The U.S. International Trade Commission said the four-year-old Earned Import Allowance Program (EIAP) is not providing enough incentives to help boost the competitiveness of Dominican apparel exports in the U.S. market.
The agency published its findings in the report, Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Fourth Annual Review
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. The Dominican Republic-Central America-United States Free Trade Agreement Implementation Act, as amended, requires ITC to evaluate annually the effectiveness of the EIAP program and make recommendations for improvements.
ITC's fourth annual review was submitted to the House Ways and Means Committee and Senate Finance Committee on July 26.
Highlights in the report include:
- As currently structured, EIAP has not provided incentives sufficient to curtail the continued decline in production of woven cotton bottoms in the Dominican Republic.
- U.S. imports under EIAP fell by just over one-half by quantity and 45 percent by value during 2011-12. In addition, U.S. exports of bottom-weight cotton fabrics to the Dominican Republic fell sharply in 2012, for the first time since the program's inception.
ITC received several recommendations from industry and other sources concerning improvements to EIAP. The recommendations were the same as those offered during the first, second, and third annual reviews, the agency said. They included lowering the 2-for-1 ratio of U.S. to foreign fabric to a 1-for-1 ratio; including other types of fabrics and apparel items in EIAP; and changing the requirement that dyeing, finishing, and printing of eligible fabrics take place in the United States.