Reagan offers the Caribbean duty free access against Cuban influence

In February 1982 Ronald Reagan told the Organization of American States that falling prices for Caribbean exports and rising prices for imports, energy above all, had produced debt, balance of payment problems and unemployment across the region. His answer was the Caribbean Basin Initiative. It widened the list of goods that could enter the United States free of duty, and it ran twelve years, a span chosen so investors would have time to commit. Reagan set the plan against Cuba, the government in Grenada and Soviet backed support for revolution in Central America. The machinery came from the United States tariff code of 1963. Under items 806.30 and 807.00, goods put together abroad from American made parts were taxed only on the value added overseas, and that value was labour. Haiti’s share of the process was sewing, so duty fell on Haitian wages alone.