Trade Agreements & Valuation Flashcards

Under the U.S.-Korea Free Trade Agreement (KORUS), what certification method is used to claim preferential tariff treatment?

Answer: A certified statement by the exporter, producer, or importer on the commercial invoice or a separate document

KORUS (and most modern U.S. FTAs) use a self-certification system where the exporter, producer, or importer prepares a certification of origin — there is no required government-issued form.

Under USMCA, what is the minimum Regional Value Content (RVC) required for automotive parts classified in Chapters 84–85 using the net cost method?

Answer: 55%

Under USMCA Annex 4-B, auto parts in HS Chapters 84–85 generally require 55% RVC under the net cost method (with a phase-in schedule that increased from earlier NAFTA thresholds).

A producer in Mexico uses steel from China to manufacture auto parts. Under USMCA's Steel and Aluminum Purchase Requirements for passenger vehicles, what must the producer do with these materials?

Answer: Source at least 70% of steel and aluminum purchases from North America

USMCA Article 32.10 and Annex 4-B require that at least 70% of a producer's steel and aluminum purchases used in covered vehicles be sourced from North America to qualify for preferential treatment.

Under the U.S.-Australia FTA (AUSFTA), if goods do not qualify under the tariff shift rule, which alternative rule may apply?

Answer: The net cost method requiring 40% RVC

AUSFTA provides that if goods fail the tariff change rule, they may qualify if the non-originating materials do not exceed a specified RVC threshold, typically using a 40% net cost or similar alternative.

The U.S.-Chile FTA (USCFTA) uses which primary method to determine rules of origin?

Answer: Product-specific rules based on tariff classification changes (tariff shift)

USCFTA, like most modern U.S. FTAs, uses product-specific rules of origin based on changes in tariff classification (tariff shift rules) set out in the agreement's Annex.

Under USMCA's Labor Value Content (LVC) rule for passenger vehicles, what percentage of the vehicle's value must be produced by workers earning at least $16 per hour?

Answer: 40%

USMCA Annex 4-B requires that 40% of the content of passenger vehicles (and 45% for light trucks) be produced by workers earning at least $16/hour by 2023.

Under the African Growth and Opportunity Act (AGOA), which requirement must sub-Saharan African beneficiary countries meet for textile and apparel goods?

Answer: Yarn-forward construction using U.S. or AGOA-country yarn and fabric, with limited third-country fabric allowances

AGOA apparel benefits generally require yarn-forward rules of origin using U.S. or regional fabric, with special provisions (e.g., third-country fabric allowances with annual caps) for lesser-developed AGOA beneficiaries.