< Back to S. 2610 (108th Congress, 2003–2004)

Text of the United States-Australia Free Trade Agreement Implementation Act

This bill was introduced on July 14, 2004, in a previous session of Congress, but was not enacted. The text of the bill below is as of Jul 6, 2004 (Introduced).

This is not the latest text of this bill.

Source: GPO

S 2610 IS

108th CONGRESS

2d Session

S. 2610

To implement the United States-Australia Free Trade Agreement.

IN THE SENATE OF THE UNITED STATES

July 6, 2004

Mr. GRASSLEY (for himself, Mr. BAUCUS, and Mr. FRIST) (by request) introduced the following bill; which was read twice and referred to the Committee on Finance pursuant to section (b)(3) of Public Law 107-210


A BILL

To implement the United States-Australia Free Trade Agreement.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘United States-Australia Free Trade Agreement Implementation Act’.

    (b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

      Sec. 1. Short title; table of contents.

      Sec. 2. Purposes.

      Sec. 3. Definitions.

TITLE I--APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE AGREEMENT

      Sec. 101. Approval and entry into force of the Agreement.

      Sec. 102. Relationship of the Agreement to United States and State law.

      Sec. 103. Implementing actions in anticipation of entry into force and initial regulations.

      Sec. 104. Consultation and layover provisions for, and effective date of, proclaimed actions.

      Sec. 105. Administration of dispute settlement proceedings.

      Sec. 106. Effective dates; effect of termination.

TITLE II--CUSTOMS PROVISIONS

      Sec. 201. Tariff modifications.

      Sec. 202. Additional duties on certain agricultural goods.

      Sec. 203. Rules of origin.

      Sec. 204. Customs user fees.

      Sec. 205. Disclosure of incorrect information.

      Sec. 206. Enforcement relating to trade in textile and apparel goods.

      Sec. 207. Regulations.

TITLE III--RELIEF FROM IMPORTS

      Sec. 301. Definitions.

Subtitle A--Relief From Imports Benefiting From the Agreement

      Sec. 311. Commencing of action for relief.

      Sec. 312. Commission action on petition.

      Sec. 313. Provision of relief.

      Sec. 314. Termination of relief authority.

      Sec. 315. Compensation authority.

      Sec. 316. Confidential business information.

Subtitle B--Textile and Apparel Safeguard Measures

      Sec. 321. Commencement of action for relief.

      Sec. 322. Determination and provision of relief.

      Sec. 323. Period of relief.

      Sec. 324. Articles exempt from relief.

      Sec. 325. Rate after termination of import relief.

      Sec. 326. Termination of relief authority.

      Sec. 327. Compensation authority.

      Sec. 328. Business confidential information.

Subtitle C--Cases Under Title II of the Trade Act of 1974

      Sec. 331. Findings and action on goods from Australia.

TITLE IV--PROCUREMENT

      Sec. 401. Eligible products.

SEC. 2. PURPOSES.

    The purposes of this Act are--

      (1) to approve and implement the Free Trade Agreement between the United States and Australia, entered into under the authority of section 2103(b) of the Bipartisan Trade Promotion Authority Act of 2002 (19 U.S.C. 3803(b));

      (2) to strengthen and develop economic relations between the United States and Australia for their mutual benefit;

      (3) to establish free trade between the 2 nations through the reduction and elimination of barriers to trade in goods and services and to investment; and

      (4) to lay the foundation for further cooperation to expand and enhance the benefits of such Agreement.

SEC. 3. DEFINITIONS.

    In this Act:

      (1) AGREEMENT- The term ‘Agreement’ means the United States-Australia Free Trade Agreement approved by Congress under section 101(a)(1).

      (2) HTS- The term ‘HTS’ means the Harmonized Tariff Schedule of the United States.

      (3) TEXTILE OR APPAREL GOOD- The term ‘textile or apparel good’ means a good listed in the Annex to the Agreement on Textiles and Clothing referred to in section 101(d)(4) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).

TITLE I--APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE AGREEMENT

SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE AGREEMENT.

    (a) APPROVAL OF AGREEMENT AND STATEMENT OF ADMINISTRATIVE ACTION- Pursuant to section 2105 of the Bipartisan Trade Promotion Authority Act of 2002 (19 U.S.C. 3805) and section 151 of the Trade Act of 1974 (19 U.S.C. 2191), Congress approves--

      (1) the United States-Australia Free Trade Agreement entered into on May 18, 2004, with the Government of Australia and submitted to Congress on XXXXX, 2004; and

      (2) the statement of administrative action proposed to implement the Agreement that was submitted to Congress on XXXXXX, 2004.

    (b) CONDITIONS FOR ENTRY INTO FORCE OF THE AGREEMENT- At such time as the President determines that Australia has taken measures necessary to bring it into compliance with those provisions of the Agreement that are to take effect on the date on which the Agreement enters into force, the President is authorized to exchange notes with the Government of Australia providing for the entry into force, on or after January 1, 2005, of the Agreement with respect to the United States.

SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED STATES AND STATE LAW.

    (a) RELATIONSHIP OF AGREEMENT TO UNITED STATES LAW-

      (1) UNITED STATES LAW TO PREVAIL IN CONFLICT- No provision of the Agreement, nor the application of any such provision to any person or circumstance, which is inconsistent with any law of the United States shall have effect.

      (2) CONSTRUCTION- Nothing in this Act shall be construed--

        (A) to amend or modify any law of the United States, or

        (B) to limit any authority conferred under any law of the United States,

      unless specifically provided for in this Act.

    (b) RELATIONSHIP OF AGREEMENT TO STATE LAW-

      (1) LEGAL CHALLENGE- No State law, or the application thereof, may be declared invalid as to any person or circumstance on the ground that the provision or application is inconsistent with the

Agreement, except in an action brought by the United States for the purpose of declaring such law or application invalid.

      (2) DEFINITION OF STATE LAW- For purposes of this subsection, the term ‘State law’ includes--

        (A) any law of a political subdivision of a State; and

        (B) any State law regulating or taxing the business of insurance.

    (c) EFFECT OF AGREEMENT WITH RESPECT TO PRIVATE REMEDIES- No person other than the United States--

      (1) shall have any cause of action or defense under the Agreement or by virtue of congressional approval thereof; or

      (2) may challenge, in any action brought under any provision of law, any action or inaction by any department, agency, or other instrumentality of the United States, any State, or any political subdivision of a State, on the ground that such action or inaction is inconsistent with the Agreement.

SEC. 103. IMPLEMENTING ACTIONS IN ANTICIPATION OF ENTRY INTO FORCE AND INITIAL REGULATIONS.

    (a) IMPLEMENTING ACTIONS-

      (1) PROCLAMATION AUTHORITY- After the date of the enactment of this Act--

        (A) the President may proclaim such actions, and

        (B) other appropriate officers of the United States Government may issue such regulations,

      as may be necessary to ensure that any provision of this Act, or amendment made by this Act, that takes effect on the date the Agreement enters into force is appropriately implemented on such date, but no such proclamation or regulation may have an effective date earlier than the date on which the Agreement enters into force.

      (2) EFFECTIVE DATE OF CERTAIN PROCLAIMED ACTIONS- Any action proclaimed by the President under the authority of this Act that is not subject to the consultation and layover provisions under section 104, may not take effect before the 15th day after the date on which the text of the proclamation is published in the Federal Register.

      (3) WAIVER OF 15-DAY RESTRICTION- The 15-day restriction in paragraph (2) on the taking effect of proclaimed actions is waived to the extent that the application of such restriction would prevent the taking effect on the date the Agreement enters into force of any action proclaimed under this section.

    (b) INITIAL REGULATIONS- Initial regulations necessary or appropriate to carry out the actions required by or authorized under this Act or proposed in the statement of administrative action submitted under section 101(a)(2) to implement the Agreement shall, to the maximum extent feasible, be issued within 1 year after the date on which the Agreement enters into force. In the case of any implementing action that takes effect on a date after the date on which the Agreement enters into force, initial regulations to carry out that action shall, to the maximum extent feasible, be issued within 1 year after such effective date.

SEC. 104. CONSULTATION AND LAYOVER PROVISIONS FOR, AND EFFECTIVE DATE OF, PROCLAIMED ACTIONS.

    If a provision of this Act provides that the implementation of an action by the President by proclamation is subject to the consultation and layover requirements of this section, such action may be proclaimed only if--

      (1) the President has obtained advice regarding the proposed action from--

        (A) the appropriate advisory committees established under section 135 of the Trade Act of 1974 (19 U.S.C. 2155); and

        (B) the United States International Trade Commission;

      (2) the President has submitted a report to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives that sets forth--

        (A) the action proposed to be proclaimed and the reasons therefor; and

        (B) the advice obtained under paragraph (1);

      (3) a period of 60 calendar days, beginning on the first day on which the requirements set forth in paragraphs (1) and (2) have been met has expired; and

      (4) the President has consulted with such Committees regarding the proposed action during the period referred to in paragraph (3).

SEC. 105. ADMINISTRATION OF DISPUTE SETTLEMENT PROCEEDINGS.

    (a) ESTABLISHMENT OR DESIGNATION OF OFFICE- The President is authorized to establish or designate within the Department of Commerce an office that shall be responsible for providing administrative assistance to panels established under chapter 21 of the Agreement. The office may not be considered to be an agency for purposes of section 552 of title 5, United States Code.

    (b) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated for each fiscal year after fiscal year 2004 to the Department of Commerce such sums as may be necessary for the establishment and operations of the office under subsection (a) and for the payment of the United States share of the expenses of panels established under chapter 21 of the Agreement.

SEC. 106. EFFECTIVE DATES; EFFECT OF TERMINATION.

    (a) EFFECTIVE DATES- Except as provided in subsection (b), the provisions of this Act and the amendments made by this Act take effect on the date on which the Agreement enters into force.

    (b) EXCEPTIONS- Sections 1 through 3 and this title take effect on the date of the enactment of this Act.

    (c) TERMINATION OF THE AGREEMENT- On the date on which the Agreement terminates, the provisions of this Act (other than this subsection) and the amendments made by this Act shall cease to be effective.

TITLE II--CUSTOMS PROVISIONS

SEC. 201. TARIFF MODIFICATIONS.

    (a) TARIFF MODIFICATIONS PROVIDED FOR IN THE AGREEMENT- The President may proclaim--

      (1) such modifications or continuation of any duty,

      (2) such continuation of duty-free or excise treatment, or

      (3) such additional duties,

    as the President determines to be necessary or appropriate to carry out or apply articles 2.3, 2.5, and 2.6, and Annex 2-B of the Agreement.

    (b) OTHER TARIFF MODIFICATIONS- Subject to the consultation and layover provisions of section 104, the President may proclaim--

      (1) such modifications or continuation of any duty,

      (2) such modifications as the United States may agree to with Australia regarding the staging of any duty treatment set forth in Annex 2-B of the Agreement,

      (3) such continuation of duty-free or excise treatment, or

      (4) such additional duties,

    as the President determines to be necessary or appropriate to maintain the general level of reciprocal and mutually advantageous concessions with respect to Australia provided for by the Agreement.

    (c) CONVERSION TO AD VALOREM RATES- For purposes of subsections (a) and (b), with respect to any good for which the base rate in the Schedule of the United States to Annex 2-B of the Agreement is a specific or compound rate of duty, the President may substitute for the base rate an ad valorem rate that the President determines to be equivalent to the base rate.

SEC. 202. ADDITIONAL DUTIES ON CERTAIN AGRICULTURAL GOODS.

    (a) GENERAL PROVISIONS-

      (1) APPLICABILITY OF SUBSECTION- This subsection applies to additional duties assessed under subsections (b), (c), and (d).

      (2) APPLICABLE NTR (MFN) RATE OF DUTY- For purposes of subsections (b), (c), and (d), the term ‘applicable NTR (MFN) rate of duty’ means, with respect to a safeguard good, a rate of duty that is the lesser of--

        (A) the column 1 general rate of duty that would have been imposed under the HTS on the same safeguard good entered, without a claim for preferential treatment, at the time the additional duty is imposed under subsection (b), (c), or (d), as the case may be; or

        (B) the column 1 general rate of duty that would have been imposed under the HTS on the same safeguard good entered, without a claim for preferential treatment, on December 31, 2004.

      (3) SCHEDULE RATE OF DUTY- For purposes of subsections (b) and (c), the term ‘schedule rate of duty’ means, with respect to a safeguard good, the rate of duty for that good set out in the Schedule of the United States to Annex 2-B of the Agreement.

      (4) SAFEGUARD GOOD- In this subsection, the term ‘safeguard good’ means--

        (A) a horticulture safeguard good described subsection (b)(1)(B); or

        (B) a beef safeguard good described in subsection (c)(1) or subsection (d)(1)(A).

      (5) EXCEPTIONS- No additional duty shall be assessed on a good under subsection (b), (c), or (d) if, at the time of entry, the good is subject to import relief under--

        (A) subtitle A of title III of this Act; or

        (B) chapter 1 of title II of the Trade Act of 1974 (19 U.S.C. 2251 et seq.).

      (6) TERMINATION- The assessment of an additional duty on a good under subsection (b) or (c), whichever is applicable, shall cease to apply to that good on the date on which duty-free treatment must be provided to that good under the Schedule of the United States to Annex 2-B of the Agreement.

      (7) NOTICE- Not later than 60 days after the date on which the Secretary of the Treasury assesses an additional duty on a good under subsection (b), (c), or (d), the Secretary shall notify the Government of Australia in writing of such action and shall provide to that Government data supporting the assessment of the additional duty.

    (b) ADDITIONAL DUTIES ON HORTICULTURE SAFEGUARD GOODS-

      (1) DEFINITIONS- In this subsection:

        (A) F.O.B- The term ‘F.O.B.’ means free on board, regardless of the mode of transportation, at the point of direct shipment by the seller to the buyer.

        (B) HORTICULTURE SAFEGUARD GOOD- The term ‘horticulture safeguard good’ means a good--

          (i) that qualifies as an originating good under section 203;

          (ii) that is included in the United States Horticulture Safeguard List set forth in Annex 3-A of the Agreement; and

          (iii) for which a claim for preferential treatment under the Agreement has been made.

        (C) UNIT IMPORT PRICE- The ‘unit import price’ of a good means the price of the good determined on the basis of the F.O.B. import price of the good, expressed in either dollars per kilogram or dollars per liter, whichever unit of measure is indicated for the good in the United States Horticulture Safeguard List set forth in Annex 3-A of the Agreement.

        (D) TRIGGER PRICE- The ‘trigger price’ for a good is the trigger price indicated for that good in the United States Horticulture Safeguard List set forth in Annex 3-A of the Agreement or any amendment thereto.

      (2) ADDITIONAL DUTIES- In addition to any duty proclaimed under subsection (a) or (b) of section 201, and subject to subsection (a) of this section, the Secretary of the Treasury shall assess a

duty on a horticulture safeguard good, in the amount determined under paragraph (3), if the Secretary determines that the unit import price of the good when it enters the United States is less than the trigger price for that good.

      (3) CALCULATION OF ADDITIONAL DUTY- The additional duty assessed under this subsection on a horticulture safeguard good shall be an amount determined in accordance with the following table:

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 If the excess of the trigger price over the unit import price is: The additional duty is an amount equal to:                                                 
 Not more than 10 percent of the trigger price                            0.                                                                                                
 More than 10 percent but not more than 40 percent of the trigger price   30 percent of the excess of the applicable NTR (MFN) rate of duty over the schedule rate of duty. 
 More than 40 percent but not more than 60 percent of the trigger price   50 percent of such excess.                                                                        
 More than 60 percent but not more than 75 percent of the trigger price   70 percent of such excess.                                                                        
 More than 75 percent of the trigger price                                100 percent of such excess.                                                                       
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    (c) ADDITIONAL DUTIES ON BEEF SAFEGUARD GOODS BASED ON QUANTITY OF IMPORTS-

      (1) DEFINITION- In this subsection, the term ‘beef safeguard good’ means a good--

        (A) that qualifies as an originating good under section 203;

        (B) that is listed in paragraph 3 of Annex I of the General Notes to the Schedule of the United States to Annex 2-B of the Agreement; and

        (C) for which a claim for preferential treatment under the Agreement has been made.

      (2) ADDITIONAL DUTIES- In addition to any duty proclaimed under subsection (a) or (b) of section 201, and subject to subsection (a) of this section and paragraphs (4) and (5) of this subsection, the Secretary of the Treasury shall assess a duty, in the amount determined under paragraph (3), on a beef safeguard good imported into the United States in a calendar year if the Secretary determines that, prior to such importation, the total volume of beef safeguard goods imported into the United States in that calendar year is equal to or greater than 110 percent of the volume set out for beef safeguard goods in the corresponding year in the table contained in paragraph 3(a) of Annex I of the General Notes to the Schedule of the United States to Annex 2-B of the Agreement. For purposes of this subsection, the years 1 through 19 set out in the table contained in paragraph 3(a) of such Annex I correspond to the calendar years 2005 through 2023.

      (3) CALCULATION OF ADDITIONAL DUTY- The additional duty on a beef safeguard good under this subsection shall be an amount equal to 75 percent of the excess of the applicable NTR (MFN) rate of duty over the schedule rate of duty.

      (4) WAIVER-

        (A) IN GENERAL- The United States Trade Representative is authorized to waive the application of this subsection, if the Trade Representative determines that extraordinary market conditions demonstrate that the waiver would be in the national interest of the United States, after the requirements of subparagraph (B) are met.

        (B) NOTICE AND CONSULTATIONS- Promptly after receiving a request for a waiver of this subsection, the Trade Representative shall notify the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate, and may make the determination provided for in subparagraph (A) only after consulting with--

          (i) appropriate private sector advisory committees established under section 135 of the Trade Act of 1974 (19 U.S.C. 2155); and

          (ii) the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate regarding--

            (I) the reasons supporting the determination to grant the waiver; and

            (II) the proposed scope and duration of the waiver.

          (C) NOTIFICATION OF THE SECRETARY OF THE TREASURY AND PUBLICATION- Upon granting a waiver under this paragraph, the Trade Representative shall promptly notify the Secretary of the Treasury of the period in which the waiver will be in effect, and shall publish notice of the waiver in the Federal Register.

      (5) EFFECTIVE DATES- This subsection takes effect on January 1, 2013, and shall not be effective after December 31, 2022.

    (d) ADDITIONAL DUTIES ON BEEF SAFEGUARD GOODS BASED ON PRICE-

      (1) DEFINITIONS- In this subsection:

        (A) BEEF SAFEGUARD GOOD- The term ‘beef safeguard good’ means a good--

          (i) that qualifies as an originating good under section 203;

          (ii) that is classified under subheading 0201.10.50, 0201.20.80, 0201.30.80, 0202.10.50, 0202.20.80, or 0202.30.80 of the HTS; and

          (iii) for which a claim for preferential treatment under the Agreement has been made.

        (B) CALENDAR QUARTER-

          (i) IN GENERAL- The term ‘calendar quarter’ means any 3-month period beginning on January 1, April 1, July 1, or October 1 of a calendar year.

          (ii) FIRST CALENDAR QUARTER- The term ‘first calendar quarter’ means the calendar quarter beginning on January 1.

          (iii) SECOND CALENDAR QUARTER- The term ‘second calendar quarter’ means the calendar quarter beginning on April 1.

          (iv) THIRD CALENDAR QUARTER- The term ‘third calendar quarter’ means the calendar quarter beginning on July 1.

          (v) FOURTH CALENDAR QUARTER- The term ‘fourth calendar quarter’ means

the calendar quarter beginning on October 1.

        (C) MONTHLY AVERAGE INDEX PRICE- The term ‘monthly average index price’ means the simple average, as determined by the Secretary of Agriculture, for a calendar month of the daily average index prices for Wholesale Boxed Beef Cut-Out Value Select 1-3 Central U.S. 600-750 lbs., or its equivalent, as such simple average is reported by the Agricultural Marketing Service of the Department of Agriculture in Report LM--XB459 or any equivalent report.

        (D) 24-MONTH TRIGGER PRICE- The term ‘24-month trigger price’ means, with respect to any calendar month, the average of the monthly average index prices for the 24 preceding calendar months, multiplied by 0.935.

      (2) ADDITIONAL DUTIES- In addition to any duty proclaimed under subsection (a) or (b) of section 201, and subject to subsection (a) of this section and paragraphs (4) through (6) of this subsection, the Secretary of the Treasury shall assess a duty, in the amount determined under paragraph (3), on a beef safeguard good imported into the United States if--

        (A)(i) the good is imported in the first calendar quarter, second calendar quarter, or third calendar quarter of a calendar year; and

        (ii) the monthly average index price, in any 2 calendar months of the preceding calendar quarter, is less than the 24-month trigger price; or

        (B)(i) the good is imported in the fourth calendar quarter of a calendar year; and

        (ii)(I) the monthly average index price, in any 2 calendar months of the preceding calendar quarter, is less than the 24-month trigger price; or

        (II) the monthly average index price, in any of the 4 calendar months preceding January 1 of the succeeding calendar year, is less than the 24-month trigger price.

      (3) CALCULATION OF ADDITIONAL DUTY- The additional duty on a beef safeguard good under this subsection shall be an amount equal to 65 percent of the applicable NTR (MFN) rate of duty for that good.

      (4) LIMITATION- An additional duty shall be assessed under this subsection on a beef safeguard good imported into the United States in a calendar year only if, prior to the importation of that good, the total quantity of beef safeguard goods imported into the United States in that calendar year is equal to or greater than the sum of--

        (A) the quantity of goods of Australia eligible to enter the United States in that year specified in Additional United States Note 3 to Chapter 2 of the HTS; and

        (B)(i) in 2023, 70,420 metric tons; or

        (ii) in 2024, and in each year thereafter, a quantity that is 0.6 percent greater than the quantity provided for in the preceding year under this subparagraph.

      (5) WAIVER-

        (A) IN GENERAL- The United States Trade Representative is authorized to waive the application of this subsection, if the Trade Representative determines that extraordinary market conditions demonstrate that the waiver would be in the national interest of the United States, after the requirements of subparagraph (B) are met.

        (B) NOTICE AND CONSULTATIONS- Promptly after receiving a request for a waiver of this subsection, the Trade Representative shall notify the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate, and may make the determination provided for in subparagraph (A) only after consulting with--

          (i) appropriate private sector advisory committees established under section 135 of the Trade Act of 1974 (19 U.S.C. 2155); and

          (ii) the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate regarding--

            (I) the reasons supporting the determination to grant the waiver; and

            (II) the proposed scope and duration of the waiver.

          (C) NOTIFICATION OF THE SECRETARY OF THE TREASURY AND PUBLICATION- Upon granting a waiver under this paragraph, the Trade Representative shall promptly notify the Secretary of the Treasury of the period in which the waiver will be in effect, and shall publish notice of the waiver in the Federal Register.

      (6) EFFECTIVE DATE- This subsection takes effect on January 1, 2023.

SEC. 203. RULES OF ORIGIN.

    (a) APPLICATION AND INTERPRETATION- In this section:

      (1) TARIFF CLASSIFICATION- The basis for any tariff classification is the HTS.

      (2) REFERENCE TO HTS- Whenever in this section there is a reference to a heading or subheading, such reference shall be a reference to a heading or subheading of the HTS.

      (3) COST OR VALUE- Any cost or value referred to in this section shall be recorded and maintained in accordance with the generally accepted accounting principles applicable in the territory of the country in which the good is produced (whether Australia or the United States).

    (b) ORIGINATING GOODS- For purposes of this Act and for purposes of implementing the preferential treatment provided for under the Agreement, a good is an originating good if--

      (1) the good is a good wholly obtained or produced entirely in the territory of Australia, the United States, or both;

      (2) the good--

        (A) is produced entirely in the territory of Australia, the United States, or both, and--

          (i) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in Annex 4-A or Annex 5-A of the Agreement;

          (ii) the good otherwise satisfies any applicable regional value-content requirement referred to in Annex 5-A of the Agreement; or

          (iii) the good meets any other requirements specified in Annex 4-A or Annex 5-A of the Agreement; and

        (B) the good satisfies all other applicable requirements of this section;

      (3) the good is produced entirely in the territory of Australia, the United States, or both, exclusively from materials described in paragraph (1) or (2); or

      (4) the good otherwise qualifies as an originating good under this section.

    (c) DE MINIMIS AMOUNTS OF NONORIGINATING MATERIALS-

      (1) IN GENERAL- Except as provided in paragraphs (2) and (3), a good that does not undergo a change in tariff classification pursuant to Annex 5-A of the Agreement is an originating good if--

        (A) the value of all nonoriginating materials that--

          (i) are used in the production of the good, and

          (ii) do not undergo the required change in tariff classification,

        does not exceed 10 percent of the adjusted value of the good;

        (B) the good meets all other applicable requirements of this section; and

        (C) the value of such nonoriginating materials is included in the value of nonoriginating materials for any applicable regional value-content requirement for the good.

      (2) EXCEPTIONS- Paragraph (1) does not apply to the following:

        (A) A nonoriginating material provided for in chapter 4 of the HTS or in subheading 1901.90 that is used in the production of a good provided for in chapter 4 of the HTS.

        (B) A nonoriginating material provided for in chapter 4 of the HTS or in subheading 1901.90 that is used in the production of a good provided for in subheading 1901.10, 1901.20, or 1901.90, heading 2105, or subheading 2106.90, 2202.90, or 2309.90.

        (C) A nonoriginating material provided for in heading 0805 or any of subheadings 2009.11 through 2009.39 that is used in the production of a good provided for in any of subheadings 2009.11 through 2009.39, or in subheading 2106.90 or 2202.90.

        (D) A nonoriginating material provided for in chapter 15 of the HTS that is used in the production of a good provided for in any of headings 1501.00.00 through 1508, or in heading 1512, 1514, or 1515.

        (E) A nonoriginating material provided for in heading 1701 that is used in the production of a good provided for in any of headings 1701 through 1703.

        (F) A nonoriginating material provided for in chapter 17 of the HTS or heading 1805.00.00 that is used in the production of a good provided for in subheading 1806.10.

        (G) A nonoriginating material provided for in any of headings 2203 through 2208 that is used in the production of a good provided for in heading 2207 or 2208.

        (H) A nonoriginating material used in the production of a good provided for in any of chapters 1 through 21 of the HTS unless the nonoriginating material is provided for in a different subheading than the good for which origin is being determined under this section.

      (3) TEXTILE AND APPAREL GOODS-

        (A) IN GENERAL- Except as provided in subparagraph (B), a textile or apparel good that is not an originating good because certain fibers or yarns used in the production of the component of the good that determines the tariff classification of the good do not undergo an applicable change in tariff classification set out in Annex 4-A of the Agreement shall be considered to be an originating good if the total weight of all such fibers or yarns in that component is not more than 7 percent of the total weight of that component.

        (B) CERTAIN TEXTILE OR APPAREL GOODS- A textile or apparel good containing elastomeric yarns in the component of the good that determines the tariff classification of the good shall be considered to be an originating good only if such yarns are wholly formed in the territory of Australia or the United States.

        (C) YARN, FABRIC, OR FIBER- For purposes of this paragraph, in the case of a textile or apparel good that is a yarn, fabric, or group of fibers, the term ‘component of the good that determines the tariff classification of the good’ means all of the fibers in the yarn, fabric, or group of fibers.

    (d) ACCUMULATION-

      (1) ORIGINATING MATERIALS USED IN PRODUCTION OF GOODS OF OTHER COUNTRY- Originating materials from the territory of Australia or the United States that are used in the production of a good in the territory of the other country shall be considered to originate in the territory of the other country.

      (2) MULTIPLE PROCEDURES- A good that is produced in the territory of Australia, the United States, or both, by 1 or more producers, is an originating good if the good satisfies the requirements of subsection (b) and all other applicable requirements of this section.

    (e) REGIONAL VALUE-CONTENT-

      (1) IN GENERAL- For purposes of subsection (b)(2), the regional value-content of a good referred to in Annex 5-A of the Agreement, except for goods to which paragraph (4) applies, shall be calculated by the importer, exporter, or producer of the good, on the basis of the build-down method described in paragraph (2) or the build-up method described in paragraph (3).

      (2) BUILD-DOWN METHOD-

        (A) IN GENERAL- The regional value-content of a good may be calculated on the basis of the following build-down method: