Trade Package for Africa, Central America Advances

The White House on Friday backed a congressional compromise that would extend new trade privileges to Africa, the Caribbean and Central America, saying it would give an economic boost to the world’s poorest nations.

“This bill is a solid compromise effort that will create a framework for expanding economic growth and opportunity in both regions,” U.S. Trade Representative Charlene Barshefsky said in a statement.

Senate Majority Leader Trent Lott (R-Miss.) said he expected the legislation to win final approval before the end of May. Its passage could give a much-needed boost to President Clinton’s free-trade agenda and bolster congressional support for a landmark trade agreement with China.

Clinton urged lawmakers to send him the bill early next month.

It would be the first significant trade bill to be approved by Congress since lawmakers authorized U.S. participation in the World Trade Organization five years ago.

Still, the American Textile Manufacturers Institute, which represents U.S. producers, said the compromise could have a “detrimental impact” on the U.S. textile industry.

On Thursday, leaders in the House and Senate reached a tentative agreement, which would grant more than 70 countries in sub-Saharan Africa, the Caribbean and Central America greater duty-free access to U.S. markets. Lott said congressional staff should finalize the package in the next week.

Under the tentative accord, House and Senate leaders agreed to extend duty-free access to apparel made from African as well as U.S. fabric. But these shipments would be subject to a cap, which would grow from 1.5% of all U.S. apparel imports to 3.5% over eight years.

For the poorest countries in Africa, there would be no restrictions on the source of the fabric for four years, but imports would also be subject to a 1.5% to 3.5% cap.

Congress would also provide duty-free access to apparel made of Caribbean and Central American fabric. However, these benefits would apply to only 250 million square meters of knit apparel, which could be cut and assembled in the region with regional fabric but be made of U.S. yarn.