International Trade

Pursuant to a congressional request, GAO provided information on the trade agreement between the United States and Czechoslovakia signed in April 1990, focusing on: (1) Czechoslovakia's exports and imports to select countries; (2) tariff rates on U.S. imports from Czechoslovakia as compared to rates on imports from countries with most-favored-nation (MFN) status; (3) Czechoslovakia's eligibility for receiving the generalized system preferences (GSP) trade benefits; and (4) U.S. exports and imports from Czechoslovakia from 1987 to 1990.

GAO found that: (1) Czech trade data showed that 89 percent of its exports were manufactured goods; (2) machinery and transport equipment accounted for over half of all Czechoslovakia's exports; (3) the Soviet Union and Eastern European countries were Czechoslovakia's major trade partners, accounting for about 70 percent of its total trade; (4) the United States accounted for less than one-half of 1 percent of Czechoslovakia's trade; (5) granting MFN status to Czechoslovakia would reduce the weighted average tariff rate on dutiable products from 29.5 percent to an estimated 5.2 percent; (6) a drop in tariff rates would increase Czechoslovakia's exports to the United States, but only by a small margin; (7) Czechoslovakia met the per-capita-income eligibility requirement for the GSP program, but to receive benefits Czechoslovakia must receive MFN status; (8) with GSP, the tariff rate on all eligible Czech exports to the United States would decrease from an average MFN rate of 5.2 percent to zero; (9) U.S. exports to Czechoslovakia averaged $51 million annually between 1987 and 1989, with hides and skins, measuring instruments and apparatus, fertilizers, and specialized machinery being the leading exports; and (10) U.S. imports from Czechoslovakia averaged $82 million during the same period, with footwear, glassware, tractors, and men's coats and jackets being the leading imports.