§2463 Designation of eligible articles

Summary

The President can choose which products from beneficiary developing countries may enter the United States duty-free. Before deciding, the President must get advice from the International Trade Commission. Duty-free rules apply only if the product is shipped directly from the beneficiary country and enough of the product’s materials and processing costs come from that country. Simple packing or just diluting a product does not count as making it in that country. The Treasury Secretary and the U.S. Trade Representative must make rules to explain how these origin rules work. Some items are generally blocked because they are import-sensitive, including many textiles and apparel that were not eligible on January 1, 1994, certain watches (with a special rule for watches entered after June 30, 1989), footwear and leather goods not eligible on January 1, 1995, import-sensitive electronics, steel, certain glass products, and other articles the President finds import-sensitive. A few specific handmade carpets, some cotton items for the poorest countries, and certain listed items may be allowed despite these limits. The President can also stop, limit, or suspend duty-free treatment for any product, but cannot set a different duty rate than the rate that would apply without this duty-free program. If a beneficiary country exports more than a set amount or more than 50 percent of U.S. imports of an article in a year, that country can lose duty-free status for that article. The yearly “applicable amount” was $75,000,000 for 1996 and increases by $5,000,000 each year after that. The President can ignore the 50 percent rule if total U.S. imports of that article are below another threshold ($13,000,000 for 1996, rising by $500,000 each year). A product denied designation cannot be reconsidered for 3 years. The President may waive these limits if, by November 1 after the year in question, the President gets ITC advice, finds the waiver is in the national economic interest, and publishes that finding. Waivers must weigh the beneficiary country’s market access and protection of intellectual property. The law also limits how large waivers can be (for example, not exceeding 30 percent or certain 15 percent limits of prior duty-free imports) and calls for revoking long-standing waivers in some cases after 5 years. Before designating products, the President must publish lists and give them to the International Trade Commission. Finally, none of this changes any Puerto Rico tariff on coffee set by Puerto Rico’s legislature.