U.S. apparel trade program for Dominican Republic falls short

The ITC said that six years after implementing EIAP Dominican Republic, apparel manufacturers have found little benefit to participating in the trade program.    A six-year-old U.S. trade program that allows Dominican Republic apparel manufacturers that use U.S. fabric to produce certain apparel to earn a credit, which can then be used to ship eligible apparel made with non-U.S.-produced fabric into the United States duty free, continues to fall short, according to the U.S. International Trade Commission.
   “Six years after the implementation of the Earned Import Allowance Program (EIAP), the government of the Dominican Republic and U.S. and Dominican apparel industry sources continue to indicate that the program is not providing enough incentives to help reverse the decline in Dominican apparel exports to the U.S. market,” the ITC said in a report submitted to the House Ways and Means and Senate Finance committees.
   Of the 13 registered firms, only five are currently using the EIAP program, the same number reported in last year’s ITC report.
   In 2014, U.S. imports of woven cotton bottoms from the Dominican Republic totaled less than 8 percent of the value and quantity of imports under EIAP in 2010, the first full year of the program. Also, U.S. exports to the Dominican Republic of cotton fabrics of a weight suitable for making bottoms fell for the third year in a row, declining by 12 percent by quantity and 19 percent by value between 2013 and 2014, ITC said in its report.
   The recommendations offered in the ITC’s sixth annual review of EIAP were essentially the same as those received by the commission during the previous five annual reviews:

• Lower the 2-for-1 ratio of U.S. to foreign fabric to a 1-for-1 ratio.
• Expand the program coverage to enable other types of fabrics and apparel items to be included in the EIAP.
• Eliminate the requirement that dyeing and finishing of eligible fabrics occur in the United States.