Caribbean Basin Initiative

In response to a congressional request, GAO provided information on legislation and agency rules, regulations, and decisions enacted to constrain the effectiveness of the 1983 Caribbean Basin Initiative (CBI) legislation.

GAO noted that Congress enacted CBI to: (1) permit the United States to import eligible products from designated countries in Central America and the Caribbean duty free; and (2) promote economic and political stability by attracting foreign and domestic investment in these countries. GAO found that the Tax Reform Act of 1986: (1) restricted duty-free imports of ethanol from CBI countries; (2) would bar the International Trade Administration from funding activities such as trade shows and seminars which convey the advantages of relocating U.S. businesses overseas; (3) would direct the U.S. Travel and Tourism Administration to promote travel only to the U.S. and its possessions, preventing the agency from funding policy studies or technical assistance which could benefit the tourism industry in the Caribbean Basin; (4) would restrict Agency for International Development (AID) funding of activities involving foreign agricultural exports which could compete with U.S. production; and (5) would restrict AID-funded activities to promote the export of certain manufactured items in direct competition with U.S. production.