President Signs GSP and ATPA/ATPDEA Extensions, DR "2 for 1" Apparel Benefit, & AGOA "Abundant Supply" Repeal into Law
On October 16, 2008, President Bush signed into law H.R. 7222 (Public Law 110-436), a bill to extend the Andean trade preferences and Generalized System of Preferences programs beyond their current expiration dates, and make various changes regarding certain African and Dominican Republic textiles.
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Highlights of P.L. 110-436
P.L. 110-436 includes the following provisions:
One year extension of GSP. The GSP program (A, A*, A), which provides duty-free treatment for certain products from beneficiary countries other than those listed as African Growth and Opportunity Act (AGOA) beneficiary countries, is renewed1 for an additional year, through December 31, 2009.
(For AGOA beneficiary countries, both the GSP program (A, A*, A) and the AGOA-GSP program (D) remain in effect through September 30, 2015.)
Six months to one year extension of ATPA/ATPDEA. The Andean Trade Preferences Act/Andean Trade Promotion and Drug Eradication Act (ATPA/ATPDEA) is renewed1 for:
One year (through December 31, 2009) for Colombia and Peru;
Six months for Ecuador (through June 30, 2009), plus an additional six months unless the Administration determines that Ecuador does not satisfy ATPA criteria; and
Six months for Bolivia (through June 30, 2009), plus an additional six months only if the Administration determines that Bolivia satisfies ATPA criteria.
P.L. 110-436 also appears to extend the ATPDEA regional fabric tariff preference level (TPL) and the ATPDEA brassiere provision.
(The ATPA/ATPDEA provides duty-free treatment to certain exports from Colombia, Peru, Ecuador and Bolivia; however, President Bush has recently proposed to suspend ATPA/ATPDEA benefits for Bolivia. (See ITT's Online Archives or 09/29/08 news, 08092915, for BP summary.))
Dominican Republic 2-for-1 apparel program. According to the House Ways and Means Committee, under this Earned Income Allowance Program, when producers purchase a certain quantity of qualifying U.S. fabric (2 square meter equivalents (SMEs)) for certain apparel production2 in the Dominican Republic, they will receive a credit (equivalent to 1 SME).
This credit can then be used to ship a proportional quantity of eligible apparel (woven cotton (but not of denim) trousers, bib and brace overalls, breeches and shorts, skirts and divided skirts, and pants) from the Dominican Republic to the U.S. duty-free regardless of the origin of the fabric from which the apparel product is made.
Repeal of AGOA "abundant supply" provision.AGOA is amended to repeal the "abundant supply" provision to ensure African countries can use third country fabrics in apparel qualifying for duty-free treatment.
(The House Ways and Means Committee has previously stated that the "abundant supply" provision stated 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), lesser developed AGOA beneficiary countries will lose the third country fabric privileges with respect to any apparel produced from that fabric.)
Third country fabric AGOA benefits for Mauritius. Mauritius is designated as an AGOA lesser developed AGOA beneficiary country, and its eligibility to use the AGOA "third country fabric" provisions is reinstated. Mauritius' designation lapsed in September 2005.
Technical corrections, funding, etc. provisions. P.L. 110-436 also makes certain technical corrections to AGOA and the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II). It also includes certain reporting requirements.
P.L. 110-436 includes funding provisions, including a shift in corporate estimated taxes, extended Customs user fees, and a repeal of the Customs' user fee prepayment provisions in the 2008 Farm Bill.
1Without an extension, the expiration date would have been December 31, 2008.
2 This apparel should be 'similar' to the apparel (e.g. trousers, etc.) that would make use of the credits.
(See ITT's Online Archives or 10/03/08 news, 08100307, for BP summary of the Senate's October 2, 2008 passage of its version of H.R. 7222.
See ITT's Online Archives or 09/30/08 news, 08093000, for BP summary of the House's September 29, 2008 passage of its version of H.R. 7222.)
Senate Finance Committee press release on H.R. 7222 (dated 10/03/08) available at http://finance.senate.gov/press/Bpress/2008press/prb100308.pdf.
White House press release (dated 10/16/08) available at http://www.whitehouse.gov/news/releases/2008/10/20081016-4.html.
H.R. 7222 available athttp://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h7222enr.txt.pdf.