Eligible
Countries
In
order for countries to be eligible for apparel benefits,
they must have in place an effective visa system to prevent
illegal trans-shipment and use of counterfeit documentation,
as well as effective enforcement and verification procedures.
For a list of countries eligible for apparel benefits, including
those also eligible for the Special Rule for Apparel, click
on the Country Eligibility
page.
Qualifying
Textile and Apparel Articles
The
Africa Investment Incentive Act of 2006 (signed by President
Bush on December 20, 2006) amends the textile and apparel
portions of the African Growth and Opportunity Act (AGOA)
and is referred to as "AGOA IV".
AGOA
IV provides duty-free and quota-free treatment for eligible
apparel articles made in qualifying sub-Saharan African
countries through 2015. Qualifying articles include:
Special
Rule for Apparel Applying to Lesser Developed AGOA Countries
Until
September 30, 2012, lesser-developed beneficiary sub-Saharan
African countries may use non-U.S. fabric and yarn in apparel
wholly assembled in their countries and still qualify for
duty- and quota-free treatment. Exports under the Special
Rule are subject to a cap (see below for details on the
cap). Lesser-developed countries are those with a per capita
gross national product of less than $1500 a year in 1998
as measured by the World Bank. AGOA IV continues to grant
lesser-developed beneficiary country status to Botswana
and Namibia, qualifying both countries for the Special Rule.
Other
Textile and Apparel Provisions
The
Committee for the Implementation of Textile Agreements (CITA),
an interagency group chaired by the Commerce Department's
Deputy Assistant Secretary for Textiles and Apparel, has
the authority to implement certain provisions of AGOA's
textile and apparel benefits. These provisions include:
Regional
Cap
AGOA
limits imports of apparel made with regional or third country
fabric to a fixed percentage of the aggregate square meter
equivalents (SME) of all apparel articles imported into
the United States. For the year beginning October 1, 2006,
the aggregate quantity of imports eligible for preferential
treatment under these provisions is an amount not to exceed
6.43675 percent of all apparel articles imported into the
United States. Of this overall amount, apparel imported
under the Special Rule for lesser-developed countries is
limited to an amount not to exceed 3.5 percent of apparel
imported into the United States in the preceding 12-month
period. Apparel articles entered in excess of these quantities
will be subject to otherwise applicable tariffs. The duty-
free cap is not allocated among countries. It is filled
on a "first-come, first-served" basis.
For
the most current data on aggregate imports under the cap,
please visit http://otexa.ita.doc.gov
and click on "AGOA".
Abundant
Supply
AGOA
IV provides for special rules for fabrics or yarns produced
in commercial quantities (or "abundant supply")
in any designated sub-Saharan African country for use in
qualifying apparel articles. Upon receiving a petition from
any interested party, the International Trade Commission
will determine the quantity of such fabrics or yarns that
must be sourced from the region before applying the third
country fabric provision. It also provides for 30 million
square meter equivalents (SMEs) of denim to be determined
to be in abundant supply beginning October 1, 2006. The
U.S. International Trade Commission will provide further
guidance on how it will implement this provision.
Commercial
Availability
Under
AGOA, the President is authorized to proclaim duty-free
and quota-free benefits for apparel that is both cut (or
knit-to-shape) and sewn or otherwise assembled in beneficiary
countries from fabric or yarns not formed in the United
States or a beneficiary country, if the President has determined
that such yarns or fabrics cannot be supplied by the domestic
industry in commercial quantities in a timely manner. In
Executive Order 13191, the President delegated to the Committee
for the Implementation of Textile Agreements (CITA) authority
to determine whether yarn or fabric cannot be supplied by
the domestic industry in commercial quantities in a timely
manner and to extend preferential treatment to apparel articles
from such yarn or fabric.
For
details on products that receive duty- free treatment under
the AGOA, please visit http://otexa.ita.doc.gov
and click on "Commercial Availability".
AGOA
IV provides for a process to remove designated fabrics or
yarns that were determined not to be available in commercial
quantities in the United States on the basis of fraud.
Handloomed/Handmade/Folklore
Articles/Ethnic Printed Fabrics
AGOA
provides duty- and quota-free benefits for handloomed, handmade,
folklore articles, or ethnic printed fabrics, made in beneficiary
sub-Saharan African countries. This provision is known as
"Category 9". In Executive Order 13191, the President
authorized CITA, after consultation with the Commissioner
of Customs and Border Protection, to consult with beneficiary
sub-Saharan African countries and to determine which, if
any, particular textile and apparel goods shall be treated
as being handloomed, handmade, folklore articles or ethnic
printed fabrics.
As
of January 2007, Botswana, Ghana, Ethiopia, Kenya, Lesotho,
Madagascar, Malawi, Mali, Mozambique, Namibia, Niger, Nigeria,
Senegal, Sierra Leone, Swaziland, Tanzania and Zambia have
been approved under the hand-loomed and the handmade provisions
of Category 9.
Instructions
for Beneficiary Country Governments to Apply for Approval
of Handloomed/Handmade/Folklore Articles Under Category
9
Findings
and Trimmings
An
apparel article is eligible for benefits even if the article
contains findings or trimmings of foreign origin, if the
value of such findings and trimmings does not exceed 25
percent of the cost of the components of the assembled article.
Examples of findings and trimmings include sewing thread,
hooks and eyes, snaps, buttons, "bow buds," decorative
lace trim, elastic strips, and zippers. Elastic strips are
considered findings or trimmings only if they are each less
than 1 inch in width and used in the production of brassieres.
Certain
Interlinings
Articles
containing certain interlinings of foreign origin are eligible
for benefits if the value of the interlinings (and any findings
and trimmings) does not exceed 25 percent of the cost of
the components of the assempled article. The interlinings
permitted include only a chest type plate, a "hymo"
piece, or "sleeve header," made of woven or weft-inserted
warp knit construction and of coarse animal hair or man-made
filaments. This benefit will terminate if the President
determines such interlinings are made in the United States
in commercial quantities.
Certain
Components
AGOA
III expanded product eligibility to allow non-AGOA produced
collars, cuffs, drawstrings, padding/shoulder pads, waistbands,
belts attached to garments, straps with elastic, and elbow
patches for all import categories to be eligible. This treatment
continues under AGOA IV.
De
Minimis Rule
Apparel
products assembled in sub-Saharan Africa which would otherwise
be considered eligible for AGOA benefits but for the presence
of some fibers or yarns not wholly formed in the United
States or the beneficiary sub-Saharan African country will
still be eligible for benefits as long as the total weight
of all such fibers and yarns is not more than 10 percent
of the total weight of the article. AGOA III increased this
percentage from seven percent.