01-25091. Request for Public Comment on Short Supply Petition under the North American Free Trade Agreement (NAFTA)

October 2, 2001.

AGENCY:

Committee for the Implementation of Textile Agreements (CITA).

ACTION:

Request for Public Comments concerning a petition for modification of the NAFTA rules of origin for gimped yarn made from certain filament yarn of nylon.

FOR FURTHER INFORMATION CONTACT:

Martin Walsh, International Trade Specialist, Office of Textiles and Apparel, U.S. Department of Commerce, [phone].

SUPPLEMENTARY INFORMATION:

Authority: Section 204 of the Agricultural Act of 1956, as amended (7 USC 1854); Section 202(q) of the North American Free Trade Agreement Implementation Act (19 USC 3332(q)); Executive Order 11651 of March 3, 1972, as amended.

SUMMARY:

On September 5, 2001 the Chairman of CITA received a petition from Unifi, Inc. (Unifi). alleging that certain untextured (flat) yarns of nylon classified under subheading 5402.41.90 of the Harmonized Tariff Schedule of the United States (HTSUS), cannot be supplied by the domestic industry in commercial quantities in a timely manner and requesting that the President proclaim a modification of the NAFTA rules of origin. The yarns are described as (1) of nylon, 7 denier/5 filament nylon 66 untextured (flat) semi-dull yarn; miltifilament, untwisted or with a twist not exceeding 50 turns/m. (2) of nylon, 10 denier/7 filament nylon 66 untextured (flat) semi-dull yarn; miltifilament, untwisted or with a twist not exceeding 50 turns/m. (3) of nylon, 12 denier/5 filament nylon 66 untextured (flat) semi-dull yarn; multifilament, untwisted or with a twist not exceeding 50 turns/m.

Unifi requests the the NAFTA rules of origin for gimped yarns classifed under subheading 5606.00 of the HTSUS be mofified to allow the use of non-North American yarns of the type described above.

Such a proclamation may be made only after reaching agreement with the other NAFTA countries on the modification. CITA hereby solicits public comments on this petition, in particular with regard to whether the nylon yarns described above can be supplied by the domestic industry in commercial quantities in a timely manner. Comments must be submitted by November 5, 2001 to the Chairman, Committee for the Implementation of Textile Agreements, Room 3001, United States Department of Commerce, Washington, D.C. 20230.

BACKGROUND: Under the North American Free Trade Agreement (NAFTA), NAFTA countries are required to eliminate customs duties on textile and apparel goods that qualify as originating goods under the NAFTA rules of origin, which are set out in Annex 401 to the NAFTA. The NAFTA provides that the rules of origin for textile and apparel products may be amended through a subsequent agreement by the NAFTA countries. In consultations regarding such a change, the NAFTA countries are to consider issues of availability of supply of fibers, yarns, or fabrics in the free trade area and whether domestic producers are capable of supplying commercial quantities of the good in a timely manner. The Statement of Administrative Action (SAA) that accompanied the NAFTA Implementation Act stated that any interested person may submit to CITA a request for a modification to a particular rule of origin based on a change in the availability in North America of a particular fiber, yarn or fabric and that the requesting party would bear the burden of demonstrating that a change is warranted. The SAA provides that CITA may make a recommendation to the President regarding a change to a rule of origin for a textile or apparel good. The NAFTA Implementation Act provides the President with the authority to proclaim modifications to the NAFTA rules of origin as are necessary to implement an agreement with one or more NAFTA country on such a modification.

On September 5, 2001 the Chairman of CITA received a petition from Unifi, Inc. (Unifi). alleging that certain untextured (flat) yarns of nylon classified under subheading 5402.41.90 of the Harmonized Tariff Schedule of the United States (HTSUS), cannot be supplied by the domestic industry in commercial quantities in a timely manner and requesting that the President proclaim a modification of the NAFTA rules of origin. The yarns are described as (1) of nylon 7 denier/5 filament nylon 66 untextured (flat) semi-dull yarn; miltifilament, untwisted or with a twist not exceeding 50 turns/m/10 denier/ (2) of nylon, 7 filament nylon 66 untextured (flat) semi-dull yarn; miltifilament, untwisted or with a twist not exceeding 50/turns/m. (3) of nylon, 12 denier/5 filament nylon 66 untextured (flat) semi-dull yarn; multifilament, etc. Unifi uses these yarns in producing their gimped yarn, classified under 5606.00 of the HTSUS.

CITA is soliciting public comments regarding this request, particularly with respect to whether the filament yarn of nylon, classified in HTSUS heading 5402.41.90, can be supplied by the domestic industry in commercial quantities in a timely manner. The petition states that Unifi has contacted known North American suppliers of these yarns and was unable to locate a supplier who produced the yarns in commercial quantities in a timely manner. Comments must be received no later than November 5, 2001. Interested persons are invited to submit six copies of such comments or information to the Chairman, Committee for the Implementation of Textile Agreements, room 3100, U.S. Department of Commerce, 14th and Constitution Avenue, N.W., Washington, DC 20230.

If a comment alleges that the filament yarn of nylon can be supplied by the domestic industry in commercial quantities in a timely manner, CITA will closely review any supporting documentation, such as a signed statement by a manufacturer of the yarn stating that it produces the yarn that is in the subject of the request, including the quantities that can be supplied and the time necessary to fill an order, as well as any relevant information regarding past production.

CITA will protect any business confidential information that is marked business confidential from disclosure to the full extent permitted by law. CITA will make available to the public non-confidential versions of the request and non-confidential versions of any public comments received with respect to a request in room 3100 in the Herbert Hoover Building, 14th and Constitution Avenue, N.W., Washington, DC 20230. Persons submitting comments on a request are encouraged to include a non-confidential version and a non-confidential summary.

D. Michael Hutchinson,

Acting Chairman, Committee for the Implementation of Textile Agreements.