CARICOM countries benefiting more from US trade pact
WASHINGTON, United States, Thursday January 5, 2012 – As more Central American countries opt out of the Caribbean Basin Initiative (CBI) trade pact with the United States, more Caribbean Community (CARICOM) countries are witnessing export surges.
Trinidad and Tobago has become the leading source of United States imports entering under the CBI tariff preferences, displacing the Dominican Republic, according to the latest report issued by the Office of the United States Trade Representative.
In the “Ninth Report to Congress on the operations of the Caribbean Basin Economic Recovery Act 2011” , the United States imported US$2.2 billion under CBI tariff preferences from Trinidad and Tobago in 2010, an increase of 43.8 per cent from 2009.
“Imports under CBI tariff preferences from Trinidad and Tobago are dominated by petroleum and methanol and 75 per cent of imports of these two goods entered under CBI provisions in 2010.
“U.S. imports of petroleum under CBI tariff preferences increased in value in 2010 because of both higher volume and higher prices. U.S. imports of methanol increased in value mainly because of higher prices.”
The report noted that Haiti became the second leading source of U.S. imports entering under CBI tariff preferences in 2009 after Costa Rica left CBI.
It said that apparel accounts for over 90 per cent of U.S. imports from Haiti and almost all imports of apparel from Haiti enter under CBTPA or the two HOPE Acts.
Imports of apparel from Haiti at preferential tariff rates increased nearly 26 per cent in 2009, as utilization of preferences under the HOPE Acts became established.
The report noted that the January 2010 earthquake in Haiti slowed the growth of imports of apparel under preferential tariffs to 0.7 per cent in 2010, but such imports surged 46 per cent in the January–August 2011 period compared to same period in 2010.
Since Costa Rica left the CBI in 2009, Haiti has become the source of virtually all imports of apparel from CBI countries.
The Bahamas replaced Jamaica as the third leading source of U.S. imports entering under CBI tariff preferences in 2010 as imports of fuel ethanol from Jamaica plummeted and imports of apparel from Jamaica declined.
“Jamaica had been the major U.S. source of fuel ethanol in past years, but market conditions in 2009 and 2010 radically changed the profitability of fuel ethanol production in Jamaica, and there were no imports of fuel ethanol from Jamaica from March 2010 to June 2011,” the report noted.
It said that after several years of decline, there were no U.S. imports of apparel from Jamaica under CBI tariff preferences in 2010.
The United States continues to have a small amount of bilateral trade with many of the Caribbean economies.
“While the overall value of imports is small, imports under CBI tariff preferences account for relatively significant proportions of total U.S. imports from these countries. Cane sugar, non-monetary gold, orange juice, papayas, and electrical machinery were some of the leading categories of CBI- imports from the smaller Caribbean economies,” the report noted.
The Office of the United States Trade Representative said that although the CBI was initially envisioned as a programme to facilitate the economic development and export diversification of the Caribbean Basin economies, U.S. export growth to the region has been a “welcome corollary benefit”.
It said that the value of total U.S. exports to CBI countries fell 38.4 per cent in 2009, but rose 27.6 per cent in 2010.
When only 2010 beneficiaries are considered, U.S. exports decreased 21.5 per cent in 2010. Collectively, at US$18.5 billion, the CBI region ranked 16th among U.S. export destinations in 2010 and absorbed 1.7 per cent of total U.S. exports to the world.
“Panama, The Bahamas, the Netherlands Antilles, and Trinidad and Tobago were the principal markets for U.S. products in 2010, accounting for 72 per cent of U.S. exports to the CBI region in 2010,” the report said, noting that the United States exports a broad range of products to the CBI region.
In 2010, the leading categories included refined petroleum products, aircraft, jewellery and jewellery parts, rice, and corn.