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