The International Trade Commission (ITC) is conducting its annual review of a scheme designed to boost US imports of apparel from the Dominican Republic.
The so-called Earned Import Allowance Program (EIAP) provides a duty-free benefit for US imports of certain woven cotton bottoms (including trousers, overalls, shorts and skirts skirts) wholly assembled in the Dominican Republic.
To qualify, manufacturers must initially purchase a certain quantity of qualifying US fabric to produce the garments – and for every two square metre equivalents (SME) of qualifying fabric that are used, they receive a one SME credit to ship eligible apparel made with third-country fabric into the US free of duty.
The ITC is required to review this programme annually to evaluate its effectiveness and make recommendations for improvements. Its report will be submitted to the House Ways and Means and Senate Finance committees by August.
Launched nine years ago, the scheme has consistently been found to lack enough incentives to boost Dominican apparel exports to the US market.
Last year’s annual review found that only five of the 12 registered firms are currently using the programme – the same number reported in the last two reviews.
In 2016, US imports of woven cotton bottoms from the Dominican Republic fell 57% by value to $3.5m from $8.2m in 2015 and fell 61% by quantity to 745,000 SMEs from 1.9m SMEs in 2015.
US government sources and a user of the programme in the Dominican Republic attributed the decline in US imports under the EIAP to increased imports from Haiti and increased competition from other Western Hemisphere suppliers.