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Printable Version Textile and Apparel Quota Changes
Canada
As of January 1, 2005, all textiles and wearing apparel manufactured outside of Canada and exported into Canada are no longer subject to quota restrictions. In other words, an export license is no longer required for these commodities. However, Canada will maintain its system of import permits and continue to enforce the regulations governing the importation of textiles and clothing. For additional information, contact the Department of Foreign Affairs and International Trade (DFAIT).
U.S.
Effective January 1, 2005, textiles and wearing apparel manufactured in a World Trade Organization (WTO) country and imported into the U.S. are no longer subject to quota restrictions. Previous agreements between the U.S. and other countries expired on December 31, 2004 and have been replaced by the WTO trading rules, which became effective on January 1, 2005. As a result, significant changes are expected to occur in the world production of these commodities and entry into the U.S. will be simpler and faster.
Highlights of these changes:
- Goods imported from a WTO country on and after January 1, 2005 will not be subject to quota restrictions for import to the U.S.
- Textile visas will no longer be required for goods exported from WTO countries on/after January 1, 2005.
- Textiles and wearing apparel imported on/after January 1, 2005 will no longer require "live entry." Live entry requires payment of duties/taxes and review of entry summary prior to release.
- Certain commodities from China will still be subject to quota restraints, even though China is a WTO country. China agreed to certain restrictions as part of its accession to the WTO.
The quota and visa phase-out is only for WTO member countries. There will be no change in current quota or visa restrictions for such textile and apparel exporters as Russia, the former Soviet satellite countries of Central Asia (except for the Kyrgyz Republic), Vietnam or any other non-WTO country. Textiles and apparel shipments manufactured in non-WTO countries are still subject to a quota-visa and will continue to require a live entry. Unless the regulation changes, a quota charge statement will be required for quota-class merchandise manufactured in a non-WTO country.
On December 13, 2004, the U.S. announced that it would deny entry to textiles exported in 2004 that exceed the allowed quantities for 2004. Goods denied entry will be subject to a staged admission process and will be delayed up to one month - until February 1, 2005 - at which time the U.S. Customs and Border Protection (CBP) will permit entry of quantities equal to 5 percent of the 2004 quota quantities. Each following month, for as long as necessary, an additional 5 percent will be allowed entry. Affected importers will have to decide whether to export or warehouse the goods - perhaps for months - until entry is allowed. Unanticipated storage, transportation and brokerage costs will likely be incurred.
In addition to the final elimination of textile quotas, special "safeguard" measures limiting imports of Chinese textiles expired on December 23, 2004. The U.S. will follow the same staged-entry process as described above for any goods exported before December 24, 2004 that exceed the allowed quantities for 2004. For those goods, the monthly 5 percent allowance will begin on January 24, 2005.
"Safeguard" limits are quotas set under special rules that China agreed to when it joined the WTO. Under that agreement, the U.S. and other countries can set import quotas for particular Chinese textile and apparel products when it believes imports of such items from China are threatening to impede the orderly development of trade through market disruption.
For more information about the Committee for the Implementation of Textile Agreements (CITA's) instructions to CBP, and the special safeguard measures applicable to imports of Chinese textiles, including the petitions seeking limits and corresponding requests for public comments, please visit the Office of Textiles and Apparel website.
For addtional information, please visit the CBP website.