The overall effect of imports under the Andean Trade Preference Act (ATPA) on the U.S. economy and consumers continued to be negligible in 2003, reports the U.S. International Trade Commission in its publication Andean Trade Preference Act: Impact on U.S. Industries and Consumers and on Drug Crop Eradication and Crop Substitution, Tenth Report, 2003.

The ITC, an independent, nonpartisan, factfinding federal agency, recently issued the tenth report in a series monitoring imports under ATPA. The ATPA program affords preferential tariff treatment to most products of Bolivia, Colombia, Ecuador, and Peru. The ATPA's goal is to promote the development of sustainable economic alternatives to drug crop production by offering alternative, legal Andean products broader access to the U.S. market. The four Andean countries are the source of the coca plants from which most of the world's cocaine is produced or are major transit areas for cocaine.

The ATPA was renewed and amended on August 6, 2002, under the Andean Trade Promotion and Drug Eradication Act (ATPDEA), which broadened the scope of products eligible for tariff preferences. The year 2003 marked the first full year that the ATPDEA was in effect. Following are highlights of the report.

• Total U.S. imports from ATPA countries in 2003 amounted to $11.6 billion, of which $5.8 billion, or 50.6 percent, entered under the ATPA. The value and the share of U.S. imports that entered under the ATPA rose significantly in 2003 due primarily to the implementation of the ATPDEA. Petroleum-related products and apparel articles, both newly eligible for ATPA trade preferences under the ATPDEA, accounted for over 70 percent of imports under the program and represented 10 of the top 20 U.S. imports under the ATPA. Other important imports under the ATPA were copper cathodes, cut flowers, precious metal jewelry, and asparagus.

• A few U.S. industries were identified as potentially experiencing displacement by ATPA imports of more than an estimated 5 percent of the value of U.S. production: asparagus; fresh-cut roses; and chrysanthemums, carnations, anthuriums, and orchids. U.S. imports of all of the 20 leading ATPA-exclusive products produced net welfare gains for U.S. consumers in 2003.

• The ATPA continued to have a small, indirect, but positive effect on drug-crop eradication and crop substitution efforts in the ATPA countries in 2003. Coca eradication in the region reached a record high in 2003 for a second consecutive year, driven primarily by the largest ever eradication efforts in Colombia. As a result, net cultivation in the ATPA countries declined to a record low in 2003. By supporting such industries as flowers in Colombia and asparagus in Peru, the ATPA also remained an important source of employment creation for workers who might otherwise have grown illicit coca or entered the drug trade.

Andean Trade Preference Act: Impact on U.S. Industries and Consumers and on Drug Crop Eradication and Crop Substitution, Tenth Report, 2003 (Inv. No. 332-352, USITC Publication No. 3725, September 2004) will be available on the ITC's Internet site at www.usitc.gov. The publication will also be available at federal depository libraries in the United States. A CD-ROM or printed copy of the report may be requested by calling 202-205-1809 or by writing to the Office of the Secretary, U.S. International Trade Commission, 500 E Street, SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means. The resulting reports convey the Commissions' objective findings and independent analyses on the subject investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its finding and analyses to the requestor. General factfinding investigations reports are subsequently released to the public unless they are classified by the requestor for national security reasons.