The Impact of the Andean Trade Preference Act Twelfth ... - USITC

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CCCThe overall effect of ATPA-exclusive imports on the U.S. economy continued to benegligible in 2005. In 2005, the value of duty-free U.S. imports under ATPAaccounted for about 0.7 percent of total U.S. imports, or 0.09 percent of the U.S.gross domestic product (GDP).Men’s or boys’ knitted cotton shirts provided the largest gain in consumer surplus($30 million to $34 million) from lower prices and higher consumption resultingexclusively from ATPA tariff preferences in 2005. Knitted cotton t-shirts providedthe second-largest gain in consumer surplus ($22 million to $24 million). U.S.imports of all of the 20 leading ATPA-exclusive products produced net welfaregains (consumer surplus net of U.S. Treasury losses) for U.S. consumers in 2005.Men’s or boys’ knitted cotton shirts yielded the largest net welfare gain, valued at$4.0 million to $6.6 million, followed by knitted cotton t-shirts and men’s or boys’woven cotton trousers and shorts.The Commission’s economic and industry analyses indicate that U.S. industries thatmay have experienced displacement of more than 5 percent of the value of U.S.production in 2005, based on upper estimates, were those producing asparagus (2.9percent to 10.8 percent displacement, valued at $4.0 million to $14.8 million); freshcutroses (1.3 percent to 8.1 percent displacement, valued at $0.5 million to $3.2million); and chrysanthemums, carnations, anthuriums, and orchids (1.1 percent to6.5 percent displacement, valued at $0.3 million to $1.7 million).• The probable future effect of ATPA on the United States is expected to be minimalon the U.S. economy overall and in most economic sectors, even if U.S. tradepreferences were to continue in some form. Uncertainties related to the expirationof ATPA in December 2006 and the negotiation and implementation of bilateral freetrade agreements with the United States constrained investments in non-oil ATPArelatedsectors in 2005. Despite these uncertainties, the Commission was able toidentify ATPA-related investments in textiles and apparel, flowers, jewelry, woodproducts, ethanol, fruits and vegetables, including asparagus and avocados, as wellas oil, which may generate increased exports to the United States in the future.However, stiff competition from China in the textile and apparel sector could limitfuture exports to the United States, even if trade preferences are continued.• In 2005, ATPA continued to have a small, indirect effect in support of illicit cocaeradication and crop substitution efforts in the Andean region. Net coca cultivationin the ATPA region remains at roughly its lowest level in two decades, although thedramatic declines in cultivation seen in Colombia since 2001 are being offset partlyby annual average increases in Bolivia and Peru of approximately 5 percent since2001 . (The reported 38-percent surge in coca cultivation in Peru from 2004 to 2005is due in large part to expanded survey mapping, which counts areas not includedin previous U.S. Government estimates.) However, U.S. imports under ATPAcontinued to increase during 2005 and supported job growth in areas such as theasparagus and flower industries, thereby expanding alternatives to workers whomight otherwise engage in drug-crop production. In addition, ATPA benefits appearto have directly supported the expansion of jobs for the production of otheragricultural products as well as textiles and apparel in 2005.xii
Trade-Related Activities in 2005• In 2005, U.S. imports from ATPA countries, U.S. exports to ATPA countries, andthe U.S. deficit in trade with the ATPA countries all reached record levels at $20.0billion, $8.9 billion, and $11.1 billion, respectively.• Despite the volatile political environment of ATPA countries, their economicgrowth and large export revenues resulted in a steady regional market for U.S.exports in 2005.• Rising U.S. imports from ATPA countries reflected higher commodity prices anda steep contraction in the dutiable portion of U.S. imports from the region.• Mainly because of the implementation of ATPDEA late in 2002, the dutiable portionof total U.S. imports from ATPA countries continued to shrink in 2005 to 7.7percent, from 9.5 percent in 2004 and 39.7 percent in 2001. All 20 leading U.S.imports from ATPA countries entered free of duty in 2005 under either ATPA, GSP,or normal trade relations (NTR) tariff rates.• In 2005, imports under the expanded ATPA (the original ATPA and ATPDEAcombined) accounted for 57.1 percent of all imports from the region. This sharecompares with 54.0 percent in 2004 and 17.5 percent under the original ATPA in2001.• Mineral fuels and apparel—both of which became eligible for trade preferencesunder ATPDEA—were jointly responsible for nearly four-fifths of all imports underATPA in 2005. The two largest import product groups under the original ATPA in2001 were copper articles and flowers, which together accounted for approximatelyone-half of the total.• In 2005, 12 products on the list of 20 leading imports under ATPA were eligibleunder ATPDEA preferences, and eight were eligible under original ATPApreferences.• Colombia and Ecuador, the two regional crude oil exporting ATPA countries,together accounted for almost four-fifths of all U.S. imports under ATPA in 2005.Colombia accounted for 40.6 percent; Ecuador for 38.1 percent; Peru for 19.9percent; and Bolivia for 1.4 percent of the total.xiii
Page 2 and 3: U.S. International Trade Commission
Page 5: PREFACEThe submission of this study
Page 20 and 21: Organization of the ReportThis chap
Page 22 and 23: actions to withdraw or suspend coun
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Page 26 and 27: duty-free entry are identical—a C
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Page 46 and 47: The 2005 list of leading imports un
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Page 54 and 55: 2-26Table 2-11 U.S. exports to ATPA
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2-28Table 2-12 Leading U.S. exports
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Figure 2-5U.S. exports to ATPA coun
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EcuadorThe growth rate of the Ecuad
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CHAPTER 3ECONOMIC IMPACT OF ATPA ON
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Products That Benefited Exclusively
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Several leading imports that were i
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Table 3-3 Leading imports that bene
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Table 3-5 Estimated displacement ef
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more in 2004. 132 Asparagus and cut
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esulted in greater availability of
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In recent years, some U.S. growers
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U.S. sales of domestically produced
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Table 3-6 Foreign direct investment
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product quality at the volumes requ
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$314 million purchase by Phillip Mo
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Industry sources attribute the slow
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place will have a devastating effec
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textile and apparel machinery and t
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Textile and Apparel SectorPeru has
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could begin producing the high-end
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Role of ATPA in Counternarcotics Ef
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(table 4-1, figure 4-1). 306 Net co
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Figure 4-1Net Coca Cultivation in t
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to other forms of legal justice. Th
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ulk of funding for the plan between
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Alternative DevelopmentThe USAID al
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APPENDIX AFederal Register NoticeA-
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27278 Federal Register / Vol. 71, N
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American Chamber of Commerce of Per
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Government of Colombia—Colombian
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Peruvian Asparagus Importers Associ
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Technical Notes to Chapter 3:Partia
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(1)N(Q a /Q a N) = (1+t)ε aa(2)N(Q
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