Title:Competition Policy, Monopolies and State Enterprises -- Chap 15
Author: White House
Document-Date: 29 Sept 1993
Content-Type: text/plain; CHARSET=US-ASCII
Content-Length:10487                                    Chapter Fifteen 
 
                  Competition Policy, Monopolies and State Enterprises 
 
 
            Article 1501:  Competition Law 
 
            1.   Each Party shall adopt or maintain measures to proscribe 
            anti-competitive business conduct and take appropriate action 
            with respect thereto, recognizing that such measures will 
            enhance the fulfillment of the objectives of this Agreement.  
            To this end the Parties shall consult from time to time about 
            the effectiveness of measures undertaken by each Party. 
 
            2.   Each Party recognizes the importance of cooperation and 
            coordination among their authorities to further effective 
            competition law enforcement in the free trade area.  The 
            Parties shall cooperate on issues of competition law 
            enforcement policy, including mutual legal assistance, 
            notification, consultation and exchange of information relating 
            to the enforcement of competition laws and policies in the free 
            trade area. 
 
            3.   No Party may have recourse to dispute settlement under 
            this Agreement for any matter arising under this Article. 
 
 
            Article 1502:  Monopolies and State Enterprises 
 
            1.   Nothing in this Agreement shall be construed to prevent a 
            Party from designating a monopoly. 
 
            2.   Where a Party intends to designate a monopoly and the 
            designation may affect the interests of persons of another 
            Party, the Party shall: 
 
                 (a)  wherever possible, provide prior written notification 
                      to the other Party of the designation; and 
 
                 (b)  endeavor to introduce at the time of the designation 
                      such conditions on the operation of the monopoly as 
                      will minimize or eliminate any nullification or 
                      impairment of benefits in the sense of Annex 2004 
                      (Nullification and Impairment). 
 
            3.   Each Party shall ensure, through regulatory control, 
            administrative supervision or the application of other 
            measures, that any privately-owned monopoly that it designates 
            and any government monopoly that it maintains or designates: 
 
 
 
 
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                 (a)  acts in a manner that is not inconsistent with the 
                      Party's obligations under this Agreement wherever 
                      such a monopoly exercises any regulatory, 
                      administrative or other governmental authority that 
                      the Party has delegated to it in connection with the 
                      monopoly good or service, such as the power to grant 
                      import or export licenses, approve commercial 
                      transactions or impose quotas, fees or other charges; 
 
                 (b)  except to comply with any terms of its designation 
                      that are not inconsistent with subparagraph (c) or 
                      (d), acts solely in accordance with commercial 
                      considerations in its purchase or sale of the 
                      monopoly good or service in the relevant market, 
                      including with regard to price, quality, 
                      availability, marketability, transportation and other 
                      terms and conditions of purchase or sale; 
 
                 (c)  provides non-discriminatory treatment to investments 
                      of investors, to goods and to service providers of 
                      another Party in its purchase or sale of the monopoly 
                      good or service in the relevant market; and 
 
                 (d)  does not use its monopoly position to engage, either 
                      directly or indirectly, including through its 
                      dealings with its parent, its subsidiary or other 
                      enterprise with common ownership, in anticompetitive 
                      practices in a non-monopolized market in its 
                      territory that adversely affect an investment of an 
                      investor of another Party, including through the 
                      discriminatory provision of the monopoly good or 
                      service, cross-subsidization or predatory conduct. 
 
            4.   Paragraph 3 does not apply to procurement by governmental 
            agencies of goods or services for governmental purposes and not 
            with a view to commercial resale or with a view to use in the 
            production of goods or the provision of services for commercial 
            sale. 
 
            5.   For purposes of this Article "maintain" means designate 
            prior to the date of entry into force of this Agreement and 
            existing on January 1, 1994.  
 
 
            Article 1503:  State Enterprises 
 
            1.   Nothing in this Agreement shall be construed to prevent a 
            Party from maintaining or establishing a state enterprise. 
 
            2.   Each Party shall ensure, through regulatory control, 
            administrative supervision or the application of other 
 
 
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            measures, that any state enterprise that it maintains or 
            establishes acts in a manner that is not inconsistent with the 
            Party's obligations under Chapters Eleven (Investment) and 
            Fourteen (Financial Services) wherever such enterprise 
            exercises any regulatory, administrative or other governmental 
            authority that the Party has delegated to it, such as the power 
            to expropriate, grant licenses, approve commercial transactions 
            or impose quotas, fees or other charges. 
 
            3.   Each Party shall ensure that any state enterprise that it 
            maintains or establishes accords non-discriminatory treatment 
            in the sale of its goods or services to investments in the 
            Party's territory of investors of another Party. 
 
 
            Article 1504:  Working Group on Trade and Competition 
 
                 The Commission shall establish a Working Group on Trade 
            and Competition, comprising representatives of each Party, to 
            report, and to make recommendations on further work as 
            appropriate, to the Commission within five years of the date of 
            entry into force of this Agreement on relevant issues 
            concerning the relationship between competition laws and 
            policies and trade in the free trade area. 
 
 
            Article 1505:  Definitions 
 
            For purposes of this Chapter: 
 
            designate means to establish, designate or authorize, or to 
            expand the scope of a monopoly to cover an additional good or 
            service, after the date of entry into force of this Agreement; 
 
            discriminatory provision includes treating: 
 
                 (a)  a parent, a subsidiary or other enterprise with 
                      common ownership more favorably than an unaffiliated 
                      enterprise, or 
 
                 (b)  one class of enterprises more favorably than another, 
 
            in like circumstances; 
 
            government monopoly means a monopoly that is owned, or 
            controlled through ownership interests, by the federal 
            government of a Party or by another such monopoly; 
 
            in accordance with commercial considerations means consistent 
            with normal business practices of privately-held enterprises in 
            the relevant business or industry; 
 
 
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            market means the geographic and commercial market for a good or 
            service; 
 
            monopoly means an entity, including a consortium or government 
            agency, that in any relevant market in the territory of a Party 
            is designated as the sole provider or purchaser of a good or 
            service, but does not include an entity that has been granted 
            an exclusive intellectual property right solely by reason of 
            such grant;  
 
            non-discriminatory treatment means the better of national 
            treatment and most-favored-nation treatment, as set out in the 
            relevant provisions of this Agreement; and 
 
            state enterprise means, except as set out in Annex 1505, an 
            enterprise owned, or controlled through ownership interests, by 
            a Party. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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                                                                 Annex 1505                                              
                   __________ 
 
 
                                       Annex 1505 
 
                   Country-Specific Definitions of State Enterprises  
 
 
            For purposes of Article 1503(3), "state enterprise":  
 
                 (a)  with respect to Canada, means a Crown corporation 
                      within the meaning of the Financial Administration 
                      Act (Canada), a Crown corporation within the meaning 
                      of any comparable provincial law or equivalent entity 
                      that is incorporated under other applicable 
                      provincial law; and 
 
                 (b)  with respect to Mexico, does not include, the 
                      Compa  a Nacional de Subsistencias Populares 
                      (National Company for Basic Commodities) and its 
                      existing affiliates, or any successor enterprise or 
                      its affiliates, for purposes of sales of maize, beans 
                      and powdered milk. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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