Monday, April 09, 2007
[IWS] CRS: U.S. TRADE POLICY & the CARIBBEAN: From Trade Preferences to Free Trade Agreements [4 April 2007]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Order Code RL33951
U.S. Trade Policy and the Caribbean: From Trade Preferences to Free Trade Agreements
April 4, 2007
J. F. Hornbeck, Specialist in International Trade and Finance, Foreign
Affairs, Defense, and Trade Division
http://www.opencrs.com/rpts/RL33951_20070404.pdf
[full-text, 24 pages]
Summary
For over 40 years, the United States has relied on unilateral trade preferences to
promote export-led development in poor countries. Congressionally authorized trade
preferences give market access to selected developing country goods, duty-free or at
tariffs below normal rates, without requiring reciprocal trade concessions. The
Caribbean Basin has benefitted from multiple preferential trade arrangements, the
best known being those linked to the Caribbean Basin Initiative (CBI) begun in the
mid-1980s. Since then, the growing number of reciprocal U.S. free trade agreements
(FTAs) in the region have effectively replaced preferential trade arrangements,
signaling a shift in U.S. trade policy and raising questions with respect to the future
of those mostly smaller countries still relying on trade preferences. This report
discusses the evolution of U.S. trade policy toward the Caribbean, focusing on the
implications of moving from unilateral tariff preferences to reciprocal FTAs.
The U.S. Congress has approved multiple trade preference programs over the
past three decades (production sharing, GSP, CBERA, CBI II, CBTPA, and HOPE
Act of 2006). Each one amended trade rules and tariff preferences in ways designed
to increase imports from CBI countries. Trade grew and many of the goals for
development were supported. Evaluations of the benefits, however, suggested that
they may not have been as robust as originally expected. Benefits tended to be
concentrated in a few countries and products, often skirting industries with the
greatest potential to stimulate exports. Also, the benefits of preferences are being
eroded by multilateral trade liberalization and recently implemented FTAs.
A number of issues and circumstances are converging during the 110th Congress
that will be a challenge for U.S. trade policy in the Caribbean region. Among these
circumstances are the expiring trade preference programs, their limited use by
remaining eligible countries, and the reluctance of these countries to make the
transition to an FTA with the United States without some guarantee of a
"development component" to the agreement. These concerns persist, despite the
promise of permanent market access and increased investment that an FTA holds out.
The Caribbean countries, long accustomed to dependent economic relationships,
appear content to take a cautious and leisurely path toward any new arrangement with
the United States.
For U.S. trade policy, which is still committed to achieving regional integration,
these circumstances present a special challenge. Broader integration may be difficult
to reconcile with the needs of very small developing countries, which are highly
vulnerable to the vicissitudes of global economic trends and may require new and
creative solutions, particularly if U.S. policy is still driven by the historical focus on
development and regional security issues in addition to trade liberalization. In the
context of continuing with trade preferences in similar or altered form, or opting for
an FTA, the solution is not immediately obvious. This report will be updated.
For more information on the Caribbean region, see CRS Report RL32160,
Caribbean Region: Issues in U.S. Relations, by Mark P. Sullivan
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Order Code RL33951
U.S. Trade Policy and the Caribbean: From Trade Preferences to Free Trade Agreements
April 4, 2007
J. F. Hornbeck, Specialist in International Trade and Finance, Foreign
Affairs, Defense, and Trade Division
http://www.opencrs.com/rpts/RL33951_20070404.pdf
[full-text, 24 pages]
Summary
For over 40 years, the United States has relied on unilateral trade preferences to
promote export-led development in poor countries. Congressionally authorized trade
preferences give market access to selected developing country goods, duty-free or at
tariffs below normal rates, without requiring reciprocal trade concessions. The
Caribbean Basin has benefitted from multiple preferential trade arrangements, the
best known being those linked to the Caribbean Basin Initiative (CBI) begun in the
mid-1980s. Since then, the growing number of reciprocal U.S. free trade agreements
(FTAs) in the region have effectively replaced preferential trade arrangements,
signaling a shift in U.S. trade policy and raising questions with respect to the future
of those mostly smaller countries still relying on trade preferences. This report
discusses the evolution of U.S. trade policy toward the Caribbean, focusing on the
implications of moving from unilateral tariff preferences to reciprocal FTAs.
The U.S. Congress has approved multiple trade preference programs over the
past three decades (production sharing, GSP, CBERA, CBI II, CBTPA, and HOPE
Act of 2006). Each one amended trade rules and tariff preferences in ways designed
to increase imports from CBI countries. Trade grew and many of the goals for
development were supported. Evaluations of the benefits, however, suggested that
they may not have been as robust as originally expected. Benefits tended to be
concentrated in a few countries and products, often skirting industries with the
greatest potential to stimulate exports. Also, the benefits of preferences are being
eroded by multilateral trade liberalization and recently implemented FTAs.
A number of issues and circumstances are converging during the 110th Congress
that will be a challenge for U.S. trade policy in the Caribbean region. Among these
circumstances are the expiring trade preference programs, their limited use by
remaining eligible countries, and the reluctance of these countries to make the
transition to an FTA with the United States without some guarantee of a
"development component" to the agreement. These concerns persist, despite the
promise of permanent market access and increased investment that an FTA holds out.
The Caribbean countries, long accustomed to dependent economic relationships,
appear content to take a cautious and leisurely path toward any new arrangement with
the United States.
For U.S. trade policy, which is still committed to achieving regional integration,
these circumstances present a special challenge. Broader integration may be difficult
to reconcile with the needs of very small developing countries, which are highly
vulnerable to the vicissitudes of global economic trends and may require new and
creative solutions, particularly if U.S. policy is still driven by the historical focus on
development and regional security issues in addition to trade liberalization. In the
context of continuing with trade preferences in similar or altered form, or opting for
an FTA, the solution is not immediately obvious. This report will be updated.
For more information on the Caribbean region, see CRS Report RL32160,
Caribbean Region: Issues in U.S. Relations, by Mark P. Sullivan
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 5:39 AM
