Under the bill, Haitian apparel may enjoy a duty-free status even if they are not made from US materials. Yarns and fabrics may come from countries having concluded a free-trade agreement with the United States.
The bipartisan bill was introduced by the end of February by a series of Democrats and Republicans and proposed in the same terms in the Senate and the House of Representatives.
It is not yet clear if the bill has any chance to be approved by specialised committees or by full House and full Senate.
Mainly sponsored by Republican Senator Mike DeWine (Ohio), the new bill aims at boosting apparel production in Haiti, the poorest country in Latin America.
The text is warmly supported by the two Senators from Florida, destination of a large part of Haitian apparel.
According to Congressmen who introduced the bill, numerous factories are now idle in Haiti, mainly due to political uncertainty.
In order to help in restoring law and order in the tiny country, the duty-free status will only be provided if substantial improvement is recorded regarding human rights and working conditions.
Haiti must also make progress towards establishing a market-based economy and reducing trade barriers and corruption.
If approved by the Congress and signed by the US president, the new law would be effective from 1 October 2003.
US$ 2 per day:
Labour costs are very low in Haiti with a minimum wage of US$1 per day and effective daily salaries of about US$2.
In addition to its low labor costs, Haiti could benefit from its proximity with Florida, compared with Central American countries.
By boosting apparel production, Congressmen hope generating thousands of new jobs, therefore limiting illegal immigration from Haiti.
More than half of Haiti's population is unemployed and a majority of the country lives in poverty.
International aid was sharply reduced in order to force the current regime of Jean-Bertrand Aristide in restoring democracy.
A new preferential treatment would help Haiti in attracting investors, US supporters hope. Confronted with rising costs, apparel producers from neighbouring Dominican Republic would develop new factories at the border with their country.
Benefiting Dominican companies:
A duty-free textile zone is already being built by Gruppo M, the largest apparel manufacturer in the Dominican Republic.
Such as Haiti, the Dominican Republic is directly threatened by the future free trade agreement currently negotiated by the United States and Central America. The new US treaty would grant duty-free entry to apparel from Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, if they are made from regional or US fabrics.
US imports from Haiti did not dramatically fell in the past years in volume terms but remained at a very low level while shipments from other low-cost countries surged at the same time.
US apparel imports from Haiti rose 33% in the first two months of the year, however, possibly announcing a boom if the bill is finally approved by the US Congress.
April 22, 2003