USTR Consults On Caribbean Trade Benefits

by Mike Godfrey, Tax-News.com, Washington

17 October 2012

The United States Trade Representative (USTR) has begun a consultation on whether certain Caribbean countries should be designated as eligible to receive benefits under the Caribbean Basin Economic Recovery Act (CBERA) or the Caribbean Basin Trade Partnership Act (CBTPA).

Comments are sought on whether Curaçao, Saint Maarten, and the Turks and Caicos Islands should be designated as eligible to receive benefits under CBERA, as amended by CBTPA, and whether Aruba, the Bahamas, Dominica, Grenada, Montserrat, St. Kitts and Nevis and St. Vincent and the Grenadines should be designated as eligible to receive benefits under CBTPA.

It was pointed out that, although Congress had identified the Turks and Caicos Islands as potentially eligible for benefits in 1983, they did not request beneficiary status until July 2012. Similarly, although Congress identified the Bahamas, Grenada, Montserrat, St. Kitts and Nevis and St. Vincent for benefits under CBERA in 1983 and CBTPA in 2000, these countries also did not request benefits under CBTPA until 2012.

Aruba was designated as a beneficiary country of CBERA from January 1, 1986 upon becoming independent of the Netherlands Antilles in 1986, and requested CBTPA benefits in October 2012. In a similar manner, as a result of the dissolution of the Netherlands Antilles in October 2010, Curaçao and Saint Maarten became successor political entities of the Netherlands Antilles and eligible to receive benefits, but did not request the receipt of CBERA and CBTPA benefits until, respectively, July and June 2012.

The CEBRA and CBTPA trade programmes, known collectively as the Caribbean Basin Initiative (CBI) are intended to facilitate the economic development and export diversification of the Caribbean Basin economies. Initially launched in 1983, through CBERA, and substantially expanded through CBTPA, the CBI currently provides beneficiary countries with duty-free access to the US market for most goods.

CBTPA entered into force on October 1, 2000, and continues in effect until September 30, 2020, or the date, if sooner, on which a free trade agreement as described in legislation enters into force between the US and a CBTPA beneficiary country. In particular, CBTPA extended preferential tariff treatment to textile and apparel products assembled from US fabric, which were previously excluded from the programme.

Public comments on the consultation are requested by November 9, 2012.

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