Central American Free Trade Agreement Ethanol Provisions· The Central American Free
Trade Agreement (CAFTA) does not
increase overall access to the U.S.
ethanol market.
· Under the Caribbean Basin
Initiative (CBI), countries in Central America and the Caribbean have had duty-free access to the United States since 1989
for ethanol from regional feedstocks. Access for ethanol derived from
non-regional feedstocks has been limited by a
CBI quota equal to 7% of total U.S. ethanol consumption.
· CAFTA simply establishes
country-specific shares for El Salvador and Costa Rica within the existing CBI quota, without
increasing the quota size. Other CAFTA
countries retain existing CBI benefits on ethanol.
· Strict rules-of-origin
prevent transshipment of ethanol from other countries.
· The country-specific shares
for Costa Rica and El Salvador will have the effect of limiting the
overall CBI quota available to other
countries in the Caribbean and Central America.
· Costa Rica, El Salvador, and
Jamaica are the only countries that have ever exported ethanol under the CBI quota, and at least 50% of the quota typically goes
unused.
· Between 1995 and 2004,
U.S. ethanol consumption grew an
average of 11% per year.
Ethanol Production and Imports (2002)
U.S. Production: 2.3 billion gal.U.S. Imports: 141 million gal.CBI Quota: 120 million gal.In-quota Imports: 48 million gal. --From El Salvador: 4.5 million gal. --From Costa Rica: 12 million gal.
CAFTA Shares:
El Salvador: 5.2 million gallons plus 1.3 million gallons per year, not to exceed 10% of quota.
Costa Rica: 31 million gallons. CBI Quota (2004): 187 million gallons
Avg. Quota Growth: 11% per year (‘95-‘04)
