Section 206 of the ATPA requires the U.S. International Trade Commission (the Commission) to report annually on the program. Highlights follow of the Commission's second annual report on ATPA, covering the year 1994:
o U.S. merchandise imports from Bolivia, Colombia, Ecuador, and Peru in 1994 totaled $5.9 billion, or less than 1 percent of U.S. imports worldwide. Imports entered under ATPA in 1994, the first full year that all four countries were participants, totaled just under $684 million, or 11.6 percent of total imports from the ATPA countries. ATPA duty-free imports were over $663 million, and ATPA reduced-duty imports were over $20 million. In comparison, GSP duty-free imports from the ATPA countries were just $339 million in 1994.
o Colombia is by far the largest ATPA trading partner of the United States, supplying 60.2 percent of imports under ATPA in 1994. As in prior years, Colombia was the principal source of fresh cut flowers, the leading import sector under ATPA, including the top two product categories in this sector--chrysanthemums, standard carnations, anthuriums and orchids (ATPA duty-free imports valued at $121 million) and roses ($105 million). In all, fresh cut flowers accounted for nearly 44 percent of all ATPA imports in 1994 with a combined value of almost $300 million. Bolivia was the main supplier of the next leading ATPA import, jewelry of precious metals ($85 million). Combined jewelry imports from Bolivia and Peru, mostly precious metal rope, rope necklaces, and gold neck chains, accounted for nearly 20 percent of all ATPA imports for a combined value of $134 million.
o Less than one-half of ATPA duty-free and reduced-duty imports benefited exclusively from ATPA and could not have benefited from GSP. Items benefiting exclusively from ATPA totaled $288 million in 1994, or 4.9 percent of all imports from ATPA countries. The five leading items benefiting exclusively from ATPA in 1994 were chrysanthemums, standard carnations, anthuriums and orchids (imports from Colombia excluded by GSP "competitive need" limits); roses; tuna; asparagus; and leather luggage.
o The overall effect of ATPA imports on the U.S. economy and consumers continued to be small in 1994, although a few industries were measurably affected. The Commission used a partial-equilibrium analysis to produce "upper bound" estimates of these effects. Imports of the 20 leading items (measured at the 8-digit subheading of the U.S. Harmonized Tariff Schedule) benefiting exclusively from ATPA in 1994 produced welfare gains for U.S. consumers. Fresh cut roses yielded the largest such net gain, valued at $864 thousand, followed by chrysanthemums, carnations, anthuriums, and orchids, with net welfare gain valued at $805 thousand. Displacement of U.S. output by ATPA imports also was measured using upper bound estimates. Industries that experienced displacement of more than 5 percent of the value of U.S. production were: chrysanthemums, carnations, anthuriums, and orchids (13.4 percent of domestic shipments displaced, valued at $7.4 million); fresh cut roses (8.5 percent displacement, valued at $12.8 million); and asparagus (6.4 percent displacement, valued at $6.5 million).
o Based on published reports and data collected for 1994, the probable future effect of ATPA on the United States will be minimal in most economic sectors. According to Andean public and private sector representatives, ATPA has not stimulated significant new export-oriented investment. Sectors receiving possible ATPA-related investment reported during 1994 include: gold and silver jewelry in Bolivia; disposable medical devices and tableware in Colombia; and gold jewelry, copper wire, and asparagus in Peru.
o ATPA appears to have had only minimal effects on drug crop eradication and crop substitution in the Andean region during 1994. To date, neither drug crop eradication nor crop substitution efforts have shown the successes that were earlier anticipated. The newness of ATPA makes it difficult to draw a causal linkage between trade preferences and drug crop eradication and crop substitution. Moreover, the long-term nature of establishing viable alternative crops and building the necessary economic infrastructure means that a significant decline in drug crop production as a result of current crop eradication/substition efforts in the Andean region may not be seen for some time.