Textiles Continue to be a "No Go" for FTZs

PBR, Inc. d/b/a/ SKAPS Industries (SKAPS) has submitted a notification of proposed production activity to the Foreign-Trade Zone Board for its facility in Athens, Georgia. The facility currently has authority to produce non-woven geotextile fabric using polypropylene staple fiber (PPSF) for a five-year period (until August 23, 2018) subject to a restriction requiring admission of all foreign-status PPSF (duty rate 4.3%) be admitted to the zone under privileged foreign status (19 CFR 146.41), thereby precluding inverted tariff benefits.

SKAPS' current notification would extend that restricted authority indefinitely.

Until 2009 most textile articles were not eligible for consideration for an FTZ operation. Since then there have been several applications relating to textiles and in each case where the U.S. textile industry objected because they were willing and able to supply the textile article in question, the application was denied in whole, or at least as regards the textile component that was available from a domestic source. The latest SKAPS application appears to be yet another example of an applicant recognizing that they were unlikely to succeed in getting FTZ inverted tariff benefits for the textile component and that excluding textiles from the application would avoid having the whole application held up due to a dispute over textiles.