Haitian Trade Preferences Need Action Now, Stakeholders Say at WITA

An apparel factory owner and a trade policy professional from the apparel industry said it's critical to renew Haitian trade preferences this year, even though they don't expire for 14 months.

Beth Hughes, vice president trade and customs policy at the American Apparel and Footwear Association, said during a Washington International Trade Association webinar on trade preferences, "We've been working diligently to get Congress to pay attention to Haiti. They need to renew it now. Folks are making their orders now. They need that certainty."

For Haitian manufacturers to be competitive with Asian producers, they have to have the tariff breaks, she said.

Grupo M and Codevi CEO Fernando Capellán, also on the WITA program, agreed. He said his Haitian operations employ 15,000 -- down from 22,000. He said the company's business is suffering because customers don't know if the tariff breaks will continue in the fourth quarter of 2025.

"Our customers need to see a little bit more down the road," he said.

The Haitian programs are HOPE, the Haitian Hemispheric Opportunity through Partnership Encouragement Act, and HELP, the Haitian Economic Lift Program.

Moderator Nicole Bivens Collinson, who leads the Sandler Travis government relations practice, said several bills have been introduced to extend the Haitian programs (see 2309210033), "but we’re not seeing the action to move it forward."

The close to four-year expiration of the Generalized System of Preferences benefits program, the longest ever for the trade preferences program, is causing anxiety for companies that rely on HOPE/HELP and the African Growth and Opportunity Act.

Hughes said AAFA members that import travel goods are owed millions of dollars in refunds of tariffs paid over 43 months.

"They’re trying to diversify out of China," she said, but with these extra costs, some trade is returning to China. Companies are deciding they can't trust Congress to maintain the tariff structures they relied on to sign contracts. "That kind of rubs off on some of the other trade preference programs that still need to be renewed next year," she said.

Capellán said that the Dominican Republic, which is also part of the Grupo M supply chain, and other Central America Free Trade Agreement countries' textile production are not competitive for labor-intensive clothing, but the supply chain the FTA and Haitian preferences support is beneficial to U.S. yarn spinners and cotton growers.

He said his operations, which are by the DR border, haven't been affected by the rampant gang violence in Haiti, but they have lost business just the same. Kenya is sending troops to Haiti to try to quell the gang warfare.

"Now this country needs jobs. No matter [if] the peace comes, if people don’t have jobs, we’ll come back to the same place," he said. And, he said, without jobs, illegal immigration from Haiti to the U.S. will continue to build.

"People are desperate to do something -- people need to eat," he said.

Progressive Policy Institute Vice President Ed Gresser noted that Haitian apparel exports to the U.S. of about $1 billion annually account for more than 5% of Haitian GDP.

The webinar also talked about GSP, which covers about $20 billion in trade, including flowers, jewelry, suitcases and backpacks. Gresser said it only covers 10% of exports from GSP beneficiary countries, and .06% of U.S. imports.

Hughes said the bill to renew GSP that passed the House Ways and Means Committee could be problematic as the regional value content climbs over time. Currently, GSP requires that 35% of the value come from the exporting country; that would climb to 50% by 2031. While it does allow 15% of that amount to be U.S. inputs, Hughes said she's not sure all the products that are covered now could reach 50%, though she thinks it's not a problem for travel goods.

The African Growth and Opportunity Act has not yet been tackled by the committee, though there was a hearing (see 2406120056) that discussed some changes to the text.

Global Shea Alliance Deputy Managing Director Olawunmi Osholake said she wanted to acknowledge that members of Congress are concerned that AGOA hasn't spurred substantial trade among many beneficiaries, and that trade is concentrated in petroleum and apparel. She said there is a difficulty in other sectors making the connection to U.S. buyers or obtaining trade finance.

"But it’s important to remember AGOA has really provided significant benefits to sub-Saharan Africa," she said, covering $30 billion in exports annually. "That should not be overshadowed."

Bivens Collinson said she, too, is frustrated that participation in AGOA isn't broader. But, she said, "trade statistics don’t reflect countries trading amongst themselves." She said cars exported from South Africa could have leather seats with leather tanned in Eswatini and the skins could come from cattle raised in Namibia, but those countries don't get credit for their participation.