WORLD TRADE  
ORGANIZATION  G/C/W/540 
16 November 2005 
 (05-5344) 
Council for Trade in Goods Original:   English 
  
UNITED STATES - REQUESTS FOR WAIVERS FOR THE 
CARIBBEAN BASIN ECONOMIC AND RECOVERY ACT (CBERA, AS AMENDED), 
THE AFRICAN GROWTH AND OPPORTUNITY ACT (AGOA), AND THE 
ANDEAN TRADE PREFERENCE ACT (ATPA, AS AMENDED) 
 
Replies from the United States to Follow-up Questions from India 
 
 
  The following communication, dated 10 N ovember 2005, has been received from the 
delegation of the United States.  
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 1. We appreciate the US response to our concerns on the delay in seeking the waiver despite the 
legislations having been promulgated earlier. Ho wever, the US has not answered our question on the 
impairment of benefits to the non-beneficiaries duri ng the period of delay in seeking waiver.  Is the 
US contemplating any compensation to the non- beneficiaries for the impairment thus caused?   
  The question presumes that impairment of benefits occurred.  Inasmuch as no such 
impairment has been demonstrated, this question is hypothetical.    
2. The stipulation preventing the use of fabric  / yarn of non US origin (when these are 
commercially available in the US) in the apparel exported under the CBERA and ATPA preference 
schemes may lead to  non viability of exports for th e beneficiaries due to difference in costs of the 
procured fabric/ yarn of US and third party origin. Is n’t this a constraining factor in the exports to be 
made by the beneficiaries under the preference schemes?  Would this also not be in violation of the 
commitment of the US in the WTO Document WT/L/ 104 wherein it is stated that “duty free treatment 
shall be designed not to raise barriers or create undue difficulties for the trade of other Members?”   
  First, as stated in G/C/W/518, in response to questions from India 3, 4, and 5, the CBERA and 
ATPA contain provisions that provide benefits to  apparel assembled usi ng regional inputs.  We 
believe the success of the programs is evident from the trade data supplied in G/C/W/518, in response 
to question from China 4, and the large increases in apparel imports from beneficiary countries shown 
in the table provided do not support India’s (undocum ented) premise that cost  differences between US 
and third parties are a constraining factor.
  
 
 Would this also not be in violation of th e commitment of the US in the WTO Document 
WT/L/104 wherein it is stated that “duty free treatm ent shall be designed not to raise barriers or 
create undue difficulties for the trade of other Members?”  
 
 This question presumes that the duty-free treatment provided raises barriers or creates undue 
difficulties for the trade of other Members.  
 G/C/W/540 
Page 2  
 
 3. The US has stated in its replies to question No  4 posed by  Pakistan in the WTO Document No 
G/C/W/518 dated 13.05.2005 that the   “Apparel assembled in beneficiary country with fabr ic formed in the United States using yarn 
imported into the United States is not eligible for duty free treatment”.  
 
“Other than fabrics designated und er the commercial availability provisions of the CBERA and 
ATPA, preferential treatment is not available to a pparel articles made from third country fabrics.” 
 This would imply that the United States grants more  favourable treatment to domestic yarn/ fabric 
over imported yarn/ fabric as per its regulatio ns under the CBERA and ATPA preference schemes.  
Does the US therefore plan to seek a waiver of Article III under GATT, 1994?  
 The question does not explain the basis for th e alleged violation of Article III of the GATT 
1994.      If not, then would the US please elaborate how it proposes to cover the departure from its obligation under this Article?    
 The question does not explain the basis for the assertion that the United States is departing 
from any obligation under Article III.    4. Is there statistical evidence to vindicate that the African Growth & Opportunity Act, 
Caribbean Basin Economic Recovery Act and Andean  Trade Preference Act have actually benefited 
the preference receiving countries? If so; does the US  think that the preference schemes in its present 
form can grant enhanced market acce ss to the beneficiaries?      
 
 AGOA has helped African countries to diversif y the range of products they export to the 
United States.  Non-oil AGOA imports – including a pparel, automobiles, and processed agricultural 
goods – have more than doubled since 2001 (the fi rst full year of AGOA), reaching US$3.5 billion in 
2004.  Moreover, many AGOA beneficiary countries ha ve documented new jobs and investment that 
they attribute directly to AGOA.  For example, seven countries that keep track of AGOA job creation 
– Kenya, Lesotho, Malawi, Mauritius, Namibia, Swaziland, and South Afri ca – have credited AGOA 
with providing significant increases in employment.  An informal tabulation of new investment reported by AGOA beneficiary countries, suggests that the total new investment generated by AGOA 
runs into the hundreds of millions of dollars.   
 
 Likewise, the preferential access to the U.S. ma rket for countries in the Central American and 
Caribbean region provided under CBERA continue to ge nerate important benefits for those countries.  
CBERA has helped these countries diversify their exports and has contributed to their economic 
growth.  When CBERA was implemented in 1984, th e majority of US imports from the region were 
traditional and primary products such as coffee, banan as, and mineral fuels.  By 2002, more than half 
of the imports to the US from the region were ma nufactured products such as apparel and electrical 
and non-electrical machinery.  There has also been a substantial growth in the total value of exports 
under CBERA.  In 2002, these exports amounted to US$29 billion, approximately 2.5 times more than the exports in 1984.     ATPA has helped beneficiary countries increase and diversify their exports to the United 
States.  US imports from ATPA countries have tripled since the program was enacted in 1991.  From 
2003 to 2004, US imports under ATPA increased 43 pe rcent to US$8.4 billion, helping to generate 
strong economic growth in the beneficiary countri es. ATPA has encouraged export diversification 
into non-traditional products, particularly in the agricultural sector, including cut flowers and 
asparagus; in 2004, US imports under ATPA of cu t flowers increased 22 percent and of asparagus  G/C/W/540 
 Page 3 
 
 
 rose 24 percent.  ATPA has also had direct effects on jobs and investment in the beneficiary countries.  
For example, ATPA has contributed to the creation of over 100,000 jobs in the flower sector in Colombia and about 60,000 jobs in the asparagus i ndustry in Peru.  Exports, investment, and jobs also 
increased in the textiles and apparel sector in 2004 in  each of the four ATPA beneficiaries as a result 
of ATPA.  Job growth in these and other sectors dire ctly attributable to ATPA has provided important 
opportunities for workers who might otherwi se engage in drug-crop production.  
 
5. Does the United States believe that the African Growth & Opportunity Act can generate real 
market access for the beneficiaries given the supply side constraints and lack of resources in their 
economies? If so; the features of the AGOA whic h the US believes addresses the impediments for 
exports from the beneficiaries?    
 
 The United State recognizes that many AGOA bene ficiaries face supply-side constraints and 
other challenges that hinder their ability to take full advantage of AGOA’s benefits.  In order to help 
African countries respond to these challenges, the US Government dedicated US$199 million to trade 
capacity building in sub-Saharan Africa in FY05, up 10 percent over FY04.  This aid goes toward 
activities such as helping African businesses and farmer s to meet quality and standards issues, to get 
more timely market information, and to establish li nkages with prospective Amer ican partners.  At the 
AGOA Forum in July 2005, President Bush rein forced and renewed the US Government’s 
commitment to trade-related technical assistan ce by announcing the African Global Competitiveness 
Initiative (AGCI) with a 5-year funding target of US$200 million.  The goals of AGCI are to expand 
sub-Saharan Africa’s trade under AGOA and to improve the region’s external competitiveness.    
 
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