From: [l w b] at [cs.utexas.edu] (Lance W. Bledsoe) Newsgroups: alt.conspiracy,alt.activism,alt.fan.rush-limbaugh,talk.politics.misc Subject: NAFTA Synopsis (3/3) Date: 9 Sep 1993 11:12:06 -0500 (continued) Other Intellectual Property Rights This section also provides rules for protecting: - service marks to the same extent as trademarks; - encrypted satellite signals against illegal use; - trade secrets generally, as well as for protecting from disclosure by the government test data submitted by firms regarding the safety and efficacy of pharmaceutical and agri-chemical products; - integrated circuits, both directly and in goods that incorporate them; and - geographical indications so as to avoid misleading the public, while protecting trademark owners. Enforcement Procedures The NAFTA also includes detailed obligations regarding: - procedures for the enforcement of intellectual property rights, including provisions on damages, injunctive relief and general due process issues; and - enforcement of intellectual property rights at the border, including safeguards to prevent abuse. TEMPORARY ENTRY FOR BUSINESS PERSONS Taking account of the preferential trading relationship between the NAFTA countries, this section sets out commitments by the three countries to facilitate on a reciprocal basis temporary entry into their respective territories of business persons who are citizens of Canada, Mexico or the United States. The NAFTA does not create a common market for the movement of labor. Each NAFTA country maintains its rights to protect the permanent employment base of its domestic labor force, to implement its own immigration policies and to protect the security of its borders. This section's rules governing entry of business persons, constructed along the lines of similar provisions of the CanadaU.S. FTA, are tailored to meet the needs of all NAFTA partners. Each country will grant temporary entry to four categories of business persons: - business visitors engaged in international business activities for the purpose of conducting activities related to research and design, growth, manufacture and production, marketing, sales, distribution, after-sales service and other general services; - traders who carry on substantial trade in goods or services between their own country and the country they wish to enter, as well as investors seeking to commit a substantial amount of capital in that country, provided that such persons are employed or operate in a supervisory or executive capacity or one that involves essential skills; - intra-company transferees employed by a company in a managerial or executive capacity or one that involves specialized knowledge and who are transferred within that company to another NAFTA country; and - certain categories of professionals who meet minimum educational requirements or who possess alternative credentials and who seek to engage in business activities at a professional level in that country. Mexico and the United States have agreed to an annual numerical limit of 5,500 Mexican professionals entering the United States. This number is in addition to those admitted under a similar category in U.S. law that is subject to a global limitation of 65,000 professionals, but which remains unaffected by the NAFTA. The numerical limit of 5,500 may be increased by agreement between the United States and Mexico, and will expire 10 years after the Agreement goes into effect unless the two countries decide to remove the limit earlier. Canada has not set a numerical limit with respect to Mexico. Consultations The three countries will consult through a specialized working group on temporary entry matters. As part of its work, the group will consider providing temporary entry to spouses of business persons granted entry under NAFTA for periods of one year or more as traders and investors, intra-company transferees and professionals. Provision of Information Each country will publish clear explanatory material on procedures that business persons must follow to take advantage of the NAFTA temporary entry provisions. Non-Compliance The dispute settlement provisions of the Agreement may be invoked only if a country claims, on the basis of repeated practices, that another country has not complied with the temporary entry provisions. INSTITUTIONAL ARRANGEMENTS AND DISPUTE SETTLEMENT PROCEDURES Institutional Arrangements This section establishes the institutions responsible for implementing the Agreement, ensuring its joint management and for avoiding and settling any disputes between the NAFTA countries regarding its interpretation and application. Trade Commission: The central institution of the Agreement is the Trade Commission, comprising Ministers or cabinet-level officers designated by each country. Regular meetings are to be held annually, although the day-to-day work of the Commission will be carried out by officials of the three governments participating in the various committees and working groups mandated by the Agreement, operating on the basis of consensus. Secretariat: The NAFTA establishes a Secretariat to serve the Commission as well as other subsidiary bodies and dispute settlement panels. The administrative and technical support that the Secretariat will provide is designed to assist the Commission to ensure effective and joint management of the free trade area. Dispute Settlement Procedures The dispute settlement procedures of the NAFTA provide expeditious and effective means for the resolution of disputes. Consultations: Whenever any matter arises that could affect a country's rights under the Agreement, it may request consultations and the countries concerned will promptly consult on the matter. The NAFTA places priority on reaching an amicable settlement. The third country may participate, or may seek its own consultations. The Role of the Commission: Should the consultations fail to resolve the matter within 30 to 45 days, any country may call a meeting of the Trade Commission with all three countries present. The NAFTA directs the Commission to seek to settle the dispute promptly. The Commission may use good offices, mediation, conciliation or other means of alternative dispute resolution to this end. Initiation of Panel Proceedings: If the countries concerned are unable to reach a mutually satisfactory resolution through the Commission, any consulting country may initiate panel proceedings. Forum Selection If a dispute could be brought under both the GATT and the NAFTA, the complaining country may choose either forum. If the third NAFTA country wants to bring the same case in the other forum, the two complaining countries will consult, with a view to agreement on a single forum. If those countries cannot agree, the dispute settlement proceeding normally will be heard by a NAFTA panel. Once selected, the chosen forum must be used to the exclusion of the other. If a dispute involves factual issues regarding certain standardsrelated environmental, safety, health or conservation measures or if the dispute arises under specific environmental agreements, the responding country may elect to have the dispute considered by a NAFTA panel. The rules also set out procedures for addressing disputes relating to matters covered by the CanadaU.S. FTA. Panel Procedures If the complaining country elects to have the matter heard through NAFTA procedures, it may request the establishment of an arbitral panel. The third country may either join as a complaining country or limit its participation to oral and written submissions. The panel will typically be charged with making findings of fact and determining whether the action taken by the defending country is inconsistent with its obligations under the NAFTA, and may make recommendations for resolution of the dispute. Panels will be composed of five members, who will normally be chosen from a trilaterally agreed roster of eminent trade, legal and other experts, including from countries outside the NAFTA. The NAFTA provides for a special roster of experts for disputes involving financial services. The panel will be chosen through a process of "reverse selection" to ensure impartiality: the chair of the panel will be selected first, either by agreement of the disputing countries or, failing agreement, by designation of one disputing side, chosen by lot. The chair may not be a citizen of the side making the selection, and may be a non-NAFTA national. Each side will then select two additional panelists who are citizens of the country or countries on the other side. Whenever an individual not on the roster of panelists is nominated, any other disputing NAFTA country may exercise a peremptory challenge against that individual. Rules of procedure, to be more fully elaborated by the Commission, provide for written submissions, rebuttals and at least one oral hearing. There are strict time limits to ensure prompt resolution. A special procedure permits scientific boards to provide expert advice to panels on factual questions related to the environment and other scientific matters. Unless the disputing countries decide otherwise, within 90 days of a panel's selection, it will present to them a confidential initial report. They will then have 14 days in which to provide comments to the panel. Within 30 days of the presentation of its initial report, the panel will present its final report to the countries concerned. The report will then be transmitted to the Commission, which will normally publish it. Implementation and Non-Compliance Upon receiving the panel's report, the disputing countries are to agree on the resolution of the dispute, which will normally conform to the recommendations of the panel. If a panel determines that the responding country has acted in a manner inconsistent with its NAFTA obligations, and the disputing countries do not reach agreement within 30 days or other mutually agreed period after receipt of the report, the complaining country may suspend the application of equivalent benefits until the issue is resolved. Any country that considers the retaliation to be excessive may obtain a panel ruling on this question. Alternate Dispute Resolution of Private Commercial Disputes Special provisions, described in the investment section, set out procedures for international arbitration of disputes between investors and NAFTA governments. The NAFTA countries will also encourage and facilitate the use of alternative dispute resolution as a means of settling international commercial disputes between private parties in the NAFTA region. The three countries will provide for the enforcement of arbitral agreements and arbitral awards. The Agreement establishes an advisory committee concerning the use of alternative dispute resolution for such disputes. ADMINISTRATION OF LAWS Procedural "Transparency" This section provides rules designed to ensure that laws, regulations and other measures affecting traders and investors will be accessible and will be administered fairly and in accordance with notions of due process by officials in all three countries. Each country will also ensure, under its domestic laws, independent administrative or judicial review of government action relating to matters covered by the NAFTA. The NAFTA's notification and exchange of information provisions will allow each government the opportunity to consult on any action taken by another country that could affect the operation of the Agreement. These provisions are designed to assist the three countries to avoid or minimize potential disputes. Contact Points Each country will designate a contact point to facilitate communications between NAFTA countries. EXCEPTIONS The NAFTA includes provisions that ensure that the Agreement does not constrain a country's ability to protect its national interests. General Exceptions This provision permits a country to take measures otherwise inconsistent with its obligations affecting trade in goods to protect such interests as public morals, human, animal or plant life or health or national treasures, to conserve exhaustible natural resources or to take enforcement measures regarding such matters as deceptive practices or anticompetitive behavior. However, such measures must not result in arbitrary discrimination or disguised restrictions on trade between NAFTA countries. National Security Nothing in the Agreement will affect a NAFTA country's ability to take measures it considers necessary for the protection of its essential security interests. Taxation The NAFTA provides that, as a general matter, taxation questions will be governed by applicable double taxation agreements between the NAFTA countries. Balance of Payments Under the Agreement, a NAFTA country may take traderestrictive measures to protect its balance of payments only in limited circumstances and in accordance with the rules of the International Monetary Fund. Cultural Industries The rights of Canada and the United States with respect to cultural industries will be governed by the Canada-U.S. FTA. Each country reserves the right to take measures of equivalent commercial effect in response to any action regarding cultural industries that would have been a violation of the Canada-U.S. FTA but for the cultural industries provisions. Such compensatory measures will not be limited by the obligations imposed by the NAFTA. The rights and obligations between Canada and Mexico regarding cultural industries will be identical to those applying between Canada and the United States. FINAL PROVISIONS Entry into Force This section provides that the Agreement will enter into force on January 1, 1994, upon completion of domestic approval procedures. Accession The NAFTA provides that other countries or groups of countries may be admitted into the Agreement if the NAFTA countries agree, and subject to terms and conditions that they require and to the completion of domestic approval procedures in each country. Amendments and Withdrawal This section also provides for amendments to the Agreement, subject to domestic approval procedures. Any country may withdraw from the Agreement on six-months' notice. SUMMARY OF ENVIRONMENTAL PROVISIONS The three NAFTA countries have committed in the NAFTA to implementing the Agreement in a manner consistent with environmental protection and to promoting sustainable development. Specific provisions throughout the Agreement build upon these commitments. For example: - The trade obligations of the NAFTA countries under specified international environmental agreements regarding endangered species, ozone-depleting substances and hazardous wastes will take precedence over NAFTA provisions, subject to a requirement to minimize inconsistency with the NAFTA. This ensures that the NAFTA will not diminish a country's right to take action under these environmental agreements. - The Agreement affirms the right of each country to choose the level of protection of human, animal or plant life or health or of environmental protection that it considers appropriate. - NAFTA also makes clear that each country may maintain and adopt standards and sanitary and phytosanitary measures, including those more stringent than international standards, to secure its chosen level of protection. - The NAFTA countries will work jointly to enhance the protection of human, animal and plant life and health and the environment. - The Agreement provides that no NAFTA country should lower its health, safety or environmental standards for the purpose of attracting investment. - When a dispute regarding a country's standards raises factual issues concerning the environment, that country may choose to have the dispute submitted to NAFTA dispute settlement procedures rather than under the procedures of other trade agreements. This same option is available for disputes concerning trade measures taken under specified international environmental agreements. - NAFTA dispute settlement panels may call on scientific experts, including environmental experts, to provide advice on factual questions related to the environment and other scientific matters. - In dispute settlement, the complaining country bears the burden of proving that another NAFTA country's environmental or health measure is inconsistent with the NAFTA. -- "Thoughtcrime was not a thing that could be concealed forever. You might dodge sucessfully for a while, even for years, but sooner or later they were bound to get you." -- George Orwell, Nineteen Eighty-Four