NAFTA FREE TRADE COMMISSION JOINT STATEMENT
“Decade of Achievement ”

San Antonio, July 16, 2004

Ambassador Robert B. Zoellick, United States Trade Representative; Fernando Canales, Mexico Secretary of Economy; and The Honourable James Peterson, Canada Minister of International Trade, are pleased to release the following Joint Statement, which outlines the overall results of the July 16, 2004, meeting of the NAFTA Free Trade Commission, in San Antonio, Texas.

Ten years ago, our countries launched a bold initiative: to create the world’s largest free trade area, one that would knit our countries together through freer trade and investment. Today, as we look back over the record of the last decade, we are proud of the accomplishments. We remain committed to the full implementation of the NAFTA, and to building upon our achievements to date. By any measure, NAFTA has been a success. The dismantling of barriers has led to increased trade and investment, growth in employment, and enhanced competitiveness.

Since January 1, 1994, when the NAFTA entered into force, three-way trade among our countries has reached over US $623 billion, more than double the pre-NAFTA level. From 1994 to 2003, cumulative Foreign Direct Investment in our three countries has increased by over US $1.7 trillion. Increased investment has brought more and better-paying jobs, as well as lower costs and more choices for consumers and producers.

Similarly, we are pleased to take note of the success of the North American Agreement on Environmental Co-operation and the North American Agreement on Labor Co-operation. These agreements, which have also marked ten years since their entry into force, have effectively promoted better environmental performance and working conditions in North America.

We cannot, however, rest on past accomplishments. We are committed to deepening economic integration in North America by building on the NAFTA to further benefit businesses, workers, and consumers. With virtually all tariffs and quotas on North American trade eliminated, we are looking for additional ways to enhance trade and investment by lowering transaction costs and other administrative burdens. In addition, we agreed to explore a broad range of ways to further integrate our economies through trade and boost competitiveness. We asked our officials to place a particular emphasis on areas such as manufacturing, services, business facilitation, compatibility of standards, and the further elimination of technical barriers to trade. We want to ensure that the NAFTA provides our countries with a competitive advantage in a world of global sourcing.

Last year we asked the NAFTA Working Group on Rules of Origin to pursue further liberalization of the NAFTA Rules of Origin. Today we have reached tentative agreement to liberalize the rules of origin for a broad range of foods, consumer and industrial products. Together, these changes will affect over US $20 billion in trilateral trade. We have asked our officials to begin our respective domestic procedures required to implement these changes on January 1, 2005. We also asked the Working Group on Rules of Origin to continue its work to pursue further liberalization of the rules of origin, including those for chemicals, pharmaceuticals, plastics and rubber, motor vehicles and their parts, footwear and copper, as well as any items for which all of our countries have a common MFN duty rate of zero. In addition, we asked the Working Group to continue considering new requests from our consumers and producers and to examine the rules of origin in the free trade agreements that each country has negotiated subsequent to the NAFTA, to determine if we should apply those new rules to the NAFTA. We instructed officials to initiate the necessary consultations with domestic industries and to report to our Deputies at their next meeting.

We noted the progress of the trilateral working group negotiating provisions on the exportation of tequila. We instructed our officials to complete this work prior to the next Deputies Meeting in the fall of 2004.

We are committed to transparency in trade negotiations. The negotiating texts of the NAFTA are documents of historical value and we recognize the level of public interest in them. We asked our officials to compile the NAFTA negotiating texts, bearing in mind the time necessary to complete this. We began the process with Chapter 11 and are pleased to announce that Chapter 11 texts will be available through our websites.

We are pleased that the transparency initiatives we took during our October 2003 meeting have already begun to improve the operation of the investment chapter investor-state dispute-settlement mechanism. Earlier this year, for the first time a tribunal accepted written submissions from a non-disputing party and adopted the procedures that we recommended following our
October 7, 2003 meeting in Montreal, for the handling of such submissions.

We were pleased Mexico has now joined Canada and the United States in supporting open hearings for investor-state disputes. In addition, we have agreed that the same degree of openess should apply to proceedings under the Dispute Settlement provisions of Chapter 20 of the NAFTA, and asked officials to develop rules governing open hearings for such proceedings.

We reaffirmed our interest in the on-going review of the operation of the Investment Chapter and directed officials to continue work seeking ways to improve the implementation of the chapter, including through, where appropriate, an examination of all of our experiences in subsequent free trade agreements which we have negotiated.

Noting the value of the NAFTA Dispute Settlement provisions, we reaffirm our commitment to their effective operation.

We analyzed the current state and the future prospects for the North American textile and apparel sectors. We addressed the impending liberalization of international textile and apparel trade at the end of 2004 and asked our officials to continue to consider actions such as cumulation among countries with whom we each have free trade agreements in order to enhance the competitiveness of our industries. We are committed to strengthening efforts to combat illegal transshipment and will continue to explore mechanisms to increase trilateral cooperation in this area. We also want to encourage the textile and apparel industries of North America to come together and identify areas of common interest where private sector cooperation could contribute to the development of the sectors.

We are also pleased that the NAFTA countries are close to finalizing an arrangement on the use of care symbols for textile and apparel goods. The uniform acceptance of care instruction symbols in our three countries will facilitate trade in our region and will send a positive signal that we are fully committed to pursuing further integration in this sector. We asked our Deputies to report to us by December 1 on the prospects and opportunities for the North American market.

We recognized the critical importance of the August 30, 2003, decision of the WTO Members to address the public health problems affecting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics, and agreed to ensure that this historic multilateral decision is fully reflected in the context of the NAFTA.

We support the continuing work of the Council of the North American Commission on Environmental Cooperation to protect the environment in North America. We ask our officials to continue their close cooperation with their environmental colleagues, through the Article 10(6) Working Group, to develop a strategic plan on trade and the environment.

We reaffirmed our commitment to achieving meaningful progress this year on the WTO Doha Development Agenda. We are encouraged by the reinvigoration of the negotiations on the Doha Development Agenda. In agriculture, we are on the verge of an historic agreement that this round will: eliminate export subsidies and discipline other forms of export competition in a parallel manner; substantially reduce and discipline trade-distorting domestic supports far in excess of what was achieved in previous negotiations; and substantially improve market access for all agricultural products, especially for developing countries. Working in cooperation with other WTO members, we are determined to complete the frameworks on key issues before the end of July that will put these far-reaching negotiations on track toward a rapid and successful conclusion. We call on all WTO members to work constructively and swiftly so we can meet our shared commitment to the Doha Development Agenda.

At the same time, we reaffirmed our commitment to the Free Trade Area of the Americas (FTAA) process and the successful conclusion of negotiations on a comprehensive, ambitious multilateral agreement including common rules, plurilateral rules, and market access that is compatible with the WTO.

We agreed to publish on the three Ministries web sites a trilateral brochure on the NAFTA.

Finally, we agreed that Mexico will host the next NAFTA Commission meeting, at the Ministerial level, in 2005.

Source: International Trade Canada