CBP Post Guidance on Textile and Apparel Tariff Shift Rules Under Free Trade Agreements
U.S. Customs and Border Protection recently posted guidance in the form of a 154 page presentation on understanding tariff shift rules under U.S. free trade agreements. The March 2006 presentation is part of CBP in-house training material for field Import Specialists.
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The presentation titled "How Do I Read Tariff Shift Rules? And Other Textile & Apparel Rules of Origin Questions You Were Afraid to Ask (March 2006)," is a useful overview of preferential and non-preferential Rules of Origin. The first 40 pages present a snapshot of the key general provisions of U.S. FTAs in place or under negotiation. The general presentation overview covers such topics as:
Why import under an FTA; significant duty advantages
Duty rate reductions under FTAs vs. preferential programs
Definitions of Originating vs. Non-originating
Descriptions of and diagrams/pictures of terms used in the classification of fibers, yarns, fabrics
Fiber forward, yarn forward, single transformation descriptions
How to read the actual tariff shift rules and their variations
Tariff shift groupings
Preference Rule Summary
Component that determine classification
De minimis
Visible Lining Rule
Sets
Direct Shipping and Subsequent Processing
Etc.
The rest of the presentation is devoted to presenting specific tariff shift rules under the various FTAs the U.S. is a party to. (Tariff preferences provided under legislated tariff preference programs such as the African Growth and Opportunity Act (AGOA) and the Caribbean Basin Trade Partnership Act (CBTPA) are addressed in separate CBP training materials.) Overviews for each FTA include, in general and where applicable, the following;
General description including effective/expiration dates, special indicator designation, U.S. Code/ Public Law cite, etc.
Overall checklist for each FTA
Individual presentation pages covering specifics applicable to each FTA in place (including Oman). These cover topics such as:
Specific textile and apparel chapters covered under each FTA
Details of short supply provisions by Chapter and subheading
Special provisions covering select products (e.g. Mexico Sweaters)
Assembly rules
Trade Preference Levels/Tariff Rate Quotas allowing certain volumes of non-qualifying goods to enter duty free or at a reduced duty
- Bra rule
Sets
Subsequent processing
Handloomed and folklore products
Direct Shipment
The presentation covers the following FTAs:
NAFTA (Mexico and Canada)
Bahrain (not yet implemented)
Chile
Morocco
Oman (not yet submitted to Congress)
Australia
Singapore
DR-CAFTA (El Salvador, Honduras and Nicaragua)
The NAFTA and DR-CAFTA presentation pages are more detailed given the multi-country nature of these agreements. The DR-CAFTA presentation also includes two pages on DR-CAFTA vs. CBTPA outlining similarities and differences between the two.
The Tariff Shift Rules training material are available at: http://www.customs.treas.gov/linkhandler/cgov/import/textiles_and_quotas/fta_training/tariff_shift.ctt/tariff_shift.pdf