Rangel Presses Farm Conferees To Add Haiti Preferences

Tue. Apr. 29, 2008


House Ways and Means Chairman Charles Rangel is pressing for a major expansion of Haiti trade preferences as part of the farm bill, as rampant food shortages continue to spark political unrest in the impoverished country. Domestic textile interests and their allies in Congress are opposed and are weighing a response in the face of broad support for the larger agriculture package.

While the language was being fleshed out Monday, the farm bill was expected to extend for 10 years tariff preferences for Haitian textile and apparel imports, while granting more flexible rules of origin that require a percentage of material to be produced in Haiti. Originally the program had a five-year lifespan, with some provisions expiring at staggered times. For example, tariff preference levels for woven apparel expire Dec. 19, 2009.

Advocates said the measure will correct flaws in the program as enacted in December 2006 and create jobs in Haiti. “It’s the right thing to do,” said Rep. Kendrick Meek, D-Fla., a Ways and Means member who worked with Rangel on the measure.

“It will help stabilize the economic situation and be a strong message to the Haitian people that the U.S. government is here to help the poorest country in the Western Hemisphere.” Meek’s district has about 200,000 people of Haitian descent, the largest concentration in the country.

An industry source backing the extension said major retailers like JCPenney, who have found Haiti to be increasingly attractive for investment, have hesitated because of the phased-out preference levels.

At the same time, while the United States imports huge quantities from places like Vietnam and China — Vietnamese imports were up 45 percent in the first two months of 2008 — Haitian imports declined 34 percent in January and February, and totals just $43 million.

“That’s just 6/10ths of 1 percent of U.S. imports,” the source said. “I seriously doubt even one job will be lost under these provisions.” Nonetheless, domestic textile interests and their backers were taken by surprise when the Haiti preferences language first emerged as part of the farm bill talks Thursday.

Textile-state lawmakers opposed the original enactment of the Haitian Hemispheric Opportunity through Partnership Encouragement Act, or “HOPE,” and “HOPE II” as it is known, might spark increased imports from Haiti.

That could include more goods produced with materials from third-party countries like China, which might benefit from more flexible rules of origin for Haitian textile and apparel products.

GOP Sens. Elizabeth Dole of North Carolina and Lindsey Graham of South Carolina put a hold on the 2006 measure, which was contained in a massive year-end tax, trade and health bill, right down to the waning hours of the 2006 lame-duck session.

A Graham aide said staff had yet to see the final language, but based on information trickling in, he would likely oppose it.

A spokeswoman for Senate Agriculture ranking member Saxby Chambliss, who signed a Dole-Graham letter in 2006 urging opposition to the program, said he opposes the provision in its current form but was “hopeful a compromise can still be reached.” Representatives of the National Council of Textile Organizations and American Manufacturing Trade Action Coalition said they could not comment until they see final language. But the alarm has clearly sounded. “Things are fluid, and obviously the industry is concerned and monitoring the situation closely,” said AMTAC spokesman Lloyd Wood.

Rangel’s staff has been reaching out to the textile community for months to demonstrate sensitivity to their concerns, sources said. But they said textile interests were so opposed to trade preferences for other apparel-producing countries, that it was unlikely they would support even a watered-down bill.

The HOPE expansion also got a lift from the support of religious charities like the U.S. Conference of Catholic Bishops, which has been lobbying for aid to Haiti given the food shortage and political situation.

“Haiti needs all the help it can get at the moment,” said Andrew Small, the group’s foreign policy advisor. Given the tiny size of Haiti’s economy and the country’s poverty, Small said: “The idea that any benefits that we give to Haiti would be in some way detrimental would be hard to imagine. I would hope that Haiti is not seen as a threat to U.S. economic development.”

Rangel also added a two-year extension of the Caribbean Basin Initiative, which provides duty-free access for goods from 19 countries. First enacted in 1983, the program has faced periodic renewal and is set to expire Sept. 30.

by Peter Cohn

Tue. Apr. 29, 2008

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