PART TWO

TRADE IN GOODS

Chapter Three

National Treatment and Market Access for Goods

Subchapter A - National Treatment

Article 301: National Treatment

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 province or state, treatment no

less favorable than the most favorable treatment accorded by such

province or state 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 shall not apply to the measures set out

in Annex 301.3.

Subchapter B - Tariffs

Article 302: Tariff Elimination

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 set out in Annex 302.2 or

as otherwise indicated in Annex 300-B.

3. At 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 any two or more Parties

to accelerate the elimination of a customs duty on a good shall

supersede any prior inconsistent duty rate or staging category in

their Schedules for such good when approved by each such Party in

accordance with Article 2202(2) (Amendments).

Article 303: Restriction on Drawback and Duty Deferral Programs

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 that is:

(a) subsequently exported to the territory of another

Party,

(b) used as a material in the production of another good

that is subsequently exported to the territory of

another Party, or

(c) 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, or 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, by reason of an exportation described in

paragraph 1, refund, waive or reduce:

(a) 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);

(b) 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;

(c) a fee applied pursuant to section 22 of the U.S.

Agricultural Adjustment Act, subject to Chapter Seven

(Agriculture); or

(d) 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:

(a) shall assess the customs duties as if the exported good

had been withdrawn for domestic consumption; and

(b) 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:

(a) shall collect customs duties as if the exported good

had been withdrawn for domestic consumption; and

(b) may refund such customs duties to the extent permitted

under paragraph 1 upon the timely presentation of such

evidence under the laws and regulations of the Party.

6. This Article shall not apply to:

(a) a good entered under bond for transportation and

exportation to the territory of another Party;

(b) 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). Where originating and non-originating

fungible goods are commingled and exported in the same

form, the origin of the good may be determined on the

basis of the inventory methods provided for in the

Uniform Regulations;

(c) a good imported into the territory of the Party that is

deemed to be exported from the territory of a Party, 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

(i) delivery to a duty-free shop,

(ii) delivery for ship's stores or supplies for ships

or aircraft, or

(iii) delivery for use in joint undertakings of two

more of the Parties and that will

subsequently become the property of the Party

into whose territory the good was imported;

(d) 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;

(e) a dutiable 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

(f) a good set out in Annex 303.6.

7. 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 under tariff provision 8540.xx (cathode-ray color television

picture tubes, including video monitor tubes, with a diagonal

exceeding 14") 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.

Article 304: Waiver of Customs Duties

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, upon 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, and thus not generally available to all

importers, 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 covered by Article

303 (Restriction on Drawback and Duty Deferral).

Article 305: Temporary Admission of Goods

1. Each Party shall grant duty-free temporary admission for:

(a) professional equipment necessary for carrying out the

business activity, trade or profession of a business

person who qualifies for temporary entry pursuant to

Chapter 16 (Temporary Entry for Business Persons),

(b) equipment for the press or for sound or television

broadcasting and cinematographic equipment,

(c) goods imported for sports purposes and goods intended

for display and demonstration, and

(d) 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 subparagraph 1(a), (b), or (c), other than to require that

such good:

(a) be imported by a national or resident of another Party

who seeks temporary entry;

(b) 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;

(c) not be sold or leased while in its territory;

(d) be accompanied by a bond in an amount no greater than

110 percent of the charges that would otherwise be owed

upon entry or final importation, or by another form of

security, releasable upon exportation of the good,

except that a bond for customs duties shall not be

required for an originating good;

(e) be capable of identification when exported;

(f) be exported upon the departure of that person or within

such other period of time as is reasonably related to

the purpose of the temporary admission; and

(g) 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 subparagraph 1(d), other than to require that such good:

(a) be imported solely for the solicitation of orders for

goods, or services provided from the territory, of

another Party or non-Party;

(b) not be sold, leased, or put to any use other than

exhibition or demonstration while in its territory;

(c) be capable of identification when exported;

(d) be exported within such period as is reasonably related

to the purpose of the temporary admission; and

(e) 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 upon 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):

(a) each Party shall allow a locomotive, truck, truck

tractor, or tractor trailer unit, railway car, other

railroad equipment, trailer ("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;

(b) 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;

(c) 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

(d) 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.

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

Printed Advertising Materials

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:

(a) such samples be imported solely for the solicitation of

orders for goods of, or services provided from, the

territory of another Party or non-Party; or

(b) 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

1. Except as set out in Annex 307.1, no Party may apply a

customs duty on 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 (Duty Drawback), no Party shall

apply a customs duty to a good, regardless of its origin,

imported temporarily from the territory of another Party for

repair or alteration.

3. Each Party shall act in accordance with Annex 307.3

respecting the repair and rebuilding of vessels.

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

1. Each Party shall act in accordance with Annex 308.1

respecting certain automatic data processing goods and their

parts.

2. Each Party shall act in accordance with Annex 308.2

respecting certain color television tubes.

3. Each Party shall accord most-favored-nation duty-free

treatment to Local Area Network (LAN) apparatus imported into its

territory as set out in each Party's section of Annex 308.3.

Subchapter C - Non-Tariff Measures

Article 309: Import and Export Restrictions

1. Except as otherwise provided in this Agreement, no Party

shall 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 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:

(a) limiting or prohibiting the importation from the

territory of another Party of such good of that non-

Party; or

(b) 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 that non-Party, directly or

indirectly, without having been increased in value and

improved in condition [subject to review].

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, upon 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:

(a) not apply to the measures set out in Annex 301.3;

(b) apply to automotive goods as modified in Annex 300-A

(Trade and Investment in the Automotive Sector); and

(c) apply to trade in textile and apparel goods, as

modified in Annex 300-B (Textile and Apparel Goods).

6. For purposes of this Article, goods of another Party shall

mean [under review].

Article 310: Non-Discriminatory Administration of Restrictions

(GATT Article XIII)

[need for this Article is under review]

Article 311: Customs User Fees

1. No Party may adopt any customs user fee of the type referred

to in Annex 311 for originating goods.

2. Each Party may maintain existing such fees only in

accordance with Annex 311.2.

Article 312: Country of Origin Marking

Each Party shall comply with Annex 312 with respect to its

measures relating to country of origin marking.

Article 313: Blending Requirements

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.

Article 314: Distinctive Products

Each Party shall comply with Annex 314 respecting standards

and labelling of the distinctive products set out therein.

Article 315: Export Taxes

Except as set out in Annex 315 or Article 604 (Energy -

Export Taxes), 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:

(a) exports of any such good to the territory of all other

Parties; and

(b) any such good when destined for domestic consumption.

Article 316: Other Export Measures

1. Except as set out in Annex 316, a Party may adopt or

maintain a restriction otherwise justified under the provisions

of 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:

(a) 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 36-month 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;

(b) the Party does not adopt any measure, such as a

license, fee, tax or minimum price requirement, that

has the effect of raising the price for exports of a

good to that other Party above the price charged for

such good when consumed domestically, except that a

measure taken pursuant to subparagraph (a) that only

restricts the volume of exports shall not be considered

to have such effect; and

(c) 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.

2. 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.

Subchapter D - Consultations

Article 317: Committee on Trade in Goods

1. The Parties hereby establish a Committee on Trade in Goods,

comprising representatives of each Party.

2. The Committee shall meet at the request of any Party or the

Commission to consider any matter arising under this Chapter.

Article 318: Third-Country Dumping

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 anti-dumping 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.

Subchapter E - Definitions

Article 319: Definitions

For purposes of this Chapter:

advertising films means recorded visual media, with or without

sound-tracks, consisting essentially of images showing the nature

or operation of goods or services offered for sale or lease by a

person established or resident in the territory of any Party,

provided that the films are of a kind suitable for exhibition to

prospective customers but not for broadcast to the general

public, and provided that they are imported in packets that each

contain no more than one copy of each film and that do not form

part of a larger consignment;

commercial samples of negligible value means commercial samples

having a value (individually or in the aggregate as shipped) of

not more than one U.S. dollar, or the equivalent amount in the

currency of another Party, or so marked, torn, perforated or

otherwise treated that they are unsuitable for sale or for use

except as commercial samples;

customs duty includes any customs or import duty and a charge of

any kind imposed in connection with the importation of a good,

including any form of surtax or surcharge in connection with such

importation, but does not include any:

(a) charge equivalent to an internal tax imposed

consistently with Article III:2 of the GATT, or any

equivalent provision of a successor agreement to which

all Parties are party, in respect of like, directly

competitive or substitutable goods of the Party, or in

respect of goods from which the imported good has been

manufactured or produced in whole or in part;

(b) antidumping or countervailing duty that is applied

pursuant to a Party's domestic law and not applied

inconsistently with Chapter Nineteen (Review and

Dispute Settlement in Antidumping and Countervailing

Duty Matters);

(c) fee or other charge in connection with importation

commensurate with the cost of services rendered;

(d) premium offered or collected on an imported good

arising out of any tendering system in respect of the

administration of quantitative import restrictions or

tariff rate quotas or tariff preference levels; and

(e) fee applied pursuant to section 22 of the U.S.

Agricultural Adjustment Act, subject to Chapter Seven

(Agriculture);

distilled spirits include distilled spirits and distilled spirit-

containing beverages;

duty deferral program includes measures such as those governing

foreign-trade zones, temporary importations under bond, bonded

warehouses, "maquiladoras", and inward processing programs;

duty-free means free of customs duty;

goods imported for sports purposes means sports requisites for

use in sports contests, demonstrations or training in the

territory of the Party into whose territory such goods are

imported;

goods intended for display or demonstration includes their

component parts, ancillary apparatus and accessories;

item means a tariff classification item at the eight- or ten-

digit level set out in a Party's tariff schedule;

material means "material" as defined in Chapter Four (Rules of

Origin);

most-favored-nation rate of duty does not include any other

concessionary rate of duty;

performance requirement means a requirement that:

(a) a given level or percentage of goods or services be

exported;

(b) domestic goods or services of the Party granting a

waiver of customs duties be substituted for imported

goods or services;

(c) a person benefitting from a waiver of customs duties

purchase other goods or services in the territory of

the Party granting the waiver or accord a preference to

domestically produced goods or services; or

(d) a person benefitting from a waiver of customs duties

produce goods or provide services, in the territory of

the Party granting the waiver, with a given level or

percentage of domestic content; or

(e) relates in any way the volume or value of imports to

the volume or value of exports or to the amount of

foreign exchange inflows;

printed advertising materials means those goods classified in

Chapter 49 of the Harmonized System, including brochures,

pamphlets, leaflets, trade catalogues, yearbooks published by

trade associations, tourist promotional materials and posters,

that are used to promote, publicize or advertise a good or

service, are essentially intended to advertise a good or service,

and are supplied free of charge;

repair or alteration does not include an operation or process

that either destroys the essential characteristics of a good or

creates a new or commercially different good;

satisfactory evidence means:

(a) a receipt, or a copy of a receipt, evidencing payment

of customs duties on a particular entry;

(b) a copy of the entry document with evidence that it was

received by a customs administration;

(c) a copy of a final customs duty determination by a

customs administration respecting the relevant entry;

or

(d) any other evidence of payment of customs duties

acceptable under the Uniform Regulations developed in

accordance with Chapter Five (Customs Procedures);

total export shipments means all shipments from total supply to

users located in the territory of another Party;

total supply means all shipments, whether intended for domestic

or foreign users, from:

(a) domestic production;

(b) domestic inventory; and

(c) other imports as appropriate; and

waiver of customs duties means a measure that waives otherwise

applicable customs duties on any good imported from any country,

including the territory of another Party.

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ANNEX 301.3

Exceptions to Articles 301 and 309

[subject to review]

Section A - Canadian Measures

1. Articles 301 and 309 shall not apply to:

(a) controls by Canada on the export of logs of all

species;

(b) controls by Canada on the export of unprocessed fish

pursuant to the following existing statutes:

(i) New Brunswick Fish Processing Act, R.S.N.B. c. F-

18.01 (1982), as amended, and Fisheries

Development Act, S.N.B. c. F-15.1 (1977), as

amended;

(ii) Newfoundland Fish Inspection Act, R.S.N. 1970, c.

132, as amended;

(iii) Nova Scotia Fisheries Act, S.N.S. 1977, c. 9,

as amended;

(iv) Prince Edward Island Fish Inspection Act,

R.S.P.E.I. 1988, c. F-13, as amended; and

(v) Quebec Marine Products Processing Act, No. 38,

S.Q. 1987, c. 51, as amended;

(c) measures by Canada respecting the importation of

certain items on the Prohibited Goods List in Schedule

VII of the Customs Tariff, R.S.C. 1985, c. 41 (3rd

supp.), as amended, as of July 1, 1991;

(d) except as provided in Chapter Seven (Agriculture),

measures by Canada respecting the importation of grains

taken with respect to the United States, (Canadian

Wheat Board Act, R.S.C. 1985, c. C-24, as amended);

(e) 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 Export Act, R.S.C. 1985, c. E-

18, as amended;

(f) measures by Canada respecting the importation and

distribution of imported liquor by designated

government agencies under the existing provisions of

Importation of Intoxicating Liquors Act, R.S.C. 1985,

c. I-3, as amended, to the extent that it creates an

import monopoly consistent with Articles II:4 and XVII

of the GATT and Article 31 of the Havana Charter;

(g) except as provided in Chapter Seven (Agriculture),

measures by Canada respecting preferential freight

rates for grain originating in certain Canadian

provinces under the existing provisions of Western

Grain Transportation Act, R.S.C. 1985, c. W-8, as

amended;

(h) measures by Canada respecting preferential rates for

goods originating in certain Canadian provinces under

the existing provisions of Maritime Freight Rate Act,

R.S.C. 1985, c. M-1, as amended;

(i) Canadian excise taxes on absolute alcohol used in

manufacturing under the existing provisions of Excise

Tax Act, R.S.C. 1985, c. E-15, as amended;

(j) except as provided for in Chapter Seven (Agriculture),

import restrictions imposed under Section 5(1)(b) and

(d) of the Export and Import Permits Act, R.S.C. 1985,

c. E-19, as amended, as of January 1, 1994, that are in

accordance with the provisions of Article XI:2(c)(i) of

the GATT; and

(k) 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 U.S.C. App. 883) and

the Merchant Marine Act of 1936, (46 U.S.C. App. 1171,

1176, 1241 and 1241o) apply with quantitative effect to

comparable Canadian origin goods sold or offered for

sale into the United States market.

2. Notwithstanding any provision of this Agreement, any measure

related to the internal sale and distribution of wine and

distilled spirits, other than those covered by Article 313

(Blending Requirements) or Article 314 (Distinctive Products)

shall, as between Canada and the United States, be governed under

this Agreement exclusively in accordance with the relevant

provisions of the Canada - United States Free Trade Agreement

which for this purpose are hereby incorporated into this

Agreement.

3. In respect of any measure related to the internal sale and

distribution of wine and distilled spirits, the provisions of

Articles 301 and 309 shall not apply as between Canada and Mexico

to:

(a) a non-conforming provision of any existing measure;

(b) the continuation or prompt renewal of a non-conforming

provision of any existing measure;

(c) an amendment to a non-conforming provision of any

existing measure to the extent the amendment does not

decrease its conformity with the provisions of Article

301 or 309; or

(d) measures set out in paragraphs 4 and 5.

4. Further to paragraph 3(d):

(a) automatic listing measures in the province of British

Columbia may be maintained provided they apply only to

existing estate wineries producing less than 30,000

gallons of wine annually and meeting the existing

content rule;

(b) Canada may

(i) adopt or maintain a measure limiting on-premise

sales by a winery or distillery to those wines or

distilled spirits produced on its premises, and

(ii) maintain a measure requiring existing private wine

store outlets in the provinces of Ontario and

British Columbia to discriminate in favor of wine

of those provinces to a degree no greater than the

discrimination required by such existing measure;

and

(c) nothing in this Agreement shall prohibit the Province

of Quebec from requiring that any wine sold in grocery

stores in Quebec be bottled in Quebec, provided that

alternative outlets are provided in Quebec for the sale

of wine of the other Parties, whether or not such wine

is bottled in Quebec.

5. As between Canada and Mexico:

(a) any measure related to listing of wine and distilled

spirits of the other Party shall

(i) conform with Article 301,

(ii) be transparent, non-discriminatory and provide for

prompt decision on any listing application, prompt

written notification of such decision to the

applicant, and in the case of a negative decision,

provide for a statement of the reason for refusal,

(iii) establish administrative appeal procedures

for listing decisions that provide for

prompt, fair and objective rulings,

(iv) be based on normal commercial considerations,

(v) not create disguised barriers to trade, and

(vi) be published and made generally available to

persons of Mexico;

(b) where the distributor is a public entity, the entity

may charge the actual cost-of-service differential

between wine and distilled spirits of the other Party

and domestic wine and distilled spirits. Any such

differential shall not exceed the actual amount by

which the audited cost-of-service for the wine or

distilled spirits of the exporting party exceeds the

audited cost-of-service for the wine and distilled

spirits of the importing party;

(c) notwithstanding Articles 301 and 309, Article I

(Definitions), Article IV.3 (Wine), and Annexes A, B

and C of the Agreement between Canada and the European

Economic Community Concerning Trade and Commerce in

Alcoholic Beverages dated February 28, 1989 shall apply

with such modifications as may be necessary as between

Canada and Mexico;

(d) all discriminatory mark-ups on distilled spirits shall

be eliminated immediately upon the date of entry into

force of this Agreement. Cost-of-service differential

mark-ups as described in subparagraph (b) shall be

permitted;

(e) any other discriminatory pricing measure shall be

eliminated upon the date of entry into force of this Agreement;

(f) any measure related to distribution of wine or

distilled spirits of the other Party shall conform with

Article 301; and

(g) unless otherwise specifically provided in this Annex,

the Parties retain their rights and obligations under

the GATT and agreements negotiated under the GATT.

(The intention of paragraphs 3, 4, and 5 is to

grant Mexico the same concessions granted to the

U.S. under the Canada - United States Free Trade

Agreement respecting wine and distilled spirits.)

=============================================================================

Section B - Mexican Measures

1. Articles 301 and 309 shall not apply to:

(a) controls by Mexico on the export of logs of all

species;

(b) measures under the existing provisions of Articles 192

through 194 of the General Ways of Communication Act

("Ley de Vias Generales de Comunicación") 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;

(c) measures taken in accordance with Annex 300-A (Trade in

Automotive Goods) and measures taken in accordance with

existing provisions of Articles 1, 4 and 5 of the

Mexican Foreign Trade Act ("Ley Reglamentaria del

Artículo 131 de la Constitución Política de los Estados

Unidos Mexicanos en Materia de Comercio Exterior") with

respect to automotive goods referred to in Annex 300-A

(Trade in Automotive Goods);

(d) measures taken in accordance with Sections 3 (Import

and Export Restrictions), 5 (Bilateral Emergency

Actions-Quantitative Restrictions), 6 (Rules of

Origin), and 8 (Trade in Worn Clothing) of Annex 300-B

(Textile and Apparel Goods) and measures taken in

accordance with existing provisions of Articles 1, 4

and 5 of the Mexican Foreign Trade Act ("Ley

Reglamentaria del Artículo 131 de la Constitución

Política de los Estados Unidos Mexicanos en Materia de

Comercio Exterior") with respect to textile and apparel

goods referred to in Annex 300-B;

(e) measures taken in accordance with Articles 703 (Market

Access) and Annex (permits for Dairy, Poultry and

Eggs) of Chapter Seven (Agriculture) and measures taken

in accordance with existing provisions of Articles 1, 4

and 5 of the Mexican Foreign Trade Act ("Ley

Reglamentaria del Artículo 131 de la Constitución

Política de los Estados Unidos Mexicanos en Materia de

Comercio Exterior") with respect to agricultural goods

referred to in Chapter Seven;

(f) measures covered by Chapter Six (Energy) and measures

taken in accordance with existing provisions of

Articles 1, 4 and 5 of the Mexican Foreign Trade Act

("Ley Reglamentaria del Artículo 131 de la Constitución

Política de los Estados Unidos Mexicanos en Materia de

Comercio Exterior") with respect to energy and basic

petrochemical goods referred to in Chapter 6;

(g) export permit measures taken in accordance with

existing provisions of Articles 1, 4 and 5 of the

Mexican Foreign Trade Act ("Ley Reglamentaria del

Artículo 131 de la Constitución Política de los Estados

Unidos Mexicanos en Materia de Comercio Exterior") with

respect to goods subject to quantitative restrictions,

tariff rate quotas or tariff preference levels adopted

or maintained by another Party; and

(h) with respect to existing provisions, the continuation

or prompt renewal of a non-conforming provision of any

of the above provisions or an amendment to a non-

conforming provision of any of the above provisions to

the extent that the amendment does not decrease its

conformity with the provisions of Articles 301 and 309.

2. Notwithstanding Article 309, and without prejudice to other

rights and obligations under this Agreement concerning import and

export restrictions, for the first 10 years after the date of

entry into force of this Agreement, Mexico may require permits

for the importation of used goods provided for in the following

existing items in the Tariff Schedule of the General Import Duty

Act ("Tarifa de la Ley del Impuesto General de Importación").

For purposes of reference, the goods covered by those items are

broadly identified next to the corresponding item.

Item Description

8407.3499 Gasoline engines of more than 1,000 cm3, except

for motorcycles.

8413.11.01 Pumps 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 lifting frames on tires and straddle carriers.

8426.19.01 Other (overhead travelling cranes,

transporter cranes, gantry cranes, bridge

cranes, mobile lifting frames and straddle

carriers.

8426.30.01 Portal or pedestal jib cranes.

8426.41.01 Derricks, cranes and other lifting machinery

on tires, self-propelled with mechanical

working and carrying capacity less than 55

tons.

8426.41.02 Derricks, cranes and other lifting machinery

on tires, self-propelled with hydraulic

working and carrying capacity more than 9.9

up to 30 tons.

8426.41.99 Other (Machinery, self propelled, on tires.)

8426.49.01 Derricks, cranes and other lifting machinery

(other than on tires), self-propelled with

mechanical working and carrying capacity less

than 55 tons.

8426.49.02 Derricks, cranes sand other lifting machinery

(other than on tires), self-propelled with

hydraulic working and carrying capacity more

than 9.9 up to 30 tons.

8426.91.01 Derricks, cranes and other lifting machinery

except items 8426.91.02, 03 and 04.

8426.91.02 Derricks, cranes and other lifting machinery

for mounting on road vehicles, with

hydraulical working and carrying capacity up

to 9.9 tons.

8426.91.03 Derricks, cranes and other lifting machinery

(basket type) for mounting on road vehicles,

with carrying capacity up to 1 ton and 15

meters lift.

8426.91.99 Other (machinery designed for mounting on

road vehicles).

8426.99.01 Derricks, cranes and other lifting machinery

except items 8426.91.02

8426.99.02 Swivel cranes.

8426.99.99 Other (derricks; cranes, including cable

cranes; mobile lifting frames, straddle

carriers and works trucks fitted with a

crane).

8427.10.01 Self-propelled work trucks powered by an

electric motor, carrying capacity 3.5 tons.

8427.20.01 Other self-propelled trucks with combustion

piston engines, carrying capacity up to 7

tons.

8428.40.99 Other (escalators and moving walkways).

8428.90.99 Other (continuous-action elevators and

conveyors, for goods or materials).

8429.11.01 Self-propelled bulldozers and angledozers,

for track laying.

8429.19.01 Other (bulldozers and angledozers).

8429.20.01 Self-propelled graders and levelers.

8429.30.01 Self-propelled scrapers.

8429.40.01 Self-propelled tamping machines and road

rollers.

8429.51.02 Self-propelled front-end shovel loaders,

wheel-type, less than 335 HP.

8429.51.03 Self-propelled front-end shovel loaders,

wheel-type, other than item 8429.51.01.

8429.51.99 Other (mechanical shovels, excavators and

shovel loaders).

8429.52.02 Self-propelled backhoes, shovels, clamshells

and draglines, other than 8429.52.01.

8429.52.99 Other (machinery with a 360 revolving

superstructure).

8429.59.01 Excavators.

8429.59.02 Track laying draglines, carrying capacity up

to 4 tons.

8429.59.03 Track laying draglines, other than item

8429.59.04.

8429.59.99 Other (self-propelled bulldozers,

angledozers, graders, levellers, scrapers,

mechanical shovels, excavators, shovel

loaders, tamping machines and road rollers).

8430.31.01 Self-propelled tunneling machinery.

8430.31.99 Other (self-propelled coal or rock cutters

and tunnelling machinery).

8430.39.01 Sinking or boring shields.

8430.39.99 Other (coal or rock cutters and tunnelling

machinery).

8430.41.01 Self-propelled boring or sinking machinery,

other than item 8430.41.02.

8430.41.99 Other (self-propelled boring or sinking

machinery).

8430.49.99 Other (boring or sinking machinery).

8430.50.01 Self-propelled peat excavators, with frontal

carriers and hydraulic mechanism less than

335 hp capacity.

8430.50.02 Scrapers.

8430.50.99 Other (machinery self-propelled).

8430.61.01 Tamping machinery, not self-propelled.

8430.61.02 Compacting machinery, not self-propelled.

8430.61.99 Other (machinery, not self-propelled).

8430.62.01 Scarificationer machine.

8430.69.01 Threshers or scrapers machine.

8430.69.02 Trencher machine, other than 8430.69.03.

8430.69.99 Other (moving, grading, levelling, scraping,

excavating, tamping, compacting, extracting

or boring machinery).

8452.10.01 Sewing machines of the household type.

8452.21.04 Industrial machines, other than 845221.02, 03

and 05.

8452.21.99 Other (automatic sewing machines).

8452.29.05 Pending

8452.29.06 Industrial machines, other than 84522901, 03

and 05.

8452.29.99 Other (sewing machines).

8452.90.99 Other (parts of sewing machines).

8471.10.01 Analog or hybrid automatic data processing

machines.

8471.20.01 Digital automatic data processing machines,

containing in the same housing at least a

central processing unit and an input and

output unit, whether or not combined.

8471.91.01 Numerical or digital units entered with the

rest of a system, which may contain in the

housing one or two of the following types of

units: 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).

8474.20.02 Crushing jawbone and grinding millstone.

8474.20.05 Drawer cone crushing, with diameter no more

than 1200 millimeters.

8474.20.06 Grinding hammer percussion.

8701.30.01 Track-laying tractors with a net engine power

more than 105 h.p. but less than 380 h.p.

including pushing blade.

8701.90.02 Rail road tractors, on tires with mechanical

mechanism for pavement.

8474.20.01 Crushing and grinding with two or more

cylinders.

8474.20.03 Blades crushing machines.

8474.20.04 Blades XXX

8474.20.99 Other (crushing or grinding machines).

8474.39.99 Other (mixing machines).

8474.80.99 Other (kneading machines).

8475.10.01 Machines for assembling electric or

electronic lamps, tubes.

8477.10.01 Injection-molding machines for working rubber

or plastics, up to 5 kg capacity for one

molding model.

8711.10.01 Motorcycles, mopeds and cycles fitted with an

auxiliary motor with reciprocating internal

combustion piston engine not exceeding 50

cm.3.

8711.20.01 Motorcycles, mopeds and cycles fitted with an

auxiliary motor with reciprocating internal

combustion piston engine over 50 cm.3 but not

over 250 cm.3.

8711.30.01 Motorcycles, mopeds and cycles fitted with an

auxiliary motor with reciprocating internal

combustion piston engine over 250 cm.3 but

not over 500 cm.3.

8711.40.01 Motorcycles, mopeds and cycles fitted with an

auxiliary motor with reciprocating internal

combustion piston engine over 500 cm.3 but

less than 550 cm.3.

8711.90.99 Other (motorcycles, mopeds and cycles fitted

with an auxiliary motor without an internal

combustion piston engine, and sidecars which

are not to be used with motocycles and

velocipedes of any kind).

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 semi-trailers for housing and

camping, not mechanically propelled.

8716.31.02 Tanker trailers and tanker semi-trailers for

the transport of goods, not mechanically

propelled, of the steel-tank type.

8716.31.99 Other (Tanker trailers and tanker

semi-trailers for the transport of goods, not

mechanically propelled, except of the

steel-tank type, and of the thermal type for

the transportation of milk).

8716.39.01 Trailers and semi-trailers for the transport

of goods, not mechanically propelled, of the

platform type (more detailed description

pending).

8716.39.02 Trailers and semi-trailers for the transport

of vehicles, not mechanically propelled.

8716.39.04 Trailers and semi-trailers for the transport

of goods, not mechanically propelled, of the

modular-platform type (more detailed

description pending).

8716.39.05 Semi-trailers for the transport of goods, not

mechanically propelled, of the low-bed type

(more detailed description pending).

8716.39.06 Trailers and semi-trailers for the transport

of goods, not mechanically propelled, of the

closed-box type, including those for

refrigeration.

8716.39.07 Trailers and semi-trailers for the transport

of goods, not mechanically propelled, of the

steel-tank type.

8716.39.99 Other. (Trailers and semi-trailers for the

transport of goods, not mechanically

propelled, except those referred to in items

87163901, 02, 04, 05, 06 and 07, those with

two levels which are recognizable as intended

for use exclusively in the transportation of

cattle, and carriages with solid rubber

wheels).

8716.40.01 Other trailers and semi-trailers, not

mechanically propelled. (Other than for the

transport of goods).

8716.80.99 Other. (Vehicles not mechanically propelled,

except trailers and semi-trailers,

hand-wagons, and hand-wagons of hydraulic

operation.

3. Notwithstanding Article 309, and without prejudice to other

rights and obligations under this Agreement concerning import and

export restrictions:

(a) for the first five years after the date of entry into

force of this Agreement, Mexico may require permits for

the importation of new automotive goods provided for in

the following existing items in the Tariff Schedule of

the General Import Duty Act ("Tarifa de la Ley del

Impuesto General de Importación"). For purposes of

reference, the goods covered by those items are broadly

identified next to the corresponding item;

Item Description

8701.20.01 Road Tractors for semi-trailers

8702.10.01 Public-transport type passenger vehicles, with

diesel or semi-diesel engine, with body mounted on

a chassis.

8702.10.02 Public-transport type passenger vehicles, with

diesel or semi-diesel engine, with an integral

body.

8702.90.03 Public-transport type passenger vehicles, with

gasoline engine, with an integral body.

8703.10.99 Other special vehicles.

8704.22.99 Motor vehicles for the transport of goods with

diesel engine and capacity of cargo of more than 5

tons but less than 20 tons.

8704.23.99 Motor vehicles for the transport of goods with

diesel engine and capacity of cargo of more than

20 tons.

8704.32.99 Motor vehicles for the transport of goods with

gasoline engine and with capacity of cargo of more

than 5 tons.

8705.20.01 Mobile drilling derricks.

8705.40.01 Concrete mixers.

8706.00.01 Chassis fitted with gasoline engine.

8706.00.99 Other chassis fitted with gasoline engine.

(b) for the first 10 years after the date of entry into

force of this Agreement, Mexico may require permits for

the importation of new automotive goods provided for in

the following existing items in the Tariff Schedule of

the General Import Duty Act ("Tarifa de la Ley del

Impuesto General de Importación"). For purposes of

reference, the goods covered by those items are broadly

identified next to the corresponding item;

Item Description

8407.34.99 Gasoline engines of more than 1,000 cm3, except

for motorcycles.

8702.90.02 Public-transport type passenger vehicles, with

gasoline engine, with body mounted on a chassis.

8703.21.01 Passenger motor vehicles with gasoline engine of

less than or equal to 1,000 cm3.

8703.22.01 Passenger motor vehicles with gasoline engine of

more than 1,000 cm3 but less than 1,500 cm3.

8703.23.01 Passenger motor vehicles with gasoline engine of

more than 1,500 cm3 but less than or equal to

3,000 cm3.

8703.24.01 Passenger motor vehicles with gasoline engine of

more than 3,000 cm3.

8703.31.01 Passenger motor vehicles with diesel engine of

less than or equal to 1,500 cm3.

8703.32.01 Passenger motor vehicles with diesel engine of

more than 1,500 cm3 but less than or equal to

2,500 cm3.

8703.33.01 Passenger motor vehicles with diesel engine of

more than 2,500 cm3.

8703.90.99 Other passenger vehicles.

8704.21.99 Motor vehicles for the transport of goods with

diesel engine and with capacity of cargo of less

than or equal to 5 tons.

8704.31.99 Motor vehicles for the transport of goods with

gasoline engine and with capacity of cargo of less

than or equal to 5 tons.

(c) for the first 25 years after the date of entry into

force of this Agreement, Mexico may require permits for

the importation of used automotive goods provided for

in the following existing items in the Tariff Schedule

of the General Import Duty Act ("Tarifa de la Ley del

Impuesto General de Importación"). As of the 26th year

after the date of entry into force of this Agreement,

Mexico may require permits for the importation of

non-originating automotive goods provided for under

such items. For purposes of reference, the goods

covered by those items are broadly identified next to

the corresponding item.

Item Description

8701.20.01 Road Tractors for semi-trailers

8702.10.01 Public-transport type passenger vehicles, with

diesel or semi-diesel engine, with body mounted on

a chassis.

8702.10.02 Public-transport type passenger vehicles, with

diesel or semi-diesel engine, with an integral

body.

8702.90.01 Trolleys.

8702.90.02 Public-transport type passenger vehicles, with

gasoline engine, with body mounted on a chassis.

8702.90.03 Public-transport type passenger vehicles, with

gasoline engine, with an integral body.

8703.10.01 Special vehicles with electric engine

(snowmobiles, golf cart).

8703.10.99 Other special vehicles.

8703.21.01 Passenger motor vehicles with gasoline engine of

less than or equal to 1,000 cm3.

8703.22.01 Passenger motor vehicles with gasoline engine of

more than 1,000 cm3 but less than 1,500 cm3.

8703.23.01 Passenger motor vehicles with gasoline engine of

more than 1,500 cm3 but less than or equal to

3,000 cm3.

8703.24.01 Passenger motor vehicles with gasoline engine of

more than 3,000 cm3.

8703.31.01 Passenger motor vehicles with diesel engine of

less than or equal to 1,500 cm3.

8703.32.01 Passenger motor vehicles with diesel engine of

more than 1,500 cm3 but less than or equal to

2,500 cm3.

8703.33.01 Passenger motor vehicles with diesel engine of

more than 2,500 cm3.

8703.90.01 Electrical motor cars.

8703.90.99 Other passenger vehicles.

8704.21.99 Motor vehicles for the transport of goods with

diesel engine and with capacity of cargo of less

than or equal to 5 tons.

8704.22.99 Motor vehicles for the transport of goods with

diesel engine and capacity of cargo of more than 5

tons but less than 20 tons.

8704.23.99 Motor vehicles for the transport of goods with

diesel engine and capacity of cargo of more than

20 tons.

8704.31.99 Motor vehicles for the transport of goods with

gasoline engine and with capacity of cargo of less

than or equal to 5 tons.

8704.32.99 Motor vehicles for the transport of goods with

gasoline engine and with capacity of cargo of more

than 5 tons.

8705.10.01 Mobile crane vehicles.

8705.20.01 Mobile drilling derricks.

8705.20.99 Other drilling derricks.

8705.40.01 Concrete mixers.

8705.90.01 Spraying vehicles.

8705.90.99 Other special purpose vehicles.

8706.00.01 Chassis fitted with gasoline engine.

8706.00.99 Other chassis fitted with gasoline engine.

=============================================================================

Section C - United States Measures

Articles 301 and 309 shall not apply to:

(a) controls by the United States on the export of logs of

all species;

(b) 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));

(c) measures under existing provisions of section 27 of the

Merchant Marine Act (46 U.S.C. App. 883), the Passenger

Vessel Act of 1920 (46 U.S.C. App. 289), the Merchant

Ship Sales Act of 1946 (46 U.S.C. App. 292, 316, and 46

U.S.C. 12108); and

(d) import restrictions with respect to Canada imposed

under existing provisions of section 22 of the

Agricultural Adjustment Act of 1933 (7 U.S.C. 624).

=============================================================================

ANNEX 302.2

Tariff Elimination

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):

(a) 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;

(b) duties on goods provided for in the items in staging

category B in a Party's Schedule shall be removed in 5

equal annual stages commencing on January 1, 1994, and

such goods shall be duty-free, effective January 1,

1998;

(c) 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 commencing on January 1, 1994, and

such goods shall be duty-free, effective January 1,

2003;

(d) 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 commencing on January 1, 1994,

and such goods shall be duty-free, effective January 1,

2008; and

(e) goods provided for in the items in staging category D

in a Party's Schedule shall continue to receive duty-

free treatment.

(other staging categories will be displayed in the

tariff schedules of each Party and may be incorporated

here.)

2. The base rate of duty and staging category for determining

the interim rate of duty at each stage of reduction for an item

are indicated for the item in each Party's Schedule attached to

this Annex. These rates generally reflect the rate of duty in

effect on July 1, 1991, including rates under 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 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 part of this Agreement, to an

originating good provided that:

(a) notwithstanding any provision in Chapter Four of this

Agreement, 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

(b) 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 the rate applicable under the staging

category set out for an item contained in column I of section A

of this Annex to an originating good provided that:

(a) notwithstanding any provision to the contrary 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

(b) any processing that occurs in the United States 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.

6. Canada shall apply to an originating good to which neither

paragraph 4 nor paragraph 5 applies, the applicable rate

indicated for an item contained in column II, reduced in

accordance with the staging category of column I of section A of

this Annex except as otherwise indicated, or where there is a

letter "X" (to be replaced with descriptive language) in column

II, the applicable rate of duty for the item shall be the higher

of:

(a) the General Preferential Tariff rate of duty for that

item applied on July 1, 1991, reduced in accordance

with the applicable staging category set out for that

item in column I of its Schedule; or

(b) the applicable rate under the staging category for that

item set out in Annex 401.2, as amended, of the Canada -

United States Free Trade Agreement.

7. Paragraphs 4, 5 and 6 shall not apply to goods provided for

under Chapters 50 through 63 of the Harmonized System and to

other goods identified in Appendix 1.1 of Annex 300-B (Textiles

and Apparel Goods).

8. Mexico shall apply the rate applicable under the staging

category set out for an item in column II of section B of this

Annex to an originating good when the good qualifies to be marked

as a good of Canada, pursuant to Annex 312, without regard to

whether the good is marked.

9. Mexico shall apply the rate applicable under the staging

category set out for an item in column I of section B of this

Annex to an originating good when the good qualifies to be marked

as a good of the United States, pursuant to Annex 312, without

regard to whether the good is marked.

10. The United States 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 Canada pursuant to Annex 312, without regard to whether the

good is marked.

11. The United States shall apply the rate applicable under the

staging category set out for an item in section C of this Annex

to an originating good when the good qualifies to be marked as a

good of Mexico pursuant to Annex 312, whether or not the good is

marked.

=============================================================================

SECTION A - SCHEDULE OF CANADA

(TARIFF SCHEDULE TO BE ATTACHED)

SECTION B - SCHEDULE OF MEXICO

(TARIFF SCHEDULE TO BE ATTACHED)

SECTION C - SCHEDULE OF THE UNITED STATES

(TARIFF SCHEDULE TO BE ATTACHED)

=============================================================================

ANNEX 303.6

Goods Not Subject to Article 303

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:

(a) imported citrus products;

(b) 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. tariff items 5811.00.20 (quilted cotton piece

goods), 5811.00.30 (quilted man-made piece goods) or

6307.90.99 (furniture moving pads) that are subject to

the most-favored-nation rate of duty when exported to

the territory of the other Party; (Canadian tariff

items to be added) and

(c) 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, 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

Section A - Canada

For Canada, Article 303 shall apply to a good imported into the

territory of Canada that is:

(a) 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;

(b) 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;

(c) 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; or

(d) substituted by an identical or similar 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 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:

(a) subsequently exported to the territory of another Party

on or after January 1, 2001;

(b) 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;

(c) 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; or

(d) substituted by an identical or similar 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:

(a) 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;

(b) 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;

(c) 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; or

(d) substituted by an identical or similar good that is

subsequently exported to the territory of Canada on or

after January 1, 1996, or substituted by an identical

or similar good that is subsequently exported to the

territory of Mexico on or after January 1, 2001.

=============================================================================

ANNEX 303.8

Exception to Article 303(8)

For Certain Cathode-Ray Picture Tubes

Mexico

Mexico may refund customs duties paid, or waive or reduce the

amount of customs duties owed, on goods provided for in

subheading 8540.xx 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 goods that would not have been

considered to be originating goods had this Agreement been in

force during that period, where the goods are:

(a) subsequently exported from the territory of Mexico to

the territory of the United States, or are used as

materials in the production of other goods that are

subsequently exported from the territory of Mexico to

the territory of the United States, or are substituted

by identical or similar goods used as materials in the

production of other goods that are subsequently

exported to the territory of the United States, in an

amount, for all such persons combined, no greater than

(i) 1,200,000 units in 1994,

(ii) 1,000,000 units in 1995,

(iii) 800,000 units in 1996,

(iv) 600,000 units in 1997,

(v) 400,000 units in 1998,

(vi) 200,000 units in 1999, and

(vii) zero units in 2000 and thereafter,

provided that the number of goods 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 such goods qualifying

as originating goods 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

(b) subsequently exported from the territory of Mexico to

the territory of Canada, or used as materials in the

production of other goods that are subsequently

exported from the territory of Mexico to the territory

of Canada, or are substituted by identical or similar

goods used as materials in the production of other

goods that are subsequently exported to the territory

of Canada, in an amount no greater than

(i) 75,000 units in 1994,

(ii) 50,000 units in 1995, and

(iii) zero units in 1996 and thereafter.

=============================================================================

ANNEX 304.1

Exceptions for Existing Waiver Measures

Article 304(1) shall not apply in respect of existing

Mexican waivers of customs duties, except that:

(a) Mexico shall not increase the ratio of customs duties

waived to customs duties owed relative to the

performance required under any such waiver; or

(b) Mexico shall not add any type of 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 Waiver Measures

For purposes of Article 304(2):

(a) Canada may condition on the fulfillment of a

performance requirement the waiver of customs duties

under any measure in effect on or before September 28,

1988, on any goods entered or withdrawn from warehouse

for consumption before January 1, 1998;

(b) 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;

(c) as between the United States and Canada, Article 405 of

the Canada - United States Free Trade Agreement is

incorporated and made 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; and

(d) Canada may grant duty waivers as set out in Annex 300-

A.

=============================================================================

ANNEX 307.1

Goods Re-Entered after Repair or Alteration

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:

(a) 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 duty for such goods applicable under

its Schedule attached to Annex 302.2;

(b) 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

duty for such goods applicable under the Tariff

Schedule of Canada attached to Annex 401.2 of the

Canada - United States Free Trade Agreement.

(c) 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 duty for such

goods applicable under its Schedule attached to Annex

401.2 of the Canada - United States Free Trade

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 duty

for such goods that would apply if such goods were included in

staging category B in the Schedule of Mexico attached to Annex

302.2.

Section C - United States

1. The United States may impose customs duties on:

(a) goods set out in section D, or

(b) goods that are not set out in section D and that are

not repaired or altered pursuant to a warranty,

regardless of their origin, that re-enter 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 duty

applicable under the Canada-U.S. Free Trade 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

duty of 50 percent reduced in five equal annual stages

commencing 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 [description under review]

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, ferry-boats, cargo ships,

barges and similar vessels for the transport of persons or goods,

including:

(a) tankers;

(b) refrigerated vessels, other than tankers; and

(c) 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 30.5m.

3. Light-vessels, 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, including drilling ships, drilling

barges and floating drilling rigs.

=============================================================================

ANNEX 307.3

Repair and Rebuilding of Vessels

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:

(a) remain eligible to engage in coastwise trade or to

access U.S. fisheries,

(b) transport U.S. government cargo, or

(c) participate in U.S. assistance programs, including the

"operating difference subsidy",

the United States shall, no later than the date of entry into

force of this Agreement:

(d) provide written clarification 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, where possible,

clarifications on "jumboizing", vessel conversions, and

emergency repairs, and

(e) commence a process to define the terms "repairs",

"emergency repairs", and "rebuilding" under U.S.

maritime legislation, including the Merchant Marine Act

of 1920 (codified at 46 U.S.C. App. 883) and the

Merchant Marine Act of 1936 (codified at 46 U.S.C. App.

1171, 1176, 1241 and 1241(o)).

=============================================================================

ANNEX 308.1

Most-Favored-Nation Rates of Duty on

Certain Automatic Data Processing Goods and Their Parts

Section A - General Provisions

1. Each Party shall reduce its most-favored-nation rate of duty

applicable to the goods provided for under the tariff provisions

set out in Tables 308.1.1 and 308.1.2 in section B of this Annex

to the rate set out therein, or to such reduced rate as the

Parties may agree, in accordance with the Schedule set out in

section B of this Annex, or with such accelerated schedule as the

Parties may agree.

2. Notwithstanding Chapter 3, 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 of this Annex

has been reduced in accordance with 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 of this Annex, 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 rate set out

therein or to such reduced rate as the Parties may agree.

=============================================================================

Section B - Rates of Duty and Schedule for Reduction

Table 308.1.1

Tariff Rate Schedule

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:

8471.92.90.11 3.7% S

8471.92.90.12 3.7% S

8471.92.90.19 3.7% S

Mexico:

8471.92.h1 3.7% S

United States:

8471.92.10 3.7% S

Display Units:

Canada:

8471.92.90.32 3.7% S

8471.92.90.39.a1 3.7% S

8471.92.90.39.a2 Free S

Mexico:

8471.92.h2 3.7% S

8471.92.h3 Free S

United States:

8471.92.30 Free S

8471.92.40.75 3.7% S

=============================================================================

Other Input or Output Units:

Canada:

8471.92.10.20 Free S

8471.92.10.90 Free S

8471.92.90.20 Free S

8471.92.90.40 Free S

8471.92.90.50 3.7% S

8471.92.90.91 Free S

8471.92.90.99 Free S

Mexico:

8471.92.h4 3.7% S

8471.92.h5 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

8504.40.a3 Free S

8504.90.a4 Free S

Table 308.1.2

Metal Oxide Varistors:

8533.40.a4 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:

8541.20 Free R

Mexico:

8541.20 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

=============================================================================

ANNEX 308.2

Most-Favored-Nation Rates of Duty

on Certain Color Television Picture Tubes

1. Any Party considering the reduction of its most-favored-

nation rate of customs duty for goods provided for in tariff

provision 8540.11.a2 (cathode-ray color television picture tubes,

including video monitor cathode-ray tubes, with a diagonal

exceeding 14 inches) during the first 10 years after the date of

entry into force of this Agreement shall consult with the other

Parties in advance of such reduction.

2. If any other Party objects in writing to such reduction, and

the Party proceeds with the reduction, any objecting Party may

raise its applicable rate of duty on originating goods provided

for in the corresponding tariff provision set out in its Schedule

attached to Annex 302.2, up to the applicable rate of duty as if

such good had been placed in staging category C for purpose of

tariff elimination.

=============================================================================

ANNEX 308.3

Most-Favored-Nation Duty-Free

Treatment of Local Area Network Apparatus

Section A - Canada

Canada shall accord most-favored-nation duty-free treatment

to goods provided for in item(s) [to be provided] of its tariff

schedule.

Section B - Mexico

Mexico shall accord most-favored-nation duty-free treatment

to goods provided for in item(s) [to be provided] of its tariff

schedule.

Section C - United States

The United States shall accord most-favored-nation duty-free

treatment to goods provided for in item(s) [to be provided] of

its tariff schedule.

For purposes of this Annex:

local area network apparatus means a good dedicated for use

solely or principally to permit the interconnection of automatic

data processing machines and units thereof for a network that is

used primarily for the sharing of resources such as central

processor units, data storage devices and input or output units,

including in-line repeaters, converters, concentrators, bridges

and routers, and printed circuit assemblies for physical

incorporation into automatic data processing machines and units

thereof suitable for use solely or principally with a private

network, and providing for the transmission, receipt, error-

checking, control, signal conversion or correction functions for

non-voice data to move through a local area network.

=============================================================================

ANNEX 311.2

Existing Customs User Fees

Section A - Mexico

Mexico shall not increase its customs processing fee

("derechos de tr mite aduanero") on originating goods, and shall

by June 30, 1999, eliminate such fee on originating goods.

Mexico B - United States

1. The United States shall not increase its merchandise

processing fee and shall eliminate such fee according to the

schedule set out in Article 403 of the Canada - United States

Free Trade Agreement on originating goods where those goods

qualify to be marked as goods of Canada pursuant to Annex 312,

without regard to whether the goods are marked.

2. The United States shall not increase its merchandise

processing fee and shall by June 30, 1999, eliminate such fee, on

originating goods where those goods qualify to be marked as goods

of Mexico pursuant to Annex 312, without regard to whether the

goods are marked.

=============================================================================

ANNEX 312

Country of Origin Marking

1. The Parties shall establish by January 1, 1994, rules for

determining whether a good is a good of a Party ("Marking Rules")

for the purposes of this Annex, Annex 300-B and Annex 302.2, and

for such other purposes as may be agreed.

2. Each Party may require that a good of another Party, as

determined in accordance with the Marking Rules, imported into

its territory bear a country of origin marking that indicates to

the ultimate purchaser of that good the name of its country of

origin.

3. Each Party shall permit the country of origin marking of a

good of another Party to be indicated in English, French or

Spanish, except that a Party may, as part of its general consumer

information measures, require that an imported good be marked

with its country of origin in the same manner as prescribed for

goods of that Party.

4. Each Party shall, in adopting, maintaining and administering

any measure relating to country of origin marking, minimize the

difficulties, costs and inconveniences that such measure may

cause to the commerce and industry of the other Parties.

5. Each Party shall:

(a) accept any reasonable method of marking, including the

use of stickers, labels, tags or paint, that ensures

that the marking is conspicuous, legible and

sufficiently permanent;

(b) exempt from a country of origin marking requirement a

good of another Party which

(i) is incapable of being marked,

(ii) cannot be marked prior to exportation to the

territory of another Party without causing injury

to the goods,

(iii) cannot be marked except at an expense which

would materially discourage its exportation

to the territory of another Party,

(iv) cannot be marked without materially impairing its

function or substantially detracting from its

appearance,

(v) is in a container that is marked in a manner that

will reasonably indicate the good's origin to the

ultimate purchaser,

(vi) is a crude substance,

(vii) is imported for use by the importer and is

not intended for sale in the form in which it

was imported,

(viii) is to be processed in the importing Party by

the importer, or on its behalf, in a manner

that results in a change of origin for

marking purposes, under the Marking Rules,

(ix) by reason of its character, or the circumstances

of its importation, the ultimate purchaser would

reasonably know its country of origin even though

it is not marked,

(x) was produced more than 20 years prior to its

importation,

(xi) was imported without the required marking and

cannot be marked after its importation except at

an expense that would materially discourage its

importation, provided that the failure to mark the

good before importation was not for the purpose of

avoiding compliance with such requirement,

(xii) for the purposes of temporary duty-free

admission, is in transit or in bond or

otherwise under customs administration

control,

(xiii) is an original work of art, or

(xiv) is provided for in headings 8541 or 8542, and

6904.10.

6. Except for a good described in subparagraphs 5(b)(vi),(vii),

(viii), (ix), (x), (xii), (xiii) and (xiv), a Party may provide

that, wherever a good is exempted under subparagraph 5(b), its

outermost container that ordinarily reaches the ultimate

purchaser shall be marked so as to indicate the country of origin

of the good it contains.

7. Each Party shall provide that:

(a) a usual container imported empty, whether or not

disposable, shall not be required to be marked with its

own country of origin, but the container in which it is

imported may be required to be marked with the country

of origin of its contents; and

(b) a usual container imported filled, whether or not

disposable,

(i) shall not be required to be marked with its own

country of origin, but

(ii) may be required to be marked with the country of

origin of its contents, unless the contents are

marked with their country of origin and the

container can be readily opened for inspection of

the contents, or the marking of the contents is

clearly visible through the container.

8. Each Party shall, whenever administratively practicable,

permit an importer to mark a good subsequent to importation but

prior to release of the good from customs control or custody,

unless there have been repeated violations of the country of

origin marking requirements of that Party by the same importer

and that importer has been previously notified in writing that

such good is required to be marked prior to importation.

9. Each Party shall provide that, except with respect to

importers that have been notified under paragraph 8, no special

duty or penalty shall be imposed for failure to comply with

country of origin marking requirements, unless a good is removed

from customs custody or control without being properly marked, or

a deceptive marking has been used.

10. The Parties shall cooperate and consult on matters related

to this Annex, including additional exemptions from a country of

origin marking requirement, in accordance with Chapter Five

(Customs Procedures).

11. For purposes of this Annex:

conspicuous means capable of being easily seen with normal

handling of the good or container;

legible means capable of being easily read;

materially discourage means add a cost to the good that is

substantial in relation to its customs value;

sufficiently permanent means capable of remaining in place until

the good reaches the ultimate purchaser, unless deliberately

removed;

the form in which it was imported means the condition of the good

before it has undergone one of the changes in tariff

classification described in the Marking Rules;

ultimate purchaser means the last person in the territory of the

Party into which the good is imported that purchases the good in

the form in which it was imported; such purchaser need not be the

last person that will use the good; and

usual container means the container in which a good will

ordinarily reach its ultimate purchaser.

=============================================================================

ANNEX 314

Distinctive Products

1. Mexico and Canada shall recognize Bourbon Whiskey and

Tennessee Whiskey, which is a straight Bourbon Whiskey authorized

to be produced only in the State of Tennessee, as distinctive

products of the United States. Accordingly, Mexico and Canada

shall not permit the sale of any product as Bourbon Whiskey or

Tennessee Whiskey, unless it has been manufactured in the United

States in accordance with the laws and regulations of the United

States governing the manufacture of Bourbon Whiskey and Tennessee

Whiskey.

2. The United States and Mexico shall recognize Canadian

Whiskey as a distinctive product of Canada. Accordingly, the

United States and Mexico shall not permit the sale of any product

as Canadian Whiskey, unless it has been manufactured in Canada in

accordance with the laws and regulations of Canada governing the

manufacture of Canadian Whiskey for consumption in Canada.

3. The United States and Canada shall recognize Tequila and

Mezcal as distinctive products of Mexico. Accordingly, the

United States and Canada shall not permit the sale of any product

as Tequila or Mezcal, unless it has been manufactured in Mexico

in accordance with the laws and regulations of Mexico governing

the manufacture of Tequila and Mezcal. This provision shall

apply to Mezcal, either on the date of entry into force of this

Agreement, or 90 days after the date when the official standard

for this product is made obligatory by the Government of Mexico,

whichever is later.

=============================================================================

ANNEX 315

Export Taxes

Mexico

1. Mexico may adopt or maintain a duty, tax, or other charge on

the export of those basic foodstuffs set out in paragraph 4, on

their ingredients, or on the goods from which such foodstuffs are

derived, if such duty, tax, or other charge is adopted or

maintained on the export of such goods to the territory of all

other Parties, and is used:

(a) to limit to domestic consumers the benefits of a

domestic food assistance program with respect to such

foodstuff; or

(b) to ensure the availability of sufficient quantities of

such foodstuff to domestic consumers or of sufficient

quantities of its ingredients, or of the goods from

which such foodstuffs are derived, to a domestic

processing industry, when the domestic price of such

foodstuff is held below the world price as part of a

governmental stabilization plan, provided that such

duty, tax, or other charge

(i) does not operate to increase the protection

afforded to such domestic industry, and

(ii) is maintained only for such period of time as is

necessary to maintain the integrity of the

stabilization plan.

2. Notwithstanding paragraph 1, Mexico may adopt or maintain a

duty, tax, or other charge on the export of any foodstuff to the

territory of another Party if such duty, tax, or other charge is

temporarily applied to relieve critical shortages of that

foodstuff. For purposes of this paragraph, "temporarily" means

up to one year, or such longer period as the Parties may agree.

3. Mexico may maintain its existing tax on the export of goods

provided for under tariff item 4001.30.02 of the Tariff Schedule

of the General Export Duty Act ("Tarifa de la Ley del Impuesto

General de Exportación") for up to 10 years after the date of

entry into force of this Agreement.

=============================================================================

4. For purposes of paragraph 1, "basic foodstuffs" means:

Beans

Beef steak or pulp

Beef liver

Beef remnants and bones ("retazo con

hueso")

Beer

Bread

Brown sugar

Canned sardines

Canned tuna

Canned peppers

Chicken broth

Condensed milk

Cooked ham

Corn tortillas

Corn flour

Corn dough

Crackers

Eggs

Evaporated milk

French rolls ("pan blanco")

Gelatine

Ground beef

Instant coffee

Low-priced cookies ("galletas dulces

populares)

Margarine

Oat flakes

Pasteurized milk

Powdered chocolate

Powdered milk for children

Powdered milk

Rice

Roasted coffee

Salt

Soft drinks

Soup paste

Tomato puree

Vegetable oil

Vegetable fat

Wheat flour

White sugar

=============================================================================

ANNEX 316

Other Export Measures

Article 316 shall not apply as between Mexico and the other

Parties.