International Trade:

Administration of Short Supply in Steel Import Restraint Agreements

NSIAD-89-166: Published: Jun 5, 1989. Publicly Released: Jun 5, 1989.

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Pursuant to a congressional request, GAO reviewed the Department of Commerce's process for evaluating short-supply requests, through which steel consumers petition Commerce to allow additional steel imports from countries which have voluntary restraint agreements (VRA) limiting steel imports to the United States.

GAO found that: (1) as of the end of 1988, Commerce had approved 94 and denied 36 of the 161 short-supply petitions it received, with 27 petitions withdrawn and 4 pending; (2) the approved petitions resulted in an additional 1.4 million tons in steel imports; (3) Commerce used an informal administrative process and based short-supply decisions on the availability of domestic steel, without considering domestic prices; (4) steel consumers and producers believed that the program lacked clarity and openness, since Commerce lacked regulations and comprehensive program guidance and did not publicize the rationale for its decisions or the results of its reviews; (5) Commerce reduced its average processing time from 236 days to 81 days, which could still adversely affect some steel purchasers; (6) Commerce lacked a standard, publicly known deadline for completing reviews; (7) although Commerce had a tracking system to measure the timeliness of its decisions, it did not consistently track the full process from petition receipt to petitioner notification; and (8) almost half of 143 petition files examined contained such serious documentation deficiencies as missing information.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Regulations are in effect that define the requirements for adequate petitions, how short supply is determined, and require public notice of agency decisions.

    Recommendation: If VRA are extended, the Secretary of Commerce should direct the Office of Agreements Compliance to provide more process transparency by: (1) issuing comprehensive guidance or regulations on the program's requirements, policies (including decision criteria), procedures, and detailed filing information for petitioners' use; and (2) publicizing the decisions made and reasons for them.

    Agency Affected: Department of Commerce

  2. Status: Closed - Implemented

    Comments: The law and implementating regulations have created a 30-day deadline for decisions. The Office of Agreements Compliance is tracking the timeliness of its decisions.

    Recommendation: If VRA are extended, the Secretary of Commerce should direct the Office of Agreements Compliance to establish and publicize in the guidance or regulations a standard deadline for processing short supply reviews and monitor timeliness through its tracking system on the full process from petition receipt to decision notification.

    Agency Affected: Department of Commerce

  3. Status: Closed - Implemented

    Comments: The Office of Agreements Compliance is maintaining a checklist for all its files. Regulations have outlined requirements for the public record, including documentation of all exparte communication.

    Recommendation: If VRA are extended, the Secretary of Commerce should direct the Office of Agreements Compliance to ensure that official short-supply review files contain complete and official documentation, including a full case history and decision on each petition.

    Agency Affected: Department of Commerce

 

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