Measuring U.S.-Canada Trade:

Shifting Trade Winds May Threaten Recent Progress

GGD-94-4: Published: Jan 19, 1994. Publicly Released: Jan 19, 1994.

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GAO reviewed the current systems and processes used for measuring trade between the United States and Canada, focusing on: (1) how these systems are affected by changes in the trade environment; and (2) the United States' and Canada's ability to produce accurate and complete trade data.

GAO found that: (1) U.S. exports to Canada and other countries have been undercounted because the Customs Service has had problems in collecting export data; (2) the United States has improved the accuracy of its merchandise trade data through a bilateral agreement with Canada that authorizes import data exchanges and reconciliations; (3) additional efforts are needed to improve third-party export undercounting, controls over import documents sent between Customs and Census, reporting of Customs law violations, and data quality which could adversely affect the accuracy of U.S. merchandise trade data; (4) Customs has made significant efforts to improve its trade enforcement programs; and (5) Customs will need to adapt to changes in the international trade environment by further automating its cargo examination procedures and developing alternative methods for collecting merchandise trade data.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: GAO has no information on the actions taken in response to this recommendation.

    Recommendation: The Secretary of Commerce should instruct the Director of the Census and the Secretary of the Treasury should instruct the Commissioner of Customs to form an interagency task force to study how U.S.-Canada merchandise trade data should be collected in the future trade environment. This study should be expanded to include U.S.-Mexico trade data as the North American Free Trade Agreement is implemented. The task force could be modeled after the one that is currently in place to study ways of improving the U.S.-Canada import data exchange Memorandum of Understanding. The secretaries should consider joining with Statistics Canada and Canada Customs officials to form a bilateral task force to address this issue cooperatively.

    Agency Affected: Department of Commerce

  2. Status: Closed - Not Implemented

    Comments: The U.S. Customs Service and the Bureau of the Census formed a task force and met with representatives of Canada and Mexico to study how merchandise trade data should be collected. The effort has been suspended and Customs is reevaluating the direction of the work.

    Recommendation: The Secretary of Commerce should instruct the Director of the Census and the Secretary of the Treasury should instruct the Commissioner of Customs to form an interagency task force to study how U.S.-Canada merchandise trade data should be collected in the future trade environment. This study should be expanded to include U.S.-Mexico trade data as the North American Free Trade Agreement is implemented. The task force could be modeled after the one that is currently in place to study ways of improving the U.S.-Canada import data exchange Memorandum of Understanding. The secretaries should consider joining with Statistics Canada and Canada Customs officials to form a bilateral task force to address this issue cooperatively.

    Agency Affected: Department of the Treasury

 

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