[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

29565: Stephen Jacob - News article (fwd)

Stephen Jacob

Article published in today's Wall Street Journal.  See below.

Haiti's Trade Push Hits
New Political Head Wind
Lawmakers Look Askance
At Effort to Ease Tariff Rule
Amid Globalization Concern
November 27, 2006; Page A6

WASHINGTON -- Haiti's struggle to persuade Congress to help its apparel makers underscores a new reality: In the political climate on Capitol Hill, even small trade gestures face big hurdles.

Haiti is trying to secure passage of an initiative that would allow the Caribbean country to use non-American-made material in garments destined for the U.S., while still qualifying for duty-free access. Currently, Haitian garments must be made from material produced in the U.S., or in some cases from the Caribbean region, to get duty-free treatment. Using foreign-made fabric, such as from China, could significantly lower production costs for Haitian garments makers and make their goods more competitive in global markets.

Haiti exported $447 million in goods to the U.S. in 2005, a fraction of total U.S. imports. Haitian officials say the deal could create as many as 40,000 sorely needed jobs there.

Lawmakers from textile-heavy states, worried the initiative would result in the widespread use of inexpensive Chinese fabric by Haitian garment makers, temporarily got the deal shelved earlier this fall. Haiti and a diverse group of supporters -- including the Catholic Church, American companies and musician Wyclef Jean -- have since renewed the campaign to push through the deal. But with voter concern over globalization having tipped important races in midterm elections and helped Democrats retake Congress, Haiti now faces an even-tougher environment, trade experts said.

"There's going to be a pronounced change of tone, from a period of accommodation and negotiation to litigation and enforcement," said Dan Ikenson, associate director of the Center for Trade Policy Studies at the Cato Institute, a free-market think tank.

Mr. Ikenson said small countries like Haiti aren't going to find much political support in Washington as lawmakers from both parties pull back from free-trade initiatives. Peru and Colombia, which have sealed deals with the U.S. that await congressional approval, could also be affected.

Underscoring the sensitivity of the trade issue, the House earlier this month failed to pass legislation that would end Cold War-era trade restrictions on Vietnam and give it the same benefits as other U.S. trading partners in the World Trade Organization. The bill's defeat shocked the Bush administration, which had hoped Congress would approve the measure in time for the president's visit to Vietnam last week for a regional summit.

As needy as Haiti may be, lawmakers from textile-producing states and industry lobbyists say a similar fate could befall the proposed Haiti bill. They contend the measure would open a new loophole in U.S. trade laws, exposing already stressed domestic producers to new levels of foreign competition.

"We can stop it," pledged Cass Johnson, president of the National Council of Textile Organizations, the largest U.S. textile-industry group. "If Vietnam shows anything, it will fail."

The increased protectionist environment is a cause of concern for Haiti's finance minister, Daniel Dorsainvil, who was in town earlier this month trying to drum up support among U.S. lawmakers for the Haiti bill. At the start, he was hopeful of gathering support, but after making the rounds for two days, he conceded, "It's not 100% guaranteed."

The Haiti trade proposal has been in the works for years, but really emerged as a divisive issue this fall. Perhaps the most controversial proposal on the table would allow Haiti garment makers to produce as much as 60 million square yards of woven apparel, such as chinos and denim jeans, with foreign-made material, while still qualifying for duty-free access to the U.S. Haiti's backers say that accounts for less than 1% of the U.S.'s overall apparel imports each year.

Supporters say the deal would give Haiti greater flexibility to meet the requests of retailers, and is needed to restore some competitive edge Haiti lost after Congress conferred special trade benefits last year on the Dominican Republic and five Central American nations.

Haiti is by far the poorest country in the Western hemisphere, with four-fifths of its 8.3 million people living in poverty, and newly elected president René Préval is grappling with the spread of AIDS, unreliable electrical service and criminal gangs, as he seeks to revive the economy. "We need these jobs," said Mr. Dorsainvil.

At the end of September, House Ways and Means Chairman Bill Thomas, a California Republican, folded the Haiti measure into a larger trade package aimed at helping poor countries, including in Africa. But only days after the package was introduced, Mr. Johnson and other textile lobbyists, working with House allies, persuaded Republican leaders to shelve the bill, after raising alarms about the Haiti measure. The maneuvering underscored the political leverage wielded by the textile industry.

After the setback, a loose coalition of business and religious interests with ties to Haiti began working quietly to revive the proposal. On Sept. 26, the day after the bill was pulled, the Catholic archbishop of Cincinnati wrote to House Majority Leader John Boehner, an Ohio Republican, to urge reconsideration.

An executive at Cintas Corp., an Ohio-based uniform firm with an apparel plant in Haiti, called Mr. Boehner's office. "For Haiti, it's a big deal," said Glenn Larsen, Cintas's vice president of manufacturing. Mr. Larsen said the proposed trade benefits for Haiti would allow his company to nearly double the work force at its plant there from 1,100.

At the time, Mr. Boehner said he would be open to reviving the bill after the midterm election.

As lawmakers left to campaign in late September, Haiti's allies built support among voters. Father Andrew Small, a trade strategist at the U.S. Conference of Catholic Biships, distributed an alert to 1,000 Catholic leaders around the country, urging them to press lawmakers to back the bill. He distributed a letter signed by leaders of the Episcopal Church, the Evangelical Lutheran Church, the United Church of Christ and the United Methodist Church to every congressional office.

The week after the midterm elections, Mr. Dorsainvil, Haiti's finance minister, arrived in Washington to make a push for the legislation. His timing was ill-fated: That day, the Vietnam bill went down on the House floor.

Undaunted, Mr. Dorsainvil toured Capitol Hill with Haiti's ambassador to the U.S. and Mr. Jean, the musician, who also is the ambassador's nephew. They visited several lawmakers, including Rep. Charles Rangel, the New York Democrat who is set to take over the House Ways and Means Committee, the starting point for all trade bills in Congress. They also met with Mr. Boehner's chief of staff.

Mr. Jean later performed at a Capitol Hill reception, urging staffers, lawmakers and lobbyists to step up efforts for Haiti. A spokesman for Mr. Boehner said no formal decision has been made about how to proceed. But House Republican leaders have discussed bringing the Africa and Haiti package to a vote in early December, when Congress is expected to make another run at approving the Vietnam measure.

Mr. Rangel is supportive, suggesting that he isn't a knee-jerk opponent of free trade but sees moral and foreign-policy reasons for helping Haiti. Being able to see trade in those terms could help Mr. Rangel reach across party lines, since the Bush administration at times defends its own trade priorities in similar ways.

The Vietnam and Haiti-Africa packages could face resistance. Rep. Robin Hayes, a Republican who represents a textile-heavy district in North Carolina, led the opposition against Haiti earlier this fall, and he is less inclined to compromise now. Mr. Hayes had expected to cruise to re-election, but encountered a challenge from a Democrat who made much of the congressman's support for the Central America Free Trade Agreement in 2005. Nov. 7's election results were so close that a full recount is likely.

When lawmakers returned the week after the election, Mr. Hayes chided Republican leaders for bringing up the Vietnam legislation. He voted against the bill, and said he is opposed to helping Haiti if that trade deal comes up again.

"It's a way for China to get around quota agreements in place," a Hayes spokeswoman said.

Write to Greg Hitt at greg.hitt@wsj.com

Get free, personalized commercial-free online radio with MSN Radio powered by Pandora http://radio.msn.com/?icid=T002MSN03A07001