Background

The U.S.-Mexico-Canada Agreement has been signed and implementing legislation is making its way through Congress. The USMCA will update and revise NAFTA in a number of ways, including with respect to textiles, apparel, footwear, and bags.

According to ST&R attorney Elise Shibles, who will be hosting a Jan. 16 webinar on this topic, these changes include revised rules for determining when textile and apparel goods will be eligible for duty-free treatment under the USMCA. For example, there will be a new limitation that no more than ten percent of the value of a set (e.g., bed-in-a-bag items or pants with belts) can be foreign content. On the other hand, the NAFTA requirement for the lining fabric for certain coats, jackets, suits, and skirts to be knit or woven within a NAFTA country has been eliminated. There are also new requirements for sewing thread, narrow elastics, and pocketing fabric in apparel that are the same as those in CAFTA-DR and a new requirement for visibly coated fabric in household textile products.

Tariff preference levels eliminate duties on specific quantities of imported apparel items, and Shibles said the USMCA makes changes to TPL levels but coverage remains largely the same. The USMCA also eliminates the merchandise processing fee on imports of TPL goods from Canada (but not Mexico), implements new transparency requirements for TPLs, and makes clear that importers may make TPL claims for at least one year after importation.

In addition, Shibles said, the USMCA makes broader changes that will have an impact on textile and apparel shipments such as eliminating the NAFTA certificate executed by the exporting party and providing for duty-free express shipments at specific levels.

Click here to register for Shibles’ Jan. 16 webinar on these and other changes in the USMCA.

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