Congress should not now revise the decisions it made when it passed the CBERA, particularly the revisions reflected in H.R. 1567, H. R. 1720 and H.R. 4094. Such revisions would only undermine the CBI and send a clear message to friendly nations in the Caribbean that the CBERA was merely a gesture, not a real commitment to aiding Caribbean Basin countries. If Congress demonstrates its willingness to withdraw CBI benefits from a new product every time a domestic special interest opposes entry of such a product under the CBERA provisions, no prospective investor will rely on the promise of CBERA incentives. This is particularly true if a project such as that of Allied, which has complied with every statutory and regulatory requirement, and which so directly furthers the purpose of the CBERA, can be derailed by an attack from special interest groups. Congress should not allow this to happen. Respectfully submitted, авл Richard B. Berryman, P.C. Fried, Frank, Harris, Shriver & Jacobson Counsel to Allied Ethanol Ltd. The American Hotel & Motel Association is a federation of hotel and motel associations located in the fifty states, the District of Columbia, Puerto Rico and the Virgin Islands, having a membership in excess of 8,800 hotels and motels accounting for over 1.25 million rentable rooms. Inclusive in our membership are all of the major hotel and motel chains. Our purpose in providing this statement to your subcommittee is to add our support to the individuals who recently testified before your subcommittee on the importance of tourism to the Caribbean Basin. We are aware that the primary orientation of the Caribbean Basin Initiative is duty free trade flowing from designated beneficiary countries to the United States. Also, that an indirect benefit to tourism has been provided by extending to CBI countries sharing tax information with the United States equal tax treatment for conventions held in those countries as is enjoyed by countries in what is known as the North American area. While we applaud this recognition of the importance of convention business in providing much needed revenue and jobs in the Caribbean Basin we must point out that very few of the countries able to avail themselves of this opportunity have chosen to do so. The American Hotel & Motel Association feels that what is needed is an awareness that tourism is a very significant economic factor in the entire Caribbean Basin. The Federal government, in addressing itself to the economic health of this area, must undergo a basic reorientation and recognize that tourism and its continued growth must be a primary focus of any efforts directed toward the Caribbean Basin. The main asset offered in the Caribbean is the area's magnificent climate and unparalleled natural beauty which combine to make the region one of the world's great vacation destinations. Tourism is central to the economy of this entire region and is therefore the key to any long term stability. It is not our purpose to recommend a particular course of action to this subcommittee but rather to suggest that a proper acknowledgment of tourism as a primary industry for the Caribbean Basin should lead to investigations by the subcommittee of the current impediments to development of this industry. From these investigations, methods of increasing economic investment in tourism can be developed and implemented. It is clear from its first two years of operations, that the tax incentives for business conventions has not provided the needed impetus. While this acknowledgment of equality with the North American area is necessary and should be continued, it should not be seen as an appropriate response which prevents this subcommittee from seeking additional economic stimulus. The problems and complexities involved in developing the tourism industry are many and it is beyond the scope of this brief statement to spell them out. What is called for at this stage is a recognition of the primary importance of the tourism industry and a willingness to look into its problems, to develop responses that solve these problems and to promote an economic climate that encourages further development of the hotel industry and related supporting industries in the Caribbean Basin. We appreciate the opportunity to provide this statement to be included in the record of testimony on the Caribbean Basin Initiative. Sincerely, ALM/bjl Albert L. McDermott STATEMENT OF THE AMERICAN IRON AND STEEL INSTITUTE The American Iron and Steel Institute is pleased to present the following comments for inclusion in the public record of the House Ways and Means Oversight Subcommittee hearings on the impact and effectiveness of the Caribbean Basin Initiative. The American Iron and Steel Institute is the principal trade association of the U.S. steel industry. In the Subcommittee's press release of Februry 5, 1986 announcing the oversight hearings, comments were requested on "problem areas [regarding the CBI that] need to be identified and addressed by the Committee in a timely fashion." In the American Iron and Steel Institute's testimony before the Committee on Ways and Means in 1983 on the Caribbean Basin Initiative, the AISI stated its strong conviction that CBI benefits should not apply to steel products (steel products include steel mill products and fabricated steel products). We noted that, if the CBI did not exclude steel products, the program would necessarily conflict with other government policies concerning steel trade by which the U.S. government was attempting to limit steel imports unfairly traded imports. In the final legislation passed by Congress and signed by President Reagan, other import-sensitive industries such as textiles, apparel, luggage, etc., were exempted from the CBI for import sensitivity reasons. Unfortunately, steel was not excluded. - especially A principal concern of the AISI at that time was that major steel exporting countries could circumvent tariffs, quotas, antidumping or countervailing duties, etc., by processing their steel products in the Caribbean Basin. Such fabrication in the Caribbean Basin, using low cost fabricating operations, could easily take advantage of the Customs Service's rules of origin and enter the U.S. market duty-free under the Caribbean Basin Initiative. Unfortunately, our fears regarding the Caribbean Basin Initiative are coming to pass. For example, last fall the U.S. Customs Service ruled that sheet products produced in Brazil and fabricated into oil country tubular goods in Panama would thereby acquire Panamanian nationality and, in addition, could enter the United States duty-free under the CBI. This Panamanian OCTG facility, once built, would therefore have the effect of increasing the importation of OCTG into the United States, and indirectly increasing Brazilian shipments of steel mill products as well. The Customs Service has other CBI related country of origin determinations under review also, such as galvanizing sheet, drawing wire rod into wire, etc. All of the schemes have as their purpose the circumvention of the President's steel program. Such schemes become even more attractive, obviously, in the Caribbean Basin, where the Caribbean Basin Initiative benefits can be used to lower costs of importations into the U.S. We believe that it is critical that the Congress reassess the CBI with regard to steel products shipments from the Basin. We believe that current law has provided an additional incentive for countries covered by the President's steel import program to increase their shipments of steel products to the U.S. through minor fabrication operations in the Basin. Such developments undermine the purposes of the President's program and the Steel Import Stabilization Act of 1984: to grant a period of relief from imports to the domestic steel industry in order to allow the U.S. industry time to modernize its facilities. In sum, we believe that the prediction we made in 1983 that the CBI would be used to increase unfairly traded and disruptive imports of steel products into the United States is increasingly likely to materialize unless Congress acts to eliminate steel products from those covered by the CBI. We strongly urge Congress to take this action. |