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. 
Be it enacted by the Senate and House of Representa-
tives 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 2009’’ 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 ‘‘Phil-
ippines’’), a former colony, share deep historical and 
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cultural connections. The United States has devel-
oped preferential trading relations with former colo-
nies such as the Marshall Islands, the Federated 
States of Micronesia and the Republic of Palau. 
(2) The Philippines represents a tremendous 
economic potential and enduring political and secu-
rity significance to the United States. 
(3) The United States and the Philippines 
maintain a fair trading relationship that should be 
expanded to the mutual benefit of both countries. In 
2008, United States exports to the Philippines were 
valued at $8,300,000,000, and United States im-
ports 
from 
the 
Philippines 
were 
valued 
at 
$8,700,000,000. 
(4) United States textile exports to the Phil-
ippines were valued at nearly $20,000,000 in 2008, 
consisting mostly of broadwoven, industrial or spe-
cialty, and nonwoven fabrics. The potential for ex-
port growth in this area can sustain and create 
thousands of jobs. 
(5) The Philippines’ textile and apparel indus-
tries, like that of their counterparts in the United 
States, share the same challenges and risks stem-
ming from the end of the United States quota sys-
tem and from the end of safeguards that continued 
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to control apparel imports from the People’s Repub-
lic of China until January 1, 2009. 
(6) 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 75 percent of United States 
fabric exports presently going to countries that are 
parties to the North American Free Trade Agree-
ment and the Dominican Republic-Central America- 
United States Free Trade Agreement. Increased de-
mand for United States fabric in Asia will increase 
opportunities for the United States industry. 
(7) Apparel producers in the Western Hemi-
sphere 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 em-
broidered T-shirts and fashion jeans with embellish-
ments. Such apparel manufacturing is done almost 
exclusively in Asia. 
(8) A program that provides preferential duty 
treatment for certain apparel articles of the Phil-
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ippines 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 manufactures. 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 tex-
tiles and apparel between the United States and the 
Philippines and enhance the commercial well-being 
of their respective industries in times of global eco-
nomic hardship; 
(2) to enhance and broaden the economic, secu-
rity, and political ties between the United States and 
the Philippines; 
(3) to stimulate economic activity and develop-
ment 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 re-
gional agreement. 
SEC. 3. DEFINITIONS. 
In this Act: 
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(1) CLASSIFICATION
UNDER
THE
HTS.—The 
term ‘‘classification under the HTS’’ means, with re-
spect to an article, the 10-digit subheading under 
which the article is classified in the HTS. 
(2) HTS.—The term ‘‘HTS’’ means the Har-
monized Tariff Schedule of the United States. 
(3) ENTERED.—The term ‘‘entered’’ means en-
tered, or withdrawn from warehouse for consump-
tion, in the customs territory of the United States. 
(4) 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, applique´s, or the like. Minor cut-
ting, trimming, or sewing of those major parts shall 
not affect the determination of whether an article is 
‘‘knit-to-shape’’. 
(5) WHOLLY ASSEMBLED.—An article is ‘‘whol-
ly assembled in the Philippines or the United 
States’’ if— 
(A) all components of the article pre-ex-
isted in essentially the same condition as found 
in the finished article and were combined to 
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form the finished article in the Philippines or 
the United States; and 
(B) the article is comprised of at least 2 
components. 
(6) WHOLLY
FORMED.—A yarn is ‘‘wholly 
formed in the United States’’ if all of the production 
processes and finishing operations, starting with the 
extrusion of filaments, strips, film, or sheet, and in-
cluding 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) ARTICLES COVERED.—For purposes of this sec-
tion, an eligible apparel article is any of the following: 
(1) Men’s and boys’ cotton knit shirts. 
(2) Women’s and girls’ cotton knit shirts and 
blouses. 
(3) Men’s and boys’ cotton trousers, breeches, 
and shorts. 
(4) Women’s and girls’ cotton trousers, slacks, 
and shorts. 
(5) Men’s and boys’ cotton underwear. 
(6) Men’s and boys’ manmade fiber underwear. 
(7) Men’s and boys’ manmade fiber knit shirts. 
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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 the fabric compo-
nents or components knit-to-shape described in 
subparagraphs (A) and (B). 
(2) DYEING, PRINTING, OR FINISHING.—An ap-
parel article described in paragraph (1) shall be in-
eligible for duty-free treatment under such para-
graph if the 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 de-
scribed in paragraph (1) shall not be disqualified 
from eligibility for duty-free treatment under such 
paragraph because it undergoes stone-washing, en-
zyme-washing, acid-washing, permapressing, oven- 
baking, bleaching, garment-dyeing, screen printing, 
or other similar processes in either the United 
States or the Philippines. 
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(c) DUTY REDUCTION FOR CERTAIN ELIGIBLE AP-
PAREL ARTICLES.— 
(1) DUTY REDUCTION.—An eligible apparel ar-
ticle shall enter the United States at a reduced rate 
of duty specified in paragraph (2) if it is wholly as-
sembled 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 components cut in the United 
States or the Philippines, or both, from fabric 
wholly formed in the United States or the Phil-
ippines, or both, from yarns wholly formed in 
the United States; 
(B) 
components 
knit-to-shape 
in 
the 
United States or the Philippines, or both, from 
yarns wholly formed in the United States; or 
(C) any combination of fabric components 
or components knit-to-shape that are described 
in subparagraphs (A) and (B). 
(2) REDUCED TARIFF RATE.—An eligible ap-
parel article described in paragraph (1) shall be du-
tiable at the lesser of— 
(A) 50 percent of the column 1 rate of 
duty that applies to the apparel article under 
its classification under the HTS; or 
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(B) the column 1 rate of duty under the 
HTS that applies to the article, assessed upon 
the value of the article, less the cost or value 
of yarns in the article that are wholly formed 
in the United States. 
(d) ARTICLES
ELIGIBLE
UNDER
BOTH
CAT-
EGORIES.—An eligible apparel article that meets the re-
quirements of both subsections (b) and (c) shall be eligible 
for duty-free treatment under subsection (b). 
(e) DE MINIMIS.— 
(1) IN GENERAL.—An otherwise eligible apparel 
article shall not be ineligible for preferential treat-
ment because fibers or yarns used in the production 
of the component that determines the article’s classi-
fication under the HTS do not meet the require-
ments of subsection (b) or (c), if the total weight of 
all such fibers or yarns in the component that deter-
mines the article’s classification under the HTS is 
not more than 10 percent of the total weight of that 
component. 
(2) ELASTOMERIC
YARNS.—Notwithstanding 
paragraph (1), an article described in subsection (b) 
or (c) that contains elastomeric yarns in the compo-
nent of the article that determines the article’s clas-
sification under the HTS shall be eligible for duty- 
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free treatment under this section only if such elas-
tomeric 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 arti-
cle only if it is imported directly into the United 
States from the Philippines. 
(f) SINGLE TRANSFORMATION RULES.—Any of the 
following apparel articles that are 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) Any apparel article that is of a type listed 
in chapter rule 3, 4, or 5 for chapter 61 of the HTS 
(as such chapter rules are contained in paragraph 1 
of section A of the Annex to Proclamation 8213 of 
the President of December 20, 2007) as being ex-
cluded from the scope of such chapter rule, when 
such chapter rule is applied to determine whether an 
apparel article is an originating good for purposes of 
general note 29(n) to the HTS, except that, for pur-
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poses of this paragraph, reference in such chapter 
rule to ‘‘6104.12.00’’ shall be deemed to be ref-
erence to ‘‘6104.19.60’’. 
(2) Any apparel article that is of a type listed 
in chapter rule 3(a), 4(a), or 5(a) for chapter 62 of 
HTS, as such chapter rules are contained in para-
graph 9 of section A of the Annex to Proclamation 
8213 of the President of December 20, 2007. 
(3) Any article not described in paragraph (1) 
or (2) that is any of the following: 
(A) Playsuits and sunsuits. 
(B) Babies’ garments and clothing acces-
sories. 
(C) Women’s and girls’ cotton coats. 
(D) Cotton dresses. 
(E) Manmade fiber dresses. 
(F) Men’s and boys’ cotton, non-knit, 
shirts. 
(G) Cotton nightwear and pajamas. 
(H) Manmade fiber nightwear and paja-
mas. 
(I) Women’s and girls’ wool coats. 
(J) Wool dresses. 
(K) Wool skirts. 
(L) Women’s and girls’ wool suits. 
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(M) Women’s and girls’ wool slacks, 
breeches, and shorts. 
(N) Women’s and girls’ cotton, non-knit, 
shirts and blouses. 
(O) Women’s and girls’ non-knit, man-
made fiber shirts and blouses. 
(P) Women’s and girls’ manmade fiber 
suits. 
(Q) Men’s and boys’ wool coats. 
(R) Cotton dressing gowns and robes. 
(S) Manmade fiber robes and dressing 
gowns. 
(T) Women’s and girls’ manmade fiber 
coats. 
(U) Cotton skirts. 
(V) Manmade fiber skirts. 
(W) Men’s and boys’ manmade fiber coats. 
(X) Women’s and girls’ cotton underwear. 
(Y) Women’s and girls’ manmade fiber un-
derwear. 
(Z) Women’s and girls’ coats of silk and 
vegetable blends. 
(AA) Skirts made of silk and vegetable 
blends. 
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(g) REVIEW AND REPORT.—The Comptroller General 
shall, at the end of the 2-year period beginning on the 
effective date under section 5, review the program estab-
lished under this section for the purpose of evaluating the 
effectiveness of, and making recommendations to Congress 
for improvements in, the program. 
(h) ENFORCEMENT.— 
(1) PRESIDENTIAL CERTIFICATION OF CONDI-
TIONS.—No apparel article shall be afforded the 
preferential treatment under this section unless the 
President certifies to Congress that the Philippines 
is meeting the following conditions: 
(A) The Philippines reestablishes the Elec-
tronic Visa Information System (ELVIS) to 
further assist with prevention of transshipment 
of apparel articles and the use of counterfeit 
documents relating to the importation of ap-
parel articles into the United States. 
(B) The Philippines continues to enforce 
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. 
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(C) 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 Phil-
ippines of apparel articles eligible for pref-
erential 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. 
(D) 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)). 
(E) The Philippines agrees to require its 
producers and exporters of articles eligible for 
preferential treatment under this section to 
maintain, for at least 3 years after export, com-
plete records of the production and the export 
of such articles, including records of yarns, fab-
rics, fabric components, and components knit- 
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to-shape and used in the production of such ar-
ticles. 
(F) The Philippines agrees to report, on a 
timely basis, at the request of U.S. Customs 
and Border Protection, documentation estab-
lishing the country of origin of articles eligible 
for preferential treatment under this section, as 
used by that country in reimplementing an ef-
fective visa system. 
(G) The Philippines is to establish, within 
60 days after the date of the President’s certifi-
cation 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 10-digit HTS subheading of the apparel ar-
ticles to be made from the fabric, and the quan-
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tity of the apparel articles to be made from the 
fabric for importation into the United States. 
(2) DEFINITION OF TRANSHIPMENT.—As used 
in paragraph (1), transshipment has occurred when 
preferential treatment for an apparel article under 
this section has been claimed on the basis of mate-
rial false information concerning the country of ori-
gin, manufacture, processing, or assembly of the ar-
ticle or of any fabric, fabric component, or compo-
nent knit-to-shape from which the apparel article 
was 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 
Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate 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 
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after the date on which the President issues the proclama-
tion under 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 10 years beginning on the effective date provided in 
section 5. 
(b) GSP ELIGIBILITY.—The preferential duty treat-
ment provided under this Act shall terminate if and when 
the Philippines becomes ineligible for designation as a ben-
eficiary developing country under title V of the Trade Act 
of 1974 (19 U.S.C. 2461 et seq.). 
Æ 
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