February 27, 2020

UNITED STATES-MEXICO-CANADA AGREEMENT – CHAPTER 30 – ADMINISTRATIVE AND INSTITUTIONAL PROVISIONS


I. INTRODUCTION.

Chapter 30 of the USMCA provides for the establishment of the Agreement’s permanent institutional bodies, along with the official communications channels among the Parties. While NAFTA grouped Institutions, Dispute Settlement and Domestic Proceedings, and Private Commercial Dispute Settlement under Chapter Twenty, the USMCA separates Institutional Arrangements into its own Chapter. Additionally, the USMCA provides more specificity as to the role and functions of the Free Trade Commission (Commission), while expanding its functions.

II. EXECUTIVE SUMMARY.

The USMCA’s Chapter 30 addresses the creation and establishes the functions of the Commission, along with the Decision-Making process, the Rules of Procedure of the Commission and Subsidiary Bodies. The functions of the Commission include: (i) considering proposals to amend or modify the USMCA; (ii) adopting and updating the Rules of Procedure and the Code of Conduct applicable to dispute settlement proceedings; and (iii) reviewing the Roster and Qualifications of Panelists (Article 31.8), and, when appropriate, constituting a new roster.

The Commission may consider and adopt a modification to the USMCA of: (i) the Schedules to Annex 2-B (Tariff Commitments); (ii) the adjustments to the Tariff Preferential Levels established in Chapter 6 (Textile and Apparel Goods); (iii) the rules of origin established in Annex 4-B (Product-Specific Rules of Origin); (iv) the minimum data requirements for the certification of origin; (v) any provision as may be required to conform with any change to the Harmonized System; and (vi) the lists of entities, covered goods and services, and thresholds contained in the Schedules to Chapter 13 (Government Procurement). The Commission may also issue interpretations of the provisions of the USMCA, which are binding for USMCA tribunals and panels. Additionally, the Commission may modify any Uniform Regulations agreed jointly by the Parties, subject to completion of applicable legal procedures by each Party.

Chapter 30 also creates the obligation for each Party to designate Agreement Coordinators to facilitate communications between the Parties, as well as formal Contact Points, as discussed further below.

Finally, this chapter states that the Commission shall establish a Secretariat, which shall assist the Commission and provide administrative assistance to the USMCA’s panels and the committees.

III. LEGAL DISCUSSION.

The most significant articles of Chapter 30 are summarized below:

Article 30.1: Establishment of the Free Trade Commission. The Commission shall be composed of government representatives of each Party at the level of Ministers or their designees.

Article 30.2: Functions of the Commission. The Commission shall consider matters relating to the implementation or operations of the USMCA, consider proposals to amend or modify the USMCA, supervise the work of the subsidiary bodies, adopt and update the Rules of Procedure and Code of Conduct, and review the Roster and Qualifications of Panelists.

The Commission may:

1. consider and adopt certain types of modifications to the USMCA, including: (i) Tariff Commitments under Annex 2-B; (ii) adjustments to Tariff Preferential Levels under Chapter 6 (Textile and Apparel Goods); (iii) the rules of origin in Annex 4-B; (iv) the minimum data requirements for the certification of origin; (v) any provision as may be required to conform with any change to the Harmonized System, or the lists of entities, covered goods and services, and thresholds contained in the Schedules to Chapter 13 (Government Procurement),

2. develop arrangements for implementing the USMCA,

3. seek to resolve differences or disputes that may arise regarding the interpretation or application of the USMCA,

4. issue interpretations of the provisions of the USMCA (which shall be binding for tribunals and panels established under Chapter 14 [Investment] and Chapter 31 [Dispute Settlement]), and

5. modify any Uniform Regulations agreed jointly by the Parties under Article 5.16 (Uniform Regulations).

Article 30.3: Decision-Making. Unless otherwise provided in the USMCA, the Commission or a subsidiary body shall be deemed to have taken a decision by consensus if all Parties are present at a meeting when a decision is taken and no Party present at the meeting when a decision is taken objects to the proposed decision.

Article 30.4: Rules of Procedure of the Commission and Subsidiary Bodies. The Commission shall meet within one year of the date of entry into force of the USMCA and thereafter as the Parties may decide, including as necessary to fulfill its functions. The Commission has the prerogative to establish rules of procedures for the conduct of its work.

Article 30.5: Agreement Coordinator and Contact Points. For the facilitation of communications between the Parties on any matter covered by the USMCA, Chapter 30 sets rules for the appointment of Agreement Coordinators and Contact Points.

Article 30.6: The Secretariat. Finally, the Commission shall establish and oversee a Secretariat, which shall aid the Commission, provide administrative assistance to panels and committees under the USMCA, and be responsible for the payment of remuneration to and expenses of panels and committees under the USMCA. The Secretariat shall, as the Commission may direct, support the work of other committees and groups under the USMCA and facilitate the operation of the USMCA. Each Party shall establish and maintain a permanent office of its Section and be responsible for its operations and costs, designate an individual to serve as Secretary of its Section, who shall be responsible for its administration and management, and notify the other Parties of the contact information for its Section’s office.

IV. CONCLUSION.

Chapter 30 establishes the rules for the ongoing, day to day communications among the Parties and the shared institutions under the USMCA. Although the Agreement contains no major differences with NAFTA, the USMCA provides a more specific and solid legal framework for the Parties.

CONTACT INFORMATION.

Rene Cacheaux | rcacheaux@ccn-law.com
Tel: +1 (512) 614-1562

Daniel Cavazos | dcavazos@ccn-law.com
Tel: +1 (956) 686-5883

Joseph B. Newton | jnewton@ccn-law.com
Tel: +1 (210) 222-1642

Robert M. Barnett | rbarnett@ccn-law.com
Tel: +1 (210) 222-1642

Michael Aguilar | maguilar@ccn-law.com
Tel: +1 (210) 222-0204