Chapter Twenty: Institutional Arrangements and Dispute Settlement Procedures
Section A - Institutions
Article 2001: The Free Trade Commission
1. The Parties hereby establish the Free Trade Commission, comprising cabinet-level representatives of the Parties or their designees.
2. The Commission shall:
(a) supervise the implementation of this Agreement;
(b) oversee its further elaboration;
(c) resolve disputes that may arise regarding its interpretation or application;
(d) supervise the work of all committees and working groups established under this Agreement, referred to in Annex 2001.2; and
(e) consider any other matter that may affect the operation of this Agreement.
3. The Commission may:
(a) establish, and delegate responsibilities to, ad hoc or standing committees, working groups or expert groups;
(b) seek the advice of non-governmental persons or groups; and
(c) take such other action in the exercise of its functions as the Parties may agree.
4. The Commission shall establish its rules and procedures. All decisions of the Commission shall be taken by consensus, except as the Commission may otherwise agree.
5. The Commission shall convene at least once a year in regular session. Regular sessions of the Commission shall be chaired successively by each Party.
1. The Commission shall establish and oversee a Secretariat comprising national Sections.
2. Each Party shall:
(a) establish a permanent office of its Section;
(b) be responsible for
(i) the operation and costs of its Section, and
(ii) the remuneration and payment of expenses of panelists and members of committees and scientific review boards established under this Agreement, as set out in Annex 2002.2;
(c) designate an individual to serve as Secretary for its Section, who shall be responsible for its administration and management; and
(d) notify the Commission of the location of its Section's office.
3. The Secretariat shall:
(a) provide assistance to the Commission;
(b) provide administrative assistance to
(i) panels and committees established under Chapter Nineteen (Review and Dispute Settlement in Antidumping and Countervailing Duty Matters), in accordance with the procedures established pursuant to Article 1908, and
(ii) panels established under this Chapter, in accordance with procedures established pursuant to Article 2012; and
(c) as the Commission may direct
(i) support the work of other committees and groups established under this Agreement, and
(ii) otherwise facilitate the operation of this Agreement.
Section B - Dispute Settlement
The Parties shall at all times endeavor to agree on the interpretation and application of this Agreement, and shall make every attempt through cooperation and consultations to arrive at a mutually satisfactory resolution of any matter that might affect its operation.
Article 2004: Recourse to Dispute Settlement Procedures
Except for the matters covered in Chapter Nineteen (Review and Dispute Settlement in Antidumping and Countervailing Duty Matters) and as otherwise provided in this Agreement, the dispute settlement provisions of this Chapter shall apply with respect to the avoidance or settlement of all disputes between the Parties regarding the interpretation or application of this Agreement or wherever a Party considers that an actual or proposed measure of another Party is or would be inconsistent with the obligations of this Agreement or cause nullification or impairment in the sense of Annex 2004.
Article 2005: GATT Dispute Settlement
1. Subject to paragraphs 2, 3 and 4, disputes regarding any matter arising under both this Agreement and the General Agreement on Tariffs and Trade, any agreement negotiated thereunder, or any successor agreement (GATT), may be settled in either forum at the discretion of the complaining Party.
2. Before a Party initiates a dispute settlement proceeding in the GATT against another Party on grounds that are substantially equivalent to those available to that Party under this Agreement, that Party shall notify any third Party of its intention. If a third Party wishes to have recourse to dispute settlement procedures under this Agreement regarding the matter, it shall inform promptly the notifying Party and those Parties shall consult with a view to agreement on a single forum. If those Parties cannot agree, the dispute normally shall be settled under this Agreement.
3. In any dispute referred to in paragraph 1 where the responding Party claims that its action is subject to Article 104 (Relation to Environmental and Conservation Agreements) and requests in writing that the matter be considered under this Agreement, the complaining Party may, in respect of that matter, thereafter have recourse to dispute settlement procedures solely under this Agreement.
4. In any dispute referred to in paragraph 1 that arises under Section B of Chapter Seven (Sanitary and Phytosanitary Measures) or Chapter Nine (Standards-Related Measures):
(a) concerning a measure adopted or maintained by a Party to protect its human, animal or plant life or health, or to protect its environment, and
(b) that raises factual issues concerning the environment, health, safety or conservation, including directly related scientific matters,
where the responding Party requests in writing that the matter be considered under this Agreement, the complaining Party may, in respect of that matter, thereafter have recourse to dispute settlement procedures solely under this Agreement.
5. The responding Party shall deliver a copy of a request made pursuant to paragraph 3 or 4 to the other Parties and to its Section of the Secretariat. Where the complaining Party has initiated dispute settlement proceedings regarding any matter subject to paragraph 3 or 4, the responding Party shall deliver its request no later than 15 days thereafter. On receipt of such request, the complaining Party shall promptly withdraw from participation in those proceedings and may initiate dispute settlement procedures under Article 2007.
6. Once dispute settlement procedures have been initiated under Article 2007 or dispute settlement proceedings have been initiated under the GATT, the forum selected shall be used to the exclusion of the other, unless a Party makes a request pursuant to paragraph 3 or 4.
7. For purposes of this Article, dispute settlement proceedings under the GATT are deemed to be initiated by a Party's request for a panel, such as under Article XXIII:2 of the General Agreement on Tariffs and Trade 1947, or for a committee investigation, such as under Article 20.1 of the Customs Valuation Code.
Consultations
1. Any Party may request in writing consultations with any other Party regarding any actual or proposed measure or any other matter that it considers might affect the operation of this Agreement.
2. The requesting Party shall deliver the request to the other Parties and to its Section of the Secretariat.
3. Unless the Commission otherwise provides in its rules and procedures established under Article 2001(4), a third Party that considers it has a substantial interest in the matter shall be entitled to participate in the consultations on delivery of written notice to the other Parties and to its Section of the Secretariat.
4. Consultations on matters regarding perishable agricultural goods shall commence within 15 days of the date of delivery of the request.
5. The consulting Parties shall make every attempt to arrive at a mutually satisfactory resolution of any matter through consultations under this Article or other consultative provisions of this Agreement. To this end, the consulting Parties shall:
(a) provide sufficient information to enable a full examination of how the actual or proposed measure or other matter might affect the operation of this Agreement;
(b) treat any confidential or proprietary information exchanged in the course of consultations on the same basis as the Party providing the information; and
(c) seek to avoid any resolution that adversely affects the interests under this Agreement of any other Party.
Initiation of Procedures
Article 2007: Commission - Good Offices, Conciliation and Mediation
1. If the consulting Parties fail to resolve a matter pursuant to Article 2006 within:
(a) 30 days of delivery of a request for consultations,
(b) 45 days of delivery of such request if any other Party has subsequently requested or has participated in consultations regarding the same matter,
(c) 15 days of delivery of a request for consultations in matters regarding perishable agricultural goods, or
(d) such other period as they may agree,
any such Party may request in writing a meeting of the Commission.
2. A Party may also request in writing a meeting of the Commission where:
(a) it has initiated dispute settlement proceedings under the GATT regarding any matter subject to Article 2005(3) or (4), and has received a request pursuant to Article 2005(5) for recourse to dispute settlement procedures under this Chapter; or
(b) consultations have been held pursuant to Article 513 (Working Group on Rules of Origin), Article 723 (Sanitary and Phytosanitary Measures Technical Consultations) and Article 914 (Standards-Related Measures Technical Consultations).
3. The requesting Party shall state in the request the measure or other matter complained of and indicate the provisions of this Agreement that it considers relevant, and shall deliver the request to the other Parties and to its Section of the Secretariat.
4. Unless it decides otherwise, the Commission shall convene within 10 days of delivery of the request and shall endeavor to resolve the dispute promptly.
5. The Commission may:
(a) call on such technical advisers or create such working groups or expert groups as it deems necessary,
(b) have recourse to good offices, conciliation, mediation or such other dispute resolution procedures, or
(c) make recommendations,
as may assist the consulting Parties to reach a mutually satisfactory resolution of the dispute.
6. Unless it decides otherwise, the Commission shall consolidate two or more proceedings before it pursuant to this Article regarding the same measure. The Commission may consolidate two or more proceedings regarding other matters before it pursuant to this Article that it determines are appropriate to be considered jointly.
Panel Proceedings
Article 2008: Request for an Arbitral Panel
1. If the Commission has convened pursuant to Article 2007(4), and the matter has not been resolved within:
(a) 30 days thereafter,
(b) 30 days after the Commission has convened in respect of the matter most recently referred to it, where proceedings have been consolidated pursuant to Article 2007(6), or
(c) such other period as the consulting Parties may agree,
any consulting Party may request in writing the establishment of an arbitral panel. The requesting Party shall deliver the request to the other Parties and to its Section of the Secretariat.
2. On delivery of the request, the Commission shall establish an arbitral panel.
3. A third Party that considers it has a substantial interest in the matter shall be entitled to join as a complaining Party on delivery of written notice of its intention to participate to the disputing Parties and its Section of the Secretariat. The notice shall be delivered at the earliest possible time, and in any event no later than seven days after the date of delivery of a request by a Party for the establishment of a panel.
4. If a third Party does not join as a complaining Party in accordance with paragraph 3, it normally shall refrain thereafter from initiating or continuing:
(a) a dispute settlement procedure under this Agreement, or
(b) a dispute settlement proceeding in the GATT on grounds that are substantially equivalent to those available to that Party under this Agreement,
regarding the same matter in the absence of a significant change in economic or commercial circumstances.
5. Unless otherwise agreed by the disputing Parties, the panel shall be established and perform its functions in a manner consistent with the provisions of this Chapter.
1. The Parties shall establish by January 1, 1994 and maintain a roster of up to 30 individuals who are willing and able to serve as panelists. The roster members shall be appointed by consensus for terms of three years, and may be reappointed.
2. Roster members shall:
(a) have expertise or experience in law, international trade, other matters covered by this Agreement or the resolution of disputes arising under international trade agreements, and shall be chosen strictly on the basis of objectivity, reliability and sound judgment;
(b) be independent of, and not be affiliated with or take instructions from, any Party; and
(c) comply with a code of conduct to be established by the Commission.
Article 2010: Qualifications of Panelists
1. All panelists shall meet the qualifications set out in Article 2009(2).
2. Individuals may not serve as panelists for a dispute in which they have participated pursuant to Article 2007(5).
Continue on to Article 2011: Panel Selection
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