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

previous years. However, the Embassy reported that exporters of all sizes “have emphasizedthe difficulty of competing without trade preferences, noting that sharp price increases willundermine their products’ competitiveness in U.S. markets” if ATPA is not renewed. 186The U.S. Embassy survey showed that investments valued at about $5.5 million were madein 2005 by four companies in the textile and apparel sector, as described in more detailbelow. The U.S. Embassy was also able to identify $4.4 million of investments in the goldjewelry sector, and $4.2 million in the wood products sector, which produces such items asfurniture, doors, moldings, frames, floors, and decks for export. According to the U.S.Embassy, these two sectors currently employ several thousand people in Bolivia. Most ofthe companies in both of these sectors indicated that they would not have been launched inthe absence of ATPA trade preferences and that they use U.S. inputs in their productionprocesses. Companies in the gold jewelry sector expressed serious concern about how theirproducts would compete in the United States following the expiration of ATPA, and onecompany indicated that it is seriously contemplating moving out of Bolivia, probably to Peru(which has negotiated a trade promotion agreement with the United States). In the woodproducts sector, one company official indicated that his company would have been launchedin the absence of ATPA trade preferences, but that ATPA had provided incentives to developnew products for sale in the United States. Company officials in the wood products sectoralso expressed concern about the expiration of ATPA, which they claimed would lead toprice increases and lost sales; one such official cited already increasingly difficult contractnegotiations with U.S. clients. The U.S. Embassy stated that a recent study by the BolivianForestry Chamber suggests that ATPA’s expiration could lead to industry losses of up to $65million over the next 5 years. 187Textile and Apparel SectorBolivia is a small supplier of textiles and apparel to the United States, accounting for only2 percent of total U.S. imports of textiles and apparel from the Andean region in 2005.Although total sector exports to the United States in 2005 declined 7 percent from the 2004level, to $36.7 million, the sector is an increasingly important segment of the country’seconomy, especially for generating employment. 188 Bolivia’s textile and apparel sectoremploys about 10,000 workers. 189 The industry’s key competitive strengths are access tohigh-quality alpaca, angora, and llama fiber, and low labor costs. 190 Textile manufacturingis limited; 191 most production is in garments and clothing accessories. Bolivia has oneproducer of polyester yarn and fabrics, Texturbol, and industry sources report that muchspinning and dyeing is done offshore because the country lacks the infrastructure to ensure186Ibid.187Ibid.188U.S. Department of State, “Background Note: Bolivia - Profile,” Mar. 2006, found athttp://www.state.gov/r/pa/ei/bgn/35751.htm, retrieved June 12, 2006.189 U.S. Department of State telegram, “Revision: Bolivia: 2006 ATPA/ATPDEA Impact Report,”message reference No. 1691, prepared by U.S. Embassy, La Paz, June 22, 2006.190Office of Textiles and Apparel, U.S. Department of Commerce, “Bolivia: Local Industry and Market,”Feb. 23, 2005, found athttp://web.ita.doc.gov/tacgi/overseas.nsf/44210e990fcdb43d85256df6006a3caf/83bde904d870c76785256fb1006885db!OpenDocument, retrieved May 24, 2006.191World Bank, “Pilot Investment Climate Assessment - Bolivia Microeconomic Constraints andOpportunities for Higher Growth - Annex 2 - The Textile and Garment Industry in Bolivia,” Mar. 19, 2001,p. 76.3-20