In recent years, the United States Congress has come to understand the importance of trade benefits for Haiti, passing the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act in 2006, and further improving this program in 2008. As a result, between 2006 and 2009 Haiti re-emerged as a viable manufacturing country for U.S. apparel brands and retailers. This new focus enabled employment in Haiti’s garment sector to grow from 12,000 to over 25,000 people prior to the earthquake.
The trend was encouraging, yet modest compared to Haiti’s potential. At one time, Haiti’s garment industry employed more than 100,000 people. Now much of that production is being done in China and other Asian countries. HOPE I and II began to reverse that trend, and at times preventing additional apparel manufacturing to move from the Western Hemisphere to Asia. However, to meet the challenges confronting Haiti today, we need to generate jobs even faster, and work to again reach 100,000 jobs in our apparel industry.
We now have some major foreign investors knocking on our door, companies that supply major U.S. retailers like the Gap and Wal-Mart. We have three major Korean companies, as well as companies from Brazil, looking to invest in Haiti. Each one of the Korean companies alone could employ 10,000 to 30,000 workers each. However, for this investment to be a reality, the U.S. Congress must again show their compassion and further enhance the HOPE program, both by substantially increasing the limitations on duty-free benefits, and in extending the duration of all elements of HOPE for 15 years. The quality and duration of the benefits will determine if these potential investments become a reality. Unless potential investors have sufficient time to get a reasonable return on their investment, they will determine that building additional production in Asia makes more sense.
Quite simply, business cannot go on as usual when something very unusual is going on. The life of every Haitian changed beyond comprehension on January 12, 2010. In the aftermath of this great tragedy, the Haitian people have shown their resilience and determination to work toward building a new Haiti, one that will provide hope and opportunity for all of our citizens.
The response and generosity of the international community has been heartening to say the least. We are reassured every day that the task of building a new Haiti is a partnership; and that countries like the United States will stand side-by-side with Haiti as we embark on this incredible—and what appears at times to be an overwhelming—journey.
It comes as no surprise to me and to every Haitian that the United States is demonstrating its leadership, compassion, and generosity. Just this week two former Presidents, Bill Clinton and George W. Bush, visited my country and pledged a great deal of assistance, while promising to focus on the long-term trade benefits necessary to secure investment to expand the Haitian apparel industry. Presidents Clinton and Bush, as with many in the Obama administration and the U.S. Congress, recognize that the focus must go beyond the immediate needs of the Haitian people to the longer term requirements necessary to build an economy attuned the realities of global competition. With regard to the quality of the benefits, it is imperative that Haiti’s trade preference level (TPL) with the United States—which limits Haiti’s duty-free benefits—for knit and woven fabrics be increased to 250 million square meter equivalents (sme) each. Even at these increased levels, each TPL would be equal to only one percent of U.S. apparel imports. It’s clear that foreign imports already supply these segments of the U.S. textile market. The only question is: will these imports come from Haiti or countries like China?
We do not take lightly the complications of the U.S. legislative process or the past generosity of the U.S. Congress. However, the task before us is so immense, we must once again ask the U.S. Congress to substantially improve HOPE benefits. This is especially important since every garment worker in Haiti supports a family of as many as eight other people. Thus, on behalf of the Haitian people, I hope and pray the U.S. Congress will modify the Haitian trade program to create an environment that will indeed result in such potential investment becoming a reality.
Jean Paléme Mathurin, PhD, is an economist who serves as Economic Advisor to the Haitian Prime Minister and is President of the CTMO-HOPE Commission. He can be reached at email@example.com