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Haitian President’s Assassination Could Destabilize Apparel Sourcing

Haiti’s decades-old effort to become a reliable apparel and footwear sourcing destination likely took another hit Wednesday with the assassination of Haitian President Jovenel Moïse.

Reports said the action, which also injured Moïse’s wife Martine Marie Etienne Joseph, inflicted more chaos on the unstable Caribbean country that was already seeing an escalation of gang violence and anti-government protests. The Associated Press (AP) reported that Claude Joseph, the interim prime minister, said the police and military were in control of security in Haiti, where a history of dictatorship, natural disasters and political instability have not only made for uncertainty but curtailed attempts by U.S. imports and the government to uplift manufacturing in the Caribbean nation.

The fallout is already being felt, according to Mirko Woitzik, senior manager EMEA, intelligence solutions  for Everstream Analytics, a supply-chain risk monitoring platform. “We are seeing impacts on logistics movements already,” he told Sourcing Journal. “The airport is closed, businesses are shut down due to a curfew in place and there are no trucking/delivery movements in the country until further notice.”

For the year to date through May, apparel imports from Haiti increased 400 percent compared to the year-ago period to 37.42 million square meter equivalents. Haiti receives preferential trade status under the Caribbean Basin Trade Partnership Act (CBTPA) and the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE) and the Haiti Economic Lift Program.

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CBTPA and HOPE established unlimited duty-free treatment for various apparel products, with certain restrictions regarding the source of the yarns and fabrics used in the apparel, and duty-free treatment for certain apparel up to certain annual quota levels, known as trade preference levels (TPLs). HOPE II and HELP expand these existing preference programs by allowing additional textile and apparel articles to qualify for duty-free treatment, as well as increasing some of the TPL quota levels.

In October, CBTPA, which has provided a structured system of textile and apparel duty preferences for certain countries, most notably Haiti, since it was implemented in 2000, was extended for 10 years.

“Haiti has long been a trusted trading and supply chain partner of the global apparel and footwear industry,” Steve Lamar, president and CEO of the American Apparel & Footwear Association, told Sourcing Journal. “We pray for peace and calm in the region and order as Interim Prime Minister Claude Joseph represents the people of Haiti. Our association and many of its member companies have been proud to work on, support enactment of and operate under trade partnership programs in the Caribbean Basin during the past quarter century.”

Lamar said Haiti is the 14th largest supplier of U.S. apparel imports and a “dependable partner with which we will continue to support.” He said since the Caribbean Basin Economic Recovery Act (CBERA) and amendments made to it through CBTPA, HOPE and HELP has provided an important trade policy basis to support U.S. investment in and exports to U.S. allies in the Caribbean Basin.

“Not only have these programs supported many U.S. textile, apparel and footwear jobs, but they have also supported economic development in the region, advancing key U.S. foreign, security and immigration policy goals,” Lamar added.

In Haiti, according to AP, Joseph said, “The country’s security situation is under the control of the National Police of Haiti and the Armed Forces of Haiti. Democracy and the republic will win.”

The U.S. Embassy in Haiti said it was restricting U.S. staff to its compounds and that the embassy would be closed Wednesday because of “an ongoing security situation.”

“We are shocked and saddened to hear of the horrific assassination of President Jovenel Moïse and the attack” on the first lady, President Biden said. “We condemn this heinous act and I am sending my sincere wishes for First Lady Moïse’s recovery. The United States offers condolences to the people of Haiti and we stand ready to assist as we continue to work for a safe and secure Haiti.”

The U.S. apparel industry and the Clinton Global Initiative (CGI) raised millions of dollars for the people and country after a devastating earthquake in 2010. Since then, socioeconomic and political woes and other natural disasters have seen Haiti’s manufacturing ebb and flow.

Rick Helfenbein, a retail and fashion industry consultant, and former AAFA chief who was instrumental in the CGI efforts in Haiti, said for the apparel industry, “Haiti remains a very special place and has been for many years.”

Garment manufacturers were lured there in the early 1980’s, taking advantage of President Ronald Reagan’s original 807 program, where U.S.-made raw material was cut to shape in Florida and shipped to Haiti for assembly, Helfenbein noted.

“Many who pioneered those early programs felt the industry was doing a world of good by supplying entry level jobs and a sustainable income to people who had no other reasonable way to make a living,” he said.

Over the years, the assembly programs have continued to function with some degree of interruption, Helfenbein said, but the effort endures to this day with special programs like Haiti HELP and Haiti HOPE that assure continued growth and progress.

“As the current travesty subsides and the turmoil abates, Haiti will still be a land of great beauty and promise,” he added. “It has evolved from dictatorship to democracy, from hurricane to earthquake, and yet the people of Haiti always try their best. Perhaps this time around, something good will evolve and Haitians will see some light at the end of their seemingly endless tunnel of problems and issues. As they say in Haiti, ‘beyond the mountains, more mountains.’”

This time around, AP reported that opposition leaders accused Moïse of seeking to increase his power, including approving a decree that limited the powers of a court that audits government contracts and another that created an intelligence agency that answers only to the president.

Moïse had been ruling by decree for more than a year after the country failed to hold elections and the opposition demanded he step down in recent months. Former President Michel Martelly, who Moïse succeeded, called the assassination “a hard blow for our country and for Haitian democracy, which is struggling to find its way,” AP reported.

Additional reporting by Jessica Binns.