Haiti lacks a fixed pricing structure for most products, leading the government to impose mark-up restrictions on some products. For example, prices of petroleum and related products are strictly controlled. While Haiti remains party to a bilateral trade preference with the U.S., petroleum and related goods tend to be excluded from the benefits those agreements provide. Nonetheless, petroleum remains one of Haiti’s most imported products, following agricultural products and apparel. The chart below from the U.S. Census trade data represents the export of foreign and domestic petroleum from the U.S. and abroad into Haiti.

U.S. Census

One preferential trade program that does not completely exclude everything petroleum related is the Caribbean Basin Trade Partnership Agreement (CBTPA), from which Haiti benefits. CBTPA was designed to provide greater duty-free access to U.S. markets for Caribbean and Central American nations. Since its inception, October 5, 2000, it’s been renewed twice. It was last set to expire on October 1, 2020, but, was reinstated on October 13, 2020, strengthening U.S.-Caribbean trade relations for another decade. CBTPA provides tariff treatment including certain items previously excluded from duty-free treatment under the CBI program, like petroleum related products.  The reinstatement of this program will enhance the export American-made goods and strengthen Western supply chains while contributing to economic development and job creation in Haiti and other beneficiaries to this agreement.

U.S. exporters considering exporting petroleum to Haiti must know the basics of exporting. Diaz Trade Law provides a list of top 10 tips when exporting to ensure maximum compliance with laws and regulations. One of the imperative steps a U.S. supplier must take prior to exporting is to ensure it knows who the end user of the petroleum is and ensures vetting of the end user via the consolidated screening list.

Though the business environment for FDI in Haiti remains a challenge, the considerable increase has been attributable to the acquisition of the leading distributors of petroleum and related products in Haiti. Haiti stands as the 78^th largest goods trading partner of the U.S with a total of over $2 billion dollars in two way trade. This number includes mineral fuels (i.e. Petroleum) as the second top export category.

Have questions about exporting compliantly or want more information on your specific products? Contact info@diaztradelaw.com.

The Caribbean Basin Trade Partnership Act (“CBTPA”) is an Act of U.S. legislation which expired on October 1, 2020. The CBTPA sought to strengthen Caribbean basin economies by extending preferential trade and tariff treatment and increase U.S. export opportunities in those countries. Upon the expiration of the CBTPA at midnight on October 1, 2020, importers may not file otherwise CBTPA-eligible without the payment of duties and other fees set at normal trade relation duty rates.

U.S. Trade Preference Programs in the Caribbean

U.S. trade preference programs in the Caribbean Basin region, known as the Caribbean Basin Initiative (“CBI”), began in 1983 with the implementation of the Caribbean Basin Economic Recovery Act (“CBERA”). In 2000, the CBTPA expanded CBI benefits in the CBERA. The CBI programs sought to strengthen Caribbean basin economies preferential trade and tariff treatment, which was meant to liberalize Caribbean trade regimes and cause those economies to diversity their exports.

Although the effect of the CBI programs on the U.S. economy have been marginal, the CBI programs are credited with significantly benefiting certain Caribbean economies. For example, Haiti has developed significantly stronger export capacity during the program and has come to use the preferential treatment opportunities extensively. Several Caribbean Basin countries have specialized in niche exports such as t-shirts (Haiti), methanol (Trinidad and Tobago), polystyrene (The Bahamas), and fruit juice (Belize).

In considering whether a Caribbean Basin country is eligible for special treatment under CBTPA, the President is required to take a number of factors into consideration, including: (1) whether the beneficiary country has demonstrated a commitment to undertake its WTO obligations, (2) the extent to which the country protects intellectual property rights, and (3) the extent to which the country provides internationally recognized workers’ rights, among others.

The following Caribbean Basin countries are current CBTPA eligible countries:

• Barbados
• Belize
• Curacao
• Guyana
• Haiti
• Jamaica
• St. Lucia
• Trinidad & Tobago

Potential Reenactment

On September 10, 2020, the U.S. House of Representatives’ Ways & Means Committee held a hearing to consider CBTPA’s renewal. The CBTPA enjoys broad support from the U.S. and Caribbean business communities. For example, the U.S. Chamber of Commerce and a coalition of trade associations wrote a letter to U.S. Trade Representative Robert Lighthizer advocating for CBTPA’s reenactment, arguing that the CBTPA is in the economic interest of the U.S. as well as Caribbean Basin nations. The Haitian Ambassador to the United States, Herve Denis, underscored in his testimony before the Ways & Means Committee the importance of CBTPA to Haitian security, economic, and immigration concerns. Civil society advocates, however, have questioned CBTPA and other preference programs’ ability to empower the middle class in the United States and beneficiary countries. Overall, it is unclear whether CBTPA will be renewed.

Customs Implications of CBTPA Expiration

The CBTPA’s October 1 expiration has important customs implications. Upon its expiration, importers may not file otherwise CBTPA-eligible entries without the payment of duties and applicable Merchandise Processing Fee (MPF). These include tariff lines with CBTPA special program indicators (“SPI”) “R” and the following HTSUS tariff lines:

• 9820.11.03
• 9820.11.06
• 9820.11.09
• 9820.11.12
• 9820.11.15
• 9820.11.18
• 9820.11.21
• 9820.11.24
• 9820.11.27
• 9820.11.30
• 9820.11.33
• 9802.00.8044
• 9802.00.8046

Duties must be deposited at the normal trade relations (column 1) duty rates. In the event that CBTPA is renewed, U.S. Customs and Border Protection (CBP) will provide further instructions on how to file a refund request for duties or fees.

Contact Us!

If you have questions about trading with the Caribbean region or how CBTPA’s expiration impacts your operation, reach out to us at info@diaztradelaw.com

In order to boost their economic relations with the Caribbean and also stabilize the Caribbean Basin economy, the U.S. implemented the Caribbean Basin Initiative (CBI), which is a collection of programs created to provide over a dozen Caribbean countries with duty-free access to the U.S. market for most goods. The CBI represents a crucial element of U.S. and Caribbean economic relations, and encompasses over 5,000 tariff lines at the HTS8 level for U.S. products being exported to and imported from Antigua and Barbuda, Aruba, The Bahamas, Barbados, Belize, the British Virgin Islands, Curacao, Dominica, Guyana, Haiti, Jamaica, Montserrat, Saint Kitts and Nevis, Saint Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago.

The charts below from the U.S. Census Bureau show U.S. imports and exports, from and to the Caribbean, by major product categories. The data shows a slight increase in agricultural trade between 2015 and 2019 (the last year that complete data was available).

Source: U.S. Census Bureau

Source: U.S. Census Bureau

A list of factors must be satisfied in order to gain preferential treatment when trading agricultural products with the CBI region. Those factors are that the goods must be:

1. imported directly from a CBI beneficiary country into the U.S. customs territory;
2. solely the growth, product or manufacture of a CBI beneficiary country or be substantially transformed into a new or different article in the CBI beneficiary country; and
3. a minimum of 35 percent local content of one or more CBI beneficiary countries (15 percent of the minimum content may be from the United States).

In 2018, CBI beneficiaries supplied $6 billion of the total U.S. Imports ranking 44th among U.S. import suppliers.

The Caribbean market is appealing to importers and exporters alike because of its close proximity to the United States, long-standing reputation of high quality products, and superior quality of service. The limited agricultural production capacity of most Caribbean countries has resulted in consumer-oriented products accounting for nearly two-thirds of U.S. agricultural and related product exports to the Caribbean, with poultry meat and products (excluding eggs), dairy products, prepared foods, beef and beef products, and snacks rounding out the top five export categories. On the other hand,  as Americans become wealthier and more ethnically diverse, U.S. imports from CBI beneficiaries have increased in recent years, including in products such as cocoa, coffee, guavas, mangos, papayas, yams and sauces, and other fruit preparations. As such, while member nations need not have the identical regulatory systems, they must employ equivalent sanitary and health measures that provide the same level of protection achieved domestically for imported goods. Data on the import values of edible products entering U.S. ports and their origin of shipment can be seen in USDA’s summary data on annual food imports.

Nonetheless, despite these advantages that member nations benefit from, those involved in the importation or exportation of agricultural commodities to and from the U.S., must adhere to U.S. regulations imposed by the U.S. Department of Agriculture (USDA), the U.S. Food and Drug Administration (FDA), as well as the U.S. Customs and Border Protection (CBP). For example, on September 1, 2020 the U.S. Trade Representative (USTR), U.S. Department of Commerce, and the USDA released a report addressing the Trump Administration’s plan to support America’s seasonal and perishable fruit and vegetable producers. Those government agencies will establish an interagency working group tasked with monitoring seasonal and perishable fruit and vegetable products, coordinate as appropriate regarding future investigations and trade actions, and providing technical assistance to Members of Congress in developing legislation on this issue. While CBI provides special rules governing emergency relief from imports of perishable agricultural products from beneficiary countries, the report establishes more serious enforcement could potentially affect U.S. Caribbean trade.

Diaz Trade Law provides a list of top 10 tips when importing and exporting to ensure maximum compliance with laws and regulations, starting with knowing your product and the HTS classification it falls under, the agency that regulates your products, and whether or not you need a license/permit to import or export. If you have questions regarding exporting and/or importing products to and from the Caribbean, contact Diaz Trade Law today.