Dominican Republic's 2007 Exit from CBERA Contributes to Drop in Imports under CBERA
The overall effect of the Caribbean Basin Recovery Act (CBERA) on the U.S. economy continues to be negligible while the effect on U.S. consumers and beneficiary countries is small but positive. Imports benefiting from CBERA continued to fall in 2007 and 2008, reports the U.S. International Trade Commission (USITC) in its report The Impact of the Caribbean Basin Economic Recovery Act, Nineteenth Report, 2007-2008.
(Media-Newswire.com) - The overall effect of the Caribbean Basin Recovery Act ( CBERA ) on the U.S. economy continues to be negligible while the effect on U.S. consumers and beneficiary countries is small but positive. Imports benefiting from CBERA continued to fall in 2007 and 2008, reports the U.S. International Trade Commission ( USITC ) in its report The Impact of the Caribbean Basin Economic Recovery Act, Nineteenth Report, 2007-2008.
Lower imports in all of the leading product categories as well as the exit of the Dominican Republic from the CBERA during 2007 contributed to the decline, according to the report.
The ITC, an independent, nonpartisan, factfinding federal agency, recently issued its 19th report in a series monitoring imports under the CBERA. The CBERA program, operative since January 1, 1984, affords preferential tariff treatment to most products of designated Caribbean, Central American, and South American countries, 19 of which were CBERA beneficiaries for all of 2008.
The ITC report covers the impact of the CBERA, as modified, on the United States, with particular emphasis on calendar year 2008. 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 report also covers the impact of the overall preference program on the beneficiary countries themselves. Following are highlights of the 2007-2008 report.
The overall effect of CBERA-exclusive imports ( imports that could receive tariff preferences only under CBERA provisions ) on the U.S. economy and U.S. consumers continued to be negligible in 2008.
Imports under the CBERA continued to fall from their peak of $12.3 billion in 2005, reaching $4.7 billion in 2008. Imports under the program declined in 2008 from 2007 in all leading product categories energy products ( -9.3 percent ), agricultural products ( -9.5 percent ), textiles and apparel products ( -34.3 percent ), and other mining and manufacturing products ( -13.8 percent ).
Imports under CBERA also declined from 2007 to 2008 because the Dominican Republic ( one of the largest sources of imports under the CBERA in past years ) was a CBERA beneficiary country for only two months of 2007 before leaving the CBERA when it implemented the Dominican Republic-Central America-United States Free Trade Agreement ( CAFTA-DR ).
Of the $4.7 billion in U.S. imports that were entered under the CBERA in 2008, imports valued at $4.1 billion could not have received tariff preferences under any other program. These CBERA-exclusive imports accounted for 21.1 percent of total U.S. imports from CBERA countries. The five leading products benefiting exclusively from the CBERA in 2008 were methanol, light crude oil, fuel ethanol, fresh or dried pineapples, and knitted cotton T-shirts.
The Commission analyzed recent investment trends for the near-term production and export of CBERA-eligible products. The Commission finds that this investment is not likely to result in imports that would have a measurable economic impact on U.S. consumers and producers, as CBERA countries generally are small suppliers relative to the U.S. market, and investment activity in CBERA countries continued to focus on export-oriented services such as tourism, financial, and telecommunications services. Services imports are not covered by the CBERA. Costa Rica has now acceded to the CAFTA-DR, which will further lessen the volume and value of future imports under the CBERA, as would an FTA with Panama and an FTA with Panama ( awaiting consideration by Congress ).
The CBERA has had small positive effects on Caribbean exports, but those effects have largely been concentrated in a few countries and focused on a few products. Despite the limited use some CBERA countries have made of the program, sources in several countries reported that the CBERA is nevertheless important both as an incentive for trade and investment and as an indication of continued U.S. engagement with the Caribbean Basin region.
The Impact of the Caribbean Basin Economic Recovery Act, Nineteenth Report, 2007-2008 ( Inv. No. 332-227, USITC Publication No. 4102, September 2009 ) is available at http://www.usitc.gov/publications/332/pub4102.pdf. The publication will also be available at federal depository libraries in the United States. A CD-ROM or printed copy of the report may be requested by emailing pubrequest@usitc.gov, calling 202-205-2000, or 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.
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