Haiti & Dominican Rep. Trade Dependency

By Raulin Cadet | Published Oct. 9, 2023 | Updated Oct. 12, 2023 | Topics: Trade, Haiti, Dominican Republic

What are the main product categories for which Haiti is the main market for export and the Dominican Republic (DR) is the main supplier? This article raises the possibility of monopsony in favor of Haiti. 

Concept: A monopsony occurs when there is just one buyer in a market, giving that buyer the power to set the price on that market. It is the opposite of monopoly that occurs when there is a single supplier. The supplier sets the price in the last case.

Within certain product categories, Haiti accounts for more than 50% of Dominican Republic exports. This suggests that, while not a pure monopsony, Haiti could have some power to control the prices of these products. But the situation isn't that straightforward. Numerous products from the Dominican Republic are produced only for the Haitian market. In a market, such as Haiti, where income levels usually remain low, this strategy might be used to offer products of poorer quality. In this regard, the power of Haiti to negociate the prices may be less effective, if Dominican Republic is the most affordable supplier.

Considering the graphic of this article, a strong trade dependency between Haiti and Dominican Republic is revealed within particular product groups (These product categories represent 31.57% of goods exports to Haiti by Dominican Rep.). However, this article highlights a significant challenge regarding Haiti's ability to manage concerns related to the quality of imported goods, given its low income levels.