CBP Updates COAC on the January 1, 2005 Elimination of Most Textile and Apparel Quotas
The Departmental Advisory Committee on Commercial Operations of the Bureau of Customs and Border Protection (COAC) held a quarterly meeting on April 2, 2004 in Washington, DC to discuss and receive updates from U.S. Customs and Border Protection (CBP) officials on various trade and customs issues.
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This is Part III of a multi-part series of summaries of the April 2, 2004 COAC meeting and highlights CBP's update on the status of U.S. government preparations for the final phase-out of textile and apparel quotas for World Trade Organization (WTO) member countries on January 1, 2005. See future issues for additional summaries.
CBP sources note that the following represents what they "expect" to occur, but that no final decisions have yet been made.
Apparel Quota Preprocessing Prototype Scheduled to End on December 31, 2004
Expiration of QPP test. CBP has no current plans to extend the quota preprocessing program (QPP) test beyond its December 31, 2004 expiration date.
However, CBP would be willing to listen to the trade community if there was an interest in maintaining QPP for apparel that will remain subject to quota on/after January 1, 2005 (e.g., non-WTO countries like Vietnam, etc.).
(QPP permits certain quota entries (currently merchandise in HTS Chapters 61 and 62) to be filed, reviewed for admissibility, and to have their quota priority and status determined by CBP prior to arrival of the carrier, similar to the method of preliminary review by which non-quota entries are currently processed. See ITT's Online Archives or 09/10/02 news, 02091005, for BP summary on most recent extension.)
End-of-year procedures. With regards to end-of-the-year apparel entries and the expected end of QPP on December 31, 2004, CBP expects the following scenarios:
Apparel exported and entered in 2004 - prefiling under QPP would be allowed
Apparel exported in 2004 and entered in 2005 - no prefiling under QPP would be allowed
Apparel exported and entered in 2005 - no prefiling under QPP would be allowed
Certain Foreign Governments Request U.S. to Maintain Visa Requirements, Etc. After Quotas are Phased-Out
CBP states that certain foreign governments have expressed an interest in having the U.S. maintain visa requirements or some other form of monitoring on their textiles and apparel that were subject to quota even after their quotas are phased-out on January 1, 2005.
Quota-Free Textiles and Apparel Expected to be Eligible for Entry Type '01'
CBP expects that textiles and apparel that become quota-free would be eligible for entry type '01' (consumption - free and dutiable).
CBP Expects to Eliminate the Quota Charge Statement for Quota-Free Textiles and Apparel
CBP expects to eliminate the quota charge statement for textiles and apparel that become quota-free. CBP states it is not yet known whether the quota charge statement will be eliminated for textiles and apparel that remain subject to quota on/after January 1, 2005.
Numerous Issues are Still Unresolved
There are still a number of issues to be resolved regarding the January 1, 2005 phase-out of quotas for WTO member countries, including (partial list):
how textiles and apparel that embargo in 2004 will be handled;
what types of documents will continue to be required for textile and apparel entries;
what will be done with the Textile Declaration and the CMT (Cut, Make and Trim) documents; and
whether textiles and apparel will be eligible for Remote Location Filing.
(See ITT's Online Archives or 04/28/04 and 04/29/04 news, 04042810 and 04042910, for previous BP summaries on COAC's April 2, 2004 meeting.)
BP Note on China Safeguard Provisions
China's WTO accession agreement contained a special safeguard provision for textiles and apparel under which the U.S. retains the right to impose quotas to address surges in imports of textile and apparel products from China for which quotas have been phased-out. This special safeguard provision remains in effect until December 31, 2008.
In addition, China's WTO accession agreement included a separate, product-specific safeguard provision that can also be applied to textile and apparel import surges and which remains in effect until December 11, 2013. U.S. government sources have previously stated that these two safeguards cannot be applied to the same product at the same time.
The U.S. has imposed such safeguard quotas on China cats 222, 349/649, and 350/650 effective for exports during the December 24, 2003 through December 23, 2004 period.
Under the provisions of China's WTO accession agreement, these three China safeguard quotas could not remain in effect after December 23, 2004 without reapplication, unless otherwise agreed by the U.S. and China. CITA has previously stated that reapplication will only take place if CITA makes a new determination that Chinese imports are, due to market disruption, threatening to impede the orderly development of trade in these products.