Chapter Twenty-- Dispute Settlement

Chapter Twenty-- Dispute Settlement

Section A:  Dispute Settlement

Article 20.1:  Cooperation 

 The Parties shall at all times endeavor to agree on the interpretation and application of

this Agreement, and shall make every attempt through cooperation and consultations to arrive at

a mutually satisfactory resolution of any matter that might affect its operation.

Article 20.2:  Scope of Application

 Except as otherwise provided in this Agreement, the dispute settlement provisions of this

Chapter shall apply:

(a) with respect to the avoidance or settlement of all disputes between the Parties

regarding the interpretation or application of this Agreement;

(b) wherever a Party considers that an actual or proposed measure of another Party is

or would be inconsistent with the obligations of this Agreement or that another

Party has otherwise failed to carry out its obligations under this Agreement; and

(c) wherever a Party considers that an actual or proposed measure of another Party

causes or would cause nullification or impairment in the sense of Annex 20.2.

Article 20.3:  Choice of Forum

1. Where a dispute regarding any matter arises under this Agreement and under another free

trade agreement to which the disputing Parties are party or the WTO Agreement, the

complaining Party may select the forum in which to settle the dispute. 

2. Once the complaining Party has requested a panel under an agreement referred to in

paragraph 1, the forum selected shall be used to the exclusion of the others. 

Article 20.4:  Consultations 

1. Any Party may request in writing consultations with any other Party with respect to any

actual or proposed measure or any other matter that it considers might affect the operation of this

Agreement. 

2. The requesting Party shall deliver the request to the other Parties, and shall set out the

reasons for the request, including identification of the actual or proposed measure or other matter

at issue and an indication of the legal basis for the complaint.

 

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3. A Party that considers it has a substantial trade interest in the matter may participate in

the consultations on delivery of written notice to the other Parties within seven days of the date

of delivery of the request for consultations.  The Party shall include in its notice an explanation

of its substantial trade interest in the matter. 

4. Consultations on matters regarding perishable goods1 shall commence within 15 days of

the date of delivery of the request.

5. The consulting Parties shall make every attempt to arrive at a mutually satisfactory

resolution of any matter through consultations under this Article or other consultative provisions

of this Agreement.  To this end, the consulting Parties shall:

(a) provide sufficient information to enable a full examination of how the actual or

proposed measure or other matter might affect the operation and application of

this Agreement; and

(b) treat any confidential information exchanged in the course of consultations on the

same basis as the Party providing the information.

6. In consultations under this Article, a consulting Party may request another consulting

Party to make available personnel of its government agencies or other regulatory bodies who

have expertise in the matter subject to consultations.2

 

Article 20.5:  Commission – Good Offices, Conciliation, and Mediation

1. If the consulting Parties fail to resolve a matter pursuant to Article 20.4 within:

 (a) 60 days of delivery of a request for consultations; 

(b)  15 days of delivery of a request for consultations in matters regarding perishable

goods; or

(c) such other period as they may agree,

any such Party may request in writing a meeting of the Commission.3

                                                

1

  For greater certainty, the term “perishable goods” means perishable agricultural and fish goods classified in

chapters 1 through 24 of the Harmonized System.

2

  A consulting Party receiving such a request shall strive to accommodate it.

3

  For purposes of this paragraph and paragraphs 2 and 4, the Commission shall consist of the cabinet-level

representatives of the consulting Parties, as set out in Annex 19.1 (The Free Trade Commission), or their designees.

 

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2. A consulting Party may also request in writing a meeting of the Commission where

consultations have been held pursuant to Article 16.6 (Cooperative Labor Consultations), Article

17.10 (Collaborative Environmental Consultations), or Article 7.8 (Committee on Technical

Barriers to Trade).

3. The requesting Party shall deliver the request to the other Parties, and shall set out the

reasons for the request, including identification of the actual or proposed measure or other matter

at issue and an indication of the legal basis for the complaint.

4. Unless it decides otherwise, the Commission shall convene within ten days of delivery of

the request and shall endeavor to resolve the dispute promptly.  The Commission may:

(a) call on such technical advisers or create such working groups or expert groups as

it deems necessary;

(b) have recourse to good offices, conciliation, mediation, or such other dispute

resolution procedures; or

(c) make recommendations,

as may assist the consulting Parties to reach a mutually satisfactory resolution of the dispute.  

5. Unless it decides otherwise, the Commission shall consolidate two or more proceedings

before it pursuant to this Article regarding the same measure or matter.  The Commission may

consolidate two or more proceedings regarding other matters before it pursuant to this Article

that it determines are appropriate to be considered jointly.4

Article 20.6:  Request for an Arbitral Panel

1. If the consulting Parties fail to resolve a matter within:

(a) 30 days after the Commission has convened pursuant to Article 20.5;

(b) 30 days after the Commission has convened in respect of the matter most recently

referred to it, where proceedings have been consolidated pursuant to Article

20.5.5;

(c) 30 days after a Party has delivered a request for consultations under Article 20.4

in a matter regarding perishable goods, if the Commission has not convened

pursuant to Article 20.5.4;  

                                                

4

  For purposes of this paragraph, the Commission shall consist of the cabinet-level representatives of the consulting

Parties in the relevant proceedings, as set out in Annex 19.1 (The Free Trade Commission), or their designees.

 

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(d) 75 days after a Party has delivered a request for consultations under Article 20.4,

if the Commission has not convened pursuant to Article 20.5.4; or

(e) such other period as the consulting Parties may agree,

any consulting Party that requested a meeting of the Commission with regard to the measure or

other matter in accordance with Article 20.5 may request in writing the establishment of an

arbitral panel to consider the matter.  The requesting Party shall deliver the request to the other

Parties, and shall set out the reasons for the request, including identification of the measure or

other matter at issue and an indication of the legal basis for the complaint.

2. An arbitral panel shall be established upon delivery of a request.

3. A Party that is eligible under paragraph 1 to request the establishment of a panel and

considers it has a substantial interest in the matter may join the arbitral panel proceedings as a

complaining Party on delivery of written notice to the other Parties.  The notice shall be

delivered at the earliest possible time, and in any event no later than seven days after the date of

delivery of the request by the Party for the establishment of a panel.

4. If a Party does not join as a complaining Party in accordance with paragraph 3, it

normally shall refrain thereafter from initiating or continuing:

(a) a dispute settlement procedure under this Agreement; or

(b) a dispute settlement proceeding under the WTO Agreement or under another free

trade agreement to which it and the Party complained against are party, on

grounds that are substantially equivalent to those available to it under this

Agreement,  

regarding the same matter in the absence of a significant change in economic or commercial

circumstances.

5. Unless otherwise agreed by the disputing Parties, the panel shall be established and

perform its functions in a manner consistent with the provisions of this Chapter.

6. An arbitral panel may not be established to review a proposed measure.

Article 20.7:  Roster

1. The Parties shall establish within six months of the date of entry into force of this

Agreement and maintain a roster of up to 70 individuals who are willing and able to serve as

panelists.  Unless the Parties otherwise agree, up to eight members of the roster shall be nationals

of each Party, and up to 14 members of the roster shall be selected from among individuals who

are not nationals of any Party.  The roster members shall be appointed by consensus, and may be

reappointed.  Once established, a roster shall remain in effect for a minimum of three years, and

 

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shall remain in effect thereafter until the Parties constitute a new roster.  The Parties may appoint

a replacement where a roster member is no longer available to serve.

 

2. Roster members shall:

(a) have expertise or experience in law, international trade, other matters covered by

this Agreement, or the resolution of disputes arising under international trade

agreements;

(b) be chosen strictly on the basis of objectivity, reliability, and sound judgment;

(c) be independent of, and not be affiliated with or take instructions from, any Party;

and

(d) comply with a code of conduct to be established by the Commission.

Article 20.8:  Qualifications of Panelists

 All panelists shall meet the qualifications set out in Article 20.7.2.  Individuals may not

serve as panelists for a dispute in which they have participated pursuant to Article 20.5.4.  

Article 20.9:  Panel Selection

1. The Parties shall apply the following procedures in selecting a panel:

(a) the panel shall comprise three members;

(b) the disputing Parties shall endeavor to agree on the chair of the panel within 15

days of the delivery of the request for the establishment of the panel.  If the

disputing Parties are unable to agree on the chair within this period, the chair shall

be selected by lot within three days from among the roster members who are not

nationals of a disputing Party; 

(c) within 15 days of selection of the chair, the complaining Party or Parties shall

select one panelist and the Party complained against shall select one panelist;

(d) if the complaining Party or Parties or the Party complained against fail to select a

panelist within this period, the panelist shall be selected by lot within three days

from among the roster members who are nationals of such Party or Parties, as the

case may be; and 

(e) each disputing Party shall endeavor to select panelists who have expertise or

experience relevant to the subject matter of the dispute, as appropriate.

 

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2. Panelists shall normally be selected from the roster.  Any disputing Party may exercise a

peremptory challenge against any individual not on the roster who is proposed as a panelist by a

disputing Party within 15 days after the individual has been proposed.

3. If a disputing Party believes that a panelist is in violation of the code of conduct, the

disputing Parties shall consult and if they agree, the panelist shall be removed and a new panelist

shall be selected in accordance with this Article.

Article 20.10:   Rules of Procedure

1. The Commission shall establish by the date of entry into force of this Agreement Model

Rules of Procedure, which shall ensure:

 

(a) a right to at least one hearing before the panel, which, subject to subparagraph (e),

shall be open to the public;  

(b) an opportunity for each disputing Party to provide initial and rebuttal written

submissions;

(c) that each participating Party’s written submissions, written versions of its oral

statement, and written responses to a request or questions from the panel shall be

public, subject to subparagraph (e);

(d) that the panel will consider requests from non-governmental entities in the

disputing Parties’ territories to provide written views regarding the dispute that

may assist the panel in evaluating the submissions and arguments of the disputing

Parties; and

(e) the protection of confidential information.

2. Unless the disputing Parties otherwise agree, the panel shall conduct its proceedings in

accordance with the Model Rules of Procedure.

3. The Commission may modify the Model Rules of Procedure.

4. Unless the disputing Parties otherwise agree within 20 days from the date of the delivery

of the request for the establishment of the panel, the terms of reference shall be:

“To examine, in the light of the relevant provisions of this Agreement, the matter

referenced in the panel request and to make findings, determinations, and

recommendations as provided in Articles 20.10.6 and 20.13.3 and to deliver the

written reports referred to in Articles 20.13 and 20.14.”

5. If a complaining Party in its panel request has identified that a measure has nullified or

impaired benefits, in the sense of Annex 20.2, the terms of reference shall so indicate.

 

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6. If a disputing Party wishes the panel to make findings as to the degree of adverse trade

effects on any Party of a Party’s failure to conform with the obligations of this Agreement or of a

Party’s measure found to have caused nullification or impairment in the sense of Annex 20.2, the

terms of reference shall so indicate.

Article 20.11:  Third Party Participation

 A Party that is not a disputing Party, on delivery of a written notice to the disputing

Parties, shall be entitled to attend all hearings, to make written and oral submissions to the panel,

and to receive written submissions of the disputing Parties in accordance with the Model Rules

of Procedure.  Those submissions shall be reflected in the final report of the panel.

Article 20.12:  Role of Experts 

 On request of a disputing Party, or on its own initiative, the panel may seek information

and technical advice from any person or body that it deems appropriate, provided that the

disputing Parties so agree and subject to such terms and conditions as such Parties may agree.

Article 20.13:  Initial Report 

1. Unless the disputing Parties otherwise agree, the panel shall base its report on the

relevant provisions of this Agreement, the submissions and arguments of the disputing Parties,

and on any information before it pursuant to Article 20.12.

2. If the disputing Parties request, the panel may make recommendations for resolution of

the dispute.

3. Unless the disputing Parties otherwise agree, the panel shall, within 120 days after the

last panelist is selected or such other period as the Model Rules of Procedure established

pursuant to Article 20.10 may provide, present to the disputing Parties an initial report

containing:

(a) findings of fact, including any findings pursuant to a request under Article

20.10.6;

(b) its determination as to whether a disputing Party has not conformed with its

obligations under this Agreement or that a Party’s measure is causing nullification

or impairment in the sense of Annex 20.2, or any other determination requested in

the terms of reference; and

(c) its recommendations, if the disputing Parties have requested them, for resolution

of the dispute.

4. When the panel considers that it cannot provide its report within 120 days, it shall inform

the disputing Parties in writing of the reasons for the delay together with an estimate of the

 

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period within which it will provide its report.  In no case should the period to provide the report

exceed 180 days.  The panel shall inform the disputing Parties of any determination under this

paragraph no later than seven days after the initial written submission of the complaining Party

or Parties and shall adjust the remainder of the schedule accordingly.

5. Panelists may furnish separate opinions on matters not unanimously agreed. 

6. A disputing Party may submit written comments to the panel on its initial report within

14 days of presentation of the report or within such other period as the disputing Parties may

agree.

7. After considering any written comments on the initial report, the panel may reconsider its

report and make any further examination it considers appropriate.

Article 20.14:  Final Report

1. The panel shall present a final report to the disputing Parties, including any separate

opinions on matters not unanimously agreed, within 30 days of presentation of the initial report,

unless the disputing Parties otherwise agree.  The disputing Parties shall release the final report

to the public within 15 days thereafter, subject to the protection of confidential information.

2. No panel may, either in its initial report or its final report, disclose which panelists are

associated with majority or minority opinions.

Article 20.15:  Implementation of Final Report

1. On receipt of the final report of a panel, the disputing Parties shall agree on the resolution

of the dispute, which normally shall conform with the determinations and recommendations, if

any, of the panel.

2. If, in its final report, the panel determines that a disputing Party has not conformed with

its obligations under this Agreement or that a disputing Party’s measure is causing nullification

or impairment in the sense of Annex 20.2, the resolution, whenever possible, shall be to

eliminate the non-conformity or the nullification or impairment.5 

3. Where appropriate, the disputing Parties may agree on a mutually satisfactory action plan

to resolve the dispute, which normally shall conform with the determinations and

recommendations, if any, of the panel.  If the disputing Parties agree on such an action plan, a

                                                

5

  Compensation, the payment of monetary assessments, and the suspension of benefits are intended as temporary

measures pending the elimination of any non-conformity or nullification or impairment that the panel has found.

 

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complaining Party may have recourse to Article 20.16.2 or Article 20.17.1, as the case may be,

only if it considers that the Party complained against has failed to carry out the action plan.6

Article 20.16:  Non-Implementation Suspension of Benefits

1. If a panel has made a determination of the type described in Article 20.15.2, and the

disputing Parties are unable to reach agreement on a resolution pursuant to Article 20.15 within

45 days of receiving the final report, or such other period as the disputing Parties agree, the Party

complained against shall enter into negotiations with the complaining Party or Parties with a

view to developing mutually acceptable compensation.

2. If the disputing Parties:

(a) are unable to agree on compensation within 30 days after the period for

developing such compensation has begun; or

(b) have agreed on compensation or on a resolution pursuant to Article 20.15 and a

complaining Party considers that the Party complained against has failed to

observe the terms of the agreement,

any such complaining Party may at any time thereafter provide written notice to the Party

complained against that it intends to suspend the application to the Party complained against of

benefits of equivalent effect.  The notice shall specify the level of benefits that the Party

proposes to suspend.  Subject to paragraph 6, the complaining Party may begin suspending

benefits 30 days after the later of the date on which it provides notice under this paragraph or the

panel issues its determination under paragraph 3, as the case may be.

3. If the Party complained against considers that: 

(a) the level of benefits proposed to be suspended is manifestly excessive; or

(b) it has eliminated the non-conformity or the nullification or impairment that the

panel has found,

it may, within 30 days after the complaining Party provides notice under paragraph 2, request

that the panel be reconvened to consider the matter.  The Party complained against shall deliver

its request in writing to the complaining Party.  The panel shall reconvene as soon as possible

after delivery of the request and shall present its determination to the disputing Parties within 90

days after it reconvenes to review a request under subparagraph (a) or (b), or within 120 days for

a request under subparagraphs (a) and (b).  If the panel determines that the level of benefits

                                                

6

  For greater certainty, as part of an action plan the disputing Parties may undertake, modify, or enhance

cooperation activities.

 

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proposed to be suspended is manifestly excessive, it shall determine the level of benefits it

considers to be of equivalent effect.

4. The complaining Party may suspend benefits up to the level the panel has determined

under paragraph 3 or, if the panel has not determined the level, the level the complaining Party

has proposed to suspend under paragraph 2, unless the panel has determined that the Party

complained against has eliminated the non-conformity or the nullification or impairment.

5. In considering what benefits to suspend pursuant to paragraph 2:

(a) the complaining Party should first seek to suspend benefits in the same sector or

sectors as that affected by the measure or other matter that the panel has found to

be inconsistent with the obligations of this Agreement or to have caused

nullification or impairment in the sense of Annex 20.2; and

(b) if the complaining Party considers that it is not practicable or effective to suspend

benefits in the same sector or sectors, it may suspend benefits in other sectors.

6. The complaining Party may not suspend benefits if, within 30 days after it provides

written notice of intent to suspend benefits or, if the panel is reconvened under paragraph 3,

within 20 days after the panel provides its determination, the Party complained against provides

written notice to the complaining Party that it will pay an annual monetary assessment.  The

disputing Parties shall consult, beginning no later than ten days after the Party complained

against provides notice, with a view to reaching agreement on the amount of the assessment.  If

the disputing Parties are unable to reach an agreement within 30 days after consultations begin,

the amount of the assessment shall be set at a level, in U.S. dollars, equal to 50 percent of the

level of the benefits the panel has determined under paragraph 3 to be of equivalent effect or, if

the panel has not determined the level, 50 percent of the level that the complaining Party has

proposed to suspend under paragraph 2.

7. Unless the Commission otherwise decides, a monetary assessment shall be paid to the

complaining Party in U.S. dollars, or in an equivalent amount of the currency of the Party

complained against, in equal, quarterly installments beginning 60 days after the Party

complained against gives notice that it intends to pay an assessment.  Where the circumstances

warrant, the Commission may decide that an assessment shall be paid into a fund established by

the Commission and expended at the direction of the Commission for appropriate initiatives to

facilitate trade between the disputing Parties, including by further reducing unreasonable trade

barriers or by assisting a disputing Party in carrying out its obligations under this Agreement.7

                                                

7

  For purposes of this paragraph, the Commission shall consist of the cabinet-level representatives of the disputing

Parties, as set out in Annex 19.1 (The Free Trade Commission), or their designees.

 

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8. If the Party complained against fails to pay a monetary assessment, the complaining Party

may suspend the application to the Party complained against of benefits in accordance with

paragraph 4.

9. This Article shall not apply with respect to a matter described in Article 20.17.1.

Article 20.17:  Non-Implementation In Certain Disputes

1. If, in its final report, a panel determines that a Party has not conformed with its

obligations under Article 16.2.1(a) (Enforcement of Labor Laws) or Article 17.2.1(a)

(Enforcement of Environmental Laws), and the disputing Parties:

(a) are unable to reach agreement on a resolution pursuant to Article 20.15 within 45

days of receiving the final report; or

(b) have agreed on a resolution pursuant to Article 20.15 and a complaining Party

considers that the Party complained against has failed to observe the terms of the

agreement, 

any such complaining Party may at any time thereafter request that the panel be reconvened to

impose an annual monetary assessment on the Party complained against.  The complaining Party

shall deliver its request in writing to the Party complained against.  The panel shall reconvene as

soon as possible after delivery of the request.

2. The panel shall determine the amount of the monetary assessment in U.S. dollars within

90 days after it reconvenes under paragraph 1.  In determining the amount of the assessment, the

panel shall take into account:

(a) the bilateral trade effects of the Party’s failure to effectively enforce the relevant

law;

(b) the pervasiveness and duration of the Party’s failure to effectively enforce the

relevant law;

(c) the reasons for the Party’s failure to effectively enforce the relevant law,

including, where relevant, its failure to observe the terms of an action plan;

(d) the level of enforcement that could reasonably be expected of the Party given its

resource constraints;

(e) the efforts made by the Party to begin remedying the non-enforcement after the

final report of the panel, including through the implementation of any mutually

agreed action plan; and

(f) any other relevant factors.

 

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The amount of the assessment shall not exceed 15 million U.S. dollars annually, adjusted for

inflation as specified in Annex 20.17.

3. On the date on which the panel determines the amount of the monetary assessment under

paragraph 2, or at any time thereafter, the complaining Party may provide notice in writing to the

Party complained against demanding payment of the monetary assessment.  The monetary

assessment shall be payable in U.S. dollars, or in an equivalent amount of the currency of the

Party complained against, in equal, quarterly installments beginning 60 days after the

complaining Party provides such notice. 

4. Assessments shall be paid into a fund established by the Commission and shall be

expended at the direction of the Commission for appropriate labor or environmental initiatives,

including efforts to improve or enhance labor or environmental law enforcement, as the case may

be, in the territory of the Party complained against, consistent with its law.  In deciding how to

expend monies paid into the fund, the Commission shall consider the views of interested persons

in the disputing Parties’ territories.8

5. If the Party complained against fails to pay a monetary assessment, the complaining Party

may take other appropriate steps to collect the assessment or otherwise secure compliance. 

These steps may include suspending tariff benefits under the Agreement as necessary to collect

the assessment, while bearing in mind the Agreement’s objective of eliminating barriers to trade

and while seeking to avoid unduly affecting parties or interests not party to the dispute.

Article 20.18:  Compliance Review

1. Without prejudice to the procedures set out in Article 20.16.3, if the Party complained

against considers that it has eliminated the non-conformity or the nullification or impairment that

the panel has found, it may refer the matter to the panel by providing written notice to the

complaining Party or Parties.  The panel shall issue its report on the matter within 90 days after

the Party complained against provides notice.

2. If the panel decides that the Party complained against has eliminated the non-conformity

or the nullification or impairment, the complaining Party or Parties shall promptly reinstate any

benefits that Party has or those Parties have suspended under Article 20.16 or Article 20.17 and

the Party complained against shall no longer be required to pay any monetary assessment it has

agreed to pay under Article 20.16.6 or that has been imposed on it under Article 20.17.1. 

Article 20.19:  Five-Year Review

 The Commission shall review the operation and effectiveness of Articles 20.16 and 20.17

not later than five years after the Agreement enters into force, or within six months after benefits

                                                

8

  For purposes of this paragraph, the Commission shall consist of the cabinet-level representatives of the disputing

Parties, as set out in Annex 19.1 (The Free Trade Commission), or their designees.

 

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have been suspended or monetary assessments have been imposed in five proceedings initiated

under this Chapter, whichever occurs first.

Section B:  Domestic Proceedings and Private Commercial Dispute Settlement

Article 20.20:  Referral of Matters from Judicial or Administrative Proceedings

1. If an issue of interpretation or application of this Agreement arises in any domestic

judicial or administrative proceeding of a Party that any Party considers would merit its

intervention, or if a court or administrative body solicits the views of a Party, that Party shall

notify the other Parties.  The Commission shall endeavor to agree on an appropriate response as

expeditiously as possible.

2. The Party in whose territory the court or administrative body is located shall submit any

agreed interpretation of the Commission to the court or administrative body in accordance with

the rules of that forum.

3. If the Commission is unable to agree, any Party may submit its own views to the court or

administrative body in accordance with the rules of that forum.

Article 20.21:  Private Rights 

 No Party may provide for a right of action under its law against any other Party on the

ground that the other Party has failed to conform with its obligations under this Agreement.

Article 20.22:  Alternative Dispute Resolution

1. Each Party shall, to the maximum extent possible, encourage and facilitate the use of

arbitration and other means of alternative dispute resolution for the settlement of international

commercial disputes between private parties in the free trade area.

2. To this end, each Party shall provide appropriate procedures to ensure observance of

agreements to arbitrate and for the recognition and enforcement of arbitral awards in such

disputes.

3. A Party shall be deemed to be in compliance with paragraph 2 if it is a party to and is in

compliance with the 1958 United Nations Convention on the Recognition and Enforcement of

Foreign Arbitral Awards or the 1975 Inter-American Convention on International Commercial

Arbitration.

4. The Commission may establish an Advisory Committee on Private Commercial Disputes

comprising persons with expertise or experience in the resolution of private international

commercial disputes. 

 

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5. This committee shall: 

(a) report and provide recommendations to the Commission on general issues

referred to it by the Commission respecting the availability, use, and effectiveness

of arbitration and other procedures for the resolution of such disputes in the free

trade area; and

(b) when the committee considers appropriate, promote technical cooperation

between the Parties, in furtherance of the objectives identified in paragraph 1.

 

 

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Annex 20.2

Nullification or Impairment

1. If any Party considers that any benefit it could reasonably have expected to accrue to it

under any provision of:

(a) Chapters Three through Five (National Treatment and Market Access for Goods,

Rules of Origin and Origin Procedures, and Customs Administration and Trade

Facilitation);

(b) Chapter Seven (Technical Barriers to Trade);

(c) Chapter Nine (Government Procurement);

(d) Chapter Eleven (Cross-Border Trade in Services); or

(e) Chapter Fifteen (Intellectual Property Rights),

is being nullified or impaired as a result of the application of any measure that is not inconsistent

with this Agreement, the Party may have recourse to dispute settlement under this Chapter.

2. A Party may not invoke paragraph 1(d) or (e) with respect to any measure subject to an

exception under Article 21.1 (General Exceptions). 

 

 

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Annex 20.17

Inflation Adjustment Formula for Monetary Assessments

1. An annual monetary assessment imposed before December 31, 2005 shall not exceed 15

million dollars (U.S.).

2. Beginning January 1, 2006, the 15 million dollar (U.S.) annual cap shall be adjusted for

inflation in accordance with paragraphs 3 through 5.

3. The period used for the accumulated inflation adjustment shall be calendar year 2004

through the most recent calendar year preceding the one in which the assessment is owed.

4. The relevant inflation rate shall be the U.S. inflation rate as measured by the Producer

Price Index for Finished Goods published by the U.S. Bureau of Labor Statistics.

5. The inflation adjustment shall be estimated according to the following formula:

 

$15 million x (1+ πi) = A 

πi = accumulated U.S. inflation rate from calendar year 2004 through the most recent

calendar year preceding the one in which the assessment is owed.

A = cap for the assessment for the year in question.