ITC: U.S.-Dominican Republic apparel program frayed

The U.S. International Trade Commission said the Earned Import Allowance Program continues to fall short at boosting the Dominican Republic’s apparel exports to the United States.    The U.S. International Trade Commission (ITC) said that after seven years of implementation, the Earned Import Allowance Program (EIAP) continues to fall short at boosting the Dominican Republic’s apparel exports to the United States.
   EIAP allows Dominican apparel manufacturers who use U.S. fabric to produce certain apparel to earn a credit that can be used to ship it duty-free into the United States.
   The Dominican Republic-Central America-U.S. Free Trade Agreement Implementation Act, as amended, requires the ITC to annually evaluate the effectiveness of the EIAP program and make recommendations for improvements to the House Ways and Means and Senate Finance committees.
   Of the 12 registered firms, only five are currently using EIAP, which is the same number reported in last year’s ITC report.
   In 2015, U.S. imports of woven cotton bottoms from the Dominican Republic tripled by value to $8.2 million from $2.7 million in 2014 and increased more than fivefold by quantity.
   However, “U.S. industry sources attributed these increases, however, to incidental larger orders rather than to incentives offered by the EIAP,” ITC said. “Moreover, the value and quantity of U.S. imports of woven cotton bottoms under the EIAP in 2015 accounted for less than 25 percent and 41 percent, respectively, of what they were at their peak in 2010.”
   U.S. exports to the Dominican Republic of cotton fabrics of a weight suitable to making bottoms rose 13 percent by quantity and 11 percent by value between 2014 and 2015.
   The ITC’s recommendations to improve the program’s effectiveness largely mirrored last year’s, 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.
   The ITC’s report, Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Seventh Annual Review, is available on the agency’s website.