ITC Finds Impact of

Haitian HOPE Has Been Minimal to Date

(Overview of HOPE II)

 

 

 

The International Trade Commission released its report to Congress on the effects of the trade benefits that were accorded to textile and apparel imports from Haiti under legislation enacted in late 2006.

 

(The Haitian Hemispheric Opportunity through Partnership Encouragement Act (Haitian HOPE, aka HOPE I), which expanded trade benefits beyond what Haiti receives under the Caribbean Basin Trade Partnership Act (CBTPA)¹, was enacted as part of the Tax Relief and Health Care Act of 2006.)

 

ITC Finds Haitian HOPE Impact Has Been Minimal to Date

 

The ITC found that the impact of the Haitian HOPE Act on Haiti, the U.S., and countries with which the U.S. has a free or preferential trade agreement has been minimal to date.

 

Haitian HOPE apparently has provided some small benefits to Haiti in terms of increased employment and increased exports over what might have occurred in the absence of the Act. Some Haitian apparel firms have expanded operations, but there has been little additional foreign investment.

 

Specifically the ITC found that:

 

Little to no effect on U.S. market/industry. The short six-month period of observable data (the first shipments under the Act did not occur until July 2007) precludes reaching a definitive conclusion, but the small response to the Haitian HOPE suggests that there has been no effect on the U.S. market or industry. U.S. exports of textiles and apparel to Haiti declined in 2007, but this trend began prior to the Haitian HOPE.

 

Enhanced co-production between Haiti, Dominican Republic. Haitian HOPE has had little, if any, effect on trade markets and industries in countries that have a free or preferential trade agreement with the U.S. The Dominican Republic is the country most likely affected by the Act, in a small but positive way, because textiles and apparel production in the Dominican Republic is integrated with Haitian apparel manufacturing.

 

Haitian HOPE II Enacted as Part of Farm Bill

 

The report states that following ITC approval of this report and shortly before publication, the Food, Conservation, and Energy Act of 2008 (Public Law No. 110-234) was enacted, which amended the special rules for apparel and other textiles from Haiti in the Caribbean Basin Economic Recovery Act (CBERA) (19 USC 2703a(b), including rules enacted in 2006 by HOPE I.

 

The amendments were added in conference and are contained in Part I of Subtitle D of Title XV of the Act, which can also be cited as the “Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008” or the “HOPE II."

 

In the conference report, the Conferees noted that the use of HOPE I to date has been very limited, and they attributed this to HOPE I’s complex value-added rule of origin.  To address the deficiencies in HOPE I, the conference report provided additional ways, under simplified rules, that Haitian apparel can qualify for duty-free treatment, and also authorized a new apparel-sector capacity building and monitoring program to benefit labor.

 

HOPE II amends section 213A(b) of CBERA in the following principal ways:

 

-        most apparel preferences are extended for 10 years, until September 30, 2018;

 

-        the existing value-added rule is retained until the original 5-year expiration date, but the  quantitative cap is changed to 1.25% of total U.S. ..... ( More )

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Excerpt from June 20, 2008

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