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surance; State and local measures exempt from Article 1102 of the North American Free Trade Agreement pursuant to Article 1108 thereof; and landing of submarine cables. The U.S. exceptions from its national and MFN treatment obliga- tion are: fisheries; and air and maritime transport, and related ac- tivities. During negotiations, the United States informed Honduras that if Honduras undertook acceptable commitments with respect to all or certain financial services, the United States would consider lim- iting its exceptions with respect to its national and MFN treatment obligations in financial services. Honduras offered to take no exceptions to the treaty’s national or MFN treatment obligations with respect to banking, insurance, securities, and other financial services. Therefore in paragraph 3 of the Annex, the United States limited its exceptions with respect to banking, insurance, securities, and other financial services to afford treatment no less favorable than that accorded with respect to Can- ada and Mexico in the North American Free Trade Agreement. Paragraph 4 of the Annex lists Honduras’ exceptions from its na- tional treatment obligation, which are: properties on cays, reefs, rocks, shoals or sandbanks or on islands or on any property located within 40 km of the coastline of land borders of Honduras; small scale industry and commerce with total invested capital of no more than US $40,000 or its equivalent in national currency; ownership, operation and editorial control of broadcast radio and television; ownership, operation and editorial control of general interest peri- odicals and newspapers published in Honduras. Honduras has taken no exception to its MFN treatment obliga- tion. Paragraph 5 of the Annex ensures that national treatment is granted by each Party in all leasing of minerals or pipeline rights- of-way on government lands. In so doing, this provision affects the implementation of the Mineral Lands Leasing Act (MLLA) (30 U.S.C. 181 et seq.) and 10 U.S.C. 7435, regarding Naval Petroleum Reserves, with respect to nationals and companies of Honduras. The Treaty provides for resort to binding international arbitration to resolve disputes, rather than denial of mineral rights or rights to naval petroleum shares to investors of the other Party, as is the current process under the statute, U.S. domestic remedies, would, however, remain available for use in conjunction with the Treaty’s provisions. The MLLA and 10 U.S.C. 7435 direct that a foreign investor be denied access to leases for minerals on on-shore federal lands, leases of land within the Naval Petroleum and Oil Shale Reserves, and rights-of-way for oil or gas pipelines across on-shore federal lands, if U.S. investors are denied access to similar or like privi- leges in the foreign country. Honduras’ extension of national treatment in these sectors will fully meet the objectives of the MLLA and 10 U.S.C. 7435. Hon- duras was informed during negotiations that, were it to include this sector in its list of treatment exemptions, the United States would (consistent with the MLLA and 10 U.S.C. 7435) exclude the leasing of minerals or pipeline rights-of-way on Government lands from the national and MFN treatment obligations of this Treaty.
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