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ARTICLES

LEGAL RESOURSES

Exchange rate:

$ 17.14

    • Annex 1001.2b: General Notes

    Schedule of Canada

    1. This Chapter does not apply to procurements in respect of:

  • Shipbuilding and repair;

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  • Urban rail and urban transportation equipment, systems, components and materials incorporated there in as well as all project related materials of iron or steel;

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  • Contracts respecting FSC 58 (communications, detection and coherent radiation equipment);

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  • Set-asides for small and minority businesses;

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  • The Departments of Transport, Communications and Fisheries and Oceans respecting Federal Supply Classification (FSC) 70 (automatic data processing equipment, software supplies and support equipment), FSC 74 (office machines, text processing systems and visible record equipment) and FSC 36 (special industry machinery); and

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  • Agricultural products made in furtherance of agricultural support programs or human feeding programs.

    • 2. This Chapter does not apply to the procurement of transportation services that form a part of, or are incidental to, a procurement contract.

    3. Pursuant to Article 1018 (TLCAN: Art. 1018), national security exemptions include oil purchases related to any strategic reserve requirements.

    4. National security exceptions include procurements made in support of safeguarding nuclear materials or technology.

    5. The most-favored-nation obligation of Article 1003 (TLCAN: Art. 1003) does not apply to procurements covered by Annex 1001.2c (TLCAN: Anexo 1001.2c).

    Schedule of Mexico

    1. This Chapter does not apply to procurements made:

  • With a view to commercial resale by government-owned retail stores;

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  • Pursuant to loans from regional or multilateral financial institutions to the extent that different procedures are imposed by such institutions (except for national content requirements); or

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  • By one entity from another entity of Mexico.

    • 2. This Chapter does not apply to the procurement of transportation services that form a part of, or are incidental to, a procurement contract.

    3. Notwithstanding any other provision in this Chapter, Mexico may set aside procurement contracts from the obligations of this Chapter, subject to the following:

  • The total value of the contracts set aside that may be allocated by all entities, except Pemex and CFE, may not exceed the Mexican peso equivalent of

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  • US$1.0 billion, in each year until December 31, 2002, and

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  • US$1.2 billion, in each year beginning January 1, 2003;

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  • No contract may be set aside under this paragraph by Pemex or CFE prior to January 1, 2003;

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  • The total value of the contracts set aside by Pemex and CFE under this paragraph may not exceed the Mexican peso equivalent of US$300 million, in each year beginning January 1, 2003;

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  • The total value of contracts under any single FSC class (or other classification system agreed by the Parties) that may be set aside under this paragraph in any year shall not exceed 10 percent of the total value of contracts that may be set aside under this paragraph for that year; and

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  • No entity subject to subparagraph (a) may set aside contracts in any year of a value of more than 20 percent of the total value of contracts that may be set aside for that year.

    • 4. Beginning one year after the date of entry into force of this Agreement, the dollar values referred to in paragraph 3 shall be adjusted annually for cumulative inflation from the date of entry into force of this Agreement, based on the implicit price deflator for U.S. Gross Domestic Product (GDP) or any successor index published by the Council of Economic Advisors in "Economic Indicators".

    The dollar values adjusted for cumulative inflation up to January of each year following 1994 shall be equal to the original dollar values multiplied by the ratio of:

  • The implicit U.S. GDP price deflator or any successor index published by the Council of Economic Advisors in "Economic Indicators", current as of January of that year, to

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  • The implicit U.S. GDP price deflator or any successor index published by the Council of Economic Advisors in "Economic Indicators", current as of the date of entry into force of this Agreement,

    • Provided that the price deflators under paragraphs (a) and (b) have the same base year.

    The resulting adjusted dollar values shall be rounded to the nearest million dollars.

    5. National security exceptions include procurements made in support of safeguarding nuclear materials or technology.

    6. Notwithstanding any other provision of this Chapter, an entity may impose a local content requirement of no more than:

  • 40 percent, for labor-intensive turnkey or major integrated projects; or

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  • 25 percent, for capital-intensive turnkey or major integrated projects.

    • For purposes of this paragraph, a turnkey or major integrated project means, in general, a construction, supply or installation project undertaken by a person pursuant to a right granted by an entity with respect to which:

  • The prime contractor is vested with the authority to select the general contractors or subcontractors;

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  • Neither the Government of Mexico nor its entities fund the project;

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  • The person bears the risks associated with non- performance; and

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  • The facility will be operated by an entity or through a procurement contract of that entity.

    • 7. Notwithstanding the thresholds set out in Article 1001(1)(c) (TLCAN: Art. 1001), Article 1003 (TLCAN: Art. 1003) shall apply to any procurement from locally-established suppliers of oil and gas field supplies or equipment by Pemex at any project site where it performs works.

    8. In the event that Mexico exceeds in any given year the total value of the contracts it may set aside for that year in accordance with paragraph 3 or the reserved procurement under Annex 1001.2a(1)(2) or (4) (TLCAN: Anexo 1001.2a), Mexico shall consult with the other Parties with a view to agreement on compensation in the form of additional procurement opportunities during the following year. The consultations shall be without prejudice to the rights of any Party under Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures).

    9. Notwithstanding Annex 1001.2a(6) (TLCAN: Anexo 1001.2a), Mexico may not set aside from the obligations of this Chapter procurement contracts by its entities of biologicals and drugs patented in Mexico.

    10. Nothing in this Chapter shall be construed to require Pemex to enter into risk-sharing contracts.

    Schedule of the United States

    1. This Chapter does not apply to set asides on behalf of small and minority businesses.

    2. This Chapter does not apply to the procurement of transportation services that form a part of, or are incidental to, a procurement contract.

    3. The most-favored-nation obligation of Article 1003 (TLCAN: Art. 1003) does not apply to procurements covered by Annex 1001.2c (TLCAN: Anexo 1001.2c).