Co-Authored by Sharath Patil.

The Caribbean Basin Trade Partnership Act (“CBTPA”) is an Act of U.S. legislation which expired on October 1, 2020. The CBTPA sought to strengthen Caribbean basin economies by extending preferential trade and tariff treatment and increase U.S. export opportunities in those countries. Upon the expiration of the CBTPA at midnight on October 1, 2020, importers may not file otherwise CBTPA-eligible without the payment of duties and other fees set at normal trade relation duty rates.

U.S. Trade Preference Programs in the Caribbean

U.S. trade preference programs in the Caribbean Basin region, known as the Caribbean Basin Initiative (“CBI”), began in 1983 with the implementation of the Caribbean Basin Economic Recovery Act (“CBERA”). In 2000, the CBTPA expanded CBI benefits in the CBERA. The CBI programs sought to strengthen Caribbean basin economies preferential trade and tariff treatment, which was meant to liberalize Caribbean trade regimes and cause those economies to diversity their exports.

Although the effect of the CBI programs on the U.S. economy have been marginal, the CBI programs are credited with significantly benefiting certain Caribbean economies. For example, Haiti has developed significantly stronger export capacity during the program and has come to use the preferential treatment opportunities extensively. Several Caribbean Basin countries have specialized in niche exports such as t-shirts (Haiti), methanol (Trinidad and Tobago), polystyrene (The Bahamas), and fruit juice (Belize).

In considering whether a Caribbean Basin country is eligible for special treatment under CBTPA, the President is required to take a number of factors into consideration, including: (1) whether the beneficiary country has demonstrated a commitment to undertake its WTO obligations, (2) the extent to which the country protects intellectual property rights, and (3) the extent to which the country provides internationally recognized workers’ rights, among others.

The following Caribbean Basin countries are current CBTPA eligible countries:

  • Barbados
  • Belize
  • Curacao
  • Guyana
  • Haiti
  • Jamaica
  • St. Lucia
  • Trinidad & Tobago

Potential Reenactment

On September 10, 2020, the U.S. House of Representatives’ Ways & Means Committee held a hearing to consider CBTPA’s renewal. The CBTPA enjoys broad support from the U.S. and Caribbean business communities. For example, the U.S. Chamber of Commerce and a coalition of trade associations wrote a letter to U.S. Trade Representative Robert Lighthizer advocating for CBTPA’s reenactment, arguing that the CBTPA is in the economic interest of the U.S. as well as Caribbean Basin nations. The Haitian Ambassador to the United States, Herve Denis, underscored in his testimony before the Ways & Means Committee the importance of CBTPA to Haitian security, economic, and immigration concerns. Civil society advocates, however, have questioned CBTPA and other preference programs’ ability to empower the middle class in the United States and beneficiary countries. Overall, it is unclear whether CBTPA will be renewed.

Customs Implications of CBTPA Expiration

The CBTPA’s October 1 expiration has important customs implications. Upon its expiration, importers may not file otherwise CBTPA-eligible entries without the payment of duties and applicable Merchandise Processing Fee (MPF). These include tariff lines with CBTPA special program indicators (“SPI”) “R” and the following HTSUS tariff lines:

  • 9820.11.03
  • 9820.11.06
  • 9820.11.09
  • 9820.11.12
  • 9820.11.15
  • 9820.11.18
  • 9820.11.21
  • 9820.11.24
  • 9820.11.27
  • 9820.11.30
  • 9820.11.33
  • 9802.00.8044
  • 9802.00.8046

Duties must be deposited at the normal trade relations (column 1) duty rates. In the event that CBTPA is renewed, U.S. Customs and Border Protection (CBP) will provide further instructions on how to file a refund request for duties or fees.

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