President Issues Proclamation Implementing U.S.-Morocco FTA on January 1, 2006

According to the Proclamation, which is published in the December 27, 2005 FederalRegister, the MFTA is generally in effect for goods entered, or withdrawn from warehouse, for consumption on or after January 1, 2006.

This is Part I of a multi-part series of BP summaries on Proclamation 7971, and highlights this two-page proclamation.

MFTA Annexes Containing HTS Modifications to Be Posted to ITC Web Site

The Proclamation states that the HTS modifications necessary for the MFTA are not in the Proclamation but are instead listed in publication 3721 of the International Trade Commission (ITC), entitled "Modifications to the HTS of the U.S. Implementing the U.S.-Morocco Free Trade Agreement", which will be posted to the ITC's web site at http://www.usitc.gov/tata/hts/other/rel_doc/annex/index.htm, and is incorporated by reference into Proclamation 7971.

These HTS modifications implement the initial stage of duty elimination provided for in the MFTA, and provide for future MFTA staged duty reductions, effective on the dates specified in the relevant sections of publication 3721.

HTS Modifications Include MFTA TRQs, Rules of Origin, GSP Removal

The HTS modifications also include tariff-rate quotas (TRQs) for certain MFTA originating goods, rules of origin for determining whether a good is eligible for preferential tariff treatment, and provision for the removal of Morocco from the list of countries eligible for benefits under the Generalized System of Preferences (GSP) program.

Proclamation Authorizes CITA to Exercise MFTA Act Authorities on Textiles

The Proclamation also authorizes the Committee for the Implementation of Textile Agreements (CITA) to exercise certain MFTA Implementation Act authorities to exclude textile and apparel goods from the customs territory of the U.S.; to determine whether an enterprise's production of, and capability to produce, goods are consistent with statements by the enterprise; to find that an enterprise has knowingly or willfully engaged in circumvention; and to deny MFTA preferential treatment to textile or apparel goods.

CITA is further authorized to review requests and determine whether to commence consideration of such requests (with provision for proper public notice and opportunity to comment), to determine whether imports of a Moroccan textile or apparel article are causing serious damage, or actual threat thereof, to a domestic industry producing an article that is like, or directly competitive with, the imported article; and to provide relief from imports of an article that is the subject of such a determination.

See future issues of ITT for BP summaries on the annexes to the Proclamation, which are in ITC Publication 3721, as well as earlier issued USTR Fact Sheets on the MFTA.

Presidential Proclamation 7971 (FR Pub 12/27/05) available at http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-24595.pdf

USTR's Morocco Web Page, available at http://www.ustr.gov/Trade_Agreements/Bilateral/Morocco_FTA/Section_Index.html

USTR's Fact Sheet on Morocco FTA's Textile and Apparel Provisions (dated 07/19/04) available at http://www.ustr.gov/Document_Library/Fact_Sheets/2004/US_-_Morocco_Free_Trade_Agreement_Textile_Apparel_Provisions.html

BP Note

According to the USTR's 2004 Fact Sheet on the textile and apparel provisions of the MFTA (partial list):

The MFTA has a "yarn forward" rule for textiles and apparel. It also has a temporary Tariff Preference Level (TPL) set at an initial level of 30,000,000 square meters equivalent (SME) for the first four years of the MFTA, which is then reduced over the next six years and eliminated after ten years. The MFTA also contains a special allowance for the U.S. and Moroccan industry to use cotton fibers from least-developed sub-Saharan African countries.

For the majority of textile products, tariffs will be eliminated over six years. In addition, for selected items, the U.S. and Morocco will provide duty free treatment to designated quantities of products. There is also a special textile safeguard that allows either party to re-impose MFN tariffs if imports from the other party damage domestic production.

(See ITT's Online Archives or 08/19/04 news, 04081905 for BP summary providing link to these USTR Fact Sheets.)