Part III. TRADE AND INVESTMENT (1)
Chapter 1. GENERAL AND INSTITUTIONAL PROVISIONS
SECTION A
General Provisions
ARTICLE 1.1
Establishment of a Free Trade Area
The Parties establish by virtue of this Part of the Agreement a free trade area, consistent with Article XXIV of GATT 1994 and Article V of GATS.
ARTICLE 1.2
Objectives
The objectives of this Part of the Agreement are:
(a) the expansion and diversification of trade in goods, in conformity with Article XXIV of GATT 1994, between the Parties through the reduction or the elimination of customs duties and non-tariff barriers to trade;
(b) the facilitation of trade in goods, in particular through the provisions regarding customs and trade facilitation, standards, technical regulations and conformity assessment procedures as well as sanitary and phytosanitary measures, while preserving the right of each Party to regulate within its territory and to achieve public policy objectives;
(c) the liberalisation of trade in services, in conformity with Article V of GATS;
(d) the development of a framework conducive to increased investment flows by providing transparent, stable and predictable rules governing the conditions for establishment of enterprises and the related movement of capital, and guaranteeing an appropriate balance between the liberalisation and the protection of investments and the right of each Party to regulate in order to achieve legitimate policy objectives;
(e) the establishment of an investment court system to solve investor-state disputes in an effective, impartial and predictable manner;
(f) the effective and reciprocal opening of government procurement markets of the Parties;
(g) the promotion of innovation and creativity by ensuring an adequate and effective protection of intellectual property rights, in accordance with international obligations in force between the Parties, and the balance between this protection and the public interest;
(h) the conduct of trade and investment relations between the Parties in conformity with the principle of free and undistorted competition;
(i) the promotion of sustainable development and of the development of international trade in a manner that contributes to sustainable development, encompassing economic development, social development and environmental protection;
(j) the establishment of an effective, fair and predictable dispute settlement mechanism to solve disputes between the Parties on the interpretation or application of this Part of the Agreement.
ARTICLE 1.3
Definitions of General Application
For the purposes of this Part of the Agreement, and unless otherwise specified:
(a) "administrative ruling of general application" means an administrative ruling or interpretation that applies to all persons and factual situations that fall generally within the scope of that administrative ruling or interpretation and that establishes a norm of conduct, but does not include:
(i) a determination or ruling made in administrative or quasi-judicial proceedings that applies to a particular person, good or service of the other Party in a specific case; or
(ii) any other ruling that adjudicates with respect to a particular act or practice;
(b) "Agreement on Agriculture" means the Agreement on Agriculture in Annex 1A to the WTO Agreement;
(c) "agricultural good" means a product listed in Annex 1 to the Agreement on Agriculture;
(d) "aircraft repair and maintenance services during which an aircraft is withdrawn from service" means repair and maintenance activities undertaken on an aircraft or a part thereof while it is withdrawn from service and do not include line maintenance;
(e) "Anti-dumping Agreement" means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(f) "computer reservation system services" means services provided by computerised systems that contain information about air carriers' schedules, availability, fares and fare rules, and through which reservations can be made or tickets may be issued;
(g) "customs duty" means any duty or charge of any kind imposed on or in connection with the importation of a good, it includes any surtax or surcharge imposed in connection with such importation; but does not include any:
(i) charge equivalent to an internal tax imposed in accordance with Article 2.3;
(ii) anti-dumping or countervailing 2 duty applied in accordance with GATT 1994, the Anti‑dumping Agreement and the SCM Agreement, as appropriate;
(iii) fee or other charge imposed on or in connection with the importation of a good that is limited in amount to the approximate cost of services rendered; and
(iv) premium offered or collected on an imported good arising out of a tendering system authorised for the administration of tariff rate quotas pursuant to Appendix 2-A-4 (Tariff Rate Quotas of Mexico);
(h) "Customs Valuation Agreement" means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(i) "days" means calendar days, including weekends and holidays;
(j) "DSU" means the Understanding on Rules and Procedures Governing the Settlement of Disputes, contained in Annex 2 to the WTO Agreement;
(k) "enterprise" means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately owned or governmentally owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
(l) "existing" means in effect on the date of entry into force of this Agreement;
(m) "freely convertible currency" means a currency which is widely traded in international foreign exchange markets and widely used in international transactions;
(n) "GATS" means the General Agreement on Trade in Services in Annex 1B to the WTO Agreement;
(o) "GATT 1994" means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(p) "goods" means both materials and products;
(q) "good of a Party" means a domestic good as this is understood in GATT 1994, and includes originating goods of that Party;
(r) "ground handling services" means the supply at an airport, on a fee or contract basis, of airline representation, administration and supervision services, passenger handling, baggage handling, ramp services, catering, 3 air cargo and mail handling, fuelling of an aircraft, aircraft servicing and cleaning, surface transport, and flight operation, crew administration and flight planning services; but does not include self-handling, security, line maintenance, aircraft repair and maintenance; and management or operation of essential centralised airport infrastructure such as de-icing facilities, fuel distribution systems, baggage handling systems and fixed intra-airport transport systems;
(s) "Harmonized System" or "HS" means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, Chapter Notes and Subheading Notes and amendments thereto;
(t) "measure" includes any law, regulation, rule, procedure, decision, administrative action, requirement or practice; 4
(u) "national" means a natural person who has the nationality of one of the Member States of the European Union or of Mexico according to their respective law or is a permanent resident of a Party;
(v) "natural person" means 5 :
(i) in the case of the European Union, a person having the nationality of one of the Member States of the European Union according to its legislation; 6 and
(ii) in the case of Mexico, a person having the nationality of Mexico according to its legislation;
a natural person who is a national of Mexico and has the nationality of one of the Member States of the European Union is deemed to be exclusively a natural person of the Party of his or her dominant and effective nationality;
(w) "OECD" means the Organization for Economic Co-operation and Development;
(x) "originating good" means a good qualifying as originating under the rules of origin set out in Chapter 3 (Rules of Origin and Origin Procedures);
(y) "person" means a natural person or an enterprise;
(z) "person of a Party" means a national or an enterprise of a Party;
(aa) "preferential tariff treatment" means the rate of customs duty applicable to an originating good pursuant to Article 2.4 (Elimination or Reduction of Customs Duties);
(bb) "Safeguards Agreement" means the Agreement on Safeguards in Annex 1A to the WTO Agreement;
(cc) "SCM Agreement" means the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement;
(dd) "selling and marketing of air transport services" means opportunities for the air carrier concerned to sell and market freely its air transport services, including all aspects of marketing such as market research, advertising and distribution, but does not include the pricing of air transport services or the applicable conditions;
(ee) "service supplier" means a person that supplies or seeks to supply a service;
(ff) "SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A to the WTO Agreement;
(gg) "state enterprise" means an enterprise that is owned or controlled by a Party;
(hh) "TBT Agreement" means the Agreement on Technical Barriers to Trade in Annex 1A to the WTO Agreement;
(ii) "territory" means the territory where this Agreement applies pursuant to Article 2.2 (Territorial Application) of Part IV of this Agreement;
(jj) "third country" means a country or territory outside the territorial scope of application of this Agreement;
(kk) "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1C to the WTO Agreement;
(ll) "Vienna Convention on the Law of Treaties" means the Vienna Convention on the Law of Treaties, done at Vienna on 23 May 1969;
(mm) "WTO" means the World Trade Organization; and
(nn) "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.
ARTICLE 1.4
Relation to the WTO Agreement
The Parties affirm their rights and obligations with respect to each other under the WTO Agreement.
ARTICLE 1.5
References to Laws and other Agreements
1. Unless otherwise indicated, any reference in this Part of the Agreement to laws, either generally or by reference to a specific statute, regulation or directive, shall be construed as a reference to the laws, as they may be amended.
2. Unless otherwise indicated, any reference, or incorporation by means of a reference in this Part of the Agreement to other agreements or legal instruments in whole or in part shall be construed as including:
(a) related annexes, protocols, footnotes, interpretative notes and explanatory notes; and
(b) successor agreements to which the Parties are party or amendments that are binding on the Parties, except where the reference affirms existing rights and obligations.
ARTICLE 1.6
Fulfilment of Obligations
1. Each Party shall adopt any general or specific measures required to fulfil the obligations under this Part of the Agreement, including those required to ensure observance thereof by central, regional or local governments and authorities, as well as non-governmental bodies in the exercise of powers delegated to them.
2. For greater certainty, a Party may suspend rights and obligations under this Part of the Agreement, except as provided for in paragraph 3 of Article 2.3 of Part IV of this Agreement (Fulfilment of Obligations), only for violations of this Part of the Agreement by the other Party and in conformity with the requirements set out therein, including Chapter 31 (Dispute Settlement).
SECTION B
Institutional Provisions
ARTICLE 1.7
Specific Functions of the Joint Council
1. When the Joint Council performs any of the functions conferred upon it in this Part of the Agreement, it shall be composed, at ministerial level, of representatives of the EU Party with responsibility for trade and investment matters, of the one part, and of representatives of the Ministry of Economy of Mexico, of the other, or by their designees.
2. The Joint Council may modify, in fulfilment of the objectives of this Part of the Agreement:
(a) Annex 2-A (Tariff Elimination Schedule) and Annex 2-E (Relevant measures on Wines Products and Spirits);
(b) Chapter 3 (Rules of Origin and Origin Procedures) including Annexes 3-A to 3-D;
(c) Annex 10-D (Code of Conduct for Members of the Tribunal, the Appeal Tribunal and Mediators);
(d) the relevant lists and schedules of Mexico pursuant to paragraph 6 of Article 10.12 (Non‑Conforming Measures and Exceptions) and paragraph 4 of Article 11.8 (Non‑Conforming Measures and Exceptions);
(e) Annex 21-A (Covered Procurement of the European Union) and Annex 21-B (Covered Procurement of Mexico);
(f) Annex 25-B (List of Geographical Indications);
(g) Annex 31-A (Rules of Procedure) and Annex 31-B (Code of Conduct for Panellists and Mediators);
3. The Joint Council may also, in fulfilment of the objectives of this Part of the Agreement:
(a) adopt binding interpretations of the provisions of this Part of the Agreement;
(b) take such other decision as provided for in this Part of the Agreement; and
(c) take any other action in the exercise of its functions as the Parties may agree.
4. Each Party shall implement, in accordance with its applicable legal procedures, any modification referred to in subparagraph 2(a) within such period as the Parties may agree.
ARTICLE 1.8
Specific Functions of the Joint Committee
1. When the Joint Committee performs any of the functions conferred upon it in this Part of the Agreement, it shall be composed of representatives at senior level of the EU Party with responsibility for trade and investment matters, on the one part, and of representatives of the Ministry of Economy of Mexico, on the other, in accordance with the respective requirements of each Party or by their designees.
2. The Joint Committee shall:
(a) assist the Joint Council in the performance of its functions regarding trade-related matters;
(b) be responsible for the proper implementation and application of the provisions of this Part of the Agreement and for the evaluation of the results obtained from its application;
(c) without prejudice to Chapter 31 (Dispute Settlement), seek to prevent and solve differences or disputes that may arise regarding the interpretation or application of this Part of the Agreement;
(d) supervise the work of the Sub-Committees and other bodies established under this Part of the Agreement; and
(e) discuss ways to further enhance trade and investment between the Parties.
3. In the performance of its duties under paragraph 2, the Joint Committee may:
(a) establish additional Sub-Committees and other bodies from those established in this Part of the Agreement, composed of representatives of the Parties, and assign them responsibilities within its competence and decide to modify the functions that are assigned to the Sub‑Committees and other bodies it establishes, as well as dissolve them;
(b) recommend the adoption of decisions in compliance with the specific objectives of this Part of the Agreement to the Joint Council, including the modifications referred to in subparagraph 2(a) of Article 1.7, or adopt such decisions in the intervals between the meetings of the Joint Council, including when the Joint Council is not able to meet; and
(c) take any other action in the exercise of its functions as the Parties may agree or as instructed by the Joint Council.
ARTICLE 1.9
Coordinators of Part III of this Agreement
1. Each Party shall designate a Coordinator for this Part of the Agreement and notify the other Party thereof within sixty days after the entry into force of this Agreement.
2. The coordinators shall:
(a) facilitate communications between the Parties on any matter covered by this Part of the Agreement, as well as other contact points established thereunder;
(b) jointly prepare agendas and make all other necessary preparations for the meetings of the Joint Council and the Joint Committee in accordance with this Article; and
(c) follow-up on the decisions of the Joint Council and the Joint Committee, as appropriate.
ARTICLE 1.10
Sub-Committees and Other Bodies of Part III of this Agreement
1. The Parties hereby establish the following sub-committees and other bodies, which shall be composed of representatives of the EU Party, of the one part, and of representatives of Mexico, of the other:
(a) Committee on Trade in Goods;
(b) Sub-Committee on Agriculture;
(c) Sub-Committee on Trade in Wine and Spirits;
(d) Sub-Committee on Customs Trade Facilitation and Rules of Origin;
(e) Sub-Committee on Sanitary and Phytosanitary Measures;
(f) Joint Working Group on Animal Welfare and Antimicrobial Resistance;
(g) Sub-Committee on Technical Barriers to Trade;
(h) Sub-Committee on Services and Investment;
(i) Sub-Committee on Financial Services;
(j) Sub-Committee on Public Procurement;
(k) Sub-Committee on Intellectual Property;
(l) Sub-Committee on Trade and Sustainable Development.
2. Except as otherwise provided in this Part of the Agreement, Article 1.4 of Part IV of this Agreement applies to the sub-committees and other bodies referred to in paragraph 1.
3. The sub-committees and other bodies referred to in paragraph 1 may make appropriate recommendations in the cases provided for under this Part of the Agreement.
4. Recommendations shall be made by mutual consent.
ARTICLE 1.11
Relationship with Civil Society
1. Each Party shall meet at least once a year its respective domestic advisory group referred to in Article 1.7 (Domestic Advisory Groups) of Part IV of this Agreement to discuss matters relating to the application of this Part of the Agreement.
2. When the Joint Council or the Joint Committee meets in its trade configuration, it shall convene a meeting of the Civil Society Forum referred to in Article 1.8 (Civil Society Forum) of Part IV of this Agreement in order to conduct a dialogue on the application of this Part of the Agreement.
Chapter 2. TRADE IN GOODS
SECTION A
General Provisions
ARTICLE 2.1
Definitions