CLA-2 CO:R:C:T 956362 PR
Ralph S. Newitter, Jr.
Level Export Sales Corporation
1460 Broadway
New York, New York 10036
RE: NAFTA Eligibility of Denim Jeans
Dear Mr. Newitter:
This is in reply to your letter of April 29, 1994,
concerning the status of denim jeans under the North American
Free Trade Agreement (NAFTA). Our ruling on the matter follows.
FACTS:
You state that United States grown cotton will be spun in
the United States into yarn which will be woven in the United
States into fabric. The fabric will be made in Mexico into jeans
by cutting and sewing.
ISSUE:
The issue presented is whether garments wholly produced in
NAFTA countries are qualifying goods under the NAFTA.
LAW AND ANALYSIS:
The NAFTA eliminates tariffs on most goods originating in
Canada, Mexico, and the United States, over a maximum transition
period of fifteen years. Generally, tariffs only will be
eliminated on goods that "originate", as defined in Article 401,
NAFTA. Article 401 states that a good is "originating" if (1) it
is wholly obtained or produced in the NAFTA region; (2) it is
produced in the NAFTA region wholly from originating materials;
(3) each of the nonoriginating materials used in the production
of the good undergoes the applicable tariff shift set out in
Annex 401 and any other applicable requirements of that Annex; or
(4) it is unassembled, or is classified with its parts, and does
not meet the Annex 401 requirements but contains 60 percent
regional value content using the transaction method (50 percent
using the net cost method).
-2-
HOLDING:
Under the facts presented, the jeans are wholly produced in
the NAFTA region. Accordingly, those jeans are qualifying goods
for purposes of the NAFTA. There are no quantitative
restrictions (e.g. quotas) applicable to the subject goods.
Without samples, we are unable to determine the tariff
classification or rate of duty applicable to the imported
merchandise.
Sincerely,
John Durant, Director
Commercial Rulings Division