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Q. How are products qualified for special tariff treatment under the NAFTA?

Under NAFTA, U.S., Mexican, and Canadian tariffs on "originating" goods are gradually being phased out. Originating goods are those that meet the appropriate NAFTA Rule of Origin. In order to obtain preferential tariff treatment on these products, exporters must complete a NAFTA Certificate of Origin. The following process can be used as a guide to determine if your product qualifies and how to fill out a certificate of origin: Check with the production manager [or the supplier(s) of the product] about any foreign components, parts, or raw materials used to manufacture the product. If there are foreign components, parts, or raw materials, you will need to obtain the Schedule B number for the foreign component and the end product. Check to see if there are any duties on the end product. If there are no duties, it is not necessary to complete the NAFTA Certificate of Origin. If the duties using NAFTA Preference are less than the usual duties applied under Most-Favored Nation (MFN) status (which is equivalent to U.S. Normal Trade Relations), complete a NAFTA Certificate of Origin after determining your product qualifies. Read or review the NAFTA Rules of Origin in Annex 401 (as updates in General Note 12(t) of the US Harmonized Tariff Schedule). Look up the specific rule of origin for the product (the Rules of Origin are listed according to the tariff classification number) and apply the rule to the product to determine whether it meets the requirement. Use the Schedule B numbers obtained in Step 2 above. If the product does not meet the specific Rules of Origin, it does not qualify for preferential tariff treatment and the Certificate of Origin should not be completed. If the product meets the specific Rules of Origin, complete a NAFTA Certificate of Origin. The TIC can assist you in interpreting the Preference Criteria and other information needed on the Certificate.

Q. What is required for a product to qualify for preferential tariff treatment under CAFTA-DR?

The product must qualify as an "originating" good under the terms of the Agreement. This means that the product must have sufficient U.S., Nicaraguan, Guatemalan, Honduran, Salvadoran, Costa Rican, and/or Dominican content or processing to meet the criteria of the Agreement. If goods contain only U.S. or Central American or Dominican Republic inputs, they qualify. If they contain some inputs from other countries, they still might qualify if they meet specific criteria set out in the Rules of Origin of the Agreement. Each product has a unique rule, based on its tariff classification. Most of the rules require either that the non-originating inputs undergo a specified transformation through processing in the United States or one or more of the other signatory countries (tariff shift method) and/or that they have a sufficient level of originating content as determined by a formula (regional value content method).

Q. How can my product qualify to take advantage of the U.S.-Australia Free Trade Agreement?

The product must qualify as an "originating" good under the terms of the Agreement. This means that the product must have sufficient U.S. or Australian content or processing to meet the criteria of the Agreement. If goods contain only U.S. or Australian inputs, they qualify. If they contain some inputs from other countries, they still might qualify if they meet specific criteria set out in the Rules of Origin of the Agreement. Each product has a unique rule, based on its tariff classification. Most of the rules require either that the non-U.S./Australian inputs undergo a specified transformation through processing in the United States or Australia (tariff shift method) and/or that they have a sufficient level of U.S. and/or Australian content as determined by a formula (regional value content method).

Q. How can my product qualify to take advantage of the U.S.- Korea Free Trade Agreement (FTA)?

To receive reduced tariff rates under the U.S.-Korea FTA, the good: Must be produced and shipped directly* from the U.S. or Korea Must comply with the FTA Rules of Origin (ROO) Must be documented as "originating," with an appropriate certification.

Q. What is required for a product to qualify for preferential tariff treatment under U.S.-Bahrain Free Trade Agreement (FTA)?

Generally, to qualify for preferential tariff treatment under the U.S.-Bahrain FTA, a product must qualify as an "originating" good under the terms of the Agreement. This means that the product must have sufficient U.S. or Bahraini content or processing to meet the criteria of the Agreement. If goods contain only U.S. or Bahraini inputs (if you purchase inputs from a U.S. or Bahraini supplier you will need to confirm with the supplier that those goods qualify under the FTA), they qualify. If they contain some inputs from other countries, they still might qualify if they meet specific criteria set out in the FTA's Rules of Origin. For most products, a good will qualify even if it contains inputs from other countries provided it is both (a) produced in Bahrain or the United States, and (b) when added together, the value of U.S. or Bahrain inputs and the direct cost of manufacturing in the United States and Bahrain equals at least 35 percent of the value of the goods. For textiles and apparel and a few other products (all of which are prepared food items), the 35 percent test is not applicable, and the rule instead is based on the tariff classification of the product. For these few products, there are product-specific rules that require the non-U.S./Bahraini inputs undergo a specified transformation through processing in the United States or Bahrain, the so-called tariff shift method.

Q. How does a product qualify for preferential treatment under the US-Jordan Free Trade Agreement (FTA)?

To qualify for preferential tariffs for export to Jordan, goods from the United States must meet three requirements: The good must be produced entirely in the United States. If foreign materials are included, the good may qualify provided that the foreign materials are "substantially transformed" by manufacturing or processing into a U.S. good. The good must contain at least 35 percent U.S. content. Jordanian content, up to 15 percent of the customs value, can count toward the 35 percent U.S. domestic content requirement. Goods must be imported into Jordan directly from the United States.

Q. How does the Central America and Dominican Republic Free Trade Agreement (CAFTA-DR) agreement benefit U.S. exporters?

Among other benefits from the elimination of non-tariff barriers, the CAFTA-DR allows the U.S. supplier to be more price-competitive in the Central American and Dominican market simply due to duty reduction and elimination. A U.S. exporter whose goods qualify under the Agreement may afford its buyer considerable savings. U.S. exporters will also be more competitive in Central America and the Dominican Republic against competing third country products that do not have the duty benefits.

Q. How does the U.S.-Australia Free Trade Agreement (FTA) benefit U.S. exports?

Duties on more than 99 percent of U.S. manufactured exports to Australia were eliminated as soon as the Agreement entered into force on January 01, 2005. Manufactured goods account for 93 percent of U.S. exports to Australia. Australia is a key export market for U.S. manufacturing sectors such as aircraft, automobiles, automobile parts, machinery, computers, electronics, chemicals, wood, and paper products. All U.S. farm exports -- nearly $700 million last year -- are now duty-free to Australia, benefiting many sectors such as processed foods, fruits and vegetables, corn, and soybeans. The Agreement also requires the elimination of a variety of non-tariff barriers. The FTA will open markets and streamline mutual access in intellectual property, services, government procurement, e-commerce, and investment. Companies in all 50 U.S. states export to Australia and Australia is among the top 25 export destinations for companies in 48 of the 50 states.

Q. How does the U.S.-Bahrain Free Trade Agreement (FTA) affect service sectors?

Under the U.S.-Bahrain FTA, U.S. service providers receive substantial market access across Bahrain's entire services regime and receive the same treatment as that provided to Bahraini companies in almost all areas. The very few exceptions are specifically provided for under the FTA through the use of the so-called "negative list" approach. Under the FTA, the Government of Bahrain is required to lift existing restrictions for U.S. service suppliers on the following service sectors: accounting, architecture, engineering, advertising, construction, tourist services, consultancy and management, and publishing. Additionally, Bahrain will remove market access barriers for U.S. telecommunications suppliers. U.S.-based financial services providers were granted full rights to establish subsidiaries, joint ventures, or branches for banks and insurance companies. U.S. insurance providers are able to supply insurance on a cross-border basis, including reinsurance; reinsurance brokerage; marine, aviation, and transport insurance; and other insurance services. Along with opening markets to U.S. service provides, under this FTA there is to be more regulatory transparency, including commitments regarding the maintenance of open and transparent administrative procedures, consultations with interested parties before issuing regulations, and the provision of advance notice and comment periods for proposed rules and regulations.

Q. How does the U.S.-Bahrain Free Trade Agreement (FTA) improve access for U.S. exporters?

The U.S.-Bahrain FTA provides new market access for U.S. consumer and industrial products as well as agricultural products. All bilateral trade in consumer and industrial products became duty-free immediately upon entry into force of the Agreement. In addition, Bahrain provides immediate duty-free access for U.S. agricultural exports in 98% of agricultural tariff lines. Bahrain will phase out tariffs on all remaining products within ten years. Bilateral trade in qualifying textiles and apparel goods became duty-free upon the date the Agreement entered into force, promoting new opportunities for U.S. and Bahraini fiber, yarn, fabric and apparel manufacturing. The Agreement requires most qualifying textiles and apparel to be made from either U.S. or Bahraini yarn and fabric and contains a temporary transitional allowance for textiles and apparel that do not meet these requirements (up to a specified limit), so that U.S. and Bahrain producers can develop and expand business contacts.

Q. How does the U.S.-Morocco Free Trade Agreement (FTA) affect service sectors?

Services represent 54 percent of Morocco's GDP. This is slightly less than the average for most developing countries. Morocco stated that one of its primary interests in concluding the Agreement was to improve the climate for investment from the United States. As such, the Agreement reinforces the on-going development of Morocco's legal and regulatory reforms and development plans for many sectors of interest to U.S. service providers: telecommunications, e-commerce, engineering and infrastructure services, environmental and energy services among them. Morocco, a developing country, has taken on the many fundamental commitments and obligations under the Agreement that will provide the basis for enhanced liberalization and opportunities for U.S. companies providing services as well as products. The Agreement provides a framework for transparency in Morocco's regulatory framework for services in three areas: standard setting; the regulatory application process; and judicial, arbitral, and administrative procedures. These reinforce services and investment reforms already underway in many services sectors by lowering, phasing out, or making more transparent barriers to services trade and inward investment. In effect, the Agreement institutionalizes international business law, accounting procedures and standards, opening Morocco up to increased U.S. business, direct investment, as well as agricultural and service sector exports. Hot Service Sectors Include: Telecom Services Financial Services (Banking, Insurance, and Securities) Tourism Infrastructure Housing and Construction Engineering and Consulting Legal Services Environmental Services Airport Ground Support and Security Franchising Energy Services Education

Q. How does U.S.-Australia Free Trade Agreement (FTA) benefit U.S. exporters?

Among other benefits from the elimination of non-tariff barriers, the FTA allows the U.S. supplier to be more price-competitive in the Australian market simply due to duty reduction and elimination. A U.S. exporter whose goods qualify under the Agreement may afford its buyer considerable savings. U.S. exporters will also be more competitive in Australia against competing third country products that do not have the duty benefits.

Q. How does U.S.-Bahrain Free Trade Agreemen (FTA) protect intellectual property rights?

U.S. industry supports the Intellectual Property Rights (IPR) provisions of the U.S.-Bahrain FTA noting that it maintains many of the key characteristics of the IPR chapter of the U.S.-Morocco FTA, which the U.S. industry considers a benchmark for all FTAs. This Agreement provides for tough penalties for piracy and counterfeiting by requiring each government to criminalize end-user piracy. Additionally, each government commits to having and maintaining authority to seize, forfeit, and destroy counterfeit and pirated goods and the equipment used to produce them. Moreover, IPR laws will be enforced against goods-in-transit, to deter violators from using U.S. or Bahraini ports or free-trade zones to traffic in pirated products. Finally, the Agreement mandates both statutory and actual damages under Bahraini law for IPR violations, which will further deter piracy. Additional Resources STOPfakes.gov Your resource for intellectual property rights information and assistance Help with trade problems International Logistics Resources on packing, labeling, documentation, and insurance requirements

Q. How does the U.S.-Jordan Free Trade Agreement (FTA) improve access for U.S. exports?

The U.S.-Jordan Free Trade Agreement (FTA) entered into force on December 17, 2001. The FTA will eventually eliminate duties and commercial barriers to bilateral trade in goods and services originating in the United States and Jordan. The FTA also includes for the first time ever in the text of a trade agreement provisions addressing trade and environment (Article 5), trade and labor (Article 6), and electronic commerce (Article 7). Other provisions address intellectual property rights protection(Article 4), balance of payments (Article 11), rules of origin(Article 14), safeguards (Article 10) and procedural matters (Articles 16 and 17). Because the United States already has a Bilateral Investment Treaty with Jordan, the FTA does not include an investment chapter. In order to take advantage of the benefits for U.S. goods under this agreement, exporters will need to understand how to determine that their goods originate or qualify for preferential duty treatment under the U.S.-Jordan FTA Rules of Origin. Some may find the process of qualifying one's goods to be rather complicated. US exporters will find information here to help guide them through the process. Users of this site should keep in mind, however, that the text of the U.S.-Jordan FTA and the customs regulations of Jordan are the only definitive resources regarding qualification. Under the U.S.-Jordan FTA, Jordan is obligated to adopt stronger protection and enforcement provisions for copyrights, trademarks, patents, and trade secrets. The FTA will also open the Jordanian services market to US companies. These changes, among others, will provide US and Jordanian businesses with a market base that is more accessible and easily navigated.

Q. How does U.S.-Morocco Free Trade Agreemen protect intellectual property rights?

U.S. industry has expressed a high level of satisfaction with the IPR provisions of the Agreement. U.S. industry calls the Agreement's IPR chapter, "the most advanced IP chapter in any FTA negotiated so far" and "a precedential agreement for future FTAs." Morocco has agreed to protect IPR to a degree unseen in many other developing countries. Some of the highlights for enhanced copyright, trademark, and patent protection and enforcement include: Copyrights: Ensures extended terms of protection (e.g., life of the author plus 70 years) for copyrighted works. Establishes strong anti-circumvention provisions to prohibit tampering with technologies that are designed to prevent piracy and unauthorized distribution over the Internet. Provides rules for the liability of Internet Service Providers (ISPs) for copyright infringement, reflecting the balance struck in the U.S. Digital Millennium Copyright Act between legitimate ISP activity and the infringement of copyrights. Patents & Undisclosed Information Provides for the adjustment of patent terms to compensate for unreasonable delays in granting the original patent. Clarifies that test data and trade secrets submitted to a government for the purpose of product approval will be protected against unfair commercial use for a period of five years for pharmaceuticals and ten years for agricultural chemicals. Requires measures to prevent the marketing approval of pharmaceutical products that infringe patents, and to provide notice when the infringement or validity of a pharmaceutical patent is to be challenged. Trademarks Requires a system to resolve disputes about trademarks used in connection with Internet domain names, which is important to address trademark cyber-piracy. Applies the principle of "first-in-time, first-in-right" to trademarks and geographical indications, so that the first person who acquires a right to a trademark or geographical indication is the person who has the right to use it. Enforcement Criminalizes end-user software piracy, providing strong deterrence against piracy and counterfeiting. Requires both Parties to authorize the seizure, forfeiture, and destruction of counterfeit and pirated goods and the equipment used to produce them. Ex officio action may be taken in border and criminal cases, thus providing more effective enforcement.

Q. I have heard that packaging materials and containers are not taken into consideration when qualifying a good under the CAFTA-DR. Is this true?

When the packing materials and containers are being used for shipping purposes, they are disregarded in determining the origin of the good being shipped. In cases where the packaging material or container is for retail sale, it will be disregarded in determining whether the good qualifies under the FTA only if it is classified with the good and qualification of the good is determined using the tariff shift method. If the container is not classified with the good, or the regional value content method is used, the material or container will need to be considered in determining whether the good qualifies as originating.

Q. Are packaging materials and containers taken into consideration when qualifying a good under the U.S.-Korea Free Trade Agreement (FTA)?

In general, packing material and containers are not taken into consideration. An exception is when a certain percentage of the value of the goods must be from North America known as the "regional value content" method. In determining the regional value content of the good, the packaging material or container is considered.

Q. When shipping to Australia, I often send accessories for my product separately from the product. Will these qualify automatically if the main product qualifies?

No. When accessories, spare parts, or tools are delivered with a good, they are regarded as a material used in the production of the good as long as 1) they form part of the good's standard package and are not invoiced separately from the good and 2) the quantities and values are customary for the good. However, when these ancillary items are sent separately from the original good, they are treated as a separate export and must qualify as such.

Q. When shipping to a CAFTA-DR country, I often send accessories for my product separately from the product. Will these qualify automatically if the main product qualifies?

No. When accessories, spare parts, or tools are delivered with a good, they are regarded as a material used in the production of the good as long as 1) they form part of the goods standard package and are not invoiced or classified separately from the good and 2) the quantities and values are customary for the good. However, when these ancillary items are sent separately from the original good, they are treated as a separate export and must qualify as such.

Q. When shipping to South Korea, I often send accessories for my product separately from the product. Will these qualify automatically if the main product qualifies?

When accessories, spare parts, or tools that form part of the good's standard accessories, spare parts, or tools, are delivered with a good, they are regarded as a material used in the production of the good as long as they 1) are classified with and not invoiced separately from the good; 2) the quantities are not considered to be unusual. When these ancillary items are sent separately from the original good, they become "the good" and must qualify as such; otherwise they will be subject to standard duty rates.

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