The Impact of the Andean Trade Preference Act Twelfth ... - USITC

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textile and apparel articles made in beneficiary countries from fabrics or fabric componentswholly formed, or components knit-to-shape, in the United States from yarns produced inthe United States or one or more ATPDEA beneficiary countries, provided the fabrics arealso dyed, printed, and finished in the United States. 37 ATPDEA also includes unlimitedpreferential treatment for apparel assembled from ATPDEA-country fabrics or fabriccomponents formed, or components knit-to-shape, of llama, alpaca, or vicuña.Apparel items assembled in ATPDEA countries from regional fabrics or regionalcomponents formed or knit-to-shape from yarns produced in the United States or one ormore ATPDEA beneficiary countries are also eligible to enter free of duty and ordinaryquota but subject to a cap. 38 The cap on U.S. imports of apparel made in the ATPA countriesfrom regionally knit or woven fabrics was set at 2 percent of the aggregate square meterequivalents (SMEs) of total U.S. imports of apparel from the world for the one-year periodbeginning on October 1, 2002, and increasing in each of the four succeeding one-yearperiods by equal increments up to a maximum of 5 percent for the three-month periodbeginning October 1, 2006. 39 For the one-year period from October 1, 2004 throughSeptember 30, 2005, the cap was 3.5 percent of total U.S. apparel imports or 709.8 millionSMEs; the fill rate was just 3.53 percent or 25.1 million SMEs. 40 As such, the expansion ofthe cap from 2 percent to 5 percent allows for significant growth of exports of apparel fromthe ATPDEA countries made from regional fabrics. The principal textile and apparelprovisions of ATPDEA are summarized in table 1-1.ATPA and GSPThe four ATPA beneficiaries also are GSP beneficiaries. 41 ATPA and GSP provisions aresimilar in many ways, and many products can enter the United States free of duty undereither program. Both programs offer increased access to the U.S. market. Like ATPA, GSPrequires that eligible imports: (1) be imported directly from beneficiaries into the customsterritory of the United States, (2) meet the (usually double) substantial transformationrequirement for any foreign inputs, and (3) contain a minimum of 35 percent qualifyingvalue content. The documentary requirements necessary to claim either ATPA or GSP37The dyeing, printing, and finishing requirement does not refer to post-assembly and other operationssuch as garment dyeing and stone washing.38 This provision is one of the most important for apparel in ATPDEA. See discussion of U.S. imports ofapparel made from regional fabric in chapter 2.39 ATPA, including ATPDEA, is scheduled to expire Dec. 31, 2006.40U.S. Department of Commerce, Office of Textiles and Apparel (OTEXA), found athttp://otexa.ita.doc.gov/agoa-cbtpa/agoa-cbtpa_2005.htm.41 The U.S. GSP program originally was enacted for 10 years pursuant to title V of the Trade Act of 1974(Public Law 93-618, 88 Stat. 2066 et seq.) and was renewed for an additional 10 years pursuant to title V ofthe Trade and Tariff Act of 1984 (Public Law 98-573, 98 Stat. 3018 et seq.), as amended (19 U.S.C. 2461 etseq.). Since that time, the GSP program has expired and been renewed several times. GSP expiration andrenewal issues are discussed later in this section.1-6
Table 1-1 Andean Trade Promotion and Drug Eradication Act: Key textile and apparel provisionsArticles eligible to enter free of duty and quotaApparel assembled in one or more ATPDEA beneficiarycountries from fabrics or fabric components whollyformed, or components knit-to-shape, in the United StatesApparel assembled from Andean fabrics or fabriccomponents formed, or components knit-to-shape, ofllama, alpaca, or vicuñaApparel cut and assembled from fabrics or yarns identifiedin Annex 401 of NAFTA as being not available incommercial quantities (in “short supply”) in the UnitedStates (HTS 9820.11.24)Apparel assembled in ATPDEA countries from fabrics oryarns deemed not available in commercial quantities atthe request of any interested partyApparel assembled in ATPDEA countries from regionalfabrics or regional components formed or knit-to-shape inthe regionCertified handloomed, handmade, and folklore articlesCriteria*From U.S. or Andean yarn*Knit and woven fabrics must be dyed, printed, andfinished in the United States*From Andean yarn*Fabrics or components must be in chief value of llama,alpaca, or vicuña*The fabrics and yarns include fine-count cotton knittedfabrics for certain apparel; linen; silk; cotton velveteen;fine-wale corduroy; Harris Tweed; certain woven fabricsmade with animal hairs; certain lightweight, high-threadcount polyester-cotton woven fabrics; and certainlightweight, high-thread count broadwoven fabrics for usein men’s and boys’ shirts a*President determines that such fabrics or yarns cannotbe supplied by the domestic industry in commercialquantities in a timely manner based upon advice from theappropriate advisory committee and the USITC within 60days after the request*From U.S. or Andean yarn*Subject to cap b*Originating in ATPDEA countriesCertain brassieres cut and sewn or otherwise assembledin the United States, or one or more ATPDEA countries orboth*Producer must satisfy rule that, in each of four one-yearperiods starting on October 1, 2003, at least 75 percentof the value of the fabric contained in the firm’sbrassieres in the preceding year was attributable to fabriccomponents formed in the United States (the 75-percentstandard rises to 85 percent for a producer found byCustoms not to have met the 75-percent standard in thepreceding year)Apparel assembled in ATPDEA countries from qualifyingfabrics that contain findings or trimmings of foreign originApparel assembled in ATPDEA countries from qualifyingfabrics that contain certain interlinings of foreign originApparel assembled in ATPDEA countries from qualifyingfabrics that contain yarns not wholly formed in the UnitedStates or in one or more ATPDEA countriesTextile luggage assembled in ATPDEA countries fromU.S. fabrics*If such findings or trimmings do not exceed 25 percentof the cost of the components of the assembled product*If the value of such interlinings (and any findings andtrimmings) does not exceed 25 percent of the cost of thecomponents of the assembled article*If the total weight of such yarns does not exceed 7percent of the total weight of the good*Must be of U.S. yarnSource: Compiled by USITC staff from ATPDEA statute.a As described in General Note 12(t), chapter rule 2 to Chapter 62 of the Harmonized Tariff Schedule.b Maximum 2 percent of the aggregate square meter equivalents of all apparel articles imported into the UnitedStates in the preceding 12-month period for which data are available, increased in equal increments in eachsucceeding 1-year period to a maximum of 5 percent for the 3-month period beginning Oct. 1, 2006.1-7
Page 2 and 3: U.S. International Trade Commission
Page 5: PREFACEThe submission of this study
Page 17: Trade-Related Activities in 2005•
Page 20 and 21: Organization of the ReportThis chap
Page 22 and 23: actions to withdraw or suspend coun
Page 26 and 27: duty-free entry are identical—a C
Page 28 and 29: analysis assumes that the supply of
Page 30 and 31: $11.1 billion in 2005 compared with
Page 32 and 33: Table 2-2 Leading U.S. imports for
Page 34 and 35: and 9.5 percent in 2004 to 7.7 perc
Page 36 and 37: 2-8Table 2-5 U.S. imports for consu
Page 38 and 39: 2-10Table 2-6 Leading U.S. imports
Page 42 and 43: Table 2-8 Textiles and apparel: U.S
Page 44 and 45: Virtually all flower imports from t
Page 46 and 47: The 2005 list of leading imports un
Page 48 and 49: Table 2-9 U.S. imports for consumpt
Page 52 and 53: cathodes, four apparel products, on
Page 54 and 55: 2-26Table 2-11 U.S. exports to ATPA
Page 56 and 57: 2-28Table 2-12 Leading U.S. exports
Page 58 and 59: Figure 2-5U.S. exports to ATPA coun
Page 60 and 61: EcuadorThe growth rate of the Ecuad
Page 63 and 64: CHAPTER 3ECONOMIC IMPACT OF ATPA ON
Page 65 and 66: Products That Benefited Exclusively
Page 67 and 68: Several leading imports that were i
Page 69 and 70: Table 3-3 Leading imports that bene
Page 71 and 72: Table 3-5 Estimated displacement ef
Page 73 and 74: more in 2004. 132 Asparagus and cut
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esulted in greater availability of
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In recent years, some U.S. growers
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U.S. sales of domestically produced
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Table 3-6 Foreign direct investment
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product quality at the volumes requ
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$314 million purchase by Phillip Mo
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Industry sources attribute the slow
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place will have a devastating effec
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textile and apparel machinery and t
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Textile and Apparel SectorPeru has
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could begin producing the high-end
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Role of ATPA in Counternarcotics Ef
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(table 4-1, figure 4-1). 306 Net co
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Figure 4-1Net Coca Cultivation in t
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to other forms of legal justice. Th
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ulk of funding for the plan between
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Alternative DevelopmentThe USAID al
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APPENDIX AFederal Register NoticeA-
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27278 Federal Register / Vol. 71, N
Page 117 and 118:
American Chamber of Commerce of Per
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Government of Colombia—Colombian
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Peruvian Asparagus Importers Associ
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Technical Notes to Chapter 3:Partia
Page 128 and 129:
(1)N(Q a /Q a N) = (1+t)ε aa(2)N(Q
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