AGREEMENT BETWEEN JAPAN AND THE UNITED MEXICAN STATES
FOR THE STRENGTHENING OF THE ECONOMIC PARTNERSHIP

Preamble

Japan and the United Mexican States,

Conscious of their longstanding friendship and strong economic and political ties that have developed through growing trade and investment and mutually beneficial cooperation between the Parties;

Realizing that a dynamic and rapidly changing global environment brought about by globalization and closer integration among economies in the world presents many new economic challenges and opportunities to the Parties;

Recognizing that the economies of the Parties are endowed with conditions to complement each other and that this complementarity should contribute to further promoting the economic development in the Parties, by making use of their respective economic strengths through bilateral trade and investment activities;

Recognizing that creating a clearly established and secured trade and investment framework through mutually advantageous rules to govern trade and investment between the Parties would enhance the competitiveness of the economies of the Parties, make their markets more efficient and vibrant and ensure predictable commercial environment for further expansion of trade and investment between them;

Noting that such a framework would promote the economic relations between the Parties;

Recalling Article XXIV of the General Agreement on Tariffs and Trade 1994 and Article V of the General Agreement on Trade in Services in Annex 1A and Annex 1B, respectively, to the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, April 15, 1994;

Realizing that enhancing economic ties between the Parties would contribute to increasing trade and investment flows across the Pacific;

Convinced that this Agreement would open a new era for the relationship between the Parties; and

Determined to establish a legal framework for strengthening the economic partnership between the Parties;

HAVE AGREED as follows:

Chapter 1
Objectives

Article 1
Objectives

The objectives of this Agreement are to:

(a) liberalize and facilitate trade in goods and services between the Parties;

(b) increase investment opportunities and strengthen protection for investments and investment activities in the Parties;

(c) enhance opportunities for suppliers to participate in government procurement in the Parties;

(d) promote cooperation and coordination for the effective enforcement of competition laws in each Party;

(e) create effective procedures for the implementation and operation of this Agreement and for the resolution of disputes; and

(f) establish a framework for further bilateral cooperation and improvement of business environment.

Chapter 2
General Definitions

Article 2
General Definitions

1. For the purposes of this Agreement, unless otherwise specified:

(a) the term “Area” means:

with respect to the United Mexican States (hereinafter referred to as “Mexico”):

(i) the States of the Federation and the Federal District;

(ii) the islands, including the reefs and keys, in adjacent seas;

(iii) the islands of Guadalupe and Revillagigedo situated in the Pacific Ocean;

(iv) the continental shelf and the submarine shelf of such islands, keys and reefs;

(v) the waters of the territorial seas, in accordance with international law, and its interior maritime waters;

(vi) the space located above the national territory, in accordance with international law; and

(vii) any areas beyond the territorial seas of Mexico within which, in accordance with international law, including the United Nations Convention on the Law of the Sea, as may be amended, and its domestic law, Mexico may exercise rights with respect to the seabed and subsoil and their natural resources; and

with respect to Japan:

(viii) the territory of Japan which means the land areas, internal waters, and territorial seas and the airspace above such areas, waters and seas, under the sovereignty of Japan in accordance with international law; and

(ix) any areas beyond the territorial seas of Japan within which, in accordance with international law, including the United Nations Convention on the Law of the Sea, as may be amended, and its domestic law, Japan may exercise rights with respect to the seabed and subsoil and their natural resources.

Nothing in this subparagraph shall affect the rights and obligations of the Parties under the United Nations Convention on the Law of the Sea, as may be amended;

(b) the term “days” means calendar days, including weekends and holidays;

(c) the term “enterprise” means any entity constituted or organized under applicable law, whether or not for profit, and whether privately- owned or governmentally-owned, including any corporation, trust, partnership, or other association or sole proprietorship;

(d) the term “enterprise of a Party” means an enterprise constituted or organized under the law of a Party;

(e) the term “existing” means in effect on the date of entry into force of this Agreement;

(f) the term “GATS” means the General Agreement on Trade in Services in Annex 1B to the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, April 15, 1994, as may be amended;

(g) the term “GATT 1994” means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, April 15, 1994, as may be amended. For the purposes of this Agreement, references to Articles in the GATT 1994 include the interpretative notes;

(h) the term “goods of a Party” means domestic products as these are understood in the GATT 1994, and includes originating goods of that Party;

(i) the term “Harmonized System (HS)” means the Harmonized Commodity Description and Coding System set out in the Annex to the International Convention on the Harmonized Commodity Description and Coding System, as may be amended, and adopted and implemented by the Parties in their respective domestic laws;

(j) the term “Joint Committee” means the Joint Committee established under Article 165;

(k) the term “measure” means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action or any other form;

(l) the term “national” means a natural person possessing the nationality of a Party under its domestic laws;

(m) the term “originating goods” means goods qualifying as originating under the provisions of Chapter 4;

(n) the term “originating materials” means materials qualifying as originating under the provisions of Chapter 4;

(o) the term “person” means a natural person or enterprise;

(p) the term “person of a Party” means a national or an enterprise of a Party;

(q) the term “state enterprise” means an enterprise owned or controlled through ownership interests by a Party; and

(r) the term “WTO Agreement” means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, April 15, 1994, as may be amended.

2. For the purposes of this Agreement, unless otherwise specified:

(a) in the case of Mexico, a reference to a state includes local governments of that state; and

(b) in the case of Japan, a reference to a local government means a prefecture or any other local authority.

Chapter 3
Trade in Goods

Section 1
General Rules

Article 3
National Treatment

1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994 and to this end Article III of the GATT 1994 is incorporated into and made part of this Agreement.

2. The provisions of paragraph 1 above regarding national treatment shall mean, with respect to a local government in the case of Japan, and with respect to a state in the case of Mexico, treatment no less favorable than the most favorable treatment accorded by that local government or state to any like goods or, directly competitive or substitutable goods, as the case may be, of the Party of which it forms a part.

Article 4
Classification of Goods

The classification of goods in trade between the Parties shall be in conformity with the Harmonized System.

Article 5
Elimination of Customs Duties

1. Except as otherwise provided for in this Agreement, each Party shall eliminate or reduce its Customs Duties on originating goods designated for such purposes in its Schedule in Annex 1, in accordance with the terms and conditions set out therein.

2. Except as otherwise provided for in this Agreement, neither Party shall increase any Customs Duty on originating goods from the level provided for in its Schedule in Annex 1.

Note: The term “level” means the level of Customs Duty that shall be implemented by each Party in accordance with its Schedule and does not mean the Base Rate specified in such Schedule.

3.

(a) On the request of either Party, the Parties shall consult to consider:

(i) issues such as improving market access conditions on originating goods designated for consultation in the Schedule in Annex 1, in accordance with the terms and conditions set out in such Schedule; or

(ii) further steps in the process of liberalization of trade between the Parties in respect of goods after 4 years of the date of entry into force of this Agreement.

(b) Subparagraph (a)(ii) above shall not apply to the originating goods referred to in subparagraph (a)(i) above while the consultation on the originating goods is held under the terms and conditions referred to in subparagraph (a)(i) above.

4. The Parties shall consult to consider further steps in the process of liberalization of trade between the Parties in respect of originating goods set out in the Schedule in Annex 1, in light of the result of the multilateral trade negotiations under the World Trade Organization (WTO).

5. Any amendment to the Schedules as a result of the consultations referred to in paragraph 3 or 4 above shall be approved by both Parties in accordance with their respective legal procedures, and shall supersede any corresponding concession provided for in their respective Schedules.

Article 6
Export Duties

Neither Party shall adopt or maintain any duties on goods exported from a Party into the other Party.

Article 7
Import and Export Restrictions

1. Except as otherwise provided for in this Agreement, each Party shall not institute or maintain any prohibition or restriction other than Customs Duties on the importation of any good of the other Party or on the exportation or sale for export of any good destined to the other Party, which is inconsistent with its obligations under Article XI of the GATT 1994 and its relevant provisions under the WTO Agreement.

2. The measures specified in Annex 2 may be maintained, provided that such measures are consistent with the rights and obligations of the Party taking such measures under the WTO Agreement.

Article 8
Protection of Geographical Indications for Spirits

1. The Parties agree that indications for spirits listed in Annex 3 are geographical indications referred to in paragraph 1 of Article 22 of the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1C to the WTO Agreement, as may be amended, and shall abide by the obligations under the relevant provisions of the said Agreement with respect to the protection of geographical indications, and for this purpose, they shall take appropriate measures to prohibit the use of any geographical indications listed in Annex 3 for spirits not originating in the place indicated by the respective geographical indication.

2. Modifications to Annex 3 proposed by both Parties may be adopted by the Joint Committee pursuant to subparagraph 2(e)(i) of Article 165. The adopted modifications shall be confirmed by an exchange of diplomatic notes and shall enter into force on the date specified in the said notes. The modified part of Annex 3 shall supersede the corresponding part provided for in Annex 3.

Article 9
Sub-Committee on Trade in Goods

1. For the purposes of the effective implementation and operation of this Section, a Sub-Committee on Trade in Goods (hereinafter referred to in this Article as “the Sub- Committee”) shall be established pursuant to Article 165.

2. The Sub-Committee shall meet at such venue and times as may be agreed by the Parties.

3. The functions of the Sub-Committee shall be:

(a) reviewing the implementation and operation of this Section;

(b) reporting the findings of the Sub-Committee to the Joint Committee; and

(c) carrying out other functions which may be delegated by the Joint Committee pursuant to Article 165.

4.

(a) For the purposes of the effective implementation and operation of this Section, the Sub-Committee shall establish a Special Sub-Committee on Steel Products. If necessary, the Sub-Committee may establish any other Special Sub-Committees.

(b) The Special Sub-Committees shall be held at such venue and times as may be agreed by the Parties.

(c) The functions of the Special Sub-Committees shall be:

(i) analyzing relevant matters on the relevant products and its sector, including trade in such products; and

(ii) reporting the findings of the Special Sub- Committees, through the Sub-Committee, to the Joint Committee.

Article 10
Uniform Regulations

Upon the date of entry into force of this Agreement, the Joint Committee shall adopt the Uniform Regulations that provide detailed regulations pursuant to which the customs authorities, the competent governmental authorities defined in Article 49 and the relevant authorities of the Parties shall implement their functions under this Section, Chapter 4 and Chapter 5, except Section 3.

Article 11
Definition

For the purposes of this Section, the term “Customs Duty” means any customs or import duty and a charge of any kind, imposed in connection with the importation of a good, but does not include any:

(a) charge equivalent to an internal tax imposed consistently with the provisions of paragraph 2 of Article III of the GATT 1994, in respect of the like goods or, directly competitive or substitutable goods of the Party or in respect of goods from which the imported goods have been manufactured or produced in whole or in part;

(b) anti-dumping or countervailing duty applied pursuant to a Party’s domestic law and applied consistently with the provisions of Article VI of the GATT 1994, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, as may be amended, and the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement, as may be amended; or

(c) fees or other charges commensurate with the cost of services rendered.

Section 2
Sanitary and Phytosanitary Measures

Article 12
Reaffirmation of Rights and Obligations

The Parties reaffirm their rights and obligations relating to sanitary and phytosanitary (hereinafter referred to in this Chapter as “SPS”) measures under the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A to the WTO Agreement, as may be amended.

Article 13
Enquiry Points

Each Party shall designate an enquiry point which is able to answer all reasonable enquiries from the other Party regarding SPS measures referred to in Article 12 and, if appropriate, to provide their relevant information.

Article 14
Sub-Committee on SPS Measures

1. For the purposes of the effective implementation and operation of this Section, a Sub-Committee on SPS Measures (hereinafter referred to in this Article as “the Sub- Committee”) shall be established pursuant to Article 165.

2. The Sub-Committee shall meet at such venue and times as may be agreed by the Parties.

3. The functions of the Sub-Committee shall be:

(a) exchang