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1 1 (March 26, 1999)

handle is hein.crs/crsahbj0001 and id is 1 raw text is: Order Code RS20102 Updated March 26, 1999 Caribbean Basin Enhancement Legislation Raymond J. Ahearn Specialist in Trade Relations Foreign Affairs, Defense, and Trade Division Summary Legislation has been introduced to provide Caribbean Basin countries similar tariff benefits afforded Mexico under the North American Free Trade Agreement (NAFTA). On the House side, Title I of H.R. 984 (Caribbean and Central American Relief and Economic Stabilization Act) would provide Caribbean Basin countries with essentially the same tariff treatment that Mexico receives under NAFTA. On the Senate side, so- called Caribbean Basin Initiative (CBI) enhancement legislation has been included in S. 371, a bill to provide relief to the hurricane-ravaged countries of Central America. The Senate bill is more restrictive than the House bill in the scope of tariff benefits offered, particularly for textile and apparel products. The Clinton Administration, in testimony before the House Ways and Means Subcommittee on Trade on March 23, announced its opposition to H.R. 984. While supporting enhanced trade benefits for CBI countries, the Administration unveiled its own proposal that is more similar to S. 371. As in the past, the outlook in the 106' Congress for passage of some sort of enhancement bill remains uncertain. Efforts to help the region recover from hurricane damage may provide impetus for passage. But the legislation still lacks a consensus approach in the private sector and in Congress. This report will be updated. Background Ever since NAFTA was proposed in the early 1990s, Caribbean Basin leaders have expressed concern that Mexico's more preferential trading status would erode its own preferential access to the U.S. market as provided by the Caribbean Basin Economic Recovery Act (CBERA). The CBERA, commonly referred to as the Caribbean Basin Initiative or CBI, was enacted in 1983 in an effort to bolster the economic and political stability of this neighboring region. The CBERA is a non-reciprocal grant of duty-free or reduced duty access for certain CBI exports to the United States. Legislation to enhance the CBI has been introduced in every Congress since 1993. The primary change proposed centers on the tariff treatment of the region's apparel exports. U.S. garment companies have set up factories in the region to assemble clothes cut from U.S. or foreign-made fabric, and then re-export the items to the United States. Congressional Research Service + The Library of Congress CRS Report for Congress Received through the CRS Web

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