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which an aircraft is withdrawn from service, and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.

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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.

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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.

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Appendix 1210 - C

Civil Engineers

Mexico will undertake the commitments of this Section only

with respect to civil engineers ("ingenieros civiles").