House Ways and Means Committee Amends and Approves AGOA III Bill

(The Senate's AGOA bill, the U.S.-Africa Partnership Act, (S. 1900) was introduced and referred to the Senate Finance Committee in November 2003. See ITT's Online Archives or 05/06/04 news, 04050699 1, for BP summary.)

This is Part III of a multi-part series of summaries of H.R. 4103 as amended and ordered reported by the House Ways and Means Committee and covers the remaining apparel-related provisions of the bill. See future issues of ITT for additional summaries.

H.R. 4103, as amended and ordered reported ("H.R. 4103"), would:

Expand AGOA duty- and quota-free benefits to certain ethnic printed fabrics. H.R. 4103 would redesignate the text in 19 USC 3721(b)(6) as 19 USC 3721(b)(6)(A) and amend it to allow certain ethnic printed fabrics of an AGOA beneficiary country(s) that are certified as such by the competent authority of such country(s) to be eligible for AGOA duty- and quota-free benefits. The President, after consultations with the AGOA beneficiary country(s) would determine which, if any, particular fabric of the country(s) would be treated as being an ethnic printed fabric.

H.R. 4103 would also add a new 19 USC 3721(b)(6)(B) to list the requirements for such ethnic printed fabrics. Among other requirements, these ethnic printed fabrics must be classifiable under HTS 5208.52.30 or 5208.52.40 and must be from fabrics formed in the U.S., from yarns formed in the U.S., or from fabric formed in one or more AGOA beneficiary countries from yarn originating in either the U.S. or one or more AGOA beneficiary countries.

Modify AGOA duty- and quota-free benefits for apparel assembled from hybrid-cut or hybrid knit-to-shape components for former AGOA beneficiary countries. H.R. 4103 would also amend 19 USC 3721(b)(7) in order to provide AGOA duty-free and quota-free treatment to apparel articles sewn or otherwise assembled in one or more AGOA beneficiary countries with thread formed in the U.S. from components cut in the U.S. and one or more current or former AGOA beneficiary countries¹ from fabric wholly formed in the U.S. from yarns wholly formed in the U.S., or from components knit-to-shape in the U.S. and one or more current or former AGOA beneficiary countries from yarns wholly formed in the U.S., or both (including fabrics not formed from yarns, if such fabrics are classifiable under HTS 5602 or 5603).

¹ H.R. 4103 would define "former AGOA beneficiary country" as an AGOA beneficiary country that has ceased to be a beneficiary because it entered into a free trade agreement (FTA) with the U.S. (see below).

Collars, attached belts, etc., regardless of origin, would be allowed. H.R. 4103 would add a new special rule (3) to 19 USC 3721(d) which would state that an article otherwise eligible for AGOA duty- and quota-free treatment would not be ineligible for such treatment because it contains:

any collars or cuffs (cut or knit-to-shape) drawstrings shoulder pads or other padding waistbands

that do not meet the requirements set forth in 19 USC 3721(b), regardless of the country of origin of the item.

"De minimis" rule enlarged, modified for former AGOA beneficiary countries. H.R. 4103 would modify the "de minimis" special rule in 19 USC 3721(d)(2) so that an article otherwise eligible for AGOA duty- and quota-free treatment would not be ineligible for such treatment because it contains fibers or yarns not wholly formed in the U.S. or current or former AGOA beneficiary countries if the total weight of all such fibers and yarns is not more than 10% of the total weight of the article.

(The "de minimis" rule currently makes no reference to former AGOA beneficiary countries and allows only 7% of the total weight of the article to be of such fibers and yarns.)

Definition for former AGOA beneficiary country added. H.R. 4103 would amend 19 USC 3721(f) (sic) by adding a new definition for former AGOA beneficiary country which states that it is a country that was designated as an AGOA beneficiary country after the enactment of AGOA, but thereafter ceased to be an AGOA beneficiary country by reason of its entering into a free trade agreement with the U.S.

Retroactive AGOA duty- and quota-free treatment would be allowed for AGOA III and Trade Act of 2002 AGOA entries, etc. H.R. 4103 would require the Secretary of the Treasury (Secretary) to liquidate or reliquidate as duty- and quota-free entries made on or after October 1, 2000 (the implementation date of AGOA) and before the date of enactment of H.R. 4103 that are entries of apparel articles that meet the requirements of AGOA for duty- and quota-free treatment (19 USC 3721(b), as amended by Section 3108 of the Trade Act of 2002 (which amended AGOA) and H.R. 4103).

According to H.R. 4103, liquidation or reliquidation may be made with respect to an entry only if a request is filed with the Secretary within 90 days after the date of enactment and the request contains sufficient information to enable the Secretary to locate the entry or reconstruct the entry if it cannot be located. H.R. 4103 further states that any amounts owed by the U.S. pursuant to this liquidation or reliquidation shall be paid within 180 days of the date of such liquidation or reliquidation.

Executive branch urged to broadly interpret AGOA textile and apparel provisions. H.R. 4103 contains a "sense of Congress" statement stating that the executive branch, particularly the Committee for the Implementation of Textile Agreements (CITA), U.S. Customs and Border Protection (CBP), and the Commerce Department, should interpret, implement, and enforce the provisions of AGOA section 112 (19 USC 3721) relating to preferential treatment of textile and apparel articles, broadly in order to expand trade by maximizing opportunities for imports of such articles from eligible AGOA countries.

(See ITT's Online Archives or 05/10/04 and 05/11/04 news, 04051005 and 04051105, for Parts I and II of this series of BP summaries of H.R. 4103 as approved by House Ways and Means.)

House Ways and Means press release (FC 17-A, dated 05/08/04) are available at http://waysandmeans.house.gov/legis.asp?formmode=read&id=1438.

H.R. 4103 as amended and ordered reported are available at http://waysandmeans.house.gov/Media/pdf/hr4103/hr4103sub.pdf.

House Ways and Means Committee description of the amendments made to H.R. 4103 during committee mark-up are available at http://waysandmeans.house.gov/Media/pdf/hr4103/hr4103subdesc.pdf.