Statement of the U.S. Representative at the WTO Trade Policy Review of Haiti
December 2, 2015
Thank you, Chair. I would like to join others in welcoming H.E. Minister Jude Hervey Day and his distinguished delegation from Port au Prince to Geneva for Haiti’s second Trade Policy Review. In addition, I would like to thank Haiti and the Secretariat for their work in compiling the helpful reports on trade policy developments in Haiti since it became a WTO Member in 1996. Each of the reports has helped to inform our consideration of Haiti’s trade and investment policies today. They also establish a solid foundation upon which to build future TPR discussions regarding Haiti.
The United States is Haiti’s number one export destination, receiving 83% percent of Haiti’s exports in 2014. The United States renewed and extended preferential access for Haitian goods earlier this year. We take great interest in Haiti’s success and support measures that will maximize that success as broadly as possible for the Haitian people. Haiti’s garment sector, in particular, is helping to forge a better life for workers and spurring the kind of sustainable, broad-based growth and development that is possible when trade and investment are combined with respect for core labor standards. The Better Work program in Haiti continues to help boost competitiveness in the sector while serving as one of the world’s most robust labor monitoring programs.
In 2015, Haiti’s economy showed signs of continuing improvement as private investment outpaced donor assistance for the fourth consecutive year. While GDP grew by only 2.8 percent, exports of manufactured goods continued to grow, as did consumer spending and public investment. Agricultural production declined by 1.5 percent due to its vulnerability to changing weather conditions, which spotlights the need for more investment in agricultural infrastructure to mitigate such negative events in the future and help lessen Haiti’s dependence on imports of food. Inflation remained under control despite fiscal pressures. Visible investments in industrial parks and manufacturing centers, hotels and other tourism development, and many start-up enterprises reflect the shift away from aid dependency.
Haiti faces many challenges to expanding investment and economic growth: investor protections are weak, contract enforcement is problematic, energy costs are high, and infrastructure is inadequate. Political uncertainty has made private investors hesitant. Imports, a significant portion of the Haitian economy, declined 18 percent in year-over-year comparison with 2014. Unemployment remains high, with official figures topping 40 percent, and other estimates going as high as 80 percent. Job opportunities in Haiti’s formal economy remain scarce.
Haiti could take a number of measures unrelated to increased governmental expenditure that would address these challenges: investor protections and contract enforcement would be strengthened by greater transparency on how appeals against customs rulings are addressed through the courts; and eliminating or reducing the 250 million dollar subsidy to Electricite d’ Haiti (EDH) would go a long way toward creating better public investment opportunities. Haiti would further improve the predictability of its business climate by updating the Commercial Code and moving to ratify the International Center for Settlement of Investor Disputes (ICSID) Convention. Continued diligence on labor rights in the garments sector, and changes that would improve labor regulation throughout the rest of the economy, can further the goals of broad-based development and enhance the climate for investors.
There is much uncertainty about planned sectoral tariff increases, particularly in agriculture and manufacturing, but also more generally, that impede business planning and investment. We note the Secretariat’s reporting on the many unrelated and uncoordinated levies on imports that result in substantial increases in the actual import duty of goods – the lack of transparency that these various duties and charges create is a clear impediment to efficient trade. In addition, their costs on the Haitian economy are immediately visible, and their positive impact in this form, if any, is uncertain.
Similarly, fees applied by a wholly government-owned firm for bringing outside goods through the port of Port-au-Prince and the next largest port are among the highest in the Caribbean: without bringing these costs in line with other ports in the region, Haiti places itself at a comparative disadvantage for economic activity that can and does go elsewhere. Import prohibitions, restrictions, and licensing serve a similarly negative purpose when they are seen to be non-transparent and arbitrary. On the other hand, coordinated efforts to formalize trade between Haiti and the Dominican Republic could help reduce the trade imbalance and boost Haiti’s revenue.
While we recognize the challenges Haiti faces with regards to customs and logistics and the need for appropriate donor support in this area, we hope that Haiti be in a position to ratify and implement the WTO Trade Facilitation Agreement as quickly as possible. It is clear that trade facilitation improvements are likely bring important benefits to Haiti, including reducing trade and transportation costs, as well as promoting a more attractive investment climate and boosting competitiveness.
A number of international agreements to which Haiti nominally belongs would address uncertainty as well as Haiti’s structural problems in trade if they were ratified and implemented. Other treaties that have been ratified, such as the CARICOM Single Market and Economy – establishing consistent rates CARICOM-wide – have not been officially published and thus cannot be transparently and fully implemented.
The United States has always advocated for strong intellectual property protection as critical to creating a business-friendly economy. Haiti’s major laws governing intellectual property protection date from the early- to mid-twentieth century, and updates to bring them into compliance with TRIPS and WIPO agreements, as well as the institutions that are to enforce these laws, are either not implemented or not well understood by rights holders.
Many of the conflicts of Haiti’s trade regime with WTO provisions identified in the Secretariat’s report existed at the time of Haiti’s last review, in 2003. We understand that there have been difficult circumstances in the intervening years, but progress in addressing these durable and ongoing inconsistencies between Haiti’s trade laws and WTO obligations would go a fair way toward promoting greater growth and prosperity for Haiti and for its people.
All told, Haiti is playing a difficult hand. We congratulate Haiti for its positive actions in the face of these serious challenges. We believe that there remains considerable scope to remove obstacles to trade that are not due to outside factors. We believe that greater adherence by Haiti to the rules and principles of the WTO would bring Haiti the greatest chance for success. We hope this discussion today will encourage Haiti’s furtherance of such policies and we look forward to continuing our work with Haiti to achieve those goals.