Proclamation 5923—To Implement the United States-Canada Free-Trade Agreement

1. On January 2, 1988, I entered into the United States-Canada Free-Trade Agreement (the Agreement). The Agreement and certain letters exchanged between the Governments of Canada and the United States were approved by the Congress, in section 101(a) of the United States-Canada Free-Trade Agreement Implementation Act of 1988 (the Implementation Act) (Pub. L. 100-449, 102 Stat. 1851).

2. Section 201(a) of the Implementation Act authorizes the President to proclaim such modifications or continuance of existing duties, such continuance of existing duty-free or excise treatment, and such additional duties, as the President determines are necessary or appropriate to carry out Article 401 of the Agreement (including the schedule of duty reductions with respect to goods originating in the territory of Canada set forth in Annexes 401.2 and 401.7).

3. Section 202 of the Implementation Act provides for certain rules of origin. I have determined that it is necessary to include in the Harmonized Tariff Schedule of the United States (HTS) the rules of origin set forth in section 202 (including the "Annex Rules", as that term is defined in section 202(d)). Further, pursuant to section 202(e) of the Implementation Act, in order to conform the definition of Canadian articles of original motor-vehicle equipment for purposes of the Automotive Products Trade Act of 1965 (19 U.S.C. 2001 et seq.) with the rules set forth in Annex 301.2 of the Agreement, I have determined that it is necessary to modify the pertinent definition set forth in general note 3(c)(iii) of the HTS.

4. Pursuant to sections 503 and 504(c) of the Trade Act of 1974, as amended (the Trade Act) (19 U.S.C. 2463 and 2464(c)), I have determined that certain preferential tariff treatment previously afforded for purposes of the Generalized System of Preferences (GSP) should be continued in the HTS subheadings established by Annex II to this Proclamation.

5. Pursuant to section 466 of the Tariff Act of 1930, as amended (19 U.S.C. 1466), the rate of duty imposed on equipments, or any part thereof, including boats, purchased for, or the repair parts or the materials to be used, or the expenses of repairs made in a foreign country upon a U.S.-documented vessel at its first arrival in any port of the United States is 50 percent ad valorem. Such duty does not apply to the cost of repair parts, materials, or expenses of repairs in a foreign country upon a U.S. civil aircraft, as defined in general note 3(c)(iv) to the HTS. I have determined that it is necessary or appropriate to provide for the staged reductions in the rate of duty on such equipments, or any part thereof, originating in the territory of Canada and the expenses of repairs made in the territory of Canada upon U.S.-documented vessels (except such civil aircraft), as set forth in Annex 401.2 of the Agreement.

6. Section 1204(b) of the Omnibus Trade and Competitiveness Act of 1988 (the 1988 Act) (19 U.S.C. 3004(b)) confers authority upon the President to proclaim such modifications to the HTS as are necessary or appropriate to implement the applicable provisions of Executive actions taken after January 1, 1988, and before January 1, 1989. 7. Section 604 of the Trade Act (19 U.S.C. 2483) confers authority upon the President to embody in the HTS the substance of relevant provisions of that Act, of other Acts affecting import treatment, and of actions taken thereunder.

Now, Therefore, I, Ronald Reagan, President of the United States of America, acting under the authority vested in me by the Constitution and statutes of the United States, including but not limited to sections 201 and 202 of the Implementation Act, section 1204 of the 1988 Act, and section 604 of the Trade Act, do proclaim that:

(1) In order to specify the symbol pertaining to preferential duty treatment for goods originating in the territory of Canada, general note 3(c)(i)(A) to the HTS is modified by inserting, immediately after the line reading "Agreement on Trade in Civil Aircraft .... C", a new line reading "United States-Canada Free-Trade Agreement..... CA".

(2) In order to implement the duty treatment provided by the Agreement and to set forth rules for determining the country of origin of goods imported into the customs territory of the United States for purposes of the Agreement and of the Automotive Products Trade Act, general note 3 to the HTS is modified as set forth in Annex I to this Proclamation.

(3) In order to provide preferential duty treatment to particular goods originating in the territory of Canada, the HTS is modified as set forth in Annex II to this Proclamation.

(4) In order to provide duty-free entry to particular goods originating in the territory of Canada, the column entitled "Rates of Duty 1-Special" for each of the HTS subheadings enumerated in Annex III to this Proclamation is modified as set forth in such Annex.

(5) In order to provide staged reductions in duties for particular goods originating in the territory of Canada, the rate column entitled "Rates of Duty 1-Special" for each of the HTS subheadings enumerated in Annex IV to this Proclamation is modified—

(a) by inserting in such column for each such subheading the rate of duty specified for such subheading in the first dated Annex column under the heading "Rates of Duty, effective with respect to goods originating in the territory of Canada and entered on or after—", followed by the symbol "CA" in parentheses, and

(b) effective on the date specified for the second dated Annex column under such heading and on each of the subsequent dated Annex columns, by deleting from each such subheading the "Canada" rates of duty in the HTS column entitled "Rates of Duty 1-Special" in effect on the day before the respective dates provides therein, and by inserting in lieu thereof the rates of duty specified in the next Annex column as effective on or after the respective date indicated for such column.

(6) In order to implement staged reductions in the rate of duty otherwise applicable under section 466 of the Tariff Act of 1930 to the equipments, or any part thereof, including boats, originating in the territory of Canada and the expenses of repairs made in the territory of Canada upon U.S.-documented vessels (other than civil aircraft, as defined in general note 3(c)(iv) of the HTS), such equipments, parts (including boats), and expenses of repairs shall be subject to duty at a rate of 45 percent ad valorem, effective with respect to any U.S.-documented vessel arriving in any port of the United States on or after January 1, 1989. Effective with respect to any U.S.-documented vessel (other than civil aircraft) arriving in any port of the United States on or after January i in each of the following years, the rate of duty set forth opposite the appropriate year shall be assessed on such equipments, parts, and repairs:

1990—40% ad valorem

1991—35% ad valorem

1992—30% ad valorem

1993—25% ad valorem

1994—20% ad valorem

1995—15% ad valorem

1996—10% ad valorem

1997—5% ad valorem

1998 and thereafter—Free

(7) All previously issued Proclamations and Executive orders are superseded to the extent inconsistent with this Proclamation.

(8)(a) The amendments made by paragraph (5)(b) of this Proclamation shall be effective with respect to articles entered, or withdrawn from warehouse for consumption, on or after the dates indicated for the respective Annex columns.

(b) Except as provided in paragraph (a), this Proclamation shall be effective with respect to articles entered, or withdrawn from warehouse for consumption, on or after January 1, 1989, or, if the Agreement does not enter into force on January 1, 1989, on or after such later date as the Agreement enters into force.

(c) If the date of entry into force is later than January 1, 1989, the United States Trade Representative shall publish notice of that later date in the Federal Register. All other references to January 1, 1989, in this Proclamation and its annexes shall then be deemed to be that later date of entry into force.

In Witness Whereof, I have hereunto set my hand this 14th day of December, in the year of our Lord nineteen hundred and eighty-eight, and of the Independence of the United States of America the two hundred and thirteenth.

RONALD REAGAN