Publication Number: 3725

Report Title: Andean Trade Preference Act: Impact on U.S. Industries and Consumers and on Drug Crop Eradication and Crop Substitution, 10th Report 2003

Investigation Number: 332-352

Author's name(s): Joanne Guth

Date Published: September 2004

Report Description/Introductory Text: USITC economic assessment of the Andean Trade Preference Act, ATPA, and the Andean Trade Promotion and Drug Eradication Act, ATPDEA. The USITC report assesses economic effects of ATPA and ATPDEA related trade and investment on the U.S. industries and consumers and the effectiveness of ATPA in promoting drug-related crop eradication and crop substitution in the Andean countries. The report also assesses the probable future economic effect of ATPA related trade and investment on the United States.

In this report, the U.S. International Trade Commission (USITC) assesses the actual economic impact and the probable future effects of the Andean Trade Preference Act (ATPA), as amended by the Andean Trade Promotion and Drug Eradication Act (ATPDEA), on the U.S. economy generally, and on U.S. industries and consumers, and the effectiveness of ATPA in promoting drug-related crop eradication and crop substitution efforts of Bolivia, Colombia, Ecuador, and Peru. The actual impact of ATPA on the United States in 2003 is estimated using partial equilibrium analysis. The probable future effect of ATPA on the United States is estimated by an examination of ATPA-eligible investment in the beneficiary countries. The report also includes a comprehensive review of U.S. trade under ATPA in 2003.

The overall effect of ATPA-exclusive imports (those ineligible for other tariff preferences) on the U.S. economy and consumers continued to be negligible in 2003. However, U.S. imports of ATPA-exclusive products were estimated to have potentially significant effects on domestic industries producing asparagus; fresh-cut roses; and chrysanthemums, carnations, anthuriums, and orchids. U.S. imports of all of the 20 leading ATPA-exclusive items produced net welfare gains for U.S. consumers in 2003. The probable future effect of ATPA on the United States is also expected to be minimal on the overall U.S. economy and in most sectors. Nonetheless, the Commission identified recent investments in the textile and apparel sector in response to ATPDEA benefits, which may generate increased U.S. sector imports. ATPA continued to have a small, indirect but positive effect on drug-crop eradication and crop substitution efforts in the ATPA countries in 2003. ATPA trade preferences continued to support industries that provide jobs for workers who might otherwise have participated in illicit coca cultivation, including flowers in Colombia and asparagus in Peru.

USITC prepared this report in accordance with section 206 of the ATPA.


Topics Covered: USITC economic assessment, USITC economic effect, Andean, trade preference, ATPA, ATPDEA

Countries: United States, Bolivia, Colombia, Ecuador, Peru

HTS Numbers: 0603, 0709, 1604, 2402, 2709, 2710, 6105, 6109, 6110, 7113, 7403

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