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CBERA Continues to Have a Small but Positive Impact on Beneficiary Countries and U.S. Consumers; Imports Declined in 2014, Says USITC

September 30, 2015
News Release 15-094
Inv. No. 332-227
Contact: Peg O'Laughlin, 202-205-1819
CBERA Continues to Have a Small but Positive Impact on Beneficiary Countries and U.S. Consumers; Imports Declined in 2014, Says USITC

The overall effect of the Caribbean Basin Economic Recovery Act (CBERA) on the U.S. economy and U.S. consumers continues to be negligible while the effect on beneficiary countries is small but positive, reports the U.S. International Trade Commission (USITC) in its publication Caribbean Basin Economic Recovery Act: Impact on U.S. Industries and Consumers and on Beneficiary Countries, Twenty-second Report, 2013-14.

The USITC, an independent, nonpartisan, factfinding federal agency, recently issued its 22nd in a series of biennial reports monitoring imports under CBERA. The CBERA program, operative since January 1, 1984, affords preferential tariff treatment to most products of the designated Caribbean countries. During the period covered in the report, 17 countries received CBERA benefits including. Curaçao, which was designated a CBERA beneficiary effective January 1, 2014.

The USITC report covers the impact of CBERA, as modified by the Caribbean Basin Trade Partnership Act of 2000 (CBTPA), and the HOPE and HELP Acts, on the United States, with particular emphasis on calendar year 2014. CBERA requires the USITC to prepare a biennial report assessing both the actual and the probable future effect of CBERA on the U.S. economy generally, on U.S. industries, and on U.S. consumers. The report also covers the impact of the preference program on the beneficiary countries themselves. Following are highlights of the 2013-14 report.

  • Total U.S imports from CBERA countries (with and without trade preferences) declined for a third consecutive year to $8.5 billion in 2014. The decline was mainly due to the sharp drop in the value of imports of crude petroleum and refined petroleum products, according to the report. In contrast, U.S. imports of textiles and apparel from Haiti increased sharply in 2014, attributed in large part to new apparel manufacturing facilities built to take advantage of the trade preference program established by the HOPE/HELP Acts. The decline in imports from CBERA countries in 2013 reflected slower growth in commodity prices and a decline in U.S. demand for energy imports, among other factors.
  • The overall effect of CBERA-exclusive imports (imports that could receive tariff preferences only under CBERA provisions) on the U.S. economy generally and on U.S. industries and consumers continued to be negligible in 2014. The USITC identified one U.S. industry – methanol -- that might face significant negative effects due to competition from CBERA-exclusive imports.
  • U.S imports under the CBERA program totaled $2.0 billion in 2014, a decline of 16.8 percent from $2.4 billion in 2013. Energy products accounted for 62.0 percent of total imports under CBERA in 2014, with Trinidad and Tobago supplying 97.3 percent of energy imports. Textiles and apparel, supplied mainly by Haiti, accounted for 19.8 percent of imports under CBERA in 2014; other mining and manufacturing products, 10.7 percent; and agricultural products, 7.6 percent. Increasing U.S. production and a slight drop in U.S. consumption of crude petroleum, as well as the shutdown for maintenance of several petroleum refineries in Trinidad and Tobago, and other factors, such as changes in the U.S. ethanol program on December 31, 2011, contributed to this trend.
  • CBERA has encouraged several beneficiary countries to develop niche exports to the United States. Most notably, The Bahamas is exporting polystyrene Belize, fruits and fruit juices, and St. Kitts and Nevis, electronic products.
  • The report found that investment for the near-term production and export of CBERA-eligible products is not likely to result in imports that would have a measurable economic impact on the U.S. economy generally and on U.S. producers. Although investment in Haiti's export-oriented apparel sector increased significantly in 2013-2014, Haiti will likely remain a small U.S. apparel supplier.
  • Exporting CBERA-eligible goods is a challenge for many CBERA beneficiaries because of supply-side constraints, including inadequate infrastructure. However, special CBERA provisions for Haiti have had a strong, positive effect on export earnings and job creation in Haiti's apparel sector.

Caribbean Basin Economic Recovery Act: Impact on U.S. Industries and Consumers and on Beneficiary Countries, Twenty-second Report, 2013-14 (Inv. No. 332-227, USITC Publication No. 4567, September 2015) is available at http://www.usitc.gov/publications/332/pub4567.pdf.

USITC 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 House Committee on Ways and Means, or the Senate Committee on Finance. 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 USITC 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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