CBPTA Benefits to the U.S. Textile Industry
CBPTA, first enacted in 2000, is the backbone supporting Haiti’s garment industry. The program requires the use of U.S. made yarn, virtually all of which is spun from U.S. cotton, or U.S fabric made from U.S. yarns. Thus, CBTPA provides a major boost to U.S. textile exports. Total 2016 United States yarn and fabric exports to Haiti and the Dominican Republic (DR) totaled $511,862,234, as seen in the chart below.
To complement the successful CBPTA program, and in recognition of the development challenges facing the poorest country in the Western Hemisphere, Congress enacted the Haiti HOPE program in 2006, which now expires in 2025. These symbiotic programs are essential to Haiti’s continued maintenance and growth of its garment industry, which accounts for over 90% of Haiti’s exports to the United States.
If CBTPA expires, all apparel eligible for CBTPA would be eligible for duty-free treatment under various provisions afforded by Haiti HOPE. However, shifting preference claims from CBTPA to HOPE would over subscribe the relevant Trade Preference Levels (TPLs), harming existing investment in Haiti, and would likely bring new investment to a screeching halt. Further, the saturation of the HOPE TPLs due to the inclusion of CBTPA trade would result in a disincentive for companies to continue to invest in expanding U.S. yarn spinning and fabric production and would harm U.S. textile exports.
Yarn exported from the United States to Haiti and the DR is knit or woven into fabric, cut and sewn into finished garments in Haiti, and then exported from Haiti back to the United States. As seen in the data below, while total U.S. yarn exports are down, they decreased less for Haiti and the Dominican Republic. Notably, between 2016-2017, exports to Haiti and the DR rose 7.8%.
Fabric exports from the United States to Haiti and the DR also rose over the past year, in this case 11.9%. While exports to Haiti by value are less than to NAFTA or China, geographically Haiti is only about the size of the state of Maryland, yet it is a major destination for U.S. made fabric.
Recent U.S. investment that directly supports CBTPA exports from Haiti
• Over the last 5 years, Gildan, a vertically integrated supplier of basic apparel goods has invested almost $400 million in the United States for yarn-spinning operations in North Carolina and Georgia.
• In 2017, MAS Holdings, a Sri Lankan company, purchased a facility in North Carolina for an estimated $20 million to complement its production its new operations in Caracol Industrial Park, located in northern Haiti.
• In 2016, Everest Textiles Co., a Taiwanese company with vertically integrated operations, expanded fabric production to the United States. It set up operations in North Carolina that added 610 American jobs. Fabric made in Everest’s facilities is intended to be exported to Haiti, and then reimported into the U.S. as apparel. Everest produces for many well-known U.S. companies like Nike, Adidas, Patagonia, the North Face, Columbia, and Spyder
CBPTA (caribbean basin trade partnership act)