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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 Comunicación") 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
 Artículo 131 de la Constitución Política 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 Artículo 131 de la Constitución
 Política 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 Artículo 131 de la Constitución
 Política 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 Artículo 131 de la Constitución
 Política 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
 Artículo 131 de la Constitución Política 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 Importación").
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 Importación").  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 Importación").  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 Importación").  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 trámite 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 Exportación") 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:

                 │ Sb -  Se   │
               F =     ├───────────┤    x  100
                 │     Sb    │


     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
            talegiöl)

      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 co─operation 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
 ("Secretaría 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.   Secretaría de Gobernación
     - Centro Nacional de Estudios Municipales
     - Comisión Calificadora de Publicaciones y Revistas
 Ilustradas
     - Consejo Nacional de Población
     - Archivo General de la Nación
     - Instituto Nacional de Estudios Históricos de la
 Revolución Mexicana
     - Patronato de Asistencia para la Reincorporación Social
     - Centro Nacional de Prevención de Desastres
     - Consejo Nacional de Radio y Televisión
     - Comisión Mexicana de Ayuda a Refugiados

2.   Secretaría de Relaciones Exteriores
     - Sección Mexicana de la Comisión Intercional de Límites y
 Aguas México-EEUU
     - Sección Mexicana de la Comisión Internacional de Límites
 y Aguas México-Guatemala

3.   Secretaría de Hacienda y Crédito Público
     - Comisión Nacional Bancaria
     - Comisión Nacional de Valores
     - Comisión Nacional de Seguros y Fianzas
     - Instituto Nacional de Estadistica , Geografía e
 Informática

4.   Secretaría de Agricultura y Recursos Hidraulicos
     - Instituto Mexicano de Tecnología del Agua
     - Instituto Nacional de Investigaciones Forestales y
 Agropecuarias
     - Apoyos a Servicios a la Comercialización Agropecuaria,
 Aserca

5.   Secretaría de Comunicaciones y Transportes (including the
   Instituto Mexicano de Comunicaciones and the Instituto
   Mexicano de Transporte)
     - Comisión Nacional Coordinadora de Puertos

6.   Secretaría de Comercio y Fomento Industrial

7.   Secretaría de Educación Pública
     - Instituto Nacional de Antropología e Historia
     - Instituto Nacional de Bellas Artes y Literatura
     - Radio Educación
     - Centro de Ingeniería y Desarrollo Industrial
     - Consejo Nacional para la Cultura y las Artes
     - Comisión Nacional del Deporte

8.   Secretaría de Salud
     - Administración del Patrimonio de la Beneficencia Pública
     - Centro Nacional de la Transfusión Sanguinea
     - Gerencia General de Farmacias
     - Gerencia General de Biológicos y Reactivos
     - Consejo Interno del Centro de Obras y Equipamiento en
 Salud
     - Instituto de la Comunicación Humana Dr. Andrés Bustamante
 Gurría
     - Instituto Nacional de Medicina de la Rehabilitación
     - Instituto Nacional de Ortopedia
     - Consejo Nacional para la Prevención y Control del
 Síndrome de la Inmunodeficiencia Adquirida, Conasida

9.   Secretaría del Trabajo y Previsión Social
     - Procuraduría Federal de la Defensa del Trabajo
     - Unidad Coordinadora del Empleo, Capacitación y
 Adiestramiento

10.  Secretaría de la Reforma Agraria
     - Instituto de Capacitación Agraria

11.  Secretaría de Pesca
     - Instituto Nacional de la Pesca

12.  Procuraduría General de la República

13.  Secretaría de Energia Minas e Industria Paraestatal
     - Comisión Nacional de Seguridad Nuclear y Salvaguardias
     - Centro de Promoción y Evaluación de Proyectos
     - Centro Nacional de Ahorro Energético

14.  Secretaría de Desarrollo Social

15.  Secretaría de Turismo

16.  Secretaría de la Contraloría General de La Federación

17.  Comisión Nacional de Zonas Aridas

18.  Comisión Nacional de Libros de Texto Gratuito

19.  Comisión Nacional de Derechos Humanos

20.  Consejo Nacional de Fomento Educativo

21.  Secretaría de la Defensa Nacional

22.  Secretaría de Marina

     The following products purchased by the Secretaría de la
     Defensa Nacional and the Secretaría 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 Gráficos de la Nación
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 México, Ferronales
8.   Telecomunicaciones de México, Telecom

Industry
9.   Petróleos Mexicanos, Pemex (This Chapter does not apply to
   procurement of fuels and gas.)
10.  Comisión Federal de Electricidad, CFE
11.  Consejo de Recursos Minerales
12.  Comisión de Fomento Minero

Commerce
13.  Compañía 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.  Procuraduría Federal del Consumidor
18.  Instituto Nacional del Consumidor
19.  Laboratorios Nacionales de Fomento Industrial
20.  Servicio Nacional de Información 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 Secretaría de Marina
25.  Instituto de Seguridad Social para las Fuerzas Armadas
  Mexicanas
26.  Instituto Nacional Indigenista, INI
27.  Instituto Nacional Para la Educación de los Adultos
28.  Centros de Integración Juvenil
29.  Instituto Nacional de la Senectud

Others
30.  Comite Administrador del Programa Federal de Construcción de
  Escuelas, Capfce
31.  Comisión Nacional del Agua, CNA
32.  Comisión Para la Regularización de la Tenencia de la Tierra
33.  Consejo Nacional de Ciencia y Tecnología, Conacyt
34.  Notimex, S.A . de C.V.
35.  Instituto Mexicano de Cinematografía
36.  Lotería Nacional para la Asistencia Pública
37.  Pronósticos 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 Secretaría de Salud, IMSS, ISSSTE, Secretaría de
Defensa and the Secretaría 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 México.
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 Federación.

2.   Semanario Judicial de la Federación (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
("Comisión 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 Resolución de Inicio for Resolución Provisional and
the term Resolución Provisional for Resolución que revisa a la
Resolución 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 Artículo 131 de la Constitución
 Política 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 Secretaría 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 Artículo 131 de la Constitución
 Política 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
 Secretaría de Comercio y Fomento Industrial,
 pursuant to Article 13 of the Ley Reglamentaria
 del Artículo 131 de la Constitución Política 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 Secretaría 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 Código Fiscal de la Federación, 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.

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                  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.  The rights and obligations between Canada and any
other Party with respect to such measures shall be identical to
those applying between Canada and the United States.