This is a report to the U.S. Congress examining the employment impact of the trade provisions in the Caribbean Basin Economic Recovery Act. The main finding of this report is: Preferential tariff treatment under the CBERA does not appear to have had an adverse impact on, or have constituted a significant threat to, U.S. employment generally. There are several smaller domestic industrial sectors (e.g., leather cut for shoes and cigars and cheroots) that have been subject to significant, long-term domestic employment declines and significant increases in CBERA duty-free imports. The extent to which declines in employment in these sectors may have been affected by the tariff preferences granted under the CBERA -- as opposed to other factors -- is not clear; however, during 1997 and 1998, trade and employment developments in these industries tended to moderate any adjustment problems. During 1998, $3.4 billion in U.S. imports from the 24 CBERA beneficiaries entered the United States duty-free under provisions in the CBERA; however, a significant portion of these duty-free entries probably would have qualified for duty-free entry under other existing U.S. trade preference programs such as the Generalized System of Preferences. Approximately 48 percent ($1.6 billion) of these duty-free entries probably would not have qualified for duty-free entry under other available U.S. trade preference programs and represent the unique benefits of the CBERA to the CBERA beneficiaries. These unique benefits represented 9.5 percent of total U.S. imports from the CBERA beneficiaries, but accounted for only 0.2 percent of total U.S. imports from all nations.