NAFTA - ANNEX II

                                 ANNEX II

1.   The Schedule of a Party sets out the reservations taken by
that Party, pursuant to Articles 1108(4) and 1206(4), with respect
to specific sectors, sub-sectors or activities for which it may
maintain existing, non-conforming measures or adopt new or more
restrictive measures.  Such measures may derogate from an
obligation relating to:

     (a) national treatment, pursuant to Article 1102 (Investment)
 or 1202 (Services);

     (b) most-favored-nation treatment, pursuant to Article 1103
 (Investment) or 1203 (Services);

     (c) local presence, pursuant to Article 1205 (Services);

     (d) performance requirements, pursuant to Article 1106
 (Investment); or

     (e) nationality requirements for senior management or members
 of boards of directors, pursuant to Article 1107
 (Investment).

2.   Each reservation sets out the following elements:

     (a) SECTOR refers to the general sector in which the
 reservation is taken;

     (b) SUB-SECTOR refers to the specific sector in which the
 reservation is taken;

     (c) INDUSTRY CLASSIFICATION refers to the activity, where
 appropriate, covered by the reservation according to
 domestic industry classification codes;

     (d) TYPE OF RESERVATION specifies the obligation referred to
 in paragraph 1 for which a reservation is taken;

     (e) DESCRIPTION describes the scope of the sector, sub-sector
 or activities covered by the reservation; and

     (f) LEGAL CITATION OF EXISTING MEASURES identifies existing
 measures that apply to the sector, sub-sector or
 activities covered by the reservation.

3.   In the interpretation of a reservation, all elements of the
reservation should be considered.  In the event of any
inconsistency between DESCRIPTION and any other element of the
reservation, the DESCRIPTION shall govern to the extent of the
inconsistency.

4.   For purposes of this Annex:

CMAP means Clasificaci¢n Mexicana de Actividades y Productos;

CPC means Central Product Classification numbers as set out in
Statistical Office of the United Nations, Statistical Papers,
Series M, No. 77,  Provisional Central Product Classification,
1991;

Mexican enterprise means an enterprise constituted under the laws
of Mexico;

Mexican national means a national of Mexico, as defined by the
Constitution of Mexico;

person of a Party means a national or an enterprise of a Party; and

SIC means:

     (a) with respect to Canada, Standard Industrial
 Classification (SIC) numbers as set out in Statistics
 Canada, Standard Industrial Classification, fourth
 edition, 1980; and

     (b) with respect to the United States, Standard Industrial
 Classification (SIC) numbers as set out in the United
 States Office of Management and Budget, Standard
 Industrial Classification Manual, 1987.