Caribbean Basin Country

A Caribbean Basin Country is a nation benefiting from U.S. trade preferences under the Caribbean Basin Economic Recovery Act, with products from those countries treated as eligible under the Trade Agreements Act for qualifying federal procurement contracts.

What is a Caribbean Basin Country?

The Caribbean Basin Economic Recovery Act (CBERA, 19 U.S.C. § 2702) established a preferential trade program to support economic development in Caribbean and Central American countries. For federal procurement purposes, products from CBERA-designated countries are treated as eligible products under the Trade Agreements Act (TAA), qualifying them for non-discriminatory treatment in U.S. federal purchases above TAA thresholds.

CBERA-designated Caribbean Basin Countries for procurement purposes include:

Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, British Virgin Islands, Costa Rica (also covered by CAFTA-DR), Curacao, Dominica, Dominican Republic (also covered by CAFTA-DR), El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Montserrat, Netherlands Antilles, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Trinidad and Tobago.

For a product to qualify as a Caribbean Basin Country end product:

1. The product must be substantially transformed in the qualifying country, OR
2. The product must be wholly grown, produced, or manufactured in the qualifying country.
3. At least 35 percent of the appraised value must consist of the cost of materials produced in the designated country, in a WTO GPA country, or in the United States.

The Caribbean Basin Initiative (CBI) thresholds for procurement eligibility align with the general Trade Agreements Act thresholds - approximately $182,000 for goods and services and approximately $7 million for construction.

Why Caribbean Basin Country status matters for government contractors

Manufacturers operating in Caribbean Basin countries gain a strategic advantage in competing for U.S. federal contracts because their products qualify for TAA eligibility, unlike products from non-designated countries such as China or India. U.S. contractors can also leverage Caribbean Basin manufacturing as an alternative to non-compliant supply chains.

Example

A textile manufacturer operating facilities in Honduras - a CAFTA-DR country and Caribbean Basin Country - produces uniforms for federal agency customers. The uniforms are substantially manufactured in Honduras using materials partially sourced from the United States. The product qualifies as a Caribbean Basin Country eligible product under both CAFTA-DR and CBERA for TAA-covered federal contracts. The manufacturer's federal customers can purchase the uniforms on contracts above TAA thresholds without violating Buy American Act restrictions.

Frequently Asked Questions

Is Haiti treated differently from other Caribbean Basin Countries?

Haiti qualifies as both a Caribbean Basin Country and a Least Developed Country (LDC) for TAA purposes, which means its products receive eligible product treatment under both designations. Haiti also benefits from the HOPE Act (Haitian Hemispheric Opportunity through Partnership Encouragement Act), which provides additional trade preferences for Haitian textile and apparel products.

Does the Berry Amendment affect Caribbean Basin Country products for DoD?

Yes. The Berry Amendment (10 U.S.C. § 4862) imposes additional domestic content requirements for textiles, apparel, food, hand tools, and certain other categories purchased by DoD, and generally overrides TAA and CBERA preferences for covered items. DoD purchases of Berry Amendment-covered items must be from domestic sources regardless of whether the supplier is in a designated country.

Can a product assembled in a Caribbean Basin Country from Chinese components be TAA-eligible?

This depends on whether the assembly in the Caribbean Basin Country constitutes a "substantial transformation" that changes the product's essential character. Simple assembly of imported components without significant transformation of those components is generally not considered a substantial transformation, and the product retains its country of origin from the prior transformation (typically China). Meaningful manufacturing processes - not just assembly - must occur in the Caribbean Basin Country.

How does a contractor document Caribbean Basin Country eligibility?

The contractor certifies the country of origin using FAR 52.225-5 (Trade Agreements) by identifying the country of origin for each end product offered. Supporting documentation (supplier certifications, bills of lading, manufacturing records) should be maintained but is not routinely submitted unless requested by the contracting officer or during an audit.