A report published by the US International Trade Commission (USITC) – US-Haiti Trade: Impact of US Preference Programs on Haiti’s Economy and Workers – finds that US preference programmes have played “an important role” in the trade relationship between the US and Haiti and the development of Haiti’s apparel sector.
The preference programmes have helped the sector continue to attract investment despite a difficult political and social landscape and risks of natural disasters, the report details.
As requested by the US House of Representatives Committee on Ways and Means, the report provides information and analysis on the Haitian economy, US preference programmes that benefit Haiti, the impacts of these preference programmes on Haitian industries and workers, and case studies on key industries.
For the apparel industry in particular, the report found Haiti has benefitted from unilateral preference programmes offered by the US since 2000, including the Caribbean Basin Trade Partnership Act (CBTPA) and the Haiti-specific trade preference programme (Hope I/HOPE II/HELP).
As a result of these programmes, US apparel imports from Haiti quadrupled, increasing from US$231m in 2001 to $994m in 2021, with T-shirts accounting for a large proportion of the increase. In 2021, 23.6% of total imports ($260.4m) entered the US under the CBTPA programme and 67.9% ($751.3m) under the HOPE I/HOPE II/HELP programme.
The Haiti-specific trade preference programme also spurred investment and production in Haiti’s apparel industry, which helped Haiti stay competitive over regional competitors such as former CBTPA beneficiaries (current CAFTA-DR countries 353) El Salvador, Honduras, Nicaragua, Guatemala, the Dominican Republic, and Costa Rica.
In addition to preference programmes, businesses in Haiti benefit from other competitive advantages, such as speed-to-market due to its geographic proximity to the US and use of a dedicated cargo fleet, which has proven to be more reliable than shipping lines to Asia during the ongoing shipping crisis.
Companies also noted that Haitian firms tend to be reliable suppliers that produce good quality garments. Haiti has also moved up the apparel supply chain from simple “cut and sew” operations to making more complex garments with advanced machinery in recent years.
Other highlights from the report include:
- Haiti experienced a surge in foreign direct investment (FDI) following the implementation of the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE I) in 2006, HOPE II in 2008, and the Haiti Economic Lift Program Act (HELP) in 2010. Haiti’s FDI stock grew rapidly during this time, about 17% per year, from $300m in 2006 to $1.74bn in 2017. However, political instability, insecurity due to increased gang activity, and disruptions due to the Covid-19 pandemic have all contributed to an investment slowdown.
- Apparel employment fell sharply in the 1990s as a result of the trade embargo imposed in 1991. Apparel employment partially recovered after implementation of the HOPE I/HOPE II/HELP Acts. As of 2021, the garment industry is once again one of the largest sources of formal employment, providing 53,000–57,000 jobs and supporting more than 450,000 people in the country.
- An analysis of Better Work Haiti compliance assessments since 2009 shows low levels of noncompliance with International Labour Organization core labour standards (forced labour, child labour, freedom of association, collective bargaining, and gender discrimination) but generally high levels of noncompliance with respect to compensation and safety-related metrics. Union representatives and NGOs have indicated that labour issues persist.