Annex 703.2: Market Access
Section A - Mexico and the United States
1. This Section applies only as between Mexico and the United
States.
Customs Duties and Quantitative Restrictions
2. With respect to agricultural goods, Article 309(1) and (2)
(Import and Export Restrictions) applies only to qualifying goods.
3. Each Party waives its rights under Article XI:2(c) of the
GATT, and those rights as incorporated by Article 309, regarding
any measure adopted or maintained with respect to the importation
of qualifying goods.
4. Except with respect to a good set out in Section B or C of
Annex 703.3 or Appendix 703.2.A.4, where a Party applies an over-quota
tariff rate to a qualifying good pursuant to a tariff rate quota
set out in its Schedule to Annex 302.2, or increases a customs
duty for a sugar or syrup good to a rate, in accordance with paragraph
18, that exceeds the rate of customs duty for that good set out
in its GATT Schedule of Tariff Concessions as of July 1, 1991,
the other Party waives its rights under the GATT with respect
to the application of that rate of customs duty.
5. Notwithstanding Article 302(2) (Tariff Elimination), where
an agreement resulting from agricultural multilateral trade negotiations
under the GATT enters into force with respect to a Party pursuant
to which it has agreed to convert a prohibition or restriction
on its importation of an agricultural good into a tariff rate
quota or a customs duty, that Party may not apply to such good
that is a qualifying good an over-quota tariff rate that is higher
than the lower of the over-quota tariff rate set out in:
a) its Schedule to Annex 302.2, and
b) that agreement, and paragraph 4 shall no longer apply to the
other Party with respect to that good.
6. Each Party may count the in-quota quantity under a tariff rate
quota applied to a qualifying good in accordance with its Schedule
to Annex 302.2 toward the satisfaction of commitments regarding
an in-quota quantity of a tariff rate quota or level of access
under a restriction on the importation of that good:
a) that have been agreed under the GATT, including as set out
in its GATT Schedule of Tariff Concessions; or
b) undertaken by the Party as a result of any agreement resulting
from agricultural multilateral trade negotiations under the GATT.
7. Neither Party may count toward the satisfaction of a commitment
regarding an in-quota quantity of a tariff rate quota in its Schedule
to Annex 302.2 an agricultural good admitted or entered into a
maquiladora or foreign-trade zone and re-exported, including subsequent
to processing.
8. The United States shall not adopt or maintain, with respect
to the importation of an agricultural qualifying good, any fee
applied pursuant to section 22 of the U.S. Agricultural Adjustment
Act.
9. Neither Party may seek a voluntary restraint agreement from
the other Party with respect to the exportation of meat that is
a qualifying good.
10. Notwithstanding Chapter Four (Rules of Origin), for purposes
of applying a rate of customs duty to a good, the United States
may consider as if it were non-originating a good provided for
in:
a) heading 12.02 that is exported from the territory of Mexico,
if the good is not wholly obtained in the territory of Mexico;
b) subheading 2008.11 that is exported from the territory of
Mexico, if any material provided for in heading 12.02 used in
the production of that good is not wholly obtained in the territory
of Mexico; or
c) U.S. tariff item 1806.10.42 or 2106.90.12 that is exported
from the territory of Mexico, if any material provided for in
HS heading 1701.99 used in the production of that good is not
a qualifying good.
11. Notwithstanding Chapter Four, for purposes of applying a rate
of customs duty to a good, Mexico may consider as if it were non-originating
a good provided for in:
a) HS heading 12.02 that is exported from the territory of the United
States, if that good is not wholly obtained in the territory of
the United States;
b) HS subheading 2008.11 that is exported from the territory of
the United States, if any material provided for in heading 12.02
used in the production of that good is not wholly obtained in
the territory of the United States; or
c) Mexican tariff item 1806.10.01 (except those with a sugar
content less than 90 percent) or 2106.90.05 (except those that
contain added flavoring matter) that is exported from the territory
of the United States, if any material provided for in HS subheading
1701.99 used in the production of that good is not a qualifying
good.
Restriction on Same-Condition Substitution Duty Drawback
12. Beginning on the date of entry into force of this Agreement,
neither Mexico nor the United States may refund the amount of
customs duties paid, or waive or reduce the amount of customs
duties owed, on any agricultural good imported into its territory
that is substituted for an identical or similar good that is subsequently
exported to the territory of the other Party.
Trade in Sugar and Syrup Goods
13. The Parties shall consult by July 1 of each of the first 14
years beginning with 1994 to determine jointly, in accordance
with Appendix 703.2.A.13, whether, and if so, by what quantity
either Party:
a) is projected to be a net surplus producer of sugar in the
next marketing year; and
b) has been a net surplus producer in any marketing year beginning
after the date of entry into force of this Agreement, including
the current marketing year.
14. For each of the first 14 marketing years beginning after the
date of entry into force of this Agreement, each Party shall accord
duty-free treatment to a quantity of sugar and syrup goods that
are qualifying goods not less than the greatest of:
a) 7,258 metric tons raw value;
b) the quota allocated by the United States for a non-Party within
the category designated "other specified countries and areas"
under paragraph (b)(i) of additional U.S. note 3 to chapter 17
of the Harmonized Tariff Schedule of the United States; and
c) subject to paragraph 15, the other Party's projected net production
surplus for that marketing year, as determined under paragraph
13 and adjusted in accordance with Appendix 703.2.A.13.
15. Subject to paragraph 16, the duty-free quantity of sugar and
syrup goods under paragraph 14(c); shall not exceed the following
ceilings:
a) for each of the first six marketing years, 25,000 metric tons
raw value;
b) for the seventh marketing year, 150,000 metric tons raw value;
and
c) for each of the eighth through 14th marketing years, 110 percent
of the previous marketing year's ceiling.
16. Beginning with the seventh marketing year, paragraph 15 shall
not apply where, pursuant to paragraph 13, the Parties have determined
the exporting Party to be a net surplus producer:
a) for any two consecutive marketing years beginning after the
date of entry into force of this Agreement;
b) for the previous and current marketing years; or
c) in the current marketing year and projected it to be a net
surplus producer in the next marketing year, unless subsequently
the Parties determine that, contrary to the projection, the exporting
Party was not a net surplus producer for that year.
17. Mexico shall, beginning no later than six years after the
date of entry into force of this Agreement, apply on a most- favored-nation
(MFN) basis a tariff rate quota for sugar and syrup goods consisting
of rates of customs duties no less than the lesser of the corresponding:
a) MFN rates of the United States in effect on the date that
Mexico commences to apply the tariff rate quota; and
b) prevailing MFN rates of the United States.
18. When Mexico applies a tariff rate quota under paragraph 17,
it shall not apply on a sugar or syrup good that is a qualifying
good a rate of customs duty higher than the rate of customs duty
applied by the United States on such good.
19. Each Party shall determine the quantity of a sugar or syrup
good that is a qualifying good based on the actual weight of such
good, converted as appropriate to raw value, without regard to
the good's packaging or presentation.
20. If the United States eliminates its tariff rate quota for
sugar and syrup goods imported from non-Parties, at such time
the United States shall accord to such goods that are qualifying
goods the better of the treatment, as determined by Mexico, of:
a) the treatment provided for in paragraphs 14 through 16; or
b) the MFN treatment granted by the United States to non-Parties.
21. Except as provided in paragraph 22, Mexico shall not be required
to apply the applicable rate of customs duty provided in this
Annex or in its Schedule to Annex 302.2 to a sugar or syrup good,
or sugar-containing product, that is a qualifying good where the
United States has granted or will grant benefits under any re-export
program or any like program in connection with the export of the
good. The United States shall notify Mexico in writing within
two days, excluding weekends, of any export to Mexico of such
a good for which the benefits of any re-export program or any
other like program have been or will be claimed by the exporter.
22. Notwithstanding any other provision of this Section:
a) the United States shall accord duty-free treatment to imports
of
(i) raw sugar that is a qualifying good that will be refined in
the territory of the United States and re-exported to the territory
of Mexico, and
(ii) refined sugar that is a qualifying good that has been refined
from raw sugar produced in, and exported from, the territory of
the United States;
b) Mexico shall accord duty-free treatment to imports of
(i) raw sugar that is a qualifying good that will be refined in
the territory of Mexico and re-exported to the territory of the
United States, and
(ii) refined sugar that is a qualifying good that has been refined
from raw sugar produced in, and exported from, the territory of
Mexico; and
c) imports qualifying for duty-free treatment pursuant to subparagraphs
(a) and (b) shall not be subject to, or counted under, any tariff
rate quota.
Agricultural Grading and Marketing Standards.
23. Where a Party adopts or maintains a measure respecting the
classification, grading or marketing of a domestic agricultural
good, it shall accord treatment to a like qualifying good destined
for processing no less favorable than it accords under the measure
to the domestic good destined for processing. The importing Party
may adopt or maintain measures to ensure that such imported good
is processed.
24. Paragraph 23 shall be without prejudice to the rights of either
Party under the GATT or under Chapter Three (National Treatment
and Market Access) regarding measures respecting the classification,
grading or marketing of an agricultural good, whether or not destined
for processing.
25. The Parties hereby establish a Working Group, comprising representatives
of Mexico and the United States, which shall meet annually or
as otherwise agreed. The Working Group shall review, in coordination
with the Committee on Standards-Related Measures established under
Article 913 (Committee on Standards- Related Measures), the operation
of agricultural grade and quality standards as they affect trade
between the Parties, and shall resolve issues that may arise regarding
the operation of the standards. This Working Group shall report
to the Committee on Agricultural Trade established under Article
706.
Definitions
26. For purposes of this Section:
marketing year means a 12-month period beginning October
1;
net production surplus means the quantity by which a Party's
domestic production of sugar exceeds its total consumption of
sugar during a marketing year, determined in accordance with this
Section;
net surplus producer means a Party that has a net production
surplus;
plantation white sugar means crystalline sugar that has
not been refined and is intended for human consumption without
further processing or refining;
qualifying good means an originating good that is an agricultural
good, except that in determining whether such good is an originating
good, operations performed in or materials obtained from Canada
shall be considered as if they were performed in or obtained from
a non-Party;
raw value means the equivalent of a quantity of sugar in
terms of raw sugar testing 96 degrees by the polariscope, determined
as follows:
a) the raw value of plantation white sugar equals the number
of kilograms thereof multiplied by 1.03;
b) the raw value of liquid sugar and invert sugar equals the
number of kilograms of the total sugars thereof multiplied by
1.07; and
c) the raw value of other imported sugar and syrup goods equals
the number of kilograms thereof multiplied by the greater of 0.93,
or 1.07 less 0.0175 for each degree of polarization under 100
degrees (and fractions of a degree in proportion);
sugar means raw or refined sugar derived directly or indirectly
from sugar cane or sugar beets, including liquid refined sugar;
and
sugar-containing product means a good containing sugar;
and
wholly obtained in the territory of means harvested in
the territory of.
Continue on to Annex 703.2: Section B - Canada and Mexico
