DELMAS, Haiti – The IFC, one of Better Work’s founding partners, has recently pledged to support the garment sector in Haiti by bringing together key players in the public and private sectors and seeking opportunities and means to increase production. The COVID-19 pandemic has forced Better Work Haiti to adapt to working virtually and support factories and workers as they return to operations under new pandemic circumstances. According to the IFC, the industry’s priorities in Haiti includes helping companies and workers navigate the COVID-19 crisis through job and investment retention, and ultimately attract private capital and create more employment. Leveraging its potential, Haiti can also aspire to attract high-priced and high-quality garment manufacturers.
Through a recently launched project, IFC will bring together key players from the public and private sectors to seek opportunities to increase production. A first phase is focusing on helping manufacturers quickly convert to produce Personal Protective Equipment (PPE) or expand apparel production to meet a shifting global demand; a second stage seeks to improve government services; and a final phase will focus on attracting investors, facilitating expansions, developing a new value proposition that takes advantage of nearshoring, and mobilizing investments.
“IFC has supported Haiti’s apparel industry for more than a decade, during both the good times and also difficult times, and with the current challenges IFC is pleased to be working with this important sector to reach its potential,” said Judith Green, IFC Manager for the Caribbean. “We are looking to develop a renewed value proposition that can push sector growth. IFC will play an integrator role, bringing together institutions, companies, industry associations, as well as local and international investors who are paying attention to Haiti’s potential,” she added.
Likewise, enhancing the business environment and the sector’s competitiveness through improved business regulations are crucial elements to helping the local industry reach its full potential. Fortunately, the renewal of key legislation will aid Haiti’s garment industry in responding to the circumstances of an unprecedented year. The Caribbean Basin Economic Recovery Act (CBTPA) was renewed September 20, 2020 and will extend for another 10 years.
The trade pact will support around 30 percent of Haiti’s exports to the U.S., which will keep providing textile and apparel trade preferences to Caribbean countries through September 2030. Thanks to the trade pact, Haiti will aim to enhance its leverage to attract investors, facilitate expansions and develop a new value proposition for bringing production closer to the US market, take advantage of nearshoring, and mobilize investments.
“The trade benefits included in the agreement offer great opportunities for the country, but I don’t think Haiti has been taking full advantage of it as of yet. There is still much room for improvement,” said Claudine François, Better Work Haiti programme manager.
Six factories enrolled in her programme are currently taking advantage of the CBTPA trade deal.
“Having the CBTPA in place makes a huge difference for Haiti’s employer associations, it works as a backup for them,” François said. “Still, the industry must thoroughly know how to use the trade benefits included in the pact to reap its rewards.”
Key industry players in Haiti agree that there is still work to be done.
Clifford Apaid serves on the board of directors for the Association Des Industries d’Haiti (ADIH) and is a garment factory owner himself. He said that the first CBTPA led the groundwork for what the industry was able to achieve, also thanks to other trade agreements, like the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act of 2006, running through 2025.
“Haiti was coming out of a very difficult situation,” Apaid said. “I am referring to the 1990s embargo, when the industry was practically decimated. The first CBTPA sparked the beginning of a post-embargo and turmoil environment that backed a fledgling garment sector and attracted buyers to Haiti.”
Apaid said that although several governments over time contributed to the passing of the CBTPA in Haiti, they have not been able to achieve the necessary level of stability in the country to push and drive business opportunities to their maximum.
“In light of the COVID-19 pandemic, buyers today are looking at the world from a different perspective, with a particular focus on the cost-of-pipeline. This has led to nearshoring production, which will, in turn, enhance the value and importance of trade agreements like the CBTPA.”
Dominique Saint Eloi, leader of the Centrale nationale des ouvriers haïtiens (CNOHA) union group, said that before the implementation of the CBTPA, unions could not operate inside factories. “The CBTPA has certainly brought more freedom of association to Haiti, but significant interferences and discrimination towards unions still persist,” Saint Eloi said, adding that unions were urging employers and investors to see this renewal as a long-term profitable opportunity for their business. This could eventually translate into better wages and improved working conditions.
Looking ahead, the combination of the CBTPA and the Better Work and IFC support come together to provide crucial instruments for the growth of the country’s garment industry.