Chapter Seven

                                Agriculture



Article 701: Scope 

1.   This Chapter applies to trade in agricultural goods and to
sanitary and phytosanitary measures.


                       Subchapter A - Market access


Article 702: Scope

1.   Further to Article 102 (Objectives), the provisions of this
Subchapter address import barriers, domestic support, export
subsidies, and grading and marketing standards and measures that
affect trade of agricultural goods between the Parties.

2.   To the extent of any inconsistency in this Agreement with
the provisions of this Subchapter, this Subchapter shall prevail.


Article 703: International obligations

1.   Each Party shall comply with Annex 703.1 with respect to its
agricultural trade under other international agreements, to the
extent set out in that Annex.

2.   When a Party desires to adopt a measure pursuant to any
international commodity agreement with respect to an agricultural
good, it shall consult with the other Parties in order to avoid
nullification or impairment of a concession granted by such Party
in its Schedule set out in Annex 302.2.

3.   Each Party shall comply with Annex 703.3 with respect to
actions taken pursuant to any international coffee agreement.


Article 704: Market Access

     General Provisions

1.   In order to facilitate trade in agricultural goods, the
Parties shall work together to improve access to their respective
markets through the reduction or elimination of import barriers.

     Tariffs and Quantitative Restrictions

2.   Each Party shall comply with Annex 704.2 with respect to
tariffs and quantitative restrictions, including GATT market
access requirements and trade in sugar.

     Agricultural Grading and Marketing Standards

3.   Each Party shall comply with Annex 704.3 with respect to
agricultural grading and marketing standards.

     Special Safeguard Provisions

4.   Each Party may, during the applicable period of transition,
adopt or maintain special safeguards in the form of tariff quotas
on specific agricultural goods, as specified in its Schedule set
out in Annex 302.2, and further described in Annex 704.4.

5.   A Party may not apply, at the same time, measures under
paragraph 4 and Chapter 8 (Emergency Action) with respect to the
same agricultural good.


Article 705:   Domestic Support

     The Parties recognize that domestic support measures can be
of crucial importance to their agricultural sectors but may also
have trade distorting effects and effects on production.  The
Parties further recognize that domestic support commitments may
result from the agriculture negotiations in the Uruguay Round of
multilateral trade negotiations under the GATT.  Accordingly, to
the extent a Party decides to support its agricultural producers,
such Party should endeavor to move toward domestic support
policies that:

     (a)  have minimal or no trade distortion effects or effects
 on production; or

     (b) are exempt from domestic support reduction commitments
 under the GATT.

The Parties further recognize that the domestic support
mechanisms of each Party, including those that are subject to
reduction commitments, may be changed at the Party's discretion
so long as such change is in compliance with its GATT rights and
obligations.


Article 706: Export Subsidies

1.   The Parties recognize that export subsidies may have serious
prejudicial effects on importing and exporting Parties, and the
Parties share the objective of achieving the multilateral
elimination of export subsidies for agricultural goods.  The
Parties shall cooperate in an effort to achieve an agreement in
the General Agreement on Tariffs and Trade which eliminates
export subsidies on agricultural goods.

2.   The Parties also recognize that export subsidies may cause
disruption in the market of an importing Party.  Accordingly, the
Parties affirm that it is inappropriate for a Party to provide
export subsidies for the export of an agricultural good to the
territory of another Party when there are no other subsidized
imports of that good into that other Party.

3.   Except as provided in Annex 703.1, where an exporting Party
considers that a non-Party is exporting an agricultural good into
the territory of another Party with the benefit of export
subsidies, the exporting Party may request consultations with the
importing Party with a view toward agreeing on measures that the
importing Party could adopt to counter the effect of such
subsidized imports.  If the importing Party adopts the
agreed-upon measures, the exporting Party shall refrain from
applying, or immediately cease to apply, any export subsidy to
exports of such good into the territory of the importing Party.

4.   Except as provided in Annex 703.1, a Party proposing to
introduce an export subsidy on exports of an agricultural good to
the territory of another Party shall notify such Party at least
three days in advance, and shall upon request consult with such
Party, within 72 hours of receipt of the request, with a view to
eliminating the subsidy or minimizing any adverse impact on the
importing Party's market for that good.  Another Party may
request to join such consultations.

5.   Each Party shall take into account the interests of the
other Parties in the use of any export subsidy on an agricultural
good exported to a Party or non-Party, recognizing that such
subsidies may have prejudicial effects on the interests of the
other Parties.

6.   The Parties shall establish a Working Group on Agricultural
Subsidies which shall meet at least semi-annually, or at such
other times as the Parties may agree, to work toward elimination
of all export subsidies in connection with trade in agricultural
goods between the Parties.  The functions of the Working Group on
Agricultural Subsidies shall include:

     (a) monitoring the volume and price of imports of
 agricultural goods that have benefitted from export
 subsidies into the territory of any Party;

     (b) providing a forum for the Parties to develop mutually
 acceptable criteria and procedures for reaching
 agreement on the limitation or elimination of the
 provision of export subsidies in connection with
 importation of agricultural goods into the territories
 of the Parties; and

     (c) reporting annually to the Committee on Agricultural
 Trade, established under Article 708, with respect to
 implementation of this Article.

7.   Notwithstanding any other provision of this Article:

     (a) if the Parties agree to a particular export subsidy
 measure on an agricultural good for export to the
 territory of a Party, the exporting Party may adopt or
 maintain such measure; and

     (b) each Party shall retain its rights to apply
 countervailing duties to subsidized imports from any
 source.


Article 707: Resolution of Private Commercial Disputes
 Regarding Transactions in Agricultural Goods

     The advisory committee established pursuant to Article
2022(4)  shall work toward a system for resolving private
commercial disputes that arise in connection with transactions in
agricultural goods.  The system of each Party shall be designed
to achieve prompt and effective resolution of such disputes with
attention to special circumstances, including the perishability
of the goods involved.


Article 708: Committee on Agricultural Trade

1.   The Parties hereby establish a Committee on Agricultural
Trade, comprising representatives of each Party.

2.   The Committee's functions shall include:

     (a) monitoring and promoting cooperation on the
 implementation and administration of this Subchapter;

     (b) providing a forum for the Parties to consult at least
 semi-annually and at such other times as the Parties
 may agree on issues related to this Subchapter; and

     (c) reporting annually to the Commission on the
 implementation of this Subchapter.


Article 709: Definitions

For purposes of this Subchapter:

agricultural goods means:

     (i)  HS Chapters 1 to 24 less fish and fish products, plus

     (ii) HS Code  29.05.43  (manitol)
     HS Code  29.05.44  (sorbitol)
     HS Heading  33.01   (essential
 oils)
     HS Headings  35.01 to 35.05 (albuminoidal
 substances, modified
 starches, glues)
     HS Code  38.09.10  (finishing agents)
     HS Code  38.23.60  (sorbitol n.e.p.)
     HS Headings  41.01 to 41.03 (hides and skins)
     HS Heading  43.01   (raw furskins)
     HS Headings  50.01 to 50.03 (raw silk and silk waste)
     HS Headings  51.01 to 51.03 (wool and animal hair)
     HS Headings  52.01 to 52.03 (raw cotton, waste and cotton carded or
        combed)
     HS Heading  53.01   (raw flax)
     HS Heading  53.02   (raw hemp);

fish and fish products for purposes of the definition of
agricultural goods means fish or crustaceans, molluscs or other
aquatic invertebrates, marine mammals, and their products within
the following headings of the Harmonized System:

     HS Heading  05.07  (tortoise-shell, whalebone and
                         whalebone hair and those fish or
                         crustaceans, molluscs or other
                         aquatic invertebrates, marine mammals, and
                         their products within this heading)

     HS Heading  05.08  (all goods (coral and similar materials))
     HS Heading  05.09  (all goods (natural sponges of animal origin))
     HS Heading  05.11  (products of fish or crustaceans,molluscs or other
                         aquatic invertebrates; dead animals of Chapter 3)
     HS Heading  15.04  (all goods (fats and oils and their fractions, of 
                         fish  or marine mammals))
     HS Heading  16.03  ("non-meat" extracts and juices)
     HS Heading  16.04  (all goods (prepared or preserved fish))
     HS Heading  16.05  (all goods (prepared preserved crustaceans,
                         molluscs and other aquatic invertebrates));

net production surplus means the quantity by which a Party's
domestic production of sugar exceeds its total consumption of
sugar for a marketing year;

net surplus producer means that a Party has been determined to
have a net production surplus in accordance with Schedule
704.2(I)(B)(3);

plantation white sugar means crystalline sugar which has not been
refined and is intended for human consumption without further
processing or refining;

raw value means the equivalent of a quantity of sugar in terms of
raw sugar testing 96 degrees by the polariscope, determined as
follows:

     (a) the raw value of plantation white sugar equals the
 number of kilograms thereof multiplied by 1.03;

     (b) the raw value of liquid sugar and invert sugar equals
 the number of kilograms of the total sugars thereof
 multiplied by 1.07; and

     (c) the raw value of other imported sugar and syrup goods
 equals the number of kilograms thereof multiplied by
 the greater of 0.93, or 1.07 less 0.0175 for each
 degree of polarization under 100 degrees (and fractions
 of a degree in proportion);

sugar means raw or refined sugar derived directly or indirectly
from sugar cane or sugar beets, including liquid refined sugar;
and 

sugar and syrup goods means "sugar and syrup goods" as defined in
Annex 709.
                                ANNEX 703.1

                    Incorporation  of Trade Provisions


1.   Articles 701.1, 701.2, 701.3, 701.5, 702, 704, 705, 706,
707, 708.1, 708.4  710 and 711 [subject to review] of the Canada -
 U.S. Free Trade Agreement shall apply to trade in "agricultural
goods", as that term is defined in Article 711 of that Agreement,
between Canada and the United States, which Articles are hereby
incorporated into and made a part of this Agreement for such
purpose. 

2.   For purposes of this incorporation, any reference to Chapter
18 of the Canada - U.S. Free Trade Agreement shall be deemed to
be a reference to Chapter 20 of this Agreement.

                                ANNEX 703.3

                      International Coffee Agreement

     Neither Canada nor Mexico shall take actions pursuant to any
international coffee agreement and measures authorized thereunder
to restrict trade in coffee between them.

                                ANNEX 704.2

                               Market Access

Each Party shall comply with Sections I and II.


                                 Section I

                       Mexico and the United States

1.   This Section shall apply only between the United States and
Mexico.

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


                                Appendix A

         Tariffs, Quantitative Restrictions and GATT Market Access

1.   The Parties recognize that, upon the date of entry into
force of the 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.   Each Party agrees to waive its rights under Article XI.2(c)
of the General Agreement on Tariffs and Trade with respect to any
measure taken in connection with the importation of agricultural
goods originating in the territory of the other.

3.   Except as provided in paragraph 4, 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 of this Agreement.

4.   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.

5.   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.

6.   Neither Party shall seek a voluntary restraint agreement
from the other Party with respect to the exportation of meat
originating in the territory of that other Party.

7.   Notwithstanding the provisions of Chapter 3 (Market Access),
goods of subheading 2008.11 of the Harmonized System (HS) that
originate in the territory of Mexico shall be subject upon
importation into the territory of the United States to the rate
of duty provided in the Schedule set out in Annex 302.2 for the
United States only if all agricultural goods within heading 12.02
of the HS used in the production of such goods originate in the
territory of one or more of the Parties.

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

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

     (b) imported into the territory of Mexico from the
 territory of the United States,

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

9.   The United States shall not adopt or maintain, with respect
to imports into its territory of agricultural goods originating
in the territory of Mexico, any fee applied pursuant to Section
22 of the Agricultural Adjustment Act of 1933, or any successor
statute.  

10.  Agricultural goods entered into maquiladoras or foreign-
trade zones and re-exported, including subsequent to processing,
shall not count toward the fulfillment of market access
commitments under a Party's Schedule set out in Annex 302.2.



                                Appendix B

                              Trade in Sugar


1.   The United States and Mexico recognize the importance of
liberalizing trade in sugar and syrup goods while avoiding
conditions of entry that may result in displacement of the
consumption of such goods originating in the territories of the
United States and Mexico by imports from non-Parties. 
Accordingly, the United States and Mexico have agreed to the
following provisions to govern trade between them in sugar and
syrup goods.

2.   The over quota customs duty for imports into the territory
of the United States of sugar and syrup goods originating in the
territory of Mexico shall be reduced to zero during a period of
15 years after the date of entry into force of this Agreement as
follows: 

     (a) from the first to the sixth year after the date of
 entry into force of this Agreement, the customs duty
 shall be reduced by a total of 15 percent in equal
 annual stages;

     (b) from the seventh to the fifteenth year after the date
 of entry into force of this Agreement, the customs duty
 shall be removed entirely in equal annual stages; and

     (c) after the end of the sugar transition period, the duty
 on all imports of sugar and syrup goods from Mexico
 shall be zero.

3.   In addition to the customs duty reductions provided for
under paragraph 2, imports into the territory of the United
States of sugar and syrup goods originating in the territory of
Mexico shall be duty free for a quantity, on a marketing year
(October 1 - September 30) basis, to be determined as follows:

     (a) for each upcoming marketing year in which Mexico is not
 projected to be a net surplus producer, the quantity
 shall be the greater of 7,258 metric tons raw value or
 the quota allocated by the United States for a non-
 Party within the category designated "other specified
 countries and areas" under paragraph (b)(i) of
 additional U.S. note 3 to chapter 17 of the Harmonized
 Tariff Schedule of the United States;

     (b) for each upcoming marketing year in which Mexico is
 projected to be a net surplus producer of sugar, in
 accordance with sub-paragraph (d), the quantity shall
 be the greater of (i) the amount specified in sub-
 section (a), or (ii) Mexico's projected net production
 surplus, but not greater than a maximum quantity as
 follows
 
     (i) for each of the first through sixth marketing
 years after the date of entry into force of this
 Agreement, 25,000 metric tons raw value,

     (ii) for the seventh marketing year after the date of
 entry into force of this Agreement, 150,000 metric
 tons raw value, and

     (iii) for each of the eighth through fifteenth
 marketing years after the date of entry into
 force of this Agreement, 110 percent of the
 previous marketing year's maximum quantity;

     (c) in any year after the sixth year after the date of
 entry into force of this Agreement, the quantity of
 imports of sugar and syrup goods originating in the
 territory of Mexico shall not be subject to the
 limitations set out in subparagraph (b) if

          (i) Mexico has been a net surplus producer for any two
 consecutive marketing years, or

          (ii) Mexico has been a net surplus producer during the
 previous marketing year, and Mexico is projected
 to be a net surplus producer of sugar, in
 accordance with subparagraph (d), in the upcoming
 marketing year, unless Mexico ultimately is not a
 net surplus producer in that marketing year; and

          (d) prior to the beginning of each marketing year, Mexico
 shall make projections of its domestic production and
 total consumption of sugar.  Mexico and the United
 States shall consult by July 1 of each year to jointly
 determine whether Mexico is projected to be a net
 surplus producer in the upcoming marketing year, in
 accordance with the methodology and sources of
 information set out in Schedule 704.2(I)(B)(3).

4.   Mexico shall implement a tariff quota to be applied on a
Most Favored Nation basis for sugar and syrup goods with customs
duties equal to those of the United States no later than six
years after the date of entry into force of this Agreement. 
Mexico shall thereafter progressively eliminate its over quota
customs duty for imports of sugar and syrup goods originating in
the territory of the United States, in identical fashion as the
reductions provided for United States customs duties in paragraph
2.  Mexico shall establish the quantities of imports of sugar and
syrup goods originating in the territory of the United States
that shall be duty-free pursuant to the same procedure by which
the United States shall establish such quantities with respect to
imports of such goods originating in the territory of Mexico in
accordance with sub-paragraph 3(b).  The United States shall make
projections of its domestic production and consumption, and the
United States and Mexico shall consult and make the determination
whether the United States is projected to be a net surplus
producer, on the same terms as provided for in subparagraph 3(d).

5.   If the United States eliminates its tariff quota for sugar
and syrup goods imported from non-Parties, at such time the
United States shall grant to Mexico the better of the treatment,
as determined by Mexico, of:

     (a) the treatment provided for in paragraph 3; or

     (b) the Most-Favored-Nation treatment granted by the United
 States to non-Parties.

6.   The measurement of the quantity imported shall be based on
the actual weight of the imported sugar and syrup goods,
converted as appropriate to raw value, without regard to the
packaging in which the goods are imported or their presentation.

7.   With respect to imports into the territory of Mexico of
sugar and syrup goods, and products containing sugar or syrup,
from the territory of the United States,

     (a) Mexico shall accord preferential treatment in
 accordance with this Agreement when the following
 conditions apply

     (i) with respect to sugar and syrup goods no benefits
 under any re-export program or any like program
 have been or will be granted in connection with
 the export of those goods, and

     (ii) with respect to products containing sugar and
 syrup goods, no benefits under any re-export
 program or any like program have been or will be
 granted in connection with the export of those
 products;

     (b) the United States shall provide notification to Mexico
 of any export to Mexico, within two days of such
 export, for which the benefits of any re-export program
 or any other like program have been or will be claimed
 by the exporter; and

     (c) except as provided for in paragraph 8, Mexico shall
 accord Most Favored Nation treatment to all imports
 from the territory of the United States of sugar and
 syrup  goods with respect to which benefits under any
 re-export program or any like program shall have been
 claimed.

8.   Notwithstanding any other provision of this Article:

     (a) the United States shall grant duty-free treatment to
 imports of

          (i) raw sugar originating in the territory of Mexico
 that will be refined within the territory of the
 United States and re-exported to the territory of
 Mexico, and

          (ii) refined sugar originating in the territory of
 Mexico that has been refined from raw sugar
 previously produced within, and exported from, the
 territory of the United States;

          (b) Mexico shall grant duty-free treatment to imports of

          (i) raw sugar originating in the territory of the
 United States that will be refined within the
 territory of Mexico and re-exported to the
 territory of the United States, and

          (ii) refined sugar originating in the territory of the
 United States that has been refined from raw sugar
 previously produced within, and exported from, the
 territory of Mexico; and

     (c) imports qualifying for duty-free treatment pursuant to
 subparagraphs (a) and (b) of this paragraph shall not
 be subject to, or counted under, any quota of the
 importing Party.



                          Schedule 704.2(I)(B)(3)

                   Net Production Surplus Determination


1.   Methodology

     (a) The size of a Party's net production surplus, shall be
 determined in accordance with the following formula:

     (i) If a net production surplus has not been projected
 for any previous year, the formula shall be:

     NPS = (PPy - CPy)

     (ii) If a Party is projected to be a net surplus
 producer and has been projected to be a net
 surplus producer in a previous year, the Party's
 projected net production surplus shall be
 adjusted, to account for an underestimate or
 overestimate, as follows:
     
     NPS = (PPy - CPy) - ((PPys - CPys) - (PAys - CAys))

     where:

     NPS  = Net production surplus
     PP  = Projected Domestic Production of
 sugar
     CP  = Projected Total Consumption of
 sugar
      y  = upcoming marketing year
     ys  = most recent previous marketing year
 in which a net production surplus
 was projected
     PA  = Actual Domestic Production of sugar
     CA  = Actual Total Consumption of sugar

     (b) The net production surplus shall be determined in
 metric tons raw value.

     (c) For purpose of determining whether a Party is a net
 surplus producer, imported sugar shall not be treated
 as part of domestic production.

     (d) The domestic production of a Party shall not include
 sugar, that has been either processed or refined from
 sugar beets or sugar cane grown, or sugar processed or
 refined, outside of the territory of such Party.

     (e) When making projections of its net production surplus,
 each Party shall consider adjustments, in appropriate
 circumstances, to such projections to take into account
 a change in stocks for the current marketing year
 exceeding an upper bound calculated in accordance with
 the following formula:


     where:

     B = upper bound, expressed as a percentage

     F = the absolute value of the change in stocks
 from the beginning of the marketing year to
 the end of the marketing year, expressed as a
 percentage of beginning stocks and calculated
 in accordance with the following formula: 

                                 ³ Sb -  Se   ³
                           F =   ÃÄÄÄÄÄÄÄÄÄÄÄ´  x  100   
                                 ³     Sb    ³

 
     Sb = beginning stocks

     Se = ending stocks

     N  = previous marketing year, ranging from 1
 (first preceding year) to 5 (fifth preceding
 year)

2.   Sources of Information

     (a) For Mexico, statistics on production, consumption and
 stocks shall be provided by the Secretaria de
 Agricultura y Recursos Hidraulicos, the Secretaria de
 Comercio y Fomento Industrial, and the Secretaria de
 Hacienda y Credito Publico.

     (b) For the United States, statistics on production,
 consumption and stocks shall be provided by the United
 States Department of Agriculture (USDA).
 
     (c) Each Party shall permit representatives from the other
 Party to observe and comment on the methodology it uses
 to prepare its data.


                                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
                        talegi”l)
          
          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.


                                 Section I

                         United States and Mexico

1.   When either the United States or Mexico adopts or maintains
a measure regarding the classification, grading or marketing of a
domestic agricultural good, it shall, with respect to the like
agricultural good imported from the territory of the other
destined for processing, accord treatment no less favorable than
the treatment it accords under the measure to the domestic
agricultural good destined for processing.  The importing Party
may also adopt or maintain measures to ensure that such imported
good is processed.

2.   Paragraph 1 shall be without prejudice to the rights of
either the United States or Mexico under the GATT or under
Article 301 of this Agreement with respect to measures concerning
the classification, grading or marketing of an agricultural good
(whether or not destined for processing).

3.   Mexico and the United States agree to form a Working Group
to review, in coordination with the Committee on
Standards-Related Measures established under Chapter 9, the
operation of grade and quality standards regarding agricultural
goods as they affect the other Parties to this Agreement, and to
resolve issues which may arise.  This Working Group shall report
to the Committee on Agriculture established under Article 708,
and shall meet at least once a year or as otherwise agreed by the
two Parties.


                                Section II

                             Canada and Mexico

     Mexico and Canada agree to form a Working Group to review,
in coordination with the Committee on Standards-Related Measures
established under Chapter Nine (Standards-Related Measures), the
operation of grade and quality standards regarding agricultural
goods as they affect the other Parties to this Agreement, and to
resolve issues which may arise.  This Working Group shall report
to the Committee on Agriculture established under Article 708,
and shall meet at least once a year or as otherwise agreed by the
two Parties.                                ANNEX 704.4

                            Special Safeguards

                                 Section I

                      Mexican Special Safeguard Goods

     MEXICO HTS NUMBER    DESCRIPTION

     0103.91.99   Live swine, weighing less than
         	  50 kilograms each, except
                  purebred breeding animals and
                  those with pedigree or
                  selected breed certificate

     0103.92.99   Live swine, weighing 50
                  kilograms or more each, except
                  purebred breeding animals and
                  those with pedigree or
                  selected breed certificate

     0203.11.01   Meat of swine, carcasses and
                  half-carcasses, fresh or
                  chilled

     0203.12.01   Hams, shoulders or cuts
                  thereof, with bone in, fresh
                  or chilled

     0203.19.99   Other swine meat, fresh or
                  chilled

     0203.21.01   Meat of swine, carcasses and
                  half-carcasses, frozen

     0203.22.01   Hams, shoulders and cuts
                  thereof, with bone in, frozen

     0203.29.99   Other swine meat, frozen

     0210.11.01   Hams, shoulders and cuts
                  thereof with bone in, salted,
                  in brine, dried or smoked

     0210.12.01   Bellies (streaky) and cuts
                  thereof, salted, in brine,
                  dried or smoked

     0210.19.99   Other swine meat, salted, in
                  brine, dried or smoked

     0710.10.01   Potatoes, uncooked or cooked
                  by steaming or boiling in
                  water, frozen

     0712.10.01   Dried potatoes, whole cut,
                  sliced, broken or in powder,
                  but not further prepared

     0808.10.01   Apples, fresh

     2004.10.01   Potatoes prepared or preserved
                  otherwise than by vinegar or
                  acetic acid, frozen

     2005.20.01   Potatoes prepared or preserved
                  otherwise than by vinegar or
                  acetic acid, not frozen

     2101.10.01   Extracts, essences or
                  concentrates, of coffee, and
                  preparations with a basis of
                  these extracts, essences or
                  concentrates or with a basis
                  of coffee


                                Section II

                       U.S. Special Safeguard Goods

     U.S. HTS NUMBER    DESCRIPTION

     Note:  A new U.S. HTS number will be established for each item

     0702.00.XX   Tomatoes (except cherry
                  tomatoes), fresh or chilled;
                  if entered during the period
                  from November 15 to the last
                  day of the following February,
                  inclusive

     0702.00.XX   Tomatoes (except cherry
                  tomatoes), fresh or chilled;
                  if entered during the period
                  from March 1 to July 14,
                  inclusive

     0703.10.XX   Onions and shallots, fresh or
                  chilled (not including onion
                  sets and not including pearl
                  onions not over 16 mm in
                  diameter) if entered January 1
                  to April 30, inclusive

     0709.30.XX   Eggplants (aubergines), fresh
                  or chilled, if entered during
                  the period from April 1 to
                  June 30, inclusive

     0709.60.XX   "Chili" peppers; if entered
                   during the period from October
                   1 to July 31, inclusive
                   (current 0709.60.00.20)

     0709.90.XX   Squash, fresh or chilled; if
                  entered during the period from
                  October 1 to the following
                  June 30, inclusive

     0807.10.XX   Watermelons, fresh; if entered
                  during the period from May 1
                  to September 30, inclusive


                                Section III

                     Canadian Special Safeguard Goods

     Canadian HTS NUMBER   DESCRIPTION

     0603.10.90   Fresh cut flowers
     0702.00.91   Tomatoes n.e.s., fresh or
                  chilled (dutiable period)
     0703.10.31   Onions or shallots, green
                  (dutiable period), fresh
     0707.00.91   Cucumber, fresh or chilled,
                  n.e.s. (dutiable period)
     0710.80.20   Broccoli and cauliflowers,
                  blanched or not, frozen
     0811.10.10   Strawberries, for processing,
                  frozen
     0811.10.90   Strawberries, frozen, other
                  than for processing
     2002.90.00   Tomatoes, other than whole
                  (tomato paste)

                                 ANNEX 709

                       Country-Specific Definitions

For purposes of this Subchapter, sugar and syrup goods means:

     (a) for imports into Mexico, goods classifiable under
 current subheadings 1701.11.01, 1701.11.99, 1701.12.01,
 1701.12.99, 1701.91 (except those that contain added
 flavoring matter), 1701.99.01, 1701.99.99, 1702.90.01,
 1806.10.01 (except those with a sugar content less than
 90 per cent) and 2106.90.05 (except those that contain
 flavoring matter) of the Mexican Tariff Schedules;

     (b) for imports into the United States, goods classifiable
 under current subheadings 1701.11.03, 1701.12.02,
 1701.91.22, 1701.99.02, 1702.90.32, 1806.10.42, and
 2106.90.12 of the U.S. Harmonized Tariff Schedule,
 without regard to the quantity imported; and

     (c) for imports into Canada, goods classifiable under
 current subheadings 1701.11.10, 1701.11.20, 1701.11.30,
 1701.11.40, 1701.11.50, 1701.12.00, 1701.91.00,
 1701.99.00, 1702.90.31, 1702.90.32, 1702.90.33,
 1702.90.34, 1702.90.35, 1702.90.36, 1702.90.37,
 1702.90.38, 1702.90.40, 1806.10.00 (except those with a
 sugar content less than 90 per cent) and 2106.90.20
 (except those that contain flavoring matter) of the
 Canadian Tariff Schedule.
            Subchapter B - Sanitary and Phytosanitary Measures



Article 751: Scope

     In order to establish a framework of rules and disciplines
to guide the development, adoption and enforcement of sanitary
and phytosanitary measures, this Subchapter applies to any such
measure of a Party that may, directly or indirectly, affect trade
between the Parties.


Article 752: Relation to Other Chapters

     Articles 301 (National Treatment), 309 (Import and Export
Restrictions) and 310 (Non-Discriminatory Administration of
Restrictions), and the provisions of Article XX(b) of the GATT as
incorporated into Article 2101(1), do not apply to any sanitary
or phytosanitary measure.


Article 753: Reliance on Non-Governmental Entities

     Each Party shall ensure that any non-governmental entity on
which it relies in applying a sanitary or phytosanitary measure
acts in a manner consistent with this Subchapter.


Article 754: Basic Rights and Obligations

     Right to Take Sanitary and Phytosanitary Measures

1.   Each Party may, in accordance with this Subchapter, adopt,
maintain or apply any sanitary or phytosanitary measure necessary
for the protection of human, animal or plant life or health in
its territory, including a measure more stringent than an
international standard, guideline or recommendation.

     Right to Establish Level of Protection

2.   Notwithstanding any other provision of this  Subchapter,
each Party may, in protecting human, animal or plant life or
health, establish its appropriate level of protection in
accordance with Article 757.

     Scientific Principles

3.   Each Party shall ensure that any sanitary or phytosanitary
measure that it adopts, maintains or applies is:

     (a) based on scientific principles, taking into account
 relevant factors including, where appropriate,
 different geographic conditions;

     (b) not maintained where there is no longer a scientific
 basis for it; and

     (c) based on a risk assessment, as appropriate to the
 circumstances.

     Non-Discriminatory Treatment

4.   Each Party shall ensure that a sanitary or phytosanitary
measure that it adopts, maintains or applies does not arbitrarily
or unjustifiably discriminate between its goods and like goods of
another Party, or between goods of another Party and like goods
of any other country, where identical or similar conditions
prevail.

     Unnecessary Obstacles

5.   Each Party shall ensure that any sanitary or phytosanitary
measure that it adopts, maintains or applies is applied only to
the extent necessary to achieve its appropriate level of
protection, taking into account technical and economic
feasibility.

     Disguised Restrictions

6.    No Party may adopt, maintain or apply any sanitary or
phytosanitary measure with a view to, or with the effect of,
creating a disguised restriction to trade between the Parties.


Article 755: International Standards and Standardizing
 Organizations

1.   Without reducing the level of protection of human, animal,
or plant life or health, each Party shall use, as a basis for its
sanitary and phytosanitary measures, relevant international
standards, guidelines or recommendations with the objective,
among others, of making its sanitary and phytosanitary measures
equivalent or, where appropriate, identical to those of the other
Parties.

2.   A Party's sanitary or phytosanitary measure that conforms to
a relevant international standard, guideline or recommendation
shall be presumed to be consistent with Article 754. A measure
that results in a level of sanitary or phytosanitary protection
different from that which would be achieved by a measure based on
a relevant international standard, guideline or recommendation
shall not for that reason alone be presumed to be inconsistent
with this Subchapter.

3.   Notwithstanding paragraph 1 and in accordance with the other
provisions of this Subchapter, a Party may adopt, maintain or
apply a sanitary or phytosanitary measure that is more stringent
than the relevant international standard, guideline or
recommendation.

4.   Where a Party has reason to believe that a sanitary or
phytosanitary measure of another Party is adversely affecting or
may adversely affect its exports and the measure is not based on
a relevant international standard, guideline or recommendation,
it may request, and the other Party shall provide in writing, the
reasons for such measure.

5.   Each Party shall, to the greatest extent practicable,
participate in relevant international and North American
standardizing organizations, including the Codex Alimentarius
Commission, the International Office of Epizootics, the
International Plant Protection Convention, and the North American
Plant Protection Organization, with a view to promoting the
development and periodic review of international standards,
guidelines and recommendations.


Article 756: Equivalence

1.   Without reducing the level of protection of human, animal,
or plant life or health, the Parties shall, to the greatest
extent practicable and in accordance with this Subchapter, pursue
equivalence of their respective sanitary or phytosanitary
measures.

2.   Each importing Party:

     (a) shall treat a sanitary or phytosanitary measure adopted
 or maintained by an exporting Party as equivalent to
 its own where the exporting Party, in cooperation with
 the importing Party, provides to the importing Party
 scientific evidence or other information, in accordance
 with risk assessment methodologies agreed upon by those
 Parties, to demonstrate objectively, subject to
 subparagraph (b), that the exporting Party's measure
 achieves the importing Party's appropriate level of
 protection;

     (b) may, where it has a scientific basis, determine that
 the exporting Party's measure does not achieve the
 importing Party's appropriate level of protection; and

     (c) shall, upon the request of the exporting Party, provide
 its reasons in writing for a determination under
 subparagraph (b).

3.   For purposes of establishing equivalency, each exporting
Party shall, upon the request of an importing Party, take such
reasonable measures as may be available to it to facilitate
access in its territory for inspection, testing, and other
relevant procedures.

4.   Each Party should, in the development of a sanitary or
phytosanitary measure, consider relevant actual or proposed
sanitary or phytosanitary measures of the other Parties.


Article 757: Risk Assessment and Appropriate Level of
 Protection

1.   In conducting a risk assessment, each Party shall take into
account:

     (a) relevant risk assessment techniques and methodologies
 developed by international or North American
 standardizing organizations;

     (b) relevant scientific evidence;

     (c) relevant processes and production methods;

     (d) relevant inspection, sampling, and testing methods;

     (e) the prevalence of relevant diseases or pests, including
 the existence of pest-free or disease-free areas or
 areas of low pest or disease prevalence;

     (f) relevant ecological and other environmental conditions;
 and

     (g) relevant treatments, such as quarantines.

2.   Further to paragraph 1, each Party shall, in establishing
its appropriate level of protection regarding the risk associated
with the introduction, establishment or spread of an animal or
plant pest or disease, and in assessing such risk, also take into
account the following economic factors, where relevant:

     (a) loss of production or sales that may result from such
 pest or disease;

     (b) costs of control or eradication of the pest or disease
 in its territory; and

     (c) the relative cost-effectiveness of alternative
 approaches to limiting risks.

3.   Each Party, in establishing its appropriate level of
protection:

     (a) should take into account the objective of minimizing
 negative trade effects; and

     (b) shall, with the objective of achieving consistency in
 such levels, avoid arbitrary or unjustifiable
 distinctions in such levels in different circumstances,
 where such distinctions result in arbitrary or
 unjustifiable discrimination against a good of another
 Party or constitute a disguised restriction on trade
 between the Parties.

4.   Notwithstanding paragraphs (1) through (3) and Article
754(3)(c), where a Party conducting a risk assessment determines
that available relevant scientific evidence or other information
is insufficient to complete the assessment, it may adopt a
provisional sanitary or phytosanitary measure on the basis of
available relevant information, including from international or
North American standardizing organizations and from sanitary or
phytosanitary measures of other Parties. Such Party shall, within
a reasonable period after information sufficient to complete the
assessment is presented to it, complete its assessment, review
and where appropriate revise the provisional measure in light of
such assessment.

5.   Where a Party is able to achieve its appropriate level of
protection through the phased application of a sanitary or
phytosanitary measure, it may, upon the request of another Party
and in accordance with this Subchapter, allow for such a phased
application, or grant specified exceptions for limited periods
from such measure, taking into account the requesting Party's
export interests.


Article 758: Adaptation to Regional Conditions

1.   Each Party shall adapt any of its sanitary or phytosanitary
measures relating to the introduction, establishment, or spread
of an animal or plant pest or disease, to the sanitary or
phytosanitary characteristics of the area where a good subject to
such measure is produced and the area in its territory to which
such good is destined, taking into account any relevant
conditions, including those relating to transportation and
handling, between such areas. In assessing such characteristics
of an area, including whether an area is, and is likely to
remain, a pest-free or disease-free area or an area of low pest
or disease prevalence, each Party shall take into account, among
other factors:

     (a) the prevalence of relevant pests or diseases in that
 area;

     (b) the existence of eradication or control programs in
 that area; and

     (c) any relevant international standard, guideline or
 recommendation.

2.   Further to paragraph 1, each Party shall, in determining
whether an area is a pest-free or disease-free area or an area of
low pest or disease prevalence, base such determination on
factors such as geography, ecosystems, epidemiological
surveillance, and the effectiveness of sanitary or phytosanitary
controls in that area.

3.   Each importing Party shall recognize that an area in the
territory of the exporting Party is, and is likely to remain, a
pest-free or disease-free area or an area of low pest or disease
prevalence, where the exporting Party provides to the importing
Party scientific evidence or other information sufficient to so
demonstrate to the satisfaction of the importing Party. For this
purpose, each exporting Party shall provide reasonable access in
its territory to the importing Party for inspection, testing and
other relevant procedures.

4.   Each Party may, in accordance with this Subchapter:

     (a) adopt, maintain or apply a different risk assessment
 procedure for a pest-free or disease-free area than for
 an area of low pest or disease prevalence; or

     (b) make a different final determination for the
 disposition of a good produced in a pest-free or
 disease-free area than for a good produced in an area
 of low pest or disease prevalence,

taking into account any relevant conditions, including those
relating to transportation and handling.

5.   Each Party shall, in adopting, maintaining or applying a
sanitary or phytosanitary measure relating to the introduction,
establishment, or spread of an animal or plant pest or disease,
accord a good produced in a pest-free or disease-free area in the
territory of another Party no less favorable treatment than it
accords a good produced in a pest-free or disease-free area, in
another country, that poses the same level of risk. Such Party
shall use equivalent risk assessment techniques to evaluate
relevant conditions and controls in the pest-free or disease-free
area and in the area surrounding that area and take into account
any relevant conditions, including those relating to
transportation and handling.

6.   Each importing Party shall pursue an agreement with an
exporting Party, upon request, on specific requirements the
fulfillment of which allows a good produced in  an area of low
pest or disease prevalence in the territory of an exporting Party
to be imported into the territory of the importing Party and
achieves the importing Party's appropriate level of protection.


Article 759: Control, Inspection and Approval Procedures

1.   Each Party, with respect to any control or inspection
procedure that it conducts:

     (a) shall initiate  and complete such procedure as
 expeditiously as possible and in no less favorable
 manner for a good of another Party than for a good of
 such Party or a like good of any other country;

     (b) shall publish the normal processing period for each
 such procedure or communicate the anticipated
 processing period to the applicant upon request;

     (c) shall ensure that the competent body

     (i) upon receipt of an application,  promptly examines
 the completeness of the documentation and informs
 the applicant in a precise and complete manner of
 any  deficiency, 

     (ii) transmits to the applicant as soon as possible the
 results of the procedure in a form that is precise
 and complete so that such applicant may take any
 necessary  corrective action,

     (iii) where the application is deficient, proceeds
 as far as practicable with such  procedure if
 the applicant so requests, and 

     (iv) informs the applicant, upon request,  of the
 status of the application and the reasons for  any
 delay;

     (d) shall limit the information the applicant is required
 to supply to that necessary for conducting such
 procedure;

     (e) shall accord confidential or proprietary information
 arising from, or supplied in connection with, such
 procedure conducted for a good of another Party

     (i) treatment no less favorable than for a good of
 such Party, and 

     (ii) in any event, treatment that protects the
 applicant's legitimate commercial interests, to
 the extent provided under the Party's law;

     (f) shall limit any requirement regarding individual
 specimens or samples of a  good to that which is
 reasonable and necessary;

     (g) should not impose a fee for conducting such procedure
 that is higher for a good of another Party than is
 equitable in relation to any such fee it imposes for
 its like goods or for like goods of any other country,
 taking into account communication, transportation and
 other related costs;

     (h) should use criteria for selecting the location of
 facilities at which a procedure is conducted that do
 not cause unnecessary inconvenience to an applicant or
 its agent;

     (i) shall provide a mechanism to review complaints
 concerning the operation of such procedure and to take
 corrective action when a complaint is justified;

     (j) should use criteria for selecting samples of goods that
 do not cause unnecessary inconvenience to an applicant
 or its agent; and

     (k) shall limit such procedure, for a good modified
 subsequent to a determination that such good fulfills
 the requirements of the applicable sanitary or
 phytosanitary measure, to that necessary to determine
 that such good continues to fulfill the requirements of
 such measure.

2.   Each Party shall apply, with such modifications as may be
necessary, paragraphs 1(a) through (i) to its approval
procedures.

3.   Where an importing Party's sanitary or phytosanitary measure
requires the conduct of a control or inspection procedure at the
level of production, an exporting Party shall, upon the request
of the importing Party, take such reasonable measures as may be
available to it to facilitate access in its territory and to
provide assistance necessary to facilitate the conduct of the
importing Party's control or inspection procedure.

4.   A Party maintaining an approval procedure may require its
approval for the use of an additive, or its establishment of a
tolerance for a contaminant, in a food, beverage or feedstuff,
under such procedure, prior to granting access to its domestic
market for a food, beverage or feedstuff containing such additive
or contaminant. Where such Party so requires, it shall consider
using a relevant international standard, guideline or
recommendation as the basis for granting access until it
completes such procedure.


Article 760: Notification, Publication and Provision of
 Information

1.   Further to Articles 1802 and 1803, each Party proposing to
adopt or modify a sanitary or phytosanitary measure of general
application at the federal level shall:

     (a) at least 60 days prior to the adoption or modification
 of such measure, other than a law, publish a notice and
 notify in writing the other Parties of the proposed
 measure and provide to the other Parties and publish
 the full text of the proposed measure, in such a manner
 as to enable interested persons to become acquainted
 with the proposed measure;

     (b) identify in such notice and notification the good to
 which the proposed measure would apply, and provide a
 brief description of the objective and reasons for such
 measure;

     (c) provide a copy of such proposed measure to any Party or
 interested person that so requests and, wherever
 possible, identify any provision that deviates in
 substance from relevant international standards,
 guidelines or recommendations; and

     (d) without discrimination, allow other Parties and
 interested persons to make comments in writing and
 shall, upon request, discuss such comments and take the
 comments and the results of such discussions into
 account.

2.   Each Party shall seek, through appropriate measures, to
ensure, with respect to a sanitary or phytosanitary measure of a
state or provincial government:

     (a) that, at an early appropriate stage, a notice and
 notification of the type referred to in paragraphs 1(a)
 and (b) are made prior to their adoption; and

     (b) observance of paragraphs 1(c) and (d).

3.   Where a Party considers it necessary to address an urgent
problem relating to sanitary and phytosanitary protection, it may
omit any step set out in paragraph 1 or 2, provided that, upon
adoption of a sanitary or phytosanitary measure, it shall:

     (a) immediately provide to the other Parties a notification
 of the type referred to in paragraph 1(b), including a
 brief description of the urgent problem;

     (b) provide a copy of such measure to any Party or
 interested person that so requests; and

     (c) without discrimination, allow other Parties and
 interested persons to make comments in writing and
 shall, upon request, discuss such comments and take
 such comments and the results of such discussions into
 account.

4.   Except where necessary to address an urgent problem referred
to in paragraph 3, each Party shall allow a reasonable period
between the publication of a sanitary or phytosanitary measure of
general application and the date that it becomes effective to
allow time for interested persons to adapt to such measure.

5.   Each Party shall designate a government authority
responsible for the implementation at the federal level of the
notification provisions of this Article, and shall notify the
other Parties thereof. Where a Party designates two or more
government authorities for such purpose, it shall provide to the
other Parties complete and unambiguous information on the scope
of responsibility of each such authority.

6.   Where an importing Party denies entry into its territory of
a good of another Party because it does not comply with a
sanitary or phytosanitary measure, the importing Party shall
provide a written explanation to the exporting Party, upon
request, that identifies the applicable measure and the reasons
that the good is not in compliance.


Article 761: Inquiry Points

1.   Each Party shall ensure that there is one inquiry point that
is able to answer all reasonable enquiries from other Parties and
interested persons, and to provide relevant documents, regarding:

     (a) any sanitary or phytosanitary measure of general
 application, including any control or inspection
 procedure or approval procedure, proposed, adopted or
 maintained in its territory at the federal, provincial,
 or state government level;

     (b) such Party's risk assessment procedures and factors it
 considers in conducting such assessment and in
 establishing its appropriate levels of protection;

     (c) the membership and participation of such Party, or its
 relevant federal, provincial or state government
 authorities in international and regional sanitary and
 phytosanitary organizations and systems, and in
 bilateral and multilateral arrangements within the
 scope of this Subchapter, and the provisions of such
 systems and arrangements; and

     (d) the location of notices published pursuant to this
 Subchapter or where such information can be obtained.

2.   Each Party shall ensure that where copies of documents are
requested by another Party or by interested persons in accordance
with this Subchapter, they are supplied at the same price, apart
from the actual cost of delivery, as the price for domestic
purchase.


Article 762: Technical Cooperation

1.   Each Party shall, upon the request of another Party,
facilitate the provision of technical advice, information and
assistance, on mutually agreed terms and conditions, to enhance
that Party's sanitary and phytosanitary measures and related
activities, including research, processing technologies,
infrastructure and the establishment of national regulatory
bodies. Such assistance may include credits, donations and
grants, for the purpose of acquiring technical expertise,
training and equipment to allow the Party to adjust to and comply
with a Party's sanitary or phytosanitary measure.

2.   Each Party shall, on the request of another Party:

     (a) provide to that Party information on its technical
 cooperation programs regarding sanitary or
 phytosanitary measures relating to specific areas of
 interest; and

     (b) consult with the other Party during the development of,
 or prior to the adoption or change in the application
 of, any sanitary or phytosanitary measure.


Article 763: Limitations on the Provision of Information

Nothing in this Subchapter shall be construed as requiring a
Party to:

     (a) communicate, publish texts or provide particulars or
 copies of documents other than in an official language
 of such Party; or

     (b) furnish any information the disclosure of which would
 impede law enforcement or otherwise be contrary to the
 public interest or would prejudice the legitimate
 commercial interests of particular enterprises.


Article 764: Committee on Sanitary and Phytosanitary Measures

1.   The Parties hereby establish a Committee on Sanitary and
Phytosanitary Measures, comprising representatives of each Party
who have responsibility for sanitary and phytosanitary matters.

2.   The Committee should facilitate:

     (a) the enhancement of food safety and improvement of
 sanitary and phytosanitary conditions in the
 territories of the Parties;

     (b) activities of the Parties pursuant to Articles 755 and
 756;

     (c) technical cooperation between the Parties, including
 cooperation in the development, application and
 enforcement of sanitary or phytosanitary measures; and

     (d) consultations on specific matters relating to sanitary
 or phytosanitary measures.

3.   The Committee:

     (a) shall, to the extent possible, in carrying out its
 functions, seek the assistance of  relevant
 international and North American standardizing
 organizations to obtain available scientific and
 technical advice and minimize duplication of effort;

     (b) may draw upon such experts and expert bodies as it
 considers appropriate;

     (c) shall report annually to the Commission on the
 implementation of this Subchapter;

     (d) shall meet upon the request of any Party and, unless
 the Parties otherwise agree, at least once each year;
 and

     (e) may, as it considers appropriate, establish and
 determine the scope and mandate of working groups.


Article 765: Technical Consultations

1.   A Party may request consultations with another Party on any
matter covered by this Subchapter.

2.   Each Party should use the good offices of relevant
international and North American standardizing organizations,
including those referred to in Article 755(5), for advice and
assistance on sanitary and phytosanitary matters within their
respective mandates.

3.   Where a Party requests consultations regarding the
application of this Subchapter to a Party's sanitary or
phytosanitary measure, and so notifies the Committee, the
Committee may facilitate such consultations, if it does not
consider the matter itself, by referring the matter for
non-binding technical advice or recommendations to a working
group, including an ad hoc  working group, or to another forum.

4.   The Committee should consider any matter referred to it
under paragraph 3 as expeditiously as possible, particularly
regarding perishable goods, and promptly forward to the Parties
any technical advice or recommendations that it develops or
receives concerning the matter.  The Parties involved shall
provide a written response to the Committee concerning the
technical advice or recommendations within such time as the
Committee may request.

5.   Where the involved Parties have had recourse to
consultations facilitated by the Committee under paragraph 3,
such consultations shall, upon the agreement of the Parties
involved, constitute consultations conducted for purposes of
Article 2006 (Consultations).

6.   The Parties confirm that a Party asserting that a sanitary
or phytosanitary measure of another Party is inconsistent with
the provisions of this Subchapter shall have the burden of
establishing such inconsistency.


Article 766: Definitions

For purposes of this Subchapter:

animal includes fish and wild fauna;

appropriate level of protection means the level of protection of
human, animal or plant life or health in the territory of a Party
that the Party considers appropriate; 

approval procedure means any registration, notification or other
mandatory administrative procedure for:

     (a) approving the use of an additive for a stated purpose
 or under stated conditions; or

     (b) establishing a tolerance for a stated purpose or under
 stated conditions for a contaminant,

in a food, beverage or feedstuff prior to permitting the use of
such additive or the marketing  of a food, beverage or feedstuff
containing such additive or contaminant;

area means a country, part of a country or all or parts of
several countries;

area of low pest or disease prevalence means an area in which a
specific pest or disease occurs at low levels;

contaminant includes pesticide and veterinary drug residues and
extraneous matter;

control or inspection procedure means any procedure used,
directly or indirectly, to determine that a sanitary or
phytosanitary measure is fulfilled, including sampling, testing,
inspection, evaluation, verification, monitoring, auditing,
assurance of conformity, accreditation, registration,
certification, or other procedure involving the physical
examination of a good, of the packaging of a good, or of the
equipment or facilities directly related to production, marketing
or use of a good, but does not mean an approval procedure;

international standard, guideline or recommendation means a
standard, guideline or recommendation:

     (a) regarding food safety, adopted by the Codex
 Alimentarius Commission, including one regarding
 decomposition elaborated by the Codex Committee on Fish
 and Fishery Products, food additives, contaminants,
 hygienic practice, and methods of analysis and
 sampling;

     (b) regarding animal health and zoonoses, developed under
 the auspices of the International Office of Epizootics;

     (c) regarding plant health, developed under the auspices of
 the Secretariat of the International Plant Protection
 Convention in coÄoperation with the North American
 Plant Protection Organization; or

     (d) established by or developed under any other
 international organization agreed upon by the Parties;

pest includes a weed;

pest-free or disease-free area means an area in which a specific
pest or disease does not occur;

plant includes wild flora;

risk assessment means an evaluation of:

     (a) the potential for the introduction, establishment or
 spread of a pest or disease and associated biological
 and economic consequences; or

     (b) the potential for adverse effects on human or animal
 life or health arising from the presence of an
 additive, contaminant, toxin or disease-causing
 organism in a food, beverage or feedstuff;

sanitary or phytosanitary measure means a measure that a Party
adopts, maintains or applies to:

     (a) protect animal or plant life or health in its territory
 from risks arising from the introduction, establishment
 or spread of a pest or disease,

     (b) protect human or animal life or health in its territory
 from risks arising from the presence of an additive,
 contaminant, toxin or disease-causing organism in a
 food, beverage or feedstuff,

     (c) to protect human life or health in its territory from
 risks arising from a disease-causing organism or pest
 carried by an animal or plant, or a product thereof, 

     (d) prevent or limit other damage in its territory arising
 from the introduction, establishment or spread of a
 pest,

including end product criteria; a product-related processing or
production method; a testing, inspection, certification or
approval procedure; a relevant statistical method; a sampling
procedure; a method of risk assessment; a packaging and labelling
requirement directly related to food safety; and a quarantine
treatment, such as a relevant requirement associated with the
transportation of animals or plants or with material necessary
for their survival during transportation; and

scientific basis means a reason based on data or information
derived using scientific methods.