House Passes GSP Extension, D.R. "2 for 1" Apparel Benefit, Repeal of AGOA 'Abundant Supply', Etc.
On July 29, 2008, the House of Representatives passed H.R. 6560, a bill that would extend the Generalized System of Preferences program for one year, create a Dominican Republic "2 for 1" program for certain cotton apparel, repeal the "abundant supply" provisions of the African Growth and Opportunity Act, etc.
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(Although the House has passed H.R. 6560, it is not yet in effect. Generally, in order for a bill to be implemented, identical versions of that bill must be passed by both the House and Senate and then the bill must be approved (enacted) by the President.)
According to a House Ways and Means Committee summary, H.R. 6560 includes the following elements:
Extension of GSP Through December 2009
H.R. 6560 would provide a one-year extension of the GSP through December 2009. (GSP is currently scheduled to expire on December 31, 2008, unless extended.)
(See ITT's Online Archives or 07/08/08 news, 08070810, for most recent BP summary on the December 31, 2008 expiration of GSP.)
"2 for 1" Program for Certain Eligible Dominican Republic Cotton Apparel
H.R. 6560 would establish a "2 for 1" textile and apparel program for the Dominican Republic. Under the program, when producers purchase a certain quantity of qualifying U.S. fabric1 (2 square meter equivalents or "SMEs") for apparel production in the Dominican Republic, they would receive a credit (equivalent to 1 SME). This credit could then be used to ship a corresponding quantity of eligible cotton apparel2 (pants and other bottoms) from the Dominican Republic to the U.S. duty-free regardless of the origin of the fabric from which the apparel product is made.
(See ITT's Online Archives or 07/24/08 news, 08072405, for BP summary of H.R. 6560 as introduced.)
Repeal of AGOA "Abundant Supply" Provision
H.R. 6560 would also repeal the AGOA "abundant supply" provision and replace it with a request for U.S. government studies to find new ways of encouraging investment in Africa.
(The existing "abundant supply" provision states that if any fabric is available in "abundant supply" in Africa and is not wholly consumed in the production of apparel under AGOA over a certain period (2 years), least developed countries (LDCs) will lose the third-country fabric privileges with respect to any apparel produced from that fabric.)
(See ITT's Online Archives or 07/14/08 news, 08071430, for BP summary of the ITC's announcement of the amount of "abundant supply" denim used by AGOA LDBCs in FY 2007 duty-free apparel.)
Reinstatement of Mauritius' AGOA LDC Status
H.R. 6560 would reinstate the LDC designation for Mauritius under AGOA.
(Mauritius was an LDC for AGOA purposes until September 2005, and therefore able to use the critical "third country" fabric provisions of the program. The press release states that since that designation lapsed, the Mauritius industry has gone into significant decline, as many garment factories shut down operations in Mauritius and moved to Asia.
See ITT's Online Archives or 11/01/04 news, 04110115, for BP summary of Public Law 108-429, which applied the term LDC to Mauritius for a one year period beginning October 1, 2004.)
Repeal of Customs User Fee "Prepayment" Provision
H.R. 6560 would implement an agreement by Representatives Rangel and McCrery and Senators Baucus and Grassley to repeal a 2008 Farm Bill provision on the prepayment of customs user fees.
(According to a Senate Finance Committee summary, the Farm Bill requires pre-payment of certain inspection fees in late fiscal year 2017 and the merchandise processing fees in early 2018.
Senate Finance Committee summary of the Farm Bill Tax and Trade Title, with details on the prepayment provision is available here.)
Technical Fix to the Haiti HOPE II Legislation
H.R. 6560 would also correct a typographical error (the accidental transposition of two numbers) in the Haiti HOPE II provisions included in the 2008 Farm Bill.
(See ITT's Online Archives or 05/19/08 news, 08051905, for BP summary of the 2008 Farm Bill, including Hatii HOPE II.)
1"Qualifying fabric" means certain cotton woven fabric as defined in H.R. 6560.
2"Eligible apparel" of the Dominican Republic is defined as the following articles classified in HTS Chapter 62 (and meeting the General Note 29(n) requirements for HTS Chapter 62) of cotton (but not of denim): trousers, bib and brace overalls, breeches and shorts, skirts and divided skirts, and pants.
(See ITT's Online Archives or 07/24/08 news, 08072405, for BP summary of H.R. 6560 as introduced.)
House Ways and Means Committee press release (dated 07/30/08) available at http://waysandmeans.house.gov/News.asp?FormMode=release&ID=679
House Ways and Means Committee summary of H.R. 6560 available at http://waysandmeans.house.gov/media/pdf/110/hr6560.pdf.
H.R. 6560 (as passed by the House) available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h6560eh.txt.pdf.