North American Free Trade Agreement

Part Two: Trade in Goods

(a) goods covered by Annex 300-A (Trade and Investment in the Automotive Sector),

(b) goods covered by Annex 300-B (Textile and Apparel Goods), and

(c) goods covered by another Chapter in this Part, 

(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, 

(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 and Sanitary and Phytosanitary Measures); 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.

(a) shall assess the customs duties as if the exported good had been withdrawn for domestic consumption; and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.

(a) shall collect customs duties as if the exported good had been withdrawn for domestic consumption; and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 on the timely presentation of such evidence under its laws and regulations.

(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). Except as provided in Annex 703.2, Section A, paragraph 12, where such a good has been commingled with fungible goods and exported in the same condition, its origin for purposes of this subparagraph, may be determined on the basis of the inventory methods provided for in the Uniform Regulations established under Article 511 (Uniform Regulations);

(c) a good imported into the territory of a Party that is deemed to be exported from its territory, or used as a material in the production of another good that is deemed to be exported to the territory of another Party, or is substituted by an identical or similar good used as a material in the production of another good that is deemed to be exported to the territory of another Party, by reason of

(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 or more of the Parties and that will subsequently become the property of the Party into whose territory the good was deemed to be imported;

(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) an originating good that is imported into the territory of a Party and is subsequently exported to the territory of another Party, or used as a material in the production of another good that is subsequently exported to the territory of another Party, or is substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of another Party; or

(f) a good set out in Annex 303.6.

(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 Sixteen (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 or demonstration, and

(d) commercial samples and advertising films,

(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 on entry or final importation, or by another form of security, releasable on exportation of the good, except that a bond for customs duties shall not be required for an originating good;

(e) be capable of identification when exported;

(f) be exported on the departure of that person or within such other period of time as is reasonably related to the purpose of the temporary admission; and

(g) be imported in no greater quantity than is reasonable for its intended use.

(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.

(a) each Party shall allow a vehicle or container used in international traffic that enters its territory from the territory of another Party to exit its territory on any route that is reasonably related to the economic and prompt departure of such vehicle or container;

(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.

(a) such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of another Party or non-Party; or

(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.

(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 the non-Party, directly or indirectly, without being consumed in the territory of the other Party.

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

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

(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 36month period for which data are available prior to the imposition of the measure, or in such other representative period on which the Parties may agree;

(b) the Party does not impose a higher price for exports of a good to that other Party than the price charged for such good when consumed domestically, by means of any measure, such as licenses, fees, taxation and minimum price requirements. The foregoing provision does not apply to a higher price that may result from a measure taken pursuant to subparagraph (a) that only restricts the volume of exports; and

(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.

(a) actually consumed; or

(b) further processed or manufactured so as to result in a substantial change in value, form or use of the good or in the production of another good;

(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, 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 and Sanitary and Phytosanitary Measures);

(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;

(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;

(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;

(d) any other evidence of payment of customs duties acceptable under the Uniform Regulations established in accordance with Chapter Five (Customs Procedures);

(a) domestic production;

(b) domestic inventory; and

(c) other imports as appropriate; and

(a) New Brunswick Fish Processing Act , R.S.N.B. c. F­18.01 (1982), and Fisheries Development Act, S.N.B. c. F15.1 (1977);

(b) Newfoundland Fish Inspection Act , R.S.N. 1990, c. F­12;

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

(d) Prince Edward Island Fish Inspection Act , R.S.P.E.I. 1988, c. F­13; and

(e) Quebec Marine Products Processing Act , No. 38, S.Q. 1987, c. 51.

(a) except as provided in Annex 300-A, Appendix 300-A.1, paragraph 4, measures by Canada respecting the importation of any goods enumerated or referred to in Schedule VII of the Customs Tariff , R.S.C. 1985, c. 41 (3rd Supp.), as amended,

(b) measures by Canada respecting the exportation of liquor for delivery into any country into which the importation of liquor is prohibited by law under the existing provisions of the Export Act , R.S.C. 1985, c. E18, as amended,

(c) measures by Canada respecting preferential rates for certain freight traffic under the existing provisions of the Maritime Freight Rate Act , R.S.C. 1985, c. M-1, as amended,

(d) Canadian excise taxes on absolute alcohol used in manufacturing under the existing provisions of the Excise Tax Act , R.S.C. 1985, c. E-14, as amended, and

(e) measures by Canada prohibiting the use of foreign or non-duty paid ships in the coasting trade of Canada unless granted a license under the Coasting Trade Act , S.C. 1992, c. 31,

(a) the continuation or prompt renewal of a non-conforming provision of any statute referred to in paragraph 2 or 3; and

(b) the amendment to a non-conforming provision of any statute referred to in paragraph 2 or 3 to the extent that the amendment does not decrease the conformity of the provision with Articles 301 and 309.

(a) 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; and

(b) export permit measures applied to goods for exportation to another Party that are subject to quantitative restrictions or tariff rate quotas adopted or maintained by that other Party.

(a) the continuation or prompt renewal of a non-conforming provision of the statute referred to in paragraph 2(a); and

(b) the amendment to a non-conforming provision of the statute referred to in paragraph 2(a) to the extent that the amendment does not decrease the conformity of the provision with Articles 301 and 309.

(b) Notwithstanding subparagraph (a), Mexico shall not prohibit or restrict the importation, on a temporary basis, of used goods provided for in the items set out in subparagraph (c) for the provision of a crossborder service subject to Chapter Twelve (CrossBorder Trade in Services) or the performance of a contract subject to Chapter Ten (Government Procurement), provided that the imported goods

(i) are necessary to the provision of the cross border service or the performance of the contract awarded to a supplier of another Party,

(ii) are used solely by or under the supervision of the service provider or the supplier performing the contract,

(iii) are not sold, leased or loaned while in the territory of Mexico,

(iv) are imported in no greater quantity than is necessary for the provision of the service or the performance of the contract,

(v) are reexported promptly on completion of the service or the contract, and

(vi) comply with other applicable requirements on the importation of such goods to the extent they are not inconsistent with this Agreement.

(c) Subparagraph (b) applies to used goods provided for in the following items:

(a) taxes on imported perfume containing distilled spirits under existing provisions of section 5001(a)(3) and 5007(b)(2) of the Internal Revenue Code of 1986, 26 U.S.C. 5001(a)(3), 5007(b)(2), and

(b) measures under existing provisions of the Merchant Marine Act of 1920, 46 App. U.S.C. 883; the Passenger Vessel Act, 46 App. U.S.C. 289, 292, and 316; and 46 U.S.C. 12108, 

to the extent that such measures were mandatory legislation at the time of the United States' accession to the GATT and have not been amended so as to decrease their conformity with the GATT.

(a) the continuation or prompt renewal of a non-conforming provision of any statute referred to in paragraph 2; and

(b) the amendment to a non-conforming provision of any statute referred to in paragraph 2 to the extent that the amendment does not decrease the conformity of the provision with Articles 301 and 309.

(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 five equal annual stages beginning 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 beginning 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 beginning 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.

(a) notwithstanding any provision in Chapter Four, in determining whether such good is an originating good, operations performed in or materials obtained from Mexico are considered as if they were performed in or obtained from a non-Party; and

(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.

(a) notwithstanding any provision in Chapter Four, in determining whether such good is an originating good, operations performed in or materials obtained from the United States are considered as if they were performed in or obtained from a non-Party; and

(b) any processing that occurs in the United States after subparagraph (a) does not increase the transaction value of the good by greater than seven percent.

(a) in each year of the staging category indicated in Column I, the higher of

(i) the rate of customs duty under the staging category set out for the item in Annex 401.2, as amended, of the Canada-United States Free Trade Agreement , and

(ii) the General Preferential Tariff rate of customs duty for the item applied on July 1, 1991, reduced in accordance with the applicable staging category set out for the item in Column I of its Schedule to this Annex; or

(b) where specified in Column II of its Schedule to this Annex, the most-favored-nation rate of customs duty for the item applied on July 1, 1991, reduced in accordance with the applicable staging category set out for the item in Column I of its Schedule to this Annex, or reduced in accordance with the applicable staging category otherwise indicated.

(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. items 5811.00.20 (quilted cotton piece goods), 5811.00.30 (quilted man-made piece goods) or 6307.90.99 (furniture moving pads), or Canadian items 5811.00.10 (quilted cotton piece goods), 5811.00.20 (quilted man-made piece goods) or 6307.90.30 (furniture moving pads), that are subject to the most-favored-nation rate of duty when exported to the territory of the other Party; and

(c) an imported good used as a material in the production in the production of, apparel that is subject to the most­favored­nation rate of duty when exported to the territory of the other Party.

(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; 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 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.

(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; 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 on or after January 1, 2001.

(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; or

(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.

(a) subsequently exported from the territory of Mexico to the territory of the United States, or is used as a material in the production of another good that is subsequently exported from the territory of Mexico to the territory of the United States, or is substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of the United States, in an amount, for all such persons combined, no greater than

(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 units of the good on which such customs duties may be refunded, waived or reduced in any year shall be reduced, with respect to that year, by the number of units of such good that qualifies as an originating good during the year immediately preceding that year, considering operations performed in, or materials obtained from, the territories of Canada and the United States as if they were performed in, or obtained from, a non-Party; or

(b) subsequently exported from the territory of Mexico to of another good that is subsequently exported from the territory of Mexico to the territory of Canada, or is substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of Canada, for all such persons combined, in an amount no greater than

(i) 75,000 units in 1994,

(ii) 50,000 units in 1995, and

(iii) zero units in 1996 and thereafter.

(a) increase the ratio of customs duties waived to customs duties owed relative to the performance required under any such waiver; or

(b) add any type of imported good to those qualifying on July 1, 1991, in respect of any waiver of customs duties in effect on that date.

(a) as between Canada and Mexico, Canada may condition on the fulfillment of a performance requirement the waiver of customs duties under any measure in effect on or before January 1, 1989, on any goods entered or withdrawn from warehouse for consumption before January 1, 1998;

(b) as between Canada and the United States, Article 405 of the Canada-United States Free Trade Agreement is hereby incorporated and made a part of this Annex solely with respect to measures adopted by Canada or the United States prior to the date of entry into force of this Agreement;

(c) Mexico may condition on the fulfillment of a performance requirement the waiver of customs duties under any measure in effect on July 1, 1991, on any goods entered or withdrawn from warehouse for consumption before January 1, 2001; and

(d) Canada may grant waivers of customs duties as set out in Annex 300-A (Trade and Investment in the Automotive Sector).

(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 customs duty for such goods applicable under its Schedule 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 customs duty for such goods applicable under the Tariff Schedule of Canada attached to Annex 401.2 of the Canada United States Free Trade Agreement, as incorporated into Annex 302.2 of this Agreement; and

(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 customs duty for such goods applicable under its Schedule attached to Annex 401.2 of the Canada United States Free Trade Agreement , as incorporated into Annex 302.2 of this Agreement.

(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,

(a) cruise ships, excursion boats, ferryboats, cargo ships, barges and similar vessels for the transport of persons or goods, including

(i) tankers,

(ii) refrigerated vessels, other than tankers, and

(iii) other vessels for the transport of goods and other vessels for the transport of both persons and goods, including open vessels;

(b) fishing vessels, including factory ships and other vessels for processing or preserving fishery products of a registered length not exceeding 30.5m;

(c) lightvessels, fire-floats, dredgers, floating cranes, and other vessels the navigability of which is subsidiary to their main function, floating docks, floating or submersible drilling or production platforms; and drilling ships, drilling barges and floating drilling rigs; and

(d) tugboats.

(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,"

(d) provide written clarification no later than July 1, 1993, to the other Parties of current U.S. Customs and Coast Guard practices that constitute, and differentiate between, the repair and the rebuilding of vessels, including clarifications with respect to "jumboizing", vessel conversions and casualty repairs, and

(e) begin a process, no later than the date of entry into force of this Agreement, to define the terms "repairs" and "rebuilding" under U.S. maritime law, including the Merchant Marine Act of 1920, 46 App. U.S.C. 883, and the Merchant Marine Act of 1936, 46 App. U.S.C. 1171, 1176, 1241 and 1241(o).

(a) accept any reasonable method of marking of a good of another Party, 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 that

(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 a cost that is substantial in relation to its customs value so as to discourage its exportation to the territory of the 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 undergo production in the territory of the importing Party by the importer, or on its behalf, in a manner that would result in the good becoming a good of the importing Party 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 a cost that would be substantial in relation to its customs value, provided that the failure to mark the good before importation was not for the purpose of avoiding compliance with the requirement,

(xii) for 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 subheading 6904.10, or heading 8541 or 8542.

(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.

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

(b) the continuation or prompt renewal of a non-conforming provision of any existing measure; or

(c) an amendment to a non-conforming provision of any existing measure to the extent that the amendment does not decrease its conformity with Article 301.

(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 the other Party.

(b) Notwithstanding paragraph 3(a) and Article 301, and provided that listing measures of British Columbia otherwise conform with paragraph 3(a) and Article 301, 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) Notwithstanding Article 301, Article I (Definitions) except for the definition of "distilled spirits", 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 changes as the circumstances may require.

(c) All discriminatory mark-ups on distilled spirits shall be
eliminated immediately on the date of entry into force of this Agreement. Cost-of-service differential mark-ups as described in subparagraph (a) shall be permitted.

(d) Any other discriminatory pricing measure shall be eliminated on the date of entry into force of this Agreement.

(b) Notwithstanding subparagraph (a), and provided that distribution measures otherwise ensure conformity with Article 301, a Party may

(i) maintain or introduce 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.

(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 Party, whether or not such wine is bottled in Quebec.

(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.

Article 315 shall not apply as between Mexico and the other Parties.

(a) has been sold, leased or loaned;

(b) has been driven for more than

(i) 1,000 kilometers if the vehicle has a gross weight of less than five metric tons, or

(ii) 5,000 kilometers if the vehicle has a gross weight of five metric tons or more; or

(c) was manufactured prior to the current year and at least 90 days have elapsed since the date of manufacture; and

(a) beginning January 1, 2009, Canada may not adopt or maintain a prohibition or restriction on imports from the territory of Mexico of originating used vehicles that are at least 10 years old;

(b) beginning January 1, 2011, Canada may not adopt or maintain a prohibition or restriction on imports from the territory of Mexico of originating used vehicles that are at least eight years old;

(c) beginning January 1, 2013, Canada may not adopt or maintain a prohibition or restriction on imports from the territory of Mexico of originating used vehicles that are at least six years old;

(d) beginning January 1, 2015, Canada may not adopt or maintain a prohibition or restriction on imports from the territory of Mexico of originating used vehicles that are at least four years old;

(e) beginning January 1, 2017, Canada may not adopt or maintain a prohibition or restriction on imports from the territory of Mexico of originating used vehicles that are at least two years old; and

(f) beginning January 1, 2019, Canada may not adopt or maintain a prohibition or restriction on imports from the territory of Mexico of originating used vehicles.

(a) the manufacturer's reference value as set out in paragraph 8; or

(b) the manufacturer's total national value added (VANt),

(a) 34 percent for each of the first five years beginning January 1, 1994;

(b) 33 percent for 1999;

(c) 32 percent for 2000;

(d) 31 percent for 2001;

(e) 30 percent for 2002; and

(f) 29 percent for 2003.

(a) for each of the years 1994 through 1997, the base value for the manufacturer, plus no more than 65 percent of the difference between the manufacturer's total sales in Mexico in that year and its base value;

(b) for each of the years 1998 through 2000, the base value for the manufacturer, plus no more than 60 percent of the difference between the manufacturer's total sales in Mexico in that year and its base value; and

(c) for each of the years 2001 through 2003, the base value for the manufacturer, plus no more than 50 percent of the difference between the manufacturer's total sales in Mexico in that year and its base value.

(a) 80 percent for 1994;

(b) 77.2 percent for 1995;

(c) 74.4 percent for 1996;

(d) 71.6 percent for 1997;

(e) 68.9 percent for 1998;

(f) 66.1 percent for 1999;

(g) 63.3 percent for 2000;

(h) 60.5 percent for 2001;

(i) 57.7 percent for 2002; and

(j) 55.0 percent for 2003.

(a) for a manufacturer that produced motor vehicles prior to model year 1992

(i) the greater of the manufacturer's reference value or the manufacturer's total national value added (VANt), minus

(ii) the manufacturer's actual national value added from suppliers (VANp) divided by the appropriate percentage specified under paragraph 6 or 7 as appropriate;

(b) for all other manufacturers

(i) the manufacturer's total national value added (VANt), minus

(ii) the manufacturer's actual national value added from suppliers (VANp) divided by the appropriate percentage specified under paragraph 6,

(a) to use the procedures of the existing Auto Decree Implementing Regulations; or

(b) to apply up to the Mexican peso equivalent of US$150 million, adjusted annually for cumulative inflation, from the date of entry into force of this Agreement, based on the implicit price deflator for U.S. Gross Domestic Product (GDP) or any successor index published by the Council of Economic Advisers in its "Economic Indicators" (hereinafter "U.S. GDP price deflator"). To adjust the US$150 million ceiling for cumulative inflation up to a certain month of a year following 1994, the $150 million shall be multiplied by the ratio of

(i) the U.S. GDP price deflator current as of the month of that year, to

(ii) the U.S. GDP price deflator current as of the date of entry into force of this Agreement,

provided that the price deflators under subparagraphs (i) and (ii) have the same base year.

The resulting adjusted amount shall be rounded to the nearest million dollars.

(a) for each of the years 1994 and 1995, no less than 15 percent of the total number of vehicles of each type of autotransportation vehicle produced in Mexico;

(b) for 1996, no less than 20 percent of the total number of vehicles of each type of autotransportation vehicle produced in Mexico; and

(c) for each of the years 1997 and 1998, no less than 30 percent of the total number of vehicles of each type of autotransportation vehicle produced in Mexico.

(a) beginning January 1, 2009, Mexico may not adopt or maintain a prohibition or restriction on imports from the territories of Canada or the United States of originating used vehicles that are at least 10 years old;

(b) beginning January 1, 2011, Mexico may not adopt or maintain a prohibition or restriction on imports from the territories of Canada or the United States of originating used vehicles that are at least eight years old;

(c) beginning January 1, 2013, Mexico may not adopt or maintain a prohibition or restriction on imports from the territories of Canada or the United States of originating used vehicles that are at least six years old;

(d) beginning January 1, 2015, Mexico may not adopt or maintain a prohibition or restriction on imports from the territories of Canada or the United States of originating used vehicles that are at least four years old;

(e) beginning January 1, 2017, Mexico may not adopt or maintain a prohibition or restriction on imports from the territories of Canada or the United States of originating used vehicles that are at least two years old; and

(f) beginning January 1, 2019, Mexico may not adopt or maintain a prohibition or restriction on imports from the territories of Canada or the United States of originating used vehicles.

(a) Paragraph 24 shall not apply to the importation on a temporary basis of a used vehicle provided for in item 8705.20.01 (mobile drilling derricks), 8705.20.99 (other mobile drilling derricks) or 8705.90.01 (street sweepers) of the Tariff Schedule of the General Import Duty Act . Such importation shall be subject to the conditions set out in Section 4(b) of Annex 301.3 for such time as Mexico may adopt or maintain a prohibition or restriction on the importation of the vehicle under paragraph 24.

(b) Paragraph 24 shall not be construed to allow Mexico to derogate from its obligations in respect of land transportation services under Chapter Twelve (Cross- Border Trade in Services), including its Schedule to Annex I.

(a) the Auto Decree and the Auto Decree Implementing Regulations, as modified by this Appendix, on the importation of motor vehicles;

(b) paragraph 19 of this Appendix on the importation of new automotive products provided for in item 8407.34.02 (gasoline engines larger than 1000cm3, but smaller than or equal to 2000 cm³, except for motorcycles) or 8703.10.99 (other special vehicles) in the Tariff Schedule of the General Import Duty Act ;

(c) paragraphs 22 and 23 of this Appendix on the importation of autotransportation vehicles; and

(d) paragraph 24 (a) through (f) of this Appendix on the importation of used vehicles that are motor vehicles or autotransportation vehicles or of other used vehicles provided for in existing items 8702.90.01 (trolley buses), 8705.10.01 (mobile cranes), 8705.20.99 (other mobile drilling derricks), 8705.90.01 (street sweepers) or 8705.90.99 (other special purpose vehicles, nes) in the Tariff Schedule of the General Import Duty Act ;

(a) a vehicle without a chassis and with an integrated body, intended for the transport of more than 10 persons, with a gross vehicle weight of more than 8,864 kilograms, provided for in items 8702.10.02, 8702.10.03, 8702.90.03, 8702.90.04, 8705.20.01 or 8705.40.01 of the Tariff Schedule of the General Import Duty Act ;

(b) a vehicle with a chassis, intended for the transport of goods or more than 10 persons, with a gross vehicle weight of more than 8,864 kilograms, provided for in items 8702.10.01, 8702.10.03, 8702.90.02, 8702.90.04, 8704.22.99, 8704.23.99, 8704.32.99, 8705.20.01, 8705.40.01 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ; or

(c) a vehicle with two or three axles, either with integrated equipment or intended for the transport of goods by hauling a trailer, or semi-trailer, provided for in items 8701.20.01, 8705.20.01, 8705.40.01 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ;

(a) the Mexican NPPI for that year, to

(b) the Mexican NPPI for 1992,

(a) whose annual invoice value of sales of autoparts to manufacturers, for use as original equipment by the manufacturer in its production of automotive products for sale in Mexico, constitutes more than 60 percent of the enterprise's annual total invoice value of sales, calculating its annual invoice value of sales of autoparts to manufacturers in accordance with rule 20 of the Auto Decree Implementing Regulations as of August 12, 1992, or any other measure adopted by Mexico that is no more restrictive than such rule;

(b) complies with the national value added requirements pursuant to paragraphs 2 and 3 of this Appendix;

(c) complies with the capital structure required under the Law to Promote Mexican Investment and Regulate Foreign Investment ("Ley para Promover la Inversión Mexicana y Regular la Inversión Extranjera"), March 9, 1973, and the Regulations of the Law to Promote Mexican Investment and to Regulate Foreign Investment ("Reglamento de la Ley para Promover la Inversión Mexicana y Regular la Inversión Extranjera"), May 16, 1989, as applied consistently with Mexico's commitments set out in its Schedule to Annex I of Part Five (Investment, Services and Related Matters); and

(d) that, on the fulfillment of the requirements under (a), (b) and (c), is registered with the Ministry of Trade and Industrial Development ("Secretaría de Comercio y Fomento Industrial") ("SECOFI") as an enterprise of the autoparts industry, except that SECOFI may grant registration to an enterprise that complies with subparagraphs (b) and (c) but does not comply with subparagraph (a);

(a) S denotes the manufacturer's trade balance;

(b) T denotes the transfer of

(i) trade balance surpluses between the manufacturer and other manufacturers, and

(ii) foreign exchange to the manufacturer that an enterprise of the autoparts industry has earned from exports of autoparts, excluding the value of import content in such exports, and excluding foreign exchange that the enterprise has earned from exports of autoparts that were promoted by the manufacturer,

applied in accordance with rule 8 of the Auto Decree Implementing Regulations as of August 12, 1992, or any other measure adopted by Mexico that is no more restrictive than such rule;

(c) W denotes the transfer to the manufacturer of foreign exchange that a maquiladora has earned from the export of automotive products, excluding the value of the import content in such exports, provided that the maquiladora is not a national supplier, and one or more of the following conditions is met

(i) the manufacturer is, directly or indirectly, a majority shareholder of the maquiladora,

(ii) the manufacturer and the maquiladora have a majority shareholder in common, or

(iii) the manufacturer is a promoter of the automotive goods exported by such maquiladora,

calculated in accordance with article 9 of the Auto Decree and rule 8 of the Auto Decree Implementing Regulations as of August 12, 1992, or any other measure adopted by Mexico that is no more restrictive than that article or rule;

(d) I denotes the value of the manufacturer's investments in fixed assets of Mexican origin destined for permanent use in Mexico, excluding machinery and equipment purchased in Mexico but not produced in Mexico, that the manufacturer may transfer to its extended trade balance, applied in accordance with article 11 of the Auto Decree and rule 8 of the Auto Decree Implementing Regulations as of August 12, 1992, or any other measure adopted by Mexico that is no more restrictive than the article or rule;

(e) SFt denotes the manufacturer's trade balance surpluses unused in prior years and transferred to the current year, calculated in accordance with rules 17 and 19 of the Auto Decree Implementing Regulations as of August 12, 1992, as modified by paragraph 16 of this Appendix, or any other measure adopted by Mexico that is no more restrictive than such rules; and

(f) Y denotes the adjustment factor calculated in accordance with paragraph 15;

(a) registered with SECOFI; and

(b) engaged in Mexico in the manufacture or final assembly of motor vehicles;

(a) that is registered with SECOFI;

(b) that manufactures autotransportation vehicles in Mexico; and

(c) where the enterprise's

(i) total invoice value of sales of autotransportation vehicles and autotransportation parts that it produces in Mexico, minus

(ii) total invoice value of autotransportation parts that the enterprise imports directly, plus the value of the import content of autotransportation parts that it purchases in Mexico,

is equal to at least 40 percent of its total invoice value of sales of autotransportation vehicles and autotransportation parts that the enterprise produces in Mexico;

(a) automobile means a vehicle intended for the transport of up to 10 persons, provided for in items 8703.21 through 8703.33, 8703.90.99, 8706.00.01, 8706.00.02 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ;

(b) compact automobile of popular use means a vehicle that complies with the characteristics set out in the existing Decree that Establishes Exemptions for Compact Automobiles of Popular Use ("Decreto que Otorga Exenciones a los Automóviles Compactos de Consumo Popular"), August 2, 1989, provided for in items 8703.21 through 8703.33, 8703.90.99, 8706.00.01, 8706.00.02 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ;

(c) commercial truck means a vehicle with or without a chassis, intended for the transport of goods or more than 10 persons, with a gross vehicle weight of up to 2,727 kilograms provided for in items 8702.10, 8702.90.02, 8702.90.03, 8702.90.04, 8703.21 through 8703.33, 8703.90.99, 8704.21.99, 8704.31.99, 8705.20.01, 8705.40.01, 8706.00.01, 8706.00.02 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ;

(d) light duty truck means a vehicle with or without a chassis, intended for the transport of goods or more than 10 persons, with a gross vehicle weight of more than 2,727 but no more than 7,272 kilograms provided for in items 8702.10, 8702.90.02, 8702.90.03, 8704.90.04, 8704.21.99, 8704.22.99, 8704.31.99, 8704.32.99, 8705.20.01, 8705.40.01, 8706.00.01, 8706.00.02 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ; and

(e) medium duty truck means a vehicle with or without a chassis, intended for the transport of goods or more than 10 persons, with a gross vehicle weight of more than 7,272 but no more than 8,864 kilograms provided for in items 8702.10, 8702.90.02, 8702.90.03, 8702.90.04, 8704.22.99, 8704.32.99, 8705.20.01, 8705.40.01, 8706.00.01, 8706.00.02 or 8706.00.99 of the Tariff Schedule of the General Import Duty Act ;

(a) that supplies to manufacturers autoparts classified in categories 26, 40, 41, 42, 43 and 57 of the input-output matrix of the National Institute of Statistics, Geography and Informatics ("Instituto Nacional de Estadística, Geografía e Informática"), published in 1980;

(b) that is registered with SECOFI;

(c) in which no manufacturer, directly or indirectly, is a majority shareholder;

(d) that has no majority shareholders that are also majority shareholders of any manufacturer; and

(e) that complies with the national value added requirements pursuant to paragraphs 2 and 3;

(a) the national value added contained in the autoparts that the manufacturer purchases from national suppliers and from enterprises of the autoparts industry, excluding purchases of autoparts from such suppliers and enterprises destined for the aftermarket, and

(b) the foreign exchange attributable to the value of exports of autoparts, excluding the value of import content in the exports, produced by national suppliers and enterprises of the autoparts industry, where the export of the autoparts was promoted by the manufacturer,

(a) the sum of the manufacturer's production in Mexico for sale in Mexico (VTVd) plus the manufacturer's trade balance (S), where the trade balance (S) is greater than zero; or

(b) the manufacturer's production in Mexico for sale in Mexico (VTVd), where the manufacturer's trade balance (S) is negative;

(a) the invoice value of sales of autoparts by that supplier or enterprise to a manufacturer that are intended for use as original equipment in the motor vehicles or autoparts that the manufacturer produces, excluding autoparts destined for the aftermarket; and

(b) the value of autoparts that the supplier or enterprise exports, either directly or through a manufacturer, less the value of the imported content of such autoparts; and

(a) X denotes the value of the manufacturer's direct exports of motor vehicles and autoparts that it produces,

(b) TP denotes the foreign exchange attributable to the value of exports of autoparts, excluding the value of import content in the exports, produced by national suppliers and enterprises of the autoparts industry, where the exportation of such autoparts was promoted by the manufacturer,

(c) ID denotes the value of the manufacturer's direct imports, excluding duties and domestic taxes, and whether the imports are for domestic consumption ("definitivas") or for re-export ("temporales"), incorporated in the motor vehicles and autoparts produced by the manufacturer, excluding autoparts destined for the aftermarket, and

(d) IP denotes the value of import content in the autoparts purchased by the manufacturer from an enterprise of the autoparts industry or a national supplier that are incorporated in the motor vehicles and autoparts produced by the manufacturer, excluding the import content of autoparts destined for the aftermarket, calculated in accordance with rules 10, 12, 13, 14, and 15 of the Auto Decree Implementing Regulations as of August 12, 1992, or any other measure adopted by Mexico that is no more restrictive than such rules,

(a) with respect to a manufacturer that initiated the production of automobiles in Mexico before model year 1992, the enterprise subject to the fuel economy requirements for those automobiles under the CAFE Act may make a one-time election at any time between January 1, 1997 and January 1, 2004, to have paragraph 1 applied beginning with the next model year after its election;

(b) with respect to a manufacturer initiating the production of automobiles in Mexico after model year 1991, paragraph 1 shall apply beginning with the next model year after either January 1, 1994 or the date that the manufacturer initiates the production of automobiles in Mexico, whichever is later;

(c) with respect to any other manufacturer producing automobiles in the territory of a Party, the enterprise subject to the fuel economy requirements for those automobiles under the CAFE Act may make a one-time election at any time between January 1, 1997 and January 1, 2004, to have paragraph 1 applied beginning with the next model year after its election. If such a manufacturer initiates the production of automobiles in Mexico, it shall be subject to subparagraph (b) on the date it initiates such production;

(d) with respect to all manufacturers of automobiles not producing automobiles in the territory of a Party, paragraph 1 shall apply beginning with the next model year after January 1, 1994; and

(e) with respect to a manufacturer of automobiles covered by subparagraph (a) or (c), paragraph 1 shall apply beginning with the next model year after January 1, 2004, where the enterprise subject to the fuel economy requirements for those automobiles under the CAFE Act, has not made an election under subparagraph (a) or (c).

(a) a textile or apparel good shall be considered an originating good if the applicable change in tariff classification set out in Chapter Four (Rules of Origin) has been satisfied in the territory of one or more of the Parties in accordance with Article 404 (Accumulation); and

(b) for purposes of determining which rate of customs duty and staging category is applicable to an originating textile or apparel good, a good shall be considered a good of a Party

(i) as determined by each importing Party's regulations, practices or procedures, except that

(ii) in the event of an agreement between the Parties pursuant to

Annex 311 as determined by such agreement.

(a) hand-loomed fabrics of a cottage industry;

(b) hand-made cottage industry goods made of such hand-loomed fabrics; or

(c) traditional folklore handicraft goods.

(a) suspend the further reduction of any rate of duty provided for under this Agreement on the good; or

(b) increase the rate of duty on the good to a level not to exceed the lesser of

(i) the most-favored-nation (MFN) applied rate of duty in effect at the time the action is taken, and

(ii) the MFN applied rate of duty in effect on December 31, 1993.

(a) shall examine the effect of increased imports on the particular industry, as reflected in changes in such relevant economic variables as output, productivity, utilization of capacity, inventories, market share, exports, wages, employment, domestic prices, profits and investment, none of which is necessarily decisive; and

(b) shall not consider changes in technology or consumer preference as factors supporting a determination of serious damage or actual threat thereof.

(a) no action may be maintained for a period exceeding three years or, except with the consent of the Party against whose good the action is taken, have effect beyond the expiration of the transition period;

(b) no action may be taken by a Party against any particular good originating in the territory of another Party more than once during the transition period; and

(c) on termination of the action, the rate of duty shall be the rate that, according to the Schedule for the staged elimination of the tariff, would have been in effect one year after the initiation of the action, and beginning January 1 of the year following the termination of the action, at the option of the Party that has taken the action

(i) the rate of duty shall conform to the applicable rate set out in that Party's Schedule to Annex 302.2, or

(ii) the tariff shall be eliminated in equal annual stages ending on the date set out in that Party's Schedule to Annex 302.2 for the elimination of the tariff.

(a) consider the situation in the market in the importing Party;

(b) consider the history of trade in textile and apparel goods between the consulting Parties, including previous levels of trade; and

(c) seek to ensure that the textile and apparel goods imported from the territory of the exporting Party are accorded equitable treatment as compared with treatment accorded like textile and apparel goods from non-Party suppliers.

(a) the quantity of the good imported into the territory of the Party requesting consultations from the Party that would be affected by the restriction, as reported in general import statistics of the importing Party, during the first 12 of the most recent 14 months preceding the month in which the request for consultations was made; and

(b) 20 percent of such quantity for cotton, man-made fiber and other non-cotton vegetable fiber good categories, and six percent for wool good categories.

(a) increase it by six percent for cotton, man-made fiber and noncotton vegetable fiber textile and apparel goods, and by two percent for wool textile and apparel goods, and

(b) accelerate the growth rate for quantitative restrictions on cotton, man-made fiber and non-cotton vegetable fiber textile and apparel goods if required by any successor agreement to the Multifiber Arrangement,

(b) If the consulting Parties fail to reach a mutually satisfactory solution within 90 days of a request for consultations, on request of any Party the rule of origin applicable to subheading 6212.10 shall change to the rule of origin set out in Annex 401 applicable to headings 62.06 through 62.11 with respect to trade between the requesting Party and the other Parties. Any such change shall be effective 180 days after the request. The Parties shall take measures to ease any resulting administrative burden on producers.

(c) Unless the Parties agree otherwise, at any time after the completion of consultations held under subparagraph (a) and during the transition period only, a Party that has requested such consultations may make one additional request for consultations under subparagraph (a) and take action under subparagraph (b).

(b) In the consultations, each Party shall consider all data presented by a Party showing substantial production in its territory of the particular good. The consulting Parties shall consider that substantial production has been shown if that Party demonstrates that its domestic producers are capable of supplying commercial quantities of the good in a timely manner.

(c) The Parties shall endeavor to conclude consultations within 60 days of the request. An agreement between two or more Parties resulting from the consultations shall supersede any prior rule of origin for such good when approved by each such Party in accordance with Article 2202(2) (Amendments). If no agreement is reached, a Party may have recourse to paragraph B.8 of Appendix 6.

(d) Further to subparagraph (a), on request of any Party, the Parties shall consult to consider whether the rules of origin set out in Annex 401 applicable to the following provisions should be amended in view of increasing availability of supply of relevant yarns or fabrics within the free trade area:

(i) Canadian tariff item 5407.60.10, Mexican tariff item 5407.60.02 and U.S. tariff item 5407.60.22,

(ii) provisions (a) through (i) of the rule of origin for subheadings 6205.20 through 6205.30,

(iii) goods of subheadings 6107.21, 6108.21 and 6108.31, wholly of fabric of Canadian tariff item 6002.92.10, Mexican tariff item 6002.92.01, and U.S. tariff item 6002.92.10, and exclusive of collar, cuffs, waistband, elastic or lace;

(iv) note 2 to Chapter 62 of Annex 401, and

(v) Canadian tariff item 6303.92.10, Mexican tariff item 6303.92.01 and U.S. tariff item 6303.92.aa.

(a) include or consult with a broadly representative group drawn from the manufacturing and retailing sectors in each Party; and

(b) act in a transparent manner and, if no member of the Committee formally objects, make recommendations to the Commission.

N is the average yarn number,

B is the breadth (width) of the fabric in centimeters,

Y is the meters (linear) of the fabric per kilogram,

T is the total single yarns per square centimeter,

S is the square meters of fabric per kilogram,

Z is the grams per linear meter of fabric, and

Z' is the grams per square meter of fabric.

Fractions in the resulting "average yarn number" shall be disregarded.

(a) apparel in chief weight of wool;

(b) woven apparel in chief weight of man-made fibers containing 36 percent or more by weight of wool; and

(c) knitted or crocheted apparel in chief weight of man-made fibers containing 23 percent or more by weight of wool.

(a) duties on textile and apparel goods provided for in the items in staging category A in a Party's Schedule shall be eliminated entirely and such goods shall be dutyfree, effective January 1, 1994;

(b) duties on textile and apparel goods provided for in the items in staging category B6 in a Party's Schedule shall be reduced on January 1, 1994, by an amount equal, in percentage terms, to the base rates. Thereafter, duties shall be removed in five equal annual stages beginning on January 1, 1995, and such goods shall be dutyfree, effective January 1, 1999;

(c) duties on textile and apparel goods provided for in the items in staging category C in a Party's Schedule shall be removed in 10 equal annual stages beginning on January 1, 1994, and such goods shall be dutyfree, effective January 1, 2003; and

(d) if the application of a formula provided in subparagraph (b) or (c) for staging category B6 or C results in a duty that exceeds 20 percent ad valorem during any annual stage, the rate of duty during that stage shall be 20 percent ad valorem instead of the rate that otherwise would have applied.

(a) duties on textile and apparel goods provided for in the items in staging category A in a Party's Schedule shall be eliminated entirely and such goods shall be dutyfree, effective January 1, 1994;

(b) duties on textile and apparel goods provided for in the items in staging category Bl in a Party's Schedule shall be removed in six equal annual stages beginning on January 1, 1994, and such goods shall be dutyfree, effective January 1, 1999;

(c) duties on textile and apparel goods provided for in the items in staging category B+ in a Party's Schedule shall be reduced by the following percentages of the base rates, beginning on January 1, 1994, and such goods shall be dutyfree, effective January 1, 2001

(i) January 1, 1994, 20 percent

(ii) January 1, 1995, 0 percent

(iii) January 1, 1996, 10 percent

(iv) January 1, 1997, 10 percent

(v) January 1, 1998, 10 percent

(vi) January 1, 1999, 10 percent

(vii) January 1, 2000, 10 percent

(viii) January 1, 2001, 30 percent and

(d) duties on textile and apparel goods provided for in the items in staging category C in a Party's Schedule shall be removed in 10 equal annual stages beginning on January 1, 1994, and such goods shall be dutyfree, effective January 1, 2003.

(a) U.S. tariff item 9802.00.80.10; or

(b) Chapter 61, 62 or 63 if, after such assembly, those goods that would have qualified for treatment under 9802.00.80.10 have been subject to bleaching, garment dyeing, stonewashing, acidwashing or permapressing.

(a) applicable to the calendar year in which the good was exported; or

(b) authorized for the following year if such exports exceed the authorized limit or level for the calendar year in which the good was exported, if allowed entry into the territory of the importing Party.

(a) if the exporting Party whose goods are subject to a DCL wishes to export goods in any category in excess of the applicable DCL in any calendar year, that Party may present to the importing Party a formal written request for an increase in the DCL; and

(b) the importing Party shall respond, in writing, within 30 days of the receipt of the request. If the response is negative, the Parties concerned shall consult no later than 15 days after the receipt of the response or as soon thereafter as mutually convenient, and shall endeavor to reach a mutually satisfactory solution. The Parties concerned shall confirm any agreement reached on a new DCL by an exchange of letters.

(a) an exporting Party wishing to adjust an SL shall deliver a notice to the importing Party of its intent to make an adjustment;

(b) the exporting Party may increase the SL for a calendar year by no more than six percent ("swing"); and

(c) in addition to any increase of its SL under subparagraph (b), the exporting Party may increase its unadjusted SL for that year by no more than 11 percent by allocating to such SL for that calendar year (the "receiving year") an unused portion ("shortfall") of the corresponding SL for the previous calendar year ("carryover") or a portion of the corresponding SL for the following calendar year ("carryforward"), as follows:

(i) subject to subparagraph (iii), the exporting Party may utilize carryover, as available, up to 11 percent of the unadjusted SL for the receiving year,

(ii) the exporting Party may utilize carryforward charged against the corresponding SL for the following calendar year, up to six percent of the unadjusted SL for the receiving year,

(iii) the combination of the exporting Party's carryover and carryforward shall not exceed 11 percent of the unadjusted SL in the receiving year, and

(iv) carryover may be utilized only following confirmation by the importing Party that sufficient shortfall exists. If the importing Party does not consider that sufficient shortfall exists, it shall promptly provide data to the exporting Party to support that view. Where substantial statistical differences exist between the import and export data on which the shortfall is computed, the Parties concerned shall seek to resolve these differences promptly.

(a) restrictions or consultation levels on items contained in the categories of textile and apparel goods in staging category 1 in Schedule 3.1.1 shall be eliminated on January 1, 1994;

(b) restrictions or consultation levels on items contained in the categories of textile and apparel goods in staging category 2 in Schedule 3.1.1 shall be eliminated on January 1, 2001; and

(c) restrictions or consultation levels on items contained in the categories of textile and apparel goods in staging category 3 in Schedule 3.1.1 shall be eliminated on January 1, 2004.

(a) U.S. tariff item 9802.00.80.10; or

(b) Chapter 61, 62 or 63 if, after such assembly, those goods that would have qualified for treatment under 9802.00.80.10 have been subject to bleaching, garment dyeing, stonewashing, acidwashing or permapressing.

(a) handloomed fabrics of a cottage industry;

(b) handmade cottage industry goods made of such handloomed fabrics; or

(c) traditional folklore handicraft goods.

(a) man-made fibers if the good is in chief weight of man-made fibers, unless

(i) the good is knitted or crocheted apparel in which wool equals or exceeds 23 percent by weight of all fibers, in which case it shall be of wool,

(ii) the good is apparel, not knitted or crocheted, in which wool equals or exceeds 36 percent by weight of all fibers, in which case it shall be of wool, or

(iii) the good is a woven fabric in which wool equals or exceeds 36 percent by weight of all fibers, in which case it shall be of wool;

(b) cotton, if not covered by subparagraph (a) and if the good is in chief weight of cotton, unless the good is a woven fabric in which wool equals or exceeds 36 percent by weight of all fibers, in which case it shall be of wool;

(c) wool, if not covered by subparagraph (a) or (b), and the good is in chief weight of wool; and

(d) non-cotton vegetable fiber, if not covered by subparagraph (a), (b) or (c), and the good is in chief weight of non-cotton vegetable fiber, unless

(i) cotton with wool and/or man-made fibers in the aggregate equal or exceed 50 percent by weight of the component fibers thereof and the cotton component equals or exceeds the weight of each of the total wool and/or man-made fiber components, in which case it shall be of cotton,

(ii) if not covered by subparagraph (i) and wool exceeds 17 percent by weight of all component fibers, in which case it shall be of wool, or

(iii) if not covered by subparagraph (i) or (ii) and man-made fibers in combination with cotton and/or wool in the aggregate equal or exceed 50 percent by weight of the component fibers thereof and the man-made fiber component exceeds the weight of the total wool and/or total cotton component, in which case it shall be of man-made fibers.

C means cotton;

M&B means men's and boys';

MMF means man-made fiber;

NR means normal regime;

W means wool; and

W&G means women's and girls'.

DZ means dozen;

KG means kilogram;

NO means number; and

SM means square meter.

(a) a change to subheading 5703.20 or 5703.30 or heading 57.04 from any heading outside Chapter 57 other than headings 51.06 through 51.13, 52.04 through 52.12, 53.08, 53.11 or any headings of Chapter 54 or 55; or a change to any other heading or subheading of Chapter 57 from any heading outside that chapter other than headings 51.06 through 51.13, 52.04 through 52.12, 53.08, 53.11, any heading of Chapter 54 or 55.08 through 55.16; and

(b) a change to U.S. tariff item 6110.30.10.10, 6110.30.10.20, 6110.30.15.10, 6110.30.15.20, 6110.30.20.10, 6110.30.20.20, 6110.30.30.10, 6110.30.30.15, 6110.30.30.20, or 6110.30.30.25 or Mexican tariff item 6110.30.01, or a good of those tariff items that is classified as part of an ensemble in subheading 6103.23 or 6104.23, from any heading outside Chapter 61 other than headings 51.06 through 51.13, 52.04 through 52.12, 53.07 through 53.08, 53.10 through 53.11, any heading of Chapter 54 or 55, 60.01 or 60.06, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the Parties; or a change to any other tariff item of subheading 6110.30 from any heading outside Chapter 61 other than headings 51.06 through 51.13, 52.04 through 52.12, 53.07 through 53.08, 53.10 through 53.11, any heading of Chapter 54, 55.08 through 55.16, 60.01 or 60.06, provided, that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the Parties.

(i) for cotton or man-made fiber apparel, 2 percent,

(ii) for cotton or man-made fiber apparel made from fabrics woven or knit in a non-Party, 1 percent, and

(iii) for wool apparel, 1 percent.

(a) apparel goods provided for in Chapters 61 and 62 of the HS, in which the fabric that determines the tariff classification of the good is classified in one of the following tariff provisions, are ineligible for preferential tariff treatment provided for under the levels established in Schedule 6.B.1

(i) blue denim: subheadings 5209.42 and 5211.42, U.S. tariff items 5212.24.60.20, and 5514.32.00.10 or Mexican tariff items 5212.24.xx and 5514.32.xx; and

(ii) fabric woven as plain weave where two or more warp ends are woven as one (oxford cloth) of average yarn number less than 135 metric number: 5208.19, 5208.29, 5208.39, 5208.49, 5208.59, 5210.19, 5210.29, 5210.39, 5210.49, 5210.59, 5512.11, 5512.19, 5513.13, 5513.23, 5513.33, and 5513.43;

(b) apparel goods provided for in U.S. tariff items 6107.11.00, 6107.12.00, 6109.10.00 and 6109.90.00 or Mexican tariff items 6107.11.01, 6107.12.01, 6109.10.01 and 6109.90.01 are ineligible for preferential tariff treatment provided for under the levels established in Schedule 6.B.1 if they are composed chiefly of circular knit fabric of yarn number equal to or less than 100 metric number. Apparel goods provided for in subheadings 6108.21 and 6108.22 are ineligible for preferential tariff treatment provided for under the levels established in parts 2(a), 2(b), 3(a) and 3(b) in Schedule 6.B.1 if they are composed chiefly of circular knit fabric of yarn number equal to or less than 100 metric number; and

(c) apparel goods provided for in U.S. tariff items 6110.30.10.10, 6110.30.10.20, 6110.30.15.10, 6110.30.15.20, 6110.30.20.10, 6110.30.20.20, 6110.30.30.10, 6110.30.30.15, 6110.30.30.20, 6110.30.30.25 and items of those tariff items that are classified as parts of ensembles in U.S. tariff items 6103.23.00.30, 6103.23.00.70, 6104.23.00.22 and 6104.23.00.40 or Mexican tariff item 6110.30.01or goods of that tariff item that are classified as parts of ensembles in subheading 6103.23 or 6104.23 are ineligible for preferential tariff treatment provided for under the levels established in Schedule 6.B.1.

(a) for textile goods that are not originating because certain non-originating textile materials do not undergo the applicable change in tariff classification set out in Annex 401 for that good, but where such materials are 50 percent or less by weight of the materials of that good, only 50 percent of the SME for that good, determined in accordance with the conversion factors set out in Schedule 3.1.3; and

(b) for textile goods that are not originating because certain non-originating textile materials do not undergo the applicable change in tariff classification set out in Annex 401 for that good, but where such materials are more than 50 percent by weight of the materials of that good, 100 percent of the SME for that good, determined in accordance with the conversion factors set out in Schedule 3.1.3.

(a) a change to woven fabrics, other than tapestry fabrics or upholstery fabrics of a weight not exceeding 140 grams per square meter, of combed fine animal hair of subheading 5112.11 from yarn of combed camel hair or combed cashmere of subheading 5108.20 or any other heading, except from heading 51.06 through 51.07, any other good of heading 51.08 or heading 51.09 through 51.11, 51.13, 52.05 through 52.06, 54.01 through 54.04 or 55.09 through 55.10; and

(b) a change to woven fabrics, other than tapestry fabrics or upholstery fabrics, of combed fine animal hair of subheading 5112.19 from yarn of combed camel hair or combed cashmere of subheading 5108.20 or any other heading, except from heading 51.06 through 51.07, any other good of heading 51.08 or heading 51.09 through 51.11, 51.13, 52.05 through 52.06, 54.01 through 54.04 or 55.09 through 55.10.

a change to woven-warp pile fabric, cut, of subheading 5801.35, with pile of dry-spun acrylic staple fibers of subheading 5503.30, which fabric has been dyed in the piece to a single uniform color, from any other chapter, except from heading 51.06 through 51.13, 52.04 through 52.12, 53.07 through 53.08 or 53.10 through 53.11, Chapter 54, heading 55.01 through 55.02, subheading 5503.11 through 5503.20 or 5503.40 through 5503.90 or heading 55.04 through 55.16.

a change to subheading 5801.36 from any other chapter, except from heading 51.06 through 51.13, 52.04 through 52.12, 53.07 through 53.08 or 53.10 through 53.11, Chapter 54, heading 55.01 through 55.02, subheading 5503.10 through 5503.20 or 5503.40 through 5503.90 or heading 55.04 through 55.16.

a change to subheading 5509.31 from acid-dyeable acrylic tow of subheading 5501.30 or any other chapter, except from heading 52.01 through 52.03 or 54.01 through 54.05.

¹ Of the 80,000,000 SME annual quantity of cotton or man-made fiber apparel imports from Canada into the United States, no more than 60,000,000 SME shall be made from fabrics which are knit or woven in a nonParty.

² Of the 5,066,948 SME annual quantity of wool apparel imports from Canada into the United States, no more than 5,016,780 SME shall be men's or boys' wool suits of U.S. category 443.

¹

² Of the 65,000,000 SME annual quantity of imports from Canada into the United States, no more than 35,000,000 SME may be in goods of chapters 52 through 55, 58 and 63 (other than subheading 6302.10, 6302.40, 6303.11, 6303.12, 6303.19, 6304.11or 6304.91) of the HS; and no more than 35,000,000 SME may be in goods of chapter 60 and subheading 6302.10, 6302.40, 6303.11, 6303.12, 6303.19, 6304.11 or 6304.91 of the HS.

³ Of the 24,000,000 SME annual quantity of imports from Mexico into the United States, no more than 18,000,000 SME may be in goods of chapter 60 and subheading 6302.10, 6302.40, 6303.11, 6303.12, 6303.19, 6304.11 or 6304.91 of the HS; and no more than 6,000,000 SME may be in goods of chapters 52 through 55, 58 and 63 (other than subheading 6302.10, 6302.40, 6303.11, 6303.12, 6303.19, 6304.11 or 6304.91) of the HS.

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