MESSAGE TO HOUSE: WE NEED CBI COMMERCE
Byline: Joyce Barrett
WASHINGTON — As the House opens debate on broadening trade benefits to the Caribbean Basin, Miami officials have been pressing their case that commerce with the Caribbean is critical to their local economy.
“Greater Miami serves as a vital link for trade with Caribbean nations,” said Gilbert Lee Sandler, a member of the executive committee of the Greater Miami Chamber of Commerce, in testimony before the House Trade Subcommittee, as the new bill to grant such benefits came up for its first hearing this month.
To make his point, Sandler threw out statistics that 36 percent of Caribbean trade went through the Greater Miami area, accounting for 16 percent of Miami’s total trade in 1992. As trade has continued to blossom, more and more businesses have established operations in Greater Miami as well, leading to the creation and preservation of more and more jobs for South Florida’s economy.
The current bill that Miami officials, along with domestic apparel makers, retailers and importers, are arguing for is sponsored by Rep. Phil Crane (R., Ill.). It would grant tariff treatment equivalent to that accorded Mexico under the North American Free Trade Agreement to Caribbean Basin Initiative countries for six years, pending their accession to NAFTA.
While Crane is optimistic that his measure can be approved by Congress this year, past versions of the plan have not had much success.
The Clinton administration attempted to attach it to the NAFTA as well as to the GATT Uruguay Round, but both times withdrew it after Congressional tallies showed it did not have much support, despite the backing of the Congressional Black and Hispanic caucuses.
Crane’s bill also has drawn the ire of the administration, as well as textile-state House members, because it includes a provision, dubbed tariff preference levels (TPL), that would grant NAFTA-like benefits to fabrics not made in the U.S. that are imported to the Caribbean, sewn into apparel and then exported to the U.S.
While Crane has said he won’t accede to the administration’s request that the TPL provision be amended, it’s a sticking point that could prove problematical to the ultimate passage of the bill.
Meanwhile, since NAFTA went into effect at the start of 1994, apparel trade with Mexico has increased more than apparel trade with the Caribbean, Sandler told the House Trade Subcommittee. It’s a phenomenon that is cutting into trade through the Miami port, he said.
According to trade statistics for the year through November 1994, imports from Mexico during that time increased 49 percent, while imports from the CBI region increased 15 percent, he told the committee.
“These data show a drastic change from the trend over the past six years of CBI and Mexican apparel import growth,” Sandler said. “If apparel imports from the CBI are not placed on an equal footing with those of Mexico, there will be a continued shift of production out of the region and accompanying disinvestment.”
Crane’s bill, Sandler said, “fosters production in the CBI region, which contributes to employment in Greater Miami in cutting, marketing, transportation, shipping, handling and other tasks.
“It will enhance Miami-CBI trade and have a great positive impact on the economy of South Florida. It will create political stability in the CBI and discourage excessive migration to Greater Miami.”
Rep. Peter Deutsch (D., Fla.), who represents parts of Miami, also told the panel that the bill has a direct effect on southern Florida.
“Before NAFTA, this trade relationship was working very well,” Deutsch said. “The effects of NAFTA have been very real. I’ve seen entire facilities leave the CBI countries and go to Mexico. This is not anecdotal phenomena. It’s real.”
Among others giving testimony to the panel, Anthony Hylton, parliamentary secretary in the Ministry of Foreign Affairs of Jamaica, testified that Caribbean trade with the U.S. supports 250,000 U.S. jobs.
“During the past decade, nearly 16,000 American jobs have been created each year, as U.S. trade links with the Caribbean have expanded,” Hylton said.
However, he added, “In the 12 months since NAFTA was implemented, we are beginning to see signs that the 12 years of the CBI could be undermined.”
In the past two years, investment in the region has slowed, Hylton said, and noted that in Guatemala, seven factories already have closed, putting 25,000 people out of work.
“An erosion of export access to the U.S. would translate directly into a contraction of economic activity in the CBI region,” he said. “Such a contraction would lower regional incomes and, ultimately, the demand for U.S. imports.
“It would be ironic,” Hylton said, “if jobs in the U.S. that are maintained by exports to the CBI region were to be lost as a result of investment diversion and trade contraction resulting from the erosion of the CBI caused by NAFTA.”
David E. Ivy, president of the Association of American Chambers of Commerce in Latin America, said the Mexican peso devaluation will magnify the competitive disadvantage to the region.
“Apparel is among the sectors most adversely impacted,” Ivy said. He also noted that the major reason for seeking to preserve the CBI-U.S. trading relationship is that the chief beneficiary is the U.S.