Ten years after its implementation, the Earned Import Allowance Program (EIAP) did not provide enough incentives to significantly boost Dominican apparel exports to the U.S. market, reports the U.S. International Trade Commission (USITC) in its publication Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Tenth Annual Review.

The program terminated by statute on December 1, 2018.

The EIAP allowed apparel manufacturers in the Dominican Republic who used U.S. fabric to produce certain apparel to earn a credit that could 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, required the USITC, an independent, nonpartisan, factfinding federal agency, to evaluate annually the effectiveness of the EIAP program and make recommendations for improvements.

The USITC's 10th and final annual review was submitted to the U.S. House of Representatives Committee on Ways and Means and the U.S. Senate Committee on Finance on September 17, 2019. Highlights of the report follow.

• Of the 13 registered firms, only four used the program in its final year, the same as the prior year.
• In 2018, U.S. imports of woven cotton bottoms from the Dominican Republic fell 4 percent by value to just under $1.4 million in 2018, down from $1.5 million in 2017, and fell 2 percent by quantity to 150,716 SMEs in 2018 from 153,679 SMEs in 2017. The continued decline in U.S. imports under the EIAP in its final year likely reflects a significant decline in woven trouser manufacturing capacity in the Dominican Republic, a simultaneous shift by U.S. importers to Asian suppliers during the life of the program, and anticipation of the expiration of the program on December 1, 2018. The general decline in the program’s usage after U.S. imports under the EIAP peaked in 2010 may also reflect the lack of changes made to the program despite the recommendations put forth since the first annual review.
• No new recommendations to improve the program were received during the 10th annual review of the EIAP, nor were there any known requests or efforts to extend the program beyond its expiration date. During the previous nine annual reviews, the government of the Dominican Republic, industry representatives, and users of the program consistently made three principal recommendations to improve the EIAP: 1) lower the 2-for-1 ratio of U.S. to foreign fabric to a 1-for-1 ratio; 2) expand the program coverage to enable other types of fabrics and apparel items to be included in the EIAP; and 3) change the requirement that dyeing and finishing of eligible fabrics occur in the United States.

Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Tenth Annual Review (Inv. No. 332-503, USITC Publication 4950, September 2019) is available on the USITC's Internet site at http://www.usitc.gov/publications/332/pub4950.pdf

USITC general factfinding investigations, such as this, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, and the Senate Committee on Finance. The resulting reports convey the Commission's objective findings and independent analyses on the subject investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigations reports are subsequently released to the public, unless they are classified by the requester for national security reasons.

Nine years after its implementation, the Earned Import Allowance Program (EIAP) is not providing enough incentives to significantly boost Dominican apparel exports to the U.S. market, as intended, reports the U.S. International Trade Commission (USITC) in its publication Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Ninth Annual Review.

The 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 the USITC, an independent, nonpartisan, factfinding federal agency, to evaluate annually the effectiveness of the EIAP program and make recommendations for improvements.

The USITC's ninth annual review was submitted to the U.S. House of Representatives Committee on Ways and Means and the U.S. Senate Committee on Finance on August 3, 2018.  Highlights of the report follow.

• Of the 13 registered firms, only 4 firms are currently using the program – one less than was reported in the last three annual reviews.

• In 2017, U.S. imports of woven cotton bottoms from the Dominican Republic fell 57 percent by value (from $3.5 million in 2016 to $1.5 million) and 80 percent by quantity (from 745,000 SMEs in 2016 to 154,000 SMEs). U.S. government sources and a former user of the program in the Dominican Republic attributed the decline in U.S. imports under the EIAP to increased imports from Haiti and increased competition from other Western Hemisphere suppliers. Haiti offers lower labor costs and trade preferences under the HOPE/HELP programs, which provide more sourcing flexibility and coverage for a wider range of products than the EIAP, as well as a tariff preference level (TPL) for woven apparel from Haiti that allows the use of third-country fabric up to a specified level.  Also, the decline in U.S. imports under the EIAP likely reflects a significant decline in woven trouser manufacturing capacity in the Dominican Republic, along with a simultaneous shift by U.S. importers to Asian suppliers during the life of the program. Finally, uncertainty surrounding the program's renewal after its expiration on December 1, 2018, may also explain why U.S. imports of woven cotton bottoms under the program reached their lowest level in 2017.

• The recommendations offered during the ninth annual review of the EIAP were virtually the same as those received by the Commission during the previous eighth annual reviews:  1) lowering the 2-for-1 ratio of U.S. to foreign fabric to a 1-for-1 ratio; 2) expanding the program coverage to enable other types of fabrics and apparel items to be included in the EIAP; and 3) changing the requirement that dyeing and finishing of eligible fabrics occur in the United States. 

Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Ninth Annual Review (Inv. No. 332-503, USITC Publication 4809, August 2018) is available on the USITC's Internet site at https://www.usitc.gov/publications/332/pub4809.pdf. 

USITC general factfinding investigations, such as this, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, and the Senate Committee on Finance. The resulting reports convey the Commission's objective findings and independent analyses on the subject investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigations reports are subsequently released to the public, unless they are classified by the requester for national security reasons.

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, as intended, reports the U.S. International Trade Commission (USITC) in its publication Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Sixth Annual Review.

The 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 the USITC, an independent, nonpartisan, factfinding federal agency, to evaluate annually the effectiveness of the EIAP program and make recommendations for improvements.

The USITC's sixth annual review was submitted to the U.S. House of Representatives Committee on Ways and Means and the U.S. Senate Committee on Finance on July 24, 2015. Highlights of the report follow.

• Of the 13 registered firms, only five firms are currently using the program, the same number reported in the fifth annual review.
• 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 the program 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.
• The recommendations offered during the sixth annual review of the EIAP were virtually the same as those received by the Commission during the previous five annual reviews—1) lowering the 2-for-1 ratio of U.S. to foreign fabric to a 1-for-1 ratio; 2) expanding the program coverage to enable other types of fabrics and apparel items to be included in the EIAP; and 3) eliminating the requirement that dyeing and finishing of eligible fabrics occur in the United States.

Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Sixth Annual Review (Inv. No. 332-503, USITC Publication 4544, July 24, 2015) is available on the USITC's Internet site at http://www.usitc.gov/publications/332/pub4544.pdf.

USITC general factfinding investigations, such as this, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, and the Senate Committee on Finance. The resulting reports convey the Commission's objective findings and independent analyses on the subject investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigations reports are subsequently released to the public, unless they are classified by the requester for national security reasons.

Three years after its implementation, the Earned Import Allowance Program (EIAP) is not providing enough incentives to help boost the competitiveness of Dominican apparel exports in the U.S. market, as intended, reports the U.S. International Trade Commission (USITC) in its publication Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Third Annual Review.

The 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 the USITC, an independent, nonpartisan, factfinding federal agency, to evaluate annually the effectiveness of the EIAP program and make recommendations for improvements.

The USITC's third annual review was submitted to the U.S. House of Representatives Committee on Ways and Means and the U.S. Senate Committee on Finance on July xx, 2012. Highlights of the report follow.

 

 

 

 

 

 

• As currently structured, the EIAP has not provided enough incentives to curtail the ongoing declines in the Dominican Republic's production of woven cotton bottoms and exports.
• Although U.S. exports of cotton bottom-weight fabrics grew in 2011, the rate of growth slowed significantly from the first two years of the program.
• The USITC received several recommendations from industry and other sources concerning improvements to the EIAP. The recommendations were the same as those offered during the first and second annual reviews. 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 the EIAP; and changing the requirement that dyeing, finishing, and printing of eligible fabrics take place in the United States.

Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Third Annual Review (Investigation No. 332-503, USITC Publication 4340, July 2012) is available on the USITC's Internet site at http://www.usitc.gov/publications/332/pub4340.pdf. A CD-ROM of the report may be requested by e-mailing pubrequest@usitc.gov, calling 202-205-2000, or contacting the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.

USITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means. The resulting reports convey the Commission's objective findings and independent analyses on the subject investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requester for national security reasons.

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