Annex 1001.2a: Transitional Provisions for Mexico

Notwithstanding any other provision of this Chapter, Annexes 1001.1a-1 through 1001.1b-3 (TLCAN: Anexo 1001.1a-1) (TLCAN: Anexo 1001.1a-2) (TLCAN: Anexo 1001.1a-3) (TLCAN: Anexo 1001.1b-1) (TLCAN: Anexo 1001.1b-2) (TLCAN: Anexo 1001.1b-3) are subject to the following:

Pemex, CFE and Non-Energy Construction

1. Mexico may set aside from the obligations of this Chapter for a calendar year set out in paragraph 2 the percentage specified in that paragraph of:

2. The calendar years to which paragraph 1 applies and the percentages for those calendar years are as follows:

3. The value of procurement contracts that are financed by loans from regional and multilateral financial institutions shall not be included in the calculation of the total value of procurement contracts under paragraphs 1 and 2. Procurement contracts that are financed by such loans shall also not be subject to any restrictions set out in this Chapter.

4. Mexico shall ensure that the total value of procurement contracts under any single FSC class (or other classification system agreed by Parties) that are set aside by Pemex or CFE under paragraphs 1 and 2 for any year does not exceed 10 percent of the total value of the procurement contracts that may be set aside by Pemex or CFE for that year.

5. Mexico shall ensure that, after December 31, 1998, Pemex and CFE each shall make all reasonable efforts to ensure that the total value of procurement contracts under any single FSC class (or other classification system agreed by the Parties) that are set aside by Pemex or CFE under paragraphs 1 and 2 for any year does not exceed 50 percent of the total value of all Pemex and CFE procurement contracts under that FSC class (or other classification system agreed by the Parties) for that year.

Pharmaceuticals

6. Until January 1, 2002, this Chapter shall not apply to the procurement by the Secretaría de Salud, IMSS, ISSSTE, Secretaría Defensa Nacional and the Secretaría de Marina of drugs that are not currently patented in Mexico or whose Mexican patents have expired. Nothing in this paragraph shall prejudice rights under Chapter Seventeen (Intellectual Property).

Time Limits for Tendering and Delivery

7. Mexico shall use its best efforts to comply with the 40- day time limit requirements of Article 1012 (TLCAN: Art. 1012), and in any event shall fully comply with that obligation no later than January 1, 1995.

Provision of Information

8. The Parties recognize that Mexico may be required to undertake extensive retraining of personnel, introduce new data maintenance and reporting systems and make major adjustments to the procurement systems of certain entities in order to comply with Article 1019 (TLCAN: Art. 1019). The Parties also recognize that Mexico may encounter difficulties in making the transition to procurement systems that facilitate full compliance with this Chapter.

9. The Parties shall consult on an annual basis for the first five years after the date of entry into force of this Agreement to review transitional problems and to develop mutually agreed solutions. Such solutions may include, when appropriate, temporary adjustment to the obligations of Mexico under this Chapter, such as those related to reporting requirements.

10. Canada and the United States shall cooperate with Mexico to provide technical assistance, as appropriate and mutually agreed pursuant to Article 1020 (TLCAN: Art. 1020), to aid Mexico's transition.

11. Nothing in paragraphs 8 through 10 shall be construed to excuse compliance with the obligations of this Chapter.

Note: The General Notes for Mexico set out in Annex 1001.2b (TLCAN: Anexo 1001.2b) apply to this Annex.