1. When establishing or implementing measures aimed at protecting the environment or occupational safety and health that may affect trade or investment, each Party shall take into account available scientific and technical information, relevant international standards, guidelines or recommendations.
2. If there is a lack of full scientific certainty and there are threats of serious or irreversible damage to the environment or to occupational safety and health, a Party may adopt cost-effective measures based on the precautionary principle. Such measures shall be consistent with, or justified under, this Agreement. They shall be based upon available pertinent information and subject to periodic review in the light of new scientific information.
Article 26.12. Transparency
When a Party adopts and implements measures of general application aimed at the protection of the environment and labour conditions that may affect trade or investment between the Parties, or trade or investment measures that may affect the protection of the environment or labour conditions, that Party shall do so in accordance with Chapter 27 (Transparency), and shall provide reasonable opportunities for interested persons to submit views on the proposed measures in accordance with its domestic laws and regulations.
Article 26.13. Cooperation on Trade and Sustainable Development
1. The Parties recognise the importance of cooperating in order to achieve the objectives of this Chapter.
2. The cooperation referred to in paragraph 1 may cover areas such as:
(a) labour and environmental aspects of trade and sustainable development in international fora, including in particular the WTO, the ILO, the United Nations Environment Assembly and Programme and multilateral environmental agreements;
(b) the impact of labour and environmental law and standards on trade and investment; and
(c) the impact of trade and investment law on labour and the environment.
3. The cooperation referred to in paragraph 1 may also cover trade-related aspects of:
(a) the fundamental, governance and other up-to-date ILO conventions of relevance in a trade context;
(b) the ILO Decent Work Agenda, including on the inter-linkages between trade and full and productive employment, labour market adjustment, core labour standards, decent work in global supply chains, social protection and social inclusion, social dialogue, skills development and gender equality;
(c) multilateral environmental agreements, including customs cooperation and support for each other's participation in such agreements;
(d) the current and future international climate change regime, including means to promote low-carbon technologies and energy efficiency, preparation and adoption of carbon pricing action including emissions trading systems, ecosystem-based adaptation and water management adaptation approaches to climate change;
(e) the Montreal Protocol on Substances that Deplete the Ozone Layer and its Kigali Amendment, in particular:
(i) measures to control the production and consumption of and trade in ozone- depleting substances (ODSs) and hydrofluorocarbons (HFCs);
(ii) introduction of environmentally friendly alternatives;
(iii) updating of standards; and
(iv) combatting illegal trade of substances regulated by that agreement;
(f) the promotion of inclusive green growth and a circular economy;
(g) transparent private and public sustainability assurance schemes, including eco-labelling;
(h) the protection and restoration of ecosystems, access to genetic resources and the fair and equitable sharing of benefits from their utilisation in accordance with the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity done at Nagoya on 29 October 2010, as well as the valuation of ecosystems and their services and related economic instruments;
(i) corporate social responsibility, responsible business conduct and responsible management of global supply chains, including with regard to adherence, implementation and dissemination of internationally agreed instruments;
(j) the sound management of chemicals and waste;
(k) the promotion of the conservation and sustainable use of biological diversity, including by combatting illegal wildlife trade, as referred to in Article 26.6;
(l) the promotion of the conservation and sustainable management of forests with a view to halting deforestation and illegal logging, including the promotion of trade in forest products that have not given rise to deforestation or forest degradation, as referred to in Article 26.7; and
(m) the promotion of sustainable fishing practices and trade in sustainably managed fish products, as well as the protection and restoration of the marine environment, as referred to in Article 26.8.
Article 26.14. Sub-Committee on Trade and Sustainable Development
1. The Sub-Committee on Trade and Sustainable Development established by Article 1.10.1(l) (Sub-Committees and Other Bodies of Part III of this Agreement) shall meet within a year of the date of entry into force of this Agreement, unless otherwise agreed by the Parties, and thereafter as necessary in accordance with Article 1.4 (Sub-Committees and Other Bodies) of Part IV of this Agreement.
2. The Sub-Committee on Trade and Sustainable Development shall:
(a) facilitate and monitor the effective implementation and administration of this Chapter, including cooperation activities undertaken under this Chapter;
(b) carry out the tasks referred to in Articles 26.17 to 26.19;
(c) make recommendations to the Joint Committee, including with regard to topics for discussion with the Domestic Advisory Group and Civil Society Forum, referred to in Articles 1.7 (Domestic Advisory Groups) and 1.8 (Civil Society Forum) of Part IV of this Agreement; and
(d) consider any other matters related to this Chapter as the Parties may agree.
3. The Sub-Committee on Trade and Sustainable Development shall issue a public report after each of its meetings.
4. Each Party shall give due consideration to communications and opinions from the public on matters related to this Chapter and shall inform of such communications and opinions the Sub‑Committee on Trade and Sustainable Development and its civil society mechanisms referred to in Article 1.6 (Relationship with Civil Society) of Part IV of this Agreement.
Article 26.15. Trade and Sustainable Development Contact Points
Each Party shall designate a contact point to facilitate communication and coordination between the Parties on any matters relating to the implementation of this Chapter and notify the other Party of its contact details. The Parties shall promptly notify each other of any changes to those contact details.
Article 26.16. Dispute Resolution
In case of disagreement between the Parties regarding the interpretation or application of this Chapter, the Parties shall have recourse exclusively to the dispute resolution procedures referred to in Articles 26.17 and 26.18.
Article 26.17. Consultations
1. A Party may request consultations with the other Party regarding the interpretation or application of this Chapter by delivering a written request to the contact point of the other Party established in accordance with Article 26.15. The request shall set out the reasons for requesting consultations, including a description of the matter at issue. Consultations shall start promptly after a Party delivers a request for consultations, and in any event no later than 30 days after the date of receipt of the request, unless the Parties agree otherwise. Consultations shall be held in person or, if the Parties so agree, by electronic means.
2. The Parties shall enter into consultations with the aim of reaching a mutually satisfactory resolution of the matter. With respect to matters related to the multilateral agreements referred to in this Chapter, the Parties shall take into account information from the ILO or relevant multilateral environmental organisations or bodies in order to ensure coherence between the work of the Parties and the work of those organisations or bodies. Where relevant and mutually agreed, the Parties shall seek advice from such organisations or bodies, or any other expert or body they deem appropriate.
3. If, 30 days after the date of receipt of the request referred to in paragraph 1, a Party considers that the matter needs further discussion, that Party may request in writing that the Sub-Committee on Trade and Sustainable Development be convened and notify that request to the contact point referred to in paragraph 1.The Sub-Committee on Trade and Sustainable Development shall meet promptly and endeavour to reach a mutually satisfactory resolution of the matter.
4. The Sub-Committee on Trade and Sustainable Development shall seek as appropriate the advice of the Domestic Advisory Groups referred to in Article 1.7 (Domestic Advisory Groups) of Part IV of this Agreement or other expert advice.
5. Any resolution reached by the Parties shall be made available to the public.
Article 26.18. Panel of Experts
1. If, within 90 days after a request for consultations pursuant to Article 26.17, the Parties have not reached a mutually agreed solution, a Party may request the establishment of a panel of experts to examine the matter. That request shall be made in writing to the contact point of the other Party designated pursuant to Article 26.15. The request shall identify the reasons for requesting the establishment of a panel of experts, including an indication of the legal basis for the complaint.
2. Except as otherwise provided for in this Article, Articles 31.6 (Establishment of a Panel), 31.10 (Functions of the Panel), 31.20 (Replacement of Panellists), 31.21 (Rules of Procedure), 31.22 (Suspension and Termination), 31.23 (Receipt of Information) and 31.24 (Rules of Interpretation); and Section E (Common Provisions) of Chapter 31 (Dispute Settlement); as well as Annexes 31-A (Rules of Procedure) and 31-B (Code of Conduct for Panellists and Mediators), apply.
3. The Sub-Committee on Trade and Sustainable Development shall, at its first meeting after the entry into force of this Agreement, establish a list of at least 15 individuals who are willing and able to serve as panellists on the panel of experts. The list shall be composed of three sub-lists: one sub‑list for each Party and one sub-list of individuals that are not nationals of either Party and who may serve as chairperson of the panel of experts. Each Party shall propose at least five individuals for its sub-list. The Parties shall also select at least five individuals for the list of chairpersons. The Sub-Committee on Trade and Sustainable Development shall ensure that the list is kept updated and that the number of experts is maintained at least at 15 individuals.
4. The individuals referred to in paragraph 3 shall have specialised knowledge of, or expertise in, labour or environmental law, issues addressed in this Chapter or the resolution of disputes arising under international agreements. They shall be independent, serve in their individual capacities and shall not take instructions from any organisation or government with regard to issues related to the disagreement or be affiliated with the government of any Party, and shall comply with the provisions set out in Annex 31-B (Code of Conduct for Panellists and Mediators).
5. A panel of experts shall be established in accordance with the procedures set out in paragraphs 2 and 3 of Article 31.6 (Establishment of a Panel). The experts shall be selected from the individuals on the sub-lists referred to in paragraph 3 of this Article, in accordance with Article 31.7 (Composition of a Panel).
6. Unless the Parties agree otherwise within five days after the date of establishment of the panel of experts, as defined in paragraph 3 of Article 31.6 (Establishment of a Panel), the terms of reference of the panel shall be:
"to examine, in the light of the relevant provisions of Chapter 26 (Trade and Sustainable Development) of Part III (Trade and Investment) of this Agreement, the matter referred to in the request for the establishment of the Panel of Experts, to make findings and recommendations for the resolution of the matter and to deliver a report, in accordance with paragraph 8 of Article 26.18 (Panel of Experts)".
7. In matters related to the respect of multilateral agreements referred to in this Chapter, the panel of experts shall endeavour to seek information and advice from relevant bodies of the ILO or other bodies established under multilateral environmental agreements.
8. The panel of experts shall issue to the Parties an interim report within 90 days after the establishment of the panel of experts and a final report no later than 30 days after issuing the interim report. Those reports shall set out the findings of fact, the applicability of the relevant provisions and the basic rationale behind any findings and recommendations. Each Party shall make the final report available to the public within 15 days after its delivery by the panel of experts.
9. The Parties shall discuss appropriate measures to be implemented taking into account the report and recommendations of the panel of experts. The Party implementing appropriate measures shall inform its Domestic Advisory Group referred to in Article 1.7 (Domestic Advisory Groups) of Part IV of this Agreement and the other Party of any actions or measures to be implemented no later than three months after the report has been made available to the public. The Sub-Committee on Trade and Sustainable Development shall monitor the follow-up to the report of the panel of experts and its recommendations. The domestic advisory groups referred to in Article 1.7 (Domestic Advisory Groups) of Part IV of this Agreement may submit observations to the Sub-Committee on Trade and Sustainable Development in this regard.
Article 26.19. Review
1. For the purposes of enhancing the effective implementation of this Chapter, the Parties shall initiate, upon entry into force of the Agreement, a formal review process taking into account, among others, the experience gained through implementation of this Chapter, policy developments in each Party, developments in international agreements and views presented by stakeholders. The Parties will aim to conclude the review process within 12 months.
2. For the purpose of paragraph 1, the Parties shall in particular discuss at the meetings of the Sub-Committee on Trade and Sustainable Development, the operation of the institutional and dispute settlement provisions set out in Articles 26.14 to 26.18, including a possible review of their effectiveness and the enhancement of the enforcement mechanism, including the possibility to apply a compliance phase and relevant countermeasures as last resort.
3. The Sub-Committee on Trade and Sustainable Development may prepare amendments to the relevant provisions of this Chapter reflecting the outcome of the discussions referred to in paragraph 1 and 2, in accordance with the amendment procedure established in Article 2.4 (Amendment) of Part IV of the Agreement.
4. Without prejudice to the outcome of the review, the Parties shall also consider the possibility and modality of including the Paris Agreement as an essential element of this Agreement.
Chapter 27. TRANSPARENCY
Article 27.1. Definitions
For the purposes of this Chapter:
(a) "measures of general application" means laws, regulations, procedures and administrative rulings of general application;
(b) "interested person" means any natural or legal person that may be affected by a measure of general application; and
(c) "administrative action" means an action or decision having a legal effect that affects the rights and obligations of a specific person in an individual case, and covers an administrative action or failure to take an administrative action or decision as provided for in the Party's law.
Article 27.2. Objective
The Parties aim to promote a transparent regulatory environment.
Article 27.3. Publication
1. Each Party shall ensure that any measure of general application with respect to any matter covered by this Part of the Agreement:
(a) is promptly published via an officially designated medium and, if feasible, electronic means, or otherwise made available in such a manner as to enable traders and other interested parties to become acquainted with them; and
(b) if adopted by the central level of government, provides an explanation of its objective and rationale.
2. To the extent possible, when introducing or changing a measure referred to in paragraph 1, each Party shall provide sufficient time to become acquainted with it between publication and entry into force.
Article 27.4. Provision of Information
1. A Party shall, at the request of the other Party, promptly provide information and respond to questions pertaining to any existing or proposed measure of general application that materially affects the operation of this Agreement.
2. Information provided pursuant to this Article is without prejudice as to whether the measure is consistent with this Agreement.
Article 27.5. Administration of Measures of General Application
1. Each Party shall administer in an objective, impartial, consistent and reasonable manner all measures of general application with respect to any matter covered by this Part of the Agreement.
2. When applying measures of general application in specific cases to particular persons, goods or services of the other Party, each Party shall:
(a) endeavour to provide a person that is directly affected by administrative proceedings with reasonable notice, in accordance with its laws and regulations, when those proceedings are initiated, including a description of the nature of the proceedings, a statement of the legal authority under which the proceedings are initiated and a general description of any controversial issues;
(b) afford such person a reasonable opportunity to present facts and arguments in support of that person's position prior to any final administrative action if time, the nature of the proceedings and public interest allow; and
(c) ensure the procedures are in accordance with its law.
Article 27.6. Review and Appeal
1. Each Party shall establish or maintain judicial, arbitral or administrative tribunals or procedures for the purposes of the prompt review and, where warranted, correction of an administrative action with respect to any matter covered by this Part of the Agreement. (85) Each Party shall ensure that its procedures for appeal or review are carried out in a non-discriminatory and impartial manner by tribunals that are independent of the authority entrusted with administrative enforcement and shall not have any substantial interest in the outcome of the matter.
2. Each Party shall ensure that the parties to the proceedings referred to in paragraph 1 are provided with the right to:
(a) a reasonable opportunity to support or defend their respective positions; and
(b) a decision based on the evidence and submissions of record or, where required by its law, the record compiled by the relevant administrative authority.
3. The decision referred to in subparagraph 2(b) shall, subject to appeal or further review as provided for under law of that Party, be implemented by, and govern the practice of, the office or authority entrusted with administrative enforcement.
Chapter 28. GOOD REGULATORY PRACTICES
Article 28.1. Definitions
For the purposes of this Chapter:
(a) "regulatory authority" means:
(i) for the European Union: the European Commission; and
(ii) for Mexico: the Federal Public Administration, including any decentralised bodies of the Federal Public Administration; and
(b) "regulatory measures" means measures of general application, developed by a regulatory authority and adopted by a Party with which compliance is mandatory, which are:
(i) for the European Union:
(A) regulations and directives, as provided for in Article 288 of the Treaty on the Functioning of the European Union (TFEU); and
(B) delegated and implementing acts, as provided for in Articles 290 and 291 TFEU, respectively; and
(ii) for Mexico:
(A) laws and legislative decrees presented by the executive branch of the Federal Government; and
(B) any other administrative acts of general application, including, but not limited to, regulations, decrees, agreements and Normas Oficiales Mexicanas ("NOMs", Mexican Official Standards).
Article 28.2. General Principles
1. The Parties recognise the importance of:
(a) using good regulatory practices in the process of planning, designing, issuing, implementing, evaluating and reviewing regulatory measures in order to achieve domestic policy objectives; and
(b) maintaining and enhancing the benefits of this Agreement through the use of good regulatory practices to facilitating trade in goods and services and increasing investment between the Parties.
2. Each Party shall have the right to determine its approach to good regulatory practices under this Agreement in a manner consistent with its own legal framework, practice and fundamental principles (86) underlying its regulatory system.
3. The provisions in this Chapter shall not be construed as requiring a Party to:
(a) deviate from domestic procedures for identifying its regulatory priorities and for preparing and adopting regulatory measures ensuring the levels of protection that it considers appropriate;
(b) take actions that would undermine or impede the timely adoption of regulatory measures to achieve its public policy objectives; or
(c) achieve any particular regulatory outcome.
Article 28.3. Scope
1. This Chapter applies to regulatory measures in respect to any matter covered by this Part of the Agreement.
2. This Chapter does not apply to regulatory authorities and regulatory measures, practices or approaches of the Member States.
Article 28.4. Internal Consultation and Coordination of Regulatory Development
1. The Parties recognise that the implementation of good regulatory practices can be facilitated through domestic mechanisms that improve internal consultation and coordination required for processes or mechanisms for the development of regulatory measures.
2. Each Party shall adopt or maintain internal coordination or review processes or mechanisms with respect to regulatory measures that its regulatory authority is developing.
3. Such processes or mechanisms should seek, among others, to:
(a) foster good regulatory practices, including those set out in this Chapter;
(b) strengthen internal consultations and coordination for the identification and avoidance of unnecessary duplication and inconsistency of the requirements in the Party's regulatory measures;
(c) promote that the potential impacts of the regulatory measures under preparation, including those on small and medium-sized enterprises, are taken into consideration in the subsequent decision making process;
(d) ensure compliance with international trade and investment obligations; and
(e) promote that relevant developments in international and other fora are taken into consideration.
4. The Parties recognise that the processes or mechanisms referred to in paragraph 2 may vary depending on their respective circumstances. In this regard, each Party may, in accordance with its domestic rules and procedures, improve its regulatory system through additional internal consultation and coordination mechanisms.
5. Each Party may establish or maintain a central coordinating body.
Article 28.5. Transparency of the Regulatory Processes and Mechanisms
Each Party shall make publicly available descriptions of the processes and mechanisms used by its regulatory authority to prepare, evaluate or review regulatory measures. Those descriptions shall refer to relevant guidelines, rules or procedures, including those regarding opportunities for the public to provide comments.
Article 28.6. Early Information on Planned Regulatory Measures
1. Each Party shall make publicly available, at least on an annual basis, a list of planned major (87) regulatory measures that its regulatory authority reasonably expect to adopt within the year.
2. With respect to each of the regulatory measures included in the list referred to in paragraph 1, each Party should also make publicly available:
(a) a brief description of its scope and objectives; and
(b) the estimated time for its adoption including, if possible, the period for public consultation.
Article 28.7. Public Consultations
1. When developing a major regulatory measure, each Party shall, in accordance with its rules and procedures:
(a) publish either a draft regulatory measure or consultation documents that provides sufficient details about the new regulatory measure under preparation in order to allow any person to assess whether and how its interests might be significantly affected;
(b) offer reasonable opportunities for any person, on a non-discriminatory basis, to provide comments; and
(c) consider the comments received.
2. Each Party should make use of electronic means of communication and seek to use a dedicated single access point for providing information related to public consultations, including on how to provide comments.
3. Each Party shall make publicly available any comments it receives, as well as a summary of the results of the consultations. This obligation does not apply to the extent necessary to protect confidential information or personal data, or to withhold inappropriate content.
Article 28.8. Regulatory Impact Assessment
1. Each Party shall promote that its regulatory authority, in accordance with the applicable rules and procedures, carries out regulatory impact assessments when developing major regulatory measures.
2. When carrying out an regulatory impact assessment in accordance with paragraph 1, the regulatory authority of each Party shall establish and maintain processes and mechanisms that promote the consideration of the following factors:
(a) the need for a regulatory measure, including the nature and significance of the problem the regulatory measure is intended to address;
(b) any feasible and appropriate regulatory and non-regulatory alternatives, including the option of not regulating, that would achieve the public policy objective of that Party;
(c) to the extent possible and relevant, the potential costs and benefits and social, economic and environmental impact of those alternatives, including on international trade and investment and on small and medium-sized enterprises; recognising that some costs and benefits are difficult to quantify and to express in monetary terms;