forward foreign exchange contract means a commitment to transact, at a designated future date and agreed-upon exchange rate, in a specified amount of specified foreign exchange (paragraph FD 28, Financial Derivatives, A supplement to the Fifth Edition (1993) of the IMF's Balance of Payments and International Investment Position Manual),
forward positions means predetermined short-term net drains on foreign currency assets in the form of forwards, futures, and swaps, as defined in Item II.2 of the Reserves Data Template in the IMF International Reserves and Foreign Currency Liquidity: Guidelines for a Data Template (2013);
imports means all goods that add to the stock of material resources of a country by entering its economic territory (International Merchandise Trade Statistics: Concepts and Definitions 2010, Chapter I, section A 1.2 of the United Nations);
intervention means the purchase or sale, or the purchase or sale of a forward position, under the direction of an exchange rate authority, of foreign exchange reserves involving the currency of the intervening Party and at least one other currency;
portfolio capital flows means cross-border transactions and positions involving debt or equity securities, other than those included in direct investment or reserve assets, as defined in the IMF's Balance of Payments and International Investment Position Manual, Sixth Edition (BPM6), paragraphs 6.54-6.57;
principal representative of a Party means a senior official of the exchange rate or fiscal or monetary authority of a Party; (1) and
spot foreign exchange market means the foreign exchange market in which participants transact for immediate delivery.
Article 33.2. General Provisions
1. The Parties affirm that market-determined exchange rates are fundamental for smooth macroeconomic adjustment and promote strong, sustainable, and balanced growth.
2. The Parties recognize the importance of macroeconomic stability in the region to the success of this Agreement and that strong economic fundamentals and sound policies are essential to macroeconomic stability, and contribute to strong and sustainable growth and investment.
3. The Parties share the objective of pursuing policies that strengthen underlying economic fundamentals, foster growth and transparency, and avoid unsustainable external imbalances.
Article 33.3. Scope
This Chapter does not apply with respect to the regulatory or supervisory activities or monetary and related credit policy and related conduct of an exchange rate or fiscal or monetary authority of a Party. (2)
Article 33.4. Exchange Rate Practices
1. Each Party confirms that it is bound under the IMF Articles of Agreement to avoid manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage.
2. Each Party should:
(a) achieve and maintain a market-determined exchange rate regime;
(b) refrain from competitive devaluation, including through intervention in the foreign exchange market; and
(c) strengthen underlying economic fundamentals, which reinforces the conditions for macroeconomic and exchange rate stability.
3. Each Party should inform promptly another Party and discuss if needed when an intervention has been carried out by the Party with respect to the currency of that other Party.
Article 33.5. Transparency and Reporting
1. Each Party shall disclose publicly:
(a) monthly foreign exchange reserves data and forward positions according to the IMF's Data Template on International Reserves and Foreign Currency Liquidity, no later than 30 days after the end of each month;
(b) monthly interventions in spot and forward foreign exchange markets, no later than seven days after the end of each month;
(c) quarterly balance of payments portfolio capital flows, no later than 90 days after the end of each quarter; and
(d) quarterly exports and imports, no later than 90 days after the end of each quarter.
2. Each Party shall consent to the public disclosure by the IMF of:
(a) each IMF Article IV Staff Report on the country of the Party, including the exchange rate assessment, within four weeks of the IMF Executive Board discussion; and
(b) confirmation of the Party's participation in the IMF COFER database.
3. If the IMF does not disclose publicly any items listed in paragraph (2) with respect to a Party, that Party shall request that the IMF disclose publicly those items.
Article 33.6. Macroeconomic Committee
1. The Parties hereby establish a Macroeconomic Committee composed of principal representatives of each Party. Article 30.2.2(b) (Functions of the Commission) does not apply to the Macroeconomic Committee.
2. The Macroeconomic Committee shall monitor the implementation of this Chapter and its further elaboration.
3. The Macroeconomic Committee shall meet within one year after the date of entry into force of this Agreement, and at least annually thereafter, unless the Parties decide otherwise.
4. The Macroeconomic Committee shall, at each annual meeting, consider:
(a) the macroeconomic and exchange rate policies of each Party, and their consequences on diverse macroeconomic variables, including domestic demand, external demand, and the current account balance;
(b) issues, challenges, or efforts to strengthen capacity with respect to transparency or reporting; and
(c) undertaking other activities as the Macroeconomic Committee may decide.
5. At each annual meeting, or as necessary, the Macroeconomic Committee may consider whether any provisions of this Chapter, except Article 33.3 (Scope), should be amended to reflect changes in monetary policy and the financial markets or should be interpreted. A decision by consensus of the Macroeconomic Committee that a provision of this Chapter should be amended shall be deemed to be a decision by consensus of the Commission to amend the provision. Amendments shall enter into force as provided for in Article 34.3 (Amendments). An interpretation issued pursuant to a decision by consensus of the Macroeconomic Committee shall be deemed to be an interpretation issued pursuant to a decision by consensus of the Commission.
6. The Commission shall not take any decision to amend or interpret a provision of this Chapter except as provided in paragraph 5.
Article 33.7. Principal Representative Consultations
1. A principal representative of a Party may request expedited bilateral consultations with a principal representative of another Party with respect to policies or measures of another Party that the principal representative of the requesting Party considers associated with competitive devaluation, the targeting of exchange rates for competitive purposes, fulfillment of the transparency and reporting commitments in Article 33.5 (Transparency and Reporting), or any other issue that the principal representative of the Party may wish to raise with respect to Articles 33.4 (Exchange Rate Practices) or 33.5 (Transparency and Reporting). A Party engaged in bilateral consultations may invite the Party not engaged in those consultations to participate and provide input.
2. If a principal representative of a Party requests bilateral consultations, the principal representatives (or their designees) of the consulting Parties shall meet within 30 days of the request to arrive at a mutually satisfactory resolution of the matter within 60 days of their initial meeting.
3. If a principal representative of a Party requests bilateral consultations with respect to another Party's fulfillment of the transparency and reporting commitments in Article 33.5 (Transparency and Reporting), whether circumstances disrupted the practical ability of the other Party to disclose publicly the items listed in that Article shall be taken into account in the consultations, with the objective of arriving at a mutually satisfactory resolution of the matter.
4. If there is failure to arrive at a mutually satisfactory resolution in any consultations under this Article, the consulting Parties may request that the IMF, consistent with its mandate:
(a) undertake rigorous surveillance of the macroeconomic and exchange rate policies and data transparency and reporting policies of the requested Party; or
(b) initiate formal consultations and provide input, as appropriate.
Article 33.8. Dispute Settlement
1. A Party may have recourse to dispute settlement under Chapter 31 (Dispute Settlement), as modified by this Article, only with respect to a claim that a Party has failed to carry out an obligation under Article 33.5 (Transparency and Reporting) in a recurring or persistent manner and has not remediated that failure during consultations under Article 33.7 (Principal Representative Consultations). (3)
2. When selecting panelists to compose a panel under Article 31.9 (Panel Composition), each disputing Party shall select panelists so that each panelist:
(a) has served as a senior official of an exchange rate or fiscal or monetary authority of a Party or the International Monetary Fund; and
(b) meets the qualifications set out in paragraphs (2)(b) through (2)(d) of Article 31.8 (Roster and Qualification of Panelists).
3. A panel established under Article 31.6 (Establishment of a Panel) to make a determination as to whether a Party has failed to carry out an obligation under Article 33.5 (Transparency and Reporting) in a recurring or persistent manner and has not remediated that failure during consultations under Article 33.7 (Principal Representative Consultations) and a panel reconvened to make a determination on the proposed suspension of benefits, in accordance with Article 31.19 (Non-Implementation - Suspension of Benefits), may seek the views of the IMF in accordance with Article 31.15 (Role of Experts).
4. When a panel's determination is that a Party has failed to carry out an obligation under Article 33.5 (Transparency and Reporting) in a recurring or persistent manner, and has not remediated that failure during consultations under Article 33.7 (Principal Representative Consultations), the complaining Party may not suspend benefits that are in excess of benefits equivalent to the effect of that failure. In suspending benefits under Article 31.19 (Non-Implementation - Suspension of Benefits), the complaining Party may take into account only the failure to carry out an obligation under Article 33.5 (Transparency and Reporting) and not any other action or alleged failure by the responding Party.
Chapter 34. FINAL PROVISIONS
Article 34.1. Transitional Provision from NAFTA 1994
1. The Parties recognize the importance of a smooth transition from NAFTA 1994 to this Agreement.
2. Issues under consideration, including documents or other work under development, by the Commission or a subsidiary body of NAFTA 1994 may be continued under any equivalent body in this Agreement, subject to any decision by the Parties on whether and in what manner that continuation is to occur.
3. Membership of the Committee established under Article 2022 of NAFTA 1994 may be maintained for the Committee under Article 31.22.4 (Alternative Dispute Resolution).
4. Chapter Nineteen of NAFTA 1994 shall continue to apply to binational panel reviews related to final determinations published by a Party before the entry into force of this Agreement.
5. With respect to the matters set out in paragraph 4, the Secretariat established under Article 30.6 of this Agreement shall perform the functions assigned to the NAFTA 1994 Secretariat under Chapter Nineteen of the NAFTA 1994 and under, for Chapter Nineteen, the domestic implementation procedures adopted by the Parties in connection therewith, until the binational panel has rendered a decision and a Notice of Completion of Panel Review has been issued by the Secretariat pursuant to the Rules of Procedure for Article 1904 Binational Panel Reviews.
6. With respect to claims for preferential tariff treatment made under NAFTA 1994, the Parties shall make appropriate arrangements to grant these claims in accordance with NAFTA 1994 after entry into force of this Agreement. The provisions of Chapter Five of NAFTA 1994 will continue to apply through those arrangements, but only to goods for which preferential tariff treatment was claimed in accordance with NAFTA 1994, and will remain applicable for the period provided for in Article 505 (Records) of that Agreement.
Article 34.2. Annexes, Appendices, and Footnotes
The annexes, appendices, and footnotes to this Agreement constitute an integral part of this Agreement.
Article 34.3. Amendments
1. The Parties may agree, in writing, to amend this Agreement.
2. An amendment shall enter into force 60 days after the date on which the last Party has provided written notice to the other Parties of the approval of the amendment in accordance with its applicable legal procedures, or such other date as the Parties may agree.
Article 34.4. Amendment of the WTO Agreement
In the event of an amendment of the WTO Agreement that amends a provision that the Parties have incorporated into this Agreement, the Parties shall, unless otherwise provided in this Agreement, consult on whether to amend this Agreement.
Article 34.5. Entry Into Force
This Agreement enters into force in accordance with paragraph 2 of the Protocol Replacing the North American Free Trade Agreement with the Agreement between the United States of America, the United Mexican States, and Canada.
Article 34.6. Withdrawal
A Party may withdraw from this Agreement by providing written notice of withdrawal to the other Parties. A withdrawal shall take effect six months after a Party provides written notice to the other Parties. If a Party withdraws, this Agreement shall remain in force for the remaining Parties.
Article 34.7. Review and Term Extension
1. This Agreement shall terminate 16 years after the date of its entry into force, unless each Party confirms it wishes to continue this Agreement for a new 16-year term, in accordance with the procedures set forth in paragraphs 2 through 6.
2. On the sixth anniversary of the entry into force of this Agreement, the Commission shall meet to conduct a "joint review" of the operation of this Agreement, review any recommendations for action submitted by a Party, and decide on any appropriate actions. Each Party may provide recommendations for the Commission to take action at least one month before the Commission's joint review meeting takes place.
3. As part of the Commission's joint review, each Party shall confirm, in writing, through its head of government, if it wishes to extend the term of this Agreement for another 16-year period. If each Party confirms its desire to extend this Agreement, the term of this Agreement shall be automatically extended for another 16 years and the Commission shall conduct a joint review and consider extension of this Agreement term no later than at the end of the next six-year period.
4. If, as part of a six-year review, a Party does not confirm its wish to extend the term of this Agreement for another 16-year period, the Commission shall meet to conduct a joint review every year for the remainder of the term of this Agreement. If one or more Parties did not confirm their desire to extend this Agreement for another 16-year term at the conclusion of a given joint review, at any time between the conclusion of that review and expiry of this Agreement, the Parties may automatically extend the term of this Agreement for another 16 years by confirming in writing, through their respective head of government, their wish to extend this Agreement for another 16-year period.
5. At any point when the Parties decide to extend the term of this Agreement for another 16- year period, the Commission shall conduct joint reviews every six years thereafter, and the Parties shall have the ability to extend this Agreement after each joint review pursuant to the procedures set forth in paragraphs 3 and 4.
6. At any point in which the Parties do not all confirm their wish to extend the term of this Agreement, paragraph 4 shall apply.
Article 34.8. Authentic Texts
The English, French, and Spanish texts of this Agreement are equally authentic, unless provided elsewhere in this Agreement.
Conclusion
Attachments
ANNEX I. EXPLANATORY NOTE
1. The Schedule of a Party to this Annex sets out, pursuant to Articles 14.12 (Non- Conforming Measures) and 15.7 (Non-Conforming Measures), a Party's existing measures that are not subject to some or all of the obligations imposed by:
(a) Article 14.4 (National Treatment) or 15.3 (National Treatment);
(b) Article 14.5 (Most-Favored-Nation Treatment) or 15.4 (Most-Favored-Nation Treatment);
(c) Article 14.10 (Performance Requirements);
(d) Article 14.11 (Senior Management and Boards of Directors);
(e) Article 15.5 (Market Access); or
(f) Article 15.6 (Local Presence).
2. Each Schedule entry sets out the following elements:
(a) Sector refers to the sector for which the entry is made;
(b) Sub-Sector, where referenced, refers to the specific subsector for which the entry is made;
(c) Obligations Concerned specifies the obligation(s) referred to in paragraph 1 that, pursuant to Articles 14.12.1(a) (Non-Conforming Measures) and 15.7.1(a) (Non-Conforming Measures), do not apply to the non-conforming aspects of the law, regulation, or other measure, as set out in paragraph 3;
(d) Level of Government indicates the level of government maintaining the scheduled measure(s);
(e) Measures identifies the laws, regulations, or other measures for which the entry is made. A measure cited in the Measures element:
(i) means the measure as amended, continued, or renewed as of the date of entry into force of this Agreement, and
(ii) includes any subordinate measure adopted or maintained under the authority of and consistent with the measure; and
(f) Description, as indicated in the introductory note for each Party's Schedule, either sets out the non-conforming measure or provides a general non-binding description of the measure for which the entry is made.
3. Articles 15.6 (Local Presence) and 15.3 (National Treatment) are separate disciplines and a measure that is only inconsistent with Article 15.6 (Local Presence) need not be reserved against Article 15.3 (National Treatment).
ANNEX I. SCHEDULE OF MEXICO
INTRODUCTORY NOTE
1. Description provides a general non-binding description of the measure for which the entry is made.
2. In accordance with Article 14.12 (Non-Conforming Measures) and Article 15.7 (Non- Conforming Measures), the articles of this Agreement specified in the Obligations Concerned element of an entry do not apply to the non-conforming aspects of the law, regulation, or other measure identified in the Measures element of that entry.
3. In the interpretation of an entry, all elements of the entry shall be considered. An entry shall be interpreted in the light of the relevant provisions of the Chapters against which the entry is taken. To the extent that:
(a) the Measures element is qualified by a liberalization commitment from the Description element, the Measures element as so qualified shall prevail over all other elements; and
(b) the Measures element is not so qualified, the Measures element shall prevail over all other elements, unless any discrepancy between the Measures element and the other elements considered in their totality is so substantial and material that it would be unreasonable to conclude that the Measures element should prevail, in which case the other elements shall prevail to the extent of that discrepancy.
4. For the purposes of this Annex:
CMAP means the Mexican Classification of Activities and Products 1994 (Clasificación Mexicana de Actividades y Productos) numbers as set out by the National Institute for Statistics and Geography (Instituto Nacional de Estadistica y Geografía);
CNIE means the National Commission on Foreign Investments (Comisión Nacional de Inversiones Extranjeras);
Concession means an authorization granted by the Mexican State to a person to exploit a natural resource or supply a service, for which Mexican nationals and Mexican enterprises are granted priority over foreigners;
Foreigners' exclusion clause means the express provision in an enterpriseâs by-laws, stating that the enterprise shall not allow a foreigner, directly or indirectly, to become a partner or shareholder of the enterprise; and
SCT means the Ministry of Communications and Transportation (Secretaria de Comunicaciones y Transportes).
Sector: All
Sub-Sector:
Industry Classification:
Obligations Concerned: National Treatment (Article 14.4)
Level of Government: Central
Measures: Political Constitution of the United Mexican States (Constitución Política de los Estados Unidos Mexicanos), Article 27.
Foreign Investment Law (Ley de Inversión Extranjera), Title II, Chapters I and II.
Regulations to the Foreign Investment Law and the National Registry of Foreign Investments (Reglamento de la Ley de Inversión Extranjera y del Registro Nacional de Inversiones Extranjeras), Title Il, Chapters I and II.
Description: Investment
No foreign national or foreign enterprise may acquire property tights (dominio directo) over land and water in a 100-kilometer strip along the country's borders or in a 50-kilometer strip inland from its coasts (Restricted Zone).
A Mexican enterprise without a foreigners' exclusion clause may acquire property rights (dominio directo) over real estate located in the Restricted Zone, used for non-residential purposes. Notice of the acquisition must be given to the Ministry of Foreign Affairs (Secretaria de Relaciones Exteriores or SRE) within 60 business days from the date of acquisition.
No Mexican enterprise without a foreigners' exclusion clause may acquire property rights (dominio directo) over real estate located in the Restricted Zone, used for residential purposes.
Pursuant to the procedure described below, a Mexican enterprise without a foreigners' exclusion clause may acquire rights for the use and enjoyment over real estate in the Restricted Zone, used for residential purposes. This procedure shall also apply when a foreign national or a foreign enterprise seeks to acquire rights for the use and enjoyment over real estate in the Restricted Zone regardless of the purpose for which the real estate is used.
A permit from the SRE is required for a credit institution to acquire, as a trustee, rights to real estate located in the Restricted Zone, when the purpose of the trust is to allow the use and enjoyment of such real estate, without granting real property rights thereof, and the trust beneficiary is a Mexican enterprise without a foreigners' exclusion clause, or the foreign national or foreign enterprise referred to above.
The terms "use" and "enjoyment" of the real estate located in the Restricted Zone mean the rights to use or enjoy such real estate, including, as applicable, obtaining benefits, products, and, in general, any yield resulting from lucrative operation and exploitation through third parties or through a credit institution acting as trustee.
The duration of the trust referred to in this entry shall be for a maximum period of 50 years, which may be renewed on request of the interested party.
The SRE can verify at any time the compliance with the conditions under which the permits referred to in this entry are granted, as well as the submission and veracity of the notices mentioned above.
The SRE shall decide on the permits, considering the economic and social benefits that these operations could have on the Nation.
A foreign national or a foreign enterprise seeking to acquire teal estate outside the Restricted Zone, shall previously submit to the SRE a statement agreeing to consider themselves a Mexican national for the above mentioned purposes, and waiving its right to invoke the protection of its government with respect to such real estate.
Sector:All
Sub-Sector:
Industry Classification:
Obligations Concerned: National Treatment (Article 14.4) Market Access (Article 15.5)
Level of Government: Central
Measures: Foreign Investment Law (Ley de Inversión Extranjera), Title VI, Chapter III.
Description: Investment and Cross-Border Trade in Services
In order to evaluate an application submitted for its consideration (an acquisition or establishment of investments in restricted activities as set out in this Schedule), the CNIE shall take into account the following criteria:
(a) the effects on employment and training of workers;
(b) the technological contribution;
(c) the compliance with the environmental provisions contained in the environmental legislation; and