Client: Petratex Confecções, S.A.

Petratex – Fashion, Sport and High-Tech – Petratex

PETRATEX CONFECÇÕES SA design and manufacture innovative textiles that have revolutionised the sectors of fashion and sport due to their combination of comfort and aesthetic characteristics. They source their fabrics and materials from all over the world and have factories in Portugal and Tunisia, one of which is in a free zone.

They work with more than 100 international brands and thus export all over the world, but increasingly to the United States which is becoming an extremely important market for them. However, import duties for their range of products to the US can be prohibitive so The International Trade Consultancy was engaged to write a consultation paper about how to restructure their supply chain to minimise these duties.

The United States, like many countries, offers reduced rates of import duty to countries with whom they have a Free Trade Agreement and also countries that are members of blocs who are considered by the World Customs Organisation to need assistance developing their manufacturing industries. In both instances, the reduced rates of import duty only apply to specific HS codes. It was therefore necessary to research which countries the USA has trade agreements with and which countries benefit from reduced duty rates due to being in one of these blocs, for example, the General System of Preferences. It was also essential to check that the HS codes in question were included in the FTA / GSP terms.

Because GSP reduced duty rates do not apply for the Petratex HS codes, I then looked at Free Trade Agreements. This research determined that, of the live FTAs, the United States Morocco Free Trade Agreement and the United States-Mexico-Canada Agreement could both be utilised.