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CAFTA to announce revision in 'short supply' rules today
12 Sep '08
2 min read
The Committee of Commerce Department created for the implementation of Textile Agreements will today announce changes to the commercial availability rules of the Central American Free Trade Agreement.
The changes would essentially clarify the certain standard norms for apparel and textile companies operating under CAFTA. The revision has come to a conclusion after a year-long process of supervision that included meeting with industry people followed by public comment period. Countries included in CAFTA are the US, El Salvador, Gautemala, Honduras, Nicaragua and the Dominican Republic. Although, Costa Rica is also a part of the CAFTA, it has not yet ratified the pact.
Commercial availability, also referred to as short supply, is a list of fabric, yarns and fibers that are not available in the CAFTA region in commercial quantities and in a timely manner. However, in order to qualify for duty-free status in shipping apparel under CAFTA, companies are required to use components from within 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 agreement, companies can make a plea to the Commission on International Trans-Regional Accreditation (CITA), for adding more products to the list.
The changes made thereafter would apply equally to both petitioners and potential suppliers. The revised procedures specifies that prior to petitioning for adding more products to the commercial availability list, the company must contact potential suppliers directly. Even the suppliers have to show that they were fully engaged in communicating with potential buyers.
The changes would essentially clarify the certain standard norms for apparel and textile companies operating under CAFTA. The revision has come to a conclusion after a year-long process of supervision that included meeting with industry people followed by public comment period. Countries included in CAFTA are the US, El Salvador, Gautemala, Honduras, Nicaragua and the Dominican Republic. Although, Costa Rica is also a part of the CAFTA, it has not yet ratified the pact.
Commercial availability, also referred to as short supply, is a list of fabric, yarns and fibers that are not available in the CAFTA region in commercial quantities and in a timely manner. However, in order to qualify for duty-free status in shipping apparel under CAFTA, companies are required to use components from within 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 agreement, companies can make a plea to the Commission on International Trans-Regional Accreditation (CITA), for adding more products to the list.
The changes made thereafter would apply equally to both petitioners and potential suppliers. The revised procedures specifies that prior to petitioning for adding more products to the commercial availability list, the company must contact potential suppliers directly. Even the suppliers have to show that they were fully engaged in communicating with potential buyers.
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