International Trade: Exporters' Use of the Earned Import Allowance Program for Haiti Is Negligible because They Favor Other Trade Provisions

In 2006, Congress passed the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE), giving preferential access to U.S. imports of Haitian apparel. In 2008, Congress amended HOPE (now HOPE II), expanding existing trade preference provisions and creating new ones, including the Earned Import Allowance Program (EIAP). Under the EIAP, for every 3-square- meter equivalents (SME) of U.S. or other qualifying fabric a firm imports into Haiti, it earns a credit to export 1 SME of apparel produced in Haiti to the United States, duty-free, regardless of the fabric source. The Haiti Economic Lift Program (HELP) Act of 2010 amended the EIAP, reducing the qualifying fabric requirement from 3 to 2. HOPE II also mandated GAO to review the effectiveness of the EIAP and to look for potential improvements. GAO examined (1) the extent to which the program has been used, (2) how U.S. government agencies implemented it, and (3) how might the program be improved. To address these questions GAO reviewed data from the Department of Commerce's Office of Textiles and Apparel (OTEXA); interviewed U.S. agency officials, Haitian and Dominican apparel producers, U.S. apparel buyers, and U.S textile manufactures; and reviewed relevant literature. Additionally, this report informs Congress of options provided by stakeholders to modify the program. GAO is making no recommendations in this report.