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Textile/Apparel Safeguard, Short Supply Procedures in Colombia FTA Still Under Review

Thursday, August 13, 2015
Sandler, Travis & Rosenberg Trade Report

The International Trade Administration has extended through Sept. 14 the period for public comments on the procedures for considering requests for textile and apparel safeguards and short supply determinations under the U.S.-Colombia Free Trade Agreement.

Short Supply. The FTA provides in Annex 3-B a list of specific fabrics, yarns and fibers that the two countries agreed are not available in commercial quantities in a timely manner from suppliers in Colombia or the U.S. A textile or apparel good imported into the U.S. containing fibers, yarns or fabrics that are included on this list will be treated as if it is an originating good regardless of the actual origin of those inputs.

The intent of the short supply procedures is to foster the use of U.S. and regional products by implementing procedures that allow products to be placed on or removed from a product list on a timely basis and in a manner that is consistent with normal business practice. The procedures are intended to facilitate the transmission of requests; allow the market to indicate the availability of the supply of products that are the subject of requests; make available promptly, to interested entities and the public, information regarding the requests for products and offers received for those products; ensure wide participation by interested entities and parties; allow for careful review and consideration of information provided to substantiate requests, responses and rebuttals; and provide timely public dissemination of information used in making short supply determinations.

The Committee for the Implementation of Textile Agreements must collect certain information about fabric, yarn or fiber technical specifications and the production capabilities of Colombian and U.S. textile producers to determine whether certain fabrics, yarns or fibers are available in commercial quantities in a timely manner in the U.S. or Colombia.

Safeguards. The safeguard mechanism applies when, as a result of the elimination of a customs duty under this agreement, a Colombian textile or apparel article is being imported into the U.S. in such increased quantities, in absolute terms or relative to the domestic market for that article, and under such conditions as to cause serious damage or actual threat thereof to a U.S. industry producing a like or directly competitive article. In these circumstances, the U.S. may increase duties on the imported article from Colombia to a level that does not exceed the lesser of the prevailing U.S. normal trade relations/most-favored-nation duty rate for the article or the U.S. NTR/MFN duty rate in effect on the day the agreement entered into force.

For a safeguard request to be considered, the requester must provide the following information: (1) name and description of the imported article concerned; (2) import data demonstrating that imports of a Colombian-origin textile or apparel article that is like or directly competitive with the articles produced by the domestic industry concerned are increasing in absolute terms or relative to the domestic market for that article; (3) U.S. domestic production of the like or directly competitive articles of U.S. origin, indicating the nature and extent of the serious damage or actual threat thereof along with an affirmation that to the best of the requester’s knowledge the data represent substantially all of the domestic production of the like or directly competitive article(s) of U.S. origin; (4) imports from Colombia as a percentage of the domestic market of the like or directly competitive article; and (5) all data available to the requester showing changes in productivity, utilization of capacity, inventories, exports, wages, employment, domestic prices, profits and investment as well as any other information relating to the existence of serious damage or actual threat thereof caused by imports from Colombia to the industry producing the like or directly competitive article that is the subject of the request. To the extent that such information is not available, the requester should provide best estimates and the basis therefore.

If CITA determines that the request provides the necessary information it will publish a notice in the Federal Register seeking public comments for 30 days. CITA will generally make a determination on any request it considers within 60 calendar days of the close of the comment period. If this determination is affirmative, CITA may provide tariff relief to the extent necessary to remedy or prevent serious damage or actual threat thereof and to facilitate adjustment by the domestic industry to import competition. This relief is effective beginning on the date that CITA’s affirmative determination is published in the Federal Register.

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