INVESTING IN THE PETROLEUM INDUSTRY? – WHY HAITI.
Despite Haiti’s challenging socio-economic, as well as political climate, Haiti remains one of the most open economies of the Caribbean seeking foreign direct investment (FDI). Haiti’s legislation encourages such FDI with the assurance that the same rights, privileges, and equal protection are provided to local and foreign companies. The current president of Haiti established and announced “Seven Priority Axes” for the development of Haiti. One of which is in the electricity (e.g., Hydro, Solar, Natural Gas and, of course, Petroleum) sector.
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.
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 78th 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 firstname.lastname@example.org.