Certain Cashere Yarn Added to U.S.-Korea FTA Short Supply List

Effective Date: April 24, 2014, The Committee for the Implementation of Textile Agreements ("CITA") has determined that certain cashmere yarns, as specified below, are not available in commercial quantities in a timely manner in the United States. The product will be added to the list in Annex 4-B-1 of the U.S.-Korea Free Trade Agreement ("KORUS") in unrestricted quantities.

Specifications

Certain Cashmere Yarns

HTS 5108.10 & 5108.20

100% cashmere 2-ply yarns

Denier and length of staple (the figures below include the +/- 10% variance that may occur after knitting, weaving and finishing)

Yarn Sizes:

Weaving Count (single yarn): 22.86-27.94 nm (13.5-16.5 Ne), 25.2-33mm

Knitting Count (two plied): 39.62-48.43 nm (23.4-28.626 Ne), 30.6-37.4mm

Yarn sizes were calculated using a conversion factor of Ne x 1.69336 = Nm

Put up: Cone type packages.

BACKGROUND: On March 18, 2014, the Chairman of CITA received a Request for a commercial availability determination from Kingery, Samet & Sorini PLLC on behalf of Heritage Cashmere Korea Co., Ltd., for certain cashmere yarns as specified above. The due diligence statement accompanying the petition shows an exhaustive attempt to locate potential U.S. producers of this yarn (Agathon Associates assisted with background information on the domestic U.S. wool spinning industry). CITA opened a comment period for interested entities to submit offers to supply the yarn. No interested entity submitted a Response to the Request advising CITA of its objection to the Request with an offer to supply the subject product.

The KORUS rule of origin for wool and specialty wools such as cashmere is "yarn forward" meaning that a garment made in Korea may enter the U.S. duty-free under KORUS provided that all processing, from the spinning of the yarn through the final garment take place in the U.S. and/or Korea. Today's ruling by CITA means that, in the case of yarn of 100% cashmere of the specifications above, the yarn forward rule no longer will apply in KORUS.