WASHINGTON — High-ranking House members have urged the two top Republican leaders to move quickly on legislation extending a trade preference program for Andean countries that expires at the end of the year.
The expiration of the Andean Trade Promotion & Drug Eradication Act with Peru, Colombia, Bolivia and Ecuador has raised concerns among apparel importers that source in the region and fear losing duty free benefits under the program.
The Bush administration has completed free trade agreements with Peru and Colombia, but Congress has not considered the deals, and Tuesday’s Congressional elections complicate the timing of votes on the trade pacts.
Reps. Dan Burton (R., Ind.), Henry Hyde (R., Ill.), Tom Davis (R., Va.) and Michael Oxley (R. Ohio), all committee chairmen, signed a letter with 24 other House members, including Democrats, which called on Speaker Dennis Hastert (R., Ill.) and Majority Leader John Boehner (R., Ohio) to act fast. The letter asked them to “strongly consider” moving legislation to bridge the gap between the expiration of the Andean preference program and the implementation — if approved by Congress — of the free trade pacts with Peru and Colombia.
The lawmakers said allowing the program to expire will “create a disruptive gap in coverage for U.S. companies that currently trade with these countries.” The congressmen said they are concerned that U.S. companies will pull business out of the region and move operations to Asia if an extension is not put in place, which could destabilize a volatile region.
For the year ended Aug. 30, apparel and textile imports from the four Andean countries fell 7 percent to 265.7 million square meter equivalents. The value of those imports also dropped 1.6 percent to $1.4 billion in the same period.
“Our companies shy away from uncertainty, and this on-again, off-again duty free environment” creates a lot of uncertainty, said Stephen Lamar, executive vice president at the American Apparel & Footwear Association. “Businesses have told me they are cutting back on, withholding and delaying orders, and the numbers support it on an aggregate basis.”
Cass Johnson, president of the National Council of Textile Organizations, said textile producers have a lot of business at stake. The fabric and yarn export business to the Andean region is almost $200 million and has the potential to grow, Johnson said.
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“We are supportive of an extension to bridge the gap, and we’ve seen what happens when the gap is not bridged,” Johnson said. “Our exports to Central America dropped by almost 10 percent” because of the way the Central American Free Trade Agreement was implemented, country by country.