As follow-up to our most recent client memorandum on Considerations for Importing Merchandise in 2007 (December 2006), this memorandum briefly summarizes the announcements made in the Presidential Proclamations issued on December 29, 2006 and published in the Federal Register on January 4, 2007, which concern changes to the Harmonized Tariff Schedule of the United States (“HTSUS”), the African Growth and Opportunity Act (“AGOA”), Generalized System of Preferences (“GSP”), the pharmaceuticals appendix and relations with Vietnam.
The topic taking center stage at this time is the effective date of the changes to the HTSUS. Presidential Proclamation 8097 announced the modifications that will be made to theHTSUS, including the WCO-recommended changes, staged duty reductions under the North American Free Trade Agreement (“NAFTA”) and the other current U.S. free trade agreements (“FTAs”), as well as the rules of origin changes under the U.S.- Australia FTA.
The United States International Trade Commission (“USITC”) has posted to its website Publication 3898, entitled “Modifications to the Harmonized Tariff Schedule of the United States under Section 1206 of the Omnibus Trade and Competitiveness Act of 1988,” dated December 2006. See http://hotdocs.usitc.gov/docs/tata/ht s/pub3898.pdf. This draft document contains the 2007 HTSUS modifications proposed by the WCO, to the 10- digit level. The tariff provisions resulting from this draft are stated to take effect on February 3, 2007 (30 days after the Federal Register Notice, which was published on January 4, 2007). Because this remains a draft version until February 3rd, the USITC warns importers not to rely upon the tariff provisions stated therein until such time. Instead, importers should continue to use the HTSUS version dated January 1, 2007. See http://www.usitc.gov/tata/hts/bycha pter/index_old-01032007.htm. However, the new draft version provides importers with a better idea of the modifications that will be made to the HTSUS.
The final version of the 2007 HTSUS is expected to be published to the USITC website on February 3rd and hard copies will also be made available at that time. According to a U.S. Customs and Border Protection (“CBP”) notice dated December 13, 2006, importers may be able to enter merchandise under lower duty rates that result from the HTSUS changes up to 10 days prior to the effective date of the HTSUS modifications, by releasing the goods under immediate delivery and then making actual entry on the entry summary date (however, this procedure is unavailable for certain goods entered under quota or an Immediate Transportation entry). Furthermore, CBP may be allowing importers a 15-day grace period after the WCO changes are implemented to refile any entries that CBP rejects as a result of classification errors. Additional information about this will be provided when it is available.
AGOA and GSP Changes
Changes have been made to AGOA and GSP in accordance with Presidential Proclamation 8098, which affects the following countries:
• Liberia has been granted AGOA benefits as a lesser developed beneficiary country for articles entered or withdrawn from warehouse for consumption on or after
• East Timor has been designated a GSP country for articles entered or withdrawn from warehouse for consumption on or after January 18, 2007 and has also been designated a least-developed GSP country with respect to articles withdrawn from warehouse for consumption on or after February 27, 2007.
• Bulgaria and Romania will be removed as GSP beneficiary countries on the date they become European Union Member States. The United States Trade Representative (“USTR”) will announce the effective dates in the Federal Register.
• Afghanistan has been designated as a member of the South Asian Association for Regional Cooperation (“SAARC”) for purposes of GSP and is eligible for GSP benefits for articles entered or withdrawn from warehouse for consumption on or after the date it formally becomes a SAARC member. The USTR will announce the effective date in the Federal Register. January 1, 2007.
PNTR for Vietnam
According to Presidential Proclamation 8096, effective December 29, 2006, permanent normal trade relations (“PNTR”) treatment is extended to Vietnam. As a result, the U.S. will remove the quotas currently in place for textiles and apparel articles, which could later be reimposed if the U.S. determines that Vietnam has been illegally subsidizing exports of such articles.
Elimination of Tariffs on Certain
Pharmaceuticals and Chemical Intermediates Based upon Presidential Proclamation 8095, the Pharmaceuticals Appendix to the HTSUS will be modified to eliminate duties on additional pharmaceuticals and chemical intermediates imported into the U.S. As background, during the Uruguay Round of Multilateral Trade Negotiations, the U.S. and a number of major trading countries agreed to reciprocal elimination of tariffs on certain pharmaceuticals and chemical intermediates and to revise the products subject to duty-free treatment periodically. Since then, revisions have been made to the list of pharmaceuticals and chemical intermediates that will benefit from duty-free treatment, the last revision being made in 2006 between the U.S. and 30 other WTO members.