Four 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 new publication.
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 to evaluate annually the effectiveness of the EIAP program and make recommendations for improvements.
The USITC's fourth annual report found:
- As currently structured, the 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 the 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.
- 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, second, and third 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.
View the publication at: http://www.usitc.gov/publications/332/pub4417.pdf