Publication Number: 3636

Report Title: The Impact of the Caribbean Basin Economic Recovery Act: 16th Report, 2001-2002

Author's name(s): Walker Pollard, Thomas Jennings

Date Published: September 2003

Report Description/Introductory Text: USITC economic assessment of the Caribbean Basin Economic Recovery Act, CBERA, and the Caribbean Basin Trade Preference Act, CBTPA. The USITC report assesses economic effects of CBERA and CBTPA related trade and investment on the U.S. economy, U.S. industries, and consumers. The report also assesses the probable future economic effect of CBERA and CBTPA trade and investment on the United States, as well as the impact of CBERA on the Caribbean basin countries.

In this report, the U.S. International Trade Commission (USITC) assesses the actual economic impact and the probable future effects of the Caribbean Basin Economic Recovery Act (CBERA), as amended by the Caribbean Basin Trade Partnership Act (CBTPA), on the U.S. economy generally, and on U.S. industries and consumers, and the impact of the program on the economies of the beneficiary countries. The actual impact of CBERA on the United States in 2002 is estimated using partial equilibrium analysis. The probable future effect of CBERA on the United States is estimated by an examination of CBERA-eligible investment in the beneficiary countries. The report also includes a comprehensive review of U.S. trade with Central America and the Caribbean in 2001-2002.

The overall effect of CBERA-exclusive imports (those ineligible for other tariff preferences) on the U.S. economy and consumers continued to be negligible in 2002. The USITC did not identify any U.S. industries that would face potentially significant negative effects from CBERA-exclusive imports. U.S. industries supplying inputs to CBERA country apparel producers benefit from the CBTPA enhancements. U.S. imports of the 20 leading CBERA-exclusive items, except one sugar subheading, produced net welfare gains for U.S. consumers in 2002. The probable future effect of CBERA on the United States is also expected to be minimal in most sectors. However, in one sector, textiles and apparel, the probable future effect is likely to be significant, following the CBTPA inclusion of certain apparel articles as eligible for preferential treatment. The impact of the CBERA program on beneficiary countries is small, but positive, and has been enhanced by the CBTPA.

USITC prepared this report in accordance with section 215 of the CBERA.

Topics Covered: USITC economic assessment, USITC economic effect, Caribbean, trade preference, CBERA, CBTPA, CBI

Countries: United States, El Salvador, Guatemala, Honduras

HTS Numbers: 0804, 1701, 2402, 2710, 2905, 6107, 6108, 6109, 6110, 6115, 6203, 6204, 6205, 6212, 7113

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