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North American Free Trade Agreement (NAFTA)

Articles 1102 [National Treatment], 1103 [MFN Treatment], 1106 [Performance Requirements] and 1107 [Senior Management and Boards of Directors] do not apply to:
a) any existing non-conforming measure that is maintained by

i) a Party at the federal level, as set out in its Schedule to Annex I or III;
ii) a state or province, for two years after the date of entry into force of this Agreement, and thereafter as set out by a Party in its Schedule to Annex I, in accordance with paragraph 2, or
iii) a local government;

Each Party may set out in its Schedule to Annex I, within two years of the date of entry into force of this Agreement, any existing non-conforming measure maintained by a state or province, not including a local government. (Article 1108(2)).

Articles 1102, 1003, 1106, and 1107 do not apply to any measure that a Party adopts or maintains with respect to sectors, subsectors or activities, as set out in its Schedule to Annex II. (Article 1108(3)).

No Party may, under any measure adopted after the date of entry into force of this Agreement and covered by its Schedule to Annex II, require an investor of another Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure becomes effective. (Article 1108(4)).

Articles 1102 and 1103 do not apply to any measure that is an exception to, or derogation from, the obligations under Article 1703 (Intellectual Property-National Treatment) as specifically provided for in that Article. (Article 1108(5)).

Article 1103 does not apply to treatment accorded by a Party pursuant to agreements, or with respect to sectors, set out in its Schedule to Annex IV. (Article 1108(6)).

Articles 1102, 1003 and 1107 do not apply to:
a) procurement by a Party or a state enterprise; or
b) subsidies or grants provided by a Party or a state enterprise, including government-supported loans, guarantees and insurance. (Article 1108(7)).

The provisions of:
a) Article 1106(1)(a), (b) and (c), and (3)(a) and (b) do not apply to qualification requirements for goods or services with respect to export promotion and foreign aid programs;
b) Article 1106(1)(b), (c), (f) and (g), and (3)(a) and (b) do not apply to procurement by a Party or a state enterprise; and
c) Article 1106(3)(a) and (b) do not apply to requirements imposed by an importing Party relating to the content of goods necessary to qualify for preferential tariffs or preferential quotas. (Article 1108(8)).

Denial of benefits
A Party may deny the benefits of NAFTA Chapter 11 on Investment to an investor of another Party that is an enterprise of such Party and to investments of such investor if investors of a non-Party own or control the enterprise and the denying Party:
a) does not maintain diplomatic relations with the non-Party; or
b) adopts or maintains measures with respect to the non-Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Chapter were accorded to the enterprise or to its investments. (Article 1113(1)).

Subject to prior notification and consultation in accordance with Articles 1803 (Notification and Provision of Information) and 2006 (Consultations), a Party may deny the benefits of NAFTA Chapter 11 on Investment to an investor of another Party that is an enterprise of such Party and to investments of such investors if investors of a non-Party own or control the enterprise and the enterprise has no substantial business activities in the territory of the Party under whose law it is constituted or organized. (Article 1113(2)).

Free Trade Agreement of the Group of Three among Mexico, Colombia, and Venezuela (Group of Three)

No Party shall impose performance requirements by adopting investment-related measures that are mandatory or required for the establishment or operation of an investment, or for which compliance is necessary in order to obtain or maintain an advantage or incentive, or which prohibit:
a) the purchase or use by an enterprise of goods of national origin of that Party, or from its national sources, whether specified in terms of specific goods, in terms of volume or value of the goods, or as a proportion of the volume or value of its local production;
b) the purchase or use of imported goods by an enterprise from being limited to an amount related to the volume or value of the local goods exported by the enterprise;
c) restrictions on imports of goods used by an enterprise in its local production or related thereto, limiting access by the enterprise to foreign exchange to an amount related to the entry of foreign exchange imputable to said enterprise;
d) restrictions on the exportation or the sale for exportation of goods by an enterprise, whether specified in terms of the volume or value of the goods, or as a proportion of the volume or value of its local production. (Article 17-04(1)).

The provisions of:
a) Paragraph 1(a) and (d) shall not apply with respect to requirements for the qualification of goods for export promotion programs;
b) Paragraph 1(a) shall not apply with respect to purchase or use by a Party or by a State enterprise;
c) Paragraph 1(a) shall not apply with respect to the requirements imposed by an importing Party with respect to the content required for goods in order to qualify for preferential tariffs or duties. (Article 17-04(2)).

Nothing in the provisions of this Article shall be construed as preventing a Party from imposing, with regard to any investment in its territory, requirements to locate production, generate jobs, train workers, or carry out research and development. (Article 17-04(3)).

If, in the judgment of a Party, another Party imposes a requirement not stipulated in paragraph 1 that adversely affects the flow of trade or that constitutes a significant barrier to investment, the matter shall be considered by the Commission. (Article 17-04(4)).

If the Commission finds that the requirement in question adversely affects the flow of trade or constitutes a significant barrier to investment, it shall recommend to the Party in question that it suspend the requirement. (Article 17-04(5)).

Common Market of the South (MERCOSUR)

Members:
The provisions of Article 3(2) shall not be construed as to oblige one Contracting Party to extend to investors of another Contracting Party the benefit of any treatment, preference, or privilege resulting from an international agreement relating wholly or mainly to taxation. (Article 3(3) of the Colonia Protocol).

From the Annex to the Protocol of Colonia:
Exceptions to National Treatment at the admission phase (maintained for a transitory period of time):

Argentina: real estate in the border areas; air transportation; shipbuilding; nuclear energy centers; uranium mining; insurance; and fishing.

Brazil: exploration and mining of minerals; development of hydraulic energy; health care; radio and television broadcasting and other telecommunication services; leasing of rural property; participation in the system of financial, insurance, social security and capitalization intermediation; construction, ownership and coastal and interior shipping.

Paraguay: real estate in border areas; mass media instruments - print, radio and television; air, sea and land transportation; electricity, water and telephone; hydrocarbon and strategic mineral development; importing and refining of petroleum derivatives; and postal service.

Uruguay: electricity; hydrocarbons; basic petrochemicals; atomic energy; development of strategic minerals; financial intermediation; railroads; telecommunications, broadcasting; press and audiovisual instruments.

With respect to Article 3(2), Brazil reserves the right to maintain the exception with respect to Article 171 (government procurement) of its Constitution.

Notwithstanding Article 3(4) on performance requirements, Argentina and Brazil reserve the right to maintain for a transitory period of time performance requirements in the automotive sector.

Non-Members:
Member Parties shall not extend to investors of third States the benefit of any treatment, preference or privilege resulting from:
a) its participation or association in a free trade area, customs union, common market, or another regional agreement;
b) an international agreement related wholly or mainly to taxation. (Article 2(C)(3) of the Buenos Aires Protocol).

Andean Pact

Foreign investors shall have the same rights and obligations as national investors, except as otherwise provided in the legislation of each Member Country. (Article 2).

A. Bolivia : Law No. 1182 (Sept. 11, 1990), No reservation.

B. Colombia: Law 9 (1991). Article 8 of the International Investment Statute provides that investments of foreign capital may be made in any percentage in all economic sectors, except the following: defense and national security; processing, disposal and toxic, dangerous or radioactive wastes not produced in the country. In any case, CONPES may reserve economic sectors and determine the participation of foreign capital in them.

Article 9 establishes that the following investments shall require authorization from the National Planning Department: a) provision of such public services such as electricity; garbage disposal; water and sewage; postal services; public health; and all types of communication except cellular telephone services.

C. Ecuador. Decree No. 415 (Jan. 8, 1993). No reservation.

D. Peru. Decree No. 622 (Aug. 29, 1991). No reservation.

E. Venezuela . Decree No. 2095 (Feb. 13, 1992). Article 26 establishes that the following economic sectors shall be reserved for national companies:
a) television and radio broadcasting; Spanish language newspapers; and
b) professional services whose exercise is regulated by national laws.

Caribbean Community and the Caribbean Common Market (CARICOM)

A Member State shall notify the Council within such period as the Council may decide of particulars of any restrictions which it applies in such a way that persons belonging to another Member State are accorded in the first-mentioned State less favorable treatment in respect of the matters set out in Article 35 (1) (Treaty of Chaguaramas, Caribbean Common Market Annex) than is accorded to persons belonging thereto. (Treaty of Chaguaramas, Caribbean Common Market Annex, Article 35(3)).

Principles and Guidelines on Foreign Investment (1982 Caricom Heads of Government Conference): In general, private foreign investment shall not be allowed in a sector/activity where there is need to:
a) protect small local entrepreneurs;
b) insulate areas of the economy where investment is already adequate and where the effect of new overseas investment would be to drive out present investments;
c) avoid threats to national security;
d) create economic opportunities for nationals and nationally-controlled enterprises which need protection from more efficient foreign enterprises until, in the long run, they can develop the necessary entrepreneurial managerial and technological capability to adequately service the sector/activity; and
e) curtail increased investment in service activities, thus giving preference to the goods-producing sectors.
In the case of joint ventures, Governments shall determine the level of local participation which will qualify for consideration as local investments. (Caricom Heads of Government Conference, 1982; see HGC 82/3/17 Attachment IV).

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