[Weekly Compilation of Presidential Documents Volume 41, Number 26 (Monday, July 4, 2005)]
[Pages 1088-1092]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Proclamation 7912--To Modify Duty-Free Treatment Under the Generalized 
System of Preferences and Certain Rules of Origin Under the North 
American Free Trade Agreement, and For Other Purposes

 June 29, 2005

 By the President of the United States

 of America

 A Proclamation

    1. Pursuant to section 502(a)(1) of the Trade Act of 1974, as 
amended (the ``1974 Act'') (19 U.S.C. 2462(a)(1)), the President is 
authorized to designate countries as beneficiary developing countries 
for purposes of the Generalized System of Preferences (GSP).
    2. In Proclamation 6425 of April 29, 1992, the President suspended 
duty-free treatment for certain eligible articles imported from India 
after considering the factors set forth in sections 501 and 502(c) of 
the 1974 Act (19 U.S.C. 2461, 2462(c)), in particular section 502(c)(5) 
of the 1974 Act (19 U.S.C. 2462(c)(5)) on the extent to which India 
provides adequate and effective protection of intellectual property 
rights.
    3. In Proclamation 6942 of October 17, 1996, the President suspended 
duty-free treatment for certain eligible articles imported from Pakistan 
because of insufficient progress on affording workers in that country 
internationally recognized worker rights.
    4. Pursuant to sections 501 and 503(a)(1)(A) of the 1974 Act (19 
U.S.C. 2463(a)(1)(A)), the President may designate articles as eligible 
for preferential tariff treatment under the GSP.
    5. Pursuant to section 503(c)(2)(A) of the 1974 Act (19 U.S.C. 
2463(c)(2)(A)), beneficiary developing countries, except those 
designated as least-developed beneficiary developing countries or 
beneficiary sub-Saharan African countries as provided in section 
503(c)(2)(D) of the 1974 Act (19 U.S.C. 2463(c)(2)(D)), are subject to 
competitive need limitations on the preferential treatment afforded 
under the GSP to eligible articles.
    6. Section 503(c)(2)(C) of the 1974 Act (19 U.S.C. 2463(c)(2)(C)) 
provides that a country that is no longer treated as a beneficiary 
developing country with respect to an eligible article may be 
redesignated as a beneficiary developing country with respect to such 
article if imports of such article from such country did not exceed the 
competitive need limitations in section 503(c)(2)(A) of the 1974 Act 
during the preceding calendar year.
    7. Section 503(c)(2)(F)(i) of the 1974 Act (19 U.S.C. 
2463(c)(2)(F)(i)) provides that the President may disregard the 
competitive need limitation provided in section 503(c)(2)(A)(i)(II) (19 
U.S.C. 2463(c)(2)(A)(i)(II)) with respect to any eligible article from 
any beneficiary developing country if the aggregate appraised value of 
the imports of such article into the United States during the preceding 
calendar year does not exceed an amount set forth in section 
503(c)(2)(F)(ii) of the 1974 Act (19 U.S.C. 2463(c)(2)(F)(ii)).
    8. Pursuant to section 503(d)(1) of the 1974 Act (19 U.S.C. 
2463(d)(1)) and after giving great weight to the considerations in 
section 503(d)(2) of the 1974 Act (19 U.S.C. 2463(d)(2)), the President 
may, subject to the limitations set out in section 503(d)(4) (19 U.S.C. 
2463(d)(4)), waive the application of the competitive need limitations 
in section 503(c)(2)(A) of the 1974 Act with respect to any eligible 
article from any beneficiary developing country, if after receiving 
advice from the United States International Trade Commission (USITC), he 
determines that such waiver is in the national economic interest of the 
United States.
    9. Section 507(2) of the 1974 Act (19 U.S.C. 2467(2)) provides that 
in the case of an association of countries that is a free trade area or 
customs union, or that is contributing to a comprehensive regional 
economic integration among its members through appropriate means, the 
President may provide that all members of such association other than 
members that are barred from designation under section 502(b) of the 
1974 Act (19 U.S.C. 2462(b)) shall be treated as one country for 
purposes of the GSP.
    10. Pursuant to section 502 of the 1974 Act (19 U.S.C. 2462) and 
taking into account the factors set forth in section 502(c) of the 1974 
Act, I have decided to designate Serbia

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and Montenegro as a beneficiary developing country for purposes of the 
GSP.
    11. After a review of the current situation in India and taking into 
account the factors set out in section 502 of the 1974 Act, in 
particular section 502(c)(5), I have determined that India has made 
progress in providing adequate and effective protection of intellectual 
property rights. Accordingly, I have determined to terminate the 
suspension of India's duty-free treatment for certain articles under the 
GSP.
    12. After a review of the current situation in Pakistan, I have 
determined that Pakistan has taken or is taking steps to afford workers 
in that country internationally recognized worker rights as provided in 
section 502(c)(7) of the 1974 Act (19 U.S.C. 2462(c)(7)). Accordingly, I 
have determined to restore Pakistan's eligibility for certain articles 
for preferential treatment under the GSP.
    13. Pursuant to sections 501 and 503(a)(1)(A) of the 1974 Act, and 
after receiving advice from the USITC in accordance with section 503(e) 
of the 1974 Act (19 U.S.C. 2463(e)), I have determined to designate 
certain articles, some of which were previously designated under section 
503(a)(1)(B) of the 1974 Act (19 U.S.C. 2463(a)(1)(B)), as eligible 
articles. In order to do so for certain articles, it is necessary to 
subdivide and amend the nomenclature of certain existing subheadings of 
the Harmonized Tariff Schedule of the United States (HTS).
    14. Pursuant to section 503(c)(2)(A) of the 1974 Act, I have 
determined that certain beneficiary countries have exported certain 
eligible articles in quantities exceeding the applicable competitive 
need limitation in 2004, and I therefore terminate the duty-free 
treatment for such articles from such beneficiary developing countries.
    15. Pursuant to section 503(c)(2)(C) of the 1974 Act, and subject to 
the considerations set forth in sections 501 and 502 of the 1974 Act, I 
redesignate certain countries as beneficiary developing countries with 
respect to certain eligible articles that previously had been imported 
in quantities exceeding the competitive need limitations of section 
503(c)(2)(A) of the 1974 Act.
    16. Pursuant to section 503(c)(2)(F)(i) of the 1974 Act, I have 
determined that the competitive need limitation provided in section 
503(c)(2)(A)(i)(II) of the 1974 Act should be disregarded with respect 
to certain eligible articles from certain beneficiary developing 
countries.
    17. Pursuant to section 503(d)(1) of the 1974 Act, I have received 
the advice of the USITC on whether any industries in the United States 
are likely to be adversely affected by such waivers, and I have 
determined, based on that advice and on the considerations described in 
sections 501 and 502(c) of the 1974 Act, and after giving great weight 
to the considerations in section 503(d)(2) of the 1974 Act, that such 
waivers are in the national economic interest of the United States. 
Accordingly, I have determined that the competitive need limitations of 
section 503(c)(2)(A) should be waived with respect to certain eligible 
articles from certain beneficiary developing countries.
    18. Pursuant to section 507(2) of the 1974 Act, I have determined 
that currently qualifying members of the South Asian Association for 
Regional Cooperation (SAARC) should be treated as one country for 
purposes of the GSP.
    19. Presidential Proclamation 6641 of December 15, 1993, implemented 
the North American Free Trade Agreement (NAFTA) with respect to the 
United States and, pursuant to the North American Free Trade Agreement 
Implementation Act (Public Law 103-182) (the ``NAFTA Implementation 
Act'') incorporated in the HTS the tariff modifications and rules of 
origin necessary or appropriate to carry out the NAFTA.
    20. Section 202 of the NAFTA Implementation Act (19 U.S.C. 3332) 
provides rules for determining whether goods imported into the United 
States originate in the territory of a NAFTA Party and thus are eligible 
for the tariff and other treatment contemplated under the NAFTA. Section 
202(q) of the NAFTA Implementation Act (19 U.S.C. 3332(q)) authorizes 
the President to proclaim, as a part of the HTS, the rules of origin set 
out in the NAFTA and to proclaim modifications to such previously 
proclaimed rules of origin, subject to the consultation and layover 
requirements of section 103(a) of the

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NAFTA Implementation Act (19 U.S.C. 3313(a)).
    21. The United States and Canada have agreed to modifications to 
certain NAFTA rules of origin. Modifications to the NAFTA rules of 
origin set out in Proclamation 6641 are therefore necessary.
    22. Section 1558 of the Miscellaneous Trade and Technical 
Corrections Act of 2004 (Public Law 108-429) (the ``Miscellaneous Trade 
Act'') amended section 213(b) of the Caribbean Basin Economic Recovery 
Act (CBERA) (19 U.S.C. 2703(b)) to exclude certain footwear from duty-
free treatment under the CBERA and to provide duty-free treatment for 
certain other footwear that is the product of a designated beneficiary 
Caribbean Basin Trade Partnership Act country.
    23. In order to implement the tariff treatment provided under 
section 1558 of the Miscellaneous Trade Act, it is necessary to modify 
the HTS.
    24. Section 7(c) of the AGOA Acceleration Act of 2004 (Public Law 
108-274) (the ``AGOA Acceleration Act'') amended section 112(b)(6) of 
the of the African Growth and Opportunity Act (title I of Public Law 
106-200) (AGOA) (19 U.S.C. 3721(b)(6)) by adding ethnic printed fabrics 
to the list of textile and apparel goods of beneficiary sub-Saharan 
African countries that may be eligible for the preferential treatment 
described in section 112(a) of the AGOA (19 U.S.C. 3721(a)).
    25. Section 2 of Executive Order 13191 of January 17, 2001, 
delegated the President's authority under section 112(b)(6) of the AGOA 
to the Committee for the Implementation of Textile Agreements 
(Committee), in consultation with the then-Commissioner, United States 
Customs Service, now the Commissioner, Bureau of Customs and Border 
Protection (Commissioner), to determine which, if any, particular 
textile and apparel goods of beneficiary sub-Saharan African countries 
shall be treated as being hand loomed, handmade, or folklore articles. 
Executive Order 13191 further ordered the Commissioner to take actions 
directed by the Committee to carry out such determinations.
    26. In order to implement section 7(c) of the AGOA Acceleration Act, 
it is necessary to modify Executive Order 13191.
    27. Section 604 of the 1974 Act, as amended (19 U.S.C. 2483), 
authorizes the President to embody in the HTS the substance of the 
relevant provisions of that Act, and of other acts affecting import 
treatment, and actions thereunder, including the removal, modification, 
continuance, or imposition of any rate of duty or other import 
restriction.
    Now, Therefore, I, George W. Bush, President of the United States of 
America, acting under the authority vested in me by the Constitution and 
the laws of the United States, including title V and section 604 of the 
1974 Act, section 202 of the NAFTA Implementation Act, section 1558 of 
the Miscellaneous Trade Act, section 7(c) of the AGOA Acceleration Act, 
and section 301 of title 3, United States Code, do hereby proclaim:
    (1) In order to reflect in the HTS the addition of Serbia and 
Montenegro as a beneficiary developing country under the GSP, general 
note 4(a) to the HTS is modified as provided in section A(1) of Annex I 
to this proclamation.
    (2) In order to provide that one or more countries that have not 
been treated as beneficiary developing countries with respect to one or 
more eligible articles should be designated or redesignated as 
beneficiary developing countries with respect to such article or 
articles for purposes of the GSP, in order to terminate the suspensions 
of India's and Pakistan's eligibility for certain articles, and in order 
to provide that one or more countries should no longer be treated as 
beneficiary developing countries with respect to one or more eligible 
articles for purposes of the GSP, general note 4(d) to the HTS is 
modified as provided in section A(2) of Annex I to this proclamation.
    (3) In order to designate certain articles as eligible articles for 
purposes of the GSP, the HTS is modified by amending and subdividing the 
nomenclature of certain existing HTS subheadings as provided in section 
B of Annex I to this proclamation.
    (4) (a) In order to designate certain articles as eligible articles 
for purposes of the GSP, the Rates of Duty 1-Special subcolumn for such 
HTS subheadings is modified as provided in sections C(1) and C(2) of 
Annex I to this proclamation.

[[Page 1091]]

    (b) In order to designate certain articles as eligible articles for 
purposes of the GSP when imported from any beneficiary developing 
country except for a country or countries exceeding the applicable 
competitive need limitation in 2004, the Rates of Duty 1-Special 
subcolumn for such HTS subheadings is modified as provided for in 
section C(3) of Annex I to this proclamation.

    (c) In order to provide preferential tariff treatment under the GSP 
to a beneficiary developing country that has been excluded from the 
benefits of the GSP for certain eligible articles, the Rates of Duty 1-
Special subcolumn for such HTS subheadings is modified as provided for 
in section C(4) of Annex I to this proclamation.

    (d) In order to provide that one or more countries should not be 
treated as beneficiary developing countries with respect to certain 
eligible articles for purposes of the GSP, the Rates of Duty 1-Special 
subcolumn for such HTS subheadings is modified as provided for in 
section C(5) of Annex I to this proclamation.

    (e) In order to reflect in the HTS the decision that certain members 
of the SAARC should be treated as one country for purposes of title V of 
the 1974 Act, and to enumerate those countries, general note 4(a) to the 
HTS is modified as provided in section D of Annex I to this 
proclamation.

    (5) A waiver of the application of section 503(c)(2)(A)(i)(II) of 
the 1974 Act shall apply to the eligible articles in the HTS subheadings 
and to the beneficiary developing countries listed in Annex II to this 
proclamation.

    (6) A waiver of the application of section 503(c)(2)(A) of the 1974 
Act shall apply to the eligible articles in the HTS subheading and to 
the beneficiary developing countries set forth in Annex III to this 
proclamation.

    (7) In order to modify the rules of origin under the NAFTA, general 
note 12 to the HTS is modified as provided in Annex IV to this 
proclamation.

    (8) The modifications made by Annex IV to this proclamation shall be 
effective with respect to goods of Canada that are entered, or withdrawn 
from warehouse for consumption, on or after the date provided in that 
Annex.

    (9) General notes 7 and 17 to the HTS are modified as set forth in 
Annex V to this proclamation.

    (10) The modifications made by Annex V to this proclamation shall be 
effective with respect to goods entered, or withdrawn from warehouse for 
consumption, on or after December 18, 2004.

    (11) In order to make technical corrections to the HTS, the HTS is 
modified as provided in Annex VI to this proclamation.

    (12) The modifications made by Annex VI to this proclamation shall 
be effective with respect to articles entered, or withdrawn for 
consumption, on or after the dates provided in that Annex.

    (13) Section 2 of Executive Order 13191 of January 17, 2001, is 
modified by revising the heading to state ``Handloomed, Handmade, and 
Folklore Articles and Ethnic Printed Fabrics'' and deleting the phrase 
``handloomed, handmade, or folklore articles,'' and inserting in lieu 
thereof, ``handloomed, handmade, or folklore articles or ethnic printed 
fabrics.''

    (14) Any provisions of previous proclamations and Executive Orders 
that are inconsistent with the actions taken in this proclamation are 
superseded to the extent of such inconsistency.

    In Witness Whereof, I have hereunto set my hand this twenty-ninth 
day of June, in the year of our Lord two thousand five, and of the 
Independence of the United States of America the two hundred and twenty-
ninth.

                                                George W. Bush

 [Filed with the Office of the Federal Register, 2:36 p.m., June 29, 
2005]

Note: This proclamation and its attached annex were published in the 
Federal Register on June 30.

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