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Apparel Import Program for Dominican Republic No Longer in Effect

Monday, December 10, 2018
Sandler, Travis & Rosenberg Trade Report

The Department of Commerce’s Office of Textiles and Apparel has issued a reminder that the Dominican Republic Earned Import Allowance Program expired Dec. 1. Entries of qualifying apparel on or after that date may no longer use allowances to qualify for duty-free treatment under this program.

For ten years, the so-called DR 2-for-1 program provided an uncapped duty-free benefit for U.S. imports of certain woven cotton bottoms (pants and trousers, bib and brace overalls, breeches and shorts, and skirts and divided skirts) assembled in the DR from third-country fabric. However, according to reports from the International Trade Commission, activity under this program decreased steadily for years and fell precipitously in 2016 and 2017. This decline was attributed to increased imports from Haiti, which offers lower labor costs and trade preferences under the HOPE/HELP programs; increased competition from other Western Hemisphere suppliers; a significant drop in woven trouser manufacturing capacity in the DR; a shift by U.S. importers to Asian suppliers; and uncertainty surrounding the program’s renewal.

Industry and other sources had recommended that to increase program participation the DOC should lower the 2:1 ratio of U.S. to foreign fabric to 1:1, expand the program to include other types of fabrics and apparel items, and allow U.S. qualifying greige fabrics to be dyed and finished outside the U.S. However, such changes were never made.

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