The US House of Representatives yesterday (27 February) approved a 10-month extension of the Andean Trade Preference Act (ATPA), just days before the existing trade pact is due to expire.

The US Senate must now approve the companion bill before the ATPA ends on 29 February to avoid any lapse in trade benefits on imports from four Andean nations. 

The vote would mean goods made in Bolivia, Colombia, Ecuador and Peru from US cotton, yarn and fabric inputs would continue to be shipped tariff-free to the US until the end of this year.

And it would avoid considerable disruption for US cotton, textile and apparel firms that do business with the Andean countries.

About $250m worth of US cotton and textiles were exported to the four Andean countries in 2007. 

The finished products - made with these US yarns, fabrics, fibres, cotton and other textile inputs - are then brought back to the US duty-free under the ATPA.

"The clock is running out," warned Kevin M. Burke, president and CEO of the American Apparel & Footwear Association (AAFA). 

"The current uncertainty created by the imminent threat of expiration of the ATPA program contributes to the overall unease of the national economy." 
 
Renewal of the ATPA will also provide extra time to enable full implementation of the recently approved US/Peru Trade Promotion Agreement (TPA) and speedy approval of the pending US/Colombia TPA. 

These two TPAs are seen as key to transforming the current one-way, temporary programme into a permanent, comprehensive and reciprocal partnership.
 
US Congress first authorised duty-free benefits for Bolivia, Colombia, Ecuador and Peru in 1991 to help in their fight against illegal drug production and trafficking.

The trade preferences were renewed and enhanced under the Andean Trade Promotion and Drug Eradication Act (ATPDEA), which expired on 31 December 2006.

A further six-month period was then added, followed by an additional eight-month extension in July last year.