Caribbean Basin Economic Recovery Act's Limited Impact

The impact of the Caribbean Basin Economic Recovery Act on the US economy is small, but the effect on beneficiary countries is positive, the International Trade Commission reported Sept. 8.

This is the ITC’s 26th biennial report monitoring US imports under CBERA. The CBERA program, operative since January 1, 1984, affords preferential tariff treatment to most products of the 17 designated Caribbean beneficiaries that received CBERA benefits during the period covered in the report.

The report also covers the HOPE and HELP Acts.

The overall effect of CBERA imports on the US economy generally and on US imports, industries, and consumers continued to be small in 2021-2022, according to the report. For
US industries in particular, the overall effect of the program on domestic production, employment and operating profits was also small.

Two US industries – methanol and T-shirts – most likely have faced small negative effects due to competition from CBERA imports.

US imports receiving preferential treatment under CBERA totaled $2.6 billion in 2022, a significant increase of 44.7 percent from $1.8 billion in 2020, when import values were lower due to COVID-19.

The increase in 2021 was driven primarily by increasing imports of textiles and apparel (an increase of $256 million or 34.6 percent), mostly from Haiti, while the increase in 2022 was driven by methanol and energy products (an increase of $384 million or 43.7 percent), mostly from Trinidad and Tobago and Guyana. The CBERA regional utilization rate was 47.9 percent in 2022 and 49.0 percent in 2021.

The ITC also found that under CBERA, exports to the United States of some countries, such as Trinidad and Tobago and Jamaica, have become more diversified. At the same time, there are wide differences in the patterns of diversification among CBERA beneficiaries. Growth in bulk commodity exports, notably petroleum products, corresponded with more concentrated exports in several countries, such as Guyana and The Bahamas, between 2020 and 2022.

The HOPE and HELP preferences programs for Haiti have helped increase employment in Haiti’s mostly female textile and apparel sector.

[ITC Report]