Page 26 - Caribbean-Central America Profile 2018

REGIONAL

CARIBBEAN-CENTRAL AMERICA PROFILE 2018

MAJOR TRADE ARRANGEMENTS

CARIBBEAN BASIN INITIATIVE (CBI) sales subsidiary of a U.S. export company The Act provides for more flexible sourcing
The Caribbean Basin Initiative (CBI) is in a CBI country and allows the organizer to alternatives than the CBTPA and has the
a broad program to promote economic receive U.S. tax benefits. potential to improve the competitiveness of
development through private sector initiative On a biennial basis, the United States Trade Haitian manufacturers by allowing the use
in Central American and Caribbean countries. Representative (USTR) is required to submit a of lower cost raw materials, a primary cost
A major goal of the CBI is to expand foreign report to Congress regarding the results of the component in the production of apparel.
and domestic investment in nontraditional general review of CBI beneficiary countries
sectors, thereby diversifying CBI country and their performance under the CBI eligibility On September 30, 2008, HOPE II entered into
economies and expanding their exports. The criteria. This Report provides an important force for a period of 10 years. The HOPE Act
Caribbean Basin Economic Recovery Act of opportunity to evaluate the effects of these as amended (Section 213a of the CBERA)
1983 (CBERA) (amended in 1990) and the provides for apparel imports from Haiti to enter
Caribbean Basin Trade Partnership Act of 2000 expansions of CBI trade preferences the United States duty-free if the “applicable
(CBTPA), collectively known as CBI, provides Beneficiary Countries: percentage” of the value of inputs and/or costs
customs duty-free entry to the United States on • Antigua and Barbuda
a permanent basis for a broad range of products • Aruba of processing is met from any combination
from CBI beneficiary countries. The CBTPA is • The Bahamas of Haiti, United States, U.S. FTA or regional
scheduled to expire on September 30, 2020. • Barbados preference program partner countries.
• Belize
The major elements of the CBI program The HOPE Act as amended also provides
available to all CBI beneficiary countries are: • The British Virgin Islands duty-free treatment for certain apparel
• Duty-free entry to the United States for a wide • Costa Rica articles if imported directly from Haiti or the
range of products grown and manufactured in • Dominica Dominican Republic, provided that Haiti and
• The Dominican Republic
CBI countries as an incentive for investment the Dominican Republic develop procedures
and expanded export production, and other • El Salvador to prevent transshipment. Additionally, the Act
special tariff statuses. • Grenada allows duty-free treatment for any apparel article
• CBI Textile Program: Under the CBTPA, • Guatemala classifiable under heading 6212.10 of the HTS,
apparel manufactured in eligible CBI • Guyana
countries from U.S. yarns and fabric, as well • Haiti if the article is both cut and sewn or otherwise
as non-textile products excluded from earlier • Honduras assembled in Haiti or the U.S., or both without
CBI legislation, will enter the United States • Jamaica regard to the source of the fabric or components
free of quota and duty. • Montserrat from which the article is made. Finally, the
• CBI Government Procurement: National • The Netherlands Antilles HOPE Act as amended allows automotive wire
treatment for producers in CBI countries in • Nicaragua harnesses imported from Haiti that contain at
bidding for certain types of U.S. Government • Panama least 50 percent by value of materials produced
procurement opportunities. • St. Kitts and Nevis in Haiti, the United States, or U.S.-FTA partner
• Exemption for CBI exports to the United • St. Lucia or regional preference program beneficiary
States from U.S. Import Merchandise • St. Vincent and the Grenadines countries to qualify for duty-free treatment.
Processing Fees, a fee based on a percent of • Trinidad and Tobago
value-based customs duty surcharge levied HAITIAN HEMISPHERIC The HOPE Act as amended also establishes an
on incoming goods to cover costs of U.S. International Labor Organization monitoring
Customs operations. OPPORTUNITY THROUGH program, and requires the President to establish
• A wide range of U.S. Government, state PARTNERSHIP ENCOURAGEMENT certain procedures to monitor Haiti’s and
government, and private sector business ACT (HHOPE) individual producers’ compliance with the
development programs, including trade and The 2006 Haitian Hemispheric Opportunity eligibility criteria.
investment financing, business missions, through Partnership Encouragement (HHOPE)
and technical assistance programs partially Act, which was signed into law on December CARIBCAN
supported through U.S. foreign economic 20, 2006 and became effective March 20, 2007, The Caribbean Canada Trade Agreement
assistance. was designed to support development and (CARIBCAN) was established between Canada
employment growth in Haiti. The HOPE Act and the Commonwealth Caribbean countries
For CBI beneficiary countries that have signed
provides expanded trade benefits beyond what in 1986 to provide one-way duty-free access
a Tax Information Exchange Agreement (TIEA)
the country receives under the Caribbean Basin into the Canadian market for commodities that
with the United States, the following initiatives
Trade Partnership Act (CBTPA), extending satisfy certain rules of origin requirements. The
are also available:
• CBI Convention Tourism Tax Credit: A duty-free treatment to U.S. imports of knit and CARIBCAN is nonreciprocal in nature, which
deduction on U.S. taxes for companies that hold woven apparel assembled in Haiti from the U.S., means that Caribbean Community (CARICOM)
business conventions in an eligible country. Haitian, or global inputs, subject to eligibility countries can export to Canada duty free, but a
• Foreign Sales Corporation status, which requirements, and in most cases, value-added tariff is imposed on Canadian goods entering the
enables the establishment of a specialized content requirements. Caribbean.

A-20 Caribbean-Central American Action