Another Fiberglass FTZ Filing

Back in April, Agathon Associates REPORTED that the Texas company PGTEX USA, Inc. was approved for Foreign-Trade Zone procedures in the production of fiber glass fabric is imported components. In granting approval the FTZ Board imposed the restriction that glass fibers and polyester yarn be admitted in "privileged foreign status" which precludes inverted tariff benefits on such items on its domestic sales of fiber glass fabrics.

Today the FTZ Board published notice that PGTEX USA has filed for additional FTZ production authority. This latest application could exempt PGTEX from customs duty payments on the glass fiber rovings used in export production. The applicant indicates that the foreign-sourced glass fiber rovings (HTSUS 7019.12, duty rate 4.8%) will be admitted to the FTZ in privileged foreign status (19 CFR 146.41), which would require payment of the original duty rate on the glass fiber rovings incorporated into a finished product on which entry from the FTZ was subsequently made. Customs duties also could possibly be deferred or reduced on foreign-status production equipment. This continues a trend we have seen of FTZ applicants omitting controversial textile inputs which are likely to generate opposition from the domestic textile industry.