July 26, 2013
News Release 13-070
Inv. No. 332-503
Contact: Peg O'Laughlin, 202-205-1819

Decline in U.S. Imports of Woven Cotton Bottoms Under Program Accelerated in 2012

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 publication Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Fourth 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 fourth 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 26, 2013. Highlights of the report follow.

• 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.

Earned Import Allowance Program: Evaluation of the Effectiveness of the Program for Certain Apparel from the Dominican Republic; Fourth Annual Review (Inv. No. 332-503, USITC Publication 4417, July 2013) is available on the USITC's Internet site at http://www.usitc.gov/publications/332/pub4417.pdf. The report may be requested by emailing pubrequest@usitc.gov, by calling 202-205-2000, or by writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436.

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.