2 El Salvador Jacket Styles Don't Qualify for Central American Tariff Treatment

Even though two jacket styles produced by manufacturer and supplier Youngone El Salvador met the tariff shift requirement of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), the jackets still aren't eligible for preferential tariff treatment because the visible lining was formed and finished in a country outside of member countries with the CAFTA-DR, CBP ruled recently.

The jackets are cut into components, sewn and assembled into finished garments in El Salvador, thus fulfilling the tariff shift requirement specified in GN 29(n), Chapter 62, Chapter Rule 35C of the Harmonized Tariff Schedule, CPB noted.

However, for certain fabrics, the fabric that makes up the visible lining material must be made in a CAFTA-DR member country in order to be compliant with the tariff's GN 29(n) Chapter 62. Because the fabric was formed and finished in Thailand and Taiwan, the jacket didn't qualify for duty preferences.

The two styles -- women’s style #A7QEU-W and men’s style A7QEU-M -- are constructed from 100% nylon woven fabric that has been coated by plastic, which itself has been given a durable water-repellent treatment. The liner consists of two different polyester fabrics.

The jackets are manufactured in El Salvador, with the fabric and other components originating from elsewhere. The zipper and the nylon of the garment’s outer shell are made in South Korea, the liner fabric comes from Taiwan, and the elastic and fabric used to construct the pocket bags of the waist pockets from Guatemala. The elastic draw cord, cord lock and labels were made in Hong Kong.

“The fabric used to construct the visible lining in the main body of the jackets are not formed from yarn and finished in the territory of one or more of the parties” that are part of the CAFTA-DR, CBP said. Therefore, the jackets are not entitled to a free rate of duty under the trade agreement, the agency continued.

Youngone El Salvador had requested a determination in November.