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.