06-2610. Denial of Request to Revoke Commercial Availability Designation under the United States-Caribbean Basin Trade Partnership Act (CBTPA) and the Andean Trade Promotion and Drug Enforcement Act (ATPDEA)

March 14, 2006.

AGENCY:

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

ACTION:

Denial of the request to revoke commercial availability designation for certain compact, plied, ring-spun cotton yarn under the CBTPA and ATPDEA.

SUMMARY:

On January 10, 2006, the Chairman of the Committee for the Implementation of Textile Agreements (CITA) received a petition from The National Council of Textile Organizations (NCTO), alleging that a substitutable product for certain compacted, plied, ring-spun cotton yarns, with yarn counts in the range from 42 to 102 metric, classified in subheadings 5205.42.0020, 5205.43.0020, 5205.44.0020, 5205.46.0020, 5205.47.0020 of the Harmonized Tariff Schedule of the United States, can be supplied by the domestic industry in commercial quantities in a timely manner. The petition requested that CITA revoke its previous commercial availability designation regarding these yarns under the CBTPA and the ATPDEA (70 FR 58190, October 5, 2005). CITA has determined that the subject yarns cannot be supplied by the domestic industry in commercial quantities and in a timely manner and that the petitioner has not substantiated that ring spun yarns currently produced by the domestic industry are substitutable for the subject compact, plied yarns. Therefore, CITA denies the request to revoke its designation made on October 5, 2005, for such yarns under the CBTPA and the ATPDEA.

FOR FURTHER INFORMATION CONTACT:

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

SUPPLEMENTARY INFORMATION:

Authority: Section 213(b)(2)(A)(v)(II) of the Caribbean Basin Economic Recovery Act, as added by Section 211(a) of the CBTPA; Section 6 of Executive Order No. 13191 of January 17, 2001; Presidential Proclamation 7351 of October 2, 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 CBTPA and 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 CBTPA and ATPDEA also provide for duty-free treatment for apparel articles that are both cut (or knit-to-shape) and sewn or otherwise assembled in one or more CBTPA and ATPDEA beneficiary countries from fabric or yarn that is not formed in the United States or a beneficiary country, 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, the President delegated to CITA the authority to determine whether yarns or fabrics cannot be supplied by the domestic industry in commercial quantities in a timely manner under the CBTPA and ATPDEA and directed CITA to establish procedures to ensure appropriate public participation in any such determination. On March 6, 2001, CITA published procedures that it will follow in considering requests (66 FR 13502).

On October 5, 2005, following a determination that certain compacted, plied, ring spun cotton yarns could not be supplied by the domestic industry in commercial quantities in a timely manner under the CBTPA and ATPDEA, CITA designated certain apparel made from U.S. formed fabric containing such yarns as eligible for duty-free treatment under the CBTPA and ATPDEA. On January 10, 2006, the Chairman of CITA received a petition from The National Council of Textiles Organizations (NCTO) alleging that yarns substitutable for these yarns can be supplied by the domestic industry in commercial quantities in a timely manner, and requesting that CITA revoke its previous designation regarding these yarns. On January 17, 2006, CITA published a Federal Register notice requesting public comments on NCTO's request (71 FR 3057).

The Industry Trade Advisory Committees (ITACs) charters and members' appointments expired on February 5, 2006, and have not yet been renewed. Therefore, CITA was not able to seek ITAC advice on this request. USTR requested the advice of the U.S. International Trade Commission (ITC) on the probable economic effects on the domestic industry of granting the request.

On February 6, 2006, CITA and USTR offered to hold consultations with the Senate Finance Committee and the House Ways and Means Committee. The Senate Finance Committee responded with general procedural questions, but provided no substantive comments. CITA met with the House Ways and Means Committee on March 9, 2006, and discussed CITA's authority to revoke a prior designation and discussed the substance of the case.

CITA carefully reviewed the request, the comments, advice received, and met with interested parties on February 22, 2006. Based on our review of the information provided, the ITC report, the public comments received, and our knowledge in the industry, CITA finds that the subject yarns cannot be supplied by the domestic industry in commercial quantities in a timely manner. CITA also finds that the petitioner has not substantiated its claim that ring spun yarns currently produced by the domestic industry are substitutable for the subject compact, plied yarns.

On the basis of currently available information and our review of this request, CITA has determined that the domestic industry cannot supply the subject fabrics in commercial quantities in a timely manner. Therefore, CITA is denying the request to revoke its previous designation.

James C. Leonard III,

Chairman, Committee for the Implementation of Textile Agreements.