> CMP-1 OT:TPP:TAPP:TO JS

August 11, 2008

MEMORANDUM FOR: DIRECTORS, FIELD OPERATIONS

ASSISTANT DIRECTORS, TRADE, FIELD OPERATIONS

OFFICE OF FIELD OPERATIONS

FROM: Executive Director, Trade Policy and Programs

Office of International Trade

SUBJECT: INFO: TBT-08-014 Requirement for "Pocket Bag Fabric" and Other
Amendments to the Dominican Republic-Central America-United States Free
Trade Agreement (CAFTA-DR)

REFERENCE: TBT-08-006, dated March 20, 2008

BACKGROUND:

On August 7, 2008, the United States Trade Representative (USTR)
published a federal Register notice (73 FR 46057) establishing an
effective date of August 15, 2008 for the amendments announced in
Presidential Proclamation 8213 and its Annex, dated December 20, 2007,
published in the Federal Register on December 27, 2007 (72 FR 73555), as
modified by Annex VI of Presidential Proclamation 8272, dated June 30,
2008, published in the Federal Register on July 3, 2008 (73 FR 38297).

The amendments of Section A, B, and C of the Annex to Proclamation 8213,
as modified by Proclamation 8272, implement a new requirement for pocket
bag fabric, as well as modify the single transformation rule, the
Nicaragua Tariff Preference Level, and allow for reduced duty treatment
for certain non-originating goods.

Section D of the Annex to Proclamation 8213, as modified by Annex VI of
Proclamation 8272, modifies the CAFTA-DR to allow Mexican materials to
be used in the production of CAFTA-DR apparel of Chapter 62 and is
addressed in TBT-08-015.

ACTION:

Goods entered, or withdrawn, for consumption on or after August 15,
2008, may claim preferential duty treatment under CAFTA-DR if they
qualify under any of the following modifications implemented in
Proclamation 8213, as modified by Proclamation 8272.

**Pocket Bag Fabric and New Single Transformation Rules**

Section A of the Annex to Presidential Proclamation 8213 introduces new
Chapter rule 5 to Chapter 61 and 62 of GN 29. Chapter rule 5 provides
for a yarn forward requirement for "pocket bag fabric." Therefore,
unless excepted, pocket bag fabric used in an apparel good claiming
preferential treatment under CAFTA-DR must be formed and finished in a
CAFTA-DR beneficiary country from yarn wholly formed in a CAFTA-DR
beneficiary country. However, this rule does not apply to garments that
do not have pocket bag fabric, such as patch pockets, cargo pockets, or
typical shirt pockets.

Section A of the Annex also modifies the list of apparel items subject
to the single transformation rule. Certain enumerated goods are only
required to be cut or knit to shape, or both, and sewn or otherwise
assembled in the CAFTA-DR beneficiary countries in order to qualify for
preferential treatment. These items are not subject to GN29 Chapter 61
and 62 Chapter rule 5, i.e. pocket bag fabric of CAFTA-DR origin.

The Annex identifies the apparel items eligible for the single
transformation rule by a 4-digit or 6-digit HTS number, some with a
description. Where the 10-digit HTS number is clearly identifiable
because of the description, this office has provided it in the list
below. The 4-digit and 6-digit HTS numbers that are not clearly
identifiable at the 10-digit level are provided as found in the Annex.
Importers are advised to request a binding ruling for an administrative
interpretation of the intent of a referenced HTS number if there is a
question in determining whether or not the apparel item they are
importing is eligible for the single transformation rule.

Items Eligible for the Single Transformation Rule:

6102.20.00

6102.90.9005 (for goods subject to cotton restraints)

6104.13.20

6104.19.15

6104.19.8010 (for jackets imported as parts of suits and subject to
cotton restraints

6104.19.8060 or subject to man-made fiber restraints)

6104.22.0010 (for garments described in heading 6102 or jackets and
blazers described in heading 6104)

6104.29.2010 (for garments described in heading 6102 or jackets and
blazers described in heading 6104, the foregoing subject to cotton
restraints)

6104.32.00

6104.39.2010 (for goods subject to cotton restraints)

6112.11.0020 (for women's or girls' garments described in heading 6101
or 6102)

6113.00.9015 (for coats and jackets of cotton, for women or girls)

6117.90.9040 (for coats and jackets of cotton)

6202.12.20

6202.19.9010 (for goods subject to cotton restraints)

6202.91.2011 (for goods for women)

6202.92.15

6202.92.20 (other than padded, sleeveless jackets without attachments
for sleeves)

6202.93.45

6202.99.9011 (for goods subject to cotton restraints)

6203.39.9020 (for goods subject to wool restraints)

6204.12.0010 (for jackets imported as parts of suits)

6204.13.20

6204.19.20

6204.19.8010 (for jackets imported as parts of suits and subject to
cotton restraints and 6204.19.8060 or goods subject to man-made fiber
restraints)

6204.22.3010 (for garments described in heading 6202, or for jackets and
blazers described in heading 6204)

6204.23

6204.29

6204.32

6204.33.20

6204.39.80

6204.42.3040 (for garments for girls, other than of corduroy)

6204.42.3060 (for garments for girls, other than of corduroy)

6204.43.4020 (for garments for girls)

6204.43.4040 (for garments for girls)

6204.44.4020 (for garments for girls)

6205.20.2016 (for dress shirts for men, with two or more colors in the
warp and/or the filling, each with collar and sleeve size stated in
inches, without dual collar sizing, the foregoing individually packaged
with chipboards, pins, jett clips, individual polybags and hang tags
ready for retail sale)

6205.30.2010 (for dress shirts for men, with two or more colors in the
warp and/or the filling, each with collar and sleeve size stated in
inches, without dual collar sizing, the foregoing individually packaged
with chipboards, pins, jett clips, individual polybags and hang tags
ready for retail sale)

6207 (for boxers, pajamas or nightwear only)

6208 (for boxers, pajamas or nightwear only)

6209.20.10

6210.30.9020 (for garments other than of linen)

6210.50.9010 (for anoraks)

6210.50.9050 (for anoraks)

6211.20.1540 (for anoraks (including ski-jackets)), windbreakers and
similar articles (including padded, sleeveless jackets), for women or
girls, of cotton, imported as parts of ski suits)

6211.20.5810 (for goods of cotton)

6211.41.0055 (for jackets and jacket-type garments excluded from heading
6202)

6211.42.0040 (for track suits, other than trousers, or for jackets and
jacket-type garments excluded from heading 6202)

6211.42.0075 (for track suits, other than trousers, or for jackets and
jacket-type garments excluded from heading 6202)

6212.10

6217.90.9025 (for coats and jackets, of cotton)

With respect to the apparel items listed above, Section A of the Annex
also modifies Chapter rules 3 and 4 to Chapter 61 and Chapter 62 of
GN29, exempting goods with a single transformation rule from the narrow
elastic fabric rule and the sewing thread rule. These exemptions are in
addition to the pocketing fabric rule exemption mentioned above in
Chapter rule 5 to Chapter 61 and 62 of GN29.

Aside from the single transformation items, modifications to Chapter
rules 1, 3, 4, and 5 to Chapter 62 of GN29 also exempt certain other
woven items from the visible lining rule, the narrow elastic fabric
rule, the sewing thread rule, and the pocket bag fabric rule. These
exemptions apply to woven wool suits, trousers, suit-type jackets,
blazers, vests and skirts entered under HTS subheadings 6203.11.30,
6203.11.90, 6203.31.90, 6203.41.18, 6204.11 6204.31.10, 6204.31.20,
6204.51, 6204.6110, 6204.61.90, 6211.39.05, 6211.41.00, provided that
they are not made of carded wool fabric or of wool yarn having an
average fiber diameter of less than or equal to 18.5 microns.

**Modification of the Nicaragua Tariff Preference Level**

Section B of the Annex modifies the Nicaragua Tariff Preference Level
(TPL), for cotton and man-made fiber apparel, provided for in HTS
subheading 9915.61.01, by adding certain men's sport coats as eligible
for the TPL. The quantitative limit of the TPL was also increased to
100,000,000 SME and a sub-limit created for the certain men's sport
coats.

Men's sport coats, containing 23 percent or more by weight of wool or
final animal hair, of HTS subheadings 6103.23.00, 6103.29.05,
6103.31.00, 6103.33.10, 6103.39.80, 6203.23.00, 6203.29.10, 6203.29.15,
6203.31.50, 6203.31.90, 6203.33.10 or 6203.39.10, are now eligible for
duty free treatment under HTS 9915.61.01 provided that the component
that determines classification is carded wool fabric of HTS subheadings
5111.11.70, 5111.19.60 or 5111.90.90, and provided that good satisfies
all other requirements of the applicable note (U.S. note 15 to
subchapter XV of Chapter 99).

The quantitative limit and sub-limits are set forth in detail in QBT
08-103.

**Reduced Duty Treatment for Certain Non-Originating Apparel**

Section C of the Annex provides for reduced duty treatment for certain
goods classified in subheadings in Chapter 62 that do not meet the
requirements of the DR-CAFTA. These goods must be cut or knit to shape,
and sewn or otherwise assembled in the territory of a Party, and meet
GN29, Chapter 62 Chapter rules 1, 3, 4 and 5 for visible lining, narrow
elastic fabric, sewing thread, and pocket bag fabric.

Eligible goods of subheadings 6202.11.00, 6203.31.90, 6203.33.10,
6203.41.18, 6203.42.40 or 6204.62.40, and 6203.43.30 that meet the
requirements are to be classified in subheadings 9822.05.30 through
9822.05.55, and receive a reduced duty treatment of the Normal Trade
Relations (NTR) rate minus .5%.

Eligible goods of subheadings 6203.12.20, 6203.43.40, and 6204.63.35
that meet the requirements are to be classified in subheadings
9822.05.60 through 9822.05.70, and receive a reduced duty treatment of
the NTR rate minus 2%.

Goods classified in these Chapter 98 provisions are not subject to the
Merchandise Processing Fee.

INFORMATION:

Questions concerning this administrative notice should be directed to
Import Specialist Jacqueline Sprungle at (202) 863-6517, Import
Specialist Nancy Mondich at (202) 863-6524, or Textile Operations Branch
Chief Robert Abels at (202) 863-6503.

/s/ Joseph M. Rees for

Brenda B. Smith

cc: National Import Specialists