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.

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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.