November 3, 2005
News Release 05-133
Inv. No. 332-227
Contact: Peg O'Laughlin, 202-205-1819
ITC FINDS IMPACT OF CBERA IMPORTS NEGLIGIBLE, DESPITE ENHANCEMENTS
The overall effect of imports under the Caribbean Basin Economic Recovery Act (CBERA) on
the U.S. economy and consumers continued to be negligible in 2003-2004, reports the U.S.
International Trade Commission (ITC) in its report The Impact of the Caribbean Basin Economic
Recovery Act, Seventeenth Report, 2003-2004.
The ITC, an independent, nonpartisan, factfinding federal agency, recently issued its seventeenth
report in a series monitoring imports under CBERA. The CBERA program affords preferential
tariff treatment to most products of 24 designated Caribbean, Central American, and South
The ITC report covers the impact of the CBERA on the United States, with particular emphasis
on calendar year 2004. The CBERA requires the Commission to prepare a biennial report
assessing both the actual and the probable future effects of the CBERA on the U.S. economy
generally, on U.S. industries, and on U.S. consumers. The CBERA was amended in 2000 by the
Caribbean Basin Trade Partnership Act (CBTPA), which broadened the scope of products
eligible for the tariff preferences, and in 2002 by the Trade Act of 2002, which clarified and
modified the CBTPA. The CBTPA also instructed the Commission to report on the impact of the
overall preference program on the beneficiary countries themselves. Following are highlights of
- The overall effect of CBERA-exclusive imports (imports that could receive tariff
preferences only under CBERA provisions) on the U.S. economy and on U.S. industries
and consumers continued to be negligible in 2004. In 2004, the value of all U.S. imports
under CBERA preferences was less than 0.10 percent of U.S. gross domestic product. The
value of total U.S. imports from CBERA countries was 1.9 percent of total U.S. imports.
- Total U.S. imports from CBERA beneficiary countries amounted to $27.6 billion in 2004,
of which $10.9 billion entered under CBERA preferences. The value of U.S. imports under
CBERA preferences increased 4.9 percent in 2004. In contrast, total imports from CBERA
countries (all goods, regardless of duty treatment) increased 12.5 percent in 2004, while
total U.S. imports from all countries increased 16.8 percent during the same period. Four
countries the Dominican Republic, Honduras, Trinidad and Tobago, and Guatemala
accounted for 71 percent of all U.S. imports entering under CBERA preferences in 2004.
- Of the 20 leading import items entered under CBERA in 2004, 12 were apparel items. The
largest apparel imports under CBERA included knitted cotton t-shirts, knitted cotton tops,
men's or boys' woven cotton trousers and shorts, men's or boys' knitted cotton underpants,
brassieres, men's or boys' woven manmade fiber trousers and shorts, women's or girls'
woven cotton trousers and shorts, and knitted manmade fiber tops. Other leading import
items under CBERA included crude oil, methanol, higher priced cigars, fuel oil, precious
metal jewelry, raw cane sugar, and naphthas.
- Based on recent foreign direct investment (FDI) trends, the probable future effect of
CBERA on the United States is expected to be minimal in most economic sectors. The
Commission identified new FDI during 2004 to increase production and export capacity in
the oil, gas, and petrochemicals sectors of Trinidad and Tobago, and the fuel-grade ethanol
sector of Jamaica. Despite the pressure of increasing international competition from lower-
cost producers, some CBERA countries reported new FDI in the textile and apparel sector
- President Bush signed implementing legislation for the Dominican Republic-Central
America-United States Free Trade Agreement (CAFTA-DR) on August 2, 2005. When the
agreement enters into force, the Dominican Republic and five Central American countries
Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua will no longer be
designated beneficiary countries under CBERA and CBTPA. In 2004, the CAFTA-DR
countries supplied 79 percent of U.S. imports under CBERA. In the same year, Trinidad
and Tobago, Haiti, and Jamaica supplied 90 percent of U.S. imports under CBERA from
The Impact of the Caribbean Basin Economic Recovery Act, Seventeenth Report, 2003-2004 (Inv.
No. 332-227, USITC Publication No. 3804, September 2005) will be available on the ITC's
Internet server at www.usitc.gov. The publication will also be available at federal depository
libraries in the United States. A CD-ROM or printed copy of the report 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.
ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and
are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on
Finance, or the House Committee on Ways and Means. The resulting reports convey the
Commission's objective findings and independent analyses on the subjects investigated. The
Commission makes no recommendations on policy or other matters in its general factfinding
reports. Upon completion of each investigation, the ITC submits its findings and analyses to the
requestor. General factfinding investigation reports are subsequently released to the public, unless
they are classified by the requestor for national security reasons.
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