Letter Supporting H.R. 5264, the "Andean Trade Preference Extension Act of 2008"

February 25, 2008

TO THE MEMBERS OF THE U.S. HOUSE OF REPRESENTATIVES:

The U.S. Chamber of Commerce, the world’s largest business federation representing more than three million businesses and organizations of every size, sector, and region, is committed to increasing trade with the strategically important Andean region. To that end, the Chamber urges representatives to approve H.R. 5264, the “Andean Trade Preference Extension Act of 2008.” The Chamber supports this extension of the program so that U.S. investors, large and small, will not be penalized while Congress determines how and when to move forward on the pending free trade agreements. Both the economic and foreign policy interests of the United States will benefit from an extension of ATPA and approval of the pending free trade agreements with Colombia and Panama.

Since its enactment in 1991, ATPA has surpassed expectations as a tool to generate trade, growth, and jobs in the Andean region. In Colombia and Peru alone, ATPA and the industries it supports have led directly to the creation of approximately 1.5 million jobs. These jobs pay above-average wages and often serve as a gateway for workers to enter the formal sector, where they pay taxes and receive health care benefits. As a result, ATPA has been perhaps the single most effective alternative development program in the region. By providing local citizens with long-term alternatives to narcotics trafficking, and illegal immigration, ATPA has helped governments isolate violent extremist groups, restore economic growth, and increase investment in education, health, and infrastructure.

 

While much discussion of ATPA centers on the Andean countries, this trade program also benefits U.S. businesses by allowing them to import components and materials as well as labor-intensive consumer goods on a duty-free basis, enhancing their competitiveness and their ability to create jobs. For example, the cut flower industry employs approximately 100,000 Colombians directly and an additional 90,000 Colombians indirectly. However, an additional 225,000 U.S. jobs depend on imports of Colombian flowers, largely in the transportation, distribution, and retail industries. Across the board, ATPA provides American consumers with more choices at better prices for an array of products. Goods imported under the program generally do not compete directly with U.S. products.

 

In the long run, a more robust, reciprocal trade framework is needed to unleash the full benefits of trade and investment between the United States and Andean countries. That is why the Chamber will continue its efforts to garner approval for the trade promotion agreements with Panama and Colombia. However, moving swiftly to extend ATPA prior to February 29 will help avoid trade disruption and job loss pending entry-into-force of the Peru agreement—which may take many months—and pending congressional consideration of the agreement with Colombia.

In sum, the Chamber urges Congress to pass H.R. 5264 and secure a continuation of the impressive benefits of ATPA. Moreover, the Chamber reiterates its call that Congress take up and approve the trade promotion agreements with Colombia and Panama as soon as possible this year. The Chamber may consider votes on, or in relation to, these issues in our annual How They Voted scorecard.

Sincerely,
R. Bruce Josten