The Export Enhancement Program, U.S. For. Agricultural Market Development Cooperator Program, Long-Term Bilateral Grain Agts. and Countertrade, Alternative Agricultural Trade Legis. Proposals

T-NSIAD-87-15: Published: Mar 17, 1987. Publicly Released: Mar 17, 1987.

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GAO discussed the Export Enhancement Program (EEP), the Foreign Market Development Cooperator Program, and bilateral long-term grain agreements and countertrade. GAO noted that EEP is a means of increasing U.S. exports, regaining the lost U.S. market share, and disposing of surplus U.S. wheat and other agricultural commodities, but: (1) in fiscal year 1986, EEP sales represented only 3 percent of the value of total U.S. agricultural exports; and (2) U.S. exports not targeted under EEP decreased significantly in the 1986 crop year because of increased production and limited availability of foreign currency. GAO found that: (1) although there was little evidence that EEP sales directly displaced European sales for the 1986 crop year, EEP could hurt these countries if it lowered their export volume or prices; (2) EEP was designed to be budget neutral, but there were examples where individual EEP sales could result in higher government outlays; (3) cooperator programs are geared to increasing consumer and commercial uses of U.S. agricultural products and to developing long-term markets rather than achieving immediate sales; and (4) long-term bilateral grain agreements and countertrade were used extensively in countries where the government attempted to maintain and expand their market share, but these agreements declined as a result of a buyer's market. GAO concluded that more emphasis on market development, coordination of existing and newly established programs, and new markets and value-added commodities are positive responses to increasing foreign competition.

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