13 March 2001

Text: Sens. Graham, DeWine Endorse Andean Trade Preference Expansion Act

(Trade benefits will aid anti-narcotics efforts, say lawmakers)

Senators Bob Graham (Democrat of Florida) and Mike DeWine (Republican of Ohio) introduced the Andean Trade Preference Expansion Act on March 13 in order to "help the Andean region develop economic alternatives to drug-crop production," the two leaders said in a joint news release.

"Expanded trade benefits will provide the alternative economic stimulus needed to support our counter-narcotics efforts in the region," Graham added. For his part, DeWine described the legislation as an important tool for protecting U.S. national security and "the stability of the Western Hemisphere."

To ensure the success of the Colombian government's anti-narcotics efforts, DeWine said, "it is crucial that we help bolster the faltering economies of the Andean countries -- namely Colombia, Peru, Bolivia, and Ecuador -- so they don't turn to the drug trade for their economic livelihood."

The senators explained that the original Andean Trade Preference Act (ATPA), which extends trade benefits to Bolivia, Colombia, Ecuador and Peru, is set to expire in December 2001. "This legislation will extend the original agreement to September 2005 and provide additional trade benefits to the ATPA countries," they said.

Following is the text of the Graham/DeWine news release, the text of a background summary on ATPA expansion, and a fact sheet on Andean trade:
(begin text of news release)

Graham, DeWine Introduce Andean Trade Preference Expansion Act March 13, 2001

Washington -- The Andean Trade Preference Expansion Act, introduced today by United States Senators Bob Graham (D-FL) and Mike DeWine (R-OH), renews and enhances this country's commitment to helping the Andean region develop economic alternatives to drug-crop production.

"Aid plus trade is the right formula for building a strong, legal economy in the Andean region," Graham said. "Expanded trade benefits will provide the alternative economic stimulus needed to support our counter-narcotics efforts in the region."

"This bill is about more than just trade," said DeWine. "This is an issue of national security. The stability of the Western Hemisphere is at stake. For Plan Colombia to succeed, it is crucial that we help bolster the faltering economies of the Andean countries -- namely Colombia, Peru, Bolivia, and Ecuador -- so they don't turn to the drug trade for their economic livelihood."

The original Andean Trade Preference Act, which extends trade benefits to Bolivia, Colombia, Ecuador and Peru, is set to expire in December. This legislation will extend the original agreement to September 2005 and provide additional trade benefits to the ATPA countries. Specifically, the bill would extend duty-free, quota-free treatment to apparel articles knit, assembled or cut in ATPA beneficiary nations using yarns and fabric wholly formed in the United States. Goods other than apparel that previously were not eligible under the ATPA would now receive the NAFTA tariff rate.

These benefits will create trade parity between the Andean region and nations of the Caribbean Basin Initiative. In 1999, Congress expanded benefits to CBI nations.

(end text of news release)

(begin text of background summary)

BACKGROUND SUMMARY OF THE "ANDEAN TRADE PREFERENCE EXPANSION ACT" February 2001 U.S. Senators Bob Graham and Mike DeWine

The "Andean Trade Preference Expansion Act" renews and enhances the United States' commitment to helping the Andean region develop economic alternatives to drug-crop production. This Act will strengthen the economic competitiveness of the countries that currently benefit from the Andean Trade Preference Act of 1991 (ATPA): Bolivia, Colombia, Ecuador, and Peru. The strategy has two parts: (1) an expansion of current trade benefits for the ATPA nations; and (2) an extension of the ATPA from December 4, 2001, through September 30, 2005.

This legislation addresses an important, albeit unintentional, contradiction in U.S. policy towards the Andean region. With the recent passage of enhanced trade benefits for the countries included in the Caribbean Basin Initiative, the region stands to lose substantial apparel industry jobs -- up to 100,000 jobs in Colombia alone. At least ten (10) U.S.-based companies that purchase apparel from Colombian garment manufacturers have already indicated their near-term intentions to shift production to CBI countries due to the significant cost savings associated with the new trade benefits afforded to the Caribbean basin.

New expanded benefits will harmonize ATPA benfits with related provisions extended to the countries of the Caribbean Basin under the "Trade and Development Act of 2000," which was signed by the president on May 18, 2000. Specifically, the bill would extend duty-free, quota-free treatment to apparel articles knit, assembled or cut in ATPA beneficiary nations using yarns and fabric wholly formed in the United States, thereby achieving parity with the CBI nations. Goods other than apparel that previously were not eligible under the ATPA would now receive the NAFTA tariff rate.

Although the bill provides benefits to all ATPA beneficiaries, it is particularly critical to Colombia, which in 1998 exported 59 percent of all textiles and apparel from the Andean region to the U.S., two-thirds of which were assembled and/or cut from U.S. yarns and fabric.

The bill is consistent with U.S. policy of promoting trade and combating drugs on a regional basis, thereby ensuring that U.S. benefits and/or assistance provided to one nation do not adversely affect other nations in the immediate region. This is the only way to avoid what is often described as the "balloon effect," which means that the drug problem, at best, is displaced from one location to another.

(end text of background summary)

(begin text of fact sheet)

ANDEAN TRADE FACTS

-- In 1991 Congress passes the Andean Trade Preference Act, providing trade benefits to the countries of Bolivia, Colombia, Ecuador and Peru similar to those extended to the Caribbean Basin Initiative in 1983.

-- Between 1991-1999 total two-way trade between the United States and Andean beneficiary countries nearly doubled.

-- Over that same period, U.S. exports grew 65 percent and imports grew 98 percent.

-- In spite of rapid growth in imports, the ATPA countries provide a minute share of U.S. imports overall. Over the nine years of the current program, total imports to the United States from these four countries averaged between 9/10 of a percent to 1 percent of total imports. But while ATPA countries represent only a fraction of U.S. imports, the United States is a leading destination for their exports.

-- Last year, the United States government provided Colombia a supplemental appropriations package of more than $1.6 billion dollars to help the country in its time of crisis.

-- Today in Colombia more than one million people are displaced, the unemployment rate is nearly 20 percent and Colombia is experiencing the worst recession in 70 years.

-- In 1999, Colombia and its Andean neighbors exported approximately $562 million in textiles and apparel to the United States.

-- Andean textile and apparel production sustains more than 200,000 jobs in Colombia alone.

(end text of fact sheet)