Morocco FTA Textile and Apparel TRQs and TPLs

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1 April 4, 2006 Morocco FTA and Apparel TRQs and TPLs Originating s and Apparel s and apparel products may qualify as originating under the U.S.-Morocco FTA if they meet the requirements as specified in the Agreement. In order to be an originating good under the FTA, the good must meet the preference rules, including the tariff shift rules as identified in Harmonized Tariff Schedule (HTS) General Note 27(h). The duty rate for this originating good is identified in the special column of the HTS with a special product indicator (SPI) of MA. Additionally, certain products indicated below are eligible for tariff rate quotas and refer the reader to specific Chapter 99 tariff subheadings. Tariff Rate Quotas (TRQ) Forty-five Tariff Rate Quotas (TRQ) have been established for certain originating textile and apparel goods provided for in Chapter 99, Subchapter XII, Notes 17 through 61. (The FTA refers to this provision for originating goods as Tariff Rate Quotas [Annex 4- B] and the provision for non-originating goods as Tariff Preference Levels (TPL) [Article ], but we recognize the trade may use these terms interchangeably.) The below Chapter 61, 62 and 63 subheadings are eligible for a free rate of duty under HTS provisions through , up to the specified quantities listed in Chapter 99, Subchapter XII, Notes 17 through 61. Originating goods in excess of the agreed upon levels are eligible for the U.S.-Morocco FTA preferential rates of duty as described in the special column of the Chapter 99 provision. (Originating goods may also be eligible for the Tariff Preference Levels (TPL) noted below under Non-Originating s and Apparel. ) All of the below TRQ s will increase in quantity each year until the year Since all TRQ items have a six-year duty phase-out under the FTA, in 2011 all originating TRQ eligible products will enter the United States duty-free, thus there is no need for a TRQ. Originating Goods Eligible for TRQs Under the U.S.-Morocco FTA Attached to this document are a summary of the TRQ preference levels, a correlation table between each 10 digit Chapter 61/62/63 HTS number and the corresponding TRQ Chapter 99 subheading number eligible for duty free treatment (in-quota restraint limit), and the Chapter 99 subheading number subject to the over-quota duty rate. U.S. Customs and Border Protection 1

2 April 4, 2006 The TRQ levels are set out in Square Meter Equivalents, frequently referred to as SME. To determine the quantity in square meters equivalents, CBP will apply the conversion factors listed in, or utilize a methodology based on, the Correlation: U.S. and Apparel System with the Harmonized Tariff Schedule of the United States of America, 2003 ( The Correlation ), U.S. Department of Commerce, Office of s and Apparel, or successor publication. ( CBP does not require a Certificate of Origin for any originating shipment of textiles and apparel. However, a claim for preferential tariff treatment may be filed at the time of entry summary by placing the symbol MA as a prefix to the HTS subheading for each good or line item for which treatment is being claimed. Importers are required to maintain for five years after the date of importation, all records relating to the importation of the good, including, but not limited to the purchase of, cost of, value of and payment for the good and the materials used in the production of the good. Non-Originating s and Apparel s and apparel products that do not qualify as originating under the U.S.-Morocco FTA as they do not meet the requirements as specified in HTS General Note 27(h) are considered non-originating. Non-originating products, with the exceptions noted below, are not entitled to preferential treatment. The duty rate for these non-originating goods will be identified in column 1 of the HTS, the Normal Trade Relations (NTR) duty rate. Tariff Preference Levels (TPL) For non-originating goods, two Tariff Preference Levels (TPLs) have been established for textiles and apparel under the U.S.-Morocco FTA. A non-originating textile and apparel article eligible for a TPL is manufactured regardless of the origin of the fiber, yarn or fabric used to produce the good. Each of the two TPLs is unique and goods must meet certain criteria in order to be eligible for preferential treatment. As of April 4, 2006, CBP is not requiring a Certificate of Eligibility for any shipment of textiles and apparel. However, we are aware that the Government of Morocco is issuing a Certificate of Eligibility for goods qualifying for Tariff Preference Levels. CBP is working with Morocco with the ultimate goal of requiring the Certificate of Eligibility in order for importers to receive duty-free treatment. Please be advised that as soon as some technical difficulties are resolved, CBP will require a Certificate of Eligibility for TPL goods. Notice will be provided in the form of a TBT published on cbp.gov. 1. Fabric and Apparel Goods: A TPL has been established for non-originating fabric goods provided for in HTS Chapters 51, 52, 54, 55, 58 and 60 and for non-originating apparel goods provided for in HTS Chapters 61 and 62. The fabric goods of HTS U.S. Customs and Border Protection 2

3 April 4, 2006 Chapters 51, 52, 54, 55, 58 and 60 must be wholly formed in Morocco, regardless of the origin of the fiber or yarn used to produce the goods. The apparel goods of HTS Chapters 61 and 62 must be cut from fabric or have its components knit to shape, or both, and be assembled in Morocco, regardless of the origin of the yarn or fabric used to produce the good. This fabric and apparel TPL has a combined aggregate restraint limit and is provided for in Chapter 99, Subchapter XII, Note 64 and is covered by HTS (As this TPL covers products regardless of the origin of the fibers, yarns and/or fabrics, originating goods are also eligible for this duty-free provision until the level filled.) The TPL level is set out in Square Meter Equivalents, frequently referred to as SME. To determine the quantity in square meters equivalents, CBP will apply the conversion factors listed in, or utilize a methodology based on, the Correlation: U.S. and Apparel System with the Harmonized Tariff Schedule of the United States of America, 2003 ( The Correlation ), U.S. Department of Commerce, Office of s and Apparel, or successor publication. ( Below are the combined annual quantities for the Tariff Preference Levels in Square Meter Equivalents (SMEs) that are eligible for duty-free treatment into the United States. Year Level in SME ,000, ,000, ,000, ,000, ,714, ,428, ,142, ,856, ,571, ,285, Certain Cotton Goods: A second TPL has been established for certain nonoriginating textile goods incorporating cotton fibers from designated sub-saharan African countries that meet the criteria listed below. This TPL is provided for in Chapter 99, Subchapter XII, Note 65 and is covered by HTS The products eligible for this TPL include products with a fiber forward preference rule of origin. Only yarns and knit fabric classified within the below ranges contain a fiber forward preference rule of origin: 5204 through 5207; 5401 through 5406; 5508 through 5511; and 6001 through No apparel is subject to a cotton fiber forward rule. The below non-originating goods shall receive preferential treatment as if they were originating goods, up to the specified quantity. U.S. Customs and Border Protection 3

4 April 4, 2006 a) Goods that are not originating solely because cotton fibers used in the production of the good do not undergo an applicable change in tariff classification as set out in General Note 27; and b) Goods that use cotton fibers, classified in heading of the HTS, and originate in one or more of the following least-developed beneficiary sub-saharan African countries: Angola, Benin, Burkina Faso, Burundi, Cape Verde, Comoros, Djibouti, Eritrea, Ethiopia, Gambia, Guinea, Guinea Bissau, Lesotho, Madagascar, Equatorial Guinea, Liberia, Malawi, Mali, Mauritania, Mozambique, Central African Republic, Niger, Uganda, Rwanda, Sierra Leone, Chad, Tanzania, Somalia, Sudan, Sao Tome and Principe, Togo, Democratic Republic of Congo, and Zambia; and c) The cotton fibers are carded and combed in the United States, Morocco, or a designated least-developed country. There is a non-expiring annual limit of 1,067,257 kilograms, but at the request of Morocco or the United States, the parties will consult on whether to adjust this quantity. Resources: Should you have questions regarding the U.S.-Morocco Free Trade Agreement, please contact your local U.S. Customs and Border Protection office. More information on the U.S.-Morocco Free Trade Agreement may be found on various U.S. Government websites, including: International Trade Commission (ITC) U.S. Customs and Border Protection (CBP) United States Trade Representative (USTR) U.S. Customs and Border Protection 4

5 Morocco FTA Tariff Rate Quotas (TRQ) Levels (in Square Meter Equivalents) HTS TRQ # Ch. 99-XII US Note 17 1,027,517 1,284,396 1,541,275 1,798,154 2,055, US Note , , , ,150 1,083, US Note , ,638 1,173,165 1,368,693 1,564, US Note 20 76,850 96, , , , US Note , , , , , US Note 22 17,022,703 21,278,379 25,534,055 29,789,730 34,045, US Note 23 17,134,067 21,417,583 25,701,100 29,984,617 34,268, US Note 24 1,756,467 2,195,583 2,634,700 3,073,817 3,512, US Note 25 1,529,322 1,911,652 2,293,982 2,676,313 3,058, US Note 26 1,322,731 1,653,413 1,984,096 2,314,778 2,645, US Note 27 17,217 21,521 25,825 30,129 34, US Note 28 5,736,583 7,170,729 8,604,875 10,039,021 11,473, US Note 29 5,394,700 6,743,375 8,092,050 9,440,725 10,789, US Note 30 2,366,183 2,957,729 3,549,275 4,140,821 4,732, US Note , , , , , US Note 32 4,250,708 5,313,385 6,376,063 7,438,740 8,501, US Note , , , , , US Note 34 1,285,990 1,607,488 1,928,985 2,250,483 2,571, US Note , , , , , US Note , , , , , US Note , , , , , US Note ,394, ,493, ,591, ,690, ,789, US Note 39 1,749,417 2,186,771 2,624,125 3,061,479 3,498, US Note , , ,100 1,051,283 1,201, US Note 41 2,045,717 2,557,146 3,068,575 3,580,004 4,091, US Note 42 2,144,750 2,680,938 3,217,125 3,753,313 4,289, US Note 43 1,254,500 1,568,125 1,881,750 2,195,375 2,509, US Note 44 2,095,985 2,619,981 3,143,978 3,667,974 4,191, US Note 45 1,295,450 1,619,313 1,943,175 2,267,038 2,590, US Note , , , , , US Note 47 39,216,310 49,020,388 58,824,465 68,628,543 78,432, US Note 48 6,299,430 7,874,288 9,449,145 11,024,003 12,598, US Note 49 1,151,967 1,439,958 1,727,950 2,015,942 2,303, US Note 50 6,011,550 7,514,438 9,017,325 10,520,213 12,023, US Note 51 1,862,667 2,328,333 2,794,000 3,259,667 3,725, US Note 52 4,318,080 5,397,600 6,477,120 7,556,640 8,636, US Note 53 2,295,367 2,869,208 3,443,050 4,016,892 4,590, US Note 54 5,974,200 7,467,750 8,961,300 10,454,850 11,948, US Note 55 11,400,900 14,251,125 17,101,350 19,951,575 22,801, US Note 56 1,831,600 2,289,500 2,747,400 3,205,300 3,663, US Note 57 1,275,887 1,594,858 1,913,830 2,232,802 2,551, US Note 58 8,286,787 10,358,483 12,430,180 14,501,877 16,573, US Note , , , , , US Note 60 51, US Note , , , , ,800 Prepared by CBP/TEOD March 10, 2006

6 KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note NONE DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note 23 Prepared by CBP/TEOD March 9, 2006 Page 1 of 11

7 DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note DOZ US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note 26 Prepared by CBP/TEOD March 9, 2006 Page 2 of 11

8 DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note 29 Prepared by CBP/TEOD March 9, 2006 Page 3 of 11

9 DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note 31 Prepared by CBP/TEOD March 9, 2006 Page 4 of 11

10 KG US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note NO US Note NO US Note NO US Note NO US Note NO US Note DOZ US Note NO US Note DOZ US Note NO US Note DOZ US Note NO US Note DOZ US Note DOZ US Note DOZ US Note 37 Prepared by CBP/TEOD March 9, 2006 Page 5 of 11

11 KG US Note KG US Note DOZ US Note DOZ US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note KG US Note DOZ US Note DOZ US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note 41 Prepared by CBP/TEOD March 9, 2006 Page 6 of 11

12 DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note 46 Prepared by CBP/TEOD March 9, 2006 Page 7 of 11

13 KG US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note 49 Prepared by CBP/TEOD March 9, 2006 Page 8 of 11

14 DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note 51 Prepared by CBP/TEOD March 9, 2006 Page 9 of 11

15 DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note NONE KG US Note KG US Note KG US Note DOZ US Note KG US Note DOZ US Note DOZ US Note DOZ US Note 56 Prepared by CBP/TEOD March 9, 2006 Page 10 of 11

16 DOZ US Note KG US Note KG US Note DOZ US Note KG US Note NONE KG US Note KG US Note KG US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note DOZ US Note KG US Note NONE DOZ US Note DOZ US Note DOZ US Note KG US Note NONE DOZ US Note DOZ US Note DOZ US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note KG US Note 61 Prepared by CBP/TEOD March 9, 2006 Page 11 of 11

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