Part C - Schedule of the United States - North American Free Trade Agreement, 1992 Oct. 7 Tariff Phasing Descriptions - 19

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.

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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.

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ANNEX 1911

Country-Specific Definitions

For purposes of this Chapter:

antidumping statute means:

(a) in the case of Canada, the relevant provisions of the
Special Import Measures Act, as amended, and any
successor statutes;

(b) in the case of the United States, the relevant
provisions of Title VII of the Tariff Act of 1930, as
amended, and any successor statutes;

(c) in the case of Mexico, the relevant provisions of the Ley Reglamentaria del Art¡culo 131 de la Constituci¢n Pol¡tica de los Estados Unidos Mexicanos en Materia de Comercio Exterior Implementing Article 131 of the Constitution of the United Mexican States, as amended, and any successor statutes; and

(d) the provisions of any other statute that provides for judicial review of final determinations under subparagraph (a), (b) or (c), or indicates the standard of review to be applied to such determinations.

competent investigating authority means:

(a) in the case of Canada;

(i) the Canadian International Trade Tribunal, or its successor, or

(ii) the Deputy Minister of National Revenue for Customs and Excise as defined in the Special Import Measures Act, or the Deputy Minister's successor;

(b) in the case of the United States;

(i) the International Trade Administration of the United States Department of Commerce, or its successor, or

(ii) the United States International Trade Commission, or its successor; and

(c) in the case of Mexico, the designated authority within the Secretar¡a de Comercio y Fomento Industrial, or its successor.

countervailing duty statute means:

(a) in the case of Canada, the relevant provisions of the
Special Import Measures Act, as amended, and any
successor statutes;

(b) in the case of the United States, section 303 and the
relevant provisions of Title VII of the Tariff Act of
1930, as amended, and any successor statutes;

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

(i) a final resolution regarding anti-dumping or countervailing duties investigations by the Secretar¡a de Comercio y Fomento Industrial, pursuant to Article 13 of the Ley Reglamentaria del Art¡culo 131 de la Constituci¢n Pol¡tica de los Estados Unidos Mexicanos en Materia de Comercio Exterior, as amended,

(ii) a final resolution regarding an annual administrative review of anti-dumping or countervailing duties by the Secretar¡a de Comercio y Fomento Industrial, as described in Article 1904.15(q)(xiv), and

(iii) a final resolution by the Secretaria de Comercio y Fomento Industrial as to whether a particular type of merchandise is within the class or kind of merchandise described in an existing antidumping or countervailing duty resolution.

standard of review means:

(a) in the case of Canada, the grounds set forth in section 18.1(4) of the Federal Court Act with respect to all final determinations;

(b) in the case of the United States,

(i) the standard set forth in section 516A(b)(l)(B) of the Tariff Act of 1930, as amended, with the exception of a determination referred to in (ii), and

(ii) the standard set forth in section 516A(b)(l)(A) of the Tariff Act of 1930, as amended, with respect to a determination by the United States International Trade Commission not to initiate a review pursuant to section 751(b) of the Tariff Act of 1930, as amended; and

(c) in the case of the Mexico, the standard set forth in
Article 238 of the C¢digo Fiscal de la Federaci¢n, or
any successor statutes, based solely on the
administrative record.
NAFTA Chapter Twenty Institutional Arrangements and Dispute Settlement Procedures

Subchapter A - Institutions

Article 2001: The Free Trade Commission

1. The Parties hereby establish the Free Trade Commission, comprising cabinet-level representatives of the Parties or their designees.

2. The Commission shall:

(a) supervise the implementation of this Agreement;

(b) oversee its further elaboration;

(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

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

(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

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;

(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

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

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

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

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

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.

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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))

(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

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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.

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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),

(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,

(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

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

(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;

(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;

(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).

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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.

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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.