Publication Number: 3538

Report Title: Andean Trade Preference Act: Impact on U.S. Industries and Consumers and on Drug Crop Eradication and Crop Substitution, 8th Report 2001

Investigation Number: 332-352

Author's name(s): Joanne Guth, James Stamps

Date Published: September 2002

Report Description/Introductory Text: USITC economic assessment of the Andean Trade Preference Act, ATPA. The USITC report assesses economic effects of ATPA related trade and investment on the U.S. economy, U.S. industries and consumers and the effectiveness of ATPA in promoting drug-related crop eradication and crop substitution in the Andean countries. The report also assesses the probable future economic effect of ATPA related trade and investment on the United States.

Andean Trade Preference Act: Impact on U.S. Industries and Consumers and on Drug Crop Eradication and Crop Substitution, 8th Report, 2001

In this report, the U.S. International Trade Commission (USITC) assesses the actual economic impact and the probable future effects of the Andean Trade Preference Act (ATPA) on the U.S. economy generally, and on U.S. industries and consumers, and the effectiveness of ATPA in promoting drug-related crop eradication and crop substitution efforts of Bolivia, Colombia, Ecuador, and Peru. The actual impact of ATPA on the United States in 2001 is estimated using partial equilibrium analysis. The probable future effect of ATPA on the United States is estimated by an examination of ATPA-eligible investment in the beneficiary countries. The report also includes a comprehensive review of U.S. trade under ATPA in 2001.

The overall effect of ATPA-exclusive imports (those ineligible for other tariff preferences) on the U.S. economy and consumers continued to be negligible in 2001. However, U.S. imports of ATPA-exclusive products were estimated to have potentially significant effects on domestic industries producing fresh-cut roses; chrysanthemums, carnations, anthuriums, and orchids; and asparagus. U.S. imports of all of the 20 leading ATPA-exclusive items produced net welfare gains for U.S. consumers in 2001. The probable future effect of ATPA on the United States is also expected to be minimal in most sectors. ATPA continued to have a small, indirect but positive effect on drug-crop eradication and crop substitution efforts in Bolivia and Peru in 2001. ATPA appeared to have a limited effect on such efforts in Colombia, where net coca cultivation continued to increase in 2001. However, ATPA trade preferences continued to support industries that provide jobs for workers who might otherwise have participated in illicit coca cultivation.

With the expiration of ATPA in December 2001, this report was prepared at the request of the Committee on Ways and Means of the U.S. House of Representatives under section 332(g) of the Tariff Act of 1930.

Topics Covered: USITC economic assessment, USITC economic effect, Andean, trade preference, ATPA, ATPDEA, coca eradication, alternative development

Countries: United States, Bolivia, Colombia, Ecuador, Peru

HTS Numbers: 0603, 0709, 0804, 1604, 1701, 2402, 3212, 3921, 7113, 7403, 7901

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