The Caribbean Basin Initiative (CBI), a trade initiative initiated by the 1983
Caribbean Basin Economic Recovery Act (CBERA), is a United States program. The CBI came into effect on January 1, 1984, and aimed to provide several tariff and trade benefits to many
Central America
Central America is a subregion of North America. Its political boundaries are defined as bordering Mexico to the north, Colombia to the southeast, the Caribbean to the east, and the Pacific Ocean to the southwest. Central America is usually ...
n and
Caribbean
The Caribbean ( , ; ; ; ) is a region in the middle of the Americas centered around the Caribbean Sea in the Atlantic Ocean, North Atlantic Ocean, mostly overlapping with the West Indies. Bordered by North America to the north, Central America ...
countries. Provisions in the CBERA prevented the United States from extending preferences to CBI countries that it judged to be contrary to its interests or that had expropriated American property.
The Caribbean Basin Economic Recovery Expansion Act of 1990, known as "CBI II", made the CBI permanent. However, once the United States entered into the
North American Free Trade Agreement
The North American Free Trade Agreement (, TLCAN; , ALÉNA), referred to colloquially in the Anglosphere as NAFTA, ( ) was an agreement signed by Canada, Mexico, and the United States that created a trilateral trade bloc in North America. The ...
(NAFTA) in 1994 with Mexico it became easier for Mexico to export its products to the United States. CBI countries had lost their advantage relative to Mexico, a major competitor in industries such as textiles and apparel, so they sought to increase their own preferences and achieve "NAFTA parity". Those efforts were not successful until the 2000
Caribbean Basin Trade Partnership Act, which was broadened in 2002. Several exports from the region continue to receive preferential status in the United States, however those preferences will likely be replaced by
bilateral free trade agreement
A free trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating state (polity), states. There are two types of trade agreements: Bilateralism, bilateral and Multilateralism, m ...
s, and possibly by the proposed
Free Trade Area of the Americas.
Impact on farmers in Haiti
In the early 1980's, Haiti was self-sufficient in the field of rice production. However, the CBI called for liberalizing Haiti's economy and re-allocating nearly one-third of domestic Haitian food production toward export crops, and as a result of the subsequent shrinking of the rice industry and inundation of the market with cheap imported rice subsidized by the US government, Haitian farmers found their livelihoods crippled as they could not compete with the subsidized "Miami rice". Subsequently, rice production in Haiti plummeted, and many rural Haitians employed throughout the rice industry lost their source of income. However,
American rice producers that took in government subsidies and dumped their product on Haiti, where tariffs on rice imports shrank from 35% to 3%, benefited greatly financially.
See also
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Agriculture in Haiti
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Caribbean Basin Trade and Partnership Act
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Latin American debt crisis
The Latin American debt crisis (; ) was a financial crisis that originated in the early 1980s (and for some countries starting in the 1970s), often known as '' La Década Perdida'' (The Lost Decade), when Latin American countries reached a point ...
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Latin American economy
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Rice production in Haiti
References
External links
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* {{cite web , url=https://archive.org/details/4732328.1983.002.umich.edu/page/1418 , title=Remarks at a White House Ceremony Marking the Implementation of the Caribbean Basin Initiative - October 5, 1983 , last=Reagan , first=Ronald W. , date=October 5, 1983 , website=Internet Archive , location=Washington, D.C. , publisher=National Archives and Records Service , pages=1418–1420
United States foreign relations legislation
United States–Caribbean relations
Economy of the Caribbean
Economy of Central America
1984 in international relations
1984 in American law