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

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Organization of the ReportThis chapter summarizes the provisions of ATPA and describes the analytical approach usedin the report. Chapter 2 analyzes U.S. trade with ATPA beneficiaries during 2005. Chapter3 estimates the effects of ATPA in 2005 on the U.S. economy generally, as well as on U.S.industries and consumers. Chapter 3 also examines the probable future effects of ATPA.Chapter 4 assesses the estimated effect of ATPA on the drug-crop eradication and cropsubstitution efforts of the beneficiary countries.Appendix A reproduces the Federal Register notice by which the Commission solicitedpublic comment, and appendix B contains summaries of submissions received by theCommission in response to the Federal Register notice. Appendix C explains the economicmodel used to derive the findings presented in chapter 3.Summary of the ATPA ProgramATPA authorizes the President to grant certain unilateral preferential trade benefits toBolivia, Colombia, Ecuador, and Peru in the form of duty-free treatment of eligible productsimported into the customs territory of the United States, based on importer claims for thistreatment. 9 ATPDEA amended the original ATPA to authorize duty-free treatment for certainproducts previously excluded from ATPA trade preferences. In Presidential Proclamation7616 of October 31, 2002, the President designated all four original ATPA beneficiarycountries as ATPDEA beneficiary countries and designated most of the additional ATPDEAeligibleproducts as eligible for duty-free treatment. 10 The following sections summarizeATPA provisions concerning beneficiaries, trade benefits, and qualifying rules, and therelationship between ATPA and the Generalized System of Preferences (GSP).BeneficiariesBolivia, Colombia, Ecuador, and Peru are the only countries eligible under the statute to bedesignated by the President for ATPA benefits. 11 The statute authorizes the President at anytime to withdraw or suspend the designation of any country as a beneficiary country underATPA or ATPDEA or withdraw, suspend, or limit application of duty-free treatment to anyarticle of any country; 12 the President can withdraw, suspend, or limit ATPDEA benefitseven if preferences under the original ATPA are continued. The statute requires thePresident, when determining whether to designate a country for benefits under the originalATPA, to take into account a number of considerations, including whether that country has9The World Trade Organization’s (WTO) waiver for the original ATPA program expired on Dec. 4,2001. The United States requested a waiver for ATPA, as amended by ATPDEA, in February 2005 for theperiod ending Dec. 31, 2006. The request is pending. A waiver is required because benefits are not extendedon a most-favored-nation (MFN) basis. WTO, “Request for a Waiver, Andean Trade Preference Act (ATPAAs Amended),” G/C/W/510, Mar. 1, 2005.10 Presidential Proclamation 7616, 67 F.R. 67283. See the section in this chapter on “Trade Benefits underATPA” for more specific information on the exception for import-sensitive products.1119 U.S.C. 3202(b). Although Venezuela is a member of the Andean Community along with the fourATPA beneficiary countries, it is not eligible under the statute to be designated as an ATPA beneficiarycountry.12 19 U.S.C. 3202(e).1-2
met the criteria for U.S. narcotics cooperation certification. 13 The statute also requires ATPAbeneficiary countries, among other things, to take steps to afford internationally recognizedworker rights as defined under the GSP program 14 and to provide effective protection ofintellectual property rights (IPR), including copyrights for film and television material. 15 By1993, the President had designated all four countries as eligible for ATPA benefits, 16 andduring the 10 years that the original ATPA was in effect, he did not withdraw or suspend thedesignation of any country or any article. 17Each ATPA beneficiary country is eligible to be designated by the President for theadditional trade benefits under the ATPDEA. The statute provides the President with a listof criteria that must be considered in designating countries as ATPDEA beneficiarycountries. 18 The list includes those criteria that apply to country eligibility under the originalATPA, 19 as well as several new criteria. 20 The new criteria include the extent to which thecountry (1) has implemented its World Trade Organization (WTO) commitments andparticipated in the Free Trade Area of the Americas (FTAA) process; (2) provides protectionof IPR; (3) provides internationally recognized worker rights; (4) has implemented itscommitments to eliminate the “worst forms” of child labor; (5) has cooperated with theUnited States on counternarcotics initiatives; (6) has implemented an internationalanticorruption convention; (7) has applied transparent, nondiscriminatory, and competitiveprocedures in government procurement; and (8) has cooperated with the United States tocombat terrorism. Following enactment of ATPDEA on August 6, 2002, the Office of theU.S. Trade Representative (USTR) conducted a review of ATPA beneficiaries’ compliancewith these requirements. On October 31, 2002, the President designated all four beneficiarycountries of the original ATPA as ATPDEA beneficiary countries. 21ATPDEA provides for an annual review of the eligibility of articles and countries for ATPAbenefits similar to the annual reviews performed for GSP. 22 On July 25, 2003, USTRpublished regulations, effective that date, establishing procedures for petitions forwithdrawal or suspension of country eligibility or duty-free treatment under ATPA. 23 No1319 U.S.C. 3202(d)(11). These criteria are set forth in 22 U.S.C. 2291(h)(2)(A).1419 U.S.C. 2462(b)(2)(G) or 2462(c)(7).15 19 U.S.C. 3202(c).16 Bolivia and Colombia were designated for ATPA benefits in 1992; Ecuador and Peru were designatedin 1993.17Commission staff interview with USTR official, June 18, 2002.1819 U.S.C. 3203(b)(6)(B).1919 U.S.C. 3202(c) and (d).20 19 U.S.C. 3203(b)(6)(B).21 President, Proclamation, “To Implement the Andean Trade Promotion and Drug Eradication Act,”Proclamation No. 7616, Nov. 5, 2002 (67 F.R. 67283). For more information on the eligibility criteria andbeneficiary country compliance with these criteria, see USTR, Second Report to the Congress on theOperation of the Andean Trade Preference Act As Amended, Apr. 30, 2005. ATPA, as amended, requiredUSTR to submit a report by Apr. 30, 2003, and requires similar reports every two years thereafter on theoperation of ATPA, including a general review of the beneficiary countries based on the eligibility criteriaand considerations described in the statute.22Sec. 3103(d) of ATPDEA (Public Law 107-210).23 15 CFR part 2016, announced in 68 F.R. 43922 (July 25, 2003).1-3
Page 2 and 3: U.S. International Trade Commission
Page 5: PREFACEThe submission of this study
Page 17: Trade-Related Activities in 2005•
Page 22 and 23: actions to withdraw or suspend coun
Page 24 and 25: textile and apparel articles made i
Page 26 and 27: duty-free entry are identical—a C
Page 28 and 29: analysis assumes that the supply of
Page 30 and 31: $11.1 billion in 2005 compared with
Page 32 and 33: Table 2-2 Leading U.S. imports for
Page 34 and 35: and 9.5 percent in 2004 to 7.7 perc
Page 36 and 37: 2-8Table 2-5 U.S. imports for consu
Page 38 and 39: 2-10Table 2-6 Leading U.S. imports
Page 42 and 43: Table 2-8 Textiles and apparel: U.S
Page 44 and 45: Virtually all flower imports from t
Page 46 and 47: The 2005 list of leading imports un
Page 48 and 49: Table 2-9 U.S. imports for consumpt
Page 52 and 53: cathodes, four apparel products, on
Page 54 and 55: 2-26Table 2-11 U.S. exports to ATPA
Page 56 and 57: 2-28Table 2-12 Leading U.S. exports
Page 58 and 59: Figure 2-5U.S. exports to ATPA coun
Page 60 and 61: EcuadorThe growth rate of the Ecuad
Page 63 and 64: CHAPTER 3ECONOMIC IMPACT OF ATPA ON
Page 65 and 66: Products That Benefited Exclusively
Page 67 and 68: Several leading imports that were i
Page 69 and 70: 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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The Impact of the Andean Trade Preference Act Twelfth ... - USITC

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