The Export Enhancement Program, U.S. Foreign Agricultural Market Development Programs, CCC Export Credit Guarantee Programs, and L Term Bilateral Grain Agreements and Countertrade

GAO discussed: (1) the status of the export enhancement program (EEP); (2) U.S. foreign market development efforts; (3) agricultural export credit programs; and (4) long-term grain agreements and countertrade. GAO noted that: (1) EEP is affecting the European Community by increasing competition, lowering affected commodity prices, increasing restitution, and contributing to additional dissent with Europe over the farm program's direction and costs; (2) EEP has increased U.S. agricultural exports in some targeted countries; (3) EEP has provided no immediate relief to U.S. farmers; and (4) broadening EEP to other markets might increase competition, place pressure on Europe and further antagonize non-subsidizing exporters. GAO also noted that: (1) the Department of Agriculture approved assistance programs for 10 commodities that met certain criteria established by the Foreign Agricultural Service; (2) it is difficult to accurately determine the effect that export credit programs have on agricultural exports because commodity costs and political factors also affect sales; and (3) some bank officials, cooperators, and exporters said that they would not have been able to make a number of sales if export credit programs had not been available. In addition, GAO noted that: (1) 25 percent of international trade in wheat is conducted under bilateral grain agreements; (2) all of the major grain-exporting nations have employed long-term agreements; (3) at least 19 nations have imported grain under long-term agreements; (4) there are 26 long-term agreements in effect; (5) about 10 percent of all international trade is countertrade, which saves scarce foreign exchange, circumvents trade problems if a nation has an inconvertible currency, ensures access to supply, may be used to dispose of an excess supply of agricultural or other commodities, and may enhance market development; and (6) countertrade is inefficient, costly, and risky.