Sugar Program

In response to a congressional request, GAO reviewed certain aspects of the U.S. sugar program to determine: (1) the amount of sugar in imports that displaces domestic sugar; (2) the increase in such sugar imports since implementation of the sugar import quota system; (3) the amount of sugar in sugar-containing product imports that enters U.S. commerce from foreign trade zones (FTZ) and through ports of entry; (4) whether Customs Service controls over such imports were adequate to ensure compliance with regulations; and (5) administrative options available to the President to limit the importation of sugar-containing products.

GAO found that: (1) between 265,000 tons to 307,000 tons of sugar may have displaced domestic sugar in 1986; (2) the sugar entered the United States in sugar-containing products under 46 tariff categories; (3) in addition, over 1.7 million tons of raw and refined sugar entered the United States under the 1986 commodity sugar program quota; (4) the United States consumed slightly less than 8 million tons of domestic sugar in 1986; (5) the amount of sugar-containing imports in 1986 more than doubled that in 1982; (6) increases in some products were greater due to tariff classifications; (7) blended products produced in FTZ and imported through various ports of entry contained about 40,000 tons of sugar; and (8) Customs did not always enforce its laws and regulations or paperwork controls at some FTZ. GAO believes that: (1) although Customs took some actions to improve its administration of sugar allocations and other enforcement mandates, monitoring the implementation of improvement actions could help ensure proper entry of sugar imports; and (2) the President could limit sugar-containing product imports by extending import restrictions and submitting a legislative proposal to rewrite tariff schedule descriptions.