Determination and Non-Designation under the Textile and Apparel Commercial Availability Provisions of the United States-Caribbean Basin Trade Partnership Act

AGENCY:

The Committee for the Implementation of Textile Agreements (The Committee).

ACTION:

Committee decision not to revoke its prior designation regarding certain coated fusible interlining fabrics.

SUMMARY:

The Committee received a petition alleging that certain coated, fusible interlining fabrics, which had been determined by the Committee not to be available in commercial quantities in a timely manner, were in fact available from the domestic industry. The petition requested that the Committee revoke its previous designation making apparel from such fabric eligible for duty-free treatment under the commercial availability provision of the CBTPA. Subsequently, the Committee determined that the subject fabrics, detailed below, both classified under item 5903.90.2500 of the Harmonized Tariff Schedule of the United States (HTSUS), for use in apparel articles, can be supplied by the domestic industry in commercial quantities in a timely manner. However, the Committee has determined that revoking the designation of these fabrics under the commercial availability provision of the CBTPA would have an adverse impact on a significant component of the U.S. textile industry. Therefore, the Committee has decided not to revoke the previous designation regarding these fabrics, and apparel from such fabric will continue to be eligible for duty-free treatment under the commercial availability provision of the CBTPA.

FOR FURTHER INFORMATION CONTACT:

Richard P. Stetson, Office of Textiles and Apparel, U.S. Department of Commerce, (202) 482-3400.

SUPPLEMENTARY INFORMATION:

Authority: Section 211 of the Caribbean Basin Trade Partnership Act (CBTPA), amending Section 213(b)(2)(A)(v)(II) of the Caribbean Basin Economic Recovery Act (CBERA); Presidential Proclamation 7351 of October 2, 2000; Executive Order No. 13191 of January 17, 2001.

Background

The commercial availability provision of the CBTPA provides for duty-free and quota-free treatment for apparel articles that are both cut (or knit-to-shape) and sewn or otherwise assembled in one or more beneficiary CBTPA country from fabric or yarn that is not formed in the United States or a beneficiary CBTPA country if it has been determined that such yarns or fabrics cannot be supplied by the domestic industry in commercial quantities in a timely manner and certain procedural requirements have been met. In Presidential Proclamation 7351, the President proclaimed that this treatment would apply to apparel articles from fabrics or yarn designated by the appropriate U.S. government authority in the Federal Register.

In Executive Order 13191, the President authorized the Committee to determine whether yarns or fabrics cannot be supplied by the domestic industry in commercial quantities in a timely manner.

On April 22, 2003, following a determination that certain coated, fusible interlinings, detailed in the Annex to this notice, could not be supplied by the domestic industry in commercial quantities in a timely manner under the CBTPA, the Committee designated apparel from these fabrics as eligible for duty-free treatment under the CBTPA (68 FR 19788).

On April 16, 2004, the Chairman of the Committee received a petition from Hodgson Russ Attorneys, LLP, on behalf of Narroflex, alleging that these fabrics can be supplied by the domestic industry in commercial quantities in a timely manner, and requesting that the Committee revoke its previous designation regarding these fabrics. On April 21, 2004, the Committee requested public comments on the petition (67 FR 244). On May 9, 2004, the Committee and the U.S. Trade Representative (USTR) sought the advice of the Industry Trade Advisory Committee for Textiles and Clothing and the Industry Trade Advisory Committee for Distribution Services regarding the proposed action.

On May 24, 2004, the Committee and USTR offered to hold consultations with the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate (Congressional Committees) regarding the proposed action. On May 28, 2004, the U.S. International Trade Commission provided advice regarding the proposed action. Based on the information and advice received and its understanding of the industry, the Committee determined that the fabrics set forth in the petition can be supplied by the domestic industry in commercial quantities in a timely manner.

On June 16, 2004, as required by the CBTPA, the Committee and USTR submitted a report to the Congressional Committees that set forth the action proposed, the reasons for such action, and the advice obtained. A period of 60 calendar days since this report was submitted has expired and during this period the House Ways and Means Committee provided additional advice. On August 4, the Committee received a letter from Chairman William M. Thomas and Ranking Democrat Charles B. Rangel of the Committee on Ways and Means expressing strong concern about revocation, noting the adverse affects such a decision could have on U.S. textile manufacturers and on the economy of the Dominican Republic. The letter also drew the Committee's attention to the Committee on Ways and Means' reports on the United States - Australia Free Trade Agreement Implementation Act and the United States Morocco Free Trade Agreement Implementation Act; in both reports, the Committee on Ways and Means expressed its view that “once an item is designated as being in short supply under trade preference programs, the item is permanently designated as such unless otherwise provided for by the statute implementing the trade preference program.”

Based on the advice from a broad spectrum of the domestic industry and the House Ways and Means Committee, the Committee has decided not to revoke its April 22, 2003 designation. Such a revocation would, as a result of the reliance on the Committee's prior designation, have an adverse impact on a significant component of the U.S. textile industry. The Committee will not revoke its previous designation regarding these fabrics.

Apparel articles from these fabrics remain eligible for quota-free and duty-free treatment under the textile and apparel commercial availability provisions of the CBTPA.

Annex

1. A knitted outer-fusible material with a fold line that is knitted into the fabric. The fabric is a 45mm wide base substrate, knitted in narrow width, synthetic fiber based (made of 49% polyester / 43% elastomeric filament / 8% nylon with a weight of 4.4 oz., a 110/110 stretch, and a dull yarn), stretch elastomeric material with an adhesive (thermoplastic resin) coating. The 45mm width is divided as follows: 34mm solid, followed by a 3mm seam allowing it to fold over, followed by 8mm of solid.

2. A knitted inner-fusible material with an adhesive (thermoplastic resin) coating that is applied after going through a finishing process to remove all shrinkage from the product. The fabric is a 40mm synthetic fiber based stretch elastomeric fusible consisting of 80% nylon type 6/20% elastomeric filament with a weight of 4.4 oz., a 110/110 stretch, and a dull yarn.