Textile Trade

This report examines the role of the U.S. Committee for the Implementation of Textile Agreements in administering the U.S. textile program in light of the 1994 Uruguay Round Agreement on Textiles and Clothing. The Agreement calls for the phaseouts of quotas under the prior Multifiber Arrangement. GAO (1) identifies the Committee's authority, functions, resource, and costs under the Multifiber Arrangement and the Agreement; (2) determines the Committee's decision-making process for imposing quotas, including the level of openness in its process; (3) reviews the Committee's use of data to make quota decisions; and (4) evaluates the Committee's use in 1995 of transitional safeguards provided by the Agreement. GAO also examines the European Union, Canadian, and Japanese use of quotas under the Multifiber Arrangement and the Agreement. In addition, GAO describes the safeguard process administered by the U.S. International Trade Commission.

GAO found that: (1) CITA has broad delegated authority to impose quotas when it determines that imports are causing or threatening to cause damage to the domestic textile industry; (2) since its main function, to implement textile agreements, has not changed under ATC, CITA does not expect its workload to increase significantly, but it will continue to participate in negotiations for bilateral quota agreements; (3) CITA received about $3.6 million in fiscal year 1995 from five agencies and had a staff of 33 provided by the Department of Commerce to support CITA operations; (4) CITA has not published guidelines or procedures describing its quota decisionmaking process; (5) CITA tries to match import data and domestic production data to establish a causal link between imports and damage to domestic producers on a case-by-case basis before requesting consultations with exporting countries and seeking comments from interested parties; (6) CITA uses U.S. government statistics in its quota decisionmaking process, but some data compatibility problems occur due to varying collection methods; (7) the United States has been the only country to impose quotas under ATC; (8) EU and Canada have imposed quotas under MFA, but Japan has never imposed any quotas; (9) although EU and Canada use similar import data, their decisionmaking processes are different; and (10) the ITC quota decisionmaking process differs significantly from CITA because it is based on U.S. legislation that stipulates specific procedures and time-frames for imposing quotas and holding public hearings.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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