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Public Papers - 1990 - October

Message to the Congress Transmitting Proposed Legislation on Trade Preference for Andean Countries


To the Congress of the United States:

I am pleased to transmit a legislative proposal entitled the ``Andean Trade Preference Act of 1990'' and a section-by-section analysis. The Andean nations are engaged in a serious struggle to combat illegal narcotics trafficking. It is incumbent upon the United States to aid them in their efforts to develop legitimate trading opportunities for their people. Their struggle is our struggle as well.

This proposal would implement my Andean Trade Preference Initiative of July 23, 1990. It would create a trade preference program patterned after the Caribbean Basin Initiative (CBI) for four Andean countries -- Bolivia, Colombia, Ecuador, and Peru.

The Andean Trade Preference Initiative is intended to:

fulfill, in part, my commitment at the Cartagena Summit to expand economic alternatives for these four Andean countries;

complement the program of economic assistance, drug control, and the economic reforms agreed on with the Andean countries; and

provide U.S. economic support to those Andean countries that are fighting to eliminate the production, processing, and shipment of drugs.

Just as CBI did for the countries of the Caribbean Basin, the Andean Trade Preference Act of 1990 will provide the authority to establish duty-free treatment of imports from the four Andean countries. These trade preferences would be granted for a period of 10 years.

The legislation outlines the rule-of-origin requirements for duty-free entry. Articles must be imported directly from a beneficiary country. These imports must consist of at least 35 percent value-added in one or more of the beneficiary countries, or one or more of the CBI countries, to which 15 percent of the total value from U.S.-made components may be applied. If foreign components are used to produce an article, the final product must be substantially transformed into a ``new and different article of commerce'' in one or more of the beneficiary countries. Products not qualifying under these three requirements will be dutiable.

Products that are particularly sensitive to import competition will still be dutiable. These products include textiles and apparel; footwear; canned tuna; petroleum and petroleum products; and watches and watch parts. Handbags, luggage, flat goods, work gloves, and leather wearing apparel also will continue to be dutiable, but will be subject to the same duty reduction program as has been made available to products from the Caribbean Basin. Duty-free entry of sugars, syrups, and molasses is provided consistent with the tariff-rate quotas on these products.

The proposal includes provisions for general import relief and emergency relief to safeguard domestic industries. Specific relief provisions are also included to safeguard domestic industries producing perishable products (i.e., live plants and fresh cut flowers, certain fresh or chilled vegetables, certain fresh fruit, and concentrated citrus fruit juice).

To assess the effects of the legislation on the U.S. economy and on particular industries producing like or directly competitive articles, the U.S. International Trade Commission would be required to issue reports to the Congress. The first such study will assess the effectiveness of the Act during its first 2 years, with annual reports thereafter. The proposal also requires the Secretary of Labor to report to the Congress annually on the impact of the Act on U.S. labor.

Enactment of the Andean Trade Preference Act of 1990 will permit the United States to support the efforts of the Andean countries to eliminate the production, processing, and shipment of illicit drugs. In conjunction with other Andean trade measures announced on July 23 and the Enterprise for the Americas Initiative announced on June 27, it will also increase the prospects for economic growth and prosperity in the Andean countries and throughout the hemisphere. I look forward to working closely with the Congress to enact this vital initiative.

George Bush

The White House,

October 5, 1990.

George Bush Presidential Library and Museum
1000 George Bush Drive West, College Station, Texas 77845
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