North American Free Trade Agreement

Chapter 3 - Annex 307.3 to Annex 315

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,

      (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).

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 a good provided for under the tariff provisions set out in Tables 308.1.1 and 308.1.2 in Section B to the rate set out therein, to the lowest rate agreed by any Party in the Uruguay Round of Multilateral Trade Negotiations, or to such reduced rate as the Parties may agree, in accordance with the schedule set out in Section B, or with such accelerated schedule as the Parties may agree.

    2. Notwithstanding Chapter Four (Rules of Origin), when the most-favored-nation rate of duty applicable to a good provided for under the tariff provisions set out in Table 308.1.1 in Section B conforms with the rate established under paragraph 1, each Party shall consider the good, when imported into its territory from the territory of another Party, to be an originating good.

    3. A Party may reduce in advance of the schedule set out in Table 308.1.1 or Table 308.1.2 in Section B, or of such accelerated schedule as the Parties may agree, its most-favored-nation rate of duty applicable to any good provided for under the tariff provisions set out therein, to the lowest rate agreed by any Party in the Uruguay Round of Multilateral Trade Negotiations, or the rate set out in Table 308.1.1 or 308.1.2, or to such reduced rate as the Parties may agree.

    4. For greater certainty, most-favored-nation rate of duty does not include any other concessionary rate of duty.

Section B - Rates of Duty and Schedule for Reduction

    Table 308.1.1

    Tariff Rate Schedule1
    Automatic Data Processing Machines (ADP)
      8471.10
    3.9% S
      8471.20
    3.9% S
    Digital Processing Units
      8471.91
    3.9% S
    Input or Output Units
      Combined Input/Output Units
      Canada:
      8471.92.10
    3.7% S
      Mexico:
      8471.92.09
    3.7% S
      United States:
      8471.92.10
    3.7% S
      Display Units:
      Canada:
      8471.92.32
    3.7% S
      8471.92.33
    Free S
      8471.92.34
    3.7% S
      8471.92.39
    3.7% S
      Mexico:
      8471.92.10
    3.7% S
      8471.92.11
    Free S
      United States:
      8471.92.30
    Free S
      8471.92.40.75
    3.7% S
      8471.92.40.85
    3.7% S
      Other Input or Output Units:
      Canada:
      8471.92.40
    3.7% S
      8471.92.50
    Free S
      8471.92.90
    Free S
      Mexico:
      8471.92.12
    3.7% S
      8471.92.99
    Free S
      United States:
      8471.92.20
    Free S
      8471.92.80
    Free S
      8471.92.90.20
    Free S
      8471.92.90.40
    3.7% S
      8471.92.90.60
    Free S
      8471.92.90.80
    Free S
    Storage Units
      8471.93
    Free S
    Other Units of Automatic Data Processing Machines
      8471.99
    Free S
    Parts of Computers
      8473.30
    Free R
    Computer Power Supplies
      Canada:
      8504.40.40
    Free S
      8504.90.14
    Free R
      8504.90.80
    Free R
      Mexico:
      8504.40.12
    Free S
      8504.90.08
    Free S
      8504.90.09
    Free S
      United States:
      8471.99.32
    Free S
      8471.99.34
    Free S
      8504.90.00B
    Free S
    _______________________________
    1

      R on the date of entry into force of this Agreement

      S in five equal annual stages commencing January 1, 1999.


    Table 308.1.2

    Tariff Rate Schedule1
    Metal Oxide Varistors
      Canada:
      8533.40.10
    Free R
      Mexico:
      8533.40.07
    Free R
      United States:
      8533.40.00A
    Free R
    Diodes, Transistors and Similar Semiconductor Devices; Photosensitive Semiconductor Devices;
    Light Emitting Diodes; Mounted Piezo-electric Crystals
      8541.10
    Free R
      8541.21
    Free R
      8541.29
    Free R
      8541.30
    Free R
      8541.50
    Free R
      8541.60
    Free R
      8541.90
    Free R
      Canada:
      8541.40
    Free R
      Mexico:
      8541.40
    Free R
      United States:
      8541.40.20
    Free S
      8541.40.60
    Free R
      8541.40.70
    Free R
      8541.40.80
    Free R
      8541.40.95
    Free R
    Electronic Integrated Circuits and Microassemblies
      8542
    Free R
    _______________________________
    1

      R on the date of entry of this Agreement

      S in five equal annual stages commencing January 1, 1999.

Annex 308.2: Most-Favored-Nation Rates of Duty on Certain Color Cathode-Ray Television Picture Tubes

Annex 308.3: Most-Favored-Nation Duty-Free Treatment of Local Area Network Apparatus

    To facilitate the operation of Article 308(3), the Parties shall consult regarding the tariff classification of local area network apparatus and shall endeavor to agree, no later than January 1, 1994, on the classification of such goods in each Party's tariff schedule.

Annex 310.1: Existing Customs User Fees

Section A - Mexico

    Mexico shall not increase its customs processing fee ("derechos de trámite aduanero") on originating goods, and shall eliminate such fee on originating goods by June 30, 1999.

Section 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 311, without regard to whether the goods are marked.

    2. The United States shall not increase its merchandise processing fee and shall eliminate such fee by June 30, 1999, on originating goods where those goods qualify to be marked as goods of Mexico pursuant to Annex 311, without regard to whether the goods are marked.

Annex 311: 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 purposes of this Annex, Annex 300-B and Annex 302.2, and for such other purposes as the Parties may agree.

    2. Each Party may require that a good of another Party, as determined in accordance with the Marking Rules, bear a country of origin marking, when imported into its territory, 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 applying any measure relating to country of origin marking, minimize the difficulties, costs and inconveniences that the measure may cause to the commerce and industry of the other Parties.

    5. Each Party shall:

      (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.

    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 usual container 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, wherever administratively practicable, permit an importer to mark a good of a Party 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 the 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 of that Party, unless the 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 Article 513 (Customs Procedures - Working Group and Customs Subgroup).

    11. For purposes of this Annex:

      conspicuous means capable of being easily seen with normal handling of the good or container;

      customs value means the value of a good for purposes of levying duties of customs on an imported good;

      legible means capable of being easily read;

      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 an importing Party 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 312.2: Wine and Distilled Spirits

Section A - Canada and the United States

    As between Canada and the United States, any measure related to the internal sale and distribution of wine and distilled spirits, other than a measure covered by Article 312(1) or 313, shall be governed under this Agreement exclusively in accordance with the relevant provisions of the Canada - United States Free Trade Agreement, which for this purpose are hereby incorporated into and made a part of this Agreement.

Section B - Canada and Mexico

    As between Canada and Mexico:

    1. Except as provided in paragraphs 3 through 6, in respect of any measure related to the internal sale and distribution of wine and distilled spirits, Article 301 shall not apply to:

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

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

    2. The Party asserting that paragraph 1 applies to one of its measures shall have the burden of establishing the validity of such assertion.

    3. (a) Any measure related to the listing of wine and distilled spirits of the other Party shall:

        (i) conform with Article 301,

        (ii) be transparent, non-discriminatory and provide for prompt decision on any listing application, prompt written notification of such decision to the applicant and, in the case of a negative decision, provide for a statement of the reason for refusal,

        (iii) establish administrative appeal procedures for listing decisions that provide for prompt, fair and objective rulings,

        (iv) be based on normal commercial considerations,

        (v) not create disguised barriers to trade, and

        (vi) be published and made generally available to persons of 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.

    4. (a) Where the distributor is a public entity, the entity may charge the actual cost-of-service differential between wine or distilled spirits of the other Party and domestic wine or distilled spirits. Any such differential shall not exceed the actual amount by which the audited cost of service for the wine or distilled spirits of the exporting Party exceeds the audited cost of service for the wine or distilled spirits of the importing Party.

      (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.

    5. (a) Any measure related to distribution of wine or distilled spirits of the other Party shall conform with Article 301.

      (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.

    6. Unless otherwise specifically provided in this Annex, the Parties retain their rights and obligations under the GATT and agreements negotiated under the GATT.

    7. For purposes of this Annex:

    wine includes wine and wine-containing beverages.

Annex 313: Distinctive Products

    1. Canada and Mexico 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, Canada and Mexico 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. Mexico and the United States shall recognize Canadian Whisky as a distinctive product of Canada. Accordingly, Mexico and the United States shall not permit the sale of any product as Canadian Whisky, unless it has been manufactured in Canada in accordance with the laws and regulations of Canada governing the manufacture of Canadian Whisky for consumption in Canada.

    3. Canada and the United States shall recognize Tequila and Mezcal as distinctive products of Mexico. Accordingly, Canada and the United States 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 314: 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 315: Other Export Measures

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

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