Title:Annex I -- Schedule of Canada
Author: White House
Document-Date: 29 Sept 1993
Content-Type: text/plain CHARSET=US-ASCII
Content-Length: 92576



                                                           Annex I - Canada




                                        Annex I
                                   Schedule of Canada


            Sector:             Agriculture
            
            Sub-Sector:
            
            Industry
            Classification:
            
            Type of             National Treatment (Article 1102)
            Reservation:
            Level of            Federal
            Government:
            Measures:           Farm Credit Act, R.S.C. 1985, c. F-2

                                Farm Credit Regulations, C.R.C. 1978, c. 644

            Description:        Investment

                                Loans by the Farm Credit Corporation may be
                                made only to:

                                (a)  individuals who are Canadian citizens or
                                     permanent residents;

                                (b)  farming corporations controlled by
                                     Canadian citizens or permanent
                                     residents; or

                                (c)  cooperative farm associations, all
                                     members of which are Canadian citizens
                                     or permanent residents.

            Phase-Out:          None











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                                                           Annex I - Canada




            Sector:             All Sectors

            Sub-Sector:

            Industry
            Classification:

            Type of             National Treatment (Article 1102)
            Reservation:        Performance Requirements (Article 1106)
                                Senior Management and Boards of Directors
                                (Article 1107)
            
            Level of            Federal
            Government:
            Measures:           Investment Canada Act, R.S.C. 1985, c. 28
                                (1st Supp.)

                                Investment Canada Regulations, SOR/85-611

                                As qualified by paragraphs 8 through 12 of
                                the Description element

            Description:        Investment

                                1.   Under the Investment Canada Act, the
                                following acquisitions of Canadian businesses
                                by "non-Canadians" are subject to review by
                                Investment Canada:

                                (a)  all direct acquisitions of Canadian
                                     businesses with assets of C$5 million or
                                     more;

                                (b)  all indirect acquisitions of Canadian
                                     businesses with assets of C$50 million
                                     or more; and

                                (c)  indirect acquisitions of Canadian
                                     businesses with assets between C$5
                                     million and C$50 million that represent
                                     more than 50 percent of the value of the
                                     assets of all the entities the control
                                     of which is being acquired, directly or
                                     indirectly, in the transaction in
                                     question.


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                                                           Annex I - Canada




                                2.   A "non-Canadian" is an individual,
                                government or agency thereof or an entity
                                that is not "Canadian".  "Canadian" means a
                                Canadian citizen or permanent resident,
                                government in Canada or agency thereof or
                                Canadian-controlled entity as provided for in
                                the Investment Canada Act.

                                3.   In addition, specific acquisitions or
                                new businesses in designated types of
                                business activities relating to Canada's
                                cultural heritage or national identity, which
                                are normally notifiable, may be reviewed if
                                the Governor in Council authorizes a review
                                in the public interest.

                                4.   An investment subject to review under
                                the Investment Canada Act may not be
                                implemented unless the Minister responsible
                                for the Investment Canada Act advises the
                                applicant that the investment is likely to be
                                of net benefit to Canada.  Such a
                                determination is made in accordance with six
                                factors described in the Act, summarized as
                                follows:

                                (a)  the effect of the investment on the
                                     level and nature of economic activity in
                                     Canada, including the effect on
                                     employment, on the utilization of parts,
                                     components and services produced in
                                     Canada, and on exports from Canada;

                                (b)  the degree and significance of
                                     participation by Canadians in the
                                     investment;

                                (c)  the effect of the investment on
                                     productivity, industrial efficiency,
                                     technological development and product
                                     innovation in Canada;

                                (d)  the effect of the investment on
                                     competition within any industry or
                                     industries in Canada;


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                                                           Annex I - Canada




                                (e)  the compatibility of the investment with
                                     national industrial, economic and
                                     cultural policies, taking into
                                     consideration industrial, economic and
                                     cultural policy objectives enunciated by
                                     the government or legislature of any
                                     province likely to be significantly
                                     affected by the investment; and 

                                (f)  the contribution of the investment to
                                     Canada's ability to compete in world
                                     markets.

                                5.   In making a net benefit determination,
                                the Minister, through Investment Canada, may
                                review plans under which the applicant
                                demonstrates the net benefit to Canada of the
                                proposed acquisition.  An applicant may also
                                submit undertakings to the Minister in
                                connection with any proposed acquisition
                                which is the subject of review.  In the event
                                of noncompliance with an undertaking by an
                                applicant, the Minister may seek a court
                                order directing compliance or any other
                                remedy authorized under the Act.

                                6.   Non-Canadians who establish or acquire
                                Canadian businesses, other than those
                                described above, must notify Investment
                                Canada.

                                7.   Investment Canada will review an
                                "acquisition of control", as defined in the
                                Investment Canada Act, of a Canadian business
                                by an investor of Mexico or of the United
                                States if the value of the gross assets of
                                the Canadian business is not less than the
                                applicable threshold.

                                8.   The review threshold applicable to
                                investors of Mexico or of the United States,
                                calculated as set out in the Phase-Out
                                element, is higher than those described in
                                paragraph 1.  However, this higher review
                                threshold does not apply in the following


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                                sectors: uranium production and ownership of
                                uranium producing properties; oil and gas;
                                financial services; transportation services;
                                and cultural businesses.

                                9.   Notwithstanding the definition of
                                "investor of a Party" in Article 1139, only
                                investors who are nationals, or entities
                                controlled by nationals as provided for in
                                the Investment Canada Act, of Mexico or of
                                the United States may benefit from the higher
                                review threshold.

                                10.  An indirect "acquisition of control" of
                                a Canadian business by an investor of Mexico
                                or of the United States is not reviewable.  

                                11.  Notwithstanding Article 1106(1), Canada
                                may impose requirements, or enforce any
                                commitment or undertaking, in connection with
                                the establishment, acquisition, expansion,
                                conduct or operation of an investment of an
                                investor of another Party or of a non-Party
                                for the transfer of technology, production
                                process or other proprietary knowledge to a
                                national or enterprise, affiliated to the
                                transferor, in Canada, in connection with the
                                review of an acquisition of an investment
                                under the Investment Canada Act.

                                12.  Except for requirements, commitments or
                                undertakings relating to technology transfer
                                as set out in paragraph 11, Article 1106(1)
                                shall apply to requirements, commitments or
                                undertakings imposed or enforced under the
                                Investment Canada Act.  Article 1106(1) shall
                                not be construed to apply to any requirement,
                                commitment or undertaking imposed or enforced
                                in connection with a review under the
                                Investment Canada Act, to locate production,
                                carry out research and development, employ or
                                train workers, or to construct or expand
                                particular facilities, in Canada.

            Phase-Out:          For investors of Mexico or of the United


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                                                           Annex I - Canada




                                States, the applicable threshold for the
                                review of a direct acquisition of control of
                                a Canadian business will be:

                                (a)  for the 12-month period beginning on the
                                     date of entry into force of this
                                     Agreement, the monetary amount as
                                     determined in accordance with Annex
                                     1607.3 of the Canada - United States
                                     Free Trade Agreement; and

                                (b)  beginning one year after the date of
                                     entry into force of this Agreement, the
                                     monetary amount for the preceding year
                                     multiplied by an annual adjustment
                                     representing the increase in nominal
                                     Gross Domestic Product, as set out
                                     below.

                                The calculation of the annual adjustment will
                                be determined in January of each year after
                                1994 using the most recently available data
                                published by Statistics Canada and using the
                                following formula:


                                             Annual Adjustment =

                                     Current nominal GDP at market prices
                                     ----------------------------------------
                                     ---------------
                                     Previous year nominal GDP at market
                                     prices

            
                                "Current nominal GDP at market prices" means
                                the arithmetic mean of the nominal Gross
                                Domestic Product at market prices for the
                                most recent four consecutive quarters
                                (seasonally adjusted at annual rates).

                                "Previous year nominal GDP at market prices"
                                means the arithmetic mean of the nominal
                                Gross Domestic Product at market prices for
                                the four consecutive quarters (seasonally


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                                                           Annex I - Canada




                                adjusted at annual rates) for the comparable
                                period in the year preceding the year used in
                                calculating the "current nominal GDP at
                                market prices".

                                The amounts determined in this manner will be
                                rounded to the nearest million dollars.








































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                                                           Annex I - Canada




            Sector:             All Sectors

            Sub-Sector:

            Industry
            Classification:

            Type of             National Treatment (Article 1102)
            Reservation:        Senior Management and Boards of Directors
                                (Article 1107)
            
            Level of            Federal
            Government:         Provincial
            
            Measures:           As set out in the Description element

            Description:        Investment

                                Canada or any province, when selling or
                                disposing of its equity interests in, or the
                                assets of, an existing state enterprise or an
                                existing governmental entity, may prohibit or
                                impose limitations on the ownership of such
                                interests or assets, and on the ability of
                                owners of such interests or assets to control
                                any resulting enterprise, by investors of
                                another Party or of a non-Party or their
                                investments.  With respect to such a sale or
                                other disposition, Canada or any province may
                                adopt or maintain any measure relating to the
                                nationality of senior management or members
                                of the board of directors.

                                For purposes of this reservation:

                                (a)  any measure maintained or adopted after
                                     the date of entry into force of this
                                     Agreement that, at the time of sale or
                                     other disposition, prohibits or imposes
                                     limitations on the ownership of equity
                                     interests or assets or imposes
                                     nationality requirements described in
                                     this reservation shall be deemed to be
                                     an existing measure; and



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                                (b)  "state enterprise" means an enterprise
                                     owned or controlled through ownership
                                     interests by Canada or a province and
                                     includes an enterprise established after
                                     the date of entry into force of this
                                     Agreement solely for the purposes of
                                     selling or disposing of equity interests
                                     in, or the assets of, an existing state
                                     enterprise or governmental entity.
            
            Phase-Out:          None




































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                                                           Annex I - Canada




            Sector:             All Sectors

            Sub-Sector:

            Industry
            Classification:

            Type of             National Treatment (Article 1102)
            Reservation:
            
            Level of            Federal
            Government:

            Measures:           Canada Business Corporations Act, R.S.C.
                                1985, c. C-44

                                Canada Corporations Act, R.S.C. 1970, c. C-32

                                Canada Business Corporations Act Regulations,
                                SOR/79-316

            Description:        Investment

                                "Constraints" may be placed on the issue,
                                transfer and ownership of shares in federally
                                incorporated corporations.  The object is to
                                permit corporations to meet Canadian
                                ownership requirements, under certain laws
                                set out in the Canada Business Corporations
                                Act Regulations, in sectors where ownership
                                is required as a condition to operate or to
                                receive licenses, permits, grants, payments
                                or other benefits.  In order to maintain
                                certain "Canadian" ownership levels, a
                                corporation is permitted to sell
                                shareholders' shares without the consent of
                                those shareholders, and to purchase its own
                                shares on the open market.  "Canadian" is
                                defined in the Canada Business Corporations
                                Act Regulations.
            
            Phase-Out:          None





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                                                           Annex I - Canada




            Sector:             All Sectors

            Sub-Sector:

            Industry
            Classification:

            Type of             Senior Management and Boards of Directors
            Reservation:        (Article 1107)
            
            Level of            Federal
            Government:

            Measures:           Canada Business Corporations Act, R.S.C.
                                1985, c. C-44

                                Canada Business Corporations Act Regulations,
                                SOR/79-316

                                Canada Corporations Act, R.S.C. 1970, c. C-32

                                Special Acts of Parliament incorporating
                                specific companies

            Description:        Investment

                                The Canada Business Corporations Act requires
                                that a simple majority of the board of
                                directors, or of a committee thereof, of a
                                federally-incorporated corporation be
                                resident Canadians.  For purposes of the Act,
                                "resident Canadian" means an individual who
                                is a Canadian citizen ordinarily resident in
                                Canada, a citizen who is a member of a class
                                set out in the Canada Business Corporations
                                Act Regulations, or a permanent resident as
                                defined in the Immigration Act other than one
                                who has been ordinarily resident in Canada
                                for more than one year after he became
                                eligible to apply for Canadian citizenship.

                                In the case of a holding corporation, not
                                more than one-third of the directors need be
                                resident Canadians if the earnings in Canada
                                of the holding corporation and its


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                                                           Annex I - Canada




                                subsidiaries are less than five percent of
                                the gross earnings of the holding corporation
                                and its subsidiaries.

                                Under the Canada Corporations Act, a simple
                                majority of the elected directors of a
                                Special Act corporation must be resident in
                                Canada and citizens of a Commonwealth
                                country.  This requirement applies to every
                                joint stock company incorporated subsequent
                                to June 22, 1869 by any Special Act of
                                Parliament.

            Phase-Out:          None

































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            Sector:             All Sectors

            Sub-Sector:

            Industry
            Classification:

            Type of             National Treatment (Article 1102)
            Reservation:

            Level of            Federal
            Government:
            Measures:           Citizenship Act, R.S.C. 1985, c. C-29 

                                Foreign Ownership of Land Regulations,
                                SOR/79-416

            Description:        Investment

                                The Foreign Ownership of Land Regulations are
                                made pursuant to the Citizenship Act and the
                                Alberta Agricultural and Recreational Land
                                Ownership Act.  In Alberta, an ineligible
                                person or foreign-owned or controlled
                                corporation may only hold an interest in
                                controlled land consisting of not more than
                                two parcels containing, in the aggregate, not
                                more than 20 acres.  An "ineligible person"
                                is:

                                (a)  an individual who is not a Canadian
                                     citizen or permanent resident;

                                (b)  a foreign government or agency thereof;
                                     or

                                (c)  a corporation incorporated elsewhere
                                     than in Canada.

                                "Controlled land" means land in Alberta but
                                does not include:

                                (a)  land other than land owned by the Crown;




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                                (b)  land within a city, town, new town,
                                     village or summer village; and

                                (c)  mines or minerals.  

            Phase-Out:          None









































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            Sector:             All Sectors

            Sub-Sector:

            Industry
            Classification:

            Type of             National Treatment (Article 1102)
            Reservation:
            
            Level of            Federal
            Government:
            Measures:           Air Canada Public Participation Act, R.S.C.
                                1985, c. 35 (4th Supp.)

                                Canada Development Corporation Reorganization
                                Act, S.C. 1985, c. 49

                                Petro-Canada Public Participation Act, S.C.
                                1991, c. 10

                                Canadian Arsenals Limited Divestiture
                                Authorization Act, S.C. 1986, c. 20

                                Cooperative Energy Act, S.C. 1980-81-82-83,
                                c. 108

                                Eldorado Nuclear Limited Reorganization and
                                Divestiture Act, S.C. 1988, c. 41

                                Nordion and Theratronics Divestiture
                                Authorization Act, S.C. 1990, c. 4

            Description:        Investment

                                A "non-resident" may not own more than a
                                specified percentage of the voting shares of
                                the corporation to which each Act applies. 
                                For each company the restriction is as
                                follows:

                                Air Canada: 25 percent
                                Canada Development Corporation: 25 percent
                                Petro-Canada Inc: 25 percent
                                Canadian Arsenals Limited: 25 percent


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                                Nordion Limited: 25 percent
                                Eldorado Nuclear Limited: 5 percent
                                                           Annex I - Canada







                                Cooperative Energy Corporation: 49 percent

                                "Non-resident" generally means:
                                Theratronics Limited: 49 percent




                                (a)  an individual, other than a Canadian







































            Sub-Sector:


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            Sector:             All Sectors
                                     citizen, who is not ordinarily resident

















                                     (i)  established by a non-resident as
                                (d)  a corporation that is controlled
                                (b)  a corporation incorporated, formed or
                                     otherwise organized outside Canada;


                                     political subdivision thereof, or a
                                     person empowered to perform a function







                                (e)  a trust
                                (c)  the government of a foreign state or any







                                     through (c);
                                     as defined in any of paragraphs (a)
                                     in Canada;







                                     or duty on behalf of such a government;


                                     directly or indirectly by non-residents








                                          the administration of a pension





                                          in any of paragraphs (a) through
                                          fund for the benefit of individuals
                                          a majority of whom are residents,




                                          (d) have more than 50 percent of
                                          the beneficial interest; or
                                     (ii) in which non-residents as defined
                                          or







                                     directly or indirectly by a trust
                                (f)  a corporation that is controlled

                                     referred to in paragraph (e).
                                          defined in any of paragraphs (b)















            Phase-Out:          None      through (d), other than a trust for
                                                           Annex I - Canada




            Industry
            Classification:

            Type of             Local Presence (Article 1205)
            Reservation:

            Level of            Federal
            Government:

            Measures:           Export and Import Permits Act, R.S.C. 1985,
                                c. E-19
            Description:        Cross-Border Services

                                Only individuals ordinarily resident in
                                Canada, enterprises having their head offices
                                in Canada or branch offices in Canada of
                                foreign enterprises may apply for and be
                                issued import or export permits or transit
                                authorization certificates for goods and
                                related services subject to controls under
                                the Export and Import Permits Act.

            Phase-Out:          None



























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                                                           Annex I - Canada




            Sector:             Automotive

            Sub-Sector:

            Industry Classification:
            
            Type of             Performance Requirements (Article 1106)
            Reservation:
                                Federal
            Level of
            Government:
            
            Measures:           Canada - United States Free Trade Agreement
                                Implementation Act, S.C. 1988, c. 65

            Description:        Investment

                                Canada may grant waivers of customs duties
                                conditioned, explicitly or implicitly, on the
                                fulfillment of performance requirements:

                                (a)  to those manufacturers of automotive
                                     goods set out in Part One of Annex
                                     1002.1 of the Canada - United States
                                     Free Trade Agreement, in accordance with
                                     the headnote to that Part; and

                                (b)  for the applicable periods specified in
                                     Article 1002(2) and (3) of the Canada -
                                     United States Free Trade Agreement to
                                     those manufacturers of automotive goods
                                     set out in Parts Two and Three,
                                     respectively, of Annex 1002.1 of that
                                     Agreement.

            Phase-Out:          (a)  None

                                (b)  For Part Two, until January 1, 1998; and
                                     for Part Three, until January 1, 1996 or
                                     such earlier date specified in existing
                                     agreements between Canada and the
                                     recipient of the waiver.








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                                                           Annex I - Canada




            Sector:             Business Service Industries 

            Sub-Sector:         Customs Brokerages and Brokers

            Industry            SIC 7794  Customs Brokers
            Classification:

            Type of             National Treatment (Article 1202)
            Reservation:        Local Presence (Article 1205)
                                Senior Management and Boards of Directors
                                (Article 1107)

            Level of            Federal
            Government:

            Measures:           Customs Act, R.S.C. 1985, c. 1 (2nd Supp.)

                                Customs Brokers Licensing Regulations,
                                SOR/86-1067

            Description:        Cross-Border Services and Investment

                                To be a licensed customs broker or brokerage
                                in Canada:

                                (a)  an individual must be a Canadian citizen
                                     or permanent resident;

                                (b)  a corporation must be incorporated in
                                     Canada with a majority of its directors
                                     being Canadian citizens or permanent
                                     residents; and

                                (c)  a partnership must be composed of
                                     persons who are Canadian citizens or
                                     permanent residents, or corporations
                                     incorporated in Canada with a majority
                                     of their directors being Canadian
                                     citizens or permanent residents.

                                An individual who is not a licensed customs
                                broker but who transacts business as a
                                customs broker on behalf of a licensed
                                customs broker or brokerage must be a
                                Canadian citizen or permanent resident. 

            Phase-Out:          None.  Subject to discussion by the Parties



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                                                           Annex I - Canada




                                five years after the date of entry into force
                                of this Agreement.
















































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                                                           Annex I - Canada




            Sector:             Business Service Industries

            Sub-Sector:         Duty Free Shops

            Industry            SIC 6599  Other Retail Stores, Not Elsewhere
            Classification:               Classified (limited to duty free
                                          shops)

            Type of             National Treatment (Articles 1102, 1202)
            Reservation:        Local Presence (Article 1205)

            Level of            Federal
            Government:

            Measures:           Customs Act, R.S.C. 1985, c. 1 (2nd Supp.)

                                Duty Free Shop Regulations, SOR/86-1072

            Description:        Cross-Border Services and Investment

                                1.   To be a licensed duty free shop operator
                                     at a land border crossing in Canada, an
                                     individual must:

                                     (a)  be a Canadian citizen or permanent
                                          resident;

                                     (b)  be of good character; 

                                     (c)  be principally resident in Canada;
                                          and

                                     (d)  have resided in Canada for at least
                                          183 days of the year preceding the
                                          year of application for the
                                          license.

                                2.   To be a licensed duty free shop operator
                                     at a land border crossing in Canada, a
                                     corporation must:

                                     (a)  be incorporated in Canada; and

                                     (b)  have all of its shares beneficially
                                          owned by Canadian citizens or
                                          permanent residents who meet the
                                          requirements of paragraph 1.

            Phase-Out:          None



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            Sector:             Business Service Industries

            Sub-Sector:         Examination Services relating to the Export
                                and Import of Cultural Property

            Industry            SIC 999   Other Services, Not Elsewhere
            Classification:               Classified (limited to cultural
                                          property examination services)

            Type of             Local Presence (Article 1205)
            Reservation:

            Level of            Federal
            Government:

            Measures:           Cultural Property Export and Import Act,
                                R.S.C. 1985, c. C-51

            Description:        Cross-Border Services

                                Only a "resident of Canada" or an
                                "institution" in Canada may be designated as
                                an "expert examiner" of cultural property for
                                purposes of the Cultural Property Export and
                                Import Act.  A "resident" of Canada is an
                                individual who is ordinarily resident in
                                Canada, or a corporation that has its head
                                office in Canada or maintains one or more
                                establishments in Canada to which employees
                                employed in connection with the business of
                                the corporation ordinarily report for work. 
                                An "institution" is an institution that is
                                publicly owned and operated solely for the
                                benefit of the public, that is established
                                for educational or cultural purposes and that
                                conserves objects and exhibits them.

            Phase-Out:          None














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                                                           Annex I - Canada




            Sector:             Business Service Industries

            Sub-Sector:         Patent Agents and Agencies

            Industry            SIC 999   Other Services, Not Elsewhere
            Classification:               Classified (limited to patent
                                          agency)

            Type of             National Treatment (Article 1202)
            Reservation:        Local Presence (Article 1205)

            Level of            Federal
            Government:

            Measures:           Patent Act, R.S.C. 1985, c. P-4

                                Patent Rules, C.R.C. 1978, c. 1250

                                Patent Cooperation Treaty Regulations,
                                SOR/89-453

            Description:        Cross-Border Services

                                To represent persons in the presentation and
                                prosecution of applications for patents or in
                                other business before the Patent Office, a
                                patent agent must be resident in Canada and
                                registered by the Patent Office.

                                A registered patent agent who is not resident
                                in Canada must appoint a registered patent
                                agent who is resident in Canada as an
                                associate to prosecute an application for a
                                patent.

                                An enterprise may be added to the patent
                                register provided that it has at least one
                                member who is also on the register.

            Phase-Out:          Citizenship and permanent residency
                                requirements are subject to removal within
                                two years of the date of entry into force of
                                this Agreement in accordance with Article
                                1210(3).






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            Sector:             Business Service Industries

            Sub-Sector:         Trade-Mark Agents

            Industry            SIC 999   Other Services, Not Elsewhere
            Classification:               Classified (limited to trade-mark
                                          agency)

            Type of             National Treatment (Article 1202)
            Reservation:        Most-Favored-Nation Treatment (Article 1203)
                                Local Presence (Article 1205)

            Level of            Federal
            Government:

            Measures:           Trade-Marks Act, R.S.C. 1985, c. T-13

                                Trade-Marks Regulations, C.R.C. 1978, c. 1559

            Description:        Cross-Border Services

                                To represent persons in the presentation and
                                prosecution of applications for trade-marks
                                or in other business before the Trade-Mark
                                Office, a trade-mark agent must be resident
                                in Canada and registered by the Trade-Mark
                                Office.

                                A registered trade-mark agent who is not
                                resident in Canada must appoint a registered
                                trade-mark agent who is resident in Canada as
                                an associate to prosecute an application for
                                a trade-mark.

                                Trade-mark agents who are resident, and are
                                registered (in good standing), in a
                                Commonwealth country or the United States may
                                be added to the register of trade-mark
                                agents.

            Phase-Out:          Citizenship and permanent residency
                                requirements are subject to removal within
                                two years of the date of entry into force of
                                this Agreement in accordance with Article
                                1210(3).





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                                                           Annex I - Canada




            Sector:             Energy

            Sub-Sector:         Oil and Gas

            Industry            SIC 071   Crude Petroleum and Natural Gas
            Classification:     Industries

            Type of             National Treatment (Article 1102)
            Reservation:

            Level of            Federal
            Government:
            Measures:           Canada Petroleum Resources Act, R.S.C. 1985,
                                c. 36 (2nd Supp.)

                                Territorial Lands Act, R.S.C. 1985, c. T-7 

                                Public Lands Grants Act, R.S.C. 1985, c. P-30


                                Canada - Newfoundland Atlantic Accord
                                Implementation Act, S.C. 1987, c. 3 

                                Canada - Nova Scotia Offshore Petroleum
                                Resources Accord Implementation Act, S.C.
                                1988, c. 28 

                                Canada Oil and Gas Land Regulations, C.R.C.
                                1978, c. 1518

            Description:        Investment

                                This reservation applies to production
                                licenses issued with respect to "frontier
                                lands" and "offshore areas" (areas not under
                                provincial jurisdiction) as defined in the
                                applicable measures.

                                Persons who hold oil and gas production
                                licenses or shares therein for discoveries
                                made after March 5, 1982 must be Canadian
                                citizens ordinarily resident in Canada,
                                permanent residents or corporations
                                incorporated in Canada.  No production
                                license may be issued for discoveries made
                                after March 5, 1982 unless the Minister of
                                Energy, Mines and Resources is satisfied that
                                the Canadian ownership rate of the


                                         I-C-25












                                                           Annex I - Canada




                                interest-owner in relation to the production
                                license on the date of issuance would not be
                                less than 50 percent.  "Interest-owner" is
                                defined in the Canada Petroleum Resources Act
                                to mean "the interest holder who owns an
                                interest or the group of interest holders who
                                hold all the shares of an interest".

                                The Canadian ownership requirements for oil
                                and gas production licenses for discoveries
                                made prior to March 5, 1982, are set out in
                                the Canada Oil and Gas Land Regulations.

            Phase-Out:          None




































                                         I-C-26












                                                           Annex I - Canada




            Sector:             Energy

            Sub-Sector:         Oil and Gas

            Industry            SIC 071  Crude Petroleum and Natural Gas
            Classification:     Industries

            Type of             Performance Requirements (Article 1106)
            Reservation:        Local Presence (Article 1205)

            Level of            Federal
            Government:

            Measures:           Canada Oil and Gas Production and
                                Conservation Act, R.S.C. 1985, c. O-7, as
                                amended by Canada Oil and Gas Operations Act,
                                S.C. 1992, c. 35

                                Canada - Nova Scotia Offshore Petroleum
                                Resources Accord Implementation Act, S.C.
                                1988, c. 28

                                Canada - Newfoundland Atlantic Accord
                                Implementation Act, S.C. 1987, c. 3

                                Measures implementing Yukon Oil and Gas
                                Accord

                                Measures implementing Northwest Territories
                                Oil and Gas Accord

                                As qualified by paragraphs 5 and 6 of the
                                Description element

            Description:        Cross-Border Services and Investment

                                1.   Under the Canada Oil and Gas Operations
                                Act, the approval of the Minister of Energy,
                                Mines and Resources of a "benefits plan" is
                                required to receive authorization to proceed
                                with any oil and gas development project.

                                2.   A "benefits plan" is a plan for the
                                employment of Canadians and for providing
                                Canadian manufacturers, consultants,
                                contractors and service companies with a full
                                and fair opportunity to participate on a
                                competitive basis in the supply of goods and


                                         I-C-27












                                                           Annex I - Canada




                                services used in any proposed work or
                                activity referred to in the benefits plan. 
                                The Act permits the Minister to impose an
                                additional requirement on the applicant, as
                                part of the benefits plan, to ensure that
                                disadvantaged individuals or groups have
                                access to training and employment
                                opportunities or can participate in the
                                supply of goods and services used in any
                                proposed work referred to in the benefits
                                plan.

                                3.   The Canada - Nova Scotia Offshore
                                Petroleum Resources Accord Implementation Act
                                and the Canada - Newfoundland Atlantic Accord
                                Implementation Act have the same requirement
                                for a benefits plan but also require that the
                                benefits plan ensure that:

                                (a)  prior to carrying out any work or
                                     activity in the offshore area, the
                                     corporation or other body submitting the
                                     plan establish in the applicable
                                     province an office where appropriate
                                     levels of decision-making are to take
                                     place;

                                (b)  expenditures be made for research and
                                     development to be carried out in the
                                     province, and for education and training
                                     to be provided in the province; and

                                (c)  first consideration be given to goods
                                     produced or services provided from
                                     within the province, where those goods
                                     or services are competitive in terms of
                                     fair market price, quality and delivery.

                                4.   The Boards administering the benefits
                                plan under these Acts may also require that
                                the plan include provisions to ensure that
                                disadvantaged individuals or groups, or
                                corporations owned or cooperatives operated
                                by them, participate in the supply of goods
                                and services used in any proposed work or
                                activity referred to in the plan.




                                         I-C-28












                                                           Annex I - Canada




                                5.   In addition, Canada may impose any
                                requirement or enforce any commitment or
                                undertaking for the transfer of technology, a
                                production process or other proprietary
                                knowledge to a person of Canada in connection
                                with the approval of development projects
                                under the applicable Acts.

                                6.   Provisions similar to those set out
                                above will be included in laws or regulations
                                to implement the Yukon Oil and Gas Accord and
                                Northwest Territories Oil and Gas Accord
                                which for purposes of this reservation shall
                                be deemed, once concluded, to be existing
                                measures.

            Phase-Out:          None

































                                         I-C-29












                                                           Annex I - Canada




            Sector:             Energy

            Sub-Sector:         Oil and Gas

            Industry            SIC 071   Crude Petroleum and Natural Gas
            Classification:     Industries

            Type of             Performance Requirements (Article 1106)
            Reservation:

            Level of            Federal
            Government:

            Measures:           Canada - Newfoundland Atlantic Accord
                                Implementation Act, S.C. 1987, c. 3

                                Hibernia Development Project Act, S.C. 1990,
                                c. 41

            Description:        Investment

                                Pursuant to the Hibernia Development Project
                                Act, Canada and the "Hibernia Project Owners"
                                may enter into agreements whereby the Project
                                Owners undertake to perform certain work in
                                Canada and Newfoundland and to use their
                                "best efforts" to achieve specific Canadian
                                and Newfoundland "target levels" in relation
                                to the provisions of any "benefit plan"
                                required under the Canada-Newfoundland
                                Atlantic Accord Implementation Act. 
                                "Benefits plans" are further described in
                                Schedule of Canada, Annex I, page I-C-25.

                                In addition, Canada may impose in connection
                                with the Hibernia project any requirement or
                                enforce any commitment or undertaking for the
                                transfer of technology, a production process
                                or other proprietary knowledge to a national
                                or enterprise in Canada.

            Phase-Out:          None








                                         I-C-30












                                                           Annex I - Canada




            Sector:             Energy

            Sub-Sector:         Uranium

            Industry            SIC  0616   Uranium Mines
            Classification:

            Type of             National Treatment (Article 1102)
            Reservation:        Most-Favored-Nation Treatment (Article 1103)
            
            Level of            Federal
            Government:
            Measures:           Investment Canada Act, R.S.C. 1985, c. 28
                                (1st Supp.)

                                Investment Canada Regulations, SOR/85-611

                                Policy on Non-Resident Ownership in the
                                Uranium Mining Sector, 1987

            Description:        Investment

                                Ownership by "non-Canadians", as defined in
                                the Investment Canada Act, of a uranium
                                mining property is limited to 49 percent at
                                the stage of first production.   Exceptions
                                to this limit may be permitted if it can be
                                established that the property is in fact
                                "Canadian-controlled" as defined in the
                                Investment Canada Act.

                                Exemptions from the policy are permitted,
                                subject to approval of the Governor in
                                Council, only in cases where Canadian
                                participants in the ownership of the property
                                are not available.  Investments in properties
                                by non-Canadians, made prior to December 23,
                                1987 and that are beyond the permitted
                                ownership level, may remain in place.  No
                                increase in non-Canadian ownership is
                                permitted.

            Phase-Out:          None







                                         I-C-31












                                                           Annex I - Canada




            Sector:             Fisheries

            Sub-Sector:         Fish Harvesting and Processing

            Industry            SIC 031   Fishing Industry
            Classification:

            Type of             National Treatment (Article 1102)
            Reservation:        Most-Favored-Nation Treatment (Article 1103)

            Level of            Federal
            Government:
            Measures:           Coastal Fisheries Protection Act, R.S.C.
                                1985, c. C-33 

                                Fisheries Act, R.S.C. 1985, c. F-14

                                Coastal Fisheries Protection Regulations,
                                C.R.C. 1978, c. 413

                                Policy on Foreign Investment in the Canadian
                                Fisheries Sector, 1985

                                Commercial Fisheries Licensing Policy

            Description:        Investment

                                Under the Coastal Fisheries Protection Act,
                                foreign fishing vessels are prohibited from
                                entering Canada's Exclusive Economic Zone
                                except under authority of a license or under
                                treaty.  "Foreign" vessels are those which
                                are not "Canadian" as defined in the Coastal
                                Fisheries Protection Act.  Under the
                                Fisheries Act, the Minister of Fisheries and
                                Oceans has discretionary authority with
                                respect to the issuance of licenses.

                                Fish processing enterprises that have a
                                foreign ownership level of more than 49
                                percent are prohibited from holding Canadian
                                commercial fishing licenses.

            Phase-Out:          None






                                         I-C-32












                                                           Annex I - Canada




            Sector:             Fisheries

            Sub-Sector:         Fishing-Related Services

            Industry            SIC 032   Services Incidental to Fishing
            Classification:

            Type of             National Treatment (Article 1202)
            Reservation:        Most-Favored-Nation Treatment (Article 1203)

            Level of            Federal
            Government:

            Measures:           Coastal Fisheries Protection Act, R.S.C.
                                1985, c. C-33
            Description:        Cross-Border Services

                                Under the Coastal Fisheries Protection Act,
                                the Department of Fisheries and Oceans is
                                responsible for controlling the activities of
                                foreign fishing vessels in Canada's Exclusive
                                Economic Zone, including access to Canadian
                                ports (port privileges).  

                                In general, the Department grants such port
                                privileges, including the purchase of fuel
                                and supplies, ship repair, crew exchanges and
                                transshipment of fish catches, only to
                                fishing vessels from a country with which it
                                has favorable fishery relations, based
                                primarily on adherence by that country to
                                Canadian and international conservation
                                practices and policies.  Exceptions to this
                                general rule are permitted in cases of
                                emergency ("force majeure") and where the
                                specific provisions of bilateral fisheries
                                treaties apply.

            Phase-Out:          None











                                         I-C-33












                                                           Annex I - Canada




            Sector:             Transportation

            Sub-Sector:         Air Transportation

            Industry            SIC 451   Air Transport Industries
            Classification:
            Type of             National Treatment (Article 1102)
            Reservation:        Most-Favored-Nation Treatment (Article 1103)
                                Senior Management and Boards of Directors
                                (Article 1107)
            
            Level of            Federal
            Government:
            Measures:           National Transportation Act, 1987, R.S.C.
                                1985, c. 28 (3rd Supp.)

                                Aeronautics Act, R.S.C. 1985, c. A-2

                                Air Regulations, C.R.C. 1978, c. 2

                                Aircraft Marking and Registration
                                Regulations, SOR/90-591

            Description:        Investment

                                Only "Canadians" may provide the following
                                commercial air transportation services: 

                                (a)  "domestic services" (air services
                                     between points, or from and to the same
                                     point, in the territory of Canada, or
                                     between a point in the territory of
                                     Canada and a point not in the territory
                                     of another country); 

                                (b)  "scheduled international services"
                                     (scheduled air services between a point
                                     in the territory of Canada and a point
                                     in the territory of another country)
                                     where those services have been reserved
                                     to Canadian carriers under existing or
                                     future bilateral agreements; and 

                                (c)  "non-scheduled international services"
                                     (non-scheduled air services between a
                                     point in the territory of Canada and a
                                     point in the territory of another
                                     country) where those services have been


                                         I-C-34












                                                           Annex I - Canada




                                     reserved to Canadian carriers under the
                                     National Transportation Act, 1987.

                                "Canadian" is defined in the National
                                Transportation Act, 1987 to mean a Canadian
                                citizen or permanent resident, a government
                                in Canada or agent thereof or any other
                                person or entity that is controlled in fact
                                by, and of which at least 75 percent of the
                                voting interests are owned and controlled by,
                                persons otherwise meeting these requirements.

                                Regulations made under the Aeronautics Act
                                also require that a Canadian air carrier
                                operate Canadian-registered aircraft.  To be
                                qualified to register aircraft in Canada, a
                                carrier must be a Canadian citizen or
                                permanent resident, or a corporation
                                incorporated and having its principal place
                                of business in Canada, its chief executive
                                officer and not fewer than two-thirds of its
                                directors as Canadian citizens or permanent
                                residents and not less than 75 percent of its
                                voting interest owned and controlled by
                                persons otherwise meeting these requirements. 
                                In addition, all commercial air services in
                                Canada require a Canadian operating
                                certificate to ensure their safety and
                                security.  An operating certificate for the
                                provision of services restricted to Canadian
                                carriers is issued only to qualified persons.


                                A corporation incorporated in Canada but that
                                does not meet the Canadian ownership and
                                control requirements may only register a
                                private aircraft when the corporation is the
                                sole owner of the aircraft.  The regulations
                                also have the effect of limiting
                                "non-Canadian" corporations operating
                                foreign-registered private aircraft within
                                Canada to the carriage of their own
                                employees. 

                                For specialty air services, see Schedule of
                                Canada, Annex II, page II-C-10.
                                 
            Phase-Out:          None


                                         I-C-35














                                                           Annex I - Canada




            Sector:             Transportation

            Sub-Sector:         Air Transportation

            Industry            SIC 4513   Non-Scheduled Air Transport,
            Classification:     Specialty, Industry

            Type of             National Treatment (Articles 1102, 1202)
            Reservation:        Local Presence (Article 1205)
                                Senior Management and Boards of Directors
                                (Article 1107)

            Level of            Federal
            Government:

            Measures:           Aeronautics Act, R.S.C. 1985, c. A-2
                                  
                                Air Regulations, C.R.C. 1978, c. 2 

                                Aircraft Marking and Registration
                                Regulations, SOR/90-591

                                Foreign Air Carrier Certification Manual, TP
                                11524, and the Personnel Licensing Handbook,
                                TP 193 (Department of Transport)

                                As qualified by paragraph 2 of the
                                Description element

            Description:        Cross-Border Services

                                1.   An operating certificate issued by the
                                Department of Transport is required to
                                provide specialty air services in the
                                territory of Canada.  The Department of
                                Transport will issue an operating certificate
                                to a person applying for authority to provide
                                specialty air services, subject to compliance
                                by that person with Canadian safety
                                requirements.  An operating certificate for
                                the provision of aerial construction, heli-
                                logging, aerial inspection, aerial
                                surveillance, flight training, aerial
                                sightseeing, and aerial spraying services is
                                not issued to a person that is not Canadian


                                         I-C-36















                                                           Annex I - Canada




                                as provided for in the applicable
                                regulations.  For investment, see Schedule of
                                Canada, Annex II, page II-C-10.

                                2.   A person of Mexico or of the United
                                States may obtain an operating certificate,
                                subject to compliance by that person with
                                Canadian safety requirements, for the
                                provision of aerial mapping, aerial
                                surveying, aerial photography, forest fire
                                management, fire-fighting, aerial
                                advertising, glider towing and parachute
                                jumping services.

            Phase-Out:          Cross-Border Services

                                A person of Mexico or of the United States
                                will be permitted to obtain an operating
                                certificate, subject to compliance by that
                                person with Canadian safety requirements, for
                                the provision of the following specialty air
                                services: 

                                (a)  two years after the date of entry into
                                     force of this Agreement, aerial
                                     construction and heli-logging services;

                                (b)  three years after the date of entry into
                                     force of this Agreement, aerial
                                     inspection, aerial surveillance, flight
                                     training, and aerial sightseeing
                                     services; and

                                (c)  six years after the date of entry into
                                     force of this Agreement, aerial spraying
                                     services.











                                         I-C-37















                                                           Annex I - Canada




            Sector:             Transportation

            Sub-Sector:         Air Transportation

            Industry            SIC 4523  Aircraft Servicing Industry
            Classification:     SIC 3211  Aircraft and Aircraft Parts
                                          Industry

            Type of             Most-Favored-Nation Treatment (Article 1203) 
            Reservation:        Local Presence (1205)

            Level of            Federal
            Government:

            Measures:           Aeronautics Act, R.S.C. 1985, c. A-2 

                                Airworthiness Manual, chapters 573 and 575,
                                made under the authority of Air Regulations,
                                C.R.C. 1978, c. 2 

                                Agreement Concerning Airworthiness
                                Certification, Exchange of Letters between
                                Canada and the United States, dated August
                                31, 1984, CTS 1984/26

            Description:        Cross-Border Services

                                Aircraft repair, overhaul or maintenance
                                activities required to maintain the
                                airworthiness of Canadian-registered aircraft
                                must be performed by Canadian-certified
                                persons (approved maintenance organizations
                                and aircraft maintenance engineers). 
                                Certifications are not provided for persons
                                located outside Canada, except sub-
                                organizations of approved maintenance
                                organizations that are themselves located in
                                Canada.  

                                Pursuant to an airworthiness agreement
                                between Canada and the United States, Canada
                                recognizes the certifications and oversight
                                provided by the United States for all repair,
                                overhaul and maintenance facilities and
                                individuals performing the work located in
                                the United States.

            Phase-Out:          None     I-C-38













                                                           Annex I - Canada






















































                                         I-C-39














                                                           Annex I - Canada




            Sector:             Transportation

            Sub-Sector:         Land Transportation

            Industry            SIC 456   Truck Transport Industries
            Classification:     SIC 4572  Interurban and Rural Transit
                                          Systems Industry
                                SIC 4573  School Bus Operations Industry
                                SIC 4574  Charter and Sightseeing Bus
                                          Services Industry

            Type of             National Treatment (Article 1202)
            Reservation:        Local Presence (Article 1205)

            Measures:           Motor Vehicle Transport Act, 1987, R.S.C.
                                1985, c. 29 (3rd Supp.), Parts I and II
                                 
                                National Transportation Act, 1987, R.S.C.
                                1985, c. 28 (3rd Supp.), Part IV
                                 
                                Customs Tariff, R.S.C. 1985, c. 41 (3rd
                                Supp.) 

            Description:        Cross-Border Services

                                Only persons of Canada, using Canadian-
                                registered and either Canadian-built or duty-
                                paid trucks or buses, may provide truck or
                                bus services between points in the territory
                                of Canada.

            Phase-Out:          None















                                         I-C-40















                                                           Annex I - Canada




            Sector:             Transportation

            Sub-Sector:         Water Transportation

            Industry            SIC 4541  Freight and Passenger Water
            Classification:               Transport Industry
                                SIC 4542  Ferry Industry
                                SIC 4543  Marine Towing Industry
                                SIC 4549  Other Water Transport Industries
                                SIC 4553  Marine Salvage Industry
                                SIC 4559  Other Service Industries Incidental
                                          to Water Transport

            Type of             National Treatment (Article 1202) 
            Reservation:        Most-Favored-Nation Treatment (Article 1203)
                                Local Presence (Article 1205)

            Level of            Federal
            Government:

            Measures:           Canada Shipping Act, R.S.C. 1985, c. S-9,
                                Part II

            Description:        Cross-Border Services

                                To register a vessel in Canada for purposes
                                of providing international maritime
                                transportation services, the owner of that
                                vessel must be:

                                (a)  a Canadian citizen or a citizen of a
                                     Commonwealth country; or

                                (b)  a corporation incorporated under the
                                     laws of, and having its principal place
                                     of business in, Canada or a Commonwealth
                                     country.

                                For domestic maritime transportation services
                                (cabotage), see Schedule of Canada, Annex II,
                                page II-C-11.

            Phase-Out:          None




                                         I-C-41















                                                           Annex I - Canada




            Sector:             Transportation

            Sub-Sector:         Water Transportation

            Industry            SIC 4541  Freight and Passenger Water
            Classification:               Transport Industry
                                SIC 4542  Ferry Industry
                                SIC 4543  Marine Towing Industry
                                SIC 4549  Other Water Transport Industries
                                SIC 4553  Marine Salvage Industry
                                SIC 4554  Piloting Service, Water Transport
                                          Industry
                                SIC 4559  Other Service Industries Incidental
                                          to Water Transport

            Type of             National Treatment (Article 1202)
            Reservation:        Local Presence (Article 1205)

            Level of            Federal
            Government:

            Measures:           Canada Shipping Act, R.S.C. 1985, c. S-9,
                                Part II

            Description:        Cross-Border Services

                                Masters, mates, and engineers must be
                                certified by the Department of Transport as
                                ship's officers while engaged on a Canadian-
                                registered vessel.  Only Canadian citizens or
                                permanent residents may be certified as
                                ship's officers.

            Phase-Out:          None













                                         I-C-42















                                                           Annex I - Canada




            Sector:             Transportation

            Sub-Sector:         Water Transportation

            Industry            SIC 4554   Piloting Service, Water Transport
            Classification:     Industry

            Type of             National Treatment (Article 1202)
            Reservation:        Local Presence (Article 1205)

            Level of            Federal
            Government:

            Measures:           Pilotage Act, R.S.C. 1985, c. P-14

                                General Pilotage Regulations, C.R.C. 1978, c.
                                1263

                                Atlantic Pilotage Authority Regulations,
                                C.R.C. 1978, c. 1264

                                Laurentian Pilotage Authority Regulations,
                                C.R.C. 1978, c. 1268

                                Great Lakes Pilotage Regulations, C.R.C.
                                1978, c. 1266

                                Pacific Pilotage Regulations, C.R.C. 1978, c.
                                1270
            
            Description:        Cross-Border Services

                                Subject to Schedule of Canada, Annex II, page
                                II-C-14, a license issued by the Department
                                of Transport is required to provide pilotage
                                services in the territory of Canada.  Only
                                Canadian citizens or permanent residents may
                                obtain such a license.  A permanent resident
                                of Canada who has been issued a pilot's
                                license must become a Canadian citizen within
                                five years of receipt of the license in order
                                to retain it.

            Phase-Out:          None



                                         I-C-43















                                                           Annex I - Canada




            Sector:             Transportation

            Sub-Sector:         Water Transportation

            Industry            SIC 454   Water Transport Industries
            Classification:

            Type of             Local Presence (Article 1205)
            Reservation:

            Level of            Federal
            Government:

            Measures:           Shipping Conferences Exemption Act, 1987,
                                R.S.C. 1985, c. 17 (3rd Supp.)

            Description:        Cross-Border Services

                                Members of a shipping conference must
                                maintain jointly an office or agency in the
                                region of Canada where they operate.  A
                                shipping conference is an association of
                                ocean carriers that has the purpose or effect
                                of regulating rates and conditions for the
                                transportation by those carriers of goods by
                                water. 

            Phase-Out:          None



















                                         I-C-44















                                                           Annex I - Canada




            Sector:             Transportation

            Sub-Sector:         Water Transportation

            Industry            SIC 4541  Freight and Passenger Water
            Classification:               Transport Industry
                                SIC 4542  Ferry Industry
                                SIC 4543  Marine Towing Industry

            Type of             Most-Favored-Nation Treatment (Article 1203)
            Reservation:

            Level of            Federal
            Government:

            Measures:           Coasting Trade Act, S.C. 1992, c. 31

            Description:        Cross-Border Services

                                The prohibitions under the Coasting Trade
                                Act, set out in Schedule of Canada, Annex II,
                                page II-C-11, do not apply to any vessel that
                                is owned by the U.S. Government when used
                                solely for the purpose of transporting goods
                                owned by the U.S. Government from the
                                territory of Canada to supply Distant Early
                                Warning sites.

            Phase-Out:          None


















                                         I-C-45








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