International Trade:

Priority Trade Damage Estimates Could Have Been Developed

NSIAD-91-236: Published: Sep 10, 1991. Publicly Released: Oct 10, 1991.

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Pursuant to a congressional request, GAO determined the U.S. Trade Representative's (USTR) progress in implementing section 310 of the Trade Act of 1974 (super-301), which requires USTR to identify those trade barriers whose elimination would have the most significant potential to increase U.S. exports, focusing on: (1) USTR criteria for designating priority unfair trade practices in 1989 and 1990; and (2) the reasons why USTR did not provide the required trade damage estimates of such practices.

GAO found that: (1) USTR chose trade liberalization priorities to support U.S. goals in the Uruguay Round of negotiations of the General Agreements on Tariffs and Trade, and established the successful conclusion of those negotiations as its primary objective in 1989 and 1990; (2) in 1989, USTR designated six priority trade-distorting practices in Japan, Brazil, and India as representative of its concerns about the global trading system; (3) in 1990, USTR continued super-301 identification of two priority practices in one country but named no other priority practices; (4) USTR officials claimed that methodological obstacles made development of the required trade damage estimates for the designated priority practices unfeasible, but USTR economists could have tailored a specific analytical approach to each of the six cases based on the availability of data, the industries affected by the priority practice, and the particular category of trade barrier involved; and (5) USTR estimates can be useful as components in negotiations to indicate to trading partners the severity of the priority practice, criteria for judging the success of the negotiated results, and the basis for a recommendation to the President of the amount of the retaliation or compensation to seek if the President decides that such action is appropriate.

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