Trade can help Haiti to its feet

Posted by Truth About Trade & Technology
Tuesday, 23 September 2008
The Miami Herald

Tropical Storm Hanna has wreaked havoc on Haiti, a nation already ravaged by disease, food shortages, near-constant violence and extreme poverty. Already, reports suggest that the damage and death toll will exceed that of 2004's Hurricane Jeanne, which killed at least 3,000.

Gonaives and surrounding villages in west-central Haiti are under six to 10 feet of water in places. At least 150,000 Haitians have been displaced; few vehicles can operate; and there is very little access to drinking water, food and shelter. Meanwhile, Hurricane Ike is pouring down even more rain.

The damage merely compounds the already extreme conditions in Haiti. On the sunniest of days, persistent unemployment and food shortages have resulted in violent civil and political unrest. This year, Congress took crucial action -- which I applaud -- to address Haiti's pervasive problems by including language in the farm bill to extend and enhance trade law benefits. Lawmakers who supported that effort should renew their efforts immediately to ensure that business returns to Haiti.

It is hard for most Americans to imagine the poverty Haitians endure each day. The unemployment rate is 80 percent, and underemployment is rampant. More than half of all Haitians live on less than $1 a day. Although the Haitian people are industrious, over the past 15 years the average annual growth of per capita GDP has hovered at negative 2 percent. U.S. government assistance alone cannot reverse these trends. Haiti desperately needs foreign investment to create jobs and spur infrastructure development.

Nearly two years ago, Congress passed the Haitian Hemispheric Opportunity Through Partnership Encouragement Act, commonly called the HOPE Act, to use trade incentives to encourage foreign direct investment -- the most powerful tool of development. The act corrected an oversight in U.S. trade law that recognized the special economic needs of Africa's least-developed countries but overlooked the needs of the least-developed country in our own hemisphere. Specifically, it allowed the duty-free entry of Haitian apparel assembled from fabrics made in countries with which the United States has free trade or regional trade agreements.

Twenty years ago, Haiti was one of the largest apparel suppliers in the Caribbean, employing 100,000 people in assembly jobs. By last year, that sector employed fewer than 30,000 people. But in the first six months since the Hope Act went into effect, it has created 3,000 jobs. As it takes hold, Haiti can once again become a garment production center.

The U.S. textile industry has resisted efforts to ease trade restrictions with Haiti, fearing harm to U.S. jobs, but the reality is just the opposite. The HOPE Act should bring jobs from the Far East back to the United States because, unlike money made in the Far East, Haitian foreign exchange earnings are spent on goods in our country. Furthermore, when Haitian companies are assembling apparel, they frequently buy American buttons, thread and labels.

The flaw in the HOPE Act is its three-year lifespan. For economic development to continue and for foreign investors to take Haiti seriously, predictability is crucial. Congress included language in the farm bill that extends these trade benefits for 10 years and simplifies trade law so that the Haitian apparel industry can compete with major Asian suppliers in the U.S. market.

Ultimately, it is in our national interest for Haiti to be stable and prosperous. The country is a mere 80-minute flight from Miami. Our nations are linked by geography, history, humanitarian concerns and the ever-present possibility of refugees floating to our shores. We have sent troops to Haiti twice in the past decade. Unless things improve, we will send them again.

There too many things wrong with Haiti -- including a main port that doesn't work, too little food, electricity that runs in spurts -- to list completely. Three thousand new jobs is a monumental step forward. But to truly free Haiti from poverty, the United States must quickly implement the revised HOPE Act in a way that does not restrict trade. Furthermore, U.S. apparel buyers and investors around the world must recommit to doing business in Haiti, and both U.S. and global institutions need to help improve trade capacity infrastructure by rebuilding port facilities, roads and industrial parks. Given the devastation caused by recent storms, to do otherwise would be irresponsible and inexcusable.

Mike DeWine is a former Republican senator from Ohio.

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