Article 32.10 of the new NAFTA says:
Article 32.10: Non-Market Country FTA
1. At least 3 months prior to commencing negotiations, a Party shall inform the other Parties of its intention to commence free trade agreement negotiations with a non-market country. For purposes of this Article, a non-market country is a country that on the date of signature of this agreement at least one Party has determined to be a non-market economy for purposes of its trade remedy laws and is a country with which no Party has a free trade agreement.
2. Upon request, the Party shall provide as much information as possible regarding the objectives for those negotiations.
3. As early as possible, and no later than 30 days before the date of signature, that Party shall provide the other Parties with an opportunity to review the full text of the agreement, including any annexes and side instruments, in order for the Parties to be able to review the agreement and assess its potential impact on this Agreement. If the Party involved requests that the text be treated as confidential, the other Parties shall maintain the confidentiality of the text.
4. Entry by any Party into a free trade agreement with a non-market country, shall allow the other Parties to terminate this Agreement on six-month notice and replace this Agreement with an agreement as between them (bilateral agreement).
5. The bilateral agreement shall be comprised of all the provisions of this Agreement, except those provisions the relevant Parties decide are not applicable as between them.
6. The relevant Parties shall utilize the six-month notice period to review the Agreement and determine whether any amendments should be made in order to ensure the proper operation of the bilateral agreement.
7. The bilateral agreement enter into force 60 days after the date on which the parties to the bilateral agreement have notified each other that they have completed their respective applicable legal procedures.
This provision adds some conditions and burdens for a NAFTA party trying to negotiate an FTA with an NME (Canada and China come to mind). I was intrigued by the remedy in para. 4, which is an interesting variation of the Article 34.6 withdrawal provision. It looks like it would involve a mini-renegotiation. Seems unlikely we would get to this, though, as FTAs with China would be challenging for both Canada and Mexico. But if this is now part of the U.S. FTA template, it will be interesting to see how any future FTA negotiating partners react.
I also wonder what constitutes a "free trade agreement negotiation." Would the talks between Japan/EU and the U.S. that have been announced recently count? (Not that those countries are NMEs, of course).
