Chapter XII: Section II: Mexico and Canada

1. This Section shall apply only between Canada and Mexico.

2. Each Party shall comply with Appendices A and B.

Appendix A

Tariffs, Quantitative Restrictions and GATT Market Access

1. Subject to the provisions of this Section, the Parties recognize that, upon the date of entry into force of this Agreement, each Party, in accordance with the rights and obligations set forth in Chapter 3, will not adopt or maintain measures regarding quantitative restrictions on the importation of agricultural goods originating in each other's territory, but may apply tariff quotas as set forth in its Schedule set out in Annex 302.2. The Parties further recognize that the over-quota tariff rate applied by a Party in connection with such tariff quotas will be progressively eliminated in the manner set forth in its Schedule set out in Annex 302.2.

2. Except as provided in paragraph 3, to the extent a tariff applied by a Party in accordance with a tariff quota as set forth in its Schedule set out in Annex 302.2 at any time exceeds the applicable bound rate of duty for that agricultural good as set forth in its GATT Schedule of Tariff Concessions as of June 12, 1991, the other Party hereby waives its rights with respect to the applicable bound rate of duty under GATT Article II, notwithstanding the provisions of Article 103.

3. If the GATT Uruguay Round Agreement on Agriculture enters into force with respect to a Party, pursuant to which that Party has agreed to convert its quantitative restrictions into tariff quotas, that Party shall ensure that the over-quota tariff rates it applies to agricultural goods of the other Party are not greater than the lower of (a) the applicable over-quota tariff rates set out in its Schedule set out in Annex 302.2 or (b) the applicable over-quota tariff rates set out in its GATT Schedule of Tariff Concessions.

4. Market access afforded by a Party in accordance with its Schedule set out in Annex 302.2 and applied to imports of agricultural goods of another Party shall count, as between the Parties, toward the satisfaction of market access commitments which have been agreed upon under its GATT Schedule of Tariff Concessions or which may be undertaken by the importing Party as a result of any GATT agreement entering into force as to that Party during the applicable transition period under this Agreement.

5. In respect of the dairy, poultry and egg goods designated in Schedule 704.2(II)(A)(5), either Party may adopt or maintain quantitative restrictions or tariffs consistent with its rights and obligations under the GATT, with respect to such goods originating in the territory of the other Party.

6. Without prejudice to the provisions of Chapter 8 of this Agreement and paragraph 5, neither Party shall introduce, maintain or seek any quantitative restriction or any other measure having equivalent effect on any agricultural goods covered under this Subchapter originating in the territory of the other Party.

7. Subject to this Section, Canada and Mexico incorporate their respective rights and obligations with respect to agricultural goods under the General Agreement on Tariffs and Trade (GATT) and agreements negotiated under the GATT, including the rights and obligations under GATT Article XI.

8. Notwithstanding paragraph 7 and Annex 301.3(A)(1)(j), the rights and obligations contained in Article XI:2(c)(i) of the GATT shall apply only to dairy, poultry and egg goods of Canada and Mexico designated in Schedule 704.2(II)(A)(5).

9. A good provided for in item 1806.10.a1 or 2106.90.a1 that is:

(a) imported into the territory of Canada from the
territory of Mexico; or

(b) imported into the territory of Mexico from the
territory of Canada,

shall be eligible for the rate of duty provided in Annex 302.2 only if all materials provided in subheading 1701.99 used in the production of such good are originating materials.

Schedule 704.2(II)(A)(5)

Dairy, Poultry and Egg Goods

For Canada: a dairy, poultry or egg good under one of the following subheadings:

Note: "X" indicates that a new tariff subheading
will be established for this item

0105.11.90X Broiler chicks for domestic
production, <185G

0105.91.00 Poultry, >185g

0105.99.00 Ducks, geese, turkeys, etc, >185g

0207.10.00 Poultry not cut in pieces, fresh or chilled

0207.21.00 Poultry, not in pieces, frozen

0207.22.00 Turkey, not in pieces, frozen

0207.39.00 Poultry cuts & offal, fresh

0207.41.00 Poultry cuts & offal, frozen

0207.42.00 Turkey cuts & offal, frozen

0209.00.20 Poultry fat

0210.90.10 Poultry meat, salted, dried, etc.

0401.10.00 Milk & cream, fat <1%

0401.20.00 Milk & cream, fat > 1% < 6%

0401.30.00 Milk & cream, fat > 6%

0402.10.00 Skim milk powder

0402.21.10 Whole milk powder

0402.21.20 Whole cream powder

0402.29.10 Milk powder fat > 1.5%

0402.29.20 Cream powder fat < 1.5%

0402.91.00 Milk & cream, conc., n.s.

0402.99.00 Milk & cream, not solid, added sweetener

0403.10.00 Yogurt

0403.90.10 Powdered buttermilk

0403.90.90 Curdled milk & cream, etc.

0404.10.10 Whey powder

0404.10.90 Whey, not powdered

0404.90.00 Other

0405.00.10 Butter

0405.00.90 Fats & oils derived from milk

0406.10.00 Fresh cheese

0406.20.10 Cheddar cheese

0406.20.90 Cheeses, not cheddar

0406.30.00 Processed cheese

0406.40.00 Blue-veined cheese

0406.90.10 Cheddar cheese, not processed

0406.90.90 Cheese, not cheddar, not processed

0407.00.00 Bird's eggs, in shell

0408.11.00 Dried egg yolks

0408.19.00 Egg yolks, not dried

0408.91.00 Bird's eggs, not in shell, dried

0408.99.00 Bird's eggs, not in shell, not dried

1601.00.10X Sausages or similar products of poultry meat, poultry
meat offal or blood, in air tight containers

1602.31.10 Prep. meals, of meat or meat offal of turkeys

1602.31.91 Prep. or preserved meat, meat offal or blood, of turkeys,
other than sausages or prep. meals, in air-tight
containers

1602.31.99 Prep. or preserved meat, meat offal or blood, of turkeys,
other than sausages or prep. meals, other than in
air-tight containers

1602.39.10 Prep. meals containing meat or meat offal of fowls of the
species (Gallus domesticus) ducks, geese or guinea fowls,
incl. mixtures

1602.39.91 Prep. or preserved meat, meat offal or blood, of fowls of
the species (Gallus domesticus), ducks, geese or
guinea fowls, other than sausages, liver or prep.
meals, in air-tight containers

1602.39.99 Prep. or preserved meat, meat offal or blood, of ducks,
geese, etc., other than sausages, liver or prep.
meals, in other than air-tight containers

2105.00.00 Ice cream & other edible ice, containing cocoa or not

2106.90.70 Food preps. not elsewhere specified or incl. Egg preps.

2106.90.90X Ice cream or ice milk mixes

2309.90.91X Complete feeds & feed supplements, incl. concentrates,
containing more than 50% by weight of dairy products

3501.10.00 Casein

3501.90.00 Caseinates & other casein derivatives; casein glues

3502.10.10 Egg albumin, dried, evaporated, desiccated or powdered

3502.10.90 Egg albumin, nes

For Mexico: a dairy, poultry or egg good under one of the following
subheadings:

Note: "X" indicates that a new tariff subheading item will be
established for this item

MEXICO HTS NUMBER DESCRIPTION

0105.11.01 Day old chickens without being fed during its
transportation

0105.91.01 Game cocks

0105.91.99 Other

0105.99.99 Other poultry

0207.10.01 Poultry, not cut into pieces,
fresh or chilled

0207.21.01 Chickens

0207.22.01 Turkey

0207.39.01 Chicken offals except liver

0207.39.99 Other, poultry cut and offals

0207.41.0X Chicken cuts, frozen

0207.41.0Y Chicken offals, frozen

0207.41.0Z Chicken meat mechanically
deboned, frozen

0207.41.ZZ Chicken meat mechanically
deboned, fresh or chilled

0207.42.0X Turkey cuts, frozen

0207.42.0Y Turkey offals

0207.42.0Z Turkey meat, mechanically
deboned, frozen

0207.42.ZY Turkey meat, mechanically
deboned, fresh or chilled

0207.50.01 Poultry livers, frozen

0209.00.0Z Chicken or turkey bacon and
lean parts

0210.90.99 Other

0401.10.01 In hermetic containers milk
not concentrated

0401.10.99 Other

0401.20.01 In hermetic containers;

0401.20.99 Other

0401.30.01 In hermetic containers;

0401.30.99 Other

0402.10.01 Milk powder

0402.10.99 Other

0402.21.01 Milk powder

0402.21.99 Other

0402.29.99 Other

0402.91.01 Evaporated milk

0402.91.99 Other

0402.99.01 Condensed milk

0402.99.99 Other

0403.10.01 Yogurt

0403.90.01 Powdered milk whey with a
protein content less than or
equal to 12 percent

0403.90.99 Other butter whey

0404.10.01 Whey, concentrated, sweetened

0404.90.99 Other

0405.00.01 Butter, including the
immediate container, with a
weight less than or equal to 1kg

0405.00.02 Butter, including the
immediate container, with a
weight over 1 kg

0405.00.03 Butiric fat, dehydrated

0405.00.99 Other

0406.10.01 Fresh cheese, including whey
cheese

0406.20.01 Cheese, grated or powdered

0406.30.01 Melted cheese, not grated or
powdered

0406.30.99 Other, melted cheese

0406.40.01 Blue veined cheese

0406.90.01 Hard paste cheese called sardo

0406.90.02 Hard paste reggi cheese

0406.90.03 Soft paste cologne cheese

0406.90.04 Hard or semi-hard cheeses with
a fat content by weight less
than or equal to 40 percent,
and with a water content by
weight in non-fat matter less
than or equal to 47 percent
(called "grana", "parmigiana"
or "reggiano,") or with a non-
fat matter content by weight
over 47 percent without
exceeding 72 percent (called
"danloo, edam, fontan,
fontina, fynbo, gouda, Avarti,
maribo, samsoe, esron,
italico, kernhem, saint-
nactarie, saint paulin, or
talegil)

0406.90.05 Petit suisse cheese

0406.90.06 Egmont cheese

0406.90.99 Other hard and semihard cheese

0407.00.01 Fresh birds eggs, fertile

0407.00.02 Frozen eggs

0407.00.99 Other poultry eggs

0408.11.01 Dried yolks

0408.19.99 Other

0408.91.01 Frozen or powdered

0408.91.99 Other

0408.99.01 Frozen or powdered

0408.99.99 Other

1601.00.9X Chicken and turkey sausages

1602.20.0X Homogenized preparations of
chickens or turkey livers

1602.31.01 Prepared or preserved turkey
meat

2105.00.01 Ice cream and similar products

2106.90.9X Egg preparations

2309.90.9X Preparations containing over
50 percent of milk products

3501.10.01 Casein

3501.90.01 Casein glues

3501.90.02 Caseinates

3501.90.99 Other

3502.10.01 Egg albumin

Appendix B

Trade in Sugar

1. Mexico's customs duty for imports of sugar and syrup goods originating in the territory of Canada shall be equal to its Most-Favored-Nation over-quota customs duty.

2. Canada may apply a customs duty on sugar and syrup goods originating in the territory of Mexico equal to the customs duty applied by Mexico on such goods originating in the territory of Canada.

ANNEX 704.3

Agricultural Grading and Marketing Standards

Each Party shall comply with Sections I and II.