Path: utzoo!utgpu!watmath!alberta!myrias!dbf
From: dbf@myrias.com (David Ferrier)
Newsgroups: can.general
Subject: Re: What does it mean to be a Canadian?
Summary: yet another Free Trade error correction
Keywords: free trade, Mexico, patience
Message-ID: <618720988.19101@myrias.com>
Date: 10 Aug 89 02:56:27 GMT
References: <1989Aug7.192704.26849@tmsoft.uucp> <618593503.8039@myrias.com> <1989Aug9.023153.4191@tmsoft.uucp>
Distribution: can
Organization: Myrias Research Corporation
Lines: 54

In article <1989Aug9.023153.4191@tmsoft.uucp> mason@tmsoft.UUCP (Dave Mason) writes:
>Annex 301.2(4) (pp 22-23) reads:
>	Notwithstanding paragraph 3 [which refers to ways things may
>	stop being considered to have been made in USanada], goods
>	shall nonetheless be considered to have been transformed in
>	the territory of a Party and treated as goods originating in
>	the territory of the Party; provided that:
>	a) the value of materials originating in the territory of
>	   either Party or both Parties used or consumed in the
>	   production of the goods plus the direct cost of assembling
>	   the goods in the territory of either Party or both Parties
>	   constitute not less than 50 percent of the value of the
>	   goods when exported to the territory of the other Party, and
>	b) the goods have not subsequent to assembly undergone
>	   processing or further assembly in a third country and they
>	   meet the requirements of Article 302 [which refers to
>	   transshipment].
>
>What this means to people who don't like reading legalese is that if a
>product requires 500 labour-hours to build, based on Mexican border
>labour rates of $1/hr, as long as raw materials (or labour or capital
>costs) from sources in the USanada cost at least $500, then the
>product is deemed to be of USanada manufacture, and is fully covered
>by the FTA.

Nonsense. What this really means is clearly explained a few pages earlier,
in the explanatory notes accompanying the text of the Agreement:

	"The rules of interpretation in Annex 301 make clear that goods
	that are further processed in a third country before being
	shipped to their final destination would not qualify for area
	treatment even if they meet the rule of origin. For example
	cloth woven from U.S. fibres, cut in the United States but
	sewn into a shirt in Mexico...would not qualify for duty-
	free entry into Canada under the Agreement.

If that's not clear enough, maybe the following excerpt from an
April 1988 Saturday Night book review of If You Love This Country
will help:

	"The most spectacularly shoddy argument in the book...is
	John Ralston Saul's piece on the danger of cheap Mexican
	imports...the issue that Saul thought he had uniquely
	discovered had, of course, been thoroughly discussed
	at the trade negotiations...any product whose final
	assembly does not occur in either the United States or
	Canada will not be covered by the deal.

Again, how many times need it be said?
-- 
David Ferrier                            | computer: 
Edmonton, Alberta                        | a million morons
uunet!myrias.COM!dbf                     | working at the speed of light