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Canada-Honduras Free Trade Agreement

Chapter Three: National Treatment and Market Access for Goods

Article 3.1: Scope of Coverage

This Chapter applies to trade in goods of a Party, including goods covered by Annex 3.1, except as otherwise provided in this Agreement.

Section A – Definitions

Article 3.2: Definitions

For the purposes of this Chapter:

advertising films means a recorded visual media, with or without a soundtrack, consisting essentially of images showing the nature or operation of a good or service offered for sale or lease by a person established or resident in the territory of a Party, provided that the film is:

Agreement on Agriculture means the Agreement on Agriculture, of the WTO Agreement;

Agreement on Import Licensing Procedures means the Agreement on Import Licensing Procedures, of the WTO Agreement;

agricultural good means a product listed in Annex 1 of the Agreement on Agriculture;

agricultural safeguard measure means an additional customs duty permitted under Article 3.15(1);

commercial sample of negligible value means a commercial sample having a value, individually or in the aggregate as shipped, of not more than 1 U.S. dollar, or the equivalent amount in the currency of a Party, or so marked, torn, perforated or otherwise treated so that it is unsuitable for sale or for use except as a commercial sample;

commercial sample means:

consumed means:

distilled spirits include distilled spirits and distilled spirit-containing beverages;

duty-free means free of customs duties;

export subsidies for agricultural goods means export subsidies as defined in Article 1(e) of the Agreement on Agriculture;

good imported for sports purposes means a sports good required for use in a sports contest, demonstration, or training in the territory of the Party into whose territory that good is imported;

good intended for display or demonstration includes its component parts, ancillary apparatus, and accessories;

printed advertising material means a good classified in Chapter 49 of the Harmonized System including a brochure, pamphlet, leaflet, trade catalogue, yearbook published by trade associations, tourist promotional material, and poster, that is:

year 1 means the year this Agreement enters into force as provided in Article 23.4 (Final provisions – Entry into Force); and

TRQ means a tariff rate quota described in Annex 3.4.2.

Section B – National Treatment

Article 3.3: National Treatment

1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, and to this end Article III of the GATT 1994 is incorporated into and made part of this Agreement.

2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a sub-national government, treatment no less favourable than the most favourable treatment accorded by that sub-national government to a like, directly competitive, or substitutable good of the Party of which it forms a part. For the purposes of this paragraph, "goods of a Party" includes goods produced in the territory of the sub-national government of that Party.

3. Paragraphs 1 and 2 do not apply to a measure set out in Annex 3.3.

Section C – Tariffs

Article 3.4: Tariff Elimination

1. Except as otherwise provided in this Agreement, a Party may not increase any existing customs duty, or adopt any customs duty, on an originating good.

2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods in accordance with its Schedule to Annex 3.4.1.

3. Each Party shall apply to an originating good the lesser of:

4. For greater certainty, a Party may:

5. At the request of a Party, the Parties shall discuss accelerating the elimination of customs duties set out in their Schedules or incorporating into a Party's Schedule to Annex 3.4.1 a good that is not subject to tariff elimination. An agreement between the Parties to accelerate the elimination of a customs duty on a good or to include a good in a Schedule to Annex 3.4.1 shall supersede a duty rate or staging category determined pursuant to that Schedule for that good when approved by each Party in accordance with its applicable legal procedures.

6. Except as otherwise provided in this Agreement, a Party shall establish a TRQ set out in Annex 3.4.2. A Party may adopt or maintain import measures to allocate in-quota imports made pursuant to a TRQ set out in Annex 3.4.2, provided that such measures comply with Article 3.16.

Article 3.5: Export Contingent Programs

The Parties agree that in their reciprocal trade they shall maintain their rights and obligations according to the Agreement on Subsidies and Countervailing Measures of the WTO Agreement.

Article 3.6: Temporary Admission of Goods

1. Each Party shall grant duty-free temporary admission for the following goods admitted from the territory of the other Party, regardless of their origin and regardless of whether a like, directly competitive, or substitutable good is available in the territory of the importing Party:

2. Except as otherwise provided in this Agreement, a Party may not impose a condition on the duty-free temporary admission of a good referred to in paragraph 1(a), (b) or (c), other than to require that the good:

3. If another form of monetary security is used under sub-paragraph 2(d), it shall not be a more burdensome form of security than a bonding requirement referred to in that sub-paragraph. If a Party requires a non-monetary form of security, it shall not require a more burdensome form of security than existing forms of security used by that Party.

4. Except as otherwise provided in this Agreement, a Party may not impose a condition on the duty-free temporary admission of a good referred to in paragraph 1(d), other than to require that such good:

5. If a good is temporarily admitted duty-free under paragraph 1 and a condition that a Party imposes under paragraph 2 or 3 has not been fulfilled, that Party may impose:

6. Except as otherwise provided in this Agreement, a Party may not:

7. For the purposes of paragraph 6, "vehicle" means a truck, a truck tractor, a tractor, a trailer unit, a trailer, a locomotive, a railway car, or other railroad equipment.

Article 3.7: Duty-Free Entry of Certain Commercial Samples of Negligible Value and Printed Advertising Materials

Each Party shall grant duty-free entry to a commercial sample of negligible value and to printed advertising material, imported from the territory of the other Party, regardless of origin, but may require that:

Article 3.8: Goods Re-Entered after Repair or Alteration

1. A Party may not apply a customs duty to a good, regardless of its origin, that re enters its territory after that good has been exported from its territory to the territory of the other Party for repair or alteration, regardless of whether the repair or alteration could be performed in its territory.

2. A Party may not apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of the other Party for repair or alteration.

3. For the purposes of this Article, repair or alteration does not include an operation or process that:

4. Paragraph 1 does not apply to a good imported in bond, into foreign trade zones, or in similar status, that is exported for repair and is not re-imported in bond, into foreign trade zones, or in similar status.

Section D – Non-Tariff Measures

Article 3.9: Import and Export Restrictions

1. Except as otherwise provided in this Agreement, a Party may not adopt or maintain a prohibition or restriction on the importation of a good of the other Party or on the exportation or sale for export of a good to the territory of the other Party, except in accordance with Article XI of the GATT 1994, and to this end Article XI of the GATT 1994 is incorporated into and made a part of this Agreement.

2. The Parties understand that the rights and obligations of the GATT 1994 incorporated by paragraph 1 prohibit, in a circumstance in which any other form of restriction is prohibited:

3. If a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, this Agreement does not prevent that Party from:

4. If a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, the Parties, at the request of the other Party, shall discuss how to avoid undue interference with or distortion of pricing, marketing, and distribution arrangements in the other Party.

5. Paragraphs 1 through 4 do not apply to a measure set out in Annex 3.3.

Article 3.10: Distilled Spirits

A Party may not adopt or maintain a measure requiring that distilled spirits imported from the territory of the other Party for bottling be blended with distilled spirits of the Party.

Article 3.11: Export Taxes

A Party may not adopt or maintain a duty, tax, or other charge on the export of a good to the territory of the other Party unless the duty, tax, or charge is adopted or maintained on the good if it is destined for domestic consumption.

Article 3.12: Customs Fees and Similar Charges

1. A Party may not adopt or maintain any customs fee or other similar charge in connection with the importation of a good of the other Party that is not commensurate with the cost of services rendered.

2. Nothing in this Article modifies Article VIII of GATT 1994 as it applies to the Parties.

Article 3.13: Export Subsidies for Agricultural Goods

1. The Parties share the objective of the multilateral elimination of agricultural export subsidies and shall work towards an agreement in the WTO to eliminate those subsidies and avoid their reintroduction in any form.

2. Notwithstanding any other provisions of this Agreement, each Party shall eliminate, as of the date of entry into force of this Agreement, any form of export subsidies for agricultural goods exported to the other Party, and shall not reintroduce such subsidies in any form.

Article 3.14: Domestic Support for Agricultural Goods

1. The Parties recognize that domestic support measures can be of crucial importance to their agricultural sectors, but may also have distorting effects on the production or trade of agricultural goods.

2. The Parties shall cooperate in the WTO agricultural negotiations in order to achieve a substantial reduction of production and trade-distorting domestic support measures.

3. Pending the elimination of trade-distorting domestic support measures, if a Party maintains, introduces or re-introduces such a measure that the other Party considers to be distortive of bilateral trade covered under this Agreement or its internal market, the Party applying the measure shall, at the request of the other Party, consult with a view to making a best efforts endeavour to eliminate such distortion or avoid nullification or impairment of concessions granted under this Agreement. Such consultations shall be deemed to satisfy the requirements of Article 21.8 (Institutional Arrangements and Dispute Settlement Procedures – Consultations).

Article 3.15: Agricultural Safeguard Measures

1. Notwithstanding Article 3.4, Honduras may apply an additional customs duty on an originating agricultural good listed in Annex 3.15, if the volume of imports into Honduras of the originating agricultural good during a calendar year exceeds the quantity of the good, set out in Annex 3.15, for that year.

2. Honduras shall not apply a customs duty on a good, including the additional customs duty referred to in paragraph 1, which exceeds the lesser of the applied most favoured nation duty rate for that good:

3. Honduras may maintain an agricultural safeguard measure until the end of the calendar year in which it was imposed.

4. Honduras may not impose an agricultural safeguard measure on an originating agricultural good in connection with the same good:

5. For greater certainty:

6. Honduras shall apply an agricultural safeguard measure in a transparent manner. Honduras shall inform Canada in writing within 30 days of the application of that measure, and shall provide all relevant data. At the request of Canada, Honduras shall facilitate discussions with Canada on the conditions for the application of that agricultural safeguard measure.

Article 3.16: Administration and Implementation of Tariff Rate Quotas

1. Each Party shall implement and administer its TRQs in accordance with Article XIII of the GATT 1994, and the Agreement on Import Licensing Procedures.

2. Each Party shall ensure that:

3. Each Party shall make every effort to administer its TRQs in a manner that allows importers to fully utilize them.

4. A Party may not impose a condition on the application for or use of an in-quota quantity allocation under a TRQ on the re-export of an agricultural good.

5. A Party may not count food aid or other non-commercial shipments in determining whether an in-quota quantity under a TRQ has been filled.

6. At the request of the exporting Party, the importing Party shall consult with the exporting Party regarding the administration of the importing Party's TRQs and licenses. Those consultations shall be deemed to satisfy the requirements of Article 21.8 (Institutional Arrangements and Dispute Settlement Procedures – Consultations).

7. The in-quota quantities set out in Annex 3.4.2 correspond to calendar years, except as otherwise indicated. If this Agreement enters into force after January 31 of year 1, a Party shall pro-rate the in-quota quantity of that year for the remainder of the calendar year.

Article 3.17: Country of Origin Marking

1. Each Party shall apply, when applicable, its country of origin marking rules to a good of the other Party in accordance with Article IX of the GATT 1994. To this end, Article IX of the GATT 1994 is incorporated into and made part of this Agreement.

2. Each Party shall accord to the goods of the other Party, treatment no less favourable than that which it accords to the goods of a non-Party country with respect to the application of its country of origin marking rules in accordance with Article IX of the GATT 1994.

3. Each Party shall, in adopting, maintaining and applying a 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 Party. A Party shall permit the country of origin marking of a good of the other Party to be indicated in English, French, or Spanish. A Party may, however, 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 a good of that Party.

Article 3.18: Customs Valuation

The Customs Valuation Agreement governs the customs valuation rules applied by the Parties to their reciprocal trade. A Party may not make use, in that reciprocal trade, of the options and reservations permitted under Article 20 and paragraphs 2, 3, and 4 of Annex III of the Customs Valuation Agreement.

Section E – Institutional Provisions

Article 3.19: Committee on Trade in Goods and Rules of Origin

1. The Parties hereby establish a Committee on Trade in Goods and Rules of Origin, composed of representatives of each Party.

2. The Committee shall meet periodically, and at any other time at the request of either Party, or the Commission, to ensure the effective implementation and administration of this Chapter, Chapter Four (Rules of Origin), Chapter Five (Customs Procedures), Chapter Six (Trade Facilitation), Chapter Nine (Emergency Action), and the Uniform Regulations. In this regard, the Committee shall:

3. If the Committee fails to resolve a matter referred to it pursuant to sub-paragraph 2 (b) or (d) within 30 days of that referral, either Party may request a meeting of the Commission under Article 21.1 (Institutional Arrangements and Dispute Settlement Procedures – Free Trade Commission).

4. The Parties hereby establish a Sub-Committee on Agriculture, composed of representatives of each Party, that:

5. Each Party, to the extent possible, shall take the measures necessary to implement any modification of or addition to this Chapter, Chapter Four (Rules of Origin), Chapter Five (Customs Procedures), Chapter Six (Trade Facilitation), Chapter Nine (Emergency Action), and the Uniform Regulations within 180 days of the date on which the Commission approves the modification or addition.

6. The Parties shall convene at the request of either Party a meeting of their officials responsible for customs, immigration, inspection of food and agricultural products, border inspection facilities, or regulation of transportation, to address issues related to movement of goods through a Party's port of entry.

7. This Chapter does not preclude a Party from issuing a determination of origin or an advance ruling relating to a matter under consideration by the Committee on Trade in Goods and Rules of Origin, or from taking other action it considers necessary, pending a resolution of the matter under this Agreement.

Annex 3.1

Textile and Apparel Goods

Section 1: Scope and Coverage

This Annex applies to the textile and apparel goods set out in the Section XI: Textiles and Textile Articles (Chapters 50 through 63) and subheading 9404.90 of the Harmonized System.

Section 2: Definitions

For the purposes of this Annex:

competent investigating authority means the "competent investigating authority" of a Party as defined in Article 9.1 (Emergency Action – Definitions);

exporting Party means the Party from whose territory a textile or apparel good is exported;

importing Party means the Party into whose territory a textile or apparel good is imported;

square metres equivalent (SME) means that unit of measurement that results from the application of the conversion factors set out in Schedule 1 (Conversion Factors) to a primary unit of measure such as unit, dozen or kilogram;

tariff preference level (TPL) means a mechanism that provides for the application of a customs duty at a preferential rate to imports of a particular good up to a specified quantity, and at a different rate to imports of that good that exceed that quantity;

textile and apparel transition period means the 5 year period beginning on the date of entry into force of this Agreement.

Section 3: Bilateral Emergency Actions (Tariff Actions)

1. A Party may adopt an action described in paragraph 2 if, as a result of the reduction or elimination of a duty provided for in this Agreement, a textile or apparel good benefiting from preferential tariff treatment under this Agreement is being imported into the Party's territory in such increased quantities, in absolute terms or relative to the domestic market for that good, and under such conditions as to cause serious damage, or actual threat of serious damage, to a domestic industry producing a like or directly competitive good.

2. If the conditions set out in paragraphs 1, and 3 through 6 are met, a Party may, to the extent necessary to remedy the serious damage, or actual threat thereof:

3. In determining serious damage, or actual threat thereof, the Party:

4. The importing Party may apply an action described in paragraph 2 only following an investigation by its competent investigating authority.

5. A Party shall deliver without delay to the other Party written notice of its intent to take an action described in paragraph 2, and on request shall enter into consultations with that Party.

6. A Party may not maintain an action described in paragraph 2:

7. A Party may not apply an action described in paragraph 2 to the same good more than once.

8. On termination of an action described in paragraph 2, the rate of duty shall not exceed the rate that, according to the Party's Schedule to Annex 3.4.1 for the staged elimination of the tariff, would have been in effect 1 year after the adoption of the action. Beginning on January 1 of the year after the termination of the action, the Party that has taken the action shall:

9. A Party that applies an action under paragraph 2 shall provide to the other Party mutually accepted trade liberalizing compensation in the form of concessions with substantially equivalent trade effects or with a value equivalent to the value of the additional duties expected to result from the action. Those concessions shall be limited to the textile and apparel goods set out in Section 1, unless the Parties decide otherwise. If the Parties are unable to decide on compensation, the Party against whose good the action is taken may take tariff action with trade effects substantially equivalent to the action taken under this Section against any goods imported from the other Party. The Party taking the tariff action shall only apply the action for the period necessary to achieve the substantially equivalent effects.

10. A Party may not apply, with respect to the same good at the same time, an action under paragraph 2 and:

Section 4: Short Supply

1. For the purposes of this Section, "short-supply allowance" means temporarily considering a yarn or fabric from non-Parties as originating for the purpose of determining whether a good of Chapters 50 through 63 of the Harmonized System is originating.

2. The Party shall implement a short-supply allowance following a request from the other Party, based on information it considers necessary, if it determines that the yarn or fabric is not available in commercial quantities in a timely manner in the territory of either Party.

3. The Party receiving a request from the other Party shall, to the extent possible, make a short-supply determination within 45 days of receiving the request.

4. A person of a Party may request a short supply determination from that Party. The Party receiving that request shall notify the other Party of the request to the extent possible within 10 days of receiving the request.

5. A Party shall implement a short-supply allowance in accordance with its legal procedures.

6. A Party may decline to implement a short-supply allowance if the other Party does not implement a short-supply allowance for the same yarn or fabric.

7. Soon after the entry into force of this Agreement, the Parties shall commence work towards establishing procedures to guide the administration of the short-supply determinations and allowances referred to in this Section.

Section 5: Tariff Preference Levels

Apparel

1. Each Party shall apply the rate of duty applicable to originating goods set out in its Schedule to Annex 3.4.1, up to an annual quantity of 4 million SME, to apparel goods provided for in Chapters 61 and 62 of the Harmonized System, that are both cut (or knit to shape) and sewn or otherwise assembled in the territory of a Party from fabric or yarn produced or obtained outside the territory of the Parties, and that meet other applicable conditions for preferential tariff treatment under this Agreement.

Fabric and Made-Up Goods

2. Each Party shall apply the rate of duty applicable to originating goods set out in its Schedule to Annex 3.4.1, up to an annual quantity of 1 million SME, to the following goods that meet other applicable conditions for preferential tariff treatment under this Agreement:

3. The SME quantities specified in paragraphs 1 and 2 are determined in accordance with the conversion factors in Schedule 1 (Conversion Factors).

4. Textile or apparel goods that enter the territory of a Party under paragraphs 1 or 2 are not considered to be originating goods.

Section 6: Certification and Verification Requirements

Before a non-originating good may benefit from preferential tariff treatment under Section 5, the Parties must:

Schedule 1 to Annex 3.1

(Textiles and Apparel Goods)

Conversion Factors

1. The conversion factor for the primary units of measure of kilograms, numbers and pairs is one-to-one SME, unless otherwise specified in this Schedule.

2. For the purposes of this Schedule only, reference to the sub-heading code is based on the 2012 Harmonized Commodity Description and Coding System (HS).

3. For the following HS codes, with kilograms as the primary unit of measure, the conversion factors are as follows:

HS CodeKilograms/SME
5111191.9
5513231.1
5801102.8
5803001.9
58041013.6
58042113.6
58042913.6
58043013.6
5805009.7
5806102.8
58062013.6
58063113.6
58063213.6
58063911.1
58064013.5
58071012.0
58079011.4
58081013.6
58089012.5
58090013.6
58101012.5
58109113.6
58109213.6
58109912.5
58110013.6
6001106.0
6001216.0
6001226.0
6001296.0
6001916.0
6001926.0
6001996.0
6002406.0
6002906.0
6003102.8
6003206.0
6003306.0
6003406.0
6003906.0
6004106.0
6004906.0
6005216.0
6005226.0
6005236.0
6005246.0
6005316.0
6005326.0
6005336.0
6005346.0
6005416.0
6005426.0
6005436.0
6005446.0
6005906.0
6006102.8
6006216.0
6006226.0
6006236.0
6006246.0
6006316.0
6006326.0
6006336.0
6006346.0
6006416.0
6006426.0
6006436.0
6006446.0
6006906.0
6110902.6
6111206.3
6111306.3
6111906.3
61122010.3
61123114.4
61123912.1
61124114.4
61124912.1
61149012.5
6115109.3
61152114.4
61152214.4
6117809.5
61179010.3
6209206.3
6209306.3
6209906.3
62101013.9
62111112.1
62111212.5
62112010.3
62141014.4
6214203.7
62143014.4
62144014.4
62151014.4
62152014.4
6215908.2
6217109.8
62179010.3
6301202.4
6301308.5
6301405.5
6301905.5
6302293.7
6302393.7
63024012.4
6302518.5
63025314.4
63025914.4
6302918.5
63029314.4
63031214.4
63031912.4
6303918.5
63039214.4
63039914.4
6304918.9
6304928.5
63049314.4
6304999.0
63051014.4
6305208.5
63053214.4
63053314.4
63053914.4
63059014.4
63061214.4
63061912.4
63062212.4
63062912.4
63063012.4
6306918.5
63069914.4
63071011.4
63072011.4
63079011.4
63080010.8
6309008.5

4. For the following HS Codes, with units as the primary unit of measure, the conversion factors are as follows:

HS CodeUnits/SME
6101202.9
6101903.2
6102103.8
6102202.9
6102302.9
6102902.9
6103103.8
6103223.5
6103233.5
6103293.5
6103312.5
6103322.5
6103332.5
6103392.5
6103412.1
6103423.7
6103435.6
6103495.2
6104133.8
6104193.8
6104223.5
6104233.5
6104293.5
6104313.8
6104322.9
6104332.9
6104392.9
6104413.4
6104423.2
6104433.2
6104443.2
6104493.2
6104511.3
6104521.2
6104531.2
6104591.2
6104612.1
6104623.7
6104635.6
6104695.2
6105100.5
6105201.3
6105901.0
6106100.5
6106201.0
6106901.0
6107110.7
6107121.1
6107191.0
6107213.6
6107223.6
6107293.7
6107913.5
6107993.6
6108111.1
6108190.9
6108210.8
6108221.1
6108290.9
6108313.6
6108323.6
6108393.7
6108913.5
6108923.5
6108993.6
6109100.6
6109901.4
6110111.0
6110121.0
6110191.0
6110201.5
6110301.9
6112113.5
6112123.5
6112193.5
61130012.6
6114206.1
61143010.4
6117108.1
6201113.8
6201122.9
6201132.9
6201192.9
6201913.8
6201922.9
6201932.9
6201992.9
6202113.8
6202122.9
6202132.9
6202192.9
6202913.8
6202922.9
6202932.9
6202992.9
6203113.8
6203123.8
6203193.8
6203223.5
6203233.5
6203293.5
6203312.5
6203322.5
6203332.5
6203392.5
6203412.2
6203424.1
6203437.8
6203494.5
6204113.8
6204123.8
6204133.8
6204193.8
6204213.5
6204223.5
6204233.5
6204293.5
6204313.8
6204322.9
6204332.9
6204392.9
6204413.4
6204423.2
6204433.2
6204443.2
6204493.2
6204511.3
6204521.2
6204531.2
6204591.2
6204612.2
6204624.1
6204636.5
6204694.5
6205201.6
6205301.6
6205901.4
6206101.7
6206201.6
6206301.0
6206401.0
6206901.4
6207110.8
6207191.1
6207213.6
6207223.6
6207293.7
6207911.7
6207992.4
6208111.1
6208190.9
6208213.6
6208223.6
6208293.7
6208911.5
6208921.7
6208992.3
6210202.9
6210302.9
62104011.1
62105011.1
6211326.2
62113310.0
6211396.9
6211413.3
6211425.7
6211438.8
6211499.3
6212107.6
6212207.6
6212307.6
62129012.5
62149012.5
6301105.5
6302105.7
6302214.3
6302224.0
6302314.3
6302324.0
6302605.3
63029911.1
6304115.7
6304195.5
63064014.4

5. For the following HS Codes, with pairs as the primary unit of measure, the conversion factors are as follows:

HS CodePairs/SME
6115298.2
6115300.3
6115940.2
6115950.3
6115960.3
6115990.3
6116100.2
6116910.2
6116920.2
6116930.2
6116990.2
6216000.2

6. For the following HS Codes, with dozens as the primary unit of measure, the conversion factors are as follows:

HS CodeDozens/SME
6213201.4
6213906.9

Annex 3.3

Exceptions to Articles 3.3 and 3.9

Section I – Canadian Measures

Notwithstanding Articles 3.3 and 3.9, Canada may adopt or maintain:

Section II – Honduras Measures

Notwithstanding Articles 3.3 and 3.9, Honduras may adopt or maintain:

Annex 3.4.1

Tariff Elimination

1. For the purposes of eliminating customs duties in accordance with Article 3.4, interim staged rates shall be rounded down, except as set out in each Party's Schedule to this Annex, at least to the nearest tenth of a percentage point or, if the rate of duty is expressed in monetary units, at least to the nearest 0.001 of the official monetary unit of the Party.

2. Except as otherwise provided in a Party's Schedule to this Annex, the following staging categories apply to the elimination of customs duties by each Party pursuant to Article 3.4:

3. The base rate of customs duty and staging category for determining the interim rate of customs duty at each stage of reduction for an item is specified in a Party's Schedule to this Annex.

4. For the purposes of this Annex and a Party's Schedule to this Annex, beginning in year 2, each annual stage of tariff reduction shall take effect on January 1 of the relevant year.

5. The Parties agree that:

Schedule of Canada

(Tariff Schedule Attached as Separated Volume)

Schedule of Honduras

(Tariff Schedule Attached as Separated Volume)

Annex 3.4.2

Tariff Rate Quotas

Schedule of Honduras

1. For the purposes of this Schedule, "Prime", "AAA", "AA" and "A" beef means "Canada Prime", "Canada AAA", "Canada AA" and "Canada A" grades of beef as defined in the Canadian Livestock and Poultry Carcass Grading Regulations (SOR/92 541), as amended.

Prime and AAA Beef

2. Honduras shall eliminate customs duties on originating goods provided in the items listed below, in accordance with staging category H, described in paragraph 2(h) of Annex 3.4.1. Honduras shall also provide duty free access for originating goods in the calendar years specified below, up to the quantity specified below for that year:

Sistema Arancelario Centroamericano (SAC)YearQuantity (Metric Tonnes)
02012000A
02013000A
02022000A
02023000A
1300
2315
3330
4345
5360
6375
7390
8405
9420
10435
11450
12465
13480
14495
15Unlimited

AA and A Beef

3. Honduras shall eliminate customs duties on originating goods provided in the items listed below, in accordance with staging category H1, described in paragraph 2(i) of Annex 3.4.1. Honduras shall also provide duty free access for originating goods in the calendar years specified below, up to the quantity specified below for that year:

Sistema Arancelario Centroamericano (SAC)YearQuantity (Metric Tonnes)
02012000B
02013000B
02022000B
02023000B
1200
2210
3220
4230
5240
6250
7260
8270
9280
10290
11300
12310
13320
14330
15Unlimited

Pork

4. Honduras shall eliminate customs duties on originating goods provided in the items listed below, in accordance with staging category H1, described in paragraph 2(i) of Annex 3.4.1. Honduras shall also provide duty free access for originating goods in the calendar years specified below, up to the quantity specified below for that year:

Sistema Arancelario Centroamericano (SAC)YearQuantity (Metric Tonnes)
02031100
02031200
02031900
02032100
02032200
02032900
11,644
21,726
31,808
41,890
51,972
62,054
72,136
82,218
92,300
102,382
112,464
122,546
132,628
142,710
15Unlimited

Sugar – with net exporter condition

5. Customs duties on originating goods provided for in the items listed below are exempt from tariff elimination in accordance with staging category "E", described in paragraph 2(j) of Annex 3.4.1. Nevertheless, provided that Canada meets the "net exporter" condition, the following aggregate quantities shall be free of customs duty in a calendar year specified below, and shall not exceed the quantity specified below for Canada in each such year.

For purpose of this section, in any given year the "net exporter" condition for a good classified under subheadings: HS1701.91 and HS1701.99, will have been met if during the previous 3 years, the average Canadian production of refined beet sugar exceeds the average consumption of Canadian refined beet sugar over the same period. In order to export under this paragraph, Canada shall provide Honduras with official statistics to sufficiently demonstrate compliance under this paragraph.

Sistema Arancelario Centroamericano (SAC)YearQuantity (Metric Tonnes)
1701.91.00
1701.99.00
11,000
21,107
31,214
41,321
51,428
61,535
71,642
81,749
91,856
101,963
112,070
122,177
132,284
142,392
15 and following2,500

Schedule of Canada

Sugar

Customs duties on originating goods provided for in the items listed below are exempt from tariff elimination in accordance with staging category E, described in paragraph 2(j) of Annex 3.4.1. Nevertheless, Canada shall provide duty-free access for originating goods in the calendar years specified below, up to the quantity specified below for that year:

Tariff ItemsYearAggregate Quantity (Metric Tonnes)
1701.91.00
1701.99.00
1702.90.11
1702.90.12
1702.90.13
1702.90.14
1702.90.15
1702.90.16
1702.90.17
1702.90.18
1702.90.20
1702.90.30
1702.90.60
12,500
22,678
32,857
43,035
53,214
63,392
73,571
83,749
93,928
104,106
114,285
124,463
134,642
144,821
15 and following5,000

Annex 3.15

Agricultural Safeguard Measures

The quantity of a good for the purposes of Article 3.15(1) is determined as follows:

GoodTariff ClassificationTrigger LevelAnnual Trigger Growth Rate
Pork0203.11.00
0203.12.00
0203.19.00
0203.21.00
0203.22.00
0203.29.00
130% of the amount in Annex 3.4.2Not applicable
Other dairy products2202.90.9090 MT5 MT
Onions0703.10.11
0703.10.12
260 MT26 MT
Vegetable oil1507.90.00
1512.19.00
1512.29.00
1515.29.00
1516.20.90
1517.10.00
1517.90.10
1517.90.90
320 MT32 MT
Date Modified: