, on mutually agreed terms, to +increase understanding of their respective government procurement +systems, with a view to maximizing access to government procurement +opportunities for the suppliers of all Parties. + +2. Each Party shall provide to the other Parties and to the +suppliers of such Parties, on a cost recovery basis, information +concerning training and orientation programs regarding its +government procurement system, and access on a non-discriminatory +basis to such programs as it conducts. + +3. The training and orientation programs referred to in paragraph +2 include: + + (a) training of personnel directly involved in government + procurement procedures; + + (b) training of suppliers interested in pursuing government + procurement opportunities; + + (c) explanation and description of specific elements of each + Party's government procurement system, such as the bid + challenge mechanism; and + + (d) information about government procurement market + opportunities. + +4. Each Party shall establish at least one contact point to +provide the information regarding the training and orientation +programs pertaining to its government procurement system. + + +Article 1021: Joint Programs for Small Business + +1. The Parties shall establish, within 12 months after the date +of entry into force of this Agreement, the Committee on Small +Business comprising representatives of the Parties. The Committee +shall meet as mutually agreed, but no less than once a year, and +shall report annually to the Commission on the efforts of the +Parties to promote government procurement opportunities for their +small businesses. + +2. The Committee shall work to facilitate the following +activities of the Parties: + + (a) identification of available opportunities for the + training of small business personnel in their government + procurement procedures; + + (b) identification of small businesses interested in becoming + trading partners of small businesses in the territory of + any other Party; + + (c) development of data bases of small businesses in the + territory of each Party for use by entities of any other + Party wishing to procure from small businesses; + + (d) consultations regarding the factors that each Party uses + in establishing its criteria for eligibility for small + business programs, if any; and + + (e) actions to address any related matter. + + +Article 1022: Rectifications or Modifications + +1. A Party may make modifications to its coverage under this +Chapter only in exceptional circumstances. + +2. Where a Party makes modifications to its coverage under this +Chapter, the Party shall: + + (a) notify the other Parties and its Section of the + Secretariat of the modification; + + (b) reflect the change in its schedule of the appropriate + Annex; and + + (c) propose to the other Parties appropriate compensatory + adjustments to its coverage in order to maintain a + comparable level of coverage as existed prior to the + modification. + +The other Parties shall consider whether any proposed adjustment +made pursuant to subparagraph (c) is adequate to maintain a +comparable level of the mutually agreed coverage under this +Chapter. Where any Party does not agree that the proposed +adjustment is sufficient, it may have recourse to dispute +settlement procedures under Chapter Twenty (Institutional +Arrangements and Dispute Settlement Procedures). + +3. Notwithstanding paragraphs 1 and 2, a Party may make +rectifications of a purely formal nature and minor amendments to +its Annexes 1002.1 through 1002.7, provided that it notifies such +rectifications to the other Parties and its Section of the +Secretariat, and any other Party does not object to such proposed +rectification within 30 days. In such cases, subparagraph 2(c) +shall not apply. If a Party does object that the proposed +rectification would result in a substantive change in the balance +of coverage under this Chapter, it may have recourse to dispute +settlement procedures under Chapter Twenty (Institutional +Arrangements and Dispute Settlement Procedures). + +4. Notwithstanding any other provision of this Chapter, a Party +may undertake legitimate reorganizations of its government +procurement entities covered by this Chapter, including programs +through which the procurement of such entities is decentralized or +the corresponding government functions cease to be performed by any +government entity, whether or not subject to this Chapter. In such +cases, subparagraph 2(c) shall not apply. No Party shall undertake +such reorganizations or programs to avoid the obligations of this +Chapter. If a Party objects to the withdrawal on the grounds that +the functions continue to be performed by a government entity, that +Party may have recourse to dispute settlement procedures under +Chapter Twenty (Institutional Arrangements and Dispute Settlement +Procedures). + + +Article 1023: Divestiture of Entities + +1. Nothing in this Chapter shall be construed to prevent a Party +from divesting an entity subject to the obligations of this +Chapter. + +2. If, upon the public offering of shares of an entity listed in +Annex 1002.3 (Government Enterprises), or through other methods, +such entity is no longer subject to federal government control, the +respective Party may delete the entity from Annex 1002.3 +(Government Enterprises), and withdraw the entity from the +obligations of the Chapter, upon notification to the other Parties. + +3. If a Party objects to the withdrawal on the grounds that the +entity remains subject to federal government control, that Party +may have recourse to dispute settlement procedures under Chapter +Twenty (Institutional Arrangements and Dispute Settlement Procedures). + + +Article 1024: Further Negotiations + +1. The Parties shall commence further negotiations no later than +December 31, 1998, with a view towards the substantial +liberalization of their respective procurement markets. The Parties +recognize that such liberalization would ensure more competitive +opportunities for all suppliers of the Parties in their respective +procurement markets. + +2. The Parties will review all features of government procurement +practices for the purposes of: + + (a) assessing the workings of the procurement system; + + (b) seeking to expand the coverage of this Chapter; + + (c) including within the obligations of this Chapter + + (i) government enterprises, and + + (ii) legislated and administrative exceptions; and + + (d) reviewing thresholds. + +3. Prior to the review specified in paragraph 2, the Parties will +endeavor to consult with their state and provincial governments +with a view to obtaining commitments, on a voluntary and reciprocal +basis, to include within the obligations of this Chapter +procurement by state and provincial government entities and +enterprises. + +4. If the negotiations pursuant to Article 96B of the GATT +Agreement on Government Procurement (the Code) are completed prior +to the new review specified in paragraph 2, the Parties shall: + + (a) immediately begin consultations with their state and + provincial governments with a view to obtaining + commitments, on a voluntary and reciprocal basis, to + include within the obligations of this Chapter + procurement by state and provincial government entities + and enterprises; and + + (b) increase the obligations and coverage of this Chapter to + a level at least commensurate with that of the Code. + +5. The Parties shall undertake further negotiations no later than +December 31, 1998, on the subject of electronic transmission of +tender information with a view to exploring the feasibility of +amending this Chapter to permit electronic transmission as an +additional or alternate means of publication. + + +Article 1025: Definitions + +For purposes of this Chapter: + +construction services contract means a contract which has as its +objective the realization by whatever means of civil or building +works, as specified in the Appendix of Annex 1002.5 (Construction +Services); + +entity means an entity listed in Annexes 1002.1 (Federal Government +Entities), Annex 1002.2 (State and Provincial Government Entities) +or Annex 1002.3 (Government Enterprises) to this Chapter; + +offsets means conditions imposed or considered by an entity prior +to or in the course of its procurement process that encourage local +development or improve its Party's balance of payments accounts, +and can involve requirements of local content, licensing of +technology, investment, counter-trade or similar requirements. + +services includes construction services contracts, unless otherwise +specified; + +supplier means a person that has provided or could provide goods or +services in response to an entity's call for tender; and + +tendering procedures means: + + (a) open tendering procedures, being those procedures under + which all interested suppliers may submit a tender; + + (b) selective tendering procedures, being those procedures + under which, consistent with Article 1011 (3) (Selective + Tendering Procedures), those suppliers invited to do so + by an entity may submit a tender; and + + (c) limited tendering procedures, being those procedures + where an entity contacts suppliers individually, only in + the circumstances and under the conditions specified in + Article 1016 (Limited Tendering). + ANNEX 1002.1 + + Federal Government Entities + + + Schedule of Canada + +1. Department of Agriculture +2. Department of Communications +3. Department of Consumer and Corporate Affairs +4. Department of Employment and Immigration +5. Immigration and Refugee Board +6. Canada Employment and Immigration Commission +7. Department of Energy, Mines and Resources +8. Atomic Energy Control Board +9. National Energy Board +10. Department of the Environment +11. Department of External Affairs +12. Canadian International Development Agency (on its own account) +13. Department of Finance +14. Office of the Superintendent of Financial Institutions +15. Canadian International Trade Tribunal +16. Municipal Development and Loan Board +17. Department of Fisheries and Oceans +18. Department of Forestry +19. Department of Indian Affairs and Northern Development +20. Department of Industry, Science and Technology +21. Science Council of Canada +22. National Research Council of Canada +23. Natural Sciences and Engineering Research Council of Canada +24. Department of Justice +25. Canadian Human Rights Commission +26. Statute Revision Commission +27. Supreme Court of Canada +28. Department of Labour +29. Canada Labour Relations Board +30. Department of National Health and Welfare +31. Medical Research Council +32. Department of National Revenue +33. Department of Public Works +34. Department of Secretary of State of Canada +35. Social Sciences and Humanities Research Council +36. Office of the Co-ordinator, Status of Women +37. Public Service Commission +38. Department of the Solicitor General +39. Correctional Service of Canada +40. National Parole Board +41. Department of Supply and Services (on its own account) +42. Canadian General Standards Board +43. Department of Transport (Pursuant to Article 1018 the national + security considerations applicable to the Department of + National Defence are equally applicable to the Canadian Coast + Guard.) +44. Secretariat and the Office of the Controller General +45. Department of Veterans Affairs +46. Veterans Land Administration +47. Department of Western Economic Diversification +48. Atlantic Canada Opportunities Agency +49. Auditor General of Canada +50. Federal Office of Regional Development (Quebec) +51. Canadian Centre for Management Development +52. Canadian Radio-television and Telecommunications Commission +53. Canadian Sentencing Commission +54. Civil Aviation Tribunal +55. Commission of Inquiry into the Air Ontario Crash at Dryden, + Ontario +56. Commission of Inquiry into the Use of Drugs and Banned + Practices Intended to Increase Athletic Performance +57. Commissioner for Federal Judicial Affairs +58. Competition Tribunal Registry +59. Copyright Board +60. Emergency Preparedness Canada +61. Federal Court of Canada +62. Grain Transportation Agency +63. Hazardous Materials Information Review Commission +64. Information and Privacy Commissioners +65. Investment Canada +66. Multiculturalism and Citizenship +67. The National Archives of Canada +68. National Farm Products Marketing Council +69. The National Library +70. National Transportation Agency +71. Northern Pipeline Agency +72. Patented Medicine Prices Review Board +73. Petroleum Monitoring Agency +74. Privy Council Office +75. Canadian Intergovernmental Conference Secretariat +76. Commissioner of Official Languages +77. Economic Council of Canada +78. Public Service Staff Relations Office +79. Office of the Secretary to the Governor General +80. Office of the Chief Electoral Officer +81. Federal Provincial Relations Office +82. Procurement Review Board +83. Royal Commission on Electoral Reform and Party Financing +84. Royal Commission on National Passenger Transportation +85. Royal Commission on New Reproductive Technologies +86. Royal Commission on the Future of the Toronto Waterfront +87. Statistics Canada +88. Tax Court of Canada, Registry of the +89. Agricultural Stabilization Board +90. Canadian Aviation Safety Board +91. Canadian Centre for Occupational Health and Safety +92. Canadian Transportation Accident Investigation and Safety + Board +93. Director of Soldier Settlement +94. Director, The Veterans' Land Act +95. Fisheries Prices Support Board +96. National Battlefields Commission +97. Royal Canadian Mounted Police +98. Royal Canadian Mounted Police External Review Committee +99. Royal Canadian Mounted Police Public Complaints Commission +100. Department of National Defence + + The following goods purchased by the Department of National + Defence and the Royal Canadian Mounted Police are included in + the coverage of this Chapter, subject to the provisions of + Article 1018(1) (Exceptions). + + (Numbers refer to the Federal Supply Classification code) + + 22. Railway equipment + 23. Motor vehicles, trailers and cycles (except buses in + 2310, military trucks and trailers in 2320 and 2330 and + tracked combat, assault and tactical vehicles in 2350) + 24. Tractors + 25. Vehicular equipment components + 26. Tires and tubes + 29. Engine accessories + 30. Mechanical power transmission equipment + 32. Woodworking machinery and equipment + 34. Metal working equipment + 35. Service and trade equipment + 36. Special industry machinery + 37. Agricultural machinery and equipment + 38. Construction, mining, excavating and highway maintenance + equipment + 39. Materials handling equipment + 40. Rope, cable, chain and fittings + 41. Refrigeration and air conditioning equipment + 42. Fire fighting, rescue and safety equipment (except 4220 + Marine Life-saving and diving equipment, 4230 + Decontaminating and impregnating equipment) + 43. Pumps and compressors + 44. Furnace, steam plant, drying equipment and nuclear + reactors + 45. Plumbing, heating and sanitation equipment + 46. Water purification and sewage treatment equipment + 47. Pipe, tubing, hose and fittings + 48. Valves + 49. Maintenance and repair shop equipment + 52. Measuring tools + 53. Hardware and abrasives + 54. Prefabricated structures and scaffolding + 55. Lumber, millwork, plywood and veneer + 56. Construction and building materials + 61. Electric wire and power and distribution equipment + 62. Lighting fixtures and lamps + 63. Alarm and signal systems + 65. Medical, dental and veterinary equipment and supplies + 66. Instruments and laboratory equipment (except 6615: + Automatic pilot mechanisms and airborne Gyro components + 6665: Hazard-detecting instruments and apparatus) + 67. Photographic equipment + 68. Chemicals and chemical products + 69. Training aids and devices + 70. General purpose automatic data processing equipment, + software, supplies and support equipment (except 7010 + ADPE configurations) + 71. Furniture + 72. Household and commercial furnishings and appliances + 73. Food preparation and serving equipment + 74. Office machines, text processing system and visible + record equipment + 75. Office supplies and devices + 76. Books, maps and other publications (except 7650 drawings + and specifications) + 77. Musical instruments, phonographs and home-type radios + 78. Recreational and athletic equipment + 79. Cleaning equipment and supplies + 80. Brushes, paints, sealers and adhesives + 81. Containers, packaging and packing supplies + 85. Toiletries + 87. Agricultural supplies + 88. Live animals + 91. Fuels, lubricants, oils and waxes + 93. Non-metallic fabricated materials + 94. Non-metallic crude materials + 96. Ores, minerals and their primary products + 99. Miscellaneous + +Notes: + +1. Notwithstanding anything in this Annex, this Chapter does not + apply to procurements in respect of: + + (a) the Departments of Transport Canada, Communications + Canada and Fisheries and Oceans respecting FSCs 70 + (automatic data processing equipment, software supplies + and support equipment), 74 (office machines, text + processing systems and visible record equipment) and 36 + (special industry machinery); and + + (b) agricultural products made in furtherance of agricultural + support programs or human feeding programs. + +2. The General Notes for Canada as set out in Annex 1002.7 apply +to this Annex. + +============================================================================= + ANNEX 1002.1 + + Schedule of Mexico + +1. Secretar¡a de Gobernaci¢n + - Centro Nacional de Estudios Municipales + - Comisi¢n Calificadora de Publicaciones y Revistas + Ilustradas + - Consejo Nacional de Poblaci¢n + - Archivo General de la Naci¢n + - Instituto Nacional de Estudios Hist¢ricos de la + Revoluci¢n Mexicana + - Patronato de Asistencia para la Reincorporaci¢n Social + - Centro Nacional de Prevenci¢n de Desastres + - Consejo Nacional de Radio y Televisi¢n + - Comisi¢n Mexicana de Ayuda a Refugiados + +2. Secretar¡a de Relaciones Exteriores + - Secci¢n Mexicana de la Comisi¢n Intercional de L¡mites y + Aguas M‚xico-EEUU + - Secci¢n Mexicana de la Comisi¢n Internacional de L¡mites + y Aguas M‚xico-Guatemala + +3. Secretar¡a de Hacienda y Cr‚dito P£blico + - Comisi¢n Nacional Bancaria + - Comisi¢n Nacional de Valores + - Comisi¢n Nacional de Seguros y Fianzas + - Instituto Nacional de Estadistica , Geograf¡a e + Inform tica + +4. Secretar¡a de Agricultura y Recursos Hidraulicos + - Instituto Mexicano de Tecnolog¡a del Agua + - Instituto Nacional de Investigaciones Forestales y + Agropecuarias + - Apoyos a Servicios a la Comercializaci¢n Agropecuaria, + Aserca + +5. Secretar¡a de Comunicaciones y Transportes (including the + Instituto Mexicano de Comunicaciones and the Instituto + Mexicano de Transporte) + - Comisi¢n Nacional Coordinadora de Puertos + +6. Secretar¡a de Comercio y Fomento Industrial + +7. Secretar¡a de Educaci¢n P£blica + - Instituto Nacional de Antropolog¡a e Historia + - Instituto Nacional de Bellas Artes y Literatura + - Radio Educaci¢n + - Centro de Ingenier¡a y Desarrollo Industrial + - Consejo Nacional para la Cultura y las Artes + - Comisi¢n Nacional del Deporte + +8. Secretar¡a de Salud + - Administraci¢n del Patrimonio de la Beneficencia P£blica + - Centro Nacional de la Transfusi¢n Sanguinea + - Gerencia General de Farmacias + - Gerencia General de Biol¢gicos y Reactivos + - Consejo Interno del Centro de Obras y Equipamiento en + Salud + - Instituto de la Comunicaci¢n Humana Dr. Andr‚s Bustamante + Gurr¡a + - Instituto Nacional de Medicina de la Rehabilitaci¢n + - Instituto Nacional de Ortopedia + - Consejo Nacional para la Prevenci¢n y Control del + S¡ndrome de la Inmunodeficiencia Adquirida, Conasida + +9. Secretar¡a del Trabajo y Previsi¢n Social + - Procuradur¡a Federal de la Defensa del Trabajo + - Unidad Coordinadora del Empleo, Capacitaci¢n y + Adiestramiento + +10. Secretar¡a de la Reforma Agraria + - Instituto de Capacitaci¢n Agraria + +11. Secretar¡a de Pesca + - Instituto Nacional de la Pesca + +12. Procuradur¡a General de la Rep£blica + +13. Secretar¡a de Energia Minas e Industria Paraestatal + - Comisi¢n Nacional de Seguridad Nuclear y Salvaguardias + - Centro de Promoci¢n y Evaluaci¢n de Proyectos + - Centro Nacional de Ahorro Energ‚tico + +14. Secretar¡a de Desarrollo Social + +15. Secretar¡a de Turismo + +16. Secretar¡a de la Contralor¡a General de La Federaci¢n + +17. Comisi¢n Nacional de Zonas Aridas + +18. Comisi¢n Nacional de Libros de Texto Gratuito + +19. Comisi¢n Nacional de Derechos Humanos + +20. Consejo Nacional de Fomento Educativo + +21. Secretar¡a de la Defensa Nacional + +22. Secretar¡a de Marina + + The following products purchased by the Secretar¡a de la + Defensa Nacional and the Secretar¡a de Marina are included in + the coverage of this Chapter, subject to the application of + paragraph 1 in Article 1018(1) (Exceptions). + + (Numbers refer to the Federal Supply Classification Code, FSC) + + 22. Railway equipment + 23. Motor vehicles, trailers and cycles (except buses in + 2310, military trucks and trailers in 2320 and 2330 and + tracked combat, assault and tactical vehicles in 2350) + 24. Tractors + 25. Vehicular equipment components + 26. Tires and tubes + 29. Engine accessories + 30. Mechanical power transmission equipment + 32. Woodworking machinery and equipment + 34. Metal working machinery + 35. Service and trade equipment + 36. Special industry machinery + 37. Agricultural machinery and equipment + 38. Construction, mining, excavating and highway maintenance + equipment + 39. Materials handling equipment + 40. Rope, cable, chain and fittings + 41. Refrigeration and air conditioning equipment + 42. Fire fighting, rescue and safety equipment + 43. Pumps and compressors + 44. Furnace, steam plant, drying equipment and nuclear + reactors + 45. Plumbing, heating and sanitation equipment + 46. Water purification and sewage treatment equipment + 47. Pipe, tubing, hose and fittings + 48. Valves + 49. Maintenance and repair shop equipment + 52. Measuring tools + 53. Hardware and abrasives + 54. Prefabricated structures and scaffolding + 55. Lumber, millwork, plywood and veneer + 56. Construction and building materials + 61. Electric wire and power and distribution equipment + 62. Lighting fixtures and lamps + 63. Alarm and signal systems + 65. Medical, Dental, and Veterinary Equipment and Supplies + 66. Instruments and laboratory equipment + 67. Photographic equipment + 68. Chemicals and chemical products + 69. Training aids and devices + 70. General purpose ADPE, software, supplies and support + equipment + 71. Furniture + 72. Household and commercial furnishings and appliances + 73. Food preparation and serving equipment + 74. Office machines, text processing system and visible + record equipment + 75. Office supplies and devices + 76. Books, maps and other publications (except 7650: Drawings + and specifications) + 77. Musical instruments, phonographs and home-type radios + 78. Recreational and athletic equipment + 79. Cleaning equipment and supplies + 80. Brushes, paints, sealers and adhesives + 81. Containers, packaging and packing supplies + 85. Toiletries + 87. Agricultural supplies + 88. Live animals + 93. Non-metallic fabricated materials + 94. Non-metallic crude materials + 96. Ores, minerals and their primary products (except 9620: + minerals, natural and synthetic) + 99. Miscellaneous + +Notes: + +1. National security exceptions include procurements made in +support of safeguarding nuclear materials or technology. + +2. The General Notes for Mexico as set out in Annex 1002.7 apply +to this Annex. + +============================================================================= + ANNEX 1002.1 + + Schedule of the United States + + +1. Department of Agriculture (This Chapter does not apply to + procurement of agricultural products made in furtherance of + agricultural support programs or human feeding programs.) + Federal buy national requirements imposed as conditions of + funding by the Rural Electrification Administration will not + apply to products and services of Mexico and Canada. +2. Department of Commerce +3. Department of Education +4. Department of Health and Human Services +5. Department of Housing and Urban Development +6. Department of the Interior, including the Bureau of + Reclamation (For suppliers of goods and services of Canada, + the obligations of this Chapter will apply to procurements by + the Bureau of Reclamation of the Department of Interior only + at such time as the obligations of this Chapter take effect + for procurements by Canadian Provincial Hydro utilities.) +7. Department of Justice +8. Department of Labor +9. Department of State +10. United States Agency for International Development +11. Department of the Treasury +12. Department of Transportation (Pursuant to Article 1018, the + national security considerations applicable to the Department + of Defense are equally applicable to the Coast Guard, a + military unit of the United States.) +13. Department of Energy (This Chapter does not apply, pursuant to + Article 1018, to national security procurements made in + support of safeguarding nuclear materials or technology and + entered into under the authority of the Atomic Energy Act; and + to oil purchases related to the Strategic Petroleum Reserve.) +14. General Services Administration (except Federal Supply Groups + 51 and 52 and Federal Supply Class 7340) +15. National Aeronautics and Space Administration +16. The Department of Veterans Affairs +17. Environmental Protection Agency +18. United States Information Agency +19. National Science Foundation +20. Panama Canal Commission +21. Executive Office of the President +22. Farm Credit Administration +23. National Credit Union Administration +24. Merit Systems Protection Board +25. ACTION +26. United States Arms Control and Disarmament Agency +27. The Office of Thrift Supervision +28. The Federal Housing Finance Board +29. National Labor Relations Board +30. National Mediation Board +31. Railroad Retirement Board +32. American Battle Monuments Commission +33. Federal Communications Commission +34. Federal Trade Commission +35. Inter-State Commerce Commission +36. Securities and Exchange Commission +37. Office of Personnel Management +38. United States International Trade Commission +39. Export-Import Bank of the United States +40. Federal Mediation and Conciliation Service +41. Selective Service System +42. Smithsonian Institution +43. Federal Deposit Insurance Corporation +44. Consumer Product Safety Commission +45. Equal Employment Opportunity Commission +46. Federal Maritime Commission +47. National Transportation Safety Board +48. Nuclear Regulatory Commission +49. Overseas Private Investment Corporation +50. Administrative Conference of the United States +51. Board for International Broadcasting +52. Commission on Civil Rights +53. Commodity Futures Trading Commission +54. The Peace Corps +55. National Archives and Records Administration +56. Department of Defense, including the Army Corps of Engineers + + This Chapter will not apply to the following purchases of the + DOD: + + (a) Federal Supply Classification (FSC) 83 - all elements of + this classification other than pins, needles, sewing + kits, flagstaffs, flagpoles, and flagstaff trucks; + (b) FSC 84 - all elements other than sub-class 8460 (luggage); + (c) FSC 89 - all elements other than sub-class 8975 (tobacco + products); + (d) FSC 2310 - (buses only); + (e) speciality metals, defined as steels melted in steel + manufacturing facilities located in the United States or + its possessions, where the maximum alloy content exceeds + one or more of the following limits, must be used in + products purchased by DOD: (1) manganese, 1.65 per cent; + silicon, 0.60 per cent; or copper, 0.06 per cent; or + which contains more than 0.25 per cent of any of the + following elements: aluminium, chromium, cobalt, + columbium, olybdenum, nickel, titanium, tungsten, or + vanadium; (2) metal alloys consisting of nickel, iron- + nickel and cobalt base alloys containing a total of other + alloying metals (except iron) in excess of 10 per cent; + (3) titanium and titanium alloys; or (4) zirconium base + alloys; + (f) FSC 19 and 20 - that part of these classifications + defined as naval vessels or major components of the hull + or superstructure thereof; + (g) FSC 51; and + (h) the following FSC categories are not generally covered + due to application of Article 1018(1) (Exceptions): 10, + 12, 13, 14, 15, 16, 17, 19, 20, 28, 31, 58, 59 and 95. + + This Chapter will generally apply to DOD purchases of the + following FSC categories subject to United States Government + determinations under the provisions of Article 1018(1) + (Exceptions): + + 22. Railway Equipment + 23. Motor Vehicles, Trailers, and Cycles (except buses in + 2310) + 24. Tractors + 25. Vehicular Equipment Components + 26. Tires and Tubes + 29. Engine Accessories + 30. Mechanical Power Transmission Equipment + 32. Woodworking Machinery and Equipment + 34. Metalworking Machinery + 35. Service and Trade Equipment + 36. Special Industry Machinery + 37. Agricultural Machinery and Equipment + 38. Construction, Mining, Excavating, and Highway Maintenance + Equipment + 39. Materials Handling Equipment + 40. Rope, Cable, Chain and Fittings + 41. Refrigeration and Air Conditioning Equipment + 42. Fire Fighting, Rescue and Safety Equipment + 43. Pumps and Compressors + 44. Furnace, Steam Plant, Drying Equipment and Nuclear + Reactors + 45. Plumbing, Heating and Sanitation Equipment + 46. Water Purification and Sewage Treatment Equipment + 47. Pipe, Tubing, Hose and Fittings + 48. Valves + 49. Maintenance and Repair Shop Equipment + 52. Measuring Tools + 53. Hardware and Abrasives + 54. Prefabricated Structures and Scaffolding + 55. Lumber, Millwork, Plywood and Veneer + 56. Construction and Building Materials + 61. Electric Wire, and Power and Distribution Equipment + 62. Lighting Fixtures and Lamps + 63. Alarm and Signal Systems + 65. Medical, Dental, and Veterinary Equipment and Supplies + 66. Instruments and Laboratory Equipment + 67. Photographic Equipment + 68. Chemicals and Chemical Products + 69. Training Aids and Devices + 70. General Purpose ADPE, Software, Supplies and Support + Equipment + 71. Furniture + 72. Household and Commercial Furnishings and Appliances + 73. Food Preparation and Serving Equipment + 74. Office machines, text processing system and visible + record equipment + 75. Office Supplies and Devices + 76. Books, Maps and Other Publications + 77. Musical Instruments, Phonographs, and Home Type Radios + 78. Recreational and Athletic Equipment + 79. Cleaning Equipment and Supplies + 80. Brushes, Paints, Sealers and Adhesives + 81. Containers, Packaging and Packing Supplies + 85. Toiletries + 87. Agricultural Supplies + 88. Live Animals + 91. Fuels, Lubricants, Oils and Waxes + 93. Non-metallic Fabricated Materials + 94. Non-metallic Crude Materials + 96. Ores, Minerals and their Primary Products + 99. Miscellaneous + +Note: + +The General Notes for the United States as set out in Annex 1002.7 +apply to this Annex. + +============================================================================= + ANNEX 1002.2 + + State and Provincial Government Entities + + + Coverage under this Annex will be addressed following +consultations with state and provincial governments under the terms +and conditions set out in Article 1024 (Further Negotiations). + +Note: + +The General Notes as set out in Annex 1002.7 apply to this Annex. + +============================================================================= + ANNEX 1002.3 + + Government Enterprises + + Schedule of Canada + + +1. Canada Post Corporation +2. National Capital Commission +3. St. Lawrence Seaway Authority +4. Royal Canadian Mint +5. Canadian National Railways +6. Via Rail +7. Canadian Museum of Civilization +8. Canadian Museum of Nature +9. National Gallery of Canada +10. National Museum of Science and Technology +11. Defence Construction (1951) Ltd. + +Notes: + +1. With respect to procurements by Canadian National Railways, +St. Lawrence Seaway Authority and Via Rail, coverage is subject to +Article 1019(5) (Provision of Information), respecting the +protection of the commercial confidentiality of information +provided. + +2. The General Notes for Canada as set out in Annex 1002.7 apply +to this Annex. + + + Schedule of Mexico + +Printing and Editorial +1. Talleres Gr ficos de la Naci¢n +2. Productora e Importadora de Papel S.A de C.V., Pipsa + +Communications and Transportation +3. Aeropuertos y Servicios Auxiliares, ASA +4. Caminos y Puentes Federales de Ingreso y Servicios Conexos, + Capufe +5. Puertos Mexicanos +6. Servicio Postal Mexicano +7. Ferrocarriles Nacionales de M‚xico, Ferronales +8. Telecomunicaciones de M‚xico, Telecom + +Industry +9. Petr¢leos Mexicanos, Pemex (This Chapter does not apply to + procurement of fuels and gas.) +10. Comisi¢n Federal de Electricidad, CFE +11. Consejo de Recursos Minerales +12. Comisi¢n de Fomento Minero + +Commerce +13. Compa¤¡a Nacional de Subsistencias Populares, Conasupo (This + Chapter does not apply to procurement of agricultural products + made in furtherance of agricultural support programmes or + human feeding programmes.) +14. Bodegas Rurales Conasupo, S.A. de C.V. +15. Distribuidora e Impulsora de Comercio, Diconsa +16. Leche Industrializada Conasupo, S.A. de C.V., Liconsa (This + Chapter does not apply to procurement of agricultural products + made in furtherance of agricultural support programmes or + human feeding programmes.) +17. Procuradur¡a Federal del Consumidor +18. Instituto Nacional del Consumidor +19. Laboratorios Nacionales de Fomento Industrial +20. Servicio Nacional de Informaci¢n de Mercados + +Social Security +21. Instituto de Seguridad y Servicios Sociales de los + Trabajadores del Estado, ISSSTE +22. Instituto Mexicano del Seguro Social, IMSS +23. Sistema Nacional para el Desarrollo Integral de la Familia, + DIF (This Chapter does not apply to procurement of + agricultural products made in furtherance of agricultural + support programmes or human feeding programmes.) +24. Servicios Asistenciales de la Secretar¡a de Marina +25. Instituto de Seguridad Social para las Fuerzas Armadas + Mexicanas +26. Instituto Nacional Indigenista, INI +27. Instituto Nacional Para la Educaci¢n de los Adultos +28. Centros de Integraci¢n Juvenil +29. Instituto Nacional de la Senectud + +Others +30. Comite Administrador del Programa Federal de Construcci¢n de + Escuelas, Capfce +31. Comisi¢n Nacional del Agua, CNA +32. Comisi¢n Para la Regularizaci¢n de la Tenencia de la Tierra +33. Consejo Nacional de Ciencia y Tecnolog¡a, Conacyt +34. Notimex, S.A . de C.V. +35. Instituto Mexicano de Cinematograf¡a +36. Loter¡a Nacional para la Asistencia P£blica +37. Pron¢sticos Deportivos + +Notes: + +1. National security exceptions include procurements made in +support of safeguarding nuclear materials or technology. + +2. The General Notes for Mexico as set out in Annex 1002.7 apply +to this Annex. + + + Schedule of the United States + + +1. Tennessee Valley Authority +2. Power Marketing Administrations of the Department of Energy + - Bonneville Power Administration + - Western Area Power Administration + - Southeastern Power Administration + - Southwestern Power Administration + - Alaska Power Administration +3. St. Lawrence Seaway Development Corporation + +Notes: + +1. For suppliers of goods and services of Canada, the obligations +of this Chapter will apply to procurements by the Tennessee Valley +Authority and the Power Marketing Administrations of the Department +of Energy only at such time as the obligations of this Chapter take +effect for procurements by Canadian Provincial Hydro utilities. + +2. The General Notes for the United States as set out in Annex +1002.7 apply to this Annex. + +============================================================================= + ANNEX 1002.4 + + Services + + +I. General Provisions + +1. Except for the services listed in Part II of this Annex, all +services procured by the entities listed in Annex 1002.1 (Federal +Government Entities) and Annex 1002.3 (Government Enterprises) are +subject to this Chapter. + +2. Contracts for construction services are subject to this +Chapter as specified in Annex 1002.5 (Construction Services). + +3. The Parties shall adopt a universal list of services for +reporting purposes, which is indicative of the services procured by +the entities of the Parties, and is contained in the Appendix to +this Annex. + +4. The Parties shall update, as appropriate, the list of +universal services included in the Appendix to this Annex at such +time as they mutually agree. + +5. Notwithstanding paragraph 1, for Mexico only the services +included in the Temporary Schedule of Mexico will be subject to +this Chapter, until such time as Mexico has completed its schedule +under Part II pursuant to paragraph 6. + +6. Mexico will develop and, after consultations with the other +Parties, complete its list of services set out under the Schedule +of Mexico in Part II of this Annex no later than July 1, 1995. + + + Temporary Schedule of Mexico: Services Included + +(Based on the United Nations Central Product Classification, CPC) + +Professional Services + 863 Taxation services (excluding legal services) + 8671 Architectural services + 86711 Advisory and pre-design architectural services + 87612 Architectural design services + 87713 Contract administration services + 86714 Combined architectural design and contract + administration services + 86719 Other architectural services + 8672 Engineering services + 86721 Advisory and consultative engineering services + 86722 Engineering design services for foundations and + building structures + 86723 Engineering design services for mechanical and + electrical installations for buildings + 86724 Engineering design services for civil engineering + construction + 86725 Engineering design for industrial processes and + production + 86726 Engineering design services n.e.c. + 86727 Other engineering services during the construction + and installation phase + 86729 Other engineering services + 8673 Integrated engineering services + 86731 Integrated engineering services for transportation, + infrastructure turnkey projects + 86732 Integrated engineering and project management + services for water supply and sanitation works + turnkey projects + 86733 Integrated engineering services for the + construction of manufacturing turnkey projects + 86739 Integrated engineering services for other turnkey + projects + 8674 Urban planning and landscape architectural services + +Computer and Related Services + 841 Consultancy services related to the installation of + computer hardware + 842 Software implementation services, including systems and + software consulting services, systems analysis, design, + programming and maintenance services + 843 Data processing services, including processing, + tabulation and facilities management services + 844 Data base services + 845 Maintenance and repair services of office machinery and + equipment including computers + 849 Other computer services + +Real Estate Services + 821 Real estate services involving own or leased property + 822 Real estate services on a fee or contract basis + +Rental/Leasing Services without Operators + 831 Leasing or rental services concerning machinery and + equipment without operator, including computers + 832 Leasing or rental services concerning personal and + household goods (excluding in 83201, the rental of + prerecorded records, sound cassettes, CD's and excluding + 83202, rental services concerning video tapes) + +Other Business Services + 865 Management consulting services + 86501 General management consulting services + 86503 Marketing management consulting services + 86504 Human resources management consulting services + 86505 Production management consulting services + 86509 Other management consulting services, including + agrology, agronomy, farm management and related + consulting services + 8676 Technical testing and analysis services including quality + control and inspection + 8814 Services incidental to forestry and logging, including + forest management + 883 Services incidental to mining, including, drilling and + field services + 5115 Site preparation for mining + 8675 Related scientific and technical consulting services + 86751 Geological, geophysical and other scientific + prospecting services, including those related to + mining + 86752 Subsurface surveying services + 86753 Surface surveying services + 86754 Map making services + 663 Repair services of personal and household goods + 8861 Repair services incidental to metal products, to + machinery and equipment including computers, + 8866 and communications equipment + 874 Building-cleaning + 876 Packaging services + +Environmental Services + 940 Sewage and refuse disposal, sanitation and other + environmental protection services, including sewage + services, nature and landscape protection services and + other environmental protection services n.e.c. + +Hotels and restaurants(including catering) + 641 Hotel and other lodging services + 642/3 Food and beverage serving services + +Travel agency and tour operators services + 7471 Travel agency and tour operator services + II. Services Excluded from Coverage + + [Subject to review] + +The following services contracts are excluded in their entirety by +the Parties: + + + Schedule of Canada + +(Based on the United Nations Central Product Classification, CPC) + + CPC +1. Transport, storage and communication services + - Land Transport services 71 + - Water Transport services 72 + - Air Transport Services 73 + - Supporting and Auxiliary Transport services (except + 7471: Travel Agencies and Tour Operator services) 74 + - Post and Telecommunication services (except 7512: + Courier services and 7523: Data Transmission + services) 75 + Note: All transportation services, including related + repair and overhaul and launching services and + transportation services, where incidental to procurement + contracts, are not subject to this Chapter. + +2. Business services; agricultural, mining and manufacturing + services + - Financial, Intermediation services and Auxiliary + services therefor 81 + - Leasing or rental services concerning televisions, + radios, video cassette recorders and related + equipment and accessories 83201 + - Leasing or rental services concerning video tapes 83202 + - Research and Development services 85 + - Legal services (except: Advisory services on + Foreign Law) 861 + - Legal services incidental to Taxation Services 863 + - Market Research and Public Opinion Polling + services 864 + - Financial Management consulting services (except + corporate tax) 86502 + - Public relations services 86506 + - Services related to management consulting 866 + - Related scientific and technical consulting + services 8675 + - Business Services, n.e.c. (except 8740: Building + cleaning services and 8760: Packaging services) 87 + - Services incidental to agriculture, hunting and + forestry (except 8814: services incidental to + forestry and logging; and 8830: services incidental + to mining) 881 + - Services incidental to fishing 882 + - Services incidental to manufacturing, except to the + manufacture of metal products, machinery and + equipment 884 + - Services incidental to the manufacture of metal + products, machinery and equipment (except 8852: + Manufacture of fabricated metal products, except + machinery and equipment on a fee or contract + basis) 885 + - Repair services, n.e.c. of motor vehicles, trailers + and semi-trailers, on a fee or contract basis 8867 + - Repair services of other transport equipment, on a + fee or contract basis 8868 + - Services incidental to energy distribution 887 + - Intangible assets 89 + +3. Community, Social and Professional Services + - Education services 92 + - Health and Social Services 93 + - Services of Membership Organizations 95 + - Recreation, cultural and sporting services 96 + - Other services 97 + - Services provided by extraterritorial organizations + and bodies 99 + +4. Contracts of the departments of Transport Canada, + Communications Canada and Fisheries and Oceans respecting FSCs + 70 (automatic data processing equipment, software supplies and + support equipment), 74 (office machines, text processing + systems and visible record equipment), 36 (special industry + machinery). + +5. Research and development services. + +6. Dredging. + +7. All services purchased in support of military forces located + overseas. + +8. Management and operation contracts awarded to federally-funded + research and development centers or related to carrying out + government sponsored research programs. + +9. Public utilities services. + +10. Printing and publishing. + +Note: + +The General Notes for Canada as set out in Annex 1002.7 apply to +this Annex. + + + Schedule of Mexico + + +(Based on the United Nations Central Product Classification, CPC) + + CPC +1. All transportation services, including transportation + services incidental to procurement contracts: + - Land transportation 71 + - Water transport 72 + - Air transport 73 + - Supporting and auxiliary transport 74 + - Post and telecommunication 75 + - Repair services of other transport equipment, on a + fee or contract basis 8868 + +2. All risk-sharing contracts by Pemex. + +3. Public utilities services (including telecommunications, + transmission, water or energy services). + +4. Management and operation contracts awarded to federally-funded + research and development centers or related to carrying out + government sponsored research programs. + +5. Financial services + +6. Research and development services + +7. Confidential consulting services (provided that they are not + used with a view to avoiding maximum possible competition or + in a manner that would constitute a means of discrimination + among suppliers of the other Parties or protection to Mexican + suppliers). + +Note: + The General Notes for Mexico as set out in Annex 1002.7 apply + to this Annex. + + + Schedule of the United States + +(Based on the Procurement Data System Services Codes) + FSC +1. Transportation and related services (except V231: + Lodging and Hotel/Motel; and V302: travel agent) + - Transportation V + - Maintenance, Repair and Rebuilding of Ships JO19 + - Non-nuclear Ship Repair J998 and J999 + - Modification of Ships KO19 + In addition, transportation services, where incidental + to procurement contracts, are not subject to this Chapter. + +2. Dredging Y216 + +3. All services purchased in support of military forces + overseas. + +4. Management and operation contracts awarded to + - federally-funded research and development centers + (FFRDCs) or related to carrying out + government-sponsored research programs + (classification to be clarified) M181-184 + - by DOD, DOE, and NASA M + +5. Public utilities and telecommunications services: + - Utilities S1 + - ADP Telecommunications and Transmission Services D304 + - ADP Teleprocessing and Timesharing Services D305 + - Telecommunications Network Management Services D316 + - Automated News Services, Data Services, or other + information D317 + - Other ADP and Telecommunications services D399 + +6. Research and Development services A + +Note: The General Notes for the United States as set out in Annex +1002.7 apply to this Annex. + + + Appendix to ANNEX 1002.4 + Universal List of Services + + ANNEX 1002.5 + + Construction Services + + +I. General Provisions + +1. Except for the construction services listed in Part II of this +Annex, all construction services as specified in the Appendix to +this Annex, which are procured by the entities listed in Annex +1002.1 (Federal Government Entities) and Annex 1002.3 (Government +Enterprises) are subject to this Chapter. + +2. The Parties will update, as appropriate, the list of +construction services included in the Appendix at such time as they +mutually agree. + + +II. Construction Services Excluded from Coverage + +The following services contracts are excluded in their entirety by +the Parties: + + + Schedule of Canada + +1. Dredging. + +2. Construction contracts tendered by or on behalf of Department +of Transport. + +Note: The General Notes for Canada as set out in Annex 1002.7 +apply to this Annex. + + + Schedule of Mexico + +All risk-sharing contracts by Pemex. + +Notes: + + The General Notes for Mexico as set out in Annex 1002.7 apply +to this Annex. + + + Schedule of the United States + +Dredging. + +Notes: + +1. In accordance with the obligations of this Chapter, buy +national requirements on articles, supplies, and materials acquired +for use in construction contracts subject to the obligations of +this Chapter will not apply to products of Canada or Mexico. + +2. The General Notes for the United States as set out in Annex +1002.7 apply to this Annex. + + + Appendix to ANNEX 1002.5 + + List of Construction Services + +List of contracts for construction services which are subject to +the obligations of this Chapter, except as otherwise provided: + +(Based on the United Nations Central Product Classification, CPC) + +Division 51 Construction work + +511 Pre-erection work at construction sites + 5111 Site investigation work + 5112 Demolition work + 5113 Site formation and clearance work + 5114 Excavating and earthmoving work + 5115 Site preparation work for mining + 5116 Scaffolding work + +512 Construction works for buildings + 5121 For one and two dwelling buildings + 5122 For multi-dwelling buildings + 5123 For warehouses and industrial buildings + 5124 For commercial buildings + 5125 For public entertainment buildings + 5126 For hotel, restaurant and similar buildings + 5127 For educational buildings + 5128 For health buildings + 5129 For other buildings + +513 Construction work for civil engineering + 5131 For highways (except elevated highways), streets, roads, + railways and airfield runways + 5132 For bridges, elevated highways, tunnels and subways + 5133 For waterways, harbours, dams and other water works + 5134 For long distance pipelines, communication and power + lines (cables) + 5135 For local pipelines and cables; ancillary works + 5136 For constructions for mining and manufacturing + 5137 For constructions for sport and recreation + 5139 For engineering works n.e.c. + +514 5140 Assembly and erection of prefabricated constructions + +515 Special trade construction work + 5151 Foundation work, including pile driving + 5152 Water well drilling + 5153 Roofing and water proofing + 5154 Concrete work + 5155 Steel bending and erection, including welding) + 5156 Masonry work + 5159 Other special trade construction work + +516 Installation work + 5161 Heating, ventilation and air conditioning work + 5162 Water plumbing and drain laying work + 5163 Gas fitting construction work + 5164 Electrical work + 5165 Insulation work (electrical wiring, water, heat, sound) + 5166 Fencing and railing construction work + 5169 Other installation work + +517 Building completion and finishing work + 5171 Glating work and window glass installation work + 5172 Plastering work + 5173 Painting work + 5174 Floor and wall tilling work + 5175 Other floor laying, wall covering and wall papering work + 5176 Wood and metal joinery and carpentry work + 5177 Interior fitting decoration work + 5178 Ornamentation fitting work + 5179 Other building completion and finishing work + +518 5180 Renting services related to equipment for construction or + demolition of buildings or civil engineering works, with + operator + +============================================================================= + ANNEX 1002.6 + + Transition Provisions for Mexico + + +Notwithstanding any other provision of this Chapter, Annexes 1002.1 +through 1002.5 are subject to the following: + +Pemex, CFE and Non-Energy Construction + +1. The obligations of this Chapter shall not apply to: + + (a) 50 percent of the total annual procurement above + thresholds of goods, services and construction services + by Pemex; + + (b) 50 percent of the total annual procurement above + thresholds of goods, services and construction services + by CFE; and + + (c) 50 percent of the total annual procurement above + thresholds of construction services, excluding + construction services procured by Pemex and CFE. + +2. Loans from regional and multilateral financial institutions +will not be included for purposes of calculating the reservations +specified in paragraph 1 or subject to other restrictions. + +3. As of January 1st, 1994, the reservation specified in +paragraph 1 will decrease according to the following schedule: + + 1994 1995 1996 1997 1998 + 50% 45% 45% 40% 40% + + 1999 2000 2001 2002 2003 and thereafter + 35% 35% 30% 30% 0% + +4. For Pemex and CFE, no more than 10 percent of their respective +reserved procurement under paragraphs 1 and 3 shall be applied +within a single Federal Supply Classification (FSC) class (or other +classification system as agreed by all Parties) in a single year. + +5. After December 31, 1998, Pemex and CFE each will make all +reasonable efforts to assure that their respective total +reservation in each FSC class (or other classification system as +agreed by all Parties) shall not exceed 50 percent in a single year. + + +Pharmaceuticals + +6. The provisions of this Chapter shall not apply to drugs whose +patents have expired or are not currently patented (FSC class 6505) +procured by the Secretar¡a de Salud, IMSS, ISSSTE, Secretar¡a de +Defensa and the Secretar¡a de Marina. This exception shall be +eliminated after 8 years from the date of entry into force of this +Agreement. Procurement of biologicals and patented drugs shall not +be exempted under any other provision of the Annexes of this +Chapter. Nothing in this Chapter shall be interpreted in a way +which will impair the protection provided by Chapter 17 +(Intellectual Property) of this Agreement. + +Time Limits for Tendering and Delivery + +7. Upon the date of entry into force of this Agreement in January +1, 1994, Mexico will make best efforts to comply with the +provisions of Article 1012 (Time Limits for Tendering and Delivery) +with respect to the 40 day time limits. However, Mexico will fully +comply with such obligations as from January 1, 1995. + +Provision of Information + +8. The Parties recognize that Mexico may be required to undertake +extensive retraining of personnel, introduce new data maintenance +and reporting systems and make major adjustments to the procurement +systems of certain entities in order to comply with the obligations +of this Chapter. The Parties also recognize that Mexico may +encounter difficulties in making the transition to procurement +systems that facilitate full compliance with the obligations of +this Chapter. + +9. The Parties shall, therefore, consult on an annual basis for +the first five years that the Agreement is in effect to review +transitional problems and to develop mutually agreed solutions. +Such solutions may include, when appropriate, temporary adjustment +to the obligations of Mexico under this Chapter, such as those +related to reporting requirements. + +10. In addition, the United States and Canada shall cooperate with +Mexico to provide technical assistance, as appropriate and mutually +agreed pursuant to Article 1020 (Technical Cooperation) of this +Chapter, to aid Mexico's transition. + +11. Notwithstanding any other provision of this Annex, each Party +shall assume all of its obligations specified in this Chapter upon +the date of entry into force of this Agreement. + +Note: The General Notes for Mexico as set out in Annex 1002.7 +apply to this Annex. + +============================================================================= + ANNEX 1002.7 + + General Notes + + + Schedule of Canada + +1. Notwithstanding any other provision of this Chapter, this +Chapter does not apply to procurements in respect of: + + (a) shipbuilding and repair; + + (b) urban rail and urban transportation equipment, systems, + components and materials incorporated there in as well as + all project related materials of iron or steel; + + (c) contracts respecting FSC 58 (communications, detection + and coherent radiation equipment); + + (d) set-asides for small and minority businesses; + + (e) pursuant to Article 1018 national security exemptions + include oil purchases related to any strategic reserve + requirements; and + + (f) national security exceptions include procurements made in + support of safeguarding nuclear materials or technology. + +2. Procurement in terms of Canadian coverage is defined as +contractual transactions to acquire property or services for the +direct benefit or use of the government. It does not include +non-contractual agreements or any form of government assistance, +including but not limited to, cooperative agreements, grants, +loans, equity infusions, guarantees, fiscal incentives, and +government provision of goods and services, given to individuals, +firms, private institutions, and sub-central governments. + + + Schedule of Mexico + +1. Notwithstanding any other provision of this Chapter, this +Chapter does not apply to procurements made: + +(a) with a view to commercial resale by government-owned retail + stores; + +(b) pursuant to loans from regional or multilateral financial + institutions to the extent that different procedures are + imposed by such institutions (except for national content + requirements); and + +(c) between entities. + +2. Notwithstanding any other provision in this Chapter, Mexico +may allocate a non-specific sector set-aside as follows: + + (a) upon the date of entry into force of this Agreement, up + to the equivalent in real terms of $1.0 billion USD of + 1994 shall annually be available to all procurements of + entities subject to this Chapter, except Pemex and CFE + and construction services procured by other entities + subject to this Chapter as well as those procurements of + goods in FSC class 6505; + + (b) after December 31, 2002, up to the equivalent in real + terms of $1.2 billion USD of 1994 shall annually be + available to all procurement of entities subject to this + Chapter, except Pemex and CFE and construction services + procured by other entities subject to this Chapter as + well as those procurements of goods of FSC class 6505; + + (c) after December 31, 2002, up to the equivalent in real + terms of $300 million USD of 1994 shall annually be + availble to Pemex and CFE combined; and + + (d) for purposes of this paragraph + + (i) no more than 10 percent of the total procurement + reserved shall be applied within a single FSC + category (or other classification system as agreed + by all Parties) in a single year, and + + (ii) no more than 20 percent may be used by a single + entity. + +These values shall remain constant in real terms. + +3. Notwithstanding any other provision of this Chapter, the +entities subject to this Chapter may impose a local content +requirement of no more than: + + (a) 40 percent, for labor intensive turnkey or major + integrated projects; and + + (b) 25 percent, for capital intensive turnkey or major + integrated projects. + +For purposes of these provisions, a turnkey or major integrated +project means, in general, a construction, supply or installation +project undertaken by a person pursuant to a right granted by an +entity subject to this Chapter with respect to which: + + (c) the prime contractor is vested with the authority to + select the general contractors or subcontractors; + + (d) Mexico does not fund the project itself; + + (e) the person bears the risk of performance; and + + (f) the facility will be operated by an entity subject to + this Chapter or through a procurement contract of that + entity. + +4. Regardless of the thresholds, Pemex shall apply the +disciplines of Article 1004 regarding national treatment and +non-discrimination to: + + (a) procurements of oil and gas field supplies and equipment, + when such supplies and equipment are procured at the + location where works pursued by Pemex are being + performed; and + + (b) the selection of suppliers, when such suppliers are + established at the location where works pursued by Pemex + are being performed. + +5. If the obligations of the procurements covered by this Chapter +are not met, the Parties may seek compensation in the form of more +market opportunities during the following year, or through reliance +of Chapter 20 (Institutional Arrangements and Dispute Settlement +Procedures). + +6. Procurement in terms of the Mexican coverage is defined as +contractual transactions to acquire property or services for the +direct benefit or use of the government. It does not include +non-contractual agreements or any form of government assistance, +including, but not limited to, cooperative agreements, grants, +loans, equity infusions, guarantees, fiscal incentives, and +governmental provisions of goods and services, given to +individuals, firms, private institutions and state governments. + + + Schedule of the United States + +1. Notwithstanding any other provision of this Chapter, this +Chapter does not apply to set asides on behalf of small and +minority businesses. + +2. Procurement in terms of U.S. coverage is defined as +contractual transactions to acquire property or services for the +direct benefit or use of the government. It does not include +non-contractual agreements or any form of government assistance, +including, but not limited to, cooperative agreements, grants, +loans, equity infusions, guarantees, fiscal incentives, and +governmental provision of goods and services, given to individuals, +firms, private institutions, and subcentral governments. + +============================================================================= + ANNEX 1002.8 + + Indexation and Conversion of Thresholds + + +1. The calculations described in Article 1002(4) (Scope and +Coverage) shall be made in accordance with the following: + + (a) the United States inflation rate shall be measured by the + the Producer Price Index for Finished Goods published by + the United States Department of Commerce; and + + (b) the inflationary adjustment shall be estimated according + to the following formula + + T0 x (1+ pi) = T1 + + T0= threshold value at base period + pi= accumulated U.S. inflation rate for the ith two + year-period + T1= new threshold value. + +2. Mexico and Canada shall calculate and convert the value of the +thresholds specified in paragraph 3 into their national currencies +using the conversion formulas set out in paragraph 3 or 4, as +appropriate. Mexico and Canada shall notify each other and the +United States of the value, in their respective currencies, of the +newly calculated thresholds not less than one month before the +respective thresholds take effect. + +3. Canada shall base the calculation on the official conversion +rates of the Bank of Canada. From January 1, 1994 through December +31, 1995, the conversion rate shall be the average of the weekly +values of the Canadian dollars in terms of the U.S. dollars over +the period October 1, 1992 through September 30, 1993. For each +subsequent two-year period, beginning January 1, 1996, the +conversion rate shall be the average of the weekly values of the +Canadian dollar in terms of the U.S. dollar over the two-year +period ending September 30 of the year preceding the beginning of +each two-year period. + +4. Mexico shall use the conversion rate of the Banco de M‚xico. +The conversion rate shall be the existing value of the Mexican peso +in terms of the US dollar as of December 1 and June 1 of each year, +or the 1st working day after. The conversion rate as of December 1 +shall apply from January 1 to June 30 of the following year, and as +of June 1 shall apply from July 1 to December 31 of that year. + +============================================================================= + ANNEX 1002-A + + Country-Specific Thresholds + +As between Canada and the United States, + +a) for covered federal entities, thresholds on procurement + between Canada and the United States are as follows: + + i) goods and services: goods -- US$25,000; services -- + US$50,000. Canada and the United States shall consult + regarding these threshold values, and + + ii) Construction: US$6,500,000; and + +b) for covered government enterprises, thresholds on procurement + between Canada and the United States are as follows + + i) goods and services: US$250,000, and + + ii) construction: US$8,000,000. + +============================================================================= + ANNEX 1010.1 + + Publications + + +I. Publications for Notices of Procurement in Accordance with + Article 1010 (Invitation to Participate) + + + Schedule of Canada + +1. Government Business Opportunities (GBO). + +2. Open Bidding Service, ISM Publishing. + + + Schedule of Mexico + +1. Major daily newspapers of national circulation. + +2. Mexico will endeavor to establish a specialized publication +for purposes of notices of procurement. When such publication is +ready, it will substitute those referred to in paragraph 1. + + + Schedule of United States + +Commerce Business Daily (CBD). + +II. Publications for Measures in Accordance with Article 1019 + (Provision of Information) + + + Schedule of Canada + +1. Precedential judicial decisions regarding government +procurement: + (a) Dominion Law Reports; + (b) Supreme Court Reports; + (c) Federal Court Reports; + (d) National Reporter. + +2. Administrative rulings and procedures regarding government +procurement: + (a) Government Business Opportunities; and + (b) Canada Gazette. + +3. Laws and regulations: + (a) Revised Statutes of Canada; + (b) Canada Gazette. + + + Schedule of Mexico + +1. Diario Oficial de la Federaci¢n. + +2. Semanario Judicial de la Federaci¢n (for precedential judicial +decisions only). + +3. Mexico will endeavor to establish a specialized publication +for administrative rulings of general application and any +procedure, including standard contract clauses. + + + Schedule of United States + +1. All United States laws, regulations, judicial decisions, +administrative rulings and procedures regarding government +procurement covered by this Chapter are codified in the Defense +Federal Acquisition Regulation Supplement (DFARS) and the Federal +Acquisition Regulation (FAR), both of which are published as a part +of the United States Code of Federal Regulations (CFR). The DFARS +and the FAR are published in title 48 of CFR. Copies may be +purchased from the Government Printing Office. These regulations +are also published in loose-leaf versions that are available by +subscription from the Government Printing Office. Changes are +provided to subscribers as they are issued. + +2. For those who wish to consult original sources, the following +published sources are provided: + +Material Publication Name + +United States Laws U.S. Statutes at Large + +Decisions: + - United States Supreme Court U.S. Reports + - Circuit Court of Appeals Federal Reporter - 2nd Series + - District Courts Federal Supplement Reporter + - Court of Claims Court of Claims Reports + +Decisions: + - Boards of Contract Appeals Unofficial publication by Commerce Clearing + House + +Decisions: + -Comptroller General of the Those not officially United States + published as decisions of the Comptroller General are published + unofficially by Federal Publications, Inc. + +NAFTA Chapter Eleven Subchapter A - Investment + + + +Article 1101: Scope + +1. This Chapter applies to measures adopted or maintained by a +Party relating to: + + (a) investors of another Party; + + (b) investments of investors of another Party in the + territory of the Party existing at the date of entry + into force of this Agreement as well as to investments + made or acquired thereafter by such investors; and + + (c) with respect to Article 1106, all investments in the + territory of the Party existing at the date of entry + into force of this Agreement as well as to investments + made or acquired thereafter. + +2. A Party has the right to perform exclusively the economic +activities set out in Annex III and to refuse to permit the +establishment of investment in such activities. + +3. This Chapter does not apply to Chapter Fourteen (Financial +Services) except to the extent specifically provided therein. + +4. Nothing in this Chapter shall be construed to prevent a +Party from providing a service or performing a function such as +law enforcement, correctional services, income security or +insurance, social security or insurance, social welfare, public +education, public training, health, and child care, in a manner +that is not inconsistent with this Chapter. + + + +Article 1102: National Treatment + +1. Each Party shall accord to investors of another Party +treatment no less favorable than that it accords, in like +circumstances, to its own investors with respect to the +establishment, acquisition, expansion, management, conduct, +operation and sale or other disposition of investments. + +2. Each Party shall accord to investments of investors of +another Party treatment no less favorable than that it accords, +in like circumstances, to investments of its own investors with +respect to the establishment, acquisition, expansion, management, +conduct, operation and sale or other disposition of investments. + +3. The treatment accorded by a Party under paragraphs 1 and 2 +means, with respect to a state or province, treatment no less +favorable than the most favorable treatment accorded, in like +circumstances, by such state or province to investors, and to +investments of investors, of the Party of which it forms a part. + +4. For greater certainty, no Party shall: + + (a) impose on an investor of another Party a requirement + that a minimum level of equity in an enterprise in the + territory of the Party be held by its nationals, other + than nominal qualifying shares for directors or + incorporators of corporations; or + + (b) require an investor of another Party, by reason of its + nationality, to sell or otherwise dispose of an + investment in the territory of the Party. + + +Article 1103: Most-Favored-Nation Treatment + +1. Each Party shall accord to investors of another Party +treatment no less favorable than that it accords, in like +circumstances, to investors of another Party or of a non-Party +with respect to the establishment, acquisition, expansion, +management, conduct, operation and sale or other disposition of +investments. + +2. Each Party shall accord to investments of investors of +another Party treatment no less favorable than that it accords, +in like circumstances, to investments of investors of another +Party or of a non-Party with respect to the establishment, +acquisition, expansion, management, conduct, operation and sale +or other disposition of investments. + + +Article 1104: Non-discriminatory Treatment + + Each Party shall accord to investors of another Party and to +investments of investors of another Party the better of the +treatment required by Articles 1102 and 1103 ("non-discriminatory +treatment"). + + +Article 1105: Minimum Standard of Treatment + +1. Each Party shall accord to investments of investors of +another Party treatment in accordance with international law, +including fair and equitable treatment and full protection and +security. + +2. Without prejudice to paragraph 1 and notwithstanding Article +1108 (8) (b), each Party shall accord to investors of another +Party, and to investments of investors of another Party, +non-discriminatory treatment with respect to measures it +maintains or adopts relating to losses suffered by investments in +its territory owing to armed conflict or civil strife. + +3. Paragraph 2 shall not apply to existing measures related to +subsidies or grants that are inconsistent with Article 1102. + + +Article 1106: Performance Requirements + +1. A Party shall not impose the following requirements, or +enforce any commitment or undertaking, in connection with the +establishment, acquisition, expansion, management, conduct or +operation of an investment of an investor of a Party or of a +non-Party in its territory: + + (a) to export a given level or percentage of goods or + services; + + (b) to achieve a given level or percentage of domestic + content; + + (c) to purchase, use or accord a preference to goods + produced or services provided in its territory, or to + purchase goods or services from persons in its + territory; + + (d) to relate in any way the volume or value of imports to + the volume or value of exports or to the amount of + foreign exchange inflows associated with such + investment; + + (e) to restrict sales of goods or services in its territory + that such investment produces or provides by relating + such sales in any way to the volume or value of its + exports or foreign exchange earnings; + + (f) to transfer technology, a production process or other + proprietary knowledge to a person in its territory, + except when the requirement is imposed or the + commitment or undertaking is enforced by a court, + administrative tribunal or competition authority to + remedy an alleged violation of competition laws; or + + (g) to act as the exclusive supplier of the goods it + produces or services it provides to a specific region + or world market. + +2. A requirement that an investment use a technology to meet +generally applicable health, safety or environmental +standards-related measures, as defined in Article 915, shall not +be construed to be inconsistent with paragraph 1(f). For greater +certainty, Articles 1102, 1103 and 1104 shall apply to such +requirements. + +3. A Party shall not condition the receipt or continued receipt +of an advantage, in connection with investments in its territory +of investors of a Party or of a non-Party, on compliance with any +of the following requirements: + + (a) to purchase, use or accord a preference to goods + produced in its territory, or to purchase goods from + producers in its territory; + + (b) to achieve a given level or percentage of domestic + content; + + (c) to relate in any way the volume or value of imports to + the volume or value of exports or to the amount of + foreign exchange inflows associated with such + investment; or + + (d) to restrict sales of goods or services in its territory + that such investment produces or provides by relating + such sales in any way to the volume or value of its + exports or foreign exchange earnings. + +4. Nothing in paragraph 3 shall be construed to prevent a Party +from conditioning the receipt or continued receipt of an +advantage, in connection with investments in its territory of +investors of a Party or of a non-Party, on compliance with a +requirement to locate production, provide a service, train or +employ workers, construct or expand particular facilities, or +carry out research and development, in its territory. + +5. Paragraphs 1 and 3 do not apply to any requirements other +than the requirements listed in those paragraphs. + + +Article 1107: Senior Management and Boards of Directors + +1. A Party shall not require that an enterprise of the Party +that is an investment of an investor of another Party appoint to +senior management positions individuals of any particular +nationality. + +2. A Party may require that a majority of the board of +directors, or any committee thereof, of an enterprise of the +Party that is an investment of an investor of another Party, be +of a particular nationality, or resident in the territory of the +Party, provided that the requirement does not materially impair +the ability of the investor to exercise control over its +investment. + + +Article 1108: Reservations and Exceptions + +1. Articles 1102, 1103, 1106 and 1107 do not apply to: + + (a) any existing non-conforming measure that is maintained + by: + + (i) a Party at the federal level, as described in its + Schedule to Annex I or III, + + (ii) a state or province, for two years after the date + of entry into force of this Agreement, and + thereafter as described by a Party in its Schedule + to Annex I, or + + (iii) a local government; + + (b) the continuation or prompt renewal of any + non-conforming measure referred to in subparagraph (a); + or + + (c) an amendment to any non-conforming measure referred to + in subparagraph (a) to the extent that the amendment + does not decrease the conformity of the measure, as it + existed immediately before the amendment, with Articles + 1102, 1103, 1106 and 1107. + +2. A Party shall have two years from the date of entry into +force of this Agreement to describe in its Schedule to Annex I +any existing non-conforming measure maintained by a state or +province. + +3. A Party shall not be required to describe in its Schedule to +Annex I any existing non-conforming measure that is maintained by +a local government. + +4. To the extent indicated by a Party in its Schedule to Annex +II, Articles 1102, 1103, 1106 and 1107 do not apply to any +measure adopted or maintained by a Party with respect to the +sectors, subsectors or activities as described therein. + +5. Any measure adopted by a Party in a manner consistent with +paragraph 4 shall not require an investor of another Party, by +reason of its nationality, to sell or otherwise dispose of an +investment existing at the time the measure becomes effective. + +6. Articles 1102 and 1103 do not apply to any measure that is +an exception to, or derogation from, the obligations under +Article 1703 (National Treatment) as specifically provided for in +that Article. + +7. Article 1103 does not apply to treatment accorded by a Party +pursuant to agreements or with respect to sectors described in +Annex IV. + +8. Articles 1102, 1103 and 1107 do not apply to: + + (a) procurement of goods or services by a Party or a state + enterprise; or + + (b) subsidies and grants provided by a Party or a state + enterprise, including government-supported loans, + guarantees and insurance. + +9. The provisions of: + + (a) Article 1106(1)(a), (b) and (c), and (3)(a) and (b) do + not apply to qualification requirements for goods or + services with respect to export promotion and foreign + aid programs; + + (b) Article 1106(1)(b), (c), (f) and (g), and (3)(a) and + (b) do not apply to procurement of goods or services by + a Party or a state enterprise; and + + (c) Article 1106(3)(a) and (b) do not apply to requirements + imposed by an importing Party related to the content of + goods necessary to qualify for preferential tariffs or + preferential quotas. + + +Article 1109: Transfers + +1. Each Party shall permit all transfers and international +payments ("transfers") relating to an investment of an investor +of another Party in the territory of the Party to be made freely +and without delay. Such transfers include: + + (a) profits, dividends, interest, capital gains, royalty + payments, management fees, technical assistance and + other fees, returns in kind, and other amounts derived + from the investment; + + (b) proceeds from the sale of all or any part of the + investment or from the partial or complete liquidation + of the investment; + + (c) payments made under a contract entered into by the + investor, or its investment, including payments made + pursuant to a loan agreement; + + (d) payments made pursuant to Article 1110; and + + (e) payments arising under Subchapter B. + +2. Each Party shall permit transfers to be made in a freely +usable currency at the market rate of exchange prevailing on the +date of transfer with respect to spot transactions in the +currency to be transferred. + +3. No Party shall require its investors to transfer, or +penalize its investors who fail to transfer, the income, +earnings, profits or other amounts derived from, or attributable +to, an investment in the territory of another Party. + +4. Notwithstanding paragraphs 1 and 2, a Party may prevent a +transfer through the equitable, non-discriminatory and good faith +application of its laws relating to: + + (a) bankruptcy, insolvency or the protection of the rights + of creditors; + + (b) issuing, trading or dealing in securities; + + (c) criminal or penal offenses; + + (d) reports of transfers of currency or other monetary + instruments; or + + (e) ensuring the satisfaction of judgments in adjudicatory proceedings. + +5. Paragraph 3 shall not be construed to prevent a Party from +imposing any measure through the equitable, non-discriminatory +and good faith application of its laws relating to the matters +set out in subparagraphs (a) through (e) of paragraph 4. + +6. A Party may restrict transfers of returns in kind only in +circumstances in which it could otherwise restrict such transfers +under this Agreement. + + +Article 1110: Expropriation and Compensation + +1. No Party shall directly or indirectly nationalize or +expropriate an investment of an investor of another Party in its +territory or take a measure tantamount to nationalization or +expropriation of such an investment ("expropriation"), except: + + (a) for a public purpose; + + (b) on a non-discriminatory basis; + + (c) in accordance with due process of law and the general + principles of treatment provided in Article 1105; and + + (d) upon payment of compensation in accordance with + paragraphs 2 to 6. + +2. Compensation shall be equivalent to the fair market value of +the expropriated investment immediately before the expropriation +took place ("date of expropriation"), and shall not reflect any +change in value occurring because the intended expropriation had +become known earlier. Valuation criteria shall include going +concern value, asset value (including declared tax value of +tangible property) and other criteria, as appropriate to +determine fair market value. + +3. Compensation shall be paid without delay and be fully +realizable. + +4. If payment is made in a G7 currency, compensation shall +include interest at a commercially reasonable rate for that +currency from the date of expropriation until the date of actual +payment thereof. + +5. If a Party elects to pay in a currency other than a G7 +currency, the amount paid on the date of payment, if converted +into a G7 currency at the market rate of exchange prevailing on +that date, shall be no less than if the amount of compensation +owed on the date of expropriation had been converted into that G7 +currency at the market rate of exchange prevailing on that date, +and interest had accrued at a commercially reasonable rate for +that G7 currency from the date of expropriation until the date of +payment. + +6. Upon payment, compensation shall be freely transferable as +provided in Article 1109. + +7. This Article does not apply to the issuance of compulsory +licenses granted in relation to intellectual property rights, or +the revocation, limitation or creation of intellectual property +rights to the extent that such issuance, revocation, limitation +or creation is consistent with Chapter Seventeen (Intellectual +Property). + +8. For purposes of this Article and for greater clarity, a non- +discriminatory measure of general application shall not be +considered a measure tantamount to an expropriation of a debt +security or loan covered by this Chapter solely on the ground +that the measure imposes costs on the debtor that cause it to +default on the debt. + + +Article 1111: Special Formalities and Information Requirements + +1. Nothing in Article 1102 shall be construed to prevent a +Party from adopting or maintaining a measure that prescribes +special formalities in connection with the establishment of +investments by investors of another Party, such as a requirement +that investors be residents of the Party or that investments be +legally constituted under the laws and regulations of the Party, +provided that such formalities do not impair the substance of the +benefits of any of the provisions in this Chapter. + +2. Notwithstanding Articles 1102 and 1103, a Party may require, +from an investor of another Party or its investment, routine +business information, to be used solely for informational or +statistical purposes, concerning that investment in its +territory. The Party shall protect such business information as +is confidential from disclosure that would prejudice the +investor's or the investment's competitive position. Nothing in +this paragraph shall preclude a Party from otherwise obtaining or +disclosing information in connection with the equitable and good +faith application of its laws. + + +Article 1112: Relationship to Other Chapters + +1. In the event of any inconsistency between a provision of +this Chapter and a provision of another Chapter, the provision of +the other Chapter shall prevail to the extent of the +inconsistency. + +2. A requirement by a Party that a service provider of another +Party post a bond or other form of financial security as a +condition of providing a service into its territory does not of +itself make this Chapter applicable to the provision of that +cross-border service. This Chapter shall apply to that Party's +treatment of the posted bond or financial security. + + +Article 1113: Denial of Benefits + +1. Each Party reserves the right to deny to an investor of +another Party that is an enterprise of such Party and to +investments of such investor the benefits of this Chapter if +investors of a non-Party own or control the enterprise and: + + (a) the denying Party does not maintain diplomatic + relations with the non-Party; or + (b) the denying Party adopts or maintains measures with + respect to the non-Party that prohibit transactions + with the enterprise or that would be violated or + circumvented if the benefits of this Chapter were + accorded to the enterprise or to its investments. + +2. Subject to prior notification and consultation in accordance +with Articles 1803 (Notification and Provision of Information) +and 2006 (Consultations), respectively, each Party reserves the +right to deny to an investor of another Party that is an +enterprise of such Party and to investments of such investors the +benefits of this Chapter if investors of a non-Party own or +control the enterprise and the enterprise has no substantial +business activities in the territory of the Party under whose +laws it is constituted or organized. + + +Article 1114: Environmental Measures + +1. Nothing in this Chapter shall be construed to prevent a +Party from adopting, maintaining, or enforcing any measure, +otherwise consistent with this Chapter, that it considers +appropriate to ensure that investment activity in its territory +is undertaken in a manner sensitive to environmental concerns. + +2. The Parties recognize that it is inappropriate to encourage +investment by relaxing domestic health, safety or environmental +measures. Accordingly, a Party should not waive or otherwise +derogate from, or offer to waive or otherwise derogate from, such +measures as an encouragement for the establishment, acquisition, +expansion, or retention in its territory of an investment of an +investor. If a Party considers that another Party has offered +such an encouragement, it may request consultations with the +other Party and the two Parties shall consult with a view to +avoiding any such encouragement. + +============================================================================= + + Subchapter B - SETTLEMENT OF DISPUTES BETWEEN A PARTY AND + AN INVESTOR OF ANOTHER PARTY + + +Article 1115: Purpose + + This Subchapter establishes a mechanism for the settlement +of investment disputes that assures both equal treatment among +investors of the Parties in accordance with the principle of +international reciprocity and due process before an impartial +tribunal. + + +Article 1116: Claim by an Investor of a Party on Behalf of + Itself + +1. An investor of a Party may submit to arbitration under this +Subchapter a claim that another Party has breached: + + (a) a provision of Subchapter A; or + + (b) Article 1502(3)(a) (Monopolies and State Enterprises) + or Article 1503(2) (State Enterprises) where the + alleged breach pertains to the obligations of + Subchapter A, + +and that the investor has incurred loss or damage by reason of, +or arising out of, that breach. + +2. An investor may not make a claim if more than three years +have elapsed from the date on which the investor first acquired, +or should have first acquired, knowledge of the alleged breach +and knowledge that the investor has incurred loss or damage. + + +Article 1117: Claim by an Investor of a Party on Behalf of an + Enterprise + +1. An investor of a Party, on behalf of an enterprise of +another Party that is a juridical person that the investor owns +or controls directly or indirectly, may submit to arbitration +under this Subchapter a claim that the other Party has breached: + + (a) a provision of Subchapter A; or + + (b) Article 1502 (3)(a) (Monopolies and State Enterprises) + or Article 1503(2) (State Enterprises) where the + alleged breach pertains to the obligations of + Subchapter A; + +and that the enterprise has incurred loss or damage by reason of, +or arising out of, that breach. + +2. An investor may not make a claim on behalf of an enterprise +described in paragraph 1 if more than three years have elapsed +from the date on which the enterprise first acquired, or should +have first acquired, knowledge of the alleged breach and +knowledge that the enterprise has incurred loss or damage. + +3. Where an investor makes a claim under this Article and the +investor or a non-controlling investor in the enterprise makes a +claim under Article 1116 arising out of the same events which +gave rise to the claim under this Article, and two or more of the +claims are submitted to arbitration under Article 1120, the +claims should be heard together by a Tribunal established +pursuant to Article 1125, unless the Tribunal finds that the +interests of a disputing party would be prejudiced thereby. + +4. An investment may not make a claim under this Subchapter. + + +Article 1118: Settlement of a Claim Through Consultation and + Negotiation + + The disputing parties should first attempt to settle a claim +through consultation or negotiation. + + +Article 1119: Notice of Intent to Submit a Claim to Arbitration + + The disputing investor shall give to the disputing Party +written notice of its intention to submit a claim to arbitration +at least 90 days before the claim is submitted, which notice +shall specify: + + (a) the name and address of the disputing investor; + + (b) the provisions of this Agreement alleged to have been + breached and any other relevant provisions; + + (c) the issues and the factual basis for the claim; and + + (d) the relief sought and the approximate amount of damages + claimed. + + +Article 1120: Submission of a Claim to Arbitration + +1. Except as provided in Annex 1120.1, and provided that six +months have elapsed since the events giving rise to a claim, a +disputing investor may submit the claim to arbitration under: + + (a) the ICSID Convention, provided that both the disputing + Party and the Party of the investor are parties to the + Convention; + + (b) the Additional Facility Rules of ICSID, provided that + either the disputing Party or the Party of the + investor, but not both, is a party to the ICSID + Convention; or + + (c) the UNCITRAL Arbitration Rules. + +2. The applicable arbitration rules shall govern the +arbitration except to the extent modified by this Subchapter. + + +Article 1121: Conditions Precedent to Submission of a Claim to + Arbitration + +1. A disputing investor may submit a claim under Article 1116 +to arbitration only if: + + (a) the investor consents to arbitration in accordance with + the provisions of this Subchapter; and + + (b) both the investor and an enterprise of another Party + that is a juridical person that the investor owns or + controls directly or indirectly, waive their right to + initiate or continue before any administrative tribunal + or court under the domestic law of any Party any + proceedings with respect to the measure of the + disputing Party that is alleged to be a breach of + Subchapter A of this Chapter, Article 1502(3)(a) + (Monopolies and State Enterprises) or Article 1503(2) + (State Enterprises), except for proceedings for + injunctive, declaratory or other extraordinary relief, + not involving the payment of damages, before an + administrative tribunal or court under the domestic law + of the disputing Party. + +2. A disputing investor may submit a claim under Article 1117 +to arbitration only if both the investor and the enterprise: + + (a) consent to arbitration in accordance with the + provisions of this Subchapter; and + + (b) waive their right to initiate or continue before any + administrative tribunal or court under the domestic law + of any Party any proceedings with respect to the + measure of the disputing Party that is alleged to be a + breach of Subchapter A of this Chapter, Article + 1502(3)(a) (Monopolies and State Enterprises) or + Article 1503(2) (State Enterprises), except for + proceedings for injunctive, declaratory or other + extraordinary relief, not involving the payment of + damages, before an administrative tribunal or court + under the domestic law of the disputing Party. + +3. A consent and waiver required by this Article shall be in +writing, shall be given to the disputing Party, and shall be +included in the submission of a claim to arbitration. + + +Article 1122: Consent to Arbitration + +1. Each Party consents to the submission of a claim to +arbitration in accordance with the provisions of this Subchapter. + +2. The consent given by paragraph 1 and the submission by a +disputing investor of a claim to arbitration in accordance with +the provisions of this Subchapter shall satisfy the requirement +of: + + (a) Chapter II of the ICSID Convention (Jurisdiction of the + Center) and the Additional Facility Rules for written + consent of the parties; + + (b) Article II of the New York Convention for an agreement + in writing; and + + (c) Article I of the Inter-American Convention for an + agreement. + + +Article 1123: Number of Arbitrators and Method of Appointment + + Subject to Article 1125, and unless the disputing parties +agree otherwise, the Tribunal shall consist of three arbitrators. +One arbitrator shall be appointed by each of the disputing +parties. The third, who shall be the presiding arbitrator, shall +be appointed by agreement of the disputing parties. + + +Article 1124: Constitution of Tribunal When a Party Fails to + Appoint an Arbitrator or the Disputing Parties Are + Unable to Agree on a Presiding Arbitrator + +1. The Secretary-General of ICSID shall serve as appointing +authority for an arbitration under this Subchapter. + +2. If a Tribunal has not been constituted within 90 days from +the date that a claim is submitted to arbitration, the Secretary- +General, at the request of either disputing party: + + (a) shall appoint the arbitrator or arbitrators not yet + appointed in his discretion, except for the presiding + arbitrator; and + + (b) shall appoint the presiding arbitrator in accordance + with paragraph 3. + +3. The Secretary-General shall appoint the presiding arbitrator +from the list of presiding arbitrators described in paragraph 4. +In the event that no such presiding arbitrator is available to +serve, the Secretary-General shall appoint a presiding arbitrator +who is not a national of any of the Parties from the ICSID Panel +of Arbitrators. + +4. As of the date of entry into force of this Agreement, the +Parties shall have jointly designated, without regard to +nationality, 45 presiding arbitrators meeting the qualifications +of the rules referred to in Article 1120 and experienced in +international law and investment. + +5. Subject to paragraph 8, where a disputing investor submits a +claim to arbitration under the ICSID Convention or the Additional +Facility Rules, each Party agrees: + + (a) to the appointment by the investor of a national of the + Party of the investor as an arbitrator; and + + (b) to the appointment by the Secretary-General of a + national of the Party of the investor as an arbitrator + or as a presiding arbitrator. + +6. Subject to paragraph 8, a disputing investor described in +Article 1116 may submit a claim to arbitration, or continue a +claim, under the ICSID Convention or the Additional Facility +Rules, only on the following conditions: + + (a) where the disputing Party appoints a national of the + disputing Party as an arbitrator, the investor agrees + in writing to the appointment; and + + (b) where the Secretary-General appoints a national of the + disputing Party as an arbitrator or as a presiding + arbitrator, the investor agrees in writing to the + appointment. + +7. Subject to paragraph 8, a disputing investor described in +Article 1117(1) may submit a claim to arbitration, or continue a +claim, under the ICSID Convention or the Additional Facility +Rules, only on the following conditions: + + (a) where the disputing Party appoints a national of the + disputing Party as an arbitrator, the investor and the + enterprise agree in writing to the appointment; and + + (b) where the Secretary-General appoints a national of the + disputing Party as an arbitrator or as a presiding + arbitrator, the investor and the enterprise agree in + writing to the appointment. + +8. A disputing party: + + (a) in the case of a claim submitted to arbitration under + the ICSID Convention, may propose, under Article 57 of + the Convention, the disqualification of a member of the + Tribunal on account of any fact indicating a manifest + lack of the qualities required by paragraph 1 of + Article 14 of the Convention; and + + (b) in the case of a claim submitted to arbitration under + the Additional Facility Rules, may propose, under + Article 14 of the Rules, the disqualification of a + member of the Tribunal on account of any fact + indicating a manifest lack of the qualities required by + Article 9 of the Rules. + + +Article 1125: Consolidation + +1. A Tribunal established under this Article shall be +established under the UNCITRAL Arbitration Rules, and shall +conduct its proceedings in accordance with those Rules, except as +modified by this Subchapter. + +2. Where a Tribunal established under this Article is satisfied +that claims have been submitted to arbitration under Article 1120 +that have a question of law or fact in common, the Tribunal may, +in the interests of fair and efficient resolution of the claims, +and after hearing the disputing parties, order that the Tribunal: + + (a) shall assume jurisdiction over, and hear and determine + together, all or part of the claims; or + + (b) shall assume jurisdiction over, and hear and determine + one or more of the claims, the determination of which + it believes would assist in the resolution of the + others. + +3. A disputing party that seeks an order under paragraph 2 +shall request the Secretary-General of ICSID to establish a +Tribunal and shall specify in the request: + + (a) the name of the disputing Party or disputing parties + against which the order is sought; + + (b) the nature of the order sought; and + + (c) the grounds on which the order is sought. + +4. The disputing party shall give to the disputing Party or +disputing parties against which the order is sought a copy of the +request. + +5. Within 60 days of receipt of the request, the Secretary- +General of ICSID shall establish a Tribunal consisting of three +arbitrators. The Secretary-General shall appoint the presiding +arbitrator from the roster described in paragraph 4 of Article +1124. In the event that no such presiding arbitrator is +available to serve, the Secretary-General shall appoint a +presiding arbitrator, who is not a national of any of the +Parties, from the ICSID Panel of Arbitrators. The Secretary- +General shall appoint the two other members from the roster +described in paragraph 4 of Article 1124, and to the extent not +available from that roster, from the ICSID Panel of Arbitrators, +and to the extent not available from that panel, in the +discretion of the Secretary-General. One member shall be a +national of the disputing Party and one member shall be a +national of the Party of the disputing investors. + +6. Where a Tribunal has been established under this Article, a +disputing party that has not been named in a request made under +paragraph 3 may make a written request to the Tribunal that it be +included in an order made under paragraph 2, and shall specify in +the request: + + (a) the party's name and address; + + (b) the nature of the order sought; and + + (c) the grounds on which the order is sought. + +7. A disputing party described in paragraph 6 shall give a copy +of its request to the parties named in a request made under +paragraph 3. + +8. A Tribunal established under Article 1120 shall not have +jurisdiction to decide a claim, or a part of a claim, over which +a Tribunal established under this Article has assumed +jurisdiction. + +9. A disputing Party shall give to the Secretariat of the +Commission, within 15 days of receipt by the disputing Party, a +copy of: + + (a) a request for arbitration made under paragraph 1 of + Article 36 of the ICSID Convention; + + (b) a notice for arbitration made under Article 2 of the + Additional Facility Rules; or + + (c) a notice of arbitration given under the UNCITRAL + Arbitration Rules. + +10. A disputing Party shall give to the Secretariat of the +Commission a copy of a request made under paragraph 3 of this +Article: + + (a) within 15 days of receipt of the request, in the case + of a request made by a disputing investor; + + (b) within 15 days of making the request, in the case of a + request made by the disputing Party. + +11. A disputing Party shall give to the Secretariat of the +Commission a copy of a request made under paragraph 6 of this +Article within 15 days of receipt of the request. + +12. The Secretariat of the Commission shall maintain a public +register consisting of the documents referred to in paragraphs 9, +10 and 11. + + +Article 1126: Notice + + A disputing Party shall deliver to the other Parties: + + (a) written notice of a claim that has been submitted to + arbitration within 30 days from the date that the claim + is submitted; and + + (b) copies of all pleading filed in the arbitration. + + +Article 1127: Participation by a Party + + On written notice to the disputing parties, a Party may make +submissions to a Tribunal on a question of interpretation of this +Agreement. + + +Article 1128: Documents + + A Party shall be entitled to receive from the disputing +Party at the cost of the requesting Party: + + (a) a copy of the evidence that has been tendered to the + Tribunal; and + + (b) a copy of the written argument of the disputing + parties. + + +Article 1129: Place of Arbitration + + Unless the disputing parties agree otherwise, a Tribunal +shall hold an arbitration in the territory of a Party which is a +party to the New York Convention, selected in accordance with: + + (a) the Additional Facility Rules if the arbitration is + under those rules or the ICSID Arbitration Rules; or + + (b) the UNCITRAL Arbitration Rules if the arbitration is + under those rules. + + +Article 1130: Governing Law + + A Tribunal established under this Subchapter shall decide +the issues in dispute in accordance with this Agreement and +applicable rules of international law. + + +Article 1131: Interpretation of Annexes + +1. Where a disputing Party asserts as a defense that the +measure alleged to be a breach of this Chapter is within the +scope of an exception set forth in Annex I, Annex II, Annex III +or Annex IV, on request of the disputing Party, the Tribunal +shall request the interpretation of the Commission on this +question. The Commission shall have 60 days to submit its +interpretation in writing to the Tribunal. + +2. If the Commission submits to the Tribunal an agreed +interpretation, the interpretation shall be binding on the +Tribunal. If the Commission fails to submit an agreed +interpretation or fails to submit an agreed interpretation within +such 60 day period, the Tribunal shall decide the issue of +interpretation of the exception. + + +Article 1132: Report from an Expert + + Without prejudice to the appointment of other kinds of +experts where authorized by the applicable arbitration rules, a +Tribunal, at the request of a disputing party or, unless the +disputing parties disapprove, on its own initiative, may appoint +one or more experts to report to it in writing on any factual +issue concerning environmental, health, safety or other +scientific matters raised by a disputing party in a proceeding, +subject to such terms and conditions as the disputing parties may +agree. + + +Article 1133: Interim Measures of Protection + + A Tribunal may take such measures as it deems necessary to +preserve the respective rights of the disputing parties, or to +ensure that the Tribunal's jurisdiction is made fully effective. +Such measures may include, but are not limited to, orders to +preserve evidence in the possession or control of a disputing +party, or to protect the Tribunal's jurisdiction. An interim +measure of protection may not include an order of attachment or +an order to enjoin the application of the measure alleged to be +the breach of Subchapter A of this Chapter, Article 1502(3)(a) +(Monopolies and State Enterprises) or Article 1503(2) (State +Enterprises). For purposes of this paragraph, an order includes +a recommendation. + + +Article 1134: Final Award + +1. Where a Tribunal makes a final award against a Party, the +Tribunal may award only: + + (a) monetary damages, and any applicable interest; or + + (b) restitution of property, in which case the award shall + provide that the disputing Party may pay monetary + damages, and any applicable interest, in lieu of + restitution. + +2. Subject to paragraph 1, where a claim is made under +paragraph 1 of Article 1117: + + (a) an award of restitution of property shall provide that + restitution be made to the enterprise; + + (b) an award of monetary damages, and any applicable + interest, shall provide that the sum be paid to the + enterprise; and + + (c) the award shall provide that it is made without + prejudice to any right that any person may have in the + relief under applicable domestic law. + +3. A Tribunal may not order a Party to pay punitive damages. + + +Article 1135: Finality and Enforcement of Award + +1. An award made by a Tribunal is binding on the disputing +parties but shall have no binding force except between the +disputing parties and in respect of the particular case. + +2. Subject to paragraph 3, a disputing party shall abide by and +comply with an award without delay. + +3. A disputing party may not seek enforcement of a final award +until: + + (a) in the case of a final award made under the ICSID + Convention: + + (i) 120 days have elapsed from the date the award was + rendered and no disputing party has requested + revision or annulment of the award, or + + (ii) revision or annulment proceedings have been + completed, and + + (b) in the case of a final award under the Additional + Facility Rules of ICSID or the UNCITRAL Arbitration + Rules: + + (i) 3 months have elapsed from the date the award was + rendered and no disputing party has commenced a + proceeding to revise, set aside or annul the + award, or + + (ii) a court has dismissed or allowed an application to + revise, set aside or annul the award and there is + no further appeal. + +5. Each Party undertakes to provide for the enforcement in its +territory of an award. + +6. If a Party fails to abide by or comply with the terms of a +final award under this Subchapter, the Commission provided for in +Chapter Twenty (Institutional Arrangements and Dispute Settlement +Procedures) shall, upon delivery of a request by any other Party +whose investor was party to the investment dispute, establish a +panel under Article 2008(1). The requesting Party may seek in +such proceedings: + + (a) a determination that the failure to abide by and comply + with the terms of the final award is inconsistent with + the obligations of this Agreement; and + + (b) a recommendation that the defaulting Party abide by or + comply with the terms of the final award. + +7. A disputing investor may seek enforcement of an arbitration +award under the ICSID Convention, the New York Convention or the +Inter-American Convention regardless of whether proceedings have +been taken under paragraph 6. + +8. A claim that is submitted to arbitration shall be considered +to arise out of a commercial relationship or transaction for +purposes of Article I of the New York Convention and Article I of +the Inter-American Convention. + + +Article 1136: General + +1. Time when a Claim is Submitted to Arbitration: A claim is +submitted to arbitration under this Subchapter when: + + (a) the notice of registration of the request to institute + arbitration proceedings has been dispatched by the + Secretary-General of ICSID in accordance with paragraph + 3 of Article 36 of the ICSID Convention; + + (b) the certificate of registration of the notice for + arbitration has been dispatched by the Secretary- + General of ICSID in accordance with Article 4 of + Schedule C of the Additional Facility Rules; or + + (c) the notice of arbitration given under the UNCITRAL + Arbitration Rules is received by the disputing Party. + +2. Receipts under Insurance or Guarantee Contracts: In an +arbitration under this Subchapter, a Party shall not assert, as a +defense, counterclaim, right of set off or otherwise, that the +investor concerned has received or will receive, pursuant to an +insurance or guarantee contract, indemnification or other +compensation for all or part of its alleged +damages. + + +Article 1137: Exclusions + +1. Without prejudice to the applicability or non-applicability +of the dispute settlement provisions of this Subchapter or of +Chapter Twenty (Institutional Arrangements and Dispute Settlement +Procedures) to other actions taken by a Party pursuant to Article +2102 (National Security), a decision by a Party to prohibit or +restrict the acquisition of an investment in its territory by an +investor of another Party, or its investment, pursuant to that +Article shall not be subject to such provisions. + +2. The dispute settlement provisions of this Subchapter and of +Chapter Twenty shall not apply to the matters described in Annex +1137.2. + + +Article 1138: Definitions + +For purposes of this Chapter: + +disputing Party means a Party against which a claim is made under +Subchapter B; + +disputing party means the disputing investor or the disputing +Party; + +disputing parties means the disputing investor and the disputing Party; + +enterprise means an "enterprise" as defined in Article 201, +except that it shall also include a branch; + +enterprise of a Party means an enterprise constituted or +organized under the laws and regulations of a Party, and a +branch; + +equity or debt securities includes voting and non-voting shares, +bonds, convertible debentures, stock options and warrants; + +G7 Currency means the currency of Canada, Germany, France, Italy, +Japan, the United States or the United Kingdom of Great Britain +and Northern Ireland; + +ICSID Convention means the Convention on the Settlement of +Investment Disputes between States and Nationals of other States +done at Washington, March 18, 1965; + +ICSID means the International Centre for Settlement of Investment +Disputes; + +Inter-American Convention means the Inter-American Convention on +International Commercial Arbitration, done at Panama, January 30, +1975; + +investment means: + + (a) an enterprise; + + (b) an equity security of an enterprise; + + (c) a debt security of an enterprise + + (i) that is an affiliate of the investor, or + + (ii) where the original maturity of the debt security + is at least three years, + + but does not include a debt security, regardless of original + maturity, of a state enterprise; + + (d) a loan to an enterprise, + + (i) that is an affiliate of the investor, or + + (ii) where the original maturity of the loan is at + least three years, + + but does not include a loan, regardless of original + maturity, to a state enterprise; + + (e) an interest in an enterprise that entitles the owner to + share in the income or profits; + + (f) an interest in an enterprise that entitles the owner to + share in the assets on dissolution, other than a debt + security or a loan excluded from sub-paragraph (c) or + (d); + + (g) real estate or other property (tangible and intangible) + acquired in the expectation or used for the purpose of + economic benefit or other business purposes; + + (h) interests arising from the commitment of capital or + other resources in the territory of a Party to economic + activity in such territory, such as under: + + (i) contracts involving the presence of an investor's + property in the territory of the Party (including + turnkey or construction contracts, or + concessions), or + + (ii) contracts where the remuneration depends + substantially on the production, revenues or + profits of an enterprise. + +But investment does not mean, + + (i) claims to money that arise solely from: + + (i) commercial contracts for the sale of goods or + services by a national or enterprise in the + territory of one Party to an enterprise in the + territory of another Party, or + + (ii) the extension of credit in connection with a + commercial transaction, such as trade financing, + other than a loan covered by sub-paragraph (d), or + + (j) any other claims to money, + +which do not involve the kinds of interests set out in sub- +paragraphs (a) through (h); + +investment of an investor of a Party means an investment owned or +controlled directly or indirectly by an investor of such Party; + +investor of a Party means a Party or state enterprise thereof, or +a national or an enterprise of such Party, that seeks to make, +makes or has made an investment; + +investor of a non-Party means an investor other than an investor +of a Party, that makes, seeks to make or has made an investment; + +New York Convention means the United Nations Convention on the +Recognition and Enforcement of Foreign Arbitral Awards, done at +New York, June 10, 1958; + +Tribunal means an arbitration tribunal established under Article +1120 or 1125; and + +UNCITRAL Arbitration rules means the arbitration rules of the +United Nations \Commission on International Trade Law, approved +by the United Nations General Assembly on December 15, 1976. + +============================================================================= + + ANNEX 1120.1 + + Submission of Claims to Arbitration + +1. An investor of another Party may not allege that Mexico has +breached: + + (a) a provision of Subchapter A; or + + (b) Article 1502(3)(a) (Monopolies and State Enterprises) + or Article 1503(2) (State Enterprises) where the + alleged breach pertains to the obligations of + Subchapter A, + +both in an arbitration under this Subchapter and in proceedings +before a Mexican court or administrative tribunal. + +2. Where an enterprise of Mexico that is a juridical person +that an investor of another Party owns or controls directly or +indirectly alleges in proceedings before a Mexican court or +administrative tribunal that Mexico has breached: + + (a) a provision of Subchapter A; or + + (b) Article 1502(3)(a) (Monopolies and State Enterprises) + or Article 1503(2) (State Enterprises) where the + alleged breach pertains to the obligations of + Subchapter A, + +the investor may not allege the breach in an arbitration under +this Subchapter. + +============================================================================= + ANNEX 1137.2 + + Exclusions from Dispute Settlement + + + +CANADA + + A decision by Canada following a review under the Investment +Canada Act, with respect to whether or not to permit an +acquisition that is subject to review, shall not be subject to +the dispute settlement provisions of Subchapter B or of Chapter +Twenty (Institutional Arrangements and Dispute Settlement +Procedures). + +MEXICO + + A decision by the National Commission on Foreign Investment +("Comisi¢n Nacional de Inversiones Extranjeras") following a +review pursuant to Annex I, page I-M-7, with respect to whether +or not to permit an acquisition that is subject to review, shall +not be subject to the dispute settlement provisions of Subchapter +B or of Chapter Twenty (Institutional Arrangements and Dispute +Settlement Procedures). + +NAFTA Chapter Twelve Cross-Border Trade in Services + + + +Article 1201: Scope and Coverage + +1. This Chapter applies to measures adopted or maintained by a +Party relating to cross-border trade in services by service +providers of another Party, including measures respecting: + + (a) the production, distribution, marketing, sale and + delivery of a service; + + (b) the purchase, payment or use of a service; + + (c) the access to and use of distribution and transportation + systems in connection with the provision of a service; + + (d) the presence in its territory of a service provider of + another Party; and + + (e) the provision of a bond or other form of financial + security as a condition for the provision of a service. + +2. This Chapter does not apply to: + + (a) financial services, as defined in Chapter Fourteen + (Financial Services); + + (b) services associated with energy and basic + petrochemical goods to the extent provided in + Chapter Six (Energy and Basic Petrochemicals); and + + (c) air services, including domestic and international air + transportation, whether scheduled or non-scheduled, and + related activities in support of air services, other + than: + + (i) aircraft repair and maintenance services during + which an aircraft is withdrawn from service, and + + (ii) specialty air services. + +3. Nothing in this Chapter shall be construed to: + + (a) impose any obligation on a Party with respect to a + national of another Party seeking access to its + employment market, or employed on a permanent basis in + its territory, or to confer any right on that national + with respect to such access or employment; + + (b) impose any obligation or confer any right on a Party with + respect to any procurement by a Party or a state + enterprise; + + (c) impose any obligation or confer any right on a Party with + respect to subsidies and grants, including government- + supported loans, guarantees and insurance provided by a + Party or a state enterprise; or + + (d) prevent a Party from providing a service or performing a + function, such as law enforcement, correctional services, + income security or insurance, social security or + insurance, social welfare, public education, public + training, health and child care, in a manner that is not + inconsistent with this Chapter. + + +Article 1202: National Treatment + +1. Each Party shall accord to service providers of another Party +treatment no less favorable than that it accords, in like +circumstances, to its own service providers. + +2. The treatment accorded by a Party under paragraph 1 means, +with respect to a state or province treatment no less favorable +than the most favorable treatment accorded, in like circumstances, +by such state or province to service providers of the Party of it +forms a part. + + +Article 1203: Most-Favored-Nation Treatment + + Each Party shall accord to service providers of another Party +treatment no less favorable than that it accords, in like +circumstances, to service providers of another Party or of a non- +Party. + + +Article 1204: Non-Discriminatory Treatment + + Each Party shall accord to service providers of another Party +the better of the treatment required by Articles 1202 and 1203. + + +Article 1205: Local Presence + + A Party shall not require a service provider of another Party +to establish or maintain a representative office, branch or any +form of enterprise, or to be resident, in its territory as a +condition for the cross-border provision of a service. + + +Article 1206: Reservations + +1. Articles 1202, 1203 and 1205 do not apply to: + + (a) any existing non-conforming measure that is maintained + by: + + (i) a Party at the federal level, as described in its + Schedule to Annex I, + + (ii) a state or province, for two years after the date + of entry into force of this Agreement, and + thereafter as described by a Party in its Schedule + to Annex I, or + + (iii) a local government; + + (b) the continuation or prompt renewal of any non-conforming + measure referred to in subparagraph (a); or + + (c) an amendment to any non-conforming measure referred to in + subparagraph (a) to the extent that the amendment does + not decrease the conformity of the measure, as it existed + immediately before the amendment, with Articles 1202, + 1203 and 1205. + +2. A Party shall have two years from the date of entry into force +of this Agreement to describe in its Schedule to Annex I any +existing non-conforming measure maintained by a state or province. + +3. A Party shall not be required to describe in its Schedule to +Annex I any existing non-conforming measure that is maintained by +a local government. + +4. To the extent indicated by a Party in its Schedule to Annex +II, Articles 1202, 1203 and 1205 do not apply to any measure +adopted or maintained by a Party with respect to the sectors, +subsectors or activities described therein. + + +Article 1207: Quantitative Restrictions + +1. The Parties shall periodically, but in any event at least +every two years, endeavor to negotiate the liberalization or +removal of: + + (a) any existing quantitative restrictions maintained by + + (i) a Party at the federal level, as described in its + Schedule to Annex V, or + + (ii) a state or province, as described by a Party in its + Schedule to Annex V; and + + (b) any quantitative restriction adopted by a Party after the + date of entry into force of this Agreement. + +2. Each Party shall have one year from the date of entry into +force of this Agreement to describe in its Schedule to Annex V any +quantitative restriction maintained by a state or province. + +3. Each Party shall notify the other Parties of any quantitative +restriction that it adopts or amends after the date of entry into +force of this Agreement and shall describe any such quantitative +restriction in its Schedule to Annex V. + +4. A Party shall not be required to describe in its Schedule to +Annex V, or to notify, any quantitative restriction adopted or +maintained by a local government. + + +Article 1208: Liberalization of Non-Discriminatory Measures + + Each Party shall describe in its Schedule to Annex VI +commitments to liberalize quantitative restrictions, licensing +requirements, performance requirements or other non-discriminatory +measures relating to the cross-border provision of a service. + + +Article 1209: Procedures + + The Commission shall establish procedures for: + + (a) the notification and description by a Party of + + (i) state or provincial measures that it intends to + describe in its Schedule to Annex I pursuant to + Article 1206(2), + + (ii) quantitative restrictions that it intends to + describe in it Schedule to Annex V pursuant to + Article 1207(2), + + (iii) commitments that it intends to describe in its + Schedule to Annex VI pursuant to Article 1208, + and + + (iv) amendments of measures in accordance with Article + 1206(1)(c); and + + (b) consultations between Parties with a view to removing any + state or provincial measure described by a Party in its + Schedule to Annex I after the date of entry into force of + this Agreement. + + +Article 1210: Licensing and Certification + +1. With a view to ensuring that any measure adopted or maintained +by a Party relating to the licensing and certification of nationals +of another Party does not constitute an unnecessary barrier to +trade, each Party shall endeavor to ensure that any such measure: + + (a) is based on objective and transparent criteria, + such as competence and the ability to provide a + service; + + (b) is not more burdensome than necessary to ensure the + quality of a service; and + + (c) does not constitute a restriction on the cross- + border provision of a service. + +2. Notwithstanding Article 1203, a Party shall not be required to +extend to a service provider of another Party the benefits of +recognition of education, experience, licenses or certifications +obtained in another country, whether such recognition was accorded +unilaterally or by arrangement or agreement with that other +country. The Party according such recognition shall afford any +interested Party an adequate opportunity to demonstrate that +education, experience, licenses or certifications obtained in that +other Party's territory should also be recognized or to negotiate +and enter into an agreement or arrangement of comparable effect. + +3. Two years after the date of entry into force of this +Agreement, a Party shall eliminate any citizenship or permanent +residency requirement for the licensing and certification of +professional service providers in its territory. Where a Party +does not comply with this provision with respect to a particular +sector, any other Party may maintain an equivalent requirement or +reinstate any such requirement eliminated pursuant to this Article, +only in the affected sector, for such period as the non-complying +Party retains the requirement. + +4. The Parties shall consult periodically with a view to +determining the feasibility of removing any remaining citizenship +or permanent residency requirement for the licensing and +certification of nationals of the other Parties. + +5. Each Party shall implement the provisions of Annex 1210. + + +Article 1211: Denial of Benefits + +1. A Party may deny the benefits of this Chapter to a service +provider of another Party where the Party establishes that: + + (a) such service is being provided by an enterprise owned or + controlled by nationals of a non-Party, and + + (i) the denying Party does not maintain diplomatic + relations with the non-Party, or + + (ii) the denying Party has imposed measures against the + non-Party that prohibit transactions with such + enterprise or that would be violated or + circumvented by the activities of such enterprise; + and + + (b) with respect to the cross-border provision of a + transportation service covered by this Chapter, the + service is provided using equipment not registered by any + Party. + +2. Subject to prior notification and consultation in accordance +with Articles 1803 (Notification and Provision of Information) and +2006 (Consultations), respectively, a Party may deny the benefits +of this Chapter to a service provider of another Party where the +Party establishes that such service is being provided by an +enterprise of another Party that is owned or controlled by persons +of a non-Party and that has no substantial business activities in +the territory of any Party. + +3. The Party denying benefits pursuant to paragraph 1 or 2 shall +have the burden of establishing that such action is in accordance +with such paragraph. + + +Article 1212: Sectoral Annex + + Each Party shall comply with Annex 1212. + + +Article 1213: Definitions + +1. For purposes of this Chapter, a reference to a federal, state +or provincial government includes any non-governmental body in the +exercise of any regulatory, administrative or other governmental +authority delegated to it by such government. + +2. For purposes of this Chapter: + +cross-border trade in services or cross-border provision of a +service means the provision of a service: + + (a) from the territory of a Party into the territory of + another Party; + + (b) in the territory of a Party by a person of that + Party to a person of another Party; or + + (c) by a person of a Party in the territory of another + Party, + +but does not include the provision of a service in the territory of +a Party by an investment, as defined in Article 1138 (Investment - +Definitions), in that territory; + +enterprise means "enterprise" as defined in Article 201, except +that it shall also include a branch; + +enterprise of a Party means an enterprise constituted or organized +under the laws and regulations of a Party, including a branch; + +professional services means services, the provision of which +requires specialized post-secondary education, or equivalent +training or experience, and for which the right to practice is +granted or restricted by measures adopted or maintained by a Party, +but does not include services provided by trades-persons and vessel +and aircraft crew members; + +quantitative restriction means a non-discriminatory measure that +imposes limitations on: + + (a) the number of service providers, whether in the form of + a numerical quota, monopoly or a requirement for an + economic needs test or by any other quantitative means; + or + + (b) the operations of any service provider, whether in the + form of a quota or the requirement of an economic needs + test or by any other quantitative means; + +service provider of a Party means a person of a Party that provides +a service; and + +specialty air services means aerial mapping, aerial surveying, +aerial photography, forest fire management, fire fighting, aerial +advertising, glider towing, parachute jumping, aerial construction, +heli-logging, aerial sightseeing, flight training, aerial +inspection and surveillance and aerial spraying services. + +============================================================================= + ANNEX 1210 + + Professional Services + + +Section A - General Provisions + + Scope and Coverage + +1. This Annex applies to measures adopted or maintained by a +Party relating to the licensing and certification of professional +service providers. + + Processing of Applications for Licenses and Certification + +2. Each Party shall ensure that its competent authorities, within +a reasonable period after the submission of an application for +licensing or certifications by a national of another Party: + + (a) where the application is complete, make a + determination on the application, and inform the + applicant of that determination; or + + (b) where the application is not complete, inform the + applicant without undue delay of the status of the + application and the additional information that is + required under its domestic law. + + Development of Mutually Acceptable Professional Standards and +Criteria + +3. The Parties shall encourage the relevant bodies in their +respective territories to develop mutually acceptable professional +standards and criteria for licensing and certification of +professional service providers and to provide recommendations on +mutual recognition to the Commission. + +4. Such standards and criteria may be developed with regard to +the following matters: + + (a) education - accreditation of schools or academic programs + where professional service providers obtain formal + education; + + (b) examinations - qualifying examinations for the purpose of + licensing professional service providers, including + alternative methods of assessment such as oral + examinations and interviews; + + (c) experience - length and nature of experience required for + a professional service provider to be licensed; + + (d) conduct and ethics - standards of professional conduct + and the nature of disciplinary action for non-conformity + with those standards by professional service providers; + + (e) professional development and re-certification - + continuing education for professional service providers, + and ongoing requirements to maintain professional + certification; + + (f) scope of practice - extent of, or limitations on, field + of permissible activities of professional services + providers; + + (g) territory-specific knowledge - requirements for knowledge + by professional service providers of such matters as + local laws, regulations, language, geography or climate; + and + + (h) consumer protection - alternatives to residency, + including bonding, professional liability insurance and + client restitution funds to provide for the protection of + consumers of professional services. + +5. Upon receipt of the recommendations of the relevant bodies, +the Commission shall review the recommendations within a reasonable +period to determine whether they are consistent with this +Agreement. + +6. Based upon the Commission's review, the Parties shall +encourage their respective competent authorities, where +appropriate, to adopt those recommendations within a mutually +agreed period. + + Temporary Licensing + +7. Where the Parties agree, each Party shall encourage the +relevant bodies in its territory to develop procedures for +temporary licensing of professional service providers of another +Party. + + Review + +8. The Commission shall periodically, and at least once every +three years, review progress in the implementation of this Annex. + + +Section B - Foreign Legal Consultants + +1. In implementing its commitments regarding foreign legal +consultants, set out in its Schedules to Annexes I and VI in +accordance with Article 1206 and 1208, each Party shall ensure, +subject to its reservations set out in its Schedules to Annexes I +and II in accordance with Article 1206, that a foreign legal +consultant is permitted to practice or advise on the law of the +country in which such consultant is authorized to practice as a +lawyer. + + Consultations With Relevant Professional Bodies + +2. Each Party shall undertake consultations with its relevant +professional bodies for the purpose of obtaining their +recommendations on: + + (a) the forms of association and partnership between lawyers + authorized to practice in its territory and foreign legal + consultants; + + (b) the development of standards and criteria for the + authorization of foreign legal consultants in conformity + with Article 1210; and + + (c) any other issues related to the provision of foreign + legal consultancy services. + +3. Each Party shall encourage its relevant professional bodies to +meet with the relevant professional bodies designated by each of +the other Parties to exchange views regarding the development of +joint recommendations on the issues described in paragraph 2 prior +to initiation of consultations under that paragraph. + + Future Liberalization + +4. Each Party shall establish a work program aimed at developing +common procedures throughout its territory for the licensing and +certification of lawyers licensed in the territory of another Party +as foreign legal consultants. + +5. With a view to meeting this objective, each Party shall, upon +receipt of the recommendations of the relevant professional bodies, +encourage its competent authorities to bring applicable measures +into conformity with such recommendations. + +6. Each Party shall report to the Commission within one year +after the date of entry into force of this Agreement, and each year +thereafter, on progress achieved in implementing the work program. + +7. The Parties shall meet within one year from the date of entry +into force of the this Agreement with a view to: + + (a) assessing the work that has been done under paragraphs 2 + through 6; + + (b) as appropriate, amending or removing the remaining + reservations on foreign legal consultancy services; and + + (c) determining any future work that might be appropriate + relating to foreign legal consultancy services. + + +Section C - Temporary Licensing of Engineers + +1. The Parties shall meet within one year after the date of entry +into force of this Agreement to establish a work program to be +undertaken by each Party, in conjunction with relevant professional +bodies specified by that Party, to provide for the temporary +licensing in its territory of engineers licensed in the territory +of another Party. + +2. With a view to meeting this objective, each Party shall +undertake consultations with its relevant professional bodies for +the purpose of obtaining their recommendations on: + + (a) the development of procedures for the temporary licensing + of engineers licensed in the territory of another Party + to permit them to practice their engineering specialties + in each jurisdiction in its territory that regulates + engineers; + + (b) the development of model procedures, in conformity with + Article 1210 and Section A of this Annex, for adoption by + the competent authorities throughout its territory to + facilitate the temporary licensing of engineers; + + (c) the engineering specialties to which priority should be + given in developing temporary licensing procedures; and + + (d) any other issues relating to the temporary licensing of + engineers identified by the Party through its + consultations with the relevant professional bodies. + +3. The relevant professional bodies shall be requested to make +recommendations on the matters specified in paragraph 2 to their +respective Parties within two years after the date of date of entry +into force of this Agreement. + +4. Each Party shall encourage its relevant professional bodies to +meet at the earliest opportunity with the relevant professional +bodies of the other Parties with a view to cooperating in the +expeditious development of joint recommendations on matters +specified in paragraph 2. The relevant professional bodies shall +be encouraged to develop such recommendations within two years +after the date of entry into force of this Agreement. Each Party +shall request an annual report from its relevant professional +bodies on the progress achieved in developing such recommendations. + +5. Upon receipt of the recommendations described in paragraphs 3 +and 4, the Parties shall review them to ensure their consistency +with the provisions of the Agreement and, if consistent, encourage +their respective competent authorities to implement such +recommendations within one year. + +6. Pursuant to paragraph 5 of Section A, within two years after +the date of entry into force of this Agreement, the Commission +shall review progress made in implementing the objectives set out +in this Section. + +7. Appendix 1210-C shall apply to engineering specialties. + +============================================================================= + ANNEX 1212 + + Land Transportation + + + Contact Points for Land Transportation Services + +1. Further to Article 1801 (Contact Points), each Party shall +designate contact points to provide information relating to land +transportation services published by that Party on operating +authority, safety requirements, taxation, data and studies and +technology, as well as assistance in contacting its relevant +government agencies. + + Review Process for Land Transportation Services + +2. The Commission shall, during the fifth year after the date of +entry into force of this Agreement and thereafter during every +second year of the period of liberalization for bus and truck +transportation set out in the Schedule of each Party to Annex I of +this Chapter, receive and consider a report from the Parties that +assesses progress respecting such liberalization, including: + + (a) the effectiveness of such liberalization; + + (b) specific problems for, or unanticipated effects on, each + Party's bus and truck transportation industry arising + from such liberalization; and + + (c) modifications to such period of liberalization. + +The Commission shall endeavor to resolve in a mutually satisfactory +manner any matter arising from its consideration of such reports. + +3. The Parties shall consult, no later than seven years after the +date of entry into force of this Agreement, to determine the +possibilities for further liberalization commitments. + +============================================================================= + Appendix 1210 - C + + Civil Engineers + + + Mexico will undertake the commitments of this Section only +with respect to civil engineers ("ingenieros civiles"). + +NAFTA Chapter Thirteen Telecommunications + + + +Article 1301: Scope and Coverage + +1. This Chapter applies to: + + (a) measures adopted or maintained by a Party relating to + access to and use of public telecommunications + transport networks or services by persons of another + Party, including access and use by such persons + operating private networks; + + (b) measures adopted or maintained by a Party relating to + the provision of enhanced or value-added services by + persons of another Party in the territory, or across + the borders, of a Party; and + + (c) standards-related measures relating to attachment of + terminal or other equipment to public + telecommunications transport networks. + +2. Except to ensure that persons operating broadcast stations +and cable systems have continued access to and use of public +telecommunications transport networks and services, this Chapter +does not apply to any measure adopted or maintained by a Party +relating to cable or broadcast distribution of radio or +television programming. + +3. Nothing in this Chapter shall be construed to: + + (a) require a Party to authorize a person of another Party + to establish, construct, acquire, lease, operate or + provide telecommunications transport networks or + telecommunications transport services; + + (b) require a Party, or require a Party to compel any + person, to establish, construct, acquire, lease, + operate or provide telecommunications transport + networks or telecommunications transport services not + offered to the public generally; + + (c) prevent a Party from prohibiting persons operating + private networks from using such networks to provide + public telecommunications transport networks or + services to third persons; or + + (d) require a Party to compel any person engaged in the + cable or broadcast distribution of radio or television + programming to make available its cable or broadcast + facilities as a public telecommunications transport + network. + + +Article 1302: Access to and Use of Public Telecommunications + Transport Networks and Services + +1. Each Party shall ensure that persons of another Party have +access to and use of any public telecommunications transport +network or service, including private leased circuits, offered in +its territory or across its borders for the conduct of their +business, on reasonable and non-discriminatory terms and +conditions, including as set out in paragraphs 2 through 8. + +2. Subject to paragraphs 6 and 7, each Party shall ensure that +such persons are permitted to: + + (a) purchase or lease, and attach terminal or other + equipment that interfaces with the public + telecommunications transport network; + + (b) interconnect private leased or owned circuits with + public telecommunications transport networks in the + territory, or across the borders, of that Party, + including for use in providing dial-up access to and + from their customers or users, or with circuits leased + or owned by another person on terms and conditions + mutually agreed by such persons; + + (c) perform switching, signalling and processing functions; + and + + (d) use operating protocols of their choice. + +3. Each Party shall ensure that: + + (a) the pricing of public telecommunications transport + services reflects economic costs directly related to + providing such services; and + + (b) private leased circuits are available on a flat-rate + pricing basis. + +Nothing in this paragraph shall be construed to prevent +cross-subsidization between public telecommunications transport +services. + +4. Each Party shall ensure that persons of another Party may +use public telecommunications transport networks or services for +the movement of information in its territory or across its +borders, including for intracorporate communications, and for +access to information contained in data bases or otherwise stored +in machine-readable form in the territory of any Party. + +5. Further to Article 2101 (General Exceptions), nothing in +this Chapter shall be construed to prevent a Party from adopting +or enforcing any measure necessary to: + + (a) ensure the security and confidentiality of messages; or + + (b) protect the privacy of subscribers to public + telecommunications transport networks or services. + +6. Each Party shall ensure that no condition is imposed on +access to and use of public telecommunications transport networks +or services, other than that necessary to: + + (a) safeguard the public service responsibilities of + providers of public telecommunications transport + networks or services, in particular their ability to + make their networks or services available to the public + generally; or + + (b) protect the technical integrity of public + telecommunications transport networks or services. + +7. Provided that conditions for access to and use of public +telecommunications transport networks or services satisfy the +criteria set out in paragraph 6, such conditions may include: + + (a) a restriction on resale or shared use of such services; + + (b) a requirement to use specified technical interfaces, + including interface protocols, for interconnection with + such networks or services; + + (c) a restriction on interconnection of private leased or + owned circuits with such networks or services or with + circuits leased or owned by another person, where such + circuits are used in the provision of public + telecommunications transport networks or services; and + + (d) a licensing, permit, registration or notification + procedure which, if adopted or maintained, is + transparent and applications filed thereunder are + processed expeditiously. + +8. For purposes of this Article, "non-discriminatory" means on +terms and conditions no less favorable than those accorded to any +other customer or user of like public telecommunications +transport networks or services in like circumstances. + + +Article 1303: Conditions for the Provision of Enhanced or + Value-Added Services + +1. Each Party shall ensure that: + + (a) any licensing, permit, registration or notification + procedure that it adopts or maintains relating to the + provision of enhanced or value-added services is + transparent and non-discriminatory, and that + applications filed thereunder are processed + expeditiously; and + + (b) information required under such procedures is limited + to that necessary to demonstrate that the applicant has + the financial solvency to begin providing services or + to assess conformity of the applicant's terminal or + other equipment with the Party's applicable standards + or technical regulations. + +2. A Party shall not require a person providing enhanced or +value-added services to: + + (a) provide those services to the public generally; + + (b) cost-justify its rates; + + (c) file a tariff; + + (d) interconnect its networks with any particular customer + or network; or + + (e) conform with any particular standard or technical + regulation for interconnection other than for + interconnection to a public telecommunications + transport network. + +3. Notwithstanding paragraph 2(c), a Party may require the +filing of a tariff by: + + (a) such provider to remedy a practice of that provider + that the Party has found in a particular case to be + anticompetitive under its law; or + + (b) a monopoly to which Article 1305 applies. + + +Article 1304: Standards-Related Measures + +1. Further to Article 904(4) (Unnecessary Obstacles), each +Party shall ensure that its standards-related measures relating +to the attachment of terminal or other equipment to the public +telecommunications transport networks, including such measures +relating to the use of testing and measuring equipment for +conformity assessment procedures, are adopted or maintained only +to the extent necessary to: + + (a) prevent technical damage to public telecommunications + transport networks; + + (b) prevent technical interference with, or degradation of, + public telecommunications transport services; + + (c) prevent electromagnetic interference, and ensure + compatibility, with other uses of the electromagnetic + spectrum; + + (d) prevent billing equipment malfunction; or + + (e) ensure users' safety and access to public + telecommunications transport networks or services. + +2. A Party may require approval for the attachment to the +public telecommunications transport network of terminal or other +equipment that is not authorized, provided that the criteria for +such approval are consistent with paragraph 1. + +3. Each Party shall ensure that the network termination points +for its public telecommunications transport networks are defined +on a reasonable and transparent basis. + +4. A Party shall not require separate authorization for +equipment that is connected on the customer's side of authorized +equipment that serves as a protective device fulfilling the +criteria of paragraph 1. + +5. Further to Article 904(3) (Non-Discriminatory Treatment), +each Party shall: + + (a) ensure that its conformity assessment procedures are + transparent and non-discriminatory and that + applications filed thereunder are processed + expeditiously; + + (b) permit any technically qualified entity to perform the + testing required under the Party's conformity + assessment procedures for terminal or other equipment + to be attached to the public telecommunications + transport network, subject to the Party's right to + review the accuracy and completeness of the test + results; and + + (c) ensure that any measure that it adopts or maintains + requiring persons to be authorized to act as agents for + suppliers of telecommunications equipment before the + Party's relevant conformity assessment bodies is non- + discriminatory. + +6. No later than one year after the date of entry into force of +this Agreement, each Party shall adopt, as part of its conformity +assessment procedures, provisions necessary to accept the test +results from laboratories or testing facilities in the territory +of another Party for tests performed in accordance with the +accepting Party's standards-related measures and procedures. + +7. The Telecommunications Standards Subcommittee established +under Article 913(5) (Committee on Standards-Related Measures) +shall perform the functions set out in Annex 913-B. + + +Article 1305: Monopolies + +1. Where a Party maintains or designates a monopoly to provide +public telecommunications transport networks or services, and the +monopoly, directly or through an affiliate, competes in the +provision of enhanced or value-added services or other +telecommunications-related services or telecommunications-related +goods, the Party shall ensure that the monopoly does not use its +monopoly position to engage in anticompetitive conduct in those +markets, either directly or through its dealings with its +affiliates, in such a manner as to affect adversely a person of +another Party. Such conduct may include cross-subsidization, +predatory conduct and the discriminatory provision of access to +public telecommunications transport networks or services. + +2. To prevent such anticompetitive conduct, each Party shall +adopt or maintain effective measures such as: + + (a) accounting requirements; + + (b) requirements for structural separation; + + (c) rules to ensure that the monopoly accords its + competitors access to and use of its public + telecommunications transport networks or services on + terms and conditions no less favorable than those it + accords to itself or its affiliates; or + + (d) rules to ensure the timely disclosure of technical + changes to public telecommunications transport networks + and their interfaces. + + +Article 1306: Transparency + + Further to Article 1802, each Party shall make publicly +available its measures relating to access to and use of public +telecommunications transport networks or services, including +measures relating to: + + (a) tariffs and other terms and conditions of service; + + (b) specifications of technical interfaces with such + networks or services; + + (c) information on bodies responsible for the preparation + and adoption of standards-related measures affecting + such access and use; + + (d) conditions applying to attachment of terminal or other + equipment to the public telecommunications transport + network; and + + (e) notification, permit, registration or licensing + requirements. + + +Article 1307: Relationship to other Chapters + + In the event of any inconsistency between a provision of +this Chapter and the provision of another Chapter, the provision +of this Chapter shall prevail to the extent of such +inconsistency. + + +Article 1308: Relation to International Organizations and + Agreements + + The Parties recognize the importance of international +standards for global compatibility and interoperability of +telecommunication networks or services and undertake to promote +such standards through the work of relevant international bodies, +including the International Telecommunications Union and the +International Organization for Standardization. + + +Article 1309: Technical Cooperation and Other Consultations + +1. To encourage the development of interoperable +telecommunications transport services infrastructure, the Parties +shall cooperate in the exchange of technical information, the +development of government-to-government training programs and +other related activities. In implementing this obligation, the +Parties shall give special emphasis to existing exchange +programs. + +2. The Parties shall consult with a view to determining the +feasibility of further liberalizing trade in all +telecommunications services, including public telecommunications +transport networks and services. + + +Article 1310: Definitions + +For purposes of this Chapter: + +authorized equipment means terminal or other equipment that has +been approved for attachment to the public telecommunications +transport network in accordance with a Party's conformity +assessment procedures; + +conformity assessment procedure means any procedure used, +directly or indirectly, to determine that a relevant technical +regulation or standard is fulfilled, including sampling, testing, +inspection, evaluation, verification, monitoring, auditing, +assurance of conformity, accreditation, registration or approval +used for such a purpose; + +enhanced or value-added services means those telecommunications +services employing computer processing applications that: + + (a) act on the format, content, code, protocol or similar + aspects of a customer's transmitted information; + + (b) provide a customer with additional, different or + restructured information; or + + (c) involve customer interaction with stored information; + +flat-rate pricing basis means pricing on the basis of a fixed +charge per period of time regardless of the amount of usage; + +intracorporate communications means telecommunications through +which an enterprise communicates: + + (a) internally or with or among its subsidiaries, branches + or affiliates, as defined by each Party; or + + (b) on a non-commercial basis with other persons that are + fundamental to the economic activity of the enterprise + and that have a continuing contractual relationship + with it, + +but does not include telecommunications services provided to +persons other than those described herein; + +network termination point means the final demarcation of the +public telecommunications transport network at the customer's +premises; + +private network means a telecommunications transport network that +is used exclusively for intracorporate communications; + +protocol means a set of rules and formats that govern the +exchange of information between two peer entities for purposes of +transferring signaling or data information; + +public telecommunications transport network means public +telecommunications infrastructure that permits telecommunications +between defined network termination points; + +public telecommunications transport networks or services means +public telecommunications transport networks or public +telecommunications transport services; + +public telecommunications transport service means any +telecommunications transport service required by a Party, +explicitly or in effect, to be offered to the public generally, +including telegraph, telephone, telex and data transmission, that +typically involves the real-time transmission of customer- +supplied information between two or more points without any end- +to-end change in the form or content of the customer's +information; + +standards-related measure means a "standards-related measure" as +defined in Article 915; + +telecommunications means the transmission and reception of +signals by any electromagnetic means; and + +terminal equipment means any digital or analog device capable of +processing, receiving, switching, signaling or transmitting +signals by electromagnetic means and that is connected by radio +or wire to a public telecommunications transport network at a +termination point. +NAFTA Chapter Fourteen Financial Services + + + +Article 1401: Scope + +1. This Chapter shall apply to measures adopted or maintained +by a Party relating to: + + (a) financial institutions of another Party; + + (b) investors of another Party, and investments of such + investors, in financial institutions in the Party's + territory; and + + (c) cross-border trade in financial services. + +2. Only Articles 1109 (Transfers), 1110 (Expropriation and +Compensation), 1111 (Special Formalities and Information +Requirements), 1113 (Denial of Benefits), 1114 (Environmental +Measures) and Articles 1115 to 1136 (Settlement of Disputes +Between a Party and an Investor of Another Party) of Chapter +Eleven (Investment) and Article 1211 (Denial of Benefits) of +Chapter Twelve (Cross-Border Trade in Services) shall apply to +this Chapter. Article 1802(2) (Publication) shall not apply to +this Chapter. + +3. In the event of any inconsistency between a provision of +this Chapter and any other provision of this Agreement, the +former shall prevail to the extent of the inconsistency. This +paragraph does not apply to Article 2103 (Taxation). + +4. Nothing in this Chapter shall prevent a Party from being the +exclusive service provider in its territory with respect to the +following: + + (a) activities forming part of a public retirement plan or + statutory system of social security; and + + (b) activities conducted by a public entity for the account + or with the guarantee or using the financial resources + of the government or of any other public entity. + +5. Article 1407 shall not apply to the granting by a Party to a +financial service provider of an exclusive right to provide a +financial service referred to in paragraph 4(a). + +6. Each Party shall comply with Annex 1401.6. + + +Article 1402: Self-Regulatory Organizations + + Where a Party requires financial service providers of +another Party to be members of, participate in, or have access +to, a self-regulatory organization to provide a financial service +in the territory of that Party, the Party shall ensure observance +by such organization of this Chapter. + + +Article 1403: Regulatory Measures + +1. Nothing in this Part shall be construed to prevent a Party +from adopting or maintaining reasonable measures for prudential +reasons, such as: + + (a) the protection of investors, depositors, financial + market participants, policy-holders, policy-claimants + or persons to whom a fiduciary duty is owed by a + financial service provider or financial institution; + + (b) the maintenance of the safety, soundness, integrity or + financial responsibility of financial service providers + or financial institutions; and + + (c) ensuring the integrity and stability of a Party's + financial system. + +2. Nothing in this Part applies to non-discriminatory measures +of general application taken by any public entity in pursuit of +monetary and related credit policies or exchange rate policies. +This paragraph shall not affect a Party's obligations under +Article 1106 (Performance Requirements), Article 1109 (Transfers) +and Article 2104 (Balance of Payments). + +Article 1404: Establishment + +1. The Parties recognize the principle that financial service +providers of a Party should be permitted to establish financial +institutions in the territory of another Party in the juridical +form determined by the provider. + +2. The Parties also recognize the principle that financial +service providers of a Party should be permitted to participate +widely in the market of another Party through the ability: + + (a) to provide in that other Party's territory a range of + financial services through separate financial + institutions as may be required by that Party; + + (b) to expand geographically within that territory; and + + (c) to own financial institutions without the application + of ownership requirements specific to foreign financial + institutions. + +3. Each Party shall permit financial service providers of +another Party that are not already established in its territory +to establish financial institutions in the Party's territory. A +Party may: + + (a) require such financial service providers to incorporate + such financial institutions under its laws; or + + (b) impose other terms, conditions and procedures on + establishment that are consistent with Article 1407. + +4. At such time as the United States liberalizes its existing +measures to permit commercial banks of another Party located in +its territory to expand throughout significantly all the United +States market either through subsidiaries or direct branches, the +Parties shall review and assess market access in each Party, +subject to Annex 1404.4, with respect to the principles in +paragraphs 1 and 2 with a view to adopting arrangements +permitting investor choice as to juridical form of establishment +by commercial banks. + +5. Each Party shall permit financial institutions of another +Party to transfer and process information outside the territory +of the Party in electronic or other form as is necessary for the +conduct of ordinary business of such institutions. + + +Article 1405: Cross-Border Trade + +1. No Party may adopt any measure restricting any type of +cross-border trade in financial services by financial service +providers of another Party that is permitted on the date of entry +into force of this Agreement, except to the extent set out in +Part B of the Party's Schedule to Annex VII. + +2. Each Party shall permit persons located in its territory, +and its nationals wherever located, to purchase financial +services from financial service providers of another Party +located in the territory of that other Party or another Party, +provided that the Party is not required, in order to fulfill this +obligation, to permit such providers to do business or solicit in +its territory. Subject to paragraph 1, each Party may, for this +purpose, define "doing business" and "solicitation." + +3. Without prejudice to prudential regulation by other means, a +Party may require registration of financial service providers of +another Party and financial instruments. + +4. The Parties shall consult on future liberalization of cross- +border trade in financial services, as set out in Annex 1405.4. + + +Article 1406: New Financial Services + +1. Each Party shall permit a financial institution of another +Party to provide any new financial service of a type similar to +those that the Party permits its financial institutions, in like +circumstances, to provide under its domestic law. A Party may +determine the institutional and juridical form through which such +service may be provided. + +2. A Party may require authorization for the provision in its +territory of a financial service referred to in paragraph 1. +Where such authorization is required, a decision shall be made +within a reasonable period of time and may only be refused for +prudential reasons. + + +Article 1407: National Treatment + +1. Each Party shall accord to investors of another Party and +financial service providers of another Party national treatment +with respect to the establishment, acquisition, expansion, +management, conduct, operation and sale or other disposition of +investments in financial institutions in its territory. + +2. Each Party shall accord to the financial institutions of +another Party national treatment. + +3. Where a Party permits the cross-border provision of a +financial service, it shall accord national treatment to +financial service providers of another Party in the provision of +such cross-border service. + +4. "National treatment" means treatment no less favorable than +that accorded by a Party to its own investors, financial service +providers and financial institutions in like circumstances. + +5. A measure of a Party, whether it accords to financial +service providers or financial institutions of another Party +different or identical treatment compared to that it accords to +its own providers or institutions in like circumstances, shall be +deemed to be consistent with paragraph 4, if it accords equal +competitive opportunities. + +6. A measure accords equal competitive opportunities if it does +not disadvantage financial service providers of another Party in +their ability to provide financial services as compared with the +ability of domestic financial service providers in like +circumstances to provide financial services. + +7. Differences in market share, profitability or size shall not +by themselves constitute denial of equal competitive +opportunities, but shall not be precluded from being used as +evidence regarding the issue of whether a Party's measure accords +equal competitive opportunities. + +8. With respect to measures of a province or state, paragraph 4 +means: + + (a) treatment no less favorable than the most favorable + treatment accorded in like circumstances by such + province or state to financial service providers of the + Party of which it forms a part, including that province + or state; or + + (b) in the case of a financial service provider of another + Party established in another province or state of the + Party, treatment no less favorable than it accords in + like circumstances to a financial service provider of + the Party established in such other province or state. + + +Article 1408: Most-Favored-Nation Treatment + +1. Each Party shall accord to investors of another Party, +investments of such investors and financial service providers of +another Party treatment no less favorable than that it accords to +investors, investments of investors and financial service +providers of any other Party or non-Party in like circumstances. + +2. Each Party may recognize prudential measures of another +Party or non-Party in determining how the Party's measures +relating to financial services shall be applied. Such +recognition, which may be achieved through harmonization or +otherwise, may be based upon an agreement or arrangement with the +Party concerned or may be accorded unilaterally. + +3. A Party recognizing measures by means of an agreement or +arrangement referred to in paragraph 2 shall afford adequate +opportunity for another Party to negotiate its accession to such +an agreement or arrangement, or to negotiate a comparable one +under circumstances in which there would be equivalent +regulation, oversight, implementation of such regulation, and, if +appropriate, procedures concerning the sharing of information +between the Parties. Where a Party accords recognition +unilaterally, it shall afford adequate opportunity for another +Party to demonstrate that such circumstances exist. + + +Article 1409: Staffing + +1. No Party may require financial institutions of another Party +to engage, as top managerial or other essential personnel, +individuals of any particular nationality. + +2. No Party may require that more than a simple majority of the +board of directors of a financial institution of another Party be +composed of nationals of the Party, persons residing in the +territory of the Party, or a combination thereof. + + +Article 1410: Transparency + +1. Each Party shall, to the extent practicable, provide in +advance to all interested persons any measure of general +application that the Party proposes to adopt in order to allow an +opportunity for such persons to comment upon the measure. Such +measure shall be provided: + + (a) by means of official publication; + + (b) in other written form; or + + (c) in such other form as permits an interested person to + make informed comments on the proposed measure. + +2. Each Party shall make available to interested persons the +information that applications affecting the provision of +financial services must contain. + +3. At the request of an applicant, the competent regulatory +authority shall provide information concerning the status of an +application. If such authority requires additional information +from the applicant, it shall notify the applicant without undue +delay. + +4. Each Party shall make an administrative decision on a +completed application of a financial service provider of another +Party within 120 days, and shall promptly notify the applicant +of the decision. An application shall not be considered complete +until all relevant hearings are held and all necessary +information is received. Where it is not practicable for a +decision to be made within 120 days, the competent authority +shall notify the applicant without undue delay and shall endeavor +to make the decision within a reasonable time thereafter. + +5. Nothing in this Agreement requires a Party to disclose +information related to the affairs and accounts of individual +customers or any confidential or proprietary information the +disclosure of which would impede law enforcement or otherwise be +contrary to the public interest, or prejudice legitimate +commercial interests. + +6. Each Party shall ensure that inquiry points exist, at the +latest 180 days after the date of entry into force of this +Agreement, to which all reasonable inquiries from interested +persons may be directed regarding any measures of general +application taken by that Party with respect to this Chapter. +Responses shall be provided in writing as soon as practicable. + + +Article 1411: Transfers + + Without prejudice to other provisions of this Agreement that +would permit such actions to be taken, a Party may prevent or +limit transfers by a financial service provider or a financial +institution to, or for the benefit of, an affiliate of or person +related to such provider or institution, through the equitable, +non-discriminatory and good faith application of its measures +relating to maintenance of the safety and soundness of its +financial institutions. + + +Article 1412: Schedules + +1. Articles 1404 through 1409 do not apply to: + + (a) any existing non-conforming measure that is maintained + by: + + (i) a Party at the federal level, as set out in Part A + of its Schedule to Annex VII; + + (ii) a state or province, as set out by a Party in Part + A of its Schedule to Annex VII within the period + referred to in that Part; or + + (iii) a local government; + + (b) the continuation or prompt renewal of any non- + conforming measure referred to in subparagraph (a); or + + (c) an amendment to any non-conforming measure referred to + in subparagraph (a) to the extent that the amendment + does not decrease the conformity of the measure, as it + existed immediately before the amendment, with Articles + 1404 through 1409. + +2. A Party shall set out any non-conforming measure maintained +at the state or provincial level in Part A of its Schedule to +Annex VII within the periods provided therein. + +3. Articles 1404 through 1409 do not apply to any measure +adopted or maintained by a Party that is consistent with the +terms set out by the Party in Part B of its Schedule to Annex +VII. + +4. A Party shall describe in Part C of its Schedule to Annex +VII any specific commitment it is making to any other Party. + +5. For the purposes of Article 1413(2), each Party shall +specify in Part D of its Schedule to Annex VII its governmental +agency responsible for financial services. + +6. A Party shall describe in Part E of its Schedule to Annex +VII any terms and conditions that an enterprise of another Party +must meet to be considered an enterprise of such other Party for +the purposes of restrictions specified in that Part. + +7. Any reservation or exception set out by a Party in Annexes I +through VI under this Part shall be deemed to constitute +reservations or exceptions for purposes of Articles 1404 through +1409. + + +Article 1413: Consultations + +1. Any Party may request consultations with another Party at +any time regarding any matter arising under this Agreement that +affects financial services. The other Party shall give +sympathetic consideration to such a request. The results of +consultations under this Article shall be reported during the +annual meeting of the Committee provided for in Article 1414. + +2. Consultations under this Article shall be conducted by +officials of the governmental agencies responsible for financial +services specified in Part D of each Party's Schedule to Annex +VII. + +3. A Party may request that regulatory authorities of another +Party participate in consultations under this Article to discuss +that other Party's measures of general application that may +affect the operations of financial service providers in the +requesting Party's territory. + +4. Such regulatory authorities shall not be required to +disclose information or take any action that would interfere with +individual regulatory, supervisory, administrative or enforcement +matters. + +5. Where a Party requires information for supervisory purposes +concerning a financial service provider in another Party's +territory, it may approach the competent regulatory authority in +the other Party's territory to seek the information. + +6. Each Party shall comply with Annex 1413.6. + + +Article 1414: Financial Services Committee + +1. The Parties hereby establish the Financial Services +Committee. The principal representative of each Party shall be +the officials referred to in Article 1413(2). + +2. Subject to Article 2001(2)(d) (The Free Trade Commission), +the Committee shall: + + (a) supervise the implementation of this Chapter and its + further elaboration; + + (b) consider issues regarding financial services that are + referred to it by a Party; + + (c) participate in the dispute settlement procedure + pursuant to Article 1416; and + + (d) examine technical issues under this Chapter, including + interpretation of this Chapter. + +3. The Committee shall meet annually to assess the functioning +of this Agreement as it applies to financial services. The +Committee shall inform the Commission of the results of each +annual meeting. + + +Article 1415: Dispute Settlement + +1. Disputes arising under this Chapter shall be resolved in +accordance with the procedures of Chapter 20 (Institutional +Arrangements and Dispute Settlement Procedures) and this Article. + + +2. In addition to the roster established under Article 2009 +(Roster), the Parties shall establish and maintain a roster of up +to 15 individuals who are willing and able to serve as financial +services panelists. Financial services roster members shall be +appointed by consensus for terms of three years and may be +reappointed. + +3. Financial services roster members shall have expertise or +experience in financial services law or practice, which may +include the regulation of financial institutions, and shall be +chosen strictly on the basis of objectivity, reliability and +sound judgment. Such members shall also meet the qualifications +set out in Article 2009(2)(b) and (c). + +4. Where a Party alleges that a dispute arises under this +Chapter, Article 2011 (Panel Selection) applies to the selection +of panelists, except that: + + (a) the panel shall be composed entirely of panelists + meeting the qualifications in paragraph 3, where the + disputing Parties agree; + + (b) in any case other than that set out in subparagraph (a) + + (i) each disputing Party may select panelists meeting + the qualifications of Article 2010(1) + (Qualifications of Panelists) or paragraph 3 of + this Article, as the Party deems appropriate, and + + (ii) if the Party complained against alleges Article + 1403 as a defense in the dispute, the chair of the + panel must meet the qualifications of paragraph 3 + of this Article. + +5. Notwithstanding Article 2019(2) (Non-Implementation - +Suspension of Benefits), in any dispute where a panel finds a +measure to be inconsistent with the obligations of this Agreement +and the measure affects: + + (a) only the financial services sector, the complaining + Party may suspend benefits only in the financial + services sector; + + (b) the financial services sector and any other sector, the + complaining Party may suspend benefits in the financial + services sector that have an equivalent effect as the + measure or matter complained of has in the financial + services sector; or + + (c) only a sector other than the financial services sector, + the complaining Party may not suspend benefits in the + financial services sector. + + +Article 1416: Investment Disputes in Financial Services + +1. Where an investor of another Party submits a claim under +Articles 1116 or 1117 to arbitration under Section B of Chapter +Eleven (Settlement of Disputes Between a Party and an Investor of +Another Party) against a Party and the disputing Party alleges +Article 1403 as a defense, on request of the disputing Party, the +Tribunal shall refer the matter to the Committee for a decision. +The Tribunal may not proceed pending receipt of a decision or +report under this Article. + +2. The Committee shall decide the issue of whether and to what +extent Article 1403 is a valid defense to the claim of the +investor. The Committee shall transmit a copy of its decision to +the Tribunal and to the Commission. The decision shall be +binding on the Tribunal. + +3. If the Committee has not decided the issue within 60 days of +the receipt of the referral under paragraph 1, the disputing +Party or the Party of the disputing investor may request the +establishment of a panel pursuant to Article 2008(1) to decide +the issue. The matter shall proceed as a dispute under Article +1415. The panel shall transmit its final report to the Committee +and to the Tribunal. The report shall be binding on the +Tribunal. + +4. If no request for the establishment of a panel pursuant to +paragraph 3 has been made within 10 days following the expiration +of the 60-day period referred to in paragraph 3, the Tribunal may +proceed to decide the matter. + + +Article 1417: Definitions + +For purposes of this Chapter: + +cross-border trade in services and cross-border provision of a +service means "cross-border trade in services" and "cross-border +provision of a service" as defined in Article 1213 (Definitions); + +financial institution means any financial intermediary or other +enterprise that is authorized to do business and regulated or +supervised as a financial institution under the laws of the Party +in whose territory it is located; + +financial institution of another Party means a financial +institution in the territory of a Party that is controlled by +nationals or enterprises of another Party; + +financial service means any service of a financial nature, +including insurance, and any service incidental or auxiliary to a +service of a financial nature; + +financial service provider of another Party means any national or +enterprise of a Party that is engaged in the business of +providing financial services in the territory of a Party and that +is providing or intends to provide financial services through an +investment in the territory of another Party or through cross- +border provision into the territory of another Party; + +investment means "investment" as defined in Article 1138 +(Definitions), except that: + + (a) where the loan is extended to a financial institution, + regardless of the original maturity of the loan, it + shall only be an investment to the extent it is treated + as regulatory capital; or + + (b) where the loan is granted by a financial service + provider or a financial institution, the loan shall + only be an investment if it is made on a cross-border + basis and it has an original maturity of at least three + years (other than a loan to a Party or state enterprise + thereof); + +new financial service means a service of a financial nature, +including a service related to an existing service or the manner +in which a product is delivered, that is not provided by any +financial service provider in the territory of a Party but which +is provided a financial service provider in the territory of +another Party; + +public entity means a Party, a central bank or monetary authority +of a Party, or any financial institution owned or controlled by a +Party; + +service provider of a Party means "service provider of a Party" +as defined in Chapter 12 (Cross-Border Trade in Services); and + +self-regulatory organization means any non-governmental body +including any securities or futures exchange or market, clearing +agency, or other organization or association, that exercises +regulatory or supervisory authority over financial service +providers or financial institutions that are members or +participants thereof, or that have access thereto. + +============================================================================= + + ANNEX 1401.6 + Country Specific Commitments + + Articles 1702(1) and (2) of the Canada - United States Free +Trade Agreement are incorporated into this Agreement and Canada +and the United States agree to act in accordance with and be +governed by those Articles. + +============================================================================= + + ANNEX 1404.4 + Review of Market Access + + The review of market access referred to in Article 1404(4) +shall not include the market access limitations specified in Part +B of the Schedule of Mexico to Annex VII. + +============================================================================= + + ANNEX 1405.4 + Consultations on Liberalization of Cross-Border Trade + + By January 1, 2000, the Parties shall consult on further +liberalization of cross-border trade in financial services. Such +consultations shall include the possibility of allowing a wider +range of insurance services to be provided on a cross-border +basis in the territory of each Party. With respect to Mexico, +such consultations on cross-border insurance services shall +determine whether the limitations on cross-border insurance +services specified in Part A of the Schedule of Mexico to Annex +VII shall be maintained, modified, or eliminated. + +============================================================================= + + ANNEX 1413.6 + Future Consultations and Arrangements + + +Section A - Limited Scope Financial Institutions + + Three years after the date of entry into force of this +Agreement, the Parties shall consult on the aggregate limit on +limited scope financial institutions described in paragraph 8 +of Part B of the Schedule of Mexico to Annex VII. + + +Section B - Payments System Protection + +1. If the sum of the authorized capital of Foreign Commercial +Bank Affiliates (as such term is defined in Part B of the +Schedule of Mexico to Annex VII), measured as a percentage of the +aggregate capital of all commercial banks in Mexico, reaches 25 +percent, then Mexico may request consultations with the other +Parties on the potential adverse effects arising from the +presence of commercial banks of the other Parties in the Mexican +market and the possible need for remedial action, including +further temporary limitations on market participation. + +2. In considering the potential adverse effects, the Parties +shall take into account: + + (a) the threat that the Mexican payments system may be + controlled by non-Mexican persons; + + (b) the effects foreign commercial banks established in + Mexico may have on Mexico's ability to conduct monetary + and exchange-rate policy effectively; and + (c) the adequacy of various provisions agreed under this + Chapter to protect the Mexican payments system. + +3. If no consensus is achieved through consultations, which +shall be completed in an expeditious time frame, a panel shall be +convened under the procedures of Article 2008 (Request for an +Arbitral Panel) of the Agreement to render a non-binding +recommendation to the Parties no later than 60 days after the +panel is convened. + +NAFTA Chapter Fifteen Competition Policy, Monopolies and State Enterprises + + + +Article 1501: Competition Law + +1. Each Party shall adopt or maintain measures to proscribe +anti-competitive business conduct, and shall take appropriate +action with respect thereto, recognizing that such measures will +enhance the fulfillment of the objectives of this Agreement. To +this end the Parties shall consult from time to time about the +effectiveness of measures undertaken by each Party. + +2. Each Party recognizes the importance of cooperation and +coordination among their authorities to further effective +competition law enforcement in the free trade area. The Parties +shall cooperate on issues of competition law enforcement policy, +including mutual legal assistance, notification, consultation and +exchange of information relating to the enforcement of +competition laws and policies in the free trade area. + +3. No Party may have recourse to dispute settlement under this +Agreement for any matter regarding this Article. + + +Article 1502: Monopolies and State Enterprises + +1. Nothing in this Agreement shall prevent a Party from +designating a monopoly. + +2. Where a Party intends to designate a monopoly, and the +designation may affect the interests of persons of another Party, +the Party shall: + + (a) wherever possible, provide prior written notification + to the other Party of the designation; and + + (b) endeavor to introduce at the time of designation such + conditions on the operation of the monopoly as will + minimize or eliminate any nullification or impairment + of benefits under this Agreement, in the sense of + Annex 2004. + +3. Each Party shall ensure, through regulatory control, +administrative supervision or the application of other measures, +that any privately-owned monopoly that it designates and any +government monopoly that it maintains or designates: + + (a) acts in a manner that is not inconsistent with the + Party's obligations under this Agreement whenever such + monopoly exercises any regulatory, administrative, or + other governmental authority that the Party has + delegated to it in connection with the monopoly good or + service, such as the power to grant import or export + licenses, approve commercial transactions or impose + quotas, fees or other charges; + + (b) except to comply with any terms of its designation that + are not inconsistent with subparagraph (c) or (d), acts + solely in accordance with commercial considerations in + its purchase or sale of the monopoly good or service in + the relevant market, including with regard to price, + quality, availability, marketability, transportation + and other terms and conditions of purchase or sale; + + (c) provides non-discriminatory treatment to investments of + investors, to goods, and to service providers of + another Party in its purchase or sale of the monopoly + good or service in the relevant market; and + + (d) does not use its monopoly position to engage, either + directly or indirectly, including through its dealings + with its parent, subsidiary, or other enterprise with + common ownership, in anticompetitive practices in a + non-monopolized market in its territory that adversely + affect an investment of an investor of another Party, + including through the discriminatory provision of the + monopoly good or service, cross-subsidization or + predatory conduct. + +4. Paragraph 3 shall not apply to the procurement by +governmental agencies of a good or service for governmental +purposes and not with a view to commercial resale or with a view +to use in the production of goods or provisions of services for +commercial sale. + + +Article 1503: State Enterprises + +1. Nothing in this Agreement shall prevent a Party from +maintaining or establishing a state enterprise. + +2. Each Party, shall ensure, through regulatory control, +administrative supervision or the application of other measures, +that any state enterprise that it maintains or establishes acts +in a manner that is not inconsistent with the Party's obligations +under Chapter Eleven (Investment) wherever such enterprise +exercises any regulatory, administrative or other governmental +authority that the Party has delegated to it, such as the power +to expropriate, grant licenses, approve commercial transactions +or impose quotas, fees or other charges. + +3. Each Party shall ensure that any state enterprise that it +maintains or establishes accords nondiscriminatory treatment in +the sale of its goods or services to investments in the Party's +territory of investors of another Party. + + +Article 1504: Working Group on Trade and Competition + + The Commission shall establish a Working Group on Trade and +Competition, comprising representatives of each Party, to report, +and to make recommendations on further work as appropriate, to +the Commission within five years after the date of entry into +force of the Agreement on relevant issues concerning the +relationship between competition laws and policies and trade in +the free trade area. + + +Article 1505: Definitions + +For purposes of this Chapter: + +in accordance with commercial considerations means consistent +with normal business practices of privately-held enterprises in +the relevant business or industry; + +designate means to establish, designate or authorize, or to +expand the scope of, a monopoly to cover an additional good or +service, after the date of entry into force of this Agreement; + +discriminatory provision includes treating a parent, subsidiary, +or other enterprise with common ownership more favorably than an +unaffiliated enterprise, or treating one class of enterprises +more favorably than another, in like circumstances; + +government monopoly means a monopoly that is owned, or controlled +through ownership interests, by the federal government of a Party +or by another such monopoly; + +market means the geographic and commercial market for a good or +service; + +monopoly means an entity, including any consortium or government +agency that in any relevant market in the territory of a Party is +designated as the sole provider or purchaser of a good or +service, but does not include any entity that has been granted an +exclusive intellectual property right solely by reason of such +grant; + +non-discriminatory treatment means the better of national or +most-favored-nation treatment, and + +state enterprise means, except as set out in Annex 1505.1, an +enterprise owned, or controlled through ownership interests, by a +Party. + +============================================================================= + + ANNEX 1505.1 + + State Enterprises + + + For purposes of Article 1503(3), "state enterprise" means, +with respect to Canada, a Crown Corporation within the meaning of +the Financial Administration Act (Canada) or a Crown corporation +within the meaning of any comparable provincial legislation or +that is incorporated under other applicable provincial +legislation. + +NAFTA Chapter Sixteen Temporary Entry for Business Persons + + + +Article 1601: General Principles + + Further to Article 102 (Objectives), the provisions of this +Chapter reflect the preferential trading relationship between the +Parties, the desirability of facilitating temporary entry on a +reciprocal basis and of establishing transparent criteria and +procedures for temporary entry, and the need to ensure border +security and to protect the domestic labor force and permanent +employment in their respective territories. + + +Article 1602: General Obligations + +1. Each Party shall apply its measures relating to the +provisions of this Chapter in accordance with Article 1601, and +in particular, shall apply expeditiously such measures so as to +avoid unduly impairing or delaying trade in goods or services or +conduct of investment activities under this Agreement. + +2. The Parties shall endeavor to develop and adopt common +criteria, definitions and interpretations for the implementation +of this Chapter. + + +Article 1603: Grant of Temporary Entry + +1. Each Party shall grant, in accordance with this Chapter, +including Annex 1603, temporary entry to business persons who are +otherwise qualified for entry under applicable measures relating +to public health and safety and national security. + +2. A Party may refuse to issue an immigration document +authorizing employment to a business person where the temporary +entry of that person might affect adversely: + + (a) the settlement of any labor dispute that is in progress + at the place or intended place of employment; or + + (b) the employment of any person who is involved in such + dispute. + +3. When a Party refuses pursuant to paragraph 2 to issue an +immigration document authorizing employment, it shall: + + (a) inform in writing the business person of the reasons + for the refusal; and + + (b) promptly notify in writing the Party whose business + person has been refused entry of the reasons for the + refusal. + +4. Each Party shall limit any fees for processing applications +for temporary entry of business persons to the approximate cost +of services rendered. + + +Article 1604: Provision of Information + +1. Further to Article 1802 (Publication), each Party shall: + + (a) provide to the other Parties such materials as will + enable them to become acquainted with its measures + relating to the provisions of this Chapter; and + + (b) not later than one year after the date of entry into + force of this Agreement, prepare, publish and make + available in its own territory, and in the territories + of the other Parties, explanatory material in a + consolidated document regarding the requirements for + temporary entry under this Chapter in such a manner as + to enable business persons of the other Parties to + become acquainted with them. + +2. Subject to Annex 1604.2, each Party shall collect and +maintain, and make available to the other Parties in accordance +with its domestic law, data respecting the granting of temporary +entry under this Chapter to business persons of the other Parties +who have been issued immigration documentation, including that +specific to each occupation, profession or activity. + + +Article 1605: Working Group + +1. The Parties hereby establish a Temporary Entry Working +Group, comprising representatives of each Party, including +immigration officials. + +2. The Working Group shall meet at least once a year to +consider: + + (a) the implementation and administration of this + Chapter; + + (b) the development of measures to further facilitate + temporary entry of business persons on a reciprocal + basis; + + (c) the waiving of labor certification tests or procedures + of similar effect for spouses of business persons who + have been granted temporary entry for more than one + year under Sections B, C, or D of Annex 1603; and + + (d) proposed modifications of or additions to this + Chapter. + + +Article 1606: Dispute Settlement + + A Party may not initiate proceedings under Article 2007 +regarding a refusal to grant temporary entry under this Chapter +or a particular case arising under Article 1602(1) unless: + + (a) the matter involves a pattern of practice; and + + (b) the business person has exhausted available + administrative remedies regarding the particular + matter, provided that such remedies shall be deemed to + be exhausted if a final determination in the matter has + not been issued by the competent authority within one + year of the institution of an administrative + proceeding, and the failure to issue a determination is + not attributable to delay caused by the business + person. + + +Article 1607: Relation to Other Chapters + + Except for Chapter One (Objectives), Chapter Two (General +Definitions), Chapter Twenty (Institutional Arrangements and +Dispute Settlement), Chapter Twenty-Two (Final Provisions) and +Articles 1801 through 1804, no provision of any other Chapter +shall impose any obligation upon a Party regarding its +immigration measures. + + +Article 1608: Definitions + +For purposes of this Chapter: + +business person means a citizen of a Party who is engaged in the +trade in goods, the provision of services or the conduct of +investment activities; + +citizen means "citizen" as defined in Annex 1608; + +existing means "existing" as defined in Annex 1608; and + +temporary entry means entry into the territory of a Party by a +business person of another Party without the intent to establish +permanent residence. + +============================================================================= + ANNEX 1603 + + Temporary Entry for Business Persons + + +Section A - Business Visitors + +1. Each Party shall grant temporary entry to a business person +seeking to engage in a business activity set out in Schedule I, +without requiring that person to obtain an employment +authorization, provided that the business person otherwise +complies with existing immigration measures applicable to +temporary entry, upon presentation of: + + (a) proof of citizenship of a Party; + + (b) documentation demonstrating that the business person + will be so engaged and describing the purpose of entry; + and + + (c) evidence demonstrating that the proposed business + activity is international in scope and that the + business person is not seeking to enter the local labor + market. + +2. Each Party shall provide that a business person may satisfy +the requirements of paragraph 1(c) by demonstrating that: + + (a) the primary source of remuneration for the proposed + business activity is outside the territory of the Party + granting temporary entry; and + + (b) the business person's principal place of business and + the actual place of accrual of profits, at least + predominantly, remain outside such territory. A Party + shall normally accept an oral declaration as to the + principal place of business and the actual place of + accrual of profits. If the Party requires further + proof, it shall normally consider a letter from the + employer attesting to these matters as sufficient + proof. + +3. Each Party shall grant temporary entry to a business person +seeking to engage in a business activity other than those set out +in Schedule I, without requiring that person to obtain an +employment authorization, on a basis no less favorable than that +provided under the existing provisions of the measure set out in +Appendix 1603.A, provided that the business person otherwise +complies with existing immigration measures applicable to +temporary entry. + +4. No Party shall: + + (a) as a condition for temporary entry under paragraphs 1 + or 3, require prior approval procedures, petitions, + labor certification tests, or other procedures of + similar effect; or + + (b) impose or maintain any numerical restriction relating + to temporary entry under paragraphs 1 or 3. + +5. Notwithstanding paragraph 4, a Party may require a business +person seeking temporary entry under this Part to obtain a visa +or its equivalent prior to entry. Before imposing a visa +requirement, such Party shall consult with a Party whose business +persons would be affected with a view to avoiding the imposition +of the requirement. With respect to an existing visa +requirement, a Party shall, at the request of a Party whose +business persons are subject to the requirement, consult with +that Party with a view to its removal. + + +Section B - Traders and Investors + +1. Each Party shall grant temporary entry and provide +confirming documentation to a business person seeking to: + + (a) carry on substantial trade in goods or services + principally between the territory of the Party of which + the business person is a citizen and the territory of + the Party into which entry is sought; or + + (b) establish, develop, administer or provide advice or key + technical services to the operation of an investment to + which the business person or the business person's + enterprise has committed, or is in the process of + committing, a substantial amount of capital, in a + capacity that is supervisory, executive or involves + essential skills, + +provided that the business person otherwise complies with +existing immigration measures applicable to temporary entry. + +2. No Party shall: + + (a) as a condition for temporary entry under paragraph 1, + require labor certification tests or other procedures + of similar effect; or + + (b) impose or maintain any numerical restriction relating + to temporary entry under paragraph 1. + +3. Notwithstanding paragraph 2, a Party may require a business +person seeking temporary entry under this Part to obtain a visa +or its equivalent prior to entry. + + +Section C - Intra-Company Transferees + +1. Each Party shall grant temporary entry and provide +confirming documentation to a business person employed by an +enterprise who seeks to render services to that enterprise or a +subsidiary or affiliate thereof, in a capacity that is +managerial, executive, or involves specialized knowledge, +provided that the business person otherwise complies with +existing immigration measures applicable to temporary entry. A +Party may require that such business person shall have been +employed continuously by such enterprise for one year within the +three-year period immediately preceding the date of the +application for admission. + +2. No Party shall: + + (a) as a condition for temporary entry under paragraph 1, + require labor certification tests or other procedures + of similar effect; or + + (b) impose or maintain any numerical restriction relating + to temporary entry under paragraph 1. + +3. Notwithstanding paragraph 2, a Party may require a business +person seeking temporary entry under this Part to obtain a visa +or its equivalent prior to entry. Before imposing a visa +requirement, such Party shall consult with a Party whose business +persons would be affected with a view to avoiding the imposition +of the requirement. With respect to an existing visa +requirement, a Party shall, at the request of a Party whose +business persons are subject to the requirement, consult with +that Party with a view to its removal. + + +Section D - Professionals + +1. Each Party shall grant temporary entry and provide +confirming documentation to a business person seeking to engage +in a business activity at a professional level in a profession +set out in Schedule II, if the business person otherwise complies +with existing immigration measures applicable to temporary entry, +upon presentation of: + + (a) proof of citizenship of a Party; and + + (b) documentation demonstrating that the business person + will be so engaged and describing the purpose of entry. + +2. No Party shall: + + (a) as a condition for temporary entry under paragraph 1, + require prior approval procedures, petitions, labor + certification tests, or other procedures of similar + effect; or + + (b) impose or maintain any numerical restriction relating + to temporary entry under paragraph 1. + +3. Notwithstanding paragraph 2, a Party may require a business +person seeking temporary entry under this Part to obtain a visa +or its equivalent prior to entry. Before imposing a visa +requirement, such Party shall consult with a Party whose business +persons would be affected with a view to avoiding the imposition +of the requirement. With respect to an existing visa +requirement, a Party shall, upon the request of a Party whose +business persons are subject to the requirement, consult with +that Party with a view to its removal. + +4. Notwithstanding paragraphs 1 and 2, a Party may establish an +annual numerical limit, which shall be set out in Schedule III, +regarding temporary entry of business persons of another Party +seeking to engage in business activities at a professional level +in a profession set out in Schedule II, if the Parties concerned +have not agreed otherwise prior to the entry into force of this +Agreement for such Parties. In establishing such a limit, such +Party shall consult with the other Party concerned. + +5. A Party establishing a numerical limit pursuant to paragraph +4, unless the Parties concerned agree otherwise: + + (a) shall, for each year after the first year after the + date of entry into force of this Agreement, consider + increasing the numerical limit set out in Schedule III + by an amount to be established in consultation with the + other Party concerned, taking into account the demand + for temporary entry under this Part; + + (b) shall not apply its procedures established pursuant to + paragraph 1 to the temporary entry of a business person + subject to the numerical limit, but may require such + business person to comply with its other procedures + applicable to the temporary entry of professionals; and + + (c) may, in consultation with the other Party concerned, + grant temporary entry under paragraph 1 to a business + person who practices in a profession where + accreditation, licensing, and certification + requirements are mutually recognized by such Parties. + +6. Nothing in paragraphs 4 or 5 shall be construed so as to +limit the ability of a business person to seek temporary entry +under a Party's applicable immigration measures relating to the +entry of professionals other than those adopted or maintained +pursuant to paragraph 1. + +7. Three years after a Party establishes a numerical limit +pursuant to paragraph 4, it shall consult with the other Party +concerned with a view to determining a date after which the limit +shall cease to apply. +============================================================================= + ANNEX 1604.2 + + Provision of Information + + + The obligations under Article 1604(2) shall take effect with +respect to Mexico one year after the date of entry into force of +this Agreement. +============================================================================= + ANNEX 1608 + + Country - Specific Definitions + + +For purposes of this Chapter: + +citizen means, with respect to Mexico, a national or a citizen +according to the existing provisions of Articles 30 and 34, +respectively, of the Mexican Constitution; and + +existing means, as between: + + (a) Canada and Mexico, and the United States and Mexico, in + effect upon the date of entry into force of this + Agreement; and + + (b) Canada and the United States, in effect on January 1, + 1989. +============================================================================= + Appendix 1603.A + + Existing Immigration Measures + + + +1. In the case of Canada, the Immigration Act, R.S.C. 1985 c.I- +2, as amended, and subsection 19(1) of the Immigration +Regulations, 1978, as amended. + +2. In the case of the United States, Section 101(a)(15)(B) of +the Immigration and Nationality Act, 1952, as amended. + +3. In the case of Mexico, Chapter III of the Ley General de +Poblacion, 1974, as amended. + + +============================================================================= + Schedule I + + +Research and Design + +- Technical, scientific, and statistical researchers conducting +independent research, or research for an enterprise located in +the territory of another Party. + + +Growth, Manufacture and Production + +- Harvester owner supervising a harvesting crew admitted under +applicable law. + +- Purchasing and production management personnel conducting +commercial transactions for an enterprise located in the +territory of another Party. + + +Marketing + +- Market researchers and analysts conducting independent research +or analysis, or research or analysis for an enterprise located in +the territory of another Party. + +- Trade fair and promotional personnel attending a trade +convention. + + +Sales + +- Sales representatives and agents taking orders or negotiating +contracts for goods or services for an enterprise located in the +territory of another Party but not delivering goods or providing +services. + +- Buyers purchasing for an enterprise located in the territory of +another Party. + + +Distribution + +- Transportation operators transporting goods or passengers to +the territory of a Party from the territory of another Party or +loading and transporting goods or passengers from the territory +of a Party to the territory of another Party, with no loading and +delivery within the territory of the Party into which entry is +sought of goods located in or passengers boarding in that +territory. + +- With respect to temporary entry into the territory of the +United States, Canadian customs brokers performing brokerage +duties relating to the export of goods from the territory of the +United States to or through the territory of Canada; with respect +to temporary entry into the territory of Canada, United States +customs brokers performing brokerage duties relating to the +export of goods from the territory of Canada to or through the +territory of the United States. + +- Customs brokers consulting regarding the facilitation of the +import or export of goods. + + +After-Sales Service + +- Installers, repair and maintenance personnel, and supervisors, +possessing specialized knowledge essential to a seller's +contractual obligation, performing services or training workers +to perform such services, pursuant to a warranty or other service +contract incidental to the sale of commercial or industrial +equipment or machinery, including computer software, purchased +from an enterprise located outside the territory of the Party +into which temporary entry is sought, during the life of the +warranty or service agreement. + + +General Service + +- Professionals engaging in a business activity at a professional +level in a profession set out in Schedule II. + +- Management and supervisory personnel engaging in a commercial +transaction for an enterprise located in the territory of another +Party. + +- Financial services personnel (insurers, bankers or investment +brokers) engaging in commercial transactions for an enterprise +located in the territory of another Party. + +- Public relations and advertising personnel consulting with +business associates, and attending or participating in +conventions. + +- Tourism personnel (tour and travel agents, tour guides or tour +operators) attending or participating in conventions or +conducting a tour that has begun in the territory of another +Party. + +- Tour bus operators entering the territory of a Party: + + (a) with a group of passengers on a bus tour that has begun + in, and will return to, the territory of another Party; + + (b) to meet a group of passengers on a bus tour that will + end, and the predominant portion of which will take + place, in the territory of another Party; or + + (c) with a group of passengers on a bus tour to be unloaded + in the territory of the Party into which temporary + entry is sought, and returning with no passengers or + reloading with such group for transportation to the + territory of another Party. + +- Translators or interpreters performing services as employees of +an enterprise located in the territory of another Party. + + +Definitions + +For purposes of this Schedule: + +territory of another Party means the territory of a Party other +than the territory of the Party into which temporary entry is +sought; + +tour bus operator means a natural person, including relief +personnel accompanying or following to join, necessary for the +operation of a tour bus for the duration of a trip; and + +transportation operator means a natural person, other than a tour +bus operator, including relief personnel accompanying or +following to join, necessary for the operation of a vehicle for +the duration of a trip. +============================================================================= + Schedule II + + + + + +PROFESSION + + + +Accountant + + + +Architect + + +Computer Systems Analyst + + + + + +MINIMUM EDUCATION REQUIREMENTS +AND ALTERNATIVE CREDENTIALS + +Baccalaureate or Licenciatura +Degree; or C.P.A., C.A., +C.G.A., C.M.A. + + +Baccalaureate or Licenciatura +Degree; or state/provincial +license + +Baccalaureate or Licenciatura +Degree; or Post-Secondary +Diploma or Post-Secondary +Certificate, and three years +experience + + + + + +Disaster Relief Insurance +Claims Adjuster (claims +adjuster employed by an +insurance company located in +the territory of a Party, or +an independent claims +adjuster) + + + + + + +Economist + +Engineer + + +Forester + + +Graphic Designer + + + +Hotel Manager + + + + + + +Industrial Designer + + + +Interior Designer + + + +Land Surveyor +Baccalaureate or Licenciatura +Degree, and successful +completion of training in the +appropriate areas of insurance +adjustment pertaining to +disaster relief claims; or +three years of experience in +claims adjustment, and +successful completion of +training in the appropriate +areas of insurance adjustment +pertaining to disaster relief +claims + + +Baccalaureate or Licenciatura +Degree + +Baccalaureate or Licenciatura +Degree; or state/provincial +license + +Baccalaureate or Licenciatura +Degree; or state/provincial +license + +Baccalaureate or Licenciatura +Degree; or Post-Secondary +Diploma or Post-Secondary +Certificate, and three years +experience + +Baccalaureate or Licenciatura +Degree in hotel/restaurant +management; or Post-Secondary +Diploma or Post-Secondary +Certificate in +hotel/restaurant management, +and three years experience in +hotel/restaurant management + +Baccalaureate or Licenciatura +Degree; or Post-Secondary +Diploma or Post-Secondary +Certificate, and three years +experience + + + + + +Landscape Architect + + +Lawyer (including Notary in +the Province of Quebec) + + +Librarian + + + +Management Consultant + + + + + + + +Mathematician +(including Statistician) + + +MEDICAL/ALLIED PROFESSIONAL + +Dentist + + + + +Dietitian +Baccalaureate or Licenciatura +Degree + + +LL.B., J.D., LL.L., B.C.L., or +Licenciatura Degree (five +years); or membership in a +state/provincial bar + +M.L.S. or B.L.S. (for which +another Baccalaureate or +Licenciatura Degree was a +prerequisite) + +Baccalaureate or Licenciatura +Degree; or equivalent +professional experience as +established by statement, or +professional credential, +attesting to five years +experience as a management +consultant, or five years +experience in a field of +specialty related to the +consulting agreement + +Baccalaureate or Licenciatura +Degree + + + + + +D.D.S., D.M.D., Doctor en +Odontologia, or Doctor en +Cirugia Dental; or +state/provincial license + +Baccalaureate or Licenciatura +Degree; or state/provincial +license + +============================================================================= + +Medical Laboratory +Technologist (Canada)/Medical +Technologist (United States +and Mexico) + + +Nutritionist + + +Occupational Therapist + + + +Pharmacist + + +Physician (teaching or +research only) + + +Physiotherapist/Physical +Therapist + + +Psychologist + + +Recreational Therapist + +Registered Nurse + + +Veterinarian + + + + + + +Research Assistant +(Working in a post-secondary + +Baccalaureate or Licenciatura +Degree; or Post-Secondary +Diploma or Post-Secondary +Certificate, and three years +experience + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree; or state/provincial +license + + +Baccalaureate or Licenciatura +Degree; or state/provincial +license + +M.D. or Doctor en Medicina; or +state/provincial license + +Baccalaureate or Licenciatura +Degree; or state/provincial +license + +State/provincial license or +Licenciatura Degree + +Baccalaureate or Licenciatura +Degree + +State/provincial license or +Licenciatura Degree + +D.V.M., D.M.V., or Doctor en +Veterinaria; or +state/provincial license + + + + +Range Manager/ +Range Conservationalist + + +Research Assistant +(Working in a post-secondary +educational institution) + +Scientific +Technician/Technologist + + + + + + + + + + + +SCIENTIST + +Agriculturist (including +Agronomist) + + +Animal Breeder + + +Animal Scientist + + +Apiculturist + + + +Baccalaureate or Licenciatura +Degree + + + +Baccalaureate or Licenciatura +Degree + + + +Possession of: (a) theoretical +knowledge of any of the +following disciplines: +agricultural sciences, +astronomy, biology, chemistry, +engineering, forestry, +geology, geophysics, +meteorology or physics; and +(b) the ability to solve +practical problems in any of +such disciplines, or the +ability to apply principles of +any of such disciplines to +basic or applied research + + + + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + + + + +Astronomer + + +Biochemist + + +Biologist + + +Chemist + + +Dairy Scientist + + +Entomologist + + +Epidemiologist + + +Geneticist + + +Geologist + + +Geochemist + + +Geophysicist (including +Oceanographer in Mexico and +the United States) + +Horticulturist + + +Meteorologist + + +Pharmacologist +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + + + + + +Pharmacologist + + +Physicist (including +Oceanographer in Canada) + +Plant Breeder + + +Poultry Scientist + + +Soil Scientist + + +Zoologist + + +Social Worker + + +Sylviculturist +(including Forestry +Specialist) + + +TEACHER + +College + + +Seminary + + +University + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + + + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + + + +============================================================================= + + +Technical Publications Writer + + + + +Urban Planner +(including Geographer) + +Vocational Counsellor + +Baccalaureate or Licenciatura +Degree; or Post-Secondary +Diploma or Post-Secondary +Certificate, and three years +experience + + +Baccalaureate or Licenciatura +Degree + + +Baccalaureate or Licenciatura +Degree + +============================================================================= + + Schedule III + + + United States of America + + +1. Commencing on the date of entry into force of this Agreement +as between the United States and Mexico, the United States shall +annually approve as many as 5,500 initial petitions of business +persons of Mexico seeking temporary entry under Section D of +Annex 1603 to engage in a business activity at a professional +level in a profession set out in Schedule II. + +2. For purposes of paragraph 1, the United States shall not +take into account: + + (a) the renewal of a period of temporary entry; + + (b) the entry of a spouse or children accompanying or + following to join the principal business person; + + (c) an admission under Section 101(a)(15)(H)(i)(b) of the + Immigration and Nationality Act, 1952, as amended, + including the worldwide numerical limit established by + Section 214(g)(1)(A) of such Act; or + + (d) an admission under any other provision of Section + 101(a)(15) of such Act relating to the entry of + professionals. + +3. Paragraphs 4 and 5 of Section D of Annex 1603 shall apply as +between the United States and Mexico for no longer than: + + (a) the period that such paragraphs or similar provisions + may apply as between the United States and any other + Party or non-Party; or + + (b) 10 years after the date of entry into force of this + Agreement as between such Parties, + +whichever period is shorter. + +NAFTA PART SIX INTELLECTUAL PROPERTY + + Chapter Seventeen + + Intellectual Property + + + +Article 1701: Nature and Scope of Obligations + +1. Each Party shall provide in its territory to the nationals +of another Party adequate and effective protection and +enforcement of intellectual property rights, while ensuring that +measures to enforce intellectual property rights do not +themselves become barriers to legitimate trade. + +2. To provide adequate and effective protection and enforcement +of intellectual property rights, each Party shall, at a minimum, +give effect to this Chapter and to the substantive provisions of: + + (a) the Geneva Convention for the Protection of Producers + of Phonograms Against Unauthorized Duplication of their + Phonograms, 1971 (Geneva Convention); + + (b) the Berne Convention for the Protection of Literary and + Artistic Works, 1971 (Berne Convention); + + (c) the Paris Convention for the Protection of Industrial + Property, 1967 (Paris Convention); and + + (d) the International Convention for the Protection of New + Varieties of Plants, 1978 (UPOV Convention), or the + International Convention for the Protection of New + Varieties of Plants, 1991 (UPOV Convention). + +If a Party has not acceded to the specified text of any such +Conventions on or before the date of entry into force of this +Agreement, it shall make every effort to accede. + +3. Paragraph 2 shall apply, except as provided in Annex 1701.3. + + +Article 1702: More Extensive Protection + + A Party may implement in its domestic law more extensive +protection of intellectual property rights than is required under +this Agreement, provided that such protection is not inconsistent +with this Agreement. + + +Article 1703: National Treatment + +1. Each Party shall accord to nationals of another Party +treatment no less favorable than that it accords to its own +nationals with regard to the protection and enforcement of all +intellectual property rights. In respect of sound recordings, +each Party shall provide such treatment to producers and +performers of another Party, except that a Party may limit rights +of performers of another Party in respect of secondary uses of +sound recordings to those rights its nationals are accorded in +the territory of such other Party. + +2. No Party may, as a condition of according national treatment +under this Article, require right holders to comply with any +formalities or conditions in order to acquire rights in respect +of copyright and related rights. + +3. A Party may derogate from paragraph 1 in relation to its +judicial and administrative procedures for the protection or +enforcement of intellectual property rights, including any +procedure requiring a national of another Party to designate for +service of process an address in the Party's territory or to +appoint an agent in the Party's territory, if the derogation is +consistent with the relevant Convention listed in Article +1701(2), provided that such derogation: + + (a) is necessary to secure compliance with measures that + are not inconsistent with this Chapter; and + + (b) is not applied in a manner that would constitute a + disguised restriction on trade. + +4. No Party shall have any obligation under this Article with +respect to procedures provided in multilateral agreements +concluded under the auspices of the World Intellectual Property +Organization relating to the acquisition or maintenance of +intellectual property rights. + + +Article 1704: Control of Abusive or Anticompetitive Practices or + Conditions + + Nothing in this Chapter shall prevent a Party from +specifying in its domestic law licensing practices or conditions +that may in particular cases constitute an abuse of intellectual +property rights having an adverse effect on competition in the +relevant market. A Party may adopt or maintain, consistent with +the other provisions of this Agreement, appropriate measures to +prevent or control such practices or conditions. + + +Article 1705: Copyright + +1. Each Party shall protect the works covered by Article 2 of +the Berne Convention, including any other works that embody +original expression within the meaning of that Convention. In +particular: + + (a) all types of computer programs are literary works + within the meaning of the Berne Convention and each + Party shall protect them as such; and + + (b) compilations of data or other material, whether in + machine readable or other form, which by reason of the + selection or arrangement of their contents constitute + intellectual creations, shall be protected as such. + +The protection a Party provides under subparagraph (b) shall not +extend to the data or material itself, or prejudice any copyright +subsisting in that data or material. + +2. Each Party shall provide to authors and their successors in +interest those rights enumerated in the Berne Convention in +respect of works covered by paragraph 1, including the right to +authorize or prohibit: + + (a) the importation into the Party's territory of copies of + the work made without the right holder's authorization; + + (b) the first public distribution of the original and each + copy of the work by sale, rental or otherwise; + + (c) the communication of a work to the public; and + + (d) the commercial rental of the original or a copy of a + computer program. + +Subparagraph (d) shall not apply where the copy of the computer +program is not itself an essential object of the rental. Each +Party shall provide that putting the original or a copy of a +computer program on the market with the right holder's consent +shall not exhaust the rental right. + +3. Each Party shall provide that for copyright and related +rights: + + (a) any person acquiring or holding economic rights may + freely and separately transfer such rights by contract + for purposes of their exploitation and enjoyment by the + transferee; and + + (b) any person acquiring or holding such economic rights by + virtue of a contract, including contracts of employment + underlying the creation of works and sound recordings, + shall be able to exercise those rights in its own name + and enjoy fully the benefits derived from those rights. + +4. Each Party shall provide that, where the term of protection +of a work, other than a photographic work or a work of applied +art, is to be calculated on a basis other than the life of a +natural person, the term shall be not less than 50 years from the +end of the calendar year of the first authorized publication of +the work, or, failing such authorized publication within 50 years +from the making of the work, 50 years from the end of the +calendar year of making. + +5. Each Party shall confine limitations or exceptions to the +rights provided for in this Article to certain special cases that +do not conflict with a normal exploitation of the work and do not +unreasonably prejudice the legitimate interests of the right +holder. + +6. No Party may grant translation and reproduction licenses +permitted under the Appendix to the Berne Convention where +legitimate needs in that Party's territory for copies or +translations of the work could be met by the right holder's +voluntary actions but for obstacles created by the Party's +measures. + +7. Each Party shall comply with the requirements set out in +Annex 1705.7. + + +Article 1706: Sound Recordings + +1. Each Party shall provide to the producer of a sound +recording the right to authorize or prohibit: + + (a) the direct or indirect reproduction of the sound + recording; + + (b) the importation into the Party's territory of copies of + the sound recording made without the producer's + authorization; + + (c) the first public distribution of the original and each + copy of the sound recording by sale, rental or + otherwise; and + + (d) the commercial rental of the original or a copy of the + sound recording, except where expressly otherwise + provided in a contract between the producer of the + sound recording and the authors of the works fixed + therein. + +Each Party shall provide that putting the original or a copy of a +sound recording on the market with the right holder's consent +shall not exhaust the rental right. + +2. Each Party shall provide a term of protection for sound +recordings of at least 50 years from the end of the calendar year +in which the fixation was made. + +3. Each Party shall confine limitations or exceptions to the +rights provided for in this Article to certain special cases that +do not conflict with a normal exploitation of the sound recording +and do not unreasonably prejudice the legitimate interests of the +right holder. + + +Article 1707: Protection of Encrypted Program-Carrying Satellite + Signals + + Within one year from the date of entry into force of this +Agreement, each Party shall: + + (a) make it a criminal offense to manufacture, import, + sell, lease or otherwise make available a device or + system that is primarily of assistance in decoding an + encrypted program-carrying satellite signal without the + authorization of the lawful distributor of such signal; + and + + (b) make it a civil offense to receive, in connection with + commercial activities, or further distribute, an + encrypted program-carrying satellite signal that has + been decoded without the authorization of the lawful + distributor of the signal or to engage in any activity + prohibited under subparagraph (a). + +Each Party shall provide that any civil offense established under +subparagraph (b) shall be actionable by any person that holds an +interest in the content of such signal. + + +Article 1708: Trademarks + +1. For purposes of this Agreement, a trademark consists of any +sign, or any combination of signs, capable of distinguishing the +goods or services of one person from those of another, including +personal names, designs, letters, numerals, colors, figurative +elements, or the shape of goods or of their packaging. +Trademarks shall include service marks and collective marks, and +may include certification marks. A Party may require, as a +condition for registration that a sign be visually perceptible. + +2. Each Party shall provide to the owner of a registered +trademark the right to prevent all persons not having the owner's +consent from using in commerce identical or similar signs for +goods or services that are identical or similar to those goods or +services in respect of which the owner's trademark is registered, +where such use would result in a likelihood of confusion. In the +case of the use of an identical sign for identical goods or +services, a likelihood of confusion shall be presumed. The +rights described above shall not prejudice any prior rights, nor +shall they affect the possibility of a Party making rights +available on the basis of use. + +3. A Party may make registrability depend on use. However, +actual use of a trademark shall not be a condition for filing an +application for registration. No Party may refuse an application +solely on the ground that intended use has not taken place before +the expiry of a period of three years from the date of +application for registration. + +4. Each Party shall provide a system for the registration of +trademarks, which shall include: + + (a) examination of applications; + + (b) notice to be given to an applicant of the reasons for + the refusal to register a trademark; + + (c) a reasonable opportunity for the applicant to respond + to the notice; + + (d) publication of each trademark either before or promptly + after it is registered; and + + (e) a reasonable opportunity for interested persons to + petition to cancel the registration of a trademark. + +A Party may provide for a reasonable opportunity for interested +persons to oppose the registration of a trademark. + +5. The nature of the goods or services to which a trademark is +to be applied shall in no case form an obstacle to the +registration of the trademark. + +6. Article 6bis of the Paris Convention shall apply, with such +modifications as are necessary, to services. In determining +whether a trademark is well-known, account shall be taken of the +knowledge of the trademark in the relevant sector of the public, +including knowledge in the Party's territory obtained as a result +of the promotion of the trademark. No Party may require that the +reputation of the trademark extend beyond the sector of the +public that normally deals with the relevant goods or services. + +7. Each Party shall provide that the initial registration of a +trademark be for a term of at least 10 years and that the +registration be indefinitely renewable for terms of not less than +10 years when conditions for renewal have been met. + +8. Each Party shall require the use of a trademark to maintain +a registration. The registration may be canceled for the reason +of non-use only after an uninterrupted period of at least two +years of non-use, unless valid reasons based on the existence of +obstacles to such use are shown by the trademark owner. Each +Party shall recognize, as valid reasons for non-use, +circumstances arising independently of the will of the trademark +owner that constitute an obstacle to the use of the trademark, +such as import restrictions on, or other government requirements +for, goods or services identified by the trademark. + +9. Each Party shall recognize use of a trademark by a person +other than the trademark owner, where such use is subject to the +owner's control, as use of the trademark for purposes of +maintaining the registration. + +10. No Party shall encumber the use of a trademark in commerce +by special requirements, such as a use that reduces the +trademark's function as an indication of source or a use with +another trademark. + +11. A Party may determine conditions on the licensing and +assignment of trademarks, it being understood that the compulsory +licensing of trademarks shall not be permitted and that the owner +of a registered trademark shall have the right to assign its +trademark with or without the transfer of the business to which +the trademark belongs. + +12. A Party may provide limited exceptions to the rights +conferred by a trademark, such as fair use of descriptive terms, +provided that such exceptions take into account the legitimate +interests of the trademark owner and of other persons. + +13. Each Party shall prohibit the registration as a trademark of +words, at least in English, French or Spanish, that generically +designate goods or services or types of goods or services to +which the trademark applies. + +14. Each Party shall refuse to register trademarks that consist +of or comprise immoral, deceptive or scandalous matter, or matter +that may disparage or falsely suggest a connection with persons, +living or dead, institutions, beliefs or any Party's national +symbols, or bring them into contempt or disrepute. + + +Article 1709: Patents + +1. Subject to paragraphs 2 and 3, each Party shall make patents +available for any inventions, whether products or processes, in +all fields of technology, provided that such inventions are new, +result from an inventive step and are capable of industrial +application. For the purposes of this Article, a Party may deem +the terms "inventive step" and "capable of industrial +application" to be synonymous with the terms "non-obvious" and +"useful", respectively. + +2. A Party may exclude from patentability inventions if +preventing in its territory the commercial exploitation of the +inventions is necessary to protect ordre public or morality, +including to protect human, animal or plant life or health or to +avoid serious prejudice to nature or the environment, provided +that the exclusion is not based solely on the ground that the +Party prohibits commercial exploitation in its territory of the +subject matter of the patent. + +3. A Party may also exclude from patentability: + + (a) diagnostic, therapeutic and surgical methods for the + treatment of humans or animals; + + (b) plants and animals other than microorganisms; and + + (c) essentially biological processes for the production of + plants or animals, other than non-biological and + microbiological processes for such production. + +Notwithstanding subparagraph (b), each Party shall provide for +the protection of plant varieties through patents, an effective +scheme of sui generis protection, or both. + +4. If a Party has not made available product patent protection +for pharmaceutical or agricultural chemicals commensurate with +paragraph 1: + + (a) as of January 1, 1992, for subject matter that relates + to naturally occurring substances prepared or produced + by, or significantly derived from, microbiological + processes and intended for food or medicine; and + + (b) as of July 1, 1991, for any other subject matter, + +that Party shall provide to the inventor of any such product or +its assignee the means to obtain product patent protection for +such product for the unexpired term of the patent for such +product granted in another Party, as long as the product has not +been marketed in the Party providing protection under this +paragraph and the person seeking such protection makes a timely +request. + +5. Each Party shall provide that: + + (a) where the subject matter of a patent is a product, the + patent shall confer on the patent owner the right to + prevent other persons from making, using or selling the + subject matter of the patent, without the patent + owner's consent; and + + (b) where the subject matter of a patent is a process, the + patent shall confer on the patent owner the right to + prevent other persons from using that process and from + using, selling, or importing at least the product + obtained directly by that process, without the patent + owner's consent. + +6. A Party may provide limited exceptions to the exclusive +rights conferred by a patent, provided that such exceptions do +not unreasonably conflict with a normal exploitation of the +patent and do not unreasonably prejudice the legitimate interests +of the patent owner, taking into account the legitimate interests +of other persons. + +7. Subject to paragraphs 2 and 3, patents shall be available +and patent rights enjoyable without discrimination as to the +field of technology, the territory of the Party where the +invention was made and whether products are imported or locally +produced. + +8. A Party may revoke a patent only when: + + (a) grounds exist that would have justified a refusal to + grant the patent; or + + (b) the grant of a compulsory license has not remedied the + lack of exploitation of the patent. + +9. Each Party shall permit patent owners to assign and transfer +by succession their patents, and to conclude licensing contracts. + +10. Where the law of a Party allows for use of the subject +matter of a patent, other than that use allowed under paragraph +6, without the authorization of the right holder, including use +by the government or other persons authorized by the government, +the Party shall respect the following provisions: + + (a) authorization of such use shall be considered on its + individual merits; + + (b) such use may only be permitted if, prior to such use, + the proposed user has made efforts to obtain + authorization from the right holder on reasonable + commercial terms and conditions and such efforts have + not been successful within a reasonable period of time. + The requirement to make such efforts may be waived by a + Party in the case of a national emergency or other + circumstances of extreme urgency or in cases of public + non-commercial use. In situations of national + emergency or other circumstances of extreme urgency, + the right holder shall, nevertheless, be notified as + soon as reasonably practicable. In the case of public + non-commercial use, where the government or contractor, + without making a patent search, knows or has + demonstrable grounds to know that a valid patent is or + will be used by or for the government, the right holder + shall be informed promptly; + + (c) the scope and duration of such use shall be limited to + the purpose for which it was authorized; + + (d) such use shall be non-exclusive; + + (e) such use shall be non-assignable, except with that part + of the enterprise or goodwill that enjoys such use; + + (f) any such use shall be authorized predominantly for the + supply of the Party's domestic market; + + (g) authorization for such use shall be liable, subject to + adequate protection of the legitimate interests of the + persons so authorized, to be terminated if and when the + circumstances that led to it cease to exist and are + unlikely to recur. The competent authority shall have + the authority to review, upon motivated request, the + continued existence of these circumstances; + + (h) the right holder shall be paid adequate remuneration in + the circumstances of each case, taking into account the + economic value of the authorization; + + (i) the legal validity of any decision relating to the + authorization shall be subject to judicial or other + independent review by a distinct higher authority; + + (j) any decision relating to the remuneration provided in + respect of such use shall be subject to judicial or + other independent review by a distinct higher + authority; + + (k) the Party shall not be obliged to apply the conditions + set out in subparagraphs (b) and (f) where such use is + permitted to remedy a practice determined after + judicial or administrative process to be + anticompetitive. The need to correct anticompetitive + practices may be taken into account in determining the + amount of remuneration in such cases. Competent + authorities shall have the authority to refuse + termination of authorization if and when the conditions + that led to such authorization are likely to recur; + + (l) the Party shall not authorize the use of the subject + matter of a patent to permit the exploitation of + another patent except as a remedy for an adjudicated + violation of domestic laws regarding anticompetitive + practices. + +11. Where the subject matter of a patent is a process for +obtaining a product, each Party shall, in any infringement +proceeding, place on the defendant the burden of establishing +that the allegedly infringing product was made by a process other +than the patented process in one of the following situations: + + (a) the product obtained by the patented process is new; or + + (b) a substantial likelihood exists that the allegedly + infringing product was made by the process and the + patent owner has been unable through reasonable efforts + to determine the process actually used. + +In the gathering and evaluation of evidence, the legitimate +interests of the defendant in protecting its trade secrets shall +be taken into account. + +12. Each Party shall provide a term of protection for patents of +at least 20 years from the date of filing or 17 years from the +date of grant. A Party may extend the term of patent protection, +in appropriate cases, to compensate for delays caused by +regulatory approval processes. + + +Article 1710: Layout Designs of Semiconductor Integrated + Circuits + +1. Each Party shall protect layout designs (topographies) of +integrated circuits ("layout designs") in accordance with +Articles 2 through 7, 12 and 16(3), other than Article 6(3), of +the Treaty on Intellectual Property in Respect of Integrated +Circuits as opened for signature on 26 May 1989. + +2. Subject to paragraph 3, each Party shall make it unlawful +for any person without the right holder's authorization to +import, sell or otherwise distribute for commercial purposes any +of the following: + + (a) a protected layout design; + + (b) an integrated circuit in which a protected layout + design is incorporated; or + + (c) an article incorporating such an integrated circuit, + only insofar as it continues to contain an unlawfully + reproduced layout design. + +3. No Party may make unlawful any of the acts referred to in +paragraph 2 performed in respect of an integrated circuit that +incorporates an unlawfully reproduced layout design or any +article that incorporates such an integrated circuit where the +person performing those acts or ordering those acts to be done +did not know and had no reasonable ground to know, when it +acquired the integrated circuit or article incorporating such an +integrated circuit, that it incorporated an unlawfully reproduced +layout design. + +4. Each Party shall provide that, after the person referred to +in paragraph 3 has received sufficient notice that the layout +design was unlawfully reproduced, such person may perform any of +the acts with respect to the stock on hand or ordered before such +notice, but shall be liable to pay the right holder for doing so +an amount equivalent to a reasonable royalty such as would be +payable under a freely negotiated license in respect of such a +layout design. + +5. No Party may permit the compulsory licensing of layout +designs of integrated circuits. +6. Any Party that requires registration as a condition for +protection of a layout design shall provide that the term of +protection shall not end before the expiration of a period of 10 +years counted from the date of: + + (a) filing of the application for registration; or + + (b) the first commercial exploitation of the layout design, + wherever in the world it occurs. + +7. Where a Party does not require registration as a condition +for protection of a layout design, the Party shall provide a term +of protection of not less than 10 years from the date of the +first commercial exploitation of the layout design, wherever in +the world it occurs. + +8. Notwithstanding paragraphs 6 and 7, a Party may provide that +the protection shall lapse 15 years after the creation of the +layout design. + +9. This Article shall apply, except as provided in Annex +1710.9. + + +Article 1711: Trade Secrets + +1. Each Party shall provide the legal means for any person to +prevent trade secrets from being disclosed to, acquired by, or +used by others without the consent of the person lawfully in +control of the information in a manner contrary to honest +commercial practices, in so far as: + + (a) the information is secret in the sense that it is not, + as a body or in the precise configuration and assembly + of its components, generally known among or readily + accessible to persons that normally deal with the kind + of information in question; + + (b) the information has actual or potential commercial + value because it is secret; and + + (c) the person lawfully in control of the information has + taken reasonable steps under the circumstances to keep + it secret. + +2. A Party may require that to qualify for protection a trade +secret must be evidenced in documents, electronic or magnetic +means, optical discs, microfilms, films or other similar +instruments. + +3. No Party may limit the duration of protection for trade +secrets, so long as the conditions in paragraph 1 exist. + +4. No Party may discourage or impede the voluntary licensing of +trade secrets by imposing excessive or discriminatory conditions +on such licenses, or conditions that dilute the value of the +trade secrets. + +5. If a Party requires, as a condition for approving the +marketing of pharmaceutical or agricultural chemical products +that utilize new chemical entities, the submission of undisclosed +test or other data necessary to determine whether the use of such +products is safe and effective, the Party shall protect against +disclosure of the data of persons making such submissions, where +the origination of such data involves considerable effort, except +where the disclosure is necessary to protect the public or unless +steps are taken to ensure that the data is protected against +unfair commercial use. + +6. Each Party shall provide that for data subject to paragraph +5 that are submitted to the Party after the date of entry into +force of this Agreement, no person other than the person that +submitted them may, without the latter's permission, rely on such +data in support of an application for product approval during a +reasonable period of time after their submission. For this +purpose, a reasonable period shall normally mean not less than +five years from the date on which the Party granted approval to +the person that produced the data for approval to market its +product, taking account of the nature of the data and the +person's efforts and expenditures in producing them. Subject to +this provision, there shall be no limitation on any Party to +implement abbreviated approval procedures for such products on +the basis of bioequivalence and bioavailability studies. + +7. Where a Party relies upon a marketing approval granted by +another Party, the reasonable period of exclusive use of the data +submitted in connection with obtaining the approval relied upon +shall commence with the date of the first marketing approval +relied upon. + + +Article 1712: Geographical Indications + +1. Each Party shall provide, in respect of geographical +indications, the legal means for interested persons to prevent: + + (a) the use of any means in the designation or presentation + of a good that indicates or suggests that the good in + question originates in a territory, region or locality + other than the true place of origin, in a manner that + misleads the public as to the geographical origin of + the good; + + (b) any use that constitutes an act of unfair competition + within the meaning of Article 10bis of the Paris + Convention. + +2. Each Party shall, on its own initiative if its domestic law +so permits or at the request of an interested person, refuse to +register, or invalidate the registration of, a trademark +containing or consisting of a geographical indication with +respect to goods that do not originate in the indicated +territory, region or locality, if use of the indication in the +trademark for such goods is of such a nature as to mislead the +public as to the geographical origin of the good. + +3. Each Party shall also apply paragraphs 1 and 2 to a +geographical indication that, although correctly indicating the +territory, region or locality in which the goods originate, +falsely represents to the public that the goods originate in +another territory, region or locality. + +4. Nothing in this Article shall require a Party to prevent +continued and similar use of a particular geographical indication +of another Party in connection with goods or services by any of +its nationals or domiciliaries who have used that geographical +indication in a continuous manner with regard to the same or +related goods or services in that Party's territory, either: + + (a) for at least 10 years, or + + (b) in good faith, before the date of signature of this + Agreement. + +5. Where a trademark has been applied for or registered in good +faith, or where rights to a trademark have been acquired through +use in good faith, either: + + (a) before the date of application of these provisions in + that Party, or + + (b) before the geographical indication is protected in its + Party of origin, + +no Party may adopt any measure to implement this Article that +prejudices eligibility for, or the validity of, the registration +of a trademark, or the right to use a trademark, on the basis +that such a trademark is identical with, or similar to, a +geographical indication. + +6. No Party shall be required to apply this Article to a +geographical indication if it is identical to the customary term +in common language in that Party's territory for the goods or +services to which the indication applies. + +7. A Party may provide that any request made under this Article +in connection with the use or registration of a trademark must be +presented within five years after the adverse use of the +protected indication has become generally known in that Party or +after the date of registration of the trademark in that Party, +provided that the trademark has been published by that date, if +such date is earlier than the date on which the adverse use +became generally known in that Party, provided that the +geographical indication is not used or registered in bad faith. + +8. No Party shall adopt any measure implementing this Article +that would prejudice any person's right to use, in the course of +trade, its name or the name of its predecessor in business, +except where such name forms all or part of a valid trademark in +existence before the geographical indication became protected and +with which there is a likelihood of confusion, or such name is +used in such a manner as to mislead the public. + +9. Nothing in this Chapter shall require a Party to protect a +geographical indication that is not protected, or has fallen into +disuse, in the Party of origin. + + +Article 1713: Industrial Designs + +1. Each Party shall provide for the protection of independently +created industrial designs that are new or original. A Party may +provide that: + + (a) designs are not new or original if they do not + significantly differ from known designs or combinations + of known design features; and + + (b) such protection shall not extend to designs dictated + essentially by technical or functional considerations. + +2. Each Party shall ensure that the requirements for securing +protection for textile designs, in particular in regard to any +cost, examination or publication, do not unreasonably impair a +person's opportunity to seek and obtain such protection. A Party +may comply with this obligation through industrial design law or +copyright law. + +3. Each Party shall provide the owner of a protected industrial +design the right to prevent other persons not having the owner's +consent from making or selling articles bearing or embodying a +design that is a copy, or substantially a copy, of the protected +design, when such acts are undertaken for commercial purposes. + +4. A Party may provide limited exceptions to the protection of +industrial designs, provided that such exceptions do not +unreasonably conflict with the normal exploitation of protected +industrial designs and do not unreasonably prejudice the +legitimate interests of the owner of the protected design, taking +into account the legitimate interests of other persons. + +5. Each Party shall provide a term of protection for industrial +designs of at least 10 years. + + +Article 1714: Enforcement of Intellectual Property Rights: + General Provisions + +1. Each Party shall ensure that enforcement procedures, as +specified in this Article and Articles 1715 through 1718, are +available under its domestic law so as to permit effective action +to be taken against any act of infringement of intellectual +property rights covered by this Chapter, including expeditious +remedies to prevent infringements and remedies to deter further +infringements. Such enforcement procedures shall be applied so +as to avoid the creation of barriers to legitimate trade and to +provide for safeguards against abuse of the procedures. + +2. Each Party shall ensure that its procedures for the +enforcement of intellectual property rights are fair and +equitable, are not unnecessarily complicated or costly, and do +not entail unreasonable time-limits or unwarranted delays. + +3. Each Party shall provide that decisions on the merits of a +case in judicial and administrative enforcement proceedings +shall: + + (a) preferably be in writing and preferably state the + reasons on which the decisions are based; + + (b) be made available at least to the parties in a + proceeding without undue delay; and + + (c) be based only on evidence in respect of which such + parties were offered the opportunity to be heard. + +4. Each Party shall ensure that parties in a proceeding have an +opportunity to have final administrative decisions reviewed by a +judicial authority of that Party and, subject to jurisdictional +provisions in its domestic laws concerning the importance of a +case, to have reviewed at least the legal aspects of initial +judicial decisions on the merits of a case. Notwithstanding the +above, no Party shall be required to provide for judicial review +of acquittals in criminal cases. + +5. Nothing in this Article and in Articles 1715 through 1718 +shall require a Party to establish a judicial system for the +enforcement of intellectual property rights distinct from that +Party's system for the enforcement of laws in general. + +6. For the purposes of Articles 1715 through 1718, the term +"right holder" includes federations and associations having legal +standing to assert such rights. + + +Article 1715: Specific Procedural and Remedial Aspects of Civil + and Administrative Procedures + +1. Each Party shall make available to right holders civil +judicial procedures for the enforcement of any intellectual +property right covered by this Chapter. Each Party shall provide +that: + + (a) defendants have the right to written notice that is + timely and contains sufficient detail, including the + basis of the claims; + + (b) parties in a proceeding are allowed to be represented + by independent legal counsel; + + (c) the procedures do not include imposition of overly + burdensome requirements concerning mandatory personal + appearances; + + (d) all parties in a proceeding are duly entitled to + substantiate their claims and to present relevant + evidence; and + + (e) the procedures include a means to identify and protect + confidential information. + +2. Each Party shall provide that its judicial authorities shall +have the authority: + + (a) where a party in a proceeding has presented reasonably + available evidence sufficient to support its claims and + has specified evidence relevant to the substantiation + of its claims that is within the control of the + opposing party, to order the opposing party to produce + such evidence, subject in appropriate cases to + conditions that ensure the protection of confidential + information; + + (b) where a party in a proceeding voluntarily and without + good reason refuses access to, or otherwise does not + provide relevant evidence under that party's control + within a reasonable period, or significantly impedes a + proceeding relating to an enforcement action, to make + preliminary and final determinations, affirmative or + negative, on the basis of the evidence presented, + including the complaint or the allegation presented by + the party adversely affected by the denial of access to + evidence, subject to providing the parties an + opportunity to be heard on the allegations or evidence; + + (c) to order a party in a proceeding to desist from an + infringement, including to prevent the date of entry + into the channels of commerce in their jurisdiction of + imported goods that involve the infringement of an + intellectual property right, which order shall be + enforceable at least immediately after customs + clearance of such goods; + + (d) to order the infringer of an intellectual property + right to pay the right holder damages adequate to + compensate for the injury the right holder has suffered + because of the infringement where the infringer knew or + had reasonable grounds to know that it was engaged in + an infringing activity; + + (e) to order an infringer of an intellectual property right + to pay the right holder's expenses, which may include + appropriate attorney's fees; and + + (f) to order a party in a proceeding at whose request + measures were taken and who has abused enforcement + procedures to provide adequate compensation to any + party wrongfully enjoined or restrained in the + proceeding for the injury suffered because of such + abuse and to pay that party's expenses, which may + include appropriate attorney's fees. + +3. With respect to the authority referred to in subparagraph +2(c), no Party shall be obliged to provide such authority in +respect of protected subject matter that is acquired or ordered +by a person before that person knew or had reasonable grounds to +know that dealing in that subject matter would entail the +infringement of an intellectual property right. + +4. With respect to the authority referred to in subparagraph +2(d), a Party may, at least with respect to copyrighted works and +sound recordings, authorize the judicial authorities to order +recovery of profits or payment of pre-established damages, or +both, even where the infringer did not know or had no reasonable +grounds to know that it was engaged in an infringing activity. + +5. Each Party shall provide that, in order to create an +effective deterrent to infringement, its judicial authorities +shall have the authority to order that: + + (a) goods that they have found to be infringing be, without + compensation of any sort, disposed of outside the + channels of commerce in such a manner as to avoid any + injury caused to the right holder, or, unless this + would be contrary to existing constitutional + requirements, destroyed; and + + (b) materials and implements the predominant use of which + has been in the creation of the infringing goods be, + without compensation of any sort, disposed of outside + the channels of commerce in such a manner as to + minimize the risks of further infringements. + +In considering whether to issue such an order, judicial +authorities shall take into account the need for proportionality +between the seriousness of the infringement and the remedies +ordered as well as the interests of other persons. In regard to +counterfeit goods, the simple removal of the trademark unlawfully +affixed shall not be sufficient, other than in exceptional cases, +to permit release of the goods into the channels of commerce. + +6. In respect of the administration of any law pertaining to +the protection or enforcement of intellectual property rights, +each Party shall only exempt both public authorities and +officials from liability to appropriate remedial measures where +actions are taken or intended in good faith in the course of the +administration of such laws. + +7. Notwithstanding the other provisions of Articles 1714 +through 1718, where a Party is sued with respect to an +infringement of an intellectual property right as a result of its +use of that right or use on its behalf, that Party may limit the +remedies available against it to the payment to the right holder +of adequate remuneration in the circumstances of each case, +taking into account the economic value of the use. + +8. Each Party shall provide that, where a civil remedy can be +ordered as a result of administrative procedures on the merits of +a case, such procedures shall conform to principles equivalent in +substance to those set out in this Article. + + +Article 1716: Provisional Measures + +1. Each Party shall provide that its judicial authorities shall +have the authority to order prompt and effective provisional +measures: + + (a) to prevent an infringement of any intellectual property + right, and in particular to prevent the date of entry + into the channels of commerce in their jurisdiction of + allegedly infringing goods, including measures to + prevent the entry of imported goods at least + immediately after customs clearance; and + + (b) to preserve relevant evidence in regard to the alleged + infringement. + +2. Each Party shall provide that its judicial authorities shall +have the authority to require any applicant for provisional +measures to provide to the judicial authorities any evidence +reasonably available to that applicant that the judicial +authorities consider necessary to enable them to determine with a +sufficient degree of certainty whether: + + (a) the applicant is the right holder; + + (b) the applicant's right is being infringed or such + infringement is imminent; and + + (c) any delay in the issuance of such measures is likely to + cause irreparable harm to the right holder, or there is + a demonstrable risk of evidence being destroyed. + +Each Party shall provide that its judicial authorities shall have +the authority to require the applicant to provide a security or +equivalent assurance sufficient to protect the interests of the +defendant and to prevent abuse. + +3. Each Party shall provide that its competent authorities +shall have the authority to require an applicant for provisional +measures to provide other information necessary for the +identification of the relevant goods by the authority that will +execute the provisional measures. + +4. Each Party shall provide that its judicial authorities shall +have the authority to order provisional measures on an ex parte +basis, in particular where any delay is likely to cause +irreparable harm to the right holder, or where there is a +demonstrable risk of evidence being destroyed. + +5. Each Party shall provide that where provisional measures are +adopted by that Party's judicial authorities on an ex parte +basis: + + (a) a person affected shall be given notice of those + measures without delay but in any event no later than + immediately after the execution of the measures; + + (b) a defendant shall, upon request, have those measures + reviewed by that Party's judicial authorities, for the + purpose of deciding, within a reasonable period after + notice of those measures is given, whether the measures + shall be modified, revoked or confirmed, and shall be + given an opportunity to be heard in the review + proceedings. + +6. Without prejudice to paragraph 5, each Party shall provide +that, upon the request of the defendant, the Party's judicial +authorities shall revoke or otherwise cease to apply the +provisional measures taken on the basis of paragraphs 1 and 4 if +proceedings leading to a decision on the merits are not +initiated: + + (a) within a reasonable period as determined by the + judicial authority ordering the measures where the + Party's domestic law so permits; or + + (b) in the absence of such a determination, within a period + of no more than 20 working days or 31 calendar days, + whichever is longer. + +7. Each Party shall provide that, where the provisional +measures are revoked or where they lapse due to any act or +omission by the applicant, or where the judicial authorities +subsequently find that there has been no infringement or threat +of infringement of an intellectual property right, the judicial +authorities shall have the authority to order the applicant, on +request of the defendant, to provide the defendant appropriate +compensation for any injury caused by these measures. + +8. Each Party shall provide that, where a provisional measure +can be ordered as a result of administrative procedures, such +procedures shall conform to principles equivalent in substance to +those set out in this Article. + + +Article 1717: Criminal Procedures and Penalties + +1. Each Party shall provide criminal procedures and penalties +to be applied at least in cases of willful trademark +counterfeiting or copyright piracy on a commercial scale. Each +Party shall provide that penalties available include imprisonment +or monetary fines, or both, sufficient to provide a deterrent, +consistent with the level of penalties applied for crimes of a +corresponding gravity. + +2. Each Party shall provide that, in appropriate cases, its +judicial authorities may order the seizure, forfeiture and +destruction of infringing goods and of any materials and +implements the predominant use of which has been in the +commission of the offense. + +3. A Party may provide criminal procedures and penalties to be +applied in cases of infringement of intellectual property rights, +other than those in paragraph 1, where they are committed +wilfully and on a commercial scale. + + +Article 1718: Enforcement of Intellectual Property Rights at the + Border + +1. Each Party shall, in conformity with this Article, adopt +procedures to enable a right holder, who has valid grounds for +suspecting that the importation of counterfeit trademark goods or +pirated copyright goods may take place, to lodge an application +in writing with its competent authorities, whether administrative +or judicial, for the suspension by the customs administration of +the release of such goods into free circulation. No Party shall +be obligated to apply such procedures to goods in transit. A +Party may permit such an application to be made in respect of +goods that involve other infringements of intellectual property +rights, provided that the requirements of this Article are met. +A Party may also provide for corresponding procedures concerning +the suspension by the customs administration of the release of +infringing goods destined for exportation from its territory. + +2. Each Party shall require any applicant who initiates +procedures under paragraph 1 to provide adequate evidence: + + (a) to satisfy that Party's competent authorities that, + under the domestic laws of the country of importation, + there is prima facie an infringement of its + intellectual property right; and + + (b) to supply a sufficiently detailed description of the + goods to make them readily recognizable by the customs + administration. + +The competent authorities shall inform the applicant within a +reasonable period whether they have accepted the application and, +if so, the period for which the customs administration will take +action. + +3. Each Party shall provide that its competent authorities +shall have the authority to require an applicant under paragraph +1 to provide a security or equivalent assurance sufficient to +protect the defendant and the competent authorities and to +prevent abuse. Such security or equivalent assurance shall not +unreasonably deter recourse to these procedures. + +4. Each Party shall provide that, where pursuant to an +application under procedures adopted pursuant to this Article, +its customs administration suspends the release of goods +involving industrial designs, patents, integrated circuits or +trade secrets into free circulation on the basis of a decision +other than by a judicial or other independent authority, and the +period provided for in paragraphs 6 through 8 has expired without +the granting of provisional relief by the duly empowered +authority, and provided that all other conditions for importation +have been complied with, the owner, importer, or consignee of +such goods shall be entitled to their release on the posting of a +security in an amount sufficient to protect the right holder +against any infringement. Payment of such security shall not +prejudice any other remedy available to the right holder, it +being understood that the security shall be released if the right +holder fails to pursue its right of action within a reasonable +period of time. + +5. Each Party shall provide that its customs administration +shall promptly notify the importer and the applicant when the +customs administration suspends the release of goods pursuant to +paragraph 1. + +6. Each Party shall provide that its customs administration +shall release goods from suspension if within a period not +exceeding ten working days after the applicant under paragraph 1 +has been served notice of the suspension: + + (a) the customs administration has not been informed that a + party other than the defendant has initiated + proceedings leading to a decision on the merits of the + case, or + + (b) a competent authority has taken provisional measures + prolonging the suspension, + +provided that all other conditions for importation or exportation +have been met. Each Party shall provide that, in appropriate +cases, the customs administration may extend the suspension by +another 10 working days. + +7. Each Party shall provide that if proceedings leading to a +decision on the merits of the case have been initiated, a review, +including a right to be heard, shall take place on request of the +defendant with a view to deciding, within a reasonable period, +whether the measures shall be modified, revoked or confirmed. + +8. Notwithstanding paragraphs 6 and 7, where the suspension of +the release of goods is carried out or continued in accordance +with a provisional judicial measure, the provisions of Article +1716(6) shall apply. + +9. Each Party shall provide that its competent authorities +shall have the authority to order the applicant under paragraph 1 +to pay the importer, the consignee and the owner of the goods +appropriate compensation for any injury caused to them through +the wrongful detention of goods or through the detention of goods +released pursuant to paragraph 6. + +10. Without prejudice to the protection of confidential +information, each Party shall provide that its competent +authorities shall have the authority to give the right holder +sufficient opportunity to have any goods detained by the customs +administration inspected in order to substantiate its claims. +Each Party shall also provide that its competent authorities have +the authority to give the importer an equivalent opportunity to +have any such goods inspected. Where the competent authorities +have made a positive determination on the merits of a case, a +Party may provide the competent authorities the authority to +inform the right holder of the names and addresses of the +consignor, the importer and the consignee, and of the quantity of +the goods in question. + +11. Where a Party requires its competent authorities to act upon +their own initiative and to suspend the release of goods in +respect of which they have acquired prima facie evidence that an +intellectual property right is being infringed: + + (a) the competent authorities may at any time seek from the + right holder any information that may assist them to + exercise these powers; + + (b) the importer and the right holder shall be promptly + notified of the suspension by the Party's competent + authorities, and where the importer lodges an appeal + against the suspension with competent authorities, the + suspension shall be subject to the conditions, with + such modifications as are necessary, set out in + paragraphs 6 through 8; and + + (c) the Party shall only exempt both public authorities and + officials from liability to appropriate remedial + measures where actions are taken or intended in good + faith. + +12. Without prejudice to other rights of action open to the +right holder and subject to the defendant's right to seek +judicial review, each Party shall provide that its competent +authorities shall have the authority to order the destruction or +disposal of infringing goods in accordance with the principles +set out in Article 1715(5). In regard to counterfeit goods, the +authorities shall not allow the re-exportation of the infringing +goods in an unaltered state or subject them to a different +customs procedure, other than in exceptional circumstances. + +13. A Party may exclude from the application of paragraphs 1 +through 12 small quantities of goods of a non-commercial nature +contained in travellers' personal luggage or sent in small +consignments that are not repetitive. + +14. This Article shall apply, except as provided in Annex +1718.14. + + +Article 1719: Cooperation and Technical Assistance + +1. The Parties shall provide each other on mutually agreed +terms with technical assistance and shall promote cooperation +between their competent authorities. Such cooperation shall +include, but not be limited to, the training of personnel. + +2. The Parties shall cooperate with a view to eliminating trade +in goods that infringe intellectual property rights. For this +purpose, each Party shall establish and notify the other Parties +of contact points in its federal government and shall exchange +information concerning trade in infringing goods. + + +Article 1720: Protection of Existing Subject Matter + +1. Other than the provisions of Article 1705(7), this Agreement +does not give rise to obligations in respect of acts that +occurred before the date of application of the relevant +provisions of this Agreement for the Party in question. + +2. Except as otherwise provided for in this Agreement, each +Party shall apply this Agreement to all subject matter existing +on the date of application of the relevant provisions of this +Agreement for the Party in question, and which is protected in a +Party on the said date, or which meets or comes subsequently to +meet the criteria for protection under the terms of this Chapter. +In respect of this paragraph and paragraphs 3 and 4, a Party's +obligations with respect to existing works shall be solely +determined under Article 18 of the Berne Convention and with +respect to the rights of producers of sound recordings in +existing sound recordings shall be determined solely under +Article 18 of that Convention, as made applicable under this +Agreement. + +3. Except as required under Article 1705(7), and +notwithstanding paragraph 2, a Party shall not be required to +restore protection to subject matter that, on the date of +application of the relevant provisions of this Agreement for the +Party in question, has fallen into the public domain in its +territory. + +4. Any acts in respect of specific objects embodying protected +subject matter which become infringing under the terms of +legislation in conformity with this Agreement, and which were +commenced or in respect of which a significant investment was +made, before the date of ratification of this Agreement by that +Party, any Party may provide for a limitation of the remedies +available to the right holder as to the continued performance of +such acts after the date of application of the Agreement for that +Party. In such cases, the Party shall, however, at least provide +for payment of equitable remuneration. + +5. No Party shall be obliged to apply the provisions of Article +1705(2)(d) or Article 1706(1)(d) with respect to originals or +copies purchased prior to the date of application of the relevant +provisions of this Agreement for that Party. + +6. No Party shall be required to apply Article 1709(10), or the +requirement in Article 1709(7) that patent rights shall be +enjoyable without discrimination as to the field of technology, +to use without the authorization of the right holder where +authorization for such use was granted by the government before +the text of the Draft Final Act Embodying the Results of the +Uruguay Round of Multilateral Trade Negotiations became known. + +7. In the case of intellectual property rights for which +protection is conditional upon registration, applications for +protection that are pending on the date of application of the +relevant provisions of this Agreement for the Party in question +shall be permitted to be amended to claim any enhanced protection +provided under the provisions of this Agreement. Such amendments +shall not include new matter. + + +Article 1721: Definitions + +For purposes of this Agreement: + +confidential information includes trade secrets, privileged +information and other materials exempted from disclosure under +the Party's domestic law; + +encrypted program-carrying satellite signal means a +program-carrying satellite signal that is transmitted in a form +whereby the aural or visual characteristics, or both, are +modified or altered for the purpose of preventing the +unauthorized reception by persons without the authorized +equipment that is designed to eliminate the effects of such +modification or alteration, of a program carried in that signal; + +geographical indication means any indication that identifies a +good as originating in the territory of a Party, or a region or +locality in that territory, where a particular quality, +reputation or other characteristic of the good is essentially +attributable to its geographical origin; + +in a manner contrary to honest commercial practices means at +least practices such as breach of contract, breach of confidence +and inducement to breach, and includes the acquisition of +undisclosed information by other persons who knew, or were +grossly negligent in failing to know, that such practices were +involved in the acquisition; + +intellectual property rights refers to copyright and related +rights, trademark rights, patent rights, rights in layout designs +of semiconductor integrated circuits, trade secret rights, plant +breeders' rights, rights in geographical indications and +industrial design rights; + +nationals of another Party means, in respect of the relevant +intellectual property right, persons who would meet the criteria +for eligibility for protection provided for in the Paris +Convention (1967), the Berne Convention (1971), the Geneva +Convention (1971), the International Convention for the +Protection of Performers, Producers of Phonograms and +Broadcasting Organizations (1961), the UPOV Convention (1978), +the UPOV Convention (1991) or the Treaty on Intellectual Property +in Respect of Integrated Circuits, as if each Party were a party +to those Conventions, and with respect to intellectual property +rights that are not the subject of these Conventions, "nationals +of another Party" shall be understood to be at least individuals +who are citizens or permanent residents of that Party and also +includes any other natural person referred to in Annex 201.1; + +public includes, with respect to rights of communication and +performance of works provided for under Articles 11, 11bis(1) and +14(1)(ii) of the Berne Convention, with respect to dramatic, +dramatico-musical, musical and cinematographic works, at least, +any aggregation of individuals intended to be the object of, and +capable of perceiving, communications or performances of works, +regardless of whether they can do so at the same or different +times or in the same or different places, provided that such an +aggregation is larger than a family and its immediate circle of +acquaintances or is not a group comprising a limited number of +individuals having similarly close ties that has not been formed +for the principal purpose of receiving such performances and +communications of works; and + +secondary uses of sound recordings means the use directly for +broadcasting or for any other public communication of a sound +recording. + +============================================================================= + ANNEX 1701.3 + + Intellectual Property Conventions + + +1. Mexico shall: + + (a) make every effort to comply with the substantive + provisions of the 1978 or 1991 UPOV Convention as soon + as possible and shall do so no later than two years + after the date of signature of this Agreement; and + + (b) accept from the date of entry into force of this + Agreement, applications from plant breeders for + varieties in all plant genera and species and grant + protection, in accordance with such substantive + provisions, promptly after complying with subparagraph + (a). + +2. Notwithstanding Article 1701(2)(b), this Agreement confers +no rights and imposes no obligations on the United States with +respect to Article 6bis of the Berne Convention, or the rights +derived from that Article. + +============================================================================= + ANNEX 1705.7 + + Copyright + + + The United States shall provide protection to motion +pictures produced in another Party's territory that have been +declared to be in the public domain pursuant to 17 U.S.C. section +405. This obligation shall apply to the extent that it is +consistent with the Constitution of the United States, and is +subject to budgetary considerations. + +============================================================================= + ANNEX 1710.9 + + Layout Designs + + + Mexico shall make every effort to implement the requirements +of Article 1710 as soon as possible, and shall do so no later +than four years after the date of entry into force of this +Agreement. + +============================================================================= + ANNEX 1718.14 + + Enforcement of Intellectual Property Rights + + + Mexico shall make every effort to comply with the +requirements of Article 1718 as soon as possible, and shall do so +in any event no later than three years after the date of +signature of this Agreement. + + +NAFTA Chapter Eighteen Publication, Notification and Administration of Laws + + + +Article 1801: Contact Points + + Each Party shall designate a contact point to facilitate +communications between the Parties on any matter covered by this +Agreement. Upon the request of another Party, the contact point +shall identify the office or official responsible for the matter +and assist, as necessary, in facilitating communication with the +requesting Party. + + +Article 1802: Publication + +1. Each Party shall ensure that its laws, regulations, +procedures and administrative rulings of general application +respecting any matter covered by this Agreement shall be promptly +published or otherwise made available in such a manner as to +enable interested persons and Parties to become acquainted with +them. + +2. To the extent possible, each Party shall: + + (a) publish in advance any such measure that it proposes to + adopt; and + + (b) provide a reasonable opportunity for comment by + interested persons and Parties on such proposed + measures. + + +Article 1803: Notification and Provision of Information + +1. Each Party shall, to the maximum extent possible, notify any +other Party with an interest in the matter of any proposed or +actual measure that it considers might materially affect the +operation of this Agreement or otherwise substantially affect +another Party's interests under this Agreement. + +2. Upon request of another Party, a Party shall promptly +provide information and respond to questions pertaining to any +actual or proposed measure, whether or not previously notified. + +3. Notification and provision of information shall be without +prejudice as to whether the measure is consistent with this +Agreement. + + +Article 1804: Administrative Proceedings + + With a view to administering in a consistent, impartial and +reasonable manner all measures of general application affecting +matters covered by this Agreement, each Party shall ensure in its +administrative proceedings applying measures referred to in +Article 1802 to particular persons, goods or services of another +Party in specific cases that: + + (a) whenever possible, persons of another Party that are + directly affected by a proceeding are provided + reasonable notice, in accordance with domestic + procedures, when a proceeding is initiated, including a + description of the nature of the proceeding, a + statement of the legal authority under which the + proceeding is initiated and a general description of + any issues in controversy; + + (b) such persons are afforded a reasonable opportunity to + present facts and arguments in support of their + positions prior to any final administrative action, + when time, the nature of the proceeding and the public + interest permit; and + + (c) its procedures are in accordance with domestic law. + + +Article 1805: Review and Appeal + +1. Each Party shall adopt or maintain judicial, quasi-judicial +or administrative tribunals or procedures for the purpose of the +prompt review and, where warranted, correction of final +administrative actions regarding matters covered by this +Agreement. Such tribunals shall be impartial and independent of +the office or authority entrusted with administrative enforcement +and shall not have any substantial interest in the outcome of the +matter. + +2. Each Party shall ensure that, in any such tribunals or +procedures, the parties to the proceeding are provided with the +right to: + + (a) a reasonable opportunity to support or defend their + respective positions; and + + (b) a decision based on the evidence and submissions of + record or, where required by domestic law the record + compiled by the administrative authority. + +3. Each Party shall ensure, subject to appeal or further review +as provided in its domestic law, that such decisions shall be +implemented by, and shall govern the practice of, such offices or +authorities with respect to the administrative action at issue. + + +Article 1806: Definitions + +For purposes of this Chapter: + +administrative ruling of general application means an +administrative ruling or interpretation that applies to all +persons and fact situations that fall generally within its ambit +and that establishes a norm of conduct rather than adjudicating +with respect to a particular act or practice, but, does not +include a determination or ruling made in an administrative or +quasi-judicial proceeding that applies to a particular person, +good or service of another Party in a specific case. + +NAFTA Chapter Nineteen Review and Dispute Settlement in Antidumping and Countervailing Duty Matters + + + +Article 1901: General Provisions + +1. The provisions of Article 1904 shall apply only with respect +to goods that the competent investigating authority of the +importing Party, applying the importing Party's antidumping or +countervailing duty law to the facts of a specific case, +determines are goods of another Party. + +2. For the purposes of Articles 1903 and 1904, panels shall be +established in accordance with the provisions of Annex 1901.2. + +3. With the exception of Article 2203 (Entry into Force), no +provision of any other chapter of this Agreement shall be +construed as imposing obligations on the Parties with respect to +the Parties' antidumping law or countervailing duty law. + + +Article 1902: Retention of Domestic Antidumping Law and + Countervailing Duty Law + +1. Each Party reserves the right to apply its antidumping law +and countervailing duty law to goods imported from the territory +of any other Party. Antidumping law and countervailing duty law +include, as appropriate for each Party, relevant statutes, +legislative history, regulations, administrative practice and +judicial precedents. + +2. Each Party reserves the right to change or modify its +antidumping law or countervailing duty law, provided that in the +case of an amendment to a Party's antidumping or countervailing +duty statute: + + (a) such amendment shall apply to goods from another Party + only if the amending statute specifies that it applies + to the Parties to this Agreement; + + (b) the amending Party notifies any Party to which the + amendment applies in writing of the amending statute as + far in advance as possible of the date of enactment of + such statute; + + (c) following notification, the amending Party, upon + request of any Party to which the amendment applies, + consults with that Party prior to the enactment of the + amending statute; and + + (d) such amendment, as applicable to another Party, is not + inconsistent with: + + (i) the General Agreement on Tariffs and Trade (GATT), + the Agreement on Implementation of Article VI of + the General Agreement on Tariffs and Trade (the + Antidumping Code) or the Agreement on the + Interpretation and Application of Articles VI, XVI + and XXIII of the General Agreement on Tariffs and + Trade (the Subsidies Code), or successor + agreements to which all the original signatories + to this Agreement are party, or + + (ii) the object and purpose of this Agreement and this + Chapter, which is to establish fair and + predictable conditions for the progressive + liberalization of trade among the Parties to this + Agreement while maintaining effective and fair + disciplines on unfair trade practices, such object + and purpose to be ascertained from the provisions + of this Agreement, its preamble and objectives and + the practices of the Parties. + + +Article 1903: Review of Statutory Amendments + +1. A Party to which an amendment of another Party's antidumping +or countervailing duty statute applies may request in writing +that such amendment be referred to a binational panel for a +declaratory opinion as to whether: + + (a) the amendment does not conform to the provisions of + Article 1902(2)(d)(i) or (ii); or + + (b) such amendment has the function and effect of + overturning a prior decision of a panel made pursuant + to Article 1904 and does not conform to the provisions + of Article 1902(2)(d)(i) or (ii). + +Such declaratory opinion shall have force or effect only as +provided in this Article. + +2. The panel shall conduct its review in accordance with the +procedures of Annex 1903.2. + +3. In the event that the panel recommends modifications to the +amending statute to remedy a non-conformity that it has +identified in its opinion: + + (a) the two Parties shall immediately begin consultations + and shall seek to achieve a mutually satisfactory + solution to the matter within 90 days of the issuance + of the panel's final declaratory opinion. Such + solution may include seeking corrective legislation + with respect to the statute of the amending Party; + + (b) if corrective legislation is not enacted within nine + months from the end of the 90-day consultation period + referred to in subparagraph (a) and no other mutually + satisfactory solution has been reached, the Party that + requested the panel may + + (i) take comparable legislative or equivalent + executive action, or + + (ii) terminate this Agreement with regard to the + amending Party upon 60-day written notice to that + Party. + + +Article 1904: Review of Final Antidumping and Countervailing + Determinations + +1. As provided in this Article, the Parties shall replace +judicial review of final antidumping and countervailing duty +determinations with binational panel review. + +2. An involved Party may request that a panel review, based +upon the administrative record, a final antidumping or +countervailing duty determination of a competent investigating +authority of a Party to determine whether such determination was +in accordance with the antidumping or countervailing duty law of +the importing Party. For this purpose, the antidumping or +countervailing duty law consists of the relevant statutes, +legislative history, regulations, administrative practice and +judicial precedents to the extent that a court of the importing +Party would rely on such materials in reviewing a final +determination of the competent investigating authority. Solely +for purposes of the panel review provided for in this Article, +the antidumping and countervailing duty statutes of the Parties, +as those statutes may be amended from time to time, are +incorporated into this Agreement. + +3. The panel shall apply the standard of review described in +Article 1909 and the general legal principles that a court of the +importing Party otherwise would apply to a review of a +determination of the competent investigating authority. + +4. A request for a panel shall be made in writing to the other +involved Party within 30 days following the date of publication +of the final determination in question in the official journal of +the importing Party. In the case of final determinations that +are not published in the official journal of the importing Party, +the importing Party shall immediately notify the other involved +Party of such final determination where it involves goods from +the other involved Party, and the other involved Party may +request a panel within 30 days of receipt of such notice. Where +the competent investigating authority of the importing Party has +imposed provisional measures in an investigation, the other +involved Party may provide notice of its intention to request a +panel under this Article, and the Parties shall begin to +establish a panel at that time. Failure to request a panel +within the time specified in this paragraph shall preclude review +by a panel. + +5. An involved Party on its own initiative may request review +of a final determination by a panel and shall, upon request of a +person who would otherwise be entitled under the law of the +importing Party to commence domestic procedures for judicial +review of that final determination, request such review. + +6. The panel shall conduct its review in accordance with the +procedures established by the Parties pursuant to paragraph 14. +Where both involved Parties request a panel to review a final +determination, a single panel shall review that determination. + +7. The competent investigating authority that issued the final +determination in question shall have the right to appear and be +represented by counsel before the panel. Each Party shall +provide that other persons who, pursuant to the law of the +importing Party, otherwise would have had the right to appear and +be represented in a domestic judicial review proceeding +concerning the determination of the competent investigating +authority, shall have the right to appear and be represented by +counsel before the panel. + +8. The panel may uphold a final determination, or remand it for +action not inconsistent with the panel's decision. Where the +panel remands a final determination, the panel shall establish as +brief a time as is reasonable for compliance with the remand, +taking into account the complexity of the factual and legal +issues involved and the nature of the panel's decision. In no +event shall the time permitted for compliance with a remand +exceed an amount of time equal to the maximum amount of time +(counted from the date of the filing of a petition, complaint or +application) permitted by statute for the competent investigating +authority in question to make a final determination in an +investigation. If review of the action taken by the competent +investigating authority on remand is needed, such review shall be +before the same panel, which shall normally issue a final +decision within 90 days of the date on which such remand action +is submitted to it. + +9. The decision of a panel under this Article shall be binding +on the involved Parties with respect to the particular matter +between the Parties that is before the panel. + +10. This Agreement shall not affect: + + (a) the judicial review procedures of any Party; or + + (b) cases appealed under those procedures, + +with respect to determinations other than final determinations. + +11. A final determination shall not be reviewed under any +judicial review procedures of the importing Party if an involved +Party requests a panel with respect to that determination within +the time limits set forth in this Article. No Party shall +provide in its domestic legislation for an appeal from a panel +decision to its domestic courts. + +12. The provisions of this Article shall not apply where: + + (a) neither involved Party seeks panel review of a final + determination; + + (b) a revised final determination is issued as a direct + result of judicial review of the original final + determination by a court of the importing Party in + cases where neither involved Party sought panel review + of that original final determination; or + + (c) a final determination is issued as a direct result of + judicial review that was commenced in a court of the + importing Party before the date of entry into force of + this Agreement. + +13. Where within a reasonable time after the panel decision is +issued, an involved Party alleges that: + + (a) (i) a member of the panel was guilty of gross + misconduct, bias, or a serious conflict of + interest, or otherwise materially violated the + rules of conduct, + + (ii) the panel seriously departed from a fundamental + rule of procedure, or + + (iii) the panel manifestly exceeded its powers, + authority or jurisdiction set forth in this + Article, for example by failing to apply the + appropriate standard of review, and + + (b) any of the actions set out in subparagraph (a) has + materially affected the panel's decision and threatens + the integrity of the binational panel review process, + +that Party may avail itself of the extraordinary challenge +procedure set out in Annex 1904.13. + +14. To implement the provisions of this Article, the Parties +shall adopt rules of procedure by January 1, 1994. Such rules +shall be based, where appropriate, upon judicial rules of +appellate procedure, and shall include rules concerning: the +content and service of requests for panels; a requirement that +the competent investigating authority transmit to the panel the +administrative record of the proceeding; the protection of +business proprietary, government classified, and other privileged +information (including sanctions against persons participating +before panels for improper release of such information); +participation by private persons; limitations on panel review to +errors alleged by the Parties or private persons; filing and +service; computation and extensions of time; the form and content +of briefs and other papers; pre- and post-hearing conferences; +motions; oral argument; requests for rehearing; and voluntary +terminations of panel reviews. The rules shall be designed to +result in final decisions within 315 days of the date on which a +request for a panel is made, and shall allow: + + (a) 30 days for the filing of the complaint; + + (b) 30 days for designation or certification of the + administrative record and its filing with the panel; + + (c) 60 days for the complainant to file its brief; + + (d) 60 days for the respondent to file its brief; + + (e) 15 days for the filing of reply briefs; + + (f) 15 to 30 days for the panel to convene and hear oral + argument; and + + (g) 90 days for the panel to issue its written decision. + +15. In order to achieve the objectives of this Article, the +Parties shall, with respect to goods of the other Parties, amend +their antidumping and countervailing duty statutes and +regulations, and other statutes and regulations to the extent +that they apply to the operation of the antidumping and +countervailing duty laws. In particular, without limiting the +generality of the foregoing: + + (a) each Party shall amend its statutes or regulations to + ensure that existing procedures concerning the refund, + with interest, of antidumping or countervailing duties + operate to give effect to a final panel decision that a + refund is due; + + (b) each Party shall amend its statutes or regulations to + ensure that its courts shall give full force and + effect, with respect to any person within its + jurisdiction, to all sanctions imposed pursuant to the + laws of the other Parties to enforce provisions of any + protective order or undertaking that such other Party + has promulgated or accepted in order to permit access + for purposes of panel review or of the extraordinary + challenge procedure to confidential, personal, business + proprietary or other privileged information; + + (c) each Party shall amend its statutes or regulations to + ensure that + + (i) domestic procedures for judicial review of a final + determination may not be commenced until the time + for requesting a panel under paragraph 4 has + expired, and + + (ii) as a prerequisite to commencing domestic judicial + review procedures to review a final determination, + a Party or other person intending to commence such + procedures shall provide notice of such intent to + the Parties concerned and to other persons + entitled to commence such review procedures of the + same final determination no later than 10 days + prior to the latest date on which a panel may be + requested; and + + (d) Each Party shall make the further amendments set forth + in Annex 1904.15(d). + + +Article 1905: Safeguarding the Panel Review System + +1. Where a Party alleges that the application of another +Party's domestic law, + + (a) has prevented the establishment of a panel requested by + the complaining Party; + + (b) has prevented a panel requested by the complaining + Party from rendering a final decision; + + (c) has prevented the implementation of the decision of a + panel requested by the complaining Party or denied it + binding force and effect with respect to the particular + matter that was before the panel; or + + (d) has resulted in a failure to provide opportunity for + review of a final determination by a court or panel of + competent jurisdiction that is independent of the + competent investigating authorities, that examines the + basis for the investigating authorities' determination + and whether the investigating authority properly + applied domestic antidumping and countervailing duty + law in reaching the challenged determination, and that + employs the relevant standard of review identified in + Article 1911, + +that Party may request in writing consultations with the other +Party regarding the allegations. The consultations shall begin +within 15 days of the date of the request. + +2. If the matter has not been resolved within 45 days of the +request for consultations or such other period as the consulting +Parties may agree, the complaining Party may request the +establishment of a special committee. + +3. Unless otherwise agreed by the disputing Parties, the +special committee shall be established within 15 days of a +request and perform its functions in a manner consistent with the +provisions of this Chapter. + +4. The roster for special committees shall be that established +pursuant to Annex 1904.13.1. + +5. The special committee shall comprise three members selected +in accordance with the procedures set out in Annex 1904.13.1. + +6. The Parties shall establish rules of procedure in accordance +with the principles set out in Annex 1905.7. + +7. If the special committee makes an affirmative finding in +respect of one of the grounds specified in paragraph 1, the +complaining Party and the Party complained against shall begin +consultations within 10 days, and shall seek to achieve a +mutually satisfactory solution within 60 days of the issuance of +the committee's report. + +8. If, within the 60-day period, the Parties are unable to +reach a mutually satisfactory solution to the matter, or the +Party complained against has not demonstrated to the satisfaction +of the special committee that it has corrected the problem or +problems with respect to which the committee has made an +affirmative finding, the complaining Party may: + + (a) suspend the operation of Article 1904 with respect to + the Party complained against; or + + (b) suspend the application to the Party complained against + of such benefits under this Agreement as may be + appropriate under the circumstances. + +9. In the event that a complaining Party suspends the operation +of Article 1904 with respect to the Party complained against, the +latter Party may reciprocally suspend the operation of Article +1904. If either Party decides to suspend the operation of +Article 1904, it shall provide written notice of such suspension +to the other Party. + +10. The special committee may reconvene at any time, at the +request of the Party complained against, to determine: + + (a) whether the suspension of benefits by the complaining + Party pursuant to subparagraph 8(b) is manifestly + excessive; or + + (b) whether the Party complained against has corrected the + problem or problems with respect to which the committee + has made an affirmative finding. + +The special committee shall, within 45 days of the request, +present a report to both Parties containing its determination. +Where the special committee determines that the Party complained +against has corrected the problem or problems, any suspension +effected by the complaining Party or the Party complained +against, or both, pursuant to paragraphs 8 or 9 shall be +terminated. + +11. If the special committee makes an affirmative finding with +respect to one of the grounds specified in paragraph 1, then +effective as of the day following the date of issuance of the +special committee's decision: + + (a) binational panel or extraordinary challenge committee + review under Article 1904 shall be stayed + + (i) with respect to review of any final determination + of the complaining Party requested by the Party + complained against, if such review was requested + after the date on which consultations were + requested pursuant to paragraph 1 of this Article + and in no case later than 150 days prior to an + affirmative finding by the special committee, or + + (ii) with respect to review of any final determination + of the Party complained against requested by the + complaining Party, at the request of the + complaining Party; and + + (b) the time for requesting panel or committee review under + Article 1904 shall be tolled. + +12. If either Party suspends the operation of Article 1904 +pursuant to paragraph 8(a), the panel or committee review stayed +under paragraph 11(a) shall be terminated and the challenge to +the final determination shall be irrevocably referred to the +appropriate domestic court for decision, as provided below: + + (a) with respect to review of any final determination of + the complaining Party requested by the Party complained + against, at the request of either Party, or of a party + to the panel review under Article 1904; or + + (b) with respect to review of any final determination of + the Party complained against requested by the + complaining Party, at the request of the complaining + Party, or of a party of the complaining Party that is a + party to the panel review under Article 1904. + +If either Party suspends the operation of Article 1904 pursuant +to paragraph 8(a), any time period tolled under Paragraph 11(b) +of this Article shall resume. + +If such suspension does not become effective, panel or committee +review stayed under paragraph 11(a), and any time period tolled +under paragraph 8(b), shall resume. + + +Article 1906: Prospective Application + + The provisions of this Chapter shall apply only +prospectively to: + + (a) final determinations of a competent investigating + authority made after the date of entry into force of + this Agreement; and + + (b) with respect to declaratory opinions under + Article 1903, amendments to antidumping or + countervailing duty statutes enacted after the date of + entry into force of this Agreement. + + +Article 1907: Consultations + +1. The Parties shall consult annually, or on the request of any +Party, to consider any problems that may arise with respect to +the implementation or operation of this Chapter and recommend +solutions, where appropriate. The Parties shall each designate +one or more officials, including officials of the competent +investigating authorities, to be responsible for ensuring that +consultations occur, when required, so that the provisions of +this Chapter are carried out expeditiously. + +2. The Parties further agree to consult on: + + (a) the potential to develop more effective rules and + disciplines concerning the use of government subsidies; + and + + (b) the potential for reliance on a substitute system of + rules for dealing with unfair transborder pricing + practices and government subsidization. + +3. The competent investigating authorities of the Parties shall +consult annually or on the request of any Party and may submit +reports to the Commission, if appropriate. In the context of +these consultations, the Parties agree that it is desirable in +the administration of anti-dumping and countervailing duty laws +to: + + (a) publish notice of initiation of investigations in the + importing country's official journal, setting forth the + nature of the proceeding, the legal authority under + which the proceeding is initiated, and a description of + the product at issue; + + (b) provide notice of the times for submissions of + information and for decisions that the competent + investigating authorities are expressly required by + statute or regulations to make; + + (c) provide explicit written notice and instructions as to + the information required from interested parties, + including foreign interests, and reasonable time to + respond to requests for information; + + (d) accord reasonable access to information + + (i) "reasonable access" in this context means access + during the course of the investigation, to the + extent practicable, so as to permit an opportunity + to present facts and arguments as set forth in + paragraph (e); when it is not practicable to + provide access to information during the + investigation in such time as to permit an + opportunity to present facts and arguments, + reasonable access shall mean in time to permit the + adversely affected party to make an informed + decision as to whether to seek judicial or panel + review, + + (ii) "access to information" in this context means + access to representatives determined by the + competent investigating authority to be qualified + to have access to information received by that + competent investigating authority, including + access to confidential (business proprietary) + information, but does not include information of + such high degree of sensitivity that its release + would lead to substantial and irreversible harm to + the owner or which is required to be kept + confidential in accordance with domestic + legislation of a Party; any privileges arising + under domestic law of the importing Party relating + to communications between the competent + investigating authorities and a lawyer in the + employ of, or providing advice to, those + authorities may be maintained; + + (e) provide the opportunity for interested parties, + including foreign interests, to present facts and + arguments, to the extent time permits, including an + opportunity to comment on the preliminary determination + of dumping or of subsidization; + + (f) protect confidential (business proprietary) + information, received by the competent investigating + authority, to ensure that there is no disclosure except + to representatives determined by the competent + investigating authorities to be qualified; + + (g) prepare administrative records, including + recommendations of official advisory bodies that may be + required to be kept, and any record of ex parte + meetings that may be required to be kept; + + (h) provide disclosure of relevant information upon which + any preliminary or final determination of dumping or of + subsidization is based, within a reasonable time after + a request by interested parties, including foreign + interests. Such information shall include an + explanation of the calculation or the methodology used + to determine the margin of dumping or the amount of + subsidy; + + (i) provide a statement of reasons concerning the final + determination of dumping or subsidization; and + + (j) provide a statement of reasons for final determinations + concerning material injury to a domestic industry, + threat of material injury to a domestic industry or + material retardation of the establishment of such an + industry. + +Inclusion of an item in paragraphs (a) through (j) is not +intended to serve as guidance to a binational panel reviewing a +final antidumping or countervailing duty determination pursuant +to Article 1904 in determining whether such determination was in +accordance with the antidumping or countervailing duty law of the +importing Party. + + +Article 1908: Special Secretariat Provisions + +1. The Parties shall establish a section within the Secretariat +established pursuant to Article 2002 to facilitate the operation +of this Chapter and the work of panels or committees that may be +convened pursuant to this Chapter. + +2. The secretaries of the Secretariat established pursuant to +Article 2002 shall act jointly to service all meetings of panels +or committees established pursuant to this Chapter. The +secretary of the Party in which a panel or committee proceeding +is held shall prepare a record thereof and shall preserve an +authentic copy of the same in the permanent offices. Such +secretary shall upon request provide to the secretary of any +other Party a copy of such portion of the record as is requested, +except that only public portions of the record shall be provided +to the secretary of the Party that is not an involved Party. + +3. Each secretary shall receive and file all requests, briefs +and other papers properly presented to a panel or committee in +any proceeding before it that is instituted pursuant to this +Chapter and shall number in numerical order all requests for a +panel or committee. The number given to a request shall be the +file number for briefs and other papers relating to such request. + +4. Each secretary shall forward to the secretary of the other +involved Party copies of all official letters, documents or other +papers received or filed with the Secretariat office pertaining +to any proceeding before a panel or committee, except for the +administrative record, which shall be handled in accordance with +paragraph 1. The secretary of an involved Party shall provide +upon request to the secretary of the Party that is not an +involved Party in the proceeding a copy of such public documents +as are requested. + +5. The remuneration of panelists or committee members, their +travel and lodging expenses, and all general expenses of the +panels or committees shall be borne equally by the involved +Parties. Each panelist or committee member shall keep a record +and render a final account of the person's time and expenses, and +the panel or committee shall keep a record and render a final +account of all general expenses. The Commission shall establish +amounts of remuneration and expenses that will be paid to the +panelists and committee members. + + +Article 1909: Code of Conduct + + The Parties shall, by the date of entry into force of this +Agreement, exchange letters establishing a code of conduct for +panelists and members of committees established pursuant to +Articles 1903, 1904 and 1905. + + +Article 1910: Miscellaneous + + Upon request, the competent investigating authority of a +Party shall provide the other Party or Parties with copies of all +public information submitted to it for the purposes of an +investigation with respect to goods of that other Party or +Parties. + + +Article 1911: Definitions + +For purposes of this Chapter: + +administrative record means, unless otherwise agreed by the +Parties and the other persons appearing before a panel: + + (a) all documentary or other information presented to or + obtained by the competent investigating authority in + the course of the administrative proceeding, including + any governmental memoranda pertaining to the case, and + including any record of ex parte meetings as may be + required to be kept; + + (b) a copy of the final determination of the competent + investigating authority, including reasons for the + determination; + + (c) all transcripts or records of conferences or hearings + before the competent investigating authority; and + + (d) all notices published in the official journal of the + importing party in connection with the administrative + proceeding; + +antidumping statute as referred to in Articles 1902 and 1903 +means "antidumping statute" as defined in Annex 1911; + +competent investigating authority means "competent investigating +authority" of a Party, as defined in Annex 1911; + +countervailing duty statute as referred to in Articles 1902 and +1903 means "countervailing duty statute" as defined in Annex +1911; + +domestic law for the purposes of Article 1905(1) means a Party's +constitution, statutes, regulations and judicial decisions to the +extent they are relevant to the antidumping and countervailing +duty laws; + +final determination means "final determination" as defined in +Annex 1911; + +foreign interests includes exporters or producers of the Party +whose goods are the subject of the proceeding or, in the case of +a countervailing duty proceeding, the government of the Party +whose goods are the subject of the proceeding; + +general legal principles includes principles such as standing, +due process, rules of statutory construction, mootness and +exhaustion of administrative remedies; + +importing Party means the Party that issued the final +determination; + +involved Party means: + + (a) the importing Party; or + + (b) a Party whose goods are the subject of the final + determination; + +remand means a referral back for a determination not inconsistent +with the panel or committee decision; and + +standard of review means the standards set out in Annex 1911, as +may be amended from time to time by a Party. + +============================================================================= + + ANNEX 1901.2 + + Establishment of Binational Panels + + +1. Prior to the date of entry into force of this Agreement, the +Parties shall develop a roster of individuals to serve as +panelists in disputes under this Chapter. The roster shall +include sitting or retired judges to the fullest extent +practicable. The Parties shall consult in developing the roster, +which shall include at least 75 candidates. Each Party shall +select at least 25 candidates, and all candidates shall be +citizens of Canada, the United States or Mexico. Candidates +shall be of good character, high standing and repute, and shall +be chosen strictly on the basis of objectivity, reliability, +sound judgment and general familiarity with international trade +law. Candidates shall not be affiliated with a Party, and in no +event shall a candidate take instructions from a Party. Judges +shall not be considered to be affiliated with a Party. The +Parties shall maintain the roster, and may amend it, when +necessary, after consultations. + +2. A majority of the panelists on each panel shall be lawyers +in good standing. Within 30 days of a request for a panel, each +involved Party shall appoint two panelists, in consultation with +the other involved Party. The involved Parties normally shall +appoint panelists from the roster. If a panelist is not selected +from the roster, the panelist shall be chosen in accordance with +and be subject to the criteria of paragraph 1. Each involved +Party shall have the right to exercise four peremptory +challenges, to be exercised simultaneously and in confidence, +disqualifying from appointment to the panel up to four candidates +proposed by the other involved Party. Peremptory challenges and +the selection of alternative panelists shall occur within 45 days +of the request for the panel. If an involved Party fails to +appoint its members to a panel within 30 days or if a panelist is +struck and no alternative panelist is selected within 45 days, +such panelist shall be selected by lot on the 31st or 46th day, +as the case may be, from that Party's candidates on the roster. + +3. Within 55 days of the request for a panel, the involved +Parties shall agree on the selection of a fifth panelist. If the +involved Parties are unable to agree, they shall decide by lot +which of them shall select, by the 61st day, the fifth panelist +from the roster, excluding candidates eliminated by peremptory +challenges. + +4. Upon appointment of the fifth panelist, the panelists shall +promptly appoint a chairman from among the lawyers on the panel +by majority vote of the panelists. If there is no majority vote, +the chairman shall be appointed by lot from among the lawyers on +the panel. + +5. Decisions of the panel shall be by majority vote and based +upon the votes of all members of the panel. The panel shall +issue a written decision with reasons, together with any +dissenting or concurring opinions of panelists. + +6. Panelists shall be subject to the code of conduct +established pursuant to Article 1909. If an involved Party +believes that a panelist is in violation of the code of conduct, +the involved Parties shall consult and if they agree, the +panelist shall be removed and a new panelist shall be selected in +accordance with the procedures of this Annex. + +7. When a panel is convened pursuant to Article 1904 each +panelist shall be required to sign: + + (a) an application for protective order for information + supplied by the United States or its persons covering + business proprietary and other privileged information; + + (b) an undertaking for information supplied by Canada or + its persons covering confidential, personal, business + proprietary and other privileged information; or + + (c) an undertaking for information supplied by Mexico or + its persons covering confidential, business + proprietary, and other privileged information. + +8. Upon a panelist's acceptance of the obligations and terms of +an application for protective order or disclosure undertaking, +the importing Party shall grant access to the information covered +by such order or disclosure undertaking. Each Party shall +establish appropriate sanctions for violations of protective +orders or disclosure undertakings issued by or given to any +Party. Each Party shall enforce such sanctions with respect to +any person within its jurisdiction. Failure by a panelist to +sign a protective order or disclosure undertaking shall result in +disqualification of the panelist. + +9. If a panelist becomes unable to fulfill panel duties or is +disqualified, proceedings of the panel shall be suspended pending +the selection of a substitute panelist in accordance with the +procedures of this Annex. + +10. Subject to the code of conduct established pursuant to +Article 1909, and provided that it does not interfere with the +performance of the duties of such panelist, a panelist may engage +in other business during the term of the panel. + +11. While acting as a panelist, a panelist may not appear as +counsel before another panel. + +12. With the exception of violations of protective orders or +disclosure undertakings, signed pursuant to paragraph 7, +panelists shall be immune from suit and legal process relating to +acts performed by them in their official capacity. + +============================================================================= + + ANNEX 19O3.2 + + Panel Procedures Under Article 1903 + + +1. The panel shall establish its own rules of procedure unless +the Parties otherwise agree prior to the establishment of that +panel. The procedures shall ensure a right to at least one +hearing before the panel, as well as the opportunity to provide +written submissions and rebuttal arguments. The proceedings of +the panel shall be confidential, unless the two Parties otherwise +agree. The panel shall base its decisions solely upon the +arguments and submissions of the two Parties. + +2. Unless the Parties otherwise agree, the panel shall, within +90 days after its chairman is appointed, present to the two +Parties an initial written declaratory opinion containing +findings of fact and its determination pursuant to Article 1903. + +3. If the findings of the panel are affirmative, the panel may +include in its report its recommendations as to the means by +which the amending statute could be brought into conformity with +the provisions of Article 1902(2)(d). In determining what, if +any, recommendations are appropriate, the panel shall consider +the extent to which the amending statute affects interests under +this Agreement. Individual panelists may provide separate +opinions on matters not unanimously agreed. The initial opinion +of the panel shall become the final declaratory opinion, unless a +Party to the dispute requests a reconsideration of the initial +opinion pursuant to paragraph 4. + +4. Within 14 days of the issuance of the initial declaratory +opinion, a Party to the dispute disagreeing in whole or in part +with the opinion may present a written statement of its +objections and the reasons for those objections to the panel. In +such event, the panel shall request the views of both Parties and +shall reconsider its initial opinion. The panel shall conduct +any further examination that it deems appropriate, and shall +issue a final written opinion, together with dissenting or +concurring views of individual panelists, within 30 days of the +request for reconsideration. + +5. Unless the Parties to the dispute otherwise agree, the final +declaratory opinion of the panel shall be made public, along with +any separate opinions of individual panelists and any written +views that either Party may wish to be published. + +6. Unless the Parties to the dispute otherwise agree, meetings +and hearings of the panel shall take place at the office of the +amending Party's Section of the Secretariat. + ANNEX 1904.13 + + Extraordinary Challenge Procedure + + +1. The involved Parties shall establish an extraordinary +challenge committee, composed of three members, within 15 days of +a request pursuant to Article 1904(13). The members shall be +selected from a 15-person roster comprised of judges or former +judges of a federal judicial court of the United States or a +judicial court of superior jurisdiction of Canada, or a Federal +Judicial Court of Mexico. Each Party shall name five persons to +this roster. Each involved Party shall select one member from +this roster and the involved Partie's shall decide by lot which +of them shell select the third member from the roster. + +2. The Parties shall establish by the date of entry into force +of the Agreement rules of procedure for committees. The rules +shall provide for a decision of a committee within 90 days of its +establishment. + +3. Committee decisions shall be binding on the Parties with +respect to the particular matter between the Parties that was +before the panel. After examination of the legal and factual +analysis underlying the findings and conclusions of the panel's +decision in order to determine whether one of the grounds set out +in Article 1904(13) has been established, and upon finding that +one of those grounds has been established, the committee shall +vacate the original panel decision or remand it to the original +panel for action not inconsistent with the committee's decision; +if the grounds are not established, it shall deny the challenge +and, therefore, the original panel decision shall stand affirmed. +If the original decision is vacated, a new panel shall be +established pursuant to Annex 1901.2. + +============================================================================= + + ANNEX 1904.15(d) + + Amendments to Domestic Laws + + + Part A - Schedule of Canada + +1. Canada shall amend sections 56 and 58 of the Special Import +Measures Act, as amended, to allow the United States or Mexico or +a United States or a Mexican manufacturer, producer, or exporter, +without regard to payment of duties, to make a written request +for a re-determination; and section 59 to require the Deputy +Minister to make a ruling on a request for a redetermination +within one year of a request to a designated officer or other +customs officer; + +2. Canada shall amend section 18.3(1) of the Federal Court Act, +as amended, to render that section inapplicable to the United +States and to Mexico; and shall provide in its statutes or +regulations that persons (including producers of goods subject to +an investigation) have standing to ask Canada to request a panel +review where such persons would be entitled to commence domestic +procedures for judicial review if the final determination were +reviewable by the Federal Court pursuant to section 18.1(4); + +3. Canada shall amend the Special Import Measures Act, as +amended, and any other relevant provisions of law, to provide +that the following actions of the Deputy Minister shall be deemed +for the purposes of this Article to be final determinations +subject to judicial review: + + (a) a determination by the Deputy Minister pursuant to + section 41; + + (b) a re-determination by the Deputy Minister pursuant to + section 59; and + + (c) a review by the Deputy Minister of an undertaking + pursuant to section 53(1). + +4. Canada shall amend Part II of the Special Import Measures +Act, as amended, to provide for binational panel review +respecting goods of the Mexico and the United States; + +5. Canada shall amend Part II of the Special Import Measures +Act, as amended, to provide for definitions related to this +Agreement, as may be required; + +6. Canada shall amend Part II the Special Import Measures Act, +as amended, to permit the governments of Mexico and the United +States to request binational panel review of final +determinations; + +7. Canada shall amend Part II of Special Import Measures Act, +as amended, to provide for the establishment of panels requested +to review final determinations in respect of goods of Mexico and +goods of the United States; + +8. Canada shall amend Part II of Special Import Measures Act, +as amended, to provide for the conduct of review of a final +determination in accordance with Chapter XX of this Agreement; + +9. Canada shall amend Part II of the Special Import Measures +Act, as amended, to provide for request and conduct of an +extraordinary challenge proceeding in accordance with Article +1904 of this Agreement; + +10. Canada shall amend Part II of the Special Import Measures +Act, as amended, to provide for a code of conduct, immunity, +disclosure undertakings respecting confidential information and +remuneration for members of panels established pursuant to this +Agreement; and + +11. Canada shall make such amendments as are necessary to +establish a Canadian Secretariat for this Agreement and generally +to facilitate the operation of Chapter 19 of this Agreement. + + + Part B - Schedule of Mexico + + Mexico shall amend its antidumping and countervailing duty +statutes and regulations, and other statutes and regulations to +the extent that they apply to the operation of the antidumping +and countervailing duty laws, to provide the following: + +1. elimination of the possibility of imposing duties within the +five day period after the acceptance of a petition; substitution +of the term Resoluci¢n de Inicio for Resoluci¢n Provisional and +the term Resoluci¢n Provisional for Resoluci¢n que revisa a la +Resoluci¢n Provisional; + +2. full participation in the administrative process for +interested parties, including foreign interests, as well as the +right to administrative appeal and judicial review of final +determinations of investigations, reviews, product coverage or +other final decisions affecting them; + +3. elimination of the possibility of imposing provisional +duties before the issuance of a preliminary determination; + +4. the right to immediate access to review of final +determinations by binational panels, to interested parties, +including foreign interests, without the need to exhaust first +the administrative appeal; + +5. explicit and adequate timetables for determinations of the +competent investigating authority and for the submission of +questionnaires, evidence and comments by interested parties, +including foreign interests, as well as an opportunity for them +to present facts and arguments in support of their positions +prior to any final determination, to the extent time permits, +including an opportunity to be adequately informed in a timely +manner of and to comment on all aspects of preliminary +determinations of dumping or subsidization; + +6. written notice to interested parties, including foreign +interests, of any of the actions or resolutions rendered by the +competent investigating authority, including initiation of an +administrative review as well as its conclusion; + +7. disclosure meetings by the competent investigating authority +with interested parties, including foreign interests, in +investigations and reviews, within seven calendar days after the +date of publication in the Diario Oficial de la Federacion of +preliminary and final determinations, to explain the margins of +dumping and the amount of subsidies calculations and to provide +them with copies of sample calculations and, if used, computer +programs; + +8. timely access by eligible counsel of interested parties, +including foreign interests, during the course of the proceeding +(including disclosure meetings) and on appeal, either before a +national tribunal or a panel, to all information contained in the +administrative record of the proceeding, including confidential +information, excepting proprietary information of such a high +degree of sensitivity that its release would lead to substantial +and irreversible harm to the owner as well as government +classified information, subject to an undertaking for +confidentiality that strictly forbids use of the information for +personal benefit and its disclosure to persons who are not +authorized to receive such information; and for sanctions that +are specific to violations of undertakings in proceedings before +national tribunals or panels; + +9. timely access by interested parties, including foreign +interests, during the course of the proceeding, to all non- +confidential information contained in the administrative record +and access to such information by interested parties or their +representatives in any proceeding after 90 days following the +issuance of the final determination; + +10. a mechanism requiring that any person submitting documents +to the competent investigating authority shall simultaneously +serve on interested persons, including foreign interests, any +submissions after the complaint; + +11. preparation of summaries of ex parte meetings held between +the competent investigating authority and any interested party +and the inclusion in the administrative record of such summaries, +which shall be made available to parties to the proceeding; if +such summaries contain business proprietary information, such +documents must be disclosed to a party's representative under an +undertaking to ensure confidentiality; + +12. maintenance by the competent investigating authority of an +administrative record as defined in this Chapter and a +requirement that the final determination be based solely on the +administrative record; + +13. informing interested parties, including foreign interests, +in writing of all data and information the administering +authority requires them to submit for the investigation, review, +product coverage proceeding, or other antidumping and +countervailing duty proceedings; + +14. the right to an annual individual review on request by the +interested parties, including foreign interests, through which +they can obtain their own dumping margin or countervailing duty +rate, or can change the margin or rate they received in the +investigation or a previous review, reserving to the competent +investigating authority the ability to initiate a review, at any +time, on its own motion and requiring that the competent +investigating authority issue a notice of initiation within a +reasonable period of time after the request; + +15. application of determinations issued as a result of +judicial, administrative, or panel review, to the extent they are +relevant to interested parties, including foreign interests, in +addition to the plaintiff, so that all interested parties will +benefit; + +16. issuance of binding decisions by the competent investigating +authority if an interested party, including a foreign interest, +seeks clarification outside the context of an antidumping or +countervailing duty investigation or review as to whether a +particular product is covered by an antidumping or countervailing +duty order; + +17. a detailed statement of reasons and legal basis concerning +final determinations in a manner sufficient to permit interested +parties, including foreign interests, to make an informed +decision as to whether to seek judicial or panel review, +including an explanation of methodological or policy issues +raised in the calculation of dumping or subsidization; + +18. written notice to interested parties, including foreign +interests, and publication in the Diario Oficial de la Federacion +of initiation of investigations setting forth the nature of the +proceeding, the legal authority under which the proceeding is +initiated, and a description of the product at issue; + +19. documentation in writing of all advisory bodies' decisions +or recommendations, including the basis for the decision, and +release of such written decision to parties to the proceeding; +all decisions or recommendations of any advisory body shall be +placed in the administrative record and made available to parties +to the proceeding; and + +20. a standard of review to be applied by binational panels as +defined in Article 1911. + + + Part C - Schedule of the United States + +1. The United States shall amend section 301 of the Customs +Courts Act of 1980, as amended, and any other relevant provisions +of law, to eliminate the authority to issue declaratory judgments +in any civil action involving an antidumping or countervailing +duty proceeding regarding a class or kind of Canadian or Mexican +merchandise; + +2. The United States shall amend section 405(a) of the United +States-Canada Free-Trade Agreement Implementation Act of 1988, 19 +U.S.C. section 2112 note, to provide that the interagency group +established under section 242 of the Trade Expansion Act of 1962 +shall prepare a list of individuals qualified to serve as members +of binational panels, extraordinary challenge committees, and +special committees convened under chapter 19 of this Agreement; + +3. The United States shall amend section 405(b) of the United +States-Canada Free-Trade Agreement Implementation Act of 1988, 19 +U.S.C. section 2112 note, to provide that panelists selected to +serve on panels or committees convened pursuant to chapter XX of +this Agreement, and individuals designated to assist such +appointed individuals, shall not be considered employees of the +United States; + +4. The United States shall amend section 405(c) of the United +States-Canada Free-Trade Agreement Implementation Act of 1988, 19 +U.S.C. section 2112 note, to provide that panelists selected to +serve on panels or committees convened pursuant to chapter XX of +this Agreement, and individuals designated to assist the +individuals serving on such panels or committees, shall be immune +from suit and legal process relating to acts performed by such +individuals in their official capacity and within the scope of +their functions as such panelists or committee members, except +with respect to the violation of protective orders described in +section 777f(d)(3) of the Tariff Act of 1930; + +5. The United States shall amend section 405(d) of the United +States-Canada Free-Trade Agreement Implementation Act of 1988, 19 +U.S.C. section 2112 note, to establish a United States +Secretariat to facilitate, inter alia, the operation of chapter +XX of this Agreement and the work of the binational panels, +extraordinary challenge committees, and special committees +convened under that chapter; + +6. The United States shall amend section 407 of the United +States-Canada Free-Trade Agreement Implementation Act of 1988, 19 +U.S.C. section 2112 note, to provide on that an extraordinary +challenge committee convened pursuant to chapter XX of this +Agreement shall have authority to obtain information in the event +of an allegation that a member of a binational panel was guilty +of gross misconduct, bias, or a serious conflict of interest, or +otherwise materially violated the rules of conduct, and for the +committee to summon the attendance of witnesses, order the taking +of depositions, and obtain the assistance of any district or +territorial court of the United States in aid of the committee's +investigation; + +7. The United States shall amend section 408 of the United +States-Canada Free-Trade Agreement Implementation Act of 1988, 19 +U.S.C. section 2112 note, to provide that, in the case of a final +determination of a competent investigating authority of Mexico, +as well as Canada, the filing with the United States Secretary of +a request for binational panel review by a person described in +Article 1904.5 of this Agreement shall be deemed, upon receipt of +the request by the Secretary, to be a request for binational +panel review within the meaning of Article 1904.4 of that +Agreement; + +8. The United States shall amend section 516A of the Tariff Act +of 1930 to provide that judicial review of antidumping or +countervailing duty cases regarding Mexican, as well as Canadian, +merchandise shall not be commenced in the Court of International +Trade if binational panel review is requested; + +9. The United States shall amend section 516A(a) of the Tariff +Act of 1930 to provide that the time limits for commencing an +action in the Court of International Trade with regard to +antidumping or countervailing duty proceedings involving Mexican +or Canadian merchandise shall not begin to run until the 31st day +after the date of publication in the Federal Register of notice +of the final determination or the antidumping duty order; + +10. The United States shall amend section 516A(g) of the Tariff +Act of 1930 to provide, in accordance with the terms of this +Agreement, for binational panel review of antidumping and +countervailing duty cases involving Mexican or Canadian +merchandise. Such amendment shall provide that if binational +panel review is requested such review will be exclusive; + +11. The United States shall amend section 516A(g) of the Tariff +Act of 1930 to provide that the competent investigating authority +shall, within the period specified by any panel formed to review +a final determination regarding Mexican or Canadian merchandise, +take action not inconsistent with the decision of the panel or +committee; + +12. The United States shall amend section 777 of the Tariff Act +of 1930 to provide for the disclosure to authorized persons under +protective order of proprietary information in the administrative +record if binational panel review of a final determination +regarding Mexican or Canadian merchandise is requested; and + +13. The United States shall amend section 777 of the Tariff Act +of 1930 to provide for the imposition of sanctions on any person +who the competent investigating authority finds to have violated +a protective order issued by the competent investigating +authority of the United States or disclosure undertakings entered +into with an authorized agency of Mexico or with a competent +investigating authority of Canada to protect proprietary material +during binational panel review. + +============================================================================= + + ANNEX 1905.7 + + Special Committee Procedures + + +1. The Parties shall establish rules of procedure by the date +of entry into force of this Agreement in accordance with the +following principles: + + (a) the procedures shall assure a right to at least one + hearing before the special committee as well as the + opportunity to provide initial and rebuttal written + submissions; + + (b) the procedures shall assure that the special committee + shall prepare an initial report typically within + 60 days of the appointment of the last member, and + shall afford the Parties 14 days to comment on that + report prior to issuing a final report 30 days after + presentation of the initial report; + + (c) the special committee's hearings, deliberations, and + initial report, and all written submissions to and + communications with the special committee shall be + confidential; + + (d) unless the parties to the dispute otherwise agree, the + decision of the special committee shall be published 10 + days after it is transmitted to the disputing Parties, + along with any separate opinions of individual members + and any written views that either Party may wish to be + published; and + + (e) unless the Parties to the dispute otherwise agree, + meetings and hearings of the special committee shall + take place at the office of the section of the + Secretariat of the Party complained against. + +============================================================================= + + ANNEX 1911 + + Country-Specific Definitions + + +For purposes of this Chapter: + +antidumping statute means: + + (a) in the case of Canada, the relevant provisions of the + Special Import Measures Act, as amended, and any + successor statutes; + + (b) in the case of the United States, the relevant + provisions of Title VII of the Tariff Act of 1930, as + amended, and any successor statutes; + + (c) in the case of Mexico, the relevant provisions of the + Ley Reglamentaria del Art¡culo 131 de la Constituci¢n + Pol¡tica de los Estados Unidos Mexicanos en Materia de + Comercio Exterior Implementing Article 131 of the + Constitution of the United Mexican States, as amended, + and any successor statutes; and + + (d) the provisions of any other statute that provides for + judicial review of final determinations under + subparagraph (a), (b) or (c), or indicates the standard + of review to be applied to such determinations. + +competent investigating authority means: + + (a) in the case of Canada; + + (i) the Canadian International Trade Tribunal, or its + successor, or + + (ii) the Deputy Minister of National Revenue for + Customs and Excise as defined in the Special + Import Measures Act, or the Deputy Minister's + successor; + + (b) in the case of the United States; + + (i) the International Trade Administration of the + United States Department of Commerce, or its + successor, or + + (ii) the United States International Trade Commission, + or its successor; and + + (c) in the case of Mexico, the designated authority within + the Secretar¡a de Comercio y Fomento Industrial, or its + successor. + +countervailing duty statute means: + + (a) in the case of Canada, the relevant provisions of the + Special Import Measures Act, as amended, and any + successor statutes; + + (b) in the case of the United States, section 303 and the + relevant provisions of Title VII of the Tariff Act of + 1930, as amended, and any successor statutes; + + (c) in the case of Mexico, the relevant provisions of the + Ley Reglamentaria del Art¡culo 131 de la Constituci¢n + Pol¡tica de los Estados Unidos Mexicanos en Materia de + Comercio Exterior, as amended, and any successor + statutes; and + + (d) the provisions of any other statute that provides for + judicial review of final determinations under + subparagraph (a), (b) or (c), or indicates the standard + of review to be applied to such determinations. + +final determination means: + + (a) in the case of Canada, + + (i) an order or finding of the Canadian International + Trade Tribunal under subsection 43(1) of the + Special Import Measures Act, + + (ii) an order by the Canadian International Trade + Tribunal under subsection 76(4) of the Special + Import Measures Act, continuing an order or + finding made under subsection 43(1) of the Act + with or without amendment, + + (iii) a determination by the Deputy Minister of + National Revenue for Customs and Excise + pursuant to section 41 of the Special Import + Measures Act, + + (iv) a re-determination by the Deputy Minister pursuant + to section 59 of the Special Import Measures Act, + + (v) a decision by the Canadian International Trade + Tribunal pursuant to subsection 76(3) of the + Special Import Measures Act not to initiate a + review, + + (vi) a reconsideration by the Canadian International + Trade Tribunal pursuant to subsection 91(3) of the + Special Import Measures Act, and + + (vii) a review by the Deputy Minister of an + undertaking pursuant to section 53(1) of the + Special Import Measures Act; + + (b) in the case of the United States, + + (i) a final affirmative determination by the + International Trade Administration of the United + States Department of Commerce or by the United + States International Trade Commission under + section 705 or 735 of the Tariff Act of 1930, as + amended, including any negative part of such a + determination, + + (ii) a final negative determination by the + International Trade Administration of the United + States Department of Commerce or by the United + States International Trade Commission under + section 705 or 735 of the Tariff Act of 1930, as + amended, including any affirmative part of such a + determination, + + (iii) a final determination, other than a + determination in (iv), under section 751 of + the Tariff Act of 1930, as amended, + + (iv) a determination by the United States International + Trade Commission under section 751(b) of the + Tariff Act of 1930, as amended, not to review a + determination based upon changed circumstances, + and + + (v) a final determination by the International Trade + Administration of the United States Department of + Commerce as to whether a particular type of + merchandise is within the class or kind of + merchandise described in an existing finding of + dumping or antidumping or countervailing duty + order; and + + (c) in the case of the Mexico, + + (i) a final resolution regarding anti-dumping or + countervailing duties investigations by the + Secretar¡a de Comercio y Fomento Industrial, + pursuant to Article 13 of the Ley Reglamentaria + del Art¡culo 131 de la Constituci¢n Pol¡tica de + los Estados Unidos Mexicanos en Materia de + Comercio Exterior, as amended, + + (ii) a final resolution regarding an annual + administrative review of anti-dumping or + countervailing duties by the Secretar¡a de + Comercio y Fomento Industrial, as described in + Article 1904.15(q)(xiv), and + + (iii) a final resolution by the Secretaria de + Comercio y Fomento Industrial as to whether a + particular type of merchandise is within the + class or kind of merchandise described in an + existing antidumping or countervailing duty + resolution. + +standard of review means: + + (a) in the case of Canada, the grounds set forth in section + 18.1(4) of the Federal Court Act with respect to all + final determinations; + + (b) in the case of the United States, + + (i) the standard set forth in section 516A(b)(l)(B) of + the Tariff Act of 1930, as amended, with the + exception of a determination referred to in (ii), + and + + (ii) the standard set forth in section 516A(b)(l)(A) of + the Tariff Act of 1930, as amended, with respect + to a determination by the United States + International Trade Commission not to initiate a + review pursuant to section 751(b) of the Tariff + Act of 1930, as amended; and + + (c) in the case of the Mexico, the standard set forth in + Article 238 of the C¢digo Fiscal de la Federaci¢n, or + any successor statutes, based solely on the + administrative record. +NAFTA Chapter Twenty Institutional Arrangements and Dispute Settlement Procedures + + + Subchapter A - Institutions + + +Article 2001: The Free Trade Commission + +1. The Parties hereby establish the Free Trade Commission, +comprising cabinet-level representatives of the Parties or their +designees. + +2. The Commission shall: + + (a) supervise the implementation of this Agreement; + + (b) oversee its further elaboration; + + (c) resolve disputes that may arise regarding its + interpretation or application; + + (d) supervise the work of all committees and working groups + established under this Agreement, referred to in Annex + 2001.2; and + + (e) consider any other matter that may affect the operation + of this Agreement. + +3. The Commission may: + + (a) establish, and delegate responsibilities to, ad hoc or + standing committees, working groups or expert groups; + + (b) seek the advice of non-governmental persons or groups; + and + + (c) take such other action in the exercise of its functions + as the Parties may agree. + +4. The Commission shall establish its rules and procedures. +All decisions of the Commission shall be taken by consensus, +except as the Commission may otherwise agree. + +5. The Commission shall convene at least once a year in regular +session. Regular sessions of the Commission shall be chaired +successively by each Party. + + +Article 2002: The Secretariat + +1. The Commission shall establish and oversee a Secretariat +comprising national Sections. + +2. Each Party shall: + + (a) establish a permanent office of its Section; + + (b) be responsible for + + (i) the operation and costs of its Section, and + + (ii) the remuneration and payment of expenses of + panelists and members of committees and scientific + review boards established under this Agreement, as + set out in Annex 2002.2; + + (c) designate an individual to serve as Secretary for its + Section, who shall be responsible for its + administration and management; and + + (d) notify the Commission of the location of its Section's + office. + +3. The Secretariat shall: + + (a) provide assistance to the Commission; + + (b) provide administrative assistance to: + + (i) panels and committees established under Chapter + Nineteen (Review and Dispute Settlement in + Antidumping and Countervailing Duty Matters), in + accordance with the procedures established + pursuant to Article 1908, and + + (ii) panels established under this Chapter, in + accordance with procedures established pursuant to + Article 2012; and + + (c) as the Commission may direct: + + (i) support the work of other committees and groups + established under this Agreement, and + + (ii) otherwise facilitate the operation of this + Agreement. + + + + Subchapter B - Dispute Settlement + + +Article 2003: Cooperation + + The Parties shall at all times endeavor to agree on the +interpretation and application of this Agreement, and shall make +every attempt through cooperation and consultations to arrive at +a mutually satisfactory resolution of any matter that might +affect its operation. + + +Article 2004: Recourse to Dispute Settlement Procedures + + Except as otherwise provided in this Agreement, the dispute +settlement provisions of this Chapter shall apply with respect to +the avoidance or settlement of all disputes between the Parties +regarding the interpretation or application of this Agreement or +wherever a Party considers that an actual or proposed measure of +another Party is or would be inconsistent with the obligations of +this Agreement or cause nullification or impairment in the sense +of Annex 2004. + + +Article 2005: GATT Dispute Settlement + +1. Subject to paragraphs 2, 3 and 4, disputes regarding any +matter arising under both this Agreement and the General +Agreement on Tariffs and Trade, any agreement negotiated +thereunder, or any successor agreement (GATT), may be settled in +either forum at the discretion of the complaining Party. + +2. Before a Party initiates a dispute settlement proceeding in +the GATT against another Party on grounds that are substantially +equivalent to those available to that Party under this Agreement, +that Party shall notify any third Party of its intention. If a +third Party wishes to have recourse to dispute settlement +procedures under this Agreement regarding the matter, it shall +inform promptly the notifying Party and those Parties shall +consult with a view to agreement on a single forum. If those +Parties cannot agree, the dispute normally shall be settled under +this Agreement. + +3. In any dispute referred to in paragraph 1 where the +responding Party claims that its action is subject to Article 104 +(Relation to Environmental and Conservation Agreements) and +requests in writing that the matter be considered under this +Agreement, the complaining Party may, in respect of that matter, +thereafter have recourse to dispute settlement procedures solely +under this Agreement. + +4. In any dispute referred to in paragraph 1 that arises under +Subchapter Seven-B (Sanitary and Phytosanitary Measures) or +Chapter Nine (Standards-Related Measures). + + (a) concerning a measure adopted or maintained by a Party + to protect its human, animal, or plant life or health, + or to protect its environment; and + + (b) that raises factual issues concerning the environment, + health, safety or conservation, including directly + related scientific matters, + +where the responding Party requests in writing that the matter be +considered under this Agreement, the complaining Party may, in +respect of that matter, thereafter have recourse to dispute +settlement procedures solely under this Agreement. + +5. The responding Party shall deliver a copy of a request made +pursuant to paragraph 3 or 4 to the other Parties and to its +Section of the Secretariat. Where the complaining Party has +initiated dispute settlement proceedings regarding any matter +subject to paragraph 3 or 4, the responding Party shall deliver +its request no later than 15 days thereafter. Upon receipt of +such request, the complaining Party shall promptly withdraw from +participation in those proceedings and may initiate dispute +settlement procedures under Article 2007. + +6. Once dispute settlement procedures have been initiated under +Article 2007 or dispute settlement proceedings have been +initiated under the GATT, the forum selected shall be used to the +exclusion of the other, unless a Party makes a request pursuant +to paragraph 3 or 4. + +7. For purposes of this Article, dispute settlement proceedings +under the GATT are deemed to be initiated by a Party's request +for a panel, such as under Article XXIII:2 of the General +Agreement on Tariffs and Trade 1947, or for a committee +investigation, such as under Article 20.1 of the Customs +Valuation Code. + + +Consultations + +Article 2006: Consultations + +1. Any Party may request in writing consultations with any +other Party regarding any actual or proposed measure or any other +matter that it considers might affect the operation of this +Agreement. + +2. The requesting Party shall deliver the request to the other +Parties and to its Section of the Secretariat. + +3. Unless the Commission otherwise provides in its rules and +procedures established under Article 2001(4), a third Party that +considers it has a substantial interest in the matter shall be +entitled to participate in the consultations on delivery of +written notice to the other Parties and to its Section of the +Secretariat. + +4. Consultations on matters regarding perishable agricultural +goods shall commence within 15 days of the date of delivery of +the request. + +5. The consulting Parties shall make every attempt to arrive at +a mutually satisfactory resolution of any matter through +consultations under this Article or other consultative provisions +of this Agreement. To this end, the consulting Parties shall: + + (a) provide sufficient information to enable a full + examination of how the actual or proposed measure or + other matter might affect the operation of this + Agreement; + + (b) treat any confidential or proprietary information + exchanged in the course of consultations on the same + basis as the Party providing the information; and + + (c) seek to avoid any resolution that adversely affects the + interests under this Agreement of any other Party. + + +Initiation of Procedures + +Article 2007: Commission - Good Offices, Conciliation and + Mediation + +1. If the consulting Parties fail to resolve a matter pursuant +to Article 2006 within: + + (a) 30 days of delivery of a request for consultations; + + (b) 45 days of delivery of such request if any other Party + has subsequently requested or has participated in + consultations regarding the same matter; + + (c) 15 days of delivery of a request for consultations in + matters regarding perishable agricultural goods; or + + (d) such other period as they may agree, + +any such Party may request in writing a meeting of the +Commission. + +2. A Party may also request in writing a meeting of the +Commission where: + + (a) it has initiated dispute settlement proceedings under + the GATT regarding any matter subject to Article + 2005(3) or (4), and has received a request pursuant to + Articles 2005(5) for recourse to dispute settlement + procedures under this Chapter; or + + (b) consultations have been held pursuant to Article 513 + (Working Group on Rules of Origin), Article 765 + (Sanitary and Phytosanitary Measures - Technical + Consultations) and Article 914 (Standards-Related + Measures - Technical Consultations). + +3. The requesting Party shall state in the request the measure +or other matter complained of and indicate the provisions of this +Agreement that it considers relevant, and shall deliver the +request to the other Parties and to its Section of the +Secretariat. + +4. Unless it decides otherwise, the Commission shall convene +within 10 days of delivery of the request and shall endeavor to +resolve the dispute promptly. + +5. The Commission may: + + (a) call on such technical advisers or create such working + groups or expert groups as it deems necessary; + + (b) have recourse to good offices, conciliation, mediation + or such other dispute resolution procedures; or + + (c) make recommendations, + +as may assist the consulting Parties to reach a mutually +satisfactory resolution of the dispute. + +6. Unless it decides otherwise, the Commission shall +consolidate two or more proceedings before it pursuant to this +Article regarding the same measure. The Commission may +consolidate two or more proceedings regarding other matters +before it pursuant to this Article that it determines are +appropriate to be considered jointly. + + +Panel Proceedings + +Article 2008: Request for an Arbitral Panel + +1. If the Commission has convened pursuant to Article 2007(4), +and the matter has not been resolved within: + + (a) 30 days thereafter; + + (b) 30 days after the Commission has convened in respect of + the matter most recently referred to it, where + proceedings have been consolidated pursuant to Article + 2007(6); or + + (c) such other period as the consulting Parties may agree, + +any consulting Party may request in writing the establishment of +an arbitral panel. The requesting Party shall deliver the +request to the other Parties and to its Section of the +Secretariat. + +2. Upon delivery of the request, the Commission shall establish +an arbitral panel. + +3. A third Party that considers it has a substantial interest +in the matter shall be entitled to join as a complaining Party, +on delivery of written notice of its intention to participate to +the disputing Parties and its Section of the Secretariat. Such +notice shall be delivered at the earliest possible time, and in +any event no later than seven days after the date of delivery of +a request by a Party for the establishment of a panel. + +4. If such Party does not join as a complaining Party in +accordance with paragraph 3, it normally shall refrain thereafter +from initiating or continuing: + + (a) a dispute settlement procedure under this Agreement; or + + + (b) a dispute settlement proceeding in the GATT on grounds + that are substantially equivalent to those available to + that Party under this Agreement, + +regarding the same matter in the absence of a significant change +in economic or commercial circumstances. + +5. Unless otherwise agreed by the disputing Parties, the panel +shall be established and perform its functions in a manner +consistent with the provisions of this Chapter. + + +Article 2009: Roster + +1. The Parties shall establish and maintain a roster of up to +30 individuals who are willing and able to serve as panelists. +The roster members shall be appointed by consensus for terms of +three years, and may be reappointed. + +2. Roster members shall: + + (a) have expertise or experience in law, international + trade, other matters covered by this Agreement, or the + resolution of disputes arising under international + trade agreements, and shall be chosen strictly on the + basis of objectivity, reliability and sound judgment; + + (b) be independent of, and not be affiliated with or take + instructions from, any Party; and + + (c) comply with a code of conduct to be established by the + Commission. + + +Article 2010: Qualifications of Panelists + +1. All panelists shall meet the qualifications set out in +Article 2009(2). + +2. Individuals may not serve as panelists for a dispute in +which they have participated pursuant to Article 2007(5). + + +Article 2011: Panel Selection + +1. Where there are two disputing Parties, the following +procedures shall apply: + + (a) The panel shall comprise five members. + + (b) The disputing Parties shall endeavor to agree on the + chair of the panel within 15 days of the delivery of + the request for the establishment of the panel. If the + disputing Parties are unable to agree on the chair + within this period, the disputing Party chosen by lot + shall select within five days as chair an individual + who is not a citizen of that Party. + + (c) Within 15 days of selection of the chair, each + disputing Party shall select two panelists who are + citizens of the other disputing Party. + + (d) If a disputing Party fails to select its panelists + within such period, such panelists shall be selected by + lot from among the roster members who are citizens of + the other disputing Party. + +2. Where there are more than two disputing Parties, the +following procedures shall apply: + + (a) The panel shall comprise five members. + + (b) The disputing Parties shall endeavor to agree on the + chair of the panel within 15 days of the delivery of + the request for the establishment of the panel. If the + disputing Parties are unable to agree on the chair + within this period, the Party or Parties on the side of + the dispute chosen by lot shall select within 10 days a + chair who is not a citizen of such Party or Parties. + + (c) Within 15 days of selection of the chair, the Party + complained against shall select two panelists, one of + whom is a citizen of a complaining Party, and the other + of whom is a citizen of another complaining Party. The + complaining Parties shall select two panelists who are + citizens of the Party complained against. + + (d) If any disputing Party fails to select a panelist + within such period, such panelist shall be selected by + lot in accordance with the citizenship criteria of + subparagraph (c). + +3. Panelists shall normally be selected from the roster. Any +disputing Party may exercise a peremptory challenge against any +individual not on the roster who is proposed as a panelist by a +disputing Party within 15 days after the individual has been +proposed. + +4. If a disputing Party believes that a panelist is in +violation of the code of conduct, the disputing Parties shall +consult and if they agree, the panelist shall be removed and a +new panelist shall be selected in accordance with this Article. + + +Article 2012: Rules of Procedure + +1. The Commission shall establish Model Rules of Procedure, in +accordance with the following principles: + + (a) The procedures shall assure a right to at least one + hearing before the panel as well as the opportunity to + provide initial and rebuttal written submissions. + + (b) The panel's hearings, deliberations and initial report, + and all written submissions to and communications with + the panel shall be confidential. + +2. Unless the disputing Parties otherwise agree, the panel +shall conduct its proceedings in accordance with the Model Rules +of Procedure. + +3. Unless the disputing Parties otherwise agree within 20 days +from the date of the delivery of the request for the +establishment of the panel, the terms of reference shall be: + + "To examine, in the light of the relevant provisions of + the NAFTA, the matter referred to the Commission (as + set out in the request for a Commission meeting) and to + make findings, determinations and recommendations as + provided in Article 2016(2)." + +4. If a complaining Party wishes to argue that a matter has +nullified or impaired benefits, the terms of reference shall so +indicate. + +5. If a disputing Party wishes the panel to make findings as to +the degree of adverse trade effects on any Party of any measure +found not to conform with the obligations of the Agreement or to +have caused nullification or impairment in the sense of Annex +2004, the terms of reference shall so indicate. + +Article 2013: Third Party Participation + + A Party that is not a disputing Party, on delivery of a +written notice to the disputing Parties and to its Section of the +Secretariat, shall be entitled to attend all hearings, to make +written and oral submissions to the panel and to receive written +submissions of the disputing Parties. + + +Article 2014: Role of Experts + + At the request of a disputing Party, or on its own +initiative, the panel may seek information and technical advice +from any person or body that it deems appropriate, provided that +the disputing Parties so agree and subject to such terms and +conditions as such Parties may agree. + + +Article 2015: Scientific Review Boards + +1. At the request of a disputing Party or, unless the disputing +Parties disapprove, on its own initiative, the panel may request +a written report of a scientific review board on any factual +issue concerning environmental, health, safety or other +scientific matters raised by a disputing Party in a proceeding, +subject to such terms and conditions as such Parties may agree. + +2. The board shall be selected by the panel from among highly +qualified, independent experts in the scientific matters, after +consultations with the disputing Parties and the scientific +bodies set out in the Model Rules of Procedure established +pursuant to Article 2012(1). + +3. The participating Parties shall be provided: + + (a) advance notice of, and an opportunity to provide + comments to the panel on, the proposed factual issues + to be referred to the board; and + + (b) a copy of the board's report and an opportunity to + provide comments on the report to the panel. + +4. The panel shall take the board's report and any comments by +the Parties thereon into account in the preparation of its +report. + + +Article 2016: Initial Report + +1. Unless the disputing Parties otherwise agree, the panel +shall base its report on the submissions and arguments of the +Parties and on any information before it pursuant to Article 2014 +or 2015. + +2. Unless the disputing Parties otherwise agree, the panel +shall, within 90 days after the last panelist is selected or such +other period as the Model Rules of Procedure established pursuant +to Article 2012(1) may provide, present to the disputing Parties +an initial report containing: + + (a) findings of fact, including any findings pursuant to a + request under Article 2012(5); + + (b) its determination as to whether the measure at issue is + or would be inconsistent with the obligations of this + Agreement or cause nullification or impairment in the + sense of Annex 2004, or any other determination + requested in the terms of reference; and + + (c) its recommendations, if any, for resolution of the + dispute. + +3. Panelists may furnish separate opinions on matters not +unanimously agreed. + +4. A disputing Party may submit written comments to the panel +on its initial report within 14 days of presentation of the +report. + +5. In such an event, and after considering such written +comments, the panel, on its own initiative or at the request of +any disputing Party, may: + + (a) request the views of any participating Party; + + (b) reconsider its report; and + + (c) make any further examination that it considers + appropriate. + + +Article 2017: Final Report + +1. The panel shall present to the disputing Parties a final +report, including any separate opinions on matters not +unanimously agreed, within 30 days of presentation of the initial +report, unless the disputing Parties otherwise agree. + +2. No panel may, either in its initial report or its final +report, disclose which panelists are associated with majority or +minority opinions. + +3. The disputing Parties shall transmit to the Commission the +final report of the panel, including any report of a scientific +review board established under Article 2015, as well as any +written views that a disputing Party desires to be appended, on a +confidential basis within a reasonable period of time after it is +presented to them. + +4. Unless the Commission decides otherwise, the final report of +the panel shall be published 15 days after it is transmitted to +the Commission. + + +Implementation of Panel Reports + +Article 2018: Implementation of Final Report + +1. On receipt of the final report of a panel, the disputing +Parties shall agree on the resolution of the dispute, which +normally shall conform with the determinations and +recommendations of the panel, and shall notify their Sections of +the Secretariat of any agreed resolution of any dispute. + +2. Whenever possible, such resolution shall be +non-implementation or removal of a measure not conforming with +this Agreement or causing nullification or impairment in the +sense of Annex 2004 or, failing such a resolution, compensation. + + +Article 2019: Non-Implementation - Suspension of Benefits + +1. If in its final report a panel has determined that a measure +is inconsistent with the obligations of this Agreement or causes +nullification or impairment in the sense of Annex 2004 and the +Party complained against has not reached agreement with any +complaining Party on a mutually satisfactory resolution pursuant +to Article 2018(1) within 30 days of receiving the final report, +such complaining Party may suspend the application to the Party +complained against of benefits of equivalent effect until such +time as they have reached agreement on a resolution of the +dispute. + +2. In considering what benefits to suspend pursuant to +paragraph 1: + + (a) a complaining Party should first seek to suspend + benefits in the same sector or sectors as that affected + by the measure or other matter that the panel has found + to be inconsistent with the obligations of this + Agreement or to have caused nullification or impairment + by the non-complying Party in the sense of Annex 2004; + and + + (b) a complaining Party that considers it is not + practicable or effective to suspend benefits in the + same sector or sectors may suspend benefits in other + sectors. + +3. On the written request of any disputing Party delivered to +the other Parties and its Section of the Secretariat, the +Commission shall establish a panel to determine whether the level +of benefits suspended by a Party pursuant to paragraph 1 is +manifestly excessive. + +4. The panel proceedings shall be conducted in accordance with +the Model Rules of Procedure. The panel shall present its +determination within 60 days after the last panelist is selected +or such other period as the disputing Parties may agree. + + + + Subchapter C - Domestic Proceedings + and Private Commercial Dispute Settlement + + +Article 2020: Referrals of Matters from Judicial or + Administrative Proceedings + +1. If an issue of interpretation or application of this +Agreement arises in any domestic judicial or administrative +proceeding of a Party that any Party considers would merit its +intervention, or if a court or administrative body solicits the +views of a Party, that Party shall notify the other Parties and +its Section of the Secretariat. The Commission shall endeavor to +agree on an appropriate response as expeditiously as possible. + +2. The Party in whose territory the court or administrative +body is located shall submit any agreed interpretation of the +Commission to the court or administrative body in accordance with +the rules of that forum. + +3. If the Commission is unable to agree, any Party may submit +its own views to the court or administrative body in accordance +with the rules of that forum. + + +Article 2021: Private Rights + + No Party may provide for a right of action under its +domestic law against any other Party on the ground that a measure +of another Party is inconsistent with this Agreement. + + +Article 2022: Alternative Dispute Resolution of Commercial +Disputes + +1. Each Party shall, to the maximum extent possible, encourage +and facilitate the use of arbitration and other means of +alternative dispute resolution for the settlement of +international commercial disputes between private parties in the +free trade area. + +2. To this end, each Party shall provide appropriate procedures +to ensure observance of agreements to arbitrate and for the +recognition and enforcement of arbitral awards in such disputes. + +3. A Party shall be deemed to be in compliance with paragraph 2 +if it is a party to and is in compliance with the 1958 United +Nations Convention on the Recognition and Enforcement of Foreign +Arbitral Awards or the 1975 Inter-American Convention on +International Commercial Arbitration. + +4. The Commission shall establish an Advisory Committee on +Private Commercial Disputes comprising persons with expertise or +experience in the resolution of private international commercial +disputes. The Committee shall report and provide recommendations +to the Commission on general issues referred to it by the +Commission respecting the availability, use and effectiveness of +arbitration and other procedures for the resolution of such +disputes in the free trade area. + +============================================================================= + + ANNEX 2001.2 + + Committees and Working Groups + + +A. Committees: + + 1. Committee on Trade in Goods (Article 317) + + 2. Committee on Trade in Worn Clothing (Annex 300-B, + Section 9.1) + + 3. Committee on Agricultural Trade (Article 708) + + 4. Committee on Sanitary and Phytosanitary Measures + (Article 764) + + 5. Committee on Standards-Related Measures (Article 913) + + (a) Land Transportation Services Standards + Subcommittee (Article 913(5)) + + (b) Telecommunications Standards Subcommittee (Article + 913(5)) + + (c) Automotive Standards Council (Article 913(5)) + + (d) Subcommittee on Labelling of Textile and Apparel + Goods (Article 913(5)) + + 6. Committee on NAFTA Small Business (Article 1021) + + 7. Financial Services Committee (Article 1414) + + 8. Advisory Committee on Private Commercial Disputes + (Article 2022) + + +B. Working Groups: + + 1. Working Group on Rules of Origin (Article 513) + + (a) Customs Subgroup (Article 513(5)) + + 2. Working Group on Agricultural Subsidies (Article + 706(6)) + + 3. Mexican-American Working Group (Article 704(3), Section + I) + + 4. Mexican-Canadian Working Group (Article 704(3), Section + II) + + 5. Working Group on Trade and Competition (Article 1504) + + 6. Temporary Entry Working Group (Article 1605) + + +C. Other Committees and Working Groups established under this + Agreement + +============================================================================= + + ANNEX 2002.2 + + Remuneration and Payment of Expenses + + +1. The Commission shall establish the amounts of remuneration +and expenses that will be paid to the panelists, committee +members and members of scientific review boards. + +2 The remuneration of panelists or committee members and their +assistants, members of scientific review boards, their travel and +lodging expenses, and all general expenses of panels, committees +or scientific review boards shall be borne equally by: + + (a) in the case of panels or committees established under + Chapter Nineteen (Review and Dispute Settlement in + Antidumping and Countervailing Duty Matters), the + involved Parties, as they are defined in Article 1911; + or + + (b) in the case of panels and scientific review boards + established under this Chapter, the disputing Parties. + +3. Each panelist shall keep a record and render a final account +of the person's time and expenses, and the panel, committee or +scientific review board shall keep a record and render a final +account of all general expenses. + +============================================================================= + + ANNEX 2004 + + Nullification and Impairment + + +1. If any Party considers that any benefit it could reasonably +have expected to accrue to it under any provision of: + + (a) Part Two (Trade in Goods), except for those provisions + of Annex 300-A (Automotive Sector) or Chapter Six + (Energy) relating to investment, + + (b) Part Three (Technical Barriers to Trade), + + (c) Chapter Twelve (Cross-Border Trade in Services), or + + (d) Part Six (Intellectual Property), + +is being nullified or impaired as a result of the application of +any measure that is not inconsistent with this Agreement, the +Party may have recourse to dispute settlement under this Chapter. + +2. A Party may not invoke: + + (a) paragraph (1)(a) or (b), to the extent that the benefit + arises from any cross-border trade in services + provision of Part Two, or + + (b) paragraph (1)(c) or (d), + +with respect to any measure subject to an exception under Article +2101 (General Exceptions). + +NAFTA PART NINE OTHER PROVISIONS + Chapter Twenty-One + + Exceptions + + + +Article 2101: General Exceptions + +1. For purposes of: + + (a) Part Two (Trade in Goods), except to the extent that a + provision of that Part applies to services or + investment, and + + (b) Part Three (Technical Barriers to Trade), except to the + extent that a provision of that Part applies to + services, + +GATT Article XX and its interpretative notes, or any equivalent +provision of a successor agreement to which all Parties are +party, are incorporated into and made part of this Agreement. +The Parties understand that the measures referred to in GATT +Article XX(b) include environmental measures necessary to protect +human, animal or plant life or health, and that GATT Article +XX(g) applies to measures relating to the conservation of living +and non-living exhaustible natural resources. + +2. Provided that such measures are not applied in a manner that +would constitute a means of arbitrary or unjustifiable +discrimination between countries where the same conditions +prevail or a disguised restriction on trade between the Parties, +nothing in: + + (a) Part Two (Trade in Goods), to the extent that a + provision of that Part applies to services, + + (b) Part Three (Technical Barriers to Trade), to the extent + that a provision of that Part applies to services, + + (c) Chapter Twelve (Cross-Border Trade in Services), and + + (d) Chapter Thirteen (Telecommunications), + +shall be construed to prevent the adoption or enforcement by any +Party of measures necessary to secure compliance with laws or +regulations that are not inconsistent with the provisions of this +Agreement, including those relating to health and safety and +consumer protection, or + +3. Provided that such measures are not applied in an arbitrary +or unjustifiable manner, or do not constitute a disguised +restriction on international trade or investment, nothing in +Article 1106(1)(b) or (c) or (3)(a) or (b) (Performance +Requirements) shall be construed to prevent any Party from +adopting or maintaining measures, including environmental +measures: + + (a) necessary to secure compliance with laws and + regulations that are not inconsistent with the + provisions of this Agreement; + + (b) necessary to protect human, animal or plant life or + health; or + + (c) necessary for the conservation of living or non-living + exhaustible natural resources. + + +Article 2102: National Security + +1. Subject to Articles 607 (Energy) and 1018 (Government +Procurement), nothing in this Agreement shall be construed: + + (a) to require any Party to furnish or allow access to any + information the disclosure of which it determines to be + contrary to its essential security interests; + + (b) to prevent any Party from taking any actions that it + considers necessary for the protection of its essential + security interests + + (i) relating to the traffic in arms, ammunition and + implements of war and to such traffic and + transactions in other goods, materials, services + and technology undertaken directly or indirectly + for the purpose of supplying a military or other + security establishment, + + (ii) taken in time of war or other emergency in + international relations, or + + (iii) relating to the implementation of national + policies or international agreements + respecting the non-proliferation of nuclear + weapons or other nuclear explosive devices; + or + + (c) to prevent any Party from taking action in pursuance of + its obligations under the United Nations Charter for + the maintenance of international peace and security. + + +Article 2103: Taxation + +1. Except as set out in this Article, nothing in this Agreement +shall apply to taxation measures. + +2. Nothing in this Agreement shall affect the rights and +obligations of any Party under any tax convention. In the event +of any inconsistency between the provisions of this Agreement and +any such convention, the provisions of that convention shall +prevail to the extent of the inconsistency. + +3. Notwithstanding paragraph 2: + + (a) Article 301 (Market Access - National Treatment) and + such other provisions of this Agreement as are + necessary to give effect to that Article shall apply to + taxation measures to the same extent as does Article + III of the GATT, and + + (b) Article 315 (Market Access - Export Taxes) and Article + 604 (Energy - Export Taxes), + +shall apply to taxation measures. + +4. Subject to paragraph 2: + + (a) Article 1202 (Cross-Border Trade in Services - National + Treatment) and Article 1407 (Financial Services - + National Treatment) shall apply to taxation measures on + income, capital gains or on the taxable capital of + corporations, and to those taxation measures set out in + Annex 2103.4 that relate to the purchase or consumption + of particular services, and + + (b) Articles 1102 and 1103 (Investment - National Treatment + and MFN), Articles 1202 and 1203 (Cross-Border Trade in + Services - National Treatment and MFN) and Articles + 1407 and 1408 (Financial Services - National Treatment + and MFN) and shall apply to all taxation measures, + other than those on income, capital gains or on the + taxable capital of corporations and those taxes listed + in Annex 2103.4, + +except that nothing in those Articles shall apply + + (c) any most-favored-nation obligation with respect to an + advantage accorded by a Party pursuant to a tax + convention, + + (d) to a non-conforming provision of any existing taxation + measure, + + (e) to the continuation or prompt renewal of a non- + conforming provision of any existing taxation measure, + + (f) to an amendment to a non-conforming provision of any + existing taxation measure to the extent that the + amendment does not decrease its conformity, at the time + of the amendment, with any of those Articles, + + (g) to any new taxation measure aimed at ensuring the + equitable and effective imposition or collection of + taxes and that does not arbitrarily discriminate + between persons, goods or services of the Parties or + arbitrarily nullify or impair benefits accorded under + those Articles, in the sense of Annex 2004, or + + (h) to the measures set out in Annex 2103.4. + +5. Subject to paragraph 2 and without prejudice to the rights +and obligations of the Parties, Article 1106(3), (4), (5) and (6) +(Performance Requirements) shall apply to taxation measures. + +6. Article 1110 (Expropriation) shall apply to taxation +measures except that no investor may invoke that Article as the +basis for a claim under Article 1116 or 1117, where it has been +determined pursuant to this paragraph that the measure is not an +expropriation. The investor shall refer the issue of whether the +measure is not an expropriation for a determination to the +appropriate competent authorities set out in Annex 2104.6 at the +time that it gives notice under Article 1119. If the competent +authorities do not agree to consider the issue or, having agreed +to consider it, fail to agree that the measure is not an +expropriation within a period of six months after such referral, +the investor may submit its claim to arbitration under Article +1120. + + +Article 2104: Balance of Payments + +1. Nothing in this Agreement shall prevent a Party from +adopting or maintaining measures that restrict international +transactions or related international transfers and payments +("transfers") where the Party experiences serious balance of +payments difficulties, or the threat thereof, and such +restrictions are: + + (a) consistent with paragraphs 4 through 8 when imposed on + cross-border trade in financial services; or + + (b) consistent with paragraphs 2 through 6 when imposed on + any other transaction or transfer. + +2. Restrictions imposed on transactions or transfers other than +cross-border trade in financial services shall: + + (a) when imposed on payments for current international + transactions, be consistent with Article VIII(3) of the + Articles of Agreement of the International Monetary + Fund ("IMF"); + + (b) when imposed on international capital transactions, be + consistent with Article VI of the Articles of Agreement + of the IMF and imposed only in conjunction with + measures imposed on current international transactions + under paragraphs 2(a) and 4(a); and + + (c) when imposed on transfers covered by Article 1109 + (Investment - Transfers) and transfers related to trade + in goods, be made in a freely usable currency at a + market rate of exchange such that the payments and + transfers are not substantially impeded. + +3. No Party may adopt or maintain measures such as tariff +surcharges, quotas or licenses under this Article. + +4. As soon as practicable after imposing a restriction under +this Article, the Party imposing the restriction shall: + + (a) submit any current account exchange restrictions to the + IMF for review under Article VIII of the Articles of + Agreement of the IMF; and + + (b) enter into good faith consultations with the IMF on + economic adjustment measures to address the fundamental + underlying economic problems causing the difficulties + and receive endorsement of such measures by the IMF. + +5. Each Party shall ensure that any measure that it adopts or +maintains under this Article shall: + + (a) avoid unnecessary damage to the commercial, economic + and financial interests of another Party; + + (b) not be more burdensome than necessary to deal with the + balance of payments difficulties or threat thereof; + + (c) be temporary and be phased out progressively as the + situation improves; + + (d) be consistent with any economic adjustment measures + endorsed by the IMF under paragraph 4(b) and consistent + with the Articles of Agreement of the IMF; and + + (e) be applied on a national treatment and + most-favored-nation treatment basis. + +6. A Party may adopt or maintain a measure under this Article +that gives priority to services which are more essential to its +economic program, provided that, except as specifically approved +under an IMF-endorsed adjustment program in effect under +paragraph 4, no such measure is imposed for the purpose of +protecting a specific industry or sector. + +7. A Party imposing a restriction on cross-border trade in +financial services shall: + + (a) not impose more than one measure on any given + transaction and its related transfer, except as + specifically approved under an IMF-endorsed adjustment + program; + + (b) promptly notify the other Parties; and + + (c) consult promptly with the other Parties to assess the + balance of payments situation of the Party and the + measures it has adopted, taking into account among + other elements + + (i) the nature and extent of the balance of payments + and external financial difficulties of the Party, + + (ii) the external economic and trading environment of + the Party, and + + (iii) alternative corrective measures that may be + available. + +8. In consultations under paragraph 7(c), the Parties shall: + + (a) consider if measures adopted under this Article comply + with paragraph 5, in particular subparagraph 5(c); and + + (b) accept all findings of statistical and other facts + presented by the IMF relating to foreign exchange, + monetary reserves and balance of payments, and shall + base their conclusions on the assessment by the IMF of + the balance of payments and external financial + situation of the Party adopting the measures. + + +Article 2105: Disclosure of Information + + Nothing in this Agreement shall be construed to require a +Party to furnish or allow access to information the disclosure of +which would impede law enforcement or would be contrary to laws +protecting personal privacy. + + +Article 2106: Cultural Industries + + Annex 2106 applies to cultural industries. + + +Article 2107: Definitions + +For purposes of this Chapter: + +cultural industries means any person engaged in any of the +following activities: + + (a) the publication, distribution, or sale of books, + magazines, periodicals or newspapers in print or + machine readable form but not including the sole + activity of printing or typesetting any of the + foregoing; + + (b) the production, distribution, sale or exhibition of + film or video recordings; + + (c) the production, distribution, sale or exhibition of + audio or video music recordings; + + (d) the publication, distribution or sale of music in print + or machine readable form; or + + (e) radio communication in which the transmissions are + intended for direct reception by the general public, + and all radio, television and cable broadcasting + undertakings and all satellite programming and + broadcast network services; + +international capital transactions means "international capital +transactions" as defined under the Articles of Agreement of the +IMF; + +payments for current international transactions means "payments +for current international transactions" as defined under the +Articles of Agreement of the IMF; + +tax convention means a convention for the avoidance of double +taxation or other international taxation agreement or +arrangement; and + +taxes and taxation measures do not include: + + (a) a "customs duty" as defined in Article 319; or + + (b) the measures listed in exceptions (b), (c), (d) and (e) + of that definition. + +============================================================================= + + ANNEX 2103.4 + + Specific Taxation Measures + + +1. Article 2103(4)(a) (Taxation) shall apply to an asset tax +under the Asset Tax Law ("Ley del Impuesto al Activo") of Mexico. + +2. Article 2103(4)(a) and (b) shall not apply to any excise tax +on insurance premiums adopted by Mexico to the extent that such +tax would, if levied by Canada or the United States, be covered +by Article 2103(4)(d), (e) or (f). + +============================================================================= + + ANNEX 2104.6 + + Competent Authorities + + +1. The competent authority for Canada is the Assistant Deputy +Minister for Tax Policy, Department of Finance. + +2. The competent authority for Mexico is the Deputy Minister of +Revenue of the Ministry of Finance and Public Credit. +(Secretaria de Hacienda y Credito Publico) + +3. The competent authority for the United States is the +Assistant Secretary of the Treasury (Tax Policy), U.S. Department +of the Treasury. + +============================================================================= + + ANNEX 2106 + + Cultural Industries + + + Notwithstanding any other provision of this Agreement, as +between the United States and Canada, any measure adopted or +maintained with respect to cultural industries, except as +specifically provided in Article 302 (Market Access - Tariff +Elimination), and any measure of equivalent commercial effect +taken in response, shall be governed exclusively in accordance +with the terms of the Canada - United States Free Trade +Agreement. 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