US: AGOA, DR-CAFTA fixes and Burma bill signed into law
Legislation that will help provide stability for apparel and textile firms sourcing from sub-Saharan Africa and Central America, and also renews trade sanctions on Burma, has been signed into law by President Barack Obama.
The move means the third-country fabric provision under the African Growth and Opportunity Act (AGOA), which had been set to expire in September this year, is now extended through September 2015.
The AGOA amendments, which also add South Sudan to the list of countries eligible for AGOA duty-free benefits on products including apparel, footwear and textiles, come into effect from 10 August.
But date for the implementation of the technical fixes on the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA), is less clear.
According to Sandler & Travis Trade Advisory Services Inc, a consultancy firm that specialises in international trade law issues, the modifications to the DR-CAFTA origin rules "will take effect upon publication of a Federal Register notice by USTR, but no sooner than 9 October."
Included in these changes are an extension to the cut and sew rule to women's and girls' sleep pants when imported as separates; and the requirement that all sewing thread, monofilament and plied, must originate in the US/DR-CAFTA region in order for products to qualify for preferential tariff treatment.
It also clarifies how certain items will be treated on the textiles "short supply" list of the FTA.
Sandler & Travis Trade Advisory Services explains that short supply fabric will no longer require originating spandex yarn. Apparel imported under the short supply provision may now contain a non-originating ribbed waistband (in addition to collars and cuffs) as long as the garment contains both a waistband and cuffs, and the waistband is of the same construction as the cuffs.
Materials used as visible linings, narrow elastics, sewing thread or pocketing fabric may now be designated as short supply. Short supply will also include apparel and textile articles knit-to-shape in the CAFTA-DR out of short supply yarn.
The trade law specialist advises companies to "take action to make any necessary changes in their supply chains so as to be prepared when the changes go into effect."
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