CRS Reports U.S. Trade Policy with Caribbean May Need to be Reoriented
The Congressional Research Services has issued a report (RL33951) entitled, "U.S. Trade Policy and the Caribbean: From Trade Preferences to Free Trade Agreements.
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Some in Congress Want Trade Program Reform Instead of Short Term Extensions
In recent years, Congress had leaned toward short-term extensions of the Caribbean and other preference programs, however, a number of members seek a comprehensive review of these programs to harmonize and revamp their provisions. Congressional concern over eligibility criteria, simplifying rules of origin, targeting the least developed countries, and standardizing benefits are among a number of broad issues being debated as part of the preference reform agenda. In addition, CRS states that there are a number of issues that may suggest the need for reorienting U.S. trade policy in the Caribbean region.
CBTPA, HOPE Apparel Provisions Effective, but Not for Smaller Economies
According to the report, the most effective trade preferences appear to be the apparel provisions provided under the U.S.-Caribbean Basin Trade Partnership Act (CBTPA) and the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE), as amended. Both were extended through September 30, 2020, in the Haiti Economic Lift Program (HELP) Act of 2010 (P.L. 111-171). These provisions, however, are not well suited to the services and energy based economies of the smaller Eastern Caribbean countries.
Opting for FTA with the Caribbean is Not an Obvious Solution
CRS states that achieving broader regional integration may be difficult to reconcile with the needs of very small developing Caribbeancountries, 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.
(See ITT's Online Archives or 05/26/10 news, 10052663, for BP summary of President signing HELP into law which extends the CBTPA.)