The U.S. International Trade Commission said the overall effect of the Caribbean Basin Economic Recovery Act on the U.S. economy remains minute, while the effect on beneficiary countries is “small but positive.”
The U.S. International Trade Commission said the overall effect of the Caribbean Basin Economic Recovery Act (CBERA) on the U.S. economy and U.S. consumers remains “negligible,” while the effect on beneficiary countries is “small but positive.”
The commission drew these conclusions from its recently published report, Caribbean Basin Economic Recovery Act: Impact on U.S. Industries and Consumers and on Beneficiary Countries. The 22nd biennial report covers the U.S. economic impact of CBERA, as modified by the Caribbean Basin Trade Partnership Act of 2000 (CBTPA), and the HOPE and HELP Acts, with particular emphasis on calendar year 2014.
The CBERA program, which became operation on Jan. 1, 1984, provides preferential tariff treatment to most products from designated Caribbean countries. During the period covered in the ITC’s report, 17 countries received CBERA benefits, including Curaçao which was designated a CBERA beneficiary Jan. 1, 2014.
Total U.S imports from CBERA countries (with and without trade preferences) fell for the third year in a row to $8.5 billion in 2014. “The decline was mainly due to the sharp drop in the value of imports of crude petroleum and refined petroleum products,” ITC said.
“In contrast, U.S. imports of textiles and apparel from Haiti increased sharply in 2014, attributed in large part to new apparel manufacturing facilities built to take advantage of the trade preference program established by the HOPE/HELP Acts. The decline in imports from CBERA countries in 2013 reflected slower growth in commodity prices and a decline in U.S. demand for energy imports, among other factors,” the commission added.
U.S imports specifically under the CBERA program totaled $2 billion in 2014, a decline of 16.8 percent from $2.4 billion in 2013. Energy products accounted for 62 percent of total imports in the program during 2014, with Trinidad and Tobago supplying 97.3 percent of energy imports. Textiles and apparel, supplied mainly by Haiti, accounted for 19.8 percent of imports under CBERA in 2014; other mining and manufacturing products, 10.7 percent; and agricultural products, 7.6 percent, according to ITC.
“Increasing U.S. production and a slight drop in U.S. consumption of crude petroleum, as well as the shutdown for maintenance of several petroleum refineries in Trinidad and Tobago, and other factors, such as changes in the U.S. ethanol program on December 31, 2011, contributed to this trend,” ITC explained.
Meanwhile, CBERA has encouraged several beneficiary countries to develop niche exports to the United States. The Bahamas is exporting polystyrene; Belize, fruits and fruit juices; and St. Kitts and Nevis, electronic products.
“Exporting CBERA-eligible goods is a challenge for many CBERA beneficiaries because of supply-side constraints, including inadequate infrastructure. However, special CBERA provisions for Haiti have had a strong, positive effect on export earnings and job creation in Haiti’s apparel sector,” ITC said.
Caribbean trade program still offers ‘negligible’ benefits
