ANDEAN TRADE PREFERENCES WITH THE UNITED STATES

The United States Government enacted the Andean Trade Preference Act in 1991 to help combat drug production and trafficking in four Andean countries: Bolivia, Colombia, Ecuador and Peru. The program offers trade benefits to help the beneficiary countries develop and strengthen legitimate industries. ATPA was expanded under the Trade Act of 2002, and is now called the Andean Trade Promotion and Drug Eradication Act.

All existing provisions were renewed, each country enjoys the same benefits as under the original program, and the program was extended by 700 additional products. The law requires a country certification process for the new, expanded portion of the program. This program expires on December 31, 2006.

Under the expanded ATPDEA, apparel assembled in the Andean region from U.S. fabric or fabric components or components knit-to-shape in the United States may enter the United States duty free in unlimited quantities. Apparel assembled from Andean regional fabric or components knit-to-shape in the region may enter duty-free subject to a cap. The cap is set at 2 percent of total U.S. apparel imports, increasing annually in equal increments to 5 percent. These countries currently account for only about one percent of U.S. apparel imports.

Other new benefits of the program include: tuna in pouches, leather products, footwear, petroleum and petroleum products, watches and watch parts. For all of the new products except for apparel and tuna, the President of the United States must determine that the imports are not sensitive before those products can be granted duty-free treatment.