(h) the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES);
(i) the Ramsar Convention on Wetlands done at Ramsar on 2 February 1971;
(j) the United Nations Declaration on the Rights of Indigenous Peoples adopted by the General Assembly on 13 September 2007; and
(k) the ILO Conventions and Protocols.
12. With regard to the CBD, the Parties recognise the importance of the following elements to support its effective implementation:
(a) the implementation of the three objectives of the CBD - conservation of biological diversity, the sustainable use of its components and the fair and equitable sharing of the benefits arising out of the utilization of genetic resources – in a balanced manner;
(b) the implementation of the GBF;
(c) the implementation, revision or update, and communication of national biodiversity strategies and action plans, including national targets, in accordance with Article 6 of the CBD; and
(d) the provision of adequate means of implementation, including financial resources, access to and transfer of technology, technical and scientific cooperation, exchange of information and distribution of benefits from biotechnology, recognising the specific challenges faced by Signatory MERCOSUR States, in line with the provisions of the CBD.
13. In reiterating their full commitment to the UNFCCC and to effectively implementing the Paris Agreement, the Parties agree to undertake and enhance actions to support their objectives and goals, including by taking into account global stocktakes of the Paris Agreement, considering mitigation, adaptation and the means of implementation and support, and in light of equity and the best available science. The Parties recall and reiterate all their respective commitments under the climate multilateral regime, including, but not restricted to the following:
(a) regarding nationally determined contributions (hereinafter referred to as “NDCs”) and mitigation: to prepare, communicate and maintain successive NDCs and pursue domestic mitigation measures, with the aim of achieving the objectives of such contributions; that successive NDCs will represent a progression over time and reflect the highest possible ambition, reflecting equity and the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances;
(b) regarding adaptation: to engage in adaptation planning processes and the implementation of actions, including the development or enhancement of relevant plans, policies or contributions; and
(c) regarding finance flows and means of implementation: to take action aiming at making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development; to provide support to developing country parties to the Paris Agreement for the implementation of climate action, including financial resources, technology transfer and capacity building, in accordance with Articles 9, 10 and 11 of the Paris Agreement, recognising that enhanced support for developing country parties to the Paris Agreement will allow for higher ambition in their actions.
14. The Parties agree to actively cooperate, both in negotiations within the regime and in its implementation, towards fostering joint climate action.
15. Each Party reaffirms its relevant international commitments and shall implement measures, in accordance with its respective internal laws and regulations, to prevent further deforestation and enhance efforts to stabilize or increase forest cover from 2030. In this context, the Parties should not weaken the levels of protection afforded in their environmental law.
16. The Parties further acknowledge that their policies must take into account the social and economic challenges of developing countries and their contribution to global food security.
17. The Parties also stress the need for enhanced support and investment to achieve these objectives, including through financial resources, technology transfer, capacity-building, and other mechanisms foreseen in this Agreement.
18. The Parties will step up efforts to increase substantially the share of renewable energy in the global energy mix and enhance cooperation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology.
19. The Parties also agree to use the TSD Subcommittee to cooperate and exchange information regarding the implementation of the WTO Agreement on Fisheries Subsidies, adopted at the 12th WTO Ministerial Conference on 17 June 2022, once it has entered into force.
20. While recognising the privileged space for consultation and cooperation provided by the TSD Subcommittee, the Parties stress that this Agreement does not modify in any manner the nature or scope of the commitments adopted under the relevant international agreements referred to in Chapter 26 of this Agreement as well as the mechanisms for implementation agreed under those agreements. The design and functioning of those agreements, in particular the nature of the commitments adopted therein as well as the compliance mechanisms thereof, when existing, reflect balances achieved in the framework of those agreements which are not altered nor conditioned in any way by the references to these commitments in this Agreement.
A.3. Bi-regional trade and investment relations: harnessing this Agreement's potentialto spur true sustainable development that works for all
21. The Parties understand that integration of sustainable development in the Parties' trade and investment relationship, referred to in Article 26.1(1), must deliver, among others, tangible economic benefits for producers of goods and providers of services that incorporate sustainability in their activities, in particular the most vulnerable, including women, smallholder farmers, indigenous peoples and local communities.
22. The benefits referred to in paragraph 21 can be achieved through, among others, initiatives that encourage trade of products obtained or produced sustainably and in accordance with the Parties' law, and projects that foster interregional supply chains to promote the positive contribution of trade to a pathway towards low greenhouse gas emissions and climate-resilient development and to increase the ability to adapt to the adverse effects of climate change in a manner that does not threaten food production, as referred to in Article 26.6(2)(b).
23. The Parties are committed to the protection of labour rights and recognise the role of the ILO as the key multilateral organisation in this field.
24. Recalling Article 26.4(4) of this Agreement, each Party shall make continued and sustained efforts towards ratifying the fundamental ILO Conventions, Protocols and other relevant ILO Conventions to which it is not yet a party and that are classified as up-to-date by the ILO, while respecting the sovereign right of a Party to enter into additional international obligations. In accordance with Article 26.4(3) of this Agreement, each Party shall respect, promote and effectively implement the internationally recognised core labour standards, as defined in the fundamental ILO Conventions.
25. In implementation of these commitments, the Parties intend to place a specific focus on the eradication of child labour as well as on freedom of association and the effective recognition of the right to collective bargaining. The Parties understand that the commitment to the effective implementation entails that each Party adopts relevant laws and regulations, and exercises its jurisdiction and control by establishing a system for ensuring compliance with the requirements of the internationally recognised core labour standards, as defined in the fundamental ILO Conventions.
26. Furthermore, in line with the commitment to promote decent work in Article 26.4(8) of this Agreement and the ILO Declaration on Social Justice for a Fair Globalization, the Parties underline the principle of social dialogue, which is a guiding principle of the ILO, and understand that the ratification of fundamental and other relevant ILO Conventions should be carried out in a manner consistent with this principle.
Making this Agreement work for producers of sustainable goods
27. Recognising the fundamental role that millions of inhabitants of regions distant from urban centres, such as forests, natural grasslands, wetlands and other natural ecosystems play in achieving sustainable development, the Parties will collaborate in providing increased market access opportunities for products obtained sustainably and in accordance with the law of each Party, from smallholders, cooperatives, indigenous peoples and local communities and to develop mechanisms to support these populations in obtaining and maintaining sustainable sources of income, while respecting collective land rights of indigenous peoples and local communities, in accordance with the law and relevant international commitments of each Party.
28. The Parties agree to discuss specific measures and initiatives to attain this goal within the framework of the TSD Subcommittee or other body established under this Agreement, as appropriate. Among others, such measures and initiatives include identification of market access opportunities required to spur exports of products sustainably obtained or produced, and measures and initiatives to expedite and facilitate trade between the Parties.
Promoting sustainable interregional value chains for energy transition
29. Pursuant to Article 26.6(2)(b), the Parties shall seek to harness the significant potential for interregional partnerships in energy transition projects, given their many complementarities regarding the inputs, expertise and technologies required to develop solutions in areas such as sustainable mobility and other areas identified by the Parties.
30. In this sense, the Parties recognise that building interregional value chains that are responsible, sustainable, transparent, unimpeded and resilient is one of the key aspects to meeting the objectives related to achieving a fair and just energy transition that contributes to the social, economic and environmental development of both regions. Through an effective and balanced participation in these chains, both regions will be in a better position to preserve their competitiveness in the global market, maintain a high level of employment with the creation of quality jobs, reinforce their productive and innovation capacity, improve the existing industrial base and support their transformation.
31. With a view to creating jobs and fostering synergies between the levels of technological development and the natural resources existing in MERCOSUR and in the European Union, the Parties will collaborate in designing initiatives that boost sustainable and resilient interregional value chains. Such value chains should favour investment and industrial development in raw material-producing countries, with a view to increasing the value added locally and promoting job creation. Among others, the Parties will prioritize consideration of the joint development of sustainable interregional markets and value chains in strategic sectors consistent with each Party's relevant laws and regulations; such sectors may include:
(a) responsible mining, beneficiation and transformation of metals and minerals which are critical for the energy transition;
(b) energy sources which play a crucial role in the energy transition, including liquified natural gas and renewable energy; this is most notably relevant for renewable and low-emission electricity generation as well as for those industrial sectors where greenhouse gas emissions reduction is challenging;
(c) sustainable mobility and associated value chains, including lithium-ion batteries, battery recycling as well as recharging infrastructure, electromobility and electric automobile industrial production;
(d) sustainable biofuels, including ethanol and biodiesel, sustainable aviation fuel (SAF) and renewable fuels of non-biological origin;
(e) hydrogen and its derivatives, to significantly contribute to the Sustainable Development Goals.
32. To attain the goals set out in paragraph 31, the Parties agree on the importance of implementing policy instruments to accelerate the development of capabilities, particularly in developing countries, to enable them to effectively participate in value chains focused on strategic manufacturing industries for the energy transition, which require large investments, state-of-the-art technology and a specialized workforce, as well as specific policies designed to promote inclusion of women. In this sense, taking into account the asymmetries between both regions, and without prejudice to the rights of the European Union, Signatory MERCOSUR States may adopt promotion measures aimed at the development and growth of strategic manufacturing industries for sustainable transition, in line with the 2030 Agenda and its Sustainable Development Goals. Such measures shall be consistent with this agreement and the WTO Agreements.
33. In addition, the Parties will collaborate regarding the aforementioned sectors including in the following aspects:
(a) facilitation and promotion of investments that foster local addition of value in production chains in raw material-producing countries;
(b) provision of technical and other support for projects that contribute to the creation of interregional value chains, development of technology and knowledge, enabling the building of capabilities in Signatory MERCOSUR States.
34. Finally, the Parties commit to collaborate in fostering interregional value chains in areas that offer an indirect contribution to the energy transition, such as the production of goods and services for healthcare, the development of the digital economy, including knowledge-based services, as well as sustainable food production.
A.4. National or regional trade-related policies and measures:acknowledging the variety of effective approaches to attain sustainable development
35. The Parties reaffirm their respective commitments adopted under this Agreement and the relevant international regimes mentioned in Chapter 26 related to the conservation, protection and sustainable management of forests and other terrestrial ecosystems, and to sustainable land use in accordance with their respective laws and regulations. They also reaffirm their commitment to encourage trade in products from sustainably managed forests harvested in accordance with the law of the country of harvest, to combat illegal logging and related trade.
36. The Parties furthermore recognise the role of traditional and indigenous knowledge as well as the role of local actors as key protagonists in sustainable land use and protecting, conserving, and sustainably using forests and biodiversity. They recall the importance of supporting indigenous peoples and local communities in sustainably managing forests and acknowledge that policies aimed at curbing deforestation must take into account the social and economic challenges and rights of local communities in accordance with each Party's laws and regulations and its relevant international commitments.
37. The Parties are determined to reiterate and step up the efforts to end illicit threats to nature and the environment, including illegal logging and fire and illegal wildlife trade, illegal mining and other harmful activities such as illegal, unreported and unregulated (IUU) fishing and illegal traffic of waste which threaten the environment.
38. The Parties note the importance of strengthening the conservation, restoration, sustainable use and management of all types of ecosystems and enhancing the social, economic and environmental benefits of biodiversity for people, especially those in vulnerable situations and those most dependent on biodiversity, including through sustainable biodiversity-based activities, products and services that enhance biodiversity. The Parties will cooperate to promote sustainable consumption and production patterns, in order to progressively reduce negative impacts on biodiversity and increase positive impacts. They also express their resolve to take effective measures to ensure fair and equitable sharing of benefits arising out of the utilization of genetic resources and from digital sequence information on genetic resources, consistent with each Party's international commitments.
39. In order to harness the potential of trade for the benefit of ecosystems, the Parties will establish within a year of the entry into force of this Agreement a list of products from Signatory MERCOSUR States which contribute to the conservation, restoration, sustainable use and management of forests and vulnerable ecosystems. Products in this list, which shall be periodically reviewed every three years, should be granted preferential or additional market access, or other incentives by the European Union to promote their trade, such as technical assistance or capacity building.
40. Additionally, the Parties should put in place actions and measures to enhance trade in goods contributing to enhanced social conditions and environmentally sound practices, such as goods and services contributing to a resource-efficient, low-carbon economy, or goods that are the subject of sustainability assurance schemes and mechanisms. Such actions, to be periodically reviewed by the Parties every three years, may include measures to enhance market access, technical assistance, capacity building and trade facilitation, as appropriate.
41. The Parties' commitment to enhanced cooperation and understanding of their respective labour and environmental trade-related policies and measures, referred to in point (c) of Article 26.1(4), implies, among others, acknowledging that policies, measures and solutions to tackle the challenge of sustainable development may vary across countries and regions.
A.5. Trade and women's economic empowerment
42. The Parties recognise that inclusive trade policies contribute to advancing women's economic empowerment. The Parties acknowledge the important contribution by women to economic growth through their participation in economic activity, including international trade. Accordingly, the Parties intend to implement the provisions of this Agreement in a manner that promotes equal opportunities and treatment for women and men and that incorporates this perspective in trade and investment policies.
43. Each Party shall strive to ensure that its relevant law and policies provide for, and promote, equal rights, treatment and opportunities for women and men. Each Party shall strive to improve such law and policies, without prejudice to the right of each Party to establish its own scope and levels of protection for equal opportunities for women and men. Such law and policies shall be consistent with each Party's commitments to relevant international agreements, including the Convention on the Elimination of all Forms of Discrimination Against Women, adopted by the UN General Assembly on 18 December 1979, which each Party shall effectively implement.
44. The Parties acknowledge that changes in trade flows may have a differential effect on the employment opportunities and participation of men and women, on their income and their well-being. Taking into account the ILO Centenary Declaration for the Future of Work, adopted in Geneva on 21 June 2019, the Parties also acknowledge the importance of an equal sharing of responsibilities among family members and of investment in the care economy in order for women to take advantage of trade-related economic opportunities and entrepreneurial activities, especially women in vulnerable situations.
45. The Parties intend to work together to strengthen their cooperation on trade-related aspects of matters covered by this section. The cooperation activities shall aim to improve the capacity and conditions for women workers, businesswomen and entrepreneurs, including women's access to participation, leadership and education in fields in which they are underrepresented, as well as to make efforts to support sectorial policies that enable the insertion of women in dynamic and higher productivity sectors, including by promoting foreign direct investment flows that expand job opportunities for women in the labour market, especially in those sectors that are male-dominated. Such cooperation may cover, among others, exchange of information and best practices related to data collection that allows to identify, design, implement and review trade policies aimed at lifting obstacles faced by women in international trade.
Part B. COOPERATION
B.1. Contributing to the reduction of inequalities within and among countries
46. The Parties undertake to cooperate in guaranteeing that the gradual establishment of the MERCOSUR-EU free-trade area will contribute not only to increasing overall income and prosperity, but also to the reduction of inequalities, in line with Sustainable Development Goal 10. Concurrently, in the promotion of a transition to low-emission and climate resilient economies, the Parties recall their respective commitments to work towards a just transition and to provide and mobilise the necessary funds to this end.
B.2. Promoting the objectives of Chapter 26 on trade and sustainable development
47. In order to achieve the objectives of Chapter 26 of this Agreement, the Parties highlight the importance of interregional cooperation including in the following areas:
(a) the implementation of multilateral commitments in the areas of climate change, biodiversity and the environment, and of ILO labour standards;
(b) support for the role of indigenous peoples and local communities in the promotion of sustainable development;
(c) improving traceability in value chains;
(d) unlocking the potential of a sustainable and inclusive bioeconomy, including biodiversity-based products and services that enhance biodiversity;
(e) the use of transparent, comparable, measurable, inclusive, science-based and context-specific criteria and methodologies to assess the sustainability of the bioeconomy throughout value chains;
(f) sustainable biofuels, including ethanol and biodiesel, sustainable aviation fuel (SAF) and renewable fuels of non-biological origin; and
(g) production and facilitation of trade of sustainably-produced goods and services, including low-carbon goods.
48. The Parties express support for scaling up finance from developed to developing countries, as well as from other sources, for protecting, conserving, sustainably using and restoring all ecosystems, according to domestic circumstances and policies. They also acknowledge the importance, for Signatory MERCOSUR States, of the European Union´s support and appropriate means to support national policies and international commitments regarding climate change mitigation, adaptation, and its co-benefits, loss and damage objectives and to address biodiversity loss, forest conservation and restoration, in accordance with the laws and regulations as well as the applicable international commitments of each Signatory MERCOSUR State. They also acknowledge the importance of providing and mobilising the technical and financial support needed to enhance the adaptive capacity and resilience of food production and reduce the vulnerability of farmers and other vulnerable groups, especially small-scale farmers, women and youth, in relation to climate change.
49. Recalling the objective of Chapter 26 to enhance the integration of sustainable development in the Parties' trade and investment relationship, the Parties commit to supporting the review of existing financing instruments, to ensure an adequate financing for forest conservation, reforestation, restoration and the reduction of deforestation, and natural grassland conversion, and to work together to ensure these instruments are appropriately financed from domestic and international sources, where applicable, according to each Party's law. Additionally, the Parties support scaling up the mobilization of resources, including through results-based payments and other policy approaches, such as payment for ecosystem services.
50. The Parties emphasise that such cooperation should not only involve the public sector, but also businesses, academia and civil society, in line with their respective roles in promoting sustainable development.
B.3. Sustainability measures affecting trade
51. Recalling their commitments under the WTO Agreements, the Parties agree to have a cooperative approach to address challenges associated with meeting the requirements associated with a Party's sustainability measures affecting trade, taking into account the different levels of development, capacities, priorities and national circumstances and legislation, as well as the specific challenges of landlocked developing countries. Among the aforementioned challenges, the Parties recognise the need to facilitate the implementation of actions to support compliance with the sustainability measures of a Party affecting trade, so that exports can benefit fully from the market access opportunities provided for by this Agreement. They also point to the Protocol on Cooperation, annexed to the Partnership Agreement, as a tool to attain this purpose and agree that support for Signatory MERCOSUR States should include provision of financial resources, capacity building programs, technical assistance and other joint initiatives to promote sustainable supply chains.
52. The Parties recall the provisions of Chapter 13, in particular Article 13.5. The Parties shall seek to identify and adopt measures and implement initiatives to expedite and facilitate trade between them in relevant products, as appropriate, such as mutual recognition or equivalence agreements and increasing mutual knowledge and understanding of existing practices and schemes.
53. When implementing sustainability measures that affect trade, consistent with its law, a Party shall give full consideration to scientific or technical information submitted by the other Party and should take into account the actions taken by that Party to implement the commitments under this Annex.
54. Where a Party´s law provides for verification of compliance of an imported product with the relevant law of another Party, the Parties acknowledge that the authorities of a Party are best placed to assess compliance with the law of that Party. Hence, when a Party assesses compliance with the law of another Party, the former Party shall use the information provided by the latter Party.
55. With regard to the implementation of sustainability measures affecting trade and the placement on the market related to the protection of wooded ecosystems, and where the European Union's law so allows:
(a) the European Union recognises that this Agreement and actions taken to implement commitments thereunder shall be favourably considered, among other criteria, in the risk classification of countries;
(b) documentation, licenses, information and data from certification schemes and traceability and monitoring systems officially recognised, registered or identified by Signatory MERCOSUR States shall be used as a source by the relevant authorities in the European Union for the purpose of verifying compliance of products covered by such measures with traceability requirements placed on the European Union market;
(c) in case of a divergence between the documentation, licenses, information and data from certification schemes and traceability and monitoring systems officially recognised, registered or identified by Signatory MERCOSUR States, and the information being used by the relevant authorities in the European Union, the latter shall, upon request, promptly consider information and clarifications provided by Signatory MERCOSUR States; and
(d) recognising that, in the context of their due diligence obligations, European Union operators and traders may make use of traceability, certification or other third party verified schemes, the European Union shall, upon request from relevant authorities of Signatory MERCOSUR States, provide support for transparent and independent assessments of traceability, certification or third-party verification schemes and their alignment with requirements and good practices.
56. Nothing under this section shall be understood or interpreted as a derogation, modification or incorporation of new definitions regarding the protection of wooded ecosystems under a Party's law.
Part C. FINAL PROVISIONS
57. This Annex shall form an integral part of Chapter 26.
58. In accordance with Article 9.5(1), the European Union shall be responsible for the fulfilment of the commitments in this Annex.
59. In accordance with Article 9.5(2), save where otherwise provided in this Annex, each of the Signatory MERCOSUR States shall be responsible for the fulfilment of the commitments in this Annex.
60. In accordance with Article 26.15(4), parties to a dispute under Chapter 26 for any matter arising under this Annex shall be as set out in Article 29.3.
61. In accordance with Article 26.15(5), no Party shall have recourse to dispute settlement under Chapter 29 for any matter arising under this Annex.
62. The adoption and implementation of the provisions under this Annex shall not be construed as an acknowledgment that market requirements of a Party are consistent with WTO rules and principles, and is without prejudice to a Party's rights under the WTO Agreements.
ANNEX 29-A. RULES OF PROCEDURE FOR ARBITRATION
I. COSTS
1. The remuneration paid to the arbitrators shall include all remuneration and expenses due to their assistants. The Joint Committee in trade configuration shall agree on rules regarding the remuneration and expenses of arbitrators at its first meeting. If the Joint Committee in trade configuration has not established such rules, the remuneration and expenses of arbitrators shall be determined in accordance with WTO practice.
II. NOTIFICATIONS
2. The parties and the arbitration panel shall deliver any request, notice, written submission or other document by e-mail or other electronic means that provides a record of the sending thereof. Unless proven otherwise, the notification shall be deemed to be delivered and received on the date of its sending. A copy of the documents shall also be provided by post or other means agreed by the parties, including a notification of the date of its sending.
3. Any request, notice, written submission or other document shall be sent as follows:
(a) from the arbitration panel to both parties at the same time;
(b) from a party to the arbitration panel, copied to the other party;
(c) from a party to the other party, copied to the panel, as appropriate; or
(d) from the co-chair of the Joint Committee in trade configuration to the arbitrators pursuant to Rule 10(c), copied to the other co-chair and to the parties.
4. All notifications shall be addressed either to the pro tempore presidency of MERCOSUR, if MERCOSUR is a party, or to the relevant national coordinator if a Signatory MERCOSUR State is a party, and to the Directorate-General for Trade of the European Commission of the European Union, respectively. If the representatives of the parties have already been appointed, all notifications shall be also addressed to them.
5. Minor errors of a clerical nature in any request, notice, written submission or other document related to the arbitration panel proceeding may be corrected by delivery of a new document clearly indicating the changes.
6. The documents submitted by a party shall be duly signed in order to be considered officially submitted to the arbitration panel.
7. If the last day for delivery of a document falls on a non-working day of the institutions of the European Union or of a Signatory MERCOSUR State, as applicable, the time period of the delivery of the document shall end on the first following working day.
8. The chairperson of the arbitration panel shall be responsible for the internal and external communications of the arbitration panel, including notifications between the parties and the arbitration panel.
9. The chairperson of the arbitration panel shall be responsible for keeping the file of the proceedings. The chairperson shall provide to any of the parties, on its request, a copy of the file of the proceedings after the issuing of the arbitral award or ruling. The chairperson shall keep the original file during 5 (five) years after the date of issuing of the arbitral award or ruling. At the end of this period, the chairperson shall transmit the original file to the complaining party. The complaining party shall provide a copy of the file to the defending party on its request.
III. COMMENCEMENT OF THE ARBITRATION
10. Regarding the selection of an arbitrator, the following apply:
(a) If, pursuant to Article 29.9 or to Rule 26 and Rules 28 to 31, any member of the arbitration panel is to be selected by lot, representatives of both parties shall be invited with due anticipation to be present when lots are drawn. In any case, the lot shall be carried out with any party present at the time. The co-chair of the Joint Committee in trade configuration of the complaining party shall promptly inform the co-chair of the defending party of the date, time and venue of the lot.
(b) If any of the sub-lists referred to in paragraph 29.8(3) is not established, the co-chair of the Joint Committee in trade configuration of the complaining party shall select by lot the arbitrator, no later than 5 (five) days after the date of delivery of the request referred to in Article 29.8(5), among those natural persons who have been formally proposed by one or both Parties for the establishment of that particular sub-list.
(c) The co-chair of the Joint Committee in trade configuration of the complaining party shall notify arbitrators regarding their appointment.
(d) An arbitrator who has been appointed according to the procedure established in Article 29.9 shall confirm in writing her or his availability to serve as member of the arbitration panel to the co-chairs of the Joint Committee in trade configuration no later than 5 (five) days after the date of the receipt of the notification of her or his appointment. In the notification confirming her or his availability, the arbitrator shall also explicitly confirm that he or she complies and commits to comply with the provisions of set out in Annex 29-B.
(e) Unless the parties agree otherwise, they shall meet the arbitration panel no later than 7 (seven) days after its establishment in order to determine the matters that the parties or the arbitration panel deem appropriate. Members of the arbitration panel and representatives of the parties may take part in this meeting via telephone or video conference. Before this meeting, the parties shall notify the arbitration panel of their appointed representatives, as well as the address, telephone numbers and e-mail addresses to which communications arising in the course of the proceeding shall be sent.
11. Regarding the terms of reference of the arbitration panel, the following apply:
(a) Unless the parties agree otherwise no later than 5 (five) days after the date of the selection of the arbitrators, the terms of reference of the arbitration panel shall be:
"to examine, in the light of the provisions cited by the parties, the matter referred to in the request for establishment of the arbitration panel, to rule on the compatibility of the measure in question with the covered provisions or on whether the measure in question nullifies or substantially impairs any benefit accruing to the complaining party under the covered provisions in a manner adversely affecting trade between the parties, as the case may be, and to issue an arbitral award in accordance with Article 29.14."
(b) The parties shall notify the agreed terms of reference to the arbitration panel no later than 3 (three) days after their agreement.
IV. INITIAL SUBMISSIONS
12. The complaining party shall deliver its initial written submission no later than 30 (thirty) days after the date of establishment of the arbitration panel. The defending party shall deliver its written counter-submission no later than 30 (thirty) days after the date of receipt of the initial written submission.
13. The initial submission shall state clearly the party's claim, including the identification of the measures at issue, the legal basis for the complaint and a summary of the relevant facts and circumstances.
14. The counter-submission shall state the facts and arguments of the defending party upon which its defense is based.
V. EVIDENCE
15. The initial submission and the counter-submission shall include any available supporting evidence, including any expert or technical opinion. Each party shall otherwise submit all factual evidence to the arbitration panel as early as possible and no later than 5 (five) days before the date of the first hearing, except with respect to evidence necessary for purposes of rebuttals, answers to questions, or comments to answers provided by the other party. Upon due justification, the arbitration panel may grant exceptions to this Rule. In such cases, the other party shall be accorded the opportunity to comment on the newly submitted evidence.
16. In all cases, each party shall be accorded the opportunity to comment on the evidence submitted by the other party.
17. All the evidence submitted by a party shall be kept in the files of the proceedings.
18. The arbitration panel may hear witnesses or experts only in the presence of both parties.
VI. WORKING OF ARBITRATION PANELS
19. The chairperson of the arbitration panel shall preside all its meetings. An arbitration panel may delegate to the chairperson the authority to make administrative and procedural decisions. These decisions shall be notified to the other arbitrators and, if appropriate, to the parties.
20. The arbitration panel may carry out its activities by any means, including telephone, facsimile, computer links or video-conference.
21. Only arbitrators may take part in the deliberations of the arbitration panel, but the arbitration panel may permit the arbitrators' assistants to be present at its deliberations.
22. The drafting of any ruling shall remain the exclusive responsibility of the arbitration panel and shall not be delegated.
23. If a procedural question arises that is not covered by the provisions of Chapter 29 or this Annex, the arbitration panel, after consulting the parties, may adopt an appropriate procedure that is compatible with those provisions.
24. If the arbitration panel considers that there is a need to modify any time limit applicable in the proceedings or to make any other procedural or administrative adjustment, it shall inform the parties in writing of the reasons for the change or adjustment and of the period of time or adjustment needed. The arbitration panel may adopt such change or adjustment after consulting the parties. The time limits of Article 29.14 4 shall not be modified.
VII. AMENDMENT OF THE LIST OF ARBITRATORS
25. The list of arbitrators may be amended at any time by initiative of any Party. Any Party can present new individuals by notifying the other Party of the proposed names. The Parties shall discuss the proposal no later than 1 (one) month after the receipt of the notification of the proposed names. The Joint Committee in trade configuration shall take the decision to amend the list no later than 6 (six) months after such notification.
VIII. REPLACEMENT OF ARBITRATORS
26. If an arbitrator is unable to participate in the proceeding, withdraws or has to be replaced, a replacement shall be selected in accordance with Article 29.9 and Rule 10 of this Annex.
27. If a party considers that an arbitrator does not comply with the requirements of the Code of Conduct as set out in Annex 29-B and for this reason should be replaced, that party should notify the other party no later than 15 (fifteen) days after the date on which it obtained evidence of the circumstances underlying the arbitrator's material violation of the Code of Conduct as set out in Annex 29-B.
28. If a party to the dispute considers that an arbitrator other than the chairperson does not comply with the requirements of the Code of Conduct as set out in Annex 29-B, the parties shall consult and, if they so agree, replace the arbitrator and select a replacement following the procedure set out in Article 29.9 and Rule 10 of this Annex. If the parties fail to agree on the need to replace an arbitrator within 5 (five) days of the date of the notification referred to in Rule 27, any party may request that such matter be referred to the chairperson of the arbitration panel, whose decision shall be final.
29. In case an arbitrator other than the chairperson has to be replaced, and if the party concerned fails to select the replacement of an arbitrator, the chairperson shall select a new arbitrator by lot from the same sub-list as the arbitrator to be replaced in accordance with the procedure set out in Article 29.9(4). The selection of the new arbitrator shall be done no later than 5 (five) days after the date of the submission of the request to the chairperson.
30. If a party considers that the chairperson does not comply with the requirements of the Code of Conduct as set out in Annex 29-B, and for this reason should be replaced, that party should notify the other party no later than 15 (fifteen) days after the date on which it obtained evidence of the circumstances underlying the arbitrator's material violation of the Code of Conduct as set out in Annex 29-B. The parties shall consult and, if they so agree, replace the chairperson and select a replacement following the procedure set out in Article 29.9 and Rule 10 of this Annex.
31. If the parties fail to agree on the need to replace the chairperson within 5 (five) days of the date of the receipt of the notification referred to in Rule 30, a new chairperson shall, unless the parties agree otherwise, be selected by lot by the co-chair of the Joint Committee in trade configuration from the requesting party or that co-chair's designee from the sub-list referred to in point (c) of paragraph 29.8(3). The new chairperson shall be selected no later than 5 (five) days after the date of the delivery of the request to the co-chair of the Joint Committee in trade configuration from the requesting party to that effect.
32. The arbitration proceedings shall be suspended for the time period taken to carry out the procedures provided for in Rules 27, 28, 29, 30 and 31.
IX. HEARINGS
33. The defending party shall be in charge of the logistical administration of dispute settlement hearings, unless otherwise agreed. The chairperson of the arbitration panel shall fix the date and time of the hearing in consultation with the parties and the other members of the arbitration panel, and shall confirm this in writing to the parties. This information shall also be made publicly available by the party in charge of the logistical administration of the hearing unless the hearing is closed to the public. Unless a party disagrees, the arbitration panel may decide not to convene a hearing.
34. Unless the parties agree otherwise, the hearing shall be held:
(a) if the defending party is the European Union, in Brussels, Belgium;
(b) if the defending party is MERCOSUR, in Asunción, Paraguay; and
(c) if the defending party is 1 (one) or more Signatory MERCOSUR States, in the place indicated by such States.
35. The arbitration panel may convene additional hearings if the parties so agree.