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North American Free Trade Agreement
PART TWO : TRADE IN GOODS

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Chapter Three : National Treatment and Market Access for Goods

Section A - National Treatment
Section B - Tariffs
Section C - Non-Tariff Measures
Section D - Consultations
Section E - Definitions
Annex 301.3 : Exceptions to Articles 301 and 309
Annex 302.2 : Tariff Elimination
Annex 303.6 : Goods Not Subject to Article 303
Annex 303.7 : Effective Dates for the Application of Article 303
Annex 303.8 : Exception to Article 303 (8) for Certain Color Cathode-Ray Television Picture Tubes
Annex 304.1 : Exceptions for Existing Waiver Measures
Annex 304.2 : Continuation of Existing Waivers of Customs Duties
Annex 307.1 : Goods Re-Entered after Repair or Alteration
Annex 307.3 : Repair and Rebuilding of Vessels
Annex 308.1 : Most-Favored-Nation Rates of Duty on Certain Automatic Data Processing Goods and Their Parts
Annex 308.2 : Most-Favored-Nation Rates of Duty on Certain Color Cathode-Ray Television Picture Tubes
Annex 308.3 : Most-Favored-Nation Duty-Free Treatment of Local Area Network Apparatus
Annex 310.1 : Existing Customs User Fees
Annex 311 : Country of Origin Marking
Annex 312.2 : Wine and Distilled Spirits
Annex 313 : Distinctive Products
Annex 314 : Export Taxes
Annex 315 : Other Export Measures
Annex 300-A : Trade and Investment in the Automotive Sector
Annex 300-B : Textile and Apparel Goods

Article 300 : Scope and Coverage

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This Chapter applies to trade in goods of a Party, including :
  1. goods covered by Annex 300-A (Trade and Investment in the Automotive Sector),
  2. goods covered by Annex 300-B (Textile and Apparel Goods), and
  3. goods covered by another Chapter in this Part, except as provided in such Annex or Chapter.

Section A - National Treatment

Article 301 : National Treatment

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  1. Each Party shall accord national treatment to the goods of another Party in accordance with Article III of the General Agreement on Tariffs and Trade (GATT), including its interpretative notes, and to this end Article III of the GATT and its interpretative notes, or any equivalent provision of a successor agreement to which all Parties are party, are incorporated into and made part of this Agreement.
  2. The provisions of paragraph 1 regarding national treatment shall mean, with respect to a state or province, treatment no less favorable than the most favorable treatment accorded by such state or province to any like, directly competitive or substitutable goods, as the case may be, of the Party of which it forms a part.
  3. Paragraphs 1 and 2 do not apply to the measures set out in Annex 301.3.

Section B - Tariffs

Article 302 : Tariff Elimination

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  1. Except as otherwise provided in this Agreement, no Party may increase any existing customs duty, or adopt any customs duty, on an originating good.
  2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods in accordance with its Schedule to Annex 302.2.
  3. On the request of any Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in their Schedules. An agreement between two or more Parties to accelerate the elimination of a customs duty on a good shall supersede any duty rate or staging category determined pursuant to their Schedules for such good when approved by each such Party in accordance with its applicable legal procedures.
  4. Each Party may adopt or maintain import measures to allocate in-quota imports made pursuant to a tariff rate quota set out in Annex 302.2, provided that such measures do not have trade restrictive effects on imports additional to those caused by the imposition of the tariff rate quota.
  5. On written request of any Party, a Party applying or intending to apply measures pursuant to paragraph 4 shall consult to review the administration of those measures.

Article 303 : Restriction on Drawback and Duty Deferral Programs

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  1. Except as otherwise provided in this Article, no Party may refund the amount of customs duties paid, or waive or reduce the amount of customs duties owed, on a good imported into its territory, on condition that the good is :
    1. subsequently exported to the territory of another Party,
    2. used as a material in the production of another good that is subsequently exported to the territory of another Party, or
    3. substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of another Party, in an amount that exceeds the lesser of the total amount of customs duties paid or owed on the good on importation into its territory and the total amount of customs duties paid to another Party on the good that has been subsequently exported to the territory of that other Party.
  2. No Party may, on condition of export, refund, waive or reduce :
    1. an antidumping or countervailing duty that is applied pursuant to a Party's domestic law and that is not applied inconsistently with Chapter Nineteen (Review and Dispute Settlement in Antidumping and Countervailing Duty Matters) ;
    2. a premium offered or collected on an imported good arising out of any tendering system in respect of the administration of quantitative import restrictions, tariff rate quotas or tariff preference levels ;
    3. a fee applied pursuant to section 22 of the U.S. Agricultural Adjustment Act, subject to Chapter Seven (Agriculture and Sanitary and Phytosanitary Measures) ; or
    4. customs duties paid or owed on a good imported into its territory and substituted by an identical or similar good that is subsequently exported to the territory of another Party.
  3. Where a good is imported into the territory of a Party pursuant to a duty deferral program and is subsequently exported to the territory of another Party, or is used as a material in the production of another good that is subsequently exported to the territory of another Party, or is substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of another Party, the Party from whose territory the good is exported :
    1. shall assess the customs duties as if the exported good had been withdrawn for domestic consumption ; and
    2. may waive or reduce such customs duties to the extent permitted under paragraph 1.
  4. In determining the amount of customs duties that may be refunded, waived or reduced pursuant to paragraph 1 on a good imported into its territory, each Party shall require presentation of satisfactory evidence of the amount of customs duties paid to another Party on the good that has been subsequently exported to the territory of that other Party.
  5. Where satisfactory evidence of the customs duties paid to the Party to which a good is subsequently exported under a duty deferral program described in paragraph 3 is not presented within 60 days after the date of exportation, the Party from whose territory the good was exported :
    1. shall collect customs duties as if the exported good had been withdrawn for domestic consumption ; and
    2. may refund such customs duties to the extent permitted under paragraph 1 on the timely presentation of such evidence under its laws and regulations.
  6. This Article does not apply to :
    1. a good entered under bond for transportation and exportation to the territory of another Party ;
    2. a good exported to the territory of another Party in the same condition as when imported into the territory of the Party from which the good was exported (processes such as testing, cleaning, repacking or inspecting the good, or preserving it in its same condition, shall not be considered to change a good's condition). Except as provided in Annex 703.2, Section A, paragraph 12, where such a good has been commingled with fungible goods and exported in the same condition, its origin for purposes of this subparagraph, may be determined on the basis of the inventory methods provided for in the Uniform Regulations established under Article 511 (Uniform Regulations) ;
    3. a good imported into the territory of a Party that is deemed to be exported from its territory, or used as a material in the production of another good that is deemed to be exported to the territory of another Party, or is substituted by an identical or similar good used as a material in the production of another good that is deemed to be exported to the territory of another Party, by reason of
      1. delivery to a duty-free shop,
      2. delivery for ship's stores or supplies for ships or aircraft, or
      3. delivery for use in joint undertakings of two or more of the Parties and that will subsequently become the property of the Party into whose territory the good was deemed to be imported ;
    4. a refund of customs duties by a Party on a particular good imported into its territory and subsequently exported to the territory of another Party, where that refund is granted by reason of the failure of such good to conform to sample or specification, or by reason of the shipment of such good without the consent of the consignee ;
    5. an originating good that is imported into the territory of a Party and is subsequently exported to the territory of another Party, or used as a material in the production of another good that is subsequently exported to the territory of another Party, or is substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of another Party ; or
    6. a good set out in Annex 303.6.
  7. Except for paragraph 2 (d), this Article shall apply as of the date set out in each Party's Section of Annex 303.7.
  8. Notwithstanding any other provision of this Article and except as specifically provided in Annex 303.8, no Party may refund the amount of customs duties paid, or waive or reduce the amount of customs duties owed, on a non-originating good provided for in item 8540.11.aa (color cathode-ray television picture tubes, including video monitor tubes, with a diagonal exceeding 14 inches) or 8540.11.cc (color cathoderay television picture tubes for high definition television, with a diagonal exceeding 14 inches) that is imported into the Party's territory and subsequently exported to the territory of another Party, or is used as a material in the production of another good that is subsequently exported to the territory of another Party, or is substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of another Party.
  9. For purposes of this Article :
  10. For purposes of the Article : Where a good referred to by a tariff item number in this Article is described in parentheses following the tariff item number, the description is provided for purposes of reference only.

Article 304 : Waiver of Customs Duties

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  1. Except as set out in Annex 304.1, no Party may adopt any new waiver of customs duties, or expand with respect to existing recipients or extend to any new recipient the application of an existing waiver of customs duties, where the waiver is conditioned, explicitly or implicitly, on the fulfillment of a performance requirement.
  2. Except as set out in Annex 304.2, no Party may, explicitly or implicitly, condition on the fulfillment of a performance requirement the continuation of any existing waiver of customs duties.
  3. If a waiver or a combination of waivers of customs duties granted by a Party with respect to goods for commercial use by a designated person can be shown by another Party to have an adverse impact on the commercial interests of a person of that Party, or of a person owned or controlled by a person of that Party that is located in the territory of the Party granting the waiver, or on the other Party's economy, the Party granting the waiver shall either cease to grant it or make it generally available to any importer.
  4. This Article shall not apply to measures subject to Article 303.

Article 305 : Temporary Admission of Goods

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  1. Each Party shall grant duty-free temporary admission for :
    1. professional equipment necessary for carrying out the business activity, trade or profession of a business person who qualifies for temporary entry pursuant to Chapter Sixteen (Temporary Entry for Business Persons),
    2. equipment for the press or for sound or television broadcasting and cinematographic equipment,
    3. goods imported for sports purposes and goods intended for display or demonstration, and
    4. commercial samples and advertising films, imported from the territory of another Party, regardless of their origin and regardless of whether like, directly competitive or substitutable goods are available in the territory of the Party.
  2. Except as otherwise provided in this Agreement, no Party may condition the duty-free temporary admission of a good referred to in paragraph 1 (a), (b) or (c), other than to require that such good :
    1. be imported by a national or resident of another Party who seeks temporary entry ;
    2. be used solely by or under the personal supervision of such person in the exercise of the business activity, trade or profession of that person ;
    3. not be sold or leased while in its territory ;
    4. be accompanied by a bond in an amount no greater than 110 percent of the charges that would otherwise be owed on entry or final importation, or by another form of security, releasable on exportation of the good, except that a bond for customs duties shall not be required for an originating good ;
    5. be capable of identification when exported ;
    6. be exported on the departure of that person or within such other period of time as is reasonably related to the purpose of the temporary admission ; and
    7. be imported in no greater quantity than is reasonable for its intended use.
  3. Except as otherwise provided in this Agreement, no Party may condition the duty-free temporary admission of a good referred to in paragraph 1 (d), other than to require that such good :
    1. be imported solely for the solicitation of orders for goods, or services provided from the territory, of another Party or non-Party ;
    2. not be sold, leased or put to any use other than exhibition or demonstration while in its territory ;
    3. be capable of identification when exported ;
    4. be exported within such period as is reasonably related to the purpose of the temporary admission ; and
    5. be imported in no greater quantity than is reasonable for its intended use.
  4. A Party may impose the customs duty and any other charge on a good temporarily admitted duty-free under paragraph 1 that would be owed on entry or final importation of such good if any condition that the Party imposes under paragraph 2 or 3 has not been fulfilled.
  5. Subject to Chapters Eleven (Investment) and Twelve (Cross Border Trade in Services) :
    1. each Party shall allow a vehicle or container used in international traffic that enters its territory from the territory of another Party to exit its territory on any route that is reasonably related to the economic and prompt departure of such vehicle or container ;
    2. no Party may require any bond or impose any penalty or charge solely by reason of any difference between the port of entry and the port of departure of a vehicle or container ;
    3. no Party may condition the release of any obligation, including any bond, that it imposes in respect of the entry of a vehicle or container into its territory on its exit through any particular port of departure ; and
    4. no Party may require that the vehicle or carrier bringing a container from the territory of another Party into its territory be the same vehicle or carrier that takes such container to the territory of another Party.
  6. For purposes of paragraph 5, vehicle means a truck, a truck tractor, tractor, trailer unit or trailer, a locomotive, or a railway car or other railroad equipment.

Article 306 : Duty-Free Entry of Certain Commercial Samples and Printed Advertising Materials

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Each Party shall grant duty-free entry to commercial samples of negligible value, and to printed advertising materials, imported from the territory of another Party, regardless of their origin, but may require that :
  1. such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of another Party or non-Party ; or
  2. such advertising materials be imported in packets that each contain no more than one copy of each such material and that neither such materials nor packets form part of a larger consignment.

Article 307 : Goods Re-Entered after Repair or Alteration

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  1. Except as set out in Annex 307.1, no Party may apply a customs duty to a good, regardless of its origin, that re enters its territory after that good has been exported from its territory to the territory of another Party for repair or alteration, regardless of whether such repair or alteration could be performed in its territory.
  2. Notwithstanding Article 303, no Party may apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of another Party for repair or alteration.
  3. Annex 307.3 applies to the Parties specified in that Annex respecting the repair and rebuilding of vessels.

Article 308 : Most-Favored-Nation Rates of Duty on Certain Goods

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  1. Annex 308.1 applies to certain automatic data processing goods and their parts.
  2. Annex 308.2 applies to certain color television tubes.
  3. Each Party shall accord most-favoured-nation duty-free treatment to any local area network apparatus imported into its territory, and shall consult in accordance with Annex 308.3.

Section C - Non-Tariff Measures

Article 309 : Import and Export Restrictions

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  1. Except as otherwise provided in this Agreement, no Party may adopt or maintain any prohibition or restriction on the importation of any good of another Party or on the exportation or sale for export of any good destined for the territory of another Party, except in accordance with Article XI of the GATT, including its interpretative notes, and to this end Article XI of the GATT and its interpretative notes, or any equivalent provision of a successor agreement to which all Parties are party, are incorporated into and made a part of this Agreement.
  2. The Parties understand that the GATT rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, export price requirements and, except as permitted in enforcement of countervailing and antidumping orders and undertakings, import price requirements.
  3. In the event that a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, nothing in this Agreement shall be construed to prevent the Party from :
    1. limiting or prohibiting the importation from the territory of another Party of such good of that non-Party ; or
    2. requiring as a condition of export of such good of the Party to the territory of another Party, that the good not be re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.
  4. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, the Parties, on request of any Party, shall consult with a view to avoiding undue interference with or distortion of pricing, marketing and distribution arrangements in another Party.
  5. Paragraphs 1 through 4 shall not apply to the measures set out in Annex 301.3.

Article 310 : Customs User Fees

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  1. No Party may adopt any customs user fee of the type referred to in Annex 310.1 for originating goods.
  2. The Parties specified in Annex 310.1 may maintain existing such fees in accordance with that Annex.

Article 311 : Country of Origin Marking

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Annex 311 applies to measures relating to country of origin marking.

Article 312 : Wine and Distilled Spirits

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  1. No Party may adopt or maintain any measure requiring that distilled spirits imported from the territory of another Party for bottling be blended with any distilled spirits of the Party.
  2. Annex 312.2 applies to other measures relating to wine and distilled spirits.

Article 313 : Distinctive Products

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Annex 313 applies to standards and labelling of the distinctive products set out in that Annex.

Article 314 : Export Taxes

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Except as set out in Annex 314, no Party may adopt or maintain any duty, tax or other charge on the export of any good to the territory of another Party, unless such duty, tax or charge is adopted or maintained on :
  1. exports of any such good to the territory of all other Parties; and
  2. any such good when destined for domestic consumption.

Article 315 : Other Export Measures

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  1. Except as set out in Annex 315, a Party may adopt or maintain a restriction otherwise justified under Articles XI :2 (a) or XX (g), (i) or (j) of the GATT with respect to the export of a good of the Party to the territory of another Party, only if :
    1. the restriction does not reduce the proportion of the total export shipments of the specific good made available to that other Party relative to the total supply of that good of the Party maintaining the restriction as compared to the proportion prevailing in the most recent 36month period for which data are available prior to the imposition of the measure, or in such other representative period on which the Parties may agree ;
    2. the Party does not impose a higher price for exports of a good to that other Party than the price charged for such good when consumed domestically, by means of any measure, such as licenses, fees, taxation and minimum price requirements. The foregoing provision does not apply to a higher price that may result from a measure taken pursuant to subparagraph (a) that only restricts the volume of exports; and
    3. the restriction does not require the disruption of normal channels of supply to that other Party or normal proportions among specific goods or categories of goods supplied to that other Party.
    4. The Parties shall cooperate in the maintenance and development of effective controls on the export of each other's goods to a non-Party in implementing this Article.

Section D - Consultations

Article 316 : Consultations and Committee on Trade in Goods

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  1. The Parties hereby establish a Committee on Trade in Goods, comprising representatives of each Party.
  2. The Committee shall meet on the request of any Party or the Commission to consider any matter arising under this Chapter.
  3. The Parties shall convene at least once each year a meeting of their officials responsible for customs, immigration, inspection of food and agricultural products, border inspection facilities, and regulation of transportation for the purpose of addressing issues related to movement of goods through the Parties' ports of entry.

Article 317 : Third Country Dumping

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  1. The Parties affirm the importance of cooperation with respect to actions under Article 12 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade.
  2. Where a Party presents an application to another Party requesting antidumping action on its behalf, those Parties shall consult within 30 days respecting the factual basis of the request, and the requested Party shall give full consideration to the request.

Section E - Definitions

Article 318 : Definitions

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For purposes of this Chapter :

Annex 301.3 - Exceptions to Articles 301 and 309

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Section A - Canadian Measures
  1. Articles 301 and 309 shall not apply to controls by Canada on the export of logs of all species.
  2. Articles 301 and 309 shall not apply to controls by Canada on the export of unprocessed fish pursuant to the following existing statutes, as amended as of August 12, 1992 :
    1. New Brunswick Fish Processing Act, R.S.N.B. c. F-18.01 (1982), and Fisheries Development Act, S.N.B. c. F15.1 (1977) ;
    2. Newfoundland Fish Inspection Act, R.S.N. 1990, c. F-12 ;
    3. Nova Scotia Fisheries Act, S.N.S. 1977, c. 9 ;
    4. Prince Edward Island Fish Inspection Act, R.S.P.E.I. 1988, c. F-13 ; and
    5. Quebec Marine Products Processing Act, No. 38, S.Q. 1987, c. 51.
  3. Articles 301 and 309 shall not apply to :
    1. except as provided in Annex 300-A, Appendix 300-A.1, paragraph 4, measures by Canada respecting the importation of any goods enumerated or referred to in Schedule VII of the Customs Tariff, R.S.C. 1985, c. 41 (3rd Supp.), as amended,
    2. measures by Canada respecting the exportation of liquor for delivery into any country into which the importation of liquor is prohibited by law under the existing provisions of the Export Act, R.S.C. 1985, c. E18, as amended,
    3. measures by Canada respecting preferential rates for certain freight traffic under the existing provisions of the Maritime Freight Rate Act, R.S.C. 1985, c. M-1, as amended,
    4. Canadian excise taxes on absolute alcohol used in manufacturing under the existing provisions of the Excise Tax Act, R.S.C. 1985, c. E-14, as amended, and
    5. measures by Canada prohibiting the use of foreign or non-duty paid ships in the coasting trade of Canada unless granted a license under the Coasting Trade Act, S.C. 1992, c. 31,
    to the extent that such provisions were mandatory legislation at the time of Canada's accession to the GATT and have not been amended so as to decrease their conformity with the GATT.
  4. Articles 301 and 309 shall not apply to quantitative import restrictions on goods that originate in the territory of the United States, considering operations performed in, or materials obtained from, Mexico as if they were performed in, or obtained from, a non-Party, and that are indicated by asterisks in Chapter 89 in Annex 401.2 (Tariff Schedule of Canada) of the Canada United States Free Trade Agreement for as long as the measures taken under the Merchant Marine Act of 1920, 46 App. U.S.C. §§ 883, and the Merchant Marine Act of 1936, 46 App. U.S.C. §§ 1171, 1176, 1241 and 1241 (o), apply with quantitative effect to comparable Canadian origin goods sold or offered for sale into the U.S. market.
  5. Articles 301 and 309 shall not apply to :
    1. the continuation or prompt renewal of a non-conforming provision of any statute referred to in paragraph 2 or 3 ; and
    2. the amendment to a non-conforming provision of any statute referred to in paragraph 2 or 3 to the extent that the amendment does not decrease the conformity of the provision with Articles 301 and 309.
Section B - Mexican Measures
  1. Articles 301 and 309 shall not apply to controls by Mexico on the export of logs of all species.
  2. Articles 301 and 309 shall not apply to :
    1. measures under the existing provisions of Articles 192 through 194 of the General Ways of Communication Act (“Ley de Vias Generales de Comunicació n”) reserving exclusively to Mexican vessels all services and operations not authorized for foreign vessels and empowering the Mexican Ministry of Communications and Transportation to deny foreign vessels the right to perform authorized services if their country of origin does not grant reciprocal rights to Mexican vessels ; and
    2. export permit measures applied to goods for exportation to another Party that are subject to quantitative restrictions or tariff rate quotas adopted or maintained by that other Party.
  3. Articles 301 and 309 shall not apply to :
    1. the continuation or prompt renewal of a non-conforming provision of the statute referred to in paragraph 2 (a) ; and
    2. the amendment to a non-conforming provision of the statute referred to in paragraph 2 (a) to the extent that the amendment does not decrease the conformity of the provision with Articles 301 and 309.
    1. Notwithstanding Article 309, for the first 10 years after the date of entry into force of this Agreement, Mexico may adopt or maintain prohibitions or restrictions on the importation of used goods provided for in the items, as of August 12, 1992, in the Tariff Schedule of the General Import Duty Act (Tarifa de la “Ley del Impuesto General de Importació n”) set out below :
    Note : (For purposes of reference only, descriptions are provided next to the corresponding item.)
Item Description
8407.34.99 Gasoline engines of more than 1,000 cm3, except for motorcycles
8413.11.01 Distributors fitted with a measuring device even if it includes a totalizing mechanism
8413.40.01 Trailer type, from 36 up to 60 m3/hr capacity ; without hydraulic elevator for the discharge hose
8426.12.01 Mobile portals on tires and straddle carriers
8426.19.01 Other (overhead travelling cranes, bridge cranes and straddle carriers)
8426.30.01 Portal cranes
8426.41.01 Cranes with structural iron jib (lattice) with mechanical working, self-propelled, with unit weight up to 55 tons
8426.41.02 Cranes with hydraulically actuated rigid jib, selfpropelled with maximum capacity above 9.9 tons and not exceeding 30 tons
8426.41.99 Other (machinery and apparatus, self propelled, on tires)
8426.49.01 Cranes with structural iron jib (lattice) with mechanical working, with unit weight up to 55 tons
8426.49.02 Cranes with hydraulically actuated rigid jib, selfpropelled, with load capacity above 9.9 tons and not exceeding 30 tons
8426.91.01 Cranes, other than those provided for in items 8426.91.02, 8426.91.03 and 8426.91.04
8426.91.02 Cranes with hydraulic working, with articulated or rigid booms, with capacity up to 9.9 tons at 1 meter radius
8426.91.03 Isolated elevating cranes, basket type, with carrying capacity equal to or less than 1 ton and up to 15 meters lift
8426.91.99 Other (machinery and apparatus ; designed for mounting on road vehicles)
8426.99.01 Cranes, other than those provided for in items 8426.91.02
8426.99.02 Swivel cranes
8426.99.99 Other (cranes and air cables (“blondines”) ; overhead travelling cranes, handling or unloading frames, bridge cranes, straddle carriers and straddle cranes)
8427.10.01 With load capacity up to 3,500 kilograms, measured at 620 millimeters from the frontal surface of the forks, without battery or loader
8427.20.01 With explosion or internal combustion engine, with carrying capacity up to 7,000 kilograms, measured at 620 millimeters from the frontal surface of the forks
8428.40.99 Other (escalators and moving walkways)
8428.90.99 Other (machinery and apparatus for lifting, loading, unloading or handling)
8429.11.01 Caterpillar type
8429.19.01 Other (bulldozers and angledozers)
8429.20.01 Graders
8429.30.01 Scrapers
8429.40.01 Tamping machines
8429.51.02 Frontend loader with hydraulic working, wheeltype, with capacity equal or less than 335 HP
8429.51.03 Mechanical shovels, other than those provided for in item 8429.51.01
8429.51.99 Other (mechanical shovels, excavators, loaders and frontend shovel loaders)
8429.52.02 Draglines or excavators, other than those provided for in item 8429.52.01
8429.52.99 Other (machinery with a 360° revolving superstructure)
8429.59.01 Trenchers
8429.59.02 Draglines, with dragging load capacity up to 4,000 kilograms
8429.59.03 Draglines or excavators, other than those provided for in item 8429.59.04
8429.59.99 Other (selfpropelled bulldozers, angledozers, graders, scrapers, mechanical shovels, excavators, loaders, shovel loaders, tamping machines and road rollers)
8430.31.01 Rotation and/or percussion perforators
8430.31.99 Other (selfpropelled cutters, pullers or wrenchers and machines to open tunnels or galleries)
8430.39.01 Boring shields
8430.39.99 Other (not selfpropelled cutters, pullers or wrenchers and machines to open tunnels or galleries)
8430.41.01 Boring or sinking machinery, other than those provided for in item 8430.41.02
8430.41.99 Other (selfpropelled probing or boring machinery)
8430.49.99 Other (not selfpropelled probing or boring machinery)
8430.50.01 Excavators, frontal carriers with hydraulic mechanism, with capacity equal to or less than 335 HP
8430.50.02 Scrapers
8430.50.99 Other (selfpropelled machinery and apparatus)
8430.61.01 Graders (pushers)
8430.61.02 Tamping or compacting rollers
8430.61.99 Other (machinery and apparatus, not selfpropelled)
8430.62.01 Scarification machine (ripping machine)
8430.69.01 Scrapers, not selfpropelled
8430.69.02 Trencher machine, other than those provided for in item 8430.69.03
8430.69.99 Other (trenchers, other than those provided for in items 8430.69.01, 8430.69.02 and 8430.69.03)
8452.10.01 Sewing machines of the household type
8452.21.04 Industrial machines, other than those provided for in items 8452.21.02, 8452.21.03 and 8452.21.05
8452.21.99 Other (automatic sewing machines)
8452.29.05 Machines or heads for industrial use, with straight seams, straight needle and a rotating and oscillating thread linking device, double backstitching, flat bed and transportation only
8452.29.06 Industrial machines, other than those provided for in items 8452.29.01, 8452.29.03 and 8452.29.05
8452.29.99 Other (non-automatic sewing machines)
8452.90.99 Other (parts of sewing machines)
8471.10.01 Analogue or hybrid automatic data processing machines
8471.20.01 Digital or numerical automatic data processing machines, containing in the same housing at least a central processing unit and an input and output unit
8471.91.01 Numerical or digital processing units, even if presented with the rest of the system, including one or two of the following types of units contained in the same housing : storage units, input units, output unit
8471.92.99 Other (input or output units whether or not entered with the rest of a system and whether or not containing storage units in the same housing)
8471.93.01 Storage units, including the rest of the system
8471.99.01 Other (automatic data processing machines and units thereof)
8474.20.01 Crushing and grinding with two or more cylinders
8474.20.02 Crushing jawbone and grinding millstone
8474.20.03 Blade crushing machines
8474.20.04 Crushing machines of balls or bars
8474.20.05 Drawer cone crushing, with diameter no more than 1200 millimeters
8474.20.06 Grinding hammer percussion
8474.20.99 Other (machines and apparatus to break, crush or grind or pulverize dirt, stones and other solid mineral materials)
8474.39.99 Other (mixing machines)
8474.80.99 Other (machines and apparatus to classify, sieve, separate, break, crush, grind, mix, or knead dirt, stones and other mineral materials)
8475.10.01 Machines for assembling lamps
8477.10.01 Injectionmolding machines for thermoplastic materials, up to 5 kg capacity for one molding model
8701.30.01 Caterpillar tractors with an engine power at the flywheel equal to or above 105 HP, but less than 380 HP measured at 1,900 rpm, including pushing blade
8701.90.02 Railroad tractors, on tires with mechanical mechanism for pavement
8711.10.01 Motorcycles fitted with an auxiliary motor with reciprocating piston engine not exceeding 50 cm3
8711.20.01 Motorcycles fitted with an auxiliary motor with reciprocating piston engine over 50 cm3 but not over 250 cm3
8711.30.01 Motorcycles fitted with an auxiliary motor with reciprocating piston engine over 250 cm3 but not over 500 cm3
8711.40.01 Motorcycles fitted with an auxiliary motor with reciprocating piston engine over 500 cm3 but less than 550 cm3
8711.90.99 Other (motorcycles, cycles fitted with an auxiliary motor and sidecars without a reciprocating piston engine, and that are not sidecars for motorcycles and velocipedes of any kind presented separately)
8712.00.02 Bicycles, other than of the type for racing
8712.00.99 Other (cycles, not motorized, except bicycles, and tricycles for the transport of merchandise)
8716.10.01 Trailers and semitrailers for housing and camping, of the caravan type
8716.31.02 Steeltank type tankers, including cryogenic or hoppers
8716.31.99 Other (tankers except of the steeltank type, and of the thermal type for the transportation of milk)
8716.39.01 Trailers or semitrailers of the platform type, with or without stakes, including those accepted for the transport of boxes or metal baskets for cans and bottles or container carriers, or low beds, except those with hydraulic or pneumatic suspension and collapsible gooseneck
8716.39.02 Trailers or semitrailers for the transport of vehicles
8716.39.04 Trailers of the modularplatform type with directional axis, including transporter bridge section, hydraulic couplings or gooseneck or motor for hydraulic conditioning of the equipment
8716.39.05 Semitrailers of the lowbed type, with pneumatic or hydraulic suspension and collapsible gooseneck
8716.39.06 Trailers and semitrailers of the closedbox type, including refrigerated
8716.39.07 Trailers and semitrailers of the steeltank type, including cryogenic and hoppers
8716.39.99 Other (trailers and semitrailers for the transportation of goods, other than those provided for in items 8716.39.01, 8716.39.02, 8716.39.04, 8716.39.05, 8716.39.06 and 8716.39.07, and that are not vehicles for the transport of goods, with solid rubber wheels, nor doubledecker trailers or semitrailers of the type recognized as used exclusively for hauling cattle
8716.40.01 Other trailers and semitrailers not used for transporting goods
8716.80.99 Other (non-automotive vehicles except trailers or semitrailers, wheel barrows and handcarts, or wheel barrows of hydraulic operation)
b) Notwithstanding subparagraph (a), Mexico shall not prohibit or restrict the importation, on a temporary basis, of used goods provided for in the items set out in subparagraph (c) for the provision of a crossborder service subject to Chapter Twelve (CrossBorder Trade in Services) or the performance of a contract subject to Chapter Ten (Government Procurement), provided that the imported goods
  1. are necessary to the provision of the cross border service or the performance of the contract awarded to a supplier of another Party,
  2. are used solely by or under the supervision of the service provider or the supplier performing the contract,
  3. are not sold, leased or loaned while in the territory of Mexico,
  4. are imported in no greater quantity than is necessary for the provision of the service or the performance of the contract,
  5. are reexported promptly on completion of the service or the contract, and
  6. comply with other applicable requirements on the importation of such goods to the extent they are not inconsistent with this Agreement.
c) Subparagraph (b) applies to used goods provided for in the following items :
Item Description
8413.11.01 Distributors fitted with a measuring device even if it includes a totalizing mechanism
8413.40.01 Concrete pumps for liquids, not fitted with a measuring device from 36 up to 60 m3/hr capacity
8426.12.01 Mobile portals on tires and straddle carriers
8426.19.01 Other (overhead travelling cranes, bridge cranes and straddle carriers)
8426.30.01 Portal cranes
8426.41.01 Cranes with hydraulically actuated rigid jib, selfpropelled with maximum capacity above 9.9 tons and not exceeding 30 tons
8426.41.02 Cranes with structural iron jib (lattice) with mechanical working, selfpropelled, with unit weight up to 55 tons
8426.41.99 Other (machinery and apparatus, self propelled, on tires)
8426.49.01 Cranes with structural iron jib (lattice) with mechanical working, with unit weight up to 55 tons
8426.49.02 Cranes with hydraulically actuated rigid jib, selfpropelled, with load capacity above 9.9 tons and not exceeding 30 tons
8426.91.01 Cranes, other than those provided for in items 8426.91.02, 8426.91.03 and 8426.91.04
8426.99.01 Cranes
8426.99.02 Swivel cranes
8426.99.99 Other [cranes and air cables (“blondines”) ; overhead travelling cranes, handling or unloading frames, bridge cranes, straddle carriers and straddle cranes]
8427.10.01 With load capacity up to 3,500 kilograms, measured at 620 millimeters from the frontal surface of the forks, without battery or loader
8428.40.99 Other (escalators and moving walkways)
8428.90.99 Other (machinery and apparatus for lifting, loading, unloading or handling)
8429.11.01 Caterpillar type
8429.19.01 Other (bulldozers and angledozers)
8429.30.01 Scrapers
8429.40.01 Tamping machines
8429.51.02 Frontend loader with hydraulic working, wheeltype, with capacity equal or less than 335 HP
8429.51.03 Mechanical shovels, other than those provided for in item 8429.51.01
8429.51.99 Other (mechanical shovels, excavators, loaders and frontend shovel loaders)
8429.52.02 Draglines or excavators, other than those provided for in item 8429.52.01
8429.52.99 Other (machinery with a 360° revolving superstructure)
8429.59.01 Trenchers
8429.59.02 Draglines, with dragging load capacity up to 4,000 kilograms
8429.59.03 Draglines or excavators, other than those provided for in item 8429.59.04
8429.59.99 Other (selfpropelled bulldozers, angledozers, graders, scrapers, mechanical shovels, excavators, loaders, shovel loaders, tamping machines and road rollers)
8430.31.01 Rotation and/or percussion perforators
8430.31.99 Other (selfpropelled cutters, pullers or wrenchers and machines to open tunnels or galleries)
8430.39.01 Boring shields
8430.39.99 Other (not selfpropelled cutters, pullers or wrenchers and machines to open tunnels or galleries)
8430.41.01 Boring or sinking machinery, other than those provided for in item 8430.41.02
8430.41.99 Other (selfpropelled probing or boring machinery)
8430.49.99 Other (not selfpropelled probing or boring machinery)
8430.50.01 Excavators, frontal loaders with hydraulic mechanism, with capacity equal to or less than 335 HP
8430.50.02 Scrapers
8430.50.99 Other (selfpropelled machinery and apparatus)
8430.61.01 Graders (pushers)
8430.61.02 Tamping or compacting rollers
8430.62.01 Scarification machine (ripping machine)
8430.69.01 Scrapers, not selfpropelled
8430.69.02 Trencher machine, other than those provided for in item 8430.69.03
8430.69.99 Other (trenchers, other than those provided for in items 8430.69.01, 8430.69.02 and 8430.69.03)
8452.10.01 Sewing machines of the household type
8452.21.04 Industrial machines, other than those provided for in items 8452.21.02, 8452.21.03 and 8452.21.05
8452.21.99 Other (automatic sewing machines)
8452.29.06 Industrial machines, other than those provided for in items 8452.29.01, 8452.29.03 and 8452.29.05
8452.29.99 Other (non-automatic sewing machines)
8452.90.99 Other (parts of sewing machines)
8471.10.01 Analogue or hybrid automatic data processing machines
8474.20.01 Crushing and grinding with two or more cylinders
8474.20.03 Blade crushing machines
8474.20.04 Crushing machines of balls or bars
8474.20.99 Other (machines and apparatus to break, crush or grind or pulverize dirt, stones and other solid mineral materials)
8474.39.99 Other (mixing machines)
8474.80.99 Other (machines and apparatus to classify, sieve, separate, break, crush, grind, mix, or knead dirt, stones and other mineral materials)
8477.10.01 Injectionmolding machines for thermoplastic materials, up to 5 kg capacity for one molding model
8701.30.01 Caterpillar tractors with an engine power at the flywheel equal to or above 105 HP, but less than 380 HP measured at 1,900 rpm, including pushing blade
Section C - U.S. Measures
  1. Articles 301 and 309 shall not apply to controls by the United States on the export of logs of all species.
  2. Articles 301 and 309 shall not apply to :
    1. taxes on imported perfume containing distilled spirits under existing provisions of section 5001 (a) (3) and 5007 (b) (2) of the Internal Revenue Code of 1986, 26 U.S.C. 5001 (a) (3), 5007 (b) (2), and
    2. measures under existing provisions of the Merchant Marine Act of 1920, 46 App. U.S.C. 883 ; the Passenger Vessel Act, 46 App. U.S.C. 289, 292, and 316 ; and 46 U.S.C. 12108, to the extent that such measures were mandatory legislation at the time of the United States' accession to the GATT and have not been amended so as to decrease their conformity with the GATT.
  3. Articles 301 and 309 shall not apply to :
    1. the continuation or prompt renewal of a non-conforming provision of any statute referred to in paragraph 2 ; and
    2. the amendment to a non-conforming provision of any statute referred to in paragraph 2 to the extent that the amendment does not decrease the conformity of the provision with Articles 301 and 309.
Annex 302.2 - Tariff Elimination

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  1. Except as otherwise provided in a Party's Schedule attached to this Annex, the following staging categories apply to the elimination of customs duties by each Party pursuant to Article 302 (2) :
    1. duties on goods provided for in the items in staging category A in a Party's Schedule shall be eliminated entirely and such goods shall be duty-free, effective January 1, 1994 ;
    2. duties on goods provided for in the items in staging category B in a Party's Schedule shall be removed in five equal annual stages beginning on January 1, 1994, and such goods shall be duty-free, effective January 1, 1998 ;
    3. duties on goods provided for in the items in staging category C in a Party's Schedule shall be removed in 10 equal annual stages beginning on January 1, 1994, and such goods shall be duty-free, effective January 1, 2003 ;
    4. duties on goods provided for in the items in staging category C+ in a Party's Schedule shall be removed in 15 equal annual stages beginning on January 1, 1994, and such goods shall be duty-free, effective January 1, 2008 ; and
    5. goods provided for in the items in staging category D in a Party's Schedule shall continue to receive duty-free treatment.
  2. The base rate of customs duty and staging category for determining the interim rate of customs duty at each stage of the U.S. Generalized System of Preferences and the General Preferential Tariff of Canada.
  3. For the purpose of the elimination of customs duties in accordance with Article 302, interim staged rates shall be rounded down, except as set out in each Party's Schedule attached to this Annex, at least to the nearest tenth of a percentage point or, if the rate of duty is expressed in monetary units, at least to the nearest .001 of the official monetary unit of the Party.
  4. Canada shall apply a rate of customs duty no higher than the rate applicable under the staging category set out for an item in Annex 401.2, as amended, of the Canada-United States Free Trade Agreement which Annex is hereby incorporated into and made a part of this Agreement, to an originating good provided that :
    1. notwithstanding any provision in Chapter Four, in determining whether such good is an originating good, operations performed in or materials obtained from Mexico are considered as if they were performed in or obtained from a non-Party ; and
    2. any processing that occurs in Mexico after the good would qualify as an originating good in accordance with subparagraph (a) does not increase the transaction value of the good by greater than seven percent.
  5. Canada shall apply a rate of customs duty no higher than the rate applicable under the staging category set out for an item in Column I of its Schedule to this Annex to an originating good provided that :
    1. notwithstanding any provision in Chapter Four, in determining whether such good is an originating good, operations performed in or materials obtained from the United States are considered as if they were performed in or obtained from a non-Party ; and
    2. any processing that occurs in the United States after subparagraph (a) does not increase the transaction value of the good by greater than seven percent.
  6. Canada shall apply to an originating good to which neither paragraph 4 nor 5 applies a rate of customs duty no higher than the rate indicated for its corresponding item in Column II of its Schedule to this Annex. The rate of customs duty in Column II for such good shall be :
    1. in each year of the staging category indicated in Column I, the higher of
      1. the rate of customs duty under the staging category set out for the item in Annex 401.2, as amended, of the Canada-United States Free Trade Agreement, and
      2. the General Preferential Tariff rate of customs duty for the item applied on July 1, 1991, reduced in accordance with the applicable staging category set out for the item in Column I of its Schedule to this Annex ; or
    2. where specified in Column II of its Schedule to this Annex, the most-favored-nation rate of customs duty for the item applied on July 1, 1991, reduced in accordance with the applicable staging category set out for the item in Column I of its Schedule to this Annex, or reduced in accordance with the applicable staging category otherwise indicated.
  7. Paragraphs 4 through 6 and 10 through 13 shall not apply to textile and apparel goods identified in Appendix 1.1 of Annex 300-B (Textiles and Apparel Goods).
  8. Paragraphs 4, 5 and 6 shall not apply to agricultural goods as defined in Article 708. For these goods, Canada shall apply the rate applicable under the staging category set out for an item in Annex 401.2, as amended, of the Canada-United States Free Trade Agreement to an originating good when the good qualifies to be marked as a good of the United States pursuant to Annex 311, without regard to whether the good is marked. When an originating good qualifies to be marked as a good of Mexico, pursuant to Annex 311, whether or not the good is marked, Canada shall apply the rate applicable under the staging category set out for an item in Column I of its Schedule to this Annex.
  9. As between the United States and Canada, Articles 401 (7) and 401 (8) of the Canada-United States Free Trade Agreement is hereby incorporated and made a part of this Annex. The term “goods originating in the territory of the United States of America” in Article 401 (7) of that agreement shall be determined in accordance with paragraph 4 of this Annex. The term “goods originating shall be determined in accordance with paragraph 12 of this Annex.
  10. Mexico shall apply a rate of customs duty no higher than the rate applicable under the staging category set out for an item in Column I of its Schedule to this Annex to an originating good when the good qualifies to be marked as a good of the United States, pursuant to Annex 311, without regard to whether the good is marked.
  11. Mexico shall apply a rate of customs duty no higher than the rate applicable under the staging category set out for an item in Column II of its Schedule to this Annex to an originating good when the good qualifies to be marked as a good of Canada, pursuant to Annex 311, without regard to whether the good is marked.
  12. The United States shall apply a rate of customs duty no higher than the rate applicable under the staging category set out for an item in Annex 401.2, as amended, of the Canada-United States Free Trade Agreement to an originating good when the good qualifies to be marked as a good of Canada pursuant to Annex 311, without regard to whether the good is marked.
  13. The United States shall apply a rate of customs duty no higher than the rate applicable under the staging category set out for an item in its Schedule to this Annex to an originating good when the good qualifies to be marked as a good of Mexico pursuant to Annex 311, whether or not the good is marked.

Schedule of Canada

(TARIFF SCHEDULE ATTACHED AS SEPARATE VOLUME)

Schedule of Mexico

(TARIFF SCHEDULE ATTACHED AS SEPARATE VOLUME)

Schedule of the United States

(TARIFF SCHEDULE ATTACHED AS SEPARATE VOLUME)
Annex 303.6 - Goods Not Subject to Article 303

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  1. For exports from the territory of the United States to the territory of Canada or Mexico, a good provided for in U.S. tariff item 1701.11.02 that is imported into the territory of the United States and used as a material in the production of, or substituted by an identical or similar good used as a material in the production of, a good provided for in Canadian tariff item 1701.99.00 or Mexican tariff items 1701.99.01 and 1701.99.99 (refined sugar).
  2. For trade between Canada and the United States the following are not subject to Article 303 :
    1. imported citrus products ;
    2. an imported good used as a material in the production of, or substituted by an identical or similar good used as a material in the production of, a good provided for in U.S. items 5811.00.20 (quilted cotton piece goods), 5811.00.30 (quilted man-made piece goods) or 6307.90.99 (furniture moving pads), or Canadian items 5811.00.10 (quilted cotton piece goods), 5811.00.20 (quilted man-made piece goods) or 6307.90.30 (furniture moving pads), that are subject to the most-favored-nation rate of duty when exported to the territory of the other Party ; and
    3. an imported good used as a material in the production in the production of, apparel that is subject to the most-favored-nation rate of duty when exported to the territory of the other Party.
Annex 303.7 - Effective Dates for the Application of Article 303

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Section A - Canada

For Canada, Article 303 shall apply to a good imported into the territory of Canada that is :
  1. subsequently exported to the territory of the United States on or after January 1, 1996, or subsequently exported to the territory of Mexico on or after January 1, 2001 ;
  2. used as a material in the production of another good that is subsequently exported to the territory of the United States on or after January 1, 1996, or used as a material in the production of another good that is subsequently exported to the territory of Mexico on or after January 1, 2001 ; or
  3. substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of the United States on or after January 1, 1996, or substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of Mexico on or after January 1, 2001.

Section B - Mexico

For Mexico, Article 303 shall apply to a good imported into the territory of Mexico that is :
  1. subsequently exported to the territory of another Party on or after January 1, 2001 ;
  2. used as a material in the production of another good that is subsequently exported to the territory of another Party on or after January 1, 2001 ; or
  3. substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of another Party on or after January 1, 2001.

Section C - United States

For the United States, Article 303 shall apply to a good imported into the territory of the United States that is :
  1. subsequently exported to the territory of Canada on or after January 1, 1996, or subsequently exported to the territory of Mexico on or after January 1, 2001 ;
  2. used as a material in the production of another good that is subsequently exported to the territory of Canada on or after January 1, 1996, or used as a material in the production of another good that is subsequently exported to the territory of Mexico on or after January 1, 2001 ; or
  3. substituted by an identical or similar good used as a material in the production of another good subsequently exported to the territory of Canada on or after January 1, 1996, or substituted by an identical or similar good used as a material in the production of another good subsequently exported to the territory of Mexico on or after January 1, 2001.

Annex 303.8 - Exception to Article 303 (8) for Certain Color Cathode-Ray Television Picture Tubes
Mexico

Mexico may refund customs duties paid, or waive or reduce the amount of customs duties owed, on a good provided for in item 8540.11.aa (color cathode-ray television picture tubes, including video monitor cathode-ray tubes, with a diagonal exceeding 14 inches) or 8540.11.cc (color cathode-ray television picture tubes for high definition television, with a diagonal exceeding 14 inches) for a person who, during the period July 1, 1991 through June 30, 1992, imported into its territory no fewer than 20,000 units of such good that would not have been considered to be an originating good had this Agreement been in force during that period, where the good is :
  1. subsequently exported from the territory of Mexico to the territory of the United States, or is used as a material in the production of another good that is subsequently exported from the territory of Mexico to the territory of the United States, or is substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of the United States, in an amount, for all such persons combined, no greater than
    1. 1,200,000 units in 1994,
    2. 1,000,000 units in 1995,
    3. 800,000 units in 1996,
    4. 600,000 units in 1997,
    5. 400,000 units in 1998,
    6. 200,000 units in 1999, and
    7. zero units in 2000 and thereafter, provided that the number of units of the good on which such customs duties may be refunded, waived or reduced in any year shall be reduced, with respect to that year, by the number of units of such good that qualifies as an originating good during the year immediately preceding that year, considering operations performed in, or materials obtained from, the territories of Canada and the United States as if they were performed in, or obtained from, a non-Party ;
    or
  2. subsequently exported from the territory of Mexico to of another good that is subsequently exported from the territory of Mexico to the territory of Canada, or is substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of Canada, for all such persons combined, in an amount no greater than
    1. 75,000 units in 1994,
    2. 50,000 units in 1995, and
    3. zero units in 1996 and thereafter.

Annex 304.1 - Exceptions for Existing Waiver Measures

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Article 304 (1) shall not apply in respect of existing Mexican waivers of customs duties, except that Mexico shall not :
  1. increase the ratio of customs duties waived to customs duties owed relative to the performance required under any such waiver ; or
  2. add any type of imported good to those qualifying on July 1, 1991, in respect of any waiver of customs duties in effect on that date.

Annex 304.2 - Continuation of Existing Waivers of Customs Duties

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For purposes of Article 304 (2) :
  1. as between Canada and Mexico, Canada may condition on the fulfillment of a performance requirement the waiver of customs duties under any measure in effect on or before January 1, 1989, on any goods entered or withdrawn from warehouse for consumption before January 1, 1998 ;
  2. as between Canada and the United States, Article 405 of the Canada-United States Free Trade Agreement is hereby incorporated and made a part of this Annex solely with respect to measures adopted by Canada or the United States prior to the date of entry into force of this Agreement ;
  3. Mexico may condition on the fulfillment of a performance requirement the waiver of customs duties under any measure in effect on July 1, 1991, on any goods entered or withdrawn from warehouse for consumption before January 1, 2001 ; and
  4. Canada may grant waivers of customs duties as set out in Annex 300-A (Trade and Investment in the Automotive Sector).

Annex 307.1 - Goods Re-Entered after Repair or Alteration

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Section A - Canada

Canada may impose customs duties on goods, regardless of their origin, that re-enter its territory after such goods have been exported from its territory to the territory of another Party for repair or alteration as follows :
  1. for goods set out in Section D that re-enter its territory from the territory of Mexico, Canada shall apply to the value of the repair or alteration of such goods the rate of customs duty for such goods applicable under its Schedule to Annex 302.2 ;
  2. for goods other than those set out in Section D that re-enter its territory from the territory of the United States or Mexico, other than goods repaired or altered pursuant to a warranty, Canada shall apply to the value of the repair or alteration of such goods the rate of customs duty for such goods applicable under the Tariff Schedule of Canada attached to Annex 401.2 of the Canada United States Free Trade Agreement, as incorporated into Annex 302.2 of this Agreement ; and
  3. for goods set out in Section D that re-enter its territory from the territory of the United States, Canada shall apply to the value of the repair or alteration of such goods the rate of customs duty for such goods applicable under its Schedule attached to Annex 401.2 of the Canada United States Free Trade Agreement, as incorporated into Annex 302.2 of this Agreement.

Section B - Mexico

Mexico may impose customs duties on goods set out in Section D, regardless of their origin, that re-enter its territory after such goods have been exported from its territory to the territory of another Party for repair or alteration, by applying to the value of the repair or alteration of those goods the rate of customs duty for such goods that would apply if such goods were included in staging category B in Mexico's Schedule to Annex 302.2.

Section C - United States
  1. The United States may impose customs duties on :
    1. goods set out in Section D, or
    2. goods that are not set out in Section D and that are not repaired or altered pursuant to a warranty,
    3. regardless of their origin, that reenter its territory after such goods have been exported from its territory to the territory of Canada for repair or alteration, by applying to the value of the repair or alteration of such goods the rate of customs duty applicable under the Canada United States Free Trade Agreement, as incorporated into Annex 302.2 of this Agreement.
  2. The United States may impose customs duties on goods set out in Section D, regardless of their origin, that re-enter its territory after such goods have been exported from its territory to the territory of Mexico for repair or alteration, by applying to the value of the repair or alteration of such goods a rate of customs duty of 50 percent reduced in five equal annual stages beginning on January 1, 1994, and the value of such repair or alteration shall be duty-free on January 1, 1998.
Section D - List of Goods

Any vessel, including the following goods, documented by a Party under its law to engage in foreign or coastwise trade, or a vessel intended to be employed in such trade :
  1. cruise ships, excursion boats, ferryboats, cargo ships, barges and similar vessels for the transport of persons or goods, including
    1. tankers,
    2. refrigerated vessels, other than tankers, and
    3. other vessels for the transport of goods and other vessels for the transport of both persons and goods, including open vessels ;
  2. fishing vessels, including factory ships and other vessels for processing or preserving fishery products of a registered length not exceeding 30.5 m ;
  3. lightvessels, fire-floats, dredgers, floating cranes, and other vessels the navigability of which is subsidiary to their main function, floating docks, floating or submersible drilling or production platforms ; and drilling ships, drilling barges and floating drilling rigs ; and
  4. tugboats.
Annex 307.3 - Repair and Rebuilding of Vessels

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United States

For the purpose of increasing transparency regarding the types of repairs that may be performed in shipyards outside the territory of the United States that do not result in any loss of privileges for such vessel to :
  1. remain eligible to engage in coastwise trade or to access U.S. fisheries,
  2. transport U.S. government cargo, or
  3. participate in U.S. assistance programs, including the “operating difference subsidy,”

the United States shall,
4) provide written clarification no later than July 1, 1993, to the other Parties of current U.S. Customs and Coast Guard practices that constitute, and differentiate between, the repair and the rebuilding of vessels, including clarifications with respect to “jumboizing”, vessel conversions and casualty repairs, and
5) begin a process, no later than the date of entry into force of this Agreement, to define the terms repairs and rebuilding under U.S. maritime law, including the Merchant Marine Act of 1920, 46 App. U.S.C. 883, and the Merchant Marine Act of 1936, 46 App. U.S.C. 1171, 1176, 1241 and 1241 (o).

Annex 308.1 - Most-Favored-Nation Rates of Duty on Certain Automatic Data Processing Goods and Their Parts

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Section A - General Provisions
  1. Each Party shall reduce its most-favored-nation rate of duty applicable to a good provided for under the tariff provisions set out in Tables 308.1.1 and 308.1.2 in Section B to the rate set out therein, to the lowest rate agreed by any Party in the Uruguay Round of Multilateral Trade Negotiations, or to such reduced rate as the Parties may agree, in accordance with the schedule set out in Section B, or with such accelerated schedule as the Parties may agree.
  2. Notwithstanding Chapter Four (Rules of Origin), when the most-favored-nation rate of duty applicable to a good provided for under the tariff provisions set out in Table 308.1.1 in Section B conforms with the rate established under paragraph 1, each Party shall consider the good, when imported into its territory from the territory of another Party, to be an originating good.
  3. A Party may reduce in advance of the schedule set out in Table 308.1.1 or Table 308.1.2 in Section B, or of such accelerated schedule as the Parties may agree, its most-favored-nation rate of duty applicable to any good provided for under the tariff provisions set out therein, to the lowest rate agreed by any Party in the Uruguay Round of Multilateral Trade Negotiations, or the rate set out in Table 308.1.1 or 308.1.2, or to such reduced rate as the Parties may agree.
  4. For greater certainty, most-favored-nation rate of duty does not include any other concessionary rate of duty.
Section B - Rates of Duty and Schedule for Reduction

Table 308.1.1

  Tariff Rate Schedule 1
Automatic Data Processing Machines (ADP)    
8471.10
 3.9 % S
8471.20
 3.9 % S
Digital Processing Units    
8471.91
 3.9 % S
Input or Output Units    
Combined Input/Output Units
    
Canada :
    
8471.92.10
 3.7 % S
Mexico :
    
8471.92.09
 3.7 % S
United States :
    
8471.92.10
 3.7 % S
Display Units :
    
Canada :
    
8471.92.32
 3.7 % S
8471.92.33
 Free S
8471.92.34
 3.7 % S
8471.92.39
 3.7 % S
Mexico :
    
8471.92.10
 3.7 % S
8471.92.11
 Free S
United States :
    
8471.92.30
 Free S
8471.92.40.75
 3.7 % S
8471.92.40.85
 3.7 % S
Other Input or Output Units :
    
Canada :
    
8471.92.40
 3.7 % S
8471.92.50
 Free S
8471.92.90
 Free S
Mexico :
    
8471.92.12
 3.7 % S
8471.92.99
 Free S
United States :
    
8471.92.20
 Free S
8471.92.80
 Free S
8471.92.90.20
 Free S
8471.92.90.40
 3.7 % S
8471.92.90.60
 Free S
8471.92.90.80
 Free S
Storage Units    
8471.93
 Free S
Other Units of Automatic Data Processing Machines    
8471.99
 Free S
Parts of Computers    
8473.30
 Free R
Computer Power Supplies    
Canada :
    
8504.40.40
 Free S
8504.90.80
 Free S
Mexico :
    
8504.40.12
 Free S
8504.90.08
 Free S
United States :
    
8504.40.00A
 Free S
8504.40.00B
 Free S
8504.90.00B
 Free S
1
R on the date of entry into force of this Agreement
S in five equal annual stages commencing January 1, 1999.

Table 308.1.2

  Tariff Rate Schedule 1
Metal Oxide Varistors    
Canada :
    
8533.40.10
 Free R
Mexico :
    
8533.40.07
 Free R
United States :
    
8533.40.00A
 Free R
Diodes, Transistors and Similar Semiconductor Devices ; Photosensitive Semiconductor Devices ; Light Emitting Diodes ; Mounted Piezo-electric Crystals    
8541.10
 Free R
8541.21
 Free R
8541.29
 Free R
8541.30
 Free R
8541.50
 Free R
8541.60
 Free R
8541.90
 Free R
Canada :
    
8541.40
 Free R
Mexico :
    
8541.40
 Free R
United States :
    
8541.40.20
 Free S
8541.40.60
 Free R
8541.40.70
 Free R
8541.40.80
 Free R
8541.40.95
 Free R
Electronic Integrated Circuits and Microassemblies    
8542
 Free R
1
R on the date of entry into force of this Agreement
S in five equal annual stages commencing January 1, 1999.

Annex 308.2 : Most-Favored-Nation Rates of Duty on Certain Color Cathode-Ray Television Picture Tubes [ document missing ]
Annex 308.3 : Most-Favored-Nation Duty-Free Treatment of Local Area Network Apparatus [ document missing ]
Annex 310.1 : Existing Customs User Fees [ document missing ]
Annex 311 : Country of Origin Marking [ document missing ]
Annex 312.2 : Wine and Distilled Spirits [ document missing ]
Annex 313 : Distinctive Products [ document missing ]
Annex 314 : Export Taxes [ document missing ]
Annex 315 : Other Export Measures [ document missing ]

Annex 300-A : Trade and Investment in the Automotive Sector

table of chapter contents


Appendix 300-A.1 : Canada
Appendix 300-A.2 : Mexico
Appendix 300-A.3 : United States - Corporate Average Fuel Economy
  1. Each Party shall accord to all existing producers of vehicles in its territory treatment no less favourable than it accords to any new producer of vehicles in its territory under the measures referred to in this Annex, except that this obligation shall not be construed to apply to any differences in treatment specifically provided for in the Appendices to this Annex.
  2. The Parties shall review, no later than December 31, 2003, the status of the North American automotive sector and the effectiveness of the measures referred to in this Annex to determine actions that could be taken to strengthen the integration and global competitiveness of the sector.
  3. Appendices 300-A.1, 300-A.2 and 300-A.3 apply to the Parties specified therein respecting trade and investment in the automotive sector.
  4. For purposes of this Annex, unless otherwise specified in the Appendices :
    • existing producer of vehicles means a producer that was producing vehicles in the territory of the relevant Party prior to model year 1992 ;
    • new producer of vehicles means a producer that began producing vehicles in the territory of the relevant Party after model year 1991 ;
    • used vehicle means a vehicle that :
      1. has been sold, leased or loaned ;
        1. has been driven for more than 1,000 kilometers if the vehicle has a gross weight of less than five metric tons, or
        2. has been driven for more than 5,000 kilometers if the vehicle has a gross weight of five metric tons or more ; or
        3. was manufactured prior to the current year and at least 90 days have elapsed since the date of manufacture ;
      and
    • vehicle means an automobile, a truck, a bus or a special purpose motor vehicle, not including a motorcycle.
Appendix 300-A.1 - Canada

table of chapter contents

Existing Measures

  1. Canada and the United States may maintain the Agreement Concerning Automotive Products between the Government of Canada and the Government of the United States of America, signed at Johnson City, Texas, January 16, 1965 and entered into force on September 16, 1966, in accordance with Article 1001, and Article 1002 (1) and (4) (as they refer to Annex 1002.1, Part One), Article 1005 (1) and (3), and Annex 1002.1, Part One (Waivers of Customs Duties) of the Canada - United States Free Trade Agreement, which provisions are hereby incorporated into and made a part of this Agreement for such purpose, except that for purposes of Article 1005 (1) of that agreement, Chapter Four (Rules of Origin) of this Agreement shall be applied in the place of Chapter Three of the Canada - United States Free Trade Agreement.
  2. Canada may maintain the measures referred to in Article 1002 (1) and (4) (as they refer to Annex 1002.1, Parts Two and Three), Article 1002 (2) and (3), Article 1003 and Parts Two (Export-Based Waivers of Customs Duties) and Three (Production- Based Waivers of Customs Duties) of Annex 1002.1 of the Canada - United States Free Trade Agreement. Canada shall eliminate those measures in accordance with the terms set out in that agreement.
  3. For greater certainty, the differences in treatment pursuant to paragraphs 1 and 2 shall not be considered to be inconsistent with Article 1103 (Investment - Most-Favoured-Nation Treatment).

Used Vehicles

4) Canada may adopt or maintain prohibitions or restrictions on imports of used vehicles from the territory of Mexico, except as follows :
  1. beginning January 1, 2009, Canada may not adopt or maintain a prohibition or restriction on imports from the territory of Mexico of originating used vehicles that are at least 10 years old ;
  2. beginning January 1, 2011, Canada may not adopt or maintain a prohibition or restriction on imports from the territory of Mexico of originating used vehicles that are at least eight years old ;
  3. beginning January 1, 2013, Canada may not adopt or maintain a prohibition or restriction on imports from the territory of Mexico of originating used vehicles that are at least six years old ;
  4. beginning January 1, 2015, Canada may not adopt or maintain a prohibition or restriction on imports from the territory of Mexico of originating used vehicles that are at least four years old ;
  5. beginning January 1, 2017, Canada may not adopt or maintain a prohibition or restriction on imports from the territory of Mexico of originating used vehicles that are at least two years old; and
  6. beginning January 1, 2019, Canada may not adopt or maintain a prohibition or restriction on imports from the territory of Mexico of originating used vehicles.
5) Paragraph 4 shall not be construed to allow Canada to derogate from its obligations in respect of land transportation services under Chapter Twelve (Cross-Border Trade in Services), including its Schedule to Annex I.
Appendix 300-A.2 Mexico Auto Decree and Auto Decree Implementing Regulations

table of chapter contents

  1. Until January 1, 2004, Mexico may maintain the provisions of the Decree for Development and Modernization of the Automotive Industry (“Decreto para el Fomento y Modernización de la Industria Automotriz”), December 11, 1989, (the “Auto Decree”) and the Resolution that Establishes Rules for the Implementation of the Auto Decree (“Acuerdo que Determina Reglas para la Aplicaci n para el Fomento y Modernización de la Industria Automotriz”), November 30, 1990, (the “Auto Decree Implementing Regulations”) that would otherwise be inconsistent with this Agreement, subject to the conditions set out in paragraphs 2 through 18. No later than January 1, 2004, Mexico shall bring any inconsistent provision of the Auto Decree and the Auto Decree Implementing Regulations into conformity with the other provisions of this Agreement.

Autoparts Industry, National Suppliers and Independent Maquiladoras

2) Mexico may not require that an enterprise attain a level of national value added in excess of 20 percent of its total sales as one of the conditions to qualify as a national supplier or enterprise of the autoparts industry.
3) Mexico may require that a national supplier or an enterprise of the autoparts industry, in calculating its national value added solely for purposes of paragraph 2, include customs duties in the value of imports incorporated into the autoparts produced by such supplier or enterprise.
4) Mexico shall grant national supplier status to an independent maquiladora that requests such status and meets the requirements for that status set out in the existing Auto Decree, as modified by paragraphs 2 and 3. Mexico shall continue to grant to all independent maquiladoras that request national supplier status all existing rights and privileges accorded to independent maquiladoras under the existing Decree for the Promotion and Operation of the Maquiladora Export Industry (“Decreto para el Fomento y Operación de la Industria Maquiladora de Exportación”), December 0;22, 1989 (the “Maquiladora Decree”).

National Value Added

5) Mexico shall provide that a manufacturer (“empresa de la industria terminal”) calculate its required national value added from suppliers (VANp) as a percentage of :
  1. the manufacturer's reference value as set out in paragraph 8 ; or
  2. the manufacturer's total national value added (VANt), whichever is greater, except that Mexico shall provide that a manufacturer beginning production of motor vehicles in Mexico after model year 1991 calculate its required national value added from suppliers (VANp) as a percentage of its total national value added (VANt).
6) Mexico may not require that the percentage referred to in paragraph 5 be greater than :
  1. 34 percent for each of the first five years beginning January 1, 1994 ;
  2. 33 percent for 1999 ;
  3. 32 percent for 2000 ;
  4. 31 percent for 2001 ;
  5. 30 percent for 2002 ; and
  6. 29 percent for 2003.
7) Notwithstanding paragraph 6, Mexico shall allow a manufacturer that produced motor vehicles in Mexico before model year 1992 to use as its percentage referred to in paragraph 5 the ratio of actual national value added from suppliers (VANp) to total national value added (VANt) that the manufacturer attained in model year 1992, for so long as that ratio is lower than the applicable percentage specified under paragraph 6. In determining such ratio for model year 1992, purchases that the manufacturer made from independent maquiladoras that would have been eligible to receive national supplier status had paragraphs 2, 3 and 4 of this Appendix been in effect at that time, shall be included in the calculation of the manufacturer's national value added from suppliers (VANp), in the same manner as autoparts from any other national supplier or enterprise of the autoparts industry.
8) The annual reference value for a manufacturer (“reference value”) shall be :
  1. for each of the years 1994 through 1997, the base value for the manufacturer, plus no more than 65 percent of the difference between the manufacturer's total sales in Mexico in that year and its base value ;
  2. for each of the years 1998 through 2000, the base value for the manufacturer, plus no more than 60 percent of the difference between the manufacturer's total sales in Mexico in that year and its base value ; and
  3. for each of the years 2001 through 2003, the base value for the manufacturer, plus no more than 50 percent of the difference between the manufacturer's total sales in Mexico in that year and its base value.
9) Mexico shall provide that where a manufacturer's total sales in Mexico in a year are lower than its base value, the reference value for the manufacturer for that year shall be equal to the manufacturer's total sales in Mexico for the year.
10) In the event an abnormal production disruption affects a manufacturer's production capability, Mexico shall allow the manufacturer to seek a reduction in its reference value before the Intersecretariat Automotive Industry Commission, established under Chapter V of the Auto Decree. If the Commission finds that the production capability of the manufacturer has been impaired by such an abnormal production disruption, the Commission shall reduce the manufacturer's reference value in an amount commensurate to the event.
11) If, on the request of a manufacturer, the Intersecretariat Automotive Industry Commission finds that the production capability of the manufacturer has been significantly disrupted as a result of a major retooling or plant conversion in the facilities of the manufacturer, the Commission shall reduce the manufacturer's reference value for that year in an amount commensurate with the disruption, provided that any reduction in that manufacturer's required national value added from suppliers (VANp) that may result from the Commission's determination to reduce the manufacturer's reference value shall be fully made up by the manufacturer over the 24 months after the date on which the retooling or plant conversion is completed.

Trade Balance

12) Mexico may not require a manufacturer to include in the calculation of its trade balance (S) a percentage of the value of direct and indirect imports of autoparts that the manufacturer incorporated into that manufacturer's production in Mexico for sale in Mexico (VTVd) in the corresponding year, greater than the following :
  1. 80 percent for 1994 ;
  2. 77.2 percent for 1995 ;
  3. 74.4 percent for 1996 ;
  4. 71.6 percent for 1997 ;
  5. 68.9 percent for 1998 ;
  6. 66.1 percent for 1999 ;
  7. 63.3 percent for 2000 ;
  8. 60.5 percent for 2001 ;
  9. 57.7 percent for 2002 ; and
  10. 55.0 percent for 2003.
13) Mexico shall provide that, for purposes of determining a manufacturer's total national value added (VANt), paragraph 12 shall not apply to the calculation of the manufacturer's trade balance (S).
14) Mexico shall allow a manufacturer with a surplus in its extended trade balance to divide its extended trade balance by the applicable percentages in paragraph 12 to determine the total value of new motor vehicles that it may import.
15) Mexico shall provide that a manufacturer's adjustment factor (Y), included in the calculation of such manufacturer's extended trade balance, shall be equal to :
  1. for a manufacturer that produced motor vehicles prior to model year 1992
    1. the greater of the manufacturer's reference value or the manufacturer's total national value added (VANt), minus
    2. the manufacturer's actual national value added from suppliers (VANp) divided by the appropriate percentage specified under paragraph 6 or 7 as appropriate ;
  2. for all other manufacturers
    1. the manufacturer's total national value added (VANt), minus
    2. the manufacturer's actual national value added from suppliers (VANp) divided by the appropriate percentage specified under paragraph 6, except that the adjustment factor (Y) shall be zero if the amount resulting from subtracting (ii) from (i), under (a) or (b), is negative.
16) In determining the annual amount that a manufacturer may apply to its extended trade balance from unused surpluses earned prior to model year 1991, Mexico shall in any year allow the manufacturer to elect :
  1. to use the procedures of the existing Auto Decree Implementing Regulations ; or
  2. to apply up to the Mexican peso equivalent of US$150 million, adjusted annually for cumulative inflation, from the date of entry into force of this Agreement, based on the implicit price deflator for U.S. Gross Domestic Product (GDP) or any successor index published by the Council of Economic Advisers in its “Economic Indicators” (hereinafter “U.S. GDP price deflator”). To adjust the US$150 million ceiling for cumulative inflation up to a certain month of a year following 1994, the $150 million shall be multiplied by the ratio of
    1. the U.S. GDP price deflator current as of the month of that year, to
    2. the U.S. GDP price deflator current as of the date of entry into force of this Agreement, provided that the price deflators under subparagraphs (i) and (ii) have the same base year. The resulting adjusted amount shall be rounded to the nearest million dollars.

Other Restrictions in the Auto Decree

17) Mexico shall eliminate any restriction that limits the number of motor vehicles that a manufacturer may import into Mexico in relation to the total number of motor vehicles that such manufacturer sells in Mexico.
18) For greater certainty, the differences in treatment required under paragraphs 5, 7 and 15 shall not be considered to be inconsistent with Article 1103 (Investment - Most-Favoured-Nation Treatment).

Other Restrictions

19) For the first 10 years after the date of entry into force of this Agreement, Mexico may maintain prohibitions or restrictions on the importation of new automotive products provided for in existing items 8407.34.02 (gasoline engines larger than 1000 cm³ but smaller than or equal to 2000 cm³, except for motorcycles), and 8407.34.99 (gasoline engines larger than 2000 cm³, except for motorcycles) and 8703.10.99 (other special vehicles) in the Tariff Schedule of the General Import Duty Act (“Tarifa de la Ley del Impuesto General de Importación”), except that Mexico may not prohibit or restrict the importation of automotive products provided for in item 8407.34.02 (gasoline engines larger than 1000 cm³ but smaller than or equal to 2000 cm³, except for motorcycles), 8407.34.99 (gasoline engines larger than 2000 cm³, except for motorcycles), or 8703.10.99 (other special vehicles) by manufacturers that comply with the Auto Decree and the Auto Decree Implementing Regulations, as modified by this Appendix.

Autotransportation Decree and Autotransportation Implementing Regulations

20) Mexico shall eliminate the Mexican Decree for Development and Modernization of the Autotransportation Vehicle Manufacturing Industry, (“Decreto para el Fomento y Modernización de la Industria Manufacturera de Vehículos de Autotransporte”), December 1989, and the Resolution that Establishes Rules for the Implementation of the Autotransportation Decree (“Acuerdo que Establece Reglas de Aplicación del Decreto para el Fomento y Modernización de la Industria Manufacturera de Vehículos de Autotransporte”), November 1990. Mexico may adopt or maintain any measure respecting autotransportation vehicles, autotransportation parts or manufacturers of autotransportation vehicles provided that the measure is not inconsistent with this Agreement.

Importation of Autotransportation Vehicles

21) Mexico may adopt or maintain a prohibition or restriction on the importation of autotransportation vehicles of another Party until January 1, 1999, except with respect to the importation of autotransportation vehicles pursuant to paragraphs 22 and 23.
22) For each of the years 1994 through 1998, Mexico shall allow any manufacturer of autotransportation vehicles to import, for each type of autotransportation vehicle, a quantity of originating autotransportation vehicles equal to at least 50 percent of the number of vehicles of such type that the manufacturer produced in Mexico in that year.
23) For each of the years 1994 through 1998, Mexico shall allow persons other than manufacturers of autotransportation vehicles to import, in a quantity to be allocated among such persons, originating autotransportation vehicles of each type as follows :
  1. for each of the years 1994 and 1995, no less than 15 percent of the total number of vehicles of each type of autotransportation vehicle produced in Mexico ;
  2. for 1996, no less than 20 percent of the total number of vehicles of each type of autotransportation vehicle produced in Mexico ; and
  3. for each of the years 1997 and 1998, no less than 30 percent of the total number of vehicles of each type of autotransportation vehicle produced in Mexico. Mexico shall allocate such quantity through a non-discriminatory auction.

Used Vehicles

24) Mexico may adopt or maintain prohibitions or restrictions on imports of used vehicles from the territory of another Party, except as follows :
  1. beginning January 1, 2009, Mexico may not adopt or maintain a prohibition or restriction on imports from the territories of Canada or the United States of originating used vehicles that are at least 10 years old ;
  2. beginning January 1, 2011, Mexico may not adopt or maintain a prohibition or restriction on imports from the territories of Canada or the United States of originating used vehicles that are at least eight years old ;
  3. beginning January 1, 2013, Mexico may not adopt or maintain a prohibition or restriction on imports from the territories of Canada or the United States of originating used vehicles that are at least six years old ;
  4. beginning January 1, 2015, Mexico may not adopt or maintain a prohibition or restriction on imports from the territories of Canada or the United States of originating used vehicles that are at least four years old ;
  5. beginning January 1, 2017, Mexico may not adopt or maintain a prohibition or restriction on imports from the territories of Canada or the United States of originating used vehicles that are at least two years old ; and
  6. beginning January 1, 2019, Mexico may not adopt or maintain a prohibition or restriction on imports from the territories of Canada or the United States of originating used vehicles.
25)
  1. Paragraph 24 shall not apply to the importation on a temporary basis of a used vehicle provided for in item 8705.20.01 (mobile drilling derricks), 8705.20.99 (other mobile drilling derricks) or 8705.90.01 (street sweepers) of the Tariff Schedule of the General Import Duty Act. Such importation shall be subject to the conditions set out in Section 4 (b) of Annex 301.3 for such time as Mexico may adopt or maintain a prohibition or restriction on the importation of the vehicle under paragraph 24.
  2. Paragraph 24 shall not be construed to allow Mexico to derogate from its obligations in respect of land transportation services under Chapter Twelve (Cross-Border Trade in Services), including its Schedule to Annex I.

Import Licensing Measures

26) Mexico may adopt or maintain import licensing measures to the extent necessary to administer restrictions pursuant to :
  1. the Auto Decree and the Auto Decree Implementing Regulations, as modified by this Appendix, on the importation of motor vehicles ;
  2. paragraph 19 of this Appendix on the importation of new automotive products provided for in item 8407.34.02 (gasoline engines larger than 1000 cm3, but smaller than or equal to 2000 cm³, except for motorcycles) or 8703.10.99 (other special vehicles) in the Tariff Schedule of the General Import Duty Act ;
  3. paragraphs 22 and 23 of this Appendix on the importation of autotransportation vehicles ; and
  4. paragraph 24 (a) through (f) of this Appendix on the importation of used vehicles that are motor vehicles or autotransportation vehicles or of other used vehicles provided for in existing items 8702.90.01 (trolley buses), 8705.10.01 (mobile cranes), 8705.20.99 (other mobile drilling derricks), 8705.90.01 (street sweepers) or 8705.90.99 (other special purpose vehicles, cranes [???] ) in the Tariff Schedule of the General Import Duty Act ; provided that such measures shall not have trade restrictive effects on the importation of such goods additional to those due to restrictions imposed in accordance with this Appendix, and that a license shall be granted to any person that fulfills Mexico's legal requirements for the importation of the goods.

Definitions

27) For purposes of this Appendix :
  • abnormal production disruption means a disruption in a manufacturer's production capability resulting from a natural disaster, fire, explosion or other unforeseen event beyond the manufacturer's control ;
  • automotive products (referred to as “productos automotrices” in rule 1, paragraph III of the Auto Decree Implementing Regulations) means motor vehicles and autoparts ;
  • autoparts (referred to as “partes y componentes automotrices” in article 2, paragraph X of the Auto Decree) means parts and components intended for use in a motor vehicle; autotransportation parts means parts and components intended for use in an autotransportation vehicle ;
  • autotransportation vehicle means a vehicle of one of the following types :
    1. a vehicle without a chassis and with an integrated body, intended for the transport of more than 10 persons, with a gross vehicle weight of more than 8,864 kilograms, provided for in items 8702.10.02, 8702.10.03, 8702.90.03, 8702.90.04, 8705.20.01 or 8705.40.01 of the Tariff Schedule of the General Import Duty Act ;
    2. a vehicle with a chassis, intended for the transport of goods or more than 10 persons, with a gross vehicle weight of more than 8,864 kilograms, provided for in items 8702.10.01, 8702.10.03, 8702.90.02, 8702.90.04, 8704.22.99, 8704.23.99, 8704.32.99, 8705.20.01, 8705.40.01 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ; or
    3. a vehicle with two or three axles, either with integrated equipment or intended for the transport of goods by hauling a trailer, or semi-trailer, provided for in items 8701.20.01, 8705.20.01, 8705.40.01 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ;
  • base value means the average for model years 1991 and 1992 of a manufacturer's production in Mexico for sale in Mexico (VTVd), adjusted annually for cumulative inflation, based on the Mexican National Producer Price Index of Vehicles, Autoparts, and other Transportation Goods (“Indice Nacional de Precios al Productor de vehículos, refacciones y otros materiales de transporte”), or any successor index, published by the Bank of Mexico (“Banco de Mexico”) in its “Economic Indicators” (“Indicadores Económicos”) (hereinafter “Mexican NPPI”).
    To adjust the base value for cumulative inflation up to 1994 or a subsequent year, the average for model years 1991 and 1992 of the manufacturer's VTVd shall be multiplied by the ratio of :
    1. the Mexican NPPI for that year, to
    2. the Mexican NPPI for 1992,
    provided that the price indices set out in subparagraphs (a) and (b) have the same base year ;
  • enterprise of the autoparts industry (referred to as “empresa de la industria de autopartes” in article 2, paragraph V, and articles 6 and 7 of the Auto Decree) means an enterprise constituted or organized under the law of, and operating in, Mexico that produces autoparts and :
    1. whose annual invoice value of sales of autoparts to manufacturers, for use as original equipment by the manufacturer in its production of automotive products for sale in Mexico, constitutes more than 60 percent of the enterprise's annual total invoice value of sales, calculating its annual invoice value of sales of autoparts to manufacturers in accordance with rule 20 of the Auto Decree Implementing Regulations as of August 12, 1992, or any other measure adopted by Mexico that is no more restrictive than such rule ;
    2. complies with the national value added requirements pursuant to paragraphs 2 and 3 of this Appendix ;
    3. complies with the capital structure required under the Law to Promote Mexican Investment and Regulate Foreign Investment (“Ley para Promover la Inversión Mexicana y Regular la Inversión Extranjera”), March 9, 1973, and the Regulations of the Law to Promote Mexican Investment and to Regulate Foreign Investment (“Reglamento de la Ley para Promover la Inversión Mexicana y Regular la Inversión Extranjera”), May 16, 1989, as applied consistently with Mexico's commitments set out in its Schedule to Annex I of Part Five (Investment, Services and Related Matters) ; and
    4. that, on the fulfillment of the requirements under (a), (b) and (c), is registered with the Ministry of Trade and Industrial Development (“Secretaría de Comercio y Fomento Industrial”) (“SECOFI”) as an enterprise of the autoparts industry, except that SECOFI may grant registration to an enterprise that complies with subparagraphs (b) and (c) but does not comply with subparagraph (a) ;
  • extended trade balance for a manufacturer is equal to S + T + W + 0.3I + SFt - Y, where :
    1. S denotes the manufacturer's trade balance ;
    2. T denotes the transfer of
      1. trade balance surpluses between the manufacturer and other manufacturers, and
      2. foreign exchange to the manufacturer that an enterprise of the autoparts industry has earned from exports of autoparts, excluding the value of import content in such exports, and excluding foreign exchange that the enterprise has earned from exports of autoparts that were promoted by the manufacturer, applied in accordance with rule 8 of the Auto Decree Implementing Regulations as of August 12, 1992, or any other measure adopted by Mexico that is no more restrictive than such rule ;
    3. W denotes the transfer to the manufacturer of foreign exchange that a maquiladora has earned from the export of automotive products, excluding the value of the import content in such exports, provided that the maquiladora is not a national supplier, and one or more of the following conditions is met :
      1. the manufacturer is, directly or indirectly, a majority shareholder of the maquiladora,
      2. the manufacturer and the maquiladora have a majority shareholder in common, or
      3. the manufacturer is a promoter of the automotive goods exported by such maquiladora, calculated in accordance with article 9 of the Auto Decree and rule 8 of the Auto Decree Implementing Regulations as of August 12, 1992, or any other measure adopted by Mexico that is no more restrictive than that article or rule ;
    4. I denotes the value of the manufacturer's investments in fixed assets of Mexican origin destined for permanent use in Mexico, excluding machinery and equipment purchased in Mexico but not produced in Mexico, that the manufacturer may transfer to its extended trade balance, applied in accordance with article 11 of the Auto Decree and rule 8 of the Auto Decree Implementing Regulations as of August 12, 1992, or any other measure adopted by Mexico that is no more restrictive than the article or rule ;
    5. SFt denotes the manufacturer's trade balance surpluses unused in prior years and transferred to the current year, calculated in accordance with rules 17 and 19 of the Auto Decree Implementing Regulations as of August 12, 1992, as modified by paragraph 16 of this Appendix, or any other measure adopted by Mexico that is no more restrictive than such rules ; and
    6. Y denotes the adjustment factor calculated in accordance with paragraph 15 ;
  • independent maquiladora means an enterprise registered as an export maquiladora enterprise under the existing Maquiladora Decree, that has no majority shareholder in common with any manufacturer, and in which no manufacturer is directly or indirectly a majority shareholder ;
  • manufacturer (referred to as “empresa de la industria terminal” in article 2, paragraph IV, and articles 3, 4 and 5 of the Auto Decree) means an enterprise constituted or organized under the law of, and operating in, Mexico, that is :
    1. registered with SECOFI ; and
    2. engaged in Mexico in the manufacture or final assembly of motor vehicles ;
  • manufacturer of autotransportation vehicles means an enterprise constituted or organized under the law of, and operating in, Mexico :
    1. that is registered with SECOFI ;
    2. that manufactures autotransportation vehicles in Mexico ; and
    3. where the enterprise's
      1. total invoice value of sales of autotransportation vehicles and autotransportation parts that it produces in Mexico, minus
      2. total invoice value of autotransportation parts that the enterprise imports directly,
      plus the value of the import content of autotransportation parts that it purchases in Mexico, is equal to at least 40 percent of its total invoice value of sales of autotransportation vehicles and autotransportation parts that the enterprise produces in Mexico ;
  • manufacturer's production in Mexico for sale in Mexico (VTVd) means the total invoice value of a manufacturer's sales in Mexico of motor vehicles and autoparts it produced in Mexico, excluding the manufacturer's sales of imported motor vehicles ;
  • manufacturer's total sales in Mexico means the manufacturer's total invoice value of sales of motor vehicles it produced in Mexico for sale in Mexico plus the total invoice value of its sales of imported motor vehicles ;
  • model year (referred to as “año-modelo” in article 2, paragraph IX of the Auto Decree) means a 12-month period beginning November 1 ;
  • motor vehicle (referred to as “vehículos automotores” in article 2, paragraph IV of the Auto Decree) means an automobile, a compact automobile of popular use, a commercial truck, a light duty truck or a medium duty truck, where :
    1. automobile means a vehicle intended for the transport of up to 10 persons, provided for in items 8703.21 through 8703.33, 8703.90.99, 8706.00.01, 8706.00.02 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ;
    2. compact automobile of popular use means a vehicle that complies with the characteristics set out in the existing Decree that Establishes Exemptions for Compact Automobiles of Popular Use (“Decreto que Otorga Exenciones a los Automóviles Compactos de Consumo Popular”), August 2, 1989, provided for in items 8703.21 through 8703.33, 8703.90.99, 8706.00.01, 8706.00.02 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ;
    3. commercial truck means a vehicle with or without a chassis, intended for the transport of goods or more than 10 persons, with a gross vehicle weight of up to 2,727 kilograms provided for in items 8702.10, 8702.90.02, 8702.90.03, 8702.90.04, 8703.21 through 8703.33, 8703.90.99, 8704.21.99, 8704.31.99, 8705.20.01, 8705.40.01, 8706.00.01, 8706.00.02 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ;
    4. light duty truck means a vehicle with or without a chassis, intended for the transport of goods or more than 10 persons, with a gross vehicle weight of more than 2,727 but no more than 7,272 kilograms provided for in items 8702.10, 8702.90.02, 8702.90.03, 8704.90.04, 8704.21.99, 8704.22.99, 8704.31.99, 8704.32.99, 8705.20.01, 8705.40.01, 8706.00.01, 8706.00.02 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ; and
    5. medium duty truck means a vehicle with or without a chassis, intended for the transport of goods or more than 10 persons, with a gross vehicle weight of more than 7,272 but no more than 8,864 kilograms provided for in items 8702.10, 8702.90.02, 8702.90.03, 8702.90.04, 8704.22.99, 8704.32.99, 8705.20.01, 8705.40.01, 8706.00.01, 8706.00.02 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ;
  • national supplier (referred to as “proveedor nacional”in article 2, paragraph VII of the Auto Decree) means an enterprise constituted or organized under the law of, and operating in, Mexico :
    1. that supplies to manufacturers autoparts classified in categories 26, 40, 41, 42, 43 and 57 of the input-output matrix of the National Institute of Statistics, Geography and Informatics (“Instituto Nacional de Estadística, Geografía e Informática”), published in 1980 ;
    2. that is registered with SECOFI ;
    3. in which no manufacturer, directly or indirectly, is a majority shareholder ;
    4. that has no majority shareholders that are also majority shareholders of any manufacturer ; and
    5. that complies with the national value added requirements pursuant to paragraphs 2 and 3 ;
  • national value added from suppliers (VANp) (referred to as “VANp” in rule 18 of the Auto Decree Implementing Regulations) means, for a manufacturer, the sum of :
    1. the national value added contained in the autoparts that the manufacturer purchases from national suppliers and from enterprises of the autoparts industry, excluding purchases of autoparts from such suppliers and enterprises destined for the aftermarket, and
    2. the foreign exchange attributable to the value of exports of autoparts, excluding the value of import content in the exports, produced by national suppliers and enterprises of the autoparts industry, where the export of the autoparts was promoted by the manufacturer, calculated in accordance with formula 7 of rule 18 in the Auto Decree Implementing Regulations as of August 12, 1992, or any other measure adopted by Mexico that is no more restrictive than such formula ;
  • national value added means, for an enterprise of the autoparts industry or a national supplier, the total value of sales of such enterprise or supplier minus the value of its total imports, direct and indirect, excluding those imports incorporated in autoparts destined for the aftermarket, as modified by paragraphs 2 and 3 ;
  • total national value added (VANt) (referred to as “valor agregado nacional de la empresa de la industria terminal” in rule 18 of the Auto Decree Implementing Regulations) means, for a manufacturer, either :
    1. the sum of the manufacturer's production in Mexico for sale in Mexico (VTVd) plus the manufacturer's trade balance (S), where the trade balance (S) is greater than zero ; or
    2. the manufacturer's production in Mexico for sale in Mexico (VTVd), where the manufacturer's trade balance (S) is negative ;
  • total sales means, for a national supplier or an enterprise of the autoparts industry, the sum of :
    1. the invoice value of sales of autoparts by that supplier or enterprise to a manufacturer that are intended for use as original equipment in the motor vehicles or autoparts that the manufacturer produces, excluding autoparts destined for the aftermarket ; and
    2. the value of autoparts that the supplier or enterprise exports, either directly or through a manufacturer, less the value of the imported content of such autoparts ;
    and
  • trade balance (S) (referred to as “saldo en balanza comercial” in rule 9 of the Auto Decree Implementing Regulations), for a manufacturer, is equal to X + TP - ID - IP, where :
    1. X denotes the value of the manufacturer's direct exports of motor vehicles and autoparts that it produces,
    2. TP denotes the foreign exchange attributable to the value of exports of autoparts, excluding the value of import content in the exports, produced by national suppliers and enterprises of the autoparts industry, where the exportation of such autoparts was promoted by the manufacturer,
    3. ID denotes the value of the manufacturer's direct imports, excluding duties and domestic taxes, and whether the imports are for domestic consumption (“definitivas”) or for re-export (“temporales”), incorporated in the motor vehicles and autoparts produced by the manufacturer, excluding autoparts destined for the aftermarket, and
    4. IP denotes the value of import content in the autoparts purchased by the manufacturer from an enterprise of the autoparts industry or a national supplier that are incorporated in the motor vehicles and autoparts produced by the manufacturer, excluding the import content of autoparts destined for the aftermarket, calculated in accordance with rules 10, 12, 13, 14, and 15 of the Auto Decree Implementing Regulations as of August 12, 1992, or any other measure adopted by Mexico that is no more restrictive than such rules, provided that, for purposes of subparagraphs (c) and (d), the value of imports for domestic consumption (“definitivas”) shall be discounted in accordance with paragraph 12.
Appendix 300-A.3 United States - Corporate Average Fuel Economy

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  1. In accordance with the schedule set out in paragraph 2, for purposes of the Energy Policy and Conservation Act of 1975, 42 U.S.C. 6201 et seq. (“the CAFE Act”), the United States shall consider an automobile to be domestically manufactured in any model year if at least 75 percent of the cost to the manufacturer of such automobile is attributable to value added in Canada, Mexico or the United States, unless the assembly of the automobile is completed in Canada or Mexico and such automobile is not imported into the United States prior to the expiration of the 30 days following the end of the model year.
  2. Paragraph 1 shall apply to all automobiles produced by a manufacturer and sold in the United States, wherever produced and irrespective of car line or truck line, in accordance with the following schedule :
    1. with respect to a manufacturer that initiated the production of automobiles in Mexico before model year 1992, the enterprise subject to the fuel economy requirements for those automobiles under the CAFE Act may make a one-time election at any time between January 1, 1997 and January 1, 2004, to have paragraph 1 applied beginning with the next model year after its election ;
    2. with respect to a manufacturer initiating the production of automobiles in Mexico after model year 1991, paragraph 1 shall apply beginning with the next model year after either January 1, 1994 or the date that the manufacturer initiates the production of automobiles in Mexico, whichever is later ;
    3. with respect to any other manufacturer producing automobiles in the territory of a Party, the enterprise subject to the fuel economy requirements for those automobiles under the CAFE Act may make a one-time election at any time between January 1, 1997 and January 1, 2004, to have paragraph 1 applied beginning with the next model year after its election. If such a manufacturer initiates the production of automobiles in Mexico, it shall be subject to subparagraph (b) on the date it initiates such production ;
    4. with respect to all manufacturers of automobiles not producing automobiles in the territory of a Party, paragraph 1 shall apply beginning with the next model year after January 1, 1994 ; and
    5. with respect to a manufacturer of automobiles covered by subparagraph (a) or (c), paragraph 1 shall apply beginning with the next model year after January 1, 2004, where the enterprise subject to the fuel economy requirements for those automobiles under the CAFE Act, has not made an election under subparagraph (a) or (c).
  3. The United States shall ensure that any measure it adopts pertaining to the definition of domestic production in the CAFE Act or its implementing regulations shall apply equally to value added in Canada or Mexico.
  4. Nothing in this Appendix shall be construed to require the United States to make any changes in its fuel economy requirements for automobiles, or to prevent the United States from making any changes in its fuel economy requirements for automobiles that are otherwise consistent with this Appendix.
  5. For greater certainty, the differences in treatment pursuant to paragraphs 1 through 3 shall not be considered to be inconsistent with Article 1103 (Investment - Most-Favoured-Nation Treatment).
  6. For purposes of this Appendix :
    • automobile means “automobile” as defined in the CAFE Act and its implementing regulations ;
    • manufacturer means “manufacturer” as defined in the CAFE Act and its implementing regulations ; and
    • model year means “model year” as defined in the CAFE Act and its implementing regulations.

Annex 300-B - Textile and Apparel Goods

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table of sections in Annex 300-B

Section 1 : Scope and Coverage
Section 2 : Tariff Elimination
Section 3 : Import and Export Prohibitions, Restrictions and Consultation Levels
Section 4 : Bilateral Emergency Actions (Tariff Actions)
Section 5 : Bilateral Emergency Actions (Quantitative Restrictions)
Section 6 : Special Provisions
Section 7 : Review and Revision of Rules of Origin
Section 8 : Labelling Requirements
Section 9 : Trade in Worn Clothing and Other Worn Articles
Section 10 : Definitions
Appendix 1.1 : List of Goods Covered by Annex 300-B
Appendix 2.1 : Tariff Elimination Schedule 2.1.B : Exceptions to Tariff Phaseout Formula Specified in Appendix 2.1
Appendix 2.4 : Tariff Elimination on Certain Textile and Apparel Goods
Appendix 3.1 : Administration of Import and Export Prohibitions, Restrictions and Consultation Levels
Schedule 3.1.1 : Schedule for the Elimination of Restrictions and Consultation Levels on Exports from Mexico to the United States
Schedule 3.1.2 : Restrictions and Consultation Levels on Exports from Mexico to the United States
Schedule 3.1.3 : Conversion Factors
Appendix 5.1 : Bilateral Emergency Actions (Quantitative Restrictions)
Appendix 6 : Special Provisions
Schedule 6.B.1 : Preferential Tariff Treatment for Non-Originating Apparel and Made-Up Goods
Schedule 6.B.2 : Preferential Tariff Treatment for Non-Originating Cotton or Man-made Fiber Fabrics and Made-Up Goods
Schedule 6.B.3 : Preferential Tariff Treatment for Non-Originating Cotton or Man-made Fiber Spun Yarn
Appendix 10.1 : Country-Specific Definitions

Section 1 : Scope and Coverage

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  1. This Annex applies to the textile and apparel goods set out in Appendix 1.1.
  2. In the event of any inconsistency between this Agreement and the Arrangement Regarding International Trade in Textiles (Multifiber Arrangement), as amended and extended, including any amendment or extension after January 1, 1994, or any other existing or future agreement applicable to trade in textile or apparel goods, this Agreement shall prevail to the extent of the inconsistency, unless the Parties agree otherwise.
Section 2 : Tariff Elimination

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  1. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating textile and apparel goods in accordance with its Schedule to Annex 302.2 (Tariff Elimination), and as set out for ease of reference in Appendix 2.1.
  2. For purposes of this Annex :
    1. a textile or apparel good shall be considered an originating good if the applicable change in tariff classification set out in Chapter Four (Rules of Origin) has been satisfied in the territory of one or more of the Parties in accordance with Article 404 (Accumulation) ; and
    2. for purposes of determining which rate of customs duty and staging category is applicable to an originating textile or apparel good, a good shall be considered a good of a Party
      1. as determined by each importing Party's regulations, practices or procedures, except that
      2. in the event of an agreement between the Parties pursuant to Annex 311 as determined by such agreement.
  3. An importing Party and an exporting Party may identify at any time particular textile and apparel goods that they mutually agree fall within :
    1. hand-loomed fabrics of a cottage industry ;
    2. hand-made cottage industry goods made of such hand-loomed fabrics ; or
    3. traditional folklore handicraft goods.
    The importing Party shall grant duty-free treatment to goods so identified, if certified by the competent authority of the exporting Party.
  4. Appendix 2.4 applies to the Parties specified in that Appendix respecting the elimination of tariffs on certain textile and apparel goods.
Section 3 : Import and Export Prohibitions, Restrictions and Consultation Levels

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  1. Each Party may maintain a prohibition, restriction or consultation level only in accordance with Appendix 3.1 or as otherwise provided in this Annex.
  2. Each Party shall eliminate any prohibition, restriction or consultation level on a textile or apparel good that otherwise would be permitted under this Annex if that Party is required to eliminate such measure as a result of having integrated that good into the GATT as a result of commitments undertaken by that Party under any successor agreement to the Multifiber Arrangement.
Section 4 : Bilateral Emergency Actions (Tariff Actions)

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  1. Subject to paragraphs 2 through 5 and during the transition period only, if, as a result of the reduction or elimination of a duty provided for in this Agreement, a textile or apparel good originating in the territory of a Party, or a good that has been integrated into the GATT pursuant to a commitment undertaken by a Party under any successor agreement to the Multifiber Arrangement and entered under a tariff preference level set out in Appendix 6, is being imported into the territory of another Party in such increased quantities, in absolute terms or relative to the domestic market for that good, and under such conditions as to cause serious damage, or actual threat thereof, to a domestic industry producing a like or directly competitive good, the importing Party may, to the minimum extent necessary to remedy the damage or actual threat thereof :
    1. suspend the further reduction of any rate of duty provided for under this Agreement on the good; or
    2. increase the rate of duty on the good to a level not to exceed the lesser of
      1. the most-favoured-nation (MFN) applied rate of duty in effect at the time the action is taken, and
      2. the MFN applied rate of duty in effect on December 31, 1993.
  2. In determining serious damage, or actual threat thereof, the Party :
    1. shall examine the effect of increased imports on the particular industry, as reflected in changes in such relevant economic variables as output, productivity, utilization of capacity, inventories, market share, exports, wages, employment, domestic prices, profits and investment, none of which is necessarily decisive; and
    2. shall not consider changes in technology or consumer preference as factors supporting a determination of serious damage or actual threat thereof.
  3. A Party shall deliver without delay to any Party that may be affected by an emergency action taken under this Section written notice of its intent to take such action, and on request shall enter into consultations with that Party.
  4. The following conditions and limitations apply to any emergency action taken under this Section :
    1. no action may be maintained for a period exceeding three years or, except with the consent of the Party against whose good the action is taken, have effect beyond the expiration of the transition period;
    2. no action may be taken by a Party against any particular good originating in the territory of another Party more than once during the transition period; and
    3. on termination of the action, the rate of duty shall be the rate that, according to the Schedule for the staged elimination of the tariff, would have been in effect one year after the initiation of the action, and beginning January 1 of the year following the termination of the action, at the option of the Party that has taken the action
      1. the rate of duty shall conform to the applicable rate set out in that Party's Schedule to Annex 302.2, or
      2. the tariff shall be eliminated in equal annual stages ending on the date set out in that Party's Schedule to Annex 302.2 for the elimination of the tariff.
  5. The Party taking an action under this Section shall provide to the Party against whose good the action is taken mutually agreed trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the action. Such concessions shall be limited to the textile and apparel goods set out in Appendix 1.1, unless the Parties otherwise agree. If the Parties concerned are unable to agree on compensation, the exporting Party may take tariff action having trade effects substantially equivalent to the action taken under this Section against any goods imported from the Party that initiated the action under this Section. The Party taking the tariff action shall only apply the action for the minimum period necessary to achieve the substantially equivalent effects.
  6. For purposes of this Section, a good originating in the territory of a Party shall be determined in accordance with Section 2.2.
  7. Paragraphs 1 through 5 shall also apply to textile and apparel goods described in Appendix 2.4.
Section 5 : Bilateral Emergency Actions (Quantitative Restrictions)

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  1. Subject to Appendix 5.1, a Party may take bilateral emergency action against non-originating textile or apparel goods of another Party in accordance with this Section and Appendix 3.1.
  2. If a Party considers that a non-originating textile or apparel good, including a good entered under a tariff preference level set out in Appendix 6, is being imported into its territory from a Party in such increased quantities, in absolute terms or relative to the domestic market for that good, under such conditions as to cause serious damage, or actual threat thereof, to a domestic industry producing a like or directly competitive good in the importing Party, the importing Party may request consultations with the other Party with a view to eliminating the serious damage or actual threat thereof.
  3. The Party requesting consultations shall include in its request for consultations the reasons that it considers demonstrate that such serious damage or actual threat thereof to its domestic industry is resulting from the imports of the other Party, including the latest data concerning such damage or threat.
  4. In determining serious damage, or actual threat thereof, the Party shall apply Section 4 (2).
  5. The Parties concerned shall begin consultations within 60 days of the request for consultations and shall endeavour to agree on a mutually satisfactory level of restraint on exports of the particular good within 90 days of the request, unless the consulting Parties agree to extend this period. In reaching a mutually satisfactory level of export restraint, the consulting Parties shall :
    1. consider the situation in the market in the importing Party ;
    2. consider the history of trade in textile and apparel goods between the consulting Parties, including previous levels of trade ; and
    3. seek to ensure that the textile and apparel goods imported from the territory of the exporting Party are accorded equitable treatment as compared with treatment accorded like textile and apparel goods from non-Party suppliers.
  6. If the consulting Parties do not agree on a mutually satisfactory level of export restraint, the Party requesting consultations may impose annual quantitative restrictions on imports of the good from the territory of the other Party, subject to paragraphs 7 through 13.
  7. Any quantitative restriction imposed under paragraph 6 shall be no less than the sum of :
    1. the quantity of the good imported into the territory of the Party requesting consultations from the Party that would be affected by the restriction, as reported in general import statistics of the importing Party, during the first 12 of the most recent 14 months preceding the month in which the request for consultations was made; and ;
    2. 20 percent of such quantity for cotton, man-made fiber and other non-cotton vegetable fiber good categories, and six percent for wool good categories.
  8. The first period of any quantitative restriction imposed under paragraph 6 shall begin on the day after the date on which the request for consultations was made and terminate at the end of the calendar year in which the quantitative restriction is imposed. Any quantitative restriction that is imposed for a first period of less than 12 months shall be prorated to correspond to the time remaining in the calendar year in which the restriction is imposed, and the prorated amount may be adjusted in accordance with the flexibility provisions set out in paragraphs 8 (b) and (c) of Appendix 3.1.
  9. For each successive calendar year that the quantitative restriction imposed under paragraph 6 remains in effect, the Party imposing it shall :
    1. increase it by six percent for cotton, man-made fiber and noncotton vegetable fiber textile and apparel goods, and by two percent for wool textile and apparel goods, and
    2. accelerate the growth rate for quantitative restrictions on cotton, man-made fiber and non-cotton vegetable fiber textile and apparel goods if required by any successor agreement to the Multifiber Arrangement, and the flexibility provisions set out in paragraphs 8 (b) and (c) of Appendix 3.1 apply.
  10. A quantitative restriction imposed under paragraph 6 before July 1 in any calendar year may remain in effect for the remainder of that year, plus two additional calendar years. Such a restriction imposed on or after July 1 in any calendar year may remain in effect for the remainder of that year, plus three additional calendar years. No such restriction may remain in effect beyond the transition period.
  11. No Party may take an emergency action under this Section with respect to any particular textile or apparel non-originating good against which a quantitative restriction is in effect.
  12. No Party may adopt or maintain a quantitative restriction under this Section on a particular textile or apparel good that otherwise would be permitted under this Annex, if that Party is required to eliminate such measure as a result of having integrated that good into the GATT as a result of commitments undertaken by that Party pursuant to any successor agreement to the Multifiber Arrangement.
  13. No Party may take a bilateral emergency action after the expiration of the transition period with respect to cases of serious damage, or actual threat thereof, to domestic industry arising from the operation of this Agreement except with the consent of the Party against whose good the action would be taken.
Section 6 : Special Provisions

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Appendix 6 sets out special provisions applicable to certain textile and apparel goods.

Section 7 : Review and Revision of Rules of Origin

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    1. The Parties shall monitor the effects of the application of the rule of origin set out in Annex 401 applicable to goods of subheading 6212.10 of the Harmonised System (HS). No earlier than April 1, 1995, a Party may request consultations with the other Parties to seek a mutually satisfactory solution to any difficulties that it considers result from the application of that rule of origin.
    2. If the consulting Parties fail to reach a mutually satisfactory solution within 90 days of a request for consultations, on request of any Party the rule of origin applicable to subheading 6212.10 shall change to the rule of origin set out in Annex 401 applicable to headings 62.06 through 62.11 with respect to trade between the requesting Party and the other Parties. Any such change shall be effective 180 days after the request. The Parties shall take measures to ease any resulting administrative burden on producers.
    3. Unless the Parties agree otherwise, at any time after the completion of consultations held under subparagraph (a) and during the transition period only, a Party that has requested such consultations may make one additional request for consultations under subparagraph (a) and take action under subparagraph (b).
    1. On request of any Party, the Parties shall consult to consider whether particular goods should be subject to different rules of origin to address issues of availability of supply of fibres, yarns or fabrics in the free trade area.
    2. In the consultations, each Party shall consider all data presented by a Party showing substantial production in its territory of the particular good. The consulting Parties shall consider that substantial production has been shown if that Party demonstrates that its domestic producers are capable of supplying commercial quantities of the good in a timely manner.
    3. The Parties shall endeavour to conclude consultations within 60 days of the request. An agreement between two or more Parties resulting from the consultations shall supersede any prior rule of origin for such good when approved by each such Party in accordance with Article 2202 (2) (Amendments). If no agreement is reached, a Party may have recourse to paragraph B.8 of Appendix 6.
    4. Further to subparagraph (a), on request of any Party, the Parties shall consult to consider whether the rules of origin set out in Annex 401 applicable to the following provisions should be amended in view of increasing availability of supply of relevant yarns or fabrics within the free trade area :
      1. Canadian tariff item 5407.60.10, Mexican tariff item 5407.60.02 and U.S. tariff item 5407.60.22,
      2. provisions (a) through (i) of the rule of origin for subheadings 6205.20 through 6205.30,
      3. goods of subheadings 6107.21, 6108.21 and 6108.31, wholly of fabric of Canadian tariff item 6002.92.10, Mexican tariff item 6002.92.01, and U.S. tariff item 6002.92.10, and exclusive of collar, cuffs, waistband, elastic or lace ;
      4. note 2 to Chapter 62 of Annex 401, and
      5. Canadian tariff item 6303.92.10, Mexican tariff item 6303.92.01 and U.S. tariff item 6303.92.aa.
  3. The Parties shall review the rules of origin applicable to textile and apparel goods within five years of the date of entry into force of this Agreement to take into account the effect of increasing global competition on textile and apparel goods and the implications of any integration into the GATT of textile and apparel goods pursuant to any successor agreement to the Multifiber Arrangement. The Parties shall give particular consideration to operative rules in other economic association or integration agreements and developments relating to textile and apparel production and trade.
Section 8 : Labelling Requirements

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The Subcommittee on Labelling of Textile and Apparel Goods established under Article 913 (5) shall perform the functions set out in Annex 913.5.a4.

Section 9 : Trade in Worn Clothing and Other Worn Articles

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  1. The Parties hereby establish a Committee on Trade in Worn Clothing, comprising representatives of each Party. The Committee shall :
    1. include or consult with a broadly representative group drawn from the manufacturing and retailing sectors in each Party; and
    2. act in a transparent manner and, if no member of the Committee formally objects, make recommendations to the Commission.
  2. The Committee shall assess the potential benefits and risks that may result from the elimination of existing restrictions on trade between the Parties in worn clothing and other worn articles, as defined in heading 63.09 of the HS, including the effects on business and employment opportunities, and on the market for textile and apparel goods in each Party.
  3. A Party may maintain restrictions in effect on the date of entry into force of this Agreement on the importation of worn clothing and other worn articles classified under heading 63.09 of the HS, unless the Parties agree otherwise on the basis of the recommendations presented to the Commission by the Committee on Trade in Worn Clothing.
Section 10 : Definitions For purposes of this Annex :

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       BYT     100T    BT      ST
  N = ------, ------, ---- or ----
      1,000     Z'     Z       10
when : N is the average yarn number, B is the breadth (width) of the fabric in centimeters, Y is the meters (linear) of the fabric per kilogram, T is the total single yarns per square centimeter, S is the square meters of fabric per kilogram, Z is the grams per linear meter of fabric, and Z' is the grams per square meter of fabric. Fractions in the resulting “average yarn number” shall be disregarded.
Appendix 1.1 List of Goods Covered by Annex 300-B

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Note : The descriptions listed in this Appendix are provided for ease of reference only. For legal purposes, coverage shall be determined according to the terms of the Harmonized System.
 HS No.     |Description
------------+----------------------------------------------------------------
            |Chapter 30 Pharmaceutical Products
    3005 90 |Wadding, gauze, bandages and the like
            |Chapter 39 Plastics and articles thereof
 ex 3921 12 |(Woven, knitted or nonwoven fabric coated, covered or laminated
 ex 3921 13 |with plastics)
 ex 3921 90 |
            |Chapter 42 Articles of leather; saddlery and harness; travel
            |goods, handbags and similar containers
 ex 4202 12 |(Luggage, handbags and flatgoods with an outer surface
 ex 4202 22 |predominantly of textile materials)
 ex 4202 32 |
 ex 4202 92 |
            |Chapter 50 Silk
    5004 00 |Silk yarn (other than yarn spun from silk waste) not for retail
            |sale
    5005 00 |Yarn spun from silk waste, not for retail sale
    5006 00 |Silk yarn and yarn spun from silk waste, for retail sale;
            |silkworm gut
    5007 10 |Woven fabric of noil silk
    5007 20 |Woven fabric of silk or silk waste, other than noil silk,
            |85% or more of such fibers
    5007 90 |Woven fabric of silk, nes
            |Chapter 51 Wool, fine or coarse animal hair, horsehair yarn
            |and fabric
    5105 10 |Carded wool
    5105 21 |Combed wool in fragments
    5105 29 |Wool tops and other combed wool, other than combed wool
            |in fragments
    5105 30 |Fine animal hair, carded or combed
    5106 10 |Yarn of carded wool, >=85% wool, not for retail sale
    5106 20 |Yarn of carded, wool, 85% wool, not for retail sale
    5107 10 |Yarn of combed wool, >=85% wool, not for retail sale
    5107 20 |Yarn of combed wool, <85% wool, not for retail sale
    5108 10 |Yarn of carded fine animal hair, not for retail sale
    5108 20 |Yarn of combed fine animal hair, not for retail sale
    5109 10 |Yarn of wool or of fine animal hair, >= 85% wool and
            |fine animal hair, for retail sale
    5109 90 |Yarn of wool/of fine animal hair, <85% wool and fine
            |animal hair, for retail sale
    5110 00 |Yarn of coarse animal hair or of horsehair
    5111 11 |Woven fabric of carded wool or fine animal hair, >= 85% wool
            |and fine animal hair, 300 g/m2
    5111 19 |Woven fabric of carded wool or fine animal hair, >=85% wool
            |or fine animal hair, >300 g/m2
    5111 20 |Woven fabric of carded wool or fine animal hair, <85% wool
            |or fine animal hair, with man-made fibers
    5111 30 |Woven fabric of carded wool or fine animal hair, <85% wool
            |or fine animal hair, with man-made fibers
    5111 90 |Woven fabric of carded wool or fine animal hair, <85% wool
            |or fine animal hair, nes
    5112 11 |Woven fabric of combed wool or fine animal hair, >= 85% wool
            |or fine animal hair, 200 g/m2
    5112 19 |Woven fabric of combed wool or fine animal hair, >= 85% wool
            |or fine animal hair, >200 g/m2
    5112 20 |Woven fabric of combed wool or fine animal hair, <85% wool
            |or fine animal hair, with manmade filament
    5112 30 |Woven fabric of combed wool or fine animal hair, <85% wool
            |or fine animal hair, with manmade fibers
    5112 90 |Woven fabric of combed wool or fine animal hair, <85% wool
            |or fine animal hair, nes
    5113 00 |Woven fabric of coarse animal hair or of horsehair
Appendix 2.1 : Tariff Elimination Schedule 2.1.B : Exceptions to Tariff Phaseout Formula Specified in Appendix 2.1 [ document missing ]
Appendix 2.4 : Tariff Elimination on Certain Textile and Apparel Goods [ document missing ]
Appendix 3.1 : Administration of Import and Export Prohibitions, Restrictions and Consultation Levels [ document missing ]
Schedule 3.1.1 : Schedule for the Elimination of Restrictions and Consultation Levels on Exports from Mexico to the United States [ document missing ]
Schedule 3.1.2 : Restrictions and Consultation Levels on Exports from Mexico to the United States [ document missing ]
Schedule 3.1.3 : Conversion Factors [ document missing ]
Appendix 5.1 : Bilateral Emergency Actions (Quantitative Restrictions) [ document missing ]
Appendix 6  : Special Provisions [ document missing ]
Schedule 6.B.1 : Preferential Tariff Treatment for Non-Originating Apparel and Made-Up Goods [ document missing ]
Schedule 6.B.2 : Preferential Tariff Treatment for Non-Originating Cotton or Man-made Fiber Fabrics and Made-Up Goods [ document missing ]
Schedule 6.B.3 : Preferential Tariff Treatment for Non-Originating Cotton or Man-made Fiber Spun Yarn [ document missing ]
Appendix 10.1 : Country-Specific Definitions [ document missing ]

 

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