15 



general safeguard for sugar and other import sensitive 

 commodities. 



8. Q. What is the time table of this side agreement? 



A. We hope to conclude successfully the side agreements by early 

 summer. 



Under the dry edible bean proposed agreement, the U.S. would 

 eliminate the 1.1-1.3 cent per kilogram tariff on dry beans 

 imported from Mexico. In return, Mexico would implement a 

 transitional (TRQ) for dry beans for 15 years, and assure US 

 duty-free access to the Mexican market for 50,000 metric tons 

 annually. 



Enclosed is a letter from a constituent of mine regarding the US 

 dry beans provisions. I would appreciate your comments regarding 

 his concerns. 



A. Mr. Kelly sent a similar letter to us. In the NAFTA 

 negotiations, we placed our most trade sensitive items in the 15- 

 year phase out category and Mexico did too. Dried beans was one 

 of the commodities for which Mexico insisted on a 15-year phase- 

 out of import restrictions. Mexico does not apply tariffs to 

 U.S. dry bean exports but maintains a restrictive licensing 

 system. Under the NAFTA, Mexican import licenses will be 

 eliminated immediately, substituted by a tariff rate quota. 

 Initially, no tariffs will be applied to the first 50,000 metric 

 tons of U.S. bean exports to Mexico. This duty-free quantity 

 will increase by 3 percent each year while the over-quota duty 

 will be reduced to zero during the 15 year-transition period. 



The tariff rate quotas developed in the NAFTA negotiations were 

 based on both U.S. and Mexican official trade data. In 1990, the 

 United States exported 153,000 tons of dry beans to Mexico. In 

 1991, we exported 38,000 tons, and, in 1992, we exported 27,548 

 tons. 



Neither the NAFTA nor the U.S. -Canada Free Trade Agreement (CFTA) 

 address domestic subsidies. This topic has been reserved for 

 discussion in the Uruguay Round multilateral trade negotiations 

 of the General Agreement on Tariffs and Trade. 



Under the CFTA, Canada excludes agricultural products shipped 

 through western Canadian ports for consumption in the United 

 States from transport rates established under the Western Grain 

 Transportation Act. With regard to subsidized exports of 

 Canadian dried beans into the Mexican market, the NAFTA does not 

 preclude the United States from countering Canadian subsidies in 

 the Mexican market. 



9. Q. Mr. Ambassador, Canada currently controls about 75 

 percent of the Mexican wheat market. This is largely due to 

 Canadian rail subsidies and the tricks that are played by the 



