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.

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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.