If your product's HTS code shows a duty rate in the Special column, you may be able to import it at a reduced or zero rate. These special rates come from Free Trade Agreements (FTAs) and other preferential trade programs — and they can save importers significant money.
What Are the Special Duty Rates?
The HTS schedule has three duty columns. The Special column lists reduced rates available under various trade programs, with letter codes in parentheses indicating which program applies. For example, "Free (A,CA,MX)" means the product enters duty-free from eligible countries under those programs.
Key Program Letter Codes
- A / A+ — Generalized System of Preferences (GSP) for developing countries
- CA — USMCA (formerly NAFTA) for Canada
- MX — USMCA for Mexico
- AU — U.S.–Australia FTA
- BH — U.S.–Bahrain FTA
- CL — U.S.–Chile FTA
- CO — U.S.–Colombia FTA
- D — AGOA (African Growth and Opportunity Act)
- IL — U.S.–Israel FTA
- JO — U.S.–Jordan FTA
- KR — U.S.–Korea FTA (KORUS)
- MA — U.S.–Morocco FTA
- OM — U.S.–Oman FTA
- P / PA — U.S.–Panama FTA
- PE — U.S.–Peru FTA
- SG — U.S.–Singapore FTA
How to Claim an FTA Rate
To claim a preferential duty rate, you generally need to:
- Confirm the good originates in the FTA partner country (origin rules vary by agreement)
- Have documentation — a certificate of origin or a written claim by the importer
- Declare the FTA program on your CBP entry using the correct Special Program Indicator (SPI)
The specific rules of origin (what percentage of the product must be made in the partner country) differ by agreement and product. For USMCA, most goods need to meet regional value content rules.
Checking FTA Eligibility on LookupHTS
When you click on any HTS code on LookupHTS, the detail panel shows the Special rate and lists all the eligible FTA countries as country pills. This gives you a quick visual summary of which trade programs apply to that specific product.
Understanding Rules of Origin
Claiming an FTA rate is not automatic — your product must meet the rules of origin specified in each trade agreement. These rules ensure that the duty preference goes to goods genuinely produced in the partner country, not goods merely transshipped through it. Rules of origin vary by agreement and by product, but they generally fall into three categories.
The first is a tariff shift rule, which requires that the raw materials or components undergo a sufficient transformation in the partner country — typically a change in HTS chapter or heading — before the finished product qualifies. The second is a regional value content (RVC) rule, which requires that a minimum percentage of the product's value (often 35% to 55%) originates in the FTA region. The third is a process rule, which requires that specific manufacturing operations be performed in the partner country. USMCA, for example, uses a combination of all three depending on the product.
Common Mistakes When Claiming FTA Rates
One of the most common mistakes importers make is assuming that because a product was purchased from a supplier in an FTA partner country, it automatically qualifies for the preferential rate. The country of purchase is not the same as the country of origin. A product manufactured in China but sold by a distributor in Canada does not qualify for USMCA treatment. The origin of the good — where it was substantially produced or transformed — is what matters.
Another frequent error is failing to obtain or retain proper documentation. Even if your product legitimately qualifies for an FTA rate, CBP can deny the preference if you cannot provide a valid certificate of origin or equivalent documentation during an audit. For USMCA, importers can self-certify origin, but the certification must include specific data elements and be kept on file for at least five years. Missing or incomplete documentation can result in duty assessments, interest charges, and penalties.
Maximizing Duty Savings
For businesses that import significant volumes, even a small percentage reduction in duty rates can translate to substantial savings over time. Start by reviewing your top imported products and checking whether any qualify for FTA treatment that you are not currently claiming. Many importers leave money on the table simply because they have not analyzed their supply chain for FTA eligibility. Working with a customs broker or trade compliance consultant to conduct an FTA utilization review can identify savings opportunities that far exceed the cost of the analysis.