Chapter Twelve

                      Cross-Border Trade in Services



Article 1201:  Scope and Coverage

1.   This Chapter applies to measures adopted or maintained by a
Party relating to cross-border trade in services by service
providers of another Party, including measures respecting:

     (a) the production, distribution, marketing, sale and
 delivery of a service;

     (b) the purchase, payment or use of a service;

     (c) the access to and use of distribution and transportation
 systems in connection with the provision of a service;

     (d) the presence in its territory of a service provider of
 another Party; and

     (e) the provision of a bond or other form of financial
 security as a condition for the provision of a service. 

2.   This Chapter does not apply to: 

     (a) financial services, as defined in Chapter Fourteen
 (Financial Services);

     (b) services associated with energy and basic
 petrochemical goods to the extent provided in
 Chapter Six (Energy and Basic Petrochemicals); and

     (c) air services, including domestic and international air
 transportation, whether scheduled or non-scheduled, and
 related activities in support of air services, other
 than:

     (i) aircraft repair and maintenance services during
 which an aircraft is withdrawn from service, and 

     (ii) specialty air services.

3.   Nothing in this Chapter shall be construed to:

     (a) impose any obligation on a Party with respect to a
 national of another Party seeking access to its
 employment market, or employed on a permanent basis in
 its territory, or to confer any right on that national
 with respect to such access or employment;  

     (b) impose any obligation or confer any right on a Party with
 respect to any procurement by a Party or a state
 enterprise;

     (c) impose any obligation or confer any right on a Party with
 respect to subsidies and grants, including government-
 supported loans, guarantees and insurance provided by a
 Party or a state enterprise; or

     (d) prevent a Party from providing a service or performing a
 function, such as law enforcement, correctional services,
 income security or insurance, social security or
 insurance, social welfare, public education, public
 training, health and child care, in a manner that is not
 inconsistent with this Chapter. 


Article 1202:  National Treatment

1.   Each Party shall accord to service providers of another Party
treatment no less favorable than that it accords, in like
circumstances, to its own service providers.

2.   The treatment accorded by a Party under paragraph 1 means,
with respect to a state or province treatment no less favorable
than the most favorable treatment accorded, in like circumstances,
by such state or province to service providers of the Party of it
forms a part.


Article 1203:  Most-Favored-Nation Treatment

     Each Party shall accord to service providers of another Party
treatment no less favorable than that it accords, in like
circumstances, to service providers of another Party or of a non-
Party.


Article 1204:  Non-Discriminatory Treatment

     Each Party shall accord to service providers of another Party
the better of the treatment required by Articles 1202 and 1203.


Article 1205:  Local Presence

     A Party shall not require a service provider of another Party
to establish or maintain a representative office, branch or any
form of enterprise, or to be resident, in its territory as a
condition for the cross-border provision of a service.


Article 1206:  Reservations

1.   Articles 1202, 1203 and 1205 do not apply to: 

     (a) any existing non-conforming measure that is maintained
 by: 

     (i) a Party at the federal level, as described in its
 Schedule to Annex I,

     (ii) a state or province, for two years after the date
 of entry into force of this Agreement, and
 thereafter as described by a Party in its Schedule
 to Annex I, or

     (iii) a local government;

     (b) the continuation or prompt renewal of any non-conforming
 measure referred to in subparagraph (a); or 

     (c) an amendment to any non-conforming measure referred to in
 subparagraph (a) to the extent that the amendment does
 not decrease the conformity of the measure, as it existed
 immediately before the amendment, with Articles 1202,
 1203 and 1205.

2.   A Party shall have two years from the date of entry into force
of this Agreement to describe in its Schedule to Annex I any
existing non-conforming measure maintained by a state or province.

3.   A Party shall not be required to describe in its Schedule to
Annex I any existing non-conforming measure that is maintained by
a local government.

4.   To the extent indicated by a Party in its Schedule to Annex
II, Articles 1202, 1203 and 1205 do not apply to any measure
adopted or maintained by a Party with respect to the sectors,
subsectors or activities described therein.


Article 1207:  Quantitative Restrictions

1.   The Parties shall periodically, but in any event at least
every two years, endeavor to negotiate the liberalization or
removal of: 

     (a) any existing quantitative restrictions maintained by

     (i) a Party at the federal level, as described in its
 Schedule to Annex V, or

     (ii) a state or province, as described by a Party in its
 Schedule to Annex V; and 

     (b) any quantitative restriction adopted by a Party after the
 date of entry into force of this Agreement. 

2.   Each Party shall have one year from the date of entry into
force of this Agreement to describe in its Schedule to Annex V any
quantitative restriction maintained by a state or province.

3.   Each Party shall notify the other Parties of any quantitative
restriction that it adopts or amends after the date of entry into
force of this Agreement and shall describe any such quantitative
restriction in its Schedule to Annex V.

4.   A Party shall not be required to describe in its Schedule to
Annex V, or to notify, any quantitative restriction adopted or
maintained by a local government.


Article 1208:  Liberalization of Non-Discriminatory Measures 

     Each Party shall describe in its Schedule to Annex VI
commitments to liberalize quantitative restrictions, licensing
requirements, performance requirements or other non-discriminatory
measures relating to the cross-border provision of a service.


Article 1209:  Procedures

     The Commission shall establish procedures for: 

     (a) the notification and description by a Party of  

     (i) state or provincial measures that it intends to
 describe in its Schedule to Annex I pursuant to
 Article 1206(2),

     (ii) quantitative restrictions that it intends to
 describe in it Schedule to Annex V pursuant to
 Article 1207(2),

     (iii) commitments that it intends to describe in its
 Schedule to Annex VI pursuant to Article 1208,
 and 

     (iv) amendments of measures in accordance with Article
 1206(1)(c); and

     (b) consultations between Parties with a view to removing any
 state or provincial measure described by a Party in its
 Schedule to Annex I after the date of entry into force of
 this Agreement.


Article 1210:  Licensing and Certification

1.   With a view to ensuring that any measure adopted or maintained
by a Party relating to the licensing and certification of nationals
of another Party does not constitute an unnecessary barrier to
trade, each Party shall endeavor to ensure that any such measure:

     (a) is based on objective and transparent criteria,
 such as competence and the ability to provide a
 service;

     (b) is not more burdensome than necessary to ensure the
 quality of a service; and

     (c) does not constitute a restriction on the cross-
 border provision of a service.

2.   Notwithstanding Article 1203, a Party shall not be required to
extend to a service provider of another Party the benefits of
recognition of education, experience, licenses or certifications
obtained in another country, whether such recognition was accorded
unilaterally or by arrangement or agreement with that other
country.  The Party according such recognition shall afford any
interested Party an adequate opportunity to demonstrate that
education, experience, licenses or certifications obtained in that
other Party's territory should also be recognized or to negotiate
and enter into an agreement or arrangement of comparable effect.

3.   Two years after the date of entry into force of this
Agreement, a Party shall eliminate any citizenship or permanent
residency requirement for the licensing and certification of
professional service providers in its territory.  Where a Party
does not comply with this provision with respect to a particular
sector, any other Party may maintain an equivalent requirement or
reinstate any such requirement eliminated pursuant to this Article,
only in the affected sector, for such period as the non-complying
Party retains the requirement.

4.   The Parties shall consult periodically with a view to
determining the feasibility of removing any remaining citizenship
or permanent residency requirement for the licensing and
certification of nationals of the other Parties.

5.   Each Party shall implement the provisions of Annex 1210.


Article 1211:  Denial of Benefits

1.   A Party may deny the benefits of this Chapter to a service
provider of another Party where the Party establishes that:

     (a) such service is being provided by an enterprise owned or
 controlled by nationals of a non-Party, and

     (i) the denying Party does not maintain diplomatic
 relations with the non-Party, or 

     (ii) the denying Party has imposed measures against the
 non-Party that prohibit transactions with such
 enterprise or that would be violated or
 circumvented by the activities of such enterprise;
 and

     (b) with respect to the cross-border provision of a
 transportation service covered by this Chapter, the
 service is provided using equipment not registered by any
 Party.

2.   Subject to prior notification and consultation in accordance
with Articles 1803 (Notification and Provision of Information) and
2006 (Consultations), respectively, a Party may deny the benefits
of this Chapter to a service provider of another Party where the
Party establishes that such service is being provided by an
enterprise of another Party that is owned or controlled by persons
of a non-Party and that has no substantial business activities in
the territory of any Party. 

3.   The Party denying benefits pursuant to paragraph 1 or 2 shall
have the burden of establishing that such action is in accordance
with such paragraph.


Article 1212:  Sectoral Annex

     Each Party shall comply with Annex 1212.


Article 1213:  Definitions

1.   For purposes of this Chapter, a reference to a federal, state
or provincial government includes any non-governmental body in the
exercise of any regulatory, administrative or other governmental
authority delegated to it by such government.   

2.   For purposes of this Chapter:

cross-border trade in services or cross-border provision of a
service means the provision of a service:

     (a) from the territory of a Party into the territory of
 another Party;

     (b) in the territory of a Party by a person of that
 Party to a person of another Party; or

     (c) by a person of a Party in the territory of another
 Party,

but does not include the provision of a service in the territory of
a Party by an investment, as defined in Article 1138 (Investment -
Definitions), in that territory;

enterprise means "enterprise" as defined in Article 201, except
that it shall also include a branch;

enterprise of a Party means an enterprise constituted or organized
under the laws and regulations of a Party, including a branch;

professional services means services, the provision of which
requires specialized post-secondary education, or equivalent
training or experience, and for which the right to practice is
granted or restricted by measures adopted or maintained by a Party,
but does not include services provided by trades-persons and vessel
and aircraft crew members; 

quantitative restriction means a non-discriminatory measure that
imposes limitations on:

     (a) the number of service providers, whether in the form of
 a numerical quota, monopoly or a requirement for an
 economic needs test or by any other quantitative means;
 or

     (b) the operations of any service provider, whether in the
 form of a quota or the requirement of an economic needs
 test or by any other quantitative means;

service provider of a Party means a person of a Party that provides
a service; and

specialty air services means aerial mapping, aerial surveying,
aerial photography, forest fire management, fire fighting, aerial
advertising, glider towing, parachute jumping, aerial construction,
heli-logging, aerial sightseeing, flight training, aerial
inspection and surveillance and aerial spraying services.

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                                ANNEX 1210

                           Professional Services


Section A - General Provisions

     Scope and Coverage

1.   This Annex applies to measures adopted or maintained by a
Party relating to the licensing and certification of professional
service providers.

     Processing of Applications for Licenses and Certification

2.   Each Party shall ensure that its competent authorities, within
a reasonable period after the submission of an application for
licensing or certifications by a national of another Party:

     (a) where the application is complete, make a
 determination on the application, and inform the
 applicant of that determination; or

     (b) where the application is not complete, inform the
 applicant without undue delay of the status of the
 application and the additional information that is
 required under its domestic law.

     Development of Mutually Acceptable Professional Standards and
Criteria

3.   The Parties shall encourage the relevant bodies in their
respective territories to develop mutually acceptable professional
standards and criteria for licensing and certification of
professional service providers and to provide recommendations on
mutual recognition to the Commission.

4.   Such standards and criteria may be developed with regard to
the following matters:

     (a) education - accreditation of schools or academic programs
 where professional service providers obtain formal
 education;

     (b) examinations - qualifying examinations for the purpose of
 licensing professional service providers, including
 alternative methods of assessment such as oral
 examinations and interviews;

     (c) experience - length and nature of experience required for
 a professional service provider to be licensed;

     (d) conduct and ethics - standards of professional conduct
 and the nature of disciplinary action for non-conformity
 with those standards by professional service providers;

     (e) professional development and re-certification -
 continuing education for professional service providers,
 and ongoing requirements to maintain professional
 certification;

     (f) scope of practice - extent of, or limitations on, field
 of permissible activities of professional services
 providers;

     (g) territory-specific knowledge - requirements for knowledge
 by professional service providers of such matters as
 local laws, regulations, language, geography or climate;
 and

     (h) consumer protection - alternatives to residency,
 including bonding, professional liability insurance and
 client restitution funds to provide for the protection of
 consumers of professional services.

5.   Upon receipt of the recommendations of the relevant bodies,
the Commission shall review the recommendations within a reasonable
period to determine whether they are consistent with this
Agreement. 

6.   Based upon the Commission's review, the Parties shall
encourage their respective competent authorities, where
appropriate, to adopt those recommendations within a mutually
agreed period.

     Temporary Licensing

7.   Where the Parties agree, each Party shall encourage the
relevant bodies in its territory to develop procedures for
temporary licensing of professional service providers of another
Party.

     Review

8.   The Commission shall periodically, and at least once every
three years, review progress in the implementation of this Annex.


Section B - Foreign Legal Consultants

1.   In implementing its commitments regarding foreign legal
consultants, set out in its Schedules to Annexes I and VI in
accordance with Article 1206 and 1208, each Party shall ensure,
subject to its reservations set out in its Schedules to Annexes I
and II in accordance with Article 1206, that a foreign legal
consultant is permitted to practice or advise on the law of the
country in which such consultant is authorized to practice as a
lawyer.

     Consultations With Relevant Professional Bodies

2.   Each Party shall undertake consultations with its relevant
professional bodies for the purpose of obtaining their
recommendations on:

     (a) the forms of association and partnership between lawyers
 authorized to practice in its territory and foreign legal
 consultants;

     (b) the development of standards and criteria for the
 authorization of foreign legal consultants in conformity
 with Article 1210; and

     (c) any other issues related to the provision of foreign
 legal consultancy services.

3.   Each Party shall encourage its relevant professional bodies to
meet with the relevant professional bodies designated by each of
the other Parties to exchange views regarding the development of
joint recommendations on the issues described in paragraph 2 prior
to initiation of consultations under that paragraph.

     Future Liberalization

4.   Each Party shall establish a work program aimed at developing
common procedures throughout its territory for the licensing and
certification of lawyers licensed in the territory of another Party
as foreign legal consultants.

5.   With a view to meeting this objective, each Party shall, upon
receipt of the recommendations of the relevant professional bodies,
encourage its competent authorities to bring applicable measures
into conformity with such recommendations.

6.   Each Party shall report to the Commission within one year
after the date of entry into force of this Agreement, and each year
thereafter, on progress achieved in implementing the work program.

7.   The Parties shall meet within one year from the date of entry
into force of the this Agreement with a view to:

     (a) assessing the work that has been done under paragraphs 2
 through 6;

     (b) as appropriate, amending or removing the remaining
 reservations on foreign legal consultancy services; and

     (c) determining any future work that might be appropriate
 relating to foreign legal consultancy services.


Section C - Temporary Licensing of Engineers

1.   The Parties shall meet within one year after the date of entry
into force of this Agreement to establish a work program to be
undertaken by each Party, in conjunction with relevant professional
bodies specified by that Party, to provide for the temporary
licensing in its territory of engineers licensed in the territory
of another Party.

2.   With a view to meeting this objective, each Party shall
undertake consultations with its relevant professional bodies for
the purpose of obtaining their recommendations on:

     (a) the development of procedures for the temporary licensing
 of engineers licensed in the territory of another Party
 to permit them to practice their engineering specialties
 in each jurisdiction in its territory that regulates
 engineers;

     (b) the development of model procedures, in conformity with
 Article 1210 and Section A of this Annex, for adoption by
 the competent authorities throughout its territory to
 facilitate the temporary licensing of engineers; 

     (c) the engineering specialties to which priority should be
 given in developing temporary licensing procedures; and

     (d) any other issues relating to the temporary licensing of
 engineers identified by the Party through its
 consultations with the relevant professional bodies.

3.   The relevant professional bodies shall be requested to make
recommendations on the matters specified in paragraph 2 to their
respective Parties within two years after the date of date of entry
into force of this Agreement.  

4.   Each Party shall encourage its relevant professional bodies to
meet at the earliest opportunity with the relevant professional
bodies of the other Parties with a view to cooperating in the
expeditious development of joint recommendations on matters
specified in paragraph 2.  The relevant professional bodies shall
be encouraged to develop such recommendations within two years
after the date of entry into force of this Agreement.  Each Party
shall request an annual report from its relevant professional
bodies on the progress achieved in developing such recommendations.

5.   Upon receipt of the recommendations described in paragraphs 3
and 4, the Parties shall review them to ensure their consistency
with the provisions of the Agreement and, if consistent, encourage
their respective competent authorities to implement such
recommendations within one year.

6.   Pursuant to paragraph 5 of Section A, within two years after
the date of entry into force of this Agreement, the Commission
shall review progress made in implementing the objectives set out
in this Section.

7.   Appendix 1210-C shall apply to engineering specialties.

=============================================================================
                                ANNEX 1212

                            Land Transportation


     Contact Points for Land Transportation Services

1.   Further to Article 1801 (Contact Points), each Party shall
designate contact points to provide information relating to land
transportation services published by that Party on operating
authority, safety requirements, taxation, data and studies and
technology, as well as assistance in contacting its relevant
government agencies.

     Review Process for Land Transportation Services

2.   The Commission shall, during the fifth year after the date of
entry into force of this Agreement and thereafter during every
second year of the period of liberalization for bus and truck
transportation set out in the Schedule of each Party to Annex I of
this Chapter, receive and consider a report from the Parties that
assesses progress respecting such liberalization, including:

     (a) the effectiveness of such liberalization;

     (b) specific problems for, or unanticipated effects on, each
 Party's bus and truck transportation industry arising
 from such liberalization; and

     (c) modifications to such period of liberalization.

The Commission shall endeavor to resolve in a mutually satisfactory
manner any matter arising from its consideration of such reports.

3.   The Parties shall consult, no later than seven years after the
date of entry into force of this Agreement, to determine the
possibilities for further liberalization commitments.

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                             Appendix 1210 - C

                              Civil Engineers


     Mexico will undertake the commitments of this Section only
with respect to civil engineers ("ingenieros civiles").