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Textiles And Apparel Will Play Key Role In Haiti Recovery

James A. Morrissey, Washington Correspondent

As the massive relief efforts in Haiti move forward, U.S. textile and apparel manufacturers and retailers will be playing a major role in that nation's immediate and long-range recovery.

Prior to the devastating January 12th earthquake, apparel manufacturing was one of Haiti's most important industries, employing some 25,000 workers and accounting for more than three-quarters of the nation's export earnings, with 82 percent of the exports going to the United States. The National Retail Federation (NRF) estimates that as a result of the earthquake, Haiti's apparel industry is operating at only 50 percent, and it expects it will take several weeks for repairs and water and electricity to be restored and pave the way for a gradual restoration of production. As an example of the extent of the problem, NRF said a T-shirt plant that employed 500 workers was destroyed and all of its workers were killed.

In an effort to support the relief effort and long-term assistance, the American Apparel and Footwear Association (AAFA) has created a Haiti-AAFA Recovery and Reconstruction Team (HARRT) to assess recovery needs and help with reconstruction planning. AAFA says the mission of HARRT is to ensure the apparel and footwear industries "play a responsible and proactive role in Haiti's overall recovery." The recovery task force will assist the Haitian apparel and footwear industry in addressing infrastructure problems, factory capacity levels, workforce training and sourcing patterns.

HARRT Steering Committee Co-chairman Rick Helfenbein, president of Englewood Cliffs, N.J.-based TellaS Ltd., a division of Hong Kong-based Luen Thai, said the U.S. apparel industry has a long partnership with Haiti and is "ready to be a cornerstone of Haiti reconstruction." HAART Steering Committee Co-chairman Jerry Cook, senior vice president of government and trade for Winston-Salem, N.C.-based Hanesbrands Inc., said: "We must do everything we can to help rebuild this industry that has positively contributed to Haiti's economy. We have our work cut out for us as we get started making sure growth is sustainable and continues into the future."

Since 2006, apparel trade with Haiti has been governed by the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE), which created special trade rules giving preferential treatment to U.S. imports of Haitian apparel, provided the exports met specific rules of origin that placed emphasis on yarn and fabric inputs from the United States and Caribbean nations. In 2008, HOPE II was enacted, extending the HOPE Act for 10 years and broadening coverage to include more apparel, particularly knit products. Essentially, HOPE II gives duty-free treatment to apparel using U.S. yarn and fabric, but for every three garments using U.S. inputs, one garment may be made from non-U.S. yarn and fabric. U.S. textile and apparel manufacturers have supported HOPE II.

On February 2,  Sens. Ron Wyden, D-Ore., and Bill Nelson, D-Fla., introduced the Renewing Hope for Haiti Act, which extends the expiration dates for two trade preference acts benefiting Haiti and calls for other measures to facilitate trade. It would extend the Caribbean Basin Trade Partnership Act that allows Haiti and other participating countries to export qualified apparel duty-free into the United States through Sept. 18, 2013 rather than letting it expire this October, as is currently scheduled. The deadline for expiration of HOPE II would be extended through 2022 rather than 2018. In addition, the Wyden-Nelson bill would require U.S. Customs and Border Patrol to establish a presence in Haiti in order to offer commercial assistance and help facilitate trade among Haiti, the neighboring Dominican Republic and the United States. The measure would establish a Haiti Recovery and Investment Task Force led by the Secretary of the Treasury that would identify and help remove barriers to trade.

In introducing the measure, Wyden said: "The millions of dollars flowing into Haiti now are essential to addressing the immediate crisis, but Haiti's long-term survival depends on immediate steps being taken to protect its economic future. By renewing pro-Haitian provisions in U.S. trade law, streamlining Customs processes and opening up avenues for foreign investment, the U.S. can have a significant impact on this fragile economy and restore a much-needed sense of normalcy."

NRF, AAFA and the National Council of Textile Organizations all support the Wyden- Nelson bill. Rep. Charles B. Rangel, D-N.Y., chairman of the House Committee on Ways and Means, has been a long-time supporter of preferential trade and aid for Haiti, so the  Wyden-Nelson bill could receive swift action.

Commenting on the overall Haiti recovery situation, Eric Autor, NRF's vice-president and international trade counsel, said: "Haiti is a growing source of apparel for U.S. retailers, and at the same time U.S. stores are a market that has played a major role in building up the Haitian economy. It is more important than ever that this two-way relationship be continued and expanded. The legislation will put Haitians back to work at a crucial time, and will help provide long-term markets for their products that will help build the foundation for economic prosperity and political stability.

February 9, 2010