Andean Countries Seek Parity with Caribbean Basin Countries to Compete in the US Market

The US-Caribbean Basin Trade Partnership Act (CBTPA) was enacted in October 2000 to help apparel makers in Caribbean Basin countries compete in the US market against Mexico. Enactment of the CBTPA has, however, now put apparel makers in the four Andean countries - Bolivia, Colombia, Ecuador and Peru - at a competitive disadvantage. In the US market, imports of textiles and apparel from Andean countries are relatively small, and therefore pose little competition for US firms. But Andean apparel makers are overwhelmingly dependent on the US market for their exports.

Concern over falling relative competitiveness has been expressed by a number of Andean countries - especially Colombia, where any decline in investment and jobs in the apparel industry would reduce the availability of alternatives to illegal drugs and narcotrafficking.

Following representations by Andean governments, a new act was put before Congress in March 2001 to help redress the imbalance. The act should also benefit the US textile industry, because duty-free and quota-free benefits would apply only to apparel made from US materials. This is unlikely, however, to satisfy the Peruvian apparel industry, which uses little US material in manufacturing its garments.

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