Free Trade Agreements — Their Use and Abuse

January 26, 2012

In this webinar, Morgan Lewis partner Margaret Gatti and of counsel Louis Rothberg discussed how to use—not abuse—FTAs.

With the recent addition of the South Korea, Panama, and Colombia free trade agreements (FTAs), the United States now has a total of 14 FTAs involving 20 separate countries. FTAs allow for low or no import duties on goods produced in member countries, provided that the imported goods qualify as "originating" goods.

This means that importers cannot avail themselves of preferential duty treatment under an FTA unless the imported goods qualify for preferential duty treatment as "originating" goods. Additionally, preferential duty treatment is not automatic and must instead be claimed by the importer. Unfortunately, determining if goods are "originating" goods is not easy because each FTA has its own unique set of origin rules. Improper claims of eligibility under a given FTA can lead to costly penalties.

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