Caribbean Exports to US Drop by Almost 9% in 2020; AAFA Says Looser ROO Needed

Imports from Haiti and the 16 Caribbean countries and U.S. territories covered by the Caribbean Basin Trade Partnership Act declined 8.9% in 2020 from 2019, after a 8.2% decline from 2018 to 2019, the Office of the U.S. Trade Representative reported. In 2020, the countries collectively exported $5.1 billion in goods to the U.S. -- behind faraway Slovakia. These imports represent only .2% of imports in 2020. The USTR attributed the decline to COVID-19 pandemic-related disruptions.

The biennial report to Congress noted that when including imports under the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act, apparel from Haiti is 42% of the imports covered by tariff preferences in the Caribbean. About 95% of Haiti's exports to the U.S. receive tariff breaks; Haitian business interests estimate that 54,000 garment factory jobs exist because of these programs.

The report noted that since the last report was published, which covered imports through 2018, importers applying the preferences to eligible products have increased. One example -- 25% of dried kidney beans from Belize used to not get the preferences, now 98% are covered. In the past, only 38% of frozen fish fillets from Guyana claimed the tariff break; it's now 77%.

The report included trade groups' reactions to its findings. The American Apparel and Footwear Association said that more flexible apparel rules of origin would spur growth of the industry in the Caribbean (outside of Haiti, which gets more flexible rules of origin under the HOPE and Haiti Economic Lift Program acts). The National Council of Textile Organizations said the preferences should stay as they are, and opposes allowing any of the countries to also participate in the Generalized System of Preferences benefits program.

"They claim that extension would severely damage" free trade agreements "and preference-based manufacturing, as well as would hinder U.S. ability to negotiate improved market access for U.S. made products in future FTAs," the report said of NCTO, which also said that de minimis undermines preference programs.