NEWS RELEASES

August 1, 2001 (5:30 p.m. EDT) No. 116

PETTIGREW WELCOMES NAFTA COMMISSION'S INITIATIVES TO CLARIFY CHAPTER 11 PROVISIONS

International Trade Minister Pierre Pettigrew welcomed the actions taken to clarify the North American Free Trade Agreement's (NAFTA) Chapter 11 investment provisions following a NAFTA Free Trade Commission meeting yesterday in Washington with his U.S. and Mexican counterparts.

"I am very pleased I've been able to work with my NAFTA partners to improve Chapter 11 by clarifying it," said Minister Pettigrew. "We are committed to making the investor-state dispute settlement process in NAFTA as open and transparent as possible."

In the document signed by Mr. Pettigrew, U.S. Trade Representative Robert Zoellick and Mexican Secretary of Economy Luis Ernesto Derbez, each NAFTA partner:

• will make available to the public all documents submitted to or issued by Chapter 11 tribunals, except in limited circumstances;

• confirms they can share all relevant Chapter 11 documents, including confidential information, with their respective federal, state and provincial officials.

The Ministers also clarified the interpretation of the NAFTA provision governing the minimum standard of treatment to be accorded to foreign investors. NAFTA's standard is the customary international law minimum standard of treatment.

The Ministers also directed trade experts to continue their work examining the implementation and operation of Chapter 11, including developing recommendations as appropriate.

Since NAFTA's inception in 1994, trade between Canada, the United States and Mexico has grown by 128 percent, to over $1 trillion in 2000, or $2.7 billion per day. Investment among the three NAFTA economies has also increased significantly, reaching $1.87 trillion in 1999.

The complete text of the signed document is attached, and can be found, along with the NAFTA Free Trade Commission Joint Statement and NAFTA at Seven brochure, at: http://www.dfait-maeci.gc.ca/nafta-alena/menu-e.asp

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For further information, media representatives may contact:

Mora Johnson

Office of the Minister for International Trade

(613) 992-7332

Media Relations Office

Department of Foreign Affairs and International Trade

(613) 995-1874

DOCUMENT

Having reviewed the operation of proceedings conducted under Chapter Eleven of the North American Free Trade Agreement, the Free Trade Commission hereby adopts the following interpretations of Chapter Eleven in order to clarify and reaffirm the meaning of certain of its provisions:

A. Access to documents

1. Nothing in the NAFTA imposes a general duty of confidentiality on the disputing parties to a Chapter Eleven arbitration, and, subject to the application of Article 1137(4), nothing in the NAFTA precludes the Parties from providing public access to documents submitted to, or issued by, a Chapter Eleven tribunal.

2. In the application of the foregoing:

(a) In accordance with Article 1120(2), the NAFTA Parties agree that nothing in the relevant arbitral rules imposes a general duty of confidentiality or precludes the Parties from providing public access to documents submitted to, or issued by, Chapter Eleven tribunals, apart from the limited specific exceptions set forth expressly in those rules.

(b) Each Party agrees to make available to the public in a timely manner all documents submitted to, or issued by, a Chapter Eleven tribunal, subject to redaction of:

(i) confidential business information;

(Ii) information which is privileged or otherwise protected from disclosure under the Party's domestic law; and

(iii) information which the Party must withhold pursuant to the relevant arbitral rules, as applied.

(c) The Parties reaffirm that disputing parties may disclose to other persons in connection with the arbitral proceedings such unredacted documents as they consider necessary for the preparation of their cases, but they shall ensure that those persons protect the confidential information in such documents.

(d) The Parties further reaffirm that the Governments of Canada, the United Mexican States and the United States of America may share with officials of their respective federal, state or provincial governments all relevant documents in the course of dispute settlement under Chapter Eleven of NAFTA, including confidential information.

3. The Parties confirm that nothing in this interpretation shall be construed to require any Party to furnish or allow access to information that it may withhold in accordance with Articles 2102 or 2105.

• Minimum Standard of Treatment in Accordance with International Law

1. Article 1105(1) prescribes the customary international law minimum standard of treatment of aliens as the minimum standard of treatment to be afforded to investments of investors of another Party.

2. The concepts of "fair and equitable treatment" and "full protection and security" do not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens.

3. A determination that there has been a breach of another provision of the NAFTA, or of a separate international agreement, does not establish that there has been a breach of Article 1105(1).

Closing Provision

The adoption by the Free Trade Commission of this or any future interpretation shall not be construed as indicating an absence of agreement among the NAFTA Parties about other matters of interpretation of the Agreement.

Done in triplicate at Washington, D.C., on the 31st day of July, 2001, in the English, French and Spanish languages, each text being equally authentic.