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More HOPE, and HELP, for Haiti, but Congress Still Holds Back

Nearly four months after the earthquake that devastated Haiti, and after receiving a letter from former Presidents William Clinton and George W. Bush, the U.S. Congress seems prepared to expand access for Haitian apparel exports with the Haiti Economic Lift Program (HELP) Act. This is important because apparel is one of the few sectors, outside of construction, that can quickly create formal sector jobs for thousands of desperate Haitians, particularly women.

But it appears that Congress is still unwilling to go as far for Haiti as they have done for Africa because of objections from the U.S. textile industry.

The legislation jointly introduced by the chairs and ranking members of the two key trade committees in the House and Senate expands the quotas for certain Haitian apparel exports and extends the two preference programs governing U.S. imports from Haiti for 10 years, but it keeps other restrictions in place.

The table below, updated from an earlier post explaining the restrictions on Haitian exports, shows the evolution of Haiti's exports under various iterations of the HOPE ACT. Of the $138 million in Haitian exports under HOPE in 2009, just over half is in the quota categories that will be expanded under the new bill. The majority of exports, currently under the Caribbean Basin Trade Partnership Act, are unaffected by the bill and will continue to be subject to complicated eligibility rules that restrict where Haitian exporters can source fabric and other inputs, thereby raising their costs.

Sources: U.S. Department of Commerce, Office of Textiles and Apparel; U.S. International Trade Commission.

The extension of the Haitian-specific (HOPE) and Caribbean (CBTPA) preference programs, and the expansion of the quotas on certain woven and knit clothing, is important because Haiti has had contacts with foreign investors and U.S. importer/retailers that would expand sourcing in Haiti if the changes are adopted. But the t-shirt and sweatshirt categories excluded from HOPE are where there are existing investments that could be ramped up and create jobs more quickly. The HELP Act is a good step, but still smaller than one might hope for under the circumstances.