Congress Approves Extension Of Andean Trade Agreement

Congress has approved an extension of the Andean Trade Preference Act (ATPA), covering trade with
Colombia, Peru, Ecuador and Bolivia in a move supported by the Bush administration, US textile
manufacturers and importers of textiles and apparel. The extension is for one year in the case of
Colombia and Peru, and six months for Bolivia and Ecuador. The act, designed to help the ATPA
counties in their war against illegal drug production and trafficking, grants duty-free benefits
for products from those countries entering the United States.

US Trade Representative Susan C. Schwab said the act’s extension ensures continuation of
tariff suspensions on a wide variety of products and that this will help keep consumer prices down
on those products “at a time when we all are tightening our economic belts.”

In addition to the ATPA extension, the same legislation contains the so-called two-for-one
provision for the Dominican Republic that allows duty-free entry into the United States of twill
khaki or chino pants made from fabric sourced globally providing the Dominican producers buy twice
that amount of fabric from the United States.

The bill also extends the General System of Preferences (GSP), allowing 132 developing
countries, including 44 least-developed countries, to enjoy duty-free treatment for some 5,000
products. There are some specific exceptions for textile and apparel imports. The bill also removes
the abundant supply provision in the African Growth and  Opportunity Act (AGOA). That
provision requires use of regional denim fabric in denim apparel exports eligible for duty-free
treatment and allows Mauritius to be eligible to use AGOA’s third country fabric provisions.

October 7, 2008