Annex I (con.) (e) Subdivision (c) of such note 9, as redesignated, is modified by striking "(c)(vii)(B)(2)" and by inserting in lieu thereof "(b)(ii)"; and subdivision (c)(i) of such note 9, as redesignated, is modified by striking *(c)(vii)(R)" and by inserting in lieu thereof "(r)". (f) Subdivision (e) of such note 9, as redesignated, is modified by striking "(c)(vii)(B), (C) and (D)" and by inserting in lieu thereof "(b), (c) and (d)". (g) Subdivisions (f) and (j) of such note 9, as redesignated, are each modified by striking "(c)(vii)(R)" and by inserting in lieu thereof "(r)". (h) Subdivision (h) of such note 9, as redesignated, is modified by striking "(c)(vii)(G)" and by inserting in lieu thereof "(g)"; and subdivision (h)(ii) of such note 9, as redesignated, is modified by striking "(c)(vii)(E)" and by inserting in lieu thereof "(e)". (1) Subdivision (i) of such note 9, as redesignated, is modified by striking "(c)(vii)(H)" and by inserting in lieu thereof "(h)". (j) Subdivision (j) of such note 9, as redesignated, is modified by striking "(c)(vii)(H)(1)" and by inserting in lieu thereof "(h)(1)". (k) Subdivision (1) of such note 9, as redesignated, is modified by striking "(c)(vii)(B)" and by inserting in lieu thereof "(b)"; subdivision (1)(v) of such note 9, as redesignated, is modified by striking "subparagraph (4)" and by inserting in lieu thereof "subdivision (1)(iv) of this note"; and subdivision (1)(ix) of such note 9, as redesignated, is modified by striking "subparagraphs (1) to (8)" and by inserting in lieu thereof "subdivisions (1)(i) to (viii)". (1) Subdivisions (m) and (n) of such note 9, as redesignated, are each modified by striking "(c)(vii) (H) and (R)" and by inserting in lieu thereof *(h) and (r)"; and subdivision (m)(ii)(A), as redesignated, is modified by striking "subparagraph (1)" and by inserting in lieu thereof "subdivision (a)(1) of this note". (m) Subdivision (o) of such note 9, as redesignated, is modified by striking "(c)(vii)(H), (N) and (R)" and by inserting in lieu thereof "(h), (n) and (r)". (n) Rule 1 to section IV in subdivision (r), as redesignated, is modified by striking "(ee)" and by inserting in lieu thereof "5"; rule 17 to section XI in subdivision (r) is modified by striking "(nn) and (oo)" and by inserting in lieu thereof "14 and 15", and by striking "subdivision (c)(vii) of"; rule 18 to section XI in subdivision (r) is modified by striking "(dd), (ee), (ff), (hh), (kk), (mm) and (pp)" and by inserting in lieu thereof "4, 5, 6, 8, 11, 13 and 16", and by striking "subdivision (c)(vii) of"; rule 1 to section XV in subdivision (r), as redesignated, is modified by striking "(ii) or (vv)" and by inserting in lieu thereof "10 or 23"; and rules 3 and 4 to 150-006 0-94-7 Annex I (con.) section XVIII in subdivision (r) are each modified by striking "(bb)" and by inserting in lieu thereof "2"; and (0) General note 9, as redesignated, is suspended as of the close of December 31, 1993, unless the date of entry into force of the NAFTA under this proclamation with respect to Canada is after January 1, 1994, under the terms of recitals (8)(b) and (c) of this proclamation; such suspension shall continue in effect unless otherwise proclaimed by the President for the period of suspension of the United States-Canada Free-Trade Agreement; and for the period of such suspension, only the following provision shall appear in the HTS "9. United States-Canada Free-Trade Agreement. (Suspended; see general note 12.)", and the subdivisions and text of such note shall not be included in the HTS. 9 (a). Subdivision (c)(viii) of general note 3 is redesignated as general note 10, and its existing provisions are redesignated as subdivisions (a), (b), (b)(i), (b)(ii), (c), (d), (d)(i), (d)(ii), (d)(iii), (d)(iv), (d)(v), (e)(i), (e)(i)(A), (e)(i)(B), (e)(ii), (f), (f)(i), (f)(ii), and (g), respectively, of such note 10. (b) Subdivision (b) of such note 10, as redesignated in the preceding paragraph, is modified by striking "subparagraphs (D) and (E) of this paragraph" and by inserting in lieu thereof "subdivisions (d) and (e) of this note", by striking out "subparagraph (D) of this paragraph" and by inserting in lieu thereof "subdivision (d) of this note", and by striking "subparagraph (B)(2)(II) above" and by inserting in lieu thereof "subdivision (b)(ii)(B) of this note"; and subdivision (b)(ii) of such note 10, as redesignated, is modified by redesignating clauses "(I)" and "(II)" as "(A)" and "(B)", respectively. (c) Subdivision (d) of such note 10, as redesignated, is modified by striking "subparagraph (B) of this paragraph" and by inserting in lieu thereof "subdivision (b) of this note"; and subdivision (d)(i), as redesignated, is modified by striking "(C)" and by inserting in lieu thereof "(c)". (d) Subdivision (e)(i) and (ii) of such note 10, as redesignated, are each modified by striking "subparagraph (B) of this paragraph" and by inserting in lieu thereof "subdivision (b) of this note". (e) Subdivision (f) of such note 10, as redesignated, is modified by striking "subparagraph (E) of this paragraph" and by inserting in lieu thereof "subdivision (e) of this note"; and subdivision (f)(ii), as redesignated, is modified by striking "subparagraph (D) of this paragraph" and by inserting in lieu thereof "subdivision (d) of this note". (f) Subdivision (g) of such note 10, as redesignated, is modified by striking "subparagraphs (D) or (E) of this paragraph" and by inserting in lieu thereof "subdivisions (d) or (e) of this note". 10 (a). Subdivision (c)(ix) of general note 3 is redesignated as general note 11, and its existing provisions are redesignated as subdivisions (a), (b)(i), Annex I (con.) (b)(1)(A), (b)(1)(B), (b)(ii), (b)(ii)(A), (b)(ii)(B), (b)(iii), (b)(iii)(A), (b)(iii)(B), (c), (d), (d)(i), (d)(ii), (d)(iii), (d)(iv), (d)(v), (d)(vi), (d)(vii), (d)(viii), and (e), respectively, of such note 11. (b) Subdivision (b)(i) of such note 11, as redesignated in the preceding paragraph, is modified by striking "(c)(ix)(D) or (c)(ix)(E)" and by inserting in lieu thereof "(d) or (e)". (c) Subdivision (b)(i)(B) of such note 11, as redesignated, is modified by redesignating clauses "(A)" and "(B)" as "(1)" and "(2)", respectively; by striking at each occurrence "(II)(B)" and by inserting in lieu thereof '(B) (2)"; and by striking "subdivision (c)(ix)" and by inserting in lieu thereof "this note". (d) Subdivision (b)(ii) of such note 11, as redesignated, is modified by striking "subdivision (c)(ix) of". (e) Subdivision (b)(iii) of such note 11, as redesignated, is modified by striking "(c)(ix)(B)" and by inserting in lieu thereof "(b)"; and by redesignating the clauses in the final sentence as "(1)" and "(2)", respectively. (f) Subdivision (c) of such note 11, as redesignated, is modified by striking "(c)(ix)(B)", "(c)(ix)(A)", "(c)(ix)(D)", "(c)(ix)(B)" and '(c)(ix)(A)" and by inserting in lieu thereof "(b)", "(a)", "(d)", "(b)", and '(a)", respectively. (g) Subdivision (d) of such note 11, as redesignated, is modified by striking "subdivision (c)(ix) of"; and subdivision (d)(vi), as redesignated, is modified by striking "(c)(ix)(E)" and by inserting in lieu thereof "(e)". 11. The following new general note 12 is inserted in appropriate sequence: 12. North American Free Trade Agreement. (a) Goods originating in the territory of a party to the North American Free Trade Agreement (NAFTA) are subject to duty as provided herein. For the purposes of this note- (1) Goods that originate in the territory of a NAFTA party under Annex I (con.) (ii) Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note, that qualify to be marked as goods of Mexico under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (without regard to whether the goods are marked), and that are provided for in a subheading for which a rate of duty appears in the "Special" subcolumn of column 1 followed by the symbol "MX" in parentheses, are eligible for such duty rate, in accordance with section 201 of the North American Free Trade Agreement Implementation Act. (b) For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff and customs treatment set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if- (i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or (ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that- (A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification provided in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or (B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other applicable requirements of this note; or (iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or (iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials provided for in the tariff schedule as "parts" and used in the production of such goods does not undergo a change in tariff classification because- (A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or (B) the tariff heading for such goods provides for and specifically describes both the goods and their parts and is not further divided into subheadings, or the Annex I (con.) subheading for such goods provides for and specifically describes both the goods and their parts, provided that such goods are not provided for in chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable requirements of this note. For purposes of this note, the term "material" means a good that is used in the production of another good and includes a part or an ingredient. (c) Regional value content. Except as provided in subdivision (c)(iv) of this note, the regional value content of a good shall be calculated, at the choice of the exporter or producer of such good, on the basis of either the transaction value method set out in subdivision (c)(i) or the net cost method set out in subdivision (c)(ii). (1) Transaction value method. The regional value content of a good may be calculated on the basis of the following transaction value method: where RVC is the regional value content, expressed as a (11) Net cost method. The regional value content of a good may be calculated on the basis of the following net cost method: where RVC is the regional value content, expressed as a percentage; NC is the net cost of the good; and VNM is the value of non-originating materials used by the producer in the production of the good. (iii) Except as provided in subdivisions (d)(i) and (d)(ii)(A)(2) of this note, the value of non-originating materials used by the producer in the production of a good shall not, for |