October 5, 2000
News Release 00-127
Inv. No. 332-352
ITC FINDS IMPACT OF ATPA IMPORTS NEGLIGIBLE
The overall effect of imports under the Andean Trade Preference Act (ATPA) on the U.S.
economy and consumers continued to be negligible in 1999, reports the U.S. International
Trade Commission (ITC).
The ITC, an independent, nonpartisan, factfinding federal agency, recently issued its biennial
report monitoring imports under ATPA. 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 report, Andean Trade Preference Act: Impact on U.S.
Industries and Consumers and on Drug Crop Eradication and Crop Substitution, Seventh
Andean Trade Preference Act: Impact on U.S. Industries and Consumers and on Drug Crop
Eradication and Crop Substitution, Seventh Report, 1999 (Inv. No. 332-352, USITC
Publication No. 3358, September 2000) will be available on the ITC's Internet site at
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 202-205-2104.
- U.S. imports under ATPA increased by 6.4 percent to $1.8 billion in 1999. At the
same time, total U.S. imports from ATPA countries increased 17.6 percent, reflecting
primarily higher prices of petroleum products. As a result, the portion of U.S. imports
from ATPA countries entering under ATPA dropped from their peak ratio of
19.7 percent in 1998 to 17.8 percent in 1999. Also, U.S. exports to the region
declined 27.8 percent, resulting in an uncharacteristically large U.S. trade deficit of
$3.6 billion with the region.
- 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:
asparagus; chrysanthemums, carnations, anthuriums, and orchids; and fresh-cut roses.
U.S. imports of all of the 20 leading ATPA-exclusive items produced net welfare gains
for U.S. consumers in 1999. 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 Bolivia and Peru and used a general
equilibrium analysis to analyze the effectiveness of ATPA in promoting broad-based
economic growth and sustainable economic alternatives to drug crop production in the
Andean region. The case studies, as well as the general equilibrium analysis, suggest
that ATPA has had a small but positive effect on the economies of the ATPA
- ATPA continued to have a slight but positive effect on drug crop eradication and crop
substitution in the Andean region in 1999. Eradication efforts contributed to an overall
decline of 4 percent in the volume of land under coca cultivation, despite an increase in
Colombian production. Alternative development efforts to introduce new products and
expand licit crop production in the region continued to show promising results.
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