Request for Public Comment on Short Supply Petition under the North American Free Trade Agreement (NAFTA)

AGENCY:

Committee for the Implementation of Textile Agreements (CITA).

ACTION:

Request for Public Comments concerning a request for modification of the NAFTA rules of origin for textile filaments, staple yarns, and woven fabrics and nonwoven and other textile articles from rayon fiber.

SUMMARY:

On October 16, 2007, the Chairman of CITA received a request from the National Textile Association (NTA), alleging that certain rayon fibers (other than “lyocell”) cannot be supplied by the domestic industry in commercial quantities in a timely manner and requesting that CITA consider whether the North American Free Trade Agreement (NAFTA) rule of origin for textile filaments, staple yarns, and woven fabrics, classified under chapters 52, 54 and 55 of the Harmonized Tariff Schedule of the United States (HTSUS) and nonwoven and other textile articles of chapter 56, should be modified to allow the use of non-North American rayon fibers (other than “lyocell”). CITA is also considering a broad change in the rule of origin for all other textile products to allow the use of non-North American rayon fibers (other than “lyocell”). The President may proclaim a modification to the NAFTA rules of origin under these circumstances to implement an agreement with the other NAFTA countries on the modification. CITA hereby solicits public comments on this request, in particular with regard to whether rayon fibers (other than “lyocell”) can be supplied by the domestic industry in commercial quantities in a timely manner. Comments must be submitted by (January 14, 2008 to the Chairman, Committee for the Implementation of Textile Agreements, Room 3001, United States Department of Commerce, Washington, DC 20230.

FOR FURTHER INFORMATION CONTACT:

Robert Carrigg, International Trade Specialist, Office of Textiles and Apparel, U.S. Department of Commerce, (202) 482-3400.

SUPPLEMENTARY INFORMATION:

Authority: Section 204 of the Agricultural Act of 1956, as amended (7 USC 1854); Section 202(q) of the North American Free Trade Agreement Implementation Act (19 USC 3332(q)); Executive Order 11651 of March 3, 1972, as amended.

BACKGROUND

Under the North American Free Trade Agreement (NAFTA), NAFTA countries are required to eliminate customs duties on textile and apparel goods that qualify as originating goods under the NAFTA rules of origin, which are set out in Annex 401 to the NAFTA. The NAFTA provides for the Parties to consult to consider issues of availability of supply of fibers, yarns or fabrics in the free trade area. See NAFTA Annex 300-B, Section 7.2(a). The NAFTA implementing legislation authorizes the President to modify the rules of origin pursuant to any agreement reached by the NAFTA Parties, as provided in Section 7.2(a) of Annex 300-B. See Section 202(q)(3)(A) of the NAFTA Implementation Act. The Statement of Administrative Action (SAA) that accompanies the NAFTA Implementation Act stated that any interested person may submit to CITA a request for a modification to a particular rule of origin based on a change in the availability in North America of a particular fiber, yarn or fabric and that the requesting party would bear the burden of demonstrating that a change is warranted. NAFTA Implementation Act, SAA, H. Doc. 103-159, Vol. 1, at 491 (1993). The SAA provides that CITA may make a recommendation to the President regarding a change to a rule of origin for a textile or apparel good. SAA at 491. The NAFTA Implementation Act provides the President with the authority to proclaim modifications to the NAFTA rules of origin as are necessary to implement an agreement with one or more NAFTA country on such a modification. See section 202(q) of the NAFTA Implementation Act.

On October 16, 2007, the Chairman of CITA received a request from the National Textile Association (NTA), alleging that certain rayon fibers (other than “lyocell”) cannot be supplied by the domestic industry in commercial quantities in a timely manner and requesting that CITA consider whether the North American Free Trade Agreement (NAFTA) rule of origin for textile filaments, staple yarns, and woven fabrics, classified under chapters 52, 54 and 55 of the Harmonized Tariff Schedule of the United States (HTSUS) and nonwoven and other textile articles of chapter 56, should be modified to allow the use of non-North American rayon fibers (other than “lyocell”). CITA is also considering a broad change in the rule of origin for all other textile products to allow the use of non-North American rayon fibers (other than “lyocell”).

CITA is soliciting public comments regarding this request, particularly with respect to whether the rayon fiber described above can be supplied by the domestic industry in commercial quantities in a timely manner. Comments must be received no later than January 14, 2008. Interested persons are invited to submit six copies of such comments or information to the Chairman, Committee for the Implementation of Textile Agreements, Room 3100, U.S. Department of Commerce, 14th and Constitution Avenue, N.W., Washington, DC 20230.

If a comment alleges that these rayon fibers can be supplied by the domestic industry in commercial quantities in a timely manner, CITA will closely review any supporting documentation, such as a signed statement by a manufacturer stating that it produces fiber that is the subject of the request, including the quantities that can be supplied and the time necessary to fill an order, as well as any relevant information regarding past production.

CITA will protect any business confidential information that is marked business confidential from disclosure to the full extent permitted by law. CITA will make available to the public non-confidential versions of the request and non-confidential versions of any public comments received with respect to a request in room 3001 in the Herbert Hoover Building, 14th and Constitution Avenue, N.W., Washington, DC 20230. Persons submitting comments on a request are encouraged to include a non-confidential version and a non-confidential summary.