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Andean Trade Preference Act: Impact on U.S. Industries and Consumers and on Drug Crop Eradication and Crop Substitution, 2009 (Fourteenth Report)

Investigation No. 332-352
USITC Publication 4188

Summary

Andean Trade Preference Act (ATPA) imports during 2009 continued to have a negligible overall effect on the U.S. economy and consumers, and ATPA continued to have a small but indirect effect in reducing illicit coca cultivation and promoting crop substitution efforts in the Andean countries, reports the U.S. International Trade Commission (USITC) in its study Andean Trade Preference Act: Impact on U.S. Industries and Consumers and on Drug Crop Eradication and Crop Substitution, 2009.

The USITC recently issued its 14th report in a series monitoring imports under ATPA and the impact of ATPA on drug crop eradication and crop substitution. The ATPA program affords preferential tariff treatment to most products of Colombia, Ecuador, and Peru.

Since the 13th report, two major changes have had an impact on the ATPA: Bolivia was suspended from ATPA eligibility as of December 15, 2008, and the U.S.-Peru Trade Promotion Agreement (TPA) entered into force on February 1, 2009. Peru retained its ATPA eligibility after the TPA entered into force.

The USITC found:

  • The overall impact of ATPA-exclusive imports on the U.S. economy was negligible in 2009.

  • U.S. imports under the ATPA of fresh cut roses and fresh cut chrysanthemums showed the most significant impact on U.S. consumers through lower prices of ATPA imports (as a result of duty free treatment).

  • The most significant impact of ATPA tariff preferences for U.S. producers occurred as a result of reduced domestic production in industries producing fresh cut chrysanthemums.

  • The probable future effects of the ATPA are likely to continue to be minimal. U.S. and Andean government and private sector individuals reported that foreign and domestic investments in Colombia and Ecuador that could generate future exports to the United States under the ATPA were small in 2009, partly because the repeated expirations and short-term renewals of the ATPA discouraged ATPA-related investment. Also, with minor exceptions, investments in ATPA-eligible products in Peru are expected to generate future exports to the United States under the TPA, rather than the ATPA.

  • The ATPA's effectiveness in reducing illicit coca cultivation and promoting crop substitution efforts in the Andean countries continued to be small and mostly indirect. According to the most recent U.S. government data, net land area under coca cultivation decreased substantially in Colombia but increased in Peru (and Bolivia). Alternative development programs in Colombia and Peru continued to provide the infrastructure and job creation needed to generate export sales of new or improved legal crops eligible for duty-free treatment under the ATPA.

The USITC’s report is now available at: http://www.usitc.gov/publications/332/pub4188.pdf

Also available on CD-ROM and in print; call 202.205.2000 for more information.