2. Except as otherwise provided in this Agreement, no Party may condition the duty-free temporary admission of a good referred to in paragraph 1a), (b) or (c), other than to require that such good:
a) be imported by a national or resident of another Party who seeks temporary entry;
b) be used solely by or under the personal supervision of such person in the exercise of the business activity, trade or profession of that person;
c) not be sold or leased while in its territory;
d) be accompanied by a bond in an amount no greater than 110 percent of the charges that would otherwise be owed on entry or final importation, or by another form of security, releasable on exportation of the good, except that a bond for customs duties shall not be required for an originating good;
e) be capable of identification when exported;
f) be exported on the departure of that person or within such other period of time as is reasonably related to the purpose of the temporary admission; and
g) be imported in no greater quantity than is reasonable for its intended use.
3. Except as otherwise provided in this Agreement, no Party may condition the duty-free temporary admission of a good referred to in paragraph 1(d), other than to require that such good:
a) be imported solely for the solicitation of orders for goods, or services provided from the territory, of another Party or non-Party;
b) not be sold, leased or put to any use other than exhibition or demonstration while in its territory;
c) be capable of identification when exported;
d) be exported within such period as is reasonably related to the purpose of the temporary admission; and
e) be imported in no greater quantity than is reasonable for its intended use.
4. A Party may impose the customs duty and any other charge on a good temporarily admitted duty-free under paragraph 1 that would be owed on entry or final importation of such good if any condition that the Party imposes under paragraph 2 or 3 has not been fulfilled.
5. Subject to Chapters Eleven (Investment) and Twelve (Cross Border Trade in Services):
a) each Party shall allow a vehicle or container used in international traffic that enters its territory from the territory of another Party to exit its territory on any route that is reasonably related to the economic and prompt departure of such vehicle or container;
b) no Party may require any bond or impose any penalty or charge solely by reason of any difference between the port of entry and the port of departure of a vehicle or container;
c) no Party may condition the release of any obligation, including any bond, that it imposes in respect of the entry of a vehicle or container into its territory on its exit through any particular port of departure; and
d) no Party may require that the vehicle or carrier bringing a container from the territory of another Party into its territory be the same vehicle or carrier that takes such container to the territory of another Party.
6. For purposes of paragraph 5, "vehicle" means a truck, a truck tractor, tractor, trailer unit or trailer, a locomotive, or a railway car or other railroad equipment.
Article 306. Duty-Free Entry of Certain Commercial Samples and Printed Advertising Materials
Each Party shall grant duty-free entry to commercial samples of negligible value, and to printed advertising materials, imported from the territory of another Party, regardless of their origin, but may require that:
a) such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of another Party or non-Party; or
b) such advertising materials be imported in packets that each contain no more than one copy of each such material and that neither such materials nor packets form part of a larger consignment.
Article 307. Goods Re-Entered after Repair or Alteration
1. Except as set out in Annex 307.1, no Party may apply a customs duty to a good, regardless of its origin, that re enters its territory after that good has been exported from its territory to the territory of another Party for repair or alteration, regardless of whether such repair or alteration could be performed in its territory.
2. Notwithstanding Article 303, no Party may apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of another Party for repair or alteration.
3. Annex 307.3 applies to the Parties specified in that Annex respecting the repair and rebuilding of vessels.
Article 308. Most-Favored-Nation Rates of Duty on Certain Goods
1 Annex 308.1 applies to certain automatic data processing goods and their parts.
2. Annex 308.2 applies to certain color television tubes.
3. Each Party shall accord mostfavorednation duty-free treatment to any local area network apparatus imported into its territory, and shall consult in accordance with Annex 308.3.
Section C. Non-Tariff Measures
Article 309. Import and Export Restrictions
1. Except as otherwise provided in this Agreement, no Party may adopt or maintain any prohibition or restriction on the importation of any good of another Party or on the exportation or sale for export of any good destined for the territory of another Party, except in accordance with Article XI of the GATT, including its interpretative notes, and to this end Article XI of the GATT and its interpretative notes, or any equivalent provision of a successor agreement to which all Parties are party, are incorporated into and made a part of this Agreement.
2. The Parties understand that the GATT rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, export price requirements and, except as permitted in enforcement of countervailing and antidumping orders and undertakings, import price requirements.
3. In the event that a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, nothing in this Agreement shall be construed to prevent the Party from:
a) limiting or prohibiting the importation from the territory of another Party of such good of that non- Party; or
b) requiring as a condition of export of such good of the Party to the territory of another Party, that the good not be re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.
4. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, the Parties, on request of any Party, shall consult with a view to avoiding undue interference with or distortion of pricing, marketing and distribution arrangements in another Party.
5. Paragraphs 1 through 4 shall not apply to the measures set out in Annex 301.3.
Article 310. Customs User Fees
1. No Party may adopt any customs user fee of the type referred to in Annex 310.1 for originating goods.
2. The Parties specified in Annex 310.1 may maintain existing such fees in accordance with that Annex.
Article 311. Country of Origin Marking
Annex 311 applies to measures relating to country of origin marking.
Article 312. Wine and Distilled Spirits
1. No Party may adopt or maintain any measure requiring that distilled spirits imported from the territory of another Party for bottling be blended with any distilled spirits of the Party.
2. Annex 312.2 applies to other measures relating to wine and distilled spirits.
Article 313. Distinctive Products
Annex 313 applies to standards and labelling of the distinctive products set out in that Annex.
Article 314. Export Taxes
Except as set out in Annex 314, no Party may adopt or maintain any duty, tax or other charge on the export of any good to the territory of another Party, unless such duty, tax or charge is adopted or maintained on:
a) exports of any such good to the territory of all other Parties; and
b) any such good when destined for domestic consumption.
Article 315. Other Export Measures
1. Except as set out in Annex 315, a Party may adopt or maintain a restriction otherwise justified under Articles X1:2(a) or XX(g), G) or (j) of the GATT with respect to the export of a good of the Party to the territory of another Party, only if:
a) the restriction does not reduce the proportion of the total export shipments of the specific good made available to that other Party relative to the total supply of that good of the Party maintaining the restriction as compared to the proportion prevailing in the most recent 36 month period for which data are available prior to the imposition of the measure, or in such other representative period on which the Parties may agree;
b) the Party does not impose a higher price for exports of a good to that other Party than the price charged for such good when consumed domestically, by means of any measure, such as licenses, fees, taxation and minimum price requirements. The foregoing provision does not apply to a higher price that may result from a measure taken pursuant to subparagraph (a) that only restricts the volume of exports; and
c) the restriction does not require the disruption of normal channels of supply to that other Party or normal proportions among specific goods or categories of goods supplied to that other Party.
2. The Parties shall cooperate in the maintenance and development of effective controls on the export of each other's goods to a non-Party in implementing this Article.
Section D. Consultations
Article 316. Consultations and Committee on Trade In Goods
1. The Parties hereby establish a Committee on Trade in Goods, comprising representatives of each Party.
2. The Committee shall meet on the request of any Party or the Commission to consider any matter arising under this Chapter.
3. The Parties shall convene at least once each year a meeting of their officials responsible for customs, immigration, inspection of food and agricultural products, border inspection facilities, and regulation of transportation for the purpose of addressing issues related to movement of goods through the Parties' ports of entry.
Article 317. Third Country Dumping
1. The Parties affirm the importance of cooperation with respect to actions under Article 12 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade.
2. Where a Party presents an application to another Party requesting antidumping action on its behalf, those Parties shall consult within 30 days respecting the factual basis of the request, and the requested Party shall give full consideration to the request.
Section E. Definitions
Article 318. Definitions
For purposes of this Chapter:
advertising films means recorded visual media, with or without soundtracks, consisting essentially of images showing the nature or operation of goods or services offered for sale or lease by a person established or resident in the territory of any Party, provided that the films are of a kind suitable for exhibition to prospective customers but not for broadcast to the general public, and provided that they are imported in packets that each contain no more than one copy of each film and that do not form part of a larger consignment;
commercial samples of negligible value means commercial samples having a value, individually or in the aggregate as shipped, of not more than one U.S. dollar, or the equivalent amount in the currency of another Party, or so marked, torn, perforated or otherwise treated that they are unsuitable for sale or for use except as commercial samples;
consumed means:
a) actually consumed; or
b) further processed or manufactured so as to result in a substantial change in value, form or use of the good or in the production of another good;
customs duty includes any customs or import duty and a charge of any kind imposed in connection with the importation of a good, including any form of surtax or surcharge in connection with such importation, but does not include any:
a) charge equivalent to an internal tax imposed consistently with Article I:2 of the GATT, or any equivalent provision of a successor agreement to which all Parties are party, in respect of like, directly competitive or substitutable goods of the Party, or in respect of goods from which the imported good has been manufactured or produced in whole or in part;
b) antidumping or countervailing duty that is applied pursuant to a Party's domestic law and not applied inconsistently with Chapter Nineteen (Review and Dispute Settlement in Antidumping and Countervailing Duty Matters);
c) fee or other charge in connection with importation commensurate with the cost of services rendered;
d) premium offered or collected on an imported good arising out of any tendering system in respect of the administration of quantitative import restrictions, tariff rate quotas or tariff preference levels; and
e) fee applied pursuant to section 22 of the U.S. Agricultural Adjustment Act, subject to Chapter Seven (Agriculture and Sanitary and Phytosanitary Measures);
distilled spirits include distilled spirits and distilled spirit containing beverages;
duty deferral program includes measures such as those governing foreign trade zones, temporary importations under bond, bonded warehouses, "maquiladoras", and inward processing programs;
duty-free means free of customs duty;
goods imported for sports purposes means sports requisites for use in sports contests, demonstrations or training in the territory of the Party into whose territory such goods are imported;
goods intended for display or demonstration includes their component parts, ancillary apparatus and accessories;
item means a tariff classification item at the eight- or 10-digit level set out in a Party's tariff schedule;
local area network apparatus means a good dedicated for use solely or principally to permit the interconnection of automatic data processing machines and units thereof for a network that is used primarily for the sharing of resources such as central processor units, data storage devices and input or output units, including in-line repeaters, converters, concentrators, bridges and routers, and printed circuit assemblies for physical incorporation into automatic data processing machines and units thereof suitable for use solely or principally with a private network, and providing for the transmission, receipt, error-checking, control, signal conversion or correction functions for non-voice data to move through a local area network;
performance requirement means a requirement that:
a) a given level or percentage of goods or services be exported;
b) domestic goods or services of the Party granting a waiver of customs duties be substituted for imported goods or services;
c) a person benefitting from a waiver of customs duties purchase other goods or services in the territory of the Party granting the waiver or accord a preference to domestically produced goods or services;
d) a person benefitting from a waiver of customs duties produce goods or provide services, in the territory of the Party granting the waiver, with a given level or percentage of domestic content; or
e) relates in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows;
printed advertising materials means those goods classified in Chapter 49 of the Harmonized System, including brochures, pamphlets, leaflets, trade catalogues, yearbooks published by trade associations, tourist promotional materials and posters, that are used to promote, publicize or advertise a good or service, are essentially intended to advertise a good or service, and are supplied free of charge;
repair or alteration does not include an operation or process that either destroys the essential characteristics of a good or creates a new or commercially different good;
satisfactory evidence means:
a) a receipt, or a copy of a receipt, evidencing payment of customs duties on a particular entry;
b) a copy of the entry document with evidence that it was received by a customs administration;
c) a copy of a final customs duty determination by a customs administration respecting the relevant entry;
d) any other evidence of payment of customs duties acceptable under the Uniform Regulations established in accordance with Chapter Five (Customs Procedures);
total export shipments means all shipments from total supply to users located in the territory of another Party;
total supply means all shipments, whether intended for domestic or foreign users, from:
a) domestic production;
b) domestic inventory; and
c) other imports as appropriate; and
waiver of customs duties means a measure that waives otherwise applicable customs duties on any good imported from any country, including the territory of another Party.
Chapter Four. RULES OF ORIGIN
Article 401. Originating Goods
Except as otherwise provided in this Chapter, a good shall originate in the territory of a Party where:
a) the good is wholly obtained or produced entirely in the territory of one or more of the Parties, as defined in Article 415;
b) each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification set out in Annex 401 as a result of production occurring entirely in the territory of one or more of the Parties, or the good otherwise satisfies the applicable requirements of that Annex where no change in tariff classification is required, and the good satisfies all other applicable requirements of this Chapter;
c) the good is produced entirely in the territory of one or more of the Parties exclusively from originating materials; or
d) except for a good provided for in Chapters 61 through 63 of the Harmonized System, the good is produced entirely in the territory of one or more of the Parties but one or more of the non-originating materials provided for as parts under the Harmonized System that are used in the production of the good does not undergo a change in tariff classification because
(i) the good was imported into the territory of a Party in an unassembled or a disassembled form but was classified as an assembled good pursuant to General Rule of Interpretation 2(a) of the Harmonized System, or
(ii) the heading for the good provides for and specifically describes both the good itself and its parts and is not further subdivided into subheadings, or the subheading for the good provides for and specifically describes both the good itself and its parts,
provided that the regional value content of the good, determined in accordance with Article 402, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and that the good satisfies all other applicable requirements of this Chapter.
Article 402. Regional Value Content
1. Except as provided in paragraph 5, each Party shall provide that the regional value content of a good shall be calculated, at the choice of the exporter or producer of the good, on the basis of either the transaction value method set out in paragraph 2 or the net cost method set out in paragraph 3.
2. Each Party shall provide that an exporter or producer may calculate the regional value content of a good on the basis of the following transaction value method:
RVC = TV - VNM / TV x 100
where
RVC is the regional value content, expressed as a percentage;
TV is the transaction value of the good adjusted to a F.O.B. basis; and
VNM is the value of non-originating materials used by the producer in the production of the good.
3. Each Party shall provide that an exporter or producer may calculate the regional value content of a good on the basis of the following net cost method:
RVC = NC - VNM / NC x 100
where
RVC is the regional value content, expressed as a percentage;
NC is the net cost of the good; and
VNM is the value of non-originating materials used by the producer in the production of the good.
4. Except as provided in Article 403(1) and for a motor vehicle identified in Article 403(2) or a component identified in Annex 403.2, the value of non-originating materials used by the producer in the production of a good shall not, for purposes of calculating 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 production of the good.
5. Each Party shall provide that an exporter or producer shall calculate the regional value content of a good solely on the basis of the net cost method set out in paragraph 3 where:
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 producer's total sales of such goods during that period,
d) the good is
(i) a motor vehicle provided for in heading 87.01 or 87.02, subheading 8703.21 through 8703.90, or heading 87.04, 87.05 or 87.06,
(ii) identified in Annex 403.1 or 403.2 and is for use in a motor vehicle provided for in heading 87.01 or 87.02, subheading 8703.21 through 8703.90, or heading 87.04, 87.05 or 87.06,
(iii) provided for in subheading 6401.10 through 6406.10, or
(iv) provided for in tariff item 8469.10.aa (word processing machines);
e) the exporter or producer chooses to accumulate the regional value content of the good in accordance with Article 404; or
f) the good is designated as an intermediate material under paragraph 10 and is subject to a regional value-content requirement.
6. If an exporter or producer of a good calculates the regional value-content of the good on the basis of the transaction value method set out in paragraph 2 and a Party subsequently notifies the exporter or producer, during the course of a verification pursuant to Chapter Five (Customs Procedures), that the transaction value of the good, or the value of any material used in the production of the good, is required to be adjusted or is unacceptable under Article 1 of the Customs Valuation Code, the exporter or producer may then also calculate the regional value content of the good on the basis of the net cost method set out in paragraph 3.
7. Nothing in paragraph 6 shall be construed to prevent any review or appeal available under Article 510 (Review and Appeal) of 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.