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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2387 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 2387

To provide for preferential duty treatment to certain apparel articles 
                          of the Philippines.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 24, 2011

 Mr. McDermott (for himself, Mr. Austria, Mr. Bilbray, Mr. Filner, Ms. 
   Hirono, and Mr. Sablan) introduced the following bill; which was 
              referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL

 
To provide for preferential duty treatment to certain apparel articles 
                          of the Philippines.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Save Our Industries Act of 2011'' or 
the ``SAVE Act''.

SEC. 2. FINDINGS; PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) The United States and the Republic of the Philippines 
        (in this Act referred to as the ``Philippines''), a former 
        colony, share deep historical and cultural ties. The 
        Philippines holds enduring political and security significance 
        to the United States. The 2 countries have partnered very 
        successfully in combating terrorism in Southeast Asia.
            (2) The United States and the Philippines maintain a fair 
        trading relationship that should be expanded to the mutual 
        benefit of both countries. In 2010, United States exports to 
        the Philippines were valued at $7,375,000,000, and United 
        States imports from the Philippines were valued at 
        $7,960,000,000.
            (3) United States textile exports to the Philippines were 
        valued at just over $48,000,000 in 2010, consisting mostly of 
        industrial, specialty, broadwoven, and nonwoven fabrics. The 
        potential for export growth in this area can sustain and create 
        thousands of jobs.
            (4) The Philippines' textile and apparel industries, like 
        that of their counterparts in the United States, share the same 
        challenges and risks stemming from the end of the textile and 
        apparel quota system and from the end of United States safe-
        guards that continued to control apparel imports from the 
        People's Republic of China until January 1, 2009.
            (5) The United States apparel fabrics industry is heavily 
        dependent on sewing outside the United States, and, for the 
        first time, United States textile manufacturers would have a 
        program that utilizes sewing done in an Asian country. In 
        contrast, most sewing of United States fabric occurs in the 
        Western Hemisphere, with about two-thirds of United States 
        fabric exports presently going to countries that are parties to 
        the North American Free Trade Agreement and the Dominican 
        Republic-Central America-United States Free Trade Agreement. 
        Increased demand for United States fabric in Asia will increase 
        opportunities for the United States industry.
            (6) Apparel producers in the Western Hemisphere are 
        excellent at making basic garments such as T-shirts and 
        standard 5-pocket jeans. However, the needle capability does 
        not exist to make high fashion, more sophisticated garments 
        such as embroidered T-shirts and fashion jeans with 
        embellishments. Such apparel manufacturing is done almost 
        exclusively in Asia.
            (7) A program that provides preferential duty treatment for 
        certain apparel articles of the Philippines will provide a 
        strong incentive for Philippine apparel manufacturers to use 
        United States fabrics, which will open new opportunities for 
        the United States textile industry and increase opportunities 
        for United States yarn manufacturers. At the same time, the 
        United States would be provided a more diverse range of 
        sourcing opportunities.
    (b) Purposes.--The purposes of this Act are--
            (1) to encourage higher levels of trade in textiles and 
        apparel between the United States and the Philippines and 
        enhance the commercial well-being of their respective 
        industries in times of global economic hardship;
            (2) to enhance and broaden the economic, security, and 
        political ties between the United States and the Philippines;
            (3) to stimulate economic activity and development 
        throughout the Philippines, including regions such as Manila 
        and Mindanao; and
            (4) to provide a stepping stone to an eventual free trade 
        agreement between the United States and the Philippines, either 
        bilaterally or as part of a regional agreement.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Classification under the hts.--The term 
        ``classification under the HTS'' means, with respect to an 
        article, the 6-digit subheading or 10-digit statistical 
        reporting number under which the article is classified in the 
        HTS.
            (2) Dobby woven fabric.--The term ``dobby woven fabric'' 
        means fabric, other than jacquard fabric, woven with the use of 
        a dobby attachment that raises or lowers the warp threads 
        during the weaving process to create patterns including, 
        stripes, and checks and similar designs.
            (3) Entered.--The term ``entered'' means entered, or 
        withdrawn from warehouse for consumption, in the customs 
        territory of the United States.
            (4) HTS.--The term ``HTS'' means the Harmonized Tariff 
        Schedule of the United States.
            (5) Knit-to-shape.--An article is ``knit-to shape'' if 50 
        percent or more of the exterior surface area of the article is 
        formed by major parts that have been knitted or crocheted 
        directly to the shape used in the article, with no 
        consideration being given to patch pockets, appliques, or the 
        like. Minor cutting, trimming, or sewing of those major parts 
        shall not affect the determination of whether an article is 
        ``knit-to-shape''.
            (6) Wholly assembled.--An article is ``wholly assembled'' 
        in the Philippines or the United States if--
                    (A) all components of the article pre-existed in 
                essentially the same condition as the components exist 
                in the finished article and the components were 
                combined to form the finished article in the 
                Philippines or the United States; and
                    (B) the article is comprised of at least 2 
                components.
            (7) Wholly formed.--A yarn is ``wholly formed in the United 
        States'' if all of the yarn forming and finishing operations, 
        starting with the extrusion of filaments, strips, film, or 
        sheet, and including slitting a film or sheet into strip, or 
        the spinning of all fibers into yarn, or both, and ending with 
        a finished yarn or plied yarn, takes place in the United 
        States.

SEC. 4. TRADE BENEFITS.

    (a) Eligible Apparel Article.--For purposes of this section, an 
eligible apparel article is any one of the following:
            (1) Men's and boys' cotton shirts, T-shirts and tank tops 
        (other than underwear T-shirts and tank tops), pullovers, 
        sweatshirts, tops, and similar articles classifiable under 
        subheading 6105.10, 6105.90, 6109.10, 6110.20, 6110.90, 
        6112.11, or 6114.20 of the HTS.
            (2) Women's and girls' cotton shirts, blouses, T-shirts and 
        tank tops (other than underwear T-shirts and tank tops), 
        pullovers, sweatshirts, tops, and similar articles classifiable 
        under subheading 6106.10, 6106.90, 6109.10, 6110.20, 6110.90, 
        6112.11, 6114.20, or 6117.90 of the HTS.
            (3) Men's and boys' cotton trousers, breeches, and shorts 
        classifiable under subheading 6103.10, 6103.42, 6103.49, 
        6112.11, 6113.00, 6203.19, 6203.42, 6203.49, 6210.40, 6211.20, 
        6211.32 of the HTS.
            (4) Women's and girls' cotton trousers, breeches, and 
        shorts classifiable under subheading 6104.19, 6104.62, 6104.69, 
        6112.11, 6113.00, 6117.90, 6204.12, 6204.19, 6204.62, 6204.69, 
        6210.50, 6211.20, 6211.42, or 6217.90 of the HTS.
            (5) Men's and boys' cotton underpants, briefs, underwear-
        type T-shirts and singlets, thermal undershirts, other 
        undershirts, and similar articles classifiable under subheading 
        6107.11, 6109.10, 6207.11, or 6207.91 of the HTS.
            (6) Men's and boys' manmade fiber underpants, briefs, 
        underwear-type T-shirts and singlets, thermal undershirts, 
        other undershirts, and similar articles classifiable under 
        subheading 6107.12, 6109.90, 6207.19, or 6207.99 of the HTS.
            (7) Men's and boys' manmade fiber shirts, T-shirts and tank 
        tops (other than underwear T-shirts and tank tops), pullovers, 
        sweatshirts, tops, and similar articles classifiable under 
        subheading 6105.20, 6105.90, 6110.30, 6110.90, 6112.12, 
        6112.19, or 6114.30 of the HTS.
            (8) Women's and girls' manmade fiber shirts, blouses, T-
        shirts and tank tops (other than underwear T-shirts and tank 
        tops), pullovers, sweatshirts, tops, and similar articles 
        classifiable under subheading 6106.20, 6106.90, 6110.30, 
        6110.90, 6112.12, 6112.19, 6114.30, or 6117.90 of the HTS.
            (9) Men's and boys' manmade fiber trousers, breeches, and 
        shorts classifiable under subheading 6103.43, 6103.49, 6112.12, 
        6112.19, 6112.20, 6113.00, 6203.43, 6203.49, 6210.40, 6211.20, 
        or 6211.33 of the HTS.
            (10) Women's and girls' manmade fiber trousers, breeches, 
        and shorts classifiable under subheading 6104.63, 6104.69, 
        6112.12, 6112.19, 6112.20, 6113.00, 6117.90, 6204.63, 6204.69, 
        6210.50, 6211.20, 6211.43, or 6217.90 of the HTS.
            (11) Men's and boys' manmade fiber shirts classifiable 
        under subheading 6205.30, 6205.90, or 6211.33 of the HTS.
            (12) Cotton brassieres and other body support garments 
        classifiable under subheading 6212.10, 6212.20, or 6212.30 of 
        the HTS.
            (13) Manmade fiber brassieres and other body support 
        garments classifiable under subheading 6212.10, 6212.20, or 
        6212.30 of the HTS.
            (14) Manmade fiber swimwear classifiable under subheading 
        6112.31, 6112.41, 6211.11, or 6211.12 of the HTS.
            (15) Cotton swimwear classifiable under subheading 6112.39, 
        6112.49, 6211.11, or 6211.12 of the HTS.
            (16) Men's and boys' manmade fiber coats, overcoats, 
        carcoats, capes, cloaks, anoraks (including ski-jackets), 
        windbreakers, padded sleeveless jackets with attachments for 
        sleeves, and similar articles classifiable under subheading 
        6101.30, 6101.90, 6112.12, 6112.19, 6112.20, or 6113.00 of the 
        HTS.
            (17) Women's and girls' manmade fiber coats, overcoats, 
        carcoats, capes, cloaks, anoraks (including ski-jackets), 
        windbreakers, padded sleeveless jackets with attachments for 
        sleeves, and similar articles classifiable under subheading 
        6102.30, 6102.90, 6104.33, 6104.39, 6112.12, 6112.19, 6112.20, 
        6113.00, or 6117.90 of the HTS.
            (18) Gloves, mittens, and mitts of manmade fibers 
        classifiable under subheading 6116.10, 6116.93, 6116.99, or 
        6216.00 of the HTS.
    (b) Duty-Free Treatment for Certain Eligible Apparel Articles.--
            (1) Duty-free treatment.--Subject to paragraphs (2) and 
        (3), an eligible apparel article shall enter the United States 
        free of duty if the article is wholly assembled in the United 
        States or the Philippines, or both, and if the component 
        determining the article's classification under the HTS consists 
        entirely of--
                    (A) fabric cut in the United States or the 
                Philippines, or both, from fabric wholly formed in the 
                United States from yarns wholly formed in the United 
                States;
                    (B) components knit-to-shape in the United States 
                from yarns wholly formed in the United States; or
                    (C) any combination of fabric or components knit-
                to-shape described in subparagraphs (A) and (B).
            (2) Dyeing, printing, or finishing.--An apparel article 
        described in paragraph (1) shall be ineligible for duty-free 
        treatment under such paragraph if any component determining the 
        article's classification under the HTS comprises any fabric, 
        fabric component, or component knit-to-shape in the United 
        States that was dyed, printed, or finished at any place other 
        than in the United States.
            (3) Other processes.--An apparel article described in 
        paragraph (1) shall not be disqualified from eligibility for 
        duty-free treatment under such paragraph because it undergoes 
        stone-washing, enzyme-washing, acid-washing, permapressing, 
        oven baking, bleaching, garment-dyeing, screen printing, or 
        other similar processes in either the United States or the 
        Philippines.
    (c) Knit-to-Shape Apparel Articles.--A knit-to-shape apparel 
article shall enter the United States free of duty if it is wholly 
assembled in the Philippines and if the component determining the 
article's classification under the HTS consists entirely of components 
knit-to-shape in the Philippines from yarns wholly formed in the United 
States.
    (d) De Minimis Rules.--
            (1) In general.--An article that would otherwise be 
        ineligible for preferential treatment under this section 
        because the article contains fibers or yarns not wholly formed 
        in the United States or in the Philippines shall not be 
        ineligible for such treatment if the total weight of all such 
        fibers or yarns is not more than 10 percent of the total weight 
        of the article.
            (2) Elastomeric yarns.--Notwithstanding paragraph (1), an 
        article described in subsection (b) or (c) that contains 
        elastomeric yarns in the component of the article that 
        determines the article's classification under the HTS shall be 
        eligible for duty-free treatment under this section only if 
        such elastomeric yarns are wholly formed in the United States 
        or the Philippines.
            (3) Direct shipment.--Any apparel article described in 
        subsection (b) or (c) is an eligible article only if it is 
        imported directly into the United States from the Philippines.
    (e) Single Transformation Rules.--Any of the following apparel 
articles that are cut and wholly assembled, or knit-to-shape, in the 
Philippines from any combination of fabrics, fabric components, 
components knit-to-shape, or yarns and are imported directly into the 
United States from the Philippines shall enter the United States free 
of duty, without regard to the source of the fabric, fabric components, 
components knit-to-shape, or yarns from which the articles are made:
            (1) Except for brassieres classified in subheading 6212.10 
        of the HTS, any apparel article that is of a type listed in 
        chapter rule 3(a), 4(a), or 5(a) for chapter 62 of the HTS, as 
        such chapter rule is contained in paragraph 9 of section A of 
        the Annex to Proclamation 8213 of the President of December 20, 
        2007, (as amended by Proclamation 8272 of June 30, 2008, or any 
        subsequent proclamation by the President).
            (2) Any article not described in paragraph (1) that is any 
        of the following:
                    (A) Baby garments, clothing accessories, and 
                headwear classifiable under subheading 6111.20, 
                6111.30, 6111.90, 6209.20, 6209.30, 6209.90, or 6505.90 
                of the HTS.
                    (B) Women's and girls' cotton coats, over coats, 
                carcoats, capes, cloaks, anoraks (including ski-
                jackets), windbreakers, padded sleeveless jackets with 
                attachments for sleeves, and similar articles 
                classifiable under subheading 6102.20, 6102.90, 
                6104.19, 6104.32, 6104.39, 6112.11, 6113.00, 6117.90, 
                6202.12, 6202.19, 6202.92, 6202.99, 6204.12, 6204.19, 
                6204.32, 6204.39, 6210.30, 6210.50, 6211.20, 6211.42, 
                or 6217.90 of the HTS.
                    (C) Cotton dresses classifiable under subheading 
                6104.42, 6104.49, 6204.42, or 6204.49 of the HTS.
                    (D) Manmade fiber dresses classifiable under 
                subheading 6104.43, 6104.44, 6104.49, 6204.43, 6204.44, 
                or 6204.49 of the HTS.
                    (E) Men's and boys' cotton shirts classifiable 
                under statistical reporting number 6205.20.1000, 
                6205.20.2021, 6205.20.2026, 6205.20.2031, 6205.20.2061, 
                6205.20.2076, 6205.90, or 6211.32 of the HTS.
                    (F) Men's and boys' cotton shirts not containing 
                dobby woven fabric classifiable under statistical 
                reporting number 6205.20.2003, 6205.20.2016, 
                6205.20.2051, 6205.20.2066 of the HTS.
                    (G) Manmade fiber pajamas and sleepwear 
                classifiable under subheading 6107.22, 6107.99, 
                6108.32, 6207.22, 6207.99, or 6208.22 of the HTS.
                    (H) Women's and girls' wool coats, overcoats, 
                carcoats, capes, cloaks, anoraks (including ski-
                jackets), windbreakers, padded sleeveless jackets with 
                attachments for sleeves, and similar articles 
                classifiable under subheading 6102.10, 6102.30, 
                6102.90, 6104.31, 6104.33, 6104.39, 6117.90, 6202.11, 
                6202.13, 6202.19, 6202.91, 6202.93, 6202.99, 6204.31, 
                6204.33, 6204.39, 6211.20, 6211.41, or 6117.90 of the 
                HTS.
                    (I) Women's and girls' wool trousers, breeches, and 
                shorts classifiable under subheading 6104.61, 6104.63, 
                6104.69, 6117.90, 6204.61, 6204.63, 6204.69, 6211.20, 
                6211.41, or 6217.90 of the HTS.
                    (J) Women's and girls' cotton shirts and blouses 
                classifiable under subheading 6206.10, 6206.30, 
                6206.90, 6211.42, or 6217.90 of the HTS.
                    (K) Women's and girls' manmade fiber shirts, 
                blouses, shirt-blouses, sleeveless tank styles, and 
                similar upper body garments classifiable under 
                subheading 6206.10, 6206.40, 6206.90, 6211.43, or 
                6217.90 of the HTS.
                    (L) Women's and girls' manmade fiber coats, 
                jackets, carcoats, capes, cloaks, anoraks (including 
                ski-jackets), windbreakers, padded sleeveless jackets 
                with attachments for sleeves, and similar articles 
                classifiable under subheading 6202.13, 6202.19, 
                6202.93, 6202.99, 6204.33, 6204.39, 6210.30, 6210.50, 
                6211.20, 6211.43, or 6217.90 of the HTS.
                    (M) Cotton skirts classifiable under subheading 
                6104.19, 6104.52, 6104.59, 6204.12, 6204.19, 6204.52, 
                or 6204.59 of the HTS.
                    (N) Manmade fiber skirts classifiable under 
                subheading 6104.53, 6104.59, 6204.53, or 6204.59 of the 
                HTS.
                    (O) Men's and boys' manmade fiber coats, overcoats, 
                carcoats, capes, cloaks, anoraks (including ski-
                jackets), windbreakers, padded sleeveless jackets with 
                attachments for sleeves, and similar articles 
                classifiable under subheading 6201.13, 6201.19, 
                6201.93, 6201.99, 6210.20, 6210.40, 6211.20, or 6211.33 
                of the HTS.
                    (P) Women's and girls' manmade fiber slips, 
                petticoats, briefs, panties, and underwear classifiable 
                under subheading 6108.11, 6108.22, 6108.92, 6109.90, 
                6208.11, or 6208.92 of the HTS.
                    (Q) Gloves, mittens, and mitts of cotton 
                classifiable under subheading 6116.10, 6116.92, 
                6116.99, or 6216.00 of the HTS.
                    (R) Other men's or boys' garments classifiable 
                under statistical reporting number 6211.32.0081 of the 
                HTS.
    (f) Review and Report.--
            (1) In general.--The Comptroller General of the United 
        States shall, not later than 3 years after the date of the 
        enactment of this Act, and every 3 years thereafter, review the 
        effectiveness of this section in supporting the use of United 
        States fabrics and make recommendations necessary to improve or 
        expand the provisions of this section to ensure support for the 
        use of United States fabrics.
            (2) Recommendations.--After the second review required 
        under paragraph (1), the Comptroller General shall make a 
        determination regarding whether this section is effective in 
        supporting the use of United States fabrics and recommend to 
        Congress whether or not this section should be renewed.
    (g) Enforcement.--Preferential treatment under this section shall 
not be provided to textile and apparel articles that are imported from 
the Philippines unless the President certifies to Congress that the 
Philippines is meeting the following conditions:
            (1) A valid original textile visa issued by the Philippines 
        is provided to U.S. Customs and Border Protection with respect 
        to any article for which preferential treatment is claimed. The 
        visa issued is in the standard 9-digit format required under 
        the Electronic Visa Information System (ELVIS) and meets all 
        reporting requirements of ELVIS.
            (2) The Philippines is implementing the Electronic Visa 
        Information System (ELVIS) to assist in the prevention of 
        transshipment of apparel articles and the use of counterfeit 
        documents relating to the importation of apparel articles into 
        the United States.
            (3) The Philippines is enforcing the Memorandum of 
        Understanding between the United States of America and the 
        Republic of the Philippines Concerning Cooperation in Trade in 
        Textile and Apparel Goods, signed on August 23, 2006.
            (4) The Philippines agrees to provide, on a timely basis at 
        the request of U.S. Customs and Border Protection, and 
        consistently with the manner in which the records are kept in 
        the Philippines, a report on exports from the Philippines of 
        apparel articles eligible for preferential treatment under this 
        section, and on imports into the Philippines of yarns, fabrics, 
        fabric components, or components knit-to-shape that are wholly 
        formed in the United States.
            (5) The Philippines agrees to cooperate fully with the 
        United States to address and take action necessary to prevent 
        circumvention as provided in Article 5 of the Agreement on 
        Textiles and Clothing referred to in section 101(d)(4) of the 
        Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).
            (6) The Philippines agrees to require Philippines producers 
        and exporters of articles eligible for preferential treatment 
        under this section to maintain, for at least 5 years after the 
        date of export, complete records of the production and the 
        export of such articles, including records of yarns, fabrics, 
        fabric components, and components knit-to-shape and used in the 
        production of such articles.
            (7) The Philippines agrees to provide, on a timely basis, 
        at the request of U.S. Customs and Border Protection, 
        documentation establishing the country of origin of articles 
        eligible for preferential treatment under this section, as used 
        by that country in implementing an effective visa system.
            (8) The Philippines is to establish, within 60 days after 
        the date of the President's certification under this paragraph, 
        procedures that allow the Office of Textiles and Apparel of the 
        Department of Commerce (OTEXA) to obtain information when 
        fabric wholly formed in the United States is exported to the 
        Philippines to allow for monitoring and verification before the 
        imports of apparel articles containing the fabric for which 
        preferential treatment is sought under this section reach the 
        United States. The information provided upon export of the 
        fabrics shall include, among other things, the name of the 
        importer of the fabric in the Philippines, the 8-digit HTS 
        subheading covering the apparel articles to be made from the 
        fabric, and the quantity of the apparel articles to be made 
        from the fabric for importation into the United States.
            (9) The Philippines has enacted legislation or promulgated 
        regulations to allow for the seizure of merchandise physically 
        transiting the territory of the Philippines and that appears to 
        be destined for the United States in circumvention of the 
        provisions of this Act.
    (h) Customs Procedures.--
            (1) In general.--
                    (A) Penalties for exporters.--If the President 
                determines, based on sufficient evidence, that an 
                exporter has engaged in transshipments as defined in 
                paragraph (2), then the President shall deny for a 
                period of 5 years all benefits under this section to 
                such exporter, any successor of such exporter, and any 
                other entity owned or operated by the principal of the 
                exporter.
                    (B) Penalties for importers.--If the President 
                determines, based on sufficient evidence, that an 
                importer has engaged in transshipments as defined in 
                paragraph (2), then the President shall deny for a 
                period of 5 years all benefits under this section to 
                such importer, any successor of such importer, or any 
                entity owned or operated by the principal of the 
                importer.
            (2) Definition of transhipment.--For purposes of paragraph 
        (1) and subsection (g), transshipment has occurred when 
        preferential treatment for an apparel article under this 
        section has been claimed on the basis of material false 
        information concerning the country of origin, manufacture, 
        processing, cutting, or assembly of the article or of any 
        fabric, fabric component, or component knit-to-shape from which 
        the apparel article was cut and assembled. For purposes of this 
        paragraph, false information is material if disclosure of the 
        true information would have meant that the article is or was 
        ineligible for preferential treatment under this section.
    (i) Proclamation Authority.--The President shall issue a 
proclamation to carry out this section not later than 60 days after the 
date of the enactment of this Act. The President shall consult with the 
Committee on Finance of the Senate and the Committee on Ways and Means 
of the House of Representatives in preparing such proclamation.

SEC. 5. EFFECTIVE DATE.

    This Act shall apply to articles entered, or withdrawn from 
warehouse for consumption, on or after the 15th day after the date on 
which the President issues the proclamation required by section 4(i).

SEC. 6. TERMINATION.

    (a) In General.--The preferential duty treatment provided under 
this Act shall remain in effect for a period of 7 years beginning on 
the effective date provided for in section 5.
    (b) GSP Eligibility.--The preferential duty treatment provided 
under this Act shall terminate if and when the Philippines becomes 
ineligible for designation as a beneficiary developing country under 
title V of the Trade Act of 1974 (19 U.S.C. 2461 et seq.).
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