HS Code:
The 'Subject to Cotton Restraints (338)' category typically falls under the Harmonized System (HS) codes related to cotton products, specifically woven fabrics of cotton, often under HS Chapter 52. This category includes products like men's or boys' shirts of cotton, not knitted or crocheted, that are subject to specific trade restraints or quotas due to international agreements such as the Multi-Fibre Arrangement (MFA) or subsequent bilateral agreements. These restraints are designed to regulate the volume of cotton textile imports to protect domestic industries in importing countries, particularly in major markets like the United States and the European Union. The category is significant in global trade due to the high demand for cotton apparel and the historical sensitivity of textile industries to international competition.
Total Trade Volume
Approximately $12.5 billion USD
Data from 2022
Source
International Trade Centre (ITC) Trade Map, UN Comtrade Database
$3.8 billion USD
30.4% of total trade of total trade
Increasing
$2.5 billion USD
20.0% of total trade of total trade
Increasing
$2.0 billion USD
16.0% of total trade of total trade
Stable
$1.5 billion USD
12.0% of total trade of total trade
Stable
$1.0 billion USD
8.0% of total trade of total trade
Decreasing
Average Rate
10.5% ad valorem
Highest Rate
16.0% (United States under specific quota limits)
Lowest Rate
0% (under Free Trade Agreements like EU-Vietnam FTA)
Shift to sustainable cotton sourcing
Increased demand for organic and certified cotton products, pushing exporters to adopt sustainable practices; higher costs for producers but premium pricing in markets like the EU.
2021-2022
Rise of fast fashion and e-commerce
Growing demand for quick-turnaround cotton apparel, benefiting countries with efficient supply chains like Bangladesh and Vietnam.
2020-2022
Trade diversification post-COVID-19
Importers are diversifying sourcing away from single-country dependency, leading to growth in smaller exporters like Cambodia and Sri Lanka.
2021-2023
The United States extended specific cotton import quotas under Category 338 for key exporting countries like Bangladesh and Pakistan as part of protecting domestic textile industries.
January 2023
Limits export growth for affected countries but encourages diversification into non-quota markets or product categories.
Negotiations under the EU-Bangladesh Everything But Arms (EBA) initiative have eased some cotton product restrictions, maintaining duty-free access while imposing stricter sustainability compliance.
March 2023
Boosts Bangladesh's competitive edge in the EU market but increases compliance costs for exporters.
The US initiated stricter monitoring of Vietnamese cotton textile imports under Category 338 to prevent transshipment and ensure compliance with origin rules.
September 2022
Potential delays in shipments and increased scrutiny may temporarily affect Vietnam’s export volumes to the US.