CBP Implements U.S.-Bahrain Free Trade Agreement
On October 16, 2007, the Bureau of Customs and Border Protection (CBP) issued an interim regulation to implement the U.S.-Bahrain Free Trade Agreement (BFTA). The interim regulations modify the Harmonized Tariff Schedule of the U.S. (HTSUS) to reflect the reduced tariff rates for certain goods imported from Bahrain.
As a result of the interim rule, “BH” now appears in the “Special” rate subcolumn throughout the HTSUS to reflect the reduced duties for individual commodities according to the negotiated terms of the BFTA. General Note 30 to the HTSUS, which sets forth the rules of origin for preferential duty purposes, was also added.
Unlike the tariff-shift rules of origin that predominate in NAFTA and many other U.S. free trade agreements, the rules of origin for the BFTA provide in large part that “originating goods” must be substantially transformed in Bahrain or the U.S. (or both), and possess at least 35% regional value content (i.e., at least 35% of the good’s appraised value must be attributed to the cost or value of materials produced in the U.S. or Bahrain, and the cost of processing performed in one or both countries). While the BFTA rules of origin include some tariff-shift based rules, these rules apply only to textiles and a limited group of certain non-textile goods.
Public comments on the interim regulations are due on December 17, 2007 and may be submitted through the Federal eRulemaking Portal via docket number USCBP-2007-0063.