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U.S. duty-free program, too few incentives for Dominican Republic

U.S. duty-free program

The U.S. International Trade Commission (ITC) released its ninth annual review for the “earned import allowance program” (EIAP) that provides uncapped duty-free benefits for U.S. imports of certain woven cotton bottoms assembled in the Dominican Republic from third country fabric.

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According to an ITC release:

Nine years after its implementation, [the EIAP] is not providing enough incentives to significantly boost Dominican apparel exports to the U.S. market, as intended. The EIAP was created as a part of the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR).

The EIAP also requires the ITC to generate reports periodically and to evaluate the effectiveness of the EIAP program.

In summary, the ITC report found that:

  • The EIAP has not significant increased exports of woven cotton bottoms from the Dominican Republic to the United States.
  • Imports under the EIAP reached their lowest point since implementation of the program in 2009.
  • Only four firms are currently using the program.
  • U.S. imports of woven cotton bottoms from the Dominican Republic fell by 57% by value (from $3.5M in 2017 to $1.5M) and 80% by quantity in 2017.

The program is set to expire 1 December 2018. The status of the program’s renewal is uncertain.

 

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner, Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

Andy Siciliano
Partner, National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Robert Waldrop
Principal
T: 212-954-8117 
E: rwaldrop@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

John L. McLoughlin
Principal, East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Luis (Lou) Abad
Principal, WNT
T: 212-954-3094
E: labad@kpmg.com

Amie Ahanchian
Managing Director
T: 202-533-3247
E: aahanchian@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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