The mechanism effectively transforms a tariff into a demand-generation tool for the US fibre industry. The more US cotton and textile inputs a participating country imports, the greater its duty-free access for apparel exports to the United States.
How the quota rewards US fibre purchases
The quota calculation has two components. The first is the value or volume of US-produced cotton and MMF textile inputs including yarn, fabric, and staple fibre imported by the participating country. The second is the volume of US raw cotton and cotton products it purchases. Combined, these determine the country&#**;s eligible duty-free apparel quota.
The Office of the United States Trade Representative (USTR) has concluded that the TRQs cannot be implemented immediately but expects them to become operational by September *, ****. A separate USTR notice will specify the quota allocations and the effective date. Until then, imports from all four countries remain subject to the ** per cent Section *** duty on covered products. According to the White House presidential memorandum issued on July **, the mechanism is intended “to encourage the importation by each of these economies of U.S. … textile goods.”
