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Israel, Jordan, Morocco, Bahrain, and Oman FTAsApply TS (substantial transformation) + RVC-based rules. A product that meets FTA ROOs qualifiesfor FTA tariff treatment if it is produced entirely in the United States using only U.S. materials or ifit contains at least 35 percent RVC and undergoes substantial transformation.Other Important Rules of Origin ConsiderationsDe Minimis RuleIn general, the De Minimus Rule allows up to 10 percent (7 percent for NAFTA) of the selling priceto be nonqualifying material even though the nonoriginating good may not meet the TS test.However, if a foreign input does not meet the ROO and does not qualify under the De MinimusRule, then the good does not qualify under the FTA. Note: There are several exceptions to the DeMinimis Rule. For example, the De Minimis Rule for textile products is calculated by weight. It isimportant to consult the text of the agreement for more details.AccumulationA good may be produced partly in the territory of one FTA partner and completed in the territoryof the other FTA partner. A good may be made from materials produced by one producerfrom components produced by another producer. To determine whether a good meets an HSclassification change, treat all the production done in both countries as if it occurred in onecountry, and treat the production done by all producers in the FTA region as if it were completedby one. Note: Accumulation can occur within a particular FTA region.Sector-Specific ConsiderationsThe U.S. industries for autos, chemicals, agricultural products, and textiles have taken a specialinterest in creating ROOs specifically designed for that industry.AutomobilesThe ROOs for automotive products are based on a tariff change alone or a tariff change anda regional value–content requirement. NAFTA requires that the RVC for these products becalculated using the net cost RVC method only. NAFTA also requires tracing. The provisions fortracing are not used in any other FTAs.ChemicalsThe U.S. chemical industry uses the same ROOs for all agreements. For that purpose they createdsimplified versions of the rules of origin for Chapters 28 to 39.Agricultural ProductsSome agricultural products may be subject to tariff rate quotas or other restrictions. For qualifyingagricultural products for FTA benefits, visit www.fas.usda.gov.Chapter 18: Rules of Origin for FTAs209
Textile ProductsThe textile and apparel ROOs are the “yarn-forward” standard, which requires thatthe yarn production and all operations “forward” (fabric production through apparelassembly) occur in the United States and/or the partner country. However, fibers,yarns, and fabrics determined not to be available in commercial quantities in a timelymanner may be sourced from outside the countries for use in qualifying textile andapparel products. For example, a fabric that is determined not to be commerciallyavailable may come from a third party, be cut and assembled into a garment in thepartner country, and imported to the United States duty-free. Other factors may needto be considered, such as tariff preference levels and safeguards. To look up ROOsfor textile products, visit otexa.ita.doc.gov and click on the specific FTA countryor region.Fungible Goods and MaterialsFTAs allow treating “fungible goods or materials” as originating where some goodsare FTA eligible but others are not. A fungible good may be considered originatingif the importer, exporter, or producer has either physically segregated (originatingfrom the nonoriginating) the fungible good or material or used any inventorymanagement system to segregate what is recognized in the Generally AcceptedAccounting Principles.Indirect MaterialsIndirect materials are considered to be originating materials regardless of wherethey are produced. An indirect material is defined as a good used in the production,testing, or inspection of a good, but not physically incorporated into the good, or agood used in the maintenance of buildings or the operation of equipment associatedwith the production of a good.Accessories, Spare Parts, and ToolsAccessories, spare parts, and tools that are delivered with the goods and thatform part of the goods’ standard accessories, spare parts, or tools, are consideredoriginating if the goods originate and are disregarded in determining whether all thenon-originating materials undergo tariff change.Certifying Origin of a Product for FTADepending on a particular FTA, the exporter or importer may need to document theorigin of the good. Documenting the origin varies, depending on the FTA. In general,the manufacturer, importer, or exporter will certify that a particular good is FTAeligibleeven though it may contain nonoriginating material. The actual certificatesmay be required forms such as U.S.–Israel FTA or NAFTA. (Note: Customs authoritiesnow allow the use of an alternative NAFTA form, with prior customs approval.)Other FTAs may not require specific certificates. Claiming preference is done bythe importer.210U.S. Commercial Service • A Basic Guide to Exporting
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A BASIC GUIDE TOEXPORTINGThe Offici
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export.gov/basicguideLibrary of Con
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Table of ContentsChapter 1: Introdu
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global GDP and 30 percent of global
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A GEE might consist, for example, o
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Success StoryPedaling Through Trial
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Chapter 2Developing anExport Strate
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specified in the EAR under a specif
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All U.S. businesses have many ways
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Answer these 11 questions:1. Which
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Product or Service• What need doe
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Sample Outline of anExport PlanTabl
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5. Current Trends and Practices•
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16. My Product’s Harmonized Code
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Success StoryDownloading NewInterna
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This last advantage is especially i
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Gathering and evaluating secondary
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Drawing ConclusionsAfter analyzing
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United Nations Statistical Yearbook
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Private-Sector Product and Industry
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Success StoryHelping Feed the World
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Chapter 4Export AdviceIn this chapt
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Some of the more important services
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the important difference that the b
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at no cost to the small business ex
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A commercial bank can perform many
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location and construction of manufa
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To prevent reverse engineering in C
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We are agnostic on the question of
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Distribution ConsiderationsHere are
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Often, the first company does not p
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your ability to terminate agreement
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Once your company has prequalified
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Choosing a ForeignRepresentative or
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Success StoryDon’t Wait—Innovat
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Chapter 6Finding QualifiedBuyersIn
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companies are available from many p
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Trade Fair Certification Program (e
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Millennium Development CorporationT
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Who Is the “Ideal”International
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Scores of new franchising concepts
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Success StoryCast a Wide Net to Cat
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Chapter 8Preparing YourProduct for
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You can also contact the Office of
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training seminars, or DVDs. Zeigler
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The ChallengeSmith first looked tow
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encompasses services in transportat
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give U.S. companies a competitive e
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Success StoryRecruiting New Franchi
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Chapter 10International LegalConsid
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For more information from the U.S.
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When goods enter a bonded warehouse
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under the UCC. Older works may also
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Trade names are also protected on a
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knowledge, in turn, promotes furthe
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prevent him or her from obtaining a
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Business-to-Consumer E-Commerce Wor
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Because such a website is often sta
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An online exporter may choose to pu
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important to identify and incorpora
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other business contacts) options re
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Success StoryGrowing Strong withInt
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Chapter 12Shipping YourProductIn th
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One popular method of shipment is t
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Certificate of ConformityRequired b
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The cost of the shipment, delivery
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To learn more about comprehensive r
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China but needed to do a lot of hom
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price is too high, the product or s
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CompetitionIn the domestic market,
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Commonly Used TermsIt is important
Page 148 and 149: Success StoryAligning Innovationwit
Page 150 and 151: Chapter 14Methods ofPaymentIn this
Page 152 and 153: Letters of Credit and Documentary C
Page 154 and 155: You must provide documentation show
Page 156 and 157: associated with open-account trade
Page 158 and 159: payment. This is because the export
Page 160 and 161: ut they were willing to make the sm
Page 162 and 163: • The need for preshipment financ
Page 164 and 165: Thus it is in your best interest to
Page 166 and 167: to support ongoing export sales or
Page 168 and 169: To be eligible, a business must hav
Page 170 and 171: Medium Enterprise Department and OP
Page 172 and 173: Success StoryManufacturingInternati
Page 174 and 175: Chapter 16Business TravelAbroadIn t
Page 176 and 177: Planning an ItineraryTravel agents
Page 178 and 179: Business Culture TipsAlways answer
Page 180 and 181: Gift giving is an important part of
Page 182 and 183: particularly intense issue. So the
Page 184 and 185: Here are a few suggestions.• Expe
Page 186 and 187: Building a Working RelationshipOnce
Page 188 and 189: negotiations and agreements with it
Page 190 and 191: Chapter 18Rules of Originfor FTAsIn
Page 192 and 193: 5. Determine if the foreign content
Page 194 and 195: The original ROOs are listed in an
Page 196 and 197: Example Rules of OriginCombining Mu
Page 200 and 201: The importer may ask the exporter w
Page 202 and 203: Generic CertificatesIf a good does
Page 204 and 205: Architectural Association of Kenya
Page 206 and 207: Appendix A: Glossary of TermsAdvanc
Page 208 and 209: Export-Import Bank of the United St
Page 210 and 211: Market SurveyReport that provides a
Page 212 and 213: Appendix B: Definitions of Abbrevia
Page 214 and 215: Appendix D: FormsHere, you will fin
Page 216 and 217: 228U.S. Commercial Service • A Ba
Page 218 and 219: Tech International1000 J Street, N.
Page 220 and 221: COMMERCIAL INVOICESELLER: INVOICE N
Page 222 and 223: Copyright © 1998 UNZ & CO.SHIPPER/
Page 224 and 225: DEPARTMENT OF HOMELAND SECURITYU.S.
Page 226 and 227: PACKING LIST© Copyright 2001 Unz &
Page 228 and 229: 1a. U.S. PRINCIPAL PARTY IN INTERES
Page 230 and 231: U.S. $13220of this FIRST of Exchang
Page 232 and 233: IndexAA2ASee account-to-account (A2
Page 234 and 235: Global Entrepreneurship Ecosystem (
Page 236 and 237: Swinko, RonSee Jet IncorporatedSzuc
Page 238 and 239: International OfficesAfghanistanKab
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