FAR 25.405—Caribbean Basin Trade Initiative.
Plain-English Summary
FAR 25.405 explains how the Caribbean Basin Trade Initiative affects federal acquisitions that are covered by the WTO Government Procurement Agreement (GPA). It states that Caribbean Basin country end products, construction material, and services must be treated as eligible products for those covered acquisitions, which means they receive the procurement preference treatment required by the trade agreement framework. The section also ties the rule to the Dominican Republic-Central America-United States Free Trade Implementation Act and explains that, once the CAFTA-DR agreement enters into force for a particular country, that country stops being a beneficiary country under the Caribbean Basin Economic Recovery Act and is no longer included in the FAR definition of a “Caribbean Basin country” for purposes of this initiative. In practice, this section tells contracting personnel when Caribbean Basin-origin items and services qualify for consideration and when a country must be removed from Caribbean Basin status because CAFTA-DR has taken effect. It matters because country eligibility directly affects evaluation, trade agreement coverage, and whether a product or service can be treated as eligible under the applicable procurement rules.
Key Rules
Eligible under WTO GPA
For acquisitions covered by the WTO GPA, Caribbean Basin country end products, construction material, and services must be treated as eligible products. This means they cannot be excluded solely because they originate in a Caribbean Basin country.
Applies only to covered acquisitions
The rule is tied to acquisitions covered by the WTO GPA, so contracting personnel must first determine whether the procurement falls within that trade agreement coverage before applying the Caribbean Basin Trade Initiative treatment.
CAFTA-DR changes country status
When CAFTA-DR enters into force with respect to a country, that country is no longer a beneficiary country under the Caribbean Basin Economic Recovery Act. As a result, it is removed from the FAR definition of a Caribbean Basin country for this initiative.
Country eligibility is dynamic
A country’s status can change over time based on trade agreement implementation. Contracting officers must use the current legal status of the country at the time of the acquisition, not an outdated list or prior designation.
Responsibilities
Contracting Officer
Determine whether the acquisition is covered by the WTO GPA and whether the offered end products, construction material, or services qualify as Caribbean Basin country items. The contracting officer must also verify current country status, especially when CAFTA-DR has entered into force for a country, and apply the correct eligibility treatment in the solicitation and evaluation.
Contractor
Identify the country of origin for end products, construction material, and services accurately and ensure representations and supporting information reflect current trade status. The contractor should not claim Caribbean Basin eligibility for a country that has lost beneficiary status due to CAFTA-DR implementation.
Agency acquisition staff
Maintain awareness of current trade agreement designations and ensure solicitations, clauses, and evaluation procedures reflect the correct country lists and eligibility rules. They should support contracting officers by using up-to-date trade agreement and country-status references.
U.S. Trade Representative / Trade policy authorities
Determine and communicate the trade policy status that makes Caribbean Basin country products, construction material, and services eligible under WTO GPA-covered acquisitions, and recognize when CAFTA-DR implementation changes a country’s status for Caribbean Basin purposes.
Practical Implications
Contracting officers must check both trade agreement coverage and country status before deciding whether Caribbean Basin-origin items are eligible.
A common pitfall is relying on an outdated beneficiary-country list after CAFTA-DR has entered into force for a country.
Offerors should be careful not to assume that all Caribbean Basin countries remain eligible indefinitely; eligibility can end when the country transitions under CAFTA-DR.
This section can affect evaluation and responsiveness because origin-based eligibility may determine whether an offered product or service is acceptable under the solicitation.
Agencies should keep country-status references current so that solicitations and award decisions are consistent with the latest trade agreement changes.
Official Regulatory Text
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) ( 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.