Update on the Presidential Proclamation Which Implements the U.S.-Singapore FTA

Most of the substance of Proclamation 7747 is contained in its Annexes (I and II).

January 1, 2004 Changes Made by Annex I

According to Annex I, the following changes are effective with respect to goods entered, or withdrawn from warehouse, for consumption on or after January 1, 2004 (partial list):

New HTS General Note 25. A new General Note 25 is added to the HTS that describes the eligibility requirements that goods of Singapore must meet in order to benefit from the SFTA. In addition, General Note 25 indicates that the HTS Column 1 "Special" subcolumn symbol for the SFTA is "SG."

Included in General Note 25 are explanations of the following terms for purposes of the note (partial list):

General Note 25 also contains special rules for textile and apparel articles (the 7% weight rule for goods that would otherwise be considered non-originating; and, a provision to treat as originating, apparel made from fabric or yarn not available in commercial quantities in a timely manner in the U.S, as designated in the Federal Register on or before November 15, 2002 for entry under HTS 9819.11.24 or HTS 9820.11.27 ("SFTA commercially unavailable").

Also described in General Note 25 are the following:

de minimis

adjusted value

accumulation

regional value content

value of materials

accessories, spare parts, and tools

fungible goods and fungible materials

packaging materials and containers

indirect materials

record-keeping requirements and verification

goods that shall be considered originating goods (listed therein and mostly HTS Chapters 84, 85, and 90)

interpretation of rules of origin

Importantly, General Note 25 also contains the SFTA change in tariff-classification rules (used, and sometimes subject to other rules, to determine whether a good is considered originating for purposes of receiving SFTA preferential treatment).

New HTS Chapter 99, Subchapter X. A new Subchapter X, with 14 U.S. Notes, is added to HTS Chapter 99 which, among other things, establishes temporary:

tariff rate quotas (TRQs) for certain SFTA originating agricultural goods (In general, the in-quota duty rates for these TRQs are zero and the over-quota duty rates are subject to staged reductions until they become zero);

a "3rdcountry" tariff preference level (TPL) for certain cotton or MMF apparel in 282 eight-digit HTS numbers made from third country fabric or yarn (with 25 divisions of duty rates, depending on the HTS numbers, which are subject to staged duty reductions until they become zero in 2008); and

(See ITT's Online Archives or 01/06/04 news, 04010610, for additional details on this TPL that is in place for the 2004-2011 period, and is reduced in quantity each year.)

provisions for the duty-free entry of certain apparel made from fabric or yarn, regardless of origin, considered to be "SFTA commercially unavailable" .

New HTS Chapter 98, Subchapter XXII. In addition, Annex I amends HTS Chapter 98, by adding a new Subchapter XXII, to continue to provide for duty-free entry, on or after January 1, 2014, of certain apparel made from fabric or yarn, regardless of origin, considered to be "SFTA commercially unavailable" .

Transfer of HTS General Notes 19 - 24. Annex I also amends HTS General Notes 19 - 24 by transferring and designating them as subdivisions (e) through (j), respectively, of HTS General Note 3.

January 1, 2004 Changes Made by Annex II

According to Annex II, the following changes are effective with respect to qualifying goods entered, or withdrawn from warehouse, for consumption on or after January 1, 2004 (partial list):

Immediate Zero Duty Rates. Annex II lists the HTS Chapter 1-98 tariff numbers that are duty-free immediately.

HTS Chapter 99 TRQs, etc. Annex II also adds references to certain HTS Chapter 1-97 tariff numbers for their corresponding HTS Chapter 99 TRQs.

Other Changes Made by Annex II

According to Annex II, other changes are being made to the HTS (partial list):

Staged SFTA Duty Reductions. The SFTA staged duty reductions (to zero) are listed for each affected HTS Chapter 1-99 eight-digit tariff number. The staged duty reductions usually take effect on January 1, 2004 and January 1 of subsequent years variously (until 2013 at the latest), depending on the tariff number's phase-out schedule.

Certain Other SFTA Changes for HTS Chapter 98.Certain SFTA modifications to HTS 9802.00.60, 9802.00.80, 9817.61.01, and 9818.00.05 in order to provide SFTA duty-free entry effective January 1, 2013.

Other Changes Made by Proclamation 7747

Proclamation 7747 also contains provisions which (partial list):

Commencement of action for relief under the textile and apparel safeguard. Authorize the Committee for the Implementation of Textile Agreements (CITA) to exercise the authority of the President under the textile and apparel safeguard measure provisions of the U.S. Singapore FTA Implementation Act to determine whether imports of a Singaporean textile or apparel article constitute a substantial cause of serious damage, or actual threat thereof, to a domestic industry producing an article that is like, or directly competitive with, the imported article; and to provide relief from imports of an article that is the subject of such a determination.

SFTA Proclamation 7747 (FR Pub 12/31/03) available at

http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2003/pdf/03-32320.pdf.

Annexes for SFTA Proclamation 7747 (USITC Publication 3651) available at

ftp://ftp.usitc.gov/pub/reports/studies/PUB3651.PDF.