Presidential Proclamation Implements DR-CAFTA for Dominican Republic Effective March 1, 2007, Etc. (Part I)

According to the Proclamation, the DR-CAFTA for the Dominican Republic is generally in effect for goods entered, or withdrawn from warehouse, for consumption on or after March 1, 2007.

This is Part I of a multi-part series of BP summaries of this Proclamation and highlights the proclamation itself. See future issue(s) of ITT for BP summary(s) of its annexes.

Annexes I and II Containing HTS Modifications for Dominican Republic Posted to ITC Web Site

The Proclamation states that the HTS modifications necessary to implement DR-CAFTA for the Dominican Republic are not in the proclamation but are instead listed in Annexes I and II of publication 3901 of the International Trade Commission (ITC), entitled "Modifications to the HTS of the U.S. to Implement the Dominican Republic - Central America - U.S. Free Trade Agreement with respect to the Dominican Republic", which is posted to the ITC's web site and is incorporated by reference into the Proclamation.

These HTS modifications implement the initial stage of duty elimination provided for in the DR-CAFTA for the Dominican Republic, and provide for future DR-CAFTA staged duty reductions for the Dominican Republic, effective on the dates specified in the relevant sections of the Annexes I and II.

HTS Modifications Include TRQs, Removal of GSP/CBPTA/CBERA for Dom. Rep.

The HTS modifications also include tariff-rate quotas (TRQs) for certain Dominican Republic DR-CAFTA originating goods, provide for the DR-CAFTA rules of origin to be used to determine whether a Dominican Republic good is eligible for preferential DR-CAFTA tariff treatment, and remove the Dominican Republic from the list of countries eligible for benefits under the Generalized System of Preferences (GSP) program, the Caribbean Basin Trade Partnership Act (CBTPA), and the Caribbean Basin Economic Recovery Act (CBERA).

Certain NAFTA Rules of Origin Authorized to be Modified by USTR

Moreover, this Proclamation also authorizes the U. S. Trade Representative to modify the NAFTA rules of origin for certain products from Mexico, pursuant to a recent U.S. - Mexico agreement. The effective date of these amendments will be announced by USTR in a future Federal Register notice.

(Note that the Annex to the Proclamation is expected to contain these NAFTA Rule of Origin changes for Mexico, as they do not appear to be listed in Annexes I or II of the ITC publication.)

CITA Authorized to Reduce Nicaragua TPL if it Fails to Comply with Commitments

In addition to implementing the DR-CAFTA for the Dominican Republic, this proclamation also authorizes the Committee for the Implementation of Textile Agreements (CITA) to reduce the limit of the DR-CAFTA tariff preference level (TPL) for Nicaragua, if it determines that Nicaragua has failed to comply with its commitment with regard to the administration of this TPL.

(CBP has previously stated that the Nicaragua TPL is an "Earned TPL," and that HTS 9915.61.05 is being used to measure imports from Nicaragua of cotton/manmade fiber (MMF) trousers using U.S. fabric from U.S. yarn (as a subset of originating goods made from yarn and fabric from any DR-CAFTA country). If Nicaragua doesn't live up to its commitment to ship a certain volume of MMF and cotton trousers made of U.S. fabric of U.S. yarn (formerly under CBTPA), CBP states that Nicaragua's TPL may be reduced by a commensurate amount in the subsequent year. (See ITT's Online Archives or 07/14/06 news 06071405 for BP summary.)

Presidential Proclamation (without Mexico NAFTA Annex) available at http://www.whitehouse.gov/news/releases/2007/03/20070301.html

ITC publication 3901, dated 02/07 (Annexes I & II for Dominican Republic) available at http://www.usitc.gov/tata/hts/other/rel_doc/annex/documents/3901ModificationsDominicanRepub_fullreport.pdf