On March 6, 2024, a bipartisan and bicameral group of members of Congress introduced the "Americas Trade and Investment Act" or "Americas Act" (S.3878/H.R.7571). The Americas Act reimagines U.S. foreign and economic policy towards Latin America and the Caribbean by taking a more comprehensive approach to the hemisphere. The bill aims to "establish a regional trade, investment, and people-to-people partnership of countries in the Western Hemisphere to stimulate growth and integration through viable long-term private sector development." Specifically, the bill proposes expanding the United States-Mexico-Canada Agreement (USMCA) and undertaking tariff reforms to promote investment and economic development across the hemisphere.

Senators Bill Cassidy (R-LA) and Michael Bennet (D-CO) and House members Maria Elvira Salazar (R-FL) and Adriano Espaillat (D-NY), who introduced the legislation, say the Americas Act is the "only major strategic economic plan to counter China's growing geopolitical and economic power in the Western Hemisphere, and increase safety and stability to decrease regional migration." Accordingly, the goals of the Americas Act are to (1) better position U.S. engagement with Latin American and Caribbean partners as an alternative to China's Belt and Road Initiative and (2) motivate the U.S. private sector to redirect funding towards Latin America as they slow investments in China.

Legislative Overview

The Americas Act creates the Americas Partnership, a partnership of shared economic and social interests across the Western Hemisphere. The Americas Partnership is structured around three pillars: (1) trade; (2) investment; and (3) people-to-people. Each pillar aims to expand regional partnerships with democracies in the Western Hemisphere. In particular, the bill provides for expansion of regional trade benefits — including possible expansion of USMCA and other regional agreements — while also providing for enhanced enforcement aimed at forced labor and other risks. In addition to provisions focused on expanded trade with the Americas, the bill also includes provisions increasing U.S. tariff rates imposed on goods from all trading partners, and provisions providing tax credits for re-shoring and near-shoring of manufacturing activities to the United States, or, in the case of near-shoring expenses, to an Americas Partnership country.

As a threshold matter, to join the initiative and become eligible for trade benefits and financial assistance, each Americas Partnership country will be required to sign a Memorandum of Understanding (MOU), establishing standards on democracy, trade, and the rule of law. Failure to comply with the MOU will result in suspension or expulsion. The Americas Act builds on the Americas Partnership for Economic Prosperity (APEP) program, with initial APEP partnership countries grandfathered into the Americas Partnership program once they have successfully completed the MOU process. The legislation precludes completion of MOUs with Bolivarian Alliance member countries (currently Cuba, Venezuela, Bolivia, and Nicaragua) and explicitly prohibits extension of preferential trade benefits to those countries.

Key takeaways for each pillar are described below:

Trade. The trade pillar directs the office of the U.S. Trade Representative (USTR) to begin negotiations with USMCA partners on allowing Americas Partnership countries to join an expanded USMCA, provides a limited Trade Promotion Authority for that purpose, and highlights Costa Rica and Uruguay as prime trial candidate countries for USMCA expansion. Under this pillar, the Americas Act would grant certain countries, initially Ecuador and Uruguay, temporary market access for goods through the Caribbean Basin Trade Preference Act expansion with the goal of eventual full-scale free trade agreements.

An Americas Partnership Threshold Program, modeled after the Millennium Challenge Corporation Threshold Program, would be established to help countries become compliant with USMCA standards. The Americas Act encourages USTR to identify mechanisms for expansion of USMCA and other free trade agreements in the region, with an eye toward harmonization, cumulation and co-creation, and creating economies of scale, all of which could reduce the cost of investment and manufacturing in the region.

The trade pillar targets the textile and apparel industry by establishing a grant program to help bring textile and apparel investment back to the region from China. In particular, the bill creates a re-shoring and near-shoring account within the U.S. Department of Treasury to finance re-shoring and near-shoring industries and supply chains. The trade pillar establishes up to US$60 billion of loans and grants to be available for companies seeking to re-shore and near-shore industry from China to the region, with an additional US$10 billion in allocated tax credits for qualifying re-shoring and near-shoring expenses. There are also provisions for manufacturers of medical equipment, medical devices, and medical supplies to grow and expand this key industry.

The bill also instructs USTR to review the 1974 General Agreement on Tariffs and Trade (GATT) for U.S. bound rates, with a focus on tariff reciprocity. The bill's authors anticipate that this GATT reset will create investment momentum for existing U.S. Free Trade Agreements (FTAs) like the USMCA and the Dominican Republic-Central America Free Trade Agreement, where U.S. companies are looking to invest in countries where they have treaty-based tariff protection. Many Americas Partnership countries already have FTAs with the United States, so the legislation's requirement to increase tariffs on non-FTA partners through GATT reciprocity will make those FTAs more valuable and incentivize further investment.

Investment. Similar to the trade pillar, the investment pillar aims to re-shore and near-shore businesses and opportunities by providing loans, grants, and tax credits. This pillar modifies the BUILD Act of 2018 (H.R. 5105/S.2463) by creating a "Build Americas Unit" within the U.S. International Development Finance Corporation (DFC) to build more resilient supply chains and more effectively meet the needs of the Americas Partnership countries. This unit would have access to DFC's borrowing authority and would permit simplified loans and investments and expanded eligibility. To ensure the established goals can be accomplished, this pillar provides for an increase in DFC's total borrowing authority from US$60 billion to US$90 billion and increases the aggregate loan, guarantee, and insurance authority of the Export-Import Bank from US$135 billion to US$175 billion.

The investment pillar also establishes a "transformational energy development" program to support the transition to clean and renewable energy in the region.

People-to-People. The people-to-people pillar contains a number of provisions to support the Americas Partnership, strengthen relationships, and enhance U.S. leadership in the region. In addition to providing humanitarian assistance and development assistance for Americas Partnership countries, this pillar establishes an American University of the Americas; expands the number of Peace Corps volunteers in partner countries; increases existing State Department programs such as the International Visitor Leadership Program; re-establishes the university scholarship program for high-performing students from Latin America and the Caribbean; and establishes a biennial presidential summit to showcase successful investments for partner countries.

In addition, to complement these main pillars, the Americas Act establishes critical reforms across multiple U.S. government agencies and also envisions creating several new entities which would facilitate trade and commerce, assist in the administration of the new partnership, and help fund key initiatives including an Americas Institute for Digital Governance to improve e-government solutions and reduce informal economies and corruption; a Business Advisory Board to reduce paperwork and legal hurdles to investment and harmonize standards, certifications, and other private sector functions; an Americas Partnership Secretariat to address concerns and deepen the partnership; and a public-private Americas Enterprise Fund, which will provide smaller loans and grants to help small- and medium-sized business develop around the large infrastructure investments.


The Americas Act is meant to be fully funded and self-contained, using no taxpayer funding. It focuses on closing the "de minimis" loophole, which currently allows goods under $800 to enter the United States duty free. Closing the de minimis loophole by establishing a country-level agreement of reciprocity means that de minimis levels for imports into the United States will reflect the de minimis rate established in the country of origin of the items. In addition, the bill would deny de minimis benefits to certain countries, including China and Russia.

The re-shoring and near-shoring account within the U.S. Department of Treasury will fund the Americas Partnership and the rest of the Americas Act initiative. Tariffs from de minimis reciprocity will be transferred to this account. The re-shoring and near-shoring account — which is expected to grow as equity investments generate returns and interest accrues to loans — will be managed by the U.S. Department of Commerce, in coordination with other U.S. government agencies.

Significance for the Region

The United States urgently needs a bold and strategic vision for expanding engagement with Latin America and the Caribbean. The legislation is intended to enhance the mutually beneficial economic relationship. Considering the current lack of appetite for traditional trade deals, the Americas Act presents a promising opportunity which, if implemented, would not only deepen trade and investment ties but would also advance regional economic integration, strengthen regional competitiveness, improve enforcement of trade and related commitments, expand hemispheric economic prosperity, and counter China's significant geopolitical and economic influence in the region. The legislation focuses USTR on the Western Hemisphere and creates an important pathway to USMCA ascension for those countries willing and able to meet the democracy, trade, and rule of law requirements. The initiative has the potential to grow both the U.S. economy and the economies of the region through re-shoring and near-shoring, creating jobs, and reducing irregular migration.

Next Steps

According to Senator Bennet, the White House has contributed suggestions on the Americas Act since the discussion draft was released in May of last year. Senator Cassidy indicated the bill received support from Latin American leaders and other stakeholders. In May 2023, shortly after the discussion draft of the Americas Act was released, eight Ambassadors from Latin American and Caribbean countries attended a Senate Finance Subcommittee hearing on the Western Hemisphere in show of support for the Americas Act. Ambassadors in attendance represented the countries of Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Panama, Peru, and Uruguay.

Notwithstanding this support from policymakers, regional allies, and business groups, the path forward for the Americas Act to become law as introduced during this current session of Congress is unlikely. Introduction of the legislation, however, allows sponsors to test support, socialize draft language and legislative concepts, and develop budget and policy forecasts. Ultimately, advancing the legislation — or key parts of the legislation — will require strong support from a significant number of members, particularly those on committees of jurisdiction and with regional or constituent interests, as well as mesh with executive branch interests across the region.

© Arnold & Porter Kaye Scholer LLP 2024 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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