North American Agreement on Labor Cooperation 
between

the Government of Canada,
the Government of the United Mexican States and
the Government of the United States of America

Organization of American States - Trade Unit

PART FOUR

COOPERATIVE CONSULTATIONS AND EVALUATIONS

Article 20: Cooperation

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 resolve any matter that might affect its operation.

Section A: Cooperative Consultations

Article 21: Consultations between NAOs

1. A NAO may request consultations, to be conducted in accordance with the procedures set out in paragraph 2, with another NAO in relation to the other Party's labor law, its administration, or labor market conditions in its territory. The requesting NAO shall notify the NAOs of the other Parties and the Secretariat of its request.
2. In such consultations, the requested NAO shall promptly provide such publicly available data or information, including:
   1. descriptions of its laws, regulations, procedures, policies or practices,
   2. proposed changes to such procedures, policies or practices, and
   3. such clarifications and explanations related to such matters, as may assist the consulting NAOs to better understand and respond to the issues raised.
3. Any other NAO shall be entitled to participate in the consultations on notice to the other NAOs and the Secretariat.

Article 22: Ministerial Consultations

1. Any Party may request in writing consultations with another Party at the ministerial level regarding any matter within the scope of this Agreement. The requesting Party shall provide specific and sufficient information to allow the requested Party to respond.
2. The requesting Party shall promptly notify the other Parties of the request. A third Party that considers it has a substantial interest in the matter shall be entitled to participate in the consultations on notice to the other Parties.
3. The consulting Parties shall make every attempt to resolve the matter through consultations under this Article, including through the exchange of sufficient publicly available information to enable a full examination of the matter.

Section B: Evaluations

Article 23: Evaluation Committee of Experts

1. If a matter has not been resolved after ministerial consultations pursuant to Article 22, any consulting Party may request in writing the establishment of an Evaluation Committee of Experts (ECE). The requesting Party shall deliver the request to the other Parties and to the Secretariat. Subject to paragraphs 3 and 4, the Council shall establish an ECE on delivery of the request.
2. The ECE shall analyze, in the light of the objectives of this Agreement and in a non-adversarial manner, patterns of practice by each Party in the enforcement of its occupational safety and health or other technical labor standards as they apply to the particular matter considered by the Parties under Article 22.
3. No ECE may be convened if a Party obtains a ruling under Annex 23 that the matter:
   1. is not trade-related; or
   2. is not covered by mutually recognized labor laws.
4. No ECE may be convened regarding any matter that was previously the subject of an ECE report in the absence of such new information as would warrant a further report.

Article 24: Rules of Procedure

1. The Council shall establish rules of procedure for ECEs, which shall apply unless the Council otherwise decides. The rules of procedure shall provide that:
   1. an ECE shall normally comprise three members;
   2. the chair shall be selected by the Council from a roster of experts developed in consultation with the ILO pursuant to Article 45 and, where possible, other members shall be selected from a roster developed by the Parties;
   3. ECE members shall
      1. have expertise or experience in labor matters or other appropriate disciplines,
      2. be chosen strictly on the basis of objectivity, reliability and sound judgment,
      3. be independent of, and not be affiliated with or take instructions from, any Party or the Secretariat, and
      4. comply with a code of conduct to be established by the Council;
   4. an ECE may invite written submissions from the Parties and the public;
   5. an ECE may consider, in preparing its report, any information provided by
      1. the Secretariat,
      2. the NAO of each Party,
      3. organizations, institutions and persons with relevant expertise, and
      4. the public; and
   6. each Party shall have a reasonable opportunity to review and comment on information that the ECE receives and to make written submissions to the ECE.
2. The Secretariat and the NAOs shall provide appropriate administrative assistance to an ECE, in accordance with the rules of procedure established by the Council under paragraph 1.

Article 25: Draft Evaluation Reports

1. Within 120 days after it is established, or such other period as the Council may decide, the ECE shall present a draft report for consideration by the Council, which shall contain:
   1. a comparative assessment of the matter under consideration;
   2. its conclusions; and
   3. where appropriate, practical recommendations that may assist the Parties in respect of the matter.
2. Each Party may submit written views to the ECE on its draft report. The ECE shall take such views into account in preparing its final report.

Article 26: Final Evaluation Reports

1. The ECE shall present a final report to the Council within 60 days after presentation of the draft report, unless the Council otherwise decides.
2. The final report shall be published within 30 days after its presentation to the Council, unless the Council otherwise decides.
3. The Parties shall provide to each other and the Secretariat written responses to the recommendations contained in the ECE report within 90 days of its publication.
4. The final report and such written responses shall be tabled for consideration at the next regular session of the Council. The Council may keep the matter under review.

PART FIVE

RESOLUTION OF DISPUTES

Article 27: Consultations

1. Following presentation to the Council under Article 26(1) of an ECE final report that addresses the enforcement of a Party's occupational safety and health, child labor or minimum wage technical labor standards, any Party may request in writing consultations with any other Party regarding whether there has been a persistent pattern of failure by that other Party to effectively enforce such standards in respect of the general subject matter addressed in the report.
2. The requesting Party shall deliver the request to the other Parties and to the Secretariat.
3. Unless the Council otherwise provides in its rules and procedures established under Article 9(2), 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 the Secretariat.
4. The consulting Parties shall make every attempt to arrive at a mutually satisfactory resolution of the matter through consultations under this Article.

Article 28: Initiation of Procedures

1. If the consulting Parties fail to resolve the matter pursuant to Article 27 within 60 days of delivery of a request for consultations, or such other period as the consulting Parties may agree, any such Party may request in writing a special session of the Council.
2. The requesting Party shall state in the request the matter complained of and shall deliver the request to the other Parties and to the Secretariat.
3. Unless it decides otherwise, the Council shall convene within 20 days of delivery of the request and shall endeavor to resolve the dispute promptly.
4. The Council may:
   1. call on such technical advisers or create such working groups or expert groups as it deems necessary,
   2. have recourse to good offices, conciliation, mediation or such other dispute resolution procedures, or
   3. make recommendations, as may assist the consulting Parties to reach a mutually satisfactory resolution of the dispute. Any such recommendations shall be made public if the Council, by a two-thirds vote, so decides.
5. Where the Council decides that a matter is more properly covered by another agreement or arrangement to which the consulting Parties are party, it shall refer the matter to those Parties for appropriate action in accordance with such other agreement or arrangement.

Article 29: Request for an Arbitral Panel

1. If the matter has not been resolved within 60 days after the Council has convened pursuant to Article 28, the Council shall, on the written request of any consulting Party and by a two-thirds vote, convene an arbitral panel to consider the matter where the alleged persistent pattern of failure by the Party complained against to effectively enforce its occupational safety and health, child labor or minimum wage technical labor standards is:
   1. trade-related; and
   2. covered by mutually recognized labor laws.
2. 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 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 the vote of the Council to convene a panel.
3. 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 Part.

Article 30: Roster

1. The Council shall establish and maintain a roster of up to 45 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:
   1. have expertise or experience in labor law or its enforcement, or in the resolution of disputes arising under international agreements, or other relevant scientific, technical or professional expertise or experience;
   2. be chosen strictly on the basis of objectivity, reliability and sound judgment;
   3. be independent of, and not be affiliated with or take instructions from, any Party or the Secretariat; and
   4. comply with a code of conduct to be established by the Council.

Article 31: Qualifications of Panelists

1. All panelists shall meet the qualifications set out in Article 30.
2. Individuals may not serve as panelists for a dispute where:
   1. they have participated pursuant to Article 28(4) or participated as members of an ECE that addressed the matter; or
   2.  they have, or a person or organization with which they are affiliated has, an interest in the matter, as set out in the code of conduct established under Article 30(2)(d).

Article 32: Panel Selection

1. Where there are two disputing Parties, the following procedures shall apply:
   1. The panel shall comprise five members.
   2. The disputing Parties shall endeavor to agree on the chair of the panel within 15 days after the Council votes to convene the panel. If the disputing Parties are unable to agree on the chair within this period, the disputing Party chosen by lot shall select within five days a chair who is not a citizen of that Party.
   3. Within 15 days of selection of the chair, each disputing Party shall select two panelists who are citizens of the other disputing Party.
   4. If a disputing Party fails to select its panelists within such period, such panelists shall be selected by lot from among the roster members who are citizens of the other disputing Party.
2. Where there are more than two disputing Parties, the following procedures shall apply:
   1. The panel shall comprise five members.
   2. The disputing Parties shall endeavor to agree on the chair of the panel within 15 days after the Council votes to convene the panel. If the disputing Parties are unable to agree on the chair within this period, the Party or Parties on the side of the dispute chosen by lot shall select within 10 days a chair who is not a citizen of such Party or Parties.
   3. Within 30 days of selection of the chair, the Party complained against shall select two panelists, one of whom is a citizen of a complaining Party, and the other of whom is a citizen of another complaining Party. The complaining Parties shall select two panelists who are citizens of the Party complained against.
   4. If any disputing Party fails to select a panelist within such period, such panelist shall be selected by lot in accordance with the citizenship criteria of subparagraph (c).
3. Panelists shall normally be selected from the roster. Any disputing Party may exercise a peremptory challenge against any individual not on the roster who is proposed as a panelist by a disputing Party within 30 days after the individual has been proposed.
4. If a disputing Party believes that a panelist is in violation of the code of conduct, the disputing Parties shall consult and, if they agree, the panelist shall be removed and a new panelist shall be selected in accordance with this Article.

Article 33: Rules of Procedure

1. The Council shall establish Model Rules of Procedure. The procedures shall provide:
   1. a right to at least one hearing before the panel;
   2. the opportunity to make initial and rebuttal written submissions; and
   3. that no panel may disclose which panelists are associated with majority or minority opinions.
2. Unless the disputing Parties otherwise agree, panels convened under this Part shall be established and conduct their proceedings in accordance with the Model Rules of Procedure.
3. Unless the disputing Parties otherwise agree within 20 days after the Council votes to convene the panel, the terms of reference shall be:

"To examine, in light of the relevant provisions of the Agreement, including those contained in Part Five, whether there has been a persistent pattern of failure by the Party complained against to effectively enforce its occupational safety and health, child labor or minimum wage technical labor standards, and to make findings, determinations and recommendations in accordance with Article 36(2)."

Article 34: Third Party Participation

A Party that is not a disputing Party, on delivery of a written notice to the disputing Parties and the Secretariat, shall be entitled to attend all hearings, to make written and oral submissions to the panel and to receive written submissions of the disputing Parties.

Article 35: Role of Experts

On request of a disputing Party, or on its own initiative, the panel may seek information and technical advice from any person or body that it deems appropriate, provided that the disputing Parties so agree and subject to such terms and conditions as such Parties may agree.

Article 36: Initial Report

1. Unless the disputing Parties otherwise agree, the panel shall base its report on the submissions and arguments of the disputing Parties and on any information before it pursuant to Article 35.
2. Unless the disputing Parties otherwise agree, the panel shall, within 180 days after the last panelist is selected, present to the disputing Parties an initial report containing:
   1. findings of fact;
   2. its determination as to whether there has been a persistent pattern of failure by the Party complained against to effectively enforce its occupational safety and health, child labor or minimum wage technical labor standards in a matter that is trade-related and covered by mutually recognized labor laws, or any other determination requested in the terms of reference; and
   3. in the event the panel makes an affirmative determination under subparagraph (b), its recommendations, if any, for the resolution of the dispute, which normally shall be that the Party complained against adopt and implement an action plan sufficient to remedy the pattern of non-enforcement.
3. Panelists may furnish separate opinions on matters not unanimously agreed.
4. A disputing Party may submit written comments to the panel on its initial report within 30 days of presentation of the report.
5. In such an event, and after considering such written comments, the panel, on its own initiative or on the request of any disputing Party, may:
   1. request the views of any participating Party;
   2. reconsider its report; and
   3. make any further examination that it considers appropriate.

Article 37: Final Report

1. The panel shall present to the disputing Parties a final report, including any separate opinions on matters not unanimously agreed, within 60 days of presentation of the initial report, unless the disputing Parties otherwise agree.
2. The disputing Parties shall transmit to the Council the final report of the panel, as well as any written views that a disputing Party desires to be appended, on a confidential basis within 15 days after it is presented to them.
3. The final report of the panel shall be published five days after it is transmitted to the Council.

Article 38: Implementation of Final Report

If, in its final report, a panel determines that there has been a persistent pattern of failure by the Party complained against to effectively enforce its occupational safety and health, child labor or minimum wage technical labor standards, the disputing Parties may agree on a mutually satisfactory action plan, which normally shall conform with the determinations and recommendations of the panel. The disputing Parties shall promptly notify the Secretariat and the Council of any agreed resolution of the dispute.

Article 39: Review of Implementation

1. If, in its final report, a panel determines that there has been a persistent pattern of failure by the Party complained against to effectively enforce its occupational safety and health, child labor or minimum wage technical labor standards, and:
   1. the disputing Parties have not agreed on an action plan under Article 38 within 60 days of the date of the final report, or
   2. the disputing Parties cannot agree on whether the Party complained against is fully implementing
      1. an action plan agreed under Article 38,
      2. an action plan deemed to have been established by a panel under paragraph 2, or
      3. an action plan approved or established by a panel under paragraph 4, any disputing Party may request that the panel be reconvened. The requesting Party shall deliver the request in writing to the other Parties and to the Secretariat. The Council shall reconvene the panel on delivery of the request to the Secretariat.
2. No Party may make a request under paragraph 1(a) earlier than 60 days, or later than 120 days, after the date of the final report. If the disputing Parties have not agreed to an action plan and if no request was made under paragraph 1(a), the last action plan, if any, submitted by the Party complained against to the complaining Party or Parties within 60 days of the date of the final report, or such other period as the disputing Parties may agree, shall be deemed to have been established by the panel 120 days after the date of the final report.
3. A request under paragraph 1(b) may be made no earlier than 180 days after an action plan has been:
   1. agreed under Article 38,
   2. deemed to have been established by a panel under paragraph 2, or
   3. approved or established by a panel under paragraph 4, and only during the term of any such action plan.
4. Where a panel has been reconvened under paragraph 1
   1. it: shall determine whether any action plan proposed by the Party complained against is sufficient to remedy the pattern of non-enforcement and
      1. if so, shall approve the plan, or
      2. if not, shall establish such a plan consistent with the law of the Party complained against, and
   2. may, where warranted, impose a monetary enforcement assessment in accordance with Annex 39, within 90 days after the panel has been reconvened or such other period as the disputing Parties may agree.
5. Where a panel has been reconvened under paragraph 1(b), it shall determine either that:
   1. the Party complained against is fully implementing the action plan, in which case the panel may not impose a monetary enforcement assessment, or
   2. the Party complained against is not fully implementing the action plan, in which case the panel shall impose a monetary enforcement assessment in accordance with Annex 39, within 60 days after it has been reconvened or such other period as the disputing Parties may agree.
6. A panel reconvened under this Article shall provide that the Party complained against shall fully implement any action plan referred to in paragraph 4(a)(ii) or 5(b), and pay any monetary enforcement assessment imposed under paragraph 4(b) or 5(b), and any such provision shall be final.

Article 40: Further Proceeding

A complaining Party may, at any time beginning 180 days after a panel determination under Article 39(5)(b), request in writing that a panel be reconvened to determine whether the Party complained against is fully implementing the action plan. On delivery of the request to the other Parties and the Secretariat, the Council shall reconvene the panel. The panel shall make the determination within 60 days after it has been reconvened or such other period as the disputing Parties may agree.

Article 41: Suspension of Benefits

1. Subject to Annex 41A, where a Party fails to pay a monetary enforcement assessment within 180 days after it is imposed by a panel:
   1. under Article 39(4)(b), or
   2. under Article 39(5)(b), except where benefits may be suspended under paragraph 2(a), any complaining Party or Parties may suspend, in accordance with Annex 41B, the application to the Party complained against of NAFTA benefits in an amount no greater than that sufficient to collect the monetary enforcement assessment.
2. Subject to Annex 41A, where a panel has made a determination under Article 39(5)(b) and the panel:
   1. has previously imposed a monetary enforcement assessment under Article 39(4)(b) or established an action plan under Article 39(4)(a)(ii), or
   2. has subsequently determined under Article 40 that a Party is not fully implementing an action plan, the complaining Party or Parties may, in accordance with Annex 41B, suspend annually the application to the Party complained against of NAFTA benefits in an amount no greater than the monetary enforcement assessment imposed by the panel under Article 39(5)(b).
3. Where more than one complaining Party suspends benefits under paragraph 1 or 2, the combined suspension shall be no greater than the amount of the monetary enforcement assessment.
4. Where a Party has suspended benefits under paragraph 1 or 2, the Council shall, on the delivery of a written request by the Party complained against to the other Parties and the Secretariat, reconvene the panel to determine whether the monetary enforcement assessment has been paid or collected, or whether the Party complained against is fully implementing the action plan, as the case may be. The panel shall submit its report within 45 days after it has been reconvened. If the panel determines that the assessment has been paid or collected, or that the Party complained against is fully implementing the action plan, the suspension of benefits under paragraph 1 or 2, as the case may be, shall be terminated.
5. On the written request of the Party complained against, delivered to the other Parties and the Secretariat, the Council shall reconvene the panel to determine whether the suspension of benefits by the complaining Party or Parties pursuant to paragraph 1 or 2 is manifestly excessive. Within 45 days of the request, the panel shall present a report to the disputing Parties containing its determination.

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