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

preference that ATPA-country apparel producers received because of U.S. apparel quotasthat apply to other countries fell significantly starting in 2005, when most U.S. textile andapparel quotas ended.To evaluate the impact of ATPA, the Commission considered only the portion of U.S.imports that can receive preferential treatment only under ATPA, that is, imports that benefitexclusively from ATPA. Some ATPA-eligible products are also eligible for duty-free entryunder the Generalized System of Preferences (GSP) and are not included in the analysis.Some apparel articles that became eligible for ATPA duty-free entry as a result of ATPDEAcontain U.S. cut parts that are not dutiable under production-sharing arrangements (underHTS heading 9802.00.80). The U.S. value of such articles therefore does not benefitexclusively from ATPA and is not included in the analysis. 115Because the original ATPA preferences were enacted for a longer time period (the initialprogram was for the 10 years from 1991 to 2001) and GSP lapsed several times during thisperiod, ATPA provided greater assurance than the GSP program that GSP-eligible productsfrom ATPA countries would enter the United States free of duty, making investment relatedto such products more attractive than would have been the case in the absence of ATPA.Investment in developing countries that depends solely on GSP for duty-free preferences hasproved riskier because of the repeated lapses in program authorization and uncertaintiesabout when renewal would occur, and because of the possibility that imports of a particulargood might exceed competitive need limits and lose GSP eligibility, as discussed in chapter1. In 2001, both GSP and ATPA expired—GSP on September 30 and ATPA on December4—introducing additional uncertainties for ATPA-country exporters. President Bush signedlegislation to renew both programs retroactively on August 6, 2002, but only throughDecember 31, 2006. 116 Uncertainty with respect to an expiration date is now similar for bothprograms. No attempt was made to quantify any of these uncertainties in the analysis thatfollows.The material that follows in this section defines products that benefit exclusively fromATPA; presents quantitative estimates of the impact of ATPA on U.S. consumers, the U.S.Treasury, and U.S. industries whose goods compete with U.S. imports under ATPA; anddescribes the U.S. imports that benefited exclusively from ATPA in 2005 and had the largestpotential impact on competing U.S. industries.115 The U.S. value of imports from ATPA countries under production-sharing arrangements has neverbeen large and has been falling in recent years. In 2005, less than $2,000 of U.S. value was recorded forimports of products benefiting exclusively from ATPA.116Public Law 107-210, the Trade Act of 2002. ATPDEA is Title XXXI of the Act. Record keeping anddata collection for potential ATPA-eligible entries were disrupted by ATPA’s lapse, and reported data for2002 may be incomplete or inaccurate. In the analysis described in this chapter, no attempt was made toquantify any of these data problems. Data for 2002 and analysis based on that data are therefore not strictlycomparable with data and analysis in prior ATPA reports and will not be comparable with data and analysisin future ATPA reports. Furthermore, the addition of newly eligible products under ATPDEA alters thecomparability of data and analysis in reports starting in 2003 with data and analysis in reports prior to 2003.3-2