FTA Preference Rules for Apparel: Understanding the Building Blocks Used in Tariff Shift Model Agreements

FTA Preference Rules for Apparel: Understanding the Building Blocks Used in Tariff Shift Model Agreements Hosted by United States Fashion Industry Association (USFIA) and USITC October 31, 2017 2:00 P.M. Eastern/11:00 A.M. Pacific

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FTA Preference Rules for Apparel Understanding the Building Blocks Used in Tariff Shift Model Agreements October 31, 2017

U.S. International Trade Commission (USITC) www.usitc.gov The USITC is an independent Federal agency with broad investigative responsibilities on matters of trade. The Commission s mission is to: (1) Administer U.S. trade remedy laws within its mandate in a fair and objective manner; (2) Provide the President, USTR, and Congress with independent analysis, information, and support on matters of tariffs, international trade, and U.S. competitiveness; and (3) Maintain the Harmonized Tariff Schedule of the United States (HTSUS)

U.S. International Trade Commission (USITC) www.usitc.gov Commissioners The USITC is headed by six Commissioners who are nominated by the President and confirmed by the U.S. Senate. No more than three Commissioners may be of any one political party. The Commissioners serve overlapping terms of nine years, with a new term beginning every 18 months. USITC Staff Approximately 365 individuals serve as international trade analysts (investigators and experts in particular industries), international economists, attorneys, and technical support personnel. Five Major Operations: Import Injury Investigations (AD/CVD) Intellectual Property-Based Import Investigations (IPR) Industry and Economic Analysis Tariff and Trade Information Services Trade Policy Support

U.S. Free Trade Agreements Tariff Shift Model* for Apparel by Implementation Date 1994 2004 2005 2006 2007 2009 2012 NAFTA Canada Mexico Chile Singapore Australia Bahrain CAFTA-DR El Salvador Guatemala Honduras Nicaragua Morocco CAFTA-DR Dominican Republic CAFTA-DR Costa Rica Oman Peru Colombia Korea Panama * Does not include U.S. Free Trade Agreements with Israel (1985) or Jordan (2001).

FTA Preference Rules for Apparel Understanding the Building Blocks Used in Tariff Shift Model Agreements Originating Apparel: Tariff Shift Rules HTS GN Chapter Rules w/in the HTS GN s Tariff classification component Visible lining fabric Narrow elastic fabrics Sewing thread Pocket bag fabric Short Supply inputs De minimis HTS GN Percentage Elastomeric yarns Certain nylon filament yarns Cumulation (CAFTA) HTS GN & ch. 98 (also relies on tariff shift rules above) Short Supply HTS GN (w/in tariff shift rules) OR HTS GN + ch. 98 Non-Originating Apparel: Tariff Preference Levels (TPLs) - HTS chapter 98 or 99

BACKGROUND & RESOURCES U.S. International Trade Commission (USITC): www.usitc.gov U.S. Customs and Border Protection (CBP): www.cbp.gov Office of Textiles and Apparel (OTEXA): www.otexa.trade.gov

U.S. International Trade Commission (USITC) www.usitc.gov Harmonized Tariff Schedule of the United States (HTSUS) Chapters 1-97 for Description, Classification, and Duty Rates General Notes (GN) for FTA Preference Rules Special Program Indicator (SPI) for FTAs

U.S. International Trade Commission (USITC) www.usitc.gov

Special Program Indicator (SPI) CAFTA-DR: General Note (GN) 29

Tariff Shift Model FTAs for Apparel Country FTA Start SPI HTS GN Tariff Shift Rules Australia Same 1/1/2005 AU 28 Short Supply Rules Tariff Preference Levels Bahrain Same 1/11/2006 BH 30 Canada NAFTA 1/1/1994 CA 12 Chile Same 1/1/2004 CL 26 Colombia Same 5/15/2012 CO 34 Costa Rica CAFTA-DR 1/1/2009 P 29 Dominican Republic CAFTA-DR 3/1/2007 P 29 El Salvador CAFTA-DR 3/1/2006 P 29 Guatemala CAFTA-DR 7/1/2006 P 29

Tariff Shift Model FTAs for Apparel Country FTA Start SPI HTS GN Tariff Shift Rules Honduras CAFTA-DR 4/1/2006 P 29 Short Supply Rules Tariff Preference Levels Korea Same 3/15/2012 KR 33 Mexico NAFTA 1/1/1994 MX 12 Morocco Same 1/1/2006 MA 27 Nicaragua CAFTA-DR 4/1/2006 P 29 Oman Same 1/1/2009 OM 31 Panama Same 10/31/2012 PA 35 Peru Same 2/1/2009 PE 32 Singapore Same 1/1/2004 SG 25

U.S. Customs and Border Protection Office of International Trade www.cbp.gov U.S. Customs and Border Protection (CBP) resources for understanding the HTS classification of apparel: - Informed Compliance Publications (ICP) - Apparel Terminology - Children s Apparel - Coated and Water Resistant Apparel - Hats and Headgear - Knit-to-Shape Garments - Etc. - Request a Ruling Letter - Customs Ruling Online Search System (CROSS) - Search published rulings letters for similar garments

U.S. Customs and Border Protection Office of International Trade www.cbp.gov

Office of Textiles and Apparel (OTEXA) U.S. Department of Commerce www.otexa.trade.gov OTEXA oversees programs and strategies to improve domestic and international competitiveness of the U.S. textile and apparel industry by: - administering the implementation of trade agreements - formulating trade policy - performing research and analysis - compiling industry data, and - promoting U.S. trade events for the industry. - U.S. trade data - Short Supply Lists for some FTAs

U.S. Imports of Apparel: Top Suppliers Source: OTEXA, Year Ending August 2017 Country % Share (SME) Rank % Share (US$) Rank China 41.72 1 33.97 1 Vietnam 13.14 2 14.07 2 CAFTA-DR 11.27-10.11 - Bangladesh 6.83 3 6.39 3 Indonesia 4.61 4 5.71 4 Honduras 3.97 5 3.18 7 India 3.93 6 4.60 5 Cambodia 3.34 7 2.64 8 NAFTA 3.28-5.12 - Mexico 3.12 8 4.42 6 El Salvador 2.90 9 2.38 10 Nicaragua 2.02 10 1.87 11

FTA Preference Rules for Apparel Origin* (marking) vs. Originating** (FTA) Generally, country of origin for apparel determined by where assembly operation occurs Eligibility for preferential duty treatment requires satisfying the FTA product specific rule in order to be originating, which is always more than just assembly *19 CFR 102.21 (Rules of Origin) **HTSUS General Notes (GN)

FTA Preference Rules for Apparel Source: HTSUS General Notes Goods May Originate Under a Tariff Shift Model FTA by Satisfying One of the Following Rules: Wholly Obtained or Produced Produced Exclusively from Originating Materials Tariff Shift or Product Specific Rules Fiber-, yarn-, fabric-forward, or cut & sew tariff shift rules Cumulation (for CAFTA-DR only)(a type of tariff shift rule) Commercial availability (short supply) Exempt from Merchandise Processing Fee (MPF) Use Special Program Indicator (SPI) on Entry Documents to File a Preference Claim (with or without Chapter 98 or 99 provision as needed)

FTA Preference Rules for Apparel Source: HTSUS General Notes and HTS Chapters 98 & 99 Certain Non-Originating Goods May Also Be Eligible for Preferential Duty Treatment : Tariff Preference Levels (TPLs) (vary by agreement and by country)(some expired) Subject to Merchandise Processing Fee (MPF) Do NOT Use Special Program Indicator (SPI) Use Chapter 98 or 99 Provision on Entry Documents to File a Preference Claim

CAFTA-DR NAFTA Peru Korea Colombia Morocco Oman Australia Chile Singapore Bahrain Panama Colombia Morocco Oman Australia Chile Singapore Bahrain Panama Tariff Shift Model FTAs for Apparel U.S. Imports of Apparel Source: OTEXA, Year-Ending August 2017, in million US$ 9,000 8,000 7,000 200 Non-FTA FTA 6,000 150 5,000 100 4,000 3,000 50 2,000 0 1,000 0

CAFTA-DR Qualifying Trade U.S. Imports of Apparel from CAFTA-DR Source: OTEXA, Twelve-Months Ending August 2017 Tariff Shift Rules 23% Cumulation 1% 5% Short Supply 2% 69% TPLs and Other Non-Originating MFN Duty (No Preference)

CAFTA-DR Qualifying Trade U.S. Imports of Apparel from CAFTA-DR Source: OTEXA, Twelve-Months Ending August 2017 in million US$ Country Tariff Shift Cumulation Short Supply TPLs & Other* MFN Duties** % CAFTA-DR CAFTA-DR 5,661.596 170.756 388.941 86.198 1,849.146 77% Costa Rica 15.429 2.383-0.079 18.226 50% Dom Rep 609.214 n/a 45.547 1.524 121.249 84% El Salvador 1,668.345 0.727 103.877 0.707 120.398 94% Guatemala 798.942 37.052 169.552 56.577 290.871 79% Honduras 2,021.785 11.370 22.893 4.971 545.208 79% Nicaragua 547.882 119.224 47.072 22.341 753.194 49% *TPLs & Other includes CAFTA-DR reduced duty program for non-originating apparel made from U.S. fabric and assembled with U.S. sewing thread. Costa Rica is the only CAFTA-DR country with TPLs in 2017; Nicaragua s TPL expired on 12/31/2014. **MFN Duties are regular HTS column 1 duties assessed on non-cafta-dr qualifying apparel.

NAFTA Qualifying Trade U.S. Imports of Apparel from NAFTA Source: OTEXA, Twelve-Months Ending August 2017 14% Tariff Shift Rules 22% 64% TPLs and Other Non- Originating MFN Duty (No Preference)

NAFTA Qualifying Trade U.S. Imports of Apparel from NAFTA Source: OTEXA, Twelve-Months Ending August 2017 in million US$ Country Tariff Shift* TPLs & Other** MFN Duties*** % NAFTA NAFTA 2,724.869 951.047 606.562 86% Canada 164.776 393.653 19.211 97% Mexico 2,560.093 557.394 587.351 84% *Under NAFTA (and other agreements that follow NAFTA as a template), import data for apparel articles that are made from an input or material considered to be in short supply are not captured separately from tariff shift apparel. **TPLs & Other includes data for NAFTA 9802 apparel. ***MFN Duties are regular HTS column 1 duties assessed on non-nafta qualifying apparel.

Peru FTA Qualifying Trade U.S. Imports of Apparel from Peru Source: OTEXA, Twelve-Months Ending August 2017 0% 5% Tariff Shift Rules 95% Short Supply MFN Duty (No Preference)

FTA Qualifying Trade U.S. Imports of Apparel from FTAs with Separate Short Supply Provision Source: OTEXA, Twelve-Months Ending August 2017 in million US$ Country Tariff Shift Short Supply TPLs & Other* MFN Duties** Colombia 175.033 0.108 n/a 19.122 90% % FTA Korea*** 184.298 0.0 0.077 59.736 75% Panama 0.329 0.0 n/a 2.631 11% Peru 562.522 0.806 n/a 27.569 95% Singapore*** 0.460 0.0 Expired 12/31/2013 7.985 5% *TPLs & Other includes reduced duty provisions under HTS 9802. There are no TPLs for Korea. **MFN Duties are regular HTS column 1 duties assessed on non-fta qualifying goods. ***Korea and Singapore FTAs have a separate short supply provision but also include NAFTA-like short supply rules.

FTA Qualifying Trade U.S. Imports of Apparel from FTAs without Separate Short Supply Provision Source: OTEXA, Twelve-Months Ending August 2017 in million US$ Country Tariff Shift* TPLs MFN Duties** % FTA Australia 11.305 0.0 6.469 64% Bahrain 0.549 Expired 12/31/2015 2.425 18% Chile 9.401 0.240 0.214 98% Morocco 6.570 Expired 12/31/2015 Oman 9.077 62.335 Expires 12/31/18 121.978 5% 0.357 99% *Under NAFTA (and other agreements that follow NAFTA as a template), import data for apparel articles that are made from an input or material considered to be in short supply are not captured separately from tariff shift apparel. **MFN Duties are regular HTS column 1 duties assessed on non-fta qualifying goods.

FTA Preference Rules for Apparel TARIFF SHIFT RULES

FTA Originating Apparel Tariff Shift Rules Tariff Shift Rules are the Preference Rule Used Most Often for Originating Apparel Product Specific Tariff Shift Rules Listed in HTSUS GN Tariff Shift Rule Concepts for Apparel Yarn-forward Fabric-forward Cut and Sew Includes Chapter Rules & De Minimis Clause Preference Claim Filed with Use of SPI in Front of HTS Number on Entry Documents

FTA Originating Apparel Tariff Shift Rule Concepts Fibers Natural fibers harvested (cotton, wool, linen, silk, etc.) Artificial/synthetic fibers manufactured (man-made fiber (MMF) such as polyester or nylon) Yarns Spun or extruded Finishing operations (coating, twist, etc.) Fabrics Apparel Knit or woven Finishing operations (dyeing, printing, etc.) Fabric cut or yarn knit-to-shape Components assembled (sewn) or linked Post-assembly finishing operations (stone-washing, permapressing, etc.)

FTA Originating Apparel Tariff Shift Rule Concepts Yarn-forward : all of the production steps beginning with the formation of the yarn + knitting/weaving of fabric + cut and sew of finished garment occur in a partner country. The fiber used to make the yarn may be of any origin. Fabric-forward : all of the production steps beginning with the knitting/weaving of the fabric + cut and sew of finished garment occur in a partner country. The yarn used to make the fabric may be of any origin. Cut and Sew : all of the production steps beginning with the cutting of the fabric + sew occur in a partner country. The fabric used to make the garment may be of any origin.

FTA Originating Apparel Tariff Shift Rules Begin with Correct HTSUS Classification for Finished Garment Must Also Know HTSUS Classification for Certain Materials Used to Produce the Garment

FTA Originating Apparel Tariff Shift Rules Apply a tariff shift rule in three steps: Step 1: decode or translate the HTS headings in the product specific rule from General Note (GN) Step 2: check for chapter rules Step 3: verify de minimis (if needed)

FTA Originating Apparel Tariff Shift Rules Step 1: Most FTA tariff shift rules for apparel are in three parts: A change to (finished garment); From (inputs or materials), except from ; Provided the good is cut or knit to shape, or both, and sewn or otherwise assembled in a party to the agreement.

FTA Originating Apparel Tariff Shift Rules Except from is the key to which materials used in the production of the finished good must also be originating from parties to the agreement. Materials classified in the excluded provisions (after except from ), by chapter (2 digits), by heading (4 digits), or by subheading (6 digits), of the HTS are required to be originating in order for a good made from those materials to be originating and eligible for preferential duty treatment.

CAFTA-DR Originating Trade Tariff Shift Rules Example of CAFTA-DR Tariff Shift Rule for Knit Apparel (HTSUS GN 29 (n) chapter 61 rule 25): Rule for all garments of headings 6105 through 6111: Men s or boys knit shirts (6105), Women s or girls knit shirts and blouses (6106), Men s or boys underwear and pajamas (6107), Women s or girls underwear and pajamas (6108), T-shirts (6109), Sweaters, pullovers, etc. (6110), and Babies garments, etc. (6111) Same Rule Applies to Garments of All Fibers Wool, Cotton, MMF, Silk, Other

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 61.25 A change to 6105 through 6111, from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5310 through 5311, chapter 54, headings 5508 through 5516 or 6001 through 6006, provided the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties.

FTA Originating Apparel Tariff Shift Rules HTS Chapters for Textile and Apparel Goods (2 Digits of Harmonized Tariff System) 50 Silk 55 Man-Made Staple 60 Knit Fabrics 51 Wool 56 Wadding, Etc. 61 Knit Apparel 52 Cotton 57 Carpets, Etc. 62 Woven Apparel 53 Other Vegetable Fiber 58 Specialty Fabrics 63 Made-Up Articles 54 Man-Made Filaments 59 Coated Fabrics 94 Made-Up Articles

FTA Originating Apparel Tariff Shift Rules HTS Headings for Fibers, Yarns and Fabrics (4 Digits of Harmonized Tariff System) Fibers Yarns Fabrics 5001-5003: Silk 5004-5006: Silk 5007: Silk 5101-5105: Wool 5106-5110: Wool 5111-5113: Wool (Woven) 5201-5203: Cotton 5204-5207: Cotton 5208-5212: Cotton (Woven) 5301-5305: Other Vegetable Fibers 5501-5507: Man-Made Staple Fibers 5306-5308: Other Vegetable Fibers 5401-5406: Man-Made Filament Fibers 5508-5511: Man-Made Staple Fibers 5604-5606: Specialty (Rubber, Coated, Metal, Etc.) 5309-5311: Other Vegetable Fibers (Woven)(for example, ramie or linen) 5407-5408: Man-Made Filament Fibers (Woven) 5512-5516: Man-Made Staple Fibers (Woven) 5602-5603: Felt & Non-Wovens 5801-5804: Specialty 5901-5911: Coated 6001-6006: Knit

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 61.25 from any other chapter, except from headings 5111 through 5113 (wool woven fabric), 5204 through 5212 (cotton yarn and cotton woven fabric), 5310 through 5311 (woven fabric of jute or other non-cotton vegetable fibers), chapter 54 (man-made filament yarn and man-made filament woven fabric), headings 5508 through 5516 (man-made staple fiber yarn or woven fabric) or 6001 through 6006 (all knit fabric), Examples of materials not excluded by the CAFTA-DR except from clause: Silk yarn (headings 5004-5006) or woven fabric (5007); Wool yarn (headings 5106-5110) Woven fabrics of flax (heading 5309) Coated fabrics of chapter 59 Etc.

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 61.25

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 61.25 Women s MMF Pullover of HTS 6110.30.3059 (32% rate of duty) A change to 6110.30.3059, from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5310 through 5311, chapter 54 (man-made filament yarn), headings 5508 through 5516 (man-made staple fiber yarn) or 6001 through 6006 (knit fabric), provided the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties.

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 61.25 Women s Cotton Underwear T-shirt of HTS 6109.10.0037 (16.5% rate of duty) A change to 6109.10.0037, from any other chapter, except from headings 5111 through 5113, 5204 through 5212 (cotton yarn), 5310 through 5311, chapter 54, headings 5508 through 5516 or 6001 through 6006 (knit fabric), provided the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties.

Tariff Shift Model FTAs for Apparel Country FTA Start SPI HTS GN Tariff Shift Rules* Australia Same 1/1/2005 AU 28 GN 28 (n) Short Supply Rules Tariff Preference Levels Bahrain Same 1/11/2006 BH 30 GN 30 (h) Canada NAFTA 1/1/1994 CA 12 GN 12 (t) Chile Same 1/1/2004 CL 26 GN 26 (n) Colombia Same 5/15/2012 CO 34 GN 34 (o) Costa Rica CAFTA-DR 1/1/2009 P 29 GN 29 (n) Dominican Republic CAFTA-DR 3/1/2007 P 29 GN 29 (n) El Salvador CAFTA-DR 3/1/2006 P 29 GN 29 (n) Guatemala CAFTA-DR 7/1/2006 P 29 GN 29 (n) *See also chapter rules and de minimis charts.

Tariff Shift Model FTAs for Apparel Country FTA Start SPI HTS GN Tariff Shift Rules* Honduras CAFTA-DR 4/1/2006 P 29 GN 29 (n) Short Supply Rules Tariff Preference Levels Korea Same 3/15/2012 KR 33 GN 33 (o) Mexico NAFTA 1/1/1994 MX 12 GN 12 (t) Morocco Same 1/1/2006 MA 27 GN 27 (h) Nicaragua CAFTA-DR 4/1/2006 P 29 GN 29 (n) Oman Same 1/1/2009 OM 31 GN 31 (h) Panama Same 10/31/2012 PA 35 GN 35 (o) Peru Same 2/1/2009 PE 32 GN 32 (n) Singapore Same 1/1/2004 SG 25 GN 25 (o) *See also chapter rules and de minimis charts.

FTA Originating Apparel Tariff Shift Rules CAUTION: Tariff Shift Rules Vary FTA to FTA! Consult the HTS General Note for the specific FTA when applying the rule. CAFTA-DR (GN 29 (n) 61.25): NAFTA (GN 12 (t) 61.35): Korea (GN 33 (o) 61.33): Note subheadings for viscose rayon yarns (5403.10/.31/.41) not included in Korea s rule.

FTA Preference Rules for Apparel QUESTIONS?

CAFTA-DR Originating Trade Tariff Shift Rules Chapter Rules for Apparel Step 2: Chapter Rules Apply In Addition to CAFTA-DR Tariff Shift Rules for Apparel Classified in Chapters 61 and 62: Tariff Classification Component Visible Lining Fabric Narrow Elastic Fabric Sewing Thread Pocket Bag Fabric Short Supply Inputs

CAFTA-DR Originating Trade Tariff Shift Chapter Rules for Apparel Tariff Classification Component GN 29 (n) Chapter 61 Rule 2; Chapter 62 Rule 2 Tariff classification component chapter rule states that only the component of the good that determines the tariff classification of the good must meet the tariff shift rule

CAFTA-DR Originating Trade Tariff Shift Chapter Rules for Apparel Visible Lining Fabrics GN 29 (n) Chapter 61 Rule 1; Chapter 62 Rule 1 Visible lining fabrics chapter rule states select fabrics, when used as visible lining material in certain garments, must be formed from yarn and finished in a CAFTA-DR country

CAFTA-DR Originating Trade Tariff Shift Chapter Rules for Apparel Visible Lining Fabrics Only applies to the visible lining fabric in the main body of the garment, excluding sleeves, which covers the largest surface area, and shall not apply to removable linings (see tariff classification component chapter rule) When required to comply with the visible lining fabrics chapter rule, the tariff shift rule will include a reminder:

CAFTA-DR Originating Trade Tariff Shift Chapter Rules for Apparel Narrow Elastic Fabrics GN 29 (n) Chapter 61 Rule 3; Chapter 62 Rule 3 Narrow elastic fabrics chapter rule states fabrics of subheading 5806.20 or heading 6002 contained in apparel goods must be formed from yarn and finished in a CAFTA-DR country Fabrics classified in subheading 5806.20 are certain woven fabrics of a width not exceeding 30 cm, containing by weight 5 percent or more of elastomeric yarn or rubber thread: Provided with selvages (woven, gummed or otherwise) on both edges; or Tubular (flattened width not exceeding 30 cm); or Bias binding with folded edges (unfolded width not exceeding 30 cm) Fabrics classified in heading 6002 are certain knitted or crocheted fabrics of width not exceeding 30 cm, containing by weight 5 percent or more of elastomeric yarn or rubber thread

CAFTA-DR Originating Trade Tariff Shift Chapter Rules for Apparel Sewing Thread GN 29 (n) Chapter 61 Rule 4; Chapter 62 Rule 4 Sewing thread chapter rule states sewing thread of heading 5204, 5401, or 5508, or yarn of 5402 used as sewing thread, contained in the good must be formed and finished in a CAFTA-DR country Sewing thread chapter rule applies to nearly all garments

CAFTA-DR Originating Trade Tariff Shift Chapter Rules for Apparel Pocket Bag Fabric GN 29 (n) Chapter 61 Rule 5; Chapter 62 Rule 5 Pocket bag fabric chapter rule states pocket bag fabric contained in apparel goods must be formed and finished in a CAFTA-DR country from yarn wholly formed in a CAFTA-DR country Applies to pocket bags only, not to patch pockets

CAFTA-DR Originating Trade Tariff Shift Chapter Rules for Apparel Short Supply Inputs GN 29 (n) Chapter 61 Rule 6; Chapter 62 Rule 6 Short supply inputs chapter rule is an allowance to use yarns or fabrics listed on the CAFTA-DR short supply list to satisfy the tariff shift chapter rules for visible lining fabrics, narrow elastic fabrics, sewing thread or yarn of heading 5402 used as sewing thread, or pocket bag fabric

Tariff Shift Model FTAs for Apparel Tariff Shift Chapter Rules FTA Tariff Shift Rules Essential Character Australia GN 28 (n) 61, Rule 2 62, Rule 3 Visible Linings 61, 62 Rule 1 Narrow Elastic Fabric Sewing Thread Pocket Bag Fabric Short Supply Inputs n/a n/a n/a n/a Bahrain GN 30 (h) 61, Rule 2 61, 62 Rule 1 n/a n/a n/a n/a CAFTA-DR GN 29 (n) 61, 62 Rule 2 61, 62 Rule 1 61, 62 Rule 3 61, 62 Rule 4 61, 62 Rule 5 61, 62 Rule 6 Chile GN 26 (n) 61, Rule 2 62, Rule 3 61, 62 Rule 1 n/a n/a n/a n/a Colombia GN 34 (o) 61, 62 Rule 2 61, 62 Rule 1 61, 62 Rule 3 61, 62 Rule 4 61, 62 Rule 5 n/a Korea GN 33 (o) 61, Rule 2 62, Rule 3 61, 62 Rule 1 n/a n/a n/a n/a

Tariff Shift Model FTAs for Apparel Tariff Shift Chapter Rules FTA Tariff Shift Rules Essential Character Morocco GN 27 (h) 61, Rule 2 62, Rule 3 Visible Linings 61, 62 Rule 1 Narrow Elastic Fabric Sewing Thread Pocket Bag Fabric Short Supply Inputs n/a n/a n/a n/a NAFTA GN 12 (t) 61, Rule 2 62, Rule 3 61, 62 Rule 1 n/a n/a n/a 7% Oman GN 31 (h) 61, Rule 2 62, Rule 3 61, 62 Rule 1 n/a n/a n/a n/a Panama GN 35 (o) 61, 62 Rule 2 61, 62 Rule 1 61, 62 Rule 3 61, 62 Rule 4 61, 62 Rule 5 n/a Peru GN 32 (n) 61, 62 Rule 2 61, 62 Rule 1 61, 62 Rule 3 61, 62 Rule 4 61, 62 Rule 5 n/a Singapore GN 25 (o) 61, Rule 2 62, Rule 3 61, 62 Rule 1 n/a n/a n/a n/a

FTA Originating Apparel Tariff Shift Rules Chapter Rules CAUTION: Chapter Rules Vary FTA to FTA! Consult the HTS General Note for the specific FTA when applying the chapter rule. CAFTA-DR (GN 29 (n) Chapter 61/62 Rule 4 (Sewing Thread): Chapter rule 4. Notwithstanding chapter rule 2 to this chapter, a good of this chapter containing sewing thread of heading 5204, 5401, or 5508 or yarn of heading 5402 used as sewing thread, shall be considered originating only if such sewing thread or yarn is both formed and finished in the territory of one or more of the parties to the Agreement. Peru (GN 32 (n) Chapter 61/62 Rule 4 (Sewing Thread): Panama (GN 35 (o) Chapter 61/62 Rule 4 (Sewing Thread):

FTA Preference Rules for Apparel QUESTIONS?

Step 3: De Minimis De Minimis FTA Originating Apparel Tariff Shift Rules De Minimis Clause Elastomeric Yarns Certain Nylon Filament Yarns

CAFTA-DR Originating Trade Tariff Shift Rules De Minimis Clause GN 29 (d)(i)

CAFTA-DR Originating Trade Tariff Shift Rules De Minimis Clause De minimis clause permits limited use of non-cafta- DR originating fibers or yarns in the yarns or fabrics of the tariff classification component of a textile or apparel good Non-CAFTA-DR originating fibers or yarns may be up to 10 percent by weight of tariff classification component

CAFTA-DR Originating Trade Tariff Shift Rules De Minimis Clause However, elastomeric yarns in the tariff classification component must always be wholly formed in a CAFTA-DR country

CAFTA-DR Originating Trade Tariff Shift Rules De Minimis Clause No limit to certain nylon filament yarns (classified in specific subheadings) from Israel, Canada, or Mexico (each a Party to a Free Trade Agreement with the U.S. prior to January 1, 1995)

Tariff Shift Model FTAs for Apparel Tariff Shift De Minimis Clause FTA Tariff Shift Rules De Minimis Clause % Elastomeric Yarn Excluded Australia GN 28 (n) GN 28 (d)(i) 7% Yes US or AU Origin Required Bahrain GN 30 (h) GN 30 (e)(i) 7% Yes US or BH Origin Required CAFTA-DR GN 29 (n) GN 29 (d)(i) 10% Yes CAFTA-DR Origin Required Chile GN 26 (n) GN 26 (d)(i) 7% Yes US or CL Origin Required Colombia GN 34 (o) GN 34 (d)(ii) 10% Yes US or CO Origin Required Korea GN 33 (o) GN 33 (d)(iv) 7% Yes US or KR Origin Required Unlimited Nylon Filament Yarns n/a n/a Yes From Israel, Canada, Mexico n/a Yes From Israel, Canada, Mexico n/a

FTA Tariff Shift Model FTAs for Apparel Tariff Shift De Minimis Clause Tariff Shift Rules De Minimis Clause % Elastomeric Yarn Excluded Morocco GN 27 (h) GN 27 (e)(i) 7% Yes US or MA Origin Required Unlimited Nylon Filament Yarns NAFTA GN 12 (t) GN 12 (f)(vi) 7% n/a n/a n/a Oman GN 31 (h) GN 31 (e)(i) 7% Yes US or OM Origin Required Panama GN 35 (o) GN 35 (d)(ii) 10% Yes US or PA Origin Required Peru GN 32 (n) GN 32 (d)(i) 10% Yes US or PE Origin Required Singapore GN 25 (o) GN 25 (d)(i) 7% Yes US or SG Origin Required n/a Yes From Israel, Canada, Mexico Yes From Israel, Canada, Mexico n/a

FTA Preference Rules for Apparel QUESTIONS?

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 62.12 Men s Wool Suit-type Jacket HTS 6203.31.9020 (17.5% rate of duty) Step 1 tariff shift rule Step 2 chapter rules Step 3 de minimis

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 62.12 Men s Wool Suit-type Jacket HTS 6203.31.9020 (17.5% rate of duty) Wool yarn of heading 5107 England Polyester yarn of heading 5509 - China Woven wool fabric of heading 5111 of 92% wool/8% polyester U.S. Fabric cut into components in Guatemala Components assembled in Guatemala Sewing thread of heading 5401 Costa Rica Pocket Bag fabric formed in U.S. from yarn formed in U.S. Visible lining Taiwan

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 62.12 Men s Wool Suit-type Jacket HTS 6203.31.9020 (17.5% rate of duty) Step 1 5107 (yarn) - England 5509 (yarn)- China 5111 (fabric) U.S. Cut - Guatemala Sew - Guatemala Step 2 Tariff classification 5111 Visible lining - Taiwan Narrow elastic fabric n/a Sewing thread Costa Rica Pocket Bag United States Short supply inputs n/a Step 3 De minimis 10% 5111 fabric (92% wool/8% polyester) Elastomeric yarn n/a Nylon yarns n/a

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 62.12 Men s Wool Suit-type Jacket HTS 6203.31.9020 (17.5% rate of duty) Does this garment satisfy its tariff shift rule (GN 29 (n) 62.12)?

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 62.12 Men s Wool Suit-type Jacket HTS 6203.31.9020 (17.5% rate of duty) If the answer is no, is the wool yarn (5107) from England the problem?

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 62.12 Men s Wool Suit-type Jacket HTS 6203.31.9020 (17.5% rate of duty) If the answer is no, is the sewing thread (5401) from Costa Rica the problem?

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 62.12 Men s Wool Suit-type Jacket HTS 6203.31.9020 (17.5% rate of duty) If the answer is no, is the polyester yarn from China (5509) the problem?

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 62.12 Men s Wool Suit-type Jacket HTS 6203.31.9020 (17.5% rate of duty) If the answer is no, is the visible lining fabric from Taiwan the problem?

CAFTA-DR Originating Trade Tariff Shift Rules HTS GN 29 (n) 62.12 Men s Wool Suit-type Jacket HTS 6203.31.9020 (17.5% rate of duty) Does this garment satisfy its tariff shift rule (GN 29 (n) 62.12)? No If no, why not? Wool yarn from England (5107) OK, not part of except from clause Sewing thread from Costa Rica (5401) OK, Costa Rica is CAFTA country Polyester yarn from China (5509) OK, under 10% de minimis Visible lining fabric from Taiwan Fails chapter rule 1, Taiwan is not part of CAFTA-DR

CAFTA-DR Originating Trade Tariff Shift Rules Cut and Sew Apparel Rule for Certain Apparel Goods is Cut and Sew Requires a Garment be Cut and Sewn or Otherwise Assembled in a CAFTA-DR Country Fabric of any origin Yarn of any origin Chapter rules do not apply No need to apply de minimis because there is no tariff classification component for a cut and sew rule Still a Tariff Shift Rule not an Exception

CAFTA-DR Originating Trade Tariff Shift Rules Cut and Sew Apparel Example: Brassieres of heading 6212.10: Example: Women s Cotton Coats of heading 6102.20 Cut or knit to shape, or both, Sewn or otherwise assembled in a CAFTA-DR country.

CAFTA-DR Originating Trade Tariff Shift Rules Cut and Sew Apparel Note: Chapter Rules do not apply to cut and sew tariff shift rule garments. Language of each chapter rule includes other than and lists the headings of cut and sew articles. CAFTA-DR (GN 29 (n) Chapter 61/62 Rule 4 (Sewing Thread):

CAFTA-DR Preference Rules for Apparel CUMULATION

CAFTA-DR Originating (Woven) Apparel Cumulation CAFTA-DR Cumulation connects CAFTA-DR with Mexico as each of the CAFTA-DR countries is also has an FTA with Mexico Except for the Dominican Republic, which is, therefore, not eligible to use the CAFTA-DR Cumulation provision Cumulation permits the use of materials from Mexico in place of (any) CAFTA-DR originating materials Only for Woven Apparel of HTS Chapter 62 GN 29 (n) tariff shift rules, including the chapter rules for chapter 62, apply to cumulation apparel not a separate rule Subject to quantitative limits (quotas)

CAFTA-DR Originating Trade Cumulation GN 29 (d)(vii) & Chapter 98 XXII Note 21 SPI P and HTS 9822.05.11 or HTS 9822.05.13 Limited to 100 million SME (apparel of chapter 62), with sublimits for: a) Cotton (other than blue denim) & MMF skirts and trousers 45 million SME; b) Blue denim trousers and blue denim skirts 20 million SME; c) Wool garments (certain wool fabrics only) 1 million SME January 1 to December 31 Limit and sublimits shared first-come, first-served by all CAFTA countries except for DR (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua) Cumulation apparel which is subject to limit(s) use SPI P with chapter 62 HTS number and HTS 9822.05.11 on entry documents. Wool apparel of certain fabrics is exempt from the quota limit and wool sublimit. Exempt apparel is NOT made of carded wool, and NOT made of wool yarn having an average fiber diameter of 18.5 microns or less. Cumulation apparel which is exempt from limit(s) use SPI P with chapter 62 HTS number and HTS 9822.05.13 on entry documents.

CAFTA-DR Originating Trade Cumulation GN 29 (d)(vii) & Chapter 98 XXII Note 21 SPI P and HTS 9822.05.11 or HTS 9822.05.13 Year-end quota usage can be found on OTEXA s website: http://otexa.trade.gov/agoa-cbtpa/98220511_2016.htm

CAFTA-DR Originating Trade Cumulation GN 29 (d)(vii) & Chapter 98 XXII Note 21 SPI P and HTS 9822.05.11 or HTS 9822.05.13 Current quota usage can be found on CBP s website: https://www.cbp.gov/document/report/quota-status-reports As of July 31, 2017: Cumulation Woven Apparel 100,000,000 SME 0.15% Trousers & Skirts Sublimit 45,000,000 SME 20.59% Denim Sublimit 20,000,000 SME 0.03% Wool Sublimit 1,000,000 SME 3.64%

CAFTA-DR Qualifying Apparel Cumulation Subject to Limit(s) SPI P and HTS 9822.05.11 Source: OTEXA, Twelve-Months Ending August 2017 2% 17% 0% Guatemala El Salvador 7% Honduras 74% Nicaragua Costa Rica

FTA Preference Rules for Apparel QUESTIONS?

CAFTA-DR Preference Rules True or False Eligible for Cumulation? T-shirt knit-to-shape and assembled in Guatemala from Mexican cotton yarn.

CAFTA-DR Preference Rules True or False Eligible for Cumulation? T-shirt knit-to-shape and assembled in Guatemala from Mexican cotton yarn. False CAFTA-DR cumulation provisions are for woven apparel only.

CAFTA-DR Preference Rules True or False Eligible for Cumulation? Denim (woven) trousers made from cotton fabric made in Mexico from U.S. yarns, cut in Mexico and assembled in Guatemala.

CAFTA-DR Preference Rules True or False Eligible for Cumulation? Denim (woven) trousers made from cotton fabric made in Mexico from U.S. yarns, cut in Mexico and assembled in Guatemala. False All cutting and all sewing must occur in a CAFTA-DR country; only the origin-restricted materials may be from Mexico.

CAFTA-DR Preference Rules True or False Eligible for Cumulation? Woven skirt of cotton fabric made in El Salvador from U.S. yarns, cut in El Salvador, assembled with sewing thread from Mexico.

CAFTA-DR Preference Rules True or False Eligible for Cumulation? Woven skirt of cotton fabric made in El Salvador from U.S. yarns, cut in El Salvador, assembled with sewing thread from Mexico. True Any of the origin-restricted materials (including inputs to satisfy the chapter rules such as sewing thread) may be from Mexico.

FTA Preference Rules for Apparel SHORT SUPPLY RULES

FTA Originating Apparel Tariff Shift Rules Short Supply Rules Short supply is defined as fibers, yarns or fabrics not available from FTA suppliers in commercial quantities in a timely manner. Tariff Shift Model FTAs Include: NAFTA-like short supply provisions: Chapter rule for certain woven fabrics within the tariff shift rules; Special tariff shift rules for certain garments; Changes require negotiation & congressional consultation. OR CAFTA-like short supply provisions: Short supply rule for garments; and Separate short supply list of fibers, yarns and fabrics; Process for adding and/or deleting materials to/from the list.

NAFTA Originating Trade Short Supply Rules NAFTA short supply rules and inputs/materials are found within the tariff shift rules in GN 12 (t): GN 12 (t) chapter 62 rule 2; Certain fabrics of any origin may be used for any apparel of chapter 62 Men s or boys cotton (6205.20) or MMF (6205.30) shirts of certain fabrics (subheading rule to GN 12 (t) 62.30); Specific dress shirts may be made from specific fabrics of any origin Men s or boys cotton boxer shorts (6207.11) of certain fabrics (subheading rule to GN 12 (t) 62.32A) Specific boxer shorts may be made of specific fabrics of any origin Originating apparel Import or utilization data not captured separately FTA claims filed w/ SPI in front of HTS number

NAFTA Originating Trade Short Supply Rules GN 12 (t) Chapter 62 Rule 2 Note: NAFTA-like short supply provisions are only for woven apparel of HTS chapter 62

NAFTA Originating Trade Short Supply Rules GN 12 (t) 62.30 Subheading Rule Cont d

NAFTA Originating Trade Short Supply Rules NAFTA short supply rule: Apparel shall be considered to originate if they are both cut and assembled in the territory of one or more of the parties and if the fabric of the outer shell, exclusive of collars or cuffs, is wholly of one or more of the following: More than essential character component

CAFTA-DR Originating Trade Short Supply Rules CAFTA-DR short supply rules are separate from the tariff shift rules Two Parts: Short Supply Rule GN 29 (m)(viii) Short Supply List Chapter 98 Subchapter XXII Note 20, and OTEXA s website, www.otexa.trade.gov Originating apparel Data captured separately from tariff shift apparel FTA claims filed with SPI and HTS 9822.05.01 on entry documents

CAFTA-DR Originating Trade Short Supply Rules GN 29 (m)(viii) & Chapter 98 XXII Note 20 SPI P and HTS 9822.05.01 CAFTA-DR short supply rule: Apparel goods of chapters 61 & 62 must be cut or knit to shape, or both, and sewn or otherwise assembled in a CAFTA-DR country, and the fabric of the outer shell, exclusive of collars, cuffs and ribbed waistbands (only if the ribbed waistband is present in combination with cuffs and identical in fabric construction to the cuffs) is wholly of: 1) One or more fabrics listed in U.S. note 20 to subchapter XXII of chapter 98; or 2) One or more fabrics or knit to shape components formed in a CAFTA-DR country from one or more of the yarns listed in U.S. note 20 to subchapter XXII of chapter 98; or 3) Any combination of the fabrics above, or one or more originating fabrics. More than essential character component

CAFTA-DR Originating Trade Short Supply Rules GN 29 (m)(viii) & Chapter 98 XXII Note 20 SPI P and HTS 9822.05.01 Short Supply List: Short Supply fibers, yarns and fabrics listed in HTS Chapter 98 Subchapter XXII Note 20 Items No. 1 to 70 ONLY Additions to the CAFTA-DR Short Supply List ONLY on OTEXA website: www.otexa.trade.gov +150 on the list Process for adding or deleting Items managed by OTEXA

CAFTA-DR Qualifying Apparel Short Supply Rules Source: OTEXA, Twelve-Months Ending August 2017 0% 12% Guatemala El Salvador 12% 6% 43% Honduras Nicaragua 27% Costa Rica Dominican Republic

Tariff Shift Model FTAs for Apparel Country FTA Start SPI HTS GN Tariff Shift Rules Short Supply Rules Australia Same 1/1/2005 AU 28 GN 28 (n) GN 28 (n) 62, Rule 2 + Shirts Bahrain Same 1/11/2006 BH 30 GN 30 (h) GN 30 (h) 62, Rule 2 + Shirts Canada NAFTA 1/1/1994 CA 12 GN 12 (t) GN 12 (t) 62, Rule 2 + Shirts, Boxers Chile Same 1/1/2004 CL 26 GN 26 (n) GN 26 (n) 62, Rule 2 + Shirts Colombia Same 5/15/2012 CO 34 GN 34 (o) GN 34 (n)(vii) 9822.08.25 Costa Rica CAFTA-DR 1/1/2009 P 29 GN 29 (n) GN 29 (m)(viii) 9822.05.01 Dominican Republic CAFTA-DR 3/1/2007 P 29 GN 29 (n) GN 29 (m)(viii) 9822.05.01 El Salvador CAFTA-DR 3/1/2006 P 29 GN 29 (n) GN 29 (m)(viii) 9822.05.01 Guatemala CAFTA-DR 7/1/2006 P 29 GN 29 (n) GN 29 (m)(viii) 9822.05.01 Tariff Preference Levels

Country FTA Start SPI HTS GN Tariff Shift Rules Short Supply Rules Honduras CAFTA-DR 4/1/2006 P 29 GN 29 (n) GN 29 (m)(viii) 9822.05.01 Korea Same 3/15/2012 KR 33 GN 33 (o) GN 33 (o) 62, Rule 2 + Shirts 9920.99.00 Mexico NAFTA 1/1/1994 MX 12 GN 12 (t) GN 12 (t) 62, Rule 2 + Shirts, Boxers Morocco Same 1/1/2006 MA 27 GN 27 (h) GN 27 (h) 62, Rule 2 + Shirts Nicaragua CAFTA-DR 4/1/2006 P 29 GN 29 (n) GN 29 (m)(viii) 9822.05.01 Oman Same 1/1/2009 OM 31 GN 31 (h) GN 31 (h) 62, Rule 2 + Shirts Panama Same 10/31/2012 PA 35 GN 35 (o) GN 35 (n)(ii) 9822.09.62 Peru Same 2/1/2009 PE 32 GN 32 (n) GN 32 (m)(viii) 9822.06.20 Singapore Same 1/1/2004 SG 25 GN 25 (o) GN 25 (o) 62, Rule 2 + Shirts 9822.01.25 Tariff Preference Levels

FTA Preference Rules for Apparel QUESTIONS?

FTA Originating Apparel Short Supply Rules True or False Eligible for Short Supply? Denim (woven) trousers made from cotton fabric woven in Taiwan, cut and assembled in Mexico.

FTA Originating Apparel Short Supply Rules True or False Eligible for Short Supply? Denim (woven) trousers made from cotton fabric woven in Taiwan, cut and assembled in Mexico. False Denim is not in short supply for NAFTA (or any FTA) since fabric producers in both the United States and Mexico make the fabric.

FTA Originating Apparel Short Supply Rules True or False Eligible for Short Supply? Sweatshirt of Cotton / Polyester Three Thread Circular Knit Fleece Fabric (No. 78 on list) from Korea, cut and assembled in Honduras, with knitto-shape collars and cuffs (not on list) from Korea. True The CAFTA-DR short supply rule for apparel applies to the outer shell, exclusive of collars and cuffs, so the origin of the collars and cuffs does not matter.

FTA Preference Rules for Apparel TARIFF PREFERENCE LEVELS (TPLs)

FTA Non-Originating Apparel Tariff Preference Levels (TPLs) Tariff Preference Levels (TPLs) are quantitative limits set on certain non-originating FTA goods Limits are administered in Square Meters Equivalent (SME) January 1 to December 31 each year Once filled, additional non-originating goods from the FTA partner country are assessed MFN duty rates (column 1 rates) Non-originating FTA goods Do not use the Special Program Indicator (SPI) Preference claims filed by using HTS chapter 98 or 99 number on entry documents Some FTA partners allocate TPLs, which means an additional certificate may be required

Country FTA Description HTS Provision Canada/ Mexico NAFTA FTA Non-Originating Apparel Tariff Preference Levels (TPLs) Annual Limit Apparel that are both cut (or knit to shape) and sewn or otherwise assembled in the territory of a NAFTA party from fabric or yarn produced or obtained outside the territory of one of the NAFTA parties. Canada NAFTA Cotton and man-made fiber (MMF) apparel HTS Sec XI Note 3 (a) and (f) 9999.00.51 Canada NAFTA Cotton and MMF apparel from fabric knit or woven outside of NAFTA (sublimit) 9999.00.50 Canada NAFTA Wool apparel 9999.00.52 Canada NAFTA Wool men s and boys suits (sublimit) 9999.0053 Mexico NAFTA Cotton and man-made fiber (MMF) apparel HTS Sec XI Note 3 (b) and (g) 9999.00.60 Mexico NAFTA Wool apparel HTS Sec XI Note 9999.00.61 Chile same Cotton or MMF apparel that are both cut (or knit to shape) and sewn or otherwise assembled in Chile. HTS 9822.02.03 88,326,464 SME 63,060,603 SME 5,325,413 SME 5,016,780 SME 45,000,000 SME 1,500,000 SME 1,000,000 SME

NAFTA Qualifying Trade U.S. Imports of Apparel from NAFTA Source: OTEXA, Twelve-Months Ending August 2017 Canada Mexico 3% Tariff Shift Rules 68% 29% TPLs and Other Non-Originating MFN Duty (No Preference) 15% 16% 69%

FTA Non-Originating Apparel Tariff Preference Levels (TPLs) Country FTA Description HTS Provision Costa Rica* CAFTA Woven wool apparel of certain fabrics that are both cut and sewn or otherwise assembled in the territory of Costa Rica. + HTS GN 29 (n) chapter rules. Costa Rica* CAFTA Woven wool apparel of certain fabrics that are both cut and sewn or otherwise assembled in the territory of Costa Rica. Costa Rica* CAFTA Mastectomy swimsuits of subheading 6112.41.00 or 6112.49.00 if such goods are both cut or knit to shape and sewn or otherwise assembled in the territory of Costa Rica. Oman** same Cotton or MMF apparel provided for in chapters 61 or 62 of the tariff schedule that are cut or knit to shape, or both, and sewn or otherwise assembled in the territory of Oman. HTS 9915.62.05 HTS 9915.62.15 HTS 9915.61.03 HTS 9915.61.04 HTS 9916.99.20 Annual Limit 500,000 SME 500,000 SME 133,823 SME 50,000,000 SME *Costa Rica s TPLs expire on 12/31/2018. **Oman s TPL expires on 12/31/2018.

Oman FTA Qualifying Trade U.S. Imports of Apparel from Oman Source: OTEXA, Twelve-Months Ending August 2017 0% 13% Tariff Shift Rules 87% TPL MFN Duty (No Preference)

FTA Preference Rules for Apparel QUESTIONS?

True or False FTA Originating Apparel Tariff Shift Model Agreements Cut, or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the agreement is part of all three: tariff shift rules, short supply rules, and Tariff Preference Levels (TPLs)?

FTA Preference Rules for Apparel Understanding the Building Blocks Used in Tariff Shift Model Agreements Thank you! Natalie Hanson International Trade Analyst Textiles Division, Office of Industries U.S. International Trade Commission 500 E Street, SW Washington, DC 20536 Tel: (202) 205-2571 Fax: (202) 205-2150 natalie.hanson@usitc.gov

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