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CAFTA Changes Announced

The Commerce Department on Friday announced changes to the commercial availability rules of the Central American Free Trade Agreement.

WASHINGTON — The Commerce Department’s Committee for the Implementation of Textile Agreements on Friday announced changes to the commercial availability rules of the Central American Free Trade Agreement.

The changes clarify the due diligence requirements for apparel and textile companies operating under CAFTA, and come after a yearlong public vetting process that involved meetings with the industry and a public comment period. The countries included in CAFTA include the U.S., El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. Costa Rica has not yet ratified the pact.

Commercial availability, also called short supply, is a list of fabrics, yarns and fibers that are not available in the CAFTA region in commercial quantities in a timely manner. In order to qualify for duty free status in shipping apparel under the treaty, companies need to use components from inside the region. The short-supply provision is a list of exceptions to the rule, such as fabric made in China that can be used without negating the duty free status of an item. Under the terms of the agreement, companies can petition CITA to add products to the list.

The changes apply to petitioners and potential suppliers. The revised procedures specify that, before petitioning CITA to add a product to the commercial availability list, the company that would file the request must contact potential suppliers directly. On the other end, suppliers have to show they were fully engaged in communicating with potential buyers before they can file an opposition to a petition.

If CITA requests a public meeting to address a petition that is filed, the changes also allow for conference calls to be used. The previous rules required an in-person meeting.

Matt Priest, deputy assistant secretary for textiles and apparel with the Commerce Department and chairman of CITA, said the goal of the changes was to create “predictability and openness” for apparel companies.