| Total | $19.6 billion |
| Remittances from abroad | $3.9 billion |
| HOPE/HELP exports | $0.8 billion |
WHAT THEY MEAN:
In the holiday season, as we’re supposed to think at least a bit about those with less, here’s a useful last job for Congress: extend the U.S.’ three small ‘trade preference’ programs — acronyms “GSP,” “AGOA,” and HOPE/HELP” — for lower-income countries.
As an introduction, here’s an October piece from the International Labor Organization’s “Better Work” office in Port-au-Prince, worriedly entitled “Battling the Odds”. The ILO officers summarize the state of Haitian garment production and employment as follows:
“Throughout 2023 and the first half of 2024, Haiti has faced escalating crises, taking a toll on the nation’s socio-economic health. Gang-related violence is profoundly impacting daily life, with effects spilling over into the labour market, livelihoods and the well-being of workers. The garment industry has been seriously affected. Better Work Haiti’s most recent report delves into the data, revealing a troubling decline in operational factories, with one permanent and two temporary closures. The industry has seen a significant reduction in the workforce, with employment falling from 42,500 to 33,857 in just a few months, a loss of over 8,600 jobs.”
As they were writing up their report in September, “Better Work” was overseeing 29 Haitian garment factories in a handful of industrial parks — Port-au-Prince, Cap Haitien, Ouanaminthe — serving as guarantors for health and safety, wage and benefit, and other labor standards in lieu of a functioning labor ministry. Last year these factories produced about 300 million garments for American retailers and brands — mostly T-shirts, with some tracksuits, pullovers, and sweatshirts as well. Over the past decade, these factories have earned about $1 billion a year in export revenue, with 2023 shipments a bit lower at $800 million.
The figure, a bit more than 1% of American clothing imports, is about 5% of Haitian GDP. To draw an intellectually shaky but illustrative parallel to the American economy, by BEA’s GDP-By-Industry data, you could combine the GDP shares of U.S. automotive manufacturers and dealerships (1.9%), energy production and refining (1.7%), film and music (0.4%), and air transport (0.6%) to get a similar share. At a personal level, the ILO-regulated apparel jobs as of 2021 (mostly women, often with on-site clinics) made up about a tenth of Haiti’s regular, hourly-wage-paying jobs. Statistics have been scarce since then, but even with falling factory employment the share of formal labor may have been higher earlier this year.
As the ILO’s comment suggests, Haiti’s protracted political crisis has damaged but so far not broken these businesses and their workers. For most of this year, Better Work’s factories were shipping about 800,000 clothing articles to the U.S. daily via the 40-hour boat ride to the Port of Miami, together earning about $50 million a month.
The factories persist because of a special trade program — HOPE/HELP, suitably upbeat acronyms for “Haitian Hemispheric Opportunity through Partnership Encouragement”, and “Haitian Economic Lift Program” — created 20 years ago. This waives the pricy 16.5% tariff a cotton T-shirt normally gets, and has unusually simple and easy rules for the sorts of fabric factories can use to make the shirt. Last authorized in 2015, HOPE/HELP is scheduled to end in September next year. So each week the uncertainty about its future prospects grows, and the prospect of its end appears already to be pulling business away. As the ILO’s staffers were writing up their report, one of their factories had shut, and the other two were temporarily closed. This week, only 13 factories appear to be open and producing. So the already substantial worries facing the seamstresses and their employers are growing rapidly more intense.
Now back to Congress, in this session’s last days. Haiti relies more heavily than any other country in the world on American ‘trade preference’ support. Haiti’s is an exceptional case in which loss of trade preference could spark a national economic crisis as well as well as harm to the workers. But an exceptional case, HOPE/HELP isn’t alone. The 24-year-old benefit for Africa, the “African Growth and Opportunity Act” — frequently termed the “cornerstone” of U.S.-African economic relations — is also set to expire next year, and the broader “Generalized System of Preferences” has been in a sort of legal limbo since 2020, with renewal serially frustrated by intense arguments over what we see as relatively minor differences in the wording of eligibility criteria, and then by ‘hostage-taking’ on unrelated topics. Putting off renewal until next year is full of risk: a new Congress with new members unfamiliar with the programs, along with typically slow agency nominations, both make timely renewal hard to imagine and outright lapse fully possible.
These three programs represent a small share of U.S. trade flows: $29 billion in imports in 2023, about 0.9% of the $3.1 trillion in total U.S. imports, and well below the $80 billion from Ireland or the $53 billion from Switzerland. Despite this modest total, HOPE/HELP, AGOA, and GSP remain of great importance to Port-au-Prince’s anxious seamstresses as they “battle the odds” against them — and (via AGOA) to their garment-industry sisters in Maseru, Antanarivo, and Nairobi, and (via GSP) to tuna cannery workers in Honiara, jewelry-makers in Yerevan, and tannery guys in Asuncion. For Congress, a few minutes’ work for the less fortunate, before the Members go home for their own Christmas holidays, would be time well spent.
HOPE/HELP, and some context:
ILO’s “Battling the Odds” report, October 2024.
Commerce Department’s Office of Textiles and Apparel explains HOPE/HELP rules.
AGOA and GSP:
PPI on the Generalized System of Preferences.
And the African Growth and Opportunity Act.
Haitian background:
The World Bank on Haitian women in informal work.
Miami-based Haitian Times on remittances from expatriates — construction workers, restaurant dishwashers, professionals — as a second economic lifeline.
And what do “jobs,” “unemployment,” and similar terms mean in this context? World Bank databases say that Haiti’s labor force is about 5.2 million people — 45% in agriculture, 55% urban — with an unemployment rate of 15.7%. These figures suggest totals of 760,000 unemployed workers and 4.3 million with “jobs.” “Unemployment,” though, is a labor-market term invented in the 1880s and designed for wealthy countries in which most workers are in wage-paying jobs subject to national laws and taxes. The term, or at least its commonly understood American definition, doesn’t suit least-developed country realities in general, let alone in crisis. An actual on-the-ground WB report from 2021 guesses that even before the breakdown of government in 2022, 86% of “employed” Haitian workers, or about 4 million people, were in the “informal sector” — that is, doing irregular work in seasonal harvesting, maid and gardening work, day-labor on construction sites, and so on. These would be spottily paid, and not subject to minimum wage or occupational health and safety laws. This implies that about 500,000 Haitian jobs, such as those in the garment industry — 60,000 at the time, fewer now — offer safety inspection, minimum wage laws, and so on. The World Bank’s background on Haiti’s pre-COVID, pre-“gang era” private-sector economy.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
