Publication Number: 3804

Report Title: The Impact of the Caribbean Basin Economic Recovery Act: 17th Report, 2003-2004

Investigation Number: 332-227

Author's name(s): Walker Pollard, James Stamps

Date Published: September 2005

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. 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 2004 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 2003-2004.

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 2004. 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 all of the 20 leading CBERA-exclusive items produced net welfare gains for U.S. consumers in 2004. The probable future effect of CBERA on the United States is also expected to be minimal in most sectors. The USITC was able to identify a significant increase in foreign direct investment in oil, gas, and petrochemicals production in Trinidad and Tobago and continued investment in the textile and apparel sector in the region, although a number of apparel operations closed or relocated to lower cost countries. 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

Countries: United States

HTS Numbers: 1701, 2402, 2709, 2710, 2905, 6107, 6108, 6109, 6110, 6115, 6203, 6204, 6205, 6212

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