WORLD TRADE
ORGANIZATIONWT/REG109/4
31 March 2003
(03-1815)
Committee on Regional Trade Agreements Original:  English/
French/
Spanish
FREE TRADE AGREEMENT BETWEEN THE EUROPEAN COMMUNITIES
AND MEXICO, SERVICES
The following text reproduces the Decision no 2/2001 of the EU-Mexico Joint Council of 27
February 2001 implementing Articles 6, 9, 12(2)(b) and 50 of the Economic Partnership, Political
Coordination and Cooperation Agreement.*
_______________
Decision No 2/2001 of the EU-Mexico Joint Council of 27 February 2001
implementing Articles 6, 9, 12(2)(b) and 50 of the
Economic Partnership, Political Coordination and Cooperation Agreement
The Joint Council,
Having regard  to the Economic Partnership, Political Coordination and Cooperation
Agreement between the European Community and its Member States, of the one part, and the United
Mexican States, of the other part (hereinafter "the Agreement"), and in particular articles 6, 9, 12 and
50 in conjunction with Article 47 thereof.
Mindful  of their rights and obligations under the Marrakesh Agreement establishing the
World Trade Organisation (hereinafter "the WTO").
Whereas:
(1) Article 4 and 6 of the Agreement provide that the Joint Council shall decide on the
arrangements for a progressive and reciprocal liberalisation of trade in services, in accordance
with Article V of the General Agreement on Trade in Services (hereinafter "GATS").
(2) Article 9 of the Agreement provides that the Joint Council shall adopt measures for the
progressive liberalisation of investment and related payments between the Parties.
(3) Article 12 of the Agreement stipulates that the Joint Council shall adopt measures with a view
to ensure an adequate and effective protection of intellectual property rights.
(4) Article 50 of the Agreement provides that the Joint Council shall establish a specific trade or
trade related dispute settlement procedure.
                                                     
* The text of the Decision together with its Annexes is also available on the Europa website
http://europa.eu.int/eur-lex/pri/en/oj/dat/2001/l_070/l_07020010312en00070050.pdfWT/REG109/4
Page 2
(5) In accordance with Article 60 of the Agreemen t, upon entry into force of that Agreement, the
Decision 2/2000 of the Joint Council established by the Interim Agreement on trade and
trade-related matters between the European Community, of the one part, and the United
Mexican States, of the other part, is deemed to have been adopted by the Joint Council
established by the Agreement. That decision implements the objectives laid down in Articles5, 10, 11 and 12(2)(a) of the Agreement,
Has decided as follows:
TITLE I
GENERAL PROVISIONS
Article 1
Scope of the Decision
The Joint Council hereby lays down the necessary arrangements for implementing the
following objectives of the Agreement:
(a) the progressive and reciprocal liberalisation of trade in services, in conformity with
Article V of GATS;
(b) the progressive liberalisation of investment and related payments;
(c) ensuring an adequate and effective protection of the intellectual property rights, in
accordance with the highest international standards; and
(d) establishing a dispute settlement mechanism.
TITLE II
TRADE IN SERVICES
Article 2
Coverage
1. For the purposes of this Title, trade in services is defined as the supply of a service:
(a) from the territory of a Party into the territory of the other Party;
(b) in the territory of a Party to the service consumer of the other Party;
(c) by a service supplier of a Party, through commercial presence in the territory of the
other Party;
(d) by a service supplier of a Party, through presence of natural persons in the territory of
the other Party.WT/REG109/4
Page 3
2. This Title applies to trade in all services sectors with the exception of:
(a) audio-visual services;(b) air services, including domestic and international air transportation services, whether
scheduled or non-scheduled, and related services in support of air services, other
than:
(i) aircraft repair and maintenance services during which an aircraft is
withdrawn from service,
(ii) the selling and marketing of air transport services,
(iii) computer reservation system (CRS) services, and
(c) maritime cabotage.
3. Maritime transport and financial services shall be governed by the provisions laid down in
Chapters II and III, respectively, unless otherwise specified.
4. Nothing in this Title shall be construed to impose any obligation with respect to government
procurement.
5. The provisions of this Title shall not apply to subsidies granted by the Parties.
CHAPTER I
GENERAL PROVISIONS
Article 3
Definitions
For purposes of this Chapter:(a) A federal, central or subcentral government includes any non-governmental body in
the exercise of any regulatory, administrative or other governmental authority
delegated to it by that federal, central and sub-central government;
(b) "service suppliers" of a Party means any person of a Party that seeks to provide or
provides a service;
(c) "commercial presence" means:
(i) as regards nationals, the right to set up and manage undertakings, which they
effectively control. This shall not extend to seeking or taking employment inthe labour market or confer a right of access to the labour market of another
Party,
(ii) as regards juridical persons, the right to take up and pursue the economic
activities covered by this Chapter by means of the setting up andWT/REG109/4
Page 4
management of subsidiaries, branches or any other form of secondary
establishment,
(d) "subsidiary" means a juridical person which is effectively controlled by another
juridical person;
(e) a "Community juridical person" or a "Mexican juridical person" means a juridical
person set up in accordance with the laws of a Member State of the Community or of
Mexico, respectively, and having its registered office, central administration, or
principal place of business in the territory of the Community or of Mexico,
respectively;
Should the juridical person have only its registered office or central administration in
the territory of the Community or Mexico, respectively, it shall not be considered as a
Community or a Mexican juridical person, respectively, unless its operations possess
a real and continuous link with the economy of the Community or Mexico,
respectively;
(f) a "national" means a natural person who is a national of one of the Member States or
Mexico according to their respective national legislations.
Article 4
Market Access
In those sectors and modes of supply which shall be liberalised pursuant to the decision
provided for in Article 7 (3), and subject to any reservations stipulated therein, the measures which aParty shall not maintain or adopt are defined as:
(a) limitations on the number of services suppliers whether in the form of numerical
quotas, monopolies, exclusive service suppliers or the requirements of an economic
needs test;
(b) limitations on the total value of service transactions or assets in the form of numerical
quotas or the requirement of an economic needs test;
(c) limitations on the total number of service operations or on the total quantity of service
output expressed in the terms of designated numerical units in the form of quotas or
the requirement of an economic needs test;
(d) limitations on the total number of natural persons that may be employed in a
particular service sector or that a service supplier may employ and who are necessary
for, and directly related to, the supply of a specific service in the form of numerical
quotas or a requirement of an economic needs test;
(e) limitations on the participation of foreign capital in terms of maximum percentage
limit on foreign shareholding or the total value of individual or aggregate foreign
investment; and
(f) measures which require specific types of legal entities or joint ventures through
which a service supplier of the other Party may supply a service.WT/REG109/4
Page 5
Article 5
Most-favoured-nation treatment
1. Subject to exceptions that may derive from harmonisation of regulations based on agreements
concluded by a Party with a third country providing for mutual recognition in accordance with Article
VII of GATS, treatment accorded to services suppliers of the other Party shall be no less favourable
than that accorded to like services suppliers of any third country.
2. Treatment granted under other agreements concluded by one of the Parties with a third
country which have been notified under Article V of GATS shall be excluded from this provision.
3. If a Party enters into an agreement of the type referred to in paragraph 2, it shall afford
adequate opportunity to the other Party to negotiate the benefits granted therein.
Article 6
National Treatment
1. Each Party shall, in accordance with Article 7, grant to services and service suppliers of the
other Party, in respect of all measures affecting the supply of services, treatment no less favourable
than that it accords to its own like services and services suppliers.
2. A Party may meet the requirement of paragraph 1 by according to services and service
suppliers of the other Party, either formally identi cal treatment or formally different treatment to that
it accords to its own like services and service suppliers.
3. Formally identical or formally different treatm ent shall be considered to be less favourable if
it modifies the conditions of competition in favour of services or service suppliers of the Party
compared to like services or service suppliers of the other Party.
Article 7
Trade liberalisation
1. As provided for in paragraphs 2 to 4, the Parties shall liberalise trade in services between
themselves, in conformity with Article V of GATS.
2. From the entry into force of this Decision, neither Party shall adopt new, or more,
discriminatory measures as regards services or serv ice suppliers of the other Party, in comparison with
the treatment accorded to its own like services or service suppliers.
3. No later than three years following the entry into force of this Decision, the Joint Council
shall adopt a decision providing for the elimination of substantially all remaining discriminationbetween the Parties in the sectors and modes of supply covered by this Chapter.
1 That decision shall
contain:
                                                     
1 The Joint Council may decide to postpone the adoption of the decision provided for in this paragraph.
Should this occur, the decision shall be adopted not later than one year after the conclusion of the negotiationsmandated by Article XIX of GATS and in any event within a reasonable timeframe before the end of the ten-year transitional period.WT/REG109/4
Page 6
(a) a list of commitments establishing the level of liberalisation which the Parties agree
to grant each other at the end of a transitional period of ten years from the entry into
force of this Decision;
(b) a liberalisation calendar for each Party in order to reach at the end of the ten-year
transitional period the level of liberalisation described in subparagraph (a).
4. Except as provided for in paragraph 2, Articles 4, 5 and 6 shall become applicable in
accordance with the calendar and subject to any reservations stipulated in the Parties' lists of
commitments provided for in paragraph 3.
5. The Joint Council may amend the liberalisation calendar and the list of commitments
established in accordance with paragraph 3, with a view to remove or add exceptions.
Article 8
Regulatory carve-out
Each Party may regulate the supply of services in its territory, in so far as regulations do not
discriminate against services and service suppliers of the other Party, in comparison to its own like
services and service suppliers.
Article 9
Mutual recognition
1. In principle no later than three years following the entry into force of this Decision, the Joint
Council shall establish the necessary steps for the negotiation of agreements providing for the mutual
recognition of requirements, qualifications, licenses and other regulations, for the purpose of the
fulfilment, in whole or in part, by service suppliers of the criteria applied by each Party for the
authorisation, licensing, operation and certification of service suppliers and, in particular, professional
services.
2. Any such agreement shall be in conformity  with the relevant provisions of the WTO
Agreement and, in particular, Article VII of GATS.
CHAPTER II
MARITIME TRANSPORT
Article 10
International Maritime Transport
1. This Chapter applies to international maritime transport, including door to door and
intermodal transport operations involving a sea-leg.
2. The Definitions contained in Article 3 apply to this Chapter.2
                                                     
2 Notwithstanding Article 3(e), shipping companies established outside the Community or Mexico and
controlled by nationals of a Member State of the Community or Mexico, respectively, shall also be beneficiariesWT/REG109/4
Page 7
3. In view of the existing levels of liberalisation between the Parties in international maritime
transport:
(a) the Parties shall continue to effectively apply the principle of unrestricted access to
the international maritime market and traffic on a commercial and non-discriminatorybasis;
(b) each Party shall continue to grant to ships operated by service suppliers of the other
Party treatment no less favourable than that accorded to its own ships with regard to,
inter alia, access to ports, use of infrastructure and auxiliary maritime services of the
ports, as well as related fees and charges, customs facilities and the assignment of
berths and facilities for loading and unloading.
4. Each Party shall permit to service suppliers of the other Party to have a commercial presence
in its territory under conditions of establishment and operation no less favourable than those accorded
to its own service suppliers or those of any third country, whichever are the better, and this in
conformity with the legislation and regulations applicable in each Party.
5. Paragraph 4 shall become applicable in accordance with the calendar and subject to any
reservation stipulated in the Parties' list of commitments provided for in Article 7(3).
CHAPTER III
FINANCIAL SERVICES
Article 11
Definitions
In accordance with the terms of the Annex on Financial Services to the GATS and the GATS
Understanding on Commitments in Financial Services, for purposes of this Chapter:
(a) "Financial service" means any service of a financial nature offered by a financial
service supplier of a Party. Financial services comprise the following activities:
A. Insurance and insurance-related services:
1. direct insurance (including co-insurance):
(a) life;(b) non-life;
2. reinsurance and retrocession;
3. insurance inter-mediation, such as brokerage and agency; and4. services auxiliary to insurance, such as consultancy, actuarial, risk
assessment and claim settlement services.
                                                                                                                                                                    
of the provisions of this Chapter, if their vessels are registered in accordance with their respective legislation, in
that Member State or in Mexico and carry the flag of a Member State or Mexico.WT/REG109/4
Page 8
B. Banking and other financial services (excluding insurance):
1. acceptance of deposits and other repayable funds from the public;2. lending of all types, including consumer credit, mortgage credit,
factoring and financing of commercial transaction;
3. financial leasing;4. all payment and money transmission services, including credit,
charge and debit cards, travellers cheques and bankers drafts;
5. guarantees and commitments;
6. trading for own account or for account of customers, whether on an
exchange, in an over-the-counter ma rket or otherwise, the following:
(a) money market instruments (including cheques, bills,
certificates of deposits);
(b) foreign exchange;
(c) derivative products including, but not limited to, futures and
options;
(d) exchange rate and interest rate instruments, including
products such as swaps, forward rate agreements;
(e) transferable securities;
(f) other negotiable instruments and financial assets, including
bullion;
7. participation in issues of all kinds of securities, including
underwriting and placement as agent (whether publicly or privately)
and provision of services related to such issues;
8. money broking;9. asset management, such as cash or portfolio management, all forms
of collective investment management, pension fund management,
custodial, depository and trust services;
10. settlement and clearing services for financial assets, including
securities, derivative products, and other negotiable instruments;
11. provision and transfer of financial information, and financial data
processing and related software by suppliers of other financial
services;
12. advisory, intermediation and other auxiliary financial services on all
the activities listed in subparagraphs (1) through (11), including
credit reference and analysis, investment and portfolio research and
advice, advice on acquisitions and on corporate restructuring and
strategy.
(b) "Financial service supplier" means any juridical person of a Party authorised to
supply financial services. The term "financial service supplier" does not include a
public entity.WT/REG109/4
Page 9
(c) "New financial service" means a service of a financial nature, including services
related to existing and new products or the manner in which a product is delivered,
that is not supplied by any financial service supplier in the territory of a Party but
which is supplied in the territory of the other Party.
(d) "Public entity" means:
1. A government, a central bank or a monetary authority, of a Party, or an entity
owned or controlled by a Party, that is principally engaged in carrying out
governmental functions or activities for governmental purposes, not including
an entity principally engaged in supplying financial services on commercial
terms; or
2. A private entity, performing functions normally performed by a central bank
or monetary authority, when exercising those functions.
(e) "Commercial presence" means a juridical entity within a Party's territory for the
supply of financial services and includes wholly or partly owned subsidiaries, joint
ventures, partnerships, franchising operations, branches, agencies, representative
offices or other organisations.
Article 12
Establishment of financial service suppliers
1. Each Party shall allow the financial service suppliers of the other Party to establish a
commercial presence in its territory.
2. Each Party may require a financial service supplier of the other Party to incorporate under its
own law or impose terms and conditions on establishment that are consistent with the other provisions
of this Chapter.
3. No Party may adopt new measures as regards to the establishment and operation of financial
service suppliers of the other Party, which are more discriminatory than those applied on the date ofentry into force of this Decision.
4. No Party shall maintain or adopt the following measures:
(a) limitations on the number of financial service suppliers whether in the form of
numerical quotas, monopolies, exclusive financial service suppliers or the
requirements of an economic needs test;
(b) limitations on the total value of financial service transactions or assets in the form of
numerical quotas or the requirement of an economic test;
(c) limitations on the total number of service operations or on the total quantity of service
output expressed in the terms of designated numerical units in the form of quotas or
the requirement of an economic needs test;
(d) limitations on the total number of natural persons that may be employed in a
particular financial service sector or that a financial service supplier may employ and
who are necessary for, and directly related to, the supply of a specific financialWT/REG109/4
Page 10
service in the form of numerical quotas or a requirement of an economic needs test;
and
(e) limitations on the participation of foreign capital in the terms of maximum percentage
limit on foreign shareholding or the total value of individual or aggregate foreigninvestment.
Article 13
Cross-border provision of financial services
1. Each party shall allow the cross-border provision of financial services.2. No Party may adopt new measures as regard s to the cross-border provision of financial
services by financial service suppliers of the other Party which are more discriminatory as compared
to those applied on the date of entry into force of this Decision.
3. Without prejudice to other means of prudential regulation of the cross-border provision of
financial services, a Party may require the registration of cross-border financial service suppliers of
the other Party.
4. Each Party shall permit persons located in its territory to purchase financial services from
financial service suppliers of the other Party located in the territory of that other Party. This obligation
does not require a Party to permit such suppliers to do business or carry on commercial operations; or
to solicit, market or advertise their activities in its territory. Each Party may define the meaning of
"doing business", "carry on commercial operations", "solicit", "market" and "advertise" for purposes
of this obligation.
Article 14
National treatment
1. Each Party shall grant to the financial service suppliers of the other Party, including those
already established in its territory on the date of entry into force of this Decision, treatment no lessfavourable than that it accords to its own like financial service suppliers with respect to the
establishment, acquisition, expansion, management, conduct, operation and sale or other disposition
of commercial operations of financial service suppliers in its territory.
2. Where a Party permits the cross-border provision of a financial service it shall accord to the
financial service suppliers of the other Party treatment no less favourable than that it accords to its
own like financial service suppliers with respect to the provision of such a service.
Article 15
Most-favoured-nation treatment
1. Each Party shall accord to financial service suppliers of the other Party treatment no less
favourable than it accords to the like financial service suppliers of a non Party.
2. Treatment granted under other agreements concluded by one of the Parties with a third
country which have been notified under Article V of GATS shall be excluded from this provision.WT/REG109/4
Page 11
3. If a Party enters into an agreement of the type referred to in paragraph 2, it shall afford
adequate opportunity to the other Party to negotiate the benefits granted therein.
Article 16
Key personnel
1. No Party may require a financial service supplier of the other Party to engage individuals of
any particular nationality as senior managerial or other key personnel.
2. No Party may require that more than a simple majority of the board of directors of a financial
service supplier of the other Party be composed of nationals of the Party, persons residing in theterritory of the Party, or a combination thereof.
Article 17
Commitments
1. Nothing in this Chapter shall be construed to prevent a Party to apply:
(a) any existing measure inconsistent with Articles 12 to 16 which is listed on Annex I;
or
(b) an amendment to any discriminatory measure referred to in subparagraph (a) to the
extent that the amendment does not increase the inconsistency of the measure with
Articles 12 to 16, as it existed immediately before the amendment.
2. The measures listed in Annex I shall be reviewed by the Special Committee on Financial
Services established under Article 23, with a view to propose to the Joint Council their modification,
suspension or elimination.
3. No later than three years following the entry into force of this Decision, the Joint Council
shall adopt a decision providing for the elimination of substantially all remaining discrimination. That
decision shall contain a list of commitments establishing the level of liberalisation which the Partiesagree to grant each other.
Article 18
Regulatory carve out
Each Party may regulate the supply of financial services, in so far as regulations do not
discriminate against financial service or financial service suppliers of the other Party in comparison to
its own like financial services and financial service suppliers.
Article 19
Prudential carve out
1. Nothing in this Chapter shall be construed to prevent a Party from adopting or maintaining
reasonable measures for prudential reasons, such as:WT/REG109/4
Page 12
(a) the protection of investors, depositors, financial market participants, policy-holders,
policy-claimants, or persons to whom a fidu ciary duty is owed by a financial service
supplier;
(b) the maintenance of the safety, soundness, integrity or financial responsibility of
financial service suppliers; or
(c) ensuring the integrity and stability of a Party's financial system.
2. These measures shall not be more burdensome than necessary to achieve their aim, and shall
not discriminate against financial service suppliers of the other Party in comparison to its own like
financial service suppliers.
3. Nothing in this Chapter shall be construed to require a Party to disclose information relating
to the affairs and accounts of individual consumers or any confidential or proprietary information in
the possession of public entities.
Article 20
Effective and transparent regulation
1. Each Party shall make its best endeavours to pr ovide in advance to all interested persons any
measure of general application that the Party proposes to adopt in order to allow an opportunity for
such persons to comment on the measure. Such measure shall be provided:
(a) by means of an official publication; or
(b) in other written or electronic form.
2. Each Party's appropriate financial authority shall make available to interested persons its
requirements for completing applications relating to the supply of financial services.
3. On the request of an applicant, the appropriat e financial authority shall inform the applicant of
the status of its application. If such authority requires additional information from the applicant, itshall notify the applicant without undue delay.
4. Each Party shall make its best endeavours to ensure that the Basle Committee's "Core
Principles for Effective Banking Supervision", the International Association of Insurance Supervisors'
"Key Standards for Insurance Supervision" and the International Organisation of SecuritiesCommissions' "Objectives and Principles of Securities Regulation" are implemented and applied in its
territory.
5. The Parties also take note of the "Ten Key Principles for Information Exchange" promulgated
by the Finance Ministers of the G7 Nations, and undertake to consider to what extent they may beapplied in bilateral contacts.
Article 21
New financial services
Each Party shall permit a financial service supplier of the other Party to provide any new
financial service of a type similar to those services that the Party permits its own financial service
suppliers to provide under its domestic law in like circumstances. A Party may determine the juridicalWT/REG109/4
Page 13
form through which the service may be provided and may require authorisation for the provision of
the service. Where such authorisation is required, a decision shall be made within a reasonable time
and the authorisation may only be refused for prudential reasons.
Article 22
Data processing
1. Each Party shall permit a financial service supplier of the other Party to transfer information
in electronic or other form, into and out of its territory, for data processing where such processing is
required in the ordinary course of business of such financial service supplier.
2. As far as the transfer of personal data is concerned, each Party shall adopt adequate
safeguards to the protection of privacy and fundamental rights, and freedom of individuals in
accordance with Article 41 of the Agreement.
Article 23
Special Committee on Financial Services
1. The Joint Council hereby establishes a Special Committee on Financial Services. The Special
Committee shall be composed of representatives of the Parties. The principal representative of eachParty shall be an official of the Party's authority re sponsible for financial services set out in Annex II.
2. The functions of the Special Committee shall include:
(a) supervising the implementation of this Chapter;(b) considering issues regarding financial se rvices that are referred to it by a Party;
(c) considering the application of measures listed by either Party in Annex I in order to
propose to the Joint Council its modification, suspension or elimination, as
appropriate;
(d) reviewing the provisions contained in this  Chapter at such a time as either of the
Parties may grant a third party more favourable access to its financial services market
pursuant to the conclusion of a regional economic integration agreement compatible
with Article V of GATS, with a view to proposing consequent modifications to this
Chapter to the Joint Council; and
(e) considering implementation of Article 16 of the Agreement.
3. The Special Committee shall meet once a year on a date and with an agenda agreed in
advance by the Parties. The office of chairman sh all be held alternately. The Special Committee shall
report to the Joint Committee the results of each annual meeting.
Article 24
Consultations
1. A Party may request consultations with the other Party regarding any matter arising under this
Chapter. The other Party shall give sympathetic consideration to the request. The Parties shall report
the results of their consultations to the Special Committee on Financial Services at its annual meeting.WT/REG109/4
Page 14
2. Consultations under this Article shall include officials of the authorities specified in Annex II.
3. Nothing in this Article shall be construed to require financial authorities participating in
consultations to disclose information or take any action that would interfere with individualregulatory, supervisory, administrative or enforcement matters.
4. Where a Party requires information for supervisory purposes concerning a financial service
supplier in the other Party's territory, the Party may approach the competent financial authority in the
other Party's territory to seek the information.
Article 25
Dispute settlement
Arbitrators appointed to panels established in accordance with Title V for disputes on
prudential issues and other financial matters shall have the necessary expertise relevant to the specificfinancial service under dispute, as well as expertise or experience in financial services law or practice,
which may include the regulation of financial institutions.
Article 26
Specific exceptions
1. Nothing in this Chapter shall be construed to prevent a Party, including its public entities,
from exclusively conducting or providing in its territ ory activities or services forming part of a public
retirement plan or statutory system of social security, except when those activities may be carried outby financial service suppliers in competition with public entities or private institutions.
2. Nothing in this Chapter applies to activities conducted by a central bank or monetary
authority or by any other public entity in pursuit of monetary or exchange rate policies.
3. Nothing in this Chapter shall be construed to prevent a Party, including its public entities,
from exclusively conducting or providing in its terr itory activities or services for the account or with
the guarantee or using the financial resources of the Party, or its public entities.
CHAPTER IV
GENERAL EXCEPTIONS
Article 27
Exceptions
1. The provisions of this Title are subject to the exceptions contained in this Article.2. Subject to the requirement that such measures are not applied in a manner which would
constitute a means of arbitrary or unjustifiable discrimination between countries where like conditionsprevail, or a disguised restriction on trade in services, nothing in this Title shall be construed to
prevent the adoption or enforcement by any Party of measures:
(a) necessary to protect public morals or to maintain public order and public security;WT/REG109/4
Page 15
(b) necessary to protect human, animal or plant life or health;
(c) necessary to secure compliance with laws or regulations which are not inconsistent
with the provisions of this Title including those relating to:
(i) the prevention of deceptive and fraudulent practices or to deal with the effects
of a default on services contracts;
(ii) the protection of the privacy of individuals in relation to the processing and
dissemination of personal data and the protection of confidentiality of
individual records and accounts;
(iii) safety;
(d) inconsistent with the objective of Article 6 and 14, provided that the difference in
treatment is aimed at ensuring the effective or equitable imposition or collection ofdirect taxes in respect of services or service suppliers of the other Party.
3. The provisions of this Title shall not apply to the Parties' respective social security systems or
to activities in the territory of each Party, which are connected, even occasionally, with the exercise of
official authority.
4. Nothing in this Title shall prevent a Party from applying its laws, regulations and
requirements regarding entry and stay, work, labour conditions, and establishment of natural persons
3
provided that, in so doing, it does not apply them in a manner as to nullify or impair the benefitsaccruing to the other Party under the terms of a specific provision of this Title.
TITLE III
INVESTMENT AND RELATED PAYMENTS
Article 28
Definitions
1. For the purpose of this Title, investment made in accordance with the laws of the Parties
means direct investment, investment in real estate  and purchase and sale of any kind of securities, as
defined in the OECD Codes of Liberalisation.
2. Payments covered by this Title are those related to an investment.
                                                     
3 In particular, a Party may require that natural persons must possess the necessary academic
qualifications and/or professional experience specified in the territory where the service is supplied, for the
sector of activity concerned.WT/REG109/4
Page 16
Article 29
Payments related to investment
1. Without prejudice to Articles 30 and 31, restrictions on payments related to investment
between the Parties shall be progressively eliminated. The Parties undertake not to introduce any new
restrictions on payments related to direct investment from the entry into force of this Decision.
2. Restrictions on payments related to investments in the services sector which have been
liberalised in accordance with Title II of this Decision shall be eliminated according to the same
timetable.
Article 30
Exchange rate policy and monetary policy difficulties
1. Where, in exceptional circumstances, payments related to investment between the Parties
cause, or threaten to cause, serious difficulties for the operation of the exchange rate policy or
monetary policy of a Party, that Party may take safeguard measures that are strictly necessary for a
period not exceeding six months. The application of safeguard measures may be extended through
their formal reintroduction.
2. The Party adopting the safeguard measure shall inform the other Party forthwith and present,
as soon as possible, a time schedule for their removal.
Article 31
Balance of payments difficulties
1. Where one or more Member States or Mexico is in serious balance of payments difficulties,
or under imminent threat thereof, the Community or the Member State concerned, or Mexico, as the
case may be, may adopt restrictive measures with regard to payments, including transfers of proceeds
from the total or partial liquidation of direct investment. Such measures shall be equitable, non-
discriminatory, in good faith, of limited duration and may not go beyond what is necessary to remedythe balance of payments situation.
2. The Community or the Member State concerned, or Mexico, as the case may be, shall inform
the other Party forthwith and present, as soon as possible, a time schedule for their removal. Such
measures shall be taken in accordance with other international obligations of the Party concerned,including those under the WTO Agreement and the Articles of Agreement of the International
Monetary Fund.
Article 32
Transfers
The liquidation and transfer abroad of any direct investment made in Mexico by Community
residents or in the Community by Mexican residents, and of any profits stemming therefrom, shall not
be affected by the provisions of Article 30.WT/REG109/4
Page 17
Article 33
Investment promotion between the Parties
The Community and its Member States, within the scope of their respective competences, and
Mexico shall aim to promote an attractive and stable environment for reciprocal investment. Such
promotion should take the form, in particular, of:
(a) mechanisms for information about and identification and dissemination of investment
legislation and opportunities;
(b) development of a legal framework favourable to investment on both sides,
particularly through the conclusion, where appropriate, by the Member States of the
Community and Mexico of bilateral agreements promoting and protecting investment
and preventing double taxation;
(c) development of uniform and simplified administrative procedures; and(d) development of mechanisms for joint inve stments, in particular with the small and
medium enterprises of both Parties.
Article 34
International commitments on investment
The Community and its Member States, within the scope of their respective competences, and
Mexico recall their international commitments with  regard to investment, and especially the OECD
Codes of Liberalisation and OECD National Treatment Instrument.
Article 35
Review clause
With the view of the objective of progressive liberalisation of investment, the Community and
its Member States, and Mexico affirm their commitment to review the investment legal framework,
the investment climate and the flow of investment between their territories consistent with their
commitments in international investment agreements  not later than three years after the entry into
force of this Decision.
TITLE IV
INTELLECTUAL PROPERTY
Article 36
Multilateral Conventions on Intellectual Property
1. The Community and its Member States, on the one hand, and Mexico on the other hand,
confirm their obligations arising from the following multilateral conventions:
(a) Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs
Agreement, 1994);WT/REG109/4
Page 18
(b) Paris Convention for the Protection of Industrial Property (Stockholm Act, 1967);
(c) Berne Convention for the Protection of Literary and Artistic Works (Paris Act, 1971);
(d) International Convention for the Protection of Performers, Producers of Phonograms
and Broadcasting Organisations (Rome, 1961); and
(e) Patent Cooperation Treaty (Washington, 1970, amended in 1979 and modified in
1984).
2. The Parties confirm the importance they attach to the obligations arising from the
International Convention for the Protection of New Varieties of Plants, 1978 (1978 UPOV
Convention), or the International Convention for the Protection of New Varieties of Plants, 1991
(1991 UPOV Convention).
3. At the entry into force of this Decision, the Member States of the Community and Mexico
will have acceded to the Nice Agreement concerning the International Classification of Goods and
Services for the purposes of the Registration of Marks (Geneva, 1977 and amended in 1979).
4. Within 3 years of the entry into force of this Decision the Members States of the Community
and Mexico will have acceded to the Budapest Trea ty of the International Recognition of the Deposit
of Microorganisms for the Purposes of Pa tent Procedure (1977, modified in 1980).
5. The Parties shall make every effort to complete the necessary procedures for their accession
to the following multilateral conventions at the earliest possible opportunity:
(a) the WIPO Copyright Tr eaty (Geneva, 1996); and
(b) the WIPO Performances and Phonogram Treaty (Geneva, 1996).
TITLE V
DISPUTE SETTLEMENT
CHAPTER I
SCOPE AND COVERAGE
Article 37
Scope and coverage
1. The provisions of this Title shall apply with  respect to any matter arising from this Decision
or from Articles 4, 5, 6, 7, 8, 9, 10 and 11 of the Agreement (hereinafter the "covered legal
instruments").
2. By way of exception, the arbitration procedure laid down in Chapter III shall not be
applicable in the case of disputes concerning Article 9(2), 31(2) last sentence, 34 and 36 of this
Decision.WT/REG109/4
Page 19
CHAPTER II
CONSULTATION
Article 38
Consultation
1. The Parties shall at all times endeavour to agree on the interpretation and application of the
covered legal instruments and shall make every attempt through cooperation and consultations to
arrive to a mutually satisfactory resolution of any matter that might affect their operation.
2. Each Party may request consultations within the Joint Committee with respect to any matter
relating to the application or interpretation of the covered legal instruments or any other matter that it
considers might affect their operation.
3. The Joint Committee shall convene within 30 days of delivery of the request and shall
endeavour to resolve the dispute promptly by means of a decision. That decision shall specify the
implementing measures to be taken by the Party concerned, and the period of time to do so.
CHAPTER III
ARBITRATION PROCEDURE
Article 39
Establishment of an arbitration panel
1. In case a Party considers that a measure applied by the other Party violates the covered legal
instruments and such matter has not been resolved within 15 days after the Joint Committee has
convened pursuant to Article 38(3) or 45 days after the delivery of the request for a Joint Committee
meeting, either Party may request in writing the establishment of an arbitration panel.
2. The requesting Party shall state in the request the measure and indicate the provisions of the
covered legal instruments that it considers relevant, and shall deliver the request to the other Party and
to the Joint Committee.
Article 40
Appointment of arbitrators
1. The requesting Party shall notify the other Party of the appointment of an arbitrator, and
propose up to 3 candidates to serve as a chair. The other Party must then appoint a second arbitratorwithin 15 days, and propose up to 3 candidates to serve as a chair.
2. Both Parties shall endeavour to agree on the chair within 15 days after the second arbitrator
has been appointed.
3. The date of establishment of the arbitration panel shall be the date on which the chair is
appointed.WT/REG109/4
Page 20
4. If a Party fails to appoint its arbitrator pursuant to paragraph 1, such arbitrator shall be
selected by lot from the candidates proposed. If the Parties are unable to agree on the chair within the
time period referred to in paragraph 2, it shall be selected by lot within one week from the candidates
proposed.
5. If an arbitrator dies, withdraws or is removed, a replacement shall be selected within 15 days
in accordance with the selection procedure followed to select him or her. In such a case, any time
period applicable to the arbitration panel proceeding shall be suspended for a period beginning on the
date the arbitrator dies, withdraws or is removed and ending on the date the replacement is selected.
Article 41
Panel reports
1. The arbitration panel should, as a general rule, submit an initial report containing its findings
and conclusions to the Parties not later than three months from the date of establishment of the
arbitration panel. In no case should it do so later than five months from this date. Any Party maysubmit written comments to the arbitration panel on its initial report within 15 days of presentation of
the report.
2. The arbitration panel shall present to the Parties a final report within 30 days of presentation
of the initial report.
3. In cases of urgency, including those involving perishable goods, the arbitration panel shall
make every effort to issue its final report to the Parties within three months from the date of
establishment of the arbitration panel. In no case should it do so later than four months. The
arbitration panel may give a preliminary ruling on whether a case is urgent.
4. All decisions of the arbitration panel, including the adoption of the final report and of any
preliminary ruling, shall be taken by majority vote, each arbitrator having one vote.
5. The complaining Party may withdraw its complaint at any time before the final report has
been issued. Such withdrawal is without prejudice to its right to introduce a new complaint regarding
the same issue at a later point in time.
Article 42
Implementation of panel reports
1. Each Party shall be bound to take the measures involved in carrying out the final report
referred to in Article 41(2).
2. The Party concerned shall inform the other Party within 30 days after the final report has been
issued of its intentions in respect of its implementation.
3. The Parties shall endeavour to agree on the specific measures that are required for
implementing the final report.
4. The Party concerned shall promptly comply with the final report. If it is impracticable to
comply immediately, the Parties shall endeavour to agree on a reasonable period of time to do so. In
the absence of such agreement, either Party may request the original arbitration panel to determine theWT/REG109/4
Page 21
length of the reasonable period of time, in light of the particular circumstances of the case. The ruling
of the arbitration panel shall be given within 15 days from that request.
5. The Party concerned shall notify to the other Party the measures adopted in order to
implement the final report before the expiry of the reasonable period of time determined in
accordance with paragraph 4. Upon that notification, any of the Parties may request the original
arbitration panel to rule on the conformity of those measures with the final report. The ruling of the
arbitration panel shall be given within 60 days from that request.
6. If the Party concerned fails to notify the implementing measures before the expiry of the
reasonable period of time determined in accordance with paragraph 4, or if the arbitration panel rules
that the implementing measures notified by the Party concerned are inconsistent with the final report,such Party shall, if so requested by the complaining Party, enter into consultations with a view to
agree on a mutually acceptable compensation. If no such agreement has been reached within 20 days
from the request, the complaining Party shall be entitled to suspend only the application of benefits
granted under the covered legal instruments equivalent to those affected by the measure found to
violate the covered legal instruments.
7. In considering what benefits to suspend, a complaining Party should first seek to suspend
benefits in the same sector or sectors as that affected by the measure that the panel has found to
violate the covered legal instruments. A complainin g Party that considers it is not practicable or
effective to suspend benefits in the same sector or sectors may suspend benefits in other sectors.
8. The complaining Party shall notify the other Pa rty of the benefits which it intends to suspend
no later than 60 days before the date on which the suspension is due to take effect. Within 15 days
from that notification, any of the Parties may request the original arbitration panel to rule on whether
the benefits which the complaining Party intends to suspend are equivalent to those affected by the
measure found to violate the covered legal instruments, and whether the proposed suspension is in
accordance with paragraphs 6 and 7. The ruling of the arbitration panel shall be given within 45 days
from that request. Benefits shall not be suspended until the arbitration Panel has issued its ruling.
9. The suspension of benefits shall be temporary and shall only be applied by the complaining
Party until the measure found to violate the covered legal instruments has been withdrawn or amended
so as to bring it into conformity with the cove red legal instruments, or the Parties have reached
agreement on a resolution of the dispute.
10. At the request of any of the Parties, the original arbitration panel shall rule on the conformity
with the final report of any implementing measures  adopted after the suspension of benefits and, in
light of such ruling, whether the suspension of benefits should be terminated or modified. The rulingof the arbitration panel shall be given within 30 days from the date of that request.
11. The rulings provided for in paragraphs 4, 5, 8 and 10 shall be binding.
Article 43
General provisions
1. Any time period mentioned in this Title may be extended by mutual agreement of the Parties.
2. Unless the Parties otherwise agree, the arbitration panel proceedings shall be conducted in
accordance with the Model Rules of Proced ure set out in Anne x III. The Joint Comm ittee may amend
the Model Rules of Procedure.WT/REG109/4
Page 22
3. Arbitration proceedings established under this Title will not consider issues relating to each
Party's rights and obligations under the WTO.
4. Recourse to the dispute settlement provisions of this Title shall be without prejudice to any
possible action in the WTO framework, including dispute settlement action. However, where a Partyhas, with regard to a particular matter, instituted a dispute settlement proceeding under either Article
39(1) of this Title or the WTO Agreement, it shall not institute a dispute settlement proceeding
regarding the same matter under the other forum until such time as the first proceeding has ended. For
purposes of this paragraph, dispute settlement proceedings under the WTO Agreement are deemed to
be initiated by a Party's request for a panel under Article 6 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes of the WTO.
TITLE VI
SPECIFIC DUTIES OF THE JOINT COMMITTEE
WITH RESPECT TO TRADE AND OTHER TRADE RELATED MATTERS
Article 44
1. The Joint Committee shall:
(a) supervise the implementation and proper operation of this Decision, as well as of any
other decision concerning trade and other trade related matters;
4
(b) oversee the further elaboration of the provisions of this Decision;
(c) undertake consultations pursuant to Article 38(2) and (3);
(d) carry out any functions assigned to it under this Decision or under any other decision
concerning trade or trade related matters;
(e) assist the Joint Council in the performance of its functions regarding trade and other
trade related matters;
(f) supervise the work of all the special committees established under this Decision; and(g) report annually to the Joint Council.
2. The Joint Committee may:
(a) set up any special committees or bodies to deal with matters falling within its
competence, and determine their composition and duties, and how they shall function;
(b) meet at any time by agreement of the Parties;
(c) consider any issues regarding trade and other trade related matters, and take
appropriate action in the exercise of its functions; and
                                                     
4 The Parties understand that "trade and other trade related matters" includes any matter arising under
this Decision and Titles III thro ugh V of the Agreement.WT/REG109/4
Page 23
(d) take decisions or make recommendations on trade and other trade related matters, in
accordance with Article 48(2) of the Agreement.
3. When the Joint Committee meets in order to perform any of the tasks conferred upon it by
this Decision, it shall be composed of representatives of the members of the Council of the EuropeanUnion and of the European Commission, on the one hand, and of representatives of the Government
of Mexico, on the other, with a responsibility for trade and trade related matters, normally at senior
civil servant level.
TITLE VII
FINAL PROVISIONS
Article 45
Entry into force
This Decision shall enter into force on the first day of the month following that in which it is
adopted by the Joint Council.
Article 46
Annexes
The Annexes to this Decision, including the Ap pendixes to those Annexes, are an integral
part thereof.
Done at Brussels, 27 February 2001.
__________