International Trade

The transporting of racehorses between continents has increased significantly during the past 50 years, spurred by a series of lucrative international races that first appeared before World War II. In the course of this international traffic, racehorses have encountered various barriers in the form of tariffs, races that are closed to foreign-bred animals, customs delays at border crossings, and health quarantines. This report examines the barriers that limit participation by U.S. thoroughbred racehorses in races overseas. Although GAO focused primarily on Japan, which has the highest purses worldwide, as well as one of the most stringent set of restrictions, GAO also reviewed the horse race restrictions in Hong Kong, European Community member nations, European Free Trade Association member countries, Australia, Thailand, and New Zealand.

GAO found that: (1) Japan limits foreign racehorses' entry into its races, which have the highest average purses in the world, because Japanese horses are inferior; (2) Japan levies a $33,000 tariff on each imported racehorse, but has none on breeding stock; (3) both the U.S. racing industry and government have expressed concern over Japan's restrictive policies, and the U.S. government has brought the subject up in trade negotiations; (4) Japan had announced a 5-year plan to liberalize entry for foreign horses, particularly inexperienced ones, but met with strong opposition from its domestic racehorse industry because breeders believed their horses could not compete with imported horses, and buyers would turn more to foreign horses; (5) although Japan suspended its 5-year plan, it did increase to 35 percent the number of races inexperienced foreign horses could enter; and (6) the Department of Agriculture has determined that the 5-year plan would still not address the limitations on experienced foreign horses. GAO also found that: (1) although its government does not restrict foreign horses, Hong Kong limits U.S. horses' participation, mainly by requiring that horses that have run with certain medications first race in other countries that also prohibit the medications' use; (2) Great Britain, Ireland, Australia, and New Zealand do not restrict foreign horses; (3) Italy, Germany, and France restrict some races, but will be opening more races to foreign horses in 1993; (4) other European Community countries and the former Soviet Bloc countries have little racing, but some races are restricted; and (5) Thailand limits its races, which have very low purses, to domestically bred horses.