Measuring U.S.-Canada Trade

The United States and Canada are the world's top trading partners. The free trade agreement between the two countries, which took effect in 1989 and is gradually phasing out duties on bilateral trade, is expected to further enhance their trade relationship. Given the importance of this relationship to the economies of the two nations, accurate data on its nature and extent are vital. For this reason, GAO and the Office of the Auditor General of Canada reviewed the capacity of the statistical systems of both countries to produce accurate and complete trade data for the present and the future. This report focuses mainly on merchandise trade data but also recognizes the importance of data on international transactions of services, investment income, and capital.

GAO found that: (1) U.S. exports to Canada and other countries have been undercounted because the Customs Service has had problems in collecting export data; (2) the United States has improved the accuracy of its merchandise trade data through a bilateral agreement with Canada that authorizes import data exchanges and reconciliations; (3) additional efforts are needed to improve third-party export undercounting, controls over import documents sent between Customs and Census, reporting of Customs law violations, and data quality which could adversely affect the accuracy of U.S. merchandise trade data; (4) Customs has made significant efforts to improve its trade enforcement programs; and (5) Customs will need to adapt to changes in the international trade environment by further automating its cargo examination procedures and developing alternative methods for collecting merchandise trade data.

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.

Director: Team: Phone: