Officials urge trade partnership act be renewed

WASHINGTON D.C., January 30, 2008 – In exactly eight months, an act that essentially provides 19 countries in the Caribbean Basin and dependent territories with duty-free access to the U.S. market for most goods will expire.

That is unless it is renewed by U.S. lawmakers. On Capitol Hill yesterday, Caribbean officials and Secretary General of the Organization of American States, José Miguel Insulza, addressed a public hearing of the United States International Trade Commission to urge that the U.S.-Caribbean Basin Trade Partnership Act be renewed.

Insulza argued that expiry of the trade access for imports of apparel, petroleum and petroleum products, and several other products would have `an extremely deleterious effect` on Caribbean economies. And he urged that the act be expanded `to address those areas which play a central role in the majority of the CARICOM countries.` These, he said, should include financial services provisions given the important role of remittances for the economies of this region.

`An expanded CBTPA could provide for the establishment of local banks within the US, which is the main gateway for these transmissions, to accept deposits and make the transfers back to their home countries,` the secretary general asserted. `This mechanism would strengthen the capital base of these banks and also expand the ability of local banking institutions to provide sorely needed funding for investment and entrepreneurial development.`

Caribbean Community Assistant Secretary General for Trade and Economic Integration, Irwin LaRocque, argued the case for enhanced CARICOM/US trade to be placed on a permanent and more predictable basis.

Several other CARICOM ambassadors testified at yesterday’s hearing, addressing the trade, investment and other challenges specific to their respective countries. They included Ambassador Michael King of Barbados; St. Kitts and Nevis Ambassador Izben Williams; Trinidad and Tobago Ambassador Marina Valere; and Haiti’s Ambassador to the USA, Raymond Joseph.


But the act is not without its critics, some of whom argue that some companies are taking advantage of the duty free access by setting up ethanol plants in the Caribbean and shipping the product here as duty-free.

Total ethanol consumption in 2005 in the U.S. was approximately 3.9 billion gallons, whereas imports totaled 180 million gallons, or about 5 percent. Imports from the CBI totaled approximately 2.7 percent. The U.S. International Trade Commission launched the hearing as an investigation to review economic growth and development in the Caribbean region.

The investigation, Caribbean Region: Review of Economic Growth and Development, was requested by the U.S. House of Representatives’ Committee on Ways and Means in a letter received on November 7, 2007. The hearing was intended to help inform recommendations from the International Trade Commission to Chairman Charles Rangel of the Ways and Means Committee of the US House of Representatives, on the possible extension of the CBTPA and on ways that U.S. trade policy can be most beneficial to Caribbean Basin countries.

Initially launched in 1983 by the Caribbean Basin Economic Recovery Act and substantially expanded in 2000 with the U.S.-Caribbean Basin Trade Partnership Act, the CBI was further expanded in the Trade Act of 2002.

In December 2006, the HOPE Act of 2006 enhanced benefits under CBERA for Haiti.

The CBI was initially envisioned as a program to facilitate the economic development and export diversification of the Caribbean Basin economies. However, after more than two decades, it is clear that the CBI provides important benefits to the United States, as well as beneficiary countries. U.S. exports to the CBI beneficiary countries more than doubled between 1988 and 2006, reaching $25.8 billion in 2006.

Collectively, the CBI beneficiary countries rank tenth among U.S. market destinations, ahead of economies such as Taiwan, Brazil, and Italy.

These beneficiary countries of the act are: Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, British Virgin Islands, Costa Rica, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Netherlands Antilles, Panama, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines and Trinidad and Tobago.

The ITC, an independent, nonpartisan, fact-finding federal agency, will now provide an in-depth description of the current level of economic development in the Caribbean basin at the regional level and the country level and will submit its report to the Committee by May 7, 2008. (