ATPA Renewal: Background and Issues

M. Angeles Villarreal
Specialist in International Trade and Finance

The Andean Trade Preference Act (ATPA) extends special duty treatment to certain U.S. imports that meet domestic content and other requirements from designated countries in the Andean region. The purpose of ATPA is to promote economic growth in the Andean region and to encourage a shift away from dependence on illegal drugs by supporting legitimate economic activities. The countries originally designated to qualify for trade preferences under ATPA were Bolivia, Colombia, Ecuador, and Peru. However, trade preferences for Bolivia were suspended on December 15, 2008, by the Bush Administration because Bolivia failed to meet ATPA eligibility criteria. In his June 2009 report to Congress, President Obama extended the Bush Administration's determination that Bolivia failed to meet eligibility criteria. Bolivia may only be reinstated as a beneficiary country under ATPA if Congress approves legislation to do so. 

ATPA (Title II of P.L. 102-182) was enacted on December 4, 1991. It was renewed and modified under the Andean Trade Promotion and Drug Eradication Act (ATPDEA; Title XXXI of P.L. 107- 210) on August 6, 2002, extending trade preferences until December 31, 2006. Since that time, Congress has favored short-term extensions of ATPA. The most recent extension of ATPA continued trade preferences for Colombia, Ecuador, and Peru until December 31, 2010 (P.L. 111- 124). On December 14, 2009, the U.S. House of Representatives passed the bill to extend trade preferences for the three countries by unanimous consent (H.R. 4284). On December 22, 2010, the U.S. Senate passed the measure, also by unanimous consent. The bill was signed into law by President Obama on December 28, 2009. Without this extension, the program would have expired on December 31, 2009. 

The previous extension of ATPA (P.L. 110-436) extended preferences for Colombia and Peru until December 31, 2009, and until June 30, 2009, for Bolivia and Ecuador, with possible six-month extensions for Bolivia and Ecuador under certain conditions. For Ecuador, preferences were to be automatically renewed unless the President found that Ecuador was in violation of the eligibility criteria. On June 30, 2009, President Obama issued a report to Congress continuing Ecuador's eligibility for ATPA trade benefits through the end of 2009. For Bolivia, ATPA trade preferences were to be extended only if the President determined that Bolivia had met program eligibility criteria. However, President Bush suspended Bolivia's designation as a beneficiary country in late 2008 because of its failure to meet the eligibility criteria. In June 2009, President Obama extended the Bush Administration's determination that Bolivia failed to meet ATPA criteria. 

In the second session of the 111th Congress, policymakers may reevaluate the extension of ATPA trade preferences for Ecuador, Colombia, and Peru, and could decide to reconsider the suspension of preferences for Bolivia. Policymakers may also consider broader reform of U.S. trade preference programs, including the Generalized System of Preferences. Some Members of Congress believe that if ATPA trade preferences are not extended, the United States and the Andean countries risk losing some of the economic progress that has been achieved over the eighteen-year life of the program. Supporters of ATPA argue that the program should continue to reinforce the U.S. commitment to the "alternative development" counternarcotics strategy. Critics of ATPA argue that unilateral trade programs are ineffective; that the ATPA has forced U.S. producers to compete with lower-cost Andean imports; and, in the cases of Bolivia and Ecuador, that trade preferences should not be extended to countries that do not support U.S. foreign and trade policies.


Date of Report: January 21, 2010
Number of Pages: 15
Order Number: RS22548
Price: $29.95

This CRS report can be ordered over the phone at (301) 253-0881 or by email at Penny Hill Press (congress@pennyhill.com). Be sure to include the document number for the fastest possible service. Please specify whether you want electronic delivery (pdf file or postal delivery).