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Weekly Trade Focus: HOPE II

Every week, the USTR website explores a new trade topic, with background information and current trade data. This week's trade topic focuses on the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II).

Late last week, the White House announced that Haiti will continue to be eligible for the benefits of the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II), which allows duty-free access to the U.S. market for certain Haitian-made apparel and other articles, with the goals of fostering stability and economic development in Haiti.

The HOPE II Act was enacted in 2008 as a continuation and expansion of the original HOPE Act of 2006.  These agreements acted as extensions of the benefits provided by the Caribbean Basin Initiative trade programs.  HOPE II provides for duty-free access for up to 70 million square meter equivalents (SME) of knit apparel (with some t-shirt and sweatshirt exclusions) and 70 million SMEs of woven apparel without regard to the country of origin of the fabric or components, as long as the apparel is wholly assembled or knit-to-shape in Haiti.  HOPE II provides for duty-free treatment of knit or woven apparel under a "three for one" earned import allowance program:  for every three SMEs of qualifying fabric (sourced from the United States or certain trade partner countries) shipped to Haiti for production of apparel, qualifying apparel producers may export duty-free from Haiti or the Dominican Republic to the United States one SME of apparel wholly-formed or knit-to-shape in Haiti regardless of the source of the fabric. HOPE II also provides for duty-free treatment for certain brassieres, luggage, headgear, and certain sleepwear.  HOPE II allows these Haitian goods to enter the United States duty-free if shipped either directly from Haiti or through the Dominican Republic.

Under the 2008 legislation, to receive the benefits Haiti was required to establish an independent labor ombudsman's office and a program operated by the International Labor Organization to assess compliance with core labor rights and Haiti's labor laws in the country's apparel factories.  Haiti also had to agree to require Haitian producers that wish to be eligible for duty-free treatment under HOPE II to participate in the ILO program and to develop a system to ensure such participation.

Haiti is currently our 90th largest goods trading partner with $1.4 billion in total (two way) goods trade during 2008.  Goods exports totaled $944 million; Goods imports totaled $450 million.  The U.S. goods trade surplus with Haiti was $494 million in 2008.