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U.S. Code as of:
01/19/04
Section 2703. Eligible articles
(a) Growth, product, or manufacture of beneficiary countries
(1) Unless otherwise excluded from eligibility by this chapter,
and subject to section 423 of the Tax Reform Act of 1986, and
except as provided in subsection (b)(2) and (3) of this section,
the duty-free treatment provided under this chapter shall apply to
any article which is the growth, product, or manufacture of a
beneficiary country if -
(A) that article is imported directly from a beneficiary
country into the customs territory of the United States; and
(B) the sum of (i) the cost or value of the materials produced
in a beneficiary country or two or more beneficiary countries,
plus (ii) the direct costs of processing operations performed in
a beneficiary country or countries is not less than 35 per centum
of the appraised value of such article at the time it is entered.
For purposes of determining the percentage referred to in
subparagraph (B), the term "beneficiary country" includes the
Commonwealth of Puerto Rico and the United States Virgin Islands.
If the cost or value of materials produced in the customs territory
of the United States (other than the Commonwealth of Puerto Rico)
is included with respect to an article to which this paragraph
applies, an amount not to exceed 15 per centum of the appraised
value of the article at the time it is entered that is attributed
to such United States cost or value may be applied toward
determining the percentage referred to in subparagraph (B).
(2) The Secretary of the Treasury shall prescribe such
regulations as may be necessary to carry out this subsection
including, but not limited to, regulations providing that, in order
to be eligible for duty-free treatment under this chapter, an
article must be wholly the growth, product, or manufacture of a
beneficiary country, or must be a new or different article of
commerce which has been grown, produced, or manufactured in the
beneficiary country; but no article or material of a beneficiary
country shall be eligible for such treatment by virtue of having
merely undergone -
(A) simple combining or packaging operations, or
(B) mere dilution with water or mere dilution with another
substance that does not materially alter the characteristics of
the article.
(3) As used in this subsection, the phrase "direct costs of
processing operations" includes, but is not limited to -
(A) all actual labor costs involved in the growth, production,
manufacture, or assembly of the specific merchandise, including
fringe benefits, on-the-job training and the cost of engineering,
supervisory, quality control, and similar personnel; and
(B) dies, molds, tooling, and depreciation on machinery and
equipment which are allocable to the specific merchandise.
Such phrase does not include costs which are not directly
attributable to the merchandise concerned or are not costs of
manufacturing the product, such as (i) profit, and (ii) general
expenses of doing business which are either not allocable to the
specific merchandise or are not related to the growth, production,
manufacture, or assembly of the merchandise, such as administrative
salaries, casualty and liability insurance, advertising, and
salesmen's salaries, commissions or expenses.
(4) Notwithstanding section 1311 of this title, the products of a
beneficiary country which are imported directly from any
beneficiary country into Puerto Rico may be entered under bond for
processing or use in manufacturing in Puerto Rico. No duty shall be
imposed on the withdrawal from warehouse of the product of such
processing or manufacturing if, at the time of such withdrawal,
such product meets the requirements of paragraph (1)(B).
(5) The duty-free treatment provided under this chapter shall
apply to an article (other than an article listed in subsection (b)
of this section) which is the growth, product, or manufacture of
the Commonwealth of Puerto Rico if -
(A) the article is imported directly from the beneficiary
country into the customs territory of the United States,
(B) the article was by any means advanced in value or improved
in condition in a beneficiary country, and
(C) if any materials are added to the article in a beneficiary
country, such materials are a product of a beneficiary country or
the United States.
(6) Notwithstanding paragraph (1), the duty-free treatment
provided under this chapter shall apply to liqueurs and spirituous
beverages produced in the territory of Canada from rum if -
(A) such rum is the growth, product, or manufacture of a
beneficiary country or of the Virgin Islands of the United
States;
(B) such rum is imported directly from a beneficiary country or
the Virgin Islands of the United States into the territory of
Canada, and such liqueurs and spirituous beverages are imported
directly from the territory of Canada into the customs territory
of the United States;
(C) when imported into the customs territory of the United
States, such liqueurs and spirituous beverages are classified in
subheading 2208.90 or 2208.40 of the HTS; and
(D) such rum accounts for at least 90 percent by volume of the
alcoholic content of such liqueurs and spirituous beverages.
(b) Import-sensitive articles
(1) In general
Subject to paragraphs (2) through (5), the duty-free treatment
provided under this chapter does not apply to -
(A) textile and apparel articles which were not eligible
articles for purposes of this chapter on January 1, 1994, as
this chapter was in effect on that date;
(B) footwear not designated at the time of the effective date
of this chapter [Aug. 5, 1983] as eligible articles for the
purpose of the generalized system of preferences under title V
of the Trade Act of 1974 [19 U.S.C. 2461 et seq.];
(C) tuna, prepared or preserved in any manner, in airtight
containers;
(D) petroleum, or any product derived from petroleum,
provided for in headings 2709 and 2710 of the HTS;
(E) watches and watch parts (including cases, bracelets, and
straps), of whatever type including, but not limited to,
mechanical, quartz digital or quartz analog, if such watches or
watch parts contain any material which is the product of any
country with respect to which HTS column 2 rates of duty apply;
or
(F) articles to which reduced rates of duty apply under
subsection (h) of this section.
(2) Transition period treatment of certain textile and apparel
articles
(A) Articles covered
During the transition period, the preferential treatment
described in subparagraph (B) shall apply to the following
articles:
(i) Apparel articles assembled in one or more CBTPA
beneficiary countries
Apparel articles sewn or otherwise assembled in one or more
CBTPA beneficiary countries from fabrics wholly formed and
cut, or from components knit-to-shape, in the United States
from yarns wholly formed in the United States, (including
fabrics not formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603 of the HTS and are
wholly formed and cut in the United States) that are -
(I) entered under subheading 9802.00.80 of the HTS; or
(II) entered under chapter 61 or 62 of the HTS, if, after
such assembly, the articles would have qualified for entry
under subheading 9802.00.80 of the HTS but for the fact
that the articles were embroidered or subjected to
stone-washing, enzyme-washing, acid washing,
perma-pressing, oven-baking, bleaching, garment-dyeing,
screen printing, or other similar processes.
Apparel articles entered on or after September 1, 2002, shall
qualify under the preceding sentence only if all dyeing,
printing, and finishing of the fabrics from which the
articles are assembled, if the fabrics are knit fabrics, is
carried out in the United States. Apparel articles entered on
or after September 1, 2002, shall qualify under the first
sentence of this clause only if all dyeing, printing, and
finishing of the fabrics from which the articles are
assembled, if the fabrics are woven fabrics, is carried out
in the United States.(!1)
Apparel articles shall qualify under the preceding sentence
only if all dyeing, printing, and finishing of the fabrics
from which the articles are assembled, if the fabrics are
knit fabrics, is carried out in the United States. Apparel
articles shall qualify under the first sentence of this
clause only if all dyeing, printing, and finishing of the
fabrics from which the articles are assembled, if the fabrics
are woven fabrics, is carried out in the United States.(!1)
(ii) Other apparel articles assembled in one or more CBTPA
beneficiary countries
Apparel articles sewn or otherwise assembled in one or more
CBTPA beneficiary countries with thread formed in the United
States from fabrics wholly formed in the United States and
cut in one or more CBTPA beneficiary countries from yarns
wholly formed in the United States, or from components
knit-to-shape in the United States from yarns wholly formed
in the United States, or both (including fabrics not formed
from yarns, if such fabrics are classifiable under heading
5602 or 5603 of the HTS and are wholly formed in the United
States). Apparel articles entered on or after September 1,
2002, shall qualify under the preceding sentence only if all
dyeing, printing, and finishing of the fabrics from which the
articles are assembled, if the fabrics are knit fabrics, is
carried out in the United States. Apparel articles entered on
or after September 1, 2002, shall qualify under the first
sentence of this clause only if all dyeing, printing, and
finishing of the fabrics from which the articles are
assembled, if the fabrics are woven fabrics, is carried out
in the United States.(!1) Apparel articles shall qualify
under the preceding sentence only if all dyeing, printing,
and finishing of the fabrics from which the articles are
assembled, if the fabrics are knit fabrics, is carried out in
the United States. Apparel articles shall qualify under the
first sentence of this clause only if all dyeing, printing,
and finishing of the fabrics from which the articles are
assembled, if the fabrics are woven fabrics, is carried out
in the United States.(!1)
(iii) Certain knit apparel articles
(I) Apparel articles knit to shape (other than socks
provided for in heading 6115 of the HTS) in a CBTPA
beneficiary country from yarns wholly formed in the United
States, and knit apparel articles (other than t-shirts
described in subclause (III)) cut and wholly assembled in one
or more CBTPA beneficiary countries from fabric formed in one
or more CBTPA beneficiary countries or the United States from
yarns wholly formed in the United States (including fabrics
not formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS and are formed in one or more
CBTPA beneficiary countries), in an amount not exceeding the
amount set forth in subclause (II).
(II) The amount referred to in subclause (I) is as follows:
(aa) 500,000,000 square meter equivalents during the
1-year period beginning on October 1, 2002.
(bb) 850,000,000 square meter equivalents during the
1-year period beginning on October 1, 2003.
(cc) 970,000,000 square meter equivalents in each
succeeding 1-year period through September 30, 2008.
(III) T-shirts, other than underwear, classifiable under
subheadings 6109.10.00 and 6109.90.10 of the HTS, made in one
or more CBTPA beneficiary countries from fabric formed in one
or more CBTPA beneficiary countries from yarns wholly formed
in the United States, in an amount not exceeding the amount
set forth in subclause (IV).
(IV) The amount referred to in subclause (III) is as
follows:
(aa) 4,872,000 dozen during the 1-year period beginning
on October 1, 2001.
(bb) 9,000,000 dozen during the 1-year period beginning
on October 1, 2002.
(cc) 10,000,000 dozen during the 1-year period beginning
on October 1, 2003.
(dd) 12,000,000 dozen in each succeeding 1-year period
through September 30, 2008.
(V) It is the sense of the Congress that the Congress
should determine, based on the record of expansion of exports
from the United States as a result of the preferential
treatment of articles under this clause, the percentage by
which the amount provided in subclauses (II) and (IV) should
be compounded for the 1-year periods occurring after the
1-year period ending on September 30, 2004.
(iv) Certain other apparel articles
(I) General rule
Subject to subclause (II), any apparel article
classifiable under subheading 6212.10 of the HTS, except
for articles entered under clause (i), (ii), (iii), (v), or
(vi), if the article is both cut and sewn or otherwise
assembled in the United States, or one or more CBTPA
beneficiary countries, or both.
(II) Limitation
During the 1-year period beginning on October 1, 2001,
and during each of the 6 succeeding 1-year periods, apparel
articles described in subclause (I) of a producer or an
entity controlling production shall be eligible for
preferential treatment under subparagraph (B) only if the
aggregate cost of fabrics (exclusive of all findings and
trimmings) formed in the United States that are used in the
production of all such articles of that producer or entity
that are entered and eligible under this clause during the
preceding 1-year period is at least 75 percent of the
aggregate declared customs value of the fabric (exclusive
of all findings and trimmings) contained in all such
articles of that producer or entity that are entered and
eligible under this clause during the preceding 1-year
period.
(III) Development of procedure to ensure compliance
The United States Customs Service shall develop and
implement methods and procedures to ensure ongoing
compliance with the requirement set forth in subclause
(II). If the Customs Service finds that a producer or an
entity controlling production has not satisfied such
requirement in a 1-year period, then apparel articles
described in subclause (I) of that producer or entity shall
be ineligible for preferential treatment under subparagraph
(B) during any succeeding 1-year period until the aggregate
cost of fabrics (exclusive of all findings and trimmings)
formed in the United States that are used in the production
of such articles of that producer or entity entered during
the preceding 1-year period is at least 85 percent of the
aggregate declared customs value of the fabric (exclusive
of all findings and trimmings) contained in all such
articles of that producer or entity that are entered and
eligible under this clause during the preceding 1-year
period.
(v) Apparel articles assembled from fabrics or yarn not
widely available in commercial quantities
(I) Apparel articles that are both cut (or knit-to-shape)
and sewn or otherwise assembled in one or more CBTPA
beneficiary countries, from fabrics or yarn that is not
formed in the United States or in one or more CBTPA
beneficiary countries, to the extent that apparel articles of
such fabrics or yarn would be eligible for preferential
treatment, without regard to the source of the fabrics or
yarn, under Annex 401 of the NAFTA.
(II) At the request of any interested party, the President
is authorized to proclaim additional fabrics and yarn as
eligible for preferential treatment under subclause (I) if -
(aa) the President determines that such fabrics or yarn
cannot be supplied by the domestic industry in commercial
quantities in a timely manner;
(bb) the President has obtained advice regarding the
proposed action from the appropriate advisory committee
established under section 135 of the Trade Act of 1974 (19
U.S.C. 2155) and the United States International Trade
Commission;
(cc) within 60 days after the request, the President has
submitted a report to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance
of the Senate that sets forth the action proposed to be
proclaimed and the reasons for such actions, and the advice
obtained under division (bb);
(dd) a period of 60 calendar days, beginning with the
first day on which the President has met the requirements
of division (cc), has expired; and
(ee) the President has consulted with such committees
regarding the proposed action during the period referred to
in division (cc).
(vi) Handloomed, handmade, and folklore articles
A handloomed, handmade, or folklore article of a CBTPA
beneficiary country identified under subparagraph (C) that is
certified as such by the competent authority of such
beneficiary country.
(vii) Special rules
(I) Exception for findings and trimmings
(aa) An article otherwise eligible for preferential
treatment under this paragraph shall not be ineligible for
such treatment because the article contains findings or
trimmings of foreign origin, if such findings and trimmings
do not exceed 25 percent of the cost of the components of
the assembled product. Examples of findings and trimmings
are sewing thread, hooks and eyes, snaps, buttons, "bow
buds", decorative lace, trim, elastic strips, zippers,
including zipper tapes and labels, and other similar
products. Elastic strips are considered findings or
trimmings only if they are each less than 1 inch in width
and are used in the production of brassieres.
(bb) In the case of an article described in clause (ii)
of this subparagraph, sewing thread shall not be treated as
findings or trimmings under this subclause.
(II) Certain interlining
(aa) An article otherwise eligible for preferential
treatment under this paragraph shall not be ineligible for
such treatment because the article contains certain
interlinings of foreign origin, if the value of such
interlinings (and any findings and trimmings) does not
exceed 25 percent of the cost of the components of the
assembled article.
(bb) Interlinings eligible for the treatment described in
division (aa) include only a chest type plate, "hymo"
piece, or "sleeve header", of woven or weft-inserted warp
knit construction and of coarse animal hair or man-made
filaments.
(cc) The treatment described in this subclause shall
terminate if the President makes a determination that
United States manufacturers are producing such interlinings
in the United States in commercial quantities.
(III) De minimis rule
An article that would otherwise be ineligible for
preferential treatment under this paragraph because the
article contains fibers or yarns not wholly formed in the
United States or in one or more CBTPA beneficiary countries
shall not be ineligible for such treatment if the total
weight of all such fibers or yarns is not more than 7
percent of the total weight of the good. Notwithstanding
the preceding sentence, an apparel article containing
elastomeric yarns shall be eligible for preferential
treatment under this paragraph only if such yarns are
wholly formed in the United States.
(IV) Special origin rule
An article otherwise eligible for preferential treatment
under clause (i) or (ii) of this subparagraph shall not be
ineligible for such treatment because the article contains
nylon filament yarn (other than elastomeric yarn) that is
classifiable under subheading 5402.10.30, 5402.10.60,
5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 5402.41.10,
5402.41.90, 5402.51.00, or 5402.61.00 of the HTS duty-free
from a country that is a party to an agreement with the
United States establishing a free trade area, which entered
into force before January 1, 1995.
(V) Thread
An article otherwise eligible for preferential treatment
under this paragraph shall not be ineligible for such
treatment because the thread used to assemble the article
is dyed, printed, or finished in one or more CBTPA
beneficiary countries.
(viii) Textile luggage
Textile luggage -
(I) assembled in a CBTPA beneficiary country from fabric
wholly formed and cut in the United States, from yarns
wholly formed in the United States, that is entered under
subheading 9802.00.80 of the HTS; or
(II) assembled from fabric cut in a CBTPA beneficiary
country from fabric wholly formed in the United States from
yarns wholly formed in the United States.
(ix) Apparel articles assembled in one or more CBTPA
beneficiary countries from United States and CBTPA
beneficiary country components
Apparel articles sewn or otherwise assembled in one or more
CBTPA beneficiary countries with thread formed in the United
States from components cut in the United States and in one or
more CBTPA beneficiary countries from fabric wholly formed in
the United States from yarns wholly formed in the United
States, or from components knit-to-shape in the United States
and one or more CBTPA beneficiary countries from yarns wholly
formed in the United States, or both (including fabrics not
formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS). Apparel articles shall
qualify under this clause only if they meet the requirements
of clause (i) or (ii) (as the case may be) with respect to
dyeing, printing, and finishing of knit and woven fabrics
from which the articles are assembled.
(B) Preferential treatment
Except as provided in subparagraph (E), during the transition
period, the articles to which this subparagraph applies shall
enter the United States free of duty and free of any
quantitative restrictions, limitations, or consultation levels.
(C) Handloomed, handmade, and folklore articles
For purposes of subparagraph (A)(vi), the President shall
consult with representatives of the CBTPA beneficiary countries
concerned for the purpose of identifying particular textile and
apparel goods that are mutually agreed upon as being
handloomed, handmade, or folklore goods of a kind described in
section 2.3(a), (b), or (c) of the Annex or Appendix 3.1.B.11
of the Annex.
(D) Penalties for transshipments
(i) Penalties for exporters
If the President determines, based on sufficient evidence,
that an exporter has engaged in transshipment with respect to
textile or apparel articles from a CBTPA beneficiary country,
then the President shall deny all benefits under this chapter
to such exporter, and any successor of such exporter, for a
period of 2 years.
(ii) Penalties for countries
Whenever the President finds, based on sufficient evidence,
that transshipment has occurred, the President shall request
that the CBTPA beneficiary country or countries through whose
territory the transshipment has occurred take all necessary
and appropriate actions to prevent such transshipment. If the
President determines that a country is not taking such
actions, the President shall reduce the quantities of textile
and apparel articles that may be imported into the United
States from such country by the quantity of the transshipped
articles multiplied by 3, to the extent consistent with the
obligations of the United States under the WTO.
(iii) Transshipment described
Transshipment within the meaning of this subparagraph has
occurred when preferential treatment under subparagraph (B)
has been claimed for a textile or apparel article on the
basis of material false information concerning the country of
origin, manufacture, processing, or assembly of the article
or any of its components. For purposes of this clause, false
information is material if disclosure of the true information
would mean or would have meant that the article is or was
ineligible for preferential treatment under subparagraph (B).
(E) Bilateral emergency actions
(i) In general
The President may take bilateral emergency tariff actions
of a kind described in section 4 of the Annex with respect to
any apparel article imported from a CBTPA beneficiary country
if the application of tariff treatment under subparagraph (B)
to such article results in conditions that would be cause for
the taking of such actions under such section 4 with respect
to a like article described in the same 8-digit subheading of
the HTS that is imported from Mexico.
(ii) Rules relating to bilateral emergency action
For purposes of applying bilateral emergency action under
this subparagraph -
(I) the requirements of paragraph (5) of section 4 of the
Annex (relating to providing compensation) shall not apply;
(II) the term "transition period" in section 4 of the
Annex shall have the meaning given that term in paragraph
(5)(D) of this subsection; and
(III) the requirements to consult specified in section 4
of the Annex shall be treated as satisfied if the President
requests consultations with the CBTPA beneficiary country
in question and the country does not agree to consult
within the time period specified under section 4.
(3) Transition period treatment of certain other articles
originating in beneficiary countries
(A) Equivalent tariff treatment
(i) In general
Subject to clause (ii), the tariff treatment accorded at
any time during the transition period to any article referred
to in any of subparagraphs (B) through (F) of paragraph (1)
that is a CBTPA originating good shall be identical to the
tariff treatment that is accorded at such time under Annex
302.2 of the NAFTA to an article described in the same
8-digit subheading of the HTS that is a good of Mexico and is
imported into the United States.
(ii) Exception
Clause (i) does not apply to any article accorded duty-free
treatment under U.S. Note 2(b) to subchapter II of chapter 98
of the HTS.
(B) Relationship to subsection (h) duty reductions
If at any time during the transition period the rate of duty
that would (but for action taken under subparagraph (A)(i) in
regard to such period) apply with respect to any article under
subsection (h) of this section is a rate of duty that is lower
than the rate of duty resulting from such action, then such
lower rate of duty shall be applied for the purposes of
implementing such action.
(4) Customs procedures
(A) In general
(i) Regulations
Any importer that claims preferential treatment under
paragraph (2) or (3) shall comply with customs procedures
similar in all material respects to the requirements of
Article 502(1) of the NAFTA as implemented pursuant to United
States law, in accordance with regulations promulgated by the
Secretary of the Treasury.
(ii) Determination
(I) In general
In order to qualify for the preferential treatment under
paragraph (2) or (3) and for a Certificate of Origin to be
valid with respect to any article for which such treatment
is claimed, there shall be in effect a determination by the
President that each country described in subclause (II) -
(aa) has implemented and follows; or
(bb) is making substantial progress toward implementing
and following,
procedures and requirements similar in all material
respects to the relevant procedures and requirements under
chapter 5 of the NAFTA.
(II) Country described
A country is described in this subclause if it is a CBTPA
beneficiary country -
(aa) from which the article is exported; or
(bb) in which materials used in the production of the
article originate or in which the article or such
materials undergo production that contributes to a claim
that the article is eligible for preferential treatment
under paragraph (2) or (3).
(B) Certificate of origin
The Certificate of Origin that otherwise would be required
pursuant to the provisions of subparagraph (A) shall not be
required in the case of an article imported under paragraph (2)
or (3) if such Certificate of Origin would not be required
under Article 503 of the NAFTA (as implemented pursuant to
United States law), if the article were imported from Mexico.
(C) Report by USTR on cooperation of other countries concerning
circumvention
The United States Commissioner of Customs shall conduct a
study analyzing the extent to which each CBTPA beneficiary
country -
(i) has cooperated fully with the United States, consistent
with its domestic laws and procedures, in instances of
circumvention or alleged circumvention of existing quotas on
imports of textile and apparel goods, to establish necessary
relevant facts in the places of import, export, and, where
applicable, transshipment, including investigation of
circumvention practices, exchanges of documents,
correspondence, reports, and other relevant information, to
the extent such information is available;
(ii) has taken appropriate measures, consistent with its
domestic laws and procedures, against exporters and importers
involved in instances of false declaration concerning fiber
content, quantities, description, classification, or origin
of textile and apparel goods; and
(iii) has penalized the individuals and entities involved
in any such circumvention, consistent with its domestic laws
and procedures, and has worked closely to seek the
cooperation of any third country to prevent such
circumvention from taking place in that third country.
The Trade Representative shall submit to Congress, not later
than October 1, 2001, a report on the study conducted under
this subparagraph.
(5) Definitions and special rules
For purposes of this subsection -
(A) Annex
The term "the Annex" means Annex 300-B of the NAFTA.
(B) CBTPA beneficiary country
The term "CBTPA beneficiary country" means any "beneficiary
country", as defined in section 2702(a)(1)(A) of this title,
which the President designates as a CBTPA beneficiary country,
taking into account the criteria contained in subsections (b)
and (c) of section 2702 of this title and other appropriate
criteria, including the following:
(i) Whether the beneficiary country has demonstrated a
commitment to -
(I) undertake its obligations under the WTO, including
those agreements listed in section 3511(d) of this title,
on or ahead of schedule; and
(II) participate in negotiations toward the completion of
the FTAA or another free trade agreement.
(ii) The extent to which the country provides protection of
intellectual property rights consistent with or greater than
the protection afforded under the Agreement on Trade-Related
Aspects of Intellectual Property Rights described in section
3511(d)(15) of this title.
(iii) The extent to which the country provides
internationally recognized worker rights, including -
(I) the right of association;
(II) the right to organize and bargain collectively;
(III) a prohibition on the use of any form of forced or
compulsory labor;
(IV) a minimum age for the employment of children; and
(V) acceptable conditions of work with respect to minimum
wages, hours of work, and occupational safety and health;
(iv) Whether the country has implemented its commitments to
eliminate the worst forms of child labor, as defined in
section 507(6) of the Trade Act of 1974 [19 U.S.C. 2467(6)].
(v) The extent to which the country has met the
counter-narcotics certification criteria set forth in section
2291j of title 22 for eligibility for United States
assistance.
(vi) The extent to which the country has taken steps to
become a party to and implements the Inter-American
Convention Against Corruption.
(vii) The extent to which the country -
(I) applies transparent, nondiscriminatory, and
competitive procedures in government procurement equivalent
to those contained in the Agreement on Government
Procurement described in section 3511(d)(17) of this title;
and
(II) contributes to efforts in international fora to
develop and implement international rules in transparency
in government procurement.
(C) CBTPA originating good
(i) In general
The term "CBTPA originating good" means a good that meets
the rules of origin for a good set forth in chapter 4 of the
NAFTA as implemented pursuant to United States law.
(ii) Application of chapter 4
In applying chapter 4 of the NAFTA with respect to a CBTPA
beneficiary country for purposes of this subsection -
(I) no country other than the United States and a CBTPA
beneficiary country may be treated as being a party to the
NAFTA;
(II) any reference to trade between the United States and
Mexico shall be deemed to refer to trade between the United
States and a CBTPA beneficiary country;
(III) any reference to a party shall be deemed to refer
to a CBTPA beneficiary country or the United States; and
(IV) any reference to parties shall be deemed to refer to
any combination of CBTPA beneficiary countries or to the
United States and one or more CBTPA beneficiary countries
(or any combination thereof).
(D) Transition period
The term "transition period" means, with respect to a CBTPA
beneficiary country, the period that begins on October 1, 2000,
and ends on the earlier of -
(i) September 30, 2008; or
(ii) the date on which the FTAA or another free trade
agreement that makes substantial progress in achieving the
negotiating objectives set forth in 3317(b)(5) (!2) of this
title enters into force with respect to the United States and
the CBTPA beneficiary country.
(E) CBTPA
The term "CBTPA" means the United States-Caribbean Basin
Trade Partnership Act.
(F) FTAA
The term "FTAA" means the Free Trade Area of the Americas.
(c) Sugar and beef products; stable food production plan;
suspension of duty-free treatment; monitoring
(1) As used in this subsection -
(A) The term "sugar and beef products" means -
(i) sugars, sirups, and molasses provided for in subheadings
1701.11.00, 1701.12.00, 1701.91.20, 1701.99.00, 1702.90.30,
1806.10.40, and 2106.90.10 of the Harmonized Tariff Schedule of
the United States, and
(ii) articles of beef or veal, however provided for in
chapters 2 and 16 of the Harmonized Tariff Schedule of the
United States.
(B) The term "Plan" means a stable food production plan that
consists of measures and proposals designed to ensure that the
present level of food production in, and the nutritional level of
the population of, a beneficiary country will not be adversely
affected by changes in land use and land ownership that will
result if increased production of sugar and beef products is
undertaken in response to the duty-free treatment extended under
this chapter to such products. A Plan must specify such facts
regarding, and such proposed actions by, a beneficiary country as
the President deems necessary for purposes of carrying out this
subsection, including but not limited to -
(i) the current levels of food production and nutritional
health of the population;
(ii) current level of production and export of sugar and beef
products;
(iii) expected increases in production and export of sugar
and beef products as a result of the duty-free access to the
United States market provided under this chapter;
(iv) measures to be taken to ensure that the expanded
production of those products because of such duty-free access
will not occur at the expense of stable food production; and
(v) proposals for a system to monitor the impact of such
duty-free access on stable food production and land use and
land ownership patterns.
(2) Duty-free treatment extended under this chapter to sugar and
beef products that are the product of a beneficiary country shall
be suspended by the President under this subsection if -
(A) the beneficiary country, within the ninety-day period
beginning on the date of its designation as such a country under
section 2702 of this title, does not submit a Plan to the
President for evaluation;
(B) on the basis of his evaluation, the President determines
that the Plan of a beneficiary country does not meet the criteria
set forth in paragraph (1)(B); or
(C) as a result of the monitoring of the operation of the Plan
under paragraph (5), the President determines that a beneficiary
country is not making a good faith effort to implement its Plan,
or that the measures and proposals in the Plan, although being
implemented, are not achieving their purposes.
(3) Before the President suspends duty-free treatment by reason
of paragraph (2)(A), (B), or (C) to the sugar and beef products of
a beneficiary country, he must offer to enter into consultation
with the beneficiary country for purposes of formulating
appropriate remedial action which may be taken by that country to
avoid such suspension. If the beneficiary country thereafter enters
into consultation within a reasonable time and undertakes to
formulate remedial action in good faith, the President shall
withhold the suspension of duty-free treatment on the condition
that the remedial action agreed upon be appropriately implemented
by that country.
(4) The President shall monitor on a biennial basis the operation
of the Plans implemented by beneficiary countries, and shall submit
a written report to Congress by March 15 following the close of
each biennium, that -
(A) specifies the extent to which each Plan, and remedial
actions, if any, agreed upon under paragraph (4), have been
implemented; and
(B) evaluates the results of such implementation.
(5) The President shall terminate any suspension of duty-free
treatment imposed under this subsection if he determines that the
beneficiary country has taken appropriate action to remedy the
factors on which the suspension was based.
(d) Tariff-rate quotas
No quantity of an agricultural product subject to a tariff-rate
quota that exceeds the in-quota quantity shall be eligible for
duty-free treatment under this chapter.
(e) Proclamations suspending duty-free treatment
(1) The President may by proclamation suspend the duty-free
treatment provided by this chapter with respect to any eligible
article and may proclaim a duty rate for such article if such
action is provided under chapter 1 of title II of the Trade Act of
1974 [19 U.S.C. 2251 et seq.] or section 1862 of this title.
(2) In any report by the International Trade Commission to the
President under section 202(f) of the Trade Act of 1974 [19 U.S.C.
2252(f)] regarding any article for which duty-free treatment has
been proclaimed by the President pursuant to this chapter, the
Commission shall state whether and to what extent its findings and
recommendations apply to such article when imported from
beneficiary countries.
(3) For purposes of subsections (!3) section 203 of the Trade Act
of 1974 [19 U.S.C. 2253(a), (c)], the suspension of the duty-free
treatment provided by this chapter shall be treated as an increase
in duty.
(4) No proclamation which provides solely for a suspension
referred to in paragraph (3) of this subsection with respect to any
article shall be taken under section 203 of the Trade Act of 1974
[19 U.S.C. 2253] unless the United States International Trade
Commission, in addition to making an affirmative determination with
respect to such article under section 202(b) of the Trade Act of
1974 [19 U.S.C. 2252(b)], determines in the course of its
investigation under such section that the serious injury (or threat
thereof) substantially caused by imports to the domestic industry
producing a like or directly competitive article results from the
duty-free treatment provided by this chapter.
(5)(A) Any action taken under section 203 of the Trade Act of
1974 [19 U.S.C. 2253] that is in effect when duty-free treatment
pursuant to section 2701 (!4) of this title is proclaimed shall
remain in effect until modified or terminated.
(B) If any article is subject to any such action at the time
duty-free treatment is proclaimed pursuant to section 2701 of this
title, the President may reduce or terminate the application of
such action to the importation of such article from beneficiary
countries prior to the otherwise scheduled date on which such
reduction or termination would occur pursuant to the criteria and
procedures of section 203 of the Trade Act of 1974 [19 U.S.C.
2253].
(f) Petitions to International Trade Commission
(1) If a petition is filed with the International Trade
Commission pursuant to the provisions of section 201 of the Trade
Act of 1974 [19 U.S.C. 2251] regarding a perishable product and
alleging injury from imports from beneficiary countries, then the
petition may also be filed with the Secretary of Agriculture with a
request that emergency relief be granted pursuant to paragraph (3)
of this subsection with respect to such article.
(2) Within fourteen days after the filing of a petition under
paragraph (1) of this subsection -
(A) if the Secretary of Agriculture has reason to believe that
a perishable product from a beneficiary country is being imported
into the United States in such increased quantities as to be a
substantial cause of serious injury, or the threat thereof, to
the domestic industry producing a perishable product like or
directly competitive with the imported product and that emergency
action is warranted, he shall advise the President and recommend
that the President take emergency action; or
(B) the Secretary of Agriculture shall publish a notice of his
determination not to recommend the imposition of emergency action
and so advise the petitioner.
(3) Within seven days after the President receives a
recommendation from the Secretary of Agriculture to take emergency
action pursuant to paragraph (2) of this subsection, he shall issue
a proclamation withdrawing the duty-free treatment provided by this
chapter or publish a notice of his determination not to take
emergency action.
(4) The emergency action provided by paragraph (3) of this
subsection shall cease to apply -
(A) upon the taking of action under section 203 of the Trade
Act of 1974 [19 U.S.C. 2253],
(B) on the day a determination by the President not to take
action (!3) under section 203 of such Act [19 U.S.C. 2253] not to
take action (!3) becomes final,
(C) in the event of a report of the United States International
Trade Commission containing a negative finding, on the day the
Commission's report is submitted to the President, or
(D) whenever the President determines that because of changed
circumstances such relief is no longer warranted.
(5) For purposes of this subsection, the term "perishable
product" means -
(A) live plants and fresh cut flowers provided for in chapter 6
of the HTS;
(B) fresh or chilled vegetables provided for in headings 0701
through 0709 (except subheading 0709.52.00) and heading 0714 of
the HTS;
(C) fresh fruit provided for in subheadings 0804.20 through
0810.90 (except citrons of subheading 0805.90.00, tamarinds and
kiwi fruit of subheading 0810.90.20, and cashew apples, mameyes
colorados, sapodillas, soursops and sweetsops of subheading
0810.90.40) of the HTS; and
(D) concentrated citrus fruit juice provided for in subheadings
2009.11.00, 2009.19.40, 2009.20.40, 2009.30.20, and 2009.30.60 of
the HTS.
(g) Fees not affected by proclamation
No proclamation issued pursuant to this chapter shall affect fees
imposed pursuant to section 624 of title 7.
(h) Duty reduction for certain leather-related products
(1) Subject to paragraph (2), the President shall proclaim
reductions in the rates of duty on handbags, luggage, flat goods,
work gloves, and leather wearing apparel that -
(A) are the product of any beneficiary country; and
(B) were not designated on August 5, 1983, as eligible articles
for purposes of the generalized system of preferences under title
V of the Trade Act of 1974 [19 U.S.C. 2461 et seq.].
(2) The reduction required under paragraph (1) in the rate of
duty on any article shall -
(A) result in a rate that is equal to 80 percent of the rate of
duty that applies to the article on December 31, 1991, except
that, subject to the limitations in paragraph (3), the reduction
may not exceed 2.5 percent ad valorem; and
(B) be implemented in 5 equal annual stages with the first
one-fifth of the aggregate reduction in the rate of duty being
applied to entries, or withdrawals from warehouse for
consumption, of the article on or after January 1, 1992.
(3) The reduction required under this subsection with respect to
the rate of duty on any article is in addition to any reduction in
the rate of duty on that article that may be proclaimed by the
President as being required or appropriate to carry out any trade
agreement entered into under the Uruguay Round of trade
negotiations; except that if the reduction so proclaimed -
(A) is less than 1.5 percent ad valorem, the aggregate of such
proclaimed reduction and the reduction under this subsection may
not exceed 3.5 percent ad valorem, or
(B) is 1.5 percent ad valorem or greater, the aggregate of such
proclaimed reduction and the reduction under this subsection may
not exceed the proclaimed reduction plus 1 percent ad valorem.
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