Sub-Saharan Africa:

Factors Affecting Export Capabilities

NSIAD-88-145: Published: May 4, 1988. Publicly Released: May 4, 1988.

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In response to a congressional request, GAO reviewed Sub-Saharan African trade between the United States, the European Economic Community (EEC), and Japan to identify: (1) principal U.S., EEC, and Japanese imports from the region; (2) key restrictions that affect importation from the region; (3) EEC and Japanese trade practices aimed at reducing trade barriers to regional exports; and (4) U.S. efforts to reduce barriers and increase regional exports.

GAO found that: (1) in 1985, 94 percent of regional exports were primarily commodities, including petroleum, minerals, metals, and agricultural products; (2) most countries in the region were vulnerable to commodity market fluctuations, since they relied on two or three commodities for their export earnings; (3) 81 percent of regional exports are to industrialized market economies, with very little trade within the region; (4) most regional exports enter U.S., EEC, and Japanese industrial markets with little or no duty, since they provide special preferential tariff treatment to developing countries; (5) nontariff trade barriers have affected many nonpetroleum exports, such as quotas that cover agricultural products and higher tariffs that exclude some textiles and apparel, which could discourage countries in the region from developing these potentially competitive industries; (6) U.S. requirements for obtaining trade preferences, such as health requirements and customs regulations, adversely affect regional export ability; (7) 17 countries had 70 percent or more of their total eligible exports excluded from duty-free treatment because exporters did not or improperly prepared trade preference documentation; (8) in 1986, the U.S. government appointed a task force to end hunger in Africa that included increasing U.S.-regional trade; and (9) although the Agency for International Development (AID) received no new funds to implement the initiative, it received a $500 million appropriation for regional development and has funded some training on export laws and regulations.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: In January 1989, AID funded a regional seminar in Botswana, attended by 21 African countries, which focused on expanding the participants' understanding of Generalized Systems of Preference and other trade laws and regulations.

    Recommendation: The Administrator, AID, should expand its efforts to provide more training and seminars to better inform exporters of U.S. requirements.

    Agency Affected: United States Agency for International Development

 

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