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Proposed Harmonized Tariff Schedule changes to impact nonwovens.

An INDA-supported change in nomenclature used to identify nonwoven roll goods under the Harmonized Tariff Schedule (HTS) has been approved by the International Customs Cooperative Council and could be adopted worldwide by January 1, 1996. If adopted, these changes will require that nonwovens be broadly classified under the HTS by fiber content manufacturing strategies and then subdivided by the weight of the good.

This should increase INDA's ability to accurately track worldwide trade of nonwovens since it will reduce the possibility that roll goods will be misclassified within HTS subcategories. Moreover, the proposed changes are intended to be "revenue neutral" and do not provide for tariff adjustments at this time.

Trading Under The Current System

Under current HTS nomenclature, there is one main heading for nonwoven roll goods traded throughout the world (5603.00). This is an extremely broad heading that allows countries to differentiate various nonwoven roll goods any way they see fit.

In the U.S., for instance, there are separate "breakouts" for different types of nonwovens based on manufacturing technology. That is, nonwovens that cross U.S. borders must be classified as spunbonded, thermally bonded, mechanically entangled, etc. INDA members have long supported breakouts based on manufacturing technology.

Unfortunately, this system has not had much appeal outside of the U.S. Very few of our trading partners are inclined to differentiate nonwovens traveling through their borders by the relatively sophisticated means of fiber bonding technique. They prefer an easier way of differentiating, such as weight-based distinctions. In fact, breakouts based on weight have been supported by EDANA, INDA's sister organization in Europe, for quite some time.

Since the HTS was adopted in 1989, the U.S. has had one series of breakouts for nonwovens that is based on manufacturing technology and a number of our trading partners have maintained another set of breakouts based on other characteristics such as roll good weight. This has complicated matters considerably and hindered INDA's ability to track worldwide trade of various nonwoven roll goods.

Proposed Changes

In an effort to correct this disparity in breakouts, INDA has been working with representatives from EDANA and various government officials both in the U.S. and abroad to develop a more universally acceptable HTS nomenclature.

After more than three years of negotiations, a compromise was reached last March--in the form of a joint INDA/EDANA position statement--that differentiates roll goods by both technology and weight. This statement was presented to U.S. and European officials in a meeting last April; it was then presented to the CCC and adopted with only minor changes.

Basically, the proposed change agreed to by the CCC would recognize two major categories of nonwoven roll goods: those made from filament fiber and those made from non-filament fiber. Within these two broad categories, there would be subdivisions based on weight. Specifically, the following HTS numbers and descriptions would replace the current headings:
HTS # Description
5603 Nonwovens, whether or
 not impregnated, coated,
 covered or laminated

Of man-made filament:
5603.11.00 Weighing not more
 than 25 g sq. meter
5603.12.00 Weighing more than 25 g
 sq. meter but not more
 than 70 g sq. meter
5603.13.00 Weighing more than 70 g
 sq. meter but not more
 than 150 g sq. meter
5603.14 Weighing more than 150
 g sq. meter
5603.14.30 Laminated fabrics
5603.14.90 Other

Other (non-filament nonwovens)
5603.91.00 Weighing not more than
 25 g sq. meter
5603.92.00 Weighing more than 25 g
 sq. meter but not more
 than 70 g sq. meter
5603.93.00 Weighing more than 70 g
 sq. meter but not more
 than 150 g sq. meter
5603.94 Weighing more than 150
 g sq. meter
5603.94.10 Floorcovering underlays


5603.94.30 Laminated fabrics 5603.94.90 Other

Since most spunbonded and melt blown nonwovens are manufactured from filaments, it will still be possible to differentiate them from other nonwovens under this proposal. Moreover, by using weights, further distinctions can be drawn as to the type of roll good (i.e., knowing that the roll good is made from non-filament fibers and weighs more than 150 g sq. meter will provide a good indication of what type of roll good is being traded).

Under the current system, classification errors are possible since there is basically no easy way for Customs officials to determine whether or not roll goods were properly categorized. Now it will be fairly simple to make such a determination. This should, in turn, yield more accurate import and export statistics.

INDA has also been assued that the purpose of this change is to better reflect trade of these goods, not to alter duties. While ITC officials will not guarantee that duties will never change based on these subheadings, they do state that no changes are being considered at present.

Next Steps

At press time, the ITC has published these proposed changes in the Federal Register and was seeking public comment on the issue. INDA has released copies of the proposal to its membership as well and is awaiting response.

INDA noted in correspondence with members that this proposal was the result of long-term negotiations and that it was inclined to support the changes. Unless there is a compelling reason why the changes should not be made, INDA expects the new nomenclature will be in place by 1996 and that our members will benefit from what will likely be more reliable reporting of import/export data from that time forward.
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Title Annotation:Capital Comments
Author:Mayberry, Peter
Publication:Nonwovens Industry
Date:Jul 1, 1993
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