04-6939. Denial of Commercial Availability Request under the African Growth and Opportunity Act (AGOA) and the Andean Trade Promotion and Drug Eradication Act (ATPDEA)

March 24, 2004.

AGENCY:

The Committee for the Implementation of Textile Agreements (CITA).

ACTION:

Denial of the request alleging that two patented fusible interlining fabrics, used in the construction of waistbands, cannot be supplied by the domestic industry in commercial quantities in a timely manner under the AGOA and the ATPDEA.

SUMMARY:

On January 20, 2004, the Chairman of CITA received a petition from Levi Strauss and Co. alleging that a certain ultra-fine Lycra crochet material, classified under subheading 5903.90.2500 of the Harmonized Tariff Schedule of the United States (HTSUS), cannot be supplied by the domestic industry in commercial quantities in a timely manner. The petition requested that apparel containing waistbands of such fabrics be eligible for preferential treatment under the AGOA and the ATPDEA.

FOR FURTHER INFORMATION CONTACT:

Richard Stetson, International Trade Specialist, Office of Textiles and Apparel, U.S. Department of Commerce, 202-482-3400.

SUPPLEMENTARY INFORMATION:

Authority: Section 112(b)(5)(B) of the AGOA; Section 1 of Executive Order No. 13191 of January 17, 2001; Presidential Proclamations 7350 of October 4, 2000; Section 204 (b)(3)(B)(ii) of the ATPDEA, Presidential Proclamation 7616 of October 31, 2002, Executive Order 13277 of November 19, 2002, and the United States Trade Representative's Notice of Further Assignment of Functions of November 25, 2002.

BACKGROUND:

The AGOA and the ATPDEA provide for quota- and duty-free treatment for qualifying textile and apparel products. Such treatment is generally limited to products manufactured from yarns and fabrics formed in the United States or a beneficiary country. The AGOA and the ATPDEA also provide for quota- and duty-free treatment for apparel articles that are both cut (or knit-to-shape) and sewn or otherwise assembled in one or more beneficiary countries from fabric or yarn that is not formed in the United States, if it has been determined that such fabric or yarn cannot be supplied by the domestic industry in commercial quantities in a timely manner. In Executive Order No. 13191 (66 FR 7271) and pursuant to Executive Order No. 13277 (67 FR 70305) and the United States Trade Representative's Notice of Redelegation of Authority and Further Assignment of Functions (67 FR 71606), CITA has been delegated the authority to determine whether yarns or fabrics cannot be supplied by the domestic industry in commercial quantities in a timely manner under the AGOA or the ATPDEA. On March 6, 2001, CITA published procedures that it will follow in considering requests (66 FR 13502).

On January 20, 2004, the Chairman of CITA received a petition from Levi Strauss and Co. alleging that certain ultra-fine Lycra crochet outer-fusible material with a fold line that is knitted into the fabric and a fine Lycra crochet inner-fusible material with an adhesive coating that is applied after going through a finishing process to remove all shrinkage from the product, classified under item 5903.90.2500 of the Harmonized Tariff Schedule of the United States (HTSUS), for use in apparel articles (waistbands), cannot be supplied by the domestic industry in commercial quantities in a timely manner and requesting quota- and duty-free treatment under the AGOA and the ATPDEA for apparel articles that are both cut and sewn in one or more AGOA or ATPDEA beneficiary countries utilizing such fabrics. In describing the product, the petitioner uses the trademark name “Lycra”. CITA will not make a determination on a trademark name, so the term “elastomeric” has been substituted.

The two fabrics at issue are:

Fusible Interlining 1 -

An ultra-fine elastomeric crochet outer-fusible material with a fold line that is knitted into the fabric. A patent is pending for this fold-line fabric.

The fabric is a 45mm wide base substrate, crochet knitted in narrow width, synthetic fiber based (49% polyester/43% elastane/8% nylon with a weight of 4.4 oz., a 110/110 stretch and a dull yarn), stretch elastomeric material with adhesive coating that has the following characteristics:

1. The 45mm is divided as follows: 34mm solid followed by a 3mm seam allowing it to fold over followed by 8mm of solid.

2. In the length it exhibits excellent stretch and recovery properties at low extension levels.

3. It is delivered pre-shrunk with no potential for relaxation shrinkage during high temperature washing or fusing and deliveredlap laid, i.e., tension free adhesion level will be maintained or improved through garment processing temperatures of up to 350 degrees and dwell times of 20 minute durations.

4. The duration and efficacy of the bond will be such that the adhesive will not become detached from the fabric or base substrate during industrial washing or in later garment wear or after-care of 50 home washes.

In summary, the desired fabric will be an interlining fabric with the above properties. The finished interlining fabric is a fabric that has been coated with an adhesive coating after going through a finishing process to remove all shrinkage from the product and impart a stretch to the fabric. This finishing process of imparting stretch to fabrics is patented, U.S. Patent 5,987,721.

Fusible Interlining 2 -

A fine elastomeric crochet inner-fusible material with an adhesive coating that is applied after going through a finishing process to remove all shrinkage from the product. (Sample Number 2) This finishing process of imparting stretch to fabrics is patented, U.S. Patent 5,987,721.

Specifically, the fabric is a 40mm synthetic fiber based stretch elastomeric fusible (80% nylon type 6/20% spandex with a weight of 4.4 oz., a 110/110 stretch and a dull yarn), with the following characteristics:

1. It is supplied pre-coated with an adhesive that will adhere to 100% cotton and other composition materials such as polyester/cotton blends during fusing at a temperature of 180 degrees.

2. The adhesive is of a melt flow index which will not strike back through the interlining substrate or strike through the fabric to which it is fused and whose adhesion level will be maintained or improved through garment processing temperatures of up to 350 degrees and dwell times of 20 minute durations.

3. The duration and efficacy of the bond will be such that the adhesive will not become detached from the fabric or base substrate during industrial washing or in later garment wear or after-care of 50 home washes.

4. Delivered on rolls of more than 350 yards or lap laid in boxes.

Both interlining fabrics are classifiable under 5903.90.2500, HTSUS. The adhesive coating adds approximately 25% - 30% weight to the fusible interlining 1 and adds approximately 20% - 25% weight to the fusible interlining 2.

The fusible interlining fabrics are used in the construction of waistbands in pants, shorts, skirts, and other similar products that have waistbands.

Fusible interlining 1 reinforces the twill pant fabric and also exclusively contributes to the “stretch ability” of the twill pant fabric in the waistband area. Fusible interlining 2 is used on the underside of the waistband lining fabric. This interlining reinforces the waistband lining, which is made from pocketing-type fabric, and also exclusively contributes to that fabric's “stretch ability.” It also serves to “firm up” the seam area of the waistband lining so that the fabric will not rip or otherwise be damaged during the assembly/sewing process.

On February 2, 2004, CITA solicited public comments regarding this request, particularly with respect to whether these fabrics can be supplied by the domestic industry in commercial quantities in a timely manner. On February 18, 2004, CITA and the Office of the U.S. Trade Representative offered to hold consultations with the relevant Congressional committees. We also requested the advice of the U.S. International Trade Commission and the relevant Industry Sector Advisory Committees.

CITA has determined that the domestic industry can supply a product substitutable for the two fabrics described above in commercial quantities in a timely manner. On the basis of currently available information, including review of the request, public comment and advice received, and its understanding of the industry, CITA has determined that there is domestic capacity to supply a substitutable product in commercial quantities in a timely manner. Levi Strauss and Co.'s request is denied.

D. Michael Hutchinson,

Acting Chairman, Committee for the Implementation of Textile Agreements.