§2463 Designation of Eligible Articles

Summary

The President can pick which products from beneficiary developing countries can enter the United States duty-free, but must get advice from the International Trade Commission first. For the least-developed beneficiary countries, the President may only add products that are not import-sensitive. If a product is denied duty-free status, it cannot be reconsidered for 3 years. To get duty-free treatment, the product must come directly from a beneficiary country and at least 35% of its value must come from materials and processing in that country (simple packing or just diluting the product does not count). The Treasury, after talking with the U.S. Trade Representative, will write rules about how origin is figured and when a product is treated as wholly from that country or as a new, different product. Some items generally cannot be made eligible because they are import-sensitive (for example, many textiles/apparel not eligible as of January 1, 1994; many leather and footwear items not eligible as of January 1, 1995; certain watches unless entered after June 30, 1989 and found not to harm U.S. makers; certain electronics, steel, and glass), items under certain trade actions, and agricultural goods that exceed tariff‑rate‑quota in‑quota amounts. There are limited exceptions for certain hand-made carpets, specific cotton items for least-developed countries, and some luggage/travel goods listed by tariff numbers. The President may stop or limit duty-free treatment and must consider the law’s listed factors. If a beneficiary country exports in a year more than the set dollar amount or exports equal to or more than 50% of total U.S. imports of that item, the President must end duty-free treatment for that item by November 1 of the next year. The dollar threshold is $75,000,000 for 1996 and increases by $5,000,000 each year after. Countries that are least-developed or beneficiary sub‑Saharan African are exempt from the 50% rule. If a like U.S. product was not made in the past 3 years, the 50% test does not apply. The President may ignore the 50% test if total U.S. imports of that item in the prior year do not exceed the de minimis amount ($13,000,000 for 1996, then plus $500,000 each year). The President can also waive the limits if the International Trade Commission gives advice, the President finds it is in the national economic interest and publishes that finding, or for other narrow reasons (historical ties, a treaty, or no discrimination), but waivers have caps: they cannot cover quantities equal to 30% or more of all duty‑free imports by value from the prior year, and extra limits apply for certain higher‑income or large‑exporting countries. The President should revoke a waiver after 5 years if exports exceed 1.5 times the dollar threshold or reach 75% of U.S. imports of that item. Waivers stay in effect until the President decides to end them. Before designating products, the President must give lists to the International Trade Commission for review. No action under these rules can change Puerto Rico’s coffee tariff set by its legislature.