Trade - Haiti Observer Blog

Recently, on Tuesday, September 21, Alberto Navarro, the head of the EU delegation in the Dominican Republic, has warned that the Haitian import ban on some essential Dominican goods, likes of wheat, corn, bread, etc. would make them dearer by about 40% and the most disadvantages in Haiti will have no option but to pay that high price to buy them.

The ban, a consequence to the mass deportation of Haitians by the Dominican authority, would be effective from October 1. The Haitian government has imposed an import restriction on 23 items crossing the land border, but they can enter by boat or plane on payment of taxes to the capital of Port-au-Prince or at the northern coastal town of Cap Haitien. Last year Haiti has imported around $500 million worth of food items from the Dominican Republic and the figure is 6% of total Dominican export.

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Although, Haiti is a free market economy that enjoys the advantages of low labor costs and tariff-free access to the US for many of its exports, some of the serious impediments to its economic growth are poverty, corruption, vulnerability to natural disasters, lack of proper economic planning and low levels of education for much of the population. Every year, thousands of Haitians risk to cross the Dominican border illegally in search of low-wage jobs in construction and agriculture, and at the big all-inclusive resorts, albeit they become victims of racism and xenophobia in the DR. The marketplace at the Croix des Bossales is flooded with Dominican products likes of carrots, cabbages, and all other vegetables along with pasta, eggs, tomato pastes, mayonnaise and other prepared foods.
Haiti produces foods no doubt, but the majority of its consumption comes from the Dominicans. Haitian cements are good, but it is more expensive than Dominican cements. The Haitian state was never capable to defend Haitian economic actors.

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Since the Dominican Republic (DR) Constitutional Court issued a ruling Dominicans of Haitian descent and the progeny of illegal immigrants are no longer citizens of the DR, the international community has been in an uproar. Haiti made no public comment on the matter until last week.

After a CARICOM meeting, President Martelly and CARICOM Chairman, Kamla Persad-Bissessar, held a press conference to discuss the situation. Martelly was emphatic Haiti would never cut ties in trade with the Dominican Republic. He said Haiti and the DR share the island of Hispaniola, and enacting a trade embargo would not benefit either nation. Trade revenue with the DR amounts to nearly two billion yearly.

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The concept and practice of fair trade has been practiced for many years. A primary example of fair trade is promotion of fair-trade coffee at politically progressive supermarkets. Paying a fair-trade price means a living wage for coffee farmers in emerging nations.

Haiti, one of the most poverty-stricken nations on the globe, is a small island with a population of only 10 million inhabitants. Over half its revenues rely on domestic agricultural output. Further weakening its economy are trade-liberalization policies that harm the export market, and inadequate land infrastructure.

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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:

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Danilo Medina, President of the Dominican Republic focused on having an agreement for free trade with Haiti. He stated this in the meetings. In May, he won the election in the country.

Agreement On Free Trade

On taking office on August 16, 2012, Danilo Medina stated that efforts would be made towards an agreement in free trade with neighbors of the Dominican Republic in Hispaniola. Such an agreement would help producers at the domestic level to take advantage of services and goods available in Haiti.

He made this announcement after a courtesy call with Albert Ramdin, the Assistant Secretary General of the Organization of American States. The meeting was attended by Michelle Cohen, Ambassador and Shelly Dass-Clark, the policy advisor of Ramdin. Ramdin also happens to be the Chairman of Group of Friends, in Haiti.

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Haiti has overtaken Central America as second in volume of imports from its neighbor, the Dominican Republic (DR). During 2012, $97,530,000 of goods was imported from the DR, a 50% increase over 2011's figure of $64,730,000. This $32,800,000 rise in import dollars was due in part to more egg imports, a 50% gain from 6,390,000 eggs in 2011 to 12,400,000 in 2012. The Center for Export and Investment of the Dominican Republic (CEI-RD) compiled the 2011-2012 figures.

This rise in egg imports indicates although the government of Haiti has enforced a ban on egg imports beginning in 2008, it is being ignored by the trading partnership of Haiti and the DR.

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Mont Organise, part of the Ouanaminthe Arrondissement, under the Nord Est Department, lies very close to the Dominican Republic border in the north-east area of Haiti. Two sub-divisions comprise it, Wood Lice and Savanette.

Mont Organise's economy relies on trade activities conducted with the Dominican Republic (DR), whose borders are nearby. Not all trade is legal between the two countries. Smuggling operations exist, and both governments look the other way. Conflict between Haiti and the DR has had an intermittent history, but in some areas they show tolerance. One of them is the smuggling trade.

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As per the Vietnam government's 2011 records, there is an increase in bilateral trade between Vietnam and Haiti. In 2010 there was a raise of $11 million in the two way trade after which it reached $40 million in 2011. Vietnamese exports are valued at around $15 million.

Haiti's Openness to Trade

Laurent Lamothe, Haiti's Prime Minister stated at the Monday meeting with Nyuyen Tan Dung, Prime Minister of Vietnam that the number stood at $19 million thorough the first six months of 2012. Lamothe continued to make efforts to push the message across that Haiti was open to trade.

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Haiti is known for several industries in the global market, especially in terms of agriculture and tourism. But only a few know of the country's garment and apparel industry which is slowly growing with the help of the United States government.

The U.S. government has recently launched a U.S. trade preference with Haiti in order to promote the country's apparel industry. Haiti was able to export about 18 million dollars' worth of apparel to the United States on a duty-free provision for most of 2012, a highly significant increase as compared to previous trades years back. According to the U.S. Government's Accountability Office in a recent report, local apparel firms in Haiti have been receiving more credits which can be received through utilizing U.S.-made fabric and other related materials in exchange with the United States being granted with duty-free trade preferences.

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