October 4, 1999
News Release 99-141
Invs. Nos. 332-227 and 332-352
ITC FINDS IMPACT OF CBERA AND ATPA IMPORTS NEGLIGIBLE
The overall effect of imports under the Caribbean Basin Economic Recovery Act (CBERA)
and the Andean Trade Preference Act (ATPA) on the U.S. economy and consumers continued
to be negligible in 1998, reports the U.S. International Trade Commission (ITC).
The ITC, an independent, nonpartisan, factfinding federal agency, recently issued its annual
reports monitoring imports under the two programs in a single publication. The CBERA
program, operative since January 1, 1984, affords preferential tariff treatment to most products
of 24 designated Caribbean, Central American, and South American countries. The ATPA
program, signed into law in December 1991, affords preferential tariff treatment to most
products of Bolivia, Colombia, Ecuador, and Peru. These four Andean countries are the
source of the coca plants from which most of the world's cocaine is produced or are major
transit areas for cocaine. The ATPA's goal is to promote the development of sustainable
economic alternatives to drug crop production by offering alternative, legal Andean products
broader access to the U.S. market.
Following are highlights of the reports, Caribbean Basin Economic Recovery Act: Impact on
U.S. Industries and Consumers, Fourteenth Report, 1998 and Andean Trade Preference Act:
Impact on U.S. Industries and Consumers and on Drug Crop Eradication and Crop
Substitution, Sixth Report, 1998:
- U.S. imports under CBERA declined from 19.3 percent of all U.S. imports from
CBERA countries in 1997 to 18.8 percent in 1998, marking the first year since the
implementation of CBERA of a decline in share from the previous year. U.S. imports
from CBERA countries -- both under CBERA and overall -- were depressed by lower
commodity prices, smaller allocations of sugar quotas, and damage caused by
hurricanes Georges and Mitch.
- The Commission did not identify any U.S. imports under CBERA that would have
potentially significant negative effects on domestic industry. U.S. imports of the 20
leading CBERA-exclusive items, except two sugar subheadings, produced net welfare
gains for U.S. consumers in 1998. The probable future effect of CBERA on the United
States, as estimated by an examination of export-related investment in the beneficiary
countries, is expected to be minimal in most sectors.
- The Commission conducted a case study on Costa Rica to analyze the effectiveness of
CBERA in promoting export-led growth and diversification of production in the
beneficiary countries. The case study revealed that CBERA appears to have played an
important role in stimulating economic growth through export diversification.
- Although total U.S. imports from ATPA countries declined by 3.6 percent in 1998,
U.S. imports under ATPA increased by 21.6 percent to $1.6 billion. During the ATPA
years, the relative importance of U.S. imports of fresh-cut flowers has diminished as a
share of U.S. imports under ATPA, falling from 43.3 percent of the total in 1994 to
32.9 percent in 1997 and 27.5 percent in 1998. The year 1998 was the first year since
the implementation of ATPA that a cut-flower product was not the leading item under
ATPA; instead, copper cathodes ranked first.
- A few industries were identified as potentially experiencing displacement by ATPA
imports of more than an estimated 5 percent of the value of U.S. production:
chrysanthemums, carnations, anthuriums, and orchids; asparagus; and fresh-cut roses.
U.S. imports of nearly all of the 20 leading ATPA-exclusive items produced net
welfare gains for U.S. consumers in 1998. The probable future effect of ATPA on the
United States, as estimated by an examination of export-related investment in the
beneficiary countries, is expected to be minimal in most sectors.
- The Commission conducted case studies on Colombia and Ecuador to analyze the
effectiveness of ATPA in promoting export-led growth and diversification of
production in the beneficiary countries. Both case studies revealed that ATPA has had
only a small effect to date.
- ATPA continued to have a slight but positive effect on drug-crop eradication and crop
substitution in the Andean region in 1998. Eradication efforts contributed to a slight
overall decline in the volume of land under coca cultivation, and alternative
development efforts to introduce new products and expand licit-crop production in the
region are continuing to show promising results.
Caribbean Basin Economic Recovery Act: Impact on U.S. Industries and Consumers,
Fourteenth Report, 1998 and Andean Trade Preference Act: Impact on U.S. Industries and
Consumers and on Drug Crop Eradication and Crop Substitution, Sixth Report, 1998 (Invs.
Nos. 332-227 and 332-352, USITC Publication No. 3234, September 1999) will be available
on the ITC's Internet server at http://www.usitc.gov. The publication will also be available at
federal depository libraries in the United States. 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-
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