International Trade

Pursuant to a congressional request, GAO reviewed the administration and enforcement of the Department of Commerce's and the Customs Service's Special Access Program for apparel assembly in certain Caribbean countries.

GAO found that: (1) the program, designed to increase apparel assembly in Caribbean Basin Economic Recovery Act countries and expand sales of U.S. textiles, provided exporters relief from U.S. import duties and quotas if they used imported U.S. fabric for apparel assembly and exported the apparel back to the United States; (2) the United States had bilateral textile agreements with Jamaica, the Dominican Republic, Costa Rica, Haiti, and Trinidad and Tobago, although the latter was not exporting under the program; (3) Customs required U.S. fabric exporters and Caribbean apparel assemblers to report fabric and garment information on an export declaration to ensure compliance with program requirements; (4) discrepancies between fabric and garment exporters' reports on 18 percent of the forms led to physical inspections of the finished goods Caribbean assemblers returned to the United States; (5) Customs did not exercise its right to physically inspect fabric packages going to the apparel assemblers; (6) of 1,841 shipments Customs inspected, 27 had such problems as invalid visas or quantity, marking, or restriction violations; (7) Customs is investigating three firms for suspected program violations, such as using non-U.S. fabric; and (8) Customs is revising the export declaration form to reduce participating firms' errors by reducing the amount of detail required and clarifying information requirements and presentation methods.