The HOPE Act and Its Effect on the Haitian Economy

The Haitian HOPE (Hemispheric Opportunity through Partnership Encouragement) Act of 2006 (also known as HOPE I) was enforced on 6th Dec 2006. As a part of this Act, exports of certain Haiti-made apparels to U.S. were made tariff-free. The intention was to attract investment in apparel industry with the underlying plan being development and economic growth. The condition was that only those apparels will be made duty free whose raw materials were imported by Haiti from any country provided, a part of the sourced material must come from a country that is a part of U.S. Unilateral Preferential Trade Arrangement. Apart from this, Haiti was also required to establish:


• Market Economy.
• Rule of Law.
• Zero barriers for U.S. investment and trade.
• Poverty reduction policies.
• Corruption combat policies.
• Workers right protection.

With HOPE I failing dramatically, it was amended and HOPE II was enforced in 2008 and preferences were extended to 10 years (compared to 3 years of HOPE I) and more apparels were added under duty-free coverage. Some rules for qualification were also simplified and Haiti was required to create Labor Ombudsman's Office and was required to enforce Technical Assistance improvement and Compliance Needs Assessment and Remediation (TAICNAR) Program within 16 months of legislation enactment.

The more liberal HOPE II may possible help in the growth of apparel industry but that is only one sector. For the entire economy to grow and develop, deeper and more meaningful socio-economic reforms are required. As far as HOPE II is concerned, some scholars look at it as an Act that will benefit multinationals only because Haiti offers cheapest labor in world but if labor reforms increase the wages of the workers, it will negatively impact FDI and as a result, the Haitian circle of politics and business will prevent wage increments due to pressure from foreign investors. As said, Haiti will rise only when the socio-economic reforms are targeted towards uplifting of poor mass while simultaneously targeting economic development as a whole and not just one sector.

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Read more: United States, Investment, business, export, Free Trade, Industry, Apparel, Trade, Duty-Free, Trade Preference, Hope Act, Newsletter Articles, Business & Finance

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