***NAFTA Tariff and Phase-Out Data***



Contributed by: Carsten Kowalczyk,

                The Fletcher School of Law and Diplomacy,

                Tufts University,

                Medford, MA 02155

E-mail:         ckowalczyk@infonet.tufts.edu





This data should be referenced to the paper:



Carsten Kowalczyk and Donald Davis, 1996, "Tariff Phase-outs:

Theory and Evidence from  GATT and NAFTA," NBER Working Paper no. 5421.





Description:



The North American Free Trade Agreement (NAFTA) went into effect on

January 1, 1994.  Annex 302.2 of the Agreement identifies five general

tariff phase-out categories specifying the number of equal-sized annual

cuts to free trade (A:  immediately, B:  five stages, C:  ten stages,

C+:  15 stages, D:  continued duty free) and some exceptional categories

(B+:  seven stages, B6 and B1:  five stages with small initial reductions

versus large initial reductions, C10: nine stages).  The tariff schedules

list products according to the Harmonized System and associate with each

product a phase-out category and its 1991 base tariff.



The files NAFTA_US.ASC and NAFTA_MX.ASC list the imports into each

of these countries (from each other, and from the world), along with

the average 1991 ad valorem tariff rates for imports from the other

country, and the average number of years for these tariffs to be

phased-out under NAFTA.  These are reported by selected SITC Rev. 3

categories at the 3-digit and 4-digit level.  Both the ad valorem tariff

rates, and the number of years for these to be phased-out, are computed

as unweighted averages using sampled information from the detailed

tariffs and phase-out schedules at more detailed levels, as follows.



Based on the 1991 United Nations Commodity Trade Statistics for Mexico

and the United States, imports from each other and rest of world (and

corresponding exports) are sampled at the 5-digit SITC level.

Products accounting for relatively large shares of total trade within

2-digit categories were sampled first (>20% of 2-digit trade, >10% for

large value categories SITC 7 and 8).  Then 5-digit commodities were

sampled within the omitted 2-digit categories that were not represented

among the first set of products.  For each 5-digit SITC code the

corresponding six and eight digit Harmonized Codes were found using the

UN (1986) classification. Ad valorem tariffs and staging categories

were gathered from NAFTA (1993) Annex, the latter as the number of years

equal to the number of tariff reductions.  Products with specific tariffs

or tariff-quotas were not included. 5-digit SITC values of base rates

and phase-outs were found by unweighted averaging across all relevant

6- and 8-digit Harmonized categories. The procedure results in 148

5-digit product lines for the United States and 685 lines for Mexico,

with 56 common product categories.  These commodities account for 34.6

percent of U.S. imports from Mexico and 15.4 percent of its imports from

the world, and 38.5 and 40.1 percent of Mexico's imports from the U.S.

and the world, respectively.







Record Layout:



The files NAFTA_US.ASC and NAFTA_MX.ASC have the following fields:



columns 1-23    -       Harmonized System codes that were sampled from

columns 25-36   -       Corresponding SITC Rev. 3 codes

columns 38-94   -       SITC Rev. 3 commodity names

columns 96-105  -       Imports from partner country (US$ 1,000)

                          In NAFTA_US this is imports from Mexico

                          In NAFTA_MX this is imports from the U.S.

columns 108-118 -       Imports from the world

columns 121-125 -       Average 1991 tariff (percentage)

columns 129-137 -       Phase-out schedule

                          A = phase-out immediately,

                          B = phase-out in five years,

                          C = phase-out in ten years,

                          D = continued duty free.

                        When four numbers are given, the first is the

                        number of sampled A cases; the second is B cases;

                        the third is C cases; and the fourth is D cases.

columns 141-145 -       Average number of years to tariff phase-out

                          This is computed as an unweighted average of

                          the cases in the preceding columns, e.g.

                          (0*A+5*B+10*C+0*D)/(A+B+C+D).



Special Considerations:



For Mexico, the import data in NAFTA_MX.ASC is stated f.o.b., while

for the U.S. the import data in NAFTA_US.ASC is c.i.f.  In 1991, Mexico

excluded maquiladoras trade from its merchandise trade and instead

tabulated it as services trade, so that the import data in NAFTA_MX.ASC

excludes maquiladora trade.  In contrast, U.S. merchandise data include

trade with the maquiladoras:  Mexico listed 1991 merchandise imports

from the U.S. to be $25 billion while the U.S. listed 1991 merchandise

exports to Mexico as $32 billion.





Sources:



North American Free Trade Agreement.  1993.  Washington, D.C.:

United States Government Printing Office.



United Nations Statistical Office.  1986.  Standard International Trade

Classification Revision 3.  Statistical Papers Series M, No. 34/Rev. 3.



United Nations Statistical Office.  1992.  Commodity Trade Statistics

1990-91.  New York: United Nations.