PART ONE
                               GENERAL PART

                                Chapter One

                                Objectives



Article 101:  Establishment of the Free Trade Area

     The Parties to this Agreement, consistent with Article XXIV
of the General Agreement on Tariffs and Trade, hereby establish a
free trade area.


Article 102:  Objectives

1.   The objectives of this Agreement, as elaborated more
specifically through its principles and rules, including national
treatment, most-favored-nation treatment and transparency are to:

     (a) eliminate barriers to trade in, and facilitate the
 cross border movement of, goods and services between
 the territories of the Parties;

     (b) promote conditions of fair competition in the free
 trade area;

     (c) increase substantially investment opportunities in
 their territories;

     (d) provide adequate and effective protection and
 enforcement of intellectual property rights in each
 Party's territory;

     (e) create effective procedures for the implementation and
 application of this Agreement, and for its joint
 administration and the resolution of disputes; and

     (f) establish a framework for further trilateral, regional
 and multilateral cooperation to expand and enhance the
 benefits of this Agreement.

2.   The Parties shall interpret and apply the provisions of this
Agreement in the light of its objectives set out in paragraph 1
and in accordance with applicable rules of international law.


Article 103:  Relation to Other Agreements

1.   The Parties affirm their existing rights and obligations
with respect to each other under the General Agreement on Tariffs
and Trade and other agreements to which such Parties are party.

2.   In the event of any inconsistency between the provisions of
this Agreement and such other agreements, the provisions of this
Agreement shall prevail to the extent of the inconsistency,
except as otherwise provided in this Agreement.


Article 104:  Relation to Environmental and Conservation
Agreements

1.   In the event of any inconsistency between this Agreement and
the specific trade obligations set out in:

     (a) Convention on the International Trade in Endangered
 Species of Wild Fauna and Flora, done at Washington,
 March 3, 1973;

     (b) the Montreal Protocol on Substances that Deplete the
 Ozone Layer, done at Montreal, September 16, 1987, as
 amended June 29, 1990; 

     (c) Basel Convention on the Control of Transboundary
 Movements of Hazardous Wastes and Their Disposal, done
 at Basel, March 22, 1989, upon its entry into force for
 Canada, Mexico and the United States; or 

     (d) the agreements set out in Annex 104.1,

such obligations shall prevail to the extent of the
inconsistency, provided that where a Party has a choice among
equally effective and reasonably available means of complying
with such obligations, the Party chooses the alternative that is
the least inconsistent with the other provisions of this
Agreement.

2.   The Parties may agree in writing to modify Annex 104.1 to
include any amendment to the agreements listed in paragraph 1,
and any other environmental or conservation agreement.


Article 105:  Extent of Obligations

     The Parties shall ensure that all necessary measures are
taken in order to give effect to the provisions of this
Agreement, including their observance, except as otherwise
provided in this Agreement, by state and provincial governments.

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                                 ANNEX 104

       Bilateral and Other Environmental and Conservation Agreements


1.   The Agreement Between the Government of Canada and the
Government of the United States of America Concerning the
Transboundary Movement of Hazardous Waste, signed at Ottawa,
October 28, 1986.

2.   The Agreement between the United States of America and the
United Mexican States on Cooperation for the Protection and
Improvement of the Environment in the Border Area, signed at
La Paz, Baja California Sur, August 14, 1983.