25.405 Caribbean Basin Trade Initiative
Source: FAR 25.405 on acquisition.gov
Caribbean Basin country products are eligible for preferential treatment under WTO GPA-covered acquisitions, but countries joining CAFTA-DR lose this status.
Overview
FAR 25.405 outlines the requirements for treating products, construction materials, and services from Caribbean Basin countries as eligible under the Caribbean Basin Trade Initiative (CBTI) for acquisitions covered by the World Trade Organization Government Procurement Agreement (WTO GPA). The regulation also clarifies that when a country becomes party to the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), it is no longer considered a "Caribbean Basin country" for the purposes of the CBTI. This affects which countries' products and services are eligible for preferential treatment under U.S. government contracts.
Key Rules
- Eligibility of Caribbean Basin Country Products
- For WTO GPA-covered acquisitions, products, construction materials, and services from designated Caribbean Basin countries must be treated as eligible.
- CAFTA-DR Country Status Change
- Once a country joins CAFTA-DR, it loses its status as a beneficiary under the Caribbean Basin Economic Recovery Act and is excluded from the definition of "Caribbean Basin country" for CBTI purposes.
Responsibilities
- Contracting Officers: Must ensure that eligible products and services from Caribbean Basin countries are treated appropriately and update eligibility status as countries join CAFTA-DR.
- Contractors: Should verify the eligibility of their products and services based on current country designations.
- Agencies: Must monitor and implement changes in country status as notified by the U.S. Trade Representative.
Practical Implications
- This section ensures compliance with international trade agreements and proper application of preferential treatment.
- Contractors must stay informed about which countries are currently eligible under the CBTI, as status can change with new trade agreements.
- Misclassification of country status can lead to non-compliance and potential contract issues.
Under the Caribbean Basin Trade Initiative, the United States Trade Representative has determined that, for acquisitions covered by the WTO GPA, Caribbean Basin country end products, construction material, and services must be treated as eligible products. In accordance with Section 201 (a)(3) of the Dominican Republic-Central America-United States Free Trade Implementation Act (Pub. L. 109-53) (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title19-section4031&num=0&edition=prelim" target="_blank">19 U.S.C. 4031), when the CAFTA-DR agreement enters into force with respect to a country, that country is no longer designated as a beneficiary country for purposes of the Caribbean Basin Economic Recovery Act, and is therefore no longer included in the definition of "Caribbean Basin country" for purposes of the Caribbean Basin Trade Initiative.