Some considerations on the possible effects of the failure of the United States Congress to renew the ATPDEA

This brief note presents some thoughts about the possible effects of the failure to renew the Andean Trade Preferences and Drug Eradication Act (ATPDEA); and its possible expiration this coming December 31. United States President, George W. Bush, asked his country's Congress to extend the validity of the trade preferences granted to the Andean countries under the ATPDEA. That news was welcomed and applauded by the Andean countries, which hailed this measure and promptly thanked the U.S. leader for his gesture. Even so, it is evident that there are Congressmen in the United States who do not back the bill to extend the ATPDEA. Considering this situation and the possible risk of the failure of President Bush's initiative and of the efforts made by the Andean Governments and the Secretariat of the Andean Community,1 ECLAC, conscious of the pressing need for that extension, has prepared the following technical note to contribute to an understanding of the problem, pointing up the risks the countries would face if they were to lose the present conditions for their access to the Unites States market. Our intention is to voice a warning to the political bodies and business organizations of the United States, informing investors, businessmen, sector authorities, representatives of non governmental organizations, and multilateral international institutions about the grave risk the neighboring countries of Bolivia, Ecuador, Colombia and Peru run in the light of the uncertain trade situation of their businessmen, investors, exporters and, above all, labor force, whose destabilized jobs are now in serious jeopardy. The lines below explain the true importance of the ATPDEA regime for the four Andean countries and for the United States, in the areas of trade, welfare, employment, migration pressures, drug control efforts, energy security, regional political stability and contribution to the economic development to which the less favored countries of the region so aspire. The autonomy of the United States Congress in its political decision-making is not open to doubt. Even so, we deem it a legitimate concern to point up some elements that should not be overlooked in the debate, particularly because the possible consequences affect the very lives,security and stability of the citizens and countries of the hemisphere, placing at risk not only a large percentage of the inhabitants of the countries affected, but also, indirectly, those of the United States and the rest of the international community. The cost of failing to renew the ATPDEA --measured in loss of jobs, political instability, recession, loss of welfare, etc.-- appears to be very high, if one considers that the imports covered by that Act represent barely 0.64% of total United States imports. All the advances effectively made in reducing the number of hectares sown with drug crops from over 200 thousand to barely 160 thousand, in the contribution toward diversifying Andean exports and in the positive contribution to the growth and creation of jobs in both the beneficiary countries and the United States are threatened by the possible failure to extend the ATPDEA. If this happens, a vicious circle would be put into play that would, inter alia, a); reverse the accomplishments in drug eradication; b); increase migration pressures on the United States; c); complicate the political panorama as a result of pro-cyclical economic pressures; d); make the United States look in the eyes of the world as though it were turning its back on its commitments to help improve living conditions in the developing countries; and, indirectly, it would reduce the welfare of local consumers already benefited by the ATPDEA, also complicating the labor situation in the sectors that generate direct and indirect jobs in the United States.