Sec. 7. Modifications to rules of origin
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Section 503(a)(2) of the Trade Act of 1974 ( 19 U.S.C. 2463(a)(2) ) is amended— in subparagraph (A), in the matter following clause (ii)(II), by striking 35 percent and inserting the percentage described in subparagraph
(B); by redesignating subparagraph
(B)as subparagraph (C); by inserting after subparagraph
(A)the following: The percentage described in this subparagraph is— in the case of articles entered before January 1, 2027, 35 percent; in the case of articles entered on or after January 1, 2027, and before January 1, 2029, 40 percent; in the case of articles entered on or after January 1, 2029, and before January 1, 2031, 45 percent; and in the case of articles entered on or after January 1, 2031, 50 percent. ; and by adding at the end the following: The duty-free treatment provided under this title shall apply to any article that meets the requirements of this paragraph. To the extent that the cost or value of materials produced in the customs territory of the United States is included with respect to an article, an amount not to exceed 15 percent of the appraised value of the article at the time it is entered that is attributed to such United States cost or value may be applied toward determining the applicable percentage described in subparagraph (B). Notwithstanding clause (i), duty-free treatment under any other program providing such treatment for an article, conditional on the eligibility of an article to be treated as originating for purposes of this paragraph, may only be extended to an article that is otherwise eligible for duty-free treatment under this title in a calendar year— if the article would remain eligible for such treatment even if subparagraph
(A)were applied by substituting 35 percent for the percentage described in subparagraph
(B)with respect to that calendar year; and if no amount attributable to United States cost or value, as authorized by clause
(ii)of this subparagraph, would be required to be applied in order to achieve such eligibility. . Not later than January 1, 2026, the United States Trade Representative shall submit to Congress a report on the impact of the Generalized System of Preferences rule of origin requirements under section 503(a)(2)(A)(ii)(I) of the Trade Act of 1974 ( 19 U.S.C. 2463(a)(2)(A)(ii)(I) ) in fostering regional economic integration through program cumulation among regional associations. The report required under this subsection shall include recommendations regarding— new regional associations eligible for treatment as one country under the provisions of section 507(2) of the Trade Act of 1974 ( 19 U.S.C. 2467(2) ); and updates to the rule of origin methodology under section 503 of such Act that would better maximize content from beneficiary developing countries and the United States.
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