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Canada-United States-Mexico Agreement (CUSMA) – Chapter 32 – Exceptions and general provisions

Section A:  Exceptions

Article 32.1:  General Exceptions

1. For the purposes of Chapter 2 (National Treatment and Market Access for Goods), Chapter 3 (Agriculture), Chapter 4 (Rules of Origin), Chapter 5 (Origin Procedures), Chapter 6 (Textile and Apparel Goods), Chapter 7 (Customs Administration and Trade Facilitation), Chapter 9 (Sanitary and Phytosanitary Measures), Chapter 11 (Technical Barriers to Trade), Chapter 12 (Sectoral Annexes), and Chapter 22 (State-Owned Enterprises and Designated Monopolies), Article XX of the GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.Footnote 1

2. For the purposes of Chapter 15 (Cross-Border Trade in Services), Chapter 16 (Temporary Entry for Business Persons), Chapter 18 (Telecommunications), Chapter 19 (Digital Trade),Footnote 2 and Chapter 22 (State-Owned Enterprises and Designated Monopolies), paragraphs (a), (b), and (c) of Article XIV of GATS are incorporated into and made part of this Agreement, mutatis mutandis.Footnote 3 

3. The Parties understand that the measures referred to in Article XX(b) of the GATT 1994 and GATS Article XIV (b) include environmental measures necessary to protect human, animal, or plant life or health, and that Article XX(g) of the GATT 1994 applies to measures relating to the conservation of living and non-living exhaustible natural resources.

4. Nothing in this Agreement shall be construed to prevent a Party from taking action, including maintaining or increasing a customs duty, that is authorized by the Dispute Settlement Body of the WTO or is taken as a result of a decision by a dispute settlement panel under a free trade agreement to which the Party taking action and the Party against which the action is taken are party.

Article 32.2:  Essential Security

1. Nothing in this Agreement shall be construed to:

Article 32.3:  Taxation Measures

1. For the purposes of this Article:

designated authorities means:

or any successor of these designated authorities as notified in writing to the other Parties;

tax convention means a convention for the avoidance of double taxation or other international taxation agreement or arrangement; and

taxes and taxation measures include excise duties, but do not include:

2. Except as provided in this Article, this Agreement does not apply to a taxation measure.

3. This Agreement does not affect the rights and obligations of a Party under a tax convention.  In the event of any inconsistency between this Agreement and a tax convention, that convention prevails to the extent of the inconsistency.

4. In the case of a tax convention between two or more Parties, if an issue arises as to whether an inconsistency exists between this Agreement and the tax convention, the issue shall be referred to the designated authorities of the Parties in question. The designated authorities of those Parties shall have six months from the date of referral of the issue to make a determination as to the existence and extent of any inconsistency.  If those designated authorities agree, the period may be extended up to 12 months from the date of referral of the issue. No procedures concerning the measure giving rise to the issue may be initiated under Chapter 31 (Dispute Settlement) or, as between the United States and Mexico, Annex 14-D (Mexico-United States Investment Disputes), or Annex 14-E (Mexico-United States Investment Disputes Related to Covered Government Contracts) until the expiry of the six month period, or any other period as may have been agreed by the designated authorities. A panel or tribunal established to consider a dispute related to a taxation measure shall accept as binding a determination of the designated authorities of the Parties in question made under this paragraph.

5. Notwithstanding paragraph 3:

6. Subject to paragraph 3:

but nothing in the Articles referred to in subparagraphs (a), (b), and (c) apply to:

7. Subject to paragraph 3, and without prejudice to the rights and obligations of the Parties under paragraph 5, Article 14.10.2 (Performance Requirements), Article 14.10.3, and Article 14.10.4 apply to a taxation measure.

8. Article 14.8 (Expropriation and Compensation) applies to a taxation measure. However, as between the United States and Mexico, no investor may invoke Article 14.8 (Expropriation and Compensation) as the basis for a claim if it has been determined pursuant to this paragraph that the measure is not an expropriation.  An investor of the United States or Mexico that seeks to invoke Article 14.8 (Expropriation and Compensation) with respect to a taxation measure must first refer to the designated authorities of the Party of the investor and the respondent Party, at the time that it gives its notice of intent under Article 14.D.3 (Submission of a Claim to Arbitration), the issue of whether that taxation measure is not an expropriation.  If the designated authorities do not agree to consider the issue or, having agreed to consider it, fail to agree that the measure is not an expropriation within a period of six months of the referral, the investor of the United States or Mexico may submit its claim to arbitration under, as applicable, Annex 14.D.3 (Submission of a Claim to Arbitration) or paragraph 2 of Annex 14-E (Mexico-United States Investment Disputes Related to Covered Government Contracts).

Article 32.4:  Temporary Safeguards Measures

1. For the purposes of this Article:

foreign direct investment means a type of investment by an investor of a Party in the territory of another Party, through which the investor exercises ownership or control over, or a significant degree of influence on the management of, an enterprise or other direct investment, and tends to be undertaken in order to establish a lasting relationship; for example, ownership of at least 10 percent of the voting power of an enterprise over a period of at least 12 months generally would be considered a foreign direct investment.

2. This Agreement does not prevent a Party from adopting or maintaining a restrictive measure with regard to payments or transfers for current account transactions in the event of serious balance of payments and external financial difficulties or threats thereof.

3. This Agreement does not prevent a Party from adopting or maintaining a restrictive measure with regard to payments or transfers relating to the movements of capital:

4. A measure adopted or maintained under paragraph 2 or 3 must:

5. As soon as practicable after a Party imposes a measure under paragraph 2, the Party shall:

6. Measures referred to in paragraphs 2 and 3 shall not apply to payments or transfers relating to foreign direct investment. 

7. A Party shall endeavor to provide that a measure it adopts or maintains under paragraph 2 or 3 be price-based, and if that measure is not price-based, the Party shall explain the rationale for using quantitative restrictions when it notifies the other Parties of the measure.

8.  In the case of trade in goods, Article XII of GATT 1994 and the Understanding on the Balance-of-Payments Provisions of the GATT 1994, set out in Annex 1A to the WTO Agreement, are incorporated into and made part of this Agreement, mutatis mutandis.  Any measure it adopts or maintains under this paragraph shall not impair the relative benefits accorded to another Party under this Agreement as compared to the treatment of a non-Party.

9. A Party adopting or maintaining a measure under paragraph 2, 3, or 8 shall:

Article 32.5:  Indigenous Peoples Rights 

Provided that such measures are not used as a means of arbitrary or unjustified discrimination against persons of the other Parties or as a disguised restriction on trade in goods, services, and investment, this Agreement does not preclude a Party from adopting or maintaining a measure it deems necessary to fulfill its legal obligations to indigenous peoples. Footnote 7

Article 32.6:  Cultural Industries 

1. For the purposes of this Article, “cultural industry” means a person engaged in the following activities:

2. This Agreement does not apply to a measure adopted or maintained by Canada with respect to a cultural industry, except as specifically provided in Article 2.4 (Treatment of Customs Duties) or Annex 15-D (Programming Services). 

3. With respect to Canadian goods, services, and content, the United States and Mexico may adopt or maintain a measure that, were it adopted or maintained by Canada, would have been inconsistent with this Agreement but for paragraph 2.

4. Notwithstanding any other provision of this Agreement, a Party may take a measure of equivalent commercial effect in response to an action by another Party that would have been inconsistent with this Agreement but for paragraph 2 or 3.

5. Notwithstanding Article 31.3 (Choice of Forum):

Section B: General Provisions

Article 32.7:  Disclosure of Information

This Agreement does not require a Party to furnish or allow access to information, the disclosure of which would be contrary to its law or would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of particular enterprises, public or private.

Article 32.8:  Personal Information ProtectionFootnote 8

1. For the purposes of this Article:

personal information means information, including data, about an identified or identifiable natural person.

2. Each Party shall adopt or maintain a legal framework that provides for the protection of personal information.Footnote 9 In the development of this legal framework, each Party should take into account principles and guidelines of relevant international bodies, such as the APEC Privacy Framework and the OECD Recommendation of the Council concerning Guidelines governing the Protection of Privacy and Transborder Flows of Personal Data (2013).

3. The Parties recognize that, pursuant to paragraph 2 key principles include: limitation on collection; choice; data quality; purpose specification; use limitation; security safeguards; transparency; individual participation; and accountability.

4. Each Party shall endeavor to adopt non-discriminatory practices in protecting natural persons from personal information protection violations occurring within its jurisdiction.

5. Each Party shall publish information on the personal information protections it provides, including how:

6. Recognizing that the Parties may take different legal approaches to protecting personal information, each Party should encourage the development of mechanisms to promote compatibility between these different regimes.  The Parties shall endeavor to exchange information on the mechanisms applied in their jurisdictions and explore ways to extend these or other suitable arrangements to promote compatibility between them.  The Parties recognize that the APEC Cross-Border Privacy Rules system is a valid mechanism to facilitate cross-border information transfers while protecting personal information.

7. The Parties shall endeavor to foster cooperation between appropriate government agencies regarding investigations on matters involving personal information protection and encourage the development of mechanisms to assist users to submit cross-border complaints regarding protection of personal information.

Article 32.9:  Access to Information

Each Party shall maintain a legal framework that allows a natural person in its territory to obtain access to records held by the central level of government subject to reasonable terms and limitations specified in the Party’s law, provided that the terms and limitations applying to natural persons of another Party in the Party’s territory are no less favorable than those applying to natural persons of the Party, or of another country, in the Party’s territory. Footnote 10

Article 32.10:  Non-Market Country FTA

1. For the purposes of this Article:

non-market country is a country:

2. At least 3 months prior to commencing negotiations, a Party shall inform the other Parties of its intention to commence free trade agreement negotiations with a non-market country.

3. Upon request of another Party, a Party intending to commence free trade negotiations with a non-market country shall provide as much information as possible regarding the objectives for those negotiations.

4. As early as possible, and no later than 30 days before the date of signature, a Party intending to sign a free trade agreement with a non-market country shall provide the other Parties with an opportunity to review the full text of the agreement, including any annexes and side instruments, in order for the Parties to be able to review the agreement and assess its potential impact on this Agreement. If the Party involved requests that the text be treated as confidential, the other Parties shall maintain the confidentiality of the text.

5. Entry by a Party into a free trade agreement with a non-market country will allow the other Parties to terminate this Agreement on six months’ notice and replace this Agreement with an agreement as between them (bilateral agreement).

6. The bilateral agreement shall be comprised of all the provisions of this Agreement, except those provisions that the relevant Parties agree are not applicable as between them. 

7. The relevant Parties shall utilize the six months’ notice period to review this Agreement and determine whether any amendments should be made in order to ensure the proper operation of the bilateral agreement. 

8. The bilateral agreement enters into force 60 days after the date on which the last party to the bilateral agreement has notified the other party that it has completed its applicable legal procedures.

Article 32.11:  Specific Provision on Cross-Border Trade in Services, Investment, and State-Owned Enterprises and Designated Monopolies for Mexico

With respect to the obligations in Chapter 14 (Investment), Chapter 15 (Cross-Border Trade in Services), and Chapter 22 (State-Owned Enterprises and Designated Monopolies), Mexico reserves the right to adopt or maintain a measure with respect to a sector or sub-sector for which Mexico has not taken a specific reservation in its Schedules to Annexes I, II, and IV of this Agreement, only to the extent consistent with the least restrictive measures that Mexico may adopt or maintain under the terms of applicable reservations and exceptions to parallel obligations in other trade and investment agreements that Mexico has ratified prior to entry into force of this Agreement, including the WTO Agreement, without regard to whether those other agreements have entered into force.

Article 32.12:  Exclusion from Dispute Settlement

A decision by Canada following a review under the Investment Canada Act, R.S.C. 1985, c.28 (1st Supp.), with respect to whether or not to permit an investment that is subject to review, shall not be subject to the dispute settlement provisions of Chapter 31 (Dispute Settlement).

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