51th Annual Report of The European Free Trade Association 2011
1 CHAPTER V FREE TRADE AGREEMENTS European Free Trade Agreements & Common Market –European Free...
-
Upload
donna-francis -
Category
Documents
-
view
228 -
download
4
Transcript of 1 CHAPTER V FREE TRADE AGREEMENTS European Free Trade Agreements & Common Market –European Free...
1
CHAPTER V CHAPTER V FREE TRADE FREE TRADE AGREEMENTS AGREEMENTS
European Free Trade Agreements & Common Market– European Free Trade Association– Central European Free Trade
Agreement– European Union
United States Free Trade Agreements
Copyright(c) 2012 Dr. Chase C. Rhee
2
Differences between Free Trade Differences between Free Trade Area and Common MarketArea and Common Market
In Free Trade AreaIn Free Trade Area Free movement of product, service, & Free movement of product, service, &
capitalcapital No free movement of laborNo free movement of labor Separate external tariff & trade policySeparate external tariff & trade policy Separate fiscal & economic policy Separate fiscal & economic policy
In Common MarketIn Common Market Free movement of product, service, & Free movement of product, service, &
capitalcapital Free movement of laborFree movement of labor Common external tariff & trade policyCommon external tariff & trade policy Coordinated fiscal or economic policyCoordinated fiscal or economic policy
Copyright(c) 2012 Dr. Chase C. Rhee
3
European Free Trade Association (EFTA)
The oldest free trade organizationThe oldest free trade organization Stockholm Convention in 1960Stockholm Convention in 1960 Many members left EFTA to join Many members left EFTA to join
European Community (EC), which European Community (EC), which later became European Union (EU)later became European Union (EU)
Current members: Iceland, Norway, Current members: Iceland, Norway, Switzerland, and LiechtensteinSwitzerland, and Liechtenstein
EFTA & EU created European EFTA & EU created European Economic Area (EEA) of 300 million Economic Area (EEA) of 300 million consumers in 1994consumers in 1994
Copyright(c) 2012 Dr. Chase C. Rhee
4
Central European Free Trade Agreement (CEFTA)
Signed in 1992 in PolandSigned in 1992 in Poland Former members:Former members:
– Poland (left 2004)Poland (left 2004)– Hungary (left 2004)Hungary (left 2004)– Czech Republic (left 2004)Czech Republic (left 2004)– Slovakia (left 2004)Slovakia (left 2004)– Slovenia (left 2004)Slovenia (left 2004)– Romania (left 2007)Romania (left 2007)– Bulgaria (left 2007)Bulgaria (left 2007)
Copyright(c) 2012 Dr. Chase C. Rhee
Central European Free Trade Agreement
Current Members– Albania (joined 2007)– Bosnia & Herzegovina (joined 2007)– Croatia (joined 2003)– Macedonia (joined 2006)– Moldova (joined 2007)– Montenegro (joined 2007)– Serbia (joined 2007)– Kosovo (joined 2007)
5Copyright(c) 2012 Dr. Chase C. Rhee
6
European Union (EU) The most successful common marketThe most successful common market French foreign minister, Robert Schuman’s French foreign minister, Robert Schuman’s
speech on May 9, 1950, European dayspeech on May 9, 1950, European day European Economic Community (EEC) was European Economic Community (EEC) was
created by the Treaty of Rome in March created by the Treaty of Rome in March 1957 1957 composed of 6 countries: Belgium, Germany, composed of 6 countries: Belgium, Germany, France, Luxembourg, Italy, & the NetherlandFrance, Luxembourg, Italy, & the Netherland
In 1994, EEC became EU with 12 member In 1994, EEC became EU with 12 member countries:countries:– Belgium, Luxembourg, Denmark, France, Belgium, Luxembourg, Denmark, France,
Germany, Ireland, Italy, the U.K., the Germany, Ireland, Italy, the U.K., the Netherlands, Greece, Spain, and PortugalNetherlands, Greece, Spain, and Portugal
Copyright(c) 2012 Dr. Chase C. Rhee
7
European Union In 1995, Sweden, Finland, and Austria In 1995, Sweden, Finland, and Austria
joined the E.U. Membership increased to joined the E.U. Membership increased to 1515
In 2004, 10 countries joined the EU. In 2004, 10 countries joined the EU. Membership increased to 25Membership increased to 25– Cyprus, Czech Republic, Estonia, Hungary, Cyprus, Czech Republic, Estonia, Hungary,
Latvia, Lithuania, Malta, Poland, Slovak Latvia, Lithuania, Malta, Poland, Slovak Republic, and SloveniaRepublic, and Slovenia
In 2007: Bulgaria & Romania joined & In 2007: Bulgaria & Romania joined & membership increased to 27membership increased to 27
In 2013, Croatia joined as 28In 2013, Croatia joined as 28thth member member 506 million people506 million people
Copyright(c) 2012 Dr. Chase C. Rhee
European Union In 1999, the single currency, Euro, was In 1999, the single currency, Euro, was
born.born. In 2002, 11 members replaced their In 2002, 11 members replaced their
currencies with Euro notes and coinscurrencies with Euro notes and coins– 1/1/201/1/201111:1:177 countries, countries, – 1/1/2014: 18 countries (Latvia), 1/1/2014: 18 countries (Latvia), – 1/1/2015: 19 countries (Lithuania)1/1/2015: 19 countries (Lithuania)
Copyright(c) 2012 Dr. Chase C. Rhee 8
9
Common Markets
European Union European Union Central American Common MarketCentral American Common Market Andean Common MarketAndean Common Market Caribbean Community and Common Caribbean Community and Common
MarketMarket Economic Community of West Economic Community of West
African StatesAfrican States
Copyright(c) 2012 Dr. Chase C. Rhee
10
United States Free Trade Agreements U.S. - Israel Free Trade Area Agreement (IFTA) U.S. - Israel Free Trade Area Agreement (IFTA) U.S. - Canada Free Trade Agreement (CFTA) U.S. - Canada Free Trade Agreement (CFTA) North American Free Trade Agreement (NAFTA) North American Free Trade Agreement (NAFTA) U.S.- Jordan Free Trade Agreement (JFTA) U.S.- Jordan Free Trade Agreement (JFTA) U.S.- Singapore Free Trade Agreement (SFTA)U.S.- Singapore Free Trade Agreement (SFTA) U.S.- Chile Free Trade Agreement (UCFTA)U.S.- Chile Free Trade Agreement (UCFTA) U.S.- Australia Free Trade Agreement (UAFTA)U.S.- Australia Free Trade Agreement (UAFTA) U.S.- Morocco Free Trade Agreement (UMFTA)U.S.- Morocco Free Trade Agreement (UMFTA) U.S. –Central American-Dominican Free Trade U.S. –Central American-Dominican Free Trade
Agreement (CAFTA-DR)Agreement (CAFTA-DR) U.S.-Bahrain Free Trade Agreement (UBTA)U.S.-Bahrain Free Trade Agreement (UBTA) U.S-Oman Free Trade Agreement (OFTA)U.S-Oman Free Trade Agreement (OFTA) U.S.-Peru Trade Promotion Agreement (PTPA)U.S.-Peru Trade Promotion Agreement (PTPA) U.S-Korea Free Trade Agreement (UKFTA)U.S-Korea Free Trade Agreement (UKFTA) U.S.-Colombia Trade Promotion Agreement (UCTPA)U.S.-Colombia Trade Promotion Agreement (UCTPA) U.S.-Panama Trade Promotion Agreement (UPATPA)U.S.-Panama Trade Promotion Agreement (UPATPA) Recent Free Trade AgreementsRecent Free Trade Agreements
Copyright(c) 2012 Dr. Chase C. Rhee
11
U.S.-Israel Free Trade AgreementU.S.-Israel Free Trade Agreement Phase-in Period: 9/1/85-1/1/95Phase-in Period: 9/1/85-1/1/95 Israeli ProductsIsraeli Products
Wholly the growth, product or Wholly the growth, product or manufacture of Israel manufacture of Israel
If imported materials are used,If imported materials are used,• Substantially transformed into a new, Substantially transformed into a new,
different article of commerce ordifferent article of commerce or• Minimum 35% value added in Israel, West Minimum 35% value added in Israel, West
Bank, Gaza Strip or QIZ Bank, Gaza Strip or QIZ Directly imported from Israel, West Directly imported from Israel, West
Bank, Gaza Strip or Qualifying Industrial Bank, Gaza Strip or Qualifying Industrial Zone into the U.S. Zone into the U.S.
Identified by "IL" in “Special” Subcoulmn Identified by "IL" in “Special” Subcoulmn of the HTSUS of the HTSUS
Copyright(c) 2012 Dr. Chase C. Rhee
12
U.S.-Israel Free Trade AgreementU.S.-Israel Free Trade Agreement Certificate of Origin Form A must accompany the Certificate of Origin Form A must accompany the
shipment, but not required to be filed at the time shipment, but not required to be filed at the time of entryof entry
Under the amended FTA in 1996, Under the amended FTA in 1996, duty-free treatment is also allowed duty-free treatment is also allowed for products offor products of West BankWest Bank Gaza StripGaza Strip Qualifying Industrial Zone (QIZ): Qualifying Industrial Zone (QIZ): • Duty-free area encompassing portions of Duty-free area encompassing portions of
territories of Israel and Jordan, Israel territories of Israel and Jordan, Israel and Egyptand Egypt
• Designated by U.S. Trade Rep as a QIZDesignated by U.S. Trade Rep as a QIZ
Copyright(c) 2012 Dr. Chase C. Rhee
13
U.S.-Canada Free Trade U.S.-Canada Free Trade AgreementAgreement
1/1/89-1/1/98 Replaced by NAFTA since 1994
Copyright(c) 2012 Dr. Chase C. Rhee
14
North American Free Trade North American Free Trade Agreement(NAFTA)Agreement(NAFTA)
Signed August 1992 by Trade Ministers Signed August 1992 by Trade Ministers of Mexico, USA & Canada of Mexico, USA & Canada
Took effect 1/1/94 Took effect 1/1/94 • Yukon of Alaska to Yukatan of Yukon of Alaska to Yukatan of
Mexico Mexico • 370 million people & $ 6 trillion 370 million people & $ 6 trillion
GNP GNP • Imports and exports $254 billion in Imports and exports $254 billion in
19921992
Copyright(c) 2012 Dr. Chase C. Rhee
15
North American Free Trade North American Free Trade Agreement(NAFTA)Agreement(NAFTA)
Elimination of tariff and non-tariff barriers
15-year phase- out period for tariffs by three time tables• 1st reduction 50% of items: Immed.
Eff. Date • 2nd reduction 15% of items: 1st
thru 5th years • 3rd reduction 35% of items: 6th
thru 15th years
Copyright(c) 2012 Dr. Chase C. Rhee
North American Free Trade North American Free Trade Agreement(NAFTA)Agreement(NAFTA)
Impact of NAFTA – Labor-intensive industries to Mexico – Environment-sensitive industries to
Mexico– U.S.-owned factories in Asia for time-
sensitive products to Mexico– Increased exports among members – Increased investments in NAFTA
countries by non-NAFTA countries due to NAFTA rules of origin
– High paying jobs created will more than offset the losses of low paying jobs in the U.S.
16Copyright(c) 2012 Dr. Chase C. Rhee
17
North American Free Trade Agreement(NAFTA)
General Rules of OriginGeneral Rules of Origin Wholly obtained or produced in Wholly obtained or produced in
NAFTA region NAFTA region Produced entirely in the NAFTA Produced entirely in the NAFTA
region exclusively from originating region exclusively from originating materials materials
If goods incorporate non-originating If goods incorporate non-originating parts (imported materials), parts (imported materials), • A tariff classification change A tariff classification change
alone due to substantial alone due to substantial transformationtransformation
Copyright(c) 2012 Dr. Chase C. Rhee
18
North American Free Trade North American Free Trade Agreement(NAFTA)Agreement(NAFTA)
General Rules of Origin (Continued)• A tariff classification change plus a
minimum Regional Value Content (RVC) requirement. 50% for net cost method and 60% for transaction value method
• If no tariff classification change, a minimum RVC requirement, 50% for net cost or 60% for transaction value method
Directly imported from a member country Identified by MX or CA in “Special”
subcolumn of the HTSUS Importer must possess a NAFTA Certificate
of Origin
Copyright(c) 2012 Dr. Chase C. Rhee
19
North American Free Trade North American Free Trade Agreement(NAFTA)Agreement(NAFTA)
Special Provisions of the Rules-of-Origin
Automobiles: • 1/1/94-1/1/1998: No less than 50%
under Net Cost • 1/1/98-1/1/2002: 56% for 15 or
fewer passengers, 55% for 16 or more passengers
• After 1/1/2002: 62.5% for 15 or fewer passengers, 60% for 16 or more passengers
Copyright(c) 2012 Dr. Chase C. Rhee
20
North American Free Trade Agreement(NAFTA)
Special Provisions of the Rules-of-Origin (continued) Textiles: Yarn forward process consisting of
3 steps Yarn-->Fabrics-->Garments•Yarn must be made in North America
Computers: Main circuitry (motherboard) from member countries
Television: Picture tube from member countries
Copyright(c) 2012 Dr. Chase C. Rhee
21
North American Free Trade North American Free Trade Agreement(NAFTA)Agreement(NAFTA)
Method of Calculating Value-Added Method of Calculating Value-Added PercentagePercentage
Transaction Value methodTransaction Value method: RVC=(TV-: RVC=(TV-VNM)/TV x 100, 60% or more, VNM: VNM)/TV x 100, 60% or more, VNM: Value of Non-originating MaterialsValue of Non-originating Materials
Net Cost methodNet Cost method: RVC=(NC-VNM)/NC : RVC=(NC-VNM)/NC x 100, 50% or more. Costs excluded: x 100, 50% or more. Costs excluded: Promotion & Marketing, After sale Promotion & Marketing, After sale service, Royalties, Shipping & service, Royalties, Shipping & Packing, Non-allowablePacking, Non-allowable interest
Copyright(c) 2012 Dr. Chase C. Rhee
22
U.S. –Jordan Free Trade U.S. –Jordan Free Trade Agreement Agreement
Took effect December 17, 2001 Major Elements
Elimination of tariffs within 10 years Free trade in services Protection of intellectual property rights Promotion of liberalized trade
environment for e-commerce Provisions on environmental principles:
Sustainable development Provisions on labor: Full implementation
of national laws & commitment to Int’l Labor Organization (ILO)’s core labor standards
Transparency in dispute settlement procedures
Copyright(c) 2012 Dr. Chase C. Rhee
23
U.S. –Jordan Free Trade U.S. –Jordan Free Trade AgreementAgreement
General Rules of Origin Wholly the growth, product or
manufacture of Jordan If imported materials are used,
•Goods become new, different articles of commerce and 35% of appraised value created in Jordan
Directly imported to the U.S. “JO” in the “Special” subcolumn of the
HTSUS
Copyright(c) 2012 Dr. Chase C. Rhee
24
U.S.-Singapore Free Trade U.S.-Singapore Free Trade AgreementAgreement
Took effect on January 1, 2004Took effect on January 1, 2004 Major Areas of AgreementMajor Areas of Agreement
Tariffs to be phased out in 10 years. Most Tariffs to be phased out in 10 years. Most immediatelyimmediately
Substantial access across entire services Substantial access across entire services regime. Use Negative List systemregime. Use Negative List system
Investment protectionInvestment protection Non-discrimination in government Non-discrimination in government
procurementprocurement Non-discrimination in intellectual property. Non-discrimination in intellectual property.
First-in-time, first-in-right principle-The first to First-in-time, first-in-right principle-The first to file for a trademark is granted the first right to file for a trademark is granted the first right to useuse
Make domestic labor standards consistent Make domestic labor standards consistent with ILO’s labor principleswith ILO’s labor principles
Provide a high level of environmental Provide a high level of environmental protectionprotection
Copyright(c) 2012 Dr. Chase C. Rhee
25
U.S.-Singapore Free Trade U.S.-Singapore Free Trade AgreementAgreement
General Rules of OriginGeneral Rules of Origin Goods wholly(100%) obtained or Goods wholly(100%) obtained or
producedproduced If nonoriginating materials are used,If nonoriginating materials are used,
• Goods transformed resulting in Goods transformed resulting in change in tariff classification or change in tariff classification or
• Goods meeting any applicable regional Goods meeting any applicable regional value content (RVC) not less than 35% value content (RVC) not less than 35% under the build-up method (VOM/AV x under the build-up method (VOM/AV x 100) and 45% under the build-down 100) and 45% under the build-down method [(AV-VNM)/AV x 100]method [(AV-VNM)/AV x 100]
VOM: Value of originating materials AV: Adjust value which means entered
value or FOB price VNM: Value of nonoriginating materials
Copyright(c) 2012 Dr. Chase C. Rhee
U.S.-Singapore Free Trade U.S.-Singapore Free Trade AgreementAgreement
Goods with not more than 10% Goods with not more than 10% nonoriginating materials if no change nonoriginating materials if no change in tariff classificationin tariff classification
Directly imported Directly imported ““SG” in the “Special” subcolumn of the SG” in the “Special” subcolumn of the
HTSUSHTSUS
26Copyright(c) 2012 Dr. Chase C. Rhee
27
US-Chile Free Trade US-Chile Free Trade Agreement Agreement
Took effect on January 1, 2004Took effect on January 1, 2004 Major Areas of AgreementMajor Areas of Agreement
Tariffs to be phased out in 12 years. 85% Tariffs to be phased out in 12 years. 85% immediatelyimmediately
Substantial market access to entire service Substantial market access to entire service regime. Use Negative List systemregime. Use Negative List system
Protection of all forms of investments Protection of all forms of investments Non-discrimination in intellectual property. Non-discrimination in intellectual property.
First-in-time, first-in-right principle. Chilean First-in-time, first-in-right principle. Chilean government ensures that its agencies use government ensures that its agencies use only legitimate computer softwareonly legitimate computer software
Non-discrimination in government Non-discrimination in government procurementprocurement
Make domestic labor laws consistent with the Make domestic labor laws consistent with the ILO’s labor principlesILO’s labor principles
Provide a high level of environmental Provide a high level of environmental protectionprotection
Copyright(c) 2012 Dr. Chase C. Rhee
28
US-Chile Free Trade Agreement US-Chile Free Trade Agreement
General Rules of OriginGeneral Rules of Origin Goods wholly(100%) obtained or Goods wholly(100%) obtained or
producedproduced If nonoriginating materials are used, If nonoriginating materials are used,
• Goods transformed resulting in change in Goods transformed resulting in change in tariff classification ortariff classification or
• Goods meeting any applicable regional Goods meeting any applicable regional value contentvalue content
Directly imported Directly imported ““CL” in the “Special” subcolumn of CL” in the “Special” subcolumn of
the HTSUSthe HTSUS
Copyright(c) 2012 Dr. Chase C. Rhee
29
U.S.-Australia Free Trade U.S.-Australia Free Trade Agreement Agreement
Took effect on January 1, 2005Took effect on January 1, 2005 Major Areas of AgreementMajor Areas of Agreement
Tariffs to be phased out in 10 years. Tariffs to be phased out in 10 years. 99% immediately99% immediately
National and most-favored treatment National and most-favored treatment for all sectors of servicesfor all sectors of services
Protection of investmentsProtection of investments Non-discrimination in government Non-discrimination in government
procurementprocurement Protection of intellectual property Protection of intellectual property
rightsrights Make domestic labor laws consistent Make domestic labor laws consistent
with the ILO’s labor principleswith the ILO’s labor principles Provide a high level of environmental Provide a high level of environmental
protectionprotection
Copyright(c) 2012 Dr. Chase C. Rhee
30
U.S.-Australia Free Trade U.S.-Australia Free Trade Agreement Agreement
General Rules of OriginGeneral Rules of Origin Goods wholly(100%) obtained or Goods wholly(100%) obtained or
producedproduced If nonoriginating materials are used, If nonoriginating materials are used,
• Goods transformed resulted in change in Goods transformed resulted in change in tariff classification ortariff classification or
• Goods meeting any applicable regional Goods meeting any applicable regional value contentvalue content
Directly importedDirectly imported ““AU” in the “Special” subcolumn of the AU” in the “Special” subcolumn of the
HTSUSHTSUS
Copyright(c) 2012 Dr. Chase C. Rhee
31
U.S.-Morocco Free Trade U.S.-Morocco Free Trade Agreement Agreement
Took effect on January 1, 2006Took effect on January 1, 2006 Major areas of agreementsMajor areas of agreements
95% of products duty-free immediately & 95% of products duty-free immediately & remaining products in 9 yearsremaining products in 9 years
National treatment of each other’s National treatment of each other’s goodsgoods
Duties on agricultural goods to be Duties on agricultural goods to be phased out in 18 years. Use tariff-rate phased out in 18 years. Use tariff-rate Quotas (TROs). No export subsidiesQuotas (TROs). No export subsidies
Allowed safeguard measuresAllowed safeguard measures Strong protection for labor & Strong protection for labor &
environmentenvironment
Copyright(c) 2012 Dr. Chase C. Rhee
32
U.S.-Morocco Free Trade U.S.-Morocco Free Trade Agreement Agreement
General Rules of OriginGeneral Rules of Origin Goods wholly(100%) obtained or producedGoods wholly(100%) obtained or produced A good of nonoriginating materials which A good of nonoriginating materials which
undergoes an applicable change in tariff undergoes an applicable change in tariff classification andclassification and
A new or different article: Value created in A new or different article: Value created in the UMFTA countries not less than 35% of the UMFTA countries not less than 35% of appraised valueappraised value
Directly importedDirectly imported ““MA” in the “Special” subcolumn of the MA” in the “Special” subcolumn of the
HTSUSHTSUS
Copyright(c) 2012 Dr. Chase C. Rhee
33
Dominican Republic-Central Dominican Republic-Central America-U.S. Free Trade America-U.S. Free Trade Agreement (DR-CAFTA)Agreement (DR-CAFTA)
Members– Dominican Republic– Costa Rica– El Salvador– Guatemala– Honduras– Nicaragua– United States
Signed by trade ministers of 7 nations in August 2004.
Copyright(c) 2012 Dr. Chase C. Rhee
34
Dominican Republic-Central America-U.S. Free Trade Agreement (DR-CAFTA) Rolling Admissions
– El Salvador on March 1, 2006– Honduras on April 1, 2006– Nicaragua on April 1, 2006– Guatemala on July 1, 2006– Dominican Republic on March 1,
2007– Costa Rica: Approved by
referendum on October 8, 2007 & admitted 1/1/2009
Copyright(c) 2012 Dr. Chase C. Rhee
35
Dominican Republic-Central America-Dominican Republic-Central America-U.S. Free Trade Agreement (DR-U.S. Free Trade Agreement (DR-CAFTA)CAFTA) Major Areas of Agreement
80% of U.S. products duty free immediately and remaining products in 10 years. DR-CAFTA product already duty free under CBI or GSP
National treatment Agriculture: Tariff-rate quotas only and no
export subsidies Safeguard measures for agriculture & textile Strong protection of labor and environment Strong protection for U.S. investors &
mechanism for investor-state disputes Open and fair government procurement Yarn-forward rule for textiles
Copyright(c) 2012 Dr. Chase C. Rhee
36
Dominican Republic-Central Dominican Republic-Central America-U.S. Free Trade America-U.S. Free Trade Agreement (DR-CAFTA)Agreement (DR-CAFTA)
General Rules of Origin Good wholly obtained or produced in
FTA countries If nonoriginating material used,
• Applicable change in tariff classification or• Applicable regional value content
Good produced exclusively from originating materials
Identified by “P” or “P+” in the subcolumn of the HTSUS
Copyright(c) 2012 Dr. Chase C. Rhee
37
U.S.-Bahrain Free Trade U.S.-Bahrain Free Trade Agreement Agreement
Entered into force on August 1, 2006 Major Areas of Agreement
100% of industrial and consumer goods & 98% of agricultural goods duty free immediately and others in 10 years
National treatment Agriculture: Tariff-rate quota only and no
export subsidies Safeguard measures for textile & apparel Strong protection of labor and
environment Strong protections for U.S. investors
including a mechanism for investor-state disputes
Copyright(c) 2012 Dr. Chase C. Rhee
38
U.S.-Bahrain Free Trade U.S.-Bahrain Free Trade Agreement (BFTA)Agreement (BFTA)
Major Areas of Agreement (continued) No discrimination against U.S. firms in
Bahraini government purchases Yarn forwarding rules for textiles Substantial market access for entire
services regime by using “negative system”
Requires each government to prohibit bribery and establish appropriate criminal penalties to punish violators
Copyright(c) 2012 Dr. Chase C. Rhee
39
U.S.-Bahrain Free Trade U.S.-Bahrain Free Trade Agreement Agreement
General Rules of Origin Wholly growth, product or manufacture New or different article of commerce &
value created in UBFTA not less than 35% of the appraised value
A good covered by a product-specific rule & each of nonoriginating materials undergoes an applicable change in tariff classification
Directly imported in the U.S. or Bahrain Identified by “BH” in the “Special”
subcolumn of the HTSUS
Copyright(c) 2012 Dr. Chase C. Rhee
U.S.-Oman U.S.-Oman Free Trade Free Trade AgreementAgreement
Signed by Pres. Bush on 9/26/06 Entered into force on 1/1/09. Took
more than 2 years to enact regulations by Oman
Immediate duty-free for most industrial and consumer goods, and 87% of agricultural products
Remaining products tariffs phase out within 10 years
40Copyright(c) 2012 Dr. Chase C. Rhee
U.S.-Oman U.S.-Oman Free Trade Free Trade AgreementAgreement
General Rules of Origin– Wholly the growth, product or manufacture
of Oman or the U.S.– Substantially transformed products with
change in tariff classification and– Not less than 35% created in Oman – Directly imported– “OM” in the “Special” subcolumn of the
HTSUS
41Copyright(c) 2012 Dr. Chase C. Rhee
U.S.-Peru U.S.-Peru TradeTrade Promotion Promotion AgreementAgreement
Signed by Pres. Bush on 12/14/07 Entered into force on 2/1/09 Immediate duty free for 80% of
consumer & industrial goods. Remaining goods in 10 years
Immediate duty free for 2/3 of agricultural products. Remaining products in 15-17 years
42Copyright(c) 2012 Dr. Chase C. Rhee
U.S.-Peru U.S.-Peru TradeTrade Promotion Promotion AgreementAgreement
General Rules of Origin– Wholly obtained or produced in a member
country– Substantially transformed with change in
tariff classification or– Applicable regional value content– “PE” in the “Special” subcolumn of the
HTSUS
43Copyright(c) 2012 Dr. Chase C. Rhee
U.S.-Korea Free Trade Agreement
Concluded on 6/30/2007 Ratified by U.S. congress on 10/12/2011 & by
Korean congress on 11/22/2011 Took effect on 3/15/2012 The largest FTA after NAFTA of 1994 Korea is the 15th largest economy in the world and
7th largest trading partner of the U.S.
44Copyright(c) 2012 Dr. Chase C. Rhee
U.S.-Korea Free Trade Agreement
Major areas of agreement– Almost 80% of goods became duty-free on the 1st day
and 95% duty-free in 5 years
– Most remaining duties will be free in 10 years
– High level of openness of services sector
– Strong protection for investors through international arbitration system instead of other country’s legal system
– Equal treatment for government procurements
– Protection of workers’ rights & enforcement of labor laws
– Protection of environments
45Copyright(c) 2012 Dr. Chase C. Rhee
U.S.-Korea Free Trade Agreement
General rules of origin– Good wholly obtained or produced entirely in the
territory of Korea or the U.S. or both.
– Good produced entirely in the territory and,• Nonoriginating materials undergo tariff classification change
and/or
• Good otherwise satisfies any applicable regional value content
– Produced exclusively from originating materials
– Value of nonoriginating materials doe not exceed 10% of the adjusted value
– For textile or apparel, total weight of nonoriginating fibers and yarns does not exceed 7% of total weight of component. Otherwise, yarn-forward rule for most cases
46Copyright(c) 2012 Dr. Chase C. Rhee
U.S.-Korea Free Trade Agreement
General rules of origin (continued)– Directly imported from Korea
– A good identified by the symbol “KR” in the subcolumn of the HTSUS
Product-specific rules (PSR) per General Note 33(o) of the HTSUS– A tariff classification change between nonoriginating materials
and finished goods unless excluded and/or– Regional value content (RCV) for general goods with some exceptions:
35% under buildup ](VOM/AV) x 100] or 45% under builddown [(AV-VNM)/AV x 100]
– RCV for automotive goods of chapters 84 and 87: 35% under build-up, 55% under build down, 35% under net cost [(NC-VNM)/NC] x 100
47Copyright(c) 2012 Dr. Chase C. Rhee
U.S.-Colombia Trade Promotion Agreement
Concluded on 11/22/2006 Ratified by U.S. congress on 10/12/2011 Took effect on 5/15/2012 Major areas of agreement
– Over 80% became duty-free on the 1st day with remaining tariffs phased out over 10 years
– Includes greater protection for intellectual properties, labor rights, and environment
– Opens services sector and government procurement
48Copyright(c) 2012 Dr. Chase C. Rhee
U.S.-Colombia Trade Promotion Agreement General rules of origin
– Wholly obtained or produced entirely in the territory
– If nonoriginating materials are used in production• Tariff classification change and/or
• Regional value content requirement: 35% or 45%
– Produced exclusively from originating materials
– Nonoriginating materials not exceeding 10% of adusted value
– For textile and apparel: weight of nonoriginating fibers and yars not exceeding 10% of total weight of component. Otherwise, yarn-forward rule
– Symbol “CO” in the “Special” subcolumn of the HTSUS
49Copyright(c) 2012 Dr. Chase C. Rhee
U.S.-Panama Trade Promotion Agreement
Concluded on 6/28/2007 Ratified by U.S. congress 10/12/2011 Signed by Pres. Obama on 10/21/2011 Took effect on 10/31/2012 Major areas of agreement
– About 86% became duty-free immediately
– For agricultural products will be duty-free in 15 years
– Symbol “PA” in the “Special” subcolumn of the HTSUS
50Copyright(c) 2012 Dr. Chase C. Rhee
51
Recent Free Trade Recent Free Trade AgreementsAgreements FTAs under Negotiation
– Trans-Pacific Partnership (TPP) (Asia-Pacific free trade agreement)
• The 1st round of negotiation: March 15-19, 2010
• The 12 current TPP partner countries – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.
Copyright(c) 2012 Dr. Chase C. Rhee
Recent Free Trade Recent Free Trade AgreementsAgreements FTAs under Negotiation (cont.)
– Trans-Atlantic Trade and Investment Partnership (T-TIP)• Trade & investment agreement being
negotiated between the United States and the European Union
Copyright(c) 2012 Dr. Chase C. Rhee 52