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)

(b)

(c)

(d)

(e)

a given level or percentage of goods or services be exported;

domestic goods or services of the Party granting a waiver of customs duties be substituted for imported goods or services;

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;

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

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)

(b)

(c)

(d)

a receipt, or a copy of a receipt, evidencing payment of customs duties on a particular entry;

a copy of the entry document with evidence that it was received by a
customs administration;

a copy of a final customs duty determination by a customs administration respecting the relevant entry; or

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:

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.

Annex 301.3

Exceptions to Articles 301 and 309

Section A - Canadian Measures

1.

Articles 301 and 309 shall not apply to controls by Canada on the export of logs of all species.

2. Articles 301 and 309 shall not apply to controls by Canada on the export of unprocessed fish pursuant to the following existing statutes, as amended as of August 12, 1992:

(a)

New Brunswick Fish Processing Act, R.S.N.B. c. F-18.01 (1982), and
Fisheries Development Act, S.N.B. c. F-15.1 (1977);

(b)

(c)

(d)

Newfoundland Fish Inspection Act, R.S.N. 1990, c. F-12;

Nova Scotia Fisheries Act, S.N.S. 1977, c. 9;

Prince Edward Island Fish Inspection Act, R.S.P.E.I. 1988, c. F-13; and

(e) Quebec Marine Products Processing Act, No. 38, S.Q. 1987, c. 51.

(a)

(b)

(c)

except as provided in Annex 300-A, Appendix 300-A.1, paragraph 4, measures by Canada respecting the importation of any goods enumerated or referred to in Schedule VII of the Customs Tariff, R.S.C. 1985, c. 41 (3rd Supp.), as amended,

measures by Canada respecting the exportation of liquor for delivery into any country into which the importation of liquor is prohibited by law under the existing provisions of the Export Act, R.S.C. 1985, c. E-18, as amended,

measures by Canada respecting preferential rates for certain freight traffic under the existing provisions of the Maritime Freight Rate Act, R.S.C. 1985, c. M-1, as amended,

(d)

Canadian excise taxes on absolute alcohol used in manufacturing under the existing provisions of the Excise Tax Act, R.S.C. 1985, c. E-15, as amended, and

(e)

measures by Canada prohibiting the use of foreign or non-duty paid ships in the coasting trade of Canada unless granted a license under the Coasting Trade Act, S.C. 1992, c. 31,

to the extent that such provisions were mandatory legislation at the time of Canada's accession to the GATT and have not been amended so as to decrease their conformity with the GATT.

4.

Articles 301 and 309 shall not apply to quantitative import restrictions on goods that originate in the territory of the United States, considering operations performed in, or materials obtained from, Mexico as if they were performed in, or obtained from, a nonParty, and that are indicated by asterisks in Chapter 89 in Annex 401.2 (Tariff Schedule of Canada) of the Canada - United States Free Trade Agreement for as long as the measures taken under the Merchant Marine Act of 1920, 46 App. U.S.C. § 883, and the Merchant Marine Act of 1936, 46 App. U.S.C. §§ 1171, 1176, 1241 and 12410, apply with quantitative effect to comparable Canadian origin goods sold or offered for sale into the U.S. market.

(a)

(b)

the continuation or prompt renewal of a non-conforming provision of any statute referred to in paragraph 2 or 3; and

the amendment to a non-conforming provision of any statute referred to in paragraph 2 or 3 to the extent that the amendment does not decrease the conformity of the provision with Articles 301 and 309.