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Mechanisms For Fta’s

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    • 1. Inter-American Development Bank, Brasilia, Sept. 2007 U.S. Rules of Origin Mechanisms for FTA’s Richard Stetson U.S. Department of Commerce Office of Textiles and Apparel
    • 2. Office of Textiles and Apparel (OTEXA)
      • Formulate U.S. textile and apparel trade policy
      • Develop programs and strategies to improve the domestic and international competitiveness of the U.S. fiber, yarn, fabric, and apparel industries.
      • Develop positions in free trade agreement negotiations using trade data and industry guidance.
    • 3. $ 93.2 billion
    • 4. Leading Textile & Apparel Shippers to U.S.
        • China
        • Central America-Dominican Republic
        • Mexico
        • India
        • Indonesia
        • Vietnam
        • Bangladesh
        • Pakistan
        • Canada
        • Cambodia
        • 36.Brazil
    • 5. U.S. Free Trade Agreements (FTAs)
      • Central America-Dominican Republic (CAFTA-DR )
      • Mexico, Canada (NAFTA)
      • Chile
      • Singapore
      • Australia
      • Bahrain
      • Morocco
      • Israel
      • Jordan
    • 6. Free Trade Agreements (FTA’s) Pending
      • Peru
      • Panama
      • Colombia
      • Oman
      • Korea
    • 7. Free Trade Agreements (FTA) …
      • DUTY-FREE Entry
      • IF a product meets the
      • ‘ RULE OF ORIGIN’
      U.S. Customs House, New York City NO TARIFF !!!
    • 8. ‘ Yarn-Forward’ Rule of Origin Yarn  Fabrics  Apparel
    • 9. WHY ‘YARN FORWARD’
      • U.S. Yarn - $ 15 billion industry
      • U.S. Fabric - $ 8.1 billion export industry
    • 10. Exceptions to Yarn Forward Rule of Origin
      • De Minimis : 10% of the fibers and yarns of a product can be sourced from outside the region. Note: all elastomeric must be regional.
      • Cut-and-Sew : Brassieres, Woven Boxer Shorts, Woven Nightwear, Woven Girl’s Dresses, and Luggage (CAFTA-DR)
      • Tariff Preference Level (TPL)
      • ‘ Cumulation’ : Limited amount of inputs from other FTA partners (CAFTA-DR/NAFTA)
      • Short Supply (Commercial Availability)
    • 11. Short Supply
      • Fiber, Yarn, or Fabric not ‘commercially available’ in FTA region
      • Can be sourced outside of the region for use in qualifying goods (duty-free)
      • CAFTA-DR:
        • 30-day Process/Procedures
        • Short Supply List - 88 products (fibers, yarns, fabrics – 09-27-2007)
      • NAFTA/Chile FTA
    • 12. Short Supply Example: (CAFTA-DR)
        • 75. Certain 2-way stretch woven fabrics HTS Subheading: 5515.11.00 Fiber Content: 60% to 75% Polyester / 20% to 35% viscose rayon /3% to 6% spandex Fiber length: 51 to 70 millimeter staple (2 to 2.75 inches) Yarn Number : Warp and filling: 50/2 to 68/2 metric wrapped around 225 metric spandex (30/2 to 40/2 wrapped around 40-denier spandex) Thread Count: 30 to 32 warp ends x 24 to 26 filling picks per square centimeter (76 to 81 warp ends x 60 to 66 filling picks per square inch) Weave Type: Various Weight: 220 to 250 grams per square meter (6.5 to 7.4 ounces per square yard) Width: 142 to 148 centimeters (56 to 59 inches) Finish: Dyed; of yarns of different colors
      • - Sourced from Brazil
      • - Cut and assembled in the CAFTA-DR region
      • - Shipped to the U.S.
      • - Duty-Free!!! entry to U.S.
      • Short Supply List: http://web.ita.doc.gov/tacgi/CaftaReqTrack.nsf
    • 13. ‘ CUMULATION’ Limited amount of inputs from other FTA partners (CAFTA-DR/NAFTA)
    • 14. OPPORTUNITIES ?
      • Investment
      • Brazilian textile firm Pettenati is investing $95 million in an elastic fabric manufacturing plant in El Salvador
      • FTA Provisions that allow for external sourcing of yarns and fabrics
      • TPL
      • Short Supply Products
      • Cut-and-Sew Products
    • 15. On-Line Sources
      • Office of Textiles and Apparel (OTEXA)
      • http://otexa.ita.doc.gov/
      • U.S. Customs – Imports to U.S.
      • http://www.customs.treas.gov/xp/cgov/import/textiles_and_quotas/
      • U.S. ITC – Tariff Schedule
      • http://usitc.gov/
      • U.S. Trade Representative – Trade Agreements
      • http://www.ustr.gov/index.html
    • 16.  
    • 17. Contact
      • Richard Stetson Office of Textiles and Apparel U.S. Department of Commerce 202-482-2582 [email_address]