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MEMORANDUM OF UNDERSTANDING BETWEEN THE UNITED STATES OF AMERICA AND THE REPUBLIC OF ARGENTINA CONCERNING TOBACCO

AGREEMENT ON TRQ ALLOCATION. The United States of America and the Republic of Argentina have successfully concluded their bilateral negotiations under both Article XXVIII of the General Agreement on Tariffs and Trade 1947 (GATT 1947) and Article XXVIII of the General Agreement on Tariffs and Trade 1994 (GATT 1994) with respect to the modification of U.S. concessions on certain tobacco products reflected in U.S. schedules of concessions annexed to the GATT 1947 and the Marrakesh Protocol to the GATT 1994, respectively. The agreement reached as a result of these negotiations is reflected in the attached joint letters and Reports to be filed with the secretariat of the GATT 1947 and the World Trade Organization.

As specified in the Reports, consistent with Article XIII of the GATT 1947 and the GATT 1994, the United States of America shall provide to the Republic of Argentina an annual allocation of 10,750 metric tons of tobacco to be bound in Schedule XX annexed to the GATT 1994, under the U.S. tariff-rate, quota (hereinafter "TRQ") for certain tobacco products. The United States of America shall also allocate to the Republic of Argentina an additional 1,250 metric tons of tobacco annually for the first three quota years in which the TRQ quota is in effect, and an additional 250 metric tons of tobacco for the fourth quota year in which the TRQ is in effect.

ADMINISTRATION OF THE TRQ. Both Parties recognize the need to cooperate fully to ensure that the TRQ administration is effective and transparent, and does not distort trade. The TRQ should be administered with sufficient flexibility and transparency so as not to impede full utilization of the annual TRQ. In the implementation of the TRQ, the United States of America shall not establish any conditions or formalities which would prevent the Republic of Argentina from utilizing fully its annual allocation under the TRQ, subject to importation being made within the prescribed period to which the TRQ relates; nor shall the Republic of Argentina administer its exports so as to impede the utilization of its annual allocation of the TRQ. If it appears to either party that the annual allocation of the TRQ is not achieving these objectives, the parties shall promptly re-examine the mechanisms for administering the TRQ with a view to ensuring transparency and permitting full utilization of the TRQ allocation.

In addition, the United States shall publish notice before it adopts any mechanism to administer the TRQ, and agrees to consult immediately with the government of the Republic of Argentina prior to adoption of such a mechanism if that government considers that it may materially diminish the value of its TRQ allocation, without prejudice to the parties' rights and obligations under the GATT 1994 or other agreements annexed to the Agreement Establishing the WorldTrade Organization.

PROOF OF ORIGIN. The Republic of Argentina may issue an appropriate Certificate of origin for Tobacco entered within the TRQ.

APPLICABILITY OF U.S. DUTY DRAWBACK. Both governments recognize that Section 422(d) of the Uruguay Round Agreement Act permits imports from the Republic of Argentina entering the over-quota rate of duty of the TRQ to continue to be eligible for duty drawback under sections 313(a) and (j)(l) of the Tariff Act of 1930, providing for same-condition and manufacturing duty drawback. Other provisions of U.S. law also might permit tobacco products entering at the in-quota rate of duty of the TRQ to be eligible for duty drawback.

REALLOCATION. The Government of the United States of America shall not reallocate any portion of Argentina's annual TRQ allocation without the consent of the Government of Argentina.

STATISTICAL INFORMATION. Upon implementation of the TRQ, the United States shall provide the Republic of Argentina with the best information available on the quantity of Argentine tobacco stocked in U.S. bonded warehouses. Thereafter, on a monthly basis, the information on imports of Argentine tobacco within the TRQ allocation, according to tariff-line item number, as well as the best available information on general imports of Argentine tobacco.

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Andrew L. Stoller Charge d'affairs ad interim for the United States of America	Jorge Benito Raiboi Charge d'affairs ad interim For the Republic of Argentina