(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