Cargo Preference

This report examines the frequency with which exemptions from cargo preference requirements for U.S. Export-Import Bank (Eximbank) financed exports were granted between 1990 and 1992. GAO found that in 1990 and 1991, the number of general waivers that the Maritime Administration granted held steady at seven; however, in 1992 they more than doubled to 15. From 1990 to 1992, the number of statutory waivers, granted when U.S.-flag vessels were unavailable, more than tripled from 28 in 1990 to 102 in 1992. GAO did not find any situations in which Eximbank cargo preference requirements were causing U.S. exporters to lose sales; however, exporters did raise other concerns resulting from their compliance with the cargo preference requirements. GAO did not find any evidence that midwestern exporters were uniquely affected by the cargo preference requirements.

GAO found that: (1) the Maritime Administration (MARAD) granted 7 general cargo preference requirements waivers in both 1990 and 1991 and 15 general waivers in 1992; (2) MARAD granted 28 statutory waivers in 1990 and 102 statutory waivers in 1992; (3) none of the five export firms surveyed reported lost sales due to cargo preference requirements, but they cited other concerns regarding compliance with the requirements; and (4) there was no evidence that Midwestern exporters were uniquely affected by the cargo preference requirements.