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Foreign Assistance: U.S. Support for Caribbean Basin Assembly Industries

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Report Type Reports and Testimonies
Report Date Dec. 29, 1993
Report No. NSIAD-94-31
Subject
Summary:

In response to increased competition, many manufacturers, particularly those in the apparel industry, have cut costs by relocating their assembly operations to offshore sites, including the Caribbean Basin. Under production-sharing arrangements, Basin workers assemble parts made in the United States and finished products are returned to the U.S. market. The United States has provided significant amounts of bilateral foreign assistance to the Caribbean Basin--nearly $17 billion between 1980 and 1992. This report reviews (1) the impact that U.S. policies and programs have had on the growth of Basin assembly industries and on the decisions of U.S. companies to invest in these industries; (2) the relationship between Section 599, which prohibited federal agencies from offering financial incentives for U.S. firms to relocate jobs overseas, and other foreign assistance objectives; and (3) implications for the future of U.S. foreign assistance and trade policies in the Basin. This report focuses on the following four countries: Costa Rica, the Dominican Republic, El Salvador, and Honduras.

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