Pocketing, Single Transformation, Etc. Changes for DR-CAFTA Apparel on a Date Announced by USTR (Proclamation 8213)
On December 20, 2007, President Bush issued Proclamation 8213 in order to amend the Harmonized Tariff Schedule General Note 29(n) origin rules for certain Dominican Republic-Central America-U.S. Free Trade Agreement (DR-CAFTA) apparel1.
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HTS Modifications Take Effect on Date Announced by USTR
The HTS amendments described below will take effect for goods entered or withdrawn from warehouse for consumption on or after the date(s) announced by the U.S. Trade Representative in the Federal Register.
(The Office of Textiles and Apparel (OTEXA) expects these changes to be implemented soon. See ITT's Online Archives or 03/20/08 news, 08032000, for BP summary.)
Certain DR-CAFTA Apparel Would be Subject to Single Transformation2 Origin Rule, Etc.
Proclamation 8213 would amend the DR-CAFTA chapter and tariff classification rules (TCRs) in HTS General Note 29(n) as follows:
Chapter 61 and 62, Chapter rules 3 and 4. Chapter rules 3and 4 would be amended to exclude the following apparel from the requirement that narrow elastic fabric of 5806.20 or 6002 (rule 3) or sewing thread of 5204, 5401, or 5508 (rule 4) be both formed and finished in the territory of one or more of the Agreement parties for apparel containing such fabric/thread to be originating:
Chapter 61 apparel excluded from requirement: certain apparel in HTS 6102.20, 6102.90.90, 6104.12.00, 6104.13.20, 6104.19.15, 6104.19.80, 6104.22.00, 6104.29.20, 6104.32, 6104.39.20, 6112.11.00, 6113.00.90, or 6117.90.90 as specified in Proclamation 8213's Annex. (Group I)
Chapter 62 apparel excluded from requirement: certain apparel in HTS 6207, 6208, 6204.23, 6204.29, 6204.32, 6212.10, 6202.12.20, 6202.19.90, 6202.91.20, 6202.92.15, 6202.92.20, 6202.93.45, 6202.99.90, 6203.39.90, 6204.12.00, 6204.13.20, 6204.19.20, 6204.19.80, 6204.22.30, 6204.33.20, 6204.39.80, 6204.42.30, 6204.43.40, 6204.44.40, 6205.20.20, 6205.30.20, 6209.20.10, 6210.30.90, 6210.50.90, 6211.20.15, 6211.20.58, 6211.41.00, 6211.42.00, or 6217.90.90 as specified in Proclamation 8213's Annex, or;
Certain apparel in HTS 6203.11, 6203.31, 6203.41, 6204.11, 6204.31, 6204.51, 6204.61, 6211.39, or 6211.41, as specified in Proclamation 8213's Annex, provided that such goods are not made of carded wool fabric or made from wool yarn having an average fiber diameter of less than or equal to 18.5 microns. (Group II)
Chapter 62, Chapter rule 1. Chapter rule 1 would be amended to exclude the following apparel from the requirement that certain visible lining material must be both formed from yarn and finished in the territory of one or more of the Agreement parties (see rule for list of lining tariff numbers):
Chapter 62 apparel excluded from requirement: Certain apparel in HTS 6203.11, 6203.31, 6203.41, 6204.11, 6204.31, 6204.51, 6204.61, 6211.39, or 6211.41 as specified in Proclamation 8213's Annex, provided that such goods are not made of carded wool fabric or made from wool yarn having an average fiber diameter of less than or equal to 18.5 microns.
Chapter 61 and 62 TCRs. According to government sources, Proclamation 8213 would either amend the current TCRs or add new TCRs in order to apply a single transformation rule of origin to certain apparel. The amended/new TCRs are as follows (according to government sources, chapter rules can override a TCR):
Chapter 61 - TCRs 3, 4, 13, 14, 16, 17, 18A, 19, 25, 33, and 36 - 41
Chapter 62 - TCRs 5-8, 13A, 16, 17A, 19-21, 24, 25, 30, 32, 35, 37-38, and 41-43
(See Annexes for deleted TCRs, etc.)
DR-CAFTA Apparel Would be Subject to Yarn Forward Rule for Pocket Bag Fabric
The Proclamation would add a new Chapter Rule 5 for HTS Chapter 61 and 62 in order to implement a stricter yarn-forward provision for pocket bag fabric.
Chapter Rule 5 would state that goods in HTS Chapter 61 (other than Group I goods), and goods in HTS Chapter 62 (other than Group II goods), that contain a pocket or pockets would be considered originating only if the pocket bag fabric has been formed and finished in the territory of one or more DR-CAFTA parties from yarn wholly formed in the territory of one or more DR-CAFTA parties.
1According to government and other sources, these changes are a result of an agreement between the DR-CAFTA parties that provided a more lenient single transformation rule for certain apparel in exchange for applying the more strict yarn forward rule of origin to pocket bag fabric used in certain apparel.
2also known as the "cut and sew" rule, single transformation allows certain apparel articles to qualify for duty-free treatment regardless of the source of the fabric from which they are made as long as the apparel is cut and sewn or otherwise assembled in the DR-CAFTA region.
(See ITT's Online Archives or 01/04/08 news, 08010410, for BP summary of the portion of Proclamation 8213 related to the Nicaragua TPL.
See ITT's Online Archives or 01/08/08 news, 08010815, for BP summary of the portion of Proclamation 8213 related to reduced duties for certain non-originating DR-CAFTA apparel.
See ITT's Online Archives or 01/14/08 news, 08011410, for previous BP summary on the portion of Proclamation 8213 which would implement the DR-CAFTA cumulation provision.)
Proclamation 8213 (FR Pub 12/27/07) available at http://a257.g.akamaitech.net/7/257/2422/28dec20071800/edocket.access.gpo.gov/2007/pdf/07-6246.pdf