Textiles And Apparel Will Play Key Role In Haiti Recovery

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

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