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Performance of U.S. Program Aiding Dominican Apparel Exports Continues to Worsen

Tuesday, July 30, 2013
Sandler, Travis & Rosenberg Trade Report

Four years after its implementation, the Earned Import Allowance Program is still not providing enough incentives to help boost the competitiveness of Dominican apparel exports in the U.S. market, the International Trade Commission found in an annual report issued July 26. The EIAP allows apparel manufacturers in the Dominican Republic that 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.

As currently structured, the ITC states, the EIAP has not provided incentives sufficient to curtail the continued decline in production of woven cotton bottoms (pants and trousers, bib and brace overalls, breeches and shorts, and skirts and divided skirts) in the Dominican Republic. Not only did U.S. imports under the EIAP fall sharply again in 2012 (just over 50% by quantity and 45% by value), but U.S. exports of bottom-weight cotton fabrics to the Dominican Republic fell sharply in 2012 after steady growth from 2008 through 2011.

According to the ITC, industry and other sources continue to offer the same recommendations for improving the EIAP: 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 program; and changing the requirement that dyeing, finishing and printing of eligible fabrics take place in the U.S.

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