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EIAP not attractive enough for Dominican Republic
Jul '16
Notwithstanding a special concessional scheme allowing duty-free import of specific textile products from the Dominican Republic, the Caribbean nation has been steadily losing out on its market share of woven cotton bottoms in the US.

Although U.S. imports of woven cotton bottoms under the Earned Import Allowance Program (EIAP) tripled to $8.2 million in 2015 from $2.7 million in 2014, the value was less than 25 % of the peak value of $33.1 million in 2010.

Quantity-wise too, it was 41 % less than the imports in 2010, the first full year of the program, according to the Seventh Annual Review of EIAP for Dominican Republic by the US International Trade Commission.

Industry representatives describe the $5.4 million increase over 2014 to reach $8.2 million as “incidental” and not attributable to incentives provided by the program.

The Review further stated that the Dominican Republic government and industry sources in both countries indicated that the program in its present form is not providing enough incentives to substantially boost Dominican apparel exports to the U.S. market.

The Dominican Republic is a small supplier of woven cotton bottoms (pants and trousers, bib and brace overalls, breeches and shorts, and skirts and divided skirts) to the United States; it continued to lose U.S. market share in 2015.

The EIAP provides an uncapped duty-free benefit for U.S. imports of certain woven cotton bottoms assembled in the Dominican Republic from third-country fabric.

In order to qualify under the EIAP, the bottoms must be accompanied by a certificate documenting the purchase of certain U.S.-produced woven cotton fabric at a ratio of 2 for 1.

Under this formula, for every 2 units of qualifying fabric purchased for apparel production in the Dominican Republic, a 1-unit credit is received that can be used to import apparel made with third-country fabric into the United States.

Based on information available to USITC, since the program's inception, EIAP has not significantly boosted exports of bottoms from the Central American nation to the United States.

Although 12 U S and Dominican companies are registered to use EIAP, only 5 firms are currently using the program, the same number as reported in the sixth annual review implying that few entities find EIAP attractive enough to take the plunge. (SH)

Fibre2Fashion News Desk – India

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