(o) those authorized by specific regulations, international agreements or by the customs authority.
2. Except as otherwise provided in this Agreement, no Party may subject the temporary importation free of customs duty of a good referred to in paragraph 1 to conditions other than those set out below:
(a) imported by a national or resident of the other Party;
(b) that is used exclusively by the visitor, or under his or her personal supervision, in the performance of his or her activity, trade or profession;
(c) that are not subject to sale, lease or transfer in any other form while they remain in its territory under the temporary import regime;
(d) for goods falling under subparagraphs (I) and (m) of paragraph 1 and for samples and samples for non-commercial purposes, the customs authority shall require the presentation of a guarantee, which may be of a global nature, to cover the total amount of any applicable taxes as established in the national legislation of each of the Parties. For the categories indicated in subparagraphs (a), (d), (e), (f), (g) and (i) of paragraph 1, the customs authority shall not require any guarantee. In the other categories not indicated in this subparagraph, the customs authority shall determine the cases in which it is necessary to present a guarantee, which may be of a global nature, when so required by the nature of the operation;
(e) which is capable of identification by any reasonable means established by the customs legislation of each Party;
(f) to be re-exported upon the departure of that person or within the period corresponding to the purpose of the temporary importation;
(g) that it is imported in quantities not greater than is reasonable, in accordance with its intended use and in conformity with the customs legislation of each Party;
(h) that it does not undergo any transformation or modification during the authorized import period, except for wear and tear due to normal use of the merchandise; or
(i) that it complies with the sanitary and phytosanitary measures and with the applicable standards, technical regulations and conformity assessment procedures, in accordance with the provisions of Chapters VIIl (Sanitary and Phytosanitary Measures) and IX (Technical Barriers to Trade), respectively.
3. Where a good is temporarily imported and does not comply with any of the conditions that a Party imposes pursuant to paragraph 2, that Party may apply the customs duties and any other charges that would be due on the entry or final importation of the good.
Article 3.7. Duty-Free Importation for Samples of No Commercial Value
Each Party shall authorize the importation free of customs duty of samples of no commercial value from the territory of the other Party.
Article 3.8. Customs Valuation
1. The principles of customs valuation applied to trade between the Parties shall be those established in the Customs Valuation Agreement.
2. The Parties may at any time hold consultations with a view to finding mutually satisfactory solutions to issues relating to the valuation of goods, so as not to hinder trade.
Article 3.9. Import and Export Restrictions
1. Except as otherwise provided in this Agreement, neither Party may adopt or maintain any prohibition or restriction on the importation of any good of the other Party, or on the exportation or sale for export of any good destined for the territory of the other Party, except as provided in Article XI of the GATT 1994, including its interpretative notes. For this purpose, Article XI of the GATT 1994 and its interpretative notes are incorporated into and made an integral part of this Agreement.
2. The Parties understand that the rights and obligations of the GATT 1994 embodied in paragraph 1 prohibit export price requirements and, except as permitted for the application of countervailing duty orders and undertakings, import price requirements.
3. The Parties understand that the rights and obligations embodied in paragraph 1 prohibit, inter alia, but not limited to:
(a) quantitative restrictions on imports, in accordance with the parameters of paragraph 1;
(b) prices or minimum values;
(c) voluntary export restraints when they do not result from an agreement consistent with the Antidumping Agreement;
(d) the granting of import licenses on the condition that the importer purchases domestic production;
(e) the granting of import licenses on the condition that the importer exports; and
(f) the granting of import licenses on the condition that the merchandise to be imported includes a certain percentage of content from the importing Party.
4. In cases where a Party adopts or maintains a prohibition or restriction on the importation or exportation of goods from or to a non-Party, nothing in this Agreement shall be construed to prevent that Party to:
(a) limit or prohibit the importation of the goods of the non-Party State from the territory of the other Party; or
(b) require as a condition for the exportation of such goods from the Party to the territory of the other Party, that they are not re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.
5. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good of a non-Party, at the request of either Party, the Parties shall consult with a view to avoiding undue interference with or distortion of pricing, marketing and distribution mechanisms in the other Party.
6. Paragraphs 1 to 4 do not apply to the measures set forth in Annex 3.3 and 3.9.
Article 3.10. Registration of Importers
1. If, as a result of the application and administration of an importersâ registry, a Party considers that the access of a good of that Party to the territory of the Party applying the measure is hindered or prevented, both Parties shall, in accordance with the provisions of the Committee on Trade in Goods, consult with a view to reaching a mutually satisfactory solution.
2. The Party that establishes in its national legislation new provisions or requirements for the registration of importers shall notify the contact point of the Committee on Trade in Goods of the other Parties, as indicated in Article 3.24.1, in order to avoid unnecessary obstacles to trade.
Article 3.11. Customs Measures
Each Party shall ensure that the application, administration and publication of customs measures is in accordance with the provisions of this Agreement, its national legislation and the WTO Agreement. Article 3.12: Establishment of Specific Customs Offices 1. When a Party contemplates the establishment of limitations on the customs clearance of certain types of goods to specific customs offices, it shall consult with the other Parties to prevent such limitations from affecting its interests under this Agreement.
2. The Party that establishes such limitations shall allow the entry of the goods into its territory through any of the legally established border posts, in order for the goods to reach the specific customs office for the respective clearance, provided that they comply with the corresponding customs formalities.
Article 3.13. Customs Processing Fees
No Party shall impose or collect any customs processing fee on originating goods for the service rendered by customs.
Article 3.14. Export Taxes
1. Except as provided in this Article and Annex 3.14, neither Party shall levy any tax, duty, levy or charge on the export of any good destined for consumption in the territory of the other Party, unless such taxes, duties, levies or charges are adopted or maintained on such good when destined for domestic consumption.
2. For purposes of this paragraph, "temporarily" means up to one year, or such longer period as the Parties may agree. Notwithstanding paragraph 1, each Party may adopt or maintain a tax, duty, levy or charge on exports into the territory of the other Party if such tax, duty, levy or charge is applied temporarily for:
(a) to alleviate a critical shortage of a food commodity; or
(b) to ensure to a domestic processing industry the supply of indispensable quantities of raw materials during periods when the domestic price is maintained at a level lower than the world price in implementation of a government stabilization plan, provided that such taxes, duties, levies or charges:
(i) The company's activities do not have the effect of increasing the exports of this domestic industry;
(ii) do not have the effect of increasing the protection afforded to that domestic industry;
(iii) not run counter to the non-discrimination provisions of this Treaty; and
(iv) be sustained only for the period necessary to maintain the integrity of the stabilization plan.
3. The Parties may consult on the implementation of the provisions of this Convention.
The provisions of this Article, tending to the application of measures that seek to avoid undesired effects in the implementation of a domestic food aid program.
Article 3.15. Country of Origin Marking
Annex 3.15 applies to measures related to country of origin marking. Article 3.16: Preferential Tariff Treatment for Goods Classified in Chapter 62 of the Harmonized System that Incorporate Materials of the United States of America
Preferential tariff treatment shall be granted to goods classified in Chapter 62 of the Harmonized System, in accordance with the provisions of Annex 3.16.
Article 3.17. Consular Transactions or Requirements
Neither Party shall require consular transactions or requirements, including related fees and charges, in connection with the importation of any good of the other Party.
Section B. Trade In Agricultural Commodities
Article 3.18. Scope of Application
1. This Section applies to measures related to trade in agricultural goods adopted or maintained by the Parties.
2. In the event of any inconsistency between the provisions of this Section and any other provision of this Agreement, the provisions of this Section shall prevail to the extent of the inconsistency.
Article 3.19. Domestic Support
1. The Parties recognize that domestic support measures can be important for their agricultural sectors, but that they can also distort trade and affect production. In this regard, the Parties may apply domestic support measures in accordance with the provisions of the Agreement on Agriculture, and where a Party decides to support its agricultural producers it shall endeavor to move towards domestic support measures that:
(a) have little or no trade or production distorting effects; and
(b) are in full conformity with the provisions of Annex 2 of the Agreement on Agriculture.
2. To ensure transparency, the Committee on Trade in Goods shall review, at least once a year, the status of all domestic support measures in the Parties, as well as any modifications to these measures, seeking to assess compliance with the provisions of paragraph 1.
3. Annex 3.19 sets forth the bilateral provisions for the application of this Article.
Article 3.20. Domestic Food Aid
1. A Party that establishes a domestic food aid program, in accordance with paragraph 4 of Annex 2 of the Agreement on Agriculture, shall ensure, through such instruments as it deems necessary, that the benefits of this program are received only by consumers of that Party.
2. At the request of a Party, consultations shall be held to ensure compliance with paragraph 1.
3. If no agreement is reached, the Parties shall refer to Annex 3.19.
Article 3.21. Export Subsidies
1. The Parties share the objective of achieving the multilateral elimination of export subsidies on agricultural goods and in this regard will cooperate in the effort to reach an agreement within the framework of the WTO.
2. From the entry into force of this Agreement, neither Party may apply export subsidies on agricultural goods in its reciprocal trade.
Article 3.22. Agricultural Special Safeguard
Annex 3.22 sets forth the bilateral provisions for the application of this Article.
Section C. General Provisions
Article 3.23. Publication and Notification
1. Each Party undertakes to publish the measures affecting the importation or exportation of goods and the requirements that importers or exporters shall comply with for trade in goods. Such measures shall be notified without delay to the other Parties, once they enter into force.
2. No Party shall apply prior to its official publication any measure of a general nature adopted by that Party that has the effect of increasing a customs duty or other charge on the importation of goods of the other Party, or imposing a new or more burdensome measure, restriction or prohibition on imports, or establishing or increasing non-tariff restrictions and prohibitions on imports of goods of the other Party or on transfers of economic resources relating thereto.
3. Each Party shall identify in terms of the tariff items and nomenclature corresponding to them in accordance with their respective tariff, the measures, restrictions or prohibitions on the import or export of goods for reasons of national security, public health, preservation of flora or fauna, environment, sanitary and phytosanitary, standards, labels, technical regulations, international commitments, public order requirements or any other regulation.
Article 3.24. Committee on Trade In Goods
1. The Parties hereby establish the Committee on Trade in Goods. The Committee shall be composed of representatives of each Party, in accordance with Annex 3.24(a), and shall assist the Administrative Commission in the performance of its functions.
2. The Committee shall establish, if it deems it appropriate, its rules of procedure.
3. The meetings of the Committee shall be held at the request of the Administrative Commission, the Free Trade Agreement Coordinators or at the request of any of the Parties to deal with matters of interest to them.
4. The Committee's resolutions shall be adopted by consensus and reported to the appropriate bodies.
5. The meetings of the Committee may be held in person or through any technological means. When the meetings are face-to-face, they shall be held alternately in the territory of each Party, and it shall be the responsibility of the host Party to organize the meeting.
6. Notwithstanding the provisions of paragraph 1, the Committee may meet to discuss bilateral matters of interest to Mexico and one or more Central American Parties, provided that the other Parties are notified sufficiently in advance so that, if appropriate, they may participate in the meeting. Agreements arising from the meeting shall be adopted by consensus among the Parties involved in the bilateral matter and shall have effect only with respect to them.
7. The functions of the Committee shall include:
(a) monitoring the implementation and administration of this Chapter;
(b) examine the proposals submitted by the Parties in accordance with Article 3.4.5;
(c) to make appropriate recommendations to the Administrative Commission on matters within its competence;
(d) coordinate the exchange of commercial information between the Parties;
(e) to evaluate the evolution of trade in goods between the Parties;
(f) to recommend to the Administrative Commission the formation of such subcommittees as it deems necessary to address specific merchandise trade issues; and
(g) anyother matter instructed by the Administrative Commission.
8. The Parties establish the Subcommittee on Agricultural Trade, composed as indicated in Annex 3.24(b). This subcommittee shall have the functions assigned to it by the Committee on Trade in Goods.
Chapter IV. Rules of Origin
Article 4.1. Definitions
For the purposes of this Chapter, the following definitions shall apply:
shipping containers and packaging materials: goods that are used to protect merchandise during transportation, other than retail containers and materials;
shipping and repacking costs: costs incurred in repacking and transporting a good outside the territory where the producer or exporter of the good is located;
sales promotion, marketing and after-sales service costs: the following costs related to sales promotion, marketing and after-sales services:
(a) sales and marketing promotion; media advertising; advertising and market research; promotional and demonstration materials; merchandise on display; sales promotion conferences; trade shows and conventions; banners; marketing exhibitions; free samples; sales, marketing and after-sales service publications such as merchandise brochures, catalogs, technical publications, price lists, service manuals and sales support information; establishment and protection of logos and trademarks; sponsorships; restocking fees for wholesale and retail sales; and entertainment expenses;
(b) marketing, sales or merchandise incentives; and rebates to wholesalers, retailers and consumers;
(c) for sales promotion, marketing and after-sales service personnel: salaries and wages; sales commissions; bonuses; medical, insurance and pension benefits; travel, lodging and living expenses; and membership and professional fees;
(d) hiring and training of sales promotion, marketing and after-sales service personnel; and training of the customer's employees after the sale;
(e) insurance premiums for civil liability derived from the merchandise;
(f) office goods for sales promotion, marketing and after-sales services;
(g) telephone, mail and other means of communication for sales promotion, marketing and after-sales services;
(h) rent and depreciation of sales promotion, marketing and after-sales service offices, as well as distribution centers;
(i) property insurance premiums, taxes, utility costs, and repair and maintenance costs for offices and distribution centers; and
(j) payments by the producer to others for warranty repairs;
net cost: total cost less the costs of sales promotion, marketing and after-sales services; royalties; shipping and repackaging; as well as ineligible interest costs, as set forth in Annex 4.4;
ineligible interest costs: interest paid by a producer on its financial obligations that exceeds 10 percentage points above the highest interest rate on debt obligations issued by the federal or central government, as the case may be, of the Party in which the producer is located, as set forth in Annex 4.4;
total cost: the sum of the following elements in accordance with Annex 4.4:
(a) the costs or value of direct manufacturing materials used in the production of the merchandise;
(b) direct labor costs used in the production of the merchandise; and
(c) an amount for direct and indirect costs and expenses of manufacture of the merchandise, reasonably allocated to the merchandise, except for the following items:
(i) the costs and expenses of a service provided by the producer of a good to another person, when the service does not relate to that good;
(ii) costs and losses resulting from the sale of a portion of the merchandise producers business, which constitutes a discontinued operation;
(iii) costs related to the cumulative effect of changes in the application of generally accepted accounting principles;
(iv) costs or losses resulting from the sale of a producer's capital asset;
(v) costs and expenses related to acts of God or force majeure;
(vi) profits earned by the producer of the merchandise, regardless of whether they were retained by the producer or paid to other persons as dividends and taxes paid on those profits, including capital gains taxes; and
(vii) interest costs that have been agreed between related parties and that exceed interest paid at market interest rates;
direct manufacturing costs and expenses: those incurred in a period, directly related to the merchandise, other than the costs or value of direct materials and direct labor costs;
indirect manufacturing costs and expenses: those incurred in a period, other than direct manufacturing costs and expenses, direct labor costs and direct material costs or value;
F.O.B.: the value of the goods free on board, including the cost of transportation to the port or place of final shipment, regardless of the means of transport;
place where the producer is located: in relation to a commodity, the production plant of that commodity;
material: a commodity used in the production of another commodity;
self-produced material: material produced by the producer of a commodity and used in the production of that commodity;
fungible materials or goods: materials or goods that are interchangeable for commercial purposes, whose properties are essentially identical and which cannot be differentiated by simple visual examination;
indirect material: that used in the production, verification or inspection of a good, which is not physically incorporated in the good; or that used in the maintenance of buildings or in the operation of equipment related to the production of a good, including:
(a) fuel and energy;
(b) tools, dies and molds;
(c) spare parts and materials used in the maintenance of equipment and buildings;
(d) lubricants, greases, composites and other materials used in production or to operate equipment or buildings;
(e) gloves, goggles, footwear, clothing, safety equipment and attachments;
(f) equipment, apparatus and attachments used for the verification or inspection of goods;
(g) catalysts and solvents; or
(h) any other material that is not incorporated in the good, but whose use in the production of the good can be reasonably demonstrated to be part of that production;
intermediate materials: those of own manufacture used in the production of a good, and designated in accordance with Article 4.7;
commodity: any good, product, article or matter;
identical goods: goods that are alike in all respects, including their physical characteristics, quality and commercial prestige. Minor differences in appearance shall not prevent goods that otherwise conform to the definition from being considered identical;
similar goods: goods which, although not the same in all respects, have similar characteristics and composition, enabling them to perform the same functions and to be commercially interchangeable. In determining whether goods are similar, factors to be considered include their quality, commercial prestige and the existence of a trademark;
non-originating good or non-originating material: a good or material that does not qualify as originating in accordance with the provisions of this Chapter;
goods wholly obtained or produced entirely in the territory of one or more of the Parties:
(a) minerals extracted in the territory of one or more of the Parties;
(b) harvested or gathered in the territory of one or more of the Parties;
(c) live animals, born and raised in the territory of one or more of the Parties;