North American Free Trade Agreement (NAFTA)

Part Eight: Other Provisions

Notes

1. Article 201 (Definitions of General Application) : A good of a Party may include materials of other countries.

2. Article 301 (Market Access - National Treatment) : "goods of the Party" as used in paragraph 2 includes goods produced in the state or province of that Party.

3. Article 302(1) (Tariff Elimination) : this paragraph is not intended to prevent any Party from modifying its non-NAFTA tariffs on originating goods for which no NAFTA tariff preference is claimed.

4. Article 302(1) : this paragraph does not prohibit a Party from raising a tariff back to an agreed level in accordance with the NAFTA's phase-out schedule following a unilateral reduction.

5. Article 302(1) and (2) : paragraphs 1 and 2 are not intended to prevent a Party from maintaining or increasing a customs duty as may be authorized by any dispute settlement provision of the GATT or any agreement negotiated under the GATT.

6. Article 303 (Restriction on Drawback and Duty Deferral) : in applying the definition of "used" in Article 415 to this Article, the definition of "consumed" in Article 318 shall not apply.

7. Article 305(2) (d) (Temporary Admission of Goods) : where another form of monetary security is used, it shall not be more burdensome than the bonding requirement referred to in this subparagraph. Where a Party uses a non-monetary form of security, it shall not be more burdensome than existing forms of security used by that Party.

8. Article 307(1) (Goods Re-Entered after Repair or Alteration) : this paragraph does not cover goods imported in bond, into foreign-trade zones or in similar status, that are exported for repairs and are not re-imported in bond, into foreign-trade zones or in similar status.

9. Article 307(1) : for purposes of this paragraph, alteration includes laundering used textile and apparel goods and sterilizing previously sterilized textile and apparel goods.

10. Article 318 (Market Access - Definitions) : 10-digit items set out in the Tariff Schedule of Canada are included for statistical purposes only.

11. Article 318 : with respect to the definition of "repair or alteration", an operation or process that is part of the production or assembly of an unfinished good into a finished good is not a repair or alteration of the unfinished good; a component of a good is a good that may be subject to repair or alteration.

12. Annex 300-A (Trade and Investment in the Automotive Sector) , Appendix 300-A.1 - Canada : paragraphs 1 and 2 shall not be construed to modify the rights and obligations set out in Chapter Ten of the Canada - United States Free Trade Agreement , except that the NAFTA rules of origin shall replace the Canada - United States Free Trade Agreement rules of origin for purposes of Article 1005(1).

13. Annex 300-A , Appendix 300-A.2 - Mexico : citations to the Auto Decree and the Auto Decree Implementing Regulations included in parentheses are provided for purposes of reference only.

14. Annex 300-B (Textile and Apparel Goods) , Section 1 (Scope and Coverage) : the general provisions of Chapter Two (Definitions), Chapter Three (Market Access), Chapter Four (Rules of Origin) and Chapter Eight (Emergency Action) are subject to the specific rules for textiles and apparel goods set out in the Annex.

15. Annex 300-B , Section 2 (Tariff Elimination) : with respect to paragraph 1, "as otherwise provided in this Agreement" refers to such provisions as Section 4, Article 802 (Global Actions) and Chapter 22 (General Exceptions).

16. Annex 300-B, Sections 4 (Bilateral Emergency Actions (Tariff Actions) ) and 5 (Bilateral Emergency Actions (Quantitative Restrictions) ) : for purposes of Sections 4 and 5:

17. Annex 300-B , Section 5 : in paragraph 5(c), the term "equitable treatment" is intended to have the same meaning as it has in customary practice under the Multifiber Arrangement.

18. Annex 300-B , Section 7, paragraph 1(c) (Review and Revision of Rules of Origin) : for subheading 6212.10, the rule and paragraph 1 shall not be applied if the Parties agree, prior to entry into force of this Agreement, on measures to ease the administrative burden and reduce costs associated with the application of the rule for headings 62.06 through 62.11 to the apparel in subheading 6212.10.

19. Annex 300-B, Section 7, paragraph (2) (d) (ii) : with respect to provisions (a) through (i) of the rule for subheadings 6205.20 through 6205.30, prior to the entry into force of this Agreement the Parties will extend cooperation as necessary in an effort to encourage production in the free trade area of shirting fabrics specifically identified in the rule.

20. Annex 300-B, Appendix 3.1, paragraph 17 (Administration of Import and Export Prohibitions, Restrictions and Consultation Levels) : for purposes of applying paragraph 17, the determination of the component that determines the tariff classification of the good shall be based on GRI 3(b) of the Harmonized System, and if the component cannot be determined on the basis of GRI 3(b), then the determination will be based on GRI 3(c) or, if GRI 3(c) is inapplicable, GRI 4. When the component that determines the tariff classification is a blend of two or more yarns or fibers, all yarns and, where applicable, fibers, in that component are to be considered.

21. Annex 300-B, Schedule 3.1.3. (Conversion Factors) : the conversion factors in this Schedule are those used for imports into the United States. Canada and Mexico may by mutual agreement develop their own conversion factors for trade between them.

22. Article 401 (Originating Goods) : the phrase "specifically describes" is intended solely to prevent Article 401(d) from being used to qualify a part of another part, where the heading or subheading covers the final good, the part made from the other part and the other part.

23. Article 402 (Regional Value Content) :

24. Article 403 (Automotive Goods) :

25. Article 405(6) (De Minimis) : for purposes of applying paragraph 6, the determination of the component that determines the tariff classification of the good shall be based on GRI 3(b) of the Harmonized System. If the component cannot be determined on the basis of GRI 3(b), then the determination will be based on GRI 3(c) or, if GRI 3(c) is inapplicable, GRI 4. When the component that determines the tariff classification is a blend of two or more yarns or fibers, all yarns and, where applicable, fibers, in that component are to be taken into account.

26. Article 413 (Interpretation and Application) : the rules of origin under Chapter Four are based on the 1992 Harmonized System, amended by the new tariff items created for rules of origin purposes.

27. Article 415 (Rules of Origin - Definitions) : the phrase "except for the application of Article 403(1) or 403(2) (a) " in the definition of "transaction value" is intended solely to ensure that the determination of transaction value in the context of Article 403(1) or (2) (a) shall not be limited to the transaction of the producer of the good.

28. Article 514 (Customs Procedures - Definitions) : the Uniform Regulations will clarify that "determination of origin" includes a denial of preferential tariff treatment under Article 506(4), and that such denial is subject to review and appeal.

29. Article 603, paragraphs 1 through 5 (Energy - Import and Export Restrictions) : these paragraphs shall be interpreted consistently with Article 309 (Import and Export Restrictions).

30. Article 703 (Agriculture - Market Access) : the most-favored-nation rate as of July 1, 1991 is the over-quota tariff rate specified in Annex 302.2.

31. Annex 703.2, Section A (Mexico and the United States) : this quota replaces Mexico's current access under the "first tier" of the U.S. tariff rate quota as described in Additional
Note 3(b)(i) of Chapter 17 of the Harmonized Tariff Schedule of the United States prior to the date of entry into force of this Agreement.

32. Annex 703.2 , Section A (Mexico and the United States) : the United States operates a re-export program under Additional U.S. Note 3 to Chapter 17 of the U.S. Harmonized Tariff Schedule and under 7 C.F.R. Part 1530 (subparts A and B).

33. Annex 703.2 , Section B (Canada and Mexico) : the incorporation in paragraph 6 is not intended to override the exceptions to Articles 301 and 309 set out in Canada's and Mexico's respective Schedules to Annex 301.3.

34. Article 906(4) and (6) (Compatibility and Equivalence) : these paragraphs are not intended to restrict the right of the importing Party to revise its measures.

35. Article 908(2) (Conformity Assessment) : this paragraph does not treat the issue of membership in the Parties' respective conformity assessment bodies.

36. Article 915 (Standards-Related Measures - Definitions) : the definition of "standard" shall be interpreted to mean --

for common and repeated use, including explanatory and other related provisions, set out in a document approved by a standardizing body, with which compliance is not mandatory.

37. Article 915 : the definition of "technical regulation" shall be interpreted to mean --

38. Annex 1001.2c (Country Specific Thresholds) : Canada and the United States will consult regarding this Annex before the entry into force of this Agreement.

39. Article 1101 (Investment - Scope and Coverage) : this Chapter covers investments existing on the date of entry into force of this Agreement as well as investments made or acquired thereafter.

40. Article 1101(2) and Annex 602.3 : to the extent that a Party allows an investment to be made in an activity set out in Annex III or Annex 602.3, the investment shall be entitled to the protection of Chapter Eleven (Investment).

41. Article 1106 (Performance Requirements) : Article 1106 does not preclude enforcement of any commitment, undertaking or requirement between private parties.

42. Article 1305 (Monopolies) : for purposes of this Article, "monopoly" means an entity, including a consortium or government agency, that in any relevant market in the territory of a Party is maintained or designated as the sole provider of public telecommunications transport networks or services.

43. Article 1501 (Competition Law) : no investor may have recourse to investor-state arbitration under the Investment Chapter for any matter arising under this Article.

44. Article 1502 (Monopolies and State Enterprises) : nothing in this Article shall be construed to prevent a monopoly from charging different prices in different geographic markets, where such differences are based on normal commercial considerations, such as taking account of supply and demand conditions in those markets.

45. Article 1502(3) : a "delegation" includes a legislative grant, and a government order, directive or other act transferring to the monopoly, or authorizing the exercise by the monopoly of, governmental authority.

46. Article 1502(3) (b) : differences in pricing between classes of customers, between affiliated and non-affiliated firms, and cross-subsidization are not in themselves inconsistent with this provision; rather, they are subject to this subparagraph when they are used as instruments of anticompetitive behavior by the monopoly firm.

47. Article 2005(2) (GATT Dispute Settlement) : this obligation is not intended to be subject to dispute settlement under this Chapter.

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