RESTRICTEDWORLD  TRADE
ORGANIZATIONWT/TPR/S/99/Rev.1
7 October 2003
(03-5155)
Trade Policy Review Body
TRADE POLICY REVIEW
HAITI
Report by the Secretariat
Revision
This report, prepared for the first Trade Policy Review of Haiti, has been drawn
up by the WTO Secretariat on its own responsibility.  The Secretariat has, as
required by the Agreement Establishing the Trade Policy Review Mechanism
(Annex 3 to the Marrakesh Agreement Establishing the World Trade
Organization), sought clarification from the Government of Haiti on its trade
policies and practices.
Any technical questions arising from this report may be addressed to
Mr Jacques Degbelo (Tel:  739 5583) or Mr Clemens Boonekamp
(Tel: 739 5226).
Document WT/TPR/G/99/Rev.1 contains the policy statement submitted by the
Government of Haiti.
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on Haiti.Haiti WT/TPR/S/99/Rev.1
Page iii
CONTENTS
Page
SUMMARY OBSERVATIONS vii
(1) THE ECONOMIC ENVIRONMENT vii
(2) INSTITUTIONAL FRAMEWORK viii
(3) TRADE POLICY INSTRUMENTS viii
(4) SECTORAL TRADE POLICIES ix
(5) TRADE POLICY AND TRADING PARTNERS xi
I. ECONOMIC ENVIRONMENT 1
(1) MAJOR FEATURES OF THE ECONOMY 1
(2) RECENT ECONOMIC DEVELOPMENTS 4
(3) TRADE PERFORMANCE AND INVESTMENT 7
(i) Trade in goods and services 9
(ii) Investment 10
(4) OUTLOOK 11
II. TRADE REGIME 12
(1) INSTITUTIONAL FRAMEWORK 12
(2) P OLICY FORMULATION AND IMPLEMENTATION 13
(3) T RADE POLICY OBJECTIVES 14
(4) L AWS AND REGULATIONS 16
(5) TRADE AGREEMENTS AND ARRANGEMENTS 18
(i) Multilateral agreements 18(ii) Regional agreements 18
(iii) Bilateral agreements 23
(iv) Other agreements and arrangements 23(v) Trade-related technical assistance 25
III. TRADE POLICIES AND PRACTICES BY MEASURE 31
(1) INTRODUCTION 31
(2) MEASURES DIRECTLY AFFECTING IMPORTS 31
(i) Registration, documentation and procedures 31
(ii) Tariffs, other duties and taxes 33(iii) Preshipment inspection and customs valuation 39(iv) Import prohibitions, restrictions and licensing 41(v) Trade sanctions 41(vi) Contingency trade measures 41
(vii) Rules of origin 42
(viii) Local content requirements 42(ix) Government procurement 42(x) Other measures 43
(3)
MEASURES DIRECTLY AFFECTING EXPORTS 43
(i) Registration and documentation 43WT/TPR/S/99/Rev.1 Trade Policy Review Body
Page iv
Page
(ii) Export taxes, charges and levies 44(iii) Prohibitions, controls and export licensing 44
(iv) Quotas and voluntary restraints 44
(v) Subsidies, duty and tax concessions, promotion, assistance for export 45(vi) Free zones and industrial zones 45(vii) Other provisions 46
(4)
MEASURES AFFECTING PRODUCTION AND TRADE 46
(i) Incentives 46
(ii) Standards and other technical requirements 47
(iii) Competition policy and price controls 48(iv) State enterprises and privatization 49(v) Protection of intellectual property rights 51
IV. TRADE POLICIES BY SECTOR 53
(1) I NTRODUCTION 53
(2) A GRICULTURE AND RELATED ACTIVITIES 53
(i) Overview 53(ii) Main sub-sectors 56
(3)
MINING AND ENERGY 60
(i) Mining 60(ii) Energy 64
(4)
MANUFACTURING 66
(5) SERVICES 68
(i) Overview 68
(ii) Tourism 70
(iii) Financial services 72(iv) Telecommunications and postal services 74(v) Transport 75
REFERENCES 77
APPENDIX - TABLES 79Haiti WT/TPR/S/99/Rev.1
Page v
CHARTS
Page
I. ECONOMIC ENVIRONMENT
I.1 Sectoral breakdown of real GDP, 1995/96 and 2001/02 2
I.2 Trend in real GDP, 1987/88 – 2001/02 6I.3 External balances, 1995-2002 9
III. TRADE POLICIES AND PRACTICES BY MEASURE
III.1 Breakdown of MFN duties applied, 2002 34
III.2 Breakdown of MFN duties by sector, 2002 35
IV. TRADE POLICIES BY SECTOR
IV.1 Average customs duties by ISIC classification, 2002 69
TABLES
I. ECONOMIC ENVIRONMENT
I.1 Main economic indicators 1994/95 – 2001/02 5
I.2 Balance of payments, 1997/2002 8I.3 Structure of investment, 1999 11
II. TRADE REGIME
II.1 Main Haitian laws and regulations in November 2001 16
II.2 Situation of requirements relating to notifications to the WTO, November 2001 19
III. TRADE POLICIES AND PRACTICES BY MEASURE
III.1 MFN tariff escalation by ISIC Revision 2 two-digit heading, 2002 36
III.2 Annual quotas for exports of textile products (SL) by Haiti to the United States 45III.3 Annual quotas for exports of textile products (GAL) by Haiti to the United States 45III.4 Current status of certain Haitian enterprises, July 2003 50III.5 Main Haitian legislative texts on intellectual property rights 51
IV. TRADE POLICIES BY SECTOR
IV.1 Food imports, 1995-1999 54
IV.2 Farm size, 2002 54
IV.3 Production of certain cash crops 56
IV.4 Exports of certain cash crops 57
IV.5 Production of certain food crops, 1997-2001 58IV.6 Exports of marine products 59IV.7 Breakdown of tourism 1997-1999 70WT/TPR/S/99/Rev.1 Trade Policy Review Body
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APPENDIX-TABLES
Page
III. TRADE POLICIES AND PRACTICES BY MEASURE
AIII.1 MFN tariff statistics, by HS 2-digit, 2002 81
AIII.2 List of products subject to excise duty, 2003 84
IV. TRADE POLICIES BY SECTOR
AIV.1 MFN tariff statistics, by ISIC Rev.2 category, 2002 86Haiti WT/TPR/S/99/Rev.1
Page vii
SUMMARY OBSERVATIONS
(1) THE ECONOMIC ENVIRONMENT
1. The reforms undertaken by Haiti since
1986 make it one of the most liberal
economies in Latin America and the
Caribbean today.  These reforms have created
an environment that has allowed Haiti toimprove its economic performance.  After
shrinking by almost 20 per cent between 1991
and 1994, Haiti's real GDP grew at an
average annual rate of around 2.5 per cent
between 1995 and 2000.  Nonetheless, socio-political problems continue to make Haiti one
of the poorest countries in the world.  Since
2001, the economy has once again gone into
recession.  A large part of its population lives
below the poverty threshold and theunemployment rate is almost 60 per cent.
2. Budgetary reforms helped to lower the
public deficit from 2.8 per cent in 1994/95 to
0.6 per cent in 1996/97, but it then increased
and remained above 2 per cent from 1998/99
onwards.  The monetary financing of the
public deficit and the dollarization of theeconomy constrain the effectiveness of Haiti's
monetary policy.  With the exception of
1998/99 and 2001/02, the inflation rate has
usually exceeded 11 per cent.  Interest rates on
loans remain high.  Investment is modestbecause of high interest rates, the low level of
financial deepening, risks caused by socio-
political instability, administrative problems
and the high cost of production exacerbated by
the inadequacy of the infrastructure and thehigh charges for basic services (electricity,
water and transport), whose supply is
unreliable.  These are a number of the factors
that explain in particular the low level of
foreign direct investment.
3. The agricultural sector employs
almost 45 per cent of the working population.
It only accounts for 28 per cent of real GDP,
however, because of its low level of
productivity.  The manufacturing sectoraccounts for some 8 per cent of real GDP and
for a number of years it has shown steady
annual growth of around 2 per cent.  Theservices sector's share of real GDP is the
largest (around 64 per cent).  It is dominated
by non-market services which, in the main, aresupplied by the State, non-governmental
organizations and non-profit-making bodies.
Another typical feature of Haiti's economy is
the informal sector, whose activities represent
an alternative to the mass unemploymentprevailing in Haiti.  Crafts activities
(especially painting) have become principal or
secondary activities.
4. Haiti's external debt remains within
reasonable limits.  Nevertheless, Haiti hasbeen dependent on foreign assistance,
principally to finance its various development
and structural adjustment programmes.
Consequently, the downward trend in
international aid in recent years hascompounded its problems.  Foreign trade in
goods (around 30 per cent of GDP) is not very
substantial for an open economy such as
Haiti's.  The external balances in goods and
services show chronic deficits that are partly
offset by current transfers, the vast majority of
which come from Haitians living abroad.
5. Haiti's main exports are manufactures
(around 76 per cent of the total value of
exports of goods), especially products of the
textile industries and clothing.  Agricultural
products make up the remaining 24 per cent.The majority of imports are food products and
manufactures, whose share of imports is
continually rising.  Haiti's main trading
partner is the United States of America, which
takes over 90 per cent of Haiti's total exportsin terms of value.  The other important
partners are the European Union (EU) and the
Dominican Republic.
(2) 
INSTITUTIONAL FRAMEWORK
6. According to the 1987 Constitution,
the Republic of Haiti is a multiparty
parliamentary democracy.  Haitian law
follows the monistic principle of supremacy of
international legal instruments (including the
WTO Agreements) over domestic law.  Haiti'slegislation is gradually being brought into line
with these instruments.  The legislative processWT/TPR/S/99/Rev.1 Trade Policy Review Body
Page viii
is slow, however, because of the political
problems facing Haiti.  This explains why a
large part of Haitian legislation is out of dateand the reforms undertaken in many sectors
have not been underpinned by the necessary
legislative amendments.  The adoption of new
legislation on free zones in 2002 and of a new
Investment Code, however, appears to indicatethat the authorities are determined to change
this situation.
7. The Ministry of Trade and Industry
(MCI) plays a key role in the formulation and
implementation of Haiti's trade policy.  It isresponsible for drawing up draft legislation in
the areas of trade and industry.  The private
sector is not systematically consulted on the
formulation of trade policy, but its
representatives sometimes take part in thejoint committees working on the introduction
of a legislative framework for trade and
industry.  Trade policies are neither analysed
nor evaluated, but are debated on certain
particular occasions.
8. Haiti became a contracting party to
the GATT on 1 January 1950 and has been amember of the WTO since 30 January 1996.  It
grants most-favoured-nation (MFN) treatment
to all its trade partners.  It has not signed any
plurilateral agreement.  Haiti attaches great
importance to multilateral trade negotiationsin the agricultural and services sectors.  It
would like to receive technical assistance to
allow it, inter alia, to respect its commitments
on notification, to bring its trade legislation
into line with the provisions in the WTOAgreements, and to implement certain
Agreements, especially those on customs
valuation, sanitary and phytosanitary
measures, technical barriers to trade, and
trade-related aspects of intellectual propertyrights.
9. Haiti also participates in other
multilateral organizations, including the
United Nations and its agencies, the
International Monetary Fund (IMF) and theWorld Bank group.  It also belongs to regional
groups such as the Caribbean Community and
Common Market (CARICOM) whose revisedtreaty is awaiting ratification by the Haitian
Parliament, the Association of Caribbean
States (ACS) and CARIFORUM.  TheGovernment intends to pursue its integration
efforts, especially with countries that are
geographically close.  For this purpose, Haiti
is taking part in the process to create the Free
Trade Area of the Americas (FTAA).
10. Under the Generalized System of
Preferences (GSP), Haiti enjoys non-
reciprocal preferential treatment by developed
countries.  A broad range of Haitian products
has preferential access (duty-free) to theUnited States market.  This non-reciprocal
preferential treatment is granted in particular
under the Caribbean Basin Initiative (CBI),
the expanded CBI and the textiles programme.
Haiti has also signed the Cotonou Agreementunder which the European Union (EU) gives
non-reciprocal preferential treatment and aid
to developing countries in Africa, the
Caribbean and the Pacific (ACP).  Lastly,
Haiti also benefits from the "Everything but
Arms (EBA)" initiative es tablished by the EU,
which grants duty-free access to EU marketsfor products from least-developed countries,
with the exception of arms and ammunition.
(3) 
TRADE POLICY INSTRUMENTS
11. Since 1986, Haiti has greatly
liberalized its trade regime by abolishing themajority of quantitative restrictions on trade
(with the exception of those maintained for
security, health, moral or environmental
reasons) and eliminating export duties and
taxes.  Computerization has helped tostreamline customs procedures.  Tariffs are
currently the major trade policy instrument
and their structure has been simplified to
arrive at six rates (zero, 3, 5, 10, 15 and
57.8 per cent) whose levels have beennoticeably lowered.  The maximum rate of
57.8 per cent only applies to imports of
gasoline.
12. The simple arithmetic average of the
Haitian tariff is 2.9 per cent, with broaddispersion.  The modal rate is zero and applies
to around 67 per cent of tariff headings in theHaiti WT/TPR/S/99/Rev.1
Page ix
eight-digit Harmonized System.  With the
exception of the modal rate, the 5 per cent rate
is the most frequently used and applies toaround 14 per cent of tariff headings.  Overall,
tariffs decline from the first to the second
stage of processing and then rise from semi-
finished products (second stage of processing)
to finished products.  Agriculture (MajorDivision 1 of the ISIC Revision 2) is the sector
that enjoys the highest tariff protection, with a
simple average tariff of 4.5 per cent, followed
by manufacturing industry, in which the simple
average tariff is 2.8 per cent.  The mining andquarrying industry is the least protected sector
with a simple average tariff of 2.1 per cent.
13. Inspection fees of 4 per cent of the
c.i.f. value of goods are levied, bringing the
average rate of import duty up to 6.9 per cent.A tax of 2 per cent is levied on the import
duties and taxes paid, together with a turnover
tax of 10 per cent and excise duty on both
imports and domestic products.  An additional
excise duty is levied on imported beer and
cigarettes at a higher rate than on domestic
products.
14. During the Uruguay Round, Haiti
bound its import tariffs on all agricultural
products (WTO definition) and on some non-
agricultural products.  The tariffs on non-
agricultural products have been bound atrates ranging from zero to a ceiling of 30 per
cent.  Tariffs on agricultural goods have been
bound at rates ranging from zero to a ceiling
of 50 per cent.  Other duties and levies on all
these products (agricultural and non-agricultural) have been bound at 16 per cent,
except for certain edible products of animal
origin (20 per cent) and some types of grape
must and cider, as well as vinegar (21 per
cent).  The tariff applicable to gasoline,however, is well above the level bound.
Furthermore, the tariff bindings by Haiti
during the Annecy Round in 1949 have not yet
been transposed into the Harmonized System.
This makes it more difficult to undertake anoverall evaluation of the range and scope of
Haiti's commitments in this area.  In addition,
Haiti has obtained a waiver to delay
application of the WTO Customs ValuationAgreement until 30 January 2003.  The
valuation method based on the Brussels
Definition is still used, although a new law oncustoms valuation is expected in
November 2003.  Preshipment inspection is
also required for all imports exceeding
US$5,000 or in entire containers.
15. Haiti has never imposed any
antidumping, countervailing or safeguard
measures and does not at present have any
relevant legislation.  It does not have any
legislation either on competition or
standardization.  The concession regimes inthe Investment Code are intended to promote
certain types of investment deemed to be
priorities and strategic for Haiti's economic
development.  They allow exemption from
duties and taxes on certain imported inputs,equipment and raw materials needed for
production, especially products for export or
re-export.  Exemption from income tax may
also be granted for a limited period.
Following the adoption of the law on free
zones, two areas are being prepared for this
purpose.
16. In 1996, a programme to modernize
State enterprises was launched in order to
overcome their financial and management
problems and to scale down the State's
participation in production.  The privatizationprocess has not, however, gone ahead as
planned (only two enterprises have been
privatized).  The inefficiency of State
enterprises facing difficulties, particularly in
the services sector (electricity,telecommunications, postal services, water
supply, management of ports and airports, and
banking services) has a negative impact on
other branches of economic activity.
17. The draft trademark law underlines
the Government's determination to revise its
intellectual property legislation and bring it
into conformity with its multilateral
commitments.WT/TPR/S/99/Rev.1 Trade Policy Review Body
Page x
(4) SECTORAL TRADE POLICIES
18. In recent decades, the role played by
the agricultural sector in Haiti's economy hassteadily declined.  This can be attributed to the
growth in the services sector and the drop in
agricultural output due to the rural exodus,
the impact of the international embargo
against Haiti (following the coup d'Etat in1991) on the production of exportable
foodstuffs, and to adverse climatic conditions.
Agricultural production is not sufficient to
meet the population's food needs, which are
partly covered by imports.  Coffee remains themain export crop, followed by mangoes, cacao
and essential oils.  Agriculture is facing a
number of problems, including the uncertainty
concerning title deeds, the division of arable
land into smaller units, and the lack ofinfrastructure, especially for irrigation.  There
has also been large-scale deforestation, which
has greatly accelerated soil erosion.  For
farmers, access to credit is limited and loans
are often taken out at extremely high rates of
interest.
19. The aim of Haiti's agricultural policy
is to ensure food security, modernize
agriculture, and improve production for
export.  As a large part of the external
financing to be used for agricultural
development has been frozen by donorsbecause of the political deadlock in Haiti, the
Government has had to focus on certain
strategic priorities with a view to expanding
the hydro-agricultural infrastructure and
exploiting new farmland, as well as increasingproduction.  Quality controls are carried out
on domestic sales, imports or exports of
certain products such as coffee, mangoes and
cacao.  The authorities also conduct
phytosanitary and animal health controls on arange of agricultural goods and regulate
trade, including the export of animal and plant
products.  Farmers are exempt from income
tax and enjoy other advantages such as loans
on concessional terms, which are grantedunder the development programmes.  The
average tariff protection in the agricultural
sector (Major Division 1 of the ISIC Revision
2) is 4.5 per cent.20. Mining and quarrying plays a
marginal role in Haiti's economy.  A permit
must be obtained for any mining activityrelating to metal resources (three types of
permit are in effect).  For non-metal
resources, only an operating permit is
required.  Haiti's principal mining resources
are non-metal ores, especially clay, buildingstone, marble, calcium carbonate, lignite, and
gold.  In export terms, these resources are
largely under-exploited.  In Haiti, the main
sources of energy are wood, petroleum
products and electricity.  Petroleum productsare all imported, and the electricity supply is
the responsibility of the State enterprise,
l'Électricité d'Haïti (EDH) (Haiti Electricity).
The average tariff protection for the mining
and quarrying industries is 2.1 per cent.Electricity is imported duty free, whereas
gasoline is subject to the highest tariff rate
(57.8 per cent)
21. The importance of the manufacturing
sector has seriously diminished since the
international embargo against Haiti was
declared in 1991.  This sector neverthelessaccounts for the majority of exports,
particularly textiles, clothing and leather
goods, amounting to 55 per cent of Haiti's
exports of manufactures to the United States,
which takes more than 90 per cent of theseexports.  The average customs tariff on
manufactured goods is 2.8 per cent.  In
addition, tariff concessions are allowed in
order to offset to some extent the negative
impact of the degressivity in customs duties oncertain manufacturing industries, particularly
those making semi-finished products.
22. Under the General Agreement on
Trade in Services (GATS), Haiti bound certain
measures affecting education, financial,construction and related engineering, hotel
and restaurant, and veterinary services.
Measures affecting the supply of other types of
services were not bound.  Tourism and trade
services are the sub-sectors that make thelargest contribution by far to real GDP and
the Government is making great efforts to
develop them.  Haiti is a net importer of
services.  Unlike other sectors, theHaiti WT/TPR/S/99/Rev.1
Page xi
Government plays a predominant role in
supplying services.
(5) TRADE POLICY AND TRADING
PARTNERS
23. Haiti's trade policy underlines its
attachment to the multilateral trading system.
Moreover, Haiti is gradually becoming
integrated in the economic groups within itsregion in order to increase its trade flows and
enhance cooperation in areas such as health,
education and the prevention of natural
disasters.
24. Haiti has implemented reforms that
have greatly liberalized its economy and made
it one of the most open in Latin America and
the Caribbean.  Nevertheless, the
implementation of the structural component of
the reforms has not followed and this has hada negative impact on the economy's
performance because the majority of State
enterprises facing difficulties provide the basic
services needed for production.
25. The priority would currently appear to
be socio-political stability that would allow
Haiti to proceed with its reforms.  Adaptingdomestic legislation to the reforms already
implemented, some adjustments in taxation
(import duties and domestic taxes), and
transposing Haiti's former tariff bindings into
the Harmonized System , would improve the
transparency and credibility of its trade
regime and would underline its attachment to
the principles of the WTO.  Improving Haiti's
multilateral commitments on both goods and
services would also help.  Such measureswould create a more favourable environment
for investment and would allow better
distribution of resources so that Haiti could
fully exploit its potential and the opportunities
open to it due to its geographical situationand, as a least-developed country, through the
various regimes giving preferential access to
the markets of developed countries.
26. It is important for the international
community to support the liberalization effortsmade unilaterally by Haiti under difficultsocio-political conditions and to give it all the
assistance needed, particularly in training and
information on the multilateral trading system,institutional support, legislative reform,
notification, implementation of the WTO
Agreements, and multilateral and regional
negotiations.