A proposed modification to the United States-Korea Free Trade Agreement (KORUS) rules of origin for certain fabrics of triacetate filament yarns is likely to have a negligible effect on U.S. imports and U.S. exports, reports the United States International Trade Commission (USITC) in its publication Certain Fabrics of Triacetate Filament Yarns: Effect of Modification to U.S.-Korea Free Trade Agreement Rules of Origin (Inv. no. FTA-103-033).

The USITC, an independent, nonpartisan, factfinding federal agency, produced the report at the request of the U.S. Trade Representative (USTR).

As requested, the report provides advice on the probable economic effect of the proposed modification to the KORUS rules of origin on U.S. trade under the agreement, on total U.S. trade, and on domestic production of the affected articles. The proposed modification, detailed in the USTR's request letter, covers the following heading of the Harmonized Tariff Schedule of the United States (HTS):

• Certain fabrics (under HTS heading 5408) of textured and non-textured triacetate filament yarns (under HTS subheading 5403.33)

The proposed modification to the rules of origin would liberalize the current rules of origin by allowing woven fabrics of artificial filament yarn made in Korea or the United States to be eligible for preferential treatment under KORUS when made with non-originating triacetate yarn. However, U.S. imports of and demand for the affected articles is small. Thus, the likely effect of the proposed modification on imports under KORUS and on total U.S. imports of these products is negligible.

There would be little to no effect on U.S. production or exports of the affected articles because there are no known domestic producers of the articles directly affected by the proposed modification.

Certain Fabrics of Triacetate Filament Yarns: Effect of Modification to U.S.-Korea Free Trade Agreement Rules of Origin (Inv. FTA-103-033, USITC publication 5383, November 2022) is available at https://www.usitc.gov/publications/332/pub5383.pdf.

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.

However, USITC Notifies USTR That Two Domestic Producers Filed Objections

Proposed modifications to the United States-Korea Free Trade Agreement (KORUS) rules of origin are likely to have a negligible effect on U.S. imports and U.S. exports, but they could impact the U.S. industry that produces some of the affected articles, reports the United States International Trade Commission (USITC) in its publication U.S.-Korea FTA: Advice on Modifications to Certain Textile and Apparel Rules of Origin.

The USITC, an independent, nonpartisan, factfinding federal agency, produced the report at the request of the U.S. Trade Representative (USTR).

As requested, the report provides advice on the probable economic effect of the proposed modifications to the U.S.-Korea FTA rules of origin on U.S. trade under the agreement, on total U.S. trade, and on domestic production of the affected articles. The proposed modifications, detailed in the USTR's request letter, cover the following of headings of the Harmonized Tariff Schedule of the United States (HTS):

• Certain cotton yarns (under HTS heading 5206) with viscose rayon staple fibers (under HTS subheadings 5504.10 or 5507.00);


• Certain woven fabrics (under HTS heading 5408) with cuprammonium rayon yarns (under HTS subheading 5403.39); and


• Certain apparel (under HTS heading 6110), accessories, and apparel parts (under HTS heading 6117) of cashmere yarns (under HTS heading 5108).

Each of the proposed modifications to the rules of origin would liberalize the current rules of origin by allowing the use of more non-originating materials. However, because U.S. imports from Korea are a small portion of total U.S imports of the affected articles, and because Korea is not a major producer of the affected articles, the likely effect of the proposed modifications on imports under KORUS and on total U.S. imports of these products is negligible.

Similarly, because the United States exported little to none (both in terms of value and as a share of total U.S. exports of these products) of the affected articles to Korea in 2018, the likely effect of the proposed modification on exports under KORUS and on total U.S. exports would be negligible as well.

The Commission received two objections from domestic producers of two of the articles affected by the proposed modification. One domestic producer of cotton yarns with viscose rayon staple fibers objected to the first of the proposed modifications as they produce the end-use product covered by that modification. Another domestic producer of cashmere yarns objected to the third modification as they produce the input covered by that modification.

U.S.-Korea FTA: Advice on Modifications to Certain Textile and Apparel Rules of Origin (Inv. No. FTA-103-032, USITC publication 4917, June 2019) is available at https://www.usitc.gov/sites/default/files/publications/tariff_affairs/pub4917.pdf

Although U.S. Imports of Woven Cotton Bottoms under the EIAP Rose in 2015, Industry Sources Do not Attribute the Increase to the EIAP

Seven years after its implementation, the Earned Import Allowance Program (EIAP) is not providing enough incentives to substantially 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; Seventh 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 seventh 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 29, 2016. Highlights of the report follow.

• Of the 12 registered firms, only 5 firms are currently using the program, the same number reported in the sixth annual review.

• 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. U.S. industry sources attributed these increases, however, to incidental larger orders rather than to incentives offered by the EIAP.  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 for making bottoms rose 13 percent by quantity and 11 percent by value between 2014 and 2015.

• Except for one addition, the recommendations offered during the seventh annual review of the EIAP were virtually the same as those received by the Commission during the previous six 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.  The new recommendation proposed during the seventh annual review was to add countries to the EIAP to foster regional integration and create further opportunities in other CAFTA-DR countries.

Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Seventh Annual Review (Inv. No. 332-503, USITC Publication 4626, July 2016) is available on the USITC's Internet site at https://www.usitc.gov/publications/332/pub4626.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.

Textiles and Apparel

Laura V. Rodriguez
(202) 205-3499
laura.rodriguez@usitc.gov

Change in 2013 from 2012:

• Read more about Textiles and Apparel

Subscribe to Textiles