In its biennial report on the impact of the Caribbean Basin Economic Recovery Act (as modified by the Caribbean Basin Trade Partnership Act and the Haiti HOPE and HELP acts) the International Trade Commission found that in 2021 and 2022 the overall effect of this trade preference program on the U.S. economy continued to be small and the effect on beneficiary countries continued to be small but positive. CBERA has been in operation since Jan. 1, 1984, and affords preferential tariff treatment to most products of 17 Caribbean and South American countries.

Imports. According to the report, total U.S imports from CBERA countries (with and without trade preferences) jumped 70.6 percent to $8.7 billion from 2020 to 2021 and another 33.7 percent to $11.6 billion in 2022. U.S imports under CBERA increased 21.4 percent to $2.2 billion in 2021 and another 19.2 percent to $2.6 billion in 2022. These figures represent the resumption of an upward trend that had been interrupted in 2019 and 2020 due to the COVID-19 pandemic and decreased oil prices.

Imports of mining and manufacturing products under CBERA increased from 2020 through 2022. The largest share of imports in this category was expandable polystyrene from The Bahamas followed by melamine from Trinidad & Tobago.

Imports of methanol and energy products under CBERA have increased every year since 2018 and total U.S. import of such goods from CBERA beneficiaries more than tripled between 2020 and 2022, supported by Guyana’s growing crude oil production and rising global crude oil prices.

The total value of imports of textiles and apparel under CBERA grew 30.6 percent, from $740.3 million to $96.0 million, from 2020 to 2022. However, U.S. apparel imports from CBERA countries declined from 2021 to 2022, due largely to political instability and a cholera outbreak in Haiti (the largest apparel producer in the region) and the uncertainty surrounding renewal of HOPE and HELP, which are set to expire in 2025.

Effects on Beneficiaries. The ITC states that CBERA continues to have a positive impact on a number of Caribbean Basin countries. The CBERA regional utilization rate was 49.0 percent in 2021.and 47.9 percent in 2022. Factors influencing this rate include trade preferences available to competing suppliers, available productive resources and the ability to attract investment, and knowledge of the program, transparency, and flexibility of CBERA rules of origin and other U.S. import requirements.

Haiti has been the leading exporter under CBERA preferences in recent years, supported by greater product coverage and more flexible rules of origin for apparel items enacted in 2006. Exports of some beneficiary countries (e.g., Trinidad and Tobago and Jamaica) have become more diversified, but there are wide differences in the patterns of diversification among beneficiaries. Growth in bulk commodity exports, notably petroleum products, corresponded with more concentrated exports in several countries, such as Guyana and The Bahamas, between 2020 and 2022.

Effects on U.S. CBERA has little impact on the U.S. economy, imports, industries, and consumers, primarily because U.S. imports under the program comprise a minor share of total U.S. imports (0.08 percent in 2022). Two U.S. industries – T-shirts and methanol – have most likely faced small negative effects due to competition from CBERA imports.

The ITC adds that recent and planned investments in CBERA beneficiary countries are predominantly concentrated in the services sector and are therefore not expected to increase future exports to the U.S. under CBERA, which only applies to goods trade.

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