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Importers And Manufacturers Seek Renewal Of Andean Trade Pact

James A. Morrissey, Washington Correspondent

A group of eight trade associations representing textile and apparel manufacturers and importers has written to the leadership of congressional committees that handle international trade issues, asking them "in the most urgent terms" to approve legislation extending the Andean Trade Preference Act (ATPA) for another two years. The act, which has been extended year-to-year since 1992, is due to expire December 31. It grants special trade preferences to imports from Peru, Colombia and Ecuador.

The letter points out that some two million jobs in the region depend on ATPA and says the three countries are providing a steadily growing market for US exports. Apparel imports from the Andean region, which enter the United States duty-free, utilize cotton, yarn and fabric made in the United States. In 2008, US cotton exports to the region totaled almost $150 million, while US exports of yarn and fabric totaled $160 million.

Participants in the program have been concerned that the year-to-year extension of the program creates uncertainty in the market, discouraging investments in the area, and in some cases has resulted in importers looking to Asia for products. As a result, the associations are asking for a two-year extension of the pact.

The associations point out that ATPA is a centerpiece in the US war on drugs, as it encourages farmers and manufacturers to produce other products.

"A lapse in the preference program, even for a short period, threatens to undo many of our economic and foreign policy successes in the region," the associations said. "Past experience shows that letting the program lapse with the aim of renewing it retroactively is fraught with serious problems, not the least of which is harm to US and regional employment as well as US investments in the region."

Even though the United States has a free trade agreement (FTA) with Peru, enactment of ATPA is important because of the co-production of certain products in both Peru and Colombia, which at this time does not have a FTA with the United States. A FTA with Colombia, negotiated by the Bush administration and awaiting approval by Congress, would address the co-production issue and also grant permanent reciprocal treatment for US goods entering Colombia.

Swift passage of the legislation faces some difficulties, because Sen. Charles Grassley, R-Iowa, the ranking Republican on the Senate Finance Committee, is opposed to preferential agreements, and he has been successful in the past in delaying passage of preferential trade legislation.

November 3, 2009