(January 30, 2006)

The U.S. – Morocco Free Trade Agreement (US-MFTA) went into effect on January 1, 2006. The agreement provides for the immediate or staged elimination of duties and barriers to bilateral trade in goods and services originating in the United States and/or Morocco. Importers may make a claim for preferential treatment based on knowledge or information in his/her possession that the good qualifies as an originating good.

The Harmonized Tariff Schedule (HTS) has been modified by adding a new General Note 27 containing specific information regarding US-MFTA and a new Subchapter XII to Chapter 99 to provide for temporary tariff rate quotas (TRQ’s) and applicable safeguards implemented by the US-MFTA.

Generally, imported goods qualify for preferential treatment if they are:

• Wholly obtained or produced entirely in Morocco, the United States, or both;

• For goods other than those covered by Annex 4-A (textiles and apparel) and Annex 5-A (certain plant and vegetable products, foods and beverages, plastics, metals, ignition wiring sets, and motor vehicle parts), the good is a new or different article of commerce that has been grown, produced, or manufactured in the territory of one or both of the Parties, and the sum of (i) the value of materials produced in the territory of one or both of the Parties, plus (ii) the direct costs of processing operations performed in the territory of one or both of the Parties is not less than 35 percent of the appraised value of the good at the time it is imported into the territory of a Party; or

• A new or different article of commerce means a good that has been substantially transformed from a good or material that is not wholly the growth, product, or manufacture of one or both of the Parties. In addition, a new or different article would have a new name, character, or use distinct from the good or material from which it was transformed.

For further information, please consult the following documents:

Customs and Border Protection Memorandum dated December 29, 2005

Customs and Border Protection "Trade Agreement/Program Comparison" (Comparative and general guidance information for the importation of goods under various Trade Agreements.)