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

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

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

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Several leading imports that were identified in previous annual ATPA reports as benefitingexclusively from ATPA between 1992 and 2002 under <strong>the</strong> original ATPA continued to rankamong <strong>the</strong> leading U.S. imports in 2005. Those imports were fresh-cut roses (HTS0603.10.60) and chrysan<strong>the</strong>mums and o<strong>the</strong>r flowers under HTS 0603.10.70 from Colombia,which have consistently ranked among <strong>the</strong> leading items benefiting exclusively from ATPAsince <strong>the</strong> implementation <strong>of</strong> <strong>the</strong> program. Refined copper cathodes from Peru and fresh orchilled asparagus (HTS 0709.20.10 from Peru and HTS 0709.20.90) have also consistentlyremained on <strong>the</strong> list since 1995.Welfare and Displacement Effects <strong>of</strong> ATPA on U.S. Industries andConsumers in 2005<strong>The</strong> analytical approach for estimating <strong>the</strong> welfare and displacement effects <strong>of</strong> ATPA wasdescribed in <strong>the</strong> introduction to this report and is discussed in more detail in appendix C.Upper estimates and lower estimates are reported, reflecting <strong>the</strong> assumption <strong>of</strong> highersubstitution elasticities and lower substitution elasticities, respectively.<strong>The</strong> Commission focused its analysis on <strong>the</strong> 20 leading imports that benefited exclusivelyfrom ATPA in 2005 (table 3-2). 120 Estimates <strong>of</strong> welfare and potential U.S. industrydisplacement effects were made. Industries that experienced estimated displacement <strong>of</strong> morethan 5 percent <strong>of</strong> <strong>the</strong> value <strong>of</strong> U.S. production, based on upper estimates, were selected forfur<strong>the</strong>r analysis. A limited number <strong>of</strong> U.S. producers benefited from ATPA preferencesbecause <strong>the</strong>y supplied inputs to apparel assembled in ATPA countries. Those supplyingfabric are not explicitly analyzed because <strong>of</strong> data limitations, 121 but U.S. exports <strong>of</strong> textiles(Standard International <strong>Trade</strong> Classification code 65) to ATPA countries rose from $100million in 2002 to $164 million in 2004 as <strong>the</strong> relative share <strong>of</strong> exports has shifted to fabricand away from apparel parts. Exports <strong>of</strong> textiles to ATPA countries fell slightly to $162million in 2005, perhaps resulting from a shift to regional fabrics by ATPA producers.Items AnalyzedAlthough a large number <strong>of</strong> products are eligible for tariff preferences under ATPA, arelatively small group accounts for most <strong>of</strong> <strong>the</strong> imports that benefit exclusively from ATPA.Table 3-2 presents <strong>the</strong> 20 leading items that benefited exclusively from ATPA in 2005; <strong>the</strong>yare ranked on <strong>the</strong> basis <strong>of</strong> <strong>the</strong>ir c.i.f. import values. 122 Those products represented 94 percent120<strong>USITC</strong> industry analysts provided estimates <strong>of</strong> U.S. production and exports for <strong>the</strong> 20 leading itemsthat benefited exclusively from ATPA, as well as evaluations <strong>of</strong> <strong>the</strong> substitutability <strong>of</strong> ATPA-exclusiveimports and competing U.S. products.121 To make estimates <strong>of</strong> <strong>the</strong> impact <strong>of</strong> ATPA on U.S. textile producers, it would be necessary to separateimports <strong>of</strong> apparel made with U.S. fabric from imports made from regional fabric. Data available to <strong>the</strong>Commission do not allow this distinction to be made.122 In <strong>the</strong> analysis, U.S. market expenditure shares were used to compute estimates <strong>of</strong> welfare anddomestic production displacement effects. Because U.S. expenditures on imports necessarily include freightand insurance charges and duties, when applicable, <strong>the</strong> analysis used c.i.f. values for duty-free productsbenefiting exclusively from ATPA, and landed, duty-paid values for <strong>the</strong> remaining imports. Technically,landed, duty-paid values are equal to c.i.f. values for products entering free <strong>of</strong> duty.3-5

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