WASHINGTON -- The current quest to give the Caribbean Basin Initiative countries the same trade benefits that Mexico now has under the six-month-old North American Free Trade Agreement may die here quietly -- without a major battle ever being...
WASHINGTON -- The current quest to give the Caribbean Basin Initiative countries the same trade benefits that Mexico now has under the six-month-old North American Free Trade Agreement may die here quietly -- without a major battle ever being fought.
The Clinton administration has proposed that this CBI parity be included in the implementing legislation for the GATT Uruguay Round agreement for liberalization of worldwide trade. But there are many who question the administration's commitment. They feel the White House has just paid lip service to the idea to placate U.S. investors in the Caribbean and won't fight to keep CBI parity in the GATT legislation if Congress wants to remove it. While that gives opponents of parity some peace of mind, it's driving proponents crazy.
"There will be extreme dismay if the administration vacillates in its support," said Sen. Bob Graham (D., Fla.), prime backer of a parity bill in the Senate. "I would like to see them be more assertive."
He said he intends to find out how committed the White House really is.
Vice President Al Gore made the announcement last month in Honduras that the administration planned to include its CBI parity proposal in the GATT legislation. The administration proposed that apparel assembled in CBI countries from U.S. fabric be permitted to enter the U.S. duty-free, on a par with Mexico's. The Caribbean is already a key supplier of apparel under 807 programs, which allow apparel sewn in the Caribbean from U.S.-cut fabrics to be imported under tariffs collected only on value added.
In return for this free-trade status, CBI countries would have one year to meet international intellectual property rights laws, and would have to agree to meet international labor standards and enact environmental protection regulations.
The draft legislation was delivered to Capitol Hill in early June, where its detractors immediately blasted it. Because Congress is so preoccupied with the health care debate, however, proponents -- who include the 25-member Florida delegation, the 40 members of the Congressional Black Caucus and the 18 members of the Congressional Hispanic Caucus -- don't have much of a forum to tout the idea.
As Sen. Max Baucus (D., Mont.), chairman of the Senate Trade Subcommittee, said, "No one's really thought about it, but it doesn't have much support anyway."The House Trade Subcommittee is to complete work on its final recommendation for the implementing bill this week.
Trade staffers on the Senate Finance Committee, meanwhile, are drafting that panel's plan. These deliberations are critical, since once the administration formally submits implementing legislation to Capitol Hill, the bill can't be changed, only approved or rejected. So when the administration offers an extraneous provision such as the CBI parity plan, it must carefully weigh whether it will cost or win GATT votes.
If Congress decides not to include CBI parity in its final recommendation to the White House, it will be up to the administration to revive it -- and that's where the problem lies.
"They aren't talking to members about it and they aren't actively backing it," a Senate aide said. "They technically put the proposal in the implementing legislation, but that's about it."
Sandra Gonzalez-Levy, senior vice president for international economic development at the Miami Chamber of Commerce, visited Capitol Hill and the U.S. Trade Representative's office last week and came away discouraged by the lack of support for CBI parity.
"I don't think the administration is pushing this as hard as they should," she said in a telephone interview from her Miami office. "They aren't being serious about it. This agreement basically offers one-way trade from the Caribbean to the U.S., and Capitol Hill is not looking for that anymore. They want two-way free-trade agreements like NAFTA. It's been a hard uphill battle."
Granting CBI countries parity with Mexico is critical to the Port of Miami, Gonzalez-Levy said. Caribbean exports, primarily in apparel, account for almost $5 billion in annual trade through Miami. More than 40 percent of Caribbean exports enter the U.S. through Miami.
Rep. L.F. Payne (D., Va.), a member of the House Trade Subcommittee, is contemplating an amendment to eliminate the CBI parity provision from the GATT legislation, but he acknowledged he doesn't have the votes.
However, he said he may turn to Sen. Daniel P. Moynihan (D., N.Y.), chairman of the Senate Finance Committee. In defense of the thousands of apparel workers in New York, Moynihan is objecting to CBI parity, and staffers say maneuvering already has begun to strike the CBI plan from the implementing bill.The costs of CBI parity - estimated to be about $800 million in lost duty revenues over five years -- is cited as another reason to kill it, since Congress and the administration already face the prospect of finding about $13 billion to make up for tariffs that will be lost during the first five years of GATT.
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