I 

111TH CONGRESS 

1ST SESSION H. R. 3039 

To provide for preferential duty treatment to certain apparel articles of 

the Philippines. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 25, 2009 

Mr. MCDERMOTT (for himself and Mr. BILBRAY) 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Save Our Industries 

5 Act of 2009’’ or the ‘‘SAVE Act’’. 

6 SEC. 2. FINDINGS; PURPOSES. 

7 (a) FINDINGS.—Congress finds the following: 

8 (1) The United States and the Republic of the 

9 Philippines (in this Act referred to as the ‘‘Phil10 ippines’’), a former colony, share deep historical and 


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1 cultural connections. The United States has devel2 oped preferential trading relations with former colo3 nies such as the Marshall Islands, the Federated 

4 States of Micronesia and the Republic of Palau. 

5 (2) The Philippines represents a tremendous 

6 economic potential and enduring political and secu7 rity significance to the United States. 

8 (3) The United States and the Philippines 

9 maintain a fair trading relationship that should be 

10 expanded to the mutual benefit of both countries. In 

11 2008, United States exports to the Philippines were 

12 valued at $8,300,000,000, and United States im13 ports from the Philippines were valued at 

14 $8,700,000,000. 

15 (4) United States textile exports to the Phil16 ippines were valued at nearly $20,000,000 in 2008, 

17 consisting mostly of broadwoven, industrial or spe18 cialty, and nonwoven fabrics. The potential for ex19 port growth in this area can sustain and create 

20 thousands of jobs. 

21 (5) The Philippines’ textile and apparel indus22 tries, like that of their counterparts in the United 

23 States, share the same challenges and risks stem24 ming from the end of the United States quota sys25 tem and from the end of safeguards that continued 


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1 to control apparel imports from the People’s Repub2 lic of China until January 1, 2009. 

3 (6) The United States apparel fabrics industry 

4 is heavily dependent on sewing outside the United 

5 States, and, for the first time, United States textile 

6 manufacturers would have a program that utilizes 

7 sewing done in an Asian country. In contrast, most 

8 sewing of United States fabric occurs in the Western 

9 Hemisphere, with about 75 percent of United States 

10 fabric exports presently going to countries that are 

11 parties to the North American Free Trade Agree12 ment and the Dominican Republic-Central America13 United States Free Trade Agreement. Increased de14 mand for United States fabric in Asia will increase 

15 opportunities for the United States industry. 

16 (7) Apparel producers in the Western Hemi17 sphere are excellent at making basic garments such 

18 as T-shirts and standard 5-pocket jeans. However, 

19 the needle capability does not exist to make high20 fashion, more sophisticated garments such as em21 broidered T-shirts and fashion jeans with embellish22 ments. Such apparel manufacturing is done almost 

23 exclusively in Asia. 

24 (8) A program that provides preferential duty 

25 treatment for certain apparel articles of the PhilVerDate Nov 24 2008 22:44 Jun 28, 2009 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3039.IH H3039

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1 ippines will provide a strong incentive for Philippine 

2 apparel manufacturers to use United States fabrics, 

3 which will open new opportunities for the United 

4 States textile industry and increase opportunities for 

5 United States yarn manufactures. At the same time, 

6 the United States would be provided a more diverse 

7 range of sourcing opportunities. 

8 (b) PURPOSES.—The purposes of this Act are— 

9 (1) to encourage higher levels of trade in tex10 tiles and apparel between the United States and the 

11 Philippines and enhance the commercial well-being 

12 of their respective industries in times of global eco13 nomic hardship; 

14 (2) to enhance and broaden the economic, secu15 rity, and political ties between the United States and 

16 the Philippines; 

17 (3) to stimulate economic activity and develop18 ment throughout the Philippines, including regions 

19 such as Manila and Mindanao; and 

20 (4) to provide a stepping stone to an eventual 

21 free trade agreement between the United States and 

22 the Philippines, either bilaterally or as part of a re23 gional agreement. 

24 SEC. 3. DEFINITIONS. 

25 In this Act: 


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1 (1) CLASSIFICATION UNDER THE HTS.—The 

2 term ‘‘classification under the HTS’’ means, with re3 spect to an article, the 10-digit subheading under 

4 which the article is classified in the HTS. 

5 (2) HTS.—The term ‘‘HTS’’ means the Har6 monized Tariff Schedule of the United States. 

7 (3) ENTERED.—The term ‘‘entered’’ means en8 tered, or withdrawn from warehouse for consump9 tion, in the customs territory of the United States. 

10 (4) KNIT-TO-SHAPE.—An article is ‘‘knit-to11 shape’’ if 50 percent or more of the exterior surface 

12 area of the article is formed by major parts that 

13 have been knitted or crocheted directly to the shape 

14 used in the article, with no consideration being given 

15 to patch pockets, applique ́s, or the like. Minor cut16 ting, trimming, or sewing of those major parts shall 

17 not affect the determination of whether an article is 

18 ‘‘knit-to-shape’’. 

19 (5) WHOLLY ASSEMBLED.—An article is ‘‘whol20 ly assembled in the Philippines or the United 

21 States’’ if— 

22 (A) all components of the article pre-ex23 isted in essentially the same condition as found 

24 in the finished article and were combined to 


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1 form the finished article in the Philippines or 

2 the United States; and 

3 (B) the article is comprised of at least 2 

4 components. 

5 (6) WHOLLY FORMED.—A yarn is ‘‘wholly 

6 formed in the United States’’ if all of the production 

7 processes and finishing operations, starting with the 

8 extrusion of filaments, strips, film, or sheet, and in9 cluding slitting a film or sheet into strip, or the 

10 spinning of all fibers into yarn, or both, and ending 

11 with a finished yarn or plied yarn, takes place in the 

12 United States. 

13 SEC. 4. TRADE BENEFITS. 

14 (a) ARTICLES COVERED.—For purposes of this sec15 tion, an eligible apparel article is any of the following: 

16 (1) Men’s and boys’ cotton knit shirts. 

17 (2) Women’s and girls’ cotton knit shirts and 

18 blouses. 

19 (3) Men’s and boys’ cotton trousers, breeches, 

20 and shorts. 

21 (4) Women’s and girls’ cotton trousers, slacks, 

22 and shorts. 

23 (5) Men’s and boys’ cotton underwear. 

24 (6) Men’s and boys’ manmade fiber underwear. 

25 (7) Men’s and boys’ manmade fiber knit shirts. 


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1 (8) Women’s and girls’ manmade fiber knit 

2 shirts and blouses. 

3 (9) Men’s and boys’ manmade fiber trousers, 

4 breeches, and shorts. 

5 (10) Women’s and girls’ manmade fiber slacks, 

6 breeches, and shorts. 

7 (11) Men’s and boys’ non-knit manmade fiber 

8 shirts. 

9 (12) Brassieres and other body support gar10 ments. 

11 (13) Manmade fiber brassieres and other body 

12 support garments. 

13 (14) Manmade fiber swimwear. 

14 (15) Cotton swimwear. 

15 (b) DUTY-FREE TREATMENT FOR CERTAIN ELIGI16 BLE APPAREL ARTICLES.— 

17 (1) DUTY-FREE TREATMENT.—Subject to para18 graphs (2) and (3), an eligible apparel article shall 

19 enter the United States free of duty if the article is 

20 wholly assembled in the United States or the Phil21 ippines, or both, and if the component determining 

22 the article’s classification under the HTS consists 

23 entirely of— 

24 (A) fabric components cut in the United 

25 States or the Philippines, or both, from fabric 


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1 wholly formed in the United States from yarns 

2 wholly formed in the United States; 

3 (B) components knit-to-shape in the 

4 United States from yarns wholly formed in the 

5 United States; or 

6 (C) any combination of the fabric compo7 nents or components knit-to-shape described in 

8 subparagraphs (A) and (B). 

9 (2) DYEING, PRINTING, OR FINISHING.—An ap10 parel article described in paragraph (1) shall be in11 eligible for duty-free treatment under such para12 graph if the component determining the article’s 

13 classification under the HTS comprises any fabric, 

14 fabric component, or component knit-to-shape in the 

15 United States that was dyed, printed, or finished at 

16 any place other than in the United States. 

17 (3) OTHER PROCESSES.—An apparel article de18 scribed in paragraph (1) shall not be disqualified 

19 from eligibility for duty-free treatment under such 

20 paragraph because it undergoes stone-washing, en21 zyme-washing, acid-washing, permapressing, oven22 baking, bleaching, garment-dyeing, screen printing, 

23 or other similar processes in either the United 

24 States or the Philippines. 


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1 (c) DUTY REDUCTION FOR CERTAIN ELIGIBLE AP2 PAREL ARTICLES.— 

3 (1) DUTY REDUCTION.—An eligible apparel ar4 ticle shall enter the United States at a reduced rate 

5 of duty specified in paragraph (2) if it is wholly as6 sembled in the United States or the Philippines, or 

7 both, and if the component determining the article’s 

8 classification under the HTS consists entirely of— 

9 (A) fabric components cut in the United 

10 States or the Philippines, or both, from fabric 

11 wholly formed in the United States or the Phil12 ippines, or both, from yarns wholly formed in 

13 the United States; 

14 (B) components knit-to-shape in the 

15 United States or the Philippines, or both, from 

16 yarns wholly formed in the United States; or 

17 (C) any combination of fabric components 

18 or components knit-to-shape that are described 

19 in subparagraphs (A) and (B). 

20 (2) REDUCED TARIFF RATE.—An eligible ap21 parel article described in paragraph (1) shall be du22 tiable at the lesser of— 

23 (A) 50 percent of the column 1 rate of 

24 duty that applies to the apparel article under 

25 its classification under the HTS; or 


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1 (B) the column 1 rate of duty under the 

2 HTS that applies to the article, assessed upon 

3 the value of the article, less the cost or value 

4 of yarns in the article that are wholly formed 

5 in the United States. 

6 (d) ARTICLES ELIGIBLE UNDER BOTH CAT7 EGORIES.—An eligible apparel article that meets the re8 quirements of both subsections (b) and (c) shall be eligible 

9 for duty-free treatment under subsection (b). 

10 (e) DE MINIMIS.— 

11 (1) IN GENERAL.—An otherwise eligible apparel 

12 article shall not be ineligible for preferential treat13 ment because fibers or yarns used in the production 

14 of the component that determines the article’s classi15 fication under the HTS do not meet the require16 ments of subsection (b) or (c), if the total weight of 

17 all such fibers or yarns in the component that deter18 mines the article’s classification under the HTS is 

19 not more than 10 percent of the total weight of that 

20 component. 

21 (2) ELASTOMERIC YARNS.—Notwithstanding 

22 paragraph (1), an article described in subsection (b) 

23 or (c) that contains elastomeric yarns in the compo24 nent of the article that determines the article’s clas25 sification under the HTS shall be eligible for dutyVerDate Nov 24 2008 22:44 Jun 28, 2009 Jkt 079200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3039.IH H3039

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1 free treatment under this section only if such elas2 tomeric yarns are wholly formed in the United 

3 States or the Philippines. 

4 (3) DIRECT SHIPMENT.—Any apparel article 

5 described in subsection (b) or (c) is an eligible arti6 cle only if it is imported directly into the United 

7 States from the Philippines. 

8 (f) SINGLE TRANSFORMATION RULES.—Any of the 

9 following apparel articles that are wholly assembled, or 

10 knit-to-shape, in the Philippines from any combination of 

11 fabrics, fabric components, components knit-to-shape, or 

12 yarns and are imported directly into the United States 

13 from the Philippines shall enter the United States free of 

14 duty, without regard to the source of the fabric, fabric 

15 components, components knit-to-shape, or yarns from 

16 which the articles are made: 

17 (1) Any apparel article that is of a type listed 

18 in chapter rule 3, 4, or 5 for chapter 61 of the HTS 

19 (as such chapter rules are contained in paragraph 1 

20 of section A of the Annex to Proclamation 8213 of 

21 the President of December 20, 2007) as being ex22 cluded from the scope of such chapter rule, when 

23 such chapter rule is applied to determine whether an 

24 apparel article is an originating good for purposes of 

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1 poses of this paragraph, reference in such chapter 

2 rule to ‘‘6104.12.00’’ shall be deemed to be ref3 erence to ‘‘6104.19.60’’. 

4 (2) Any apparel article that is of a type listed 

5 in chapter rule 3(a), 4(a), or 5(a) for chapter 62 of 

6 HTS, as such chapter rules are contained in para7 graph 9 of section A of the Annex to Proclamation 

8 8213 of the President of December 20, 2007. 

9 (3) Any article not described in paragraph (1) 

10 or (2) that is any of the following: 

11 (A) Playsuits and sunsuits. 

12 (B) Babies’ garments and clothing acces13 sories. 

14 (C) Women’s and girls’ cotton coats. 

15 (D) Cotton dresses. 

16 (E) Manmade fiber dresses. 

17 (F) Men’s and boys’ cotton, non-knit, 

18 shirts. 

19 (G) Cotton nightwear and pajamas. 

20 (H) Manmade fiber nightwear and paja21 mas. 

22 (I) Women’s and girls’ wool coats. 

23 (J) Wool dresses. 

24 (K) Wool skirts. 

25 (L) Women’s and girls’ wool suits. 


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1 (M) Women’s and girls’ wool slacks, 

2 breeches, and shorts. 

3 (N) Women’s and girls’ cotton, non-knit, 

4 shirts and blouses. 

5 (O) Women’s and girls’ non-knit, man6 made fiber shirts and blouses. 

7 (P) Women’s and girls’ manmade fiber 

8 suits. 

9 (Q) Men’s and boys’ wool coats. 

10 (R) Cotton dressing gowns and robes. 

11 (S) Manmade fiber robes and dressing 

12 gowns. 

13 (T) Women’s and girls’ manmade fiber 

14 coats. 

15 (U) Cotton skirts. 

16 (V) Manmade fiber skirts. 

17 (W) Men’s and boys’ manmade fiber coats. 

18 (X) Women’s and girls’ cotton underwear. 

19 (Y) Women’s and girls’ manmade fiber un20 derwear. 

21 (Z) Women’s and girls’ coats of silk and 

22 vegetable blends. 

23 (AA) Skirts made of silk and vegetable 

24 blends. 


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1 (g) REVIEW AND REPORT.—The Comptroller General 

2 shall, at the end of the 2-year period beginning on the 

3 effective date under section 5, review the program estab4 lished under this section for the purpose of evaluating the 

5 effectiveness of, and making recommendations to Congress 

6 for improvements in, the program. 

7 (h) ENFORCEMENT.— 

8 (1) PRESIDENTIAL CERTIFICATION OF CONDI9 TIONS.—No apparel article shall be afforded the 

10 preferential treatment under this section unless the 

11 President certifies to Congress that the Philippines 

12 is meeting the following conditions: 

13 (A) The Philippines reestablishes the Elec14 tronic Visa Information System (ELVIS) to 

15 further assist with prevention of transshipment 

16 of apparel articles and the use of counterfeit 

17 documents relating to the importation of ap18 parel articles into the United States. 

19 (B) The Philippines continues to enforce 

20 the Memorandum of Understanding between 

21 the United States of America and the Republic 

22 of the Philippines Concerning Cooperation in 

23 Trade in Textile and Apparel Goods, signed on 

24 August 23, 2006. 


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1 (C) The Philippines agrees to provide, on 

2 a timely basis at the request of U.S. Customs 

3 and Border Protection, and consistently with 

4 the manner in which the records are kept in the 

5 Philippines, a report on exports from the Phil6 ippines of apparel articles eligible for pref7 erential treatment under this section, and on 

8 imports into the Philippines of yarns, fabrics, 

9 fabric components, or components knit-to-shape 

10 that are wholly formed in the United States. 

11 (D) The Philippines agrees to cooperate 

12 fully with the United States to address and 

13 take action necessary to prevent circumvention 

14 as provided in Article 5 of the Agreement on 

15 Textiles and Clothing referred to in section 

16 101(d)(4) of the Uruguay Round Agreements 

17 Act (19 U.S.C. 3511(d)(4)). 

18 (E) The Philippines agrees to require its 

19 producers and exporters of articles eligible for 

20 preferential treatment under this section to 

21 maintain, for at least 3 years after export, com22 plete records of the production and the export 

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1 to-shape and used in the production of such ar2 ticles. 

3 (F) The Philippines agrees to report, on a 

4 timely basis, at the request of U.S. Customs 

5 and Border Protection, documentation estab6 lishing the country of origin of articles eligible 

7 for preferential treatment under this section, as 

8 used by that country in reimplementing an ef9 fective visa system. 

10 (G) The Philippines is to establish, within 

11 60 days after the date of the President’s certifi12 cation under this paragraph, procedures that 

13 allow the Office of Textiles and Apparel of the 

14 Department of Commerce (OTEXA) to obtain 

15 information when fabric wholly formed in the 

16 United States is exported to the Philippines to 

17 allow for monitoring and verification before the 

18 imports of apparel articles containing the fabric 

19 for which preferential treatment is sought 

20 under this section reach the United States. The 

21 information provided upon export of the fabrics 

22 shall include, among other things, the name of 

23 the importer of the fabric in the Philippines, 

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1 tity of the apparel articles to be made from the 

2 fabric for importation into the United States. 

3 (2) DEFINITION OF TRANSHIPMENT.—As used 

4 in paragraph (1), transshipment has occurred when 

5 preferential treatment for an apparel article under 

6 this section has been claimed on the basis of mate7 rial false information concerning the country of ori8 gin, manufacture, processing, or assembly of the ar9 ticle or of any fabric, fabric component, or compo10 nent knit-to-shape from which the apparel article 

11 was assembled. For purposes of this paragraph, 

12 false information is material if disclosure of the true 

13 information would have meant that the article is or 

14 was ineligible for preferential treatment under this 

15 section. 

16 (i) PROCLAMATION AUTHORITY.—The President 

17 shall issue a proclamation to carry out this section not 

18 later than 60 days after the date of the enactment of this 

19 Act. The President shall consult with the Committee on 

20 Ways and Means of the House of Representatives and the 

21 Committee on Finance of the Senate in preparing such 

22 proclamation. 

23 SEC. 5. EFFECTIVE DATE. 

24 This Act shall apply to articles entered, or withdrawn 

25 from warehouse for consumption, on or after the 15th day 


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1 after the date on which the President issues the proclama2 tion under section 4(i). 

3 SEC. 6. TERMINATION. 

4 (a) IN GENERAL.—The preferential duty treatment 

5 provided under this Act shall remain in effect for a period 

6 of 10 years beginning on the effective date provided in 

7 section 5. 

8 (b) GSP ELIGIBILITY.—The preferential duty treat9 ment provided under this Act shall terminate if and when 

10 the Philippines becomes ineligible for designation as a ben11 eficiary developing country under title V of the Trade Act 

12 of 1974 (19 U.S.C. 2461 et seq.). 

Æ 


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