FTA Preference Rules for Apparel: Understanding … Preference Rules for Apparel: Understanding the Building Blocks Used in Tariff Shift Model Agreements Hosted by United States Fashion

FTA Preference Rules

for Apparel: Understanding the Building

Blocks Used in Tariff Shift Model

Agreements

Hosted by

United States Fashion Industry Association (USFIA) and

USITC

October 31, 2017

2:00 P.M. Eastern/11:00 A.M. Pacific

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FTA Preference Rules for Apparel

Understanding the Building Blocks Used in Tariff Shift Model Agreements

October 31, 2017

U.S. International Trade Commission (USITC)www.usitc.gov

The Commission’s mission is to:

(1) Administer U.S. trade remedy laws within its mandate in a fair and objective manner;

(2) Provide the President, USTR, and Congress with independent analysis, information, and support on matters of tariffs, international trade, and U.S. competitiveness; and

(3) Maintain the Harmonized Tariff Schedule of the United States (HTSUS)

The USITC is an independent Federal agency with broad investigative responsibilities on matters of trade.

http://www.usitc.gov/


USITC Staff

• Approximately 365 individuals serve as international trade analysts (investigators and experts in particular industries), international economists, attorneys, and technical support personnel.

• Five Major Operations:– Import Injury Investigations (AD/CVD)

– Intellectual Property-Based Import Investigations (IPR)

– Industry and Economic Analysis

– Tariff and Trade Information Services

– Trade Policy Support

Commissioners

• The USITC is headed by six Commissioners who are nominated by the President and confirmed by the U.S. Senate. No more than three Commissioners may be of any one political party.

• The Commissioners serve overlapping terms of nine years, with a new term beginning every 18 months.


U.S. Free Trade Agreements Tariff Shift Model* for Apparel

by Implementation Date

1994

• NAFTA•Canada

•Mexico

2004

• Chile

• Singapore

2005

• Australia

2006

• Bahrain

• CAFTA-DR•El Salvador

•Guatemala

•Honduras

•Nicaragua

• Morocco

2007

• CAFTA-DR•Dominican Republic

2009

• CAFTA-DR•Costa Rica

• Oman

• Peru

2012

• Colombia

• Korea

• Panama

* Does not include U.S. Free Trade Agreements with Israel (1985) or Jordan (2001).

• Originating Apparel:– Tariff Shift Rules – HTS GN

• Chapter Rules – w/in the HTS GN’s

– Tariff classification component

– Visible lining fabric

– Narrow elastic fabrics

– Sewing thread

– Pocket bag fabric

– Short Supply inputs

• De minimis – HTS GN

– Percentage

– Elastomeric yarns

– Certain nylon filament yarns

– Cumulation (CAFTA) – HTS GN & ch. 98 (also relies on tariff shift rules above)

– Short Supply – HTS GN (w/in tariff shift rules) OR HTS GN + ch. 98

• Non-Originating Apparel:– Tariff Preference Levels (TPLs) - HTS chapter 98 or 99

FTA Preference Rules for ApparelUnderstanding the Building Blocks Used in Tariff Shift Model Agreements

BACKGROUND & RESOURCES

U.S. International Trade Commission (USITC): www.usitc.gov

U.S. Customs and Border Protection (CBP): www.cbp.gov

Office of Textiles and Apparel (OTEXA): www.otexa.trade.gov


http://www.cbp.gov/

http://www.otexa.trade.gov/

• Harmonized Tariff Schedule of the United States (HTSUS)

• Chapters 1-97 for Description, Classification, and Duty Rates

• General Notes (GN) for FTA Preference Rules

• Special Program Indicator (SPI) for FTAs





CAFTA-DR: General Note (GN) 29

Special Program Indicator (SPI)

Country FTA Start SPI HTS GN Tariff Shift Rules

Short Supply Rules

Tariff Preference

Levels

Australia Same 1/1/2005 AU 28

Bahrain Same 1/11/2006 BH 30

Canada NAFTA 1/1/1994 CA 12

Chile Same 1/1/2004 CL 26

Colombia Same 5/15/2012 CO 34

Costa Rica CAFTA-DR 1/1/2009 P 29

DominicanRepublic

CAFTA-DR 3/1/2007 P 29

El Salvador CAFTA-DR 3/1/2006 P 29

Guatemala CAFTA-DR 7/1/2006 P 29

Tariff Shift Model FTAs for Apparel

Country FTA Start SPI HTS GN Tariff Shift Rules

Short Supply Rules

Tariff Preference

Levels

Honduras CAFTA-DR 4/1/2006 P 29

Korea Same 3/15/2012 KR 33

Mexico NAFTA 1/1/1994 MX 12

Morocco Same 1/1/2006 MA 27

Nicaragua CAFTA-DR 4/1/2006 P 29

Oman Same 1/1/2009 OM 31

Panama Same 10/31/2012 PA 35

Peru Same 2/1/2009 PE 32

Singapore Same 1/1/2004 SG 25


U.S. Customs and Border ProtectionOffice of International Trade

www.cbp.gov

U.S. Customs and Border Protection (CBP) resources for understanding the HTS classification of apparel:

- Informed Compliance Publications (ICP)- Apparel Terminology

- Children’s Apparel

- Coated and Water Resistant Apparel

- Hats and Headgear

- Knit-to-Shape Garments

- Etc.

- Request a Ruling Letter

- Customs Ruling Online Search System (CROSS)

- Search published rulings letters for similar garments

http://www.cbp.gov/


www.cbp.gov

http://www.cbp.gov/


www.cbp.gov

http://www.cbp.gov/


www.cbp.gov

http://www.cbp.gov/

Office of Textiles and Apparel (OTEXA)U.S. Department of Commerce

www.otexa.trade.gov

OTEXA oversees programs and strategies to improve domestic and international competitiveness of the U.S. textile and apparel industry by:

- administering the implementation of trade agreements

- formulating trade policy

- performing research and analysis

- compiling industry data, and

- promoting U.S. trade events for the industry.

- U.S. trade data

- Short Supply Lists for some FTAs


U.S. Imports of Apparel: Top SuppliersSource: OTEXA, Year Ending August 2017

Country % Share (SME) Rank % Share (US$) Rank

China 41.72 1 33.97 1

Vietnam 13.14 2 14.07 2

CAFTA-DR 11.27 - 10.11 -

Bangladesh 6.83 3 6.39 3

Indonesia 4.61 4 5.71 4

Honduras 3.97 5 3.18 7

India 3.93 6 4.60 5

Cambodia 3.34 7 2.64 8

NAFTA 3.28 - 5.12 -

Mexico 3.12 8 4.42 6

El Salvador 2.90 9 2.38 10

Nicaragua 2.02 10 1.87 11


• Origin* (marking) vs. Originating** (FTA)

– Generally, country of origin for apparel determined by where assembly operation occurs

– Eligibility for preferential duty treatment requires satisfying the FTA product specific rule in order to be originating, which is always more than just assembly

*19 CFR 102.21 (Rules of Origin) **HTSUS General Notes (GN)

• Goods May “Originate” Under a Tariff Shift Model FTA by Satisfying One of the Following Rules:– Wholly Obtained or Produced

– Produced Exclusively from Originating Materials

– Tariff Shift or Product Specific Rules

• Fiber-, yarn-, fabric-forward, or cut & sew tariff shift rules

• Cumulation (for CAFTA-DR only)(a type of tariff shift rule)

• Commercial availability (short supply)

• Exempt from Merchandise Processing Fee (MPF)

• Use Special Program Indicator (SPI) on Entry Documents to File a Preference Claim (with or without Chapter 98 or 99 provision as

needed)

FTA Preference Rules for ApparelSource: HTSUS General Notes

• Certain Non-Originating Goods May Also Be Eligible for Preferential Duty Treatment :– Tariff Preference Levels (TPLs)

(vary by agreement and by country)(some expired)

• Subject to Merchandise Processing Fee (MPF)

• Do NOT Use Special Program Indicator (SPI)

• Use Chapter 98 or 99 Provision on Entry Documents to File a Preference Claim

FTA Preference Rules for ApparelSource: HTSUS General Notes and HTS Chapters 98 & 99

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

CA

FTA

-DR

NA

FTA

Per

u

Ko

rea

Co

lom

bia

Mo

rocc

o

Om

an

Au

stra

lia

Ch

ile

Sin

gap

ore

Bah

rain

Pan

ama

Non-FTA FTA

Tariff Shift Model FTAs for ApparelU.S. Imports of Apparel

Source: OTEXA, Year-Ending August 2017, in million US$

0

50

100

150

200

Co

lom

bia

Mo

rocc

o

Om

an

Au

stra

lia

Ch

ile

Sin

gap

ore

Bah

rain

Pan

ama

CAFTA-DR Qualifying TradeU.S. Imports of Apparel from CAFTA-DR

Source: OTEXA, Twelve-Months Ending August 2017

69%2%

5%

1%

23%

Tariff Shift Rules

Cumulation

Short Supply

TPLs and Other Non-Originating

MFN Duty (No Preference)

Country Tariff Shift Cumulation Short Supply TPLs & Other*

MFNDuties**

% CAFTA-DR

CAFTA-DR 5,661.596 170.756 388.941 86.198 1,849.146 77%

Costa Rica 15.429 2.383 - 0.079 18.226 50%

Dom Rep 609.214 n/a 45.547 1.524 121.249 84%

El Salvador 1,668.345 0.727 103.877 0.707 120.398 94%

Guatemala 798.942 37.052 169.552 56.577 290.871 79%

Honduras 2,021.785 11.370 22.893 4.971 545.208 79%

Nicaragua 547.882 119.224 47.072 22.341 753.194 49%

CAFTA-DR Qualifying TradeU.S. Imports of Apparel from CAFTA-DR

Source: OTEXA, Twelve-Months Ending August 2017in million US$

*TPLs & Other includes CAFTA-DR reduced duty program for non-originating apparel made from U.S. fabric and assembled with U.S. sewing thread. Costa Rica is the only CAFTA-DR country with TPLs in 2017; Nicaragua’s TPL expired on 12/31/2014.**MFN Duties are regular HTS column 1 duties assessed on non-CAFTA-DR qualifying apparel.

NAFTA Qualifying TradeU.S. Imports of Apparel from NAFTA


64%22%

14% Tariff Shift Rules

TPLs and Other Non-Originating


Country Tariff Shift* TPLs & Other** MFN Duties*** % NAFTA

NAFTA 2,724.869 951.047 606.562 86%

Canada 164.776 393.653 19.211 97%

Mexico 2,560.093 557.394 587.351 84%


Source: OTEXA, Twelve-Months Ending August 2017in million US$

*Under NAFTA (and other agreements that follow NAFTA as a template), import data for apparel articles that are made from an input or material considered to be in “short supply” are not captured separately from tariff shift apparel.**TPLs & Other includes data for NAFTA 9802 apparel.***MFN Duties are regular HTS column 1 duties assessed on non-NAFTA qualifying apparel.

Peru FTA Qualifying TradeU.S. Imports of Apparel from PeruSource: OTEXA, Twelve-Months Ending August 2017

95%

0%

5%

Tariff Shift Rules

Short Supply


Country Tariff Shift Short Supply TPLs & Other*

MFN Duties** % FTA

Colombia 175.033 0.108 n/a 19.122 90%

Korea*** 184.298 0.0 0.077 59.736 75%

Panama 0.329 0.0 n/a 2.631 11%

Peru 562.522 0.806 n/a 27.569 95%

Singapore*** 0.460 0.0 Expired12/31/2013

7.985 5%

FTA Qualifying TradeU.S. Imports of Apparel from FTAs

with Separate Short Supply ProvisionSource: OTEXA, Twelve-Months Ending August 2017

in million US$

*TPLs & Other includes reduced duty provisions under HTS 9802. There are no TPLs for Korea.**MFN Duties are regular HTS column 1 duties assessed on non-FTA qualifying goods.***Korea and Singapore FTAs have a separate short supply provision but also include NAFTA-like short supply rules.

Country Tariff Shift* TPLs MFN Duties** % FTA

Australia 11.305 0.0 6.469 64%

Bahrain 0.549 Expired12/31/2015

2.425 18%

Chile 9.401 0.240 0.214 98%

Morocco 6.570 Expired12/31/2015

121.978 5%

Oman 9.077 62.335Expires 12/31/18

0.357 99%

FTA Qualifying TradeU.S. Imports of Apparel from FTAs

without Separate Short Supply ProvisionSource: OTEXA, Twelve-Months Ending August 2017

in million US$

*Under NAFTA (and other agreements that follow NAFTA as a template), import data for apparel articles that are made from an input or material considered to be in “short supply” are not captured separately from tariff shift apparel.**MFN Duties are regular HTS column 1 duties assessed on non-FTA qualifying goods.


TARIFF SHIFT RULES

FTA Originating ApparelTariff Shift Rules

• Tariff Shift Rules are the Preference Rule Used Most Often for Originating Apparel

• Product Specific Tariff Shift Rules Listed in HTSUS GN

• Tariff Shift Rule “Concepts” for Apparel– Yarn-forward

– Fabric-forward

– Cut and Sew

• Includes “Chapter Rules” & “De Minimis” Clause

• Preference Claim Filed with Use of SPI in Front of HTS Number on Entry Documents

FTA Originating ApparelTariff Shift Rule Concepts

Fibers

•Natural fibers harvested (cotton, wool, linen, silk, etc.)

•Artificial/synthetic fibers manufactured (man-made fiber (MMF) such as polyester or nylon)

Yarns

•Spun or extruded

•Finishing operations (coating, twist, etc.)

Fabrics

•Knit or woven

•Finishing operations (dyeing, printing, etc.)

Apparel

•Fabric cut or yarn knit-to-shape

•Components assembled (sewn) or linked

•Post-assembly finishing operations (stone-washing, permapressing, etc.)

FTA Originating ApparelTariff Shift Rule Concepts

• “Yarn-forward”: all of the production steps beginning with the

formation of the yarn + knitting/weaving of fabric + cut and sew of finished garment occur in a partner country. The fiber used to make the yarn may be of any origin.

• “Fabric-forward”: all of the production steps beginning with the

knitting/weaving of the fabric + cut and sew of finished garment occur in a partner country. The yarn used to make the fabric may be of any origin.

• “Cut and Sew”: all of the production steps beginning with the cutting

of the fabric + sew occur in a partner country. The fabric used to make the garment may be of any origin.


• Begin with Correct HTSUS Classification for Finished Garment

• Must Also Know HTSUS Classification for Certain Materials Used to Produce the Garment

Apply a tariff shift rule in three steps:

– Step 1: decode or translate the HTS headings in the product specific rule from General Note (GN)

– Step 2: check for “chapter rules”

– Step 3: verify “de minimis” (if needed)


• Step 1: Most FTA tariff shift rules for apparel are in three parts:

– A change to “___________” (finished garment);

– From “_____________” (inputs or materials), except from ”___________________”;

– Provided the good is cut or knit to shape, or both, and sewn or otherwise assembled in a party to the agreement.


• “Except from” is the key to which materials used in the production of the finished good must also be originating from parties to the agreement.

• Materials classified in the excluded provisions (after “except from”), by chapter (2 digits), by heading (4 digits), or by subheading (6 digits), of the HTS are required to be originating in order for a good made from those materials to be originating and eligible for preferential duty treatment.


CAFTA-DR Originating TradeTariff Shift Rules

• Example of CAFTA-DR Tariff Shift Rule for Knit Apparel (HTSUS GN 29 (n) chapter 61 rule 25):

• Rule for all garments of headings 6105 through 6111:• “Men’s or boys’ knit shirts” (6105), • “Women’s or girls’ knit shirts and blouses” (6106), • “Men’s or boys’ underwear and pajamas” (6107), • “Women’s or girls’ underwear and pajamas” (6108), • “T-shirts” (6109), • “Sweaters, pullovers, etc.” (6110), and • “Babies garments, etc.” (6111)

• Same Rule Applies to Garments of All Fibers • Wool, Cotton, MMF, Silk, Other

CAFTA-DR Originating TradeTariff Shift Rules – HTS GN 29 (n) 61.25

A change to 6105 through 6111,

from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5310 through 5311, chapter 54, headings 5508 through 5516 or 6001 through 6006,

provided the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties.


HTS Chapters for Textile and Apparel Goods(2 Digits of Harmonized Tariff System)

50 Silk 55 Man-Made Staple 60 Knit Fabrics

51 Wool 56 Wadding, Etc. 61 Knit Apparel

52 Cotton 57 Carpets, Etc. 62 Woven Apparel

53 Other Vegetable Fiber 58 Specialty Fabrics 63 Made-Up Articles

54 Man-Made Filaments 59 Coated Fabrics 94 Made-Up Articles


HTS Headings for Fibers, Yarns and Fabrics(4 Digits of Harmonized Tariff System)

Fibers Yarns Fabrics

5001-5003: Silk 5004-5006: Silk 5007: Silk

5101-5105: Wool 5106-5110: Wool 5111-5113: Wool (Woven)

5201-5203: Cotton 5204-5207: Cotton 5208-5212: Cotton (Woven)

5301-5305: Other Vegetable Fibers

5306-5308: Other Vegetable Fibers

5309-5311: Other Vegetable Fibers (Woven)(for example, ramie or linen)

5401-5406: Man-Made FilamentFibers

5407-5408: Man-Made Filament Fibers (Woven)

5501-5507: Man-MadeStaple Fibers

5508-5511: Man-Made Staple Fibers

5512-5516: Man-Made Staple Fibers (Woven)

5604-5606: Specialty (Rubber, Coated, Metal, Etc.)

5602-5603: Felt & Non-Wovens

5801-5804: Specialty

5901-5911: Coated

6001-6006: Knit


… from any other chapter, except from • headings 5111 through 5113 (wool woven fabric), • 5204 through 5212 (cotton yarn and cotton woven fabric), • 5310 through 5311 (woven fabric of jute or other non-cotton

vegetable fibers), • chapter 54 (man-made filament yarn and man-made filament

woven fabric),• headings 5508 through 5516 (man-made staple fiber yarn or

woven fabric) or • 6001 through 6006 (all knit fabric),

Examples of materials not excluded by the CAFTA-DR “except from” clause:• Silk yarn (headings 5004-5006) or woven fabric (5007); • Wool yarn (headings 5106-5110)• Woven fabrics of flax (heading 5309)• Coated fabrics of chapter 59• Etc.



A change to 6110.30.3059, from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5310 through 5311, chapter 54 (man-made filament yarn), headings 5508 through 5516 (man-made staple fiber yarn) or 6001 through 6006 (knit fabric), provided the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties.

Women’s MMF Pullover of HTS 6110.30.3059(32% rate of duty)


A change to 6109.10.0037, from any other chapter, except from headings 5111 through 5113, 5204 through 5212 (cotton yarn), 5310 through 5311, chapter 54, headings 5508 through 5516 or 6001 through 6006 (knit fabric), provided the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties.

Women’s Cotton Underwear T-shirt of HTS 6109.10.0037 (16.5% rate of duty)

Country FTA Start SPI HTS GN Tariff Shift Rules*

Short Supply Rules

Tariff Preference

Levels

Australia Same 1/1/2005 AU 28 GN 28 (n)

Bahrain Same 1/11/2006 BH 30 GN 30 (h)

Canada NAFTA 1/1/1994 CA 12 GN 12 (t)

Chile Same 1/1/2004 CL 26 GN 26 (n)

Colombia Same 5/15/2012 CO 34 GN 34 (o)

Costa Rica CAFTA-DR 1/1/2009 P 29 GN 29 (n)

DominicanRepublic

CAFTA-DR 3/1/2007 P 29 GN 29 (n)

El Salvador CAFTA-DR 3/1/2006 P 29 GN 29 (n)

Guatemala CAFTA-DR 7/1/2006 P 29 GN 29 (n)


*See also “chapter rules” and “de minimis” charts.

Country FTA Start SPI HTS GN Tariff Shift Rules*

Short Supply Rules

Tariff Preference

Levels

Honduras CAFTA-DR 4/1/2006 P 29 GN 29 (n)

Korea Same 3/15/2012 KR 33 GN 33 (o)

Mexico NAFTA 1/1/1994 MX 12 GN 12 (t)

Morocco Same 1/1/2006 MA 27 GN 27 (h)

Nicaragua CAFTA-DR 4/1/2006 P 29 GN 29 (n)

Oman Same 1/1/2009 OM 31 GN 31 (h)

Panama Same 10/31/2012 PA 35 GN 35 (o)

Peru Same 2/1/2009 PE 32 GN 32 (n)

Singapore Same 1/1/2004 SG 25 GN 25 (o)


*See also “chapter rules” and “de minimis” charts.

CAUTION: Tariff Shift Rules Vary FTA to FTA!Consult the HTS General Note for the specific FTA when applying the rule.


CAFTA-DR (GN 29 (n) 61.25):

NAFTA (GN 12 (t) 61.35):

Korea (GN 33 (o) 61.33):

Note subheadings for viscose rayon yarns (5403.10/.31/.41) not included in Korea’s rule.


QUESTIONS?

Step 2: “Chapter Rules” Apply In Addition to CAFTA-DR Tariff Shift Rules for Apparel Classified in Chapters 61 and 62:

• Tariff Classification Component

• Visible Lining Fabric

• Narrow Elastic Fabric

• Sewing Thread

• Pocket Bag Fabric

• Short Supply Inputs

CAFTA-DR Originating TradeTariff Shift Rules – Chapter Rules for Apparel

• GN 29 (n) Chapter 61 Rule 2; Chapter 62 Rule 2

• Tariff classification component chapter rule states that “only the component of the good that determines the tariff classification of the good” must meet the tariff shift rule

CAFTA-DR Originating TradeTariff Shift Chapter Rules for Apparel – Tariff Classification Component


• Visible lining fabrics chapter rule states select fabrics, when used as visible lining material in certain garments, must be formed from yarn and finished in a CAFTA-DR country

CAFTA-DR Originating TradeTariff Shift Chapter Rules for Apparel – Visible Lining Fabrics

• Only applies to “the visible lining fabric in the main body of the garment, excluding sleeves, which covers the largest surface area, and shall not apply to removable linings” (see tariff classification component chapter rule)

• When required to comply with the visible lining fabrics chapter rule, the tariff shift rule will include a reminder:

CAFTA-DR Originating TradeTariff Shift Chapter Rules for Apparel – Visible Lining Fabrics


• Narrow elastic fabrics chapter rule states “fabrics of subheading 5806.20 or heading 6002” contained in apparel goods must be formed from yarn and finished in a CAFTA-DR country– Fabrics classified in subheading 5806.20 are certain woven fabrics of a width

not exceeding 30 cm, containing by weight 5 percent or more of elastomeric yarn or rubber thread:

• Provided with selvages (woven, gummed or otherwise) on both edges; or

• Tubular (flattened width not exceeding 30 cm); or

• Bias binding with folded edges (unfolded width not exceeding 30 cm)

– Fabrics classified in heading 6002 are certain knitted or crocheted fabrics of width not exceeding 30 cm, containing by weight 5 percent or more of elastomeric yarn or rubber thread

CAFTA-DR Originating TradeTariff Shift Chapter Rules for Apparel – Narrow Elastic Fabrics


• Sewing thread chapter rule states sewing thread of heading 5204, 5401, or 5508, or yarn of 5402 used as sewing thread, contained in the good must be formed and finished in a CAFTA-DR country

• Sewing thread chapter rule applies to nearly all garments

CAFTA-DR Originating TradeTariff Shift Chapter Rules for Apparel – Sewing Thread


• Pocket bag fabric chapter rule states pocket bag fabric contained in apparel goods must be formed and finished in a CAFTA-DR country from yarn wholly formed in a CAFTA-DR country

• Applies to pocket bags only, not to patch pockets

CAFTA-DR Originating TradeTariff Shift Chapter Rules for Apparel – Pocket Bag Fabric


• Short supply inputs chapter rule is an allowance to use yarns or fabrics listed on the CAFTA-DR short supply list to satisfy the tariff shift chapter rules for visible lining fabrics, narrow elastic fabrics, sewing thread or yarn of heading 5402 used as sewing thread, or pocket bag fabric

CAFTA-DR Originating TradeTariff Shift Chapter Rules for Apparel – Short Supply Inputs

FTA Tariff Shift Rules

EssentialCharacter

Visible Linings

Narrow Elastic Fabric

SewingThread

Pocket Bag Fabric

Short SupplyInputs

Australia GN 28 (n) 61, Rule 262, Rule 3

61, 62Rule 1

n/a n/a n/a n/a

Bahrain GN 30 (h) 61, Rule 2 61, 62Rule 1

n/a n/a n/a n/a

CAFTA-DR GN 29 (n) 61, 62Rule 2

61, 62Rule 1

61, 62Rule 3

61, 62Rule 4

61, 62Rule 5

61, 62Rule 6

Chile GN 26 (n) 61, Rule 262, Rule 3

61, 62Rule 1

n/a n/a n/a n/a

Colombia GN 34 (o) 61, 62Rule 2

61, 62Rule 1

61, 62Rule 3

61, 62Rule 4

61, 62Rule 5

n/a

Korea GN 33 (o) 61, Rule 262, Rule 3

61, 62Rule 1

n/a n/a n/a n/a

Tariff Shift Model FTAs for ApparelTariff Shift Chapter Rules


EssentialCharacter

Visible Linings

Narrow Elastic Fabric

SewingThread

Pocket Bag Fabric

Short Supply Inputs

Morocco GN 27 (h) 61, Rule 262, Rule 3

61, 62Rule 1

n/a n/a n/a n/a

NAFTA GN 12 (t) 61, Rule 262, Rule 3

61, 62Rule 1

n/a n/a n/a 7%

Oman GN 31 (h) 61, Rule 262, Rule 3

61, 62Rule 1

n/a n/a n/a n/a

Panama GN 35 (o) 61, 62Rule 2

61, 62Rule 1

61, 62Rule 3

61, 62Rule 4

61, 62Rule 5

n/a

Peru GN 32 (n) 61, 62Rule 2

61, 62Rule 1

61, 62Rule 3

61, 62Rule 4

61, 62Rule 5

n/a

Singapore GN 25 (o) 61, Rule 262, Rule 3

61, 62Rule 1

n/a n/a n/a n/a

Tariff Shift Model FTAs for ApparelTariff Shift Chapter Rules

CAUTION: Chapter Rules Vary FTA to FTA!Consult the HTS General Note for the specific FTA when applying the chapter rule.

FTA Originating ApparelTariff Shift Rules – Chapter Rules

CAFTA-DR (GN 29 (n) Chapter 61/62 Rule 4 (Sewing Thread):

Peru (GN 32 (n) Chapter 61/62 Rule 4 (Sewing Thread):

Panama (GN 35 (o) Chapter 61/62 Rule 4 (Sewing Thread):

Chapter rule 4. Notwithstanding chapter rule 2 to this chapter, a good of this chapter… containing sewing thread of

heading 5204, 5401, or 5508 or yarn of heading 5402 used as sewing thread, shall be considered originating only if such

sewing thread or yarn is both formed and finished in the territory of one or more of the parties to the Agreement.


QUESTIONS?

Step 3: “De Minimis”

• De Minimis

• Elastomeric Yarns

• Certain Nylon Filament Yarns

FTA Originating ApparelTariff Shift Rules – De Minimis Clause

CAFTA-DR Originating TradeTariff Shift Rules – De Minimis Clause – GN 29 (d)(i)

• De minimis clause permits limited use of non-CAFTA-DR originating fibers or yarns in the yarns or fabrics of the tariff classification component of a textile or apparel good

– Non-CAFTA-DR originating fibers or yarns may be up to 10 percent by weight of tariff classification component

CAFTA-DR Originating TradeTariff Shift Rules – De Minimis Clause

• However, elastomeric yarns in the tariff classification component must always be wholly formed in a CAFTA-DR country


• No limit to certain nylon filament yarns (classified in specific subheadings) from Israel, Canada, or Mexico (each a Party to a Free Trade Agreement with the U.S. prior to January 1, 1995)



De Minimis Clause

% Elastomeric Yarn Excluded

Unlimited Nylon Filament Yarns

Australia GN 28 (n) GN 28 (d)(i) 7% YesUS or AU Origin

Required

n/a

Bahrain GN 30 (h) GN 30 (e)(i) 7% YesUS or BH Origin

Required

n/a

CAFTA-DR GN 29 (n) GN 29 (d)(i) 10% YesCAFTA-DR Origin

Required

YesFrom Israel,

Canada, Mexico

Chile GN 26 (n) GN 26 (d)(i) 7% YesUS or CL Origin

Required

n/a

Colombia GN 34 (o) GN 34 (d)(ii) 10% YesUS or CO Origin

Required

YesFrom Israel,

Canada, Mexico

Korea GN 33 (o) GN 33 (d)(iv) 7% YesUS or KR Origin

Required

n/a

Tariff Shift Model FTAs for ApparelTariff Shift De Minimis Clause


De Minimis Clause

% Elastomeric Yarn Excluded

Unlimited Nylon Filament Yarns

Morocco GN 27 (h) GN 27 (e)(i) 7% YesUS or MA Origin

Required

n/a

NAFTA GN 12 (t) GN 12 (f)(vi) 7% n/a n/a

Oman GN 31 (h) GN 31 (e)(i) 7% YesUS or OM Origin

Required

n/a

Panama GN 35 (o) GN 35 (d)(ii) 10% YesUS or PA Origin

Required

YesFrom Israel,

Canada, Mexico

Peru GN 32 (n) GN 32 (d)(i) 10% YesUS or PE Origin

Required

YesFrom Israel,

Canada, Mexico

Singapore GN 25 (o) GN 25 (d)(i) 7% YesUS or SG Origin

Required

n/a

Tariff Shift Model FTAs for ApparelTariff Shift De Minimis Clause


QUESTIONS?


Step 1 – tariff shift rule Step 2 – chapter rulesStep 3 – de minimis

Men’s Wool Suit-type Jacket HTS 6203.31.9020 (17.5% rate of duty)


• Wool yarn of heading 5107 – England• Polyester yarn of heading 5509 - China• Woven wool fabric of heading 5111 of 92% wool/8% polyester – U.S.• Fabric cut into components in Guatemala• Components assembled in Guatemala

• Sewing thread of heading 5401 Costa Rica• Pocket Bag fabric formed in U.S. from yarn formed in U.S.• Visible lining – Taiwan



Step 15107 (yarn) - England5509 (yarn)- China5111 (fabric) – U.S.Cut - GuatemalaSew - Guatemala

Step 2Tariff classification – 5111 Visible lining - TaiwanNarrow elastic fabric – n/aSewing thread – Costa RicaPocket Bag – United StatesShort supply inputs – n/a

Step 3De minimis 10%– 5111 fabric (92% wool/8% polyester)Elastomeric yarn – n/aNylon yarns – n/a



• Does this garment satisfy its tariff shift rule (GN 29 (n) 62.12)?



• If the answer is no, is the wool yarn (5107) from England the problem?



• If the answer is no, is the sewing thread (5401) from Costa Rica the problem?



• If the answer is no, is the polyester yarn from China (5509) the problem?



• If the answer is no, is the visible lining fabric from Taiwan the problem?



• Does this garment satisfy its tariff shift rule (GN 29 (n) 62.12)?No

• If no, why not?• Wool yarn from England (5107) OK, not part of “except from” clause

• Sewing thread from Costa Rica (5401) OK, Costa Rica is CAFTA country

• Polyester yarn from China (5509) OK, under 10% de minimis

• Visible lining fabric from Taiwan Fails chapter rule 1, Taiwan is not

part of CAFTA-DR


• Rule for Certain Apparel Goods is “Cut and Sew”

• Requires a Garment be “Cut” and “Sewn or Otherwise Assembled” in a CAFTA-DR Country

– Fabric of any origin

– Yarn of any origin

– Chapter rules do not apply

– No need to apply de minimis because there is no “tariff classification component” for a cut and sew rule

• Still a Tariff Shift Rule – not an “Exception”

CAFTA-DR Originating TradeTariff Shift Rules – Cut and Sew Apparel


• Example: Brassieres of heading 6212.10:

• Example: Women’s Cotton Coats of heading 6102.20

Cut or knit to shape, or both,…Sewn or otherwise assembled…

in a CAFTA-DR country.


CAFTA-DR (GN 29 (n) Chapter 61/62 Rule 4 (Sewing Thread):

Note: “Chapter Rules” do not apply to “cut and sew”

tariff shift rule garments. Language of each chapter rule includes “other than…” and lists the headings of “cut and sew” articles.

CAFTA-DR Preference Rules for Apparel

CUMULATION

CAFTA-DR Originating (Woven) Apparel

Cumulation

• CAFTA-DR Cumulation connects CAFTA-DR with Mexico as each of the CAFTA-DR countries is also has an FTA with Mexico– Except for the Dominican Republic, which is, therefore, not eligible to

use the CAFTA-DR Cumulation provision

• Cumulation permits the use of materials from Mexico in place of (any) CAFTA-DR originating materials

• Only for Woven Apparel of HTS Chapter 62

• GN 29 (n) tariff shift rules, including the chapter rules for chapter 62, apply to cumulation apparel – not a separate rule

• Subject to quantitative limits (quotas)

• Limited to 100 million SME (apparel of chapter 62), with sublimits for:a) Cotton (other than blue denim) & MMF skirts and trousers – 45 million SME;

b) Blue denim trousers and blue denim skirts – 20 million SME;

c) Wool garments (certain wool fabrics only) – 1 million SME

• January 1 to December 31

• Limit and sublimits shared first-come, first-served by all CAFTA countries except for DR (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua)

• Cumulation apparel which is subject to limit(s) use SPI “P” with chapter 62 HTS number and HTS 9822.05.11 on entry documents.

• Wool apparel of certain fabrics is exempt from the quota limit and wool sublimit. Exempt apparel is NOT made of carded wool, and NOT made of wool yarn having an average fiber diameter of 18.5 microns or less.

• Cumulation apparel which is exempt from limit(s) use SPI “P” with chapter 62 HTS number and HTS 9822.05.13 on entry documents.

CAFTA-DR Originating TradeCumulation – GN 29 (d)(vii) & Chapter 98 XXII Note 21

SPI “P” and HTS 9822.05.11 or HTS 9822.05.13

• Year-end quota usage can be found on OTEXA’s website: http://otexa.trade.gov/agoa-cbtpa/98220511_2016.htm



http://otexa.trade.gov/agoa-cbtpa/98220511_2016.htm

• Current quota usage can be found on CBP’s website:

https://www.cbp.gov/document/report/quota-status-reports



As of July 31, 2017:

Cumulation Woven Apparel 100,000,000 SME 0.15%Trousers & Skirts Sublimit 45,000,000 SME 20.59%Denim Sublimit 20,000,000 SME 0.03%Wool Sublimit 1,000,000 SME 3.64%

http://otexa.trade.gov/agoa-cbtpa/98220511_2016.htm

CAFTA-DR Qualifying ApparelCumulation Subject to Limit(s)

SPI “P” and HTS 9822.05.11Source: OTEXA, Twelve-Months Ending August 2017

17%0%

7%

74%

2%Guatemala

El Salvador

Honduras

Nicaragua

Costa Rica


QUESTIONS?

True or False – Eligible for Cumulation?– T-shirt knit-to-shape and assembled in Guatemala

from Mexican cotton yarn.

CAFTA-DR Preference Rules

True or False – Eligible for Cumulation?– T-shirt knit-to-shape and assembled in Guatemala

from Mexican cotton yarn.

False – CAFTA-DR cumulation provisions are for woven apparel only.


True or False – Eligible for Cumulation?– Denim (woven) trousers made from cotton fabric

made in Mexico from U.S. yarns, cut in Mexico and assembled in Guatemala.


True or False – Eligible for Cumulation?– Denim (woven) trousers made from cotton fabric

made in Mexico from U.S. yarns, cut in Mexico and assembled in Guatemala.

False – All cutting and all sewing must occur in a CAFTA-DR country; only the origin-restricted materials may be from Mexico.


True or False – Eligible for Cumulation?– Woven skirt of cotton fabric made in El Salvador

from U.S. yarns, cut in El Salvador, assembled with sewing thread from Mexico.


True or False – Eligible for Cumulation?– Woven skirt of cotton fabric made in El Salvador

from U.S. yarns, cut in El Salvador, assembled with sewing thread from Mexico.

True – Any of the origin-restricted materials (including inputs to satisfy the chapter rules such as sewing thread) may be from Mexico.



SHORT SUPPLY RULES

• “Short supply” is defined as fibers, yarns or fabrics not available from FTA suppliers in commercial quantities in a timely manner.

• Tariff Shift Model FTAs Include:– “NAFTA-like” short supply provisions:

• Chapter rule for certain woven fabrics within the tariff shift rules;

• Special tariff shift rules for certain garments;

• Changes require negotiation & congressional consultation.

OR

– “CAFTA-like” short supply provisions:• Short supply rule for garments; and

• Separate short supply list of fibers, yarns and fabrics;

• Process for adding and/or deleting materials to/from the list.

FTA Originating ApparelTariff Shift Rules – Short Supply Rules

NAFTA Originating TradeShort Supply Rules

• NAFTA short supply rules and inputs/materials are found within the tariff shift rules in GN 12 (t):– GN 12 (t) chapter 62 rule 2;

• Certain fabrics of any origin may be used for any apparel of chapter 62

– Men’s or boys’ cotton (6205.20) or MMF (6205.30) shirts of certain fabrics (subheading rule to GN 12 (t) 62.30);• Specific dress shirts may be made from specific fabrics of any origin

– Men’s or boys’ cotton boxer shorts (6207.11) of certain fabrics (subheading rule to GN 12 (t) 62.32A)• Specific boxer shorts may be made of specific fabrics of any origin

• Originating apparel

• Import or utilization data not captured separately

• FTA claims filed w/ SPI in front of HTS number

NAFTA Originating TradeShort Supply Rules – GN 12 (t) Chapter 62 Rule 2

Note: NAFTA-like short supply provisions are only for woven apparel of HTS chapter 62

NAFTA Originating TradeShort Supply Rules – GN 12 (t) 62.30 Subheading Rule

Cont’d

NAFTA Originating TradeShort Supply Rules

NAFTA short supply rule:

“Apparel shall be considered to originate if they are both cut and assembled in the territory of one or more of the parties and if the fabric of the outer shell, exclusive of collars or cuffs, is wholly of one or more of the following:…”

More than “essential character component”

CAFTA-DR Originating TradeShort Supply Rules

• CAFTA-DR short supply rules are separate from the tariff shift rules

• Two Parts:

– Short Supply Rule GN 29 (m)(viii)

– Short Supply List Chapter 98 Subchapter XXII Note 20, and OTEXA’s website, www.otexa.trade.gov

• Originating apparel

• Data captured separately from tariff shift apparel

• FTA claims filed with SPI and HTS 9822.05.01 on entry documents


CAFTA-DR Originating TradeShort Supply Rules – GN 29 (m)(viii) & Chapter 98 XXII Note 20

SPI “P” and HTS 9822.05.01

CAFTA-DR short supply rule:

Apparel goods of chapters 61 & 62 must be cut or knit to shape, or both, and sewn or otherwise assembled in a CAFTA-DR country, and the fabric of the outer shell, exclusive of collars, cuffs and ribbed waistbands (only if the ribbed waistband is present in combination with cuffs and identical in fabric construction to the cuffs) is wholly of:

1) One or more fabrics listed in U.S. note 20 to subchapter XXII of chapter 98; or

2) One or more fabrics or knit to shape components formed in a CAFTA-DR country from one or more of the yarns listed in U.S. note 20 to subchapter XXII of chapter 98; or

3) Any combination of the fabrics above, or one or more originating fabrics.

More than “essential character component”

Short Supply List:• Short Supply fibers, yarns and fabrics listed in HTS Chapter 98 Subchapter

XXII Note 20

• Items No. 1 to 70 ONLY

• Additions to the CAFTA-DR Short Supply List ONLY on OTEXA website: www.otexa.trade.gov

• +150 on the list

• Process for

adding or deleting

Items managed by

OTEXA

CAFTA-DR Originating TradeShort Supply Rules – GN 29 (m)(viii) & Chapter 98 XXII Note 20

SPI “P” and HTS 9822.05.01


CAFTA-DR Qualifying ApparelShort Supply Rules


43%

27%

6%

12%

0%

12%

Guatemala

El Salvador

Honduras

Nicaragua

Costa Rica

Dominican Republic

Country FTA Start SPI HTSGN

Tariff Shift Rules

Short Supply Rules

Tariff Preference

Levels

Australia Same 1/1/2005 AU 28 GN 28 (n) GN 28 (n) 62,Rule 2 + Shirts

Bahrain Same 1/11/2006 BH 30 GN 30 (h) GN 30 (h) 62, Rule 2 + Shirts

Canada NAFTA 1/1/1994 CA 12 GN 12 (t) GN 12 (t) 62, Rule 2 + Shirts,

Boxers

Chile Same 1/1/2004 CL 26 GN 26 (n) GN 26 (n) 62, Rule 2 + Shirts

Colombia Same 5/15/2012 CO 34 GN 34 (o) GN 34 (n)(vii)9822.08.25

Costa Rica CAFTA-DR 1/1/2009 P 29 GN 29 (n) GN 29 (m)(viii)9822.05.01

DominicanRepublic

CAFTA-DR 3/1/2007 P 29 GN 29 (n) GN 29 (m)(viii)9822.05.01

El Salvador CAFTA-DR 3/1/2006 P 29 GN 29 (n) GN 29 (m)(viii)9822.05.01

Guatemala CAFTA-DR 7/1/2006 P 29 GN 29 (n) GN 29 (m)(viii)9822.05.01



Tariff Shift Rules

Short Supply Rules

Tariff Preference

Levels

Honduras CAFTA-DR 4/1/2006 P 29 GN 29 (n) GN 29 (m)(viii)9822.05.01

Korea Same 3/15/2012 KR 33 GN 33 (o) GN 33 (o) 62, Rule 2 + Shirts

9920.99.00

Mexico NAFTA 1/1/1994 MX 12 GN 12 (t) GN 12 (t) 62, Rule 2 + Shirts,

Boxers

Morocco Same 1/1/2006 MA 27 GN 27 (h) GN 27 (h) 62, Rule 2 + Shirts

Nicaragua CAFTA-DR 4/1/2006 P 29 GN 29 (n) GN 29 (m)(viii)9822.05.01

Oman Same 1/1/2009 OM 31 GN 31 (h) GN 31 (h) 62, Rule 2 + Shirts

Panama Same 10/31/2012 PA 35 GN 35 (o) GN 35 (n)(ii)9822.09.62

Peru Same 2/1/2009 PE 32 GN 32 (n) GN 32 (m)(viii)9822.06.20

Singapore Same 1/1/2004 SG 25 GN 25 (o) GN 25 (o) 62, Rule 2 + Shirts

9822.01.25


QUESTIONS?

True or False – Eligible for Short Supply?– Denim (woven) trousers made from cotton fabric

woven in Taiwan, cut and assembled in Mexico.

FTA Originating ApparelShort Supply Rules

True or False – Eligible for Short Supply?– Denim (woven) trousers made from cotton fabric

woven in Taiwan, cut and assembled in Mexico.

False – Denim is not in “short supply” for NAFTA (or any FTA) since fabric producers in both the United States and Mexico make the fabric.


True or False – Eligible for Short Supply?– Sweatshirt of “Cotton / Polyester Three Thread

Circular Knit Fleece Fabric (No. 78 on list)” from Korea, cut and assembled in Honduras, with knit-to-shape collars and cuffs (not on list) from Korea.


True or False – Eligible for Short Supply?– Sweatshirt of “Cotton / Polyester Three Thread

Circular Knit Fleece Fabric (No. 78 on list)” from Korea, cut and assembled in Honduras, with knit-to-shape collars and cuffs (not on list) from Korea.

True – The CAFTA-DR short supply rule for apparel applies to the “outer shell, exclusive of collars and cuffs…,” so the origin of the collars and cuffs does not matter.



TARIFF PREFERENCE LEVELS (TPLs)

• Tariff Preference Levels (TPLs) are quantitative limits set on certain non-originating FTA goods– Limits are administered in Square Meters Equivalent (SME)

– January 1 to December 31 each year

– Once filled, additional non-originating goods from the FTA partner country are assessed MFN duty rates (column 1 rates)

• Non-originating FTA goods

• Do not use the Special Program Indicator (SPI)

• Preference claims filed by using HTS chapter 98 or 99 number on entry documents

• Some FTA partners allocate TPLs, which means an additional certificate may be required

FTA Non-Originating ApparelTariff Preference Levels (TPLs)

Country FTA Description HTSProvision

Annual Limit

Canada/Mexico

NAFTA Apparel that are both cut (or knit to shape) and sewn or otherwise assembled in the territory of a NAFTA party from fabric or yarn produced or obtained outside the territory of one of the NAFTA parties.

Canada NAFTA Cotton and man-made fiber (MMF) apparel HTS Sec XI Note 3 (a) and (f) 9999.00.51

88,326,464 SME

Canada NAFTA Cotton and MMF apparel from fabric knit or woven outside of NAFTA (sublimit)

“ “9999.00.50

63,060,603 SME

Canada NAFTA Wool apparel “ “9999.00.52

5,325,413 SME

Canada NAFTA Wool men’s and boys’ suits (sublimit) “ “9999.0053

5,016,780 SME

Mexico NAFTA Cotton and man-made fiber (MMF) apparel HTS Sec XI Note 3 (b) and (g) 9999.00.60

45,000,000 SME

Mexico NAFTA Wool apparel HTS Sec XI Note 9999.00.61

1,500,000 SME

Chile same Cotton or MMF apparel that are both cut(or knit to shape) and sewn or otherwise assembled in Chile.

HTS 9822.02.03 1,000,000 SME




29%

68%

3% Tariff Shift Rules

TPLs and OtherNon-Originating

MFN Duty (NoPreference)

69%15%

16%

Canada Mexico

Country FTA Description HTSProvision

Annual Limit

Costa Rica* CAFTA Woven wool apparel of certain fabrics that are both cut and sewn or otherwise assembled in the territory of Costa Rica. + HTS GN 29 (n) chapter rules.

HTS 9915.62.05 500,000 SME

Costa Rica* CAFTA Woven wool apparel of certain fabrics that are both cut and sewn or otherwise assembled in the territory of Costa Rica.

HTS 9915.62.15 500,000 SME

Costa Rica* CAFTA Mastectomy swimsuits of subheading 6112.41.00 or 6112.49.00 if such goods are both cut or knit to shape and sewn or otherwise assembled in the territory of Costa Rica.

HTS 9915.61.03HTS 9915.61.04

133,823 SME

Oman** same Cotton or MMF apparel provided for in chapters 61 or 62 of the tariff schedule that are cut or knit to shape, or both, and sewn or otherwise assembled in the territory of Oman.

HTS 9916.99.20 50,000,000 SME


*Costa Rica’s TPLs expire on 12/31/2018.**Oman’s TPL expires on 12/31/2018.

Oman FTA Qualifying TradeU.S. Imports of Apparel from Oman


13%

87%

0%

Tariff Shift Rules

TPL



Tariff Shift Rules

Short Supply Rules

Tariff Preference

Levels

Australia Same 1/1/2005 AU 28 GN 28 (n) GN 28 (n) 62,Rule 2 + Shirts

n/a

Bahrain Same 1/11/2006 BH 30 GN 30 (h) GN 30 (h) 62, Rule 2 + Shirts

Expired12/31/2015

Canada NAFTA 1/1/1994 CA 12 GN 12 (t) GN 12 (t) 62, Rule 2 + Shirts,

Boxers

HTS Section XI Note 3 (a) + (f)

9999.00.xx

Chile Same 1/1/2004 CL 26 GN 26 (n) GN 26 (n) 62, Rule 2 + Shirts

HTS 9822.02.03

Colombia Same 5/15/2012 CO 34 GN 34 (o) GN 34 (n)(vii)9822.08.25

n/a

Costa Rica CAFTA-DR 1/1/2009 P 29 GN 29 (n) GN 29 (m)(viii)9822.05.01

9915.62.05+159915.61.03+04

DominicanRepublic

CAFTA-DR 3/1/2007 P 29 GN 29 (n) GN 29 (m)(viii)9822.05.01

n/a

El Salvador CAFTA-DR 3/1/2006 P 29 GN 29 (n) GN 29 (m)(viii)9822.05.01

n/a

Guatemala CAFTA-DR 7/1/2006 P 29 GN 29 (n) GN 29 (m)(viii)9822.05.01

n/a



Tariff Shift Rules

Short Supply Rules

Tariff Preference

Levels

Honduras CAFTA-DR 4/1/2006 P 29 GN 29 (n) GN 29 (m)(viii)9822.05.01

n/a

Korea Same 3/15/2012 KR 33 GN 33 (o) GN 33 (o) 62, Rule 2 + Shirts

9920.99.00

n/a

Mexico NAFTA 1/1/1994 MX 12 GN 12 (t) GN 12 (t) 62, Rule 2 + Shirts,

Boxers

HTS Section XI Note 3 (b) + (g)

9999.00.xx

Morocco Same 1/1/2006 MA 27 GN 27 (h) GN 27 (h) 62, Rule 2 + Shirts

Expired12/31/2015

Nicaragua CAFTA-DR 4/1/2006 P 29 GN 29 (n) GN 29 (m)(viii)9822.05.01

Expired12/31/2014

Oman Same 1/1/2009 OM 31 GN 31 (h) GN 31 (h) 62, Rule 2 + Shirts

HTS 9916.99.20

Panama Same 10/31/2012 PA 35 GN 35 (o) GN 35 (n)(ii)9822.09.62

n/a

Peru Same 2/1/2009 PE 32 GN 32 (n) GN 32 (m)(viii)9822.06.20

n/a

Singapore Same 1/1/2004 SG 25 GN 25 (o) GN 25 (o) 62, Rule 2 + Shirts

Expired12/31/2013


QUESTIONS?

True or False –

“Cut, or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the agreement” is part of all three: tariff shift rules, short supply rules, and Tariff Preference Levels (TPLs)?

FTA Originating ApparelTariff Shift Model Agreements

True or False –

“Cut, or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the agreement” is part of all three: tariff shift rules, short supply rules, and Tariff Preference Levels (TPLs)?

True

FTA Originating ApparelTariff Shift Model Agreements

• Originating Apparel:– Tariff Shift Rules – HTS GN

• Chapter Rules – w/in the HTS GN’s

– Tariff classification component

– Visible lining fabric

– Narrow elastic fabrics

– Sewing thread

– Pocket bag fabric

– Short Supply inputs

• De minimis – HTS GN

– Percentage

– Elastomeric yarns

– Certain nylon filament yarns

– Cumulation (CAFTA) – HTS GN & ch. 98 (also relies on tariff shift rules above)

– Short Supply – HTS GN (w/in tariff shift rules) OR HTS GN + ch. 98

• Non-Originating Apparel:– Tariff Preference Levels (TPLs) - HTS chapter 98 or 99


Thank you!

Natalie HansonInternational Trade AnalystTextiles Division, Office of IndustriesU.S. International Trade Commission500 E Street, SWWashington, DC 20536Tel: (202) 205-2571Fax: (202) [email protected]


mailto:[email protected]

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