NAFTA AGRICULTURE FACT SHEET:
Fresh Peppers

TREATMENT OF TARIFFS:

• Upon enactment of the NAFTA on January 1, 1994, four new U.S. tariff lines were created for fresh peppers. In addition, U.S. chili pepper imports from Mexico are covered by a special agricultural safeguard, which is designed as a seasonal tariff-rate quota. Under the safeguard, a certain quantity of imports enters at the NAFTA preferential tariff rate, while any amount in excess is assessed the lower of the current MFN rate or the MFN rate in place when the quantity is reached.
• This quota quantity grows at a compounded 3-percent annual rate over the transition period. The quantity for the period Oct. 1,1997-July 31, 1998 is 32,673.
• Mexico immediately phased out its 10-percent duty on bell peppers and other non-chili peppers imported from the United States. U.S. chili peppers can enter duty-free as of January 1, 1998. Mexico does not use the safeguard on peppers.

The U.S. phaseout schedule and safeguard quota for peppers are as follows:

Item	          Season      	Base Tariff	Phase-out	Safeguard base 1/

Peppers, other	Nov. 1-May 31	5.5 cents/kg	10 years	None

Peppers, other	June 1-Oct. 31	5.5 cents/kg	5 years 2/	None

Peppers, chili	Oct. 1-July 31	5.5 cents/kg	10 years	29,900 mt

Peppers, chili	Aug. 1-Sept. 30	5.5 cents/kg	Immediately	None

1/ Will increase 3 percent annually, compounded. Current MFN rates are below the base tariff rates.
2/ Duty free on January 1, 1998.

TREATMENT OF QUANTITATIVE RESTRICTIONS:

• There are no quantitative restrictions affecting trade in peppers.

U.S. Pepper Trade with Mexico

Value in $1000; volume in metric tons.

Last modified: Friday, November 18, 2005