RESTRICTEDWORLD TRADE
ORGANIZATIONG/TBT/W/128
22 March 2000
(00-1175)
Committee on Technical Barriers to Trade Original:  English
THE U.S. PROPOSED LEGISLATION TO HAVE THE ENGLISH NAME OF
THE COUNTRY OF ORIGIN INDELIBLY MARKED IN A CONSPICUOUS
PLACE ON IMITATION JEWELLERY
Communication from Thailand
The following communication has been received from the delegation of Thailand with the
request that it be circulated to WTO Members.
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I. INTRODUCTION
1. The U.S. Harmonized Tariff Schedule (HTS) Heading 7117 covers imports of "Imitation
jewellery, of base metal, whether or not plated with precious metal," including continuous length
rope, curb, cable, chain and similar articles ... whether or not set with imitation pearls or imitation
gemstone, suitable for use in the manufacture of imitation jewellery.  The heading also covers toyjewellery, religious articles and plastic necklaces.
2. In November 1999, the U.S. Senate passed legislation which has as its primary purpose
liberalizing U.S. trade with Africa.  The U.S. House of Representative had already passed its own
version of this legislation.  During Senate debate on the bill, as part of a large amendment, a new
provision was added to the bill to require that imports of all costume jewellery described above that
enters the customs territory of the United States:
"to have the English name of the country of  origin indelibly marked in a conspicuous
place on such jewellery by cutting, die-sinking, engraving, stamping or some other
permanent method to the same extent as such marking is required for Native
American-style jewellery under section 13 4.4 3 of title 19, Code of Federal Regulations,
as in effect 1 October 1998"
3. This proposed legislation was added at the request of the Senator from Rhode Island.  The
city of Providence, Rhode Island, is a center for the manufacturing of costume jewellery and Thailand
believes that this is the request of the U.S. industry in an effort to harass importers and make their
products more expensive by requiring indelible marking on the products themselves rather than on the
packaging.  However, the American Retail Federation and individual U.S. retailers strongly objectedto this proposed legislation.
II. EXCEPTION AUTHORITY FOR CUSTOMS
4. With strong objection from certain groups, the staff of the Senate Finance Committee then
negotiated the compromise language of the amendment to require marking "to the same extent as such
marking is required for Native American-style jewellery under U.S. Customs regulations.G/TBT/W/128
Page 2
5. U.S. Customs regulations (19 Code of Federal Regulations section 134.43 (c)(2), require that
"Native American -style jewellery be:
"indelibly marked with the country of origin by cutting, die-sinking, engraving,
stamping or some other permanent method.  The indelible marking must appear legibly
on the clasp or in some other conspicuous location, or alternatively, on a metal or plastictag indelibly marked with the country of orig in and permanently attached to the article"
6. However, this regulation also allows two exceptions. First, under 19 U.S. Code
Section 1304(a)(3), the U.S. Secretary of the Treasury (acting through the Customs Service) may
prescribe regulations that:
Authorize the exception of any article from the requirements of marking if:
(a) Such article is incapable of being marked;
(b) such article cannot be marked prior to shipment to the United States without injury;(c) such article cannot be marked prior to shipment to the United States, except at an
expense economically prohibitive of its importation, (or);
(d) the marking of a container of such article will reasonably indicate the origin of such
article.
(additional subsections not relevant)
7. Second, in the Customs regulations governing Native American-style jewellery, a subsequent
provision (19 Code of Federal Regulations section 134.43(c)(3) allows the following exception to the
requirement for indelible marking on the object itself:
8. If it is technically or commercially infeasible to mark in the manner specified in
paragraph (c)(2) of this section, or in the case of a good from a NAFTA country (Canada or Mexico),
the article may be marked by means of a string tag or adhesive label securely affixed, so some other
similar method.
9. Therefore, while the basic requirement of the proposed legislation would be that the country
of origin be indelibly marked on the individual pieces of jewellery themselves, the legislation would
also authorize the Customs Service by regulation and practice to allow alternate ways of showingcountry of origin (separate label or tag marking of container) and even to allow no marking at all.
However, the Customs Service will grant such exceptions only if importers can show that it is
physically impossible or excessively expensive to place the country of origin marking on the
jewellery itself.
III. PROBLEMS CAUSED BY THE LEGISLATION
10. While we understand that the exceptions written into the proposed legislation are designed to
allow the Customs Service to apply current law and practice to the question of country of origin
labelling for imports of jewellery under HTS 7117, we believe that if the provision becomes law, the
U.S. jewellery manufacturers who requested it will pressure the Customs Service to write
implementing regulations which are as burdensome as possible on the importers.  It is likely that theU.S. manufacturers will specifically ask that importers be required to show substantial evidence that
indelible marking on the jewellery itself is physically impossible or excessively expensive to be able
to take advantage of the exceptions.G/TBT/W/128
Page 3
11. If this proposed legislation becomes law, foreign jewellery manufacturers who are currently
not required to place indelible country of origin marking on jewellery articles may be required to do
so, because they have no basis upon which to ask for one of the available exceptions.  This certainly
will add to the cost of the imported-jewellery, significantly.  Even manufacturers who can ask for the
exceptions will have to bear the expense of petitioning the Customs Service and proving that theyqualify.  This unjustifiably imposes additional burden upon foreign jewellery manufacturers despite
the fact that there is no record or proof that current country of origin marking practices for jewellery
are insufficient or causing any harm to the U.S. industry.
12. In short, this proposed legislation seems to be designed solely to undermine foreign
competition by creating barrier to trade, raising costs to foreign jewellery manufacturers and raising
prices to the U.S. consumers.
IV. THE LINKAGE BETWEEN PROPOSED LEGISLATION AND THE
WTO AGREEMENT ON TECHNICAL BARRIERS TO TRADE
13. Article 2.1 of the TBT Agreement stated that "Members shall ensure that in respect of
technical regulations products imported from the terr itory of any Member shall be accorded treatment
no less favorable that accorded to like products of national origin and to like products originating in
any other country."  In Thailand's understanding, the proposed  legislation on country of origin
labelling on imports of the imitation jewellery items and the exceptions to the requirement for
indelible labelling is inconsistent with Article 2.1 which refers to the MFN Treatment.
14. Article 2.2 "Members shall ensure that technical regulations are not prepared, adopted or
applied with a view to or with the effect of creating unnecessary obstacles to international trade.  For
this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil alegitimate objective, taking account of the risk non-fulfilment would create.  Such legitimate
objectives are, inter alia :  national security requirements;  the prevention of deceptive practices;
protection of human health or safety, animal or plant life or health, or the environment.  In assessing
such risk, relevant elements of consideration are, inter alia :  available scientific and technical
information, related processing technology or intended end-uses of products."  In Thailand's view,
the proposed legislation on country of origin labelling on imports of the imitation jewellery
items is inconsistent with Article 2.2 by creating unnecessary obstacles to international trade.
V. MEASURES TO BE CONSIDERED
(i) Thailand requests the U.S. delegation at this session of the Committee on TBT
(25 February 2000) to kindly convey Thailand's opposition to the proposed legislation
to the authority concerned, including the House Ways and Means Committee as early
as possible.
(ii) Thailand wishes to seek the explanation and justification from the U.S. delegation on
this proposed legislation.  We would be most appreciative if the U.S. could respond to
our request in writing.  We also will be most grateful for the early attention to this
matter.
(iii) Members shall have an opportunity to comment on a proposed technical regulation
notification, in accordance with Article 2.9.2., we are hopeful to be able to comment
on this new technical regulation before it entries into force.
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