The Caribbean Basin Trade Partnership Act (CBTPA)
If you have any questions about this program, please contact Maria Goodman
at the U.S. Department of Commerce Office of Textiles and Apparel at 202-482-3651
or click here for e-mail access.
**The information presented on this website is meant to serve as a guide.
Only the official texts and the customs regulations issued to implement the program are definitive.
For complex issues or where interpretation is required, U.S. exporters should seek legal assistance or an
advanced ruling from the customs administration in the country to which they are exporting.**
What opportunities exist for U.S. textile manufacturers under the CBTPA?
The Caribbean Basin Trade Partnership Act (CBTPA) provides a variety of trade preference benefits. In particular, CBTPA provides for duty- and quota-free access for apparel products manufactured in designated beneficiary Caribbean Basin region under several different scenarios. Those provisions requiring the use of U.S. formed yarns, fabrics and thread are briefly described below. The legislation and U.S. Customs interim regulations should be consulted for a detailed presentation of each of these provisions.
The textile, apparel and footwear articles to which the preferential treatment applies are as follows:
U.S. formed fabric of U.S. formed yarn, cut in the U.S.--Fabrics, wholly formed in the U.S. from yarn that is wholly formed in the U.S. and cut in the U.S. is assembled into apparel in one or more beneficiary Caribbean Basin Region. “Fabrics” include fabrics not formed from yarns (i.e. felts and nonwovens), if such fabrics are classifiable under the HTS heading 5602 and 5603 and are wholly formed and cut in the U.S. These apparel products receive duty- and quota-free treatment when entered into the U.S. under appropriate HTS tariff lines, as detailed in Presidential Proclamation 7351. Apparel that has undergone further processing, such as embroidery, stone-washing, enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, garment-dyeing, screen printing, or other similar processes, can also qualify for the trade preference.
U.S. formed fabric of U.S. formed yarn, assembled with U.S. formed thread, cut in CBI--Fabrics, wholly formed in the U.S. from yarns wholly formed in the U.S., are cut and assembled into apparel, in one or more beneficiary Caribbean Basin Region, using U.S. formed thread, “Fabrics” include fabrics not formed from yarns (i.e. felts and nonwovens), if such fabrics are classifiable under the HTS heading 5602 and 5603 and are wholly formed in the U.S.
Knit Apparel: Knit-to-Shape/Cut & Sew--Apparel articles (other than socks) knit-to-shape in a CBTPA beneficiary country from yarns wholly formed in the United States and Knit apparel articles (other than certain T-shirts), cut and wholly assembled in one or more CBTPA beneficiary countries, from fabric formed in CBTPA or US, from yarns wholly formed in the United States. With a CBTPA (or “Regional”) fabric, Tariff Rate Quota (TRQ) of 250,000,000 square meter equivalents and will increase 16% a year till 9/30/2004.
Non-underwear T-shirts Cut & Sew--T-Shirts (other than underwear), classified under 6109.10.00 and 6109.90.10, made in a CBTPA beneficiary countries from fabric made in one or more CBTPA beneficiary country (including former beneficiary countries), from yarns wholly formed in the United States. The Tariff Rate Quota (TRQ) is 12 million dozen t-shirts per year.
Brassieres: Cut & Assembled in US or CBTPA beneficiary countries -- Brassieres cut and assembled in the US or one or more CBTPA country. A producer or entity controlling production is eligible only if aggregate cost of fabric components formed in the US in the preceding year is at least 75% of the value of the fabric.
Yarns and Fabrics not Commercially Available in the US or CBTPA region--Apparel manufactured from fabrics or yarns that are found not to be commercially available in the US-CBTPA region may qualify for CBTPA benefits. Procedures for submitting a commercial availability request and a full listing of current and past cases can be found on the OTEXA website under AGOA/ATPDEA/CBTPA commercial availability.
Handloomed, Handmade, & Folklore Articles--Hand-loomed , handmade, or folklore textile or apparel article of a CBTPA country that have been agreed upon and described in section 2.3 (a), (b), (c), or Appendix 3.1.B.11 of Annex 300-B of the NAFTA.
Luggage: Cut in U.S./CBI, Assembled in CBI--Assembled in a CBTPA country from fabric wholly formed and cut in the U.S., from yarns wholly formed in the U.S. Assembled from fabric cut in a CBTPA from fabric wholly formed in the U.S. from yarns wholly formed in the U.S.
Special Rules for Textile and Apparel Articles--
Certain Interlinings: Certain foreign interlinings, along with findings and trimming may be used up to 25% of the cost of the components. Only a chest type plate, “hymo” piece, or “sleeve header”, of woven or weft-inserted warp knit construction and coarse animal hair or man-made filaments. Can be terminated by CITA.
De Minimis: Foreign (from non-CBTPA participating countries) fibers and yarns may be used as long as the total weight of all such fibers and yarns does not account for more than 7% of the total weight of the good. (Note: No exclusion for fabrics). No exclusion for elastomeric yarns, which must be wholly formed in the U.S.
Special Origin Rule: Foreign nylon filament yarn (other than elastomeric yarn) may be used if imported under a free trade agreement with Canada, Mexico, or Israel.
Click here for a complete version of the legislation, detailing all the provisions including products eligible under a tariff rate quota. U.S. Customs interim regulations implements the various provisions of CBTPA.
Which countries are eligible for the CBTPA preferential trade benefits?
As of 01-01-2008 - El Salvador, Guatemala, Nicaragua, Honduras, and Dominican Republic have become Parties to the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) and are no longer eligible for CBTPA benefits. Costa Rica is still eligible for CBTPA until they implement the CAFTA-DR.
A country must meet a set of criteria in order to be designated by the President as a beneficiary of the CBTPA trade benefits. On October 2, the President signed a Proclamation implementing the CBTPA. The Presidential Proclamation declared the 24 current beneficiary countries of the Caribbean Basin Initiative to be “Beneficiary Countries” for purposes of the enhanced trade preferences made available under the CBTPA. The following 24 countries or territories were designated as CBTPA Beneficiary Countries by Proclamation 7351 section 211 of the CBTPA. Countries listed in bold type have been found by USTR to be entitled to the enhanced benefits. Check the Federal Register for recent additions. Beneficiary countries:
Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Costa Rica, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Netherlands Antilles, Panama, St. Kitts and Nevis, St. Lucia, Saint Vincent and the Grenadines, Trinidad and Tobago, British Virgin Islands.
A country must undergo an annual review on its continual progress in implementing the criteria detailed in the legislation in order to maintain its eligibility for the trade preferences.
The new law requires the President to consider certain factors in evaluating whether to designate countries as eligible to receive the new trade preferences. These factors include, among others, worker rights, protection of intellectual property, and fulfillment of international trade obligations.
CBTPA requires that the importer:
- Make a written declaration, based on a valid Certificate of Origin, that the imported good qualifies for preferential treatment, or preferential tariff treatment
- Have the Certificate in its possession at the time the declaration is made
- Provide the Certificate to Customs on request, and promptly
- Make a corrected declaration and pay any duties owing where the importer has reason to believe that a Certificate on which a declaration was based contains information that is not correct.
Are there any special documentary requirements?
A Certificate of Origin must be submitted to Customs. The Certificate of Origin must be prepared by the exporter in the CBTPA beneficiary country in the form below:
- Must be in writing (on the appropriate form) or transmitted electronically in an approved format (containing the same information) pursuant to any electronic data interchange system authorized by Customs for that purpose;
- Must be signed by the exporter or by the exporter’s authorized agent having knowledge of the relevant facts;
- Must be completed either in the English language or in the language of the country from which the article is exported. If the Certificate is completed in a language other than English, the importer must provide to Customs upon request a written English translation of the Certificate; and
- May be applicable to:
- a single importation of an article into the United States, including a single shipment that results in the filing of one or more entries and a series of shipments that results in the filing of one entry; or
- multiple importations of identical articles into the United States that occur within a specified blanket period, not to exceed 12 months, set out in the Certificate by the exporter. The term “identical articles” means articles that are the same in all material respects, including physical characteristics, quality, and reputation.
A certificate of origin is required for each shipment of textiles, apparel and footwear claiming the preferential trade benefits for textiles and apparel. The U.S. importer must obtain the certificate of origin from the manufacturer prior to presentation of entries to the U.S. Customs Service claiming an CBTPA preference. The importer is required to posses the certificate of origin and to be able to present it upon demand by the U.S. Customs Service.
What is “transshipment?”
Transshipment is claiming preferential treatment for a product that does not meet the rules of origin requirements. CBTPA describes "transshipment" as claiming a textile or apparel article for preferential treatment that is false with respect to country of origin, manufacture, processing or assembly of the article or any of its parts. If transshipment is found, the U.S. will deny all benefits for future textile or apparel shipments from the transshipping Caribbean Basin country's exporter for five years.
Where do I find U.S. suppliers of fabrics, yarns and threads?
See the listing of U.S. Textile and Apparel Trade Associations.
Where can I find information about the economic and political situations in eligible countries?
U.S. Embassies in these countries have information available on their websites, which also provide up-to-date reports. Several of them have sections dedicated to the CBTPA opportunities. Visit the State Department website to locate a particular embassy.
Country Commercial Guides - The Country Commercial Guides (CCG) are prepared by US Embassy Staff once a year and contain information on the business and economic situation of foreign countries and the political climate as it affects U.S. business. Each CCG contains the same chapters, and an appendix, which include topics such as marketing, trade regulations, investment climate, and business travel.
Where can I find information on tariff and customs procedures in eligible countries?
You may find general tariff and tax information on the OTEXA Market Reports/Tariffs webpage (by country).
How much textiles and apparel does the United States currently export to eligible countries?
The OTEXA website provides information on U.S. exports to the world of textile and apparel products. Click here for the Export Report.
What is a ruling letter and who needs one?
An importer or exporter of merchandise to the United States may request, in writing, a ruling from the U.S. Customs Service concerning U.S. Customs and related laws pertaining to a particular transaction. If there are questions as to the eligibility of a product for receiving the preferential benefits under CBTPA, consideration should be given to requesting a ruling letter from the U.S. Customs Service.
The U.S. Customs Service will give full and careful consideration to written requests for rulings or information setting forth, with respect to a specifically described product transaction, a definitive interpretation of applicable law, or other appropriate information. A customs ruling may be requested by any person, who as an importer or exporter of merchandise, has a direct and demonstrable interest in the question(s) presented in the ruling request, or by the authorized agent of such person. A "person" in this context includes an individual, a corporation, partnership, association, or other entity or group.
Where can I get more information?