Five years after its implementation, the Earned Import Allowance Program is not providing enough incentives to help reverse the decline in Dominican apparel exports to the U.S. market, according to a new report by the U.S. International Trade Commission.
EIAP allows apparel manufacturers in the Dominican Republic who use U.S. fabric to produce certain apparel to earn a credit that can be used to ship eligible apparel made with non-U.S.-produced fabric into the United States duty free.
ITC’s fifth annual review — Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Fifth Annual — was submitted to the House Ways and Means and Senate Finance committees on July 25.
Highlights from the report include:
- Of the 12 registered firms, only five are currently using the program, down from seven reported in the fourth annual review.
- In 2013, U.S. imports of woven cotton bottoms from the Dominican Republic declined 76 percent, in both quantity and value, compared to 2012. Also, U.S. exports to the Dominican Republic of cotton fabrics of a weight suitable for making bottoms fell for the second year in a row, declining 25 percent in both quantity and value between 2012 and 2013.
- ITC received several recommendations from industry and other sources concerning improvements to EIAP. The recommendations were the same as those received during the previous four annual reviews, including lowering the 2-for-1 ratio of U.S. to foreign fabric to a 1-for-1 ratio; expanding the program coverage to allow other types of fabrics and apparel items to be included in EIAP; and changing the requirement that dyeing and finishing of eligible fabrics occur in the United States.
