(c) the promotion of enhanced transparency of sanitary and phytosanitary measures;
(d) the identification and resolution of problems related to sanitary and phytosanitary matters;
(e) the recognition of pest- or disease-free areas; and
(f) the promotion of bilateral discussions on sanitary and phytosanitary issues under discussion in multilateral and international fora.
4. The Committee should meet annually if the Parties so decide. To the extent possible, the Committee shall meet using any technological means available, such as teleconference or videoconference. The Committee shall report on its activities and work plans to the Coordinators.
Chapter Eight. TECHNICAL BARRIERS TO TRADE
Article 8.1. Objectives
The objectives of this Chapter are to:
(a) improve the implementation of the Agreement on Technical Barriers to Trade (TBT Agreement), which is part of the WTO Agreement;
(b) ensure that standards, technical regulations, and conformity assessment procedures, including those related to metrology, do not create unnecessary obstacles to trade; and
(c) enhance joint cooperation between the Parties in order to resolve specific issues related to the development and application of standards, technical regulations, and conformity assessment procedures, thereby facilitating the conduct of international trade in goods.
Article 8.2. Affirmation of the TBT Agreement
1, Further to Article 1.3(1) (Objectives and Initial Provisions - Relation to Other Agreements), the Parties affirm their existing rights and obligations with respect to each other under the TBT Agreement.
2. The WTO Agreement exclusively governs the settlement of any formal disputes about the matters referred to in paragraph 1.
Article 8.3. Scope
1. This Chapter applies to the preparation, adoption and application of standards, technical regulations and conformity assessment procedures of national governmental bodies that may affect the trade in goods between the Parties.
2. This Chapter does not apply to:
(a) a purchasing specification prepared by a governmental body for production or consumption requirements of a governmental body; or
(b) a sanitary or phytosanitary measure.
Article 8.4. Cooperation
1. The Parties shall engage in technical cooperation activities directed at reaching effective and full compliance with the obligations set forth in the TBT Agreement, while taking into account the different levels of development of each Party's standardizing, accreditation, conformity assessment, and metrology institutions. To this end, each Party shall encourage its national government bodies responsible for coordinating its standardization, notification, and conformity assessment systems to undertake:
(a) the design, implementation, and review of technical and institutional cooperation activities;
(b) the promotion of institutional and regulatory information exchange and technical cooperation; and (c) the promotion of co-ordination in international fora. 2. At the request of a Party, the Parties shall discuss an issue related to standards, technical regulations, or conformity assessment procedures at the next Commission meeting.
Chapter Nine. EMERGENCY ACTION
Article 9.1. Definitions
For the purposes of this Chapter:
competent investigating authority means:
(a) for Canada, the Canadian International Trade Tribunal, or its successor;
and
(b) for Honduras, the Directorate General for Economic Integration and Trade Policy of the Secretary of State of Industry and Trade (Dirección General de Integración Económica y Política Comercial de la Secretaria del Estado en los Despachos de Industria y Comercio), or its successor; domestic industry means, with respect to an originating good, the producers as a whole of the like or directly competitive good operating in the territory of the importing Party or those producers whose collective production of a like or directly competitive good constitutes a major proportion of the total domestic production of that good; emergency action means an emergency action described in Article 9.3;
serious injury means a significant overall impairment of a domestic industry;
threat of serious injury means serious injury that is clearly imminent based on facts and not based on allegation, conjecture, or remote possibility; and
transition period means the 8 year period beginning on the date that this Agreement enters into force, unless, in the case of Honduras, the tariff elimination for the good against which the emergency action is taken occurs over a longer period of time, in which case the transition period is the period of the staged tariff elimination for that good plus 2 years.
Article 9.2. Global Safeguard Measures
Each Party retains its rights and obligations under Article XIX of the GATT 1994 and the Agreement on Safeguards.
Article 9.3. Bilateral Emergency Actions
1. A Party may, during the transition period only, adopt an emergency action described in paragraph 2 if, as a result of the reduction or elimination of a duty provided for in this Agreement, an originating good is being imported into the Party’s territory in such increased quantities and under such conditions as to constitute a substantial cause of serious injury or threat of serious injury to a domestic industry.
2. If the conditions set out in paragraphs 1, and 3 through 9 are met, a Party may, to the extent necessary to remedy or prevent serious injury or threat of serious injury to a domestic industry:
(a) suspend the further reduction of a rate of duty provided for under this Agreement on the good;
(b) increase the rate of duty on the good to a level not exceeding the lesser of:
(i) the most-favoured-nation (MFN) applied rate of duty in effect at the time the emergency action is taken, and
(ii) the MFN applied rate of duty in effect on the day immediately preceding the date of entry into force of this Agreement; or
(c) in the case of a duty applied to a good on a seasonal basis, increase the rate of duty to a level not exceeding the MFN applied rate of duty that was in effect on the good for the corresponding season immediately preceding the date of entry into force of this Agreement.
3. A Party shall, in writing and without delay, notify the other Party and request discussions regarding the institution of a proceeding that could result in the application of an emergency action against an originating good.
4. An emergency action shall be adopted no later than 1 year after the date the proceeding is instituted.
5. A Party may not maintain an emergency action:
(a) for a period exceeding 3 years; or
(b) beyond the expiration of the transition period, unless the Party whose good is subject to the emergency action consents.
6. During the transition period, a Party may not apply an emergency action to the same good more than twice.
7. On the termination of a first emergency action, the rate of duty shall not exceed the rate that, according to the Party’s Schedule to Annex 3.4.1 (National Treatment and Market Access for Goods—Tariff Elimination) for the staged elimination of the tariff, would have been in effect 1 year after the adoption of the action. Beginning on January 1 of the year after the termination of the action, the Party that has taken the action shall:
(a) set the rate of duty at the rate that would have been in effect, but for the emergency action, according to its Schedule to Annex 3.4.1 (National Treatment and Market Access for Goods—Tariff Elimination) for the staged elimination of the tariff; or
(b) eliminate the tariff in equal annual stages ending on the date determined by Annex 3.4.1 (National Treatment and Market Access for Goods—Tariff Elimination) for the elimination of the tariff.
8. A Party may apply a second emergency action to the same good provided that:
(a) a period of time has elapsed since the termination of the first emergency action equal to at least one half the initial period of application;
(b) the rate of duty for the first year of the second emergency action is not greater than the rate that would have been in effect under the Party’s Schedule to Annex 3.4.1 (National Treatment and Market Access for Goods—Tariff Elimination) at the time the first action was adopted; and
(c) the rate of duty applicable to any subsequent year shall be reduced in equal increments such that the rate of duty in the final year of the emergency action is equal to the rate provided for in that Party’s Schedule to Annex 3.4.1 (National Treatment and Market Access for Goods—Tariff Elimination) for that year.
9. A Party may adopt a bilateral emergency action after the expiration of the transition period only with the consent of the other Party.
10. A Party that applies an emergency action under this Article shall provide to the other Party mutually accepted trade liberalizing compensation in the form of concessions with substantially equivalent trade effects or with a value equivalent to the value of the additional duties expected to result from the action. If the Parties are unable to decide on compensation, the Party against whose good the action is taken may take tariff action with trade effects substantially equivalent to the emergency action taken under this Article. The Party taking the tariff action shall apply the action only for the period necessary to achieve the substantially equivalent effects.
Article 9.4. Administration of Emergency Action Proceedings
1. Each Party shall ensure the consistent, impartial and reasonable administration of its laws, regulations, decisions, and rulings governing emergency action proceedings.
2. Each Party shall:
(a) entrust a determination of serious injury, or threat of serious injury, in an emergency action proceeding to a competent investigating authority empowered under domestic law to conduct proceedings;
(b) ensure that these determinations are subject to review by judicial or administrative tribunals, to the extent provided by domestic law;
(c) ensure that negative injury determinations are not subject to modification, except through a review referred to in subparagraph (b).
3. Each Party should provide its competent investigating authority with the resources necessary to enable it to fulfill its duties.
4. Each Party shall adopt or maintain equitable, timely, transparent and effective procedures for emergency action proceedings, in accordance with the requirements set out in Annex 9.4.
Article 9.5. Relation to Textile and Apparel Annex
This Chapter does not apply to an emergency action taken under Annex 3.1 (National Treatment and Market Access for Goods ç Textile and Apparel Goods).
Chapter Ten. Investment
Section A. Definitions
Article 10.1. Definitions
For the purposes of this Chapter:
confidential information means confidential business information or information that is privileged or otherwise protected from disclosure;
disputing investor means an investor that makes a claim under Section C;
disputing Party means a Party against which a claim is made under Section C;
disputing party means the disputing investor or the disputing Party;
enterprise means an enterprise as defined in Article 2.1 (General Definitions –Definitions of General Application), and a branch of any such entity;
equity or debt security includes voting and non-voting shares, bonds, convertible debentures, stock options and warrants;
ICSID Additional Facility Rules means the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Centre for Settlement of Investment Disputes;
ICSID Convention means the Convention on the Settlement of Investment Disputes between States and Nationals of other States, done at Washington on 18 March 1965;
intellectual property rights means copyright and related rights, trademark rights, rights in geographical indications, rights in industrial designs, patent rights, rights in layout designs on integrated circuits, rights in relation to protection of undisclosed information, and plant breeders’ rights;
Inter-American Convention means the Inter-American Convention on International Commercial Arbitration, done at Panama on 30 January 1975;
investment means:
(a) an enterprise;
(b) a share, stock or other form of equity participation in an enterprise;
(c) a bond, debenture, or other debt instrument of an enterprise:
(i) if the enterprise is an affiliate of the investor, or
(ii) if the original maturity of the debt security is at least 3 years,
but does not include a debt security, regardless of original maturity, of a state enterprise;
(d) a loan to an enterprise:
(i) if the enterprise is an affiliate of the investor, or
(ii) if the original maturity of the loan is at least 3 years,
but does not include a loan, regardless of original maturity, to a state enterprise;
(e) an interest in an enterprise that entitles the owner to a share in income or profits of the enterprise;
(f) an interest in an enterprise that entitles the owner to a share in the assets of that enterprise on dissolution, other than a debt security or a loan excluded from subparagraph (c) or (d);
(g) real estate or other property, tangible or intangible, acquired in the expectation of, or used for, economic benefit or another business purpose; and
(h) interests arising from the commitment of capital or other resources in the territory of a Party to economic activity in such territory, such as under:
(i) a contract involving the presence of an investor’s property in the territory of the Party, including a turnkey or construction contract, or a concession, or
(ii) a contract in which remuneration depends substantially on the production, revenues or profits of an enterprise;
but investment does not mean:
(i) a claim to money that arises solely from:
(i) a commercial contract for the sale of goods or services by a national or enterprise in the territory of a Party to an enterprise in the territory of the other Party, or
(ii) the extension of credit in connection with a commercial transaction, such as trade financing, other than a loan covered by subparagraph (d); or
(j) any other claim to money,
that does not involve the kinds of interests set out in subparagraphs (a) through (h);
(k) for greater certainty, the following is not an investment:
(i) an order or judgment obtained in a judicial or administrative action,
(ii) a loan issued by one Party to the other Party,
(iii) a public debt operation of a Party or state enterprise, or
(iv) an investment allowed or made pursuant to fraudulent misrepresentation, bribery, or corruption,
investment of an investor of a Party means an investment owned or controlled directly or indirectly by an investor of that Party;
investor of a non-Party means an investor other than an investor of a Party, that seeks to make, is making, or has made an investment; for greater certainty, an investor “seeks to make an investment” only when the investor has taken concrete steps to make the investment, such as when the investor has applied for a permit or license authorizing the establishment of an investment;
investor of a Party means a Party or state enterprise, or a national or an enterprise of that Party, that seeks to make, is making, or has made an investment; for greater certainty:
(a) an investor “seeks to make an investment” only when the investor has taken concrete steps to make the investment, such as when the investor has applied for a permit or license authorizing the establishment of an investment;
(b) a natural person who is a dual citizen is deemed to be exclusively a citizen of the State of their dominant and effective citizenship; a natural person who is a citizen of a Party and a permanent resident of the other Party is deemed to be exclusively a national of the Party of which that natural person is a citizen;
legal stability agreement means an agreement entered into by a national government authority of a Party and an investor of the other Party, or an investment of an investor of the other Party that accords certain benefits, including, but not limited to, a commitment to maintain an existing tax regime during a specified time;
New York Convention means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958;
non-disputing Party means the Party that is not a party to an investment dispute under Section C;
Secretary-General means the Secretary-General of ICSID;
transfers means transfers and international payments;
Tribunal means an arbitration tribunal established under Article 10.27 or 10.29; and
UNCITRAL Arbitration Rules means the arbitration rules of the United Nations Commission on International Trade Law.
Section B. Investment
Article 10.2. Scope and Coverage
1. This Chapter applies to measures adopted or maintained by a Party relating to:
(a) an investor of the other Party;
(b) an investment of an investor of the other Party in the territory of the Party; and
(c) with respect to Articles 10.7, 10.15 and 10.16, an investment in its territory.
2. This Chapter does not apply to an act or fact that took place or a situation that ceased to exist before the date of entry into force of this Agreement.
Article 10.3. Relation to other Chapters
1. In the event of an inconsistency between this Chapter and another Chapter, the other Chapter prevails.
2. A requirement by a Party that a service provider of the other Party post a bond or other form of financial security as a condition for providing a service in its territory does not of itself make this Chapter applicable to the provision of that cross-border service. This Chapter applies to that Party-s treatment of the posted bond or financial security if the bond or financial security is an investment of an investor of the other Party.
3. This Chapter does not apply to a measure adopted or maintained by a Party to the extent that the measure is covered by Chapter Thirteen (Financial Services).
Article 10.4. National Treatment
1. Each Party shall accord to an investor of the other Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to an investment of an investor of the other Party in its territory treatment no less favourable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
3. The treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a sub-national government, treatment no less favourable than the most favourable treatment accorded, in like circumstances, by that sub-national government to investors, and to investments of investors, of the Party of which it forms a part.
Article 10.5. Most-Favoured-Nation Treatment
1. Each Party shall accord to an investor of the other Party treatment no less favourable than that it accords, in like circumstances, to investors of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to an investment of an investor of the other Party, in its territory, treatment no less favourable than that it accords, in like circumstances, to investments of investors of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
3. For greater certainty, treatment "with respect to establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments" referred to in paragraphs 1 and 2 does not include dispute settlement mechanisms, such as those referred to in Section C of this Chapter, that are provided for in an international treaty or trade agreement.
4. For greater certainty, the treatment accorded by a Party under this Article means, with respect to a sub-national government, treatment accorded, in like circumstances, by that sub-national government to investors, and to investments of investors, of a non-Party.
Article 10.6. Minimum Standard of Treatment
1. Each Party shall accord to an investment of an investor of the other Party treatment in accordance with the customary international law minimum standard of treatment of aliens, including fair and equitable treatment and full protection and security.
2. The concepts of "fair and equitable treatment" and "full protection and security" in paragraph 1 do not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens.
3. A breach of another provision of this Agreement, or of a separate international agreement, does not establish a breach of this Article.
Article 10.7. Performance Requirements
1. A Party may not impose or enforce the following requirements, or enforce a commitment or undertaking, in connection with the establishment, acquisition, expansion, management, conduct or operation of an investment of an investor of a Party or of a non-Party in its territory:
(a) to export a given level or percentage of a good or service;
(b) to achieve a given level or percentage of domestic content;