Proposal for a Council Decision concerning the conclusion of 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 (97/C 356/10) COM(97) 525 final - 97/0281(AVC)

(Submitted by the Commission on 22 October 1997)

THE COUNCIL OF EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 57 (2) last sentence, 66 and 113, in conjunction with the first sentence of Article 228 (2) and the second subparagraph of Article 228 (3) thereof,

Having regard to the proposal from the Commission,

Having regard to the assent of the European Parliament,

Whereas pending the entry into force of the Economic Partnership, Political Coordination and Cooperation Agreement signed in . . . on . . ., the Interim Agreement on trade and trade-related matters between the European Community, on the one part, and the United Mexican States, of the other part, signed in . . . on . . ., should be approved,

HAS DECIDED AS FOLLOWS:

Article 1

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, together with the declarations made by the Community unilaterally or jointly with other parties, is hereby approved on behalf of the European Community.

The texts are attached to this Decision.

Article 2

The President of the Council shall give the notification provided for in Article 18 of the Agreement on behalf of the European Community.

Article 3

1. The position to be taken by the Community within the Joint Council and the Joint Committee established by the Agreement, shall be laid down by the Council, on a proposal from the Commission, in accordance with the corresponding provisions of the Treaty establishing the European Community.

2. The President of the Council shall in accordance with Article 8 of the Agreement, preside over the Joint Council and present the position of the Community. In accordance with Article 10 of the Agreement, a representative of the Commission shall preside over the Joint Committee, and present the position of the Community.

Article 4

This Decision shall be published in the Official Journal of the European Communities.

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

The European Community, hereinafter referred to as 'the Community`,

of the one part and,

the United Mexican States, hereinafter referred to as 'Mexico`,

of the other part,

WHEREAS the Economic Partnership, Political Coordination and Cooperation Agreement between the Community and its Member States of the one part and Mexico of the other part, hereinafter to as 'the Global Agreement`, was signed in . . . on . . .,

WHEREAS the Global Agreement is intended to strengthen and widen the relations between the Community and its Member States and Mexico established by the existing Cooperation Agreement of 1991;

WHEREAS it is in the mutual interest of the Parties to implement as speedily as possible, by means of an Interim Agreement, the provisions of the Global Agreement on trade and trade-related matters;

HAVE DECIDED to conclude this Agreement and to this end have designated as their plenipotentiaries,

THE EUROPEAN COMMUNITY:

THE UNITED MEXICAN STATES:

WHO, having exchanged their full powers, found in good and due form,

HAVE AGREED AS FOLLOWS:

TITLE I GENERAL PRINCIPLES

Article 1 (GA 1)

Basis of the Agreement

Respect for democratic principles and fundamental human rights proclaimed by the Universal Declaration of Human Rights, underpins the domestic and external policies of both Parties and constitutes an essential element of this Agreement.

TITLE II TRADE LIBERALIZATION

Article 2

Objective

The objective of this Title is to establish a framework to encourage the development of trade in goods and services, including a bilateral and preferential, progressive and reciprocal liberalization of trade in goods, taking into account the sensitive nature of certain products and in accordance with the relevant WTO rules.

Article 3 (GA 5)

Trade in goods

In order to achieve the objective laid down in Article 2, the Joint Council established by Article 7 of the Agreement shall decide on the arrangements and timetable for a bilateral, progressive and reciprocal liberalization of tariff and non-tariff barriers to trade in goods, in accordance with the relevant WTO rules, in particular Article XXIV of the GATT, and taking account of the sensitive nature of certain products. This decision shall address, in particular, the following matters:

(a) coverage and transitional periods;

(b) customs duties on imports and exports and charges having an equivalent effect;

(c) quantitative restrictions on imports and exports and measures having equivalent effect;

(d) national treatment including the prohibition of fiscal discrimination in respect of taxes imposed on goods;

(e) anti-dumping and countervailing measures;

(f) safeguard and surveillance measures;

(g) rules of origin and administrative cooperation;

(h) customs cooperation;

(i) customs valuation,

(j) technical regulations and standards, sanitary and phytosanitary legislation, mutual recognition of conformity assessment, certifications, marks systems, etc.;

(k) general exceptions justified on grounds of public morality, public policy or public security; the protection of human, animal or plant life or health; the protection of industrial, intellectual and commercial property, etc.;

(l) restrictions in case of balance of payments difficulties.

TITLE III PUBLIC PROCUREMENT, COMPETITION, INTELLECTUAL PROPERTY AND OTHER TRADE-RELATED PROVISIONS

Article 4 (GA 10)

Public procurement

1. The Parties shall agree to the gradual and mutual opening of agreed government procurement markets on a reciprocal basis.

2. In order to achieve this objective, the Joint Council shall decide on the appropriate arrangements and timetable. The decision shall address, in particular, the following matters:

(a) coverage of the agreed liberalization;

(b) non-discriminatory access to the agreed markets;

(c) threshold values;

(d) fair and transparent procedures;

(e) clear challenge procedures;

(f) use of information technology.

Article 5 (GA 11)

Competition

1. The Parties shall agree on the appropriate measures in order to prevent distortions or restrictions of competition that may significantly affect trade between Mexico and the Community. To this end, the Joint Council shall establish mechanisms of cooperation and coordination among their authorities with responsibility for the implementation of competition rules. Cooperation shall include mutual legal assistance, notification, consultation and exchange of information in order to ensure transparency relating to the enforcement of competition laws and policies.

2. In order to achieve this objective, the Joint Council shall decide in particular, on the following matters:

(a) agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings;

(b) the abuse by one or more undertakings of a dominant position;

(c) mergers between undertakings;

(d) State monopolies of a commercial character;

(e) public undertakings and undertakings to which special or exclusive rights have been granted.

Article 6 (GA 12)

Intellectual property

1. Reaffirming the great importance they attach to the protection of intellectual property rights (copyright, including the copyright in computer programs and databases and neighbouring rights, the rights related to patents, industrial designs, geographical indications including designation of origins, trademarks, topographies of integrated circuits, as well as protection against unfair competition as referred to in Article 10 bis of the Paris Convention for the Protection of Industrial Property and protection of undisclosed information), the Parties undertake to establish the appropriate measures with a view to ensuring an adequate and effective protection in accordance with the highest international standards, including effective means to enforce such rights.

2. To this effect, the Joint Council shall decide on a consultation mechanism with a view to reaching mutually satisfactory solutions in the event of difficulties in the protection of intellectual property.

TITLE IV INSTITUTIONAL, GENERAL AND FINAL PROVISIONS

Article 7 (GA 45)

Joint Council

A Joint Council is hereby established which shall supervise the implementation of this Agreement. It shall meet at ministerial level at regular intervals and when circumstances require. It shall examine any major issues arising within the framework of this Agreement and any other bilateral or international issues of mutual interest.

Article 8 (GA 46)

1. The Joint Council shall consist of the Members of the Council of the European Union and Members of the European Commission on the one hand, and Members of the Government of Mexico, on the other.

2. Members of the Joint Council may arrange to be represented, in accordance with the conditions to be laid down in its rules of procedure.

3. The Joint Council shall establish its own rules of procedure. It shall meet for the first time within 30 days of the entry into force of this Agreement.

4. The Joint Council shall be presided in turn by a member of the Council of the European Union and a member of the Government of Mexico, in accordance with the provisions to be laid down in its rules of procedure.

Article 9

The Joint Council shall, for the purposes of attaining the objectives of this Agreement, have the power to take decisions in the cases provided therein. The decisions taken shall be binding on the Parties which shall take the measures to implement them. The Joint Council may also make appropriate recommendations.

It shall draw up the decisions and recommendations by agreement between the two Parties.

The application of the decisions provided for in Article 3, 4 (2), 5 (2) and 6 (2) shall be suspended until the signature of the Global Agreement.

Article 10 (GA 48)

Joint Committee

1. The Joint Council shall be assisted in the performance of its duting by a joint committee composed of representatives of the Community on the one hand, and of representatives of the Government of Mexico on the other, normally at senior civil servant level.

In its rules of procedure the Joint Council shall determine the duties of the Joint Committee, which shall include the preparation of meetings of the Joint Council and how the Committee shall function.

2. The Joint Council may delegate to the Joint Committee any of its powers. In this event the Joint Committee shall take its decisions in accordance with the conditions laid down in Article 9.

3. The Joint Committee shall generally meet once a year, on a date and with an agenda agreed in advance by the Parties, in Brussels one year and Mexico the next. Special meetings may be convened by mutual agreement. The office of chairman of the Joint Committee shall be held alternately by a representative of each of the Parties.

Article 11 (GA 49)

Other special committees

The Joint Council may decide to set up any other special committee or body that can assist it in the performance of its duties.

In its rules of procedures, the Joint Council shall determine the composition and duties of such committees or bodies and how they shall function.

Article 12 (GA 50)

Dispute settlement

The Joint Council shall decide on the establishment of a specific trade or trade-related dispute settlement procedure compatible with the relevant WTO provisions in this field.

Article 13 (GA 52)

National security clause

No provision of this Agreement shall preclude a Party taking measures:

(a) which it considers necessary to prevent disclosures of information which are contrary to the essential interests of its security;

(b) relating to the production of, or trade in, arms, munitions or was material or to research, development or production connected with defence needs, provided these measures do not adversely affect the conditions of competition regarding products which are not intended for specifically military purposes;

(c) which it considers essential to its security in the event of serious domestic disturbances liable to disrupt public order, war, or serious international tensions that might erupt into armed conflict or to fulfil obligations it has entered into for the maintenance of peace and international security.

Article 14 (GA 56)

Territorial application

This Agreement shall apply to the territory in which the Treaty establishing the European Community is applied under the conditions laid down in that Treaty, on the one hand, and to the territory of the United Mexican States, on the other.

Article 15

Duration

This Agreement shall be applicable until the entry into force of Global Agreement signed on . . .

Each of the Parties may denounce the Agreement by notifying the other Party. The Agreement shall cease to apply six months after the date of such notification.

Article 16 (GA 58)

Fulfilment of obligations

1. The Parties shall adopt any general or specific measure required for them to fulfil their obligations under this Agreement and shall ensure that they comply with the objectives laid down in the Agreement.

If either Party considers that the other Party has failed to fulfil an obligation under this Agreement, it may take appropriate measures. Before doing so, except in cases of special urgency, it must supply the Joint Council with all the relevant information required for a thorough examination of the situation, within 30 days, with a view to seeking a solution acceptable to the Parties.

In this selection of measures, priority must be given to those measures which least disturb the functioning of this Agreement. These measures shall be notified immediately to the Joint Council and shall be the subject of consultations in that Council, if the other Party so requests.

2. The Parties agree that the term 'cases of special urgency` in paragraph 1 of this Article means a case of material breach of the Agreement by one of the Parties. A material breach of the Agreement consists of:

(a) repudiation of the Agreement not sanctioned by the general rules of international law;

(b) violation of the essential elements of the Agreement referred to in Article 1.

3. The Parties agree that the 'appropriate measures` referred to in this Article are measures taken in accordance with international law. If a Party takes a measure in a case of special urgency as provided for under this Article, the other Party may ask that an urgent meeting be called to bring the Parties together within 15 days.

Article 17 (GA 59)

Authentic text

This Agreement is drawn up in duplicate in the Danish, Dutch, English, Finnish, French, German, Greek, Italian, Portuguese, Spanish and Swedish languages, each of these texts being equally authentic.

Article 18

Entry into force

1. This Agreement shall be approved by the Parties in accordance with their own procedures.

2. This Agreement shall enter into force on the first day of the month following the date on which the Parties notify each other of the completion of the procedures necessary for this purpose.

3. Notification shall be sent to the Secretary-General of the Council of the European Union which shall be the depositary for the Agreement.

FINAL ACT JOINT DECLARATION

Joint Interpretative Declaration on Article 2

The commitments resulting from Article 2 of this Agreement will not take effect until the Decision referred to in Article 3 is adopted.

DECLARATION BY THE EUROPEAN COMMUNITY

Declaration by the European Community of Article 5

The Community declares that, until the adoption by the Joint Council of the implementing rules on competition referred to in Article 5 (2) it will assess any practice contrary to that Article on the basis of the criteria resulting from the rules contained in Articles 85, 86 and 92 of the Treaty establishing the European Community, and, for products covered by the Treaty establishing the European Coal and Steel Community, by those contained in Articles 65 and 66 of that Treaty and the Community rules on State aids, including secondary legislation.

JOINT DECLARATION BETWEEN THE EUROPEAN COMMUNITY AND THEIR MEMBER STATES AND THE UNITED MEXICAN STATES

With a view to the adequate coverage of the issues contained in Titles III and IV of the Economic Partnership, Political Coordination and Cooperation Agreement signed on . . . (initialled on) . . . within a comprehensive framework, the European Community and its Member States and the United Mexican States undertake to:

1. start and if possible, conclude negotiations regarding the arrangements for the liberalization of trade in services and of capital movements and payments as well as the measures relating to intellectual property provided for in Articles 6, 8, 9 and 12 of that Agreement, in parallel with negotiations on the arrangements and timetable for liberalization of trade in goods provided for both in Article 5 of that Agreement and in Article 3 of the Interim Agreement on trade and trade-related matters between the European Community and Mexico signed on . . . (initialled on) . . .;

2. aim at ensuring that, without prejudice to the accomplishment of their respective internal procedures, the results of the negotiation on the liberalization of services and of capital movements and payments as well as the measures relating to intellectual property, provided for above, may enter into force as soon as possible, thereby achieving the Parties' shared objective of a global trade liberalization covering both goods and services, in accordance with Article 7 of the Economic Partnership, Political Coordination and Cooperation Agreement.