Details of Proclamation 8742 HTS Changes for Upland Cotton
Presidential Proclamation 8742, published on November 3, 2011, modifies the conditions under which a special import quota for upland cotton takes effect under U.S. note 6 to subchapter III of chapter 99 of the Harmonized Tariff Schedule. This modification is made to reflect changes made by the Food Conservation and Energy Act of 2008 (2008 Farm Bill) and is effective with respect to goods entered or withdrawn from warehouse for consumption on or after June 18, 2008.
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(The Proclamation also makes certain changes, effective on approximately December 3, 2011, to HTS Chapter 64 for certain rubber- or plastic-soled footwear to which a layer of textile materials has been added. In addition, the Proclamation makes certain HTS rule of origin changes for various U.S.-Chile Free Trade Agreement (FTA) products that are effective November 1, 2011. See ITT's Online Archives 11110303 and 11110417 for summaries of the HTS Chapter 64 footwear changes and the HTS Chile FTA origin changes.)
Quota Takes Effect when Lowest-U.S. Price Exceeds Prevailing World Market Price
The Proclamation modifies subdivision (a)(i) of note 6 to subchapter 99 to now state that whenever the Secretary of Agriculture determines and announces that for any consecutive 4-week period1, the Friday through Thursday average price quotation for the lowest-price U.S. growth, as quoted for Middling (M) one-and-three-thirty seconds cotton, delivered to a definable and significant international market2 exceeds the prevailing world market price, there shall immediately be in effect a special import quota.
Will Equal 1 Week's Cotton Consumption by Domestic Mills
Subdivision (a)(i) further states that the quota will be equal to 1 week's consumption of cotton by domestic mills at the seasonally adjusted average rate of the most recent 3 months for which data are available. The aggregate quantity of cotton entered into the U.S. during any marketing year under the special import quota established under this subdivision may not exceed the equivalent of 10 week's consumption of upland cotton by domestic mills at the seasonally adjusted average rate of the 3 months immediately preceding the first special import quota established in any marketing year.
Proclamation Adds Explanation of Limited Global Cotton Import Quota
The Proclamation also modifies subdivision (b)(i) on the upland cotton import quota based on spot market prices, by adding a sentence explaining that "for purposes of this subdivision, a Limited Global Cotton Import Quota means a quantity of imports that is not subject to the over-quota tariff rate of a tariff-rate quota contained in chapter 52 of the tariff schedule."
Subdivision (b)(i) continues to state that a limited global import quota equal to 21 days of domestic mill consumption of upland cotton (at the seasonally adjusted average rate of the most recent 3 months for which data are available) immediately takes effect when the Secretary determines and announces that the average price of the base quality of upland cotton in designated spot markets for a month exceeded 130% of the average price of such quality of cotton in such markets for the preceding 36 months.
1Previously 10-week period
2As determined by the Secretary
(See ITT's Online Archives 11110113 for initial summary of the Proclamation.
See ITT's Online Archives 11093015 for summary of an increased supplemental assessment rate for imported cotton that took effect September 30, 2012 to reflect the increase in the weighted average price of Upland cotton received by U.S. farmers.)