Tariffication

NAFTA AGRICULTURE FACT SHEET:
Tariffication of Non-Tariff Measures

The NAFTA Will Eliminate Quantitative Restrictions Affecting U.S.-Mexico Trade

All previous quantitative restrictions affecting U.S.-Mexico trade in agricultural products were eliminated in the NAFTA.

Quantitative Restrictions Were Converted To Tariff-Rate Quotas

Most U.S. and Mexican quantitative restrictions were converted to tariff-rate quotas (TRQ’s) based on the "tariffication" of the former border measure.
The NAFTA TRQ’s provide that a certain quantity of product can enter duty-free, while anything over this amount is subject to an over-quota tariff -- established as the tariff equivalent of the border protection provided by the previous quantitative restriction. The NAFTA TRQ’s provide for growth in the quota amount. The over-quota tariff is being phased out over a 10- or 15-year period.

Mexico's Import Licensing

Upon enactment of the agreement, Mexico eliminated import licensing requirements on U.S. agricultural exports. Mexico replaced licensing requirements with a TRQ or an ordinary tariff, which are being phased-out over the NAFTA transition period.
NAFTA TRQ’s were established for Mexico's imports of corn, dry beans, milk powder, poultry, barley/malt, animal fats, potatoes, eggs, and some lumber products from the United States.
The TRQ’s are generally based on average annual 1989-91 trade, with some adjustment for special conditions. The NAFTA quota volume will grow at a compounded annual 3-percent rate, except for barley/malt, which will grow at 5 percent.
Mexico's over-quota tariffs are based on the tariff equivalent of the border protection provided by the import license. This tariff equivalent, in the form of a tariff, are being phased out using the following formula: 24 percent over the first six years in equal annual installments, then a straight-line phase out over the remaining transition period. The over-quota tariffs on all products are being eliminated over a 10-year transition period, except corn, dry beans, and powdered milk, which are being eliminated over 15 years.
Mexico immediately eliminated the import license and the duty on millet and on grapes imported from October 15 to May 31. The import licenses on wheat, grapes (June 1 to October 14), tobacco, cheese, evaporated milk, and day-old chicks imported from the United States were replaced by tariffs, which are being phased out over a 10-year period.
Canada and Mexico maintain current import restrictions, both tariffs and tariff-rate quotas, on two-way trade in poultry, eggs and most dairy products.

U.S. Import Restrictions

The previous U.S. Section 22 import quotas for imports from Mexico were replaced by NAFTA TRQ’s. The quota quantities grow at a 3-percent compounded annual rate over the NAFTA transition periods. The over-quota tariff was based on a 1989-91 tariff equivalent of the previous border protection.
For dairy products, cotton and sugar-containing products, the over-quota tariff for imports from Mexico is being phased out over 10 years. For peanuts, the over-quota tariff on peanuts imported from Mexico is being reduced over 15 years -- 15 percent over the first six years of the agreement, with the remainder of the tariff phased out over the remaining 9 years.

MEXICO'S IMPORT LICENSES CONVERTED TO TARIFF-RATE QUOTAS

	NAFTA Tariff-rate Quotas				Over-Quota Tariffs
Product	Metric tons				$U.S./mt	Percent
	United States	Canada			Specific	Ad Valorem
Corn	2,500,000		1,000	206			215
Barley/malt	120,000		30,000	N / A			N / A
barley	N / A		N / A	155			128
malt	N / A		N / A	211			175
Dry beans	50,000		1,500	480			139
Potatoes	15,000		4,000	354			272
Poultry	95,000		N / A	N / A			N / A
whole turkey	2,000		N / A	1,850			133
other whole poultry	13,000		N / A	1,650			260
turkey pieces /offal	25,000		N / A	1,650			260
other pieces/offal	28,000		N / A	1,650			260
mechanically - deboned	27,000		N / A	1,650			260
Powdered milk	40,000		N / A	1,160			139
Eggs	6,500		N / A	none			50
Animal fats / oils	35,000		1,000	930			282

All in-quota tariffs are zero. N / A = not applicable.

MEXICO’S TARIFF-RATE QUOTAS ON LUMBER PRODUCTS

Product	Tariff line	Tariff-rate quota	Over-quota tariff
	HTS code	metric tons	percent
Oak lumber, over 6mm thick	44079101	3,325	15
Logs	44031001	14,250	10
Lumber, pine, fir	44071002	119,700	10
Lumber, other	44079999	2,470	15
Coniferous lumber	44071001	9,500	15
Coniferous wood chips, particles	44012101	66,500	10
Coniferous lumber, small boards	44071003	950	10
Coniferous wood chips, particles	44012101	3,500	10
Logs, stained	44031001	750	10
Coniferous lumber	44071001	500	15
Coniferous lumber, pine, fir	44071002	6,300	10
Coniferous lumber, small boards	44071003	50	10
Lumber, oak, over 6mm thick	44079101	175	15
Lumber, other	44079999	130	15

MEXICO'S IMPORT LICENSES CONVERTED TO ORDINARY TARIFFS

Product	NAFTA Base Tariff
Wheat	15%
Day-old chicks	50%
Grapes
October 15 to May 31	0%
June 1 to October 14	20%
Tobacco, unmanufactured and manufactured	50%
Evaporated milk	20%
Cheeses	20%
except fresh cheese	40%
Millet	0%
Coffee	20%
Carnauba wax	50%

U.S. SECTION 22 QUOTAS CONVERTED TO TARIFF RATE QUOTAS

	Base MFN U.S. Quota	NAFTA Quota		Tariff		Equivalents
Product	mt	mt		Percent %		Specific $/mt
Dairy Products
* Cheese	110,999		5,550		69		1,225-2,180
*Fluid products	7,311		366		92-94		472-617
*Dried lowfat products	8,442		422		78-83		956-1,058
*Butter products	865		43		94-96		1,193-1,505
*Processed products	15,449		773		87-95		487-1,115
Sugar Products
*Blended syrups	20,000		1,500		120		379
*Articles >65% sugar	0		1,500		120		375
*Other sugar - containing	85,274		12,791		91-120		243-435
Peanuts	33,770		3,377		123-186		530-803
Cotton	28,782		10,000		26		89-355

Last modified: Friday, November 18, 2005