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News Release 23-080
Inv. No(s). 332-595
Contact: Lawrence Jones, 202-205-1819
The overall effect of the Caribbean Basin Economic Recovery Act (CBERA) on the U.S. economy generally, and U.S. imports, industries, and consumers is small, while the effect on beneficiary countries is 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-Sixth Report, 2021-22.
The USITC, an independent, nonpartisan, factfinding federal agency, recently issued its 26th biennial report monitoring U.S. imports under CBERA. The CBERA program, operative since January 1, 1984, affords preferential tariff treatment to most products of the 17 designated Caribbean beneficiaries that received CBERA benefits during the period covered in the report.
The latest 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 years 2021 and 2022. 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. imports, industries, and on U.S. consumers. The report also covers the impact of the preference program on the beneficiary countries. The following are highlights from the latest report.
- The overall effect of CBERA imports on the U.S. economy generally and on U.S. imports, industries, and consumers continued to be small in 2021–22. For U.S. industries in particular, the overall effect of the program on domestic production, employment, and operating profits was also small. The USITC identified two U.S. industries – methanol and T-shirts – that most likely have faced small negative effects due to competition from CBERA imports.
- U.S. imports receiving preferential treatment under CBERA totaled $2.6 billion in 2022, a significant increase of 44.7 percent from $1.8 billion in 2020, when import values were lower due to COVID-19.
- The increase in 2021 was driven primarily by increasing imports of textiles and apparel (an increase of $256 million or 34.6 percent), mostly from Haiti, while the increase in 2022 was driven by methanol and energy products (an increase of $384 million or 43.7 percent), mostly from Trinidad and Tobago and Guyana.
- The CBERA regional utilization rate was 47.9 percent in 2022 and 49.0 percent in 2021.
- Several factors may contribute to the overall utilization of the CBERA program including trade preferences available to competing suppliers; available productive resources and the ability to attract investment; and knowledge of the program, transparency, and flexibility of CBERA program rules of origin and other U.S. import requirements.
Under CBERA, exports to the United States of some countries, such as Trinidad and Tobago and Jamaica, have become more diversified, i.e., they began exporting a greater number of products and became less reliant on exports of just a few products. At the same time, there are wide differences in the patterns of diversification among CBERA beneficiaries. Growth in bulk commodity exports, notably petroleum products, corresponded with more concentrated exports in several countries, such as Guyana and The Bahamas, between 2020 and 2022.
- Employment has overall increased in Haiti’s mostly female textile and apparel sector since the passage of the special CBERA provisions for the country (HOPE/HELP Acts).
- With the exception of substantial recent and proposed investments in Guyana’s energy sector, investment for the near-term production and export of CBERA-eligible products is expected to have negligible impact on U.S. competitive industries as well as on the U.S. economy.
Caribbean Basin Economic Recovery Act: Impact on U.S. Industries and Consumers and on Beneficiary Countries, Twenty-sixth Report, 2021-22 (Inv. No. 332-595, USITC Publication 5446, September 2023) is available on the USITC website at: https://www.usitc.gov/sites/default/files/publications/332/pub5446.pdf . The Commission will be providing a limited modeling release underlying the analyses associated with this report. https://www.usitc.gov/sites/default/files/publications/332/cbera_model_2023_release.zip
About factfinding investigations: USITC general factfinding investigations, such as this one, cover matters related to tariffs, trade, and competitiveness and are generally conducted under section 332(g) of the Tariff Act of 1930 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 requester. General factfinding investigation reports are subsequently released to the public unless they are classified by the requester for national security reasons.