II
Calendar No. 310
103D CONGRESS
1ST SESSION
H. R. 3450
IN THE SENATE OF THE UNITED STATES
NOVEMBER 18 (legislative day, NOVEMBER 2), 1993
Received, read twice and placed on the calendar
AN ACT
To implement the North American Free Trade Agreement.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘North American Free Trade Agreement Implementation
Act’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title and table of contents.
Sec. 2. Definitions.
TITLE I—APPROVAL OF, AND GENERAL PROVISIONS RELATING
TO, THE NORTH AMERICAN FREE TRADE AGREEMENT
Sec. 101. Approval and entry into force of the North American Free Trade
Agreement.
Sec. 102. Relationship of the Agreement to United States and State law.
Sec. 103. Consultation and layover requirements for, and effective date of, pro-
claimed actions.
Sec. 104. Implementing actions in anticipation of entry into force and initial
regulations.
Sec. 105. United States Section of the NAFTA Secretariat.
Sec. 106. Appointments to chapter 20 panel proceedings.
Sec. 107. Termination or suspension of United States-Canada Free-Trade
Agreement.
Sec. 108. Congressional intent regarding future accessions.
Sec. 109. Effective dates; effect of termination of NAFTA status.
TITLE II—CUSTOMS PROVISIONS
Sec. 201. Tariff modifications.
Sec. 202. Rules of origin.
Sec. 203. Drawback.
Sec. 204. Customs user fees.
Sec. 205. Enforcement.
Sec. 206. Reliquidation of entries for NAFTA-origin goods.
Sec. 207. Country of origin marking of NAFTA goods.
Sec. 208. Protests against adverse origin determinations.
Sec. 209. Exchange of information.
Sec. 210. Prohibition on drawback for television picture tubes.
Sec. 211. Monitoring of television and picture tube imports.
Sec. 212. Title VI amendments.
Sec. 213. Effective dates.
TITLE III—APPLICATION OF AGREEMENT TO SECTORS AND
SERVICES
Subtitle A—Safeguards
PART 1—RELIEF FROM IMPORTS BENEFITING FROM THE AGREEMENT
Sec. 301. Definitions.
Sec. 302. Commencing of action for relief.
Sec. 303. International Trade Commission action on petition.
Sec. 304. Provision of relief.
Sec. 305. Termination of relief authority.
Sec. 306. Compensation authority.
Sec. 307. Submission of petitions.
Sec. 308. Special tariff provisions for Canadian fresh fruits and vegetables.
Sec. 309. Price-based snapback for frozen concentrated orange juice.
PART 2—RELIEF FROM IMPORTS FROM ALL COUNTRIES
Sec. 311. NAFTA article impact in import relief cases under the Trade Act of
1974.
Sec. 312. Presidential action regarding NAFTA imports.
PART 3—GENERAL PROVISIONS
Sec. 315. Provisional relief.
Sec. 316. Monitoring.
Sec. 317. Procedures concerning the conduct of International Trade Commis-
sion investigations.
Sec. 318. Effective date.
Subtitle B—Agriculture
Sec. 321. Agriculture.
Subtitle C—Intellectual Property
Sec. 331. Treatment of inventive activity.
Sec. 332. Rental rights in sound recordings.
Sec. 333. Nonregistrability of misleading geographic indications.
Sec. 334. Motion pictures in the public domain.
Sec. 335. Effective dates.
Subtitle D—Temporary Entry of Business Persons
Sec. 341. Temporary entry.
Sec. 342. Effective date.
Subtitle E—Standards
PART 1—STANDARDS AND MEASURES
Sec. 351. Standards and sanitary and phytosanitary measures.
Sec. 352. Transportation.
PART 2—AGRICULTURAL STANDARDS
Sec. 361. Agricultural technical and conforming amendments.
Subtitle F—Corporate Average Fuel Economy
Sec. 371. Corporate average fuel economy.
Subtitle G—Government Procurement
Sec. 381. Government procurement.
TITLE IV—DISPUTE SETTLEMENT IN ANTIDUMPING AND
COUNTERVAILING DUTY CASES
Subtitle A—Organizational, Administrative, and Procedural Provisions
Regarding the Implementation of Chapter 19 of the Agreement
Sec. 401. References in subtitle.
Sec. 402. Organizational and administrative provisions.
Sec. 403. Testimony and production of papers in extraordinary challenges.
Sec. 404. Requests for review of determinations by competent investigating au-
thorities of NAFTA countries.
Sec. 405. Rules of procedure for panels and committees.
Sec. 406. Subsidy negotiations.
Sec. 407. Identification of industries facing subsidized imports.
Sec. 408. Treatment of amendments to antidumping and countervailing duty
law.
Subtitle B—Conforming Amendments and Provisions
Sec. 411. Judicial review in antidumping duty and countervailing duty cases.
Sec. 412. Conforming amendments to other provisions of the Tariff Act of
1930.
Sec. 413. Consequential amendment to Free-Trade Agreement Act of 1988.
Sec. 414. Conforming amendments to title 28, United States Code.
Sec. 415. Effect of termination of NAFTA country status.
Sec. 416. Effective date.
TITLE V—NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE AND
OTHER PROVISIONS
Subtitle A—NAFTA Transitional Adjustment Assistance Program
Sec. 501. Short title.
Sec. 502. Establishment of NAFTA transitional adjustment assistance pro-
gram.
Sec. 503. Conforming amendments.
Sec. 504. Authorization of appropriations.
Sec. 505. Termination of transition program.
Sec. 506. Effective date.
Sec. 507. Treatment of self-employment assistance programs.
Subtitle B—Provisions Relating to Performance Under the Agreement
Sec. 511. Discriminatory taxes.
Sec. 512. Review of the operation and effects of the agreement.
Sec. 513. Actions affecting United States cultural industries.
Sec. 514. Report on impact of NAFTA on motor vehicle exports to Mexico.
Sec. 515. Center for the study of Western Hemispheric Trade.
Sec. 516. Effective date.
Subtitle C—Funding
PART 1—CUSTOMS USER FEES
Sec. 521. Fees for certain customs services.
PART 2—INTERNAL REVENUE CODE AMENDMENTS
Sec. 522. Authority to disclose certain tax information to the United States
customs service.
Sec. 523. Use of electronic fund transfer system for collection of certain taxes.
Subtitle D—Implementation of NAFTA Supplemental Agreements
PART 1—AGREEMENTS RELATING TO LABOR AND ENVIRONMENT
Sec. 531. Agreement on labor cooperation.
Sec. 532. Agreement on environmental cooperation.
Sec. 533. Agreement on Border Environment Cooperation Commission.
PART 2—NORTH AMERICAN DEVELOPMENT BANK AND RELATED
PROVISIONS.
Sec. 541. North American Development Bank.
Sec. 542. Status, immunities, and privileges.
Sec. 543. Community adjustment and investment program.
Sec. 544. Definition.
TITLE VI—CUSTOMS MODERNIZATION
Sec. 601. Reference.
Subtitle A—Improvements in Customs Enforcement
Sec. 611. Penalties for violations of arrival, reporting, entry, and clearance re-
quirements.
Sec. 612. Failure to declare.
Sec. 613. Customs testing laboratories; detention of merchandise.
Sec. 614. Recordkeeping.
Sec. 615. Examination of books and witnesses.
Sec. 616. Judicial enforcement.
Sec. 617. Review of protests.
Sec. 618. Repeal of provision relating to reliquidation on account of fraud.
Sec. 619. Penalties relating to manifests.
Sec. 620. Unlawful unlading or transshipment.
Sec. 621. Penalties for fraud, gross negligence, and negligence; prior disclosure.
Sec. 622. Penalties for false drawback claims.
Sec. 623. Interpretive rulings and decisions; public information.
Sec. 624. Seizure authority.
Subtitle B—National Customs Automation Program
Sec. 631. National Customs Automation Program.
Sec. 632. Drawback and refunds.
Sec. 633. Effective date of rates of duty.
Sec. 634. Definitions.
Sec. 635. Manifests.
Sec. 636. Invoice contents.
Sec. 637. Entry of merchandise.
Sec. 638. Appraisement and other procedures.
Sec. 639. Voluntary reliquidations.
Sec. 640. Appraisement regulations.
Sec. 641. Limitation on liquidation.
Sec. 642. Payment of duties and fees.
Sec. 643. Abandonment and damage.
Sec. 644. Customs officer’s immunity.
Sec. 645. Protests.
Sec. 646. Refunds and errors.
Sec. 647. Bonds and other security.
Sec. 648. Customhouse brokers.
Sec. 649. Conforming amendments.
Subtitle C—Miscellaneous Amendments to the Tariff Act of 1930
Sec. 651. Administrative exemptions.
Sec. 652. Report of arrival.
Sec. 653. Entry of vessels.
Sec. 654. Unlawful return of foreign vessel papers.
Sec. 655. Vessels not required to enter.
Sec. 656. Unlading.
Sec. 657. Declarations.
Sec. 658. General orders.
Sec. 659. Unclaimed merchandise.
Sec. 660. Destruction of merchandise.
Sec. 661. Proceeds of sale.
Sec. 662. Entry under regulations.
Sec. 663. American trademarks.
Sec. 664. Simplified recordkeeping for merchandise transported by pipeline.
Sec. 665. Entry for warehouse.
Sec. 666. Cartage.
Sec. 667. Seizure.
Sec. 668. Limitation on actions.
Sec. 669. Collection of fees on behalf of other agencies.
Sec. 670. Authority to settle claims.
Sec. 671. Use of private collection agencies.
Subtitle D—Miscellaneous Provisions and Consequential and Conforming
Amendments to Other Laws
Sec. 681. Amendments to the Harmonized Tariff Schedule.
Sec. 682. Customs personnel airport work shift regulation.
Sec. 683. Use of harbor maintenance trust fund amounts for administrative ex-
penses.
Sec. 684. Amendments to title 28, United States Code.
Sec. 685. Treasury forfeiture fund.
Sec. 686. Amendments to the Revised Statutes of the United States.
Sec. 687. Amendments to title 18, United States Code.
Sec. 688. Amendment to the Act to Prevent Pollution from Ships.
Sec. 689. Miscellaneous technical amendments.
Sec. 690. Repeal of obsolete provisions of law.
Sec. 691. Reports to Congress.
Sec. 692. Effective date.
SEC. 2. DEFINITIONS.
For purposes of this Act:
(1) 
AGREEMENT.—The 
term 
‘‘Agreement’’
means the North American Free Trade Agreement
approved by the Congress under section 101(a).
(2) HTS.—The term ‘‘HTS’’ means the Har-
monized Tariff Schedule of the United States.
(3) MEXICO.—Any reference to Mexico shall be
considered to be a reference to the United Mexican
States.
(4) NAFTA COUNTRY.—Except as provided in
section 202, the term ‘‘NAFTA country’’ means—
(A) Canada for such time as the Agree-
ment is in force with respect to, and the United
States applies the Agreement to, Canada; and
(B) Mexico for such time as the Agreement
is in force with respect to, and the United
States applies the Agreement to, Mexico.
(5) INTERNATIONAL TRADE COMMISSION.—The
term ‘‘International Trade Commission’’ means the
United States International Trade Commission.
(6) 
TRADE
REPRESENTATIVE.—The 
term
‘‘Trade Representative’’ means the United States
Trade Representative.
TITLE 
I—APPROVAL 
OF, 
AND
GENERAL 
PROVISIONS 
RE-
LATING 
TO, 
THE 
NORTH
AMERICAN 
FREE 
TRADE
AGREEMENT
SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE
NORTH AMERICAN FREE TRADE AGREEMENT.
(a) APPROVAL OF AGREEMENT AND STATEMENT OF
ADMINISTRATIVE ACTION.—Pursuant to section 1103 of
the Omnibus Trade and Competitiveness Act of 1988 (19
U.S.C. 2903) and section 151 of the Trade Act of 1974
(19 U.S.C. 2191), the Congress approves—
(1) the North American Free Trade Agreement
entered into on December 17, 1992, with the Gov-
ernments of Canada and Mexico and submitted to
the Congress on November 4, 1993; and
(2) the statement of administrative action pro-
posed to implement the Agreement that was submit-
ted to the Congress on November 4, 1993.
(b) CONDITIONS FOR ENTRY INTO FORCE OF THE
AGREEMENT.—The President is authorized to exchange
notes with the Government of Canada or Mexico providing
for the entry into force, on or after January 1, 1994, of
the Agreement for the United States with respect to such
country at such time as—
(1) the President—
(A) determines that such country has im-
plemented the statutory changes necessary to
bring that country into compliance with its obli-
gations under the Agreement and has made
provision to implement the Uniform Regula-
tions provided for under article 511 of the
Agreement regarding the interpretation, appli-
cation, and administration of the rules of ori-
gin, and
(B) transmits a report to the House of
Representatives and the Senate setting forth
the determination under subparagraph (A) and
including, in the case of Mexico, a description
of the specific measures taken by that country
to—
(i) bring its laws into conformity with
the requirements of the Schedule of Mexico
in Annex 1904.15 of the Agreement, and
(ii) otherwise ensure the effective im-
plementation of the binational panel review
process under chapter 19 of the Agreement
regarding final antidumping and counter-
vailing duty determinations; and
(2) the Government of such country exchanges
notes with the United States providing for the entry
into force of the North American Agreement on En-
vironmental Cooperation and the North American
Agreement on Labor Cooperation for that country
and the United States.
SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED
STATES AND STATE LAW.
(a) RELATIONSHIP
OF AGREEMENT
TO UNITED
STATES LAW.—
(1) UNITED STATES LAW TO PREVAIL IN CON-
FLICT.—No provision of the Agreement, nor the ap-
plication of any such provision to any person or cir-
cumstance, which is inconsistent with any law of the
United States shall have effect.
(2) CONSTRUCTION.—Nothing in this Act shall
be construed—
(A) to amend or modify any law of the
United States, including any law regarding—
(i) the protection of human, animal,
or plant life or health,
(ii) the protection of the environment,
or
(iii) motor carrier or worker safety; or
(B) to limit any authority conferred under
any law of the United States, including section
301 of the Trade Act of 1974;
unless specifically provided for in this Act.
(b) RELATIONSHIP
OF
AGREEMENT
TO
STATE
LAW.—
(1) FEDERAL-STATE CONSULTATION.—
(A) IN GENERAL.—Upon the enactment of
this Act, the President shall, through the inter-
governmental policy advisory committees on
trade established under section 306(c)(2)(A) of
the Trade and Tariff Act of 1984, consult with
the States for the purpose of achieving con-
formity of State laws and practices with the
Agreement.
(B) 
FEDERAL-STATE
CONSULTATION
PROCESS.—The Trade Representative shall es-
tablish within the Office of the United States
Trade Representative a Federal-State consulta-
tion process for addressing issues relating to
the Agreement that directly relate to, or will po-
tentially have a direct impact on, the States.
The Federal-State consultation process shall in-
clude procedures under which—
(i) the Trade Representative will as-
sist the States in identifying those State
laws that may not conform with the Agree-
ment but may be maintained under the
Agreement by reason of being in effect be-
fore the Agreement entered into force;
(ii) the States will be informed on a
continuing basis of matters under the
Agreement that directly relate to, or will
potentially have a direct impact on, the
States;
(iii) the States will be provided oppor-
tunity to submit, on a continuing basis, to
the Trade Representative information and
advice with respect to matters referred to
in clause (ii);
(iv) the Trade Representative will
take into account the information and ad-
vice received from the States under clause
(iii) when formulating United States posi-
tions regarding matters referred to in
clause (ii); and
(v) the States will be involved (includ-
ing involvement through the inclusion of
appropriate representatives of the States)
to the greatest extent practicable at each
stage of the development of United States
positions regarding matters referred to in
clause (ii) that will be addressed by com-
mittees, subcommittees, or working groups
established 
under 
the 
Agreement 
or
through dispute settlement processes pro-
vided for under the Agreement.
The Federal Advisory Committee Act (5 U.S.C.
App.) shall not apply to the Federal-State consulta-
tion process established by this paragraph.
(2) LEGAL CHALLENGE.—No State law, or the
application thereof, may be declared invalid as to
any person or circumstance on the ground that the
provision or application is inconsistent with the
Agreement, except in an action brought by the Unit-
ed States for the purpose of declaring such law or
application invalid.
(3) DEFINITION OF STATE LAW.—For purposes
of this subsection, the term ‘‘State law’’ includes—
(A) any law of a political subdivision of a
State; and
(B) any State law regulating or taxing the
business of insurance.
(c) EFFECT OF AGREEMENT WITH RESPECT TO PRI-
VATE REMEDIES.—No person other than the United
States—
(1) shall have any cause of action or defense
under—
(A) the Agreement or by virtue of Congres-
sional approval thereof, or
(B) the North American Agreement on
Environmental Cooperation or the North Amer-
ican Agreement on Labor Cooperation; or
(2) may challenge, in any action brought under
any provision of law, any action or inaction by any
department, agency, or other instrumentality of the
United States, any State, or any political subdivision
of a State on the ground that such action or inaction
is inconsistent with the Agreement, the North Amer-
ican Agreement on Environmental Cooperation, or
the North American Agreement on Labor Coopera-
tion.
SEC. 103. CONSULTATION AND LAYOVER REQUIREMENTS
FOR, AND EFFECTIVE DATE OF, PROCLAIMED
ACTIONS.
(a) 
CONSULTATION
AND
LAYOVER
REQUIRE-
MENTS.—If a provision of this Act provides that the imple-
mentation of an action by the President by proclamation
is subject to the consultation and layover requirements of
this section, such action may be proclaimed only if—
(1) the President has obtained advice regarding
the proposed action from—
(A) the appropriate advisory committees
established under section 135 of the Trade Act
of 1974, and
(B) the International Trade Commission;
(2) the President has submitted a report to the
Committee on Ways and Means of the House of
Representatives and the Committee on Finance of
the Senate that sets forth—
(A) the action proposed to be proclaimed
and the reasons therefor, and
(B) the advice obtained under paragraph
(1);
(3) a period of 60 calendar days, beginning
with the first day on which the President has met
the requirements of paragraphs (1) and (2) with re-
spect to such action, has expired; and
(4) the President has consulted with such Com-
mittees regarding the proposed action during the pe-
riod referred to in paragraph (3).
(b) EFFECTIVE DATE OF CERTAIN PROCLAIMED AC-
TIONS.—Any action proclaimed by the President under the
authority of this Act that is not subject to the consultation
and layover requirements under subsection (a) may not
take effect before the 15th day after the date on which
the text of the proclamation is published in the Federal
Register.
SEC. 104. IMPLEMENTING ACTIONS IN ANTICIPATION OF
ENTRY INTO FORCE AND INITIAL REGULA-
TIONS.
(a) IMPLEMENTING ACTIONS.—After the date of the
enactment of this Act—
(1) the President may proclaim such actions;
and
(2) other appropriate officers of the United
States Government may issue such regulations;
as may be necessary to ensure that any provision of this
Act, or amendment made by this Act, that takes effect
on the date the Agreement enters into force is appro-
priately implemented on such date, but no such proclama-
tion or regulation may have an effective date earlier than
the date of entry into force. The 15-day restriction in sec-
tion 103(b) on the taking effect of proclaimed actions is
waived to the extent that the application of such restric-
tion would prevent the taking effect on the date the Agree-
ment enters into force of any action proclaimed under this
section.
(b) INITIAL REGULATIONS.—Initial regulations nec-
essary or appropriate to carry out the actions proposed
in the statement of administrative action submitted under
section 101(a)(2) to implement the Agreement shall, to
the maximum extent feasible, be issued within 1 year after
the date of entry into force of the Agreement; except that
interim or initial regulations to implement those Uniform
Regulations regarding rules of origin provided for under
article 511 of the Agreement shall be issued no later than
the date of entry into force of the Agreement. In the case
of any implementing action that takes effect on a date
after the date of entry into force of the Agreement, initial
regulations to carry out that action shall, to the maximum
extent feasible, be issued within 1 year after such effective
date.
SEC. 105. UNITED STATES SECTION OF THE NAFTA SEC-
RETARIAT.
(a) ESTABLISHMENT OF THE UNITED STATES SEC-
TION.—The President is authorized to establish within
any department or agency of the United States Govern-
ment a United States Section of the Secretariat estab-
lished under chapter 20 of the Agreement. The United
States Section, subject to the oversight of the interagency
group established under section 402, shall carry out its
functions within the Secretariat to facilitate the operation
of the Agreement, including the operation of chapters 19
and 20 of the Agreement and the work of the panels, ex-
traordinary challenge committees, special committees, and
scientific review boards convened under those chapters.
The United States Section may not be considered to be
an agency for purposes of section 552 of title 5, United
States Code.
(b) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated for each fiscal year after
fiscal year 1993 to the department or agency within which
the United States Section is established the lesser of—
(1) such sums as may be necessary; or
(2) $2,000,000;
for the establishment and operations of the United States
Section and for the payment of the United States share
of the expenses of binational panels and extraordinary
challenge committees convened under chapter 19, and of
the expenses incurred in dispute settlement proceedings
under chapter 20, of the Agreement.
(c) REIMBURSEMENT OF CERTAIN EXPENSES.—If,
in accordance with Annex 2002.2 of the Agreement, the
Canadian Section or the Mexican Section of the Secretar-
iat provides funds to the United States Section during any
fiscal year, as reimbursement for expenses by the Cana-
dian Section or the Mexican Section in connection with
settlement proceedings under chapter 19 or 20 of the
Agreement, the United States Section may retain and use
such funds to carry out the functions described in sub-
section (a).
SEC. 106. APPOINTMENTS TO CHAPTER 20 PANEL PRO-
CEEDINGS.
(a) CONSULTATION.—The Trade Representative shall
consult with the Committee on Ways and Means of the
House of Representatives and the Committee on Finance
of the Senate regarding the selection and appointment of
candidates for the rosters described in article 2009 of the
Agreement.
(b) SELECTION OF INDIVIDUALS WITH ENVIRON-
MENTAL EXPERTISE.—The United States shall, to the
maximum extent practicable, encourage the selection of in-
dividuals who have expertise and experience in environ-
mental issues for service in panel proceedings under chap-
ter 20 of the Agreement to hear any challenge to a United
States or State environmental law.
SEC. 107. TERMINATION OR SUSPENSION OF UNITED
STATES-CANADA FREE-TRADE AGREEMENT.
Section 501(c) of the United States-Canada Free-
Trade Implementation Act of 1988 (19 U.S.C. 2112 note)
is amended to read as follows:
‘‘(c) TERMINATION
OR SUSPENSION
OF AGREE-
MENT.—
‘‘(1) TERMINATION OF AGREEMENT.—On the
date the Agreement ceases to be in force, the provi-
sions of this Act (other than this paragraph and sec-
tion 410(b)), and the amendments made by this Act,
shall cease to have effect.
‘‘(2) EFFECT OF AGREEMENT SUSPENSION.—
An agreement by the United States and Canada to
suspend the operation of the Agreement shall not be
deemed to cause the Agreement to cease to be in
force within the meaning of paragraph (1).
‘‘(3) SUSPENSION RESULTING FROM NAFTA.—
On the date the United States and Canada agree to
suspend the operation of the Agreement by reason of
the entry into force between them of the North
American Free Trade Agreement, the following pro-
visions of this Act are suspended and shall remain
suspended until such time as the suspension of the
Agreement may be terminated:
‘‘(A) Sections 204(a) and (b) and 205(a).
‘‘(B) Sections 302 and 304(f).
‘‘(C) Sections 404, 409, and 410(b).’’.
SEC. 108. CONGRESSIONAL INTENT REGARDING FUTURE
ACCESSIONS.
(a) IN GENERAL.—Section 101(a) may not be con-
strued as conferring Congressional approval of the entry
into force of the Agreement for the United States with
respect to countries other than Canada and Mexico.
(b) FUTURE FREE TRADE AREA NEGOTIATIONS.—
(1) FINDINGS.—The Congress makes the fol-
lowing findings:
(A) Efforts by the United States to obtain
greater market opening through multilateral ne-
gotiations have not produced agreements that
fully satisfy the trade negotiating objectives of
the United States.
(B) United States trade policy should pro-
vide for additional mechanisms with which to
pursue greater market access for United States
exports of goods and services and opportunities
for export-related investment by United States
persons.
(C) Among the additional mechanisms
should be a system of bilateral and multilateral
trade agreements that provide greater market
access for United States exports and opportuni-
ties for export-related investment by United
States persons.
(D) The system of trade agreements can
and should be structured to be consistent with,
and complementary to, existing international
obligations of the United States and ongoing
multilateral efforts to open markets.
(2) REPORT ON SIGNIFICANT MARKET OPEN-
ING.—No later than May 1, 1994, and May 1, 1997,
the Trade Representative shall submit to the Presi-
dent, and to the Committee on Finance of the Sen-
ate and the Committee on Ways and Means of the
House of Representatives (hereafter in this section
referred to as the ‘‘appropriate Congressional com-
mittees’’), a report which lists those foreign coun-
tries—
(A) that—
(i) currently provide fair and equitable
market access for United States exports of
goods and services and opportunities for
export-related investment by United States
persons, beyond what is required by exist-
ing multilateral trade agreements or obli-
gations; or
(ii) have made significant progress in
opening their markets to United States ex-
ports of goods and services and export-re-
lated investment by United States persons;
and
(B) the further opening of whose markets
has the greatest potential to increase United
States exports of goods and services and export-
related investment by United States persons, ei-
ther directly or through the establishment of a
beneficial precedent.
(3) 
PRESIDENTIAL
DETERMINATION.—The
President, on the basis of the report submitted by
the Trade Representative under paragraph (2), shall
determine with which foreign country or countries, if
any, the United States should seek to negotiate a
free trade area agreement or agreements.
(4) RECOMMENDATIONS
ON
FUTURE
FREE
TRADE AREA NEGOTIATIONS.—No later than July 1,
1994, and July 1, 1997, the President shall submit
to the appropriate Congressional committees a writ-
ten report that contains—
(A) recommendations for free trade area
negotiations with each foreign country selected
under paragraph (3);
(B) with respect to each country selected,
the specific negotiating objectives that are nec-
essary to meet the objectives of the United
States under this section; and
(C) legislative proposals to ensure ade-
quate consultation with the Congress and the
private sector during the negotiations, advance
Congressional approval of the negotiations rec-
ommended by the President, and Congressional
approval of any trade agreement entered into
by the President as a result of the negotiations.
(5) GENERAL NEGOTIATING OBJECTIVES.—The
general negotiating objectives of the United States
under this section are to obtain—
(A) preferential treatment for United
States goods;
(B) national treatment and, where appro-
priate, equivalent competitive opportunity for
United States services and foreign direct invest-
ment by United States persons;
(C) the elimination of barriers to trade in
goods and services by United States persons
through standards, testing, labeling, and certifi-
cation requirements;
(D) nondiscriminatory government pro-
curement policies and practices with respect to
United States goods and services;
(E) the elimination of other barriers to
market access for United States goods and
services, and the elimination of barriers to for-
eign direct investment by United States per-
sons;
(F) the elimination of acts, policies, and
practices which deny fair and equitable market
opportunities, including foreign government tol-
eration of anticompetitive business practices by
private firms or among private firms that have
the effect of restricting, on a basis that is in-
consistent with commercial considerations, pur-
chasing by such firms of United States goods
and services;
(G) adequate and effective protection of in-
tellectual property rights of United States per-
sons, and fair and equitable market access for
United States persons that rely upon intellec-
tual property protection;
(H) the elimination of foreign export and
domestic subsidies that distort international
trade in United States goods and services or
cause material injury to United States indus-
tries;
(I) the elimination of all export taxes;
(J) the elimination of acts, policies, and
practices which constitute export targeting; and
(K) monitoring and effective dispute settle-
ment mechanisms to facilitate compliance with
the matters described in subparagraphs (A)
through (J).
SEC. 109. EFFECTIVE DATES; EFFECT OF TERMINATION OF
NAFTA STATUS.
(a) EFFECTIVE DATES.—
(1) IN GENERAL.—This title (other than the
amendment made by section 107) takes effect on the
date of the enactment of this Act.
(2) EFFECT ON MEXICAN GSP STATUS.—Not-
withstanding section 502(a)(2) of the Trade Act of
1974 (19 U.S.C. 2462(a)(2)), the President shall
terminate the designation of Mexico as a beneficiary
developing country for purposes of title V of the
Trade Act of 1974 on the date of entry into force
of the Agreement between the United States and
Mexico.
(b) OTHER TARIFF MODIFICATIONS.—
(1) IN
GENERAL.—Subject to paragraph (2)
and the consultation and layover requirements of
section 103(a), the President may proclaim—
(A) such modifications or continuation of
any duty,
(B) such modifications as the United
States may agree to with Mexico or Canada re-
garding the staging of any duty treatment set
forth in Annex 302.2 of the Agreement,
(C) such continuation of duty-free or excise
treatment, or
(D) such additional duties,
as the President determines to be necessary or ap-
propriate to maintain the general level of reciprocal
and mutually advantageous concessions with respect
to Canada or Mexico provided for by the Agreement.
(2) SPECIAL RULE FOR ARTICLES WITH TARIFF
PHASEOUT PERIODS OF MORE THAN 10 YEARS.—The
President may not consider a request to accelerate
the staging of duty reductions for an article for
which the United States tariff phaseout period is
more than 10 years if a request for acceleration with
respect to such article has been denied in the preced-
ing 3 calendar years.
(c) CONVERSION TO AD VALOREM RATES FOR CER-
TAIN TEXTILES.—For purposes of subsections (a) and
(b), with respect to an article covered by Annex 300–B
of the Agreement imported from Mexico for which the base
rate in the Schedule of the United States in Annex 300–
B is a specific or compound rate of duty, the President
may substitute for the base rate an ad valorem rate that
the President determines to be equivalent to the base rate.
SEC. 202. RULES OF ORIGIN.
(a) ORIGINATING GOODS.—
(1) IN GENERAL.—For purposes of implement-
ing the tariff treatment and quantitative restrictions
provided for under the Agreement, except as other-
wise provided in this section, a good originates in
the territory of a NAFTA country if—
(A) the good is wholly obtained or pro-
duced entirely in the territory of one or more of
the NAFTA countries;
(B)(i) each nonoriginating material used in
the production of the good—
(I) undergoes an applicable change in
tariff classification set out in Annex 401 of
the Agreement as a result of production
occurring entirely in the territory of one or
more of the NAFTA countries; or
(II) where no change in tariff classi-
fication is required, the good otherwise sat-
isfies the applicable requirements of such
Annex; and
(ii) the good satisfies all other applicable
requirements of this section;
(C) the good is produced entirely in the
territory of one or more of the NAFTA coun-
tries exclusively from originating materials; or
(D) except for a good provided for in chap-
ters 61 through 63 of the HTS, the good is
produced entirely in the territory of one or
more of the NAFTA countries, but one or more
of the nonoriginating materials, that are pro-
vided for as parts under the HTS and are used
in the production of the good, does not undergo
a change in tariff classification because—
(i) the good was imported into the ter-
ritory of a NAFTA country in an unassem-
bled or a disassembled form but was classi-
fied as an assembled good pursuant to
General Rule of Interpretation 2(a) of the
HTS; or
(ii)(I) the heading for the good pro-
vides for and specifically describes both the
good itself and its parts and is not further
subdivided into subheadings; or
(II) the subheading for the good pro-
vides for and specifically describes both the
good itself and its parts.
(2) SPECIAL RULES.—
(A) FOREIGN-TRADE
ZONES.—Subpara-
graph (B) of paragraph (1) shall not apply to
a good produced in a foreign-trade zone or
subzone (established pursuant to the Act of
June 18, 1934, commonly known as the For-
eign Trade Zones Act) that is entered for con-
sumption in the customs territory of the United
States.
(B) REGIONAL VALUE-CONTENT REQUIRE-
MENT.—For purposes of subparagraph (D) of
paragraph (1), a good shall be treated as origi-
nating in a NAFTA country if the regional
value-content of the good, determined in accord-
ance with subsection (b), is not less than 60
percent where the transaction value method is
used, or not less than 50 percent where the net
cost method is used, and the good satisfies all
other applicable requirements of this section.
(b) REGIONAL VALUE-CONTENT.—
(1) IN GENERAL.—Except as provided in para-
graph (5), the regional value-content of a good shall
be calculated, at the choice of the exporter or pro-
ducer of the good, on the basis of—
(A) the transaction value method described
in paragraph (2); or
(B) the net cost method described in para-
graph (3).
(2) TRANSACTION VALUE METHOD.—
(A) IN
GENERAL.—An exporter or pro-
ducer may calculate the regional value-content
of a good on the basis of the following trans-
action value method:
RVC
=
TV–VNM
×
100
TV
(B) DEFINITIONS.—For purposes of sub-
paragraph (A):
(i) The term ‘‘RVC’’ means the re-
gional value-content, expressed as a per-
centage.
(ii) The term ‘‘TV’’ means the trans-
action value of the good adjusted to a
F.O.B. basis.
(iii) The term ‘‘VNM’’ means the
value of nonoriginating materials used by
the producer in the production of the good.
(3) NET COST METHOD.—
(A) IN
GENERAL.—An exporter or pro-
ducer may calculate the regional value-content
of a good on the basis of the following net cost
method:
RVC
=
NC–VNM
×
100
NC
(B) DEFINITIONS.—For purposes of sub-
paragraph (A):
(i) The term ‘‘RVC’’ means the re-
gional value-content, expressed as a per-
centage.
(ii) The term ‘‘NC’’ means the net
cost of the good.
(iii) The term ‘‘VNM’’ means the
value of nonoriginating materials used by
the producer in the production of the good.
(4) VALUE
OF
NONORIGINATING
MATERIALS
USED IN ORIGINATING MATERIALS.—Except as pro-
vided in subsection (c)(1), and for a motor vehicle
identified in subsection (c)(2) or a component identi-
fied in Annex 403.2 of the Agreement, the value of
nonoriginating materials used by the producer in the
production of a good shall not, for purposes of cal-
culating the regional value-content of the good under
paragraph (2) or (3), include the value of
nonoriginating materials used to produce originating
materials that are subsequently used in the produc-
tion of the good.
(5) NET COST METHOD MUST BE USED IN CER-
TAIN
CASES.—An exporter or producer shall cal-
culate the regional value-content of a good solely on
the basis of the net cost method described in para-
graph (3), if—
(A) there is no transaction value for the
good;
(B) the transaction value of the good is
unacceptable under Article 1 of the Customs
Valuation Code;
(C) the good is sold by the producer to a
related person and the volume, by units of
quantity, of sales of identical or similar goods
to related persons during the six-month period
immediately preceding the month in which the
good is sold exceeds 85 percent of the produc-
er’s total sales of such goods during that pe-
riod;
(D) the good is—
(i) a motor vehicle provided for in
heading 
8701 
or 
8702, 
subheadings
8703.21 through 8703.90, or heading
8704, 8705, or 8706;
(ii) identified in Annex 403.1 or 403.2
of the Agreement and is for use in a motor
vehicle provided for in heading 8701 or
8702, 
subheadings 
8703.21 
through
8703.90, or heading 8704, 8705, or 8706;
(iii) provided for in subheadings
6401.10 through 6406.10; or
(iv) a word processing machine pro-
vided for in subheading 8469.10.00;
(E) the exporter or producer chooses to ac-
cumulate the regional value-content of the good
in accordance with subsection (d); or
(F) the good is designated as an intermedi-
ate material under paragraph (10) and is sub-
ject to a regional value-content requirement.
(6) NET COST METHOD ALLOWED FOR ADJUST-
MENTS.—If an exporter or producer of a good cal-
culates the regional value-content of the good on the
basis of the transaction value method and a NAFTA
country subsequently notifies the exporter or pro-
ducer, during the course of a verification conducted
in accordance with chapter 5 of the Agreement, that
the transaction value of the good or the value of any
material used in the production of the good must be
adjusted or is unacceptable under Article 1 of the
Customs Valuation Code, the exporter or producer
may calculate the regional value-content of the good
on the basis of the net cost method.
(7) REVIEW
OF
ADJUSTMENT.—Nothing in
paragraph (6) shall be construed to prevent any re-
view or appeal available in accordance with article
510 of the Agreement with respect to an adjustment
to or a rejection of—
(A) the transaction value of a good; or
(B) the value of any material used in the
production of a good.
(8) CALCULATING
NET
COST.—The producer
may, consistent with regulations implementing this
section, calculate the net cost of a good under para-
graph (3), by—
(A) calculating the total cost incurred with
respect to all goods produced by that producer,
subtracting any sales promotion, marketing and
after-sales service costs, royalties, shipping and
packing costs, and nonallowable interest costs
that are included in the total cost of all such
goods, and reasonably allocating the resulting
net cost of those goods to the good;
(B) calculating the total cost incurred with
respect to all goods produced by that producer,
reasonably allocating the total cost to the good,
and subtracting any sales promotion, marketing
and after-sales service costs, royalties, shipping
and packing costs, and nonallowable interest
costs that are included in the portion of the
total cost allocated to the good; or
(C) reasonably allocating each cost that is
part of the total cost incurred with respect to
the good so that the aggregate of these costs
does not include any sales promotion, market-
ing and after-sales service costs, royalties, ship-
ping and packing costs, or nonallowable interest
costs.
(9) VALUE
OF
MATERIAL
USED
IN
PRODUC-
TION.—Except as provided in paragraph (11), the
value of a material used in the production of a
good—
(A) shall—
(i) be the transaction value of the ma-
terial determined in accordance with Arti-
cle 1 of the Customs Valuation Code; or
(ii) in the event that there is no trans-
action value or the transaction value of the
material is unacceptable under Article 1 of
the Customs Valuation Code, be deter-
mined in accordance with Articles 2
through 7 of the Customs Valuation Code;
and
(B) if not included under clause (i) or (ii)
of subparagraph (A), shall include—
(i) freight, insurance, packing, and all
other costs incurred in transporting the
material to the location of the producer;
(ii) duties, taxes, and customs broker-
age fees paid on the material in the terri-
tory of one or more of the NAFTA coun-
tries; and
(iii) the cost of waste and spoilage re-
sulting from the use of the material in the
production of the good, less the value of
renewable scrap or by-product.
(10) INTERMEDIATE
MATERIAL.—Except for
goods described in subsection (c)(1), any self-pro-
duced material, other than a component identified in
Annex 403.2 of the Agreement, that is used in the
production of a good may be designated by the pro-
ducer of the good as an intermediate material for
the purpose of calculating the regional value-content
of the good under paragraph (2) or (3); provided
that if the intermediate material is subject to a re-
gional value-content requirement, no other self-pro-
duced material that is subject to a regional value-
content requirement and is used in the production of
the intermediate material may be designated by the
producer as an intermediate material.
(11) VALUE
OF
INTERMEDIATE
MATERIAL.—
The value of an intermediate material shall be—
(A) the total cost incurred with respect to
all goods produced by the producer of the good
that can be reasonably allocated to the inter-
mediate material; or
(B) the aggregate of each cost that is part
of the total cost incurred with respect to the in-
termediate material that can be reasonably allo-
cated to that intermediate material.
(12) INDIRECT MATERIAL.—The value of an in-
direct material shall be based on the Generally Ac-
cepted Accounting Principles applicable in the terri-
tory of the NAFTA country in which the good is
produced.
(c) AUTOMOTIVE GOODS.—
(1) PASSENGER VEHICLES AND LIGHT TRUCKS,
AND THEIR AUTOMOTIVE PARTS.—For purposes of
calculating the regional value-content under the net
cost method for—
(A) a good that is a motor vehicle for the
transport of 15 or fewer persons provided for in
subheading 8702.10.00 or 8702.90.00, or a
motor vehicle provided for in subheadings
8703.21 
through 
8703.90, 
or 
subheading
8704.21 or 8704.31, or
(B) a good provided for in the tariff provi-
sions listed in Annex 403.1 of the Agreement,
that is subject to a regional value-content re-
quirement and is for use as original equipment
in the production of a motor vehicle for the
transport of 15 or fewer persons provided for in
subheading 8702.10.00 or 8702.90.00, or a
motor vehicle provided for in subheadings
8703.21 
through 
8703.90, 
or 
subheading
8704.21 or 8704.31,
the value of nonoriginating materials used by the
producer in the production of the good shall be the
sum of the values of all nonoriginating materials, de-
termined in accordance with subsection (b)(9) at the
time the nonoriginating materials are received by the
first person in the territory of a NAFTA country
who takes title to them, that are imported from out-
side the territories of the NAFTA countries under
the tariff provisions listed in Annex 403.1 of the
Agreement and are used in the production of the
good or that are used in the production of any mate-
rial used in the production of the good.
(2) OTHER VEHICLES AND THEIR AUTOMOTIVE
PARTS.—For purposes of calculating the regional
value-content under the net cost method for a good
that is a motor vehicle provided for in heading 8701,
subheading 8704.10, 8704.22, 8704.23, 8704.32, or
8704.90, or heading 8705 or 8706, a motor vehicle
for the transport of 16 or more persons provided for
in subheading 8702.10.00 or 8702.90.00, or a com-
ponent identified in Annex 403.2 of the Agreement
for use as original equipment in the production of
the motor vehicle, the value of nonoriginating mate-
rials used by the producer in the production of the
good shall be the sum of—
(A) for each material used by the producer
listed in Annex 403.2 of the Agreement, wheth-
er or not produced by the producer, at the
choice of the producer and determined in ac-
cordance with subsection (b), either—
(i) the value of such material that is
nonoriginating, or
(ii) the value of nonoriginating mate-
rials used in the production of such mate-
rial; and
(B) the value of any other nonoriginating
material used by the producer that is not listed
in Annex 403.2 of the Agreement determined in
accordance with subsection (b).
(3) AVERAGING PERMITTED.—
(A) IN
GENERAL.—For purposes of cal-
culating the regional value-content of a motor
vehicle described in paragraph (1) or (2), the
producer may average its calculation over its
fiscal year, using any of the categories de-
scribed in subparagraph (B), on the basis of ei-
ther all motor vehicles in the category or on the
basis of only the motor vehicles in the category
that are exported to the territory of one or
more of the other NAFTA countries.
(B) CATEGORY DESCRIBED.—A category is
described in this subparagraph if it is—
(i) the same model line of motor vehi-
cles in the same class of vehicles produced
in the same plant in the territory of a
NAFTA country;
(ii) the same class of motor vehicles
produced in the same plant in the territory
of a NAFTA country;
(iii) the same model line of motor ve-
hicles produced in the territory of a
NAFTA country; or
(iv) if applicable, the basis set out in
Annex 403.3 of the Agreement.
(4) ANNEX 403.1 AND ANNEX 403.2.—For pur-
poses of calculating the regional value-content for
any or all goods provided for in a tariff provision
listed in Annex 403.1 of the Agreement, or a compo-
nent or material identified in Annex 403.2 of the
Agreement, produced in the same plant, the pro-
ducer of the good may—
(A) average its calculation—
(i) over the fiscal year of the motor
vehicle producer to whom the good is sold;
(ii) over any quarter or month; or
(iii) over its fiscal year, if the good is
sold as an aftermarket part;
(B) calculate the average referred to in
subparagraph (A) separately for any or all
goods sold to one or more motor vehicle produc-
ers; or
(C) with respect to any calculation under
this paragraph, make a separate calculation for
goods that are exported to the territory of one
or more NAFTA countries.
(5) PHASE-IN
OF
REGIONAL
VALUE-CONTENT
REQUIREMENT.—Notwithstanding Annex 401 of the
Agreement, and except as provided in paragraph (6),
the regional value-content requirement shall be—
(A) for a producer’s fiscal year beginning
on the day closest to January 1, 1998, and
thereafter, 56 percent calculated under the net
cost method, and for a producer’s fiscal year
beginning on the day closest to January 1,
2002, and thereafter, 62.5 percent calculated
under the net cost method, for—
(i) a good that is a motor vehicle for
the transport of 15 or fewer persons pro-
vided for in subheading 8702.10.00 or
8702.90.00, or a motor vehicle provided
for 
in 
subheadings 
8703.21 
through
8703.90, 
or 
subheading 
8704.21 
or
8704.31; and
(ii) a good provided for in heading
8407 or 8408, or subheading 8708.40,
that is for use in a motor vehicle identified
in clause (i); and
(B) for a producer’s fiscal year beginning
on the day closest to January 1, 1998, and
thereafter, 55 percent calculated under the net
cost method, and for a producer’s fiscal year
beginning on the day closest to January 1,
2002, and thereafter, 60 percent calculated
under the net cost method, for—
(i) a good that is a motor vehicle pro-
vided for in heading 8701, subheading
8704.10, 8704.22, 8704.23, 8704.32, or
8704.90, or heading 8705 or 8706, or a
motor vehicle for the transport of 16 or
more persons provided for in subheading
8702.10.00 or 8702.90.00;
(ii) a good provided for in heading
8407 or 8408, or subheading 8708.40 that
is for use in a motor vehicle identified in
clause (i); and
(iii) except for a good identified in
subparagraph (A)(ii) or a good provided
for 
in 
subheadings 
8482.10 
through
8482.80, 
or 
subheading 
8483.20 
or
8483.30, a good identified in Annex 403.1
of the Agreement that is subject to a re-
gional value-content requirement and is for
use in a motor vehicle identified in sub-
paragraph (A)(i) or (B)(i).
(6) NEW
AND
REFITTED
PLANTS.—The re-
gional value-content requirement for a motor vehicle
identified in paragraph (1) or (2) shall be—
(A) 50 percent for 5 years after the date
on which the first motor vehicle prototype is
produced in a plant by a motor vehicle assem-
bler, if—
(i) it is a motor vehicle of a class, or
marque, or, except for a motor vehicle
identified in paragraph (2), size category
and underbody, not previously produced by
the motor vehicle assembler in the territory
of any of the NAFTA countries;
(ii) the plant consists of a new build-
ing in which the motor vehicle is assem-
bled; and
(iii) the plant contains substantially
all new machinery that is used in the as-
sembly of the motor vehicle; or
(B) 50 percent for 2 years after the date
on which the first motor vehicle prototype is
produced at a plant following a refit, if it is a
motor vehicle of a class, or marque, or, except
for a motor vehicle identified in paragraph (2),
size category and underbody, different from
that assembled by the motor vehicle assembler
in the plant before the refit.
(7) ELECTION FOR CERTAIN VEHICLES FROM
CANADA.—In the case of goods provided for in sub-
headings 8703.21 through 8703.90, or subheading
8704.21 or 8704.31, exported from Canada directly
to the United States, and entered on or after Janu-
ary 1, 1989, and before the date of entry into force
of the Agreement between the United States and
Canada, an importer may elect to use the rules of
origin set out in this section in lieu of the rules of
origin contained in section 202 of the United States-
Canada Free-Trade Agreement Implementation Act
of 1988 (19 U.S.C. 2112 note) and may elect to use
the 
method 
for 
calculating 
the 
value 
of
nonoriginating 
materials 
established 
in 
article
403(2) of the Agreement in lieu of the method es-
tablished in article 403(1) of the Agreement for pur-
poses of determining eligibility for preferential duty
treatment under the United States-Canada Free-
Trade Agreement. Any election under this paragraph
shall be made in writing to the Customs Service not
later than the date that is 180 days after the date
of entry into force of the Agreement between the
United States and Canada. Any such election may
be made only if the liquidation of such entry has not
become final. For purposes of averaging the calcula-
tion of regional value-content for the goods covered
by such entry, where the producer’s 1989–1990 fis-
cal year began after January 1, 1989, the producer
may include the period between January 1, 1989,
and the beginning of its first fiscal year after Janu-
ary 1, 1989, as part of fiscal year 1989–1990.
(d) ACCUMULATION.—
(1) DETERMINATION OF ORIGINATING GOOD.—
For purposes of determining whether a good is an
originating good, the production of the good in the
territory of one or more of the NAFTA countries by
one or more producers shall, at the choice of the ex-
porter or producer of the good, be considered to
have been performed in the territory of any of the
NAFTA countries by that exporter or producer, if—
(A) all nonoriginating materials used in
the production of the good undergo an applica-
ble tariff classification change set out in Annex
401 of the Agreement;
(B) the good satisfies any applicable re-
gional value-content requirement; and
(C) the good satisfies all other applicable
requirements of this section.
The requirements of subparagraphs (A) and (B)
must be satisfied entirely in the territory of one or
more of the NAFTA countries.
(2) TREATMENT AS SINGLE PRODUCER.—For
purposes of subsection (b)(10), the production of a
producer that chooses to accumulate its production
with that of other producers under paragraph (1)
shall be treated as the production of a single pro-
ducer.
(e) DE MINIMIS AMOUNTS OF NONORIGINATING MA-
TERIALS.—
(1) IN GENERAL.—Except as provided in para-
graphs (3), (4), (5), and (6), a good shall be consid-
ered to be an originating good if—
(A) the value of all nonoriginating mate-
rials used in the production of the good that do
not undergo an applicable change in tariff clas-
sification (set out in Annex 401 of the Agree-
ment) is not more than 7 percent of the trans-
action value of the good, adjusted to a F.O.B.
basis, or
(B) where the transaction value of the
good is unacceptable under Article 1 of the
Customs Valuation Code, the value of all such
nonoriginating materials is not more than 7
percent of the total cost of the good,
provided that the good satisfies all other applicable
requirements of this section and, if the good is sub-
ject to a regional value-content requirement, the
value of such nonoriginating materials is taken into
account in calculating the regional value-content of
the good.
(2) GOODS NOT SUBJECT TO REGIONAL VALUE-
CONTENT REQUIREMENT.—A good that is otherwise
subject to a regional value-content requirement shall
not be required to satisfy such requirement if—
(A)(i) the value of all nonoriginating mate-
rials used in the production of the good is not
more than 7 percent of the transaction value of
the good, adjusted to a F.O.B. basis; or
(ii) where the transaction value of the good
is unacceptable under Article 1 of the Customs
Valuation Code, the value of all nonoriginating
materials is not more than 7 percent of the
total cost of the good; and
(B) the good satisfies all other applicable
requirements of this section.
(3) DAIRY
PRODUCTS, ETC.—Paragraph (1)
does not apply to—
(A) a nonoriginating material provided for
in chapter 4 of the HTS or a dairy preparation
containing over 10 percent by weight of milk
solids provided for in subheading 1901.90.30,
1901.90.40, or 1901.90.80 that is used in the
production of a good provided for in chapter 4
of the HTS;
(B) a nonoriginating material provided for
in chapter 4 of the HTS or a dairy preparation
containing over 10 percent by weight of milk
solids provided for in subheading 1901.90.30,
1901.90.40, or 1901.90.80 that is used in the
production of—
(i) preparations for infants containing
over 10 percent by weight of milk solids
provided for in subheading 1901.10.00;
(ii) mixes and doughs, containing over
25 percent by weight of butterfat, not put
up for retail sale, provided for in sub-
heading 1901.20.00;
(iii) a dairy preparation containing
over 10 percent by weight of milk solids
provided for in subheading 1901.90.30,
1901.90.40, or 1901.90.80;
(iv) a good provided for in heading
2105 or subheading 2106.90.05, or prep-
arations containing over 10 percent by
weight of milk solids provided for in sub-
heading 
2106.90.15, 
2106.90.40,
2106.90.50, or 2106.90.65;
(v) a good provided for in subheading
2202.90.10 or 2202.90.20; or
(vi) animal feeds containing over 10
percent by weight of milk solids provided
for in subheading 2309.90.30;
(C) a nonoriginating material provided for
in heading 0805 or subheadings 2009.11
through 2009.30 that is used in the production
of—
(i) a good provided for in subheadings
2009.11 through 2009.30, or subheading
2106.90.16, or concentrated fruit or vege-
table juice of any single fruit or vegetable,
fortified with minerals or vitamins, pro-
vided for in subheading 2106.90.19; or
(ii) a good provided for in subheading
2202.90.30 or 2202.90.35, or fruit or veg-
etable juice of any single fruit or vegetable,
fortified with minerals or vitamins, pro-
vided for in subheading 2202.90.36;
(D) a nonoriginating material provided for
in chapter 9 of the HTS that is used in the
production of instant coffee, not flavored, pro-
vided for in subheading 2101.10.20;
(E) a nonoriginating material provided for
in chapter 15 of the HTS that is used in the
production of a good provided for in headings
1501 through 1508, or heading 1512, 1514, or
1515;
(F) a nonoriginating material provided for
in heading 1701 that is used in the production
of a good provided for in headings 1701
through 1703;
(G) a nonoriginating material provided for
in chapter 17 of the HTS or heading 1805 that
is used in the production of a good provided for
in subheading 1806.10;
(H) a nonoriginating material provided for
in headings 2203 through 2208 that is used in
the production of a good provided for in head-
ings 2207 through 2208;
(I) a nonoriginating material used in the
production of—
(i) a good provided for in subheading
7321.11.30;
(ii) a good provided for in subheading
8415.10, subheadings 8415.81 through
8415.83, subheadings 8418.10 through
8418.21, subheadings 8418.29 through
8418.40, subheading 8421.12 or 8422.11,
subheadings 8450.11 through 8450.20, or
subheadings 8451.21 through 8451.29;
(iii) trash compactors provided for in
subheading 8479.89.60; or
(iv) a good provided for in subheading
8516.60.40; and
(J) a printed circuit assembly that is a
nonoriginating material used in the production
of a good where the applicable change in tariff
classification for the good, as set out in Annex
401 of the Agreement, places restrictions on the
use of such nonoriginating material.
(4) CERTAIN
FRUIT
JUICES.—Paragraph (1)
does not apply to a nonoriginating single juice ingre-
dient provided for in heading 2009 that is used in
the production of—
(A) a good provided for in subheading
2009.90, or concentrated mixtures of fruit or
vegetable juice, fortified with minerals or vita-
mins, provided for in subheading 2106.90.19;
or
(B) mixtures of fruit or vegetable juices,
fortified with minerals or vitamins, provided for
in subheading 2202.90.39.
(5) GOODS
PROVIDED
FOR
IN
CHAPTERS
THROUGH 27 OF THE HTS.—Paragraph (1) does not
apply to a nonoriginating material used in the pro-
duction of a good provided for in chapters 1 through
27 of the HTS unless the nonoriginating material is
provided for in a different subheading than the good
for which origin is being determined under this sec-
tion.
(6) GOODS
PROVIDED
FOR
IN
CHAPTERS
THROUGH 63 OF THE HTS.—A good provided for in
chapters 50 through 63 of the HTS, that does not
originate because certain fibers or yarns used in the
production of the component of the good that deter-
mines the tariff classification of the good do not un-
dergo an applicable change in tariff classification set
out in Annex 401 of the Agreement, shall be consid-
ered to be a good that originates if the total weight
of all such fibers or yarns in that component is not
more than 7 percent of the total weight of that com-
ponent.
(f) FUNGIBLE GOODS AND MATERIALS.—For pur-
poses of determining whether a good is an originating
good—
(1) if originating and nonoriginating fungible
materials are used in the production of the good, the
determination of whether the materials are originat-
ing need not be made through the identification of
any specific fungible material, but may be deter-
mined on the basis of any of the inventory manage-
ment methods set out in regulations implementing
this section; and
(2) if originating and nonoriginating fungible
goods are commingled and exported in the same
form, the determination may be made on the basis
of any of the inventory management methods set out
in regulations implementing this section.
(g) ACCESSORIES, SPARE PARTS, OR TOOLS.—
(1) IN GENERAL.—Except as provided in para-
graph (2), accessories, spare parts, or tools delivered
with the good that form part of the good’s standard
accessories, spare parts, or tools shall—
(A) be considered as originating goods if
the good is an originating good, and
(B) be disregarded in determining whether
all the nonoriginating materials used in the pro-
duction of the good undergo an applicable
change in tariff classification set out in Annex
401 of the Agreement.
(2) CONDITIONS.—Paragraph (1) shall apply
only if—
(A) the accessories, spare parts, or tools
are not invoiced separately from the good;
(B) the quantities and value of the acces-
sories, spare parts, or tools are customary for
the good; and
(C) in any case in which the good is sub-
ject to a regional value-content requirement, the
value of the accessories, spare parts, or tools
are taken into account as originating or
nonoriginating materials, as the case may be, in
calculating the regional value-content of the
good.
(h) INDIRECT MATERIALS.—An indirect material
shall be considered to be an originating material without
regard to where it is produced.
(i) PACKAGING MATERIALS AND CONTAINERS FOR
RETAIL SALE.—Packaging materials and containers in
which a good is packaged for retail sale, if classified with
the good, shall be disregarded in determining whether all
the nonoriginating materials used in the production of the
good undergo an applicable change in tariff classification
set out in Annex 401 of the Agreement. If the good is
subject to a regional value-content requirement, the value
of such packaging materials and containers shall be taken
into account as originating or nonoriginating materials, as
the case may be, in calculating the regional value-content
of the good.
(j) PACKING MATERIALS
AND CONTAINERS
FOR
SHIPMENT.—Packing materials and containers in which
a good is packed for shipment shall be disregarded—
(1) in determining whether the nonoriginating
materials used in the production of the good under-
go an applicable change in tariff classification set
out in Annex 401 of the Agreement; and
(2) in determining whether the good satisfies a
regional value-content requirement.
(k) TRANSSHIPMENT.—A good shall not be consid-
ered to be an originating good by reason of having under-
gone production that satisfies the requirements of sub-
section (a) if, subsequent to that production, the good un-
dergoes further production or any other operation outside
the territories of the NAFTA countries, other than un-
loading, reloading, or any other operation necessary to
preserve it in good condition or to transport the good to
the territory of a NAFTA country.
(l) NONQUALIFYING OPERATIONS.—A good shall not
be considered to be an originating good merely by reason
of—
(1) mere dilution with water or another sub-
stance that does not materially alter the characteris-
tics of the good; or
(2) any production or pricing practice with re-
spect to which it may be demonstrated, by a prepon-
derance of evidence, that the object was to cir-
cumvent this section.
(m) INTERPRETATION AND APPLICATION.—For pur-
poses of this section:
(1) The basis for any tariff classification is the
HTS.
(2) Except as otherwise expressly provided,
whenever in this section there is a reference to a
heading or subheading such reference shall be a ref-
erence to a heading or subheading of the HTS.
(3) In applying subsection (a)(4), the deter-
mination of whether a heading or subheading under
the HTS provides for and specifically describes both
a good and its parts shall be made on the basis of
the nomenclature of the heading or subheading, the
rules of interpretation, or notes of the HTS.
(4) In applying the Customs Valuation Code—
(A) the principles of the Customs Valu-
ation Code shall apply to domestic transactions,
with such modifications as may be required by
the circumstances, as would apply to inter-
national transactions;
(B) the provisions of this section shall take
precedence over the Customs Valuation Code to
the extent of any difference; and
(C) the definitions in subsection (o) shall
take precedence over the definitions in the Cus-
toms Valuation Code to the extent of any dif-
ference.
(5) All costs referred to in this section shall be
recorded and maintained in accordance with the
Generally Accepted Accounting Principles applicable
in the territory of the NAFTA country in which the
good is produced.
(n) ORIGIN
OF
AUTOMATIC
DATA
PROCESSING
GOODS.—Notwithstanding any other provision of this sec-
tion, when the NAFTA countries apply the most-favored-
nation rate of duty described in paragraph 1 of section
A of Annex 308.1 of the Agreement to a good provided
for under the tariff provisions set out in Table 308.1.1
of such Annex, the good shall, upon importation from a
NAFTA country, be deemed to originate in the territory
of a NAFTA country for purposes of this section.
(o) SPECIAL RULE
FOR CERTAIN AGRICULTURAL
PRODUCTS.—Notwithstanding any other provision of this
section, for purposes of applying a rate of duty to a good
provided for in—
(1) heading 1202 that is exported from the ter-
ritory of Mexico, if the good is not wholly obtained
in the territory of Mexico,
(2) subheading 2008.11 that is exported from
the territory of Mexico, if any material provided for
in heading 1202 used in the production of that good
is not wholly obtained in the territory of Mexico, or
(3) subheading 1806.10.42 or 2106.90.12 that
is exported from the territory of Mexico, if any ma-
terial provided for in subheading 1701.99 used in
the production of that good is not a qualifying good,
such good shall be treated as a nonoriginating good and,
for purposes of this subsection, the terms ‘‘qualifying
good’’ and ‘‘wholly obtained in the territory of’’ have the
meaning given such terms in paragraph 26 of section A
of Annex 703.2 of the Agreement.
(p) DEFINITIONS.—For purposes of this section—
(1) CLASS
OF
MOTOR
VEHICLES.—The term
‘‘class of motor vehicles’’ means any one of the fol-
lowing categories of motor vehicles:
(A) Motor vehicles provided for in sub-
heading 
8701.20, 
subheading 
8704.10,
8704.22, 8704.23, 8704.32, or 8704.90, or
heading 8705 or 8706, or motor vehicles de-
signed for the transport of 16 or more persons
provided for in subheading 8702.10.00 or
8702.90.00.
(B) Motor vehicles provided for in sub-
heading 8701.10, or subheadings 8701.30
through 8701.90.
(C) Motor vehicles for the transport of 15
or fewer persons provided for in subheading
8702.10.00 or 8702.90.00, or motor vehicles
provided for in subheading 8704.21 or 8704.31.
(D) Motor vehicles provided for in sub-
headings 8703.21 through 8703.90.
(2) CUSTOMS
VALUATION
CODE.—The term
‘‘Customs Valuation Code’’ means the Agreement on
Implementation of Article VII of the General Agree-
ment on Tariffs and Trade, including its interpreta-
tive notes.
(3) F.O.B.—The term ‘‘F.O.B.’’ means free on
board, regardless of the mode of transportation, at
the point of direct shipment by the seller to the
buyer.
(4) FUNGIBLE
GOODS
AND
FUNGIBLE
MATE-
RIALS.—The terms ‘‘fungible goods’’ and ‘‘fungible
materials’’ mean goods or materials that are inter-
changeable for commercial purposes and whose prop-
erties are essentially identical.
(5) GENERALLY ACCEPTED ACCOUNTING PRIN-
CIPLES.—The term ‘‘Generally Accepted Accounting
Principles’’ means the recognized consensus or sub-
stantial authoritative support in the territory of a
NAFTA country with respect to the recording of
revenues, expenses, costs, assets and liabilities, dis-
closure of information, and preparation of financial
statements. These standards may be broad guide-
lines of general application as well as detailed stand-
ards, practices, or procedures.
(6) GOODS WHOLLY OBTAINED OR PRODUCED
ENTIRELY IN THE TERRITORY OF ONE OR MORE OF
THE NAFTA COUNTRIES.—The term ‘‘goods wholly
obtained or produced entirely in the territory of one
or more of the NAFTA countries’’ means—
(A) mineral goods extracted in the terri-
tory of one or more of the NAFTA countries;
(B) vegetable goods harvested in the terri-
tory of one or more of the NAFTA countries;
(C) live animals born and raised in the ter-
ritory of one or more of the NAFTA countries;
(D) goods obtained from hunting, trap-
ping, or fishing in the territory of one or more
of the NAFTA countries;
(E) goods (such as fish, shellfish, and
other marine life) taken from the sea by vessels
registered or recorded with a NAFTA country
and flying its flag;
(F) goods produced on board factory ships
from the goods referred to in subparagraph
(E), if such factory ships are registered or re-
corded with that NAFTA country and fly its
flag;
(G) goods taken by a NAFTA country or
a person of a NAFTA country from the seabed
or beneath the seabed outside territorial waters,
provided that a NAFTA country has rights to
exploit such seabed;
(H) goods taken from outer space, if the
goods are obtained by a NAFTA country or a
person of a NAFTA country and not processed
in a country other than a NAFTA country;
(I) waste and scrap derived from—
(i) production in the territory of one
or more of the NAFTA countries; or
(ii) used goods collected in the terri-
tory of one or more of the NAFTA coun-
tries, if such goods are fit only for the re-
covery of raw materials; and
(J) goods produced in the territory of one
or more of the NAFTA countries exclusively
from goods referred to in subparagraphs (A)
through (I), or from their derivatives, at any
stage of production.
(7) IDENTICAL OR SIMILAR GOODS.—The term
‘‘identical or similar goods’’ means ‘‘identical goods’’
and ‘‘similar goods’’, respectively, as defined in the
Customs Valuation Code.
(8) INDIRECT MATERIAL.—
(A) The term ‘‘indirect material’’ means a
good—
(i) used in the production, testing, or
inspection of a good but not physically in-
corporated into the good, or
(ii) used in the maintenance of build-
ings or the operation of equipment associ-
ated with the production of a good,
in the territory of one or more of the NAFTA
countries.
(B) When used for a purpose described in
subparagraph (A), the following materials are
among those considered to be indirect mate-
rials:
(i) Fuel and energy.
(ii) Tools, dies, and molds.
(iii) Spare parts and materials used in
the maintenance of equipment and build-
ings.
(iv) Lubricants, greases, compounding
materials, and other materials used in pro-
duction or used to operate equipment and
buildings.
(v) Gloves, glasses, footwear, clothing,
safety equipment, and supplies.
(vi) Equipment, devices, and supplies
used for testing or inspecting the goods.
(vii) Catalysts and solvents.
(viii) Any other goods that are not in-
corporated into the good, if the use of such
goods in the production of the good can
reasonably be demonstrated to be a part of
that production.
(9) INTERMEDIATE MATERIAL.—The term ‘‘in-
termediate material’’ means a material that is self-
produced, used in the production of a good, and des-
ignated pursuant to subsection (b)(10).
(10) MARQUE.—The term ‘‘marque’’ means the
trade name used by a separate marketing division of
a motor vehicle assembler.
(11) MATERIAL.—The term ‘‘material’’ means
a good that is used in the production of another
good and includes a part or an ingredient.
(12) MODEL
LINE.—The term ‘‘model line’’
means a group of motor vehicles having the same
platform or model name.
(13) MOTOR VEHICLE ASSEMBLER.—The term
‘‘motor vehicle assembler’’ means a producer of
motor vehicles and any related persons or joint ven-
tures in which the producer participates.
(14) NAFTA COUNTRY.—The term ‘‘NAFTA
country’’ means the United States, Canada or Mex-
ico for such time as the Agreement is in force with
respect to Canada or Mexico, and the United States
applies the Agreement to Canada or Mexico.
(15) NEW BUILDING.—The term ‘‘new build-
ing’’ means a new construction, including at least
the pouring or construction of new foundation and
floor, the erection of a new structure and roof, and
installation of new plumbing, electrical, and other
utilities to house a complete vehicle assembly proc-
ess.
(16) NET COST.—The term ‘‘net cost’’ means
total cost less sales promotion, marketing and after-
sales service costs, royalties, shipping and packing
costs, and nonallowable interest costs that are in-
cluded in the total cost.
(17) NET COST OF A GOOD.—The term ‘‘net
cost of a good’’ means the net cost that can be rea-
sonably allocated to a good using one of the methods
set out in subsection (b)(8).
(18) NONALLOWABLE INTEREST COSTS.—The
term ‘‘nonallowable interest costs’’ means interest
costs incurred by a producer as a result of an inter-
est rate that exceeds the applicable federal govern-
ment interest rate for comparable maturities by
more than 700 basis points, determined pursuant to
regulations implementing this section.
(19) NONORIGINATING GOOD; NONORIGINATING
MATERIAL.—The term ‘‘nonoriginating good’’ or
‘‘nonoriginating material’’ means a good or material
that does not qualify as an originating good or mate-
rial under the rules of origin set out in this section.
(20) ORIGINATING.—The term ‘‘originating’’
means qualifying under the rules of origin set out in
this section.
(21) PRODUCER.—The term ‘‘producer’’ means
a person who grows, mines, harvests, fishes, traps,
hunts, manufactures, processes, or assembles a good.
(22) PRODUCTION.—The term ‘‘production’’
means growing, mining, harvesting, fishing, trap-
ping, hunting, manufacturing, processing, or assem-
bling a good.
(23) REASONABLY ALLOCATE.—The term ‘‘rea-
sonably allocate’’ means to apportion in a manner
appropriate to the circumstances.
(24) REFIT.—The term ‘‘refit’’ means a plant
closure, for purposes of plant conversion or retool-
ing, that lasts at least 3 months.
(25) RELATED PERSONS.—The term ‘‘related
persons’’ means persons specified in any of the fol-
lowing subparagraphs:
(A) Persons who are officers or directors
of one another’s businesses.
(B) Persons who are legally recognized
partners in business.
(C) Persons who are employer and em-
ployee.
(D) Persons one of whom owns, controls,
or holds 25 percent or more of the outstanding
voting stock or shares of the other.
(E) Persons if 25 percent or more of the
outstanding voting stock or shares of each of
them is directly or indirectly owned, controlled,
or held by a third person.
(F) Persons one of whom is directly or in-
directly controlled by the other.
(G) Persons who are directly or indirectly
controlled by a third person.
(H) Persons who are members of the same
family.
For purposes of this paragraph, the term ‘‘members
of the same family’’ means natural or adoptive chil-
dren, brothers, sisters, parents, grandparents, or
spouses.
(26) ROYALTIES.—The term ‘‘royalties’’ means
payments of any kind, including payments under
technical assistance or similar agreements, made as
consideration for the use or right to use any copy-
right, literary, artistic, or scientific work, patent,
trademark, design, model, plan, secret formula, or
process. It does not include payments under tech-
nical assistance or similar agreements that can be
related to specific services such as—
(A) personnel training, without regard to
where performed; and
(B) if performed in the territory of one or
more of the NAFTA countries, engineering,
tooling, die-setting, software design and similar
computer services, or other services.
(27) SALES
PROMOTION, 
MARKETING, 
AND
AFTER-SALES
SERVICE
COSTS.—The term ‘‘sales
promotion, marketing, and after-sales service costs’’
means the costs related to sales promotion, market-
ing, and after-sales service for the following:
(A) Sales and marketing promotion, media
advertising, advertising and market research,
promotional and demonstration materials, ex-
hibits, sales conferences, trade shows, conven-
tions, banners, marketing displays, free sam-
ples, sales, marketing and after-sales service lit-
erature (product brochures, catalogs, technical
literature, price lists, service manuals, sales aid
information), establishment and protection of
logos and trademarks, sponsorships, wholesale
and retail restocking charges, and entertain-
ment.
(B) 
Sales 
and 
marketing 
incentives,
consumer, retailer, or wholesaler rebates, and
merchandise incentives.
(C) Salaries and wages, sales commissions,
bonuses, benefits (such as medical, insurance,
and pension), traveling and living expenses, and
membership and professional fees for sales pro-
motion, marketing, and after-sales service per-
sonnel.
(D) Recruiting and training of sales pro-
motion, marketing, and after-sales service per-
sonnel, and after-sales training of customers’
employees, where such costs are identified sepa-
rately for sales promotion, marketing, and
after-sales service of goods on the financial
statements or cost accounts of the producer.
(E) Product liability insurance.
(F) Office supplies for sales promotion,
marketing, and after-sales service of goods,
where such costs are identified separately for
sales promotion, marketing, and after-sales
service of goods on the financial statements or
cost accounts of the producer.
(G) Telephone, mail, and other commu-
nications, where such costs are identified sepa-
rately for sales promotion, marketing, and
after-sales service of goods on the financial
statements or cost accounts of the producer.
(H) Rent and depreciation of sales pro-
motion, marketing, and after-sales service of-
fices and distribution centers.
(I) Property insurance, taxes, utilities, and
repair and maintenance of sales promotion,
marketing, and after-sales service offices and
distribution centers, where such costs are iden-
tified separately for sales promotion, marketing,
and after-sales service of goods on the financial
statements or cost accounts of the producer.
(J) Payments by the producer to other
persons for warranty repairs.
(28) SELF-PRODUCED
MATERIAL.—The term
‘‘self-produced material’’ means a material that is
produced by the producer of a good and used in the
production of that good.
(29) SHIPPING
AND
PACKING
COSTS.—The
term ‘‘shipping and packing costs’’ means the costs
incurred in packing a good for shipment and ship-
ping the good from the point of direct shipment to
the buyer, but does not include the costs of prepar-
ing and packaging the good for retail sale.
(30) SIZE
CATEGORY.—The term ‘‘size cat-
egory’’ means with respect to a motor vehicle identi-
fied in subsection (c)(1)(A)—
(A) 85 cubic feet or less of passenger and
luggage interior volume;
(B) more than 85 cubic feet, but less than
100 cubic feet, of passenger and luggage inte-
rior volume;
(C) at least 100 cubic feet, but not more
than 110 cubic feet, of passenger and luggage
interior volume;
(D) more than 110 cubic feet, but less
than 120 cubic feet, of passenger and luggage
interior volume; and
(E) 120 cubic feet or more of passenger
and luggage interior volume.
(31) TERRITORY.—The term ‘‘territory’’ means
a territory described in Annex 201.1 of the Agree-
ment.
(32) TOTAL
COST.—The term ‘‘total cost’’
means all product costs, period costs, and other
costs incurred in the territory of one or more of the
NAFTA countries.
(33) TRANSACTION
VALUE.—Except as pro-
vided in subsection (c)(1) or (c)(2)(A), the term
‘‘transaction value’’ means the price actually paid or
payable for a good or material with respect to a
transaction of the producer of the good, adjusted in
accordance with the principles of paragraphs 1, 3,
and 4 of Article 8 of the Customs Valuation Code
and determined without regard to whether the good
or material is sold for export.
(34) UNDERBODY.—The term ‘‘underbody’’
means the floor pan of a motor vehicle.
(35) USED.—The term ‘‘used’’ means used or
consumed in the production of goods.
(q) PRESIDENTIAL PROCLAMATION AUTHORITY.—
(1) IN GENERAL.—The President is authorized
to proclaim, as a part of the HTS—
(A) the provisions set out in Appendix 6.A
of Annex 300–B, Annex 401, Annex 403.1,
Annex 403.2, and Annex 403.3, of the Agree-
ment, and
(B) any additional subordinate category
necessary to carry out this title consistent with
the Agreement.
(2) MODIFICATIONS.—Subject to the consulta-
tion and layover requirements of section 103, the
President may proclaim—
(A) modifications to the provisions pro-
claimed under the authority of paragraph
(1)(A), other than the provisions of paragraph
A of Appendix 6 of Annex 300–B and section
XI of part B of Annex 401 of the Agreement;
and
(B) a modified version of the definition of
any term set out in subsection (p) (and such
modified version of the definition shall super-
sede the version in subsection (p)), but only if
the modified version reflects solely those modi-
fications to the same term in article 415 of the
Agreement that are agreed to by the NAFTA
countries before the 1st anniversary of the date
of the enactment of this Act.
(3) SPECIAL RULES FOR TEXTILES.—Notwith-
standing the provisions of paragraph (2)(A), and
subject to the consultation and layover requirements
of section 103, the President may proclaim—
(A) modifications to the provisions pro-
claimed under the authority of paragraph
(1)(A) as are necessary to implement an agree-
ment with one or more of the NAFTA countries
pursuant to paragraph 2 of section 7 of Annex
300–B of the Agreement, and
(B) before the 1st anniversary of the date
of the enactment of this Act, modifications to
correct any typographical, clerical, or other
nonsubstantive technical error regarding the
provisions of Appendix 6.A of Annex 300–B
and section XI of part B of Annex 401 of the
Agreement.
SEC. 203. DRAWBACK.
(a) DEFINITION OF A GOOD SUBJECT TO NAFTA
DRAWBACK.—For purposes of this Act and the amend-
ments made by subsection (b), the term ‘‘good subject to
NAFTA drawback’’ means any imported good other than
the following:
(1) A good entered under bond for transpor-
tation and exportation to a NAFTA country.
(2) A good exported to a NAFTA country in
the same condition as when imported into the Unit-
ed States. For purposes of this paragraph—
(A) processes such as testing, cleaning, re-
packing, or inspecting a good, or preserving it
in its same condition, shall not be considered to
change the condition of the good, and
(B) except for a good referred to in para-
graph 12 of section A of Annex 703.2 of the
Agreement that is exported to Mexico, if a good
described in the first sentence of this paragraph
is commingled with fungible goods and exported
in the same condition, the origin of the good
may be determined on the basis of the inventory
methods provided for in the regulations imple-
menting this title.
(3) A good—
(A) that is—
(i) deemed to be exported from the
United States,
(ii) used as a material in the produc-
tion of another good that is deemed to be
exported to a NAFTA country, or
(iii) substituted for by a good of the
same kind and quality that is used as a
material in the production of another good
that is deemed to be exported to a NAFTA
country, and
(B) that is delivered—
(i) to a duty-free shop,
(ii) for ship’s stores or supplies for
ships or aircraft, or
(iii) for use in a project undertaken
jointly by the United States and a NAFTA
country and destined to become the prop-
erty of the United States.
(4) A good exported to a NAFTA country for
which a refund of customs duties is granted by rea-
son of—
(A) the failure of the good to conform to
sample or specification, or
(B) the shipment of the good without the
consent of the consignee.
(5) A good that qualifies under the rules of ori-
gin set out in section 202 that is—
(A) exported to a NAFTA country,
(B) used as a material in the production of
another good that is exported to a NAFTA
country, or
(C) substituted for by a good of the same
kind and quality that is used as a material in
the production of another good that is exported
to a NAFTA country.
(6) A good provided for in subheading
1701.11.02 of the HTS that is—
(A) used as a material, or
(B) substituted for by a good of the same
kind and quality that is used as a material,
in the production of a good provided for in existing
Canadian tariff item 1701.99.00 or existing Mexican
tariff item 1701.99.01 or 1701.99.99 (relating to re-
fined sugar).
(7) A citrus product that is exported to Can-
ada.
(8) A good used as a material, or substituted
for by a good of the same kind and quality that is
used as a material, in the production of—
(A) apparel, or
(B) a good provided for in subheading
6307.90.99 (insofar as it relates to furniture
moving pads), 5811.00.20, or 5811.00.30 of the
HTS,
that is exported to Canada and that is subject to
Canada’s most-favored-nation rate of duty upon im-
portation into Canada.
Where in paragraph (6) a good referred to by an item
is described in parentheses following the item, the descrip-
tion is provided for purposes of reference only.
(b) CONSEQUENTIAL AMENDMENTS WITH DELAYED
EFFECT.—
(1) BONDED MANUFACTURING WAREHOUSES.—
The last paragraph of section 311 of the Tariff Act
of 1930 (19 U.S.C. 1311) is amended to read as fol-
lows:
‘‘No article manufactured in a bonded warehouse
from materials that are goods subject to NAFTA draw-
back, as defined in section 203(a) of the North American
Free Trade Agreement Implementation Act, may be with-
drawn from warehouse for exportation to a NAFTA coun-
try, as defined in section 2(4) of that Act, without assess-
ment of a duty on the materials in their condition and
quantity, and at their weight, at the time of importation
into the United States. The duty shall be paid before the
61st day after the date of exportation, except that upon
the presentation, before such 61st day, of satisfactory evi-
dence of the amount of any customs duties paid to the
NAFTA country on the article, the customs duty may be
waived or reduced (subject to section 508(b)(2)(B)) in an
amount that does not exceed the lesser of—
‘‘(1) the total amount of customs duties paid or
owed on the materials on importation into the Unit-
ed States, or
‘‘(2) the total amount of customs duties paid on
the article to the NAFTA country.
If Canada ceases to be a NAFTA country and the suspen-
sion of the operation of the United States-Canada Free-
Trade Agreement thereafter terminates, no article manu-
factured in a bonded warehouse, except to the extent that
such article is made from an article that is a drawback
eligible good under section 204(a) of the United States-
Canada Free-Trade Agreement Implementation Act of
1988, may be withdrawn from such warehouse for expor-
tation to Canada during the period such Agreement is in
operation without payment of a duty on such imported
merchandise in its condition, and at the rate of duty in
effect, at the time of importation.’’.
(2) BONDED SMELTING AND REFINING WARE-
HOUSES.—Section 312 of the Tariff Act of 1930 (19
U.S.C. 1312) is amended—
(A) in paragraphs (1) and (4) of sub-
section (b), by striking out the parenthetical
matter and the final ‘‘, or’’ and by adding at
the end the following:
‘‘; except that in the case of a withdrawal for expor-
tation of such a product to a NAFTA country, as
defined in section 2(4) of the North American Free
Trade Agreement Implementation Act, if any of the
imported metal-bearing materials are goods subject
to NAFTA drawback, as defined in section 203(a)
of that Act, the duties on the materials shall be
paid, and the charges against the bond canceled, be-
fore the 61st day after the date of exportation; but
upon the presentation, before such 61st day, of sat-
isfactory evidence of the amount of any customs du-
ties paid to the NAFTA country on the product, the
duties on the materials may be waived or reduced
(subject to section 508(b)(2)(B)) in an amount that
does not exceed the lesser of—
‘‘(A) the total amount of customs duties
owed on the materials on importation into the
United States, or
‘‘(B) the total amount of customs duties
paid to the NAFTA country on the product,
or’’;
(B) by adding at the end of subsection (b)
the following new flush sentence.
‘‘If Canada ceases to be a NAFTA country and the sus-
pension of the operation of the United States-Canada
Free-Trade Agreement thereafter terminates, no charges
against such bond may be canceled in whole or part upon
an exportation to Canada under paragraph (1) or (4) dur-
ing the period such Agreement is in operation except to
the extent that the metal-bearing materials were of Cana-
dian origin as determined in accordance with section 202
credited under this subsection with respect to an expor-
tation of a product to Canada during the period such
Agreement is in operation except to the extent that the
product is a drawback eligible good under section 204(a)
of the United States-Canada Free Trade Agreement Im-
plementation Act of 1988’’.
(3) DRAWBACK.—Subsections (n) and (o) of
section 313 of the Tariff Act of 1930 (19 U.S.C.
1313(n) and (o)) are amended to read as follows:
‘‘(n)(1) For purposes of this subsection and sub-
section (o)—
‘‘(A) the term ‘NAFTA Act’ means the North
American Free Trade Agreement Implementation
Act;
‘‘(B) the terms ‘NAFTA country’ and ‘good
subject to NAFTA drawback’ have the same respec-
tive meanings that are given such terms in sections
2(4) and 203(a) of the NAFTA Act; and
‘‘(C) a refund, waiver, or reduction of duty
under paragraph (2) of this subsection or paragraph
(1) 
of 
subsection 
(o) 
is 
subject 
to 
section
508(b)(2)(B).
‘‘(2) For purposes of subsections (a), (b), (f), (h), (p),
and (q), if an article that is exported to a NAFTA country
is a good subject to NAFTA drawback, no customs duties
on the good may be refunded, waived, or reduced in an
amount that exceeds the lesser of—
‘‘(A) the total amount of customs duties paid or
owed on the good on importation into the United
States, or
‘‘(B) the total amount of customs duties paid
on the good to the NAFTA country.
‘‘(3) If Canada ceases to be a NAFTA country and
the suspension of the operation of the United States-Can-
ada Free-Trade Agreement thereafter terminates, then for
purposes of subsections (a), (b), (f), (h), (j)(2), and (q),
the shipment to Canada during the period such Agreement
is in operation of an article made from or substituted for,
as appropriate, a drawback eligible good under section
204(a) of the United States-Canada Free-Trade Imple-
mentation Act of 1988 does not constitute an exportation.
‘‘(o)(1) For purposes of subsection (g), if—
‘‘(A) a vessel is built for the account and own-
ership of a resident of a NAFTA country or the gov-
ernment of a NAFTA country, and
‘‘(B) imported materials that are used in the
construction and equipment of the vessel are goods
subject to NAFTA drawback,
the amount of customs duties refunded, waived, or re-
duced on such materials may not exceed the lesser of the
total amount of customs duties paid or owed on the mate-
rials on importation into the United States or the total
amount of customs duties paid on the vessel to the
NAFTA country.
‘‘(2) If Canada ceases to be a NAFTA country and
the suspension of the operation of the United States-Can-
ada Free-Trade Agreement thereafter terminates, then for
purposes of subsection (g), vessels built for Canadian ac-
count and ownership, or for the Government of Canada,
may not be considered to be built for any foreign account
and ownership, or for the government of any foreign coun-
try, except to the extent that the materials in such vessels
are drawback eligible goods under section 204(a) of the
United States-Canada Free-Trade Implementation Act of
1988.’’.
(4) MANIPULATION
IN
WAREHOUSE.—Section
562 of the Tariff Act of 1930 (19 U.S.C. 1562) is
amended—
(A) in the second sentence by striking out
‘‘without payment of duties—’’ and inserting a
dash;
(B) by striking out paragraphs (1), (2),
and (3) and inserting the following:
‘‘(1) without payment of duties for exportation
to a NAFTA country, as defined in section 2(4) of
the North American Free Trade Agreement Imple-
mentation Act, if the merchandise is of a kind de-
scribed in any of paragraphs (1) through (8) of sec-
tion 203(a) of that Act;
‘‘(2) for exportation to a NAFTA country if the
merchandise consists of goods subject to NAFTA
drawback, as defined in section 203(a) of that Act,
except that—
‘‘(A) the merchandise may not be with-
drawn from warehouse without assessment of a
duty on the merchandise in its condition and
quantity, and at its weight, at the time of with-
drawal from the warehouse with such additions
to or deductions from the final appraised value
as may be necessary by reason of change in
condition, and
‘‘(B) duty shall be paid on the merchan-
dise before the 61st day after the date of expor-
tation, but upon the presentation, before such
61st day, of satisfactory evidence of the amount
of any customs duties paid to the NAFTA
country on the merchandise, the customs duty
may be waived or reduced (subject to section
508(b)(2)(B)) in an amount that does not ex-
ceed the lesser of—
‘‘(i) the total amount of customs du-
ties paid or owed on the merchandise on
importation into the United States, or
‘‘(ii) the total amount of customs du-
ties paid on the merchandise to the
NAFTA country;
‘‘(3) without payment of duties for exportation
to any foreign country other than to a NAFTA
country or to Canada when exports to that country
are subject to paragraph (4);
‘‘(4) without payment of duties for exportation
to Canada (if that country ceases to be a NAFTA
country and the suspension of the operation of the
United States-Canada Free-Trade Agreement there-
after terminates), but the exemption from the pay-
ment of duties under this paragraph applies only in
the case of an exportation during the period such
Agreement is in operation of merchandise that—
‘‘(A) is only cleaned, sorted, or repacked in
a bonded warehouse, or
‘‘(B) is a drawback eligible good under sec-
tion 204(a) of the United States-Canada Free-
Trade Agreement Implementation Act of 1988;
and
‘‘(5) without payment of duties for shipment to
the Virgin Islands, American Samoa, Wake Island,
Midway Island, Kingman Reef, Johnston Island or
the island of Guam.’’; and
(B) in the third sentence by striking out
‘‘paragraph (1) of the preceding sentence’’ and
inserting ‘‘paragraph (4) of the preceding sen-
tence’’.
(5) FOREIGN TRADE ZONES.—Section 3(a) of
the Act of June 18, 1934 (commonly known as the
‘‘Foreign Trade Zones Act’’; 19 U.S.C. 81c(a)) is
amended—
(A) in the last proviso—
(i) by inserting after ‘‘That’’ the fol-
lowing: ‘‘, if Canada ceases to be a
NAFTA country and the suspension of the
operation of the United States-Canada
Free-Trade Agreement thereafter termi-
nates,’’; and
(ii) by striking out ‘‘on or after Janu-
ary 1, 1994, or such later date as may be
proclaimed by the President under section
204(b)(2)(B) of such Act of 1988,’’ and
inserting ‘‘during the period such Agree-
ment is in operation’’; and
(B) by inserting before such last proviso
the following new proviso: ‘‘: Provided, further,
That no merchandise that consists of goods
subject to NAFTA drawback, as defined in sec-
tion 203(a) of the North American Free Trade
Agreement Implementation Act, that is manu-
factured or otherwise changed in condition shall
be exported to a NAFTA country, as defined in
section 2(4) of that Act, without an assessment
of a duty on the merchandise in its condition
and quantity, and at its weight, at the time of
its exportation (or if the privilege in the first
proviso to this subsection was requested, an as-
sessment of a duty on the merchandise in its
condition and quantity, and at its weight, at the
time of its admission into the zone) and the
payment of the assessed duty before the 61st
day after the date of exportation of the article,
except that upon the presentation, before such
61st day, of satisfactory evidence of the amount
of any customs duties paid or owed to the
NAFTA country on the article, the customs
duty may be waived or reduced (subject to sec-
tion 508(b)(2)(B) of the Tariff Act of 1930) in
an amount that does not exceed the lesser of
(1) the total amount of customs duties paid or
owed on the merchandise on importation into
the United States, or (2) the total amount of
customs duties paid on the article to the
NAFTA country:’’.
(c) CONSEQUENTIAL AMENDMENT WITH IMMEDIATE
EFFECT.—Section 313(j) of the Tariff Act of 1930 (19
U.S.C. 1313(j)) is amended—
(1) by striking out ‘‘If’’ in paragraph (2) and
inserting ‘‘Subject to paragraph (4), if’’; and
(2) by adding at the end the following new
paragraph:
‘‘(4) Effective upon the entry into force of the
North American Free Trade Agreement, the expor-
tation to a NAFTA country, as defined in section
2(4) of the North American Free Trade Agreement
Implementation Act, of merchandise that is fungible
with and substituted for imported merchandise,
other than merchandise described in paragraphs (1)
through (8) of section 203(a) of that Act, shall not
constitute an exportation for purposes of paragraph
(2).’’.
(d) ELIMINATION OF DRAWBACK FOR SECTION 22
FEES.—Notwithstanding any other provision of law, the
Secretary of the Treasury may not, on condition of export,
refund or reduce a fee applied pursuant to section 22 of
the Agricultural Adjustment Act (7 U.S.C. 624) with re-
spect to goods included under subsection (a) that are ex-
ported to—
(1) Canada after December 31, 1995, for so
long as it is a NAFTA country; or
(2) Mexico after December 31, 2000, for so
long as it is a NAFTA country.
(e) INAPPLICABILITY
TO
COUNTERVAILING
AND
ANTIDUMPING DUTIES.—Nothing in this section or the
amendments made by it shall be considered to authorize
the refund, waiver, or reduction of countervailing duties
or antidumping duties imposed on an imported good.
SEC. 204. CUSTOMS USER FEES.
Paragraph (10) of section 13031(b) of the Consoli-
dated Omnibus Budget Reconciliation Act of 1985 (19
U.S.C. 58c(b)(10)) is amended to read as follows:
‘‘(10)(A) The fee charged under subsection (a)(9) or
(10) with respect to goods of Canadian origin (as deter-
mined under section 202 of the United States-Canada
Free-Trade Agreement) when the United States-Canada
Free-Trade Agreement is in force shall be in accordance
with section 403 of that Agreement.
‘‘(B) For goods qualifying under the rules of origin
set out in section 202 of the North American Free Trade
Agreement Implementation Act, the fee under subsection
(a)(9) or (10)—
‘‘(i) may not be charged with respect to goods
that qualify to be marked as goods of Canada pursu-
ant to Annex 311 of the North American Free
Trade Agreement, for such time as Canada is a
NAFTA country, as defined in section 2(4) of such
Implementation Act; and
‘‘(ii) may not be increased after December 31,
1993, and may not be charged after June 29, 1999,
with respect to goods that qualify to be marked as
goods of Mexico pursuant to such Annex 311, for
such time as Mexico is a NAFTA country.
Any service for which an exemption from such fee is pro-
vided by reason of this paragraph may not be funded with
money contained in the Customs User Fee Account.’’.
SEC. 205. ENFORCEMENT.
(a) RECORDKEEPING REQUIREMENTS.—Section 508
of the Tariff Act of 1930 (19 U.S.C. 1508) is amended
as follows:
(1) Subsection (b) is amended to read as fol-
lows:
‘‘(b) EXPORTATIONS TO FREE TRADE COUNTRIES.—
‘‘(1) DEFINITIONS.—As used in this sub-
section—
‘‘(A) The term ‘associated records’ means,
in regard to an exported good under paragraph
(2), records associated with—
‘‘(i) the purchase of, cost of, value of,
and payment for, the good;
‘‘(ii) the purchase of, cost of, value of,
and payment for, all material, including in-
direct materials, used in the production of
the good; and
‘‘(iii) the production of the good.
For purposes of this subparagraph, the terms
‘indirect material,’ ‘material,’ ‘preferential tariff
treatment,’ ‘used,’ and ‘value’ have the respec-
tive meanings given them in articles 415 and
514 of the North American Free Trade Agree-
ment.
‘‘(B) The term ‘NAFTA Certificate of Ori-
gin’ means the certification, established under
article 501 of the North American Free Trade
Agreement, that a good qualifies as an originat-
ing good under such Agreement.
‘‘(2) EXPORTS TO NAFTA COUNTRIES.—
‘‘(A) IN GENERAL.—Any person who com-
pletes and signs a NAFTA Certificate of Origin
for a good for which preferential treatment
under the North American Free Trade Agree-
ment is claimed shall make, keep, and render
for examination and inspection all records relat-
ing to the origin of the good (including the Cer-
tificate or copies thereof) and the associated
records.
‘‘(B) CLAIMS FOR CERTAIN WAIVERS, RE-
DUCTIONS, OR REFUNDS OF DUTIES OR FOR
CREDIT AGAINST BONDS.—
‘‘(i) IN GENERAL.—Any person that
claims with respect to an article—
‘‘(I) a waiver or reduction of
duty under the last paragraph of sec-
tion 311, section 312(b)(1) or (4),
section 562(2), or the last proviso to
section 3(a) of the Foreign Trade
Zones Act;
‘‘(II) a credit against a bond
under section 312(d); or
‘‘(III) a refund, waiver, or reduc-
tion of duty under section 313(n)(2)
or (o)(1);
must disclose to the Customs Service the
information described in clause (ii).
‘‘(ii) 
INFORMATION
REQUIRED.—
Within 30 days after making a claim de-
scribed in clause (i) with respect to an ar-
ticle, the person making the claim must
disclose to the Customs Service whether
that person has prepared, or has knowl-
edge that another person has prepared, a
NAFTA Certificate of Origin for the arti-
cle. If after such 30-day period the person
making the claim either—
‘‘(I) prepares a NAFTA Certifi-
cate of Origin for the article; or
‘‘(II) learns of the existence of
such a Certificate for the article;
that person, within 30 days after the oc-
currence described in subclause (I) or (II),
must disclose the occurrence to the Cus-
toms Service.
‘‘(iii) ACTION ON CLAIM.—If the Cus-
toms Service determines that a NAFTA
Certificate of Origin has been prepared
with respect to an article for which a claim
described in clause (i) is made, the Cus-
toms Service may make such adjustments
regarding the previous customs treatment
of the article as may be warranted.
‘‘(3) EXPORTS UNDER THE CANADIAN AGREE-
MENT.—Any person who exports, or who knowingly
causes to be exported, any merchandise to Canada
during such time as the United States-Canada Free-
Trade Agreement is in force with respect to, and the
United States applies that Agreement to, Canada
shall make, keep, and render for examination and
inspection such records (including certifications of
origin or copies thereof) which pertain to the expor-
tations.’’.
(2) Subsection (c) is amended to read as fol-
lows:
‘‘(c) PERIOD OF TIME.—The records required by sub-
sections (a) and (b) shall be kept for such periods of time
as the Secretary shall prescribe; except that—
‘‘(1) no period of time for the retention of the
records required under subsection (a) or (b)(3) may
exceed 5 years from the date of entry or exportation,
as appropriate;
‘‘(2) the period of time for the retention of the
records required under subsection (b)(2) shall be at
least 5 years from the date of signature of the
NAFTA Certificate of Origin; and
‘‘(3) records for any drawback claim shall be
kept until the 3rd anniversary of the date of pay-
ment of the claim.’’.
(3) Subsection (e) is amended to read as fol-
lows:
‘‘(e) SUBSECTION (b) PENALTIES.—
‘‘(1) RELATING TO NAFTA EXPORTS.—Any per-
son who fails to retain records required by para-
graph (2) of subsection (b) or the regulations issued
to implement that paragraph shall be liable for—
‘‘(A) a civil penalty not to exceed $10,000;
or
‘‘(B) the general recordkeeping penalty
that applies under the customs laws;
whichever penalty is higher.
‘‘(2) RELATING TO CANADIAN AGREEMENT EX-
PORTS.—Any person who fails to retain the records
required by paragraph (3) of subsection (b) or the
regulations issued to implement that paragraph shall
be liable for a civil penalty not to exceed $10,000.’’.
(b) 
CONFORMING
AMENDMENT.—Section
509(a)(2)(A)(ii) of the Tariff Act of 1930 (19 U.S.C.
1509(a)(2)(A)(ii)) is amended to read as follows:
‘‘(ii) exported merchandise, or know-
ingly caused merchandise to be exported,
100
to a NAFTA country (as defined in section
2(4) of the North American Free Trade
Agreement Implementation Act) or to Can-
ada during such time as the United States-
Canada Free-Trade Agreement is in force
with respect to, and the United States ap-
plies that Agreement to, Canada,’’.
(c) DISCLOSURE
OF INCORRECT INFORMATION.—
Section 592 of the Tariff Act of 1930 (19 U.S.C. 1592)
is amended—
(1) in subsection (c)—
(A) by redesignating paragraph (5) as
paragraph (6); and
(B) by inserting after paragraph (4) the
following new paragraph:
‘‘(5) PRIOR
DISCLOSURE
REGARDING
NAFTA
CLAIMS.—An importer shall not be subject to pen-
alties under subsection (a) for making an incorrect
claim for preferential tariff treatment under section
202 of the North American Free Trade Agreement
Implementation Act if the importer—
‘‘(A) has reason to believe that the
NAFTA Certificate of Origin (as defined in sec-
tion 508(b)(1)) on which the claim was based
contains incorrect information; and
101
‘‘(B) in accordance with regulations issued
by the Secretary, voluntarily and promptly
makes a corrected declaration and pays any du-
ties owing.’’; and
(2) by adding at the end the following new sub-
section:
‘‘(f) FALSE CERTIFICATIONS REGARDING EXPORTS
TO NAFTA COUNTRIES.—
‘‘(1) IN GENERAL.—Subject to paragraph (3),
it is unlawful for any person to certify falsely, by
fraud, gross negligence, or negligence, in a NAFTA
Certificate 
of 
Origin 
(as 
defined 
in 
section
508(b)(1)) that a good to be exported to a NAFTA
country (as defined in section 2(4) of the North
American Free Trade Agreement Implementation
Act) qualifies under the rules of origin set out in
section 202 of that Act.
‘‘(2) APPLICABLE
PROVISIONS.—The proce-
dures and penalties of this section that apply to a
violation of subsection (a) also apply to a violation
of paragraph (1), except that—
‘‘(A) subsection (d) does not apply, and
‘‘(B) subsection (c)(5) applies only if the
person voluntarily and promptly provides, to all
persons to whom the person provided the
102
NAFTA Certificate of Origin, written notice of
the falsity of the Certificate.
‘‘(3) EXCEPTION.—A person may not be consid-
ered to have violated paragraph (1) if—
‘‘(A) the information was correct at the
time it was provided in a NAFTA Certificate of
Origin but was later rendered incorrect due to
a change in circumstances; and
‘‘(B) the person voluntarily and promptly
provides written notice of the change to all per-
sons to whom the person provided the Certifi-
cate of Origin.’’.
SEC. 206. RELIQUIDATION OF ENTRIES FOR NAFTA-ORIGIN
GOODS.
Section 520 of the Tariff Act of 1930 (19 U.S.C.
1520) is amended by adding at the end the following new
subsection:
‘‘(d) Notwithstanding the fact that a valid protest
was not filed, the Customs Service may, in accordance
with regulations prescribed by the Secretary, reliquidate
an entry to refund any excess duties paid on a good quali-
fying under the rules of origin set out in section 202 of
the North American Free Trade Agreement Implementa-
tion Act for which no claim for preferential tariff treat-
ment was made at the time of importation if the importer,
103
within 1 year after the date of importation, files, in ac-
cordance with those regulations, a claim that includes—
‘‘(1) a written declaration that the good quali-
fied under those rules at the time of importation;
‘‘(2) copies of all applicable NAFTA Certifi-
cates of Origin (as defined in section 508(b)(1));
and
‘‘(3) such other documentation relating to the
importation of the goods as the Customs Service
may require.’’.
SEC. 207. COUNTRY OF ORIGIN MARKING OF NAFTA GOODS.
(a) AMENDMENTS TO TARIFF ACT OF 1930.—Sec-
tion 304 of the Tariff Act of 1930 (19 U.S.C. 1304) is
amended—
(1) in subsection (c)(1), by striking ‘‘or engrav-
ing’’ and inserting ‘‘engraving, or continuous paint
stenciling’’;
(2) in subsection (c)(2)—
(A) by striking ‘‘four’’ and inserting
‘‘five’’; and
(B) by striking ‘‘such as paint stenciling’’;
(3) in subsection (e), by striking ‘‘or engraving’’
and inserting ‘‘engraving, or an equally permanent
method of marking’’;
104
(4) by redesignating subsection (h) as sub-
section (i); and
(5) by inserting after subsection (g) the follow-
ing new subsection:
‘‘(h) TREATMENT OF GOODS OF A NAFTA COUN-
TRY.—
‘‘(1) APPLICATION OF SECTION.—In applying
this section to an article that qualifies as a good of
a NAFTA country (as defined in section 2(4) of the
North American Free Trade Agreement Implemen-
tation Act) under the regulations issued by the Sec-
retary to implement Annex 311 of the North Amer-
ican Free Trade Agreement—
‘‘(A) the exemption under subsection
(a)(3)(H) shall be applied by substituting ‘rea-
sonably know’ for ‘necessarily know’;
‘‘(B) the Secretary shall exempt the good
from the requirements for marking under sub-
section (a) if the good—
‘‘(i) is an original work of art, or
‘‘(ii) is provided for under subheading
6904.10, heading 8541, or heading 8542
of the Harmonized Tariff Schedule of the
United States; and
105
‘‘(C) subsection (b) does not apply to the
usual container of any good described in sub-
section (a)(3)(E) or (I) or subparagraph (B)(i)
or (ii) of this paragraph.
‘‘(2) PETITION RIGHTS OF NAFTA EXPORTERS
AND PRODUCERS REGARDING MARKING DETERMINA-
TIONS.—
‘‘(A) DEFINITIONS.—For purposes of this
paragraph:
‘‘(i) The term ‘adverse marking deci-
sion’ means a determination by the Cus-
toms Service which an exporter or pro-
ducer of merchandise believes to be con-
trary to Annex 311 of the North American
Free Trade Agreement.
‘‘(ii) A person may not be treated as
the exporter or producer of merchandise
regarding which an adverse marking deci-
sion was made unless such person—
‘‘(I) if claiming to be the ex-
porter, is located in a NAFTA coun-
try and is required to maintain
records in that country regarding ex-
portations to NAFTA countries; or
106
‘‘(II) if claiming to be the pro-
ducer, grows, mines, harvests, fishes,
traps, hunts, manufactures, processes,
or assembles such merchandise in a
NAFTA country.
‘‘(B) INTERVENTION
OR
PETITION
RE-
GARDING
ADVERSE
MARKING
DECISIONS.—If
the Customs Service makes an adverse marking
decision regarding any merchandise, the Cus-
toms Service shall, upon written request by the
exporter or producer of the merchandise, pro-
vide to the exporter or producer a statement of
the basis for the decision. If the exporter or
producer believes that the decision is not cor-
rect, it may intervene in any protest proceeding
initiated by the importer of the merchandise. If
the importer does not file a protest with regard
to the decision, the exporter or producer may
file a petition with the Customs Service setting
forth—
‘‘(i) a description of the merchandise;
and
‘‘(ii) the basis for its claim that the
merchandise should be marked as a good
of a NAFTA country.
107
‘‘(C) EFFECT
OF
DETERMINATION
RE-
GARDING DECISION.—If, after receipt and con-
sideration of a petition filed by an exporter or
producer under subparagraph (B), the Customs
Service determines that the adverse marking
decision—
‘‘(i) is not correct, the Customs Serv-
ice shall notify the petitioner of the deter-
mination and all merchandise entered, or
withdrawn from warehouse for consump-
tion, more than 30 days after the date that
notice of the determination under this
clause is published in the weekly Custom
Bulletin shall be marked in conformity
with the determination; or
‘‘(ii) is correct, the Customs Service
shall notify the petitioner that the petition
is denied.
‘‘(D) JUDICIAL REVIEW.—For purposes of
judicial review, the denial of a petition under
subparagraph (C)(ii) shall be treated as if it
were a denial of a petition of an interested
party under section 516 regarding an issue
arising under any of the preceding provisions of
this section.’’.
108
(b) COORDINATION WITH 1988 ACT REGARDING
CERTAIN ARTICLES.—Articles that qualify as goods of a
NAFTA country under regulations issued by the Secretary
in accordance with Annex 311 of the Agreement are ex-
empt from the marking requirements promulgated by the
Secretary of the Treasury under section 1907(c) of the
Omnibus Trade and Competitiveness Act of 1988 (Public
Law 100–418), but are subject to the requirements of sec-
tion 304 of the Tariff Act of 1930 (19 U.S.C. 1304).
SEC. 208. PROTESTS AGAINST ADVERSE ORIGIN DETER-
MINATIONS.
Section 514 of the Tariff Act of 1930 (19 U.S.C.
1514) is amended—
(1) in subsection (c)(1) by inserting ‘‘, or with
respect to a determination of origin under section
202 of the North American Free Trade Agreement
Implementation Act,’’ after ‘‘with respect to any one
category of merchandise’’ in the fourth sentence;
(2) in subsection (c)(2)—
(A) by striking out ‘‘or’’ at the end of sub-
paragraph (D);
(B) by redesignating subparagraph (E) as
subparagraph (F);
(C) by inserting after subparagraph (D)
the following new subparagraph:
109
‘‘(E) with respect to a determination of or-
igin under section 202 of the North American
Free Trade Agreement Implementation Act,
any exporter or producer of the merchandise
subject to that determination, if the exporter or
producer completed and signed a NAFTA Cer-
tificate of Origin covering the merchandise; or’’;
and
(D) by striking ‘‘clauses (A) through (D)’’
in subparagraph (F) (as redesignated by sub-
paragraph (B)), and inserting ‘‘clauses (A)
through (E)’’; and
(3) by adding at the end the following new sub-
sections:
‘‘(e) ADVANCE NOTICE OF CERTAIN DETERMINA-
TIONS.—Except as provided in subsection (f), an exporter
or producer referred to in subsection (c)(2)(E) shall be
provided notice in advance of an adverse determination of
origin under section 202 of the North American Free
Trade Agreement Implementation Act. The Secretary
may, by regulations, prescribe the time period in which
such advance notice shall be issued and authorize the Cus-
toms Service to provide in the notice the entry number
and any other entry information considered necessary to
110
allow the exporter or producer to exercise the rights pro-
vided by this section.
‘‘(f) DENIAL
OF PREFERENTIAL TREATMENT.—If
the Customs Service finds indications of a pattern of con-
duct by an exporter or producer of false or unsupported
representations that goods qualify under the rules of ori-
gin set out in section 202 of the North American Free
Trade Agreement Implementation Act—
‘‘(1) the Customs Service, in accordance with
regulations issued by the Secretary, may deny pref-
erential tariff treatment to entries of identical goods
exported or produced by that person; and
‘‘(2) the advance notice requirement in sub-
section (e) shall not apply to that person;
until the person establishes to the satisfaction of the Cus-
toms Service that its representations are in conformity
with section 202.’’.
SEC. 209. EXCHANGE OF INFORMATION.
Section 628 of the Tariff Act of 1930 (19 U.S.C.
1628) is amended by adding at the end the following new
subsection:
‘‘(c) The Secretary may authorize the Customs Serv-
ice to exchange information with any government agency
of a NAFTA country, as defined in section 2(4) of the
111
North American Free Trade Agreement Implementation
Act, if the Secretary—
‘‘(1) reasonably believes the exchange of infor-
mation is necessary to implement chapter 3, 4, or 5
of the North American Free Trade Agreement, and
‘‘(2) obtains assurances from such country that
the information will be held in confidence and used
only for governmental purposes.’’.
SEC. 210. PROHIBITION ON DRAWBACK FOR TELEVISION
PICTURE TUBES.
Notwithstanding any other provision of law, no cus-
toms duties may be refunded, waived, or reduced on color
cathode-ray television picture tubes, including video mon-
itor cathode-ray tubes (provided for in subheading
8540.11.00 of the HTS), that are nonoriginating goods
under section 202(p)(19) and are—
(A) exported to a NAFTA country;
(B) used as a material in the production of
other goods that are exported to a NAFTA country;
or
(C) substituted for by goods of the same kind
and quality used as a material in the production of
other goods that are exported to a NAFTA country.
112
SEC. 211. MONITORING OF TELEVISION AND PICTURE TUBE
IMPORTS.
(a) MONITORING.—Beginning on the date the Agree-
ment enters into force with respect to the United States,
the United States Customs Service shall, for a period of
5 years, monitor imports into the United States of articles
described in subheading 8528.10 of the HTS from
NAFTA countries and shall take action to exercise all
rights of the United States under chapter 5 of the Agree-
ment with respect to such imports. The United States
Customs Service shall take appropriate action under chap-
ter 5 of the Agreement with respect to such imports, in-
cluding verifications to ensure that the rules of origin
under the Agreement are fully complied with and that the
duty drawback obligations contained in article 303 and
Annex 303.8 of the Agreement are fully implemented and
duties are correctly assessed.
(b) REPORT
TO TRADE REPRESENTATIVE.—The
United States Customs Service shall make the results of
the monitoring and verification required by subsection (a)
available to the President and the Trade Representative.
If, based on such information, the President has reason
to believe that articles described in subheading 8540.11
of the HTS, intended for ultimate consumption in the
United States, are entering the territory of a NAFTA
country inconsistent with the provisions of the Agreement,
113
or have been undervalued in a manner that may raise con-
cerns under United States trade laws, the President shall
promptly take such action as may be appropriate under
all relevant provisions of the Agreement, including article
317 and chapter 20, and under applicable United States
trade statutes.
SEC. 212. TITLE VI AMENDMENTS.
Any amendment in this title to a law that is also
amended under title VI shall be made after the title VI
amendment is executed.
SEC. 213. EFFECTIVE DATES.
(a) PROVISIONS EFFECTIVE ON DATE OF ENACT-
MENT.—Section 212 and this section take effect on the
date of the enactment of this Act.
(b) PROVISIONS EFFECTIVE WHEN AGREEMENT EN-
TERS INTO FORCE.—Section 201, section 202, section
203(a), (d), and (e), section 210 and section 211, the
amendment made by section 203(c), and the amendments
made by sections 204 through 209 take effect on the date
the Agreement enters into force with respect to the United
States.
(c) 
PROVISIONS
WITH
DELAYED
EFFECTIVE
DATES.—The amendments made by section 203(b)
apply—
114
(1) with respect to exports from the United
States to Canada—
(A) on January 1, 1996, if Canada is a
NAFTA country on that date, and
(B) after such date for so long as Canada
continues to be a NAFTA country; and
(2) with respect to exports from the United
States to Mexico—
(A) on January 1, 2001, if Mexico is a
NAFTA country on that date; and
(B) after such date for so long as Mexico
continues to be a NAFTA country.
TITLE 
III—APPLICATION 
OF
AGREEMENT 
TO 
SECTORS
AND SERVICES
Subtitle A—Safeguards
PART 1—RELIEF FROM IMPORTS BENEFITING
FROM THE AGREEMENT
SEC. 301. DEFINITIONS.
As used in this part:
(1) CANADIAN ARTICLE.—The term ‘‘Canadian
article’’ means an article that—
(A) is an originating good under chapter 4
of the Agreement; and
115
(B) qualifies under the Agreement to be
marked as a good of Canada.
(2) MEXICAN
ARTICLE.—The term ‘‘Mexican
article’’ means an article that—
(A) is an originating good under chapter 4
of the Agreement; and
(B) qualifies under the Agreement to be
marked as a good of Mexico.
SEC. 302. COMMENCING OF ACTION FOR RELIEF.
(a) FILING OF PETITION.—
(1) IN GENERAL.—A petition requesting action
under this part for the purpose of adjusting to the
obligations of the United States under the Agree-
ment may be filed with the International Trade
Commission by an entity, including a trade associa-
tion, firm, certified or recognized union, or group of
workers, that is representative of an industry. The
International Trade Commission shall transmit a
copy of any petition filed under this subsection to
the Trade Representative.
(2) PROVISIONAL RELIEF.—An entity filing a
petition under this subsection may request that pro-
visional relief be provided as if the petition had been
filed under section 202(a) of the Trade Act of 1974.
116
(3) CRITICAL CIRCUMSTANCES.—An allegation
that critical circumstances exist must be included in
the petition or made on or before the 90th day after
the date on which the investigation is initiated under
subsection (b).
(b) INVESTIGATION
AND DETERMINATION.—Upon
the filing of a petition under subsection (a), the Inter-
national Trade Commission, unless subsection (d) applies,
shall promptly initiate an investigation to determine
whether, as a result of the reduction or elimination of a
duty provided for under the Agreement, a Canadian article
or a Mexican article, as the case may be, is being imported
into the United States in such increased quantities (in ab-
solute terms) and under such conditions so that imports
of the article, alone, constitute a substantial cause of—
(1) serious injury; or
(2) except in the case of a Canadian article, a
threat of serious injury;
to the domestic industry producing an article that is like,
or directly competitive with, the imported article.
(c) APPLICABLE PROVISIONS.—The provisions of—
(1) paragraphs (1)(B), (3) (except subpara-
graph (A)), and (4) of subsection (b);
(2) subsection (c); and
(3) subsection (d),
117
of section 202 of the Trade Act of 1974 (19 U.S.C. 2252)
apply with respect to any investigation initiated under
subsection (b).
(d) ARTICLES EXEMPT FROM INVESTIGATION.—No
investigation may be initiated under this section with re-
spect to—
(1) any Canadian article or Mexican article if
import relief has been provided under this part with
respect to that article; or
(2) any textile or apparel article set out in Ap-
pendix 1.1 of Annex 300–B of the Agreement.
SEC. 303. INTERNATIONAL TRADE COMMISSION ACTION ON
PETITION.
(a) DETERMINATION.—By no later than 120 days
after the date on which an investigation is initiated under
section 302(b) with respect to a petition, the International
Trade Commission shall—
(1) make the determination required under that
section; and
(2) if the determination referred to in para-
graph (1) is affirmative and an allegation regarding
critical circumstances was made under section
302(a), make a determination regarding that allega-
tion.
118
(b) ADDITIONAL FINDING AND RECOMMENDATION IF
DETERMINATION AFFIRMATIVE.—If the determination
made by the International Trade Commission under sub-
section (a) with respect to imports of an article is affirma-
tive, the International Trade Commission shall find, and
recommend to the President in the report required under
subsection (c), the amount of import relief that is nec-
essary to remedy or, except in the case of imports of a
Canadian article, prevent the injury found by the Inter-
national Trade Commission in the determination. The im-
port relief recommended by the International Trade Com-
mission under this subsection shall be limited to that de-
scribed in section 304(c).
(c) REPORT TO PRESIDENT.—No later than the date
that is 30 days after the date on which a determination
is made under subsection (a) with respect to an investiga-
tion, the International Trade Commission shall submit to
the President a report that shall include—
(1) a statement of the basis for the determina-
tion;
(2) dissenting and separate views; and
(3) any finding made under subsection (b) re-
garding import relief.
(d) PUBLIC NOTICE.—Upon submitting a report to
the President under subsection (c), the International
119
Trade Commission shall promptly make public such report
(with the exception of information which the International
Trade Commission determines to be confidential) and
shall cause a summary thereof to be published in the Fed-
eral Register.
(e) APPLICABLE PROVISIONS.—For purposes of this
part, the provisions of paragraphs (1), (2), and (3) of sec-
tion 330(d) of the Tariff Act of 1930 (19 U.S.C. 1330(d))
shall be applied with respect to determinations and find-
ings made under this section as if such determinations and
findings were made under section 202 of the Trade Act
of 1974 (19 U.S.C. 2252).
SEC. 304. PROVISION OF RELIEF.
(a) IN GENERAL.—No later than the date that is 30
days after the date on which the President receives the
report of the International Trade Commission containing
an affirmative determination of the International Trade
Commission under section 303(a), the President, subject
to subsection (b), shall provide relief from imports of the
article that is the subject of such determination to the ex-
tent that the President determines necessary to remedy
or, except in the case of imports of a Canadian article,
prevent the injury found by the International Trade
Commission.
120
(b) EXCEPTION.—The President is not required to
provide import relief under this section if the President
determines that the provision of the import relief will not
provide greater economic and social benefits than costs.
(c) NATURE OF RELIEF.—The import relief (includ-
ing provisional relief) that the President is authorized to
provide under this part is as follows:
(1) In the case of imports of a Canadian arti-
cle—
(A) the suspension of any further reduc-
tion provided for under Annex 401.2 of the
United States-Canada Free-Trade Agreement
in the duty imposed on such article;
(B) an increase in the rate of duty im-
posed on such article to a level that does not
exceed the lesser of—
(i) the column 1 general rate of duty
imposed under the HTS on like articles at
the time the import relief is provided, or
(ii) the column 1 general rate of duty
imposed on like articles on December 31,
1988; or
(C) in the case of a duty applied on a sea-
sonal basis to such article, an increase in the
rate of duty imposed on the article to a level
121
that does not exceed the column 1 general rate
of duty imposed on the article for the cor-
responding season occurring immediately before
January 1, 1989.
(2) In the case of imports of a Mexican arti-
cle—
(A) the suspension of any further reduc-
tion provided for under the United States
Schedule to Annex 302.2 of the Agreement in
the duty imposed on such article;
(B) an increase in the rate of duty im-
posed on such article to a level that does not
exceed the lesser of—
(i) the column 1 general rate of duty
imposed under the HTS on like articles at
the time the import relief is provided, or
(ii) the column 1 general rate of duty
imposed under the HTS on like articles on
the day before the date on which the
Agreement enters into force; or
(C) in the case of a duty applied on a sea-
sonal basis to such article, an increase in the
rate of duty imposed on the article to a level
that does not exceed the column 1 general rate
of duty imposed under the HTS on the article
122
for the corresponding season immediately occur-
ring before the date on which the Agreement
enters into force.
(d) PERIOD OF RELIEF.—The import relief that the
President is authorized to provide under this section may
not exceed 3 years, except that, if a Canadian article or
Mexican article which is the subject of the action—
(1) is provided for in an item for which the
transition period of tariff elimination set out in the
United States Schedule to Annex 302.2 of the
Agreement is greater than 10 years; and
(2) the President determines that the affected
industry has undertaken adjustment and requires an
extension of the period of the import relief;
the President, after obtaining the advice of the Inter-
national Trade Commission, may extend the period of the
import relief for not more than 1 year, if the duty applied
during the initial period of the relief is substantially re-
duced at the beginning of the extension period.
(e) RATE ON MEXICAN ARTICLES AFTER TERMI-
NATION OF IMPORT RELIEF.—When import relief under
this part is terminated with respect to a Mexican article—
(1) the rate of duty on that article after such
termination and on or before December 31 of the
year in which termination occurs shall be the rate
123
that, according to the United States Schedule to
Annex 302.2 of the Agreement for the staged elimi-
nation of the tariff, would have been in effect 1 year
after the initiation of the import relief action under
section 302; and
(2) the tariff treatment for that article after
December 31 of the year in which termination oc-
curs shall be, at the discretion of the President, ei-
ther—
(A) the rate of duty conforming to the ap-
plicable rate set out in the United States
Schedule to Annex 302.2; or
(B) the rate of duty resulting from the
elimination of the tariff in equal annual stages
ending on the date set out in the United States
Schedule to Annex 302.2 for the elimination of
the tariff.
SEC. 305. TERMINATION OF RELIEF AUTHORITY.
(a) GENERAL RULE.—Except as provided in sub-
section (b), no import relief may be provided under this
part—
(1) in the case of a Canadian article, after De-
cember 31, 1998; or
124
(2) in the case of a Mexican article, after the
date that is 10 years after the date on which the
Agreement enters into force;
unless the article against which the action is taken is an
item for which the transition period for tariff elimination
set out in the United States Schedule to Annex 302.2 of
the Agreement is greater than 10 years, in which case the
period during which relief may be granted shall be the pe-
riod of staged tariff elimination for that article.
(b) EXCEPTION.—Import relief may be provided
under this part in the case of a Canadian article or Mexi-
can article after the date on which such relief would, but
for this subsection, terminate under subsection (a), but
only if the Government of Canada or Mexico, as the case
may be, consents to such provision.
SEC. 306. COMPENSATION AUTHORITY.
For purposes of section 123 of the Trade Act of 1974
(19 U.S.C. 2133), any import relief provided by the Presi-
dent under section 304 shall be treated as action taken
under chapter I of title II of such Act.
SEC. 307. SUBMISSION OF PETITIONS.
A petition for import relief may be submitted to the
International Trade Commission under—
(1) this part;
125
(2) chapter 1 of title II of the Trade Act of
1974; or
(3) under both this part and such chapter 1 at
the same time, in which case the International
Trade Commission shall consider such petitions
jointly.
SEC. 308. SPECIAL TARIFF PROVISIONS FOR CANADIAN
FRESH FRUITS AND VEGETABLES.
(a) IN
GENERAL.—Section 301(a) of the United
States-Canada Free-Trade Agreement Implementation
Act of 1988 (19 U.S.C. 2112 note) is amended—
(1) in paragraph (1), by striking ‘‘promptly’’ in
the flush sentence at the end thereof and inserting
‘‘immediately’’,
(2) by redesignating paragraphs (2) through
(9) as paragraphs (3) through (10), respectively,
(3) by inserting after paragraph (1) the follow-
ing new paragraph:
‘‘(2) No later than 6 days after publication in
the Federal Register of the notice described in para-
graph (1), the Secretary shall decide whether to rec-
ommend the imposition of a temporary duty to the
President, and if the Secretary decides to make such
a recommendation, the recommendation shall be for-
warded immediately to the President.’’,
126
(4) in paragraph (5), as redesignated by para-
graph (2), by striking ‘‘paragraph (3)’’ and inserting
‘‘paragraph (4)’’, and
(5) by amending paragraph (9), as redesignated
by paragraph (2), to read as follows:
‘‘(9) For purposes of assisting the Secretary in
carrying out this subsection—
‘‘(A) the Commissioner of Customs and
the Director of the Bureau of Census shall co-
operate in providing the Secretary with timely
information and data relating to the importa-
tion of Canadian fresh fruits and vegetables,
and
‘‘(B) importers shall report such informa-
tion relating to Canadian fresh fruits and vege-
tables to the Commissioner of Customs at such
time and in such manner as the Commissioner
requires.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) take effect on the date of the enactment
of this Act.
SEC. 309. PRICE-BASED SNAPBACK FOR FROZEN CON-
CENTRATED ORANGE JUICE.
(a) TRIGGER PRICE DETERMINATION.—
127
(1) IN GENERAL.—The Secretary shall deter-
mine—
(A) each period of 5 consecutive business
days in which the daily price for frozen con-
centrated orange juice is less than the trigger
price; and
(B) for each period determined under sub-
paragraph (A), the first period occurring there-
after of 5 consecutive business days in which
the daily price for frozen concentrated orange
juice is greater than the trigger price.
(2) NOTICE
OF
DETERMINATIONS.—The Sec-
retary shall immediately notify the Commissioner of
Customs and publish notice in the Federal Register
of any determination under paragraph (1), and the
date of such publication shall be the determination
date for that determination.
(b) IMPORTS
OF MEXICAN ARTICLES.—Whenever
after any determination date for a determination under
subsection (a)(1)(A), the quantity of Mexican articles of
frozen concentrated orange juice that is entered exceeds—
(1) 264,978,000 liters (single strength equiva-
lent) in any of calendar years 1994 through 2002;
or
128
(2) 340,560,000 liters (single strength equiva-
lent) in any of calendar years 2003 through 2007;
the rate of duty on Mexican articles of frozen concentrated
orange juice that are entered after the date on which the
applicable limitation in paragraph (1) or (2) is reached
and before the determination date for the related deter-
mination under subsection (a)(1)(B) shall be the rate of
duty specified in subsection (c).
(c) RATE OF DUTY.—The rate of duty specified for
purposes of subsection (b) for articles entered on any day
is the rate in the HTS that is the lower of—
(1) the column 1–General rate of duty in effect
for such articles on July 1, 1991; or
(2) the column 1–General rate of duty in effect
on that day.
(d) DEFINITIONS.—For purposes of this section—
(1) The term ‘‘daily price’’ means the daily
closing price of the New York Cotton Exchange, or
any successor as determined by the Secretary, for
the closest month in which contracts for frozen con-
centrated orange juice are being traded on the Ex-
change.
(2) The term ‘‘business day’’ means a day in
which contracts for frozen concentrated orange juice
129
are being traded on the New York Cotton Exchange,
or any successor as determined by the Secretary.
(3) The term ‘‘entered’’ means entered or with-
drawn from warehouse for consumption, in the cus-
toms territory of the United States.
(4) The term ‘‘frozen concentrated orange
juice’’ means all products classifiable under sub-
heading 2009.11.00 of the HTS.
(5) The term ‘‘Secretary’’ means the Secretary
of Agriculture.
(6) The term ‘‘trigger price’’ means the average
daily closing price of the New York Cotton Ex-
change, or any successor as determined by the Sec-
retary, for the corresponding month during the pre-
vious 5-year period, excluding the year with the
highest average price for the corresponding month
and the year with the lowest average price for the
corresponding month.
PART 2—RELIEF FROM IMPORTS FROM ALL
COUNTRIES
SEC. 311. NAFTA ARTICLE IMPACT IN IMPORT RELIEF
CASES UNDER THE TRADE ACT OF 1974.
(a) IN GENERAL.—If, in any investigation initiated
under chapter 1 of title II of the Trade Act of 1974, the
International Trade Commission makes an affirmative de-
130
termination (or a determination which the President may
treat as an affirmative determination under such chapter
by reason of section 330(d) of the Tariff Act of 1930),
the International Trade Commission shall also find (and
report to the President at the time such injury determina-
tion is submitted to the President) whether—
(1) imports of the article from a NAFTA coun-
try, considered individually, account for a substan-
tial share of total imports; and
(2) imports of the article from a NAFTA coun-
try, considered individually or, in exceptional cir-
cumstances, imports from NAFTA countries consid-
ered collectively, contribute importantly to the seri-
ous injury, or threat thereof, caused by imports.
(b) FACTORS.—
(1) SUBSTANTIAL
IMPORT
SHARE.—In deter-
mining whether imports from a NAFTA country,
considered individually, account for a substantial
share of total imports, such imports normally shall
not be considered to account for a substantial share
of total imports if that country is not among the top
5 suppliers of the article subject to the investigation,
measured in terms of import share during the most
recent 3-year period.
131
(2) APPLICATION
OF
‘‘CONTRIBUTE
IMPOR-
TANTLY’’ STANDARD.—In determining whether im-
ports from a NAFTA country or countries contrib-
ute importantly to the serious injury, or threat
thereof, the International Trade Commission shall
consider such factors as the change in the import
share of the NAFTA country or countries, and the
level and change in the level of imports of such
country or countries. In applying the preceding sen-
tence, imports from a NAFTA country or countries
normally shall not be considered to contribute impor-
tantly to serious injury, or the threat thereof, if the
growth rate of imports from such country or coun-
tries during the period in which an injurious in-
crease in imports occurred is appreciably lower than
the growth rate of total imports from all sources
over the same period.
(c) DEFINITION.—For purposes of this section and
section 312(a), the term ‘‘contribute importantly’’ refers
to an important cause, but not necessarily the most impor-
tant cause.
SEC. 312. PRESIDENTIAL ACTION REGARDING NAFTA IM-
PORTS.
(a) IN GENERAL.—In determining whether to take
action under chapter 1 of title II of the Trade Act of 1974
132
with respect to imports from a NAFTA country, the Presi-
dent shall determine whether—
(1) imports from such country, considered indi-
vidually, account for a substantial share of total im-
ports; or
(2) imports from a NAFTA country, considered
individually, or in exceptional circumstances imports
from NAFTA countries considered collectively, con-
tribute importantly to the serious injury, or threat
thereof, found by the International Trade Commis-
sion.
(b) EXCLUSION OF NAFTA IMPORTS.—In determin-
ing the nature and extent of action to be taken under
chapter 1 of title II of the Trade Act of 1974, the Presi-
dent shall exclude from such action imports from a
NAFTA country if the President makes a negative deter-
mination under subsection (a)(1) or (2) with respect to
imports from such country.
(c) ACTION AFTER EXCLUSION OF NAFTA COUN-
TRY IMPORTS.—
(1) IN GENERAL.—If the President, under sub-
section (b), excludes imports from a NAFTA coun-
try or countries from action under chapter 1 of title
II of the Trade Act of 1974 but thereafter deter-
mines that a surge in imports from that country or
133
countries is undermining the effectiveness of the ac-
tion—
(A) the President may take appropriate ac-
tion under such chapter 1 to include those im-
ports in the action; and
(B) any entity that is representative of an
industry for which such action is being taken
may request the International Trade Commis-
sion to conduct an investigation of the surge in
such imports.
(2) INVESTIGATION.—Upon receiving a request
under paragraph (1)(B), the International Trade
Commission shall conduct an investigation to deter-
mine whether a surge in such imports undermines
the effectiveness of the action. The International
Trade Commission shall submit the findings of its
investigation to the President no later than 30 days
after the request is received by the International
Trade Commission.
(3) DEFINITION.—For purposes of this sub-
section, the term ‘‘surge’’ means a significant in-
crease in imports over the trend for a recent rep-
resentative base period.
(d) CONDITION APPLICABLE TO QUANTITATIVE RE-
STRICTIONS.—Any action taken under this section pro-
134
claiming a quantitative restriction shall permit the impor-
tation of a quantity or value of the article which is not
less than the quantity or value of such article imported
into the United States during the most recent period that
is representative of imports of such article, with allowance
for reasonable growth.
PART 3—GENERAL PROVISIONS
SEC. 315. PROVISIONAL RELIEF.
Section 202(d) of the Trade Act of 1974 (19 U.S.C.
2252(d)) is amended—
(1) in paragraph (1)(A) by inserting ‘‘or citrus
product’’ after ‘‘agricultural product’’ each place it
appears;
(2) in the text of paragraph (1)(C) that appears
before subclauses (I) and (II)—
(A) by inserting ‘‘or citrus product’’ after
‘‘agricultural product’’ each place it appears,
and
(B) by inserting ‘‘or citrus product’’ after
‘‘perishable product’’;
(3) by redesignating subparagraphs (A) and
(B) of paragraph (5) as subparagraphs (B) and (C);
and
(4) by inserting a new subparagraph (A) in
paragraph (5) to read as follows:
135
‘‘(A) The term ‘citrus product’ means any
processed oranges or grapefruit, or any orange
or grapefruit juice, including concentrate.’’.
SEC. 316. MONITORING.
For purposes of expediting an investigation concern-
ing provisional relief under this subtitle or section 202 of
the Trade Act of 1974 regarding—
(1) fresh or chilled tomatoes provided for in
subheading 0702.00.00 of the HTS; and
(2) fresh or chilled peppers, other than chili
peppers provided for in subheading 0709.60.00 of
the HTS;
the International Trade Commission, until January 1,
2009, shall monitor imports of such goods as if proper
requests for such monitoring had been made under sub-
section 202(d)(1)(C)(i) of such section 202. At the request
of the International Trade Commission, the Secretary of
Agriculture and the Commissioner of Customs shall pro-
vide to the International Trade Commission information
relevant to the monitoring carried out under this section.
SEC. 317. PROCEDURES CONCERNING THE CONDUCT OF
INTERNATIONAL TRADE COMMISSION INVES-
TIGATIONS.
(a) PROCEDURES AND RULES.—The International
Trade Commission shall adopt such procedures and rules
136
and regulations as are necessary to bring its procedures
into conformity with chapter 8 of the Agreement.
(b) CONFORMING AMENDMENT.—Section 202(a) of
the Trade Act of 1974 is amended by adding at the end
thereof the following:
‘‘(8) The procedures concerning the release of
confidential business information set forth in section
332(g) of the Tariff Act of 1930 shall apply with re-
spect to information received by the Commission in
the course of investigations conducted under this
chapter and part 1 of title III of the North Amer-
ican Free Trade Agreement Implementation Act.’’.
SEC. 318. EFFECTIVE DATE.
Except as provided in section 308(b), the provisions
of this subtitle take effect on the date the Agreement en-
ters into force with respect to the United States.
Subtitle B—Agriculture
SEC. 321. AGRICULTURE.
(a) MEAT IMPORT ACT OF 1979.—The Meat Import
Act of 1979 (19 U.S.C. 2253 note) is amended—
(1) in subsection (b)—
(A) by striking the last sentence in para-
graph (2),
137
(B) by redesignating paragraph (3) as
paragraph (4) and inserting after paragraph
(2) the following new paragraph:
‘‘(3) The term ‘meat articles’ does not include
any article described in paragraph (2) that—
‘‘(A) originates in a NAFTA country (as
determined in accordance with section 202 of
the NAFTA Act), or
‘‘(B) originates in Canada (as determined
in accordance with section 202 of the United
States-Canada Free-Trade Agreement Imple-
mentation Act of 1988) during such time as the
United States-Canada Free-Trade Agreement is
in force with respect to, and the United States
applies such Agreement to, Canada.’’; and
(C) by inserting after paragraph (4) (as
redesignated by subparagraph (B) of this para-
graph) the following new paragraphs:
‘‘(5) The term ‘NAFTA Act’ means the North
American Free Trade Agreement Implementation
Act.
‘‘(6) The term ‘NAFTA country’ has the mean-
ing given such term in section 2(4) of the NAFTA
Act.’’;
138
(2) in subsection (f)(1), by striking the end pe-
riod and inserting ‘‘, except that the President may
exclude any such article originating in a NAFTA
country (as determined in accordance with section
202 of the NAFTA Act) or, if paragraph (3)(B) ap-
plies, any such article originating in Canada as de-
termined in accordance with such paragraph
(3)(B).’’; and
(3) in subsection (i), by inserting ‘‘and Mexico’’
after ‘‘Canada’’ each place it appears.
(b) SECTION 22 OF THE AGRICULTURAL ADJUST-
MENT ACT.—
(1) IN GENERAL.—The President may, pursu-
ant to article 309 and Annex 703.2 of the Agree-
ment, exempt from any quantitative limitation or fee
imposed pursuant to section 22 of the Agricultural
Adjustment Act (7 U.S.C. 624), reenacted with
amendments by the Agricultural Marketing Agree-
ment Act of 1937, any article which originates in
Mexico, if Mexico is a NAFTA country.
(2) QUALIFICATION OF ARTICLES.—The deter-
mination of whether an article originates in Mexico
shall be made in accordance with section 202, except
that operations performed in, or materials obtained
from, any country other than the United States or
139
Mexico shall be treated as if performed in or ob-
tained from a country other than a NAFTA country.
(c) TARIFF RATE QUOTAS.—In implementing the
tariff rate quotas set out in the United States Schedule
to Annex 302.2 of the Agreement, the President shall take
such action as may be necessary to ensure that imports
of agricultural goods do not disrupt the orderly marketing
of commodities in the United States.
(d) PEANUTS.—
(1) EFFECT OF THE AGREEMENT.—
(A) IN GENERAL.—Nothing in the Agree-
ment or this Act reduces or eliminates—
(i) any penalty required under section
358e(d) of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1359a(d)); or
(ii) any requirement under Marketing
Agreement No. 146, Regulating the Qual-
ity of Domestically Produced Peanuts, on
peanuts in the domestic market, pursuant
to section 108B(f) of the Agricultural Act
of 1949 (7 U.S.C. 1445c–3(f)).
(B) REENTRY OF EXPORTED PEANUTS.—
Paragraph (6) of section 358e(d) of the Agri-
cultural Adjustment Act of 1938 (7 U.S.C.
1359a(d)(6)) is amended to read as follows:
140
‘‘(6) REENTRY OF EXPORTED PEANUTS.—
‘‘(A) PENALTY.—If any additional peanuts
exported by a handler are reentered into the
United States in commercial quantities as de-
termined by the Secretary, the importer of the
peanuts shall be subject to a penalty at a rate
equal to 140 percent of the loan level for quota
peanuts on the quantity of peanuts reentered.
‘‘(B) RECORDS.—Each person, firm, or
handler who imports peanuts into the United
States shall maintain such records and docu-
ments as are required by the Secretary to en-
sure compliance with this subsection.’’.
(2) CONSULTATIONS
ON
IMPORTS.—It is the
sense of Congress that the United States should re-
quest consultations in the Working Group on Emer-
gency Action, established in the Understanding Be-
tween the Parties to the North American Free
Trade Agreement Concerning Chapter Eight—
Emergency Action, if imports of peanuts exceed the
in-quota quantity under a tariff rate quota set out
in the United States Schedule to Annex 302.2 of the
Agreement concerning whether—
(A) the increased imports of peanuts con-
stitute a substantial cause of, or contribute im-
141
portantly to, serious injury, or threat of serious
injury, to the domestic peanut industry; and
(B) recourse under Chapter Eight of the
Agreement or Article XIX of the General
Agreement on Tariffs and Trade is appropriate.
(e) FRESH FRUITS, VEGETABLES, AND CUT FLOW-
ERS.—
(1) IN GENERAL.—The Secretary of Agriculture
shall collect and compile the information specified
under paragraph (3), if reasonably available, from
appropriate Federal departments and agencies and
the relevant counterpart ministries of the Govern-
ment of Mexico.
(2) DESIGNATION
OF
AN
OFFICE.—The Sec-
retary of Agriculture shall designate an office within
the United States Department of Agriculture to be
responsible for maintaining and disseminating, in a
timely manner, the data accumulated for verifying
citrus, fruit, vegetable, and cut flower trade between
the United States and Mexico. The information shall
be made available to the public and the NAFTA Ag-
riculture Committee Working Groups.
(3) INFORMATION COLLECTED.—The informa-
tion to be collected, if reasonably available, in-
cludes—
142
(A) monthly fresh fruit, fresh vegetable,
fresh citrus, and processed citrus product im-
port and export data;
(B) monthly citrus juice production and
export data;
(C) data on inspections of shipments of cit-
rus, vegetables, and cut flowers entering the
United States from Mexico; and
(D) in the case of fruits, vegetables, and
cut flowers entering the United States from
Mexico, data regarding—
(i) planted and harvested acreage; and
(ii) wholesale prices, quality, and
grades.
(f) END-USE CERTIFICATES.—
(1) IN GENERAL.—The Secretary of Agriculture
(referred to in this subsection as the ‘‘Secretary’’)
shall implement, in coordination with the Commis-
sioner of Customs, a program requiring that end-use
certificates be included in the documentation cover-
ing the entry into, or the withdrawal from a ware-
house for consumption in, the customs territory of
the United States—
(A) of any wheat that is a product of any
foreign country or instrumentality that re-
143
quires, as of the effective date of this sub-
section, end-use certificates for imports of
wheat that is a product of the United States
(referred to in this subsection as ‘‘United
States-produced wheat’’); and
(B) of any barley that is a product of any
foreign country or instrumentality that re-
quires, as of the effective date of this sub-
section, end-use certificates for imports of bar-
ley that is a product of the United States (re-
ferred to in this subsection as ‘‘United States-
produced barley’’).
(2) REGULATIONS.—The Secretary shall pre-
scribe by regulation such requirements regarding the
information to be included in end-use certificates as
may be necessary and appropriate to carry out this
subsection.
(3) 
PRODUCER
PROTECTION
DETERMINA-
TION.—At any time after the effective date of the
requirements established under paragraph (1), the
Secretary may, subject to paragraph (5), suspend
the requirements when making a determination,
after consultation with domestic producers, that the
program implemented under this subsection has di-
rectly resulted in—
144
(A) the reduction of income to the United
States producers of agricultural commodities; or
(B) the reduction of the competitiveness of
United States agricultural commodities in the
world export markets.
(4) SUSPENSION OF REQUIREMENTS.—
(A) WHEAT.—If a foreign country or in-
strumentality that requires end-use certificates
for imports of United States-produced wheat as
of the effective date of the requirement under
paragraph (1)(A) eliminates the requirement,
the Secretary shall suspend the requirement
under paragraph (1)(A) beginning 30 calendar
days after suspension by the foreign country or
instrumentality.
(B) BARLEY.—If a foreign country or in-
strumentality that requires end-use certificates
for imports of United States-produced barley as
of the effective date of the requirement under
paragraph (1)(B) eliminates the requirement,
the Secretary shall suspend the requirement
under paragraph (1)(B) beginning 30 calendar
days after suspension by the foreign country or
instrumentality.
145
(5) REPORT
TO
CONGRESS.—The Secretary
shall not suspend the requirements established under
paragraph (1) under circumstances identified in
paragraph (3) before the Secretary submits a report
to Congress detailing the determination made under
paragraph (3) and the reasons for making the deter-
mination.
(6) COMPLIANCE.—It shall be a violation of
section 1001 of title 18, United States Code, for a
person to engage in fraud or knowingly violate this
subsection or a regulation implementing this sub-
section.
(7) EFFECTIVE
DATE.—This subsection shall
become effective on the date that is 120 days after
the date of enactment of this Act.
(g) AGRICULTURAL FELLOWSHIP PROGRAM.—Sec-
tion 1542(d) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (Public Law 101–624; 7 U.S.C. 5622
note) is amended by adding at the end the following new
paragraph:
‘‘(3) AGRICULTURAL FELLOWSHIPS FOR NAFTA
COUNTRIES.—
‘‘(A) IN
GENERAL.—The Secretary shall
grant fellowships to individuals from countries
that are parties to the North American Free
146
Trade Agreement (referred to in this paragraph
as ‘NAFTA’) to study agriculture in the United
States, and to individuals in the United States
to study agriculture in other NAFTA countries.
‘‘(B) PURPOSE.—The purpose of fellow-
ships granted under this paragraph is—
‘‘(i) to allow the recipients to expand
their knowledge and understanding of agri-
cultural systems and practices in other
NAFTA countries;
‘‘(ii) to facilitate the improvement of
agricultural systems in NAFTA countries;
and
‘‘(iii) to establish and expand agricul-
tural trade linkages between the United
States and other NAFTA countries.
‘‘(C) ELIGIBLE
RECIPIENTS.—The Sec-
retary may provide fellowships under this para-
graph to agricultural producers and consult-
ants, government officials, and other individuals
from the private and public sectors.
‘‘(D) ACCEPTANCE OF GIFTS.—The Sec-
retary may accept money, funds, property, and
services of every kind by gift, devise, bequest,
grant, or otherwise, and may in any manner,
147
dispose of all of the holdings and use the re-
ceipts generated from the disposition to carry
out this paragraph. Receipts under this para-
graph shall remain available until expended.
‘‘(E) 
AUTHORIZATION
OF
APPROPRIA-
TION.—There are authorized to be appropriated
such sums as are necessary to carry out this
paragraph.’’.
(h) ASSISTANCE FOR AFFECTED FARMWORKERS.—
(1) IN GENERAL.—Subject to paragraph (3), if
at any time the Secretary of Agriculture determines
that the implementation of the Agreement has
caused low-income migrant or seasonal farmworkers
to lose income, the Secretary may make available
grants, not to exceed $20,000,000 for any fiscal
year, to public agencies or private organizations with
tax-exempt status under section 501(c)(3) of the In-
ternal Revenue Code of 1986, that have experience
in providing emergency services to low-income mi-
grant or seasonal farmworkers. Emergency services
to be provided with assistance received under this
subsection may include such types of assistance as
the Secretary determines to be necessary and appro-
priate.
148
(2) DEFINITION.—As used in this subsection,
the term ‘‘low-income migrant or seasonal farm-
worker’’ shall have the same meaning as provided in
section 2281(b) of the Food, Agriculture, Conserva-
tion, and Trade Act of 1990 (42 U.S.C. 5177a(b)).
(3) AUTHORIZATION
OF
APPROPRIATIONS.—
There 
are 
authorized 
to 
be 
appropriated
$20,000,000 for each fiscal year to carry out this
subsection.
(i) BIENNIAL REPORT ON EFFECTS OF THE AGREE-
MENT ON AMERICAN AGRICULTURE.—
(1) IN GENERAL.—The Secretary of Agriculture
shall prepare a biennial report on the effects of the
Agreement on United States producers of agricul-
tural commodities and on rural communities located
in the United States.
(2) CONTENTS
OF
REPORT.—The report re-
quired under this subsection shall include—
(A) an assessment of the effects of imple-
menting the Agreement on the various agricul-
tural commodities affected by the Agreement,
on a commodity-by-commodity basis;
(B) an assessment of the effects of imple-
menting the Agreement on investments made in
149
United States agriculture and on rural commu-
nities located in the United States;
(C) an assessment of the effects of imple-
menting the Agreement on employment in Unit-
ed States agriculture, including any gains or
losses of jobs in businesses directly or indirectly
related to United States agriculture; and
(D) such other information and data as
the Secretary determines appropriate.
(3) SUBMISSION
OF
REPORT.—The Secretary
shall furnish the report required under this sub-
section to the Committee on Agriculture, Nutrition,
and Forestry of the Senate and to the Committee on
Agriculture of the House of Representatives. The re-
port shall be due every 2 years and shall be submit-
ted by March 1 of the year in which the report is
due. The first report shall be due by March 1, 1997,
and the final report shall be due by March 1, 2011.
Subtitle C—Intellectual Property
SEC. 331. TREATMENT OF INVENTIVE ACTIVITY.
Section 104 of title 35, United States Code, is
amended to read as follows:
‘‘§ 104. Invention made abroad
‘‘(a) IN GENERAL.—In proceedings in the Patent and
Trademark Office, in the courts, and before any other
150
competent authority, an applicant for a patent, or a pat-
entee, may not establish a date of invention by reference
to knowledge or use thereof, or other activity with respect
thereto, in a foreign country other than a NAFTA coun-
try, except as provided in sections 119 and 365 of this
title. Where an invention was made by a person, civil or
military, while domiciled in the United States or a
NAFTA country and serving in any other country in con-
nection with operations by or on behalf of the United
States or a NAFTA country, the person shall be entitled
to the same rights of priority in the United States with
respect to such invention as if such invention had been
made in the United States or a NAFTA country. To the
extent that any information in a NAFTA country concern-
ing knowledge, use, or other activity relevant to proving
or disproving a date of invention has not been made avail-
able for use in a proceeding in the Office, a court, or any
other competent authority to the same extent as such in-
formation could be made available in the United States,
the Commissioner, court, or such other authority shall
draw appropriate inferences, or take other action per-
mitted by statute, rule, or regulation, in favor of the party
that requested the information in the proceeding.
‘‘(b) DEFINITION.—As used in this section, the term
‘NAFTA country’ has the meaning given that term in sec-
151
tion 2(4) of the North American Free Trade Agreement
Implementation Act.’’.
SEC. 332. RENTAL RIGHTS IN SOUND RECORDINGS.
Section 4 of the Record Rental Amendment of 1984
(17 U.S.C. 109 note) is amended by striking out sub-
section (c).
SEC. 333. NONREGISTRABILITY OF MISLEADING GEO-
GRAPHIC INDICATIONS.
(a) MARKS NOT REGISTRABLE ON THE PRINCIPAL
REGISTER.—Section 2 of the Act entitled ‘‘An Act to pro-
vide for the registration and protection of trademarks used
in commerce, to carry out the provisions of certain inter-
national conventions, and for other purposes’’, approved
July 5, 1946, commonly referred to as the Trademark Act
of 1946 (15 U.S.C. 1052(e)), is amended—
(1) by amending subsection (e) to read as fol-
lows:
‘‘(e) Consists of a mark which (1) when used on or
in connection with the goods of the applicant is merely
descriptive or deceptively misdescriptive of them, (2) when
used on or in connection with the goods of the applicant
is primarily geographically descriptive of them, except as
indications of regional origin may be registrable under sec-
tion 4, (3) when used on or in connection with the goods
of the applicant is primarily geographically deceptively
152
misdescriptive of them, or (4) is primarily merely a sur-
name.’’; and
(2) in subsection (f)—
(A) by striking out ‘‘and (d)’’ and insert-
ing ‘‘(d), and (e)(3)’’; and
(B) by adding at the end the following new
sentence: ‘‘Nothing in this section shall prevent
the registration of a mark which, when used on
or in connection with the goods of the appli-
cant, is primarily geographically deceptively
misdescriptive of them, and which became dis-
tinctive of the applicant’s goods in commerce
before the date of the enactment of the North
American Free Trade Agreement Implementa-
tion Act.’’.
(b) SUPPLEMENTAL REGISTER.—Section 23(a) of
the Trademark Act of 1946 (15 U.S.C. 1091(a)) is
amended—
(1) by striking out ‘‘and (d)’’ and inserting
‘‘(d), and (e)(3)’’; and
(2) by adding at the end the following new sen-
tence: ‘‘Nothing in this section shall prevent the reg-
istration on the supplemental register of a mark, ca-
pable of distinguishing the applicant’s goods or serv-
ices and not registrable on the principal register
153
under this Act, that is declared to be unregistrable
under section 2(e)(3), if such mark has been in law-
ful use in commerce by the owner thereof, on or in
connection with any goods or services, since before
the date of the enactment of the North American
Free Trade Agreement Implementation Act.’’.
SEC. 334. MOTION PICTURES IN THE PUBLIC DOMAIN.
(a) IN GENERAL.—Chapter 1 of title 17, United
States Code, is amended by inserting after section 104 the
following new section:
‘‘§ 104A. Copyright in certain motion pictures
‘‘(a) RESTORATION OF COPYRIGHT.—Subject to sub-
sections (b) and (c)—
‘‘(1) any motion picture that is first fixed or
published in the territory of a NAFTA country as
defined in section 2(4) of the North American Free
Trade Agreement Implementation Act to which
Annex 1705.7 of the North American Free Trade
Agreement applies, and
‘‘(2) any work included in such motion picture
that is first fixed in or published with such motion
picture,
that entered the public domain in the United States be-
cause it was first published on or after January 1, 1978,
and before March 1, 1989, without the notice required by
154
section 401, 402, or 403 of this title, the absence of which
has not been excused by the operation of section 405 of
this title, as such sections were in effect during that pe-
riod, shall have copyright protection under this title for
the remainder of the term of copyright protection to which
it would have been entitled in the United States had it
been published with such notice.
‘‘(b) EFFECTIVE DATE OF PROTECTION.—The pro-
tection provided under subsection (a) shall become effec-
tive, with respect to any motion picture or work included
in such motion picture meeting the criteria of that sub-
section, 1 year after the date on which the North Amer-
ican Free Trade Agreement enters into force with respect
to, and the United States applies the Agreement to, the
country in whose territory the motion picture was first
fixed or published if, before the end of that 1-year period,
the copyright owner in the motion picture or work files
with the Copyright Office a statement of intent to have
copyright protection restored under subsection (a). The
Copyright Office shall publish in the Federal Register
promptly after that effective date a list of motion pictures,
and works included in such motion pictures, for which pro-
tection is provided under subsection (a).
‘‘(c) USE OF PREVIOUSLY OWNED COPIES.—A na-
tional or domiciliary of the United States who, before the
155
date of the enactment of the North American Free Trade
Agreement Implementation Act, made or acquired copies
of a motion picture, or other work included in such motion
picture, that is subject to protection under subsection (a),
may sell or distribute such copies or continue to perform
publicly such motion picture and other work without liabil-
ity for such sale, distribution, or performance, for a period
of 1 year after the date on which the list of motion pic-
tures, and works included in such motion pictures, that
are subject to protection under subsection (a) is published
in the Federal Register under subsection (b).’’.
(b) CONFORMING AMENDMENT.—The table of sec-
tions at the beginning of chapter 1 of title 17, United
States Code, is amended by inserting after the item relat-
ing to section 104 the following new item:
‘‘104A. Copyright in certain motion pictures.’’.
SEC. 335. EFFECTIVE DATES.
(a) IN GENERAL.—Subject to subsections (b) and (c),
the amendments made by this subtitle take effect on the
date the Agreement enters into force with respect to the
United States.
(b) SECTION 331.—The amendments made by sec-
tion 331 shall apply to all patent applications that are
filed on or after the date of the enactment of this Act:
Provided, That an applicant for a patent, or a patentee,
may not establish a date of invention by reference to
156
knowledge or use thereof, or other activity with respect
thereto, in a NAFTA country, except as provided in sec-
tions 119 and 365 of title 35, United States Code, that
is earlier than the date of the enactment of this Act.
(c) SECTION 333.—The amendments made by section
333 shall apply only to trademark applications filed on
or after the date of the enactment of this Act.
Subtitle D—Temporary Entry of
Business Persons
SEC. 341. TEMPORARY ENTRY.
(a) NONIMMIGRANT TRADERS
AND INVESTORS.—
Upon a basis of reciprocity secured by the Agreement, an
alien who is a citizen of Canada or Mexico, and the spouse
and children of any such alien if accompanying or follow-
ing to join such alien, may, if otherwise eligible for a visa
and if otherwise admissible into the United States under
the Immigration and Nationality Act (8 U.S.C. 1101 et
seq.), be considered to be classifiable as a nonimmigrant
under section 101(a)(15)(E) of such Act (8 U.S.C.
1101(a)(15)(E)) if entering solely for a purpose specified
in Section B of Annex 1603 of the Agreement, but only
if any such purpose shall have been specified in such
Annex on the date of entry into force of the Agreement.
For purposes of this section, the term ‘‘citizen of Mexico’’
157
means ‘‘citizen’’ as defined in Annex 1608 of the Agree-
ment.
(b) NONIMMIGRANT PROFESSIONALS AND ANNUAL
NUMERICAL LIMIT.—Section 214 of the Immigration and
Nationality Act (8 U.S.C. 1184) is amended by redesig-
nating subsection (e) as paragraph (1) of subsection (e)
and adding after such paragraph (1), as redesignated, the
following new paragraphs:
‘‘(2) An alien who is a citizen of Canada or Mexico,
and the spouse and children of any such alien if accom-
panying or following to join such alien, who seeks to enter
the United States under and pursuant to the provisions
of Section D of Annex 1603 of the North American Free
Trade Agreement (in this subsection referred to as
‘NAFTA’) to engage in business activities at a profes-
sional level as provided for in such Annex, may be admit-
ted for such purpose under regulations of the Attorney
General promulgated after consultation with the Secretar-
ies of State and Labor. For purposes of this Act, including
the issuance of entry documents and the application of
subsection (b), such alien shall be treated as if seeking
classification, or classifiable, as a nonimmigrant under
section 101(a)(15). The admission of an alien who is a
citizen of Mexico shall be subject to paragraphs (3), (4),
and (5). For purposes of this paragraph and paragraphs
158
(3), (4), and (5), the term ‘citizen of Mexico’ means ‘citi-
zen’ as defined in Annex 1608 of NAFTA.
‘‘(3) The Attorney General shall establish an annual
numerical limit on admissions under paragraph (2) of
aliens who are citizens of Mexico, as set forth in Appendix
1603.D.4 of Annex 1603 of the NAFTA. Subject to para-
graph (4), the annual numerical limit—
‘‘(A) beginning with the second year that
NAFTA is in force, may be increased in accordance
with the provisions of paragraph 5(a) of Section D
of such Annex, and
‘‘(B) shall cease to apply as provided for in
paragraph 3 of such Appendix.
‘‘(4) The annual numerical limit referred to in para-
graph (3) may be increased or shall cease to apply (other
than by operation of paragraph 3 of such Appendix) only
if—
‘‘(A) the President has obtained advice regard-
ing the proposed action from the appropriate advi-
sory committees established under section 135 of the
Trade Act of 1974 (19 U.S.C. 2155);
‘‘(B) the President has submitted a report to
the Committee on the Judiciary of the Senate and
the Committee on the Judiciary of the House of
Representatives that sets forth—
159
‘‘(i) the action proposed to be taken and
the reasons therefor, and
‘‘(ii) the advice obtained under subpara-
graph (A);
‘‘(C) a period of at least 60 calendar days that
begins on the first day on which the President has
met the requirements of subparagraphs (A) and (B)
with respect to such action has expired; and
‘‘(D) the President has consulted with such
committees regarding the proposed action during the
period referred to in subparagraph (C).
‘‘(5) During the period that the provisions of Appen-
dix 1603.D.4 of Annex 1603 of the NAFTA apply, the
entry of an alien who is a citizen of Mexico under and
pursuant to the provisions of Section D of Annex 1603
of NAFTA shall be subject to the attestation requirement
of section 212(m), in the case of a registered nurse, or
the application requirement of section 212(n), in the case
of all other professions set out in Appendix 1603.D.1 of
Annex 1603 of NAFTA, and the petition requirement of
subsection (c), to the extent and in the manner prescribed
in regulations promulgated by the Secretary of Labor,
with respect to sections 212(m) and 212(n), and the At-
torney General, with respect to subsection (c).’’.
160
(c) LABOR DISPUTES.—Section 214 of the Immigra-
tion and Nationality Act (8 U.S.C. 1184) is amended by
adding at the end the following new subsection:
‘‘(j) Notwithstanding any other provision of this Act,
an alien who is a citizen of Canada or Mexico who seeks
to enter the United States under and pursuant to the pro-
visions of Section B, Section C, or Section D of Annex
1603 of the North American Free Trade Agreement, shall
not be classified as a nonimmigrant under such provisions
if there is in progress a strike or lockout in the course
of a labor dispute in the occupational classification at the
place or intended place of employment, unless such alien
establishes, pursuant to regulations promulgated by the
Attorney General, that the alien’s entry will not affect ad-
versely the settlement of the strike or lockout or the em-
ployment of any person who is involved in the strike or
lockout. Notice of a determination under this subsection
shall be given as may be required by paragraph 3 of article
1603 of such Agreement. For purposes of this subsection,
the term ‘citizen of Mexico’ means ‘citizen’ as defined in
Annex 1608 of such Agreement.’’.
SEC. 342. EFFECTIVE DATE.
The provisions of this subtitle take effect on the date
the Agreement enters into force with respect to the United
States.
161
Subtitle E—Standards
PART 1—STANDARDS AND MEASURES
SEC. 351. STANDARDS AND SANITARY AND PHYTOSANITARY
MEASURES.
(a) IN GENERAL.—Title IV of the Trade Agreements
Act of 1979 (19 U.S.C. 2531 et seq.) is amended by in-
serting at the end the following new subtitle:
‘‘Subtitle E—Standards and Meas-
ures Under the North American
Free Trade Agreement
‘‘CHAPTER 1—SANITARY AND
PHYTOSANITARY MEASURES
‘‘SEC. 461. GENERAL.
‘‘Nothing in this chapter may be construed—
‘‘(1) to prohibit a Federal agency or State
agency from engaging in activity related to sanitary
or phytosanitary measures to protect human, ani-
mal, or plant life or health; or
‘‘(2) to limit the authority of a Federal agency
or State agency to determine the level of protection
of human, animal, or plant life or health the agency
considers appropriate.
‘‘SEC. 462. INQUIRY POINT.
‘‘The standards information center maintained under
section 414 shall, in addition to the functions specified
162
therein, make available to the public relevant documents,
at such reasonable fees as the Secretary of Commerce may
prescribe, and information regarding—
‘‘(1) any sanitary or phytosanitary measure of
general application, including any control or inspec-
tion procedure or approval procedure proposed,
adopted, or maintained by a Federal or State agen-
cy;
‘‘(2) the procedures of a Federal or State agen-
cy for risk assessment, and factors the agency con-
siders in conducting the assessment and in establish-
ing the levels of protection that the agency considers
appropriate;
‘‘(3) the membership and participation of the
Federal Government and State governments in inter-
national and regional sanitary and phytosanitary or-
ganizations and systems, and in bilateral and multi-
lateral 
arrangements 
regarding 
sanitary 
and
phytosanitary measures, and the provisions of those
systems and arrangements; and
‘‘(4) the location of notices of the type required
under article 719 of the NAFTA, or where the infor-
mation contained in such notices can be obtained.
163
‘‘SEC. 463. CHAPTER DEFINITIONS.
‘‘Notwithstanding section 451, for purposes of this
chapter—
‘‘(1) ANIMAL.—The term ‘animal’ includes fish,
bees, and wild fauna.
‘‘(2) APPROVAL
PROCEDURE.—The term ‘ap-
proval procedure’ means any registration, notifica-
tion, or other mandatory administrative procedure
for—
‘‘(A) approving the use of an additive for
a stated purpose or under stated conditions, or
‘‘(B) establishing a tolerance for a stated
purpose or under stated conditions for a con-
taminant,
in a food, beverage, or feedstuff prior to permitting
the use of the additive or the marketing of a food,
beverage, or feedstuff containing the additive or con-
taminant.
‘‘(3) CONTAMINANT.—The term ‘contaminant’
includes pesticide and veterinary drug residues and
extraneous matter.
‘‘(4) CONTROL OR INSPECTION PROCEDURE.—
The term ‘control or inspection procedure’ means
any procedure used, directly or indirectly, to deter-
mine that a sanitary or phytosanitary measure is
fulfilled, including sampling, testing, inspection,
164
evaluation, verification, monitoring, auditing, assur-
ance of conformity, accreditation, registration, cer-
tification, or other procedure involving the physical
examination of a good, of the packaging of a good,
or of the equipment or facilities directly related to
production, marketing, or use of a good, but does
not mean an approval procedure.
‘‘(5) PLANT.—The term ‘plant’ includes wild
flora.
‘‘(6) RISK
ASSESSMENT.—The term ‘risk as-
sessment’ means an evaluation of—
‘‘(A) the potential for the introduction, es-
tablishment or spread of a pest or disease and
associated 
biological 
and 
economic 
con-
sequences; or
‘‘(B) the potential for adverse effects on
human or animal life or health arising from the
presence of an additive, contaminant, toxin or
disease-causing organism in a food, beverage, or
feedstuff.
‘‘(7) SANITARY
OR
PHYTOSANITARY
MEAS-
URE.—
‘‘(A) IN GENERAL.—The term ‘sanitary or
phytosanitary measure’ means a measure to—
165
‘‘(i) protect animal or plant life or
health in the United States from risks
arising from the introduction, establish-
ment, or spread of a pest or disease;
‘‘(ii) protect human or animal life or
health in the United States from risks
arising from the presence of an additive,
contaminant, toxin, or disease-causing or-
ganism in a food, beverage, or feedstuff;
‘‘(iii) protect human life or health in
the United States from risks arising from
a disease-causing organism or pest carried
by an animal or plant, or a product there-
of; or
‘‘(iv) prevent or limit other damage in
the United States arising from the intro-
duction, establishment, or spread of a pest.
‘‘(B) FORM.—The form of a sanitary or
phytosanitary measure includes—
‘‘(i) end product criteria;
‘‘(ii) a product-related processing or
production method;
‘‘(iii) a testing, inspection, certifi-
cation, or approval procedure;
‘‘(iv) a relevant statistical method;
166
‘‘(v) a sampling procedure;
‘‘(vi) a method of risk assessment;
‘‘(vii) a packaging and labeling re-
quirement directly related to food safety;
and
‘‘(viii) a quarantine treatment, such
as a relevant requirement associated with
the transportation of animals or plants or
with material necessary for their survival
during transportation.
‘‘CHAPTER 2—STANDARDS-RELATED
MEASURES
‘‘SEC. 471. GENERAL.
‘‘(a) NO BAR TO ENGAGING IN STANDARDS ACTIV-
ITY.—Nothing in this chapter shall be construed—
‘‘(1) to prohibit a Federal agency from engag-
ing in activity related to standards-related measures,
including any such measure relating to safety, the
protection of human, animal, or plant life or health,
the environment or consumers; or
‘‘(2) to limit the authority of a Federal agency
to determine the level it considers appropriate of
safety or of protection of human, animal, or plant
life or health, the environment or consumers.
‘‘(b) EXCLUSION.—This chapter does not apply to—
167
‘‘(1) technical specifications prepared by a Fed-
eral agency for production or consumption require-
ments of the agency; or
‘‘(2) sanitary or phytosanitary measures under
chapter 1.
‘‘SEC. 472. INQUIRY POINT.
‘‘The standards information center maintained under
section 414 shall, in addition to the functions specified
therein, make available to the public relevant documents,
at such reasonable fees as the Secretary of Commerce may
prescribe, and information regarding—
‘‘(1) the membership and participation of the
Federal Government, State governments, and rel-
evant nongovernmental bodies in the United States
in international and regional standardizing bodies
and conformity assessment systems, and in bilateral
and multilateral arrangements regarding standards-
related measures, and the provisions of those sys-
tems and arrangements;
‘‘(2) the location of notices of the type required
under article 909 of the NAFTA, or where the infor-
mation contained in such notice can be obtained;
and
‘‘(3) the Federal agency procedures for assess-
ment of risk, and factors the agency considers in
168
conducting the assessment and establishing the lev-
els of protection that the agency considers appro-
priate.
‘‘SEC. 473. CHAPTER DEFINITIONS.
‘‘Notwithstanding section 451, for purposes of this
chapter—
‘‘(1) APPROVAL
PROCEDURE.—The term ‘ap-
proval procedure’ means any registration, notifica-
tion, or other mandatory administrative procedure
for granting permission for a good or service to be
produced, marketed, or used for a stated purpose or
under stated conditions.
‘‘(2) CONFORMITY ASSESSMENT PROCEDURE.—
The term ‘conformity assessment procedure’ means
any procedure used, directly or indirectly, to deter-
mine that a technical regulation or standard is ful-
filled, including sampling, testing, inspection, evalua-
tion, verification, monitoring, auditing, assurance of
conformity, accreditation, registration, or approval
used for such a purpose, but does not mean an ap-
proval procedure.
‘‘(3) OBJECTIVE.—The term ‘objective’ in-
cludes—
‘‘(A) safety,
169
‘‘(B) protection of human, animal, or plant
life or health, the environment or consumers,
including matters relating to quality and iden-
tifiability of goods or services, and
‘‘(C) sustainable development,
but does not include the protection of domestic pro-
duction.
‘‘(4) SERVICE.—The term ‘service’ means a
land transportation service or a telecommunications
service.
‘‘(5) 
STANDARD.—The 
term 
‘standard’
means—
‘‘(A) characteristics for a good or a service,
‘‘(B) characteristics, rules, or guidelines
for—
‘‘(i) processes or production methods
relating to such good, or
‘‘(ii) operating methods relating to
such service, and
‘‘(C) provisions specifying terminology,
symbols, packaging, marking, or labelling for—
‘‘(i) a good or its related process or
production methods, or
‘‘(ii) a service or its related operating
methods,
170
for common and repeated use, including explan-
atory and other related provisions set out in a
document approved by a standardizing body,
with which compliance is not mandatory.
‘‘(6) 
STANDARDS-RELATED
MEASURE.—The
term ‘standards-related measure’ means a standard,
technical regulation, or conformity assessment proce-
dure.
‘‘(7) 
TECHNICAL
REGULATION.—The 
term
‘technical regulation’ means—
‘‘(A) characteristics or their related proc-
esses and production methods for a good,
‘‘(B) characteristics for a service or its re-
lated operating methods, or
‘‘(C) provisions specifying terminology,
symbols, packaging, marking, or labelling for—
‘‘(i) a good or its related process or
production method, or
‘‘(ii) a service or its related operating
method,
set out in a document, including applicable adminis-
trative, explanatory, and other related provisions,
with which compliance is mandatory.
‘‘(8) 
TELECOMMUNICATIONS
SERVICE.—The
term ‘telecommunications service’ means a service
171
provided by means of the transmission and reception
of signals by any electromagnetic means, but does
not mean the cable, broadcast, or other electro-
magnetic distribution of radio or television program-
ming to the public generally.
‘‘CHAPTER 3—SUBTITLE DEFINITIONS
‘‘SEC. 481. DEFINITIONS.
‘‘Notwithstanding section 451, for purposes of this
subtitle—
‘‘(1) NAFTA.—The term ‘NAFTA’ means the
North American Free Trade Agreement.
‘‘(2) STATE.—The term ‘State’ means any of
the several States, the District of Columbia, and the
Commonwealth of Puerto Rico.’’.
(b) TECHNICAL AMENDMENTS.—
(1) DEFINITION
OF
TRADE
REPRESENTA-
TIVE.—Section 451(12) of the Trade Agreements
Act of 1979 is amended to read as follows:
‘‘(12) TRADE
REPRESENTATIVE.—The term
‘Trade Representative’ means the United States
Trade Representative.’’.
(2) CONFORMING AMENDMENTS.—Title IV of
the Trade Agreement Act of 1979 is further amend-
ed—
172
(A) by striking out ‘‘Special Representa-
tive’’ each place it appears and inserting
‘‘Trade Representative’’; and
(B) in the section heading to section 411,
by striking out ‘‘SPECIAL REPRESENTATIVE’’
and inserting ‘‘TRADE REPRESENTATIVE’’.
SEC. 352. TRANSPORTATION.
No regulation issued by the Secretary of Transpor-
tation implementing a recommendation of the Land
Transportation 
Standards 
Subcommittee 
established
under article 913(5)(a)(i) of the Agreement may take ef-
fect before the date 90 days after the date of issuance.
PART 2—AGRICULTURAL STANDARDS
SEC. 361. AGRICULTURAL TECHNICAL AND CONFORMING
AMENDMENTS.
(a) FEDERAL SEED ACT.—Section 302(e)(1) of the
Federal Seed Act (7 U.S.C. 1582(e)(1)) is amended by
inserting ‘‘or Mexico’’ after ‘‘Canada’’.
(b) IMPORTATION OF ANIMALS.—The first sentence
of section 6 of the Act of August 30, 1890 (26 Stat. 416,
chapter 839; 21 U.S.C. 104), is amended by striking ‘‘:
Provided’’ and all that follows through the period at the
end of the sentence and inserting ‘‘, except that the Sec-
retary of Agriculture, in accordance with such regulations
as the Secretary may issue, may (1) permit the importa-
173
tion of cattle, sheep, or other ruminants, and swine, from
Canada or Mexico, and (2) permit the importation from
the British Virgin Islands into the Virgin Islands of the
United States, for slaughter only, of cattle that have been
infested with or exposed to ticks on being freed from the
ticks.’’.
(c) INSPECTION OF ANIMALS.—Section 10 of the Act
of August 30, 1890 (26 Stat. 417, chapter 839; 21 U.S.C.
105), is amended—
(1) by inserting above ‘‘SEC. 10.’’ the following
new section heading:
‘‘SEC. 10. INSPECTION OF ANIMALS.’’;
(2) by striking ‘‘SEC. 10. That the Secretary of
Agriculture shall’’ and inserting ‘‘(a) IN
GEN-
ERAL.—Except as provided in subsection (b), the
Secretary of Agriculture shall’’; and
(3) by adding at the end the following new sub-
section:
‘‘(b) EXCEPTION.—The Secretary of Agriculture, in
accordance with such regulations as the Secretary may
issue, may waive any provision of subsection (a) in the
case of shipments between the United States and Canada
or Mexico.’’.
(d) DISEASE-FREE COUNTRIES OR REGIONS.—
174
(1) TARIFF ACT OF 1930.—Section 306 of the
Tariff Act of 1930 (19 U.S.C. 1306) is amended—
(A) in subsection (a), by striking ‘‘RIN-
DERPEST AND FOOT-AND-MOUTH DISEASE.—If
the Secretary of Agriculture’’ and inserting ‘‘IN
GENERAL.—Except as provided in subsection
(b), if the Secretary of Agriculture’’; and
(B) by striking subsection (b) and insert-
ing the following new subsection:
‘‘(b) EXCEPTION.—The Secretary of Agriculture may
permit, subject to such terms and conditions as the Sec-
retary determines appropriate, the importation of cattle,
sheep, other ruminants, or swine (including embryos of the
animals), or the fresh, chilled, or frozen meat of the ani-
mals, from a region if the Secretary determines that the
region from which the animal or meat originated is, and
is likely to remain, free from rinderpest and foot-and-
mouth disease.’’.
(2) HONEYBEE ACT.—The first section of the
Act of August 31, 1922 (commonly known as the
‘‘Honeybee Act’’) (42 Stat. 833, chapter 301; 7
U.S.C. 281), is amended—
(A) in subsection (a)—
(i) by striking ‘‘, or’’ at the end of
paragraph (1) and inserting a semicolon;
175
(ii) by striking the period at the end
of paragraph (2) and inserting ‘‘; or’’; and
(iii) by adding at the end the follow-
ing new paragraph:
‘‘(3) from Canada or Mexico, subject to such
terms and conditions as the Secretary of Agriculture
determines appropriate, if the Secretary determines
that the region of Canada or Mexico from which the
honeybees originated is, and is likely to remain, free
of diseases or parasites harmful to honeybees, and
undesirable species or subspecies of honeybees.’’; and
(B) in subsection (b)—
(i) by inserting ‘‘(1)’’ after ‘‘imported
into the United States only from’’; and
(ii) by inserting before the period the
following: ‘‘, or (2) Canada or Mexico, if
the Secretary of Agriculture determines
that the region of Canada or Mexico from
which the imports originate is, and is likely
to remain, free of undesirable species or
subspecies of honeybees’’.
(e) POULTRY PRODUCTS INSPECTION ACT.—Section
17(d) of the Poultry Products Inspection Act (21 U.S.C.
466(d)) is amended—
176
(1) in paragraph (1), by inserting after ‘‘Not-
withstanding any other provision of law,’’ the follow-
ing: ‘‘except as provided in paragraph (2),’’;
(2) by redesignating paragraphs (2) and (3) as
paragraphs (3) and (4), respectively; and
(3) by inserting after paragraph (1) the follow-
ing new paragraph:
‘‘(2)(A) Notwithstanding any other provision of law,
all poultry, or parts or products of poultry, capable of use
as human food offered for importation into the United
States from Canada and Mexico shall—
‘‘(i) comply with paragraph (1); or
‘‘(ii)(I) be subject to inspection, sanitary, qual-
ity, species verification, and residue standards that
are equivalent to United States standards; and
‘‘(II) have been processed in facilities and
under conditions that meet standards that are equiv-
alent to United States standards.
‘‘(B) The Secretary may treat as equivalent to a
United States standard a standard of Canada or Mexico
described in subparagraph (A)(ii) if the exporting country
provides the Secretary with scientific evidence or other in-
formation, in accordance with risk assessment methodolo-
gies agreed to by the Secretary and the exporting country,
to demonstrate that the standard of the exporting country
177
achieves the level of protection that the Secretary consid-
ers appropriate.
‘‘(C) The Secretary may—
‘‘(i) determine, on a scientific basis, that the
standard of the exporting country does not achieve
the level of protection that the Secretary considers
appropriate; and
‘‘(ii) provide the basis for the determination in
writing to the exporting country on request.’’.
(f) FEDERAL
MEAT
INSPECTION
ACT.—Section
20(e) of the Federal Meat Inspection Act (21 U.S.C.
620(e)) is amended—
(1) by striking ‘‘not be limited to—’’ and in-
serting ‘‘not be limited to the following:’’;
(2) by striking paragraph (1);
(3) by redesignating paragraphs (2) through
(6) as paragraphs (3) through (7), respectively;
(4) by inserting after ‘‘not be limited to the fol-
lowing:’’ (as amended by paragraph (1)) the follow-
ing new paragraphs:
‘‘(1)(A) Subject to subparagraphs (B) and (C),
a certification by the Secretary that foreign plants
in Canada and Mexico that export carcasses or meat
or meat products referred to in subsection (a) have
complied with paragraph (2) or with requirements
178
that are equivalent to United States requirements
with regard to all inspection and building construc-
tion standards, and all other provisions of this Act
and regulations issued under this Act.
‘‘(B) Subject to subparagraph (C), the Sec-
retary may treat as equivalent to a United States re-
quirement a requirement described in subparagraph
(A) if the exporting country provides the Secretary
with scientific evidence or other information, in ac-
cordance with risk assessment methodologies agreed
to by the Secretary and the exporting country, to
demonstrate that the requirement or standard of the
exporting country achieves the level of protection
that the Secretary considers appropriate.
‘‘(C) The Secretary may—
‘‘(i) determine, on a scientific basis, that a
requirement of an exporting country does not
achieve the level of protection that the Sec-
retary considers appropriate; and
‘‘(ii) provide the basis for the determina-
tion to the exporting country in writing on re-
quest.
‘‘(2) A certification by the Secretary that, ex-
cept as provided in paragraph (1), foreign plants
that export carcasses or meat or meat products re-
179
ferred to in subsection (a) have complied with re-
quirements that are at least equal to all inspection
and building construction standards and all other
provisions of this Act and regulations issued under
this Act.’’;
(5) in paragraphs (3) through (7) (as redesig-
nated by paragraph (3)), by striking ‘‘the’’ the first
place it appears in each paragraph and inserting
‘‘The’’;
(6) in paragraphs (3) through (5) (as so redes-
ignated), by striking the semicolon at the end of
each paragraph and inserting a period; and
(7) in paragraph (6) (as so redesignated), by
striking ‘‘; and’’ at the end and inserting a period.
(g) PEANUT BUTTER AND PEANUT PASTE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), all peanut butter and peanut paste in the
United States domestic market shall be processed
from peanuts that meet the quality standards estab-
lished for peanuts under Marketing Agreement No.
146.
(2) IMPORTS.—Peanut butter and peanut paste
imported into the United States shall comply with
paragraph (1) or with sanitary measures that
achieve at least the same level of sanitary protection.
180
(h) ANIMAL HEALTH BIOCONTAINMENT FACILITY.—
(1) GRANT
FOR
CONSTRUCTION.—The Sec-
retary of Agriculture shall make a grant to a land
grant college or university described in paragraph
(2) for the construction of a facility at the college
or university for the conduct of research in animal
health, disease-transmitting insects, and toxic chemi-
cals that requires the use of biocontainment facilities
and equipment. The facility to be constructed with
the grant shall be known as the ‘‘Southwest Re-
gional Animal Health Biocontainment Facility’’.
(2) GRANT RECIPIENT DESCRIBED.—To be eli-
gible for the grant under paragraph (1), a land
grant college or university must be—
(A) located in a State adjacent to the
international border with Mexico; and
(B) determined by the Secretary of Agri-
culture to have an established program in ani-
mal health research and education and to have
a collaborative relationship with one or more
colleges of veterinary medicine or universities
located in Mexico.
(3) ACTIVITIES OF THE FACILITY.—The facility
constructed using the grant made under paragraph
181
(1) shall be used for conducting the following activi-
ties:
(A) The biocontainment facility shall offer
the ability to organize multidisciplinary inter-
national teams working on basic and applied re-
search on diagnostic method development and
disease control strategies, including develop-
ment of vaccines.
(B) The biocontainment facility shall sup-
port research that will improve the scientific
basis for regulatory activities, decreasing the
need for new regulatory programs and enhanc-
ing international trade.
(C) The biocontainment facility shall allow
academic institutions, governmental agencies,
and the private sector to conduct research in
basic and applied research biology, epidemiol-
ogy, pathogenesis, host response, and diagnostic
methods, on disease agents that threaten the
livestock industries of the United States and
Mexico.
(D) The biocontainment facility may be
used to support research involving food safety,
toxicology, 
environmental 
pollutants,
radioisotopes, recombinant microorganisms, and
182
selected naturally resistant or transgenic ani-
mals.
(4) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated for each fis-
cal year such sums as are necessary to carry out this
subsection.
(i) REPORTS ON INSPECTION OF IMPORTED MEAT,
POULTRY, OTHER FOODS, ANIMALS, AND PLANTS.—
(1) DEFINITIONS.—As used in this subsection:
(A) IMPORTS.—The term ‘‘imports’’ means
any meat, poultry, other food, animal, or plant
that is imported into the United States in com-
mercially significant quantities.
(B) SECRETARY.—The term ‘‘Secretary’’
means the Secretary of Agriculture.
(2) IN
GENERAL.—In consultation with rep-
resentatives of other appropriate agencies, the Sec-
retary shall prepare an annual report on the impact
of the Agreement on the inspection of imports.
(3) CONTENTS OF REPORTS.—The report re-
quired under this subsection shall, to the maximum
extent practicable, include a description of—
(A) the quantity or, with respect to the
Customs Service, the number of shipments, of
imports from a NAFTA country that are in-
183
spected at the borders of the United States with
Canada and Mexico during the prior year;
(B) any change in the level or types of in-
spections of imports in each NAFTA country
during the prior year;
(C) in any case in which the Secretary has
determined that the inspection system of an-
other NAFTA country is equivalent to the in-
spection system of the United States, the rea-
sons supporting the determination of the Sec-
retary;
(D) the incidence of violations of inspec-
tion requirements by imports from NAFTA
countries during the prior year—
(i) at the borders of the United States
with Mexico or Canada; or
(ii) at the last point of inspection in
a NAFTA country prior to shipment to the
United States if the agency accepts inspec-
tion in that country;
(E) the incidence of violations of inspection
requirements of imports to the United States
from Mexico or Canada prior to the implemen-
tation of the Agreement;
184
(F) any additional cost associated with
maintaining an adequate inspection system of
imports as a result of the implementation of the
Agreement;
(G) any incidence of transshipment of im-
ports—
(i) that originate in a country other
than a NAFTA country;
(ii) that are shipped to the United
States through a NAFTA country during
the prior year; and
(iii) that are incorrectly represented
by the importer to qualify for preferential
treatment under the Agreement;
(H) the quantity and results of any mon-
itoring by the United States of equivalent in-
spection systems of imports in other NAFTA
countries during the prior year;
(I) the use by other NAFTA countries of
sanitary and phytosanitary measures (as de-
fined in the Agreement) to limit exports of
United States meat, poultry, other foods, ani-
mals, and plants to the countries during the
prior year; and
185
(J) any other information the Secretary
determines to be appropriate.
(4) FREQUENCY OF REPORTS.—The Secretary
shall submit—
(A) the initial report required under this
subsection not later than January 31, 1995;
and
(B) an annual report required under this
subsection not later than 1 year after the date
of the submission of the initial report and the
end of each 1-year period thereafter through
calendar year 2004.
(5) REPORT
TO
CONGRESS.—The Secretary
shall prepare and submit the report required under
this subsection to the Committee on Agriculture of
the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry of the Senate.
Subtitle F—Corporate Average
Fuel Economy
SEC. 371. CORPORATE AVERAGE FUEL ECONOMY.
(a) IN GENERAL.—Section 503(b)(2) of the Motor
Vehicle Information and Cost Savings Act (15 U.S.C.
2003(b)(2)) is amended by adding at the end the following
new subparagraph:
186
‘‘(G)(i) In accordance with the schedule set out
in clause (ii), an automobile shall be considered do-
mestically manufactured in a model year if at least
75 percent of the cost to the manufacturer of the
automobile is attributable to value added in the
United States, Canada, or Mexico, unless the assem-
bly of the automobile is completed in Canada or
Mexico and the automobile is not imported into the
United States prior to the expiration of 30 days fol-
lowing the end of that model year.
‘‘(ii) Clause (i) shall apply to all automobiles
manufactured by a manufacturer and sold in the
United States, wherever assembled, in accordance
with the following schedule:
‘‘(I) With respect to a manufacturer that
initiated the assembly of automobiles in Mexico
before model year 1992, the manufacturer may
elect, at any time between January 1, 1997,
and January 1, 2004, to have clause (i) apply
to all automobiles it manufactures, beginning
with the model year commencing after the date
of such election.
‘‘(II) With respect to a manufacturer initi-
ating the assembly of automobiles in Mexico
after model year 1991, clause (i) shall apply to
187
all automobiles it manufactures, beginning with
the model year commencing after January 1,
1994, or the model year commencing after the
date that the manufacturer initiates the assem-
bly of automobiles in Mexico, whichever is later.
‘‘(III) With respect to a manufacturer not
described by subclause (I) or (II) assembling
automobiles in the United States or Canada but
not in Mexico, the manufacturer may elect, at
any time between January 1, 1997, and Janu-
ary 1, 2004, to have clause (i) apply to all auto-
mobiles it manufactures, beginning with the
model year commencing after the date of such
election, except that if such manufacturer initi-
ates the assembly of automobiles in Mexico be-
fore making such election, this subclause shall
not apply and the manufacturer shall be subject
to clause (II).
‘‘(IV) With respect to a manufacturer not
assembling automobiles in the United States,
Canada, or Mexico, clause (i) shall apply to all
automobiles it manufactures, beginning with the
model year commencing after January 1, 1994.
‘‘(V) With respect to a manufacturer au-
thorized to make an election under subclause
188
(I) or (III) which has not made that election
within the specified period, clause (i) shall
apply to all automobiles it manufactures, begin-
ning with the model year commencing after
January 1, 2004.
‘‘(iii) The Secretary shall prescribe reasonable
procedures for elections under this subparagraph,
and the EPA Administrator may prescribe rules for
purposes of carrying out this subparagraph.’’.
(b) CONFORMING AMENDMENTS.—The first sentence
of section 503(b)(2)(E) of the Motor Vehicle Information
and Cost Savings Act (15 U.S.C. 2003(b)(2)(E)) is
amended—
(1) by striking ‘‘An’’ and inserting ‘‘Except as
provided in subparagraph (G), an’’, and
(2) in the last sentence, by striking ‘‘this sub-
paragraph’’ and inserting ‘‘this subparagraph and
subparagraph (G)’’.
Subtitle G—Government
Procurement
SEC. 381. GOVERNMENT PROCUREMENT.
(a) IN GENERAL.—Section 301 of the Trade Agree-
ments Act of 1979 (19 U.S.C. 2511) is amended—
189
(1) in subsection (a) by striking ‘‘The Presi-
dent’’ and inserting ‘‘Subject to subsection (f) of
this section, the President’’;
(2) by inserting ‘‘or the North American Free
Trade Agreement’’ after ‘‘the Agreement’’ in para-
graph (1) of subsection (b); and
(3) by adding at the end the following new sub-
sections:
‘‘(e) PROCUREMENT PROCEDURES BY CERTAIN FED-
ERAL AGENCIES.—Notwithstanding any other provision of
law, the President may direct any agency of the United
States listed in Annex 1001.1a–2 of the North American
Free Trade Agreement to procure eligible products in
compliance with the procedural provisions of chapter 10
of such Agreement.
‘‘(f) SMALL
BUSINESS
AND
MINORITY
PREF-
ERENCES.—The authority of the President under sub-
section (a) of this section to waive any law, regulation,
procedure, or practice regarding Government procurement
does not authorize the waiver of any small business or mi-
nority preference.’’.
(b) 
RECIPROCAL
COMPETITIVE
PROCUREMENT
PRACTICES.—Section 302(a) of such Act (19 U.S.C.
2512(a)) is amended by striking ‘‘would otherwise be eligi-
ble products’’ in paragraph (1) and inserting ‘‘are prod-