Details of the Proclamation Implementing the DR-CAFTA for Guatemala, Etc. (Part II - Final)

According to the Proclamation, the DR-CAFTA for Guatemala is generally in effect for goods entered, or withdrawn from warehouse, for consumption on or after July 1, 2006.

This is Part II, the final part of a two-part series of BP summaries of Proclamation 8034 and highlights the many changes made by the annex to Proclamation 8034 for Guatemala, as well as one change for Nicaragua. (See ITT's Online Archives or 07/06/06 news, 06070610, for Part I.)

New HTS 9915.61.05 for Nicaragua

The annex to Proclamation 8034 states that effective with respect to goods of Nicaragua, under the terms of general note 29 to the tariff schedule, that are entered, or withdrawn from warehouse for consumption, on or after April 1, 2006, HTS Chapter 99, Subchapter XV is modified as follows:

New HTS 9915.61.05 is added for originating trousers, breeches, or shorts of Nicaragua, under the terms of HTS General Note 29, as described in new U.S. Note 15(d).

(General Note 29 contains the specific rules of origin, definitions, and other provisions necessary to determine whether a good is eligible for DR-CAFTA tariff treatment.)

In a recently revised document on textile and apparel tariff shift rules, under the title "Earned TPL," CBP states that HTS 9915.61.05 will be used to measure imports from Nicaragua of cotton/MMF trousers using U.S. fabric from U.S. yarn (as a subset of originating goods made from yarn and fabric from any DR-CAFTA country). If Nicaragua doesn't live up to its commitment to ship a certain volume of MMF and cotton trousers made of U.S. fabric of U.S. yarn (formerly under CBTPA), CBP states that Nicaragua's TPL may be reduced by a commensurate amount in the subsequent year. (See ITT's Online Archives or 06/23/06 news, 06062315, for BP summary on the "certificate of eligibility" requirement for the Nicaragua apparel TPL.)

U.S. Note 15 is amended by adding a new subdivision (d) which states:

For purposes of heading 9915.61.05, the term "originating trousers, breeches, or shorts of Nicaragua, under the terms of general note 29 of the tariff schedule" refers only to such apparel articles, not knitted or crocheted, of cotton or of man-made fibers (MMF), and made from U.S. formed fabric of U.S.-formed yarn, that (I) are classifiable in the following subheadings and (II) are originating goods of Nicaragua under the terms of general note 29 to the tariff schedule. Goods described in this note that are originating goods of Nicaragua under the applicable rules set forth in General Note 29 for the provisions of HTS Chapter 62 listed below must be reported under HTS 9915.61.05 as well as under the appropriate provision of HTS Chapter 62."

July 1, 2006 Changes for Guatemala

The annex to Proclamation 8034 also states that effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after July 1, 2006:

HTS General Note 4, and the special duty subcolumn for certain corresponding HTS numbers, are amended to reflect the exclusion of Guatemala from the Generalized System of Preferences (GSP) program.

HTS General Notes 7 and 17; HTS Chapter 98, Subchapter XX, U.S. Note 1; and HTS Chapter 98, Subchapter II, U.S. Note 7(b) are all amended to delete Guatemala from the list of Caribbean Basin Economic Recovery Act (CBERA) beneficiaries and U.S.-Caribbean Basin Trade Partnership Act (CBTPA) beneficiaries and to add Guatemala to the list of former CBERA and CBTPA beneficiary countries.

HTS General Note 29 is amended to add Guatemala to the list of DR-CAFTA countries.

HTS Chapter 98, Subchapter XXII, U.S. Note 25(a) is amended to list the July 1, 2006 through December 31, 2006 in-quota quantity for the sugar tariff-rate quota (TRQ) for Guatemala. In addition, U.S. Note 25(b) is amended to include certain sugar quantities for Guatemala for 2007 - 2021. (U.S. Note 25(b) provides for the annual 2007-2021 duty-free sugar TRQ for Guatemala which will be the lesser of (1) the level listed in U.S. Note 25 or (2) the amount of Guatemala's trade surplus for goods in certain HTS Chapter 17 tariff numbers.)

HTS Chapter 99, Subchapter IV, U.S. Note 1 is amended to add Guatemala to the list of countries whose goods that are imported into the U.S. are not subject to the provisions, duties, or limitations of Subchapter IV (WTO Safeguards and Section 22 Agriculture Restrictions).

HTS Chapter 99, U.S. Notes 5, 8, 10, and 14 are amended to add in-quota and over-quota agricultural (other than sugar) safeguard TRQ levels for Guatemala. In addition, the superior text to HTS 9915.04.01 and 9915.04.30 is amended to include Guatemala.

HTS Chapter 9 (Coffee, Tea, Mate, and Spices), Additional U.S. Note 4, is amended to add Guatemala to the list of countries eligible for duty-free entry for certain containers and wrappings and intermediate containers of tea (heading 0902).

(The DR-CAFTA is also referred to as the CAFTA-DR.)

Presidential Proclamation 8034, FR Pub 07/06/06, available at http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/06-6064.pdf.

Proclamation 8034's Annexes (ITC publication 3861, dated June 2006) available at http://www.usitc.gov/tata/hts/other/rel_doc/annex/PUB3861.pdf.