for AID to help CBI producers produce for their own market and that such AID monies for artificially creating competition for Florida's producers be withdrawn. As Secretary Abrams noted in the prepared statement (at p. 10) before the Subcommittee quoting Vice President Bush, the Administration will "fight any proposal in any form that would inhibit the free flow of trade from the Caribbean." FFVA would However, the not presume to so inhibit trade with the Caribbean. "free flow of trade" is not free; the cost of maintaining and enhancing CBI trade is great, the Administration's request for aid to the CBI region for FY 87 is $1.5 billion. And, the burden of this artificially enhanced trade is falling disproportionately on producers of winter fruits and vegetables in Florida. FFVA believes it is incumbent on Congress to assure that these enormous sums of money be spent wisely with as little harm as possible to domestic industries. We don't think this has been happening. In fact, FFVA believes it soon may be time to seek a Florida Agricultural Economic Recovery Act as a direct result of the CBI program. We have not mentioned the fast-track relief embodied in the CBERA mainly because we don't think it is relevant to an assessment of the CBERA since it has not been used. And, in any case, we are not at all certain that such relief will be effective for perishable commodities. In summary, the Florida Fruit & Vegetable Association is concerned that the gains the U.S. has paid for in the CBI are not made at the expense of Florida's fruit and vegetable producers. Based on the information we have obtained from USDA and AID, we are convinced that substantial benefits are being given outright in the form of grants to CBI countries to produce winter fruits and vegetables for the U.S. market. We think this situation is unwise since producers in the the U.S. and Caribbean will receive severely depressed prices for their commodities. This situation also is unfair since Florida's producers will bear the brunt of this artificially created competition. At a minimum, all assistance given under the CBI should be reviewed and, in addition to the perceived benefits, the harm to Florida's producers should be assessed. If the harm to Florida is too great, then the assistance should not be given. Moreover, we ask that Congress which appropriates these monies be responsible for making this judgment as we do not think the State Department can be unbiased in making this decision. Mr. Chairman, as we said at the outset FFVA fully concurs in the objectives of the CBI but we must not let our zeal to help our neighbors overtake our legitimate concerns that such government largess not harm U.S. producers. We would be pleased to supplement this statement with any information you may need. STATEMENT SOL C. CHAIKIN, PRESIDENT INTERNATIONAL LADIES' GARMENT WORKERS' UNION, AFL-CIO ON THE CARIBBEAN BASIN INITIATIVE March 5, 1986 This statement is submitted on behalf of the International Ladies' Garment Workers' Union and its more than 230,000 members employed in the production of women's and children's apparel throughout the United States and Puerto Rico. Needless to say, our union has a deep concern over the damage done by the flood of apparel imports to the domestic apparel industry and its workers. I regret I was not able to appear in person at your hearing, although the ILGWU was represented by the testimony presented on behalf of the American Fiber, Textile and Apparel Coalition (AFTAC). Along with others in AFTAC, the ILGWU had serious misgivings about the Caribbean Basin Initiative when the CBERA was first enacted in 1983. We still do. However, even when judged against the program's own announced goals, it must be deemed to have been a failure thus far. The key feature of the program was the professed expansion of U.S. imports from CBI countries. This has not happened. In 1983, before the provisions of the CBERA took effect, total U.S. imports from the 21 beneficiary countries amounted to $6.53 billion dollars. In 1984, the first year of the program, imports amounted to $6.68 billion or only 2.3 percent more than before the program started. In 1985, total imports dropped 10 percent to $6.02 billion, leaving CBI countries in a worse position than before the CBERA was enacted. The one area where imports from the CBI countries have grown significantly has been in apparel, which the bill deemed so sensitive that it was excluded from duty-free treatment. In 1983, U.S. imports of apparel and accesories from CBI countries amounted to $387.4 million. In 1984 they rose to $482.5, a gain of 24.5 percent. In 1985 they soared to $626.4 million, a gain of 29.8 percent. Apparel represented 5.9 percent of imports from CBI countries in 1983; in 1985 it was 10.4 percent of the total. Whatever aid this growth in apparel shipments may have been to CBI countries, it had tragic consequences for an already burdened domestic industry. The gain of $239 million in CBI apparel shipments represents the loss of nearly 15,000 apparel jobs in the United States. Any expectation that denial of duty-free status apparel imports from CBI countries would hold down their growth has been proven wrong beyound a shadow of doubt. Indeed, the apparel import growth has been the key sustaining segment in the entire CBI program. A look at future plans for the CBI also causes alarm in light of recent developments. In the course of his visit to Grenada, President Reagan announced a program to implement a new three-tiered access program for CBI shipments of apparel and made-up articles. The maximum access (a euphemism for either no quota or a very high one) will be given goods sewn in CBI countries from U.S.-made fabric that has been cut in the U.S. A middle tier of access will be offered to goods made from U.S. fabric but cut in the foreign country. The lowest access tier will apply to goods made of foreign fabric. The new program is being sold by the Administration as one designed to increase U.S. employment. This is not only fantasy, but very dangerous fantasy. The new program is actually designed to drain jobs out of the United States. A series of questions and answers issued by the Administration to explain the new program states that the priority access for goods made out of American fabric will increase jobs for U.S. textile and fiber workers. At best this will have a very short-term effect because the policy will undercut the prime market for U.S. textile makers -- the domestic apparel industry. The most blatant and misleading statement of the Administration explanation is the claim that the program will increase the number of apparel jobs in the United States. An unnamed firm is cited as having increased its cutting staff in the U.S. after it opened an assembly plant in a CBI country. However, cutting represents only one out of every 30 jobs in the apparel manufacturing process. Whether a single plant adds workers, however, is immaterial. What counts is the net effect of the program on total apparel jobs in the U.S. Here, the evidence of further job erosion is overwhelming. The probable impact of the new three-tiered access program can be gauged from an examination of various alternative scenarios. The first instance would be a firm that now manufactures garments in the United States and transfers its sewing and other assembly work to a CBI plant. The cutting work - one job out of 30 majority of jobs - - would remain in the U.S. The vast the sewing, pressing and other related will be completely lost to the domestic economy. A second scenario involves a newly established company. If it creates cutting operations in the U.S. it adds only that small fraction. None of the sewing and assembly jobs are added. But that looks only at one company. Apparel consumption in the U.S. has grown very slowly over the past decade, at a rate of around 2 percent per year. For all intents and purposes, a new firm can exist and prosper only if some older firm dies because of the competetive advantage of the newcomer and makes room for it. new firm is exactly the same as in the first case loss of U.S. jobs. The net result of adding this - a major net |