Originally: HOPE Act would help Haiti’s garment industry
Mon, Nov. 26, 2007
This time last year, Haiti’s labor-intensive garment industry was at death’s door, and Andrew Ansaldi III was a man facing an uncertain future as 16 factories closed in two years and the unemployment rolls grew by another 5,000.
”I wasn’t very hopeful about the future,” said Ansaldi, 44, recalling the struggle to keep his own doors open amid Haiti’s shaky political climate and brazen armed gangs who wreaked havoc in the capital’s streets. “It was a war zone.”
Now, Haiti’s security situation has vastly improved, the rat-a-tat-tat of machine guns has been replaced with the automatic sounds of sewing machines, and Ansaldi has added 300 workers to his employment rolls as Haiti’s once-dying garment sector undergoes a slight rebirth.
”Today, we have hope for the future,” said Ansaldi, as hundreds of workers cut and stitched uniform pants and shirts for Cincinnati-based Cintas Corp. in a methodical fashion inside his expansive factory. “There is no more fear of customers perhaps leaving to go cheaper places, like the Orient. We can compete . . . and it is because of HOPE.”
HOPE, or the Haitian Hemispheric Opportunity through Partnership Encouragement Act, provides duty-free access to the U.S. market for woven and knit clothing made in Haiti from fabrics from third countries. The legislation was passed by U.S. lawmakers in December, certified by President Bush in March and took effect in Haiti in June.
Now with only two years left on the legislation — and only 3,000 jobs created thus far — Haiti’s government and garment sector are renewing their call to Congress to modify the legislation in the hope of producing the kinds of job growth and investments originally envisioned.
When Haiti first began lobbying for improved bilateral trade ties with the United States, proponents were seeking to remove all tariffs on apparel manufactured in the impoverished Caribbean nation, arguing that the measure would create an estimated 100,000 jobs in the apparel-manufacturing sector. But faced with strong opposition from U.S. textile companies, they had to settle for a much narrower trade bill — HOPE. Supporters said it would create about 20,000 jobs within its first few months.
That hasn’t happened. While Haiti has been receiving many inquiries about HOPE, they have failed to materialize into new factories being built, because of the details of the law, Haitian businessmen say. With the exception of two companies that recently moved to Haiti from the Dominican Republic, all of the new jobs are the result of expansions of existing woven apparel producers.
At its height, Haiti’s apparel industry employed about 60,000 workers. But years of political instability — coupled with strong competition from China and other Asian countries — have in recent years decimated the industry, which has gone from manufacturing more constructed garments to mostly assembling T-shirts.
Today there are about 20,000 workers employed at 17 apparel factories in the country. To change that, the country argues, improvements need to be made in the existing legislation.
Among what Haiti is seeking: Simplify the language of the law to give local companies more leeway in attracting new business, increase the 1 percent ”value added” rule cap to allow for more benefits and extend the three-year provisions on duty-free access to U.S. markets.
”We have to have at least 10 years because woven garments are pants and shirts, and the equipment is more expensive. No one is going to put up a factory knowing they only have one year to get their money back. That is why the people who are taking advantage of HOPE today are those who are already here,” said Georges Sassine, vice president of the Association of Haitian Manufacturers and executive director of the Haitian government’s newly created HOPE Commission. The purpose of the commission is to track the legislation’s progress.
”In its current form, the HOPE Act is helpful but not sufficient to attract significant new investment,” said Sassine, who recently traveled to Washington to lobby U.S. lawmakers on behalf of the modifications and to testify before the U.S. International Trade Commission.
Haiti is also calling for the renewal of the Caribbean Basin Initiative, whose extension will expire in September. Without CBI, which allows Haiti to enjoy certain trade benefits on U.S. imports in garments, officials here fear all of the benefits of HOPE will be further lost.
”The attempt of Haiti’s government and garment industry to get HOPE improved is important, and so is an extension of CBI,” said Lionel Delatour, a consultant for the government on the HOPE Commission.
In recent weeks, Delatour and Sassine have been trying to meet with as many U.S. lawmakers as they can, telling them that it takes about 18 months for a new company to set up and there is just not enough time to reap the benefits of the law. Their message is being heard by some.
”Three years is an awfully short period of time,” said Sen. Bob Corker, R-Tenn., who visited Haiti earlier this month with Sen. Jeff Bingaman, D-NM, and Tom Harkin, D-IA. The three were down to survey the country’s humanitarian needs.
Though the factory the group visited on their tour wasn’t one of those taking advantage of the HOPE legislation, what they heard as they met with businessmen and President René Préval was enough, Corker said, to persuade him to send the proposed fixes to several U.S. textile companies in the Southeast to gauge their concerns.
”I am committed to finding out a way to increase investments in Haiti,” said Corker, who credits a mission to Haiti 25 years ago with his civic affairs and public life.
How easy or hard of a fight Haiti will have in Congress in the coming months to get the changes remains to be seen. It took the country four years and more than $500,000 in lobbying fees to get the current legislation, which was a compromise in the face of stringent opposition from U.S. textile companies that argued trade benefits to Haiti would result in the loss of U.S. jobs.
Even today, with Democrats in charge, trade bills remain contentious in Congress.
”Anything is contentious in Congress these days,” said Bingaman, who believes the modifications have a chance at passage. “We are going to do our best to build some bipartisan support.”
SUPPORT IN CONGRESS
Said House Ways and Means Chairman Rep. Charles Rangel, D-N.Y.: “Last year, Congress extended overdue trade preferences to Haiti, but I have long argued that more needs to be done. I have been working with Haitian industry and other stakeholders, as well as Congressman Kendrick Meek, to expand on the current benefits, and hope to introduce legislation to deepen our trade relationship with Haiti.”
Randy Nevil, one of two factory owners here who recently moved to Haiti from the Dominican Republic, said it’s imperative that investors like him receive some assurances, and quickly. He recently invested $1 million into Haiti, he said.
”What you are hearing from me today is proof that the concept of the HOPE Act was right,” he said, sitting upstairs in his factory as 120 workers below assembled shorts for a U.S. discount store. “We had to invest a lot of money down here. We didn’t do it for a three-year period or a six-year period. We need to know that we’re going to have more permanent assistance.”
Glenn Larsen, vice president of Cintas Corp., agrees. A leading uniform manufacturer, the company has shifted a lot of its production from Asia to Haiti in recent months, allowing its Haitian clients to hire hundreds of new workers.
”We feel the HOPE bill is a good first step,” Larsen said during a visit here to survey the progress. “For us to grow more dramatically and work with our partners in Haiti, we really need the encouragement of having this advantage last longer.”