Accelerated Elimination of Tariffs Under the NAFTA

Under the North American Free Trade Agreement (NAFTA), tariffs on virtually all originating goods traded between Canada and Mexico will be eliminated by 2003. Tariffs on qualifying goods traded between Canada and the United States became duty free on January 1, 1998.

Article 302(3) of the NAFTA provides for the elimination of tariffs earlier than scheduled, subject to consultation and agreement between the three governments. Since the implementation of the NAFTA in 1994 there have been two rounds of accelerated tariff elimination.

For this third round, Canada and Mexico agreed on a bilateral package that eliminated tariffs on certain goods on January 1, 2001 rather than on January 1, 2003. The estimated value of two-way annual trade in the goods on the Canadian and Mexican lists is approximately $207 million. Mexico now provides duty free access for certain pharmaceuticals, chemicals and batteries. Canada has eliminated a number of very low tariffs (i.e. those less than 2 percent) on January 1, 2001, as is already provided for under the Customs Tariff. This includes such products as plastic articles, certain chemicals, cosmetics, glues and coffee makers. Detailed list: