The overall effect of imports under the Caribbean Basin Economic Recovery Act (CBERA) and on the U.S. economy and consumers continued to be negligible in 1999-2000, but given recent changes in the preference program with Central American and Caribbean trading partners, future effects in the textiles and apparel sector could be significant, reports the U.S. International Trade Commission in its publication The Impact of the Caribbean Basin Economic Recovery Act, Fifteenth Report 1999-2000.

The ITC, an independent, nonpartisan, factfinding federal agency, recently issued the report, which monitors imports under the program. The CBERA program, operative since January 1, 1984, affords preferential tariff treatment to most products of 24 designated Caribbean, Central American, and South American countries.

The ITC report covers the impact of the Caribbean Basin Economic Recovery Act on the United States, with particular emphasis on calendar year 2000. 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. 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 report:

• Total U.S. imports from CBERA beneficiary countries in 2000 amounted to $22.2 billion, of which $2.8 billion or 11.9 percent entered under CBERA preferences. An additional $157 million, or 0.7 percent of the total, entered under the CBTPA program, which became effective only during the last quarter of 2000 for some countries eligible for CBERA. The leading items afforded duty-free entry under CBERA in 2000 were cigars and other tobacco products; methanol (methyl alcohol); gold and platinum jewelry; sugar; and pineapples. Four countries the Dominican Republic, Costa Rica, Trinidad and Tobago, and Guatemala accounted for more than 75 percent of all U.S. imports under CBERA.

• The share of U.S. imports from CBERA countries that entered under CBERA in 2000 decreased from 13.6 percent in 1999 and 18.8 percent in 1998. The decline in the relative significance of CBERA can be attributed principally to three factors: (1) the elimination of general duty rates on some CBERA-eligible products that made the use of a preferential program unnecessary; (2) smaller U.S. quota and allocations on sugar (a CBERA-eligible product) from most countries, including CBERA beneficiaries; and (3) a surge in the price of petroleum products that increased the value of that portion of overall imports that entered outside CBERA.

• Apparel products continued to dominate U.S. imports from CBERA countries. However, the share of apparel products by value in total imports from CBERA countries dipped from 48 percent in 1998 to 43 percent in 2000, due to competition in the U.S. market from Mexican apparel.

• The largest future effect of CBERA on the United States is likely to result from the enhanced preferences granted under CBTPA in 2000. Imports of textiles and apparel will likely expand significantly in the year 2001 and beyond.

The Impact of the Caribbean Basin Economic Recovery Act, Fifteenth Report 1999-2000 (Inv. No. 332-227, USITC Publication No. 3447, September 2000) will be available on the ITC's Internet site at www.usitc.gov. The publication will also be available at federal depository libraries in the United States and on a future edition of the Department of Commerce's National Trade Data Bank. A printed or CD-ROM version 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.