International Trade
U.S. Trade Preference Programs Provide Important Benefits, but a More Integrated Approach Would Better Ensure Programs Meet Shared Goals Gao ID: GAO-08-443 March 7, 2008U.S. trade preference programs promote economic development in poorer nations by providing export opportunities. The Generalized System of Preferences, Caribbean Basin Initiative, Andean Trade Preference Act, and African Growth and Opportunity Act unilaterally reduce U.S. tariffs for many products from over 130 countries. However, three of these programs expire partially or in full this year, and Congress is exploring options as it considers renewal. GAO was asked to review the programs' effects on the United States and on foreign beneficiaries' exports and development, identify policy trade-offs concerning these programs, and evaluate the overall U.S. approach to preference programs. To address these objectives, we analyzed trade data, reviewed trade literature and program documents, interviewed U.S. officials, and did fieldwork in six countries.
Overall, trade preference programs have a small effect on the U.S. economy. Some U.S. industries have shared-production arrangements with foreign producers that depend on preference benefits, while others compete with preference imports. Preference programs are used to advance U.S. goals, such as intellectual property rights protection. Developing countries extensively use preferential access to boost exports to the United States. Preference imports have grown faster than overall U.S. imports, and recent changes in product coverage have expanded beneficiaries' export opportunities. Gaps in duty-free access continue for sectors such as agriculture and apparel. Preference exports remain concentrated in a few countries and products, but trends indicate greater diversification and increased use by the poorest countries. Those GAO interviewed in beneficiary countries also stressed the benefits derived from preferences. Preference programs balance two key policy trade-offs. First, programs offer duty-free access to the U.S. market to increase beneficiaries' trade, while attempting not to harm U.S. industries. Second, Congress faces a trade-off between longer program renewals, which may encourage investment, and shorter renewals, which may provide more opportunities to change the programs to meet evolving priorities. Finally, some beneficiary countries' concerns over the eroding value of preferences must be weighed against the likely greater economic benefits of broader trade liberalization. Trade preference programs have proliferated over time, becoming more complex, but neither Congress nor the interagency Trade Policy Staff Committee that manages the programs has formally considered them as a whole. Responsive to their legal mandates, the Office of the U.S. Trade Representative (USTR) and other agencies use different approaches to monitor compliance with program criteria, resulting in disconnected review processes and gaps in reporting on some countries and issues. Separate reporting and examination also hinder measuring programs' contribution to economic development.
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Director: Team: Phone:GAO-08-443, International Trade: U.S. Trade Preference Programs Provide Important Benefits, but a More Integrated Approach Would Better Ensure Programs Meet Shared Goals
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United States Government Accountability Office:
GAO:
Report to the Chairman, Committee on Finance, U.S. Senate, and the
Chairman, Committee on Ways and Means, House of Representatives:
March 2008:
International Trade:
U.S. Trade Preference Programs Provide Important Benefits, but a More
Integrated Approach Would Better Ensure Programs Meet Shared Goals:
GAO-08-443:
GAO Highlights:
Highlights of GAO-08-443, a report to the Chairman, Committee on
Finance, U.S. Senate, and Committee on Ways and Means, House of
Representatives.
Why GAO Did This Study:
U.S. trade preference programs promote economic development in poorer
nations by providing export opportunities. The Generalized System of
Preferences, Caribbean Basin Initiative, Andean Trade Preference Act,
and African Growth and Opportunity Act unilaterally reduce U.S. tariffs
for many products from over 130 countries. However, three of these
programs expire partially or in full this year, and Congress is
exploring options as it considers renewal.
GAO was asked to review the programs‘ effects on the United States and
on foreign beneficiaries‘ exports and development, identify policy
trade-offs concerning these programs, and evaluate the overall U.S.
approach to preference programs. To address these objectives, we
analyzed trade data, reviewed trade literature and program documents,
interviewed U.S. officials, and did fieldwork in six countries.
What GAO Found:
Overall, trade preference programs have a small effect on the U.S.
economy. Some U.S. industries have shared-production arrangements with
foreign producers that depend on preference benefits, while others
compete with preference imports. Preference programs are used to
advance U.S. goals, such as intellectual property rights protection.
Developing countries extensively use preferential access to boost
exports to the United States. Preference imports have grown faster than
overall U.S. imports, and recent changes in product coverage have
expanded beneficiaries‘ export opportunities. Gaps in duty-free access
continue for sectors such as agriculture and apparel. Preference
exports remain concentrated in a few countries and products, but trends
indicate greater diversification and increased use by the poorest
countries. Those GAO interviewed in beneficiary countries also stressed
the benefits derived from preferences.
Preference programs balance two key policy trade-offs. First, programs
offer duty-free access to the U.S. market to increase beneficiaries‘
trade, while attempting not to harm U.S. industries. Second, Congress
faces a trade-off between longer program renewals, which may encourage
investment, and shorter renewals, which may provide more opportunities
to change the programs to meet evolving priorities. Finally, some
beneficiary countries‘ concerns over the eroding value of preferences
must be weighed against the likely greater economic benefits of broader
trade liberalization.
Trade preference programs have proliferated over time, becoming more
complex (as shown below), but neither Congress nor the interagency
Trade Policy Staff Committee that manages the programs has formally
considered them as a whole. Responsive to their legal mandates, the
Office of the U.S. Trade Representative (USTR) and other agencies use
different approaches to monitor compliance with program criteria,
resulting in disconnected review processes and gaps in reporting on
some countries and issues. Separate reporting and examination also
hinder measuring programs‘ contribution to economic development.
Figure: Growth of Trade Preference Programs:
[See PDF for image]
This figure is a timeline indicating the growth of trade preference
programs from 1975 through 2006, as follows:
Year: 1975;
Programs: GSP;
Year: 1983;
Programs: GSP, CBI (added);
Year: 1991;
Programs: GSP, CBI, ATPA (added);
Year: 1996;
Programs: GSP, CBI, ATPA, LDC (added);
Year: 2000;
Programs: GSP, CBI, ATPA, LDC, AGOA (added), CBTPA (added);
Year: 2002;
Programs: GSP, CBI, ATPA, LDC, AGOA, CBTPA, ATPDEA (added);
Year: 2006;
Programs: GSP, CBI, ATPA, LDC, AGOA, CBTPA, ATPDEA, HOPE (added).
Source: GAO analysis of USTR documents on Generalized System of
Preferences, African Growth and Opportunity Act,Andean Trade Preference
Act, and Caribbean Basin Initiative.
[End of figure]
What GAO Recommends:
GAO recommends that USTR periodically review beneficiary countries that
have not been considered under the regional programs. Additionally,
USTR should periodically convene relevant agencies to discuss the
programs jointly.
Congress should consider whether trade preference programs‘ review and
reporting requirements may be better integrated to facilitate
evaluating progress in meeting shared economic development goals.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-443]. For more
information, contact Loren Yager at (202) 512-4347 or yagerl@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Preference Programs Have Some Economic Effects on the United States and
Provide an Opportunity to Advance U.S. Foreign Policy:
By Providing New Opportunities, Preferences Can Increase U.S. Imports
from Developing Countries and Thus Promote Economic Development:
Fundamental Program Trade-offs Balance Foreign and Domestic Benefits:
Separate Approaches to Preference Programs Impede Assessing Whether
They Are Meeting Shared Goals:
Conclusions:
Matters for Congressional Consideration:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: Additional Information on GAO Data Analysis:
Appendix III: Coverage, Utilization, and Limitations of Preference
Programs:
Appendix IV: U.S. Imports and Global Exports from Least-Developed
Countries:
Appendix V: Preference Imports by Program and Product Group, 2006:
Appendix VI: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: U.S. Trade Preference Programs:
Table 2: U.S. Preference Imports, 2006:
Table 3: Leading LDC Exporters to the United States and Their Share
under Preference Programs, 2006:
Table 4: Key Administrative Aspects of Trade Preferences Programs:
Table 5: Countries Selected for GAO Field Research:
Table 6: Coverage and Utilization Rates by Beneficiary Country and
Preference Program, 2006:
Figures:
Figure 1: Product Groups with Most Dutiable Product Lines in U.S.
Tariff Schedule, Taking Into Account All U.S. Preference Programs:
Figure 2: The Top 25 Partners of U.S. Preference Programs, 2006:
Figure 3: U.S. Preference Imports by Beneficiary Income Levels in 2006:
Figure 4: Key Products in U.S. Preference Imports, 1992-2006:
Figure 5: U.S. Preference Imports: Nonfuel, Nonapparel Sectors:
Figure 6: Diversification Index of U.S. Imports from Preference-
Eligible Countries, 1992-2006:
Figure 7: Growth of Trade Preference Programs:
Figure 8: Countries Benefiting from Various Trade Preferences Programs,
2006:
Figure 9: Cumulative Duty-free Tariff Lines in the U.S. Tariff
Schedule, by Preference Program:
Figure 10: Dutiable and Duty-free Lines in U.S. Tariff Schedule by
Product Group:
Figure 11: Utilization Rates of U.S. Preference Program Partners, 2006:
Abbreviations:
AGOA: African Growth and Opportunity Act:
ATPA: Andean Trade Preference Act:
ATPDEA: Andean Trade Promotion and Drug Eradication Act:
CAFTA-DR: Dominican Republic-Central America-United States Free Trade
Agreement:
CBERA: Caribbean Basin Economic Recovery Act:
CBI: Caribbean Basin Initiative:
CBO: Congressional Budget Office:
CBTPA: Caribbean Basin Trade Partnership Act:
CNL: competitive need limitation:
GATT: General Agreement on Tariffs and Trade:
GSP: Generalized System of Preferences:
HOPE: Haitian Hemispheric Opportunity through Partnership Encouragement
Act:
HTS: Harmonized Tariff Schedule:
IPR: intellectual property rights:
ITC: U.S. International Trade Commission:
LDC: least-developed country:
MFN: most favored nation:
NAFTA: North American Free Trade Agreement:
NGO: nongovernmental organization:
TCB: trade capacity building:
TPSC: Trade Policy Staff Committee:
UNCTAD: United Nations Conference on Trade and Development:
USAID: U.S. Agency for International Development:
USTR: Office of the U.S. Trade Representative:
WTO:
[End of section]
United States Government Accountability Office:
Washington, D.C. 20548:
March 7, 2008:
The Honorable Max Baucus:
Chairman:
Committee on Finance:
United States Senate:
The Honorable Charles B. Rangel:
Chairman:
Committee on Ways and Means:
House of Representatives:
In an effort to promote and achieve various U.S. foreign policy
objectives, trade preference programs have expanded in number and scope
over the past three decades. The purpose of these programs is to foster
economic development through increased trade in qualified beneficiary
countries while not harming U.S. domestic producers. The trade
preferences, which reduce tariffs, or duties, for many products from
eligible countries, are "nonreciprocal"--they are granted unilaterally,
without requiring reciprocal liberalization for U.S. goods for
countries receiving them. Currently, the United States offers the
Generalized System of Preferences (GSP) and three regional programs,
the Caribbean Basin Initiative (CBI), the Andean Trade Preference Act
(ATPA), and the African Growth and Opportunity Act (AGOA).
As we noted in our previous report on U.S. trade preference
programs,[Footnote 1] these programs represent a small share of total
U.S. imports, but they constitute a significant share of many
beneficiary countries' exports to the United States. Imports under U.S.
preference programs have grown sharply since 2002. In 2006, imports
through U.S. trade preference programs totaled approximately $92
billion--about 5 percent of total U.S. goods imports.
However, while U.S. preference programs are widely used, concerns exist
about perceived shortcomings in these programs. For example, frequent
program lapses and renewals have created uncertainty about program
availability, and questions have been raised about effectiveness. This
year, three preference programs expire partially or in full; as a
result, Congress is exploring options for improvements as it considers
program renewal. At your request, in this report, we (1) describe how
U.S. preference programs affect the United States, (2) review the
effects of U.S. preference programs on foreign beneficiaries' exports
and development, (3) identify the trade-offs policymakers face with
respect to U.S. preference programs, and (4) evaluate the overall U.S.
approach to preference programs.
To address these objectives, we reviewed and analyzed U.S. laws and
regulations and authoritative international trade documents. We
analyzed official U.S. trade data and we spoke with officials from
agencies participating in the Trade Policy Staff Committee (TPSC)--
including the Office of the U.S. Trade Representative (USTR)--and
reviewed and analyzed documentation we received from the agencies. We
conducted a literature search on the impacts of U.S. preference
programs on the United States and on foreign beneficiaries. We attended
the sixth AGOA Forum in Accra, Ghana, in July 2007. We also traveled to
Brazil, Colombia, Haiti, Kazakhstan, and Turkey to meet with U.S.
embassy officials, foreign officials, and industry groups using U.S.
preference programs. We selected at least one country from each of the
preference programs based on income levels according to the World Bank
and United Nations and the spectrum of issues related to usage and
capacity of each of the programs in-country (for more information on
the how we selected these countries, see the full scope and methodology
in app. I). We conducted this performance audit from March 2007 to
February 2008 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
Results in Brief:
Overall, the effect of trade preference programs on the U.S. economy is
small. Nevertheless, preference programs have economic effects on U.S.
businesses, consumers, and the federal budget, and they provide an
opportunity to advance U.S. trade and foreign policy. Effects on U.S.
industries and individual businesses vary, as some have shared-
production arrangements with foreign producers that depend heavily on
duty-free preference benefits, while others compete with imports
benefiting from preferences. U.S. consumers benefit to the extent that
tariff savings result in lower prices on some products. Program costs
include the loss of tariff revenues that would otherwise accrue to the
U.S. Treasury. Preference programs have been used to advance U.S.
foreign policy goals in areas such as intellectual property, labor, and
human rights, as well as on broader market-oriented and democratic
governance reforms. Periodic reviews under some of the programs provide
the United States leverage to engage with governments and motivate
policy change.
By providing new opportunities, preferences can increase U.S. imports
from developing countries and thus promote their economic development.
Our analysis of U.S. tariff and trade data shows that U.S. trade
preference programs now offer relatively extensive opportunities to
many developing countries to increase their sales to the United States
and have resulted in increased and somewhat more diversified U.S.
imports from them. Gaps in product and associated duty-free coverage
persist, continuing to limit beneficiaries' export options, in sectors
such as agriculture and apparel; however, some key products that would
otherwise face high tariffs have been added to regional programs,
increasing their likely benefit to development. Available preferences
are highly used by most partners, particularly countries that have
access to regional programs. Fuel now accounts for more than half of
the value of preference trade, but expansion of programs also appears
to have helped the poorest countries increase their share of total
preference exports. Nevertheless, some countries lack capacity to take
advantage of the available preference opportunities. For example, 34 of
the 46 beneficiaries designated as "least-developed" barely used U.S.
preferences in 2006. Nevertheless, those we met in the varied range of
beneficiary countries visited stressed the benefits they derive from
preferences and the importance of continuing them to their trade and
development.
The nature and evolution of the U.S. trade preference programs require
trade-offs among competing policy goals. One key trade-off balances the
programs' goals of aiming to expand U.S. imports from developing
countries and of not harming U.S. industries. Balancing this tension
has, in some cases, resulted in products of importance to developing
countries being excluded from preference programs. Attempts to target
preferential trade opportunities to the poorest countries, while
phasing out benefits to more competitive countries, may benefit
countries other than those targeted. A second trade-off concerns the
periodic renewal of program benefits. Private sector representatives
have indicated that giving programs longer renewal periods or making
them permanent would help beneficiaries attract the investment
necessary to derive significant development benefits from the programs.
However, program renewals offer an opportunity to engage with
beneficiary countries on broader policy goals. Finally, the balancing
of these trade-offs takes place against a backdrop of increasing global
trade liberalization--a primary U.S. trade objective--which makes the
benefits of preference programs less consequential to beneficiaries.
Some developing countries have cited this concern in resisting
liberalization, even though evidence suggests that, in many cases,
there are greater economic benefits from trade openness compared with
the costs associated with erosion of preferences.
Separate approaches to preference programs impede assessing whether
they are meeting their collective goal of economic development for
beneficiary countries. Over time, trade preference programs have
increased in number and complexity, but Congress and the interagency
TPSC that manages the programs consider them separately. While
following statutory requirements, agencies' approaches to monitoring
compliance with program criteria nevertheless result in disconnected
review processes that are separate from ongoing U.S. efforts to protect
intellectual property rights, such as the Special 301 Review, and to
combat trafficking in persons; they also result in gaps in reporting on
some countries. For example, the TPSC may not review countries under
the preference programs that are not beneficiaries of a regional
program against the eligibility criteria for a long period of time.
Based on statutory directions and available resources, the U.S.
government also pursues different approaches to trade capacity building
in conjunction with the various trade preference programs, with AGOA
having the clearest statutory direction. Different approaches agencies
use to report on these programs impede an integrated assessment of
progress made under U.S. trade preferences to foster development in
beneficiary countries.
As Congress deliberates on whether to renew the ATPA, Caribbean Basin
Trade Partnership Act (CBTPA), and GSP programs this calendar year, it
should consider whether a more integrated approach would better ensure
programs meet shared goals. Specifically, Congress should consider
which elements of the approaches used by agencies to administer these
programs, such as petition-initiated compliance reviews or periodic
assessment of all countries under certain programs, have benefits that
may be applied more broadly to trade preference programs in general.
Congress should consider streamlining various program reporting
requirements to facilitate evaluating the programs' progress in meeting
their shared economic development goal.
We are recommending in this report that USTR periodically review
preference beneficiaries that have not otherwise been reviewed by
virtue of their membership in the regional programs. Additionally, USTR
should periodically convene the TPSC to discuss the programs jointly to
determine what lessons can be learned from the various provisions
concerning matters such as linkages to trade capacity building. USTR
should also work through the TPSC and its associated agencies to
consider ways to administer, evaluate, and report on preference
programs in a more integrated manner to ensure the programs, as a
whole, meet their shared goals.
We provided draft copies of this report to USTR, the U.S. International
Trade Commission (ITC), the Department of Homeland Security's U.S.
Customs and Border Protection Agency, the U.S. Agency for International
Development (USAID), and the Departments of Agriculture, Commerce,
Labor, State, and Treasury. USTR and the Departments of Agriculture,
Labor, Commerce, Treasury, and State provided extensive technical
comments on an interagency basis. Customs, Labor, State, and ITC also
provided separate technical comments. We have incorporated these
comments where appropriate. USTR indicated that it would report on the
actions taken in response to the recommendations in a letter, within 60
days of public issuance of this report, as required under U.S. law.
Background:
The United States extends unilateral tariff reductions to over 130
developing countries through one general trade preference program (GSP)
and three regional programs--CBI, ATPA, and AGOA (see table 1). The
preference programs are tools that the U.S. government uses to assist
countries in the developing world.
Table 1: U.S. Trade Preference Programs:
Program: GSP;
Enactment date: January 1975, Several amendments;
Number of eligible countries, 2007: 131.
Program: CBI[A];
Caribbean Basin Economic Recovery Act (CBERA);
Enactment date: August 1983;
Number of eligible countries, 2007: 19.
Program: CBI[A];
Caribbean Basin Economic Recovery Expansion Act;
Enactment date: Amended August 1990;
Number of eligible countries, 2007: [Empty].
Program: CBI[A];
Caribbean Basin Trade Partnership Act (CBTPA);
Enactment date: May 2000;
Number of eligible countries, 2007: 9.
Program: CBI[A];
Haitian Hemispheric Opportunity through Partnership Encouragement
(HOPE) Act;
Enactment date: December 2006;
Number of eligible countries, 2007: 1.
Program: ATPA[B];
Andean Trade Promotion and Drug Eradication Act (ATPDEA);
Enactment date: December 1991; Amended August 2002;
Number of eligible countries, 2007: 4.
Program: AGOA[C];
Enactment date: May 2000; Several amendments;
Number of eligible countries, 2007: 39.
Source: GAO.
[A] CBI is a collection of several trade preference programs. It was
initially established in 1983 through CBERA, Pub. L. No. 98-67, Title
II, 97 Stat. 384 (1983) and expanded in 1990 by the Caribbean Basin
Economic Recovery Expansion Act, Pub. L. No. 101-382, Title II, 104
Stat. 655. It was substantially expanded in 2000 by CBTPA, Pub. L. No.
106-200, Title II, 114 Stat. 275 (2000). The most recent change to CBI
was made by the HOPE Act of 2006, Pub. L. No. 109-432, Div. D., Title
V, 120 Stat. 3181 (2006). In this report, we at times describe HOPE
separately from CBI to illustrate the key characteristics of HOPE.
[B] Pub. L. No. 102-182, Title II, 105 Stat. 1236, as amended. ATPA was
substantially expanded in 2002 by ATPDEA, Pub. L. No. 107-210, Div. C.
Title XXXI, 116 Stat 1023 (2002) and amended in 2006 by the Andean
Trade Preferences Extension Act, Pub. L. No. 109-432, Div. D, Title
VII, 120 Stat. 3194 (2006).
[C] Pub. L. No. 106-200, Title I, 114 Stat. 252 (2000), as amended.
[End of table]
At the United Nations Conference on Trade and Development (UNCTAD) in
1964, developing countries asserted that one of the major impediments
to their accelerated economic growth and development was their
inability to compete with developed countries in the international
trading system; the developing countries argued that preferential
tariffs would allow them to increase exports and foreign exchange
earnings necessary to diversify their economies and reduce dependence
on foreign aid. The rationale for trade preferences was that poorer
countries need to develop industrial capacity for manufacturing in
order to move away from dependence on imports and production of
traditional commodities that could be subject to declining prices in
the long term. It was argued that poorer countries also needed time to
retain some protection to develop their "infant industries," but that
increases in exports would be necessary to help countries capture
economies of scale in production and earn foreign exchange. In
addition, it was evident that some provision for the elimination of
preferences once the industries were firmly established was necessary.
The argument was that trade preferences should be temporary, introduced
for a period of no less than 10 years with respect to any given
industry in any developing country. At the end of the 10-year period,
preferences would be withdrawn unless it could be shown that special
circumstances warranted their continuation.
At the second UNCTAD conference in New Delhi in 1968, the United States
joined other participants in supporting a resolution to establish a
mutually acceptable system of preferences. In order to permit the
implementation of the generalized preferences, in June 1971 the
developed countries, including the United States, were granted a 10-
year waiver from their obligations under the global trading system, now
embodied in the World Trade Organization (WTO), to trade on a most
favored nation (MFN)[Footnote 2] basis. Following the granting of this
waiver, developed countries created their GSP programs, and Congress
enacted the U.S. GSP program in January 1975. The United States
maintained that GSP was a temporary program to advance trade
liberalization in the developing world, but it recognized the need to
address the legal basis for granting these preferences, in anticipation
of the expiration of the waiver in 1981. An agreement was reached at
the 1979 conclusion of the Tokyo Round of Multilateral Trade
Negotiations, known as the "Enabling Clause," which has no expiration
date and replaces the waiver. Because the Enabling Clause applies to
preference regimes that are "generalized, non-reciprocal, and non-
discriminatory," separate waivers have been sought for U.S. regional
preference programs.[Footnote 3]
The GSP program seeks to accelerate economic growth and development in
developing countries by providing access to the U.S. market. GSP
establishes a basic level of product coverage common to all the
preference programs. Over the years, Congress has also enacted a series
of regional trade preference programs that have evolved to address U.S.
foreign policy objectives beyond the shared general objective of
promoting economic development. The regional programs expand on GSP to
cover additional products that are not covered by GSP, including some
apparel, footwear, and certain leather-related products. While regional
programs may generally have more liberal conditions for product entry
than GSP, these differences are more likely to affect products for
which countries cannot receive GSP benefits (e.g., textiles and
apparel). CBI was created to promote economic and political stability
in the Central America and Caribbean region, to diversify exports, and
to expand trade between those countries and the United States. ATPA was
established to combat drug production and trafficking by providing
sustainable economic alternatives to beneficiary countries in the
Andean region of South America. AGOA was set up to facilitate Sub-
Saharan Africa's integration into the global economy.
The regional preference programs have some eligibility criteria that
overlap with GSP, but the regional programs also set forth additional
eligibility criteria that are not part of the GSP statute. In order to
be eligible for AGOA, a country must also be eligible for GSP. In
addition, all preference programs contain certain common eligibility
requirements, such as having national policies to ensure workers'
rights and protect intellectual property. Regional program beneficiary
countries are subject to more extensive eligibility criteria than GSP
beneficiary countries. For example, ATPA requires cooperation with U.S.
counternarcotics and antiterrorism efforts, and AGOA requires that
countries be making progress toward political pluralism and not commit
gross violations of human rights.
Eight agencies have key roles in administering U.S. trade preference
programs. Led by USTR, they include the Departments of Agriculture,
Commerce, Homeland Security, Labor, State, and Treasury, as well as
ITC. USTR utilizes an interagency mechanism, the TPSC, and its
associated subcommittees to consult and coordinate with these and other
agencies such as USAID.
This year, ATPA,[Footnote 4] CBTPA,[Footnote 5] and GSP[Footnote 6]
expire, and Congress will need to explore the option of renewing these
programs. At the same time, legislative proposals to provide
additional, targeted benefits for the poorest countries are pending. In
addition to examining the benefits trade preference programs provide,
Congress will need to consider concerns by beneficiary and other
developing countries, industry groups, and economic experts surrounding
these programs. Such concerns include the potential for diversion of
trade from other countries that these programs can cause; the
complexity, scope of coverage, certainty, and conditionality of these
programs; and the potential opposition to multilateral and bilateral
import liberalization that preference programs can create.
Preference Programs Have Some Economic Effects on the United States and
Provide an Opportunity to Advance U.S. Foreign Policy:
The overall effects of trade preference programs on the U.S. economy
are small, but preference programs have direct effects on U.S.
businesses, consumers, and the federal budget. Effects on U.S.
industries and individual businesses vary; some have shared-production
arrangements with preference beneficiaries, while a few U.S. industries
compete with imports benefiting from preferences. U.S. consumers have
benefited from lower prices resulting from duty-free imports under
trade preference programs, while tariff revenues to the U.S. Treasury
have been lower because of foregone tariff revenues. In addition,
preference programs serve as a tool to advance U.S. foreign policy
objectives.
The Overall Effect of Trade Preference Programs on the U.S. Economy Is
Small:
Imports under preference programs represent a small share of total U.S.
imports. As shown in table 2, U.S. preference imports across all
programs accounted for about 5 percent of U.S. imports in 2006.
Table 2: U.S. Preference Imports, 2006 (Dollars in billions):
Total preference imports[A]: $36 (AGOA);
Percentage of U.S. imports: 2%.
Total preference imports[A]: $33 (GSP);
Percentage of U.S. imports: 1.8.
Total preference imports[A]: $13 (ATPA);
Percentage of U.S. imports: 0.7.
Total preference imports[A]: $10 (CBI);
Percentage of U.S. imports: 0.5.
Total U.S. imports: $1,845;
Total preference imports[A]: $92;
Percentage of U.S. imports: 5%.
Source: GAO analysis of official U.S.trade statistics.
[A] CBI includes CBTPA imports, and ATPA includes ATPDEA imports.
Shares are based on dollar value of imports. Program values are based
on preferences actually claimed upon entry.
[End of table]
In general, studies of the effects of preference programs on the U.S.
economy find that the overall impact is small. For example, the ITC
consistently finds in its biennial reports on ATPA[Footnote 7] and
CBI[Footnote 8] that the impact of imports from these programs on the
U.S. economy is minor. In the most recent ITC reports on ATPA and CBI,
ITC reported again that the overall effect of imports from these
programs on the U.S. economy continued to be negligible, representing
only 0.09 percent and 0.10 percent, respectively, of the U.S. gross
domestic product in 2005. Similarly, in January 2008, the Congressional
Research Service concluded that the overall effects of GSP on the U.S.
economy are relatively small and that the rate of increase of imports
entering under GSP in the past 10 years is relatively flat, indicating
that there may be little impact on the U.S. market as a whole by
extending these preferences.[Footnote 9]
Trade Preference Programs Have Direct Effects on Some U.S. Businesses,
Consumers, and the Federal Budget:
Businesses:
Some U.S. industries and individual businesses have shared-production
arrangements with foreign producers that depend heavily on duty-free
preference benefits. Over the last two decades, U.S. producers of
apparel have come to rely on "outward processing arrangements." In such
arrangements, U.S. factories focus on relatively capital-intensive
operations, such as fabric production. Fabrics and components are then
shipped to CBI, ATPA, or AGOA countries, where factories conduct the
relatively labor-intensive business of assembling the finished
garments.
In addition, U.S. manufacturers and importers benefit from the lower
cost of consumer goods and raw materials imported under preference
programs, such as jewelry, leather, and aluminum imported through GSP.
Furthermore, U.S. manufacturers also rely on and benefit from
intermediate goods from preference beneficiary countries. For example,
Brazil is a major user of GSP. In 2006, 10 percent of all nonfuel
imports to the United States from all preference programs came from
Brazil.[Footnote 10] Much of what Brazil ships to the United States
under GSP are intermediate goods produced by U.S.-affiliated
multinational companies. Once exported to the United States, these
goods are further processed or incorporated into U.S.-manufactured
goods such as cars and power generators. Given the importance of these
intermediate goods to domestic manufacturers, the Congressional
Research Service reported that an expiration or modification of GSP
would directly affect them, at least in the short term. Smaller U.S.
businesses that regularly import inputs under a preference program may
be especially affected by a lapse or expiration of the program because
they rely on GSP's duty savings to compete with much larger companies,
and they are less able to adjust to increased costs. A wide range of
U.S. companies submitted official comments to USTR on several countries
during an overall review of GSP in 2006.[Footnote 11] For example,
concerning GSP imports from Thailand, U.S. companies' comments were
overwhelmingly positive and supported continued preferential treatment
for imports that included items such as jewelry, bottle-grade
polyethylene terephthalate resin, motor vehicle tires, microwave ovens,
ophthalmic lenses, televisions, cookware, golf equipment, and tuna.
On the other hand, certain other U.S. industries compete with imports
benefiting from preferences. For example, ITC estimates that U.S.
methanol producers may have experienced displacement of between 5.2
percent and 10.1 percent of production, valued at $27.6 million to
$54.2 million in 2006, because of methanol imports from CBI countries.
ITC also found that U.S. asparagus, fresh cut roses, chrysanthemums,
carnations, and anthuriums may have experienced displacement of more
than 5 percent of the value of production in 2005 because of imports
that receive ATPA preferences. However, product coverage of the
preference programs is dynamic, based on statutory provisions. Based on
thresholds added by the legislation passed by Congress in December 2006
when it extended the GSP program, the President removed GSP duty-free
treatment for methanol from Venezuela.
Consumers:
U.S. consumers benefit to the extent that tariff savings result in
lower prices on final products, as well as from the lower costs of
intermediate goods. U.S. importers of goods who import duty-free
components, parts, or materials under GSP maintain that the preference
results in lower costs for these intermediate goods that, in turn, can
be passed on to consumers. In a May 1, 2006, letter to the House Ways
and Means and Senate Finance committees, a coalition of importers and
retailers stated that if GSP were allowed to expire or its benefits
were reduced, it "would impose a costly hardship on not only
beneficiary countries but their American customers as well." As part of
biennial reviews of CBI and ATPA, ITC assessed the effects of these
programs on the U.S. economy, industries, and consumers.[Footnote 12]
Following are illustrative (not comprehensive) single-year examples
extracted from the most recent ITC reports on CBI and ATPA,
highlighting products where U.S. consumers benefited:
* ITC found that, in 2006, knitted cotton T-shirts provided the largest
gain in consumer surplus[Footnote 13] ($63.7 million to $68.5 million)
resulting exclusively from CBI tariff preferences. The price U.S.
consumers would have paid for imports of such T-shirts from CBI
countries would have been 12 percent higher without CBI. Men's and
boys' woven cotton trousers or shorts provided the second-largest gain
in consumer surplus ($56.7 million to $62.3 million). Without CBI, the
import price of such woven cotton trousers or shorts from CBI countries
would have been 15 percent higher.
* ITC found that, in 2005, men's or boys' knitted shirts provided the
largest gain in consumer surplus ($30 million to $34 million) from
lower prices and higher consumption resulting exclusively from ATPA
tariff preferences.
Federal Budget:
In December 2006, the Congressional Budget Office (CBO) issued cost
estimates associated with the extension of GSP, ATPA, and AGOA and the
enactment of HOPE under the Tax Relief and Health Care Act of
2006,[Footnote 14] including the loss of tariff revenues that would
otherwise accrue to the U.S. Treasury. In the multiyear review, CBO
came to the following conclusions:
* Changes to the GSP program will result in an estimated reduction in
revenues of $297 million in 2007 and of $992 million over the 2007 to
2009 period. This estimated reduction of revenue is due to the
extension of GSP to December 31, 2008, and the new provisions
concerning competitive need limit waivers. In addition, CBO estimated
in its "Budget Outlook" for fiscal years 2007 to 2016 that revenue
losses would amount to about $3.1 billion if GSP were extended to 2011.
* The extension of ATPA to June 30, 2007, was estimated to result in a
decrease in revenues of $25 million in 2007. The most recent ATPA
extension to December 31, 2008, will result in $119 million in reduced
revenues in 2008 and 2009, according to a February 2008 CBO cost
estimate.
* AGOA will result in an estimated reduction in revenues of about $2
million in 2007, $127 million over the 2007 to 2011 period, and $180
million over the 2007 to 2016 period.
* The enactment of HOPE will result in an estimated reduction of $4
million in 2007, and $28 million over the 2007 to 2011 period.
Without econometric analysis, it may be difficult to determine whether,
absent preferences, the same volume of goods would still be exported to
the United States. If no or a reduced volume of exports occurs without
the preferences, less tariff revenue would be foregone.
Preference Programs Have Significance as a Tool to Advance U.S. Foreign
Policy:
Preference programs have been used to advance U.S. foreign policy goals
in areas such as intellectual property protection, labor, and human
rights, as well as on broader market-oriented and democratic governance
reforms. Some supporters of GSP and other nonreciprocal preferences
believe that the country practice criteria that developing countries
must meet if they are to qualify for GSP provide the United States with
political leverage that can be used to support U.S. foreign and
commercial interests. Periodic and petition-initiated reviews under the
programs provide the United States the opportunity to engage with
governments and motivate policy change. As we noted in our previous
report,[Footnote 15] these reviews serve to encourage beneficiary
countries to comply with country eligibility criteria, such as the
extent to which the country is providing adequate and effective
protection of intellectual property rights (IPR), taking steps to
afford internationally recognized worker rights, and implementing its
commitments to eliminate the worst forms of child labor. For example,
GSP has annual reviews of country and product eligibility, based on
petitions (requests) filed with USTR concerning GSP beneficiary
countries and products by U.S. industry groups, governments, and
nongovernmental organizations (NGOs) such as labor unions.[Footnote 16]
According to USTR, the United States works with a beneficiary country
during a country practice review before removing it from eligibility.
Our review of agency records and meetings with officials and interest
groups indicate that the leverage associated with preferences creates
an opportunity to secure improvements in IPR and labor protections.
Regional trade preference programs also serve important foreign policy
interests. For example, ATPA complements counternarcotics efforts by
providing opportunities for legal crops to be exported to the U.S.
market, thus encouraging farmers to shift away from coca and heroin
poppy production. Similar to GSP, ATPA also has an annual review of
country eligibility practices, based on petitions filed against
beneficiary countries by the public; this review has not resulted in
the withdrawal or suspension of benefits from any ATPA country.
By Providing New Opportunities, Preferences Can Increase U.S. Imports
from Developing Countries and Thus Promote Economic Development:
In assessing the effects of trade preferences on beneficiary country
development, economists note that preferences are just one element of a
complex economic development process and that isolating their direct
impact is difficult. However, there is fairly wide agreement among
economists that expanding trade promotes growth and development. If
trade preferences lead to increased exports, and export earnings are
used to expand industrialization and promote a more diverse economy,
then preferences can contribute to the economic development of
beneficiary countries.[Footnote 17] To shed light on the question of
whether U.S. trade preference programs are helping countries develop,
we look at the fundamental link between the programs and the trade
activity of beneficiary countries, focusing on three key elements: (1)
the extent and nature of the new opportunities provided under U.S.
preference programs, (2) whether countries are fully using the
available opportunities, and (3) whether U.S. imports from
beneficiaries have grown and diversified. We also report countries'
perspectives on the benefits they derive from U.S. preferences, based
on fieldwork. Overall, we find that U.S. trade preference programs have
contributed to increased and more diverse trade for many developing
country partners.
Opportunities Offered Beneficiaries under U.S. Preferences Have
Expanded:
To assess the opportunities provided to beneficiary countries by U.S.
preference programs, we examined the scope of programs' coverage by
beneficiary and product, the size of tariff cuts (or margins of
preference), and some eligibility conditions that can affect the
ability of beneficiaries to access program opportunities. Overall, we
found that the opportunities for beneficiaries to export under
preferences have expanded, but still have gaps (see detailed data and
further discussion in app. III).
Coverage:
As detailed in appendix III, product coverage, as measured by tariff
lines eligible for duty-free treatment, is extensive for most U.S.
preference programs, products, and partners. In 1996, the number of
duty-free tariff lines offered under GSP was expanded to provide
additional benefits to beneficiary least-developed countries (LDC).
Enactment of the regional programs continued this expansion. But, as
figure 1 shows, notable gaps remain in tariff lines available for duty-
free import under preference programs, particularly in agricultural and
textile and apparel products.
Figure 1: Product Groups with Most Dutiable Product Lines in U.S.
Tariff Schedule, Taking Into Account All U.S. Preference Programs:
[See PDF for image]
This figure is a series of pie-charts depicting the following data:
Product group: Animal and plant products;
Dutiable products that face MFN duties and are ineligible for U.S.
preference programs: 8%;
Duty-free products due to MFN or U.S. trade preference programs: 92%.
Product group: Prepared food, beverages, spirits, and tobacco;
Dutiable products that face MFN duties and are ineligible for U.S.
preference programs: 17%;
Duty-free products due to MFN or U.S. trade preference programs: 83%.
Product group: Textiles, leather, and footwear;
Dutiable products that face MFN duties and are ineligible for U.S.
preference programs: 48%;
Duty-free products due to MFN or U.S. trade preference programs: 52%.
Product group: Apparel;
Dutiable products that face MFN duties and are ineligible for U.S.
preference programs: 57%;
Duty-free products due to MFN or U.S. trade preference programs: 43%.
Source: GAO analysis of the Harmonized Tariff Schedule of the United
States, 2006.
[End of figure]
Moreover, in examining coverage by beneficiary countries' trade with
the United States in 2006, using the ratio of eligible to dutiable
imports[Footnote 18] for each partner, we find wide variation in
coverage even within programs. Our analysis finds that: (1) countries
eligible for only GSP or GSPLDC have the least coverage of partners'
dutiable imports--approximately 25 percent, (2) regional programs and
GSPLDC have much higher coverage of partners' dutiable imports, and (3)
country variations in coverage are wide. For example, 35 GSP or GSPLDC
beneficiaries, including Lebanon, Paraguay, Somalia, and Zimbabwe, have
high coverage rates, exceeding 75 percent of the value of their
dutiable imports. Yet, 54 GSP or GSPLDC beneficiaries such as
Bangladesh, Egypt, Pakistan, and Uzbekistan have low coverage rates
(less than 25 percent of dutiable imports).
Preference Margins:
The expansion of U.S. program coverage since 1996 appears to have
increased the benefit of U.S. preferences by adding some key products
under GSP-LDC and the regional programs that otherwise would face
relatively high U.S. tariffs. A recent effort[Footnote 19] to quantify
margins of preference (the difference between the preference rate and
the otherwise-applicable tariff rate) across all U.S. preference
programs, including GSP, by staff economists at ITC and the World Bank
finds that preference margins are relatively high for apparel products,
as well as certain agricultural goods (melons, cut flowers, frozen
orange juice, raw cane sugar, and asparagus);[Footnote 20] they tend to
be relatively low for other products and fairly uniform among programs.
Program Conditions:
Conditions on product entry are also a significant factor affecting
opportunities and trade under U.S. preference programs. While the data
on coverage and margins of preference suggest a degree of success in
improving the benefits of U.S. preference programs, in general, recent
assessments of the literature express some skepticism as to whether
trade preferences, and GSP in particular, have had more than a very
modest impact on the export performance, and hence the development, of
eligible countries. In discussing factors that underlie the performance
of preference programs, researchers Ozden and Reinhardt, for example,
not only indicate that GSP often fails to cover products in which
beneficiary countries have the greatest comparative advantage, such as
agricultural products, but cite administrative features of the
programs--notably, export ceilings and rules of origin--as key
constraints on benefits.[Footnote 21] Nevertheless, conformity with
such requirements can be vital to ensuring that benefits flow to the
intended country--that is, the designated beneficiary country or
countries, rather than countries that are ineligible for preferences.
Two specific conditions--"competitive need limitations" and "rules of
origin"--illustrate how administrative implementation of statutory
provisions, although addressing important policy considerations, may
affect the ability of beneficiary countries to fully access the
opportunities otherwise offered by U.S. preference programs. GSP places
export ceilings, or competitive need limitations (CNL), on eligible
products from GSP beneficiaries that exceed specified value and import
market share thresholds (LDCs and AGOA beneficiaries are exempt). Rules
of origin for U.S. trade preference programs typically specify a
minimum percentage value-added to the entering product that must come
from the beneficiary country. However, more complex rules apply to some
products, notably textiles and apparel. Our fieldwork revealed examples
where complex rules-of-origin requirements appear to be complicating
preference trade, for example, in Haiti and in Ghana. On the other
hand, liberalizing quotas and rules of origin have been the principal
means by which the regional programs have been liberalized or made more
likely to permit imports in recent years, particularly on apparel
products.
Utilization of Regional Programs Is Fairly High Compared with GSP but
Varies by Partner:
The effectiveness of trade preference programs in expanding trade is
also dependent on beneficiaries' actual use of the preference
opportunities offered. The utilization rate indicates the extent to
which beneficiaries are taking advantage of the opportunities
offered.[Footnote 22]
Our analysis shown in appendix III finds that U.S. preference programs
have fairly high utilization rates, but utilization varies by program
and beneficiary. Although utilization of the regional preference
programs is higher than utilization of GSP, to some extent, this lower
utilization of GSP reflects the fact countries that have access to both
GSP and regional programs often opt to use the regional programs. Our
analysis of utilization across programs by beneficiary country finds
substantial variation. For example, under AGOA, a number of countries,
such as Nigeria, Angola, Chad, and Gabon have high utilization rates,
but 12 of the 38 AGOA eligible countries did not export under the
program.[Footnote 23]
Overall U.S. Imports from Developing Countries Have Risen, and
Preference Imports Have Risen Even Faster:
The improved opportunities for market access provided by U.S.
preference programs appear to have contributed to the rapid growth in
U.S. imports from developing countries in recent years. The total
dollar value of U.S. imports from both developed and developing
countries has steadily grown since 1992, but developing countries have
witnessed much faster growth since 2000. The developing countries'
share of total U.S. imports has increased, while the developed (high-
income) countries' share has declined. The overall gains by developing
countries are mostly attributable to middle-income developing
countries. The share of low-income and LDCs remains small.[Footnote 24]
Turning to preference imports specifically, we also find that
preference programs have generally contributed to the increasing shares
of developing countries in U.S. imports, particularly imports from low-
income developing countries. However, imports under U.S. preference
programs only accounted for about 5 percent of total U.S. imports in
2006. Total U.S. preference imports grew from $20 billion in 1992 to
$92 billion in 2006. Most of this growth in U.S. imports from
preference countries has taken place since 2000, when preference
imports grew faster than overall U.S. imports. Whereas total U.S.
preference imports grew at an annual rate of 0.5 percent from 1992 to
1996, the growth quickened to an annual rate of 8 percent from 1996 to
2000, and 19 percent since 2000, which also suggests an expansionary
effect of program changes that increased product coverage and
liberalized rules of origin for LDCs under GSP in 1996 and African
countries under AGOA in 2000.
A Few Countries Dominate U.S. Preference Imports, but Lower-Income
Countries Have Garnered a Growing Share:
While U.S. preference imports remain concentrated in a few countries,
overall the poorer countries' share of preference imports has risen
recently. As can be seen from figure 2, the top 5 suppliers under
preference programs in 2006 accounted for 58 percent of preference
imports, and the top 10 suppliers accounted for 77 percent of
preference imports. Among the top 10 suppliers, two countries--Nigeria
and India--are low-income, and six countries--Angola, Ecuador,
Colombia, Thailand, Peru, and the Dominican Republic--are lower middle-
income countries.[Footnote 25] The top 25 preference beneficiaries
accounted for over 95 percent of U.S. preference imports.
Figure 2: The Top 25 Partners of U.S. Preference Programs, 2006:
[See PDF for image]
This figure is a chart depicting the top 25 partners of U.S. preference
programs, 2006, as follows:
* Top 10 countries comprise the top 77 percent of the preferences
import market.
* Of the top 25 preference suppliers, more than half (14) are low or
lower middle income.
Partner: (1) Nigeria;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $25.8;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 28%;
Income level: low.
Partner: (2) Angola;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $11.3;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 12%;
Income level: low middle.
Partner: (3) India;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $5.7;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 6%;
Income level: low.
Partner: (4) Ecuador;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $5.4;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 6%;
Income level: low middle.
Partner: (5) Colombia;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $5.0;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 5%;
Income level: low middle.
Partner: (6) Thailand;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $4.3;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 5%;
Income level: low middle.
Partner: (7) Brazil;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $3.7;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 4%;
Income level: upper middle.
Partner: (8) Trinidad and Tobago;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $3.7;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 4%;
Income level: high.
Partner: (9) Peru;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $3.4;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 4%;
Income level: low middle.
Partner: (10) Dominican Republic;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $2.6;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 3%;
Income level: low middle.
Partner: Subtotal of top ten countries;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $70.8;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 77%.
Partner: Indonesia;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $1.9;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 2%;
Income level: low middle.
Partner: South Africa;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $1.8;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 2%;
Income level: upper middle.
Partner: Chad;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $1.7;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 2%;
Income level: low.
Partner: Equatorial Guinea;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $1.6;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 2%;
Income level: upper middle.
Partner: Costa Rica;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $1.5;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 2%;
Income level: upper middle.
Partner: Gabon;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $1.3;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 1%;
Income level: upper middle.
Partner: Phillipines;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $1.1;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 1%;
Income level: low middle.
Partner: Turkey;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $1.1;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 1%;
Income level: upper middle.
Partner: Congo;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $0.8;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 1%;
Income level: low.
Partner: Guatemala;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $0.7;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 1%;
Income level: low.
Partner: Venezuela;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $0.7;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 1%;
Income level: low middle.
Partner: Argentina;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $0.7;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 1%;
Income level: low middle.
Partner: Honduras;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $0.6;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 1%;
Income level: low.
Partner: Russia;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $0.5;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 1%;
Income level: low middle.
Partner: Kazakhstan;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $0.5;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 1%;
Income level: low middle.
Partner: All others;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $4.9;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 5%;
Income level: N/A.
Partner: Total;
U.S. preference imports in 2006: Preference imports U.S. dollars in
billions: $92.1;
U.S. preference imports in 2006: Share of country and total U.S.
preference imports: 100%.
Source: GAO analysis of official U.S. statistics.
[End of figure]
Nevertheless, as figure 3 shows, the poorest countries have been more
successful in increasing their shares in total U.S. imports under
preferences than they have been in increasing their share of overall
U.S. imports. The year 2000 marks the beginning of gains in preference
imports for low-income countries and declines in the share of middle-
income developing countries. By 2006, imports from low-income countries
had risen to 38 percent of U.S. preference imports. Within the middle-
income grouping, the share of upper middle-income countries has
generally declined since 1992, while that of lower middle-income
countries rose, then moderated; in 1996, lower middle income countries
share surpassed that of the upper middle income countries. The share of
U.S. preference imports from the least-developed countries was 17
percent in 2006, versus nearly zero until 1996--the year of major
revisions in GSP.
Figure 3: U.S. Preference Imports by Beneficiary Income Levels in 2006:
[See PDF for image]
This figure is a series of line graphs and pie-charts depicting U.S.
preference imports by beneficiary income levels in 2006.
The first graph depicts total imports from preference beneficiaries
under preference programs from 1992 to 2006. Four income levels are represented: Low; lower-middle; upper-middle; and total. Indicated on the graph are three specific points in time: 1999, GSP expanded; 2000, AGOA initiated; CBTPA added; and 2002, ATPDEA added, GSP renewed. The following data is depicted (U.S. dollars in billions):
Low income:
1992: $1.1;
1993: $1.3;
1994: $1.3;
1995: $1.4;
1996: $1.4;
1997: $1.9;
1998: $2.3;
1999: $2.0;
2000: $2.1;
2001: $1.8;
2002: $1.8;
2003: $2.5;
2004: $3.2;
2005: $3.5;
2006: $3.5.
Lower-middle income:
1992: $6.3;
1993: $7.3;
1994: $8.2;
1995: $8.1;
1996: $9.1;
1997: $12.7;
1998: $19.1;
1999: $16.7;
2000: $16.7;
2001: $22.0;
2002: $24.0;
2003: $35.1;
2004: $36.4;
2005: $40.6;
2006: $39.0.
Upper-middle income:
1992: $11.6;
1993: $13.6;
1994: $10.8;
1995: $11.4;
1996: $10.1;
1997: $7.9;
1998: $8.3;
1999: $7.6;
2000: $9.3;
2001: $12.1;
2002: $14.2;
2003: $15.8;
2004: 16.0;
2005: $16.2;
2006: $14.4.
Total:
1992: $20.0;
1993: $23.6;
1994: $21.6;
1995: $21.7;
1996: $21.4;
1997: $23.4;
1998: $30.7;
1999: $27.3;
2000: $29.4;
2001: $54.9;
2002: $59.7;
2003: $79.1;
2004: $87.2;
2005: $95.0;
2006: $92.1.
The value of U.S. preference imports tripled in the decade from 1996 to
2006, as coverage under existing programs improved, and new programs
were added. All developing country income groups saw a rise, but low-
and lower-middle income rose most.
The next figure is a series of pie-charts depicting the following data:
All U.S. imports:
Year: 1992;
Low income: 4%;
Middle income: 27%;
High income: 68%.
Year: 2006;
Low income: 4%;
Middle income: 43%;
High income: 53%.
Preference imports:
Year: 1992;
Low income: 5%;
Middle income: 90%;
High income: 4%.
Year: 2006;
Low income: 38%;
Middle income: 58%;
High income: 4%.
Developing countries:
* Since 2000, preference imports have risen faster than overall U.S.
imports. Developed (high-income) countries‘ share of total U.S. trade
fell from 1992 to 2006, as middle-income countries‘ share grew.
* Middle-income countries dominated total U.S. imports from developing
countries in both 1992 and 2006; their dominance of preference imports
has been slipping.
The next three figures are line graphs, depicting the following data:
Percentage from preference beneficiaries: Low-income countries share of
preference imports rose to 38 percent by 2006, as the share of middle-
income countries fell from 90 to 58 percent. The following data is depicted:
Middle income:
1992: 90%;
1993: 63%;
1994: 56%;
1995: 56%;
1996: 51%;
1997: 38%;
1998: 30%;
1999: 31%;
2000: 36%;
2001: 26%;
2002: 29%;
2003: 24%;
2004: 22%;
2005: 21%;
2006: 20%.
Low income:
1992: 5%;
1993: 6%;
1994: 6%;
1995: 6%;
1996: 7%;
1997: 8%;
1998: 8%;
1999: 7%;
2000: 7%;
2001: 34%;
2002: 31%;
2003: 32%;
2004: 37%;
2005: 37%;
2006: 38%.
Percentage from preference beneficiaries: Lower-middle income countries
gained share at the expense of upper-middle income countries. The following data is depicted:
Middle income:
1992: 90%;
1993: 63%;
1994: 56%;
1995: 56%;
1996: 51%;
1997: 38%;
1998: 30%;
1999: 31%;
2000: 36%;
2001: 26%;
2002: 29%;
2003: 24%;
2004: 22%;
2005: 21%;
2006: 20%.
Lower-middle income:
1992: 32%;
1993: 31%;
1994: 38%;
1995: 37%;
1996: 43%;
1997: 54%;
1998: 62%;
1999: 61%;
2000: 57%;
2001: 40%;
2002: 40%;
2003: 44%;
2004: 42%;
2005: 43%;
2006: 42%.
Upper-middle income:
1992: 58%;
1993: 58%;
1994: 50%;
1995: 52%;
1996: 47%;
1997: 34%;
1998: 27%;
1999: 28%;
2000: 32%;
2001: 22%;
2002: 24%;
2003: 20%;
2004: 18%;
2005: 17%;
2006: 16%.
Percentage from preference beneficiaries: LDCs‘ share has risen from
virtually nil in 1992-1996 to about 17 percent by 2006. The following data is depicted:
LDC:
1992: 0%;
1993: 1%;
1994: 0%;
1995: 0%;
1996: 0%;
1997: 11%;
1998: 28%;
1999: 29%;
2000: 25%;
2001: 15%;
2002: 16%;
2003: 14%;
2004: 12%;
2005: 15%;
2006: 17%.
Note: The data presented in this figure is for the current set of
beneficiary countries. Income categories were assigned based on 2006
rankings by the World Bank or the United Nations. Each country's income
group remained constant for the period. In other words, if a country's
present income status was higher in 2006 than it was previously, it is
not captured here.
[End of figure]
Reliance on Preference Programs among Least-Developed Countries Varies
Considerably:
While our analysis shows that the LDC's share of U.S. preference
imports has risen, the extent of their trade and reliance on
preferences (as measured by the share of preference imports in total
imports) varies considerably. Three LDCs--all oil exporters--rank among
the leading suppliers of total imports into the United States under
preference programs (Angola, Chad, and Equatorial Guinea) as shown in
table 3. Other LDC exporters to the United States, such as Lesotho,
Madagascar, and Haiti are also extensive users of preference programs
and have the opportunity to export apparel under AGOA or an expanded
CBI. In contrast, several of the top 10 LDC exporters such as
Bangladesh, Cambodia, Liberia, Niger, Nepal, and Guinea do not have the
opportunity to export textiles and apparel under GSP and do not rely on
preferences to support their exports to the United States. Overall, 34
of the 46 eligible LDCs barely used preference programs for their
exports to the United States.[Footnote 26]
Table 3: Leading LDC Exporters to the United States and Their Share
under Preference Programs, 2006 (Dollars in millions):
Country: Angola;
Total U.S. imports: $11,514;
Ratio of preference program imports to total U.S. imports from country
or country group: 98.2%.
Country: Bangladesh;
Total U.S. imports: $3,268;
Ratio of preference program imports to total U.S. imports from country
or country group: 0.6.
Country: Cambodia;
Total U.S. imports: $2,188;
Ratio of preference program imports to total U.S. imports from country
or country group: 0.2.
Country: Chad;
Total U.S. imports: $1,905;
Ratio of preference program imports to total U.S. imports from country
or country group: 89.1.
Country: Equatorial Guinea;
Total U.S. imports: $1,718;
Ratio of preference program imports to total U.S. imports from country
or country group: 90.7.
Country: Haiti;
Total U.S. imports: $496;
Ratio of preference program imports to total U.S. imports from country
or country group: 76.7.
Country: Lesotho;
Total U.S. imports: $408;
Ratio of preference program imports to total U.S. imports from country
or country group: 94.2.
Country: Madagascar;
Total U.S. imports: $281;
Ratio of preference program imports to total U.S. imports from country
or country group: 82.4.
Country: Liberia;
Total U.S. imports: $140;
Ratio of preference program imports to total U.S. imports from country
or country group: 0.0.
Country: Niger;
Total U.S. imports: $124;
Ratio of preference program imports to total U.S. imports from country
or country group: 0.0.
Country: Nepal;
Total U.S. imports: $99;
Ratio of preference program imports to total U.S. imports from country
or country group: 4.0.
Country: Guinea;
Total U.S. imports: $92;
Ratio of preference program imports to total U.S. imports from country
or country group: 0.2.
Country: Others;
Total U.S. imports: $568;
Ratio of preference program imports to total U.S. imports from country
or country group: 24.4.
Total LDC group:
Total U.S. imports: $22,800;
Ratio of preference program imports to total U.S. imports from country
or country group: 69.0%.
Source: GAO analysis of official U.S. trade statistics.
[End of table]
Fuels and Apparel Dominate Preference Imports, but Overall Imports Have
Diversified Somewhat:
The growth in imports from developing countries is accompanied by
significant changes in the product mix of U.S. imports from preference-
eligible countries. Notably, the rapid rise in fuel imports since 1996
is the defining feature of U.S. imports under preference programs.
Fuels were less than 1 percent of U.S. imports from preference
countries in 1996 but, in 2006, account for nearly 60 percent of U.S.
preference imports from preference-eligible countries. Figure 4 also
highlights the importance of apparel in the growth of U.S. preference
imports up to 2005. After the phase out of global quotas on textiles
and apparel in 2005 and the entry into force of the Dominican Republic-
Central America-United States Free Trade Agreement (CAFTA-DR) for
several CBI nations during 2006, however, these imports under
preference programs declined somewhat.
Figure 4: Key Products in U.S. Preference Imports, 1992-2006:
[See PDF for image]
This figure is a stacked multiple line graph depicting total key
product imports from 1992 to 2006, and indicating three specific dates:
1996: GSP expanded;
2000: AGOA initiated and CBTPA added;
2002: ATPDEA added, GSP renewed.
The following approximated data has been extrapolated from the graph:
Year: 1992;
Product: All other products;
Amount of imports: approximately $29 billion.
Year: 1996;
Product: All other products;
Amount of imports: approximately $30 billion.
Year: 2000;
Product: Apparel, fuels, all other products;
Amount of imports: approximately $35 billion: apparel ($1), fuels ($4),
all other products ($30).
Year: 2002;
Product: Apparel, fuels, all other products;
Amount of imports: approximately $63 billion: apparel ($8), fuels
($24), all other products ($31).
Year: 2006;
Product: Apparel, fuels, all other products;
Amount of imports: approximately $90 billion: apparel ($5), fuels
($50), all other products ($35).
Source: GAO analysis of official U.S. trade statistics.
[End of figure]
In 2006, fuels comprised 94 percent of all imports under AGOA, nearly
70 percent of ATPA/ATPDEA imports, but only 27 percent each of GSP and
CBI/CBTPA imports. Apparel imports represent about 6 percent of total
preference imports but represent over 30 percent of U.S. imports under
CBI, 10 percent of ATPA imports, and just 3 percent of AGOA imports
(see app. V). Figure 5 further breaks down trends in nonfuel,
nonapparel imports under preference programs. Notably, after 1993, when
the North American Free Trade Agreement (NAFTA) was implemented, Mexico
lost GSP eligibility, and global agreements to eliminate tariffs in
certain sectors such as electronics and information technology were
effectuated by the United States, imports under preferences of
machinery and electronics--initially the largest product category--
declined, but increased somewhat after 2000. Four product areas show
increases. The year 2000 changes in U.S. preference programs (the
implementation of AGOA, CBTPA, and enhancements in ATPA) appear to have
contributed to growing imports of agriculture; textiles, leather, and
footwear; glassware, precious metals and stones, and jewelry; and
chemicals, plastic, wood, and paper.
Figure 5: U.S. Preference Imports: Nonfuel, Nonapparel Sectors:
[See PDF for image]
This figure includes a line graph depicting U.S. preference imports in
the nonfuel and nonapparel sectors and also depict the following key
dates:
1996: GSP expanded;
2000: AGOA initiated and CBTPA added;
2002: ATPDEA added, GSP renewed.
Lines on the graph represent the amount of U.S. preference imports in
billions of dollars for the following products: (which were indicated
in previous figures as "all other products")
Machinery and electronics:
1992: $8.3;
1993: $10.0;
1994: $9.3;
1995: $9.3;
1996: $8.7;
1997: $7.0;
1998: $7.3;
1999: $4.6;
2000: $4.8;
2001: $4.7;
2002: $5.4;
2003: $5.9;
2004: $6.3;
2005: $6.4;
2006: $7.5.
Agriculture:
1992: $3.1;
1993: $3.7;
1994: $3.2;
1995: $3.1;
1996: $3.3;
1997: $3.7;
1998: $3.5;
1999: $3.4;
2000: $3.5;
2001: $3.6;
2002: $3.5;
2003: $4.4;
2004: $4.5;
2005: $4.8;
2006: $5.3.
Base metals and articles:
1992: $2.1;
1993: $2.4;
1994: $2.4;
1995: $3.0;
1996: $2.9;
1997: $3.4;
1998: $3.5;
1999: $4.5;
2000: $5.8;
2001: $4.9;
2002: $4.6;
2003: $5.2;
2004: $4.9;
2005: $5.2;
2006: $5.1.
Chemicals, plastics, wood, and paper:
1992: $3.8;
1993: $4.1;
1994: $3.4;
1995: $3.5;
1996: $3.4;
1997: $3.6;
1998: $4.0;
1999: $3.9;
2000: $4.8;
2001: $5.0;
2002: $4.8;
2003: $5.5;
2004: $5.2;
2005: $6.1;
2006: $6.7.
Textiles, leather, and footwear:
1992: $0.9;
1993: $1.1;
1994: $1.1;
1995: $1.0;
1996: $0.9;
1997: $1.0;
1998: $1.0;
1999: $0.5;
2000: $0.6;
2001: $0.6;
2002: $0.6;
2003: $0.7;
2004: $0.7;
2005: $0.8;
2006: $0.9.
Glassware, precious metals and stones, and jewelery:
1992: $1.8;
1993: $2.1;
1994: $2.0;
1995: $1.7;
1996: $1.8;
1997: $2.1;
1998: $2.5;
1999: $2.3;
2000: $2.4;
2001: $2.8;
2002: $3.9;
2003: $4.9;
2004: $5.6;
2005: $5.9;
2006: $6.0.
Source: GAO analysis of official U.S. trade statistics.
[End of figure]
Diversification of Products Imported from Some Beneficiary Countries
Has Increased Modestly:
An important goal of trade preferences concerns helping developing
countries diversify the range of products that they produce and export.
Our analysis shows that total U.S. imports from all preference-eligible
countries remain quite concentrated when countries are grouped by their
preference program eligibility. However, when viewed over time, imports
from preference-eligible countries appear to have become somewhat more
diversified since 1992.
Our analysis of diversification of total U.S. imports from preference-
eligible countries is shown in figure 6. Using a widely used measure of
trade and commodity concentration, we constructed an index to show a
value of 0 when products are extremely concentrated and a value of 1
when products are most diversified.[Footnote 27] Consequently, a high
value of this index indicates a relatively diversified import/export
product mix. In figure 6, the relative level of diversification among
the programs is indicated by the height of the line, and the change in
the level of diversification over time is shown by the trend in the
line from 1992 to 2006.
Looking first at the diversification level of each program, we see that
U.S. imports from those countries that qualify for GSP only, and those
that import to the United States under CBI, have the most diverse
profile. Conversely, imports from countries eligible for the AGOA, GSP-
LDC, and ATPA show a relatively less diverse profile. This finding can
be seen as broadly consistent with the concentration of imports under
these preference programs in fuels and apparel products.
Second, looking at the trend in the diversification index over time, we
find that all country groups, except CBI, which already was the most
diversified, show a modest increase in diversification over time. The
highest rate of increase in diversification (as measured by the rate of
increase of the lines in fig. 6), is noticeable for imports from
countries eligible only for GSP. AGOA countries, which are the least
diversified, have shown relatively little change over time.[Footnote
28] It is also important to note that determination of diversification
at such a high level of aggregation still allows for significant
diversification within each broad product group.
Figure 6: Diversification Index of U.S. Imports from Preference-
Eligible Countries, 1992-2006:
[See PDF for image]
This figure is a line graph indicating the diversification of imports
from eligible countries, from least diverse to most diverse.
The following is depicted:
Diversification Index of U.S. Imports from Eligible Countries:
AGOA:
1992: 0.13;
1993: 0.14;
1994: 0.14;
1995: 0.14;
1996: 0.16;
1997: 0.17;
1998: 0.19;
1999: 0.23;
2000: 0.23;
2001: 0.20;
2002: 0.23;
2003: 0.22;
2004: 0.21;
2005: 0.18;
2006: 0.20.
GSPLDC:
1992: 0.22;
1993: 0.23;
1994: 0.22;
1995: 0.22;
1996: 0.24;
1997: 0.27;
1998: 0.26;
1999: 0.33;
2000: 0.37;
2001: 0.37;
2002: 0.34;
2003: 0.35;
2004: 0.38;
2005: 0.34;
2006: 0.34.
ATPA:
1992: 0.44;
1993: 0.39;
1994: 0.41;
1995: 0.38;
1996: 0.38;
1997: 0.43;
1998: 0.42;
1999: 0.41;
2000: 0.47;
2001: 0.47;
2002: 0.47;
2003: 0.49;
2004: 0.50;
2005: 0.51;
2006: 0.53.
GSP Only:
1992: 0.54;
1993: 0.54;
1994: 0.58;
1995: 0.60;
1996: 0.58;
1997: 0.61;
1998: 0.65;
1999: 0.68;
2000: 0.70;
2001: 0.68;
2002: 0.69;
2003: 0.69;
2004: 0.70;
2005: 0.70;
2006: 0.71.
CBI:
1992: 0.74;
1993: 0.74;
1994: 0.75;
1995: 0.75;
1996: 0.75;
1997: 0.73;
1998: 0.73;
1999: 0.74;
2000: 0.73;
2001: 0.72;
2002: 0.71;
2003: 0.72;
2004: 0.71;
2005: 0.73;
2006: 0.74.
* GSP, ATPA and GSPLDC eligible countries became more diverse.
* CBI eligible countries did not improve but were already highly
diverse.
* AGOA eligible countries improved slightly but remained undiversified.
Source: GAO analysis of official U.S. trade statistics.
[End of figure]
Developing Countries' Ability to Use Preference Opportunities May Be
Constrained by Limited Trade Capacity:
A key factor that can determine the impact of trade preference programs
on economic development is the ability of developing countries to take
advantage of global trading opportunities.[Footnote 29] The existence
of a preferential tariff is of little use in countries without the
ability to produce goods desired by importers, at competitive prices.
This ability to produce and trade competitively on world markets, which
is termed "trade capacity," is generally related to having the
appropriate economic conditions and institutions that help to attract
investment and enhance efficiency. Yet, many developing countries lack
of trade capacity prevents them from taking full advantage of
opportunities to export goods and services.
The lack of trade capacity is due to inadequate economic, legal, and
governmental infrastructure. Poor networks of roads, small and outdated
ports, inadequate supplies of energy and other utilities, rigid
financial institutions, inefficient or corrupt customs bureaus, and
poorly educated citizens are some of many obstacles that can make
production and exporting difficult and more costly. For example, in
Haiti, an apparel manufacturer located in a government-owned industrial
park told us they did not have reliable public sources of electricity
or water. Therefore, they had to pay for backup electricity generators
and trucked-in water to operate their factories. In addition,
entrepreneurs in developing countries may have little access to
information about markets and export standards or to affordable
financing that would enable them to set up a successful export
business.
Even countries that have developed industries to produce items with
strong global markets, with or without the assistance of preferences,
may need to improve their trade capacity. For example, mineral
commodities such as oil, or agricultural products such sugar and
soybeans, are an important source of export income to many developing
countries. However, developing a greater diversity of export industries
requires new skills, technologies, and investment.
Country Visits Highlight Importance Attached to Preferences, Despite
Diversity of Recipients:
While the impact of trade preferences on the development of beneficiary
countries remains a subject of debate among economists and other
analysts, our fieldwork in several beneficiary countries indicates the
diverse range of countries being served, and most countries emphasized
their view that U.S. trade preferences are important to their trade and
development objectives. The countries include several whose efforts to
use U.S. preferences are at nascent stages and several that achieved
notable success.
We chose to visit Haiti and Ghana because they are among the poorest
beneficiaries and ones where mechanisms to take advantage of recently
expanded benefits under newer preference programs--HOPE and AGOA--are
being put in place. Overall, the people we met in Haiti and Ghana
expected their countries will increase their use of the preferential
access to the U.S. market, but urged continued U.S. commitment and
patience. Following are illustrative observations from our fieldwork in
these countries:
* In-country officials and business representatives in Haiti see
preferences as a much-needed engine for creating jobs in the short-
term, attracting investment in the medium-term, and fostering growth
over the longer-term. Haitian officials recognize Haiti must confront
the daunting challenges of repairing its damaged infrastructure and
international image and improving security in order to be able to
effectively take advantage of the opportunities offered by the HOPE
program. Haiti's base of entrepreneurs with experience in the apparel
industry and geographic proximity to the United States are assets that
may help the country use the new access provided by HOPE and thereby
convince Congress to reenact it in 2011.
* Ghanaian authorities have put in place policy reforms and are
pursuing trade promotion initiatives to encourage the private sector to
take advantage of export opportunities provided under AGOA. Authorities
noted that hosting the annual AGOA forum among government, private
sector, and civil society increased the program's visibility in the
country. However, many of the Ghanaian business people we met were
still in the initial stages of exporting to the United States.
Additionally, Ghana National Chamber of Commerce officials told us many
potential beneficiaries of the program, particularly agricultural
producers, are still unfamiliar with the full range of opportunities
available under AGOA, and see the program as being primarily targeted
to the textile and apparel industry. Like Haiti, Ghana lacks such
essential capacity as reliable energy supply and cost-competitive
transportation. Yet, both governments were mobilizing and were
receiving considerable on-site and other resources from various U.S.
government and multilateral agencies to develop customs and port
facilities, and navigate U.S. rules and requirements, etc.
We picked Brazil and Turkey to visit because these countries have
successfully used U.S. trade preferences to export a diverse range of
relatively sophisticated manufactured goods. The two countries were
also of interest because both Brazil and Turkey rely on their own
government and government-affiliated business associations to promote
awareness of GSP, with limited assistance from U.S. agencies such as
USAID.[Footnote 30] Both expressed a continued need for preferences,
even though their overall economies are growing, and they are among the
leading developing country users of U.S. preferences. Following are
illustrative observations from our fieldwork in these countries:
* The government and private sector officials we met in Brazil
emphasized that GSP benefits both nations. Information provided GAO
shows that more than 90 percent of the value of what Brazil ships to
the United States under GSP are raw materials and intermediate or
capital goods, some produced by U.S.-affiliated multinationals.
[Footnote 31] Upon arrival in the United States, these
intermediate goods are destined for further processing and/or
incorporation into U.S. manufactured goods such as cars and power
generators. Officials at Brazil's Commerce and Development agencies
have stepped up efforts to promote awareness and use of GSP, seeing it
as a valuable tool for helping its poorest regions and boosting
participation by smaller businesses in export markets. An analysis by
Brazil's Commerce Ministry shows that Brazil has had more success in
exporting manufacturing goods under GSP and that more than 80 percent
of the products Brazil exports to the United States under GSP would
otherwise face relatively low tariffs (facing:
MFN tariffs set at or below 5 percent).[Footnote 32] Yet, the loss of
such privileges in competitive need limitations (CNL) decisions has
caused actual or likely business contraction and layoffs at two
companies on GAO's schedule of visits (in the automotive part and
copper wire industry). The people we met said such preferences are
particularly important now as they face intense competition from China,
which has displaced them in traditional industries such as leather
footwear (which is excluded by statute from the GSP program).
Ironically, China's rise has also coincided with a run-up in demand and
prices for Brazil's commodities, boosting the country's total exports
but disadvantaging its manufactured goods because the Brazilian
currency has appreciated.
* Turkey also has been buffeted by rising commodity prices in sectors
such as jewelry. It has been successful in exporting a diverse range of
manufactures to the United States under GSP, ranging from stone slabs
to steel, and says continuing to do so is vital to its competitiveness.
As in Brazil, the Turkish business representatives we met with said
that profit margins are so thin in the highly competitive U.S. market
they serve that even small preference margins make the difference
between being able to sell or being forced to exit entirely. Indeed,
Turkey wishes to widen the list of eligible products (e.g., hazelnuts)
and expressed concerns over losing GSP access for products such as
jewelry and marble that officials indicate have exceeded, or are likely
to exceed, CNLs. They attributed exceeding CNLs in part to rising
commodity prices, levels of aggregation in the U.S. tariff schedule
that are too high for certain products, and the related issue of
importer use of broader versus more specific categories to enter goods
to avoid complications in customs classification and clearance.
Colombia and Kazakstan were selected for high use, as well as their
involvement in ongoing liberalization: Colombia, through a free trade
agreement with the United States, and Kazakstan, as a result of its
efforts to join the WTO. Following are illustrative observations from
our fieldwork in these countries:
* Colombia dominates the ATPA program, and exports to the United States
accounted for 20 percent of Colombia's overall exports in 2006. Relying
on ATPA for more than half (54 percent) of its exports to the United
States that year, Colombia has attained success in steadily increasing
its exports in all but 2 years since the program's inception in 1991,
particularly since the program was expanded in 2002. Yet the range of
products it exported under preferences is considerably narrower than
that supplied by Brazil or Turkey. To diversify away from coca
production and spur participation in international trade, Colombia has
pursued improved security, political stabilization, and economic
diversification in the years since Plan Colombia was implemented in
2000 and the Andean Trade Preference Program was expanded in 2002. The
Department of State and USTR credit Colombia's efforts and these
programs, as well as strong internal and external demand, with
revitalizing Colombia's economy. Colombian business sector spokesmen
and government officials with whom we met generally underscored the
important role trade preferences have played in allowing certain
sectors, notably cut flowers, to compete in the U.S. market; however,
they also noted that their country needs to move beyond trade
preferences. In March 2007, Colombia's trade minister publicly stated
that his country has effectively exhausted the utility of U.S. trade
preferences and is eager to consummate a comprehensive free trade
agreement with the United States. This not only will assure continued
preferential access to the U.S. market for Colombia's exports, on which
it depends, but provide additional access and involve reciprocal
liberalization and rule-of-law changes in such areas as investment and
IPR that may help it attract additional investment and innovation.
* Kazakhstan's resource-driven economy is also booming based largely on
its vast oil, gas, and minerals reserves, which together make up about
two-thirds of its economic output. Its exports to the United States
reached $1 billion in 2006, of which half was imported using GSP
preferences. The country's development goals include managing its
mineral wealth, integrating into the world economy, and diversifying
its exports. Despite its goal of becoming a hub for East-West business,
Kazakhstan faces many challenges associated with the legacy of the
Soviet era, such as legal structures that make business formation and
trade difficult and a business mentality of dependence on government
subsidies. Geographically, Kazakhstan is challenged in trading with the
United States, although opportunities for integrating regionally with
the European Union are great. The major goal of Kazakhstan's trade
policy at present is WTO accession. Awareness and interest in the U.S.
GSP program was rather limited. In fact, exports of several major
products reached CNL limits, and the country did not seek a waiver for
its producers. The major GSP export in 2006, copper cathodes, turned
out to be more likely a one-time event prompted by factors other than
GSP preferences (the normal or MFN tariff rate on this product is just
1 percent). A major producer of the country's leading preference export
told us he sells the commodity at world prices and does not depend on
preferences or focus on the U.S. market, due to strong demand and
transportation linkages elsewhere.
Fundamental Program Trade-offs Balance Foreign and Domestic Benefits:
Preference programs balance two key trade-offs. First, programs offer
duty-free access to the U.S. market to increase beneficiary trade, to
the extent that it does not harm U.S. industries. Product exclusions,
country graduation, and product import limits are tools to make this
trade-off, although their use has raised concerns that nonbeneficiary
countries may gain U.S. market share from a beneficiary's loss of
preferences. Second, policymakers face a trade-off between longer or
permanent program duration, which may encourage investment, and shorter
renewal periods, which may provide leverage to achieve other policy
goals. Finally, the preference programs balance these trade-offs
against a backdrop of increasing global trade liberalization. Although
multilateral trade liberalization is a primary U.S. trade objective and
would be beneficial to most developing countries, liberalization
dilutes the marginal value of the preferences to beneficiaries. This
may affect their willingness to participate in reciprocal trade
liberalization. However, economic studies suggest that the negative
effects of preference erosion are outweighed by other factors, most
notably the benefits for developing countries associated with open
markets.
Product Exclusions Shield Domestic Industries but Limit Magnitude of
Preferences to Beneficiaries:
Statutory Product Exclusions Affect Products of Importance to
Developing Countries:
A basic policy trade-off is the extent to which preference programs
benefit businesses in beneficiary countries versus those in the United
States. As described in appendix III, U.S. preference programs provide
duty-free treatment for a little over half of the 10,500 U.S. tariff
lines, in addition to those that are already duty-free on an MFN basis
for all countries. But, they also exclude many other products from duty-
free status, including some that developing countries are capable of
producing and exporting. The extent of product exclusions, therefore,
may directly affect the ability of some developing countries to use and
benefit from the preferences.
Some product exclusions were established in preference legislation to
protect sensitive U.S. industries from import competition. The GSP
statute, for example, prohibits various "import-sensitive" categories
of products from being designated as eligible. These include most
textiles, apparel, watches, footwear, handbags, luggage, flat goods,
work gloves, and leather apparel; import-sensitive electronics, steel,
and glass products; and "any other articles which the President
determines to be import-sensitive in the context of the Generalized
System of Preferences."[Footnote 33] In addition, agricultural products
subject to a tariff-rate quota are not eligible under GSP for duty-free
treatment if such imports exceed the in-quota quantity. The regional
preference programs exclude some of these products as well. U.S.
tariffs on a number of these excluded products tend to be high.
The GSP statutes provide some discretion for the administration to
determine which items within some of these product categories are not
import-sensitive. Specifically, for electronic, steel, and manufactured
and semi-manufactured glass products, USTR and ITC officials told us
that the President may determine which of these items are eligible for
GSP benefits, based on advice from the ITC about import sensitivity.
The administration has at times self-initiated such a determination for
individual products, but the officials told us it has reexamined
eligibility for large numbers of products only within the context of
extending new benefits to subsets of countries, namely for LDCs in 1996
and for AGOA suppliers in 2000. More often, it makes determinations for
individual products based on petitions filed by interested parties.
There is no discretion for administrative product additions for the
other product categories specifically excluded by law from GSP
eligibility. However, the statutory language for each of these other
product categories is based on business conditions as of specific
dates--January 1, 1994, for textiles and apparel; June 30, 1989, for
watches; and January 1, 1995, for footwear, handbags, luggage, flat
goods, work gloves, and leather apparel. We note that U.S. industries
have changed in the intervening years, and these statutory provisions
may not be up-to-date. For example, in comments to USTR on the GSP
program in 2006, the Footwear Distributors and Retailers of America
stated that imports now account for 99 percent of U.S. footwear sales
and urged that the footwear exclusion be removed from the GSP
legislation.
According to USTR officials, the initial GSP statute provided that the
President could not designate as eligible those "textile and apparel
articles which are subject to textile agreements." Certain handcrafted
wall hangings, clothing, and other hand-loomed articles were not
covered by the Multi-Fiber Arrangement.[Footnote 34] In the late 1970s,
the agencies administering GSP sought to provide commercial
opportunities for handicraft producers of nonimport-sensitive items in
interested beneficiary countries. Based on an interagency review, the
President determined in 1981 that U.S. imports of certain wall
hangings, pillow covers, and carpets and textile floor coverings that
had been certified as handmade by the beneficiary country could enter
under GSP. USTR officials told us that since that time 15 GSP
beneficiaries have entered into such certified textile handicraft
agreements; however, by 2007, all but two of the items originally
covered by the presidential determination have become MFN duty-free. As
noted above, no textile and apparel items can be added to GSP
eligibility if they were not on the GSP-eligible tariff list as of
January 1, 1994.
Studies indicate that even when GSP product exclusions have been
liberalized within the context of GSP for LDCs or the regional
programs, remaining limits on product eligibility can affect the
ability of beneficiary countries to use and benefit from U.S.
preference programs. One recent study[Footnote 35] examined the
expansion of tariff lines under AGOA. In agriculture, the study noted,
AGOA appears to have liberalized nearly all products, although a
substantial portion of agricultural tariff lines are still subject to
tariff-rate quotas and, as a result, are not, in effect, fully
liberalized. Products not fully liberalized include certain meat
products, a large number of dairy products, many sugar products,
chocolate, a range of prepared food products, certain tobacco products,
and groundnuts (peanuts), the latter being of particular importance to
some African countries. The study noted that, in manufacturing, AGOA
liberalized additional tariff lines, but the increase is most notable
for those countries granted apparel benefits. According to the study,
key products that remain excluded are textile products, certain glass
products, and certain headwear.
A related trade-off involves deciding which developing countries can
enjoy additional preferential benefits for products excluded for most
preference recipients. One controversy concerns a few LDCs in Asia that
are not included in the U.S. regional preference programs, although
they are eligible for GSP-LDC benefits. Two of these countries--
Bangladesh and Cambodia--have become major producers and exporters of
apparel to the United States and have complained about the lack of duty-
free access to this country for their goods. For example, Cambodian
trade and industry officials argue that it is not fair that many LDCs
enjoy preferential access to the U.S. apparel market through the
regional preference programs, while Cambodia does not.[Footnote 36] In
comments filed with USTR on possible U.S. proposals at WTO to provide
duty-free, quota-free access to least-developed countries, some African
and other beneficiary countries, as well as certain U.S. industries,
have opposed the idea. African private sector spokesmen have raised
concerns that giving preferential access to Bangladesh and Cambodia for
apparel might endanger the nascent African apparel export industry that
has grown up under AGOA, while other non-LDC developing countries have
expressed similar concerns about their own industries. U.S. textile
manufacturers have also protested that the possible expansion of
apparel benefits to these countries would threaten their textile sales
to Latin American clothing producers under the regional preference
programs and free trade agreements. However, numerous U.S. importing
industries, such as retail groups, are strongly in favor of these
proposals.
Country and Product Graduation Aim to Focus Benefits on Poorest
Countries but May Not Achieve That Objective:
Over the 30-year life of the GSP program, questions about which
countries should benefit and how more benefits could be directed to
poorer countries have been raised repeatedly. The concerns relate to
the original intention that preference programs would confer temporary
trade advantages on developing countries, which would eventually become
unnecessary as the countries became more competitive. The GSP program
has mechanisms to limit duty-free benefits by "graduating" countries
that are no longer considered to need preferential treatment, based on
income and competitiveness criteria. The U.S. government has used two
approaches to graduation: outright removal of a country from GSP
eligibility, and the more gradual approach of ending duty-free access
for individual products from a country.
Once a country's economy reaches a "high income" level, as indicated by
World Bank measures of gross national income per capita, the statute
governing GSP requires that the country be graduated from this program.
Fifteen countries have been graduated since 1995 on that basis,
including, most recently, Antigua and Barbuda, Bahrain, and Barbados in
January 2006.[Footnote 37] Since 1995, nine other countries at high and
upper-middle income levels were removed from GSP eligibility because
they joined the European Union--most recently, Bulgaria and Romania in
December 2006.[Footnote 38] Program regulations also allow the United
States to remove a country from GSP after a review has found it to be
"sufficiently developed or competitive." Four countries or customs
territories were graduated on this basis in 1989--Singapore, South
Korea, Taiwan, and Hong Kong. Under the regional programs, there are no
mechanisms to graduate countries that have reached a more advanced
level of development. However, in the last 2 years, five Central
American/Caribbean countries were removed from GSP and CBI/CBTPA when
they entered free trade agreements with the United States.[Footnote 39]
More commonly, the United States uses import ceilings--CNLs--to end GSP
duty-free status for individual products from individual countries if
imports reach a certain level.[Footnote 40] The rationale given by USTR
for these limits is that they indicate a country has become a
"sufficiently competitive" exporter of the product and that ending
preferential benefits in such a case may allow other GSP-eligible
countries to expand their access to the U.S. market. The value of trade
from GSP beneficiaries that is ineligible for duty-free entry because
of the CNL ceiling is substantial. We identified $13 billion in imports
in 2006 that could not enter duty-free under GSP due to CNL exclusions-
-over one-third of the trade from GSP beneficiaries potentially subject
to the CNL ceiling.[Footnote 41]
Although the intent of country and product graduation is to
redistribute preference benefits more widely among beneficiary
countries, some U.S. and country officials with whom we met observe
that GSP beneficiary countries will not necessarily benefit from
another country's loss of preference benefits. The benefits cannot be
"transferred" directly from one country to another; rather, preferences
are a marginal advantage that can make a country's product competitive
only if other factors make it nearly competitive. In fact, the loss of
a tariff preference to a given country may give an advantage to a
country that is not a beneficiary of U.S. trade preference programs. In
the countries we visited, we repeatedly heard concerns that China, or
sometimes other countries, would be most likely to gain U.S. imports as
a result of a beneficiary's loss of preferences.
As part of an overall review of the GSP program in 2005 and 2006, USTR
officials reviewed trade and development indicators for large users of
the GSP program to determine whether they could be considered
sufficiently competitive in terms of trade in eligible products and,
therefore, should no longer be designated as GSP
beneficiaries.[Footnote 42] USTR officials said there are inherent
tensions between the program's statutory economic development and
export competitiveness goals. They noted that some of the beneficiaries
USTR reviewed were very competitive in certain industries but
nevertheless had large numbers of poor people.[Footnote 43] Agency
officials told us that it was important to conduct the overall review
in a manner consistent with U.S. WTO obligations under the GATT's
Enabling Clause, which enables developed WTO members to give
differential and more favorable treatment to developing
countries.[Footnote 44]
Efforts to Remove Preferences for Competitive Products Have Raised
Concerns:
Efforts to target benefits to the poorest countries have resulted in
the removal of preferences from products important to some U.S.
businesses. In 2007, the President revoked eight CNL waivers as a
result of legislation passed in December 2006.[Footnote 45]
Consequently, over $3.7 billion of trade in 2006 from six GSP
beneficiaries lost duty-free treatment. Members of the business
community and members of Congress raised concerns that the revocation
of these waivers would harm U.S. business interests while failing to
provide more opportunities to poorer beneficiaries. A bill regarding
sanctions on Burmese gems, which passed the House of Representatives in
December 2007, had included a GSP provision that would have reinstated
the CNL waivers for gold jewelry from Thailand and India and would have
required the President to review the other revoked waivers. The bill
also would have provided for the President to reinstate the other
waivers unless ITC determined that the loss of a waiver would neither
reduce the current level of U.S. imports of the article from the
beneficiary nor benefit countries that are not part of GSP.[Footnote
46]
Periodic Program Renewal Preserves U.S. Leverage but May Discourage
Long-term Investments:
Policymakers also face a trade-off in setting the duration of
preferential benefits in authorizing legislation. Preference
beneficiaries and U.S. businesses that import from them agree that
longer and more predictable renewal periods for program benefits are
desirable. However, some U.S. officials believe that periodic program
expirations can be useful as leverage to encourage countries to act in
accordance with U.S. interests.
Private sector and foreign government representatives have complained
that short program renewal periods discourage longer-term productive
investments that might be made to take advantage of preferences, such
as factories or agribusiness ventures. They would like to see
preference programs become permanent or have a longer duration. The
private sector Coalition for GSP (Coalition) cites the frequent lapses
in GSP between 1993 and 2001, with authorization periods ranging from
10 to 27 months (and gaps between expiration and legislative renewal of
1 to 15 months), as hindering long-term investment in beneficiary
countries. Both USTR and the Coalition have attributed the relatively
greater growth in GSP use after 2002 to the stability provided by a 5-
year program reauthorization at that time. Business people say that
predictable program rules and a longer program renewal period are
important to them in making business plans and investment decisions in
developing countries with confidence when they are based on preference
benefits. For example, officials in the Colombian flower industry told
us that ATPA's short time frame and frequent renewals made it difficult
to attract investment needed to enable them to compete with other
international cut-flower producers. They said investors need certainty
about preference benefits for at least 10 years to amortize and project
return on investment. Members of Congress have recognized this argument
with respect to Africa and, in December 2006, Congress renewed AGOA's
third-country fabric provisions until 2012; AGOA's general provisions
had previously been renewed until 2015.
On the other hand, short-term program renewals give Congress more
opportunities to respond to changing events and political priorities.
Threatening to let benefits lapse can be used as a way to pressure
countries to act on an issue. While acknowledging the need for U.S.
vigilance in pursuit of its commercial interests, officials at USTR and
Labor told us short-term program renewal can have other adverse
consequences, such as creating uncertainty for investors and importers
interested in using the program. From their perspective, the discretion
the administration exercises over continuation of program benefits
offers sufficient leverage to achieve policy goals, based on the
country's desire to maintain benefits and the possibility of removing
benefits administratively through reviews of country conformity with
eligibility requirements.
Nevertheless, a recent instance involving ATPA has provided U.S.
officials an opportunity to engage with beneficiary countries in the
context of program expiration. ATPA was extended for 6 months in
December 2006, again for 8 months in June 2007, and for 10 more months
on February 29, 2008. These short renewal periods reflected interest in
hastening congressional consideration of the free trade agreements with
Peru and Colombia and concern about policies adopted by Bolivia and
Ecuador that have negatively affected foreign investors. After the most
recent ATPA extension, the administration said the extension would
provide time to implement the Peru free trade agreement and for
Congress to pass the Columbia free trade agreement. The administration
also said it expected to see significant progress with respect to
Bolivia and Ecuador's treatment of foreign investors.
Global and Bilateral Trade Liberalization Diminishes Margin of
Preferences but Is Valuable in Its Own Right:
Global and bilateral trade liberalization is a primary U.S. trade
policy objective, based on the premise that increased trade flows will
support economic growth for the United States and other countries.
However, international movement toward lowering tariffs and other trade
barriers has an unavoidable effect on the marginal value of trade
preferences to beneficiaries. Because of this, beneficiary countries'
desire to keep their preferential advantages may generate some internal
resistance to multilateral liberalization. As some countries make
unilateral decisions to liberalize their national trade policies, and
as others enter into bilateral and regional trade agreements that
result in lower tariffs among trading partners, countries that rely on
preferential margins find the advantages they gain from preferences
fading away.
The erosion of the value of trade preferences poses yet another trade-
off. All of the preference programs include provisions to encourage
countries to move into reciprocal and liberalized trading
relationships. Indeed, a number of countries that were former
beneficiaries of preference programs have gone on to conclude free
trade agreements with the United States, and some have joined the ranks
of newly industrialized nations. However, members of Congress and some
administration officials have raised concerns that some preference
beneficiaries are placing their interests in trade preference programs
above the broader interest in multilateral liberalization, which the
United States has traditionally advocated. They note that, in an effort
to maintain their preference benefits, some beneficiary countries have
created roadblocks at WTO in the Doha Round of negotiations. This was
confirmed by U.S. agency officials we interviewed. The assurance of
continued preferential access to the U.S. market has at times, created
a disincentive to negotiation of reciprocal free trade agreements. For
example, officials at Commerce and Labor told us that the extension of
AGOA preferences during the negotiations toward a free trade agreement
with members of the Southern African Customs Union[Footnote 47] may
have contributed to the suspension of those negotiations since
countries were already granted broad access to the U.S. market. In the
past, spokesmen for countries that benefit from trade preferences have
told us that any agreement reached under the Doha framework must, at a
minimum, provide a significant transition period to allow beneficiary
countries to adjust to the loss of preferences. Additionally, they
questioned whether it is even fair to expect certain countries, such as
small-island states, to survive without some trade preference
arrangements under any deal that may be reached through WTO
negotiations.
As we have noted in previous reports, economic studies predict that
global trade liberalization, such as might be achieved in a new WTO
agreement from the Doha negotiations, would generally benefit most
developing countries.[Footnote 48] Moreover, with regard to preference
erosion and its impact on developing countries, some research has
suggested that the negative effects of preference erosion may be
outweighed by other factors--in particular, the benefits generated by
more open trade on the part of developing countries.[Footnote 49] For
example, one recent study estimates that while a small number of
countries, particularly those that currently receive very large
benefits under existing preference schemes, could experience a loss of
market access, most countries would benefit from the expanded market
access due to reduced tariffs under the Doha Round.[Footnote 50]
Another recent study of the impact of preference erosion on development
in the CBI countries notes that preference erosion occurred steadily
over the 15 years of the study (1984 to 1998).[Footnote 51] While
preference erosion was shown to have a small negative impact on
investment and growth in some countries in the CBI region over the
period studied, this effect may have been outweighed by the positive
effects of increased utilization of preferences. In addition, the
author finds the countries' own trade reforms (openness) may have had a
larger impact on development than the trade preferences did.
Separate Approaches to Preference Programs Impede Assessing Whether
They Are Meeting Shared Goals:
Trade preference programs have proliferated over time, but Congress has
not considered U.S. trade preferences as a whole. In response to
statutory requirements, agencies pursue different approaches to
monitoring compliance with the various criteria set for programs,
resulting in a lack of systematic review. There are other differences
in key aspects of the preference programs, such the use of trade
capacity building in conjunction with opportunities provided under
trade preference programs, which is currently most prominent in AGOA.
Finally, distinct approaches to reporting and examining the programs
limit the United States' ability to determine the extent to which U.S.
trade preferences foster development in beneficiary countries.
Trade Preferences Have Proliferated, Creating a Complex Array of
Programs, but Congress Still Considers Each Program Separately:
Over the years, Congress has set up a number of trade preference
programs to meet the overall goal of development, as well as specific
regional objectives. As a result, U.S. trade preferences have evolved
into an increasingly complex array of programs, with many countries
participating in more than one of these programs (see fig. 7). Congress
generally considers these programs separately partly because these
programs have disparate termination dates, and Congress has focused on
issues pertaining to individual programs when they have come up for
renewal. Proposals from the administration and members of Congress
suggest further additions to the preference programs are possible.
Figure 7: Growth of Trade Preference Programs:
[See PDF for image]
This figure is a timeline indicating the growth of trade preference
programs from 1975 through 2006, as follows:
Year: 1975;
Programs: GSP;
Year: 1983;
Programs: GSP, CBI (added);
Year: 1991;
Programs: GSP, CBI, ATPA (added);
Year: 1996;
Programs: GSP, CBI, ATPA, LDC (added);
Year: 2000;
Programs: GSP, CBI, ATPA, LDC, AGOA (added), CBTPA (added);
Year: 2002;
Programs: GSP, CBI, ATPA, LDC, AGOA, CBTPA, ATPDEA (added);
Year: 2006;
Programs: GSP, CBI, ATPA, LDC, AGOA, CBTPA, ATPDEA, HOPE (added).
Source: GAO analysis of USTR documents on Generalized System of
Preferences, African Growth and Opportunity Act,Andean Trade Preference
Act, and Caribbean Basin Initiative.
Note: In this figure, we use CBI to refer to CBERA, the legislation
initially establishing CBI. See note A to table 1.
[End of figure]
Of the 137 countries and territories eligible for preference programs,
as of January 1, 2007, 78 benefit from more than one (see fig. 8). The
reason that many countries benefit from more than one program is that
the regional preference programs have been added, as noted above, to
further various U.S. foreign policy objectives. The regional programs
in effect expand the preferences offered by GSP, but they result in
overlap, with various combinations of program eligibility for certain
countries. Thus, of the 48 countries to which the President may grant
AGOA eligibility, 39 are eligible for AGOA, while 47 are eligible for
GSP. The African country of Equatorial Guinea, for example, is
ineligible for AGOA, but eligible for GSP, and it exported
approximately $1.6 billion in fuel products to the United States under
that program in 2006. The 59 countries eligible for only the basic GSP
program, such as Argentina or Egypt, are neither LDCs nor part of a
regional preference scheme.
In the case of ATPA and CBI beneficiary countries, importers may choose
whether to enter products eligible for the regional program and GSP
under either one.[Footnote 52] Those importing goods from the Andean or
Caribbean areas tend to use ATPA or CBI instead of GSP, due to the more
liberal rules of origin and expanded product coverage for these
programs. To a certain extent, this has mitigated the uncertainty
associated with GSP program lapses.
Figure 8: Countries Benefiting from Various Trade Preferences Programs,
2006:
[See PDF for image]
This figure is a chart depicting the following data:
Countries benefiting from three or four programs:
Country: Angola;
Programs: GSP, GSP-LDC, AGOA.
Country: Benin;
Programs: GSP, GSP-LDC, AGOA.
Country: Burkina Faso;
Programs: GSP, GSP-LDC, AGOA.
Country: Burundi;
Programs: GSP, GSP-LDC, AGOA.
Country: Cape Verde;
Programs: GSP, GSP-LDC, AGOA.
Country: Chad;
Programs: GSP, GSP-LDC, AGOA.
Country: Congo (Kinshasa);
Programs: GSP, GSP-LDC, AGOA.
Country: Djibouti;
Programs: GSP, GSP-LDC, AGOA.
Country: Ethiopia;
Programs: GSP, GSP-LDC, AGOA.
Country: Gambia;
Programs: GSP, GSP-LDC, AGOA.
Country: Guinea;
Programs: GSP, GSP-LDC, AGOA.
Country: Guinea Bissau;
Programs: GSP, GSP-LDC, AGOA.
Country: Lesotho;
Programs: GSP, GSP-LDC, AGOA.
Country: Liberia;
Programs: GSP, GSP-LDC, AGOA.
Country: Madagascar;
Programs: GSP, GSP-LDC, AGOA.
Country: Malawi;
Programs: GSP, GSP-LDC, AGOA.
Country: Mali;
Programs: GSP, GSP-LDC, AGOA.
Country: Mauritania[A];
Programs: GSP, GSP-LDC, AGOA.
Country: Mozambique;
Programs: GSP, GSP-LDC, AGOA.
Country: Niger;
Programs: GSP, GSP-LDC, AGOA.
Country: Rwanda;
Programs: GSP, GSP-LDC, AGOA.
Country: Sao Tome and Principe;
Programs: GSP, GSP-LDC, AGOA.
Country: Sierra Leone;
Programs: GSP, GSP-LDC, AGOA.
Country: Tanzania;
Programs: GSP, GSP-LDC, AGOA.
Country: Uganda;
Programs: GSP, GSP-LDC, AGOA.
Country: Zambia;
Programs: GSP, GSP-LDC, AGOA.
Country: Barbados[B];
Programs: GSP, CBI; CBTPA.
Country: Belize;
Programs: GSP, CBI; CBTPA.
Country: Costa Rica;
Programs: GSP, CBI; CBTPA.
Country: Dominican Republic[C];
Programs: GSP, CBI; CBTPA.
Country: El Salvador[C];
Programs: GSP, CBI; CBTPA.
Country: Guatemala[C];
Programs: GSP, CBI; CBTPA.
Country: Guyana;
Programs: GSP, CBI; CBTPA.
Country: Honduras[C];
Programs: GSP, CBI; CBTPA.
Country: Jamaica;
Programs: GSP, CBI; CBTPA.
Country: Panama;
Programs: GSP, CBI; CBTPA.
Country: St. Lucia;
Programs: GSP, CBI; CBTPA.
Country: Trinidad and Tobago;
Programs: GSP, CBI; CBTPA.
Country: Haiti;
Programs: GSP, GSP-LDC; CBI; CBTPA.
Countries benefiting from two programs:
Country: Afghanistan;
Programs: GSP, GSP-LDC.
Country: Bangladesh;
Programs: GSP, GSP-LDC.
Country: Bhutan;
Programs: GSP, GSP-LDC.
Country: Cambodia;
Programs: GSP, GSP-LDC.
Country: Central African Republic;
Programs: GSP, GSP-LDC.
Country: Comoros;
Programs: GSP, GSP-LDC.
Country: Equatorial Guinea;
Programs: GSP, GSP-LDC.
Country: Kiribati;
Programs: GSP, GSP-LDC.
Country: Nepal;
Programs: GSP, GSP-LDC.
Country: Samoa;
Programs: GSP, GSP-LDC.
Country: Somalia;
Programs: GSP, GSP-LDC.
Country: Togo;
Programs: GSP, GSP-LDC.
Country: Tuvalu;
Programs: GSP, GSP-LDC.
Country: Vanuatu;
Programs: GSP, GSP-LDC.
Country: Yemen;
Programs: GSP, GSP-LDC.
Country: Botswana;
Programs: GSP, AGOA.
Country: Cameroon;
Programs: GSP, AGOA.
Country: Congo (Brazzaville);
Programs: GSP, AGOA.
Country: Gabon;
Programs: GSP, AGOA.
Country: Ghana;
Programs: GSP, AGOA.
Country: Kenya;
Programs: GSP, AGOA.
Country: Mauritius;
Programs: GSP, AGOA.
Country: Namibia;
Programs: GSP, AGOA.
Country: Nigeria;
Programs: GSP, AGOA.
Country: Senegal;
Programs: GSP, AGOA.
Country: Seychelles;
Programs: GSP, AGOA.
Country: South Africa;
Programs: GSP, AGOA.
Country: Swaziland;
Programs: GSP, AGOA.
Country: Antigua and Barbuda[B];
Programs: GSP, CBI.
Country: British Virgin Islands;
Programs: GSP, CBI.
Country: Dominica;
Programs: GSP, CBI.
Country: Montserrat;
Programs: GSP, CBI.
Country: St. Kitts and Nevis;
Programs: GSP, CBI.
Country: St. Vincent and the Grenadines;
Programs: GSP, CBI.
Country: Grenada;
Programs: GSP, CBI.
Country: Peru;
Programs: GSP, ATPA.
Country: Bolivia;
Programs: GSP, ATPA.
Country: Colombia;
Programs: GSP, ATPA.
Country: Ecuador;
Programs: GSP, ATPA.
Country: Nicaragua[C];
Programs: CBI; CBTPA.
Countries benefiting from one program:
Country: Albania;
Programs: GSP.
Country: Algeria;
Programs: GSP.
Country: Anguilla;
Programs: GSP.
Country: Argentina;
Programs: GSP.
Country: Armenia;
Programs: GSP.
Country: Bahrain[B];
Programs: GSP.
Country: Bosnia and Herzegovina;
Programs: GSP.
Country: Brazil;
Programs: GSP.
Country: British Indian Ocean Territories;
Programs: GSP.
Country: Bulgaria[D];
Programs: GSP.
Country: Christmas Island;
Programs: GSP.
Country: Cocos (Keeling) Islands;
Programs: GSP.
Country: Cook Islands;
Programs: GSP.
Country: Cote d'Ivoire;
Programs: GSP.
Country: Croatia;
Programs: GSP.
Country: Egypt;
Programs: GSP.
Country: Eritrea;
Programs: GSP.
Country: Falkland Islands;
Programs: GSP.
Country: Fiji;
Programs: GSP.
Country: Gaza Strip/West Bank[F];
Programs: GSP.
Country: Georgia;
Programs: GSP.
Country: Gibraltar;
Programs: GSP.
Country: Heard Island and McDonald Island;
Programs: GSP.
Country: India;
Programs: GSP.
Country: Indonesia;
Programs: GSP.
Country: Iraq;
Programs: GSP.
Country: Jordan;
Programs: GSP.
Country: Kazakhstan;
Programs: GSP.
Country: Kyrgyzstan;
Programs: GSP.
Country: Lebanon;
Programs: GSP.
Country: Macedonia;
Programs: GSP.
Country: Moldova;
Programs: GSP.
Country: Mongolia;
Programs: GSP.
Country: Norfolk Island;
Programs: GSP.
Country: Niue;
Programs: GSP.
Country: Oman;
Programs: GSP.
Country: Pakistan;
Programs: GSP.
Country: Papua New Guinea;
Programs: GSP.
Country: Paraguay;
Programs: GSP.
Country: Phillipines;
Programs: GSP.
Country: Pitcaim Islands;
Programs: GSP.
Country: Romania[D];
Programs: GSP.
Country: Russia;
Programs: GSP.
Country: Serbia/Montenegro;
Programs: GSP.
Country: Solomon Islands;
Programs: GSP.
Country: Sri Lanka;
Programs: GSP.
Country: St. Helena;
Programs: GSP.
Country: Suriname;
Programs: GSP.
Country: Thailand;
Programs: GSP.
Country: Tokelau;
Programs: GSP.
Country: Tonga;
Programs: GSP.
Country: Tunisia;
Programs: GSP.
Country: Turkey;
Programs: GSP.
Country: Turks and Caicos Islands;
Programs: GSP.
Country: Ukraine;
Programs: GSP.
Country: Uruguay;
Programs: GSP.
Country: Uzbekistan;
Programs: GSP.
Country: Venezuela;
Programs: GSP.
Country: Wallis and Futuna;
Programs: GSP.
Country: Zimbabwe;
Program: GSP.
Country: Aruba;
Program: CBI.
Country: Bahamas;
Program: CBI.
Country: Netherland Antilles;
Program: CBI.
Note: In the figure above, the CBTPA program is broken out because not
all CBI countries are eligible for it.
[A] Mauritania lost AGOA eligibility on Jan. 1, 2006, and regained AGOA
eligibility on June 28, 2007.
[B] Antigua and Barbuda, Bahrain, and Barbados were removed from GSP
eligibility in January 2006 due to high per capita income. The United
States-Bahrain Free Trade Agreement was implemented in July 2006.
[C] The following countries were removed from eligibility for GSP, CBI,
and CBTPA as Free Trade Agreements went into force: the Dominican
Republic (March 2007), El Salvador (March 2006), Guatemala (July 2006),
Honduras (April 2006), and Nicaragua (April 2006).
[D] Bulgaria and Romania were removed from GSP eligibility in December
2006 when they became members of the European Union.
[E] Haiti is also eligible for the Haitian Hemispheric Opportunity
through Partnership Encouragement Act.
[F] Under GSP, the Gaza Strip and the West Bank are listed as a single
entity, although they are separately identified in U.S. trade data.
[End of figure]
While there is overlap in various aspects of trade preference programs,
each program is currently considered separately by Congress based on
its distinct timetable and expiration date. Typically, when Congress
has considered these programs for renewal, the focus has been on
particular issues relevant to specific programs, such as
counternarcotics cooperation efforts in the case of ATPA, or phasing
out benefits for advanced developing countries in the case of GSP. The
oversight difficulties associated with this array of preference
programs and distinct timetables is compounded by different statutory
review and reporting requirements for agencies. As explained in detail
in the next section, in practice, these entail distinct administrative
structures and approaches that leave gaps in assessment and use of
tools known to be necessary to helping developing countries participate
in trade. Congressional deliberations have not provided for cross-
programmatic consideration or oversight. However, key congressional
leaders appear to want to use this year's coincidence of expiration
dates for ATPA, CBI, and GSP to look more systematically at preference
programs and how they can be updated and improved.[Footnote 53]
Different Approaches Agencies Use to Monitor Compliance with Program
Criteria Result in Disconnected Reviews:
Two different approaches--a petition process and periodic reviews--have
evolved to monitor compliance with criteria set for various trade
preference programs. USTR officials explained that the mechanisms for
monitoring compliance with the criteria under specific programs reflect
the relevant statutory requirements for each. We observed advantages
associated with each approach, but individual program reviews appear
disconnected and result in gaps. The petition process under GSP and
ATPA offers certain benefits over the periodic reviews of all
beneficiary countries that take place under AGOA and CBI. These
regional programs' periodic reviews, on the other hand, provide an
opportunity to engage beneficiary countries on areas of concern in a
more consistent manner. Table 4 illustrates key administrative aspects
of the trade preference programs, including the type of reviews
followed to determine compliance.
Table 4: Key Administrative Aspects of Trade Preferences Programs:
GSP:
Administrative mechanism: GSP subcommittee of the TPSC;
Product addition review: Petition process developed by regulation;
Country review: Annual petition process;
Reporting: Reporting in GSP done via the USTR annual report;
Trade capacity building and related assistance tied to program:
Outreach missions to encourage greater beneficiary use of program.
ATPA:
Administrative mechanism: Andean subcommittee of the TPSC;
Product addition review: No;
Country review: Annual petition process and biennial general review;
Reporting: Biennial operational report;
Trade capacity building and related assistance tied to program: None.
CBI:
Administrative mechanism: Caribbean subcommittee of the TPSC;
Product addition review: No;
Country review: Biennial general review;
Reporting: Biennial operational report;
Trade capacity building and related assistance tied to program: None.
AGOA:
Administrative mechanism: AGOA implementation subcommittee of the TPSC;
Product addition review: GSP petition process to determine product
additions;
Country review: Annual eligibility determination;
Reporting: Annual report on U.S. Trade and Investment Policy toward Sub-
Saharan Africa and Implementation of AGOA[A];
Trade capacity building and related assistance tied to program:
Multiple legislative directions to trade capacity building with
specific program linked to AGOA eligibility.
Source: GAO analysis of official USTR documents.
[A] The 2007 Annual Report on AGOA was the sixth of eight required by
law.
[End of table]
Petition Process Responds to Concerns but Does Not Ensure Consistent
Review or Systematically Incorporate Other U.S. Government Efforts:
GSP reviews of product and country practice petitions have the
advantage of adapting the programs to changing market conditions and
the concerns of businesses, foreign governments, and others. Most
petitions originate outside the government, and agency officials, and
NGO and private sector representatives cited the value of the petition
process in bringing forward concerns related to intellectual property
rights and workers' rights. The process also brings to bear the
knowledge of NGOs and others about problems in these areas and helps
the government pursue credible cases. Private sector and labor
representatives also said that they appreciated the petition process
because it compels a formal decision from the government on the merits
of a complaint and draws public attention to an issue. The process
allows U.S. petitioners to seek and obtain resolution of trade-related
concerns. For example, from 2001 through 2006, USTR conducted an
investigation on copyright piracy and enforcement in Brazil in response
to a petition filed under GSP by a coalition of seven trade
associations concerned about IPR violations in that country. The
investigation resulted in an agreement between the U.S. and Brazilian
governments, hailed by the petitioner, to increase antipiracy raids in
well-known marketplaces, establish antipiracy task forces at the state
and local level in Brazil, and enhance deterrence through criminal
prosecutions, among other actions.
However, a petition-driven process also can result in a long time
passing between reviews of country compliance with the criteria for
participation. From 2001 to 2006, when the number of GSP beneficiaries
ranged from 146 to 132, USTR considered petitions against 32 countries.
While some of these nations are reviewed under the regional preference
programs, approximately three-quarters of the countries eligible only
for GSP did not get examined at all for their conformity with
eligibility criteria from 2001 through 2006. Long periods of time
passed between overall reviews of GSP as well. As mentioned earlier,
USTR initiated an overall review of the GSP program in October 2005.
USTR completed the last general review of the program more than 18
years earlier in January 1987. A U.S. official told us that some of the
countries reviewed frequently are not necessarily those that perform
the worst relative to the criteria for participation, but rather those
countries of most concern to particular groups, such as businesses or
NGOs. In this sense, U.S. government resources may be unduly invested
in performing repeated reviews of a country that is of particular
concern to a given interest group, while other countries with potential
problems receive substantially less scrutiny.
A second weakness is that the petition-driven review fails to
systematically incorporate other U.S. efforts in areas such as IPR
protection and efforts to counter trafficking in persons. The
centerpiece of U.S. policy efforts to increase IPR is the annual
Special 301 process.[Footnote 54] USTR cites the GSP process as a key
part of its mission to promote IPR overseas. Moreover, GAO reviewed the
2006 Special 301 report and found that over half of the 48 countries
cited by USTR for concerns with respect to the provision of adequate
and effective protection of IPR in 2006 were U.S. preference program
beneficiaries. However, USTR did not accept any new petitions to review
beneficiaries against the IPR criteria for participation in 2006. USTR
officials observed to us that the placement of a country on the Watch
List or Priority Watch List did not constitute a USG finding that the
country failed to provide adequate and effective IPR protection.
Rather, placement of a country on these lists indicates that particular
problems exist in the country with respect to IPR protection,
enforcement, or market access for persons relying on intellectual
property. Additionally, industry officials told us that the
administration has been reluctant to threaten removal of countries from
GSP for lack of compliance with IPR protection in recent years, calling
into question whether the leverage provided by the trade preferences is
put to effective use. While it is possible that the administration may
choose not to remove countries as a result of Special 301 designations,
the lack of review, under the GSP provisions, of any of the 26
countries cited makes it appear that no linkage exists between these
issues.
U.S. efforts to combat trafficking in persons is another area where
criteria for participation in trade preferences programs may have some
bearing, although USTR officials noted that there is not a specific
link between the preference program criteria and the Trafficking and
Victims Prevention Act of 2000. Both State and the Department of
Justice cite Labor's Findings on the Worst Forms of Child Labor as
among the U.S. government's efforts to combat trafficking in
persons.[Footnote 55] State issues an annual report that analyzes and
ranks foreign governments' compliance with minimum standards to
eliminate trafficking in persons.[Footnote 56] State also prepares an
annual report that discusses the status of internationally recognized
worker rights within each GSP beneficiary.
Twenty-seven of the 48 countries on the Tier 2 Watch List or in Tier 3
in the June 2007 Trafficking in Persons report are preference
beneficiaries. In congressional hearings, members and a witness have
cited concerns that countries in Tiers 2 and 3 receive trade benefits.
Preference beneficiaries on the Tier 2 watch list include Argentina,
Armenia, South Africa, Ukraine, and India, and beneficiaries on the
Tier 3 list include Algeria, Equatorial Guinea, Uzbekistan, and
Venezuela. At times, concerns in some of these countries may have been
addressed through the regional programs. For example, the country
reports contained in the 2007 Comprehensive Report on U.S. Trade and
Investment Policy Toward Sub-Saharan Africa and Implementation of the
African Growth and Opportunity Act cite concerns in beneficiary
countries with respect to child labor and trafficking in persons,
showing consideration of these issues in the eligibility
determinations. In other countries such as Venezuela, Algeria, and
Uzbekistan, the U.S. government has not received any petitions to
initiate an examination of performance against any of the GSP
eligibility criteria related to trafficking in persons in the last 5
years. Consequently, these countries have not been reviewed against
those criteria for participation. As noted above, it is possible that
the administration might choose not to remove countries as a result of
these reviews, but it appears that no linkage between these issues
exists, given the lack of official reviews.
Regional Program Reviews Ensure a More Systematic Look at Criteria for
Participation but Are Resource-Intensive and Sometimes Miss Important
Concerns:
The periodic reviews under the regional programs offer more timely and
consistent evaluations of country performance against the criteria for
participation. Among the regional programs, AGOA has the most intensive
evaluation of country performance against the criteria for
participation. AGOA requires the President to determine annually
whether Sub-Saharan African countries are, or remain, eligible for the
program. GAO found that, between 2001 and 2007, the President
terminated eligibility four times and conferred eligibility eight
times. Between 2001 and 2006, one country was removed and reinstated
for GSP, and another country was reinstated after being removed in
1990. No country lost eligibility under the ATPA or CBI
programs.[Footnote 57]
The key difference between the AGOA review and the CBI and ATPA reviews
is that only AGOA requires a determination periodically as to whether a
country should remain a beneficiary. A USTR official testified that
AGOA's annual review process has resulted in improved country
performance under the eligibility criteria. In July 2007, a senior USTR
official testified before the Subcommittee on Africa and Global Health
of the House Foreign Affairs Committee that the President had removed,
or threatened to remove, AGOA beneficiaries that did not meet the
criteria for participation. This official noted that some of these
countries had taken action to meet the criteria, and countries such as
Liberia and Mauritania, which had been ineligible, were now eligible.
However, U.S. officials also commented that the AGOA review is
extremely time-consuming and demands a considerable investment of staff
resources, since each beneficiary country must be reviewed on its
performance on a range of criteria, such as respect for the rule of law
and poverty reduction efforts. Moreover, these reviews must be updated
on an annual basis.
Despite more regular and comprehensive reviews, 11 countries that are
in regional programs were later subject of GSP complaints in the 2001
to 2006 period. In several cases, the petition-based examination
associated with the GSP process validated and resulted in further
progress in resolving concerns with regional partners such as
Guatemala, Swaziland, and Uganda on labor issues. For example, in 2005,
the American Federation of Labor and Congress of Industrial
Organizations filed a petition regarding Uganda's performance against
workers' rights criteria under GSP and AGOA. The petition led to an
interagency investigation that was closed after Uganda enacted new
legislation facilitating organization of unions, among other things. A
Labor official told us that these issues had not been remedied under
the AGOA review.
Only One Preference Program Links to Capacity Building Efforts but No
Funding Provided:
Many developing countries have expressed concern about their inability
to take advantage of global trading opportunities because they lack the
capacity to participate in international trade. The United States
considers the ability of these countries to participate in and benefit
from the global trading system key factors in promoting economic
development, and has provided trade capacity building (TCB) assistance,
to help developing countries more effectively take advantage of trade
preferences, among other purposes. However, we found agencies pursue
different approaches with regard to using TCB in conjunction with trade
preference programs, with AGOA having the strongest link.
AGOA requires the administration to produce an annual report on the
U.S. trade and investment policy for Sub-Saharan Africa and the
implementation of AGOA. The report includes information about trade
capacity building efforts undertaken in the region by U.S. agencies
such as the Department of Agriculture and USAID. Sub-Saharan Africa has
also been the primary focus of U.S. TCB efforts linked to the
preference programs, with the United States allocating $394 million in
fiscal year 2006 to that continent. A USTR official noted that linkage
to TCB in AGOA's authorizing legislation was useful for USTR as
leverage with U.S. agencies that have development assistance funding to
target greater resources that help developing countries take advantage
of opportunities provided by trade preferences. In our field work and
research, we observed USAID efforts to improve the business and
regulatory environments in Sub-Saharan Africa, including preparing
private sector enterprises to navigate U.S. import regulations,
coaching small businesses on access financial services for trade and
investment, and facilitating investments in trade-related
infrastructure.
Several U.S. officials said that the annual AGOA Forum (Forum) also
contributed to the stronger linkage between TCB and trade opportunities
offered under the program.[Footnote 58] A USTR official told us that
the Forum brings USAID, Millennium Challenge Corporation, and other
U.S. officials together to focus on the program and that having agency
leaders attend the Forum makes a big difference in generating business
interest in the region. A USAID official told us that the Forum also
provided the opportunity for African entrepreneurs to interact directly
with senior members of the U.S. government. Although AGOA authorizing
legislation refers to trade capacity building assistance, USTR
officials noted that Congress has not appropriated funds specifically
for that purpose.
In other regions of the world, U.S. trade capacity building assistance
has less linkage to trade preferences. For example, none of the other
trade preference programs direct the relevant agencies to convene
regularly to discuss how the program's implementation affects trade
opportunities. Some agencies refer to trade programs in developing
their assistance efforts to non-African regions and countries. For
example, USAID notes the need for more resources in its strategic plan
to improve the business environment and enable local businesses to take
advantage of HOPE. Further, other U.S. trade initiatives link market
access opportunities with trade capacity building assistance, such as
CAFTA-DR.
Separate Reporting and Examination Hinder Measuring Progress on
Programs' Contribution to Economic Development:
Separate reporting for the various preference programs, while
consistent with statutory requirements, makes it difficult to measure
progress toward achieving the fundamental and shared goal of trade
preferences, namely economic development of beneficiaries. The effect
of trade preferences on beneficiary countries' economic development is
not assessed in a cross-programmatic manner that would examine progress
made under preference programs. U.S. agencies do prepare reports that
attempt to measure the effects on economic development of certain trade
preference programs, but not all. The law requires only one program to
directly report on impact on the beneficiaries. In addition, even when
agencies report on the economic effect of some of these programs,
different approaches are used, resulting in disparate analyses that are
not readily comparable.
As noted earlier in this report, trade preferences are fundamentally
intended to promote development in beneficiary countries by providing
enhanced opportunities for their products to access the U.S. market. In
its 2006 to 2011 strategic plan, USTR notes that one of its objectives
is to apply "U.S. trade preference programs in a manner that
contributes to economic development in beneficiary countries." However,
there is no formal cross-programmatic examination of the preference
programs collectively. As shown in table 4, USTR pursues different
approaches to administering these programs, and does not consider the
preference programs jointly, with respect to their performance.
Moreover, there is no evaluation of how trade preferences, as a whole,
affect economic development in beneficiary countries.
In response to statutory requirements, several government agencies
report on certain economic aspects of the regional trade preference
programs and their effects on specific countries or groups of
countries, but these agencies do not report on the economic development
impact of GSP. Agency officials noted that they strive to comply with
statutory reporting requirements and, through the TPSC, they coordinate
with each other on various aspects of administering these programs,
including reporting. This reporting, nevertheless, is done on a program-
by-program basis. For example, USTR has produced three reports to
Congress on the operation of ATPA. The ITC also issues biennial reports
on ATPA's impact on U.S. industries and consumers and on drug crop
eradication and crop substitution. Additionally, USTR prepares a
biennial report for Congress on CBI that highlights increases in
overall U.S. imports from the countries in the program. Similarly, ITC
reports on the CBI program's impact on beneficiaries on a biennial
basis, the only report required by statute to address the impact on the
beneficiaries. Finally, USTR produces an annual report on the
implementation of AGOA that highlights trade and investment trends in
Sub-Saharan Africa. However, there is no comparable periodic reporting
on the effect of GSP on the economic development of countries covered
by that program. USTR officials told us that the vehicles they use for
reporting on the GSP program are the annual Report of the President of
the United States on the Trade Agreements Program and the annual Trade
Policy Agenda. Discussion of the GSP program in these documents focuses
on product coverage and country conformity with eligibility criteria,
not on the impact of benefits to beneficiary developing countries in
terms of trade growth or economic development.
Different approaches used to measure the effects of trade preference
programs on beneficiary countries, while consistent with statutory
reporting requirements, produce disparate data and analysis that are
not readily comparable to evaluate how these programs advance economic
development--their fundamental goal. For instance,
* USTR's report on the ATPA provides some examples that illustrate the
role of the program in promoting exports and development in each of the
four beneficiary countries and refers to analyses by the ITC and Labor
on some aspects of the economic impact of ATPA. On the other hand, ITC
reporting on the ATPA provides some material on exports and economic
diversification for countries under the program.
* USTR's reporting on CBI highlights overall and country-specific
increases in U.S. imports from countries in the CBI program. The report
includes discussions on individual countries, which generally do not
evaluate the impact of CBI on the exports or development of the
beneficiaries. The ITC reports on the impact of CBI examine how that
program affects those countries that have relatively large trade flows
with the United States. The trade profile for the region presented in
this report has shifted over time, with certain countries receiving
more emphasis in earlier reports while later iterations focus on
others.
* USTR's comprehensive report on trade and investment in Sub-Saharan
Africa and the implementation of AGOA provides an overview of trade and
investment trends in participating Sub-Saharan countries, reviews
economic integration efforts at the regional and subregional level, and
discusses participation by AGOA countries in the WTO.
* Finally, while there is no regular reporting on the economic impact
of GSP on beneficiary countries, in 1980, the administration prepared a
statutorily required report to Congress on the first 5 years of
operation of the GSP program. That report included an analysis of the
impact of the GSP on developing country economies. This appears to have
been a one-time report, and USTR officials confirmed that no further
such reports were prepared.
Thus, while there is an abundance of reporting on various aspects of
the economic effects of trade preference programs on beneficiary
countries, the analyses and data presented in these reports is
typically quite dissimilar and does not lend itself for use in
evaluating the overall effects of trade preferences.
Conclusions:
Congress created these programs over the years to address compelling
trade and foreign policy objectives. The programs are important to
individual businesses and industries, both domestically and
internationally. Additionally, the criteria for participation
associated with the programs have served as an important tool to
advance U.S. foreign and trade policy objectives. The preference
programs have evolved over time to accommodate not only the general
goal of trade-led development, but regional interests, such as
counternarcotics efforts in ATPA. Changes to the preferences programs
in the past have had an impact on beneficiaries' trade profiles with
the United States, by stimulating export growth to this country. Much
of the increased exports coincided with congressional expansions of the
programs in 2000 and 2002 to cover key products.
However, U.S. trade preferences are neither administered nor evaluated
on a cross-programmatic basis. A lack of systematic evaluation limits
any judgment about the extent to which the collection of U.S. trade
preference programs has increased trade and fostered development in
beneficiary countries. While evaluations may occur to determine whether
countries should retain eligibility for preferences, such inquiries
have not been made regularly or in a consistent manner across the
programs or beneficiary countries. Two different approaches have
evolved to monitor compliance with criteria set for various trade
preference programs, and we observed advantages associated with each
approach, but individual program reviews result in gaps and appear
disconnected from other on-going U.S. government efforts, such as the
Special 301 process. Further, the petition-driven process can result in
a long time passing between reviews of country compliance with the
criteria for participation. There are also certain practices, such as
stronger links between preference benefits and trade capacity building
efforts in the AGOA program, that may be advantageous to some of the
other programs. A distinct reporting approach for each program limits
the United States' ability to determine the extent to which U.S. trade
preference programs as a whole foster development in beneficiary
countries. However, the programs' positive impact on developing
economies may be attenuated because the United States does not extend
preferential access to products that are important exports of
beneficiary countries and because the United States imposes complex
entry requirements for some products.
Matters for Congressional Consideration:
As Congress deliberates on whether to renew the ATPA, CBTPA, and GSP
programs this calendar year, it should consider whether a more
integrated approach would better ensure programs meet shared goals.
Specifically, Congress should consider which elements of the approaches
used by agencies to administer these programs, such as petition-
initiated compliance reviews or periodic assessment of all countries
under certain programs, have benefits that may be applied more broadly
to trade preference programs in general. Congress should also consider
streamlining various program reporting requirements to facilitate
evaluating the programs' progress in meeting their shared economic
development goal.
Recommendations for Executive Action:
To ensure that these programs, as a whole, meet their shared goals, we
recommend USTR undertake the following two actions:
* work through the TPSC and its associated agencies to consider ways to
administer, evaluate, and report on preference programs in a more
integrated manner, and:
* periodically convene the TPSC to discuss the programs jointly to
determine what lessons can be learned from the various provisions
concerning matters such as linkages to trade capacity building.
Additionally, to ensure that beneficiary countries are in compliance
with program criteria, we recommend that USTR should also periodically
review preference beneficiaries that have not otherwise been reviewed
by virtue of their membership in the regional programs.
Agency Comments and Our Evaluation:
We provided a draft of this report to USTR; the Departments of
Agriculture, Commerce, Homeland Security, Labor, State, and Treasury;
USAID and ITC. USTR, and the Departments of Agriculture, Labor,
Commerce, Treasury, and State provided extensive technical comments on
an interagency basis. The Departments of Homeland Security, Labor, and
State, and ITC also provided separate technical comments. We have
incorporated these comments where appropriate. USTR indicated that it
would report on the actions taken in response to the recommendations in
a letter, within 60 days of public issuance of this report, as required
under U.S. law.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies of this report
to interested congressional committees; the U.S. Trade Representative;
the Secretaries of Agriculture, Commerce, Homeland Security, Labor,
State, and the Treasury; the Administrator of USAID; and the Chairman
of ITC. We also will make copies available to others upon request. In
addition, this report will be available at no charge on the GAO Web
site at [Hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-4347 or y [Hyperlink, yagerl@gao.gov]
agerl@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
report. GAO staff who made major contributions to this report are
listed in appendix VI.
Signed by:
Loren Yager:
Director, International Affairs and Trade:
[End of section]
Appendix I: Scope and Methodology:
In this report, we (1) describe how U.S. preference programs affect the
United States, (2) review the effects of the programs on exports and
development of foreign beneficiaries, (3) identify trade-offs facing
the programs, and (4) evaluate the overall approach to preference
programs.
We followed the same overall methodology to complete objectives 1, 3,
and 4. We reviewed and analyzed U.S. laws and regulations,
authoritative international trade reports/documents describing the
impact of trade preference programs on the United States, such as the
biennial impact studies from the U.S. International Trade Commission
(ITC) on the Caribbean Basin Initiative (CBI) and the Andean Trade
Preference Act (ATPA), and periodicals. We interviewed officials from
agencies participating in the Trade Policy Staff Committee--including
the Office of the U.S. Trade Representative (USTR); the Departments of
Agriculture, Commerce, Labor, State, and the Treasury; U.S. Customs and
Border Protection; and ITC--regarding the impact of preferences on the
U.S. economy. We also interviewed representatives of businesses that
used the preference programs and nongovernmental organizations (NGOs)
that have filed petitions under the programs. We reviewed academic,
World Trade Organization, and other research studies, on the effects of
preference erosion on developing countries. In addition, we analyzed
the 2006 U.S. government reports on the Special 301 process, the August
2007 report on the Worst Forms of Child Labor, and finally, the 2007
State Department report on Trafficking in Persons. For information on
key features and use of U.S. preference programs, we drew from findings
from a previous GAO report on U.S. preference programs, International
Trade: An Overview of Use of U.S. Trade Preference Programs by
Beneficiaries and U.S. Administrative Reviews [Hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1209].
To review the effects of U.S. preference programs on exports and
development of foreign beneficiaries, we reviewed relevant academic,
government and other literature. Particularly useful were recent broad
reviews of the trade preferences literature found in (1) Bernard
Hoekman and Caglar Ozden, Trade Preferences and Differential Treatment
of Developing Countries (Cheltenham, UK, and Northampton, MA: Edward
Elgar Publishing, 2006) and (2) Caglar Ozden and Eric Reinhardt,
"Unilateral Preference Programs: The Evidence," chapter 6, in Simon J.
Everett and Bernard Hoekman, eds., Economic Development and
Multilateral Trade Cooperation (Washington, D.C.: The World Bank and
Palgrave Macmillan, 2006). We also conducted extensive analysis of the
U.S. tariff schedule and U.S. trade data published by the ITC. Our
analysis focuses on 2006 data except where we engaged in analysis of
historical trends. We relied on the 2006 edition of the official U.S.
tariff schedule from the ITC to identify products (tariff lines)
eligible for duty-free treatment under one or more U.S. trade
preference programs, as well as the countries designated as eligible
for each program. We also used ITC data to analyze Census data trends
in overall U.S. imports, imports from preference beneficiaries, and
imports actually entered under U.S. trade preference programs and to
compute measures such as program coverage and utilization and the
diversification of U.S. preference imports. More detailed information
about our data analysis is contained in appendix II. Furthermore, we
interviewed officials from the Office of the U.S. Trade Representative;
the Departments of Agriculture, Commerce, Labor, State, and the
Treasury; U.S. Customs and Border Protection; and ITC regarding the
effects of preferences on foreign beneficiaries.
In addition, we attended the sixth AGOA Forum in Accra, Ghana, in July
2007. We also traveled to Brazil, Colombia, Haiti, Kazakhstan, and
Turkey to meet with U.S. embassy officials, foreign officials, and
industry groups using U.S. preference programs to discuss the issues
mentioned above. We selected these countries based on representation on
preference program eligibility and income levels according to the World
Bank and United Nations (see table 5). Additionally, we chose to visit
Haiti and Ghana because they are among the poorest beneficiaries and
ones where mechanisms to take advantage of recently expanded benefits
under newer preference programs--Haitian Hemispheric Opportunity
through Partnership Encouragement (HOPE) and African Growth and
Opportunity Act (AGOA)--are being put in place. Also, Ghana was the
site of the annual AGOA Forum. We selected Brazil and Turkey to visit
because these countries have successfully used U.S. trade preferences
to export a diverse range of relatively sophisticated manufactured
goods. We chose Colombia and Kazakhstan because they are large users of
preference programs and are both undertaking broader liberalization
efforts. Colombia has completed a free trade agreement with the United
States, and Kazakhstan is trying to join the WTO.
Table 5: Countries Selected for GAO Field Research:
Beneficiary country: Brazil;
Program: GSP;
Income levels: Upper-middle.
Beneficiary country: Colombia;
Program: ATPA;
Income levels: Lower-middle.
Beneficiary country: Ghana;
Program: AGOA;
Income levels: Low.
Beneficiary country: Haiti;
Program: CBI/HOPE;
Income levels: Low.
Beneficiary country: Kazakhstan;
Program: GSP;
Income levels: Upper-middle.
Beneficiary country: Turkey;
Program: GSP;
Income levels: Upper-middle.
Source: GAO.
[End of table]
In addition, we selected these countries to gain perspective on the
spectrum of issues related to usage and capacity of each of the
programs in country. Brazil is a top user of the Generalized System of
Preferences (GSP) program since the 1970s; Colombia is an extensive
user of ATPA; Ghana represents the African countries under AGOA that
are dealing with internal infrastructure issues that can limit their
use of the preference programs; Haiti is an historic user of CBI and is
in the beginning stages of implementing HOPE; Kazakhstan is an
extensive user of GSP and is undergoing high liberalization; and Turkey
is also another high user of GSP and exports sophisticated manufactured
goods to the United States.
We conducted this performance audit from March 2007 to February 2008 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Appendix II: Additional Information on GAO Data Analysis:
This appendix provides additional information relevant to the data
analysis contained in this report. It includes information about the
data used, definitions of program, product and country groupings, and
definitions relevant to various program measures used.
Data:
We relied on the 2006 edition of the official U.S. tariff schedule
(Harmonized Tariff Schedule [HTS]) from the ITC to identify products
(tariff lines) eligible for duty-free treatment under one or more U.S.
trade preference programs, as well as the countries designated as
eligible for each program (beneficiaries or beneficiary countries). We
considered any country designated for benefits for all or part of 2006
to be beneficiaries.
We relied on official U.S. trade statistics for imports to analyze
trends in overall U.S. imports, imports from preference beneficiaries,
and imports actually entered under U.S. trade preference programs. Data
for time series are in constant 2006 U.S. dollars.
We made an adjustment for program and product groupings primarily
pertaining to apparel such that those apparel items normally classified
under HTS Chapters 61-63 eligible to enter duty-free under regional
preference programs if they meet specified rules of origin, as
specified in HTS Chapter 98, were identified and marked with a # sign.
This accounts for the R#, J#, and D# in the program groupings below.
Program Groupings:
GSP: In terms of products, we defined products covered by GSP as the
sum of all tariff lines designated as A or A* in the 2006 U.S. tariff
schedule. In terms of countries, all countries that were designated as
eligible for GSP at any point in 2006 were considered beneficiaries.
GSP-least developed countries (LDC): In terms of products, we defined
products covered by GSP-LDC as all tariff lines designated as A+. In
terms of countries, all countries that were designated as eligible for
GSP-LDC at any point in 2006 were considered beneficiaries.
CBI: We defined this category to include products covered by CBI as E
or E*, and products covered by CBTPA as R or R#. In terms of countries,
all countries that were designated as eligible at any point in 2006
were considered beneficiaries. It should be noted that some of the
countries in the 2006 sample have now lost eligibility for benefits
under CBI due to the entry into force of the Dominican Republic-Central
America-United States Free Trade Agreement (CAFTA-DR) as follows:
Dominican Republic (March 2007), El Salvador (March 2006), Guatemala
(July 2006), Honduras (April 2006), and Nicaragua (April 2006).
ATPA: We defined products covered by ATPA as J, J*, and products
covered by Andean Trade Promotion and Drug Eradication Act (ATPDEA) as
J#, J+. We defined countries as Bolivia, Colombia, Ecuador, and Peru.
AGOA: We defined products covered by AGOA as D, D#. We defined
countries covered by AGOA as all countries eligible for the program at
any point in 2006.
Product Groupings:
In order to examine broad groups of products, we organized the HTS
product chapters into 12 sectors as follows:
1. Animal and plant products (HTS, chapters 1-15):
2. Prepared food, beverages, spirits, and tobacco (HTS, chapters 16-
24):
3. Chemicals and plastics (HTS, chapters 25, 26, 28-40):
4. Wood and paper products (HTS, chapters 44-49):
5. Textiles, leather, and footwear (HTS, chapters 41-43, 50-60, 64-66):
6. Glassware, precious metals and stones, jewelry (HTS, chapters 68-
71):
7. Base metals and articles of base metals (HTS, chapters 72-81 and
83):
8. Machinery, electronics, and high-tech apparatus (HTS, chapters 82,
84, 85, 90):
9. Aircraft, autos and other transportation (HTS, chapters 86-89):
10. Miscellaneous manufacturing (HTS, chapters 91-97):
11. Fuels (HTS, chapter 27):
12. Apparel (HTS, chapters 61-63)[Footnote 59]
With the exception of textiles and apparel, for figure 5, we use the
more aggregated groupings presented in our last report.[Footnote 60]
Country Groupings:
We used the same sample of countries for analysis of import trends over
time. Specifically, we assigned each country to a country group based
on their eligibility and country income category in 2006. When time
series analysis was done, it is thus for "2006 program beneficiaries"
and "2006 country income group" rather than the actual program
beneficiaries or actual income groups at earlier points in time.
Numerous countries have been removed from programs over the 1992-2006
period, mostly due to attaining high-income status (e.g., Cyprus and
Aruba), attaining overall competitiveness (Malaysia), joining the
European Union (e.g., Hungary and Poland), or entering into a free
trade agreement with the United States (e.g., Mexico and Morocco). For
additional information on eligibility for programs by country, see
appendix III of GAO-07-1209.
AGOA countries: Those countries designated as eligible for the AGOA
program at any point in 2006. All of these countries are eligible for
GSP, and some of these countries are eligible for GSP-LDC.
ATPA countries: Those countries eligible for ATPA at any point in 2006.
All of these countries are also eligible for ATPDEA and GSP.
CBI: Those countries designated as eligible for the Caribbean Basin
Economic Recovery Act (CBERA) at any point in 2006. Some of these
countries are also eligible for the Caribbean Basin Trade Partnership
Act (CBTPA) and GSP.
GSP-only countries: Those countries only designated as eligible for the
GSP program.
Country income groupings: We relied on World Bank data on country
income levels. We relied on United Nations designations of least-
developed countries and for data on country income when World Bank data
was unavailable.
Definitions:
Covered products: We defined covered products as all items identified
in the 2006 U.S. tariff schedule as eligible for a preference program.
We defined products covered by GSP as the sum of all tariff lines
designated as A or A* in the U.S. tariff schedule. We defined products
covered by GSP-LDC as all tariff lines designated as A+. We defined
products covered by CBI as E, E* and products covered by CBTPA as R,
R#. We defined products covered by ATPA as J, J*, and products covered
by ATPDEA as J#, J+. We defined products covered by AGOA as D, D#.
Eligible beneficiary(ies): We used the term eligible beneficiary for
any countries designated as eligible for a particular preference
program. The term eligible beneficiaries is used for all countries
designated as eligible for a particular program.
Country income category: We relied on World Bank data on country income
levels. We relied on UN designations of least-developed countries.
Dutiable products/imports: We defined dutiable products as all products
that were subject to most favored nation (MFN) tariffs that are greater
than zero in 2006. We defined the value of dutiable imports as total
U.S. imports minus total imports of MFN duty-free products.
Preference eligible imports: We defined preference eligible imports as
the value of imports of covered products from eligible beneficiaries.
Preference imports: We defined preference imports as the value of
imports actually entered under a given preference program or programs.
Preference margins: The difference between the otherwise applicable or
MFN tariff rate and the rate at which the product is eligible to enter
under U.S. preference programs. Most products covered by preferences
enter duty-free, but some products enter at reduced (nonzero) duties.
We relied on others' estimates of U.S. preference margins, specifically
those by a team of ITC and World Bank economists given responsibility
for preparing estimates for U.S. programs as part of a multicountry
study organized by the World Bank.
Program Measures:
Coverage: We considered coverage relative to two metrics: (1) the
number of lines in the U.S. tariff schedule and (2) the total value of
imports of covered products divided by the total value of imports of
dutiable products (i.e., dutiable imports) from each preference
partner. (See above for definitions of "covered products" and dutiable
products.)
Utilization: We calculated this as a ratio of the value of preference
imports (imports actually entering under U.S. preferences) relative to
(divided by) the value of imports of covered products.
Program averages for these measures were calculated by:
For coverage, summing the value of preference-eligible imports from all
partners and then dividing it by the sum of the value of dutiable
imports from all partners.
For utilization, summing the total value of preference imports from all
partners, and then dividing it by the total value of imports of covered
products from all partners, that is, the sum of each partner's covered
products.
Country averages related to total preference program coverage and
utilization measures were calculated by:
For coverage, summing the value of preference-eligible imports under
all programs for each partner, including adjusting to avoid double
counting where a product is covered by more than one program, and then
dividing by the value of dutiable imports from that partner.
For utilization, summing the value of preference imports from that
country actually entering under preferences, adjusting to avoid double
counting, and then dividing by the value of imports of covered products
from that country.
Diversification:
Our analysis of diversification examines the distribution of total U.S.
imports from preference-eligible countries at the two-digit level of
product classification (i.e., at the "chapter level" or broad product
grouping level of the HTS of the United States, the U.S. tariff
schedule). We grouped preference-eligible countries according to the
program(s) for which they were eligible in 2006. We then calculated a
measure of diversification based on a normalization of a commonly used
indicator of industry concentration known as the Herfindahl-Hirschman
Index.[Footnote 61] For purposes of exposition and intuitive appeal, we
re-based the index by subtracting it from one to show lower values as
indicating lower diversification (more concentration) and values closer
to one as indicating higher diversification (less concentrated).
Specifically, the formula used to calculate the index is:
[See PDF for image]
[End of figure]
where xi represents the import/export value of the ith commodity, X is
the country's total imports/exports to the United States in 2006, where
N is the number of products. The index value (H*) ranges from 0 to 1.
For example, if the products are evenly distributed the value of the
index would be 1, and the more concentrated the product distribution,
the closer the value is to 0. It is observed that the index is a
function of the mean and variance of the value of imports/exports share
in different commodity groups.
[End of section]
Appendix III: Coverage, Utilization, and Limitations of Preference
Programs:
To assess the opportunities extended to developing countries under U.S.
preference programs, we examined the scope of programs' coverage by
beneficiary and product, the size of tariff cuts (or margins of
preference), and some eligibility conditions that can affect the
ability of beneficiaries to access program opportunities. We also
examined the extent to which countries are using the available
opportunities.
Coverage of U.S. Preference Programs:
Our analysis of U.S. tariff and trade data shows that duty-free
coverage under U.S. trade preference programs has increased over time.
Considered in combination, U.S. preference programs now extend duty-
free status to most of the product lines in the U.S. tariff schedule.
However, coverage varies notably by program, beneficiary, and product.
Because eligibility for duty-free status is cumulative in that
countries eligible for one preference program may also be granted
additional preferences depending on their income and regional
memberships, the potential duty-free access for particular countries
can vary substantially. Figure 9 shows that, as of 2006, the countries
eligible for GSP only were accorded duty-free access to 69 percent of
the total number of tariff lines in the U.S. tariff schedule or 7,285
lines, composed of 3,879 MFN duty-free lines, and 3,406 additional
lines that are duty-free under GSP. All three of the subsequently
enacted regional programs, and their enhancements, improve upon GSP to
varying degrees. The expansion of GSP for LDCs in 1996 also increased
the number of duty-free lines for LDC partners.
Figure 9: Cumulative Duty-free Tariff Lines in the U.S. Tariff
Schedule, by Preference Program:
[See PDF for image]
This figure is a stacked multiple bar graph depicting the following
data (Number of duty-free tariff lines out of 10,507 total):
Program: MFN;
MFN duty free: 3,879.
Program: GSP (enacted in 19750;
MFN duty free: 3,879;
GSP: 3,406.
Program: CBI (enacted in 1983):
MFN duty free: 3,879;
GSP: 3,406;
Additional duty-free access (over GSP): 1,922.
Program: ATPA (enacted in 1991):
MFN duty free: 3,879;
GSP: 3,406;
Additional duty-free access (over GSP): 1,658.
Program: LDC (enacted in 1996):
MFN duty free: 3,879;
GSP: 3,406;
Additional duty-free access (over GSP): 1,413.
Program: AGOA (enacted in 2000):
MFN duty free: 3,879;
GSP: 3,406;
Additional duty-free access (over GSP): 1,810.
Program: CBTPA (enacted in 2000):
MFN duty free: 3,879;
GSP: 3,406;
Additional duty-free access (over GSP): 2,145.
Program: ATPDEA (enacted in 2002):
MFN duty free: 3,879;
GSP: 3,406;
Additional duty-free access (over GSP): 2,088.
Source: GAO analysis of the Harmonized Tariff Schedule of the United
States, 2006.
[End of figure]
The proportion of tariff lines accorded duty-free status also varies by
product. Figure 10 shows the distribution of dutiable and duty-free
lines by product group. GSP alone offers relatively extensive duty-free
coverage to certain manufactured goods, such as chemicals and plastics;
glassware, precious metals, and jewelry; and machinery and electronics;
where coverage exceeds 40 percent of tariff lines. However, duty-free
coverage is much more limited for other product groups. Textiles,
footwear, leather, and apparel are product groups where duties still
apply to the most and highest percentage of lines, but where regional
programs offer notable improvements in coverage over GSP. For example,
with AGOA's enactment and the enhancements of CBI and ATPA offered
since 2002, 33 percent of apparel lines are eligible to enter duty-free
under regional programs, and 43 percent of apparel lines altogether
(including MFN and GSP) have duty-free access.
Figure 10: Dutiable and Duty-free Lines in U.S. Tariff Schedule by
Product Group:
[See PDF for image]
This figure is a combination of a table with a few pie-charts. The
following data is depicted:
Product group: Animal and plant products;
Duty-free[A], total number of tariff lines in group: 1,096;
Duty-free[A], MFN duty-free: 304;
Duty-free[A], Duty-free under GSP: 282;
Duty-free[A], Additional duty-free under GSP for LDC: 402;
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners:
16;
Dutiable[B]: 92;
Percent duty-free: 92%;
Percent dutiable: 8%.
Product group: Prepared food, beverages, spirits, and tobacco;
Duty-free[A], total number of tariff lines in group: 741;
Duty-free[A], MFN duty-free: 137;
Duty-free[A], Duty-free under GSP: 267;
Duty-free[A], Additional duty-free under GSP for LDC: 200;
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners:
11;
Dutiable[B]: 126;
Percent duty-free: 83%;
Percent dutiable: 17%.
Product group: Chemicals and plastics;
Duty-free[A], total number of tariff lines in group: 2,221;
Duty-free[A], MFN duty-free: 742;
Duty-free[A], Duty-free under GSP: 1,021;
Duty-free[A], Additional duty-free under GSP for LDC: 441;
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 6;
Dutiable[B]: 1.
Product group: Wood and paper products;
Duty-free[A], total number of tariff lines in group: 481;
Duty-free[A], MFN duty-free: 407;
Duty-free[A], Duty-free under GSP: 60;
Duty-free[A], Additional duty-free under GSP for LDC: 10;
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 4;
Dutiable[B]: [Empty].
Product group: Textiles, leather, and footwear;
Duty-free[A], total number of tariff lines in group: 1,320;
Duty-free[A], MFN duty-free: 257;
Duty-free[A], Duty-free under GSP: 176;
Duty-free[A], Additional duty-free under GSP for LDC: 30;
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners:
223;
Dutiable[B]: 634;
Percent duty-free: 52%;
Percent dutiable: 48%.
Product group: Glassware, precious metals and stones, jewelery;
Duty-free[A], total number of tariff lines in group: 388;
Duty-free[A], MFN duty-free: 144;
Duty-free[A], Duty-free under GSP: 177;
Duty-free[A], Additional duty-free under GSP for LDC: 51;
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 6;
Dutiable[B]: 10.
Product group: Base metals and articles of base metals;
Duty-free[A], total number of tariff lines in group: 855;
Duty-free[A], MFN duty-free: 491;
Duty-free[A], Duty-free under GSP: 321;
Duty-free[A], Additional duty-free under GSP for LDC: 41;
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 2;
Dutiable[B]: [Empty].
Product group: Machinery, electronics, and high-tech apparatus;
Duty-free[A], total number of tariff lines in group: 1,893;
Duty-free[A], MFN duty-free: 988;
Duty-free[A], Duty-free under GSP: 810;
Duty-free[A], Additional duty-free under GSP for LDC: 85;
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners:
10;
Dutiable[B]: [Empty].
Product group: Aircraft, autos, and other transportation;
Duty-free[A], total number of tariff lines in group: 2420;
Duty-free[A], MFN duty-free: 123;
Duty-free[A], Duty-free under GSP: 77;
Duty-free[A], Additional duty-free under GSP for LDC: 40;
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners:
[Empty];
Dutiable[B]: [Empty].
Product group: Miscellaneous manufacturing;
Duty-free[A], total number of tariff lines in group: 543;
Duty-free[A], MFN duty-free: 201;
Duty-free[A], Duty-free under GSP: 186;
Duty-free[A], Additional duty-free under GSP for LDC: 89;
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners:
66;
Dutiable[B]: 1.
Product group: Fuels;
Duty-free[A], total number of tariff lines in group: 72;
Duty-free[A], MFN duty-free: 41;
Duty-free[A], Duty-free under GSP: 7;
Duty-free[A], Additional duty-free under GSP for LDC: 24;
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners:
[Empty];
Dutiable[B]: [Empty].
Product group: Apparel;
Duty-free[A], total number of tariff lines in group: 667;
Duty-free[A], MFN duty-free: 44;
Duty-free[A], Duty-free under GSP: 22;
Duty-free[A], Additional duty-free under GSP for LDC: [Empty];
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners:
223[C];
Dutiable[B]: 378;
Percent duty-free: 43%;
Percent dutiable: 57%.
Product group: Total;
Duty-free[A], total number of tariff lines in group: 10,507;
Duty-free[A], MFN duty-free: 3,879;
Duty-free[A], Duty-free under GSP: 3,406;
Duty-free[A], Additional duty-free under GSP for LDC: 1,413;
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners:
567;
Dutiable[B]: 1,242.
[A] Dutiable products face MFN duties and are ineligible for U.S.
preference programs.
[B] Duty-free products are eligible to enter duty-free due to MFN or
U.S. trade programs.
[C] Although some of these HTS lines are not listed as generally
qualifying for these preference programs, items are eligible for duty
free import under the regional programs if they meet the rules of
origin.
[End of figure]
Coverage can also be examined relative to imports from beneficiary
countries using the ratio of preference eligible imports to total
dutiable imports from beneficiaries eligible for particular programs.
Our analysis (see table 6) shows that: (1) countries eligible for only
GSP have the least coverage of partners' dutiable imports--
approximately 25 percent, (2) regional programs and GSP for LDC's have
much higher coverage of partners' dutiable imports, and (3) country
variations in coverage are wide. For example, 35 GSP beneficiaries
including Lebanon, Paraguay, Somalia, and Zimbabwe have high coverage
rates, exceeding 75 percent of the value of their dutiable imports.
Yet, 48 GSP beneficiaries such as Bangladesh, Egypt, Pakistan, and
Uzbekistan have low coverage rates (less than 25 percent of dutiable
imports).
Preference Margins:
The value and effectiveness of tariff preferences depends on the
magnitude of the tariff that would otherwise be imposed on imported
products, often referred to as the preference margin. Preferences can
have an impact only if there is a nonzero tariff that otherwise would
apply in the U.S. market. Moreover, if the MFN (normally applicable)
tariff on a product is negligible, the advantage provided by
preferences can be so small as to become an insignificant factor in
trade decisions. A recent effort to quantify margins of preferences
across all U.S. preference programs by staff economists at the ITC and
the World Bank shows that preference margins are relatively high for
apparel products, as well as certain agricultural goods (melons, cut
flowers, frozen orange juice, raw cane sugar, and asparagus);[Footnote
62] they tend to be relatively low for other products and fairly
uniform among programs.[Footnote 63] Specifically, the authors found
the following:
* Across member countries and all eligible U.S. nonagricultural
imports, AGOA preference margins were the highest on average (14
percent) in 2003. CBTPA preference margins ranked second with an
average of 9 percent, and ATPA preference margins third with an average
of 8 percent.
* Nonapparel preference margins average 3 percent to 5 percent for
ATPA, CBTPA, and CBERA countries and show little variation across
countries within each program. AGOA nonapparel preference margins are
much higher--5 percent to 10 percent for more than half the countries,
and 10 percent to 20 percent for a few.
* Average apparel margins under AGOA, CBTPA, and ATPA are two or three
times as high as those for nonapparel for nearly all preference
beneficiary countries.
* Despite its importance in AGOA trade, average petroleum preference
margins by country did not exceed 2 percent, and most were well below 1
percent.
All in all, the authors conclude, while "the potential duty savings
from all U.S. preference programs represent a very small share of
beneficiaries' dutiable exports to the United States, countries in the
CBTPA and those in the AGOA-LDC program show duty savings exceeding 10
percent of their dutiable exports to the United States."[Footnote 64]
In fact, the potential duty savings for 35 countries---all but 3 of
whom qualify for regional programs--exceed 5 percent of the value of
their dutiable exports to the United States. As a result, they find
that preferences are sufficiently important to 29 countries' exports to
warrant concern over the impact of preference erosion due to
multilateral and bilateral liberalization. At the same time, they note
that some of this liberalization has since occurred, with the phase-out
of global textile quotas in 2005.[Footnote 65]
Product Caps and Rules of Origin May Limit Use and Benefits:
Conditions on product entry are also a significant factor affecting
opportunities and trade under U.S. preference programs. Two specific
conditions, "competitive need limits" and "rules of origin," illustrate
how administration of program provisions, although addressing important
policy considerations, may affect the ability of beneficiary countries
to fully access the opportunities otherwise offered by U.S. preference
programs.[Footnote 66] GSP places export ceilings or "competitive need
limits" (CNL) on eligible products for certain beneficiaries that
exceed specified value and import market share thresholds. (LDCs and
AGOA beneficiaries are exempt.) Our analysis of 2006 data shows that
some 37 percent of the value of imports of GSP products from non-LDC,
non-AGOA GSP beneficiaries--or $13 billion of the $35 billion--were
excluded from entering duty-free under GSP largely due to CNLs.
Researchers also warn that rules of origin and related paperwork are
often complex and can raise costs. As a result, it may not be worth
incurring the expense of compliance to use preferences.
Rules of origin for U.S. trade preference programs typically specify a
minimum percentage value-added to the entering product that must come
from the beneficiary country in order to qualify for duty-free
treatment. However, some programs allow countries to "cumulate" inputs
from other countries or regions. More complex rules apply to some
products, notably apparel. The fact that U.S. Customs and Border
Protection--the U.S. agency charged with enforcing such rules when
goods enter the United States--used a 70-page PowerPoint presentation
to train its officers on the conditions associated with apparel access
under U.S. preference programs is illustrative of the complexity of
such rules. For example, our meetings with CBP and statements by
Haitian textile industry groups indicate that some of the rules of
origin for HOPE are highly complex to administer and use. Indeed, as
recently as late November, 2007 industry sources had indicated to us
that HOPE has yet to become fully operational for Haiti to benefit
because of delays in issuing export visas, and the complicated nature
of HOPE rules of origin. Another possible indication of the impact of
rules of origin are the "fill rates" for each region's quotas (known as
"tariff preference levels"). Within Africa, the LDCs that qualify for
liberalized rules of origin allowing "third country" (non.-U.S., non-
AGOA) fabric and yarn to be used in apparel and still qualify for duty-
free entry under AGOA had achieved a relatively high 43.3 percent "fill
rate" for their quotas in 2006, versus other African suppliers, which
must use domestic African or U.S. inputs, whose fill rate stood at 1.8
percent. Recent economic literature also suggests that AGOA had some
success in increasing export activity for some countries, but the
increased exports are mainly associated with the liberalized apparel
provisions."[Footnote 67] Yet others are concerned that without
requiring more Sub-Saharan African value-added (e.g., through local
sourcing and production), the trade, investment, and supply linkages to
the local economy that foster development and diversification may not
accrue to AGOA beneficiaries. As a result, the recent long-term
extension of the third country fabric provision was accompanied by a
new requirement to use fabrics deemed widely available for commercial
use (i.e., in "abundant supply") in Africa. However, at a recent ITC
hearing, a major U.S. jeans manufacturer expressed concern that the
limitations the law places on their flexibility to source fabric is
making them reluctant to continue purchasing from African producers.
Our fieldwork revealed examples where complex rules-of-origin
requirements appear to be complicating preference trade. In Ghana, for
example, we met with a firm that decorates T-shirts with original
designs, using traditional African decorative techniques. This firm had
been importing plain white T-shirts from Honduras to decorate in Ghana
and then exporting them to the United States. We were surprised to
learn that the firm had to pay duty on the finished product exported to
the United States, since the inputs were exempt from tariffs under U.S.
preferences programs. For example, the plain white T-shirts
manufactured in Honduras would have entered the United States duty-free
under CBI. The value-added through the decorative process in Ghana
would also be exempt from duties under AGOA. However, because the T-
shirt manufactured in Honduras did not meet the rules of origin
requirements for the AGOA program this company was obliged to pay duty
on the finished decorated shirts. The company is now seeking to shift
its T-shirt purchases to South Africa, or another AGOA beneficiary,
since this sourcing would enable them to qualify for duty-free
treatment under AGOA.
On the other hand, liberalizing quotas and rules of origin have been a
principal means by which the regional programs have been improved in
recent years. For example, CBTPA was enacted in 2000 to enhance the CBI
program, and temporarily eliminates tariffs and most quantitative
restrictions on certain products. The CBTPA liberalized rules of origin
for certain textiles and apparel in an effort to mitigate adverse
effects on CBI suppliers caused by diversion of production and U.S.
trade to Mexico when the North American Free Trade Agreement (NAFTA)
entered into force. The change in rules appears to have benefited CBI
suppliers somewhat. Notably, items entering under the CBTPA, such as
cotton T-shirts and trousers had become leading imports from Central
America and the Dominican Republic at the time the ITC assessed the
impact of CAFTA-DR in 2005. Yet, apparel and footwear were also the
Central American sectors expected to benefit most from further
liberalization of U.S. access under CAFTA-DR. Notably, CAFTA-DR
attempted to sustain and encourage subregional integration within the
Americas by further loosening rules of origin to allow "cumulation"
(adding together the value) of inputs from United States, CAFTA-DR,
NAFTA, and CBI suppliers to meet its rules of origin. Bringing such
attempted improvements in opportunities to fruition remains complex. In
our visit to Haiti, for example, there was uncertainty as to how CAFTA-
DR will interact with Haiti's new HOPE program. In particular, concern
was expressed over whether existing production-sharing operations
between the Dominican Republic and Haiti would be eligible for duty-
free entry.
Utilization of Regional Programs Is Fairly High Compared with GSP but
Varies by Partner:
Our analysis of the share of preference eligible imports actually
entering under each preference program shows that the benefit of U.S.
preference programs may vary considerably by program and partner.
Figure 11 shows the 2006 utilization of U.S. preference programs where
the "utilization rate" is defined as the ratio of actual preference
imports under each program to eligible imports. As Figure 11 indicates,
the utilization rate for the regional preference programs offered by
the United States is high, particularly relative to the utilization of
GSP. To some extent, low utilization of GSP may reflect the fact that
coverage across programs is relatively uniform for many products,
whereas program conditions and rules of origin vary. As a result,
countries that have access to both GSP and regional programs may opt to
use the regional programs.
The utilization rate for GSP or GSPLDC imports from all eligible
partners was 61 percent. The utilization rate for imports from
countries eligible for only GSP or GSPLDC was slightly higher, at about
75 percent. Countries eligible for GSPLDC, with enhanced duty-free
access, had a utilization rate of 58 percent. Countries that were
eligible for AGOA and CBI/CBTPA had utilization rates of 77 percent and
47 percent, respectively. The four Andean countries eligible for ATPA/
ATPDEA had the highest utilization rate of 90 percent.
Figure 11: Utilization Rates of U.S. Preference Program Partners, 2006:
[See PDF for image]
This figure is an illustration of the utilization rates of U.S.
preference program partners, 2006. The following data is depicted:
Combined utilization rates:
All programs: 79%;
All regional programs: 72%;
GSP or GSPLDC: 61%.
Regional program utilization rates:
ATPA/ATPDEA: 90%;
AGOA: 77%;
CBI/CBTPA: 47%.
GSP utilization rates:
Partners eligible for only GSP or GSPLDC: 75%;
GSPLDC: 58%;
Partners eligible for GSP or GSPLDC and regional programs: 41%.
AGOA: 38 countries;
ATPA/ATPDEA: 4 countries;
CBI/CBTPA: 24 countries;
All regional: 66 countries;
All programs: 143 countries;
GSP or GSPLDC: 139 countries;
GSPLDC: 42 countries;
GSP or GSPLDC and regional: 62 countries;
Only GSP or GSPLDC: 77 countries.
Source: GAO analysis of official U.S. trade statistics and tariff
schedule.
Note: The four CBI/CBTPA countries that lost preference eligibility in
2006 are included in the CBI and regional averages.
[End of figure]
Our analysis of data for each program (see table 6) shows variation in
utilization of the programs across eligible countries in 2006. In
brief, our analysis finds the following:
* GSP or GSPLDC--Analysis of GSP shows that low-income countries are
well represented among the top countries in terms of utilization rates,
as 9 of the 35 countries with high utilization rates are designated low
income. The utilization rates of the leading GSP exporters to the
United States in terms of value vary widely, ranging from 99 percent
(Zimbabwe) to 9 percent (Chad).
* AGOA--Nigeria uses AGOA for 96 percent of its exports to the United
States and dominates the share of U.S. imports under the program. Other
major suppliers are Angola, Chad, and Gabon. The program appears to be
highly utilized for exports of others with lesser-valued imports,
including Botswana, Cameroon, Cape Verde, Ethiopia, Kenya, Lesotho,
Madagascar, Mauritius, Mozambique, South Africa, Senegal, Swaziland,
Tanzania, and Uganda. Perhaps, as a reflection of weaknesses in the
trade capacities of some AGOA eligible countries, 12 of the 38 AGOA
eligible countries (Benin, Burundi, Djibouti, Gambia, Guinea-Bissau,
Guinea, Liberia, Rwanda, Sao Tome and Principe, Seychelles, Sierra
Leone, and Democratic Republic of the Congo (formerly Zaire) did not
export under the program, though several did export under GSP.
* ATPA/ATPDEA--Most of the approximately $13.5 billion in U.S.
preference imports under ATPA/ATPDEA came from three beneficiaries.
However, utilization of the program by all beneficiary countries,
including Bolivia, is relatively high.
* CBI/CBTPA--The CBI/CBTPA preference program is the most varied
regional program in terms of the development status of eligible
countries as seven of the countries eligible for CBI are high income,
one (Haiti) is low income, and the rest are middle-income countries.
However, Trinidad and Tobago--a high-income country--is the leading
supplier and has the highest utilization rate under this preference
program.
Table 6: Coverage and Utilization Rates by Beneficiary Country and
Preference Program, 2006 (Dollars in millions):
Beneficiary: Afghanistan;
Total imports: $45.2;
All preference programs: Preference imports: $0.2;
All preference programs: Coverage rate: 74%;
All preference programs: Utilization rate: 28%;
GSP: Preference imports: $0.2;
GSP: Coverage rate: 74%;
GSP: Utilization rate: 28%;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Albania;
Total imports: 12.5;
All preference programs: Preference imports: 0.2;
All preference programs: Coverage rate: 5;
All preference programs: Utilization rate: 62;
GSP: Preference imports: 0.2;
GSP: Coverage rate: 5;
GSP: Utilization rate: 62;
Eligible for GSPLDC: [Empty];
Regional programs: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Algeria;
Total imports: 14,752.7;
All preference programs: Preference imports: 0.3;
All preference programs: Coverage rate: 0;
All preference programs: Utilization rate: 55;
GSP: Preference imports: 0.3;
GSP: Coverage rate: 0;
GSP: Utilization rate: 55;
Eligible for GSPLDC: [Empty];
Regional programs: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Angola;
Total imports: 11,513.8;
All preference programs: Preference imports: 11,307.2;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 100;
GSP: Preference imports: 6,774.3;
GSP: Coverage rate: 100;
Utilization rate: 60; GSP:
Eligible for GSPLDC: [Check];
Regional programs: AGOA;
Regional programs: Preference imports: 4,532.9;
Regional programs: Coverage rate: 100;
Regional programs: Utilization rate: 40.
Beneficiary: Anguilla;
Total imports: 4.2;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 0;
All preference programs: Utilization rate: N.A.
GSP: Preference imports: 0.0;
GSP: Coverage rate: [Empty];
GSP: Utilization rate: [Empty];
Eligible for GSPLDC: [Empty];
Regional programs: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Antigua and Barbuda;
Total imports: 5.8;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 49;
All preference programs: Utilization rate: 4;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 49;
Utilization rate: 0; GSP:
Eligible for GSPLDC: [Empty];
Regional programs: CBI;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 65;
Regional programs: Utilization rate: 3.
Beneficiary: Argentina;
Total imports: 3,924.7;
All preference programs: Preference imports: 666.4;
All preference programs: Coverage rate: 33;
All preference programs: Utilization rate: 78;
GSP: Preference imports: 666.4;
GSP: Coverage rate: 33;
GSP: Utilization rate: 78;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Armenia;
Total imports: 46.5;
All preference programs: Preference imports: 28.1;
All preference programs: Coverage rate: 85;
All preference programs: Utilization rate: 97;
GSP: Preference imports: 28.1;
GSP: Coverage rate: 85;
GSP: Utilization rate: 97;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Aruba;
Total imports: 2,605.7;
All preference programs: Preference imports: 0.2;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 0;
GSP: Preference imports: [Empty];
GSP: Coverage rate: [Empty];
GSP: Utilization rate: [Empty];
Eligible for GSPLDC: [Empty];
Regional programs: CBI;
Regional programs: Preference imports: 0.2;
Regional programs: Coverage rate: 100;
Regional programs: Utilization rate: 0.
Beneficiary: Bahamas;
Total imports: 435.7;
All preference programs: Preference imports: 125.1;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 59;
GSP: Preference imports: [Empty];
GSP: Coverage rate: [Empty];
GSP: Utilization rate: [Empty];
Eligible for GSPLDC: [Empty];
Regional programs: CBI;
Regional programs: Preference imports: 125.1;
Regional programs: Coverage rate: 99;
Regional programs: Utilization rate: 59.
Beneficiary: Bahrain;
Total imports: 632.3;
All preference programs: Preference imports: 0.7;
All preference programs: Coverage rate: 37;
All preference programs: Utilization rate: 1;
GSP: Preference imports: 0.7;
GSP: Coverage rate: 37;
GSP: Utilization rate: 1;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Bangladesh;
Total imports: 3,267.8;
All preference programs: Preference imports: 20.5;
All preference programs: Coverage rate: 1;
All preference programs: Utilization rate: 72;
GSP: Preference imports: 20.5;
GSP: Coverage rate: 1;
GSP: Utilization rate: 72;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Barbados;
Total imports: 33.0;
All preference programs: Preference imports: 4.7;
All preference programs: Coverage rate: 85;
All preference programs: Utilization rate: 87;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 79;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 4.7;
Regional programs: Coverage rate: 85;
Regional programs: Utilization rate: 87.
Beneficiary: Belize;
Total imports: 146.4;
All preference programs: Preference imports: 78.2;
All preference programs: Coverage rate: 98;
All preference programs: Utilization rate: 70;
GSP: Preference imports: 6.0;
GSP: Coverage rate: 27;
GSP: Utilization rate: 19;
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 72.2;
Regional programs: Coverage rate: 98;
Regional programs: Utilization rate: 65.
Beneficiary: Benin;
Total imports: 0.6;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 89;
All preference programs: Utilization rate: 90;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 89;
GSP: Utilization rate: 90;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 0;
Regional programs: Utilization rate: 0.
Beneficiary: Bhutan;
Total imports: 1.1;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 47;
All preference programs: Utilization rate: 9;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 47;
GSP: Utilization rate: 9;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Bolivia;
Total imports: 362.4;
All preference programs: Preference imports: 187.9;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 85;
GSP: Preference imports: 21.7;
GSP: Coverage rate: 60;
GSP: Utilization rate: 16;
Eligible for GSPLDC: [Empty];
Regional program: ATPA/ATPDEA;
Regional programs: Preference imports: 166.2;
Regional programs: Coverage rate: 99;
Regional programs: Utilization rate: 76.
Beneficiary: Bosnia and Herzegovina;
Total imports: 25.6;
All preference programs: Preference imports: 3.5;
All preference programs: Coverage rate: 22;
All preference programs: Utilization rate: 89;
GSP: Preference imports: 3.5;
GSP: Coverage rate: 22;
GSP: Utilization rate: 89;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Botswana;
Total imports: 252.1;
All preference programs: Preference imports: 28.3;
All preference programs: Coverage rate: 96;
All preference programs: Utilization rate: 97
GSP: Preference imports: 0.0;
GSP: Coverage rate: 2;
GSP: Utilization rate: 4;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 28.2;
Regional programs: Coverage rate: 94;
Regional programs: Utilization rate: 99.
Beneficiary: Brazil;
Total imports: 26,169.0;
All preference programs: Preference imports: 3,737.7;
All preference programs: Coverage rate: 48;
All preference programs: Utilization rate: 58;
GSP: Preference imports: 3,737.7;
GSP: Coverage rate: 48;
GSP: Utilization rate: 58;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: British Indian Ocean Territory;
Total imports: 0.8;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 39;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 39;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: British Virgin Islands;
Total imports: 26.3;
All preference programs: Preference imports: 0.2;
All preference programs: Coverage rate: 54;
All preference programs: Utilization rate: 11;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 47;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Empty];
Regional program: CBI;
Regional programs: Preference imports: 0.2;
Regional programs: Coverage rate: 54;
Regional programs: Utilization rate: 11.
Beneficiary: Bulgaria;
Total imports: 457.4;
All preference programs: Preference imports: 61.1;
All preference programs: Coverage rate: 39;
All preference programs: Utilization rate: 83
GSP: Preference imports: 61.1;
GSP: Coverage rate: 39;
GSP: Utilization rate: 83;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Burkina Faso;
Total imports: 1.0;
All preference programs: Preference imports: 0.1;
All preference programs: Coverage rate: 94;
All preference programs: Utilization rate: 10;
GSP: Preference imports: 0.1;
GSP: Coverage rate: 92;
GSP: Utilization rate: 9;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 83;
Regional programs: Utilization rate: 1.
Beneficiary: Burundi;
Total imports: 1.9;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 25;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 25;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 0;
Regional programs: Utilization rate: 0.
Beneficiary: Cambodia;
Total imports: 2,188.2;
All preference programs: Preference imports: 5.0;
All preference programs: Coverage rate: 0;
All preference programs: Utilization rate: 54;
GSP: Preference imports: 5.0;
GSP: Coverage rate: 0;
GSP: Utilization rate: 54;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Cameroon;
Total imports: 223.5;
All preference programs: Preference imports: 153.2;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 92;
GSP: Preference imports: 0.8;
GSP: Coverage rate: 2;
GSP: Utilization rate: 24;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 152.4;
Regional programs: Coverage rate: 98;
Regional programs: Utilization rate: 94.
Beneficiary: Cape Verde;
Total imports: 1.0;
All preference programs: Preference imports: 0.1;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 37;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 100;
GSP: Utilization rate: 7;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.1;
Regional programs: Coverage rate: 30;
Regional programs: Utilization rate: 100.
Beneficiary: Central African Republic;
Total imports: 4.3;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 41;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 41;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Chad;
Total imports: 1,904.7;
All preference programs: Preference imports: 1,698.0;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 91;
GSP: Preference imports: 166.6;
GSP: Coverage rate: 100;
GSP: Utilization rate: 9;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 1,531.4;
Regional programs: Coverage rate: 100;
Regional programs: Utilization rate: 82.
Beneficiary: Christmas Island;
Total imports: 0.4;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 54;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 54;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Cocos (Keeling) Islands;
Total imports: 1.5;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 52;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 52;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Beneficiary: Colombia;
Total imports: 9,239.8;
All preference programs: Preference imports: 4,972.8;
All preference programs: Coverage rate: 91;
All preference programs: Utilization rate: 91;
GSP: Preference imports: 181.6;
GSP: Coverage rate: 14;
GSP: Utilization rate: 22;
Eligible for GSPLDC: [Empty];
Regional program: ATPA/ATPDEA;
Regional programs: Preference imports: 4,791.2;
Regional programs: Coverage rate: 92;
Regional programs: Utilization rate: 88.
Beneficiary: Comoros;
Total imports: 1.5;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 0;
All preference programs: Utilization rate: N.A.
GSP: Preference imports: 0.0;
GSP: Coverage rate: [Empty];
GSP: Utilization rate: [Empty];
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Congo;
Total imports: 3,045.5;
All preference programs: Preference imports: 774.6;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 26.
GSP: Preference imports: 0.0;
GSP: Coverage rate: 0;
GSP: Utilization rate: 37;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 774.5;
Regional programs: Coverage rate: 100;
Regional programs: Utilization rate: 26.
Cook Islands;
Total imports: 2.1;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 53;
All preference programs: Utilization rate: 5.
GSP: Preference imports: 0.0;
GSP: Coverage rate: 53;
GSP: Utilization rate: 5;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Costa Rica;
Total imports: 3,813.5;
All preference programs: Preference imports: 1,495.3;
All preference programs: Coverage rate: 94;
All preference programs: Utilization rate: 92.
GSP: Preference imports: 113.3;
GSP: Coverage rate: 37;
GSP: Utilization rate: 18;
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 1,382.0;
Regional programs: Coverage rate: 94;
Regional programs: Utilization rate: 85.
Croatia;
Total imports: 352.6;
All preference programs: Preference imports: 145.6;
All preference programs: Coverage rate: 76;
All preference programs: Utilization rate: 90.
GSP: Preference imports: 145.6;
GSP: Coverage rate: 76;
GSP: Utilization rate: 90;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Democratic Republic of the Congo (formerly Zaire);
Total imports: 85.1;
All preference programs: Preference imports: 2.6;
All preference programs: Coverage rate: 98;
All preference programs: Utilization rate: 94.
GSP: Preference imports: 2.6;
GSP: Coverage rate: 98;
GSP: Utilization rate: 94;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 1;
Regional programs: Utilization rate: 0.
Djibouti;
Total imports: 3.3;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 2;
All preference programs: Utilization rate: 0.
GSP: Preference imports: 0.0;
GSP: Coverage rate: 2;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Dominica;
Total imports: 3.1;
All preference programs: Preference imports: 0.1;
All preference programs: Coverage rate: 23;
All preference programs: Utilization rate: 29.
GSP: Preference imports: 0.0;
GSP: Coverage rate: 18;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Empty];
Regional program: CBI;
Regional programs: Preference imports: 0.1;
Regional programs: Coverage rate: 23;
Regional programs: Utilization rate: 29.
Dominican Republic;
Total imports: 4,540.0;
All preference programs: Preference imports: 2,613.8;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 86.
GSP: Preference imports: 132.7;
GSP: Coverage rate: 42;
GSP: Utilization rate: 10;
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 2,481.0;
Regional programs: Coverage rate: 99;
Regional programs: Utilization rate: 82.
Ecuador;
Total imports: 7,011.4;
All preference programs: Preference imports: 5,396.4;
All preference programs: Coverage rate: 98;
All preference programs: Utilization rate: 94.
GSP: Preference imports: 71.2;
GSP: Coverage rate: 4;
GSP: Utilization rate: 27;
Eligible for GSPLDC: [Empty];
Regional program: ATPA/ATPDEA;
Regional programs: Preference imports: 5,325.2;
Regional programs: Coverage rate: 98;
Regional programs: Utilization rate: 92.
Egypt;
Total imports: 2,404.2;
All preference programs: Preference imports: 69.9;
All preference programs: Coverage rate: 8;
All preference programs: Utilization rate: 90.
GSP: Preference imports: 69.9;
GSP: Coverage rate: 8;
GSP: Utilization rate: 90;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
El Salvador;
Total imports: 1,842.7;
All preference programs: Preference imports: 164.0;
All preference programs: Coverage rate: 97;
All preference programs: Utilization rate: 10.
GSP: Preference imports: 9.9;
GSP: Coverage rate: 4;
GSP: Utilization rate: 15;
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 154.1;
Regional programs: Coverage rate: 97;
Regional programs: Utilization rate: 10.
Equatorial Guinea;
Total imports: 1,718.1;
All preference programs: Preference imports: 1,558.9;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 95.
GSP: Preference imports: 1,558.9;
GSP: Coverage rate: 100;
GSP: Utilization rate: 95;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Eritrea;
Total imports: 0.9;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 69;
All preference programs: Utilization rate: 0.
GSP: Preference imports: 0.0;
GSP: Coverage rate: 69;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Ethiopia;
Total imports: 81.1;
All preference programs: Preference imports: 7.2;
All preference programs: Coverage rate: 86;
All preference programs: Utilization rate: 98.
GSP: Preference imports: 2.2;
GSP: Coverage rate: 28;
GSP: Utilization rate: 92;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 5.0;
Regional programs: Coverage rate: 61;
Regional programs: Utilization rate: 97.
Falkland Islands;
Total imports: 12.2;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 41;
All preference programs: Utilization rate: 0.
GSP: Preference imports: 0.0;
GSP: Coverage rate: 41;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Fiji;
Total imports: 145.8;
All preference programs: Preference imports: 52.8;
All preference programs: Coverage rate: 41;
All preference programs: Utilization rate: 98.
GSP: Preference imports: 52.8;
GSP: Coverage rate: 41;
GSP: Utilization rate: 98;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Gabon;
Total imports: 1,331.0;
All preference programs: Preference imports: 1,290.0;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 100.
GSP: Preference imports: 0.0;
GSP: Coverage rate: 0;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 129.0;
Regional programs: Coverage rate: 100;
Regional programs: Utilization rate: 100.
Gambia;
Total imports: 0.3;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 58;
All preference programs: Utilization rate: 60.
GSP: Preference imports: 0.0;
GSP: Coverage rate: 56;
GSP: Utilization rate: 62;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 2;
Regional programs: Utilization rate: 0.
Gaza Strip;
Total imports: 0.8;
All preference programs: Preference imports: 0.3;
All preference programs: Coverage rate: 44;
All preference programs: Utilization rate: 92.
GSP: Preference imports: 0.3;
GSP: Coverage rate: 44;
GSP: Utilization rate: 92;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Georgia;
Total imports: 115.6;
All preference programs: Preference imports: 34.5;
All preference programs: Coverage rate: 54;
All preference programs: Utilization rate: 96.
GSP: Preference imports: 34.5;
GSP: Coverage rate: 54;
GSP: Utilization rate: 96;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Ghana;
Total imports: 192.2;
All preference programs: Preference imports: 45.3;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 65.
GSP: Preference imports: 10.5;
GSP: Coverage rate: 16;
GSP: Utilization rate: 96;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 34.9;
Regional programs: Coverage rate: 84;
Regional programs: Utilization rate: 59.
Gibraltar;
Total imports: 0.8;
All preference programs: Preference imports: 0.1;
All preference programs: Coverage rate: 86;
All preference programs: Utilization rate: 37.
GSP: Preference imports: 0.1;
GSP: Coverage rate: 86;
GSP: Utilization rate: 37;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Grenada;
Total imports: 4.5;
All preference programs: Preference imports: 0.1;
All preference programs: Coverage rate: 28;
All preference programs: Utilization rate: 62.
GSP: Preference imports: 0.0;
GSP: Coverage rate: 24;
GSP: Utilization rate: 33;
Eligible for GSPLDC: [Empty];
Regional program: CBI;
Regional programs: Preference imports: 0.1;
Regional programs: Coverage rate: 28;
Regional programs: Utilization rate: 33.
Guatemala;
Total imports: 3,102.7;
All preference programs: Preference imports: 699.3;
All preference programs: Coverage rate: 97;
All preference programs: Utilization rate: 30.
GSP: Preference imports: 46.4;
GSP: Coverage rate: 16;
GSP: Utilization rate: 12;
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 652.8;
Regional programs: Coverage rate: 97;
Regional programs: Utilization rate: 28.
Guinea-Bissau;
Total imports: 0.5;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 76;
All preference programs: Utilization rate: 0.
GSP: Preference imports: 0.0;
GSP: Coverage rate: 76;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 0;
Regional programs: Utilization rate: 0.
Guinea;
Total imports: 91.7;
All preference programs: Preference imports: 0.1;
All preference programs: Coverage rate: 44;
All preference programs: Utilization rate: 58.
GSP: Preference imports: 0.1;
GSP: Coverage rate: 43;
GSP: Utilization rate: 59;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 2;
Regional programs: Utilization rate: 0.
Guyana;
Total imports: 125.0;
All preference programs: Preference imports: 19.7;
All preference programs: Coverage rate: 95;
All preference programs: Utilization rate: 95.
GSP: Preference imports: 14.6;
GSP: Coverage rate: 73;
GSP: Utilization rate: 91;
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 5.1;
Regional programs: Coverage rate: 95;
Regional programs: Utilization rate: 25.
Haiti;
Total imports: 496.1;
All preference programs: Preference imports: 380.7;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 82.
GSP: Preference imports: 1.4;
GSP: Coverage rate: 4;
GSP: Utilization rate: 8;
Eligible for GSPLDC: [Check];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 379.3;
Regional programs: Coverage rate: 99;
Regional programs: Utilization rate: 82.
Heard Island and McDonald Islands;
Total imports: data not significant;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: data not available;
All preference programs: Utilization rate: data not available;
GSP: Preference imports: 0.0;
GSP: Coverage rate: data not available;
GSP: Utilization rate: data not available;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Honduras;
Total imports: 3,734.7;
All preference programs: Preference imports: 568.6;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 19;
GSP: Preference imports: 12.7;
GSP: Coverage rate: 20;
GSP: Utilization rate: 2;
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 555.8;
Regional programs: Coverage rate: 99;
Regional programs: Utilization rate: 18.
India;
Total imports: 21,673.6;
All preference programs: Preference imports: 5,678.0;
All preference programs: Coverage rate: 53;
All preference programs: Utilization rate: 84;
GSP: Preference imports: 5,678.0;
GSP: Coverage rate: 53;
GSP: Utilization rate: 84;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Indonesia;
Total imports: 13,267.8;
All preference programs: Preference imports: 1,945.7;
All preference programs: Coverage rate: 33;
All preference programs: Utilization rate: 76;
GSP: Preference imports: 1945.7;
GSP: Coverage rate: 33;
GSP: Utilization rate: 76;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Iraq;
Total imports: 11,326.3;
All preference programs: Preference imports: 0.2;
All preference programs: Coverage rate: 0;
All preference programs: Utilization rate: 68;
GSP: Preference imports: 0.2;
GSP: Coverage rate: 0;
GSP: Utilization rate: 68;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Ivory Coast;
Total imports: 722.7;
All preference programs: Preference imports: 20.0;
All preference programs: Coverage rate: 14;
All preference programs: Utilization rate: 76;
GSP: Preference imports: 20.0;
GSP: Coverage rate: 14;
GSP: Utilization rate: 76;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Jamaica;
Total imports: 470.9;
All preference programs: Preference imports: 257.8;
All preference programs: Coverage rate: 98;
All preference programs: Utilization rate: 98;
GSP: Preference imports: 12.1;
GSP: Coverage rate: 17;
GSP: Utilization rate: 27;
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 245.8;
Regional programs: Coverage rate: 98;
Regional programs: Utilization rate: 93.
Jordan;
Total imports: 1,421.3;
All preference programs: Preference imports: 15.3;
All preference programs: Coverage rate: 9;
All preference programs: Utilization rate: 12;
GSP: Preference imports: 15.3;
GSP: Coverage rate: 9;
GSP: Utilization rate: 12;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Kazakhstan;
Total imports: 988.9;
All preference programs: Preference imports: 483.1;
All preference programs: Coverage rate: 61;
All preference programs: Utilization rate: 97;
GSP: Preference imports: 483.1;
GSP: Coverage rate: 61;
GSP: Utilization rate: 97;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Kenya;
Total imports: 352.8;
All preference programs: Preference imports: 272.9;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 96;
GSP: Preference imports: 7.9;
GSP: Coverage rate: 4;
GSP: Utilization rate: 61;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 265.1;
Regional programs: Coverage rate: 95;
Regional programs: Utilization rate: 97.
Kiribati;
Total imports: 1.3;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 25;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 25;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Kyrgyzstan;
Total imports: 4.2;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 33;
All preference programs: Utilization rate: 2;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 33;
GSP: Utilization rate: 2;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Lebanon;
Total imports: 87.8;
All preference programs: Preference imports: 34.2;
All preference programs: Coverage rate: 80;
All preference programs: Utilization rate: 96;
GSP: Preference imports: 34.2;
GSP: Coverage rate: 80;
GSP: Utilization rate: 96;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Lesotho;
Total imports: 408.4;
All preference programs: Preference imports: 384.6;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 99;
GSP: Preference imports: 0.1;
GSP: Coverage rate: 0;
GSP: Utilization rate: 30;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 384.5;
Regional programs: Coverage rate: 100;
Regional programs: Utilization rate: 99.
Liberia;
Total imports: 139.8;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 98;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 98;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 98;
Regional programs: Utilization rate: 0.
Macedonia;
Total imports: 42.2;
All preference programs: Preference imports: 7.5;
All preference programs: Coverage rate: 34;
All preference programs: Utilization rate: 99;
GSP: Preference imports: 7.5;
GSP: Coverage rate: 34;
GSP: Utilization rate: 99;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Madagascar;
Total imports: 281.1;
All preference programs: Preference imports: 231.6;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 96;
GSP: Preference imports: 2.1;
GSP: Coverage rate: 2;
GSP: Utilization rate: 57;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 229.5;
Regional programs: Coverage rate: 98;
Regional programs: Utilization rate: 96.
Malawi;
Total imports: 79.0;
All preference programs: Preference imports: 60.9;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 80;
GSP: Preference imports: 31.0;
GSP: Coverage rate: 76;
GSP: Utilization rate: 54;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 29.9;
Regional programs: Coverage rate: 94;
Regional programs: Utilization rate: 42.
Mali;
Total imports: 7.9;
All preference programs: Preference imports: 0.5;
All preference programs: Coverage rate: 48;
All preference programs: Utilization rate: 56;
GSP: Preference imports: 0.5;
GSP: Coverage rate: 47;
GSP: Utilization rate: 56;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 8;
Regional programs: Utilization rate: 2.
Mauritania;
Total imports: 51.2;
All preference programs: Preference imports: 28.3;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 56;
GSP: Preference imports: 28.3;
GSP: Coverage rate: 100;
GSP: Utilization rate: 56;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Mauritius;
Total imports: 218.6;
All preference programs: Preference imports: 157.5;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 92;
GSP: Preference imports: 11.7;
GSP: Coverage rate: 8;
GSP: Utilization rate: 80;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 145.8;
Regional programs: Coverage rate: 90;
Regional programs: Utilization rate: 93.
Moldova;
Total imports: 37.1;
All preference programs: Preference imports: 2.4;
All preference programs: Coverage rate: 12;
All preference programs: Utilization rate: 78;
GSP: Preference imports: 2.4;
GSP: Coverage rate: 12;
GSP: Utilization rate: 78;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Mongolia;
Total imports: 113.9;
All preference programs: Preference imports: 0.5;
All preference programs: Coverage rate: 1;
All preference programs: Utilization rate: 58;
GSP: Preference imports: 0.5;
GSP: Coverage rate: 1;
GSP: Utilization rate: 58;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Montserrat;
Total imports: 0.8;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 75;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 59;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Empty];
Regional program: CBI;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 75;
Regional programs: Utilization rate: 0.
Mozambique;
Total imports: 15.6;
All preference programs: Preference imports: 11.8;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 100;
GSP: Preference imports: 10.9;
GSP: Coverage rate: 94;
GSP: Utilization rate: 97;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.9;
Regional programs: Coverage rate: 9;
Regional programs: Utilization rate: 90.
Namibia;
Total imports: 115.6;
All preference programs: Preference imports: 33.2;
All preference programs: Coverage rate: 96;
All preference programs: Utilization rate: 70;
GSP: Preference imports: 0.2;
GSP: Coverage rate: 0;
GSP: Utilization rate: 87;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 33.0;
Regional programs: Coverage rate: 96;
Regional programs: Utilization rate: 70.
Nepal;
Total imports: 99.4;
All preference programs: Preference imports: 4.0;
All preference programs: Coverage rate: 8;
All preference programs: Utilization rate: 78;
GSP: Preference imports: 4.0;
GSP: Coverage rate: 8;
GSP: Utilization rate: 78;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Niger;
Total imports: 123.7;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 95;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 95;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 94;
Regional programs: Utilization rate: 0.
Netherlands Antilles;
Total imports: 1,100.6;
All preference programs: Preference imports: 2.2;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 0;
GSP: Preference imports: [Empty];
GSP: Coverage rate: [Empty];
GSP: Utilization rate: [Empty];
Eligible for GSPLDC: [Empty];
Regional program: CBI;
Regional programs: Preference imports: 2.2;
Regional programs: Coverage rate: 100;
Regional programs: Utilization rate: 0.
Nicaragua;
Total imports: 1,526.1;
All preference programs: Preference imports: 111.0;
All preference programs: Coverage rate: 96;
All preference programs: Utilization rate: 9;
GSP: Coverage rate: [Empty];
GSP: Utilization rate: [Empty];
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional program: AGOA;
Regional programs: Preference imports: 111.0;
Regional programs: Coverage rate: 96;
Regional programs: Utilization rate: 9.
Nigeria;
Total imports: 27,863.4;
All preference programs: Preference imports: 25,824.3;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 96;
GSP: Preference imports: 1.2;
GSP: Coverage rate: 0;
GSP: Utilization rate: 66;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 25,823.1;
Regional programs: Coverage rate: 100;
Regional programs: Utilization rate: 96.
Niue;
Total imports: 0.1;
All preference programs: Preference imports: 0.1;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 100;
GSP: Preference imports: 0.1;
GSP: Coverage rate: 99;
GSP: Utilization rate: 100;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Norfolk Island;
Total imports: 0.1;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 97;
All preference programs: Utilization rate: 44;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 97;
GSP: Utilization rate: 44;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Oman;
Total imports: 782.0;
All preference programs: Preference imports: 64.7;
All preference programs: Coverage rate: 12;
All preference programs: Utilization rate: 98;
GSP: Preference imports: 64.7;
GSP: Coverage rate: 12;
GSP: Utilization rate: 98;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Pakistan;
Total imports: 3,666.6;
All preference programs: Preference imports: 130.3;
All preference programs: Coverage rate: 4;
All preference programs: Utilization rate: 90;
GSP: Preference imports: 130.3;
GSP: Coverage rate: 4;
GSP: Utilization rate: 90;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Panama;
Total imports: 337.6;
All preference programs: Preference imports: 58.0;
All preference programs: Coverage rate: 93;
All preference programs: Utilization rate: 87;
GSP: Preference imports: 24.2;
GSP: Coverage rate: 76;
GSP: Utilization rate: 45;
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 33.8;
Regional programs: Coverage rate: 93;
Regional programs: Utilization rate: 51.
Papua New Guinea;
Total imports: 83.6;
All preference programs: Preference imports: 2.9;
All preference programs: Coverage rate: 10;
All preference programs: Utilization rate: 99;
GSP: Preference imports: 2.9;
GSP: Coverage rate: 10;
GSP: Utilization rate: 99;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Paraguay;
Total imports: 51.4;
All preference programs: Preference imports: 24.8;
All preference programs: Coverage rate: 82;
All preference programs: Utilization rate: 98;
GSP: Preference imports: 24.8;
GSP: Coverage rate: 82;
GSP: Utilization rate: 98;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Peru;
Total imports: 5,896.9;
All preference programs: Preference imports: 3,381.2;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 98;
GSP: Preference imports: 179.4;
GSP: Coverage rate: 42;
GSP: Utilization rate: 12;
Eligible for GSPLDC: [Empty];
Regional program: ATPA/ATPDEA;
Regional programs: Preference imports: 3,201.9;
Regional programs: Coverage rate: 99;
Regional programs: Utilization rate: 93.
Philippines;
Total imports: 9,696.7;
All preference programs: Preference imports: 1,141.5;
All preference programs: Coverage rate: 38;
All preference programs: Utilization rate: 72;
GSP: Preference imports: 1,141.5;
GSP: Coverage rate: 38;
GSP: Utilization rate: 72;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Pitcairn Island;
Total imports: 0.1;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 47;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 47;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Romania;
Total imports: 1,151.6;
All preference programs: Preference imports: 283.5;
All preference programs: Coverage rate: 52;
All preference programs: Utilization rate: 77;
GSP: Preference imports: 283.5;
GSP: Coverage rate: 52;
GSP: Utilization rate: 77;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Russia;
Total imports: 19,641.6;
All preference programs: Preference imports: 512.1;
All preference programs: Coverage rate: 15;
All preference programs: Utilization rate: 34;
GSP: Preference imports: 512.1;
GSP: Coverage rate: 15;
GSP: Utilization rate: 34;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Rwanda;
Total imports: 8.9;
All preference programs: Preference imports: 0.9;
All preference programs: Coverage rate: 97;
All preference programs: Utilization rate: 100;
GSP: Preference imports: 0.9;
GSP: Coverage rate: 97;
GSP: Utilization rate: 100;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Sao Tome and Principe;
Total imports: 0.2;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 95;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 95;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 27;
Regional programs: Utilization rate: 0.
Senegal;
Total imports: 21.4;
All preference programs: Preference imports: 14.4;
All preference programs: Coverage rate: 87;
All preference programs: Utilization rate: 94;
GSP: Preference imports: 0.1;
GSP: Coverage rate: 2;
GSP: Utilization rate: 44;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 14.2;
Regional programs: Coverage rate: 85;
Regional programs: Utilization rate: 95.
Serbia/Montenegro;
Total imports: 68.6;
All preference programs: Preference imports: 29.8;
All preference programs: Coverage rate: 85;
All preference programs: Utilization rate: 80;
GSP: Preference imports: 29.8;
GSP: Coverage rate: 85;
GSP: Utilization rate: 80;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Seychelles;
Total imports: 10.1;
All preference programs: Preference imports: 0.1;
All preference programs: Coverage rate: 33;
All preference programs: Utilization rate: 26;
GSP: Preference imports: 0.1;
GSP: Coverage rate: 32;
GSP: Utilization rate: 26;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 0;
Regional programs: Utilization rate: 0.
Sierra Leone;
Total imports: 35.9;
All preference programs: Preference imports: 0.1;
All preference programs: Coverage rate: 62;
All preference programs: Utilization rate: 16;
GSP: Preference imports: 0.1;
GSP: Coverage rate: 62;
GSP: Utilization rate: 16;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 2;
Regional programs: Utilization rate: 0.
Solomon Islands;
Total imports: 2.2;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 44;
All preference programs: Utilization rate: 3;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 44;
GSP: Utilization rate: 3;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Somalia;
Total imports: 0.4;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 79;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 79;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
South Africa;
Total imports: 7,497.3;
All preference programs: Preference imports: 1,783.3;
All preference programs: Coverage rate: 97;
All preference programs: Utilization rate: 92;
GSP: Preference imports: 1,065.9;
GSP: Coverage rate: 59;
GSP: Utilization rate: 91;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 717.4;
Regional programs: Coverage rate: 38;
Regional programs: Utilization rate: 96.
Sri Lanka;
Total imports: 2,141.0;
All preference programs: Preference imports: 143.6;
All preference programs: Coverage rate: 9;
All preference programs: Utilization rate: 88;
GSP: Preference imports: 143.6;
GSP: Coverage rate: 9;
GSP: Utilization rate: 88;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
St. Helena;
Total imports: 1.7;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 0;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 99;
GSP: Utilization rate: 0;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
St. Kitts and Nevis;
Total imports: 50.0;
All preference programs: Preference imports: 25.8;
All preference programs: Coverage rate: 96;
All preference programs: Utilization rate: 91;
GSP: Preference imports: 1.0;
GSP: Coverage rate: 85;
GSP: Utilization rate: 4;
Eligible for GSPLDC: [Empty];
Regional program: CBI;
Regional programs: Preference imports: 24.7;
Regional programs: Coverage rate: 96;
Regional programs: Utilization rate: 87.
St. Lucia;
Total imports: 37.3;
All preference programs: Preference imports: 7.6;
All preference programs: Coverage rate: 94;
All preference programs: Utilization rate: 24;
GSP: Preference imports: 0.5;
GSP: Coverage rate: 19;
GSP: Utilization rate: 7;
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 7.1;
Regional programs: Coverage rate: 94;
Regional programs: Utilization rate: 22.
St. Vincent and the Grenadines;
Total imports: 2.0;
All preference programs: Preference imports: 0.2;
All preference programs: Coverage rate: 98;
All preference programs: Utilization rate: 19;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 97;
GSP: Utilization rate: 2;
Eligible for GSPLDC: [Empty];
Regional program: CBI;
Regional programs: Preference imports: 0.2;
Regional programs: Coverage rate: 98;
Regional programs: Utilization rate: 17.
Suriname;
Total imports: 164.2;
All preference programs: Preference imports: 0.2;
All preference programs: Coverage rate: 83;
All preference programs: Utilization rate: 14;
GSP: Preference imports: 0.2;
GSP: Coverage rate: 83;
GSP: Utilization rate: 14;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Swaziland;
Total imports: 155.8;
All preference programs: Preference imports: 149.8;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 98;
GSP: Preference imports: 14.4;
GSP: Coverage rate: 10;
GSP: Utilization rate: 95;
Eligible for GSPLDC: [Empty];
Regional program: AGOA;
Regional programs: Preference imports: 135.4;
Regional programs: Coverage rate: 89;
Regional programs: Utilization rate: 99.
Tanzania;
Total imports: 34.6;
All preference programs: Preference imports: 3.7;
All preference programs: Coverage rate: 72;
All preference programs: Utilization rate: 93;
GSP: Preference imports: 0.7;
GSP: Coverage rate: 17;
GSP: Utilization rate: 71;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 3.0;
Regional programs: Coverage rate: 57;
Regional programs: Utilization rate: 96.
Thailand;
Total imports: 22,344.7;
All preference programs: Preference imports: 4,252.3;
All preference programs: Coverage rate: 53;
All preference programs: Utilization rate: 83;
GSP: Preference imports: 4,252.3;
GSP: Coverage rate: 53;
GSP: Utilization rate: 83;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Togo;
Total imports: 3.6;
All preference programs: Preference imports: 2.3;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 99;
GSP: Preference imports: 2.3;
GSP: Coverage rate: 99;
GSP: Utilization rate: 99;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Tokelau Islands;
Total imports: 5.1;
All preference programs: Preference imports: 1.0;
All preference programs: Coverage rate: 33;
All preference programs: Utilization rate: 91;
GSP: Preference imports: 1.0;
GSP: Coverage rate: 33;
GSP: Utilization rate: 91;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Tonga;
Total imports: 7.3;
All preference programs: Preference imports: 0.2;
All preference programs: Coverage rate: 9;
All preference programs: Utilization rate: 54;
GSP: Preference imports: 0.2;
GSP: Coverage rate: 9;
GSP: Utilization rate: 54;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Trinidad and Tobago;
Total imports: 8,398.5;
All preference programs: Preference imports: 3,685.1;
All preference programs: Coverage rate: 99;
All preference programs: Utilization rate: 95;
GSP: Preference imports: 7.4;
GSP: Coverage rate: 27;
GSP: Utilization rate: 1;
Eligible for GSPLDC: [Empty];
Regional program: CBI/CBTPA;
Regional programs: Preference imports: 3,677.7;
Regional programs: Coverage rate: 99;
Regional programs: Utilization rate: 95.
Tunisia;
Total imports: 427.8;
All preference programs: Preference imports: 113.9;
All preference programs: Coverage rate: 40;
All preference programs: Utilization rate: 89;
GSP: Preference imports: 113.9;
GSP: Coverage rate: 40;
GSP: Utilization rate: 89;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Turkey;
Total imports: 5,387.0;
All preference programs: Preference imports: 1,125.7;
All preference programs: Coverage rate: 48;
All preference programs: Utilization rate: 70;
GSP: Preference imports: 1,125.7;
GSP: Coverage rate: 48;
GSP: Utilization rate: 70;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Turks and Caicos Islands;
Total imports: 12.1;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 17;
All preference programs: Utilization rate: 16;
GSP: Preference imports: 0.0;
GSP: Coverage rate: 17;
GSP: Utilization rate: 16;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Tuvalu;
Total imports: 0.0;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: 0;
All preference programs: Utilization rate: N.A.
GSP: Preference imports: 0.0;
GSP: Coverage rate: [Empty];
GSP: Utilization rate: [Empty];
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Uganda;
Total imports: 21.8;
All preference programs: Preference imports: 2.5;
All preference programs: Coverage rate: 97;
All preference programs: Utilization rate: 95;
GSP: Preference imports: 1.0;
GSP: Coverage rate: 41;
GSP: Utilization rate: 89;
Eligible for GSPLDC: [Check];
Regional program: [AGOA];
Regional programs: Preference imports: 1.5;
Regional programs: Coverage rate: 56;
Regional programs: Utilization rate: 100.
Ukraine;
Total imports: 1,637.9;
All preference programs: Preference imports: 23.8;
All preference programs: Coverage rate: 26;
All preference programs: Utilization rate: 34;
GSP: Preference imports: 23.8;
GSP: Coverage rate: 26;
GSP: Utilization rate: 34;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Uruguay;
Total imports: 512.1;
All preference programs: Preference imports: 50.3;
All preference programs: Coverage rate: 14;
All preference programs: Utilization rate: 86;
GSP: Preference imports: 50.3;
GSP: Coverage rate: 14;
GSP: Utilization rate: 86;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Uzbekistan;
Total imports: 151.5;
All preference programs: Preference imports: 2.8;
All preference programs: Coverage rate: 16;
All preference programs: Utilization rate: 99;
GSP: Preference imports: 2.8;
GSP: Coverage rate: 16;
GSP: Utilization rate: 99;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Vanuatu;
Total imports: 2.3;
All preference programs: Preference imports: 0.1;
All preference programs: Coverage rate: 80;
All preference programs: Utilization rate: 100;
GSP: Preference imports: 0.1;
GSP: Coverage rate: 80;
GSP: Utilization rate: 100;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Venezuela;
Total imports: 36,283.4;
All preference programs: Preference imports: 685.2;
All preference programs: Coverage rate: 3;
All preference programs: Utilization rate: 96;
GSP: Preference imports: 685.2;
GSP: Coverage rate: 3;
GSP: Utilization rate: 96;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Wallis and Futuna;
Total imports: data not significant;
All preference programs: Preference imports: 0.0;
All preference programs: Coverage rate: data not available;
All preference programs: Utilization rate: data not available;
GSP: Preference imports: 0.0;
GSP: Coverage rate: data not available;
GSP: Utilization rate: data not available;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
West Bank;
Total imports: 3.1;
All preference programs: Preference imports: 0.8;
All preference programs: Coverage rate: 46;
All preference programs: Utilization rate: 60;
GSP: Preference imports: 0.8;
GSP: Coverage rate: 46;
GSP: Utilization rate: 60;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Yemen;
Total imports: 447.4;
All preference programs: Preference imports: 390.2;
All preference programs: Coverage rate: 100;
All preference programs: Utilization rate: 89;
GSP: Preference imports: 390.2;
GSP: Coverage rate: 100;
GSP: Utilization rate: 89;
Eligible for GSPLDC: [Check];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Zambia;
Total imports: 29.0;
All preference programs: Preference imports: 0.4;
All preference programs: Coverage rate: 94;
All preference programs: Utilization rate: 74;
GSP: Preference imports: 0.4;
GSP: Coverage rate: 86;
GSP: Utilization rate: 79;
Eligible for GSPLDC: [Check];
Regional program: AGOA;
Regional programs: Preference imports: 0.0;
Regional programs: Coverage rate: 8;
Regional programs: Utilization rate: 19.
Zimbabwe;
Total imports: $103.2;
All preference programs: Preference imports: $67.7;
All preference programs: Coverage rate: 95%;
All preference programs: Utilization rate: 99%;
GSP: Preference imports: 67.7;
GSP: Coverage rate: 95;
GSP: Utilization rate: 99;
Eligible for GSPLDC: [Empty];
Regional program: [Empty];
Regional programs: Preference imports: [Empty];
Regional programs: Coverage rate: [Empty];
Regional programs: Utilization rate: [Empty].
Source: GAO analysis of official U.S. trade statistics and tariff
schedule.
Note: Program eligibility information is for 2006. For detailed
information about changes in country eligibility during 2006, see GAO-
07-1209, appendix III, table 1, pages 51-55.
[End of table]
Appendix IV: U.S. Imports and Global Exports from Least-Developed
Countries (Dollars in millions):
Product group: Animal and plant products;
Imports: $408;
Imports: 2%;
Preference imports: $29;
Preference imports: 0%;
Ratio of U.S. preference to total U.S. imports: 7;
2005 LDC exports to the world: 62%.
Product group: Prepared food, beverages, spirits, and tobacco;
Imports: $90;
Imports: 0%;
Preference imports: $56;
Preference imports: 0%;
Ratio of U.S. preference to total U.S. imports: 62;
2005 LDC exports to the world: 6%.
Product group: Chemicals, plastics, and minerals except fuel;
Imports: $370;
Imports: 2%;
Preference imports: $92;
Preference imports: 1%;
Ratio of U.S. preference to total U.S. imports: 25;
2005 LDC exports to the world: 2%.
Product group: Fuel;
Imports: $15,129;
Imports: 66%;
Preference imports: $14,513;
Preference imports: 92%;
Ratio of U.S. preference to total U.S. imports: 96;
2005 LDC exports to the world: 3%.
Product group: Wood and paper products;
Imports: $12;
Imports: 0%;
Preference imports: $2;
Preference imports: 0%;
Ratio of U.S. preference to total U.S. imports: 17;
2005 LDC exports to the world: 5%.
Product group: Textiles, leather, and footwear;
Imports: $178;
Imports: 1%;
Preference imports: $5;
Preference imports: 0%;
Ratio of U.S. preference to total U.S. imports: 3;
2005 LDC exports to the world: 1%.
Product group: Apparel;
Imports: $6,214;
Imports: 27%;
Preference imports: $1,008;
Preference imports: 6%;
Ratio of U.S. preference to total U.S. imports: 16;
2005 LDC exports to the world: 16%.
Product group: Glassware, precious metals and stones, jewelry;
Imports: $179;
Imports: 1%;
Preference imports: $9;
Preference imports: 0%;
Ratio of U.S. preference to total U.S. imports: 5;
2005 LDC exports to the world: 5%.
Product group: Base metals and articles of base metals;
Imports: $38;
Imports: 0%;
Preference imports: $5;
Preference imports: 0%;
Ratio of U.S. preference to total U.S. imports: 12;
2005 LDC exports to the world: 0%.
Product group: Machinery, electronics, and high-technology apparatus;
Imports: $16;
Imports: 0%;
Preference imports: $1;
Preference imports: 0%;
Ratio of U.S. preference to total U.S. imports: 7;
2005 LDC exports to the world: 0%.
Product group: Aircraft, autos, and other transportation;
Imports: $0;
Imports: 0%;
Preference imports: $0;
Preference imports: 0%;
Ratio of U.S. preference to total U.S. imports: 30;
2005 LDC exports to the world: 0%.
Product group: Miscellaneous manufacturing;
Imports: $160;
Imports: 1%;
Preference imports: $7;
Preference imports: 0%;
Ratio of U.S. preference to total U.S. imports: 5;
2005 LDC exports to the world: 0%.
Total:
Imports: $22,796;
Imports: 100%;
Preference imports: $15,728;
Preference imports: 100%;
Ratio of U.S. preference to total U.S. imports: 69;
2005 LDC exports to the world: 100%.
Source: GAO analysis of official U.S. trade statistics and U.N. trade
statistics.
[End of table]
[End of section]
Appendix V: Preference Imports by Program and Product Group, 2006
(Dollars in billions):
Product group: Animal and plant products;
Preference imports in 2006: Value: $2.4;
Preference imports in 2006: Percentage of preference imports: 3%;
Preference imports in 2006: Percentage of total U.S. imports: 6%;
Share in each preference program: GSP: 2%;
Share in each preference program: AGOA: 0%;
Share in each preference program: ATPA/ATPDEA: 7%;
Share in each preference program: CBI/CBTPA: 9%.
Product group: Prepared food, beverages, spirits, and tobacco;
Preference imports in 2006: Value: 2.9;
Preference imports in 2006: Percentage of preference imports: 3;
Preference imports in 2006: Percentage of total U.S. imports: 8;
Share in each preference program: GSP: 4;
Share in each preference program: AGOA: 0;
Share in each preference program: ATPA/ATPDEA: 3;
Share in each preference program: CBI/CBTPA: 9.
Product group: Chemicals and plastics;
Preference imports in 2006: Value: 5.6;
Preference imports in 2006: Percentage of preference imports: 6;
Preference imports in 2006: Percentage of total U.S. imports: 3;
Share in each preference program: GSP: 12;
Share in each preference program: AGOA: 0;
Share in each preference program: ATPA/ATPDEA: 1;
Share in each preference program: CBI/CBTPA: 14.
Product group: Wood and paper products;
Preference imports in 2006: Value: 1.0;
Preference imports in 2006: Percentage of preference imports: 1;
Preference imports in 2006: Percentage of total U.S. imports: 2;
Share in each preference program: GSP: 3;
Share in each preference program: AGOA: 0;
Share in each preference program: ATPA/ATPDEA: 0;
Share in each preference program: CBI/CBTPA: 0.
Product group: Textiles, leather, and footwear;
Preference imports in 2006: Value: 0.9;
Preference imports in 2006: Percentage of preference imports: 1;
Preference imports in 2006: Percentage of total U.S. imports: 2;
Share in each preference program: GSP: 2;
Share in each preference program: AGOA: 0;
Share in each preference program: ATPA/ATPDEA: 0;
Share in each preference program: CBI/CBTPA: 1.
Product group: Glassware, precious metals and stones, jewelry;
Preference imports in 2006: Value: 6.0;
Preference imports in 2006: Percentage of preference imports: 7;
Preference imports in 2006: Percentage of total U.S. imports: 10;
Share in each preference program: GSP: 17;
Share in each preference program: AGOA: 0;
Share in each preference program: ATPA/ATPDEA: 2;
Share in each preference program: CBI/CBTPA: 3.
Product group: Base metals and articles of base metals;
Preference imports in 2006: Value: 5.1;
Preference imports in 2006: Percentage of preference imports: 6;
Preference imports in 2006: Percentage of total U.S. imports: 5;
Share in each preference program: GSP: 12;
Share in each preference program: AGOA: 0;
Share in each preference program: ATPA/ATPDEA: 8;
Share in each preference program: CBI/CBTPA: 0.
Product group: Machinery, electronics, and high-technology apparatus;
Preference imports in 2006: Value: 4.9;
Preference imports in 2006: Percentage of preference imports: 5;
Preference imports in 2006: Percentage of total U.S. imports: 1;
Share in each preference program: GSP: 14;
Share in each preference program: AGOA: 0;
Share in each preference program: ATPA/ATPDEA: 0;
Share in each preference program: CBI/CBTPA: 4.
Product group: Aircraft, autos, and other transportation;
Preference imports in 2006: Value: 1.9;
Preference imports in 2006: Percentage of preference imports: 2;
Preference imports in 2006: Percentage of total U.S. imports: 1;
Share in each preference program: GSP: 5;
Share in each preference program: AGOA: 1;
Share in each preference program: ATPA/ATPDEA: 0;
Share in each preference program: CBI/CBTPA: 0.
Product group: Miscellaneous manufacturing;
Preference imports in 2006: Value: 0.7;
Preference imports in 2006: Percentage of preference imports: 1;
Preference imports in 2006: Percentage of total U.S. imports: 0;
Share in each preference program: GSP: 2;
Share in each preference program: AGOA: 0;
Share in each preference program: ATPA/ATPDEA: 0;
Share in each preference program: CBI/CBTPA: 0.
Product group: Fuels;
Preference imports in 2006: Value: 54.8;
Preference imports in 2006: Percentage of preference imports: 59;
Preference imports in 2006: Percentage of total U.S. imports: 17;
Share in each preference program: GSP: 27;
Share in each preference program: AGOA: 94;
Share in each preference program: ATPA/ATPDEA: 68;
Share in each preference program: CBI/CBTPA: 27.
Product group: Apparel;
Preference imports in 2006: Value: 5.9;
Preference imports in 2006: Percentage of preference imports: 6;
Preference imports in 2006: Percentage of total U.S. imports: 7;
Share in each preference program: GSP: 0;
Share in each preference program: AGOA: 3;
Share in each preference program: ATPA/ATPDEA: 10;
Share in each preference program: CBI/CBTPA: 32.
Total:
Preference imports in 2006: Value: $92.1;
Preference imports in 2006: Percentage of preference imports: 100%;
Preference imports in 2006: Percentage of total U.S. imports: 5%;
Share in each preference program: GSP: 100%;
Share in each preference program: AGOA: 100%;
Share in each preference program: ATPA/ATPDEA: 100%;
Share in each preference program: CBI/CBTPA: 100%.
Source: GAO analysis of official U.S. trade statistics and tariff
schedule.
[End of table]
[End of section]
Appendix VI: GAO Contact and Staff Acknowledgments:
GAO Contact:
Loren Yager, (202) 512-4347, or yagerl@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, the following persons made
major contributions to this report: Kim Frankena, Assistant Director;
Juan Gobel, Assistant Director; Ann Baker; Gezahegne Bekele; Ken
Bombara; Karen Deans; Etana Finkler; Richard Gifford Howland; Ernie
Jackson; Marisela Perez; and Celia Thomas. The team also benefited from
the expert advice and assistance of Martin de Alteriis, Susan Offutt,
and Mark Speight.
[End of section]
Footnotes:
[1] GAO, International Trade: An Overview of Use of U.S. Trade
Preference Programs by Beneficiaries and U.S. Administrative Reviews,
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1209] (Washington,
D.C.: Sept. 27, 2007).
[2] MFN trade is a concept promulgated in Article I of the General
Agreement on Tariffs and Trade (GATT). The article provides that
contracting parties to GATT must grant each other treatment as
favorable as they give to any country in the application and
administration of import duties.
[3] See the Decision on Differential and More Favourable Treatment
Reciprocity and Fuller Participation of Developing Countries, Nov. 28,
1979, GATT Doc. L/4903, known as the Enabling Clause, paras. 3(a) and
(b).
[4] ATPA expires Dec. 31, 2008.
[5] Certain CBI countries receive enhanced benefits under CBTPA on
previously excluded products, such as apparel, footwear, handbags, etc.
These enhanced benefits expire on Sept. 30, 2008. Other CBI benefits
are permanent.
[6] GSP expires Dec. 31, 2008.
[7] Section 206 of ATPA requires ITC to prepare a biennial report
assessing the actual and the probable future effects of ATPA on U.S.
industries and U.S. consumers. The most recent is: ITC, The Impact of
the Andean Trade Preference Act, 12th Report 2005, Investigation No.
332-352 (Washington, D.C., ITC Publication 3888, September 2006).
[8] Section 215 of CBI requires ITC to report biennially to Congress
with an assessment of the actual and probable future effects of CBI on
U.S. consumers and U.S. industries. The most recent is: ITC, The Impact
of the Caribbean Basin Economic Recovery Act, 18th Report 2005-2006,
Investigation No. 332-227 (Washington, D.C.: ITC Publication 3954,
September 2007).
[9] Congressional Research Service, Generalized System of Preferences:
Background and Renewal Debate (Washington, D.C., January 2008).
[10] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1209].
[11] For more information on the overall review, see p. 41.
[12] See ITC, CBI 18th Report (Investigation No. 332-227) and ATPA 12th
Report (Investigation No. 332-352), analytical approach section.
[13] ITC defines consumer surplus as a dollar measure of gains (or
losses) to consumers resulting from lower (higher) prices.
[14] Title V of Pub. L. No. 109-432, Dec. 20, 2006.
[15] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1209].
[16] In the annual GSP review process, petitions may be filed by
interested parties to request actions allowed by the statute and
regulations governing the GSP program, including adding or removing a
product from overall GSP eligibility and waiving the CNL for a product
from a specific beneficiary. In addition, any person may file a
petition requesting that the status of any eligible beneficiary be
reviewed with respect to any of the designation criteria listed in the
statute governing the GSP program.
[17] In principle, a country granted duty-free access under U.S. trade
preference programs would see demand for its exports grow, relative to
exporting countries still facing MFN (normal) tariffs. If the exporter
is a "price taker" on world markets for its goods--i.e., if its share
of world supply is so small that it does not change world prices--it
may also be able to keep the difference between the prevailing world
market price and what it is able to charge as a result of duty savings,
thereby transferring the foregone duties to the exporting country. The
increase in exports and the duty transfer both would benefit the
exporting country. Quantifying these effects and isolating them from
other forces influencing countries' growth and development has proven
difficult. As a result, economists tend to look at descriptive data on
program coverage, use, and trade to analyze the likely effect of
preferences on countries' development.
[18] See appendix II for a discussion of our definition of eligible and
dutiable, and our methodology for calculating country trade coverage.
[19] Judith Dean and John Wainio, "Quantifying the Value of U.S. Tariff
Preferences for Developing Countries," World Bank Policy Research
Working Paper 3977 (2006), forthcoming in C. Braga, B. Hoekman, and W.
Martin, eds., Trade Preference Erosion: The Terms of the Debate (New
York: The World Bank and Palgrave Macmillan). The authors develop and
use detailed tariff rate data for all U.S. imports, and estimate ad
valorem (by value) tariff rates for goods such as agriculture and
apparel that face complex tariffs and tariff-rate quotas, as well as
the overall tariff savings from preferences by country. Such analysis
is beyond the scope of GAO's present study.
[20] Despite relatively low MFN tariffs, petroleum-related products,
chemicals, jewelry, and electrical machinery were also significant
products in the duty savings of countries. Regarding cut flowers, ITC
staff note that with duty rates of some 6.8 percent and high shipping
costs, the effective duty rate (margin of preference) is somewhat
lower.
[21] Caglar Ozden and Eric Reinhardt, "Unilateral Preference Programs:
The Evidence"; chapter 6 in Simon J. Everett and Bernard Hoekman, eds.,
Economic Development and Multilateral Trade Cooperation (Washington,
D.C.: The World Bank and Palgrave Macmillan, 2006), 197-199. For
another review of the research on trade preferences, see chapter 1,
Bernard Hoekman and Caglar Ozden, eds., Trade Preferences and
Differential Treatment of Developing Countries (Cheltenham, U.K., and
Northampton, MA: Edward Elgar, 2006), xi-xlii.
[22] The ratio of the actual imports entering the United States that
claim a preference, to the total imports that are eligible to do so, is
termed the "utilization rate." See appendix III for data and further
discussion.
[23] Some of the 12 did export under GSP.
[24] The United Nations currently designates 50 countries as "Least
Developed Countries." Least Developed Countries (LDC) are countries
which according to the United Nations meet certain specific criteria,
including a low-income criterion, a human resource weakness criterion,
and an economic vulnerability criterion. To be added to the list, a
country must satisfy all three criteria. To qualify for graduation, a
country must meet the thresholds for two of the three in two
consecutive reviews. Also, the list does not include countries whose
population exceeds 75 million. There is thus not a one-to-one
correspondence between the level of income of countries and their LDC
designation.
[25] With the entry into force of the Dominican Republic-Central
America-United States Free Trade Agreement (CAFTA-DR), the Dominican
Republic was no longer a U.S. preference program beneficiary as of Feb.
28, 2007.
[26] For further information comparing the distribution of total U.S.
preference imports in 2006 to the distribution of total LDC exports to
the world, see appendix IV. Forty-six of the 50 countries identified by
the United Nations as LDCs are U.S. preference program beneficiaries.
[27] See appendix II for further information on methodology. We
conducted the analysis at a fairly high level of product aggregation--
that is, at the two-digit level of product classification in the
Harmonized Tariff System.
[28] It should be noted that the data are for total U.S. imports for
the relevant countries (present U.S. beneficiaries) over the period.
Our more detailed analysis showed that products such as fuel, which
have come to dominate U.S. preference imports in the AGOA program, were
imported by the United States prior to the advent of the AGOA program
in 2000 and their designation as preference imports. Therefore, fuels
could be considered as a "traditional" import product by the United
States and would not generally change the diversification profile of
U.S. imports from AGOA countries.
[29] For additional background, see GAO, Foreign Assistance: U.S. Trade
Capacity Building Extensive, but Its Effectiveness Has Yet to be
Evaluated, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-150]
(Washington, D.C.: Feb. 11, 2005).
[30] USTR has provided training and outreach to producers in the
government and business associations in Turkey to promote GSP awareness
and continues to assist U.S.-based Turkish-American business
associations. Other than that, Brazil and Turkey receive little or no
assistance from U.S. agencies, such as USAID.
[31] An analysis provided GAO by the Federation of Industry of Sao
Paolo, for example, shows that inter-company trade accounted for
(depending on the sector) roughly 25 percent to 50 percent of Brazil's
GSP exports to the United States and is particularly prevalent in the
machinery, auto part, agrichemical, and glass industries.
[32] Brazil Ministry of Commerce, GSP presentation to GAO, shows that
nearly 95 percent of the value of Brazil's exports to the United States
were manufactured goods and that 33 percent of the value of Brazil
exports to the United States under GSP would otherwise face tariffs
ranging up to 2.5 percent, whereas an additional 51 percent would
otherwise face tariffs of greater than 2.5 percent but equal or less
than 5 percent, meaning that 84 percent of Brazil's preference exports
would otherwise face tariffs of 5 percent or less.
[33] The legal exclusion applies to all textile and apparel articles
that were not eligible articles on Jan. 1, 1994; all watches, except
those entered after June 30, 1989, that the President specifically
determines will not cause material injury to watch or watch band,
strap, or bracelet manufacturing and assembly operations in the United
States or its insular possessions; and all footwear, handbags, luggage,
flat goods, work gloves, and leather wearing apparel that were not
eligible articles on Jan. 1, 1995. Electronic articles, steel articles,
and semimanufactured and manufactured glass products that are
considered import-sensitive are also excluded. USTR indicated that
these categories of articles could be considered for GSP eligibility
based on a petition by an interested party and an ITC study of the
impact of such a designation on the relevant domestic producers and on
consumers.
[34] Under this multilateral agreement, which was in effect from 1974
to 1994, countries whose markets were disrupted by increased imports of
textiles and apparel from another country were able to negotiate quota
restrictions.
[35] Paul Brenton and Takako Ikezuki, "The Initial and Potential Impact
of Preferential Access to the U.S. Market under the African Growth and
Opportunity Act," World Bank Policy Research Working Paper No. 3262,
April 2004.
[36] Of the 46 LDC preference beneficiaries, 18 enjoy some form of duty-
free access for apparel in the U.S. market under AGOA or CBI/CBTPA.
[37] In addition, Aruba, Bahamas, Cayman Islands, Cyprus, French
Polynesia, Greenland, Israel, Macau, Malta, Netherlands Antilles, New
Caledonia, and Slovenia were graduated between 1995 and 2002, based on
high income. Some of these countries remain eligible for CBI and CBTPA.
[38] The GSP statute states that European Union members are ineligible
for GSP. The Czech Republic, Estonia, Hungary, Latvia, Lithuania,
Poland, and the Slovak Republic were also removed from GSP in 2004.
[39] The Dominican Republic, El Salvador, Guatemala, and Honduras were
removed from eligibility for all these programs, and Nicaragua only
from CBI/CBTPA, as it was not eligible for GSP. Upon entering a free
trade arrangement with the United States, a country gains phased duty-
free access for virtually all its exports while providing duty-free
treatment for U.S. imports. Thus, trade preferences are no longer
necessary.
[40] The CNL caps--$135 million in GSP imports of one product from a
single country in 2008, or 50 percent of all U.S. imports of the
product--are set by legislation. When GSP imports of a product reach
one of these limits, the country is denied GSP benefits for that
product unless imports fall below the CNL level in a subsequent year
and it seeks renewed designation for GSP eligibility. However, an
interested party could petition for a waiver of the CNL before imports
reach the CNL cap.
[41] A significant portion of GSP-eligible trade is not subject to the
CNL ceiling because LDCs and AGOA beneficiaries are exempt from the CNL
review.
[42] The purpose of the review was to determine whether the program
should be modified to expand participation by GSP-eligible countries
that were not major users of the program.
[43] A large developing country, such as India, may have more
competitive export industries than smaller least-developed countries,
but it also may have many more people living in poverty, who may
benefit from the economic opportunities provided under trade
preferences.
[44] Officially called the "Decision on Differential and More Favorable
Treatment, Reciprocity, and Fuller Participation of Developing
Countries," the Enabling Clause applies as part of GATT under the WTO.
[45] A CNL waiver can be revoked, after it has been in effect for 5
years or more, when imports of the product from that country reach a
ceiling equal to 1.5 times the CNL ($202.5 million in 2008), or 75
percent of all U.S. imports of the product.
[46] H.R. 3890, 110th Cong., 1st Sess. The related Senate bill (S.
2257, 110th Cong., 1st Sess.), which is currently pending before the
Senate Foreign Relations Committee, does not include the GSP provision.
[47] Members of the Southern African Customs Union are Botswana,
Lesotho, Namibia, South Africa, and Swaziland.
[48] See [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-150],
appendix IV, and GAO, World Trade Organization: Congress Faces Key
Decisions as Efforts to Reach Doha Agreement Intensity, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-379] (Washington, D.C.: Mar.
5, 2007).
[49] Selected studies include: Mary Amiti and John Romalis, "Will the
Doha Round Lead to Preference Erosion?" National Bureau of Economic
Research Working Paper, No. 12971, March 2007; Yongzheng Yang, "Africa
in the Doha Round: Dealing with Preference Erosion and Beyond," IMF
Policy Discussion Paper, PDP/05/8, November 2005; Caglar Ozden and Eric
Reinhardt, "The Perversity of Preferences: GSP and Developing Country
Trade Policies, 1976-2000," Journal of Development Economics, vol. 78
(2005), 1-21; R.E. Baldwin and T. Murray, "MFN Tariff Reductions and
Developing Country Trade Benefits Under the GSP," The Economic Journal,
vol. 87, no. 345, March 1977, 30-46.
[50] Amiti and Romalis (2007). See also: Dean and Wainio (2006);
Patrick Low, Roberta Piermartini, and Jurgen Richtering, "Multilateral
Solutions to the Erosion of Non-Reciprocal Preferences in NAMA," WTO
Economic Research and Statistics Division Working Paper, ERSD-2005-05,
October 2005; Low, Piermartini, and Richtering, "Non-Reciprocal
Preference Erosion Arising from MFN Liberalization in Agriculture: What
Are the Risks?" WTO Economic Research and Statistics Division Working
Paper, ERSD-2006-02, March 2006.
[51] Judith Dean, "Is Trade Preference Erosion Bad for Development?"
ITC Office of Economics Working Paper, No. 2006-11-A, November 2006.
[52] Products coming from CBI or ATPA countries are eligible to enter
under either the GSP program or the regional program. In contrast, AGOA
simply made all AGOA countries eligible for GSP (with certain
enhancements) but did not duplicate the product coverage of the GSP
program.
[53] On May 16, 2007, the Senate Committee on Finance held a hearing to
assess U.S. trade preference programs. U.S. Preference Programs: How
Well Do They Work? Hearing before the Senate Committee on Finance,
110th Congress (2007).
[54] "Special 301" refers to certain provisions of the Trade Act of
1974, as amended, that require USTR to annually identify foreign
countries that deny adequate and effective IPR protection or deny fair
and equitable market access for U.S. entities or individuals who rely
on IPR protection.
[55] The requirement for the Labor report is in the GSP statute.
[56] Countries placed on the Tier 2 Watch List are those countries
whose governments do not fully comply with the minimum standards but
are making significant efforts to do so; and have a very significant or
increasing number of victims; fail to show increasing efforts to combat
trafficking from previous year or have been assessed as making
significant efforts to comply based on commitments to take steps over
the next year. Countries placed in Tier 3 are those whose governments
do not comply with minimum standards and are not making significant
efforts to do so.
[57] CBI benefits were withdrawn for a limited number of products from
Honduras in 1997 and restored in 1998.
[58] AGOA requires the President to convene annual high-level meetings
between appropriate officials of the U.S. government and officials of
the governments of Sub-Saharan African countries to foster close
economic ties between the United States and Sub-Saharan Africa.
[59] The U.S. Census Bureau lists imports that qualify for regional
preference programs under chapter HTS98 (certain textiles and apparel)
under the original tariff line. Importers must provide the original
tariff line between HTS1 and HTS97 plus the HTS98 code that shows they
are eligible for trade preferences. The ITC tariff schedule only lists
the HTS98 tariff lines as eligible for preferences. Therefore, trade
data show imports under tariff lines that don't appear eligible for
trade preferences. We confirmed that this is the case with ITC. We
marked the original tariff lines as being eligible for trade
preferences under the relevant regional program with a # sign and
excluded HTS98 to avoid double counting.
[60] It should be noted that these classifications are slightly more
disaggregated than those presented in our September 2007 report.
Notably, in that report:
Agriculture includes what we present in this report under animal and
plant products and prepared food, beverages, spirits, and tobacco;
Chemicals, plastics, paper includes both chemicals and plastics and
wood and wood products;
Textiles and apparel includes both what we report under textiles,
leather, and footwear and what we report under apparel; and
Machinery and electronics includes what we report under the three
categories of machinery, electronics, and high-tech apparatus;
aircraft, autos, and other transportation; and miscellaneous
manufacturing.
[61] According to Hirschman (1964), the index is designed as a measure
when concentration is a function of both unequal distribution and
fewness. Albert O. Hirschman, "The Paternity of an Index," The American
Economic Review, vol. 54, no. 5, Sept. 1964, 761.
[62] Despite relatively low MFN tariffs, petroleum-related products,
chemicals, jewelry, and electrical machinery were also significant
products in the duty-savings of countries.
[63] Judith Dean and John Wainio, "Quantifying the Value of U.S. Tariff
Preferences for Developing Countries," World Bank Policy Research
Working Paper 3977 (2006), forthcoming in C. Braga, B. Hoekman, and W.
Martin, eds., Trade Preference Erosion: The Terms of the Debate (New
York: The World Bank and Palgrave Macmillan). The authors develop and
use detailed tariff rate data for all U.S. imports, and estimate ad
valorem (by value) tariff rates for goods such as agriculture and
apparel that face complex tariffs and tariff-rate quotas, as well as
the overall tariff savings from preferences (including GSP) by country.
Such analysis is beyond the scope of GAO's present study.
[64] Dean and Wainio (2006), 18.
[65] The data used in the Dean and Wainio analysis was for 2003.
[66] While the data on coverage and margins of preference suggest a
degree of success in improving the benefits of U.S. preference
programs, in general, recent assessments of the literature express some
skepticism as to whether trade preferences, and GSP in particular, have
had more than a very modest impact on the export performance, and hence
the development, of eligible countries. (See Hoekman and Ozden (2006)
and Caglar Ozden and Eric Reinhardt, "Unilateral Preference Programs:
The Evidence," chapter 6, in Simon J. Evenett and Bernard M. Hoekman,
eds., Economic Development and Multilateral Trade Cooperation
(Washington, D.C.: The World Bank and Palgrave Macmillan, 2006). For
example, Ozden and Reinhardt (Ozden and Reinhardt (2006) 197-199) not
only indicate that GSP often fails to cover products in which
beneficiary countries have the greatest comparative advantage, such as
agricultural products, but cite administrative features of the
programs--notably export ceilings and rules of origin--as key
constraints on benefits.
[67] Early assessments of the AGOA program, based on simulation work,
suggested that the program would benefit many African countries. One
study that focused on the possible gains from apparel exports and the
relaxation of the rules of origin estimated that AGOA could raise non-
oil exports by 8-11 percent (Mattoo, Aaditya, Devesh Roy and Arvind
Subramanian, "The Africa Growth and Opportunity Act and its Rules of
Origin: Generosity Undermined?" World Economy, 26 (6), 829-51). This
study further asserted that the estimated benefits of AGOA would be
much greater, up to fivefold, after 2005, if more liberal rules of
origin were to continue to be applied to apparel and the program had
wider coverage. Another study reiterated these points that apparel
preferences and liberal rules of origin were key to AGOA's impact but
also noted that "with the exception of clothing most of the products
liberalized under AGOA had been liberalized under GSP for LDCs." The
study indicated that AGOA is mainly about LDCs and clothing, and that
for nonoil exporters and LDCs not eligible for the clothing provisions,
the benefits of AGOA would be small (Paul Brenton and Takako Ikezuki,
"The Initial and Potential Impact of Preferential Access to the U.S.
Market under the African Growth and Opportunity Act," World Bank Policy
Research Working Paper 3262 (April 2004).
More recent studies allow an assessment of AGOA based on historical
data and subsequent to the extension of the special rules of origin for
apparel to 2012. One study uses updated empirical techniques and finds
that the apparel provisions of AGOA are associated with a 53 percent
increase in imports to the United States, and for GSP products, AGOA
accounts for a 14 percent increase. The positive effect of AGOA grew
over time and despite the dismantling of the Multi-fiber Agreement in
2005. This study also finds that AGOA also had a positive impact on the
growth of U.S. imports of GSP agricultural and manufacturing products
(Garth Frazer and Johannes Van Biesebroeck, "Trade Growth Under the
African Growth and Opportunity Act," National Bureau of Economic
Research Working Paper 13222 (July 2007). Another recent study
estimates an even larger effect from the liberalized apparel provisions
of AGOA (Paul Collier and Anthony J. Venables, "Rethinking Trade
Preferences: How Africa Can Diversify its Exports," World Economy,
August 2007, 1,326-1,345).
[End of section]
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