Fabric is cut and sewn into lined women’s trousers in Mexico. The wool yarn was formed in Canada, elastomeric yarn is formed in Korea. The composition of the fabric is 96% wool and 4% spandex fabric that was woven in the U.S. The visible lining fabric was woven in Korea and classified under subheading 5512.19. The trousers are imported to the U.S. from Mexico. Which of the following statements is true based on the requirements of the North American Free Trade Agreement (NAFTA)?
A. The elastomeric yarn from Korea disqualifies these trousers from NAFTA.
B. The Korean visible lining fabric does not disqualify these trousers from NAFTA.
C. The Korean visible lining fabric disqualifies these trousers from NAFTA.
D. The component that determines the classification of these trousers is classified in subheading 5512.19.
E. These trousers do not qualify for NAFTA because they do not make the necessary tariff shift.
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The Answer is: B
Citation: HTSUS General Note 12
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