News Release 98-099
Inv. No. 332-237


The value of U.S. components exported for assembly in foreign manufacturing operations and then returned to the United States under the production sharing provisions of the Harmonized Tariff Schedule (HTS) continues to grow, rising by $2.6 billion (11 percent) to $26.6 billion in 1997, reports the U.S. International Trade Commission (ITC) in its publication Production Sharing: Use of U.S. Components and Materials in Foreign Assembly Operations, 1994-97.

The production sharing provisions provide reduced tariff treatment for goods assembled or processed in foreign locations that contain U.S.-made components and U.S.-origin metal. A significant amount of imports from production sharing operations do not enter under the HTS production sharing provisions because they are already eligible for duty-free treatment under other agreements or tariff-preference programs, such as the North American Free Trade Agreement (NAFTA). Both the HTS production sharing provisions and NAFTA encourage the use of U.S. parts and material in foreign production operations.

As the global economy becomes more integrated, production sharing is expanding in many industries, notably apparel, electronic products, and motor vehicles and parts. The ITC's current Production Sharing report provides an analysis of recent developments in Mexico's assembly industry and examines the most significant developments in the industries and products that accounted for the largest growth or volume of 1997 trade under the HTS production sharing provisions. The 1998 edition also assesses:

 the extent and type of production sharing trade that takes place beyond that reported under HTS production sharing provisions, including trends for this trade under NAFTA and as reported by official Mexican statistics;

 developments in assembly operations in Mexico as well as the Caribbean Basin (apparel) and Southeast Asia (semiconductors);

 the types of products assembled in foreign locations;

 trends in the location of foreign assembly operations; and

 the impact on key industries of global production sharing activities.

Production Sharing: Use of U.S. Components and Materials in Foreign Assembly Operations, 1994-1997 (USITC Publication 3146, December 1998) will be available on the ITC's Internet server at The report will also be available at regional federal depository libraries in the United States and electronically on the Government Printing Office Bulletin Board. A printed copy may be requested by calling 202-205-1809 or by writing to the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.

-- 30 --