(h) The duty-free treatment provided under the CBERA shall not apply to any footwear provided for in any of subheadings 6401.10.00,    6401.92.90, 6401.92.90, 6401.99.10, 6401.99.30, 6401.99.60, 6401.99.90, 6402.91.10, 6402.91.20, 6402.91.26, 6402.91.50,    6402.91.80, 6402.91.90, 6402.99.08, 6402.99.16, 6402.99.19, 6402.99.20, 6402.99.33, 6402.99.80, 6402.99.90, 6403.59.60,    6403.91.30, 6403.99.60, 6403.99.90, 6404.11.90 and 6404.19.20 of the tariff schedule that was not designated on December 18,    2004, as eligible articles for purposes of the GSP under general note 4 to the tariff schedule.

8. United States-Israel Free Trade Area Implementation Act of 1985.

  (a) The products of Israel described in Annex 1 of the Agreement on the Establishment of a Free Trade Area between the Government of the United States of America and the Government of Israel, entered into on April 22, 1985, are subject to duty as provided herein.    Products of Israel, as defined in subdivision (b) of this note, imported into the customs territory of the United States and entered under a provision for which a rate of duty appears in the "Special" subcolumn followed by the symbol "IL" in parentheses are eligible for the tariff treatment set forth in the "Special" subcolumn, in accordance with section 4(a) of the United States-Israel Free Trade    Area Implementation Act of 1985 (99 Stat. 82).

  (b) For purposes of this note, goods imported into the customs territory of the United States are eligible for treatment as "products of    Israel" only if--

   (i) each article is the growth, product or manufacture of Israel or is a new or different article of commerce that has been grown, produced or manufactured in Israel;

   (ii) each article is imported directly from Israel (or directly from the West Bank, the Gaza Strip or a qualifying industrial zone as defined in general note 3(a)(v)(G) to the tariff schedule) into the customs territory of the United States; and

   (iii) the sum of--

     (A) the cost or value of the materials produced in Israel, and including the cost or value of materials produced in the West       Bank, the Gaza Strip or a qualifying industrial zone pursuant to general note 3(a)(v) to the tariff schedule, plus

     (B) the direct costs of processing operations performed in Israel, and including the direct costs of processing operations performed in the West Bank, the Gaza Strip or a qualifying industrial zone pursuant to general note 3(a)(v) to the tariff schedule, is not less than 35 percent of the appraised value of each article at the time it is entered.

   If the cost or value of materials produced in the customs territory of the United States is included with respect to an article to which this note applies, an amount not to exceed 15 percent of the appraised value of the article at the time it is entered that is attributable to such United States cost or value may be applied toward determining the percentage referred to in subdivision (b)(iii) of this note.

  (c) No goods may be considered to meet the requirements of subdivision (b)(i) of this note by virtue of having merely undergone--

   (i) simple combining or packaging operations; or

   (ii) mere dilution with water or mere dilution with another substance that does not materially alter the characteristics of the goods.

  (d) As used in this note, the phrase "direct costs of processing operations" includes, but is not limited to--

   (i) all actual labor costs involved in the growth, production, manufacture or assembly of the specific merchandise, including fringe benefits, on-the-job training and the cost of engineering, supervisory, quality control and similar personnel; and

   (ii) dies, molds, tooling and depreciation on machinery and equipment which are allocable to the specific merchandise.

   Such phrase does not include costs which are not directly attributable to the merchandise concerned, or are not costs of manufacturing the product, such as (A) profit, and (B) general expenses of doing business which are either not allocable to the specific merchandise or are not related to the growth, production, manufacture or assembly of the merchandise, such as administrative salaries, casualty and liability insurance, advertising and salesmen's salaries, commissions or expenses.

  (e) The Secretary of the Treasury, after consultation with the United States Trade Representative, shall prescribe such regulations as may be necessary to carry out this note.