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January 26, 2022

Caribbean Basin Act pays dividends report shows

The US says imports from the Caribbean Basin Initiative have increased to US$1.2bn from in 2020 from $1.1bn in 2019, with Haiti being the biggest beneficiary.

By Hannah Abdulla

Since its inception, the Trade Act has become an important element of the effort to develop and facilitate trade within the Caribbean Basin region, most notably with Haiti.

Overall, CBTPA is structured in a fashion that reasonably balances the interests of US textile manufacturers with those of textile and apparel manufacturers in the region. It requires the use of US or CBTPA-regional yarns and fabrics, which means Haiti, as the main country still participating in the CBTPA, has become an important export market for US textiles.

The CBPTA was renewed following its expiration in 2020 for the third time to 2030, and the Office of the United States Trade Representative says US imports increased under the initiative but exports decreased during this reporting period likely due to disruptions related to the COVID-19 pandemic.

Haiti’s apparel exports to the United States maintain one of the highest utilization rates of CBI preferences. Approximately 95% of Haitian exports to the United States are apparel exports. Private sector associations estimate that thanks to the CBI preference programs, over 54,000 garment factory jobs have been created in Haiti as of the end of calendar year 2020.

Apparel imports from Haiti accounted for 15% of US imports under CBI preferences (and 42% of US imports when including the HOPE Acts). Apparel products from Haiti under the HOPE Acts, declined by 21.7% in 2020 to $576.9m from $737.1m in 2019.

The decline was primarily due to disruptions related to the COVID-19 pandemic. Apparel imports from Haiti under the CBI preferences and the HOPE Acts represent 91% of US imports from Haiti, with cotton T-shirts accounting for 28% of such imports.

At the end of last year, the US International Trade Administration raised the annual limit on duty-free apparel from the Caribbean’s poorest nation, Haiti, as part of its preferential trade agreement.

It came after legislation was passed to extend the Haitian Hemisphere Opportunity through Partnership Encouragement (HOPE) Act and the Haitian Economic Lift Program (HELP) Act trade preference schemes until 2035.

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