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

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Virtually all flower imports from the region enter under ATPA. Colombia and Ecuador arethe top two suppliers of flowers to the United States, accounting for 59 percent and 18percent, respectively, of all U.S. flower imports in 2005. Their competitive edge in meetingU.S. demand for flowers is attributable to a favorable climate, relatively low productioncosts, and adequate air-freight service and distribution infrastructure. 67 The Andean flowerindustry became the principal beneficiary of ATPA after its implementation in the early1990s, and accounted for a major share of imports under the program until petroleum andapparel products became eligible under the expanded ATPA. The Government of Ecuadorcredits ATPA to a great extent with boosting its floriculture, as evidenced by a significantexpansion of hectares planted with flowers in the period of 1990-2006, as well as a majorreduction in agricultural unemployment. 68After slipping in 2002, the U.S. market for Andean flowers increased sharply in 2003 and2004, following the reinstatement of duty-free treatment for flowers under ATPA. Threeflower products that have been traditionally leading imports under ATPA—roses, cut flowerssuitable for bouquets, and chrysanthemums—continued to be on the 2005 list of leadingimports under the program (table 2-7). Two of these products–roses and cut flowers suitablefor bouquets–also appear on the 2005 list of leading imports from ATPA countries under allprograms (table 2-3).However, only imports of roses—the leading flower import—continued to grow in 2005,increasing 10 percent to $263 million (table 2-7). Meanwhile, after having surged in 2004,imports of cut flowers suitable for bouquets were down by 12 percent, and imports ofminiature carnations were down by 8 percent. As a result, miniature carnations were nolonger a leading import under ATPA in 2005. Imports of chrysanthemums, which stoppedgrowing in 2004, were also slightly down.AsparagusImports under ATPA have grown rapidly in recent years, with certain fresh or chilledasparagus (HTS 0709.20.90) consistently among the leading products under the program. 69However, the value of asparagus imports under this HTS number under ATPA rose by only10 percent in 2005 from 2004, amounting to $87.1 million, following a 31 percent rise from2003 to 2004 (table 2-7). Virtually all fresh asparagus from ATPA countries entered underATPA during 2005. 70Asparagus is a perennial crop requiring a major long-term investment, with the spearsgenerally harvested in significant amounts three years after the original planting, and theplants remaining in production for many years thereafter. Peru, the only major asparagusproducer in the region, is one of only a few countries in the world with the climaticadvantage of being able to harvest fresh asparagus nearly all year long. Shifting largegrowing areas away from sugar cane to asparagus has resulted in the dramatic developmentof Peru’s asparagus industry in the past decade.67 For more information on flower imports from ATPA countries, see chapter 3.68Andres Teran, Charge d’Affairs, Embassy of Ecuador, Washington, D.C., written submission to theCommission concerning inv. No. 332-352, Andean Trade Preference Act: Impact on U.S. Industries andConsumers and on Drug Crop Eradication and Crop Substitution, June 16, 2006.69Included here are fresh or chilled asparagus not reduced in size and entered during a period other thanSept. 15 to Nov. 15 in any year, by air. Also fresh or chilled asparagus reduced in size and entered any timewhether or not by air.70 For more information on asparagus imports from ATPA countries, see chapter 3.2-16
The growth in Peruvian production and duty-free shipments to the U.S. market under ATPAhas raised concerns of U.S. asparagus growers. 71 In a submission to the Commission duringa fact-finding investigation in 2005 (see appendix B), the Michigan Asparagus AdvisoryBoard describes the increases in imports as follows:...given duty-free access to the U.S. market, Peru quickly emerged as oneof the world’s largest asparagus producers, and U.S. growers foundthemselves competing against duty-free imports without the benefit of atransition period during which to adjust. 72In view of increases in imports, and the ability of Peru to produce year-round, the Boardasked that the U.S. Government withdraw ATPA duty-free treatment for fresh asparagusduring the months of February through July. 73Virtually all U.S. imports of fresh asparagus under HTS 0709.20.90 originate in Peru andMexico. 74 Prior to 2004, Mexico was the principal U.S. supplier, but Peru overtook Mexicoin 2004. In 2005, Mexico regained the top position because U.S. imports from Mexicoincreased much faster (34 percent) than from Peru (10 percent) from 2004 to 2005. Mexicoaccounted for over one-half of all U.S. imports of fresh asparagus under HTS 0709.20.90 in2005, but Peru was close behind, with 46 percent.U.S. imports of fresh asparagus not reduced in size that are entered by air during September15 through November 15 are classified under HTS 0709.20.10. Peru has supplied the bulkof such U.S. imports for many years, principally because of its ability to manage the watersupply necessary for production virtually year round. In 2005, Peru supplied 94 percent ofall U.S. imports of such asparagus. U.S. imports increased each year; during 2005, they wereup by 19 percent. However, the item is no longer among the leading 20 imports underATPA.JewelryIn 2005, 91 percent of U.S. jewelry imports (HTS 7113.19) from ATPA countries enteredunder ATPA provisions; most of the remainder entered under GSP. Imports under ATPAamounted to $176.4 million, up 10 percent by value from 2004, reflecting higher gold prices.The value of U.S. imports of gold jewelry from ATPA countries has fluctuated in recentyears, while U.S. imports from India, China, and Thailand have grown rapidly. 75 These threeAsian countries and Italy were the leading sources in 2005 of all U.S. jewelry imports madeor plated predominantly with gold, accounting collectively for 55 percent of the total.71United States Department of Agriculture, Foreign Agricultural Service, “Peru, Asparagus Annual,”GAIN Report, June 10, 2005; Carlos Mateo Paz-Soldan, and John B. Totaro, Jr., attorneys, Schmeltzer,Aptaker & Shepard, on behalf of the Peruvian Asparagus and Vegetables Institute, written submission to theCommission concerning inv. No. 332-352, Andean Trade Preference Act: Impact on U.S. Industries andConsumers and on Drug Crop Eradication and Crop Substitution, June 8, 2006, p. 3.72Michigan Asparagus Advisory Board, on behalf of the National Asparagus Council, written submissionto the Commission concerning inv. No. 332-352, Andean Trade Preference Act: Impact on U.S. Industriesand Consumers and on Drug Crop Eradication and Crop Substitution, received June 7, 2005.73Ibid. No withdrawal of duty-free treatment has taken place in response to this request.74Limited amounts of asparagus also entered from Canada, Chile, Colombia, and Ecuador.75 Competitive advantages in jewelry production for China, India, and Thailand include low labor costs,and extensive investment in modern production technologies.2-17
Page 2 and 3: U.S. International Trade Commission
Page 5: PREFACEThe submission of this study
Page 17: Trade-Related Activities in 2005•
Page 20 and 21: Organization of the ReportThis chap
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 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
Page 71 and 72: Table 3-5 Estimated displacement ef
Page 73 and 74: more in 2004. 132 Asparagus and cut
Page 75 and 76: esulted in greater availability of
Page 77 and 78: In recent years, some U.S. growers
Page 79 and 80: U.S. sales of domestically produced
Page 81 and 82: Table 3-6 Foreign direct investment
Page 83 and 84: product quality at the volumes requ
Page 85 and 86: $314 million purchase by Phillip Mo
Page 87 and 88: Industry sources attribute the slow
Page 89 and 90: place will have a devastating effec
Page 91 and 92: textile and apparel machinery and t
Page 93 and 94: Textile and Apparel SectorPeru has
Page 95:
could begin producing the high-end
Page 98 and 99:
Role of ATPA in Counternarcotics Ef
Page 100 and 101:
(table 4-1, figure 4-1). 306 Net co
Page 102 and 103:
Figure 4-1Net Coca Cultivation in t
Page 104 and 105:
to other forms of legal justice. Th
Page 106 and 107:
ulk of funding for the plan between
Page 108 and 109:
Alternative DevelopmentThe USAID al
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APPENDIX AFederal Register NoticeA-
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27278 Federal Register / Vol. 71, N
Page 117 and 118:
American Chamber of Commerce of Per
Page 119 and 120:
Government of Colombia—Colombian
Page 121:
Peruvian Asparagus Importers Associ
Page 125:
Technical Notes to Chapter 3:Partia
Page 128 and 129:
(1)N(Q a /Q a N) = (1+t)ε aa(2)N(Q
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