Congress Extends Andean Trade Preference Act

James A. Morrissey, Washington Correspondent

As Congress approved a 10-month extension of the Andean Trade Preference Act, US government and textile and apparel trade officials rallied around the action and saw it as an opportunity to make its trade benefits permanent. The act was due to expire February 29, but the extension will continue the benefits until the United States and participating countries can work out arrangements to avoid the periodic renewals of the past.

In 1991, Congress authorized duty-free benefits for four Andean nations — Colombia, Peru, Ecuador and Bolivia — and the act was renewed and enhanced in 2002. It was designed to discourage illegal drug production and trafficking by expanding economic opportunities in the participating countries.

In order to move toward making the trade preferences permanent, the United States has negotiated free trade agreements (FTAs) with Peru and Colombia, but the agreement with Colombia is hung up in Congress. Treasury Secretary Henry Paulson said the enactment of the legislation is “an important bridge as we work with Congress to pass the Colombia Free Trade Agreement and as we implement the Peru Free Trade Agreement.” He added that the act will give American companies important access to markets and will be a “stabilizing force for democracy and economic progress in the region.” US Trade Representative Susan C. Schwab said the Peru and Colombia agreements will provide “unprecedented access to these strong and growing markets.”

The Andean agreement enjoys the strong support of US textile and apparel manufacturers, as the rules require that apparel products benefiting from the duty-free treatment must contain yarn and fabric made in the participating countries. US textile manufacturers exported some $200 million worth of yarn and fabric to the four countries last year. US apparel importers say the agreement helps provide a wider variety of products at affordable prices for US consumers. Kevin Burke, president and CEO of the American Apparel & Footwear Association, said that in order to prevent “the race against the clock,” Congress should complete implementation of the Peru agreement and pass the Colombia FTA.

March 4, 2008