Cargo Systems Messaging Service

CSMS #51247466 - To provide clarity on the implementation of the textile/apparel Tariff Preference Level (TPL) provision of the United States-Mexico-Canada Agreement (USMCA). Effective July 1, 2020.

This message provides clarity on the implementation of the textile/apparel TPL provisions on certain apparel goods of Chapters 61 and 62 and textile goods, other than of wadding, of heading 9619 of the Harmonized Tariff Schedule entering into the United States under the TPL provisions of the USMCA as set out in Annex 6-A (Special Provisions).

BACKGROUND:
The USMCA TPL provisions, found in Chapter 98 of the Harmonized Tariff Schedule of the United States (HTSUS) for subheadings 9823.52.01, 9823.52.02 and 9823.52.03 for Canada and 9823.53.01 and 9823.53.02 for Mexico, provide duty-free treatment for specified quantities of certain apparel goods of Chapters 61 and 62 and textile and apparel goods, other than of wadding, of heading 9619 that do not qualify as originating goods under the product-specific rules of origin found in HTSUS General Note 11.

More specifically, the language of these TPL provisions requires the eligible apparel of Chapters 61 and 62 and textile and apparel goods, other than of wadding, of heading 9619, to be cut (or knit to shape) and sewn or otherwise assembled from fabric or yarn produced or obtained outside the territory of any one of the USMCA countries, in order to receive preferential duty treatment.

However, the intent of the Parties was to allow apparel goods of Chapters 61 and 62 and textile or apparel goods, other than of wadding, of heading 96.19 of the Harmonized System to qualify for preferential tariff treatment under the USMCA when they are produced from non-originating materials or a combination of originating and non-originating materials, including materials that are non-originating pursuant to chapter notes 2, 3, or 4 of Chapter 61 or chapter notes 3, 4, or 5 of Chapter 62 of Annex 4-B (Product-Specific Rules of Origin). Such goods must be both cut (or knit-to-shape) and sewn or otherwise assembled in the territory of a Party and meet other applicable conditions for preferential tariff treatment under the USMCA.

GUIDANCE:
Therefore, apparel goods of Chapters 61 and 62 of the Harmonized System for which originating yarn or fabric is used in the production of the component that determines the tariff classification of the good that do not qualify as originating solely on the basis of not meeting the requirements of chapter notes 2, 3, or 4 of Chapter 61 or chapter notes 3, 4, or 5, of Chapter 62 of Annex 4-B (Product-Specific Rules of Origin), are eligible for preferential tariff treatment under an applicable TPL. This guidance is effective as of July 1, 2020, as per Decision #3 of the Free Trade Commission of the CUSMA, T-MEC, USMCA (“Agreement”). Guidance on filing a claim is forthcoming.

Questions regarding this memo may be directed to Ms. Anita Harris, Chief, Textile Policy Branch, at OTTEXTILE_POLICY_ENF@cbp.dhs.gov.