Agricultural Marketing:

U.S. Cotton Market Before and After Import Assessments

RCED-96-49: Published: Jan 22, 1996. Publicly Released: Jan 29, 1996.

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Pursuant to a legislative requirement, GAO assessed the: (1) growth in the U.S. market for cotton and cotton products; (2) extent to which import restrictions have affected importers' ability to take advantage of any growth in the U.S. market; and (3) relevant U.S. international trade obligations and the compliance factors for imported cotton and cotton products.

GAO found that: (1) the cotton import assessment has not affected the growth rate of cotton imports; (2) the volume of imported cotton products has increased from 1.5 billion pounds in 1984 to 3.8 billion pounds in 1994; (3) the assessment is in compliance with U.S. trade obligations and is based on the principle of national treatment; (4) the Department of Agriculture (USDA) established an administrative framework for assessing cotton products, held a referendum for cotton producers and importers on whether to assess imports, set an assessment rate equivalent to domestic producer rates, and established collection procedures for cotton products with the Customs Service; (5) cotton importers frequently pay duplicative assessments on cotton products containing U.S. cotton because they have difficulty meeting the exemption criteria; and (6) producers and importers disagree on the management and oversight functions of the Cotton Board.

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