International Trade: U.S. Trade Preference Programs Provide	 
Important Benefits, but a More Integrated Approach Would Better  
Ensure Programs Meet Shared Goals (07-MAR-08, GAO-08-443).	 
                                                                 
U.S. trade preference programs promote economic development in	 
poorer nations by providing export opportunities. The Generalized
System of Preferences, Caribbean Basin Initiative, Andean Trade  
Preference Act, and African Growth and Opportunity Act		 
unilaterally reduce U.S. tariffs for many products from over 130 
countries. However, three of these programs expire partially or  
in full this year, and Congress is exploring options as it	 
considers renewal. GAO was asked to review the programs' effects 
on the United States and on foreign beneficiaries' exports and	 
development, identify policy trade-offs concerning these	 
programs, and evaluate the overall U.S. approach to preference	 
programs. To address these objectives, we analyzed trade data,	 
reviewed trade literature and program documents, interviewed U.S.
officials, and did fieldwork in six countries.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-443 					        
    ACCNO:   A81232						        
  TITLE:     International Trade: U.S. Trade Preference Programs      
Provide Important Benefits, but a More Integrated Approach Would 
Better Ensure Programs Meet Shared Goals			 
     DATE:   03/07/2008 
  SUBJECT:   Economic analysis					 
	     Economic development				 
	     Economic growth					 
	     Economic policies					 
	     Export regulation					 
	     Financial management				 
	     Foreign economic assistance			 
	     International economic relations			 
	     International trade regulation			 
	     Program evaluation 				 
	     Program management 				 
	     Tariffs						 
	     Trade policies					 
	     Trade regulation					 
	     Program goals or objectives			 

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GAO-08-443

   

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United States Government Accountability Office: 
GAO: 

Report to the Chairman, Committee on Finance, U.S. Senate, and the 
Chairman, Committee on Ways and Means, House of Representatives: 

March 2008: 

International Trade: 

U.S. Trade Preference Programs Provide Important Benefits, but a More 
Integrated Approach Would Better Ensure Programs Meet Shared Goals: 

GAO-08-443: 

GAO Highlights: 

Highlights of GAO-08-443, a report to the Chairman, Committee on 
Finance, U.S. Senate, and Committee on Ways and Means, House of 
Representatives. 

Why GAO Did This Study: 

U.S. trade preference programs promote economic development in poorer 
nations by providing export opportunities. The Generalized System of 
Preferences, Caribbean Basin Initiative, Andean Trade Preference Act, 
and African Growth and Opportunity Act unilaterally reduce U.S. tariffs 
for many products from over 130 countries. However, three of these 
programs expire partially or in full this year, and Congress is 
exploring options as it considers renewal. 

GAO was asked to review the programsï¿½ effects on the United States and 
on foreign beneficiariesï¿½ exports and development, identify policy 
trade-offs concerning these programs, and evaluate the overall U.S. 
approach to preference programs. To address these objectives, we 
analyzed trade data, reviewed trade literature and program documents, 
interviewed U.S. officials, and did fieldwork in six countries. 

What GAO Found: 

Overall, trade preference programs have a small effect on the U.S. 
economy. Some U.S. industries have shared-production arrangements with 
foreign producers that depend on preference benefits, while others 
compete with preference imports. Preference programs are used to 
advance U.S. goals, such as intellectual property rights protection. 

Developing countries extensively use preferential access to boost 
exports to the United States. Preference imports have grown faster than 
overall U.S. imports, and recent changes in product coverage have 
expanded beneficiariesï¿½ export opportunities. Gaps in duty-free access 
continue for sectors such as agriculture and apparel. Preference 
exports remain concentrated in a few countries and products, but trends 
indicate greater diversification and increased use by the poorest 
countries. Those GAO interviewed in beneficiary countries also stressed 
the benefits derived from preferences. 

Preference programs balance two key policy trade-offs. First, programs 
offer duty-free access to the U.S. market to increase beneficiariesï¿½ 
trade, while attempting not to harm U.S. industries. Second, Congress 
faces a trade-off between longer program renewals, which may encourage 
investment, and shorter renewals, which may provide more opportunities 
to change the programs to meet evolving priorities. Finally, some 
beneficiary countriesï¿½ concerns over the eroding value of preferences 
must be weighed against the likely greater economic benefits of broader 
trade liberalization. 

Trade preference programs have proliferated over time, becoming more 
complex (as shown below), but neither Congress nor the interagency 
Trade Policy Staff Committee that manages the programs has formally 
considered them as a whole. Responsive to their legal mandates, the 
Office of the U.S. Trade Representative (USTR) and other agencies use 
different approaches to monitor compliance with program criteria, 
resulting in disconnected review processes and gaps in reporting on 
some countries and issues. Separate reporting and examination also 
hinder measuring programsï¿½ contribution to economic development. 

Figure: Growth of Trade Preference Programs: 

[See PDF for image] 

This figure is a timeline indicating the growth of trade preference 
programs from 1975 through 2006, as follows: 

Year: 1975; 
Programs: GSP; 

Year: 1983; 
Programs: GSP, CBI (added); 

Year: 1991; 
Programs: GSP, CBI, ATPA (added); 

Year: 1996; 
Programs: GSP, CBI, ATPA, LDC (added); 

Year: 2000; 
Programs: GSP, CBI, ATPA, LDC, AGOA (added), CBTPA (added); 

Year: 2002; 
Programs: GSP, CBI, ATPA, LDC, AGOA, CBTPA, ATPDEA (added); 

Year: 2006; 
Programs: GSP, CBI, ATPA, LDC, AGOA, CBTPA, ATPDEA, HOPE (added). 

Source: GAO analysis of USTR documents on Generalized System of 
Preferences, African Growth and Opportunity Act,Andean Trade Preference 
Act, and Caribbean Basin Initiative. 

[End of figure] 

What GAO Recommends: 

GAO recommends that USTR periodically review beneficiary countries that 
have not been considered under the regional programs. Additionally, 
USTR should periodically convene relevant agencies to discuss the 
programs jointly. 

Congress should consider whether trade preference programsï¿½ review and 
reporting requirements may be better integrated to facilitate 
evaluating progress in meeting shared economic development goals. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-443]. For more 
information, contact Loren Yager at (202) 512-4347 or [email protected]. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Preference Programs Have Some Economic Effects on the United States and 
Provide an Opportunity to Advance U.S. Foreign Policy: 

By Providing New Opportunities, Preferences Can Increase U.S. Imports 
from Developing Countries and Thus Promote Economic Development: 

Fundamental Program Trade-offs Balance Foreign and Domestic Benefits: 

Separate Approaches to Preference Programs Impede Assessing Whether 
They Are Meeting Shared Goals: 

Conclusions: 

Matters for Congressional Consideration: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Scope and Methodology: 

Appendix II: Additional Information on GAO Data Analysis: 

Appendix III: Coverage, Utilization, and Limitations of Preference 
Programs: 

Appendix IV: U.S. Imports and Global Exports from Least-Developed 
Countries: 

Appendix V: Preference Imports by Program and Product Group, 2006: 

Appendix VI: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: U.S. Trade Preference Programs: 

Table 2: U.S. Preference Imports, 2006: 

Table 3: Leading LDC Exporters to the United States and Their Share 
under Preference Programs, 2006: 

Table 4: Key Administrative Aspects of Trade Preferences Programs: 

Table 5: Countries Selected for GAO Field Research: 

Table 6: Coverage and Utilization Rates by Beneficiary Country and 
Preference Program, 2006: 

Figures: 

Figure 1: Product Groups with Most Dutiable Product Lines in U.S. 
Tariff Schedule, Taking Into Account All U.S. Preference Programs: 

Figure 2: The Top 25 Partners of U.S. Preference Programs, 2006: 

Figure 3: U.S. Preference Imports by Beneficiary Income Levels in 2006: 

Figure 4: Key Products in U.S. Preference Imports, 1992-2006: 

Figure 5: U.S. Preference Imports: Nonfuel, Nonapparel Sectors: 

Figure 6: Diversification Index of U.S. Imports from Preference-
Eligible Countries, 1992-2006: 

Figure 7: Growth of Trade Preference Programs: 

Figure 8: Countries Benefiting from Various Trade Preferences Programs, 
2006: 

Figure 9: Cumulative Duty-free Tariff Lines in the U.S. Tariff 
Schedule, by Preference Program: 

Figure 10: Dutiable and Duty-free Lines in U.S. Tariff Schedule by 
Product Group: 

Figure 11: Utilization Rates of U.S. Preference Program Partners, 2006: 

Abbreviations: 

AGOA: African Growth and Opportunity Act: 

ATPA: Andean Trade Preference Act: 

ATPDEA: Andean Trade Promotion and Drug Eradication Act: 

CAFTA-DR: Dominican Republic-Central America-United States Free Trade 
Agreement: 

CBERA: Caribbean Basin Economic Recovery Act: 

CBI: Caribbean Basin Initiative: 

CBO: Congressional Budget Office: 

CBTPA: Caribbean Basin Trade Partnership Act: 

CNL: competitive need limitation: 

GATT: General Agreement on Tariffs and Trade: 

GSP: Generalized System of Preferences: 

HOPE: Haitian Hemispheric Opportunity through Partnership Encouragement 
Act: 

HTS: Harmonized Tariff Schedule: 

IPR: intellectual property rights: 

ITC: U.S. International Trade Commission: 

LDC: least-developed country: 

MFN: most favored nation: 

NAFTA: North American Free Trade Agreement: 

NGO: nongovernmental organization: 

TCB: trade capacity building: 

TPSC: Trade Policy Staff Committee: 

UNCTAD: United Nations Conference on Trade and Development: 

USAID: U.S. Agency for International Development: 

USTR: Office of the U.S. Trade Representative: 

WTO: 

[End of section] 

United States Government Accountability Office: 
Washington, D.C. 20548: 

March 7, 2008: 

The Honorable Max Baucus: 
Chairman: 
Committee on Finance: 
United States Senate: 

The Honorable Charles B. Rangel: 
Chairman: 
Committee on Ways and Means: 
House of Representatives: 

In an effort to promote and achieve various U.S. foreign policy 
objectives, trade preference programs have expanded in number and scope 
over the past three decades. The purpose of these programs is to foster 
economic development through increased trade in qualified beneficiary 
countries while not harming U.S. domestic producers. The trade 
preferences, which reduce tariffs, or duties, for many products from 
eligible countries, are "nonreciprocal"--they are granted unilaterally, 
without requiring reciprocal liberalization for U.S. goods for 
countries receiving them. Currently, the United States offers the 
Generalized System of Preferences (GSP) and three regional programs, 
the Caribbean Basin Initiative (CBI), the Andean Trade Preference Act 
(ATPA), and the African Growth and Opportunity Act (AGOA). 

As we noted in our previous report on U.S. trade preference 
programs,[Footnote 1] these programs represent a small share of total 
U.S. imports, but they constitute a significant share of many 
beneficiary countries' exports to the United States. Imports under U.S. 
preference programs have grown sharply since 2002. In 2006, imports 
through U.S. trade preference programs totaled approximately $92 
billion--about 5 percent of total U.S. goods imports. 

However, while U.S. preference programs are widely used, concerns exist 
about perceived shortcomings in these programs. For example, frequent 
program lapses and renewals have created uncertainty about program 
availability, and questions have been raised about effectiveness. This 
year, three preference programs expire partially or in full; as a 
result, Congress is exploring options for improvements as it considers 
program renewal. At your request, in this report, we (1) describe how 
U.S. preference programs affect the United States, (2) review the 
effects of U.S. preference programs on foreign beneficiaries' exports 
and development, (3) identify the trade-offs policymakers face with 
respect to U.S. preference programs, and (4) evaluate the overall U.S. 
approach to preference programs. 

To address these objectives, we reviewed and analyzed U.S. laws and 
regulations and authoritative international trade documents. We 
analyzed official U.S. trade data and we spoke with officials from 
agencies participating in the Trade Policy Staff Committee (TPSC)-- 
including the Office of the U.S. Trade Representative (USTR)--and 
reviewed and analyzed documentation we received from the agencies. We 
conducted a literature search on the impacts of U.S. preference 
programs on the United States and on foreign beneficiaries. We attended 
the sixth AGOA Forum in Accra, Ghana, in July 2007. We also traveled to 
Brazil, Colombia, Haiti, Kazakhstan, and Turkey to meet with U.S. 
embassy officials, foreign officials, and industry groups using U.S. 
preference programs. We selected at least one country from each of the 
preference programs based on income levels according to the World Bank 
and United Nations and the spectrum of issues related to usage and 
capacity of each of the programs in-country (for more information on 
the how we selected these countries, see the full scope and methodology 
in app. I). We conducted this performance audit from March 2007 to 
February 2008 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Results in Brief: 

Overall, the effect of trade preference programs on the U.S. economy is 
small. Nevertheless, preference programs have economic effects on U.S. 
businesses, consumers, and the federal budget, and they provide an 
opportunity to advance U.S. trade and foreign policy. Effects on U.S. 
industries and individual businesses vary, as some have shared- 
production arrangements with foreign producers that depend heavily on 
duty-free preference benefits, while others compete with imports 
benefiting from preferences. U.S. consumers benefit to the extent that 
tariff savings result in lower prices on some products. Program costs 
include the loss of tariff revenues that would otherwise accrue to the 
U.S. Treasury. Preference programs have been used to advance U.S. 
foreign policy goals in areas such as intellectual property, labor, and 
human rights, as well as on broader market-oriented and democratic 
governance reforms. Periodic reviews under some of the programs provide 
the United States leverage to engage with governments and motivate 
policy change. 

By providing new opportunities, preferences can increase U.S. imports 
from developing countries and thus promote their economic development. 
Our analysis of U.S. tariff and trade data shows that U.S. trade 
preference programs now offer relatively extensive opportunities to 
many developing countries to increase their sales to the United States 
and have resulted in increased and somewhat more diversified U.S. 
imports from them. Gaps in product and associated duty-free coverage 
persist, continuing to limit beneficiaries' export options, in sectors 
such as agriculture and apparel; however, some key products that would 
otherwise face high tariffs have been added to regional programs, 
increasing their likely benefit to development. Available preferences 
are highly used by most partners, particularly countries that have 
access to regional programs. Fuel now accounts for more than half of 
the value of preference trade, but expansion of programs also appears 
to have helped the poorest countries increase their share of total 
preference exports. Nevertheless, some countries lack capacity to take 
advantage of the available preference opportunities. For example, 34 of 
the 46 beneficiaries designated as "least-developed" barely used U.S. 
preferences in 2006. Nevertheless, those we met in the varied range of 
beneficiary countries visited stressed the benefits they derive from 
preferences and the importance of continuing them to their trade and 
development. 

The nature and evolution of the U.S. trade preference programs require 
trade-offs among competing policy goals. One key trade-off balances the 
programs' goals of aiming to expand U.S. imports from developing 
countries and of not harming U.S. industries. Balancing this tension 
has, in some cases, resulted in products of importance to developing 
countries being excluded from preference programs. Attempts to target 
preferential trade opportunities to the poorest countries, while 
phasing out benefits to more competitive countries, may benefit 
countries other than those targeted. A second trade-off concerns the 
periodic renewal of program benefits. Private sector representatives 
have indicated that giving programs longer renewal periods or making 
them permanent would help beneficiaries attract the investment 
necessary to derive significant development benefits from the programs. 
However, program renewals offer an opportunity to engage with 
beneficiary countries on broader policy goals. Finally, the balancing 
of these trade-offs takes place against a backdrop of increasing global 
trade liberalization--a primary U.S. trade objective--which makes the 
benefits of preference programs less consequential to beneficiaries. 
Some developing countries have cited this concern in resisting 
liberalization, even though evidence suggests that, in many cases, 
there are greater economic benefits from trade openness compared with 
the costs associated with erosion of preferences. 

Separate approaches to preference programs impede assessing whether 
they are meeting their collective goal of economic development for 
beneficiary countries. Over time, trade preference programs have 
increased in number and complexity, but Congress and the interagency 
TPSC that manages the programs consider them separately. While 
following statutory requirements, agencies' approaches to monitoring 
compliance with program criteria nevertheless result in disconnected 
review processes that are separate from ongoing U.S. efforts to protect 
intellectual property rights, such as the Special 301 Review, and to 
combat trafficking in persons; they also result in gaps in reporting on 
some countries. For example, the TPSC may not review countries under 
the preference programs that are not beneficiaries of a regional 
program against the eligibility criteria for a long period of time. 
Based on statutory directions and available resources, the U.S. 
government also pursues different approaches to trade capacity building 
in conjunction with the various trade preference programs, with AGOA 
having the clearest statutory direction. Different approaches agencies 
use to report on these programs impede an integrated assessment of 
progress made under U.S. trade preferences to foster development in 
beneficiary countries. 

As Congress deliberates on whether to renew the ATPA, Caribbean Basin 
Trade Partnership Act (CBTPA), and GSP programs this calendar year, it 
should consider whether a more integrated approach would better ensure 
programs meet shared goals. Specifically, Congress should consider 
which elements of the approaches used by agencies to administer these 
programs, such as petition-initiated compliance reviews or periodic 
assessment of all countries under certain programs, have benefits that 
may be applied more broadly to trade preference programs in general. 
Congress should consider streamlining various program reporting 
requirements to facilitate evaluating the programs' progress in meeting 
their shared economic development goal. 

We are recommending in this report that USTR periodically review 
preference beneficiaries that have not otherwise been reviewed by 
virtue of their membership in the regional programs. Additionally, USTR 
should periodically convene the TPSC to discuss the programs jointly to 
determine what lessons can be learned from the various provisions 
concerning matters such as linkages to trade capacity building. USTR 
should also work through the TPSC and its associated agencies to 
consider ways to administer, evaluate, and report on preference 
programs in a more integrated manner to ensure the programs, as a 
whole, meet their shared goals. 

We provided draft copies of this report to USTR, the U.S. International 
Trade Commission (ITC), the Department of Homeland Security's U.S. 
Customs and Border Protection Agency, the U.S. Agency for International 
Development (USAID), and the Departments of Agriculture, Commerce, 
Labor, State, and Treasury. USTR and the Departments of Agriculture, 
Labor, Commerce, Treasury, and State provided extensive technical 
comments on an interagency basis. Customs, Labor, State, and ITC also 
provided separate technical comments. We have incorporated these 
comments where appropriate. USTR indicated that it would report on the 
actions taken in response to the recommendations in a letter, within 60 
days of public issuance of this report, as required under U.S. law. 

Background: 

The United States extends unilateral tariff reductions to over 130 
developing countries through one general trade preference program (GSP) 
and three regional programs--CBI, ATPA, and AGOA (see table 1). The 
preference programs are tools that the U.S. government uses to assist 
countries in the developing world. 

Table 1: U.S. Trade Preference Programs: 

Program: GSP; 
Enactment date: January 1975, Several amendments; 
Number of eligible countries, 2007: 131. 

Program: CBI[A]; 
Caribbean Basin Economic Recovery Act (CBERA); 
Enactment date: August 1983; 
Number of eligible countries, 2007: 19. 

Program: CBI[A]; 
Caribbean Basin Economic Recovery Expansion Act; 
Enactment date: Amended August 1990; 
Number of eligible countries, 2007: [Empty]. 

Program: CBI[A]; 
Caribbean Basin Trade Partnership Act (CBTPA); 
Enactment date: May 2000; 
Number of eligible countries, 2007: 9. 

Program: CBI[A]; 
Haitian Hemispheric Opportunity through Partnership Encouragement 
(HOPE) Act; 
Enactment date: December 2006; 
Number of eligible countries, 2007: 1. 

Program: ATPA[B]; 
Andean Trade Promotion and Drug Eradication Act (ATPDEA); 
Enactment date: December 1991; Amended August 2002; 
Number of eligible countries, 2007: 4. 

Program: AGOA[C]; 
Enactment date: May 2000; Several amendments; 
Number of eligible countries, 2007: 39. 

Source: GAO. 

[A] CBI is a collection of several trade preference programs. It was 
initially established in 1983 through CBERA, Pub. L. No. 98-67, Title 
II, 97 Stat. 384 (1983) and expanded in 1990 by the Caribbean Basin 
Economic Recovery Expansion Act, Pub. L. No. 101-382, Title II, 104 
Stat. 655. It was substantially expanded in 2000 by CBTPA, Pub. L. No. 
106-200, Title II, 114 Stat. 275 (2000). The most recent change to CBI 
was made by the HOPE Act of 2006, Pub. L. No. 109-432, Div. D., Title 
V, 120 Stat. 3181 (2006). In this report, we at times describe HOPE 
separately from CBI to illustrate the key characteristics of HOPE. 

[B] Pub. L. No. 102-182, Title II, 105 Stat. 1236, as amended. ATPA was 
substantially expanded in 2002 by ATPDEA, Pub. L. No. 107-210, Div. C. 
Title XXXI, 116 Stat 1023 (2002) and amended in 2006 by the Andean 
Trade Preferences Extension Act, Pub. L. No. 109-432, Div. D, Title 
VII, 120 Stat. 3194 (2006). 

[C] Pub. L. No. 106-200, Title I, 114 Stat. 252 (2000), as amended. 

[End of table] 

At the United Nations Conference on Trade and Development (UNCTAD) in 
1964, developing countries asserted that one of the major impediments 
to their accelerated economic growth and development was their 
inability to compete with developed countries in the international 
trading system; the developing countries argued that preferential 
tariffs would allow them to increase exports and foreign exchange 
earnings necessary to diversify their economies and reduce dependence 
on foreign aid. The rationale for trade preferences was that poorer 
countries need to develop industrial capacity for manufacturing in 
order to move away from dependence on imports and production of 
traditional commodities that could be subject to declining prices in 
the long term. It was argued that poorer countries also needed time to 
retain some protection to develop their "infant industries," but that 
increases in exports would be necessary to help countries capture 
economies of scale in production and earn foreign exchange. In 
addition, it was evident that some provision for the elimination of 
preferences once the industries were firmly established was necessary. 
The argument was that trade preferences should be temporary, introduced 
for a period of no less than 10 years with respect to any given 
industry in any developing country. At the end of the 10-year period, 
preferences would be withdrawn unless it could be shown that special 
circumstances warranted their continuation. 

At the second UNCTAD conference in New Delhi in 1968, the United States 
joined other participants in supporting a resolution to establish a 
mutually acceptable system of preferences. In order to permit the 
implementation of the generalized preferences, in June 1971 the 
developed countries, including the United States, were granted a 10- 
year waiver from their obligations under the global trading system, now 
embodied in the World Trade Organization (WTO), to trade on a most 
favored nation (MFN)[Footnote 2] basis. Following the granting of this 
waiver, developed countries created their GSP programs, and Congress 
enacted the U.S. GSP program in January 1975. The United States 
maintained that GSP was a temporary program to advance trade 
liberalization in the developing world, but it recognized the need to 
address the legal basis for granting these preferences, in anticipation 
of the expiration of the waiver in 1981. An agreement was reached at 
the 1979 conclusion of the Tokyo Round of Multilateral Trade 
Negotiations, known as the "Enabling Clause," which has no expiration 
date and replaces the waiver. Because the Enabling Clause applies to 
preference regimes that are "generalized, non-reciprocal, and non- 
discriminatory," separate waivers have been sought for U.S. regional 
preference programs.[Footnote 3] 

The GSP program seeks to accelerate economic growth and development in 
developing countries by providing access to the U.S. market. GSP 
establishes a basic level of product coverage common to all the 
preference programs. Over the years, Congress has also enacted a series 
of regional trade preference programs that have evolved to address U.S. 
foreign policy objectives beyond the shared general objective of 
promoting economic development. The regional programs expand on GSP to 
cover additional products that are not covered by GSP, including some 
apparel, footwear, and certain leather-related products. While regional 
programs may generally have more liberal conditions for product entry 
than GSP, these differences are more likely to affect products for 
which countries cannot receive GSP benefits (e.g., textiles and 
apparel). CBI was created to promote economic and political stability 
in the Central America and Caribbean region, to diversify exports, and 
to expand trade between those countries and the United States. ATPA was 
established to combat drug production and trafficking by providing 
sustainable economic alternatives to beneficiary countries in the 
Andean region of South America. AGOA was set up to facilitate Sub- 
Saharan Africa's integration into the global economy. 

The regional preference programs have some eligibility criteria that 
overlap with GSP, but the regional programs also set forth additional 
eligibility criteria that are not part of the GSP statute. In order to 
be eligible for AGOA, a country must also be eligible for GSP. In 
addition, all preference programs contain certain common eligibility 
requirements, such as having national policies to ensure workers' 
rights and protect intellectual property. Regional program beneficiary 
countries are subject to more extensive eligibility criteria than GSP 
beneficiary countries. For example, ATPA requires cooperation with U.S. 
counternarcotics and antiterrorism efforts, and AGOA requires that 
countries be making progress toward political pluralism and not commit 
gross violations of human rights. 

Eight agencies have key roles in administering U.S. trade preference 
programs. Led by USTR, they include the Departments of Agriculture, 
Commerce, Homeland Security, Labor, State, and Treasury, as well as 
ITC. USTR utilizes an interagency mechanism, the TPSC, and its 
associated subcommittees to consult and coordinate with these and other 
agencies such as USAID. 

This year, ATPA,[Footnote 4] CBTPA,[Footnote 5] and GSP[Footnote 6] 
expire, and Congress will need to explore the option of renewing these 
programs. At the same time, legislative proposals to provide 
additional, targeted benefits for the poorest countries are pending. In 
addition to examining the benefits trade preference programs provide, 
Congress will need to consider concerns by beneficiary and other 
developing countries, industry groups, and economic experts surrounding 
these programs. Such concerns include the potential for diversion of 
trade from other countries that these programs can cause; the 
complexity, scope of coverage, certainty, and conditionality of these 
programs; and the potential opposition to multilateral and bilateral 
import liberalization that preference programs can create. 

Preference Programs Have Some Economic Effects on the United States and 
Provide an Opportunity to Advance U.S. Foreign Policy: 

The overall effects of trade preference programs on the U.S. economy 
are small, but preference programs have direct effects on U.S. 
businesses, consumers, and the federal budget. Effects on U.S. 
industries and individual businesses vary; some have shared-production 
arrangements with preference beneficiaries, while a few U.S. industries 
compete with imports benefiting from preferences. U.S. consumers have 
benefited from lower prices resulting from duty-free imports under 
trade preference programs, while tariff revenues to the U.S. Treasury 
have been lower because of foregone tariff revenues. In addition, 
preference programs serve as a tool to advance U.S. foreign policy 
objectives. 

The Overall Effect of Trade Preference Programs on the U.S. Economy Is 
Small: 

Imports under preference programs represent a small share of total U.S. 
imports. As shown in table 2, U.S. preference imports across all 
programs accounted for about 5 percent of U.S. imports in 2006. 

Table 2: U.S. Preference Imports, 2006 (Dollars in billions): 

Total preference imports[A]: $36 (AGOA); 
Percentage of U.S. imports: 2%. 

Total preference imports[A]: $33 (GSP); 
Percentage of U.S. imports: 1.8. 

Total preference imports[A]: $13 (ATPA); 
Percentage of U.S. imports: 0.7. 

Total preference imports[A]: $10 (CBI); 
Percentage of U.S. imports: 0.5. 

Total U.S. imports: $1,845; 
Total preference imports[A]: $92; 
Percentage of U.S. imports: 5%. 

Source: GAO analysis of official U.S.trade statistics. 

[A] CBI includes CBTPA imports, and ATPA includes ATPDEA imports. 
Shares are based on dollar value of imports. Program values are based 
on preferences actually claimed upon entry. 

[End of table] 

In general, studies of the effects of preference programs on the U.S. 
economy find that the overall impact is small. For example, the ITC 
consistently finds in its biennial reports on ATPA[Footnote 7] and 
CBI[Footnote 8] that the impact of imports from these programs on the 
U.S. economy is minor. In the most recent ITC reports on ATPA and CBI, 
ITC reported again that the overall effect of imports from these 
programs on the U.S. economy continued to be negligible, representing 
only 0.09 percent and 0.10 percent, respectively, of the U.S. gross 
domestic product in 2005. Similarly, in January 2008, the Congressional 
Research Service concluded that the overall effects of GSP on the U.S. 
economy are relatively small and that the rate of increase of imports 
entering under GSP in the past 10 years is relatively flat, indicating 
that there may be little impact on the U.S. market as a whole by 
extending these preferences.[Footnote 9] 

Trade Preference Programs Have Direct Effects on Some U.S. Businesses, 
Consumers, and the Federal Budget: 

Businesses: 

Some U.S. industries and individual businesses have shared-production 
arrangements with foreign producers that depend heavily on duty-free 
preference benefits. Over the last two decades, U.S. producers of 
apparel have come to rely on "outward processing arrangements." In such 
arrangements, U.S. factories focus on relatively capital-intensive 
operations, such as fabric production. Fabrics and components are then 
shipped to CBI, ATPA, or AGOA countries, where factories conduct the 
relatively labor-intensive business of assembling the finished 
garments. 

In addition, U.S. manufacturers and importers benefit from the lower 
cost of consumer goods and raw materials imported under preference 
programs, such as jewelry, leather, and aluminum imported through GSP. 
Furthermore, U.S. manufacturers also rely on and benefit from 
intermediate goods from preference beneficiary countries. For example, 
Brazil is a major user of GSP. In 2006, 10 percent of all nonfuel 
imports to the United States from all preference programs came from 
Brazil.[Footnote 10] Much of what Brazil ships to the United States 
under GSP are intermediate goods produced by U.S.-affiliated 
multinational companies. Once exported to the United States, these 
goods are further processed or incorporated into U.S.-manufactured 
goods such as cars and power generators. Given the importance of these 
intermediate goods to domestic manufacturers, the Congressional 
Research Service reported that an expiration or modification of GSP 
would directly affect them, at least in the short term. Smaller U.S. 
businesses that regularly import inputs under a preference program may 
be especially affected by a lapse or expiration of the program because 
they rely on GSP's duty savings to compete with much larger companies, 
and they are less able to adjust to increased costs. A wide range of 
U.S. companies submitted official comments to USTR on several countries 
during an overall review of GSP in 2006.[Footnote 11] For example, 
concerning GSP imports from Thailand, U.S. companies' comments were 
overwhelmingly positive and supported continued preferential treatment 
for imports that included items such as jewelry, bottle-grade 
polyethylene terephthalate resin, motor vehicle tires, microwave ovens, 
ophthalmic lenses, televisions, cookware, golf equipment, and tuna. 

On the other hand, certain other U.S. industries compete with imports 
benefiting from preferences. For example, ITC estimates that U.S. 
methanol producers may have experienced displacement of between 5.2 
percent and 10.1 percent of production, valued at $27.6 million to 
$54.2 million in 2006, because of methanol imports from CBI countries. 
ITC also found that U.S. asparagus, fresh cut roses, chrysanthemums, 
carnations, and anthuriums may have experienced displacement of more 
than 5 percent of the value of production in 2005 because of imports 
that receive ATPA preferences. However, product coverage of the 
preference programs is dynamic, based on statutory provisions. Based on 
thresholds added by the legislation passed by Congress in December 2006 
when it extended the GSP program, the President removed GSP duty-free 
treatment for methanol from Venezuela. 

Consumers: 

U.S. consumers benefit to the extent that tariff savings result in 
lower prices on final products, as well as from the lower costs of 
intermediate goods. U.S. importers of goods who import duty-free 
components, parts, or materials under GSP maintain that the preference 
results in lower costs for these intermediate goods that, in turn, can 
be passed on to consumers. In a May 1, 2006, letter to the House Ways 
and Means and Senate Finance committees, a coalition of importers and 
retailers stated that if GSP were allowed to expire or its benefits 
were reduced, it "would impose a costly hardship on not only 
beneficiary countries but their American customers as well." As part of 
biennial reviews of CBI and ATPA, ITC assessed the effects of these 
programs on the U.S. economy, industries, and consumers.[Footnote 12] 
Following are illustrative (not comprehensive) single-year examples 
extracted from the most recent ITC reports on CBI and ATPA, 
highlighting products where U.S. consumers benefited: 

* ITC found that, in 2006, knitted cotton T-shirts provided the largest 
gain in consumer surplus[Footnote 13] ($63.7 million to $68.5 million) 
resulting exclusively from CBI tariff preferences. The price U.S. 
consumers would have paid for imports of such T-shirts from CBI 
countries would have been 12 percent higher without CBI. Men's and 
boys' woven cotton trousers or shorts provided the second-largest gain 
in consumer surplus ($56.7 million to $62.3 million). Without CBI, the 
import price of such woven cotton trousers or shorts from CBI countries 
would have been 15 percent higher. 

* ITC found that, in 2005, men's or boys' knitted shirts provided the 
largest gain in consumer surplus ($30 million to $34 million) from 
lower prices and higher consumption resulting exclusively from ATPA 
tariff preferences. 

Federal Budget: 

In December 2006, the Congressional Budget Office (CBO) issued cost 
estimates associated with the extension of GSP, ATPA, and AGOA and the 
enactment of HOPE under the Tax Relief and Health Care Act of 
2006,[Footnote 14] including the loss of tariff revenues that would 
otherwise accrue to the U.S. Treasury. In the multiyear review, CBO 
came to the following conclusions: 

* Changes to the GSP program will result in an estimated reduction in 
revenues of $297 million in 2007 and of $992 million over the 2007 to 
2009 period. This estimated reduction of revenue is due to the 
extension of GSP to December 31, 2008, and the new provisions 
concerning competitive need limit waivers. In addition, CBO estimated 
in its "Budget Outlook" for fiscal years 2007 to 2016 that revenue 
losses would amount to about $3.1 billion if GSP were extended to 2011. 

* The extension of ATPA to June 30, 2007, was estimated to result in a 
decrease in revenues of $25 million in 2007. The most recent ATPA 
extension to December 31, 2008, will result in $119 million in reduced 
revenues in 2008 and 2009, according to a February 2008 CBO cost 
estimate. 

* AGOA will result in an estimated reduction in revenues of about $2 
million in 2007, $127 million over the 2007 to 2011 period, and $180 
million over the 2007 to 2016 period. 

* The enactment of HOPE will result in an estimated reduction of $4 
million in 2007, and $28 million over the 2007 to 2011 period. 

Without econometric analysis, it may be difficult to determine whether, 
absent preferences, the same volume of goods would still be exported to 
the United States. If no or a reduced volume of exports occurs without 
the preferences, less tariff revenue would be foregone. 

Preference Programs Have Significance as a Tool to Advance U.S. Foreign 
Policy: 

Preference programs have been used to advance U.S. foreign policy goals 
in areas such as intellectual property protection, labor, and human 
rights, as well as on broader market-oriented and democratic governance 
reforms. Some supporters of GSP and other nonreciprocal preferences 
believe that the country practice criteria that developing countries 
must meet if they are to qualify for GSP provide the United States with 
political leverage that can be used to support U.S. foreign and 
commercial interests. Periodic and petition-initiated reviews under the 
programs provide the United States the opportunity to engage with 
governments and motivate policy change. As we noted in our previous 
report,[Footnote 15] these reviews serve to encourage beneficiary 
countries to comply with country eligibility criteria, such as the 
extent to which the country is providing adequate and effective 
protection of intellectual property rights (IPR), taking steps to 
afford internationally recognized worker rights, and implementing its 
commitments to eliminate the worst forms of child labor. For example, 
GSP has annual reviews of country and product eligibility, based on 
petitions (requests) filed with USTR concerning GSP beneficiary 
countries and products by U.S. industry groups, governments, and 
nongovernmental organizations (NGOs) such as labor unions.[Footnote 16] 
According to USTR, the United States works with a beneficiary country 
during a country practice review before removing it from eligibility. 
Our review of agency records and meetings with officials and interest 
groups indicate that the leverage associated with preferences creates 
an opportunity to secure improvements in IPR and labor protections. 

Regional trade preference programs also serve important foreign policy 
interests. For example, ATPA complements counternarcotics efforts by 
providing opportunities for legal crops to be exported to the U.S. 
market, thus encouraging farmers to shift away from coca and heroin 
poppy production. Similar to GSP, ATPA also has an annual review of 
country eligibility practices, based on petitions filed against 
beneficiary countries by the public; this review has not resulted in 
the withdrawal or suspension of benefits from any ATPA country. 

By Providing New Opportunities, Preferences Can Increase U.S. Imports 
from Developing Countries and Thus Promote Economic Development: 

In assessing the effects of trade preferences on beneficiary country 
development, economists note that preferences are just one element of a 
complex economic development process and that isolating their direct 
impact is difficult. However, there is fairly wide agreement among 
economists that expanding trade promotes growth and development. If 
trade preferences lead to increased exports, and export earnings are 
used to expand industrialization and promote a more diverse economy, 
then preferences can contribute to the economic development of 
beneficiary countries.[Footnote 17] To shed light on the question of 
whether U.S. trade preference programs are helping countries develop, 
we look at the fundamental link between the programs and the trade 
activity of beneficiary countries, focusing on three key elements: (1) 
the extent and nature of the new opportunities provided under U.S. 
preference programs, (2) whether countries are fully using the 
available opportunities, and (3) whether U.S. imports from 
beneficiaries have grown and diversified. We also report countries' 
perspectives on the benefits they derive from U.S. preferences, based 
on fieldwork. Overall, we find that U.S. trade preference programs have 
contributed to increased and more diverse trade for many developing 
country partners. 

Opportunities Offered Beneficiaries under U.S. Preferences Have 
Expanded: 

To assess the opportunities provided to beneficiary countries by U.S. 
preference programs, we examined the scope of programs' coverage by 
beneficiary and product, the size of tariff cuts (or margins of 
preference), and some eligibility conditions that can affect the 
ability of beneficiaries to access program opportunities. Overall, we 
found that the opportunities for beneficiaries to export under 
preferences have expanded, but still have gaps (see detailed data and 
further discussion in app. III). 

Coverage: 

As detailed in appendix III, product coverage, as measured by tariff 
lines eligible for duty-free treatment, is extensive for most U.S. 
preference programs, products, and partners. In 1996, the number of 
duty-free tariff lines offered under GSP was expanded to provide 
additional benefits to beneficiary least-developed countries (LDC). 
Enactment of the regional programs continued this expansion. But, as 
figure 1 shows, notable gaps remain in tariff lines available for duty- 
free import under preference programs, particularly in agricultural and 
textile and apparel products. 

Figure 1: Product Groups with Most Dutiable Product Lines in U.S. 
Tariff Schedule, Taking Into Account All U.S. Preference Programs: 

[See PDF for image] 

This figure is a series of pie-charts depicting the following data: 

Product group: Animal and plant products; 
Dutiable products that face MFN duties and are ineligible for U.S. 
preference programs: 8%; 
Duty-free products due to MFN or U.S. trade preference programs: 92%. 

Product group: Prepared food, beverages, spirits, and tobacco; 
Dutiable products that face MFN duties and are ineligible for U.S. 
preference programs: 17%; 
Duty-free products due to MFN or U.S. trade preference programs: 83%. 

Product group: Textiles, leather, and footwear; 
Dutiable products that face MFN duties and are ineligible for U.S. 
preference programs: 48%; 
Duty-free products due to MFN or U.S. trade preference programs: 52%. 

Product group: Apparel; 
Dutiable products that face MFN duties and are ineligible for U.S. 
preference programs: 57%; 
Duty-free products due to MFN or U.S. trade preference programs: 43%. 

Source: GAO analysis of the Harmonized Tariff Schedule of the United 
States, 2006. 

[End of figure] 

Moreover, in examining coverage by beneficiary countries' trade with 
the United States in 2006, using the ratio of eligible to dutiable 
imports[Footnote 18] for each partner, we find wide variation in 
coverage even within programs. Our analysis finds that: (1) countries 
eligible for only GSP or GSPLDC have the least coverage of partners' 
dutiable imports--approximately 25 percent, (2) regional programs and 
GSPLDC have much higher coverage of partners' dutiable imports, and (3) 
country variations in coverage are wide. For example, 35 GSP or GSPLDC 
beneficiaries, including Lebanon, Paraguay, Somalia, and Zimbabwe, have 
high coverage rates, exceeding 75 percent of the value of their 
dutiable imports. Yet, 54 GSP or GSPLDC beneficiaries such as 
Bangladesh, Egypt, Pakistan, and Uzbekistan have low coverage rates 
(less than 25 percent of dutiable imports). 

Preference Margins: 

The expansion of U.S. program coverage since 1996 appears to have 
increased the benefit of U.S. preferences by adding some key products 
under GSP-LDC and the regional programs that otherwise would face 
relatively high U.S. tariffs. A recent effort[Footnote 19] to quantify 
margins of preference (the difference between the preference rate and 
the otherwise-applicable tariff rate) across all U.S. preference 
programs, including GSP, by staff economists at ITC and the World Bank 
finds that preference margins are relatively high for apparel products, 
as well as certain agricultural goods (melons, cut flowers, frozen 
orange juice, raw cane sugar, and asparagus);[Footnote 20] they tend to 
be relatively low for other products and fairly uniform among programs. 

Program Conditions: 

Conditions on product entry are also a significant factor affecting 
opportunities and trade under U.S. preference programs. While the data 
on coverage and margins of preference suggest a degree of success in 
improving the benefits of U.S. preference programs, in general, recent 
assessments of the literature express some skepticism as to whether 
trade preferences, and GSP in particular, have had more than a very 
modest impact on the export performance, and hence the development, of 
eligible countries. In discussing factors that underlie the performance 
of preference programs, researchers Ozden and Reinhardt, for example, 
not only indicate that GSP often fails to cover products in which 
beneficiary countries have the greatest comparative advantage, such as 
agricultural products, but cite administrative features of the 
programs--notably, export ceilings and rules of origin--as key 
constraints on benefits.[Footnote 21] Nevertheless, conformity with 
such requirements can be vital to ensuring that benefits flow to the 
intended country--that is, the designated beneficiary country or 
countries, rather than countries that are ineligible for preferences. 

Two specific conditions--"competitive need limitations" and "rules of 
origin"--illustrate how administrative implementation of statutory 
provisions, although addressing important policy considerations, may 
affect the ability of beneficiary countries to fully access the 
opportunities otherwise offered by U.S. preference programs. GSP places 
export ceilings, or competitive need limitations (CNL), on eligible 
products from GSP beneficiaries that exceed specified value and import 
market share thresholds (LDCs and AGOA beneficiaries are exempt). Rules 
of origin for U.S. trade preference programs typically specify a 
minimum percentage value-added to the entering product that must come 
from the beneficiary country. However, more complex rules apply to some 
products, notably textiles and apparel. Our fieldwork revealed examples 
where complex rules-of-origin requirements appear to be complicating 
preference trade, for example, in Haiti and in Ghana. On the other 
hand, liberalizing quotas and rules of origin have been the principal 
means by which the regional programs have been liberalized or made more 
likely to permit imports in recent years, particularly on apparel 
products. 

Utilization of Regional Programs Is Fairly High Compared with GSP but 
Varies by Partner: 

The effectiveness of trade preference programs in expanding trade is 
also dependent on beneficiaries' actual use of the preference 
opportunities offered. The utilization rate indicates the extent to 
which beneficiaries are taking advantage of the opportunities 
offered.[Footnote 22] 

Our analysis shown in appendix III finds that U.S. preference programs 
have fairly high utilization rates, but utilization varies by program 
and beneficiary. Although utilization of the regional preference 
programs is higher than utilization of GSP, to some extent, this lower 
utilization of GSP reflects the fact countries that have access to both 
GSP and regional programs often opt to use the regional programs. Our 
analysis of utilization across programs by beneficiary country finds 
substantial variation. For example, under AGOA, a number of countries, 
such as Nigeria, Angola, Chad, and Gabon have high utilization rates, 
but 12 of the 38 AGOA eligible countries did not export under the 
program.[Footnote 23] 

Overall U.S. Imports from Developing Countries Have Risen, and 
Preference Imports Have Risen Even Faster: 

The improved opportunities for market access provided by U.S. 
preference programs appear to have contributed to the rapid growth in 
U.S. imports from developing countries in recent years. The total 
dollar value of U.S. imports from both developed and developing 
countries has steadily grown since 1992, but developing countries have 
witnessed much faster growth since 2000. The developing countries' 
share of total U.S. imports has increased, while the developed (high- 
income) countries' share has declined. The overall gains by developing 
countries are mostly attributable to middle-income developing 
countries. The share of low-income and LDCs remains small.[Footnote 24] 

Turning to preference imports specifically, we also find that 
preference programs have generally contributed to the increasing shares 
of developing countries in U.S. imports, particularly imports from low- 
income developing countries. However, imports under U.S. preference 
programs only accounted for about 5 percent of total U.S. imports in 
2006. Total U.S. preference imports grew from $20 billion in 1992 to 
$92 billion in 2006. Most of this growth in U.S. imports from 
preference countries has taken place since 2000, when preference 
imports grew faster than overall U.S. imports. Whereas total U.S. 
preference imports grew at an annual rate of 0.5 percent from 1992 to 
1996, the growth quickened to an annual rate of 8 percent from 1996 to 
2000, and 19 percent since 2000, which also suggests an expansionary 
effect of program changes that increased product coverage and 
liberalized rules of origin for LDCs under GSP in 1996 and African 
countries under AGOA in 2000. 

A Few Countries Dominate U.S. Preference Imports, but Lower-Income 
Countries Have Garnered a Growing Share: 

While U.S. preference imports remain concentrated in a few countries, 
overall the poorer countries' share of preference imports has risen 
recently. As can be seen from figure 2, the top 5 suppliers under 
preference programs in 2006 accounted for 58 percent of preference 
imports, and the top 10 suppliers accounted for 77 percent of 
preference imports. Among the top 10 suppliers, two countries--Nigeria 
and India--are low-income, and six countries--Angola, Ecuador, 
Colombia, Thailand, Peru, and the Dominican Republic--are lower middle- 
income countries.[Footnote 25] The top 25 preference beneficiaries 
accounted for over 95 percent of U.S. preference imports. 

Figure 2: The Top 25 Partners of U.S. Preference Programs, 2006: 

[See PDF for image] 

This figure is a chart depicting the top 25 partners of U.S. preference 
programs, 2006, as follows: 

* Top 10 countries comprise the top 77 percent of the preferences 
import market. 

* Of the top 25 preference suppliers, more than half (14) are low or 
lower middle income. 

Partner: (1) Nigeria; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $25.8; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 28%; 
Income level: low. 

Partner: (2) Angola; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $11.3; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 12%; 
Income level: low middle. 

Partner: (3) India; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $5.7; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 6%; 
Income level: low. 

Partner: (4) Ecuador; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $5.4; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 6%; 
Income level: low middle. 

Partner: (5) Colombia; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $5.0; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 5%; 
Income level: low middle. 

Partner: (6) Thailand; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $4.3; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 5%; 
Income level: low middle. 

Partner: (7) Brazil; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $3.7; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 4%; 
Income level: upper middle. 

Partner: (8) Trinidad and Tobago; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $3.7; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 4%; 
Income level: high. 

Partner: (9) Peru; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $3.4; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 4%; 
Income level: low middle. 

Partner: (10) Dominican Republic; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $2.6; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 3%; 
Income level: low middle. 

Partner: Subtotal of top ten countries; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $70.8; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 77%. 

Partner: Indonesia; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $1.9; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 2%; 
Income level: low middle. 

Partner: South Africa; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $1.8; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 2%; 
Income level: upper middle. 

Partner: Chad; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $1.7; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 2%; 
Income level: low. 

Partner: Equatorial Guinea; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $1.6; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 2%; 
Income level: upper middle. 

Partner: Costa Rica; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $1.5; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 2%; 
Income level: upper middle. 

Partner: Gabon; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $1.3; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 1%; 
Income level: upper middle. 

Partner: Phillipines; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $1.1; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 1%; 
Income level: low middle. 

Partner: Turkey; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $1.1; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 1%; 
Income level: upper middle. 

Partner: Congo; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $0.8; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 1%; 
Income level: low. 

Partner: Guatemala; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $0.7; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 1%; 
Income level: low. 

Partner: Venezuela; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $0.7; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 1%; 
Income level: low middle. 

Partner: Argentina; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $0.7; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 1%; 
Income level: low middle. 

Partner: Honduras; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $0.6; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 1%; 
Income level: low. 

Partner: Russia; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $0.5; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 1%; 
Income level: low middle. 

Partner: Kazakhstan; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $0.5; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 1%; 
Income level: low middle. 

Partner: All others; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $4.9; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 5%; 
Income level: N/A. 

Partner: Total; 
U.S. preference imports in 2006: Preference imports U.S. dollars in 
billions: $92.1; 
U.S. preference imports in 2006: Share of country and total U.S. 
preference imports: 100%. 

Source: GAO analysis of official U.S. statistics. 

[End of figure] 

Nevertheless, as figure 3 shows, the poorest countries have been more 
successful in increasing their shares in total U.S. imports under 
preferences than they have been in increasing their share of overall 
U.S. imports. The year 2000 marks the beginning of gains in preference 
imports for low-income countries and declines in the share of middle- 
income developing countries. By 2006, imports from low-income countries 
had risen to 38 percent of U.S. preference imports. Within the middle- 
income grouping, the share of upper middle-income countries has 
generally declined since 1992, while that of lower middle-income 
countries rose, then moderated; in 1996, lower middle income countries 
share surpassed that of the upper middle income countries. The share of 
U.S. preference imports from the least-developed countries was 17 
percent in 2006, versus nearly zero until 1996--the year of major 
revisions in GSP. 

Figure 3: U.S. Preference Imports by Beneficiary Income Levels in 2006: 

[See PDF for image] 

This figure is a series of line graphs and pie-charts depicting U.S. 
preference imports by beneficiary income levels in 2006. 

The first graph depicts total imports from preference beneficiaries 
under preference programs from 1992 to 2006. Four income levels are represented: Low; lower-middle; upper-middle; and total. Indicated on the graph are three specific points in time: 1999, GSP expanded; 2000, AGOA initiated; CBTPA added; and 2002, ATPDEA added, GSP renewed. The following data is depicted (U.S. dollars in billions):  

Low income: 
1992: $1.1; 
1993: $1.3; 
1994: $1.3; 
1995: $1.4; 
1996: $1.4; 
1997: $1.9; 
1998: $2.3; 
1999: $2.0; 
2000: $2.1; 
2001: $1.8; 
2002: $1.8; 
2003: $2.5; 
2004: $3.2; 
2005: $3.5; 
2006: $3.5. 

Lower-middle income: 
1992: $6.3; 
1993: $7.3; 
1994: $8.2; 
1995: $8.1; 
1996: $9.1; 
1997: $12.7; 
1998: $19.1; 
1999: $16.7; 
2000: $16.7; 
2001: $22.0; 
2002: $24.0; 
2003: $35.1; 
2004: $36.4; 
2005: $40.6; 
2006: $39.0. 

Upper-middle income: 
1992: $11.6; 
1993: $13.6; 
1994: $10.8; 
1995: $11.4; 
1996: $10.1; 
1997: $7.9; 
1998: $8.3; 
1999: $7.6; 
2000: $9.3; 
2001: $12.1; 
2002: $14.2; 
2003: $15.8; 
2004: 16.0; 
2005: $16.2; 
2006: $14.4. 

Total: 
1992: $20.0; 
1993: $23.6; 
1994: $21.6; 
1995: $21.7; 
1996: $21.4; 
1997: $23.4; 
1998: $30.7; 
1999: $27.3; 
2000: $29.4; 
2001: $54.9; 
2002: $59.7; 
2003: $79.1; 
2004: $87.2; 
2005: $95.0; 
2006: $92.1. 

The value of U.S. preference imports tripled in the decade from 1996 to 
2006, as coverage under existing programs improved, and new programs 
were added. All developing country income groups saw a rise, but low- 
and lower-middle income rose most. 

The next figure is a series of pie-charts depicting the following data: 

All U.S. imports: 

Year: 1992; 
Low income: 4%; 
Middle income: 27%; 
High income: 68%. 

Year: 2006; 
Low income: 4%; 
Middle income: 43%; 
High income: 53%. 

Preference imports: 

Year: 1992; 
Low income: 5%; 
Middle income: 90%; 
High income: 4%. 

Year: 2006; 
Low income: 38%; 
Middle income: 58%; 
High income: 4%. 

Developing countries: 
* Since 2000, preference imports have risen faster than overall U.S. 
imports. Developed (high-income) countriesï¿½ share of total U.S. trade 
fell from 1992 to 2006, as middle-income countriesï¿½ share grew. 
* Middle-income countries dominated total U.S. imports from developing 
countries in both 1992 and 2006; their dominance of preference imports 
has been slipping. 

The next three figures are line graphs, depicting the following data: 

Percentage from preference beneficiaries: Low-income countries share of 
preference imports rose to 38 percent by 2006, as the share of middle-
income countries fell from 90 to 58 percent. The following data is depicted: 

Middle income: 
1992: 90%; 
1993: 63%; 
1994: 56%; 
1995: 56%; 
1996: 51%; 
1997: 38%; 
1998: 30%; 
1999: 31%; 
2000: 36%; 
2001: 26%; 
2002: 29%; 
2003: 24%; 
2004: 22%; 
2005: 21%; 
2006: 20%. 

Low income: 
1992: 5%; 
1993: 6%; 
1994: 6%; 
1995: 6%; 
1996: 7%; 
1997: 8%; 
1998: 8%; 
1999: 7%; 
2000: 7%; 
2001: 34%; 
2002: 31%; 
2003: 32%; 
2004: 37%; 
2005: 37%; 
2006: 38%. 

Percentage from preference beneficiaries: Lower-middle income countries 
gained share at the expense of upper-middle income countries. The following data is depicted: 

Middle income: 
1992: 90%; 
1993: 63%; 
1994: 56%; 
1995: 56%; 
1996: 51%; 
1997: 38%; 
1998: 30%; 
1999: 31%; 
2000: 36%; 
2001: 26%; 
2002: 29%; 
2003: 24%; 
2004: 22%; 
2005: 21%; 
2006: 20%. 


Lower-middle income: 
1992: 32%; 
1993: 31%; 
1994: 38%; 
1995: 37%; 
1996: 43%; 
1997: 54%; 
1998: 62%; 
1999: 61%; 
2000: 57%; 
2001: 40%; 
2002: 40%; 
2003: 44%; 
2004: 42%; 
2005: 43%; 
2006: 42%. 

Upper-middle income: 
1992: 58%; 
1993: 58%; 
1994: 50%; 
1995: 52%; 
1996: 47%; 
1997: 34%; 
1998: 27%; 
1999: 28%; 
2000: 32%; 
2001: 22%; 
2002: 24%; 
2003: 20%; 
2004: 18%; 
2005: 17%; 
2006: 16%. 

Percentage from preference beneficiaries: LDCsï¿½ share has risen from 
virtually nil in 1992-1996 to about 17 percent by 2006. The following data is depicted: 

LDC: 
1992: 0%; 
1993: 1%; 
1994: 0%; 
1995: 0%; 
1996: 0%; 
1997: 11%; 
1998: 28%; 
1999: 29%; 
2000: 25%; 
2001: 15%; 
2002: 16%; 
2003: 14%; 
2004: 12%; 
2005: 15%; 
2006: 17%. 

Note: The data presented in this figure is for the current set of 
beneficiary countries. Income categories were assigned based on 2006 
rankings by the World Bank or the United Nations. Each country's income 
group remained constant for the period. In other words, if a country's 
present income status was higher in 2006 than it was previously, it is 
not captured here. 

[End of figure] 

Reliance on Preference Programs among Least-Developed Countries Varies 
Considerably: 

While our analysis shows that the LDC's share of U.S. preference 
imports has risen, the extent of their trade and reliance on 
preferences (as measured by the share of preference imports in total 
imports) varies considerably. Three LDCs--all oil exporters--rank among 
the leading suppliers of total imports into the United States under 
preference programs (Angola, Chad, and Equatorial Guinea) as shown in 
table 3. Other LDC exporters to the United States, such as Lesotho, 
Madagascar, and Haiti are also extensive users of preference programs 
and have the opportunity to export apparel under AGOA or an expanded 
CBI. In contrast, several of the top 10 LDC exporters such as 
Bangladesh, Cambodia, Liberia, Niger, Nepal, and Guinea do not have the 
opportunity to export textiles and apparel under GSP and do not rely on 
preferences to support their exports to the United States. Overall, 34 
of the 46 eligible LDCs barely used preference programs for their 
exports to the United States.[Footnote 26] 

Table 3: Leading LDC Exporters to the United States and Their Share 
under Preference Programs, 2006 (Dollars in millions): 

Country: Angola; 
Total U.S. imports: $11,514; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 98.2%. 

Country: Bangladesh; 
Total U.S. imports: $3,268; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 0.6. 

Country: Cambodia; 
Total U.S. imports: $2,188; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 0.2. 

Country: Chad; 
Total U.S. imports: $1,905; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 89.1. 

Country: Equatorial Guinea; 
Total U.S. imports: $1,718; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 90.7. 

Country: Haiti; 
Total U.S. imports: $496; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 76.7. 

Country: Lesotho; 
Total U.S. imports: $408; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 94.2. 

Country: Madagascar; 
Total U.S. imports: $281; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 82.4. 

Country: Liberia; 
Total U.S. imports: $140; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 0.0. 

Country: Niger; 
Total U.S. imports: $124; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 0.0. 

Country: Nepal; 
Total U.S. imports: $99; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 4.0. 

Country: Guinea; 
Total U.S. imports: $92; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 0.2. 

Country: Others; 
Total U.S. imports: $568; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 24.4. 

Total LDC group: 
Total U.S. imports: $22,800; 
Ratio of preference program imports to total U.S. imports from country 
or country group: 69.0%. 

Source: GAO analysis of official U.S. trade statistics. 

[End of table] 

Fuels and Apparel Dominate Preference Imports, but Overall Imports Have 
Diversified Somewhat: 

The growth in imports from developing countries is accompanied by 
significant changes in the product mix of U.S. imports from preference- 
eligible countries. Notably, the rapid rise in fuel imports since 1996 
is the defining feature of U.S. imports under preference programs. 
Fuels were less than 1 percent of U.S. imports from preference 
countries in 1996 but, in 2006, account for nearly 60 percent of U.S. 
preference imports from preference-eligible countries. Figure 4 also 
highlights the importance of apparel in the growth of U.S. preference 
imports up to 2005. After the phase out of global quotas on textiles 
and apparel in 2005 and the entry into force of the Dominican Republic- 
Central America-United States Free Trade Agreement (CAFTA-DR) for 
several CBI nations during 2006, however, these imports under 
preference programs declined somewhat. 

Figure 4: Key Products in U.S. Preference Imports, 1992-2006: 

[See PDF for image] 

This figure is a stacked multiple line graph depicting total key 
product imports from 1992 to 2006, and indicating three specific dates: 
1996: GSP expanded; 
2000: AGOA initiated and CBTPA added; 
2002: ATPDEA added, GSP renewed. 

The following approximated data has been extrapolated from the graph: 

Year: 1992; 
Product: All other products; 
Amount of imports: approximately $29 billion. 

Year: 1996; 
Product: All other products; 
Amount of imports: approximately $30 billion. 

Year: 2000; 
Product: Apparel, fuels, all other products; 
Amount of imports: approximately $35 billion: apparel ($1), fuels ($4), 
all other products ($30). 

Year: 2002; 
Product: Apparel, fuels, all other products; 
Amount of imports: approximately $63 billion: apparel ($8), fuels 
($24), all other products ($31). 

Year: 2006; 
Product: Apparel, fuels, all other products; 
Amount of imports: approximately $90 billion: apparel ($5), fuels 
($50), all other products ($35). 

Source: GAO analysis of official U.S. trade statistics. 

[End of figure] 

In 2006, fuels comprised 94 percent of all imports under AGOA, nearly 
70 percent of ATPA/ATPDEA imports, but only 27 percent each of GSP and 
CBI/CBTPA imports. Apparel imports represent about 6 percent of total 
preference imports but represent over 30 percent of U.S. imports under 
CBI, 10 percent of ATPA imports, and just 3 percent of AGOA imports 
(see app. V). Figure 5 further breaks down trends in nonfuel, 
nonapparel imports under preference programs. Notably, after 1993, when 
the North American Free Trade Agreement (NAFTA) was implemented, Mexico 
lost GSP eligibility, and global agreements to eliminate tariffs in 
certain sectors such as electronics and information technology were 
effectuated by the United States, imports under preferences of 
machinery and electronics--initially the largest product category-- 
declined, but increased somewhat after 2000. Four product areas show 
increases. The year 2000 changes in U.S. preference programs (the 
implementation of AGOA, CBTPA, and enhancements in ATPA) appear to have 
contributed to growing imports of agriculture; textiles, leather, and 
footwear; glassware, precious metals and stones, and jewelry; and 
chemicals, plastic, wood, and paper. 

Figure 5: U.S. Preference Imports: Nonfuel, Nonapparel Sectors: 

[See PDF for image] 

This figure includes a line graph depicting U.S. preference imports in 
the nonfuel and nonapparel sectors and also depict the following key 
dates: 
1996: GSP expanded; 
2000: AGOA initiated and CBTPA added; 
2002: ATPDEA added, GSP renewed. 

Lines on the graph represent the amount of U.S. preference imports in 
billions of dollars for the following products: (which were indicated 
in previous figures as "all other products") 

Machinery and electronics: 
1992: $8.3; 
1993: $10.0; 
1994: $9.3; 
1995: $9.3; 
1996: $8.7; 
1997: $7.0; 
1998: $7.3; 
1999: $4.6; 
2000: $4.8; 
2001: $4.7; 
2002: $5.4; 
2003: $5.9; 
2004: $6.3; 
2005: $6.4; 
2006: $7.5. 

Agriculture: 
1992: $3.1; 
1993: $3.7; 
1994: $3.2; 
1995: $3.1; 
1996: $3.3; 
1997: $3.7; 
1998: $3.5; 
1999: $3.4; 
2000: $3.5; 
2001: $3.6; 
2002: $3.5; 
2003: $4.4; 
2004: $4.5; 
2005: $4.8; 
2006: $5.3. 

Base metals and articles: 
1992: $2.1; 
1993: $2.4; 
1994: $2.4; 
1995: $3.0; 
1996: $2.9; 
1997: $3.4; 
1998: $3.5; 
1999: $4.5; 
2000: $5.8; 
2001: $4.9; 
2002: $4.6; 
2003: $5.2; 
2004: $4.9; 
2005: $5.2; 
2006: $5.1. 
 
Chemicals, plastics, wood, and paper: 
1992: $3.8; 
1993: $4.1; 
1994: $3.4; 
1995: $3.5; 
1996: $3.4; 
1997: $3.6; 
1998: $4.0; 
1999: $3.9; 
2000: $4.8; 
2001: $5.0; 
2002: $4.8; 
2003: $5.5; 
2004: $5.2; 
2005: $6.1; 
2006: $6.7. 

Textiles, leather, and footwear: 
1992: $0.9; 
1993: $1.1; 
1994: $1.1; 
1995: $1.0; 
1996: $0.9; 
1997: $1.0; 
1998: $1.0; 
1999: $0.5; 
2000: $0.6; 
2001: $0.6; 
2002: $0.6; 
2003: $0.7; 
2004: $0.7; 
2005: $0.8; 
2006: $0.9. 

Glassware, precious metals and stones, and jewelery: 
1992: $1.8; 
1993: $2.1; 
1994: $2.0; 
1995: $1.7; 
1996: $1.8; 
1997: $2.1; 
1998: $2.5; 
1999: $2.3; 
2000: $2.4; 
2001: $2.8; 
2002: $3.9; 
2003: $4.9; 
2004: $5.6; 
2005: $5.9; 
2006: $6.0. 

Source: GAO analysis of official U.S. trade statistics. 

[End of figure] 

Diversification of Products Imported from Some Beneficiary Countries 
Has Increased Modestly: 

An important goal of trade preferences concerns helping developing 
countries diversify the range of products that they produce and export. 
Our analysis shows that total U.S. imports from all preference-eligible 
countries remain quite concentrated when countries are grouped by their 
preference program eligibility. However, when viewed over time, imports 
from preference-eligible countries appear to have become somewhat more 
diversified since 1992. 

Our analysis of diversification of total U.S. imports from preference- 
eligible countries is shown in figure 6. Using a widely used measure of 
trade and commodity concentration, we constructed an index to show a 
value of 0 when products are extremely concentrated and a value of 1 
when products are most diversified.[Footnote 27] Consequently, a high 
value of this index indicates a relatively diversified import/export 
product mix. In figure 6, the relative level of diversification among 
the programs is indicated by the height of the line, and the change in 
the level of diversification over time is shown by the trend in the 
line from 1992 to 2006. 

Looking first at the diversification level of each program, we see that 
U.S. imports from those countries that qualify for GSP only, and those 
that import to the United States under CBI, have the most diverse 
profile. Conversely, imports from countries eligible for the AGOA, GSP- 
LDC, and ATPA show a relatively less diverse profile. This finding can 
be seen as broadly consistent with the concentration of imports under 
these preference programs in fuels and apparel products. 

Second, looking at the trend in the diversification index over time, we 
find that all country groups, except CBI, which already was the most 
diversified, show a modest increase in diversification over time. The 
highest rate of increase in diversification (as measured by the rate of 
increase of the lines in fig. 6), is noticeable for imports from 
countries eligible only for GSP. AGOA countries, which are the least 
diversified, have shown relatively little change over time.[Footnote 
28] It is also important to note that determination of diversification 
at such a high level of aggregation still allows for significant 
diversification within each broad product group. 

Figure 6: Diversification Index of U.S. Imports from Preference- 
Eligible Countries, 1992-2006: 

[See PDF for image] 

This figure is a line graph indicating the diversification of imports 
from eligible countries, from least diverse to most diverse. 
The following is depicted:  

Diversification Index of U.S. Imports from Eligible Countries: 

AGOA: 
1992: 0.13; 
1993: 0.14; 
1994: 0.14; 
1995: 0.14; 
1996: 0.16; 
1997: 0.17; 
1998: 0.19; 
1999: 0.23; 
2000: 0.23; 
2001: 0.20; 
2002: 0.23; 
2003: 0.22; 
2004: 0.21; 
2005: 0.18; 
2006: 0.20. 

GSPLDC: 
1992: 0.22; 
1993: 0.23; 
1994: 0.22; 
1995: 0.22; 
1996: 0.24; 
1997: 0.27; 
1998: 0.26; 
1999: 0.33; 
2000: 0.37; 
2001: 0.37; 
2002: 0.34; 
2003: 0.35; 
2004: 0.38; 
2005: 0.34; 
2006: 0.34. 

ATPA: 
1992: 0.44; 
1993: 0.39; 
1994: 0.41; 
1995: 0.38; 
1996: 0.38; 
1997: 0.43; 
1998: 0.42; 
1999: 0.41; 
2000: 0.47; 
2001: 0.47; 
2002: 0.47; 
2003: 0.49; 
2004: 0.50; 
2005: 0.51; 
2006: 0.53. 

GSP Only: 
1992: 0.54; 
1993: 0.54; 
1994: 0.58; 
1995: 0.60; 
1996: 0.58; 
1997: 0.61; 
1998: 0.65; 
1999: 0.68; 
2000: 0.70; 
2001: 0.68; 
2002: 0.69; 
2003: 0.69; 
2004: 0.70; 
2005: 0.70; 
2006: 0.71. 

CBI: 
1992: 0.74;  
1993: 0.74; 
1994: 0.75; 
1995: 0.75; 
1996: 0.75; 
1997: 0.73; 
1998: 0.73; 
1999: 0.74; 
2000: 0.73; 
2001: 0.72; 
2002: 0.71; 
2003: 0.72; 
2004: 0.71; 
2005: 0.73; 
2006: 0.74. 

* GSP, ATPA and GSPLDC eligible countries became more diverse. 
* CBI eligible countries did not improve but were already highly 
diverse. 
* AGOA eligible countries improved slightly but remained undiversified. 

Source: GAO analysis of official U.S. trade statistics. 

[End of figure] 

Developing Countries' Ability to Use Preference Opportunities May Be 
Constrained by Limited Trade Capacity: 

A key factor that can determine the impact of trade preference programs 
on economic development is the ability of developing countries to take 
advantage of global trading opportunities.[Footnote 29] The existence 
of a preferential tariff is of little use in countries without the 
ability to produce goods desired by importers, at competitive prices. 
This ability to produce and trade competitively on world markets, which 
is termed "trade capacity," is generally related to having the 
appropriate economic conditions and institutions that help to attract 
investment and enhance efficiency. Yet, many developing countries lack 
of trade capacity prevents them from taking full advantage of 
opportunities to export goods and services. 

The lack of trade capacity is due to inadequate economic, legal, and 
governmental infrastructure. Poor networks of roads, small and outdated 
ports, inadequate supplies of energy and other utilities, rigid 
financial institutions, inefficient or corrupt customs bureaus, and 
poorly educated citizens are some of many obstacles that can make 
production and exporting difficult and more costly. For example, in 
Haiti, an apparel manufacturer located in a government-owned industrial 
park told us they did not have reliable public sources of electricity 
or water. Therefore, they had to pay for backup electricity generators 
and trucked-in water to operate their factories. In addition, 
entrepreneurs in developing countries may have little access to 
information about markets and export standards or to affordable 
financing that would enable them to set up a successful export 
business. 

Even countries that have developed industries to produce items with 
strong global markets, with or without the assistance of preferences, 
may need to improve their trade capacity. For example, mineral 
commodities such as oil, or agricultural products such sugar and 
soybeans, are an important source of export income to many developing 
countries. However, developing a greater diversity of export industries 
requires new skills, technologies, and investment. 

Country Visits Highlight Importance Attached to Preferences, Despite 
Diversity of Recipients: 

While the impact of trade preferences on the development of beneficiary 
countries remains a subject of debate among economists and other 
analysts, our fieldwork in several beneficiary countries indicates the 
diverse range of countries being served, and most countries emphasized 
their view that U.S. trade preferences are important to their trade and 
development objectives. The countries include several whose efforts to 
use U.S. preferences are at nascent stages and several that achieved 
notable success. 

We chose to visit Haiti and Ghana because they are among the poorest 
beneficiaries and ones where mechanisms to take advantage of recently 
expanded benefits under newer preference programs--HOPE and AGOA--are 
being put in place. Overall, the people we met in Haiti and Ghana 
expected their countries will increase their use of the preferential 
access to the U.S. market, but urged continued U.S. commitment and 
patience. Following are illustrative observations from our fieldwork in 
these countries: 

* In-country officials and business representatives in Haiti see 
preferences as a much-needed engine for creating jobs in the short- 
term, attracting investment in the medium-term, and fostering growth 
over the longer-term. Haitian officials recognize Haiti must confront 
the daunting challenges of repairing its damaged infrastructure and 
international image and improving security in order to be able to 
effectively take advantage of the opportunities offered by the HOPE 
program. Haiti's base of entrepreneurs with experience in the apparel 
industry and geographic proximity to the United States are assets that 
may help the country use the new access provided by HOPE and thereby 
convince Congress to reenact it in 2011. 

* Ghanaian authorities have put in place policy reforms and are 
pursuing trade promotion initiatives to encourage the private sector to 
take advantage of export opportunities provided under AGOA. Authorities 
noted that hosting the annual AGOA forum among government, private 
sector, and civil society increased the program's visibility in the 
country. However, many of the Ghanaian business people we met were 
still in the initial stages of exporting to the United States. 
Additionally, Ghana National Chamber of Commerce officials told us many 
potential beneficiaries of the program, particularly agricultural 
producers, are still unfamiliar with the full range of opportunities 
available under AGOA, and see the program as being primarily targeted 
to the textile and apparel industry. Like Haiti, Ghana lacks such 
essential capacity as reliable energy supply and cost-competitive 
transportation. Yet, both governments were mobilizing and were 
receiving considerable on-site and other resources from various U.S. 
government and multilateral agencies to develop customs and port 
facilities, and navigate U.S. rules and requirements, etc. 

We picked Brazil and Turkey to visit because these countries have 
successfully used U.S. trade preferences to export a diverse range of 
relatively sophisticated manufactured goods. The two countries were 
also of interest because both Brazil and Turkey rely on their own 
government and government-affiliated business associations to promote 
awareness of GSP, with limited assistance from U.S. agencies such as 
USAID.[Footnote 30] Both expressed a continued need for preferences, 
even though their overall economies are growing, and they are among the 
leading developing country users of U.S. preferences. Following are 
illustrative observations from our fieldwork in these countries: 

* The government and private sector officials we met in Brazil 
emphasized that GSP benefits both nations. Information provided GAO 

shows that more than 90 percent of the value of what Brazil ships to 
the United States under GSP are raw materials and intermediate or 
capital goods, some produced by U.S.-affiliated multinationals. 
[Footnote 31] Upon arrival in the United States, these 
intermediate goods are destined for further processing and/or 
incorporation into U.S. manufactured goods such as cars and power 
generators. Officials at Brazil's Commerce and Development agencies 
have stepped up efforts to promote awareness and use of GSP, seeing it 
as a valuable tool for helping its poorest regions and boosting 
participation by smaller businesses in export markets. An analysis by 
Brazil's Commerce Ministry shows that Brazil has had more success in 
exporting manufacturing goods under GSP and that more than 80 percent 
of the products Brazil exports to the United States under GSP would 
otherwise face relatively low tariffs (facing: 

MFN tariffs set at or below 5 percent).[Footnote 32] Yet, the loss of 
such privileges in competitive need limitations (CNL) decisions has 
caused actual or likely business contraction and layoffs at two 
companies on GAO's schedule of visits (in the automotive part and 
copper wire industry). The people we met said such preferences are 
particularly important now as they face intense competition from China, 
which has displaced them in traditional industries such as leather 
footwear (which is excluded by statute from the GSP program). 
Ironically, China's rise has also coincided with a run-up in demand and 
prices for Brazil's commodities, boosting the country's total exports 
but disadvantaging its manufactured goods because the Brazilian 
currency has appreciated. 

* Turkey also has been buffeted by rising commodity prices in sectors 
such as jewelry. It has been successful in exporting a diverse range of 
manufactures to the United States under GSP, ranging from stone slabs 
to steel, and says continuing to do so is vital to its competitiveness. 
As in Brazil, the Turkish business representatives we met with said 
that profit margins are so thin in the highly competitive U.S. market 
they serve that even small preference margins make the difference 
between being able to sell or being forced to exit entirely. Indeed, 
Turkey wishes to widen the list of eligible products (e.g., hazelnuts) 
and expressed concerns over losing GSP access for products such as 
jewelry and marble that officials indicate have exceeded, or are likely 
to exceed, CNLs. They attributed exceeding CNLs in part to rising 
commodity prices, levels of aggregation in the U.S. tariff schedule 
that are too high for certain products, and the related issue of 
importer use of broader versus more specific categories to enter goods 
to avoid complications in customs classification and clearance. 

Colombia and Kazakstan were selected for high use, as well as their 
involvement in ongoing liberalization: Colombia, through a free trade 
agreement with the United States, and Kazakstan, as a result of its 
efforts to join the WTO. Following are illustrative observations from 
our fieldwork in these countries: 

* Colombia dominates the ATPA program, and exports to the United States 
accounted for 20 percent of Colombia's overall exports in 2006. Relying 
on ATPA for more than half (54 percent) of its exports to the United 
States that year, Colombia has attained success in steadily increasing 
its exports in all but 2 years since the program's inception in 1991, 
particularly since the program was expanded in 2002. Yet the range of 
products it exported under preferences is considerably narrower than 
that supplied by Brazil or Turkey. To diversify away from coca 
production and spur participation in international trade, Colombia has 
pursued improved security, political stabilization, and economic 
diversification in the years since Plan Colombia was implemented in 
2000 and the Andean Trade Preference Program was expanded in 2002. The 
Department of State and USTR credit Colombia's efforts and these 
programs, as well as strong internal and external demand, with 
revitalizing Colombia's economy. Colombian business sector spokesmen 
and government officials with whom we met generally underscored the 
important role trade preferences have played in allowing certain 
sectors, notably cut flowers, to compete in the U.S. market; however, 
they also noted that their country needs to move beyond trade 
preferences. In March 2007, Colombia's trade minister publicly stated 
that his country has effectively exhausted the utility of U.S. trade 
preferences and is eager to consummate a comprehensive free trade 
agreement with the United States. This not only will assure continued 
preferential access to the U.S. market for Colombia's exports, on which 
it depends, but provide additional access and involve reciprocal 
liberalization and rule-of-law changes in such areas as investment and 
IPR that may help it attract additional investment and innovation. 

* Kazakhstan's resource-driven economy is also booming based largely on 
its vast oil, gas, and minerals reserves, which together make up about 
two-thirds of its economic output. Its exports to the United States 
reached $1 billion in 2006, of which half was imported using GSP 
preferences. The country's development goals include managing its 
mineral wealth, integrating into the world economy, and diversifying 
its exports. Despite its goal of becoming a hub for East-West business, 
Kazakhstan faces many challenges associated with the legacy of the 
Soviet era, such as legal structures that make business formation and 
trade difficult and a business mentality of dependence on government 
subsidies. Geographically, Kazakhstan is challenged in trading with the 
United States, although opportunities for integrating regionally with 
the European Union are great. The major goal of Kazakhstan's trade 
policy at present is WTO accession. Awareness and interest in the U.S. 
GSP program was rather limited. In fact, exports of several major 
products reached CNL limits, and the country did not seek a waiver for 
its producers. The major GSP export in 2006, copper cathodes, turned 
out to be more likely a one-time event prompted by factors other than 
GSP preferences (the normal or MFN tariff rate on this product is just 
1 percent). A major producer of the country's leading preference export 
told us he sells the commodity at world prices and does not depend on 
preferences or focus on the U.S. market, due to strong demand and 
transportation linkages elsewhere. 

Fundamental Program Trade-offs Balance Foreign and Domestic Benefits: 

Preference programs balance two key trade-offs. First, programs offer 
duty-free access to the U.S. market to increase beneficiary trade, to 
the extent that it does not harm U.S. industries. Product exclusions, 
country graduation, and product import limits are tools to make this 
trade-off, although their use has raised concerns that nonbeneficiary 
countries may gain U.S. market share from a beneficiary's loss of 
preferences. Second, policymakers face a trade-off between longer or 
permanent program duration, which may encourage investment, and shorter 
renewal periods, which may provide leverage to achieve other policy 
goals. Finally, the preference programs balance these trade-offs 
against a backdrop of increasing global trade liberalization. Although 
multilateral trade liberalization is a primary U.S. trade objective and 
would be beneficial to most developing countries, liberalization 
dilutes the marginal value of the preferences to beneficiaries. This 
may affect their willingness to participate in reciprocal trade 
liberalization. However, economic studies suggest that the negative 
effects of preference erosion are outweighed by other factors, most 
notably the benefits for developing countries associated with open 
markets. 

Product Exclusions Shield Domestic Industries but Limit Magnitude of 
Preferences to Beneficiaries: 

Statutory Product Exclusions Affect Products of Importance to 
Developing Countries: 

A basic policy trade-off is the extent to which preference programs 
benefit businesses in beneficiary countries versus those in the United 
States. As described in appendix III, U.S. preference programs provide 
duty-free treatment for a little over half of the 10,500 U.S. tariff 
lines, in addition to those that are already duty-free on an MFN basis 
for all countries. But, they also exclude many other products from duty-
free status, including some that developing countries are capable of 
producing and exporting. The extent of product exclusions, therefore, 
may directly affect the ability of some developing countries to use and 
benefit from the preferences. 

Some product exclusions were established in preference legislation to 
protect sensitive U.S. industries from import competition. The GSP 
statute, for example, prohibits various "import-sensitive" categories 
of products from being designated as eligible. These include most 
textiles, apparel, watches, footwear, handbags, luggage, flat goods, 
work gloves, and leather apparel; import-sensitive electronics, steel, 
and glass products; and "any other articles which the President 
determines to be import-sensitive in the context of the Generalized 
System of Preferences."[Footnote 33] In addition, agricultural products 
subject to a tariff-rate quota are not eligible under GSP for duty-free 
treatment if such imports exceed the in-quota quantity. The regional 
preference programs exclude some of these products as well. U.S. 
tariffs on a number of these excluded products tend to be high. 

The GSP statutes provide some discretion for the administration to 
determine which items within some of these product categories are not 
import-sensitive. Specifically, for electronic, steel, and manufactured 
and semi-manufactured glass products, USTR and ITC officials told us 
that the President may determine which of these items are eligible for 
GSP benefits, based on advice from the ITC about import sensitivity. 
The administration has at times self-initiated such a determination for 
individual products, but the officials told us it has reexamined 
eligibility for large numbers of products only within the context of 
extending new benefits to subsets of countries, namely for LDCs in 1996 
and for AGOA suppliers in 2000. More often, it makes determinations for 
individual products based on petitions filed by interested parties. 
There is no discretion for administrative product additions for the 
other product categories specifically excluded by law from GSP 
eligibility. However, the statutory language for each of these other 
product categories is based on business conditions as of specific 
dates--January 1, 1994, for textiles and apparel; June 30, 1989, for 
watches; and January 1, 1995, for footwear, handbags, luggage, flat 
goods, work gloves, and leather apparel. We note that U.S. industries 
have changed in the intervening years, and these statutory provisions 
may not be up-to-date. For example, in comments to USTR on the GSP 
program in 2006, the Footwear Distributors and Retailers of America 
stated that imports now account for 99 percent of U.S. footwear sales 
and urged that the footwear exclusion be removed from the GSP 
legislation. 

According to USTR officials, the initial GSP statute provided that the 
President could not designate as eligible those "textile and apparel 
articles which are subject to textile agreements." Certain handcrafted 
wall hangings, clothing, and other hand-loomed articles were not 
covered by the Multi-Fiber Arrangement.[Footnote 34] In the late 1970s, 
the agencies administering GSP sought to provide commercial 
opportunities for handicraft producers of nonimport-sensitive items in 
interested beneficiary countries. Based on an interagency review, the 
President determined in 1981 that U.S. imports of certain wall 
hangings, pillow covers, and carpets and textile floor coverings that 
had been certified as handmade by the beneficiary country could enter 
under GSP. USTR officials told us that since that time 15 GSP 
beneficiaries have entered into such certified textile handicraft 
agreements; however, by 2007, all but two of the items originally 
covered by the presidential determination have become MFN duty-free. As 
noted above, no textile and apparel items can be added to GSP 
eligibility if they were not on the GSP-eligible tariff list as of 
January 1, 1994. 

Studies indicate that even when GSP product exclusions have been 
liberalized within the context of GSP for LDCs or the regional 
programs, remaining limits on product eligibility can affect the 
ability of beneficiary countries to use and benefit from U.S. 
preference programs. One recent study[Footnote 35] examined the 
expansion of tariff lines under AGOA. In agriculture, the study noted, 
AGOA appears to have liberalized nearly all products, although a 
substantial portion of agricultural tariff lines are still subject to 
tariff-rate quotas and, as a result, are not, in effect, fully 
liberalized. Products not fully liberalized include certain meat 
products, a large number of dairy products, many sugar products, 
chocolate, a range of prepared food products, certain tobacco products, 
and groundnuts (peanuts), the latter being of particular importance to 
some African countries. The study noted that, in manufacturing, AGOA 
liberalized additional tariff lines, but the increase is most notable 
for those countries granted apparel benefits. According to the study, 
key products that remain excluded are textile products, certain glass 
products, and certain headwear. 

A related trade-off involves deciding which developing countries can 
enjoy additional preferential benefits for products excluded for most 
preference recipients. One controversy concerns a few LDCs in Asia that 
are not included in the U.S. regional preference programs, although 
they are eligible for GSP-LDC benefits. Two of these countries-- 
Bangladesh and Cambodia--have become major producers and exporters of 
apparel to the United States and have complained about the lack of duty-
free access to this country for their goods. For example, Cambodian 
trade and industry officials argue that it is not fair that many LDCs 
enjoy preferential access to the U.S. apparel market through the 
regional preference programs, while Cambodia does not.[Footnote 36] In 
comments filed with USTR on possible U.S. proposals at WTO to provide 
duty-free, quota-free access to least-developed countries, some African 
and other beneficiary countries, as well as certain U.S. industries, 
have opposed the idea. African private sector spokesmen have raised 
concerns that giving preferential access to Bangladesh and Cambodia for 
apparel might endanger the nascent African apparel export industry that 
has grown up under AGOA, while other non-LDC developing countries have 
expressed similar concerns about their own industries. U.S. textile 
manufacturers have also protested that the possible expansion of 
apparel benefits to these countries would threaten their textile sales 
to Latin American clothing producers under the regional preference 
programs and free trade agreements. However, numerous U.S. importing 
industries, such as retail groups, are strongly in favor of these 
proposals. 

Country and Product Graduation Aim to Focus Benefits on Poorest 
Countries but May Not Achieve That Objective: 

Over the 30-year life of the GSP program, questions about which 
countries should benefit and how more benefits could be directed to 
poorer countries have been raised repeatedly. The concerns relate to 
the original intention that preference programs would confer temporary 
trade advantages on developing countries, which would eventually become 
unnecessary as the countries became more competitive. The GSP program 
has mechanisms to limit duty-free benefits by "graduating" countries 
that are no longer considered to need preferential treatment, based on 
income and competitiveness criteria. The U.S. government has used two 
approaches to graduation: outright removal of a country from GSP 
eligibility, and the more gradual approach of ending duty-free access 
for individual products from a country. 

Once a country's economy reaches a "high income" level, as indicated by 
World Bank measures of gross national income per capita, the statute 
governing GSP requires that the country be graduated from this program. 
Fifteen countries have been graduated since 1995 on that basis, 
including, most recently, Antigua and Barbuda, Bahrain, and Barbados in 
January 2006.[Footnote 37] Since 1995, nine other countries at high and 
upper-middle income levels were removed from GSP eligibility because 
they joined the European Union--most recently, Bulgaria and Romania in 
December 2006.[Footnote 38] Program regulations also allow the United 
States to remove a country from GSP after a review has found it to be 
"sufficiently developed or competitive." Four countries or customs 
territories were graduated on this basis in 1989--Singapore, South 
Korea, Taiwan, and Hong Kong. Under the regional programs, there are no 
mechanisms to graduate countries that have reached a more advanced 
level of development. However, in the last 2 years, five Central 
American/Caribbean countries were removed from GSP and CBI/CBTPA when 
they entered free trade agreements with the United States.[Footnote 39] 

More commonly, the United States uses import ceilings--CNLs--to end GSP 
duty-free status for individual products from individual countries if 
imports reach a certain level.[Footnote 40] The rationale given by USTR 
for these limits is that they indicate a country has become a 
"sufficiently competitive" exporter of the product and that ending 
preferential benefits in such a case may allow other GSP-eligible 
countries to expand their access to the U.S. market. The value of trade 
from GSP beneficiaries that is ineligible for duty-free entry because 
of the CNL ceiling is substantial. We identified $13 billion in imports 
in 2006 that could not enter duty-free under GSP due to CNL exclusions-
-over one-third of the trade from GSP beneficiaries potentially subject 
to the CNL ceiling.[Footnote 41] 

Although the intent of country and product graduation is to 
redistribute preference benefits more widely among beneficiary 
countries, some U.S. and country officials with whom we met observe 
that GSP beneficiary countries will not necessarily benefit from 
another country's loss of preference benefits. The benefits cannot be 
"transferred" directly from one country to another; rather, preferences 
are a marginal advantage that can make a country's product competitive 
only if other factors make it nearly competitive. In fact, the loss of 
a tariff preference to a given country may give an advantage to a 
country that is not a beneficiary of U.S. trade preference programs. In 
the countries we visited, we repeatedly heard concerns that China, or 
sometimes other countries, would be most likely to gain U.S. imports as 
a result of a beneficiary's loss of preferences. 

As part of an overall review of the GSP program in 2005 and 2006, USTR 
officials reviewed trade and development indicators for large users of 
the GSP program to determine whether they could be considered 
sufficiently competitive in terms of trade in eligible products and, 
therefore, should no longer be designated as GSP 
beneficiaries.[Footnote 42] USTR officials said there are inherent 
tensions between the program's statutory economic development and 
export competitiveness goals. They noted that some of the beneficiaries 
USTR reviewed were very competitive in certain industries but 
nevertheless had large numbers of poor people.[Footnote 43] Agency 
officials told us that it was important to conduct the overall review 
in a manner consistent with U.S. WTO obligations under the GATT's 
Enabling Clause, which enables developed WTO members to give 
differential and more favorable treatment to developing 
countries.[Footnote 44] 

Efforts to Remove Preferences for Competitive Products Have Raised 
Concerns: 

Efforts to target benefits to the poorest countries have resulted in 
the removal of preferences from products important to some U.S. 
businesses. In 2007, the President revoked eight CNL waivers as a 
result of legislation passed in December 2006.[Footnote 45] 
Consequently, over $3.7 billion of trade in 2006 from six GSP 
beneficiaries lost duty-free treatment. Members of the business 
community and members of Congress raised concerns that the revocation 
of these waivers would harm U.S. business interests while failing to 
provide more opportunities to poorer beneficiaries. A bill regarding 
sanctions on Burmese gems, which passed the House of Representatives in 
December 2007, had included a GSP provision that would have reinstated 
the CNL waivers for gold jewelry from Thailand and India and would have 
required the President to review the other revoked waivers. The bill 
also would have provided for the President to reinstate the other 
waivers unless ITC determined that the loss of a waiver would neither 
reduce the current level of U.S. imports of the article from the 
beneficiary nor benefit countries that are not part of GSP.[Footnote 
46] 

Periodic Program Renewal Preserves U.S. Leverage but May Discourage 
Long-term Investments: 

Policymakers also face a trade-off in setting the duration of 
preferential benefits in authorizing legislation. Preference 
beneficiaries and U.S. businesses that import from them agree that 
longer and more predictable renewal periods for program benefits are 
desirable. However, some U.S. officials believe that periodic program 
expirations can be useful as leverage to encourage countries to act in 
accordance with U.S. interests. 

Private sector and foreign government representatives have complained 
that short program renewal periods discourage longer-term productive 
investments that might be made to take advantage of preferences, such 
as factories or agribusiness ventures. They would like to see 
preference programs become permanent or have a longer duration. The 
private sector Coalition for GSP (Coalition) cites the frequent lapses 
in GSP between 1993 and 2001, with authorization periods ranging from 
10 to 27 months (and gaps between expiration and legislative renewal of 
1 to 15 months), as hindering long-term investment in beneficiary 
countries. Both USTR and the Coalition have attributed the relatively 
greater growth in GSP use after 2002 to the stability provided by a 5- 
year program reauthorization at that time. Business people say that 
predictable program rules and a longer program renewal period are 
important to them in making business plans and investment decisions in 
developing countries with confidence when they are based on preference 
benefits. For example, officials in the Colombian flower industry told 
us that ATPA's short time frame and frequent renewals made it difficult 
to attract investment needed to enable them to compete with other 
international cut-flower producers. They said investors need certainty 
about preference benefits for at least 10 years to amortize and project 
return on investment. Members of Congress have recognized this argument 
with respect to Africa and, in December 2006, Congress renewed AGOA's 
third-country fabric provisions until 2012; AGOA's general provisions 
had previously been renewed until 2015. 

On the other hand, short-term program renewals give Congress more 
opportunities to respond to changing events and political priorities. 
Threatening to let benefits lapse can be used as a way to pressure 
countries to act on an issue. While acknowledging the need for U.S. 
vigilance in pursuit of its commercial interests, officials at USTR and 
Labor told us short-term program renewal can have other adverse 
consequences, such as creating uncertainty for investors and importers 
interested in using the program. From their perspective, the discretion 
the administration exercises over continuation of program benefits 
offers sufficient leverage to achieve policy goals, based on the 
country's desire to maintain benefits and the possibility of removing 
benefits administratively through reviews of country conformity with 
eligibility requirements. 

Nevertheless, a recent instance involving ATPA has provided U.S. 
officials an opportunity to engage with beneficiary countries in the 
context of program expiration. ATPA was extended for 6 months in 
December 2006, again for 8 months in June 2007, and for 10 more months 
on February 29, 2008. These short renewal periods reflected interest in 
hastening congressional consideration of the free trade agreements with 
Peru and Colombia and concern about policies adopted by Bolivia and 
Ecuador that have negatively affected foreign investors. After the most 
recent ATPA extension, the administration said the extension would 
provide time to implement the Peru free trade agreement and for 
Congress to pass the Columbia free trade agreement. The administration 
also said it expected to see significant progress with respect to 
Bolivia and Ecuador's treatment of foreign investors. 

Global and Bilateral Trade Liberalization Diminishes Margin of 
Preferences but Is Valuable in Its Own Right: 

Global and bilateral trade liberalization is a primary U.S. trade 
policy objective, based on the premise that increased trade flows will 
support economic growth for the United States and other countries. 
However, international movement toward lowering tariffs and other trade 
barriers has an unavoidable effect on the marginal value of trade 
preferences to beneficiaries. Because of this, beneficiary countries' 
desire to keep their preferential advantages may generate some internal 
resistance to multilateral liberalization. As some countries make 
unilateral decisions to liberalize their national trade policies, and 
as others enter into bilateral and regional trade agreements that 
result in lower tariffs among trading partners, countries that rely on 
preferential margins find the advantages they gain from preferences 
fading away. 

The erosion of the value of trade preferences poses yet another trade- 
off. All of the preference programs include provisions to encourage 
countries to move into reciprocal and liberalized trading 
relationships. Indeed, a number of countries that were former 
beneficiaries of preference programs have gone on to conclude free 
trade agreements with the United States, and some have joined the ranks 
of newly industrialized nations. However, members of Congress and some 
administration officials have raised concerns that some preference 
beneficiaries are placing their interests in trade preference programs 
above the broader interest in multilateral liberalization, which the 
United States has traditionally advocated. They note that, in an effort 
to maintain their preference benefits, some beneficiary countries have 
created roadblocks at WTO in the Doha Round of negotiations. This was 
confirmed by U.S. agency officials we interviewed. The assurance of 
continued preferential access to the U.S. market has at times, created 
a disincentive to negotiation of reciprocal free trade agreements. For 
example, officials at Commerce and Labor told us that the extension of 
AGOA preferences during the negotiations toward a free trade agreement 
with members of the Southern African Customs Union[Footnote 47] may 
have contributed to the suspension of those negotiations since 
countries were already granted broad access to the U.S. market. In the 
past, spokesmen for countries that benefit from trade preferences have 
told us that any agreement reached under the Doha framework must, at a 
minimum, provide a significant transition period to allow beneficiary 
countries to adjust to the loss of preferences. Additionally, they 
questioned whether it is even fair to expect certain countries, such as 
small-island states, to survive without some trade preference 
arrangements under any deal that may be reached through WTO 
negotiations. 

As we have noted in previous reports, economic studies predict that 
global trade liberalization, such as might be achieved in a new WTO 
agreement from the Doha negotiations, would generally benefit most 
developing countries.[Footnote 48] Moreover, with regard to preference 
erosion and its impact on developing countries, some research has 
suggested that the negative effects of preference erosion may be 
outweighed by other factors--in particular, the benefits generated by 
more open trade on the part of developing countries.[Footnote 49] For 
example, one recent study estimates that while a small number of 
countries, particularly those that currently receive very large 
benefits under existing preference schemes, could experience a loss of 
market access, most countries would benefit from the expanded market 
access due to reduced tariffs under the Doha Round.[Footnote 50] 
Another recent study of the impact of preference erosion on development 
in the CBI countries notes that preference erosion occurred steadily 
over the 15 years of the study (1984 to 1998).[Footnote 51] While 
preference erosion was shown to have a small negative impact on 
investment and growth in some countries in the CBI region over the 
period studied, this effect may have been outweighed by the positive 
effects of increased utilization of preferences. In addition, the 
author finds the countries' own trade reforms (openness) may have had a 
larger impact on development than the trade preferences did. 

Separate Approaches to Preference Programs Impede Assessing Whether 
They Are Meeting Shared Goals: 

Trade preference programs have proliferated over time, but Congress has 
not considered U.S. trade preferences as a whole. In response to 
statutory requirements, agencies pursue different approaches to 
monitoring compliance with the various criteria set for programs, 
resulting in a lack of systematic review. There are other differences 
in key aspects of the preference programs, such the use of trade 
capacity building in conjunction with opportunities provided under 
trade preference programs, which is currently most prominent in AGOA. 
Finally, distinct approaches to reporting and examining the programs 
limit the United States' ability to determine the extent to which U.S. 
trade preferences foster development in beneficiary countries. 

Trade Preferences Have Proliferated, Creating a Complex Array of 
Programs, but Congress Still Considers Each Program Separately: 

Over the years, Congress has set up a number of trade preference 
programs to meet the overall goal of development, as well as specific 
regional objectives. As a result, U.S. trade preferences have evolved 
into an increasingly complex array of programs, with many countries 
participating in more than one of these programs (see fig. 7). Congress 
generally considers these programs separately partly because these 
programs have disparate termination dates, and Congress has focused on 
issues pertaining to individual programs when they have come up for 
renewal. Proposals from the administration and members of Congress 
suggest further additions to the preference programs are possible. 

Figure 7: Growth of Trade Preference Programs: 

[See PDF for image] 

This figure is a timeline indicating the growth of trade preference 
programs from 1975 through 2006, as follows: 

Year: 1975; 
Programs: GSP; 

Year: 1983; 
Programs: GSP, CBI (added); 

Year: 1991; 
Programs: GSP, CBI, ATPA (added); 

Year: 1996; 
Programs: GSP, CBI, ATPA, LDC (added); 

Year: 2000; 
Programs: GSP, CBI, ATPA, LDC, AGOA (added), CBTPA (added); 

Year: 2002; 
Programs: GSP, CBI, ATPA, LDC, AGOA, CBTPA, ATPDEA (added); 

Year: 2006; 
Programs: GSP, CBI, ATPA, LDC, AGOA, CBTPA, ATPDEA, HOPE (added). 

Source: GAO analysis of USTR documents on Generalized System of 
Preferences, African Growth and Opportunity Act,Andean Trade Preference 
Act, and Caribbean Basin Initiative. 

Note: In this figure, we use CBI to refer to CBERA, the legislation 
initially establishing CBI. See note A to table 1. 

[End of figure] 

Of the 137 countries and territories eligible for preference programs, 
as of January 1, 2007, 78 benefit from more than one (see fig. 8). The 
reason that many countries benefit from more than one program is that 
the regional preference programs have been added, as noted above, to 
further various U.S. foreign policy objectives. The regional programs 
in effect expand the preferences offered by GSP, but they result in 
overlap, with various combinations of program eligibility for certain 
countries. Thus, of the 48 countries to which the President may grant 
AGOA eligibility, 39 are eligible for AGOA, while 47 are eligible for 
GSP. The African country of Equatorial Guinea, for example, is 
ineligible for AGOA, but eligible for GSP, and it exported 
approximately $1.6 billion in fuel products to the United States under 
that program in 2006. The 59 countries eligible for only the basic GSP 
program, such as Argentina or Egypt, are neither LDCs nor part of a 
regional preference scheme. 

In the case of ATPA and CBI beneficiary countries, importers may choose 
whether to enter products eligible for the regional program and GSP 
under either one.[Footnote 52] Those importing goods from the Andean or 
Caribbean areas tend to use ATPA or CBI instead of GSP, due to the more 
liberal rules of origin and expanded product coverage for these 
programs. To a certain extent, this has mitigated the uncertainty 
associated with GSP program lapses. 

Figure 8: Countries Benefiting from Various Trade Preferences Programs, 
2006: 

[See PDF for image] 

This figure is a chart depicting the following data: 

Countries benefiting from three or four programs: 

Country: Angola; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Benin; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Burkina Faso; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Burundi; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Cape Verde; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Chad; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Congo (Kinshasa); 
Programs: GSP, GSP-LDC, AGOA. 

Country: Djibouti; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Ethiopia; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Gambia; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Guinea; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Guinea Bissau; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Lesotho; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Liberia; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Madagascar; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Malawi; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Mali; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Mauritania[A]; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Mozambique; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Niger; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Rwanda; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Sao Tome and Principe; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Sierra Leone; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Tanzania; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Uganda; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Zambia; 
Programs: GSP, GSP-LDC, AGOA. 

Country: Barbados[B]; 
Programs: GSP, CBI; CBTPA. 

Country: Belize; 
Programs: GSP, CBI; CBTPA. 

Country: Costa Rica; 
Programs: GSP, CBI; CBTPA. 

Country: Dominican Republic[C]; 
Programs: GSP, CBI; CBTPA. 

Country: El Salvador[C]; 
Programs: GSP, CBI; CBTPA. 

Country: Guatemala[C]; 
Programs: GSP, CBI; CBTPA. 

Country: Guyana; 
Programs: GSP, CBI; CBTPA. 

Country: Honduras[C]; 
Programs: GSP, CBI; CBTPA. 

Country: Jamaica; 
Programs: GSP, CBI; CBTPA. 

Country: Panama; 
Programs: GSP, CBI; CBTPA. 

Country: St. Lucia; 
Programs: GSP, CBI; CBTPA. 

Country: Trinidad and Tobago; 
Programs: GSP, CBI; CBTPA. 

Country: Haiti; 
Programs: GSP, GSP-LDC; CBI; CBTPA. 

Countries benefiting from two programs: 

Country: Afghanistan; 
Programs: GSP, GSP-LDC. 

Country: Bangladesh; 
Programs: GSP, GSP-LDC. 

Country: Bhutan; 
Programs: GSP, GSP-LDC. 

Country: Cambodia; 
Programs: GSP, GSP-LDC. 

Country: Central African Republic; 
Programs: GSP, GSP-LDC. 

Country: Comoros; 
Programs: GSP, GSP-LDC. 

Country: Equatorial Guinea; 
Programs: GSP, GSP-LDC. 

Country: Kiribati; 
Programs: GSP, GSP-LDC. 

Country: Nepal; 
Programs: GSP, GSP-LDC. 

Country: Samoa; 
Programs: GSP, GSP-LDC. 

Country: Somalia; 
Programs: GSP, GSP-LDC. 

Country: Togo; 
Programs: GSP, GSP-LDC. 

Country: Tuvalu; 
Programs: GSP, GSP-LDC. 

Country: Vanuatu; 
Programs: GSP, GSP-LDC. 

Country: Yemen; 
Programs: GSP, GSP-LDC. 

Country: Botswana; 
Programs: GSP, AGOA. 

Country: Cameroon; 
Programs: GSP, AGOA. 

Country: Congo (Brazzaville); 
Programs: GSP, AGOA. 

Country: Gabon; 
Programs: GSP, AGOA. 

Country: Ghana; 
Programs: GSP, AGOA. 

Country: Kenya; 
Programs: GSP, AGOA. 

Country: Mauritius; 
Programs: GSP, AGOA. 

Country: Namibia; 
Programs: GSP, AGOA. 

Country: Nigeria; 
Programs: GSP, AGOA. 

Country: Senegal; 
Programs: GSP, AGOA. 

Country: Seychelles; 
Programs: GSP, AGOA. 

Country: South Africa; 
Programs: GSP, AGOA. 

Country: Swaziland; 
Programs: GSP, AGOA. 

Country: Antigua and Barbuda[B]; 
Programs: GSP, CBI. 

Country: British Virgin Islands; 
Programs: GSP, CBI. 

Country: Dominica; 
Programs: GSP, CBI. 

Country: Montserrat; 
Programs: GSP, CBI. 

Country: St. Kitts and Nevis; 
Programs: GSP, CBI. 

Country: St. Vincent and the Grenadines; 
Programs: GSP, CBI. 

Country: Grenada; 
Programs: GSP, CBI. 

Country: Peru; 
Programs: GSP, ATPA. 

Country: Bolivia; 
Programs: GSP, ATPA. 

Country: Colombia; 
Programs: GSP, ATPA. 

Country: Ecuador; 
Programs: GSP, ATPA. 

Country: Nicaragua[C]; 
Programs: CBI; CBTPA. 

Countries benefiting from one program: 

Country: Albania; 
Programs: GSP. 

Country: Algeria; 
Programs: GSP. 

Country: Anguilla; 
Programs: GSP. 

Country: Argentina; 
Programs: GSP. 

Country: Armenia; 
Programs: GSP. 

Country: Bahrain[B]; 
Programs: GSP. 

Country: Bosnia and Herzegovina; 
Programs: GSP. 

Country: Brazil; 
Programs: GSP. 

Country: British Indian Ocean Territories; 
Programs: GSP. 

Country: Bulgaria[D]; 
Programs: GSP. 

Country: Christmas Island; 
Programs: GSP. 

Country: Cocos (Keeling) Islands; 
Programs: GSP. 

Country: Cook Islands; 
Programs: GSP. 

Country: Cote d'Ivoire; 
Programs: GSP. 

Country: Croatia; 
Programs: GSP. 

Country: Egypt; 
Programs: GSP. 

Country: Eritrea; 
Programs: GSP. 

Country: Falkland Islands; 
Programs: GSP. 

Country: Fiji; 
Programs: GSP. 

Country: Gaza Strip/West Bank[F]; 
Programs: GSP. 

Country: Georgia; 
Programs: GSP. 

Country: Gibraltar; 
Programs: GSP. 

Country: Heard Island and McDonald Island; 
Programs: GSP. 

Country: India; 
Programs: GSP. 

Country: Indonesia; 
Programs: GSP. 

Country: Iraq; 
Programs: GSP. 

Country: Jordan; 
Programs: GSP. 

Country: Kazakhstan; 
Programs: GSP. 

Country: Kyrgyzstan; 
Programs: GSP. 

Country: Lebanon; 
Programs: GSP. 

Country: Macedonia; 
Programs: GSP. 

Country: Moldova; 
Programs: GSP. 

Country: Mongolia; 
Programs: GSP. 

Country: Norfolk Island; 
Programs: GSP. 

Country: Niue; 
Programs: GSP. 

Country: Oman; 
Programs: GSP. 

Country: Pakistan; 
Programs: GSP. 

Country: Papua New Guinea; 
Programs: GSP. 

Country: Paraguay; 
Programs: GSP. 

Country: Phillipines; 
Programs: GSP. 

Country: Pitcaim Islands; 
Programs: GSP. 

Country: Romania[D]; 
Programs: GSP. 

Country: Russia; 
Programs: GSP. 

Country: Serbia/Montenegro; 
Programs: GSP. 

Country: Solomon Islands; 
Programs: GSP. 

Country: Sri Lanka; 
Programs: GSP. 

Country: St. Helena; 
Programs: GSP. 

Country: Suriname; 
Programs: GSP. 

Country: Thailand; 
Programs: GSP. 

Country: Tokelau; 
Programs: GSP. 

Country: Tonga; 
Programs: GSP. 

Country: Tunisia; 
Programs: GSP. 

Country: Turkey; 
Programs: GSP. 

Country: Turks and Caicos Islands; 
Programs: GSP. 

Country: Ukraine; 
Programs: GSP. 

Country: Uruguay; 
Programs: GSP. 

Country: Uzbekistan; 
Programs: GSP. 

Country: Venezuela; 
Programs: GSP. 

Country: Wallis and Futuna; 
Programs: GSP. 

Country: Zimbabwe; 
Program: GSP. 

Country: Aruba; 
Program: CBI. 

Country: Bahamas; 
Program: CBI. 

Country: Netherland Antilles; 
Program: CBI. 

Note: In the figure above, the CBTPA program is broken out because not 
all CBI countries are eligible for it. 

[A] Mauritania lost AGOA eligibility on Jan. 1, 2006, and regained AGOA 
eligibility on June 28, 2007. 

[B] Antigua and Barbuda, Bahrain, and Barbados were removed from GSP 
eligibility in January 2006 due to high per capita income. The United 
States-Bahrain Free Trade Agreement was implemented in July 2006. 

[C] The following countries were removed from eligibility for GSP, CBI, 
and CBTPA as Free Trade Agreements went into force: the Dominican 
Republic (March 2007), El Salvador (March 2006), Guatemala (July 2006), 
Honduras (April 2006), and Nicaragua (April 2006). 

[D] Bulgaria and Romania were removed from GSP eligibility in December 
2006 when they became members of the European Union. 

[E] Haiti is also eligible for the Haitian Hemispheric Opportunity 
through Partnership Encouragement Act. 

[F] Under GSP, the Gaza Strip and the West Bank are listed as a single 
entity, although they are separately identified in U.S. trade data. 

[End of figure] 

While there is overlap in various aspects of trade preference programs, 
each program is currently considered separately by Congress based on 
its distinct timetable and expiration date. Typically, when Congress 
has considered these programs for renewal, the focus has been on 
particular issues relevant to specific programs, such as 
counternarcotics cooperation efforts in the case of ATPA, or phasing 
out benefits for advanced developing countries in the case of GSP. The 
oversight difficulties associated with this array of preference 
programs and distinct timetables is compounded by different statutory 
review and reporting requirements for agencies. As explained in detail 
in the next section, in practice, these entail distinct administrative 
structures and approaches that leave gaps in assessment and use of 
tools known to be necessary to helping developing countries participate 
in trade. Congressional deliberations have not provided for cross- 
programmatic consideration or oversight. However, key congressional 
leaders appear to want to use this year's coincidence of expiration 
dates for ATPA, CBI, and GSP to look more systematically at preference 
programs and how they can be updated and improved.[Footnote 53] 

Different Approaches Agencies Use to Monitor Compliance with Program 
Criteria Result in Disconnected Reviews: 

Two different approaches--a petition process and periodic reviews--have 
evolved to monitor compliance with criteria set for various trade 
preference programs. USTR officials explained that the mechanisms for 
monitoring compliance with the criteria under specific programs reflect 
the relevant statutory requirements for each. We observed advantages 
associated with each approach, but individual program reviews appear 
disconnected and result in gaps. The petition process under GSP and 
ATPA offers certain benefits over the periodic reviews of all 
beneficiary countries that take place under AGOA and CBI. These 
regional programs' periodic reviews, on the other hand, provide an 
opportunity to engage beneficiary countries on areas of concern in a 
more consistent manner. Table 4 illustrates key administrative aspects 
of the trade preference programs, including the type of reviews 
followed to determine compliance. 

Table 4: Key Administrative Aspects of Trade Preferences Programs: 

GSP: 
Administrative mechanism: GSP subcommittee of the TPSC; 
Product addition review: Petition process developed by regulation; 
Country review: Annual petition process; 
Reporting: Reporting in GSP done via the USTR annual report; 
Trade capacity building and related assistance tied to program: 
Outreach missions to encourage greater beneficiary use of program. 

ATPA: 
Administrative mechanism: Andean subcommittee of the TPSC; 
Product addition review: No; 
Country review: Annual petition process and biennial general review; 
Reporting: Biennial operational report; 
Trade capacity building and related assistance tied to program: None. 

CBI: 
Administrative mechanism: Caribbean subcommittee of the TPSC; 
Product addition review: No; 
Country review: Biennial general review; 
Reporting: Biennial operational report; 
Trade capacity building and related assistance tied to program: None. 

AGOA: 
Administrative mechanism: AGOA implementation subcommittee of the TPSC; 
Product addition review: GSP petition process to determine product 
additions; 
Country review: Annual eligibility determination; 
Reporting: Annual report on U.S. Trade and Investment Policy toward Sub-
Saharan Africa and Implementation of AGOA[A]; 
Trade capacity building and related assistance tied to program: 
Multiple legislative directions to trade capacity building with 
specific program linked to AGOA eligibility. 

Source: GAO analysis of official USTR documents. 

[A] The 2007 Annual Report on AGOA was the sixth of eight required by 
law. 

[End of table] 

Petition Process Responds to Concerns but Does Not Ensure Consistent 
Review or Systematically Incorporate Other U.S. Government Efforts: 

GSP reviews of product and country practice petitions have the 
advantage of adapting the programs to changing market conditions and 
the concerns of businesses, foreign governments, and others. Most 
petitions originate outside the government, and agency officials, and 
NGO and private sector representatives cited the value of the petition 
process in bringing forward concerns related to intellectual property 
rights and workers' rights. The process also brings to bear the 
knowledge of NGOs and others about problems in these areas and helps 
the government pursue credible cases. Private sector and labor 
representatives also said that they appreciated the petition process 
because it compels a formal decision from the government on the merits 
of a complaint and draws public attention to an issue. The process 
allows U.S. petitioners to seek and obtain resolution of trade-related 
concerns. For example, from 2001 through 2006, USTR conducted an 
investigation on copyright piracy and enforcement in Brazil in response 
to a petition filed under GSP by a coalition of seven trade 
associations concerned about IPR violations in that country. The 
investigation resulted in an agreement between the U.S. and Brazilian 
governments, hailed by the petitioner, to increase antipiracy raids in 
well-known marketplaces, establish antipiracy task forces at the state 
and local level in Brazil, and enhance deterrence through criminal 
prosecutions, among other actions. 

However, a petition-driven process also can result in a long time 
passing between reviews of country compliance with the criteria for 
participation. From 2001 to 2006, when the number of GSP beneficiaries 
ranged from 146 to 132, USTR considered petitions against 32 countries. 
While some of these nations are reviewed under the regional preference 
programs, approximately three-quarters of the countries eligible only 
for GSP did not get examined at all for their conformity with 
eligibility criteria from 2001 through 2006. Long periods of time 
passed between overall reviews of GSP as well. As mentioned earlier, 
USTR initiated an overall review of the GSP program in October 2005. 
USTR completed the last general review of the program more than 18 
years earlier in January 1987. A U.S. official told us that some of the 
countries reviewed frequently are not necessarily those that perform 
the worst relative to the criteria for participation, but rather those 
countries of most concern to particular groups, such as businesses or 
NGOs. In this sense, U.S. government resources may be unduly invested 
in performing repeated reviews of a country that is of particular 
concern to a given interest group, while other countries with potential 
problems receive substantially less scrutiny. 

A second weakness is that the petition-driven review fails to 
systematically incorporate other U.S. efforts in areas such as IPR 
protection and efforts to counter trafficking in persons. The 
centerpiece of U.S. policy efforts to increase IPR is the annual 
Special 301 process.[Footnote 54] USTR cites the GSP process as a key 
part of its mission to promote IPR overseas. Moreover, GAO reviewed the 
2006 Special 301 report and found that over half of the 48 countries 
cited by USTR for concerns with respect to the provision of adequate 
and effective protection of IPR in 2006 were U.S. preference program 
beneficiaries. However, USTR did not accept any new petitions to review 
beneficiaries against the IPR criteria for participation in 2006. USTR 
officials observed to us that the placement of a country on the Watch 
List or Priority Watch List did not constitute a USG finding that the 
country failed to provide adequate and effective IPR protection. 
Rather, placement of a country on these lists indicates that particular 
problems exist in the country with respect to IPR protection, 
enforcement, or market access for persons relying on intellectual 
property. Additionally, industry officials told us that the 
administration has been reluctant to threaten removal of countries from 
GSP for lack of compliance with IPR protection in recent years, calling 
into question whether the leverage provided by the trade preferences is 
put to effective use. While it is possible that the administration may 
choose not to remove countries as a result of Special 301 designations, 
the lack of review, under the GSP provisions, of any of the 26 
countries cited makes it appear that no linkage exists between these 
issues. 

U.S. efforts to combat trafficking in persons is another area where 
criteria for participation in trade preferences programs may have some 
bearing, although USTR officials noted that there is not a specific 
link between the preference program criteria and the Trafficking and 
Victims Prevention Act of 2000. Both State and the Department of 
Justice cite Labor's Findings on the Worst Forms of Child Labor as 
among the U.S. government's efforts to combat trafficking in 
persons.[Footnote 55] State issues an annual report that analyzes and 
ranks foreign governments' compliance with minimum standards to 
eliminate trafficking in persons.[Footnote 56] State also prepares an 
annual report that discusses the status of internationally recognized 
worker rights within each GSP beneficiary. 

Twenty-seven of the 48 countries on the Tier 2 Watch List or in Tier 3 
in the June 2007 Trafficking in Persons report are preference 
beneficiaries. In congressional hearings, members and a witness have 
cited concerns that countries in Tiers 2 and 3 receive trade benefits. 
Preference beneficiaries on the Tier 2 watch list include Argentina, 
Armenia, South Africa, Ukraine, and India, and beneficiaries on the 
Tier 3 list include Algeria, Equatorial Guinea, Uzbekistan, and 
Venezuela. At times, concerns in some of these countries may have been 
addressed through the regional programs. For example, the country 
reports contained in the 2007 Comprehensive Report on U.S. Trade and 
Investment Policy Toward Sub-Saharan Africa and Implementation of the 
African Growth and Opportunity Act cite concerns in beneficiary 
countries with respect to child labor and trafficking in persons, 
showing consideration of these issues in the eligibility 
determinations. In other countries such as Venezuela, Algeria, and 
Uzbekistan, the U.S. government has not received any petitions to 
initiate an examination of performance against any of the GSP 
eligibility criteria related to trafficking in persons in the last 5 
years. Consequently, these countries have not been reviewed against 
those criteria for participation. As noted above, it is possible that 
the administration might choose not to remove countries as a result of 
these reviews, but it appears that no linkage between these issues 
exists, given the lack of official reviews. 

Regional Program Reviews Ensure a More Systematic Look at Criteria for 
Participation but Are Resource-Intensive and Sometimes Miss Important 
Concerns: 

The periodic reviews under the regional programs offer more timely and 
consistent evaluations of country performance against the criteria for 
participation. Among the regional programs, AGOA has the most intensive 
evaluation of country performance against the criteria for 
participation. AGOA requires the President to determine annually 
whether Sub-Saharan African countries are, or remain, eligible for the 
program. GAO found that, between 2001 and 2007, the President 
terminated eligibility four times and conferred eligibility eight 
times. Between 2001 and 2006, one country was removed and reinstated 
for GSP, and another country was reinstated after being removed in 
1990. No country lost eligibility under the ATPA or CBI 
programs.[Footnote 57] 

The key difference between the AGOA review and the CBI and ATPA reviews 
is that only AGOA requires a determination periodically as to whether a 
country should remain a beneficiary. A USTR official testified that 
AGOA's annual review process has resulted in improved country 
performance under the eligibility criteria. In July 2007, a senior USTR 
official testified before the Subcommittee on Africa and Global Health 
of the House Foreign Affairs Committee that the President had removed, 
or threatened to remove, AGOA beneficiaries that did not meet the 
criteria for participation. This official noted that some of these 
countries had taken action to meet the criteria, and countries such as 
Liberia and Mauritania, which had been ineligible, were now eligible. 
However, U.S. officials also commented that the AGOA review is 
extremely time-consuming and demands a considerable investment of staff 
resources, since each beneficiary country must be reviewed on its 
performance on a range of criteria, such as respect for the rule of law 
and poverty reduction efforts. Moreover, these reviews must be updated 
on an annual basis. 

Despite more regular and comprehensive reviews, 11 countries that are 
in regional programs were later subject of GSP complaints in the 2001 
to 2006 period. In several cases, the petition-based examination 
associated with the GSP process validated and resulted in further 
progress in resolving concerns with regional partners such as 
Guatemala, Swaziland, and Uganda on labor issues. For example, in 2005, 
the American Federation of Labor and Congress of Industrial 
Organizations filed a petition regarding Uganda's performance against 
workers' rights criteria under GSP and AGOA. The petition led to an 
interagency investigation that was closed after Uganda enacted new 
legislation facilitating organization of unions, among other things. A 
Labor official told us that these issues had not been remedied under 
the AGOA review. 

Only One Preference Program Links to Capacity Building Efforts but No 
Funding Provided: 

Many developing countries have expressed concern about their inability 
to take advantage of global trading opportunities because they lack the 
capacity to participate in international trade. The United States 
considers the ability of these countries to participate in and benefit 
from the global trading system key factors in promoting economic 
development, and has provided trade capacity building (TCB) assistance, 
to help developing countries more effectively take advantage of trade 
preferences, among other purposes. However, we found agencies pursue 
different approaches with regard to using TCB in conjunction with trade 
preference programs, with AGOA having the strongest link. 

AGOA requires the administration to produce an annual report on the 
U.S. trade and investment policy for Sub-Saharan Africa and the 
implementation of AGOA. The report includes information about trade 
capacity building efforts undertaken in the region by U.S. agencies 
such as the Department of Agriculture and USAID. Sub-Saharan Africa has 
also been the primary focus of U.S. TCB efforts linked to the 
preference programs, with the United States allocating $394 million in 
fiscal year 2006 to that continent. A USTR official noted that linkage 
to TCB in AGOA's authorizing legislation was useful for USTR as 
leverage with U.S. agencies that have development assistance funding to 
target greater resources that help developing countries take advantage 
of opportunities provided by trade preferences. In our field work and 
research, we observed USAID efforts to improve the business and 
regulatory environments in Sub-Saharan Africa, including preparing 
private sector enterprises to navigate U.S. import regulations, 
coaching small businesses on access financial services for trade and 
investment, and facilitating investments in trade-related 
infrastructure. 

Several U.S. officials said that the annual AGOA Forum (Forum) also 
contributed to the stronger linkage between TCB and trade opportunities 
offered under the program.[Footnote 58] A USTR official told us that 
the Forum brings USAID, Millennium Challenge Corporation, and other 
U.S. officials together to focus on the program and that having agency 
leaders attend the Forum makes a big difference in generating business 
interest in the region. A USAID official told us that the Forum also 
provided the opportunity for African entrepreneurs to interact directly 
with senior members of the U.S. government. Although AGOA authorizing 
legislation refers to trade capacity building assistance, USTR 
officials noted that Congress has not appropriated funds specifically 
for that purpose. 

In other regions of the world, U.S. trade capacity building assistance 
has less linkage to trade preferences. For example, none of the other 
trade preference programs direct the relevant agencies to convene 
regularly to discuss how the program's implementation affects trade 
opportunities. Some agencies refer to trade programs in developing 
their assistance efforts to non-African regions and countries. For 
example, USAID notes the need for more resources in its strategic plan 
to improve the business environment and enable local businesses to take 
advantage of HOPE. Further, other U.S. trade initiatives link market 
access opportunities with trade capacity building assistance, such as 
CAFTA-DR. 

Separate Reporting and Examination Hinder Measuring Progress on 
Programs' Contribution to Economic Development: 

Separate reporting for the various preference programs, while 
consistent with statutory requirements, makes it difficult to measure 
progress toward achieving the fundamental and shared goal of trade 
preferences, namely economic development of beneficiaries. The effect 
of trade preferences on beneficiary countries' economic development is 
not assessed in a cross-programmatic manner that would examine progress 
made under preference programs. U.S. agencies do prepare reports that 
attempt to measure the effects on economic development of certain trade 
preference programs, but not all. The law requires only one program to 
directly report on impact on the beneficiaries. In addition, even when 
agencies report on the economic effect of some of these programs, 
different approaches are used, resulting in disparate analyses that are 
not readily comparable. 

As noted earlier in this report, trade preferences are fundamentally 
intended to promote development in beneficiary countries by providing 
enhanced opportunities for their products to access the U.S. market. In 
its 2006 to 2011 strategic plan, USTR notes that one of its objectives 
is to apply "U.S. trade preference programs in a manner that 
contributes to economic development in beneficiary countries." However, 
there is no formal cross-programmatic examination of the preference 
programs collectively. As shown in table 4, USTR pursues different 
approaches to administering these programs, and does not consider the 
preference programs jointly, with respect to their performance. 
Moreover, there is no evaluation of how trade preferences, as a whole, 
affect economic development in beneficiary countries. 

In response to statutory requirements, several government agencies 
report on certain economic aspects of the regional trade preference 
programs and their effects on specific countries or groups of 
countries, but these agencies do not report on the economic development 
impact of GSP. Agency officials noted that they strive to comply with 
statutory reporting requirements and, through the TPSC, they coordinate 
with each other on various aspects of administering these programs, 
including reporting. This reporting, nevertheless, is done on a program-
by-program basis. For example, USTR has produced three reports to 
Congress on the operation of ATPA. The ITC also issues biennial reports 
on ATPA's impact on U.S. industries and consumers and on drug crop 
eradication and crop substitution. Additionally, USTR prepares a 
biennial report for Congress on CBI that highlights increases in 
overall U.S. imports from the countries in the program. Similarly, ITC 
reports on the CBI program's impact on beneficiaries on a biennial 
basis, the only report required by statute to address the impact on the 
beneficiaries. Finally, USTR produces an annual report on the 
implementation of AGOA that highlights trade and investment trends in 
Sub-Saharan Africa. However, there is no comparable periodic reporting 
on the effect of GSP on the economic development of countries covered 
by that program. USTR officials told us that the vehicles they use for 
reporting on the GSP program are the annual Report of the President of 
the United States on the Trade Agreements Program and the annual Trade 
Policy Agenda. Discussion of the GSP program in these documents focuses 
on product coverage and country conformity with eligibility criteria, 
not on the impact of benefits to beneficiary developing countries in 
terms of trade growth or economic development. 

Different approaches used to measure the effects of trade preference 
programs on beneficiary countries, while consistent with statutory 
reporting requirements, produce disparate data and analysis that are 
not readily comparable to evaluate how these programs advance economic 
development--their fundamental goal. For instance, 

* USTR's report on the ATPA provides some examples that illustrate the 
role of the program in promoting exports and development in each of the 
four beneficiary countries and refers to analyses by the ITC and Labor 
on some aspects of the economic impact of ATPA. On the other hand, ITC 
reporting on the ATPA provides some material on exports and economic 
diversification for countries under the program. 

* USTR's reporting on CBI highlights overall and country-specific 
increases in U.S. imports from countries in the CBI program. The report 
includes discussions on individual countries, which generally do not 
evaluate the impact of CBI on the exports or development of the 
beneficiaries. The ITC reports on the impact of CBI examine how that 
program affects those countries that have relatively large trade flows 
with the United States. The trade profile for the region presented in 
this report has shifted over time, with certain countries receiving 
more emphasis in earlier reports while later iterations focus on 
others. 

* USTR's comprehensive report on trade and investment in Sub-Saharan 
Africa and the implementation of AGOA provides an overview of trade and 
investment trends in participating Sub-Saharan countries, reviews 
economic integration efforts at the regional and subregional level, and 
discusses participation by AGOA countries in the WTO. 

* Finally, while there is no regular reporting on the economic impact 
of GSP on beneficiary countries, in 1980, the administration prepared a 
statutorily required report to Congress on the first 5 years of 
operation of the GSP program. That report included an analysis of the 
impact of the GSP on developing country economies. This appears to have 
been a one-time report, and USTR officials confirmed that no further 
such reports were prepared. 

Thus, while there is an abundance of reporting on various aspects of 
the economic effects of trade preference programs on beneficiary 
countries, the analyses and data presented in these reports is 
typically quite dissimilar and does not lend itself for use in 
evaluating the overall effects of trade preferences. 

Conclusions: 

Congress created these programs over the years to address compelling 
trade and foreign policy objectives. The programs are important to 
individual businesses and industries, both domestically and 
internationally. Additionally, the criteria for participation 
associated with the programs have served as an important tool to 
advance U.S. foreign and trade policy objectives. The preference 
programs have evolved over time to accommodate not only the general 
goal of trade-led development, but regional interests, such as 
counternarcotics efforts in ATPA. Changes to the preferences programs 
in the past have had an impact on beneficiaries' trade profiles with 
the United States, by stimulating export growth to this country. Much 
of the increased exports coincided with congressional expansions of the 
programs in 2000 and 2002 to cover key products. 

However, U.S. trade preferences are neither administered nor evaluated 
on a cross-programmatic basis. A lack of systematic evaluation limits 
any judgment about the extent to which the collection of U.S. trade 
preference programs has increased trade and fostered development in 
beneficiary countries. While evaluations may occur to determine whether 
countries should retain eligibility for preferences, such inquiries 
have not been made regularly or in a consistent manner across the 
programs or beneficiary countries. Two different approaches have 
evolved to monitor compliance with criteria set for various trade 
preference programs, and we observed advantages associated with each 
approach, but individual program reviews result in gaps and appear 
disconnected from other on-going U.S. government efforts, such as the 
Special 301 process. Further, the petition-driven process can result in 
a long time passing between reviews of country compliance with the 
criteria for participation. There are also certain practices, such as 
stronger links between preference benefits and trade capacity building 
efforts in the AGOA program, that may be advantageous to some of the 
other programs. A distinct reporting approach for each program limits 
the United States' ability to determine the extent to which U.S. trade 
preference programs as a whole foster development in beneficiary 
countries. However, the programs' positive impact on developing 
economies may be attenuated because the United States does not extend 
preferential access to products that are important exports of 
beneficiary countries and because the United States imposes complex 
entry requirements for some products. 

Matters for Congressional Consideration: 

As Congress deliberates on whether to renew the ATPA, CBTPA, and GSP 
programs this calendar year, it should consider whether a more 
integrated approach would better ensure programs meet shared goals. 
Specifically, Congress should consider which elements of the approaches 
used by agencies to administer these programs, such as petition- 
initiated compliance reviews or periodic assessment of all countries 
under certain programs, have benefits that may be applied more broadly 
to trade preference programs in general. Congress should also consider 
streamlining various program reporting requirements to facilitate 
evaluating the programs' progress in meeting their shared economic 
development goal. 

Recommendations for Executive Action: 

To ensure that these programs, as a whole, meet their shared goals, we 
recommend USTR undertake the following two actions: 

* work through the TPSC and its associated agencies to consider ways to 
administer, evaluate, and report on preference programs in a more 
integrated manner, and: 

* periodically convene the TPSC to discuss the programs jointly to 
determine what lessons can be learned from the various provisions 
concerning matters such as linkages to trade capacity building. 

Additionally, to ensure that beneficiary countries are in compliance 
with program criteria, we recommend that USTR should also periodically 
review preference beneficiaries that have not otherwise been reviewed 
by virtue of their membership in the regional programs. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to USTR; the Departments of 
Agriculture, Commerce, Homeland Security, Labor, State, and Treasury; 
USAID and ITC. USTR, and the Departments of Agriculture, Labor, 
Commerce, Treasury, and State provided extensive technical comments on 
an interagency basis. The Departments of Homeland Security, Labor, and 
State, and ITC also provided separate technical comments. We have 
incorporated these comments where appropriate. USTR indicated that it 
would report on the actions taken in response to the recommendations in 
a letter, within 60 days of public issuance of this report, as required 
under U.S. law. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to interested congressional committees; the U.S. Trade Representative; 
the Secretaries of Agriculture, Commerce, Homeland Security, Labor, 
State, and the Treasury; the Administrator of USAID; and the Chairman 
of ITC. We also will make copies available to others upon request. In 
addition, this report will be available at no charge on the GAO Web 
site at [Hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-4347 or y [Hyperlink, [email protected]] 
[email protected]. Contact points for our Offices of Congressional 
Relations and Public Affairs may be found on the last page of this 
report. GAO staff who made major contributions to this report are 
listed in appendix VI. 

Signed by: 

Loren Yager: 
Director, International Affairs and Trade: 

[End of section] 

Appendix I: Scope and Methodology: 

In this report, we (1) describe how U.S. preference programs affect the 
United States, (2) review the effects of the programs on exports and 
development of foreign beneficiaries, (3) identify trade-offs facing 
the programs, and (4) evaluate the overall approach to preference 
programs. 

We followed the same overall methodology to complete objectives 1, 3, 
and 4. We reviewed and analyzed U.S. laws and regulations, 
authoritative international trade reports/documents describing the 
impact of trade preference programs on the United States, such as the 
biennial impact studies from the U.S. International Trade Commission 
(ITC) on the Caribbean Basin Initiative (CBI) and the Andean Trade 
Preference Act (ATPA), and periodicals. We interviewed officials from 
agencies participating in the Trade Policy Staff Committee--including 
the Office of the U.S. Trade Representative (USTR); the Departments of 
Agriculture, Commerce, Labor, State, and the Treasury; U.S. Customs and 
Border Protection; and ITC--regarding the impact of preferences on the 
U.S. economy. We also interviewed representatives of businesses that 
used the preference programs and nongovernmental organizations (NGOs) 
that have filed petitions under the programs. We reviewed academic, 
World Trade Organization, and other research studies, on the effects of 
preference erosion on developing countries. In addition, we analyzed 
the 2006 U.S. government reports on the Special 301 process, the August 
2007 report on the Worst Forms of Child Labor, and finally, the 2007 
State Department report on Trafficking in Persons. For information on 
key features and use of U.S. preference programs, we drew from findings 
from a previous GAO report on U.S. preference programs, International 
Trade: An Overview of Use of U.S. Trade Preference Programs by 
Beneficiaries and U.S. Administrative Reviews [Hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1209]. 

To review the effects of U.S. preference programs on exports and 
development of foreign beneficiaries, we reviewed relevant academic, 
government and other literature. Particularly useful were recent broad 
reviews of the trade preferences literature found in (1) Bernard 
Hoekman and Caglar Ozden, Trade Preferences and Differential Treatment 
of Developing Countries (Cheltenham, UK, and Northampton, MA: Edward 
Elgar Publishing, 2006) and (2) Caglar Ozden and Eric Reinhardt, 
"Unilateral Preference Programs: The Evidence," chapter 6, in Simon J. 
Everett and Bernard Hoekman, eds., Economic Development and 
Multilateral Trade Cooperation (Washington, D.C.: The World Bank and 
Palgrave Macmillan, 2006). We also conducted extensive analysis of the 
U.S. tariff schedule and U.S. trade data published by the ITC. Our 
analysis focuses on 2006 data except where we engaged in analysis of 
historical trends. We relied on the 2006 edition of the official U.S. 
tariff schedule from the ITC to identify products (tariff lines) 
eligible for duty-free treatment under one or more U.S. trade 
preference programs, as well as the countries designated as eligible 
for each program. We also used ITC data to analyze Census data trends 
in overall U.S. imports, imports from preference beneficiaries, and 
imports actually entered under U.S. trade preference programs and to 
compute measures such as program coverage and utilization and the 
diversification of U.S. preference imports. More detailed information 
about our data analysis is contained in appendix II. Furthermore, we 
interviewed officials from the Office of the U.S. Trade Representative; 
the Departments of Agriculture, Commerce, Labor, State, and the 
Treasury; U.S. Customs and Border Protection; and ITC regarding the 
effects of preferences on foreign beneficiaries. 

In addition, we attended the sixth AGOA Forum in Accra, Ghana, in July 
2007. We also traveled to Brazil, Colombia, Haiti, Kazakhstan, and 
Turkey to meet with U.S. embassy officials, foreign officials, and 
industry groups using U.S. preference programs to discuss the issues 
mentioned above. We selected these countries based on representation on 
preference program eligibility and income levels according to the World 
Bank and United Nations (see table 5). Additionally, we chose to visit 
Haiti and Ghana because they are among the poorest beneficiaries and 
ones where mechanisms to take advantage of recently expanded benefits 
under newer preference programs--Haitian Hemispheric Opportunity 
through Partnership Encouragement (HOPE) and African Growth and 
Opportunity Act (AGOA)--are being put in place. Also, Ghana was the 
site of the annual AGOA Forum. We selected Brazil and Turkey to visit 
because these countries have successfully used U.S. trade preferences 
to export a diverse range of relatively sophisticated manufactured 
goods. We chose Colombia and Kazakhstan because they are large users of 
preference programs and are both undertaking broader liberalization 
efforts. Colombia has completed a free trade agreement with the United 
States, and Kazakhstan is trying to join the WTO. 

Table 5: Countries Selected for GAO Field Research: 

Beneficiary country: Brazil; 
Program: GSP; 
Income levels: Upper-middle. 

Beneficiary country: Colombia; 
Program: ATPA; 
Income levels: Lower-middle. 

Beneficiary country: Ghana; 
Program: AGOA; 
Income levels: Low. 

Beneficiary country: Haiti; 
Program: CBI/HOPE; 
Income levels: Low. 

Beneficiary country: Kazakhstan; 
Program: GSP; 
Income levels: Upper-middle. 

Beneficiary country: Turkey; 
Program: GSP; 
Income levels: Upper-middle. 

Source: GAO. 

[End of table] 

In addition, we selected these countries to gain perspective on the 
spectrum of issues related to usage and capacity of each of the 
programs in country. Brazil is a top user of the Generalized System of 
Preferences (GSP) program since the 1970s; Colombia is an extensive 
user of ATPA; Ghana represents the African countries under AGOA that 
are dealing with internal infrastructure issues that can limit their 
use of the preference programs; Haiti is an historic user of CBI and is 
in the beginning stages of implementing HOPE; Kazakhstan is an 
extensive user of GSP and is undergoing high liberalization; and Turkey 
is also another high user of GSP and exports sophisticated manufactured 
goods to the United States. 

We conducted this performance audit from March 2007 to February 2008 in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives. 

[End of section] 

Appendix II: Additional Information on GAO Data Analysis: 

This appendix provides additional information relevant to the data 
analysis contained in this report. It includes information about the 
data used, definitions of program, product and country groupings, and 
definitions relevant to various program measures used. 

Data: 

We relied on the 2006 edition of the official U.S. tariff schedule 
(Harmonized Tariff Schedule [HTS]) from the ITC to identify products 
(tariff lines) eligible for duty-free treatment under one or more U.S. 
trade preference programs, as well as the countries designated as 
eligible for each program (beneficiaries or beneficiary countries). We 
considered any country designated for benefits for all or part of 2006 
to be beneficiaries. 

We relied on official U.S. trade statistics for imports to analyze 
trends in overall U.S. imports, imports from preference beneficiaries, 
and imports actually entered under U.S. trade preference programs. Data 
for time series are in constant 2006 U.S. dollars. 

We made an adjustment for program and product groupings primarily 
pertaining to apparel such that those apparel items normally classified 
under HTS Chapters 61-63 eligible to enter duty-free under regional 
preference programs if they meet specified rules of origin, as 
specified in HTS Chapter 98, were identified and marked with a # sign. 
This accounts for the R#, J#, and D# in the program groupings below. 

Program Groupings: 

GSP: In terms of products, we defined products covered by GSP as the 
sum of all tariff lines designated as A or A* in the 2006 U.S. tariff 
schedule. In terms of countries, all countries that were designated as 
eligible for GSP at any point in 2006 were considered beneficiaries. 

GSP-least developed countries (LDC): In terms of products, we defined 
products covered by GSP-LDC as all tariff lines designated as A+. In 
terms of countries, all countries that were designated as eligible for 
GSP-LDC at any point in 2006 were considered beneficiaries. 

CBI: We defined this category to include products covered by CBI as E 
or E*, and products covered by CBTPA as R or R#. In terms of countries, 
all countries that were designated as eligible at any point in 2006 
were considered beneficiaries. It should be noted that some of the 
countries in the 2006 sample have now lost eligibility for benefits 
under CBI due to the entry into force of the Dominican Republic-Central 
America-United States Free Trade Agreement (CAFTA-DR) as follows: 
Dominican Republic (March 2007), El Salvador (March 2006), Guatemala 
(July 2006), Honduras (April 2006), and Nicaragua (April 2006). 

ATPA: We defined products covered by ATPA as J, J*, and products 
covered by Andean Trade Promotion and Drug Eradication Act (ATPDEA) as 
J#, J+. We defined countries as Bolivia, Colombia, Ecuador, and Peru. 

AGOA: We defined products covered by AGOA as D, D#. We defined 
countries covered by AGOA as all countries eligible for the program at 
any point in 2006. 

Product Groupings: 

In order to examine broad groups of products, we organized the HTS 
product chapters into 12 sectors as follows: 

1. Animal and plant products (HTS, chapters 1-15): 

2. Prepared food, beverages, spirits, and tobacco (HTS, chapters 16-
24): 

3. Chemicals and plastics (HTS, chapters 25, 26, 28-40): 

4. Wood and paper products (HTS, chapters 44-49): 

5. Textiles, leather, and footwear (HTS, chapters 41-43, 50-60, 64-66): 

6. Glassware, precious metals and stones, jewelry (HTS, chapters 68-
71): 

7. Base metals and articles of base metals (HTS, chapters 72-81 and 
83): 

8. Machinery, electronics, and high-tech apparatus (HTS, chapters 82, 
84, 85, 90): 

9. Aircraft, autos and other transportation (HTS, chapters 86-89): 

10. Miscellaneous manufacturing (HTS, chapters 91-97): 

11. Fuels (HTS, chapter 27): 

12. Apparel (HTS, chapters 61-63)[Footnote 59] 

With the exception of textiles and apparel, for figure 5, we use the 
more aggregated groupings presented in our last report.[Footnote 60] 

Country Groupings: 

We used the same sample of countries for analysis of import trends over 
time. Specifically, we assigned each country to a country group based 
on their eligibility and country income category in 2006. When time 
series analysis was done, it is thus for "2006 program beneficiaries" 
and "2006 country income group" rather than the actual program 
beneficiaries or actual income groups at earlier points in time. 
Numerous countries have been removed from programs over the 1992-2006 
period, mostly due to attaining high-income status (e.g., Cyprus and 
Aruba), attaining overall competitiveness (Malaysia), joining the 
European Union (e.g., Hungary and Poland), or entering into a free 
trade agreement with the United States (e.g., Mexico and Morocco). For 
additional information on eligibility for programs by country, see 
appendix III of GAO-07-1209. 

AGOA countries: Those countries designated as eligible for the AGOA 
program at any point in 2006. All of these countries are eligible for 
GSP, and some of these countries are eligible for GSP-LDC. 

ATPA countries: Those countries eligible for ATPA at any point in 2006. 
All of these countries are also eligible for ATPDEA and GSP. 

CBI: Those countries designated as eligible for the Caribbean Basin 
Economic Recovery Act (CBERA) at any point in 2006. Some of these 
countries are also eligible for the Caribbean Basin Trade Partnership 
Act (CBTPA) and GSP. 

GSP-only countries: Those countries only designated as eligible for the 
GSP program. 

Country income groupings: We relied on World Bank data on country 
income levels. We relied on United Nations designations of least- 
developed countries and for data on country income when World Bank data 
was unavailable. 

Definitions: 

Covered products: We defined covered products as all items identified 
in the 2006 U.S. tariff schedule as eligible for a preference program. 
We defined products covered by GSP as the sum of all tariff lines 
designated as A or A* in the U.S. tariff schedule. We defined products 
covered by GSP-LDC as all tariff lines designated as A+. We defined 
products covered by CBI as E, E* and products covered by CBTPA as R, 
R#. We defined products covered by ATPA as J, J*, and products covered 
by ATPDEA as J#, J+. We defined products covered by AGOA as D, D#. 

Eligible beneficiary(ies): We used the term eligible beneficiary for 
any countries designated as eligible for a particular preference 
program. The term eligible beneficiaries is used for all countries 
designated as eligible for a particular program. 

Country income category: We relied on World Bank data on country income 
levels. We relied on UN designations of least-developed countries. 

Dutiable products/imports: We defined dutiable products as all products 
that were subject to most favored nation (MFN) tariffs that are greater 
than zero in 2006. We defined the value of dutiable imports as total 
U.S. imports minus total imports of MFN duty-free products. 

Preference eligible imports: We defined preference eligible imports as 
the value of imports of covered products from eligible beneficiaries. 

Preference imports: We defined preference imports as the value of 
imports actually entered under a given preference program or programs. 

Preference margins: The difference between the otherwise applicable or 
MFN tariff rate and the rate at which the product is eligible to enter 
under U.S. preference programs. Most products covered by preferences 
enter duty-free, but some products enter at reduced (nonzero) duties. 
We relied on others' estimates of U.S. preference margins, specifically 
those by a team of ITC and World Bank economists given responsibility 
for preparing estimates for U.S. programs as part of a multicountry 
study organized by the World Bank. 

Program Measures: 

Coverage: We considered coverage relative to two metrics: (1) the 
number of lines in the U.S. tariff schedule and (2) the total value of 
imports of covered products divided by the total value of imports of 
dutiable products (i.e., dutiable imports) from each preference 
partner. (See above for definitions of "covered products" and dutiable 
products.) 

Utilization: We calculated this as a ratio of the value of preference 
imports (imports actually entering under U.S. preferences) relative to 
(divided by) the value of imports of covered products. 

Program averages for these measures were calculated by: 

For coverage, summing the value of preference-eligible imports from all 
partners and then dividing it by the sum of the value of dutiable 
imports from all partners. 

For utilization, summing the total value of preference imports from all 
partners, and then dividing it by the total value of imports of covered 
products from all partners, that is, the sum of each partner's covered 
products. 

Country averages related to total preference program coverage and 
utilization measures were calculated by: 

For coverage, summing the value of preference-eligible imports under 
all programs for each partner, including adjusting to avoid double 
counting where a product is covered by more than one program, and then 
dividing by the value of dutiable imports from that partner. 

For utilization, summing the value of preference imports from that 
country actually entering under preferences, adjusting to avoid double 
counting, and then dividing by the value of imports of covered products 
from that country. 

Diversification: 

Our analysis of diversification examines the distribution of total U.S. 
imports from preference-eligible countries at the two-digit level of 
product classification (i.e., at the "chapter level" or broad product 
grouping level of the HTS of the United States, the U.S. tariff 
schedule). We grouped preference-eligible countries according to the 
program(s) for which they were eligible in 2006. We then calculated a 
measure of diversification based on a normalization of a commonly used 
indicator of industry concentration known as the Herfindahl-Hirschman 
Index.[Footnote 61] For purposes of exposition and intuitive appeal, we 
re-based the index by subtracting it from one to show lower values as 
indicating lower diversification (more concentration) and values closer 
to one as indicating higher diversification (less concentrated). 
Specifically, the formula used to calculate the index is: 

[See PDF for image] 

[End of figure] 

where xi represents the import/export value of the ith commodity, X is 
the country's total imports/exports to the United States in 2006, where 
N is the number of products. The index value (H*) ranges from 0 to 1. 
For example, if the products are evenly distributed the value of the 
index would be 1, and the more concentrated the product distribution, 
the closer the value is to 0. It is observed that the index is a 
function of the mean and variance of the value of imports/exports share 
in different commodity groups. 

[End of section] 

Appendix III: Coverage, Utilization, and Limitations of Preference 
Programs: 

To assess the opportunities extended to developing countries under U.S. 
preference programs, we examined the scope of programs' coverage by 
beneficiary and product, the size of tariff cuts (or margins of 
preference), and some eligibility conditions that can affect the 
ability of beneficiaries to access program opportunities. We also 
examined the extent to which countries are using the available 
opportunities. 

Coverage of U.S. Preference Programs: 

Our analysis of U.S. tariff and trade data shows that duty-free 
coverage under U.S. trade preference programs has increased over time. 
Considered in combination, U.S. preference programs now extend duty- 
free status to most of the product lines in the U.S. tariff schedule. 
However, coverage varies notably by program, beneficiary, and product. 
Because eligibility for duty-free status is cumulative in that 
countries eligible for one preference program may also be granted 
additional preferences depending on their income and regional 
memberships, the potential duty-free access for particular countries 
can vary substantially. Figure 9 shows that, as of 2006, the countries 
eligible for GSP only were accorded duty-free access to 69 percent of 
the total number of tariff lines in the U.S. tariff schedule or 7,285 
lines, composed of 3,879 MFN duty-free lines, and 3,406 additional 
lines that are duty-free under GSP. All three of the subsequently 
enacted regional programs, and their enhancements, improve upon GSP to 
varying degrees. The expansion of GSP for LDCs in 1996 also increased 
the number of duty-free lines for LDC partners. 

Figure 9: Cumulative Duty-free Tariff Lines in the U.S. Tariff 
Schedule, by Preference Program: 

[See PDF for image] 

This figure is a stacked multiple bar graph depicting the following 
data (Number of duty-free tariff lines out of 10,507 total): 

Program: MFN; 
MFN duty free: 3,879. 

Program: GSP (enacted in 19750; 
MFN duty free: 3,879; 
GSP: 3,406. 

Program: CBI (enacted in 1983): 
MFN duty free: 3,879; 
GSP: 3,406; 
Additional duty-free access (over GSP): 1,922. 

Program: ATPA (enacted in 1991): 
MFN duty free: 3,879; 
GSP: 3,406; 
Additional duty-free access (over GSP): 1,658. 

Program: LDC (enacted in 1996): 
MFN duty free: 3,879; 
GSP: 3,406; 
Additional duty-free access (over GSP): 1,413. 

Program: AGOA (enacted in 2000): 
MFN duty free: 3,879; 
GSP: 3,406; 
Additional duty-free access (over GSP): 1,810. 

Program: CBTPA (enacted in 2000): 
MFN duty free: 3,879; 
GSP: 3,406; 
Additional duty-free access (over GSP): 2,145. 

Program: ATPDEA (enacted in 2002): 
MFN duty free: 3,879; 
GSP: 3,406; 
Additional duty-free access (over GSP): 2,088. 

Source: GAO analysis of the Harmonized Tariff Schedule of the United 
States, 2006. 

[End of figure] 

The proportion of tariff lines accorded duty-free status also varies by 
product. Figure 10 shows the distribution of dutiable and duty-free 
lines by product group. GSP alone offers relatively extensive duty-free 
coverage to certain manufactured goods, such as chemicals and plastics; 
glassware, precious metals, and jewelry; and machinery and electronics; 
where coverage exceeds 40 percent of tariff lines. However, duty-free 
coverage is much more limited for other product groups. Textiles, 
footwear, leather, and apparel are product groups where duties still 
apply to the most and highest percentage of lines, but where regional 
programs offer notable improvements in coverage over GSP. For example, 
with AGOA's enactment and the enhancements of CBI and ATPA offered 
since 2002, 33 percent of apparel lines are eligible to enter duty-free 
under regional programs, and 43 percent of apparel lines altogether 
(including MFN and GSP) have duty-free access. 

Figure 10: Dutiable and Duty-free Lines in U.S. Tariff Schedule by 
Product Group: 

[See PDF for image] 

This figure is a combination of a table with a few pie-charts. The 
following data is depicted: 

Product group: Animal and plant products; 
Duty-free[A], total number of tariff lines in group: 1,096; 
Duty-free[A], MFN duty-free: 304; 
Duty-free[A], Duty-free under GSP: 282; 
Duty-free[A], Additional duty-free under GSP for LDC: 402; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 
16; 
Dutiable[B]: 92; 
Percent duty-free: 92%; 
Percent dutiable: 8%. 

Product group: Prepared food, beverages, spirits, and tobacco; 
Duty-free[A], total number of tariff lines in group: 741; 
Duty-free[A], MFN duty-free: 137; 
Duty-free[A], Duty-free under GSP: 267; 
Duty-free[A], Additional duty-free under GSP for LDC: 200; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 
11; 
Dutiable[B]: 126; 
Percent duty-free: 83%; 
Percent dutiable: 17%. 

Product group: Chemicals and plastics; 
Duty-free[A], total number of tariff lines in group: 2,221; 
Duty-free[A], MFN duty-free: 742; 
Duty-free[A], Duty-free under GSP: 1,021; 
Duty-free[A], Additional duty-free under GSP for LDC: 441; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 6; 
Dutiable[B]: 1. 

Product group: Wood and paper products; 
Duty-free[A], total number of tariff lines in group: 481; 
Duty-free[A], MFN duty-free: 407; 
Duty-free[A], Duty-free under GSP: 60; 
Duty-free[A], Additional duty-free under GSP for LDC: 10; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 4; 
Dutiable[B]: [Empty]. 

Product group: Textiles, leather, and footwear; 
Duty-free[A], total number of tariff lines in group: 1,320; 
Duty-free[A], MFN duty-free: 257; 
Duty-free[A], Duty-free under GSP: 176; 
Duty-free[A], Additional duty-free under GSP for LDC: 30; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 
223; 
Dutiable[B]: 634; 
Percent duty-free: 52%; 
Percent dutiable: 48%. 

Product group: Glassware, precious metals and stones, jewelery; 
Duty-free[A], total number of tariff lines in group: 388; 
Duty-free[A], MFN duty-free: 144; 
Duty-free[A], Duty-free under GSP: 177; 
Duty-free[A], Additional duty-free under GSP for LDC: 51; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 6; 
Dutiable[B]: 10. 

Product group: Base metals and articles of base metals; 
Duty-free[A], total number of tariff lines in group: 855; 
Duty-free[A], MFN duty-free: 491; 
Duty-free[A], Duty-free under GSP: 321; 
Duty-free[A], Additional duty-free under GSP for LDC: 41; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 2; 
Dutiable[B]: [Empty]. 

Product group: Machinery, electronics, and high-tech apparatus; 
Duty-free[A], total number of tariff lines in group: 1,893; 
Duty-free[A], MFN duty-free: 988; 
Duty-free[A], Duty-free under GSP: 810; 
Duty-free[A], Additional duty-free under GSP for LDC: 85; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 
10; 
Dutiable[B]: [Empty]. 

Product group: Aircraft, autos, and other transportation; 
Duty-free[A], total number of tariff lines in group: 2420; 
Duty-free[A], MFN duty-free: 123; 
Duty-free[A], Duty-free under GSP: 77; 
Duty-free[A], Additional duty-free under GSP for LDC: 40; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 
[Empty]; 
Dutiable[B]: [Empty]. 

Product group: Miscellaneous manufacturing; 
Duty-free[A], total number of tariff lines in group: 543; 
Duty-free[A], MFN duty-free: 201; 
Duty-free[A], Duty-free under GSP: 186; 
Duty-free[A], Additional duty-free under GSP for LDC: 89; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 
66; 
Dutiable[B]: 1. 

Product group: Fuels; 
Duty-free[A], total number of tariff lines in group: 72; 
Duty-free[A], MFN duty-free: 41; 
Duty-free[A], Duty-free under GSP: 7; 
Duty-free[A], Additional duty-free under GSP for LDC: 24; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 
[Empty]; 
Dutiable[B]: [Empty]. 

Product group: Apparel; 
Duty-free[A], total number of tariff lines in group: 667; 
Duty-free[A], MFN duty-free: 44; 
Duty-free[A], Duty-free under GSP: 22; 
Duty-free[A], Additional duty-free under GSP for LDC: [Empty]; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 
223[C]; 
Dutiable[B]: 378; 
Percent duty-free: 43%; 
Percent dutiable: 57%. 

Product group: Total; 
Duty-free[A], total number of tariff lines in group: 10,507; 
Duty-free[A], MFN duty-free: 3,879; 
Duty-free[A], Duty-free under GSP: 3,406; 
Duty-free[A], Additional duty-free under GSP for LDC: 1,413; 
Duty-free[A], Additional duty-free for AGOA, ATPA, and CBI Partners: 
567; 
Dutiable[B]: 1,242. 

[A] Dutiable products face MFN duties and are ineligible for U.S. 
preference programs. 

[B] Duty-free products are eligible to enter duty-free due to MFN or 
U.S. trade programs. 

[C] Although some of these HTS lines are not listed as generally 
qualifying for these preference programs, items are eligible for duty 
free import under the regional programs if they meet the rules of 
origin. 

[End of figure] 

Coverage can also be examined relative to imports from beneficiary 
countries using the ratio of preference eligible imports to total 
dutiable imports from beneficiaries eligible for particular programs. 
Our analysis (see table 6) shows that: (1) countries eligible for only 
GSP have the least coverage of partners' dutiable imports-- 
approximately 25 percent, (2) regional programs and GSP for LDC's have 
much higher coverage of partners' dutiable imports, and (3) country 
variations in coverage are wide. For example, 35 GSP beneficiaries 
including Lebanon, Paraguay, Somalia, and Zimbabwe have high coverage 
rates, exceeding 75 percent of the value of their dutiable imports. 
Yet, 48 GSP beneficiaries such as Bangladesh, Egypt, Pakistan, and 
Uzbekistan have low coverage rates (less than 25 percent of dutiable 
imports). 

Preference Margins: 

The value and effectiveness of tariff preferences depends on the 
magnitude of the tariff that would otherwise be imposed on imported 
products, often referred to as the preference margin. Preferences can 
have an impact only if there is a nonzero tariff that otherwise would 
apply in the U.S. market. Moreover, if the MFN (normally applicable) 
tariff on a product is negligible, the advantage provided by 
preferences can be so small as to become an insignificant factor in 
trade decisions. A recent effort to quantify margins of preferences 
across all U.S. preference programs by staff economists at the ITC and 
the World Bank shows that preference margins are relatively high for 
apparel products, as well as certain agricultural goods (melons, cut 
flowers, frozen orange juice, raw cane sugar, and asparagus);[Footnote 
62] they tend to be relatively low for other products and fairly 
uniform among programs.[Footnote 63] Specifically, the authors found 
the following: 

* Across member countries and all eligible U.S. nonagricultural 
imports, AGOA preference margins were the highest on average (14 
percent) in 2003. CBTPA preference margins ranked second with an 
average of 9 percent, and ATPA preference margins third with an average 
of 8 percent. 

* Nonapparel preference margins average 3 percent to 5 percent for 
ATPA, CBTPA, and CBERA countries and show little variation across 
countries within each program. AGOA nonapparel preference margins are 
much higher--5 percent to 10 percent for more than half the countries, 
and 10 percent to 20 percent for a few. 

* Average apparel margins under AGOA, CBTPA, and ATPA are two or three 
times as high as those for nonapparel for nearly all preference 
beneficiary countries. 

* Despite its importance in AGOA trade, average petroleum preference 
margins by country did not exceed 2 percent, and most were well below 1 
percent. 

All in all, the authors conclude, while "the potential duty savings 
from all U.S. preference programs represent a very small share of 
beneficiaries' dutiable exports to the United States, countries in the 
CBTPA and those in the AGOA-LDC program show duty savings exceeding 10 
percent of their dutiable exports to the United States."[Footnote 64] 
In fact, the potential duty savings for 35 countries---all but 3 of 
whom qualify for regional programs--exceed 5 percent of the value of 
their dutiable exports to the United States. As a result, they find 
that preferences are sufficiently important to 29 countries' exports to 
warrant concern over the impact of preference erosion due to 
multilateral and bilateral liberalization. At the same time, they note 
that some of this liberalization has since occurred, with the phase-out 
of global textile quotas in 2005.[Footnote 65] 

Product Caps and Rules of Origin May Limit Use and Benefits: 

Conditions on product entry are also a significant factor affecting 
opportunities and trade under U.S. preference programs. Two specific 
conditions, "competitive need limits" and "rules of origin," illustrate 
how administration of program provisions, although addressing important 
policy considerations, may affect the ability of beneficiary countries 
to fully access the opportunities otherwise offered by U.S. preference 
programs.[Footnote 66] GSP places export ceilings or "competitive need 
limits" (CNL) on eligible products for certain beneficiaries that 
exceed specified value and import market share thresholds. (LDCs and 
AGOA beneficiaries are exempt.) Our analysis of 2006 data shows that 
some 37 percent of the value of imports of GSP products from non-LDC, 
non-AGOA GSP beneficiaries--or $13 billion of the $35 billion--were 
excluded from entering duty-free under GSP largely due to CNLs. 
Researchers also warn that rules of origin and related paperwork are 
often complex and can raise costs. As a result, it may not be worth 
incurring the expense of compliance to use preferences. 

Rules of origin for U.S. trade preference programs typically specify a 
minimum percentage value-added to the entering product that must come 
from the beneficiary country in order to qualify for duty-free 
treatment. However, some programs allow countries to "cumulate" inputs 
from other countries or regions. More complex rules apply to some 
products, notably apparel. The fact that U.S. Customs and Border 
Protection--the U.S. agency charged with enforcing such rules when 
goods enter the United States--used a 70-page PowerPoint presentation 
to train its officers on the conditions associated with apparel access 
under U.S. preference programs is illustrative of the complexity of 
such rules. For example, our meetings with CBP and statements by 
Haitian textile industry groups indicate that some of the rules of 
origin for HOPE are highly complex to administer and use. Indeed, as 
recently as late November, 2007 industry sources had indicated to us 
that HOPE has yet to become fully operational for Haiti to benefit 
because of delays in issuing export visas, and the complicated nature 
of HOPE rules of origin. Another possible indication of the impact of 
rules of origin are the "fill rates" for each region's quotas (known as 
"tariff preference levels"). Within Africa, the LDCs that qualify for 
liberalized rules of origin allowing "third country" (non.-U.S., non- 
AGOA) fabric and yarn to be used in apparel and still qualify for duty- 
free entry under AGOA had achieved a relatively high 43.3 percent "fill 
rate" for their quotas in 2006, versus other African suppliers, which 
must use domestic African or U.S. inputs, whose fill rate stood at 1.8 
percent. Recent economic literature also suggests that AGOA had some 
success in increasing export activity for some countries, but the 
increased exports are mainly associated with the liberalized apparel 
provisions."[Footnote 67] Yet others are concerned that without 
requiring more Sub-Saharan African value-added (e.g., through local 
sourcing and production), the trade, investment, and supply linkages to 
the local economy that foster development and diversification may not 
accrue to AGOA beneficiaries. As a result, the recent long-term 
extension of the third country fabric provision was accompanied by a 
new requirement to use fabrics deemed widely available for commercial 
use (i.e., in "abundant supply") in Africa. However, at a recent ITC 
hearing, a major U.S. jeans manufacturer expressed concern that the 
limitations the law places on their flexibility to source fabric is 
making them reluctant to continue purchasing from African producers. 

Our fieldwork revealed examples where complex rules-of-origin 
requirements appear to be complicating preference trade. In Ghana, for 
example, we met with a firm that decorates T-shirts with original 
designs, using traditional African decorative techniques. This firm had 
been importing plain white T-shirts from Honduras to decorate in Ghana 
and then exporting them to the United States. We were surprised to 
learn that the firm had to pay duty on the finished product exported to 
the United States, since the inputs were exempt from tariffs under U.S. 
preferences programs. For example, the plain white T-shirts 
manufactured in Honduras would have entered the United States duty-free 
under CBI. The value-added through the decorative process in Ghana 
would also be exempt from duties under AGOA. However, because the T- 
shirt manufactured in Honduras did not meet the rules of origin 
requirements for the AGOA program this company was obliged to pay duty 
on the finished decorated shirts. The company is now seeking to shift 
its T-shirt purchases to South Africa, or another AGOA beneficiary, 
since this sourcing would enable them to qualify for duty-free 
treatment under AGOA. 

On the other hand, liberalizing quotas and rules of origin have been a 
principal means by which the regional programs have been improved in 
recent years. For example, CBTPA was enacted in 2000 to enhance the CBI 
program, and temporarily eliminates tariffs and most quantitative 
restrictions on certain products. The CBTPA liberalized rules of origin 
for certain textiles and apparel in an effort to mitigate adverse 
effects on CBI suppliers caused by diversion of production and U.S. 
trade to Mexico when the North American Free Trade Agreement (NAFTA) 
entered into force. The change in rules appears to have benefited CBI 
suppliers somewhat. Notably, items entering under the CBTPA, such as 
cotton T-shirts and trousers had become leading imports from Central 
America and the Dominican Republic at the time the ITC assessed the 
impact of CAFTA-DR in 2005. Yet, apparel and footwear were also the 
Central American sectors expected to benefit most from further 
liberalization of U.S. access under CAFTA-DR. Notably, CAFTA-DR 
attempted to sustain and encourage subregional integration within the 
Americas by further loosening rules of origin to allow "cumulation" 
(adding together the value) of inputs from United States, CAFTA-DR, 
NAFTA, and CBI suppliers to meet its rules of origin. Bringing such 
attempted improvements in opportunities to fruition remains complex. In 
our visit to Haiti, for example, there was uncertainty as to how CAFTA- 
DR will interact with Haiti's new HOPE program. In particular, concern 
was expressed over whether existing production-sharing operations 
between the Dominican Republic and Haiti would be eligible for duty- 
free entry. 

Utilization of Regional Programs Is Fairly High Compared with GSP but 
Varies by Partner: 

Our analysis of the share of preference eligible imports actually 
entering under each preference program shows that the benefit of U.S. 
preference programs may vary considerably by program and partner. 
Figure 11 shows the 2006 utilization of U.S. preference programs where 
the "utilization rate" is defined as the ratio of actual preference 
imports under each program to eligible imports. As Figure 11 indicates, 
the utilization rate for the regional preference programs offered by 
the United States is high, particularly relative to the utilization of 
GSP. To some extent, low utilization of GSP may reflect the fact that 
coverage across programs is relatively uniform for many products, 
whereas program conditions and rules of origin vary. As a result, 
countries that have access to both GSP and regional programs may opt to 
use the regional programs. 

The utilization rate for GSP or GSPLDC imports from all eligible 
partners was 61 percent. The utilization rate for imports from 
countries eligible for only GSP or GSPLDC was slightly higher, at about 
75 percent. Countries eligible for GSPLDC, with enhanced duty-free 
access, had a utilization rate of 58 percent. Countries that were 
eligible for AGOA and CBI/CBTPA had utilization rates of 77 percent and 
47 percent, respectively. The four Andean countries eligible for ATPA/ 
ATPDEA had the highest utilization rate of 90 percent. 

Figure 11: Utilization Rates of U.S. Preference Program Partners, 2006: 

[See PDF for image] 

This figure is an illustration of the utilization rates of U.S. 
preference program partners, 2006. The following data is depicted: 

Combined utilization rates: 
All programs: 79%; 
All regional programs: 72%; 
GSP or GSPLDC: 61%. 

Regional program utilization rates: 
ATPA/ATPDEA: 90%; 
AGOA: 77%; 
CBI/CBTPA: 47%. 

GSP utilization rates: 
Partners eligible for only GSP or GSPLDC: 75%; 
GSPLDC: 58%; 
Partners eligible for GSP or GSPLDC and regional programs: 41%. 

AGOA: 38 countries; 
ATPA/ATPDEA: 4 countries; 
CBI/CBTPA: 24 countries; 
All regional: 66 countries; 
All programs: 143 countries; 
GSP or GSPLDC: 139 countries; 
GSPLDC: 42 countries; 
GSP or GSPLDC and regional: 62 countries; 
Only GSP or GSPLDC: 77 countries. 

Source: GAO analysis of official U.S. trade statistics and tariff 
schedule. 

Note: The four CBI/CBTPA countries that lost preference eligibility in 
2006 are included in the CBI and regional averages. 

[End of figure] 

Our analysis of data for each program (see table 6) shows variation in 
utilization of the programs across eligible countries in 2006. In 
brief, our analysis finds the following: 

* GSP or GSPLDC--Analysis of GSP shows that low-income countries are 
well represented among the top countries in terms of utilization rates, 
as 9 of the 35 countries with high utilization rates are designated low 
income. The utilization rates of the leading GSP exporters to the 
United States in terms of value vary widely, ranging from 99 percent 
(Zimbabwe) to 9 percent (Chad). 

* AGOA--Nigeria uses AGOA for 96 percent of its exports to the United 
States and dominates the share of U.S. imports under the program. Other 
major suppliers are Angola, Chad, and Gabon. The program appears to be 
highly utilized for exports of others with lesser-valued imports, 
including Botswana, Cameroon, Cape Verde, Ethiopia, Kenya, Lesotho, 
Madagascar, Mauritius, Mozambique, South Africa, Senegal, Swaziland, 
Tanzania, and Uganda. Perhaps, as a reflection of weaknesses in the 
trade capacities of some AGOA eligible countries, 12 of the 38 AGOA 
eligible countries (Benin, Burundi, Djibouti, Gambia, Guinea-Bissau, 
Guinea, Liberia, Rwanda, Sao Tome and Principe, Seychelles, Sierra 
Leone, and Democratic Republic of the Congo (formerly Zaire) did not 
export under the program, though several did export under GSP. 

* ATPA/ATPDEA--Most of the approximately $13.5 billion in U.S. 
preference imports under ATPA/ATPDEA came from three beneficiaries. 
However, utilization of the program by all beneficiary countries, 
including Bolivia, is relatively high. 

* CBI/CBTPA--The CBI/CBTPA preference program is the most varied 
regional program in terms of the development status of eligible 
countries as seven of the countries eligible for CBI are high income, 
one (Haiti) is low income, and the rest are middle-income countries. 
However, Trinidad and Tobago--a high-income country--is the leading 
supplier and has the highest utilization rate under this preference 
program. 

Table 6: Coverage and Utilization Rates by Beneficiary Country and 
Preference Program, 2006 (Dollars in millions): 

Beneficiary: Afghanistan; 
Total imports: $45.2; 
All preference programs: Preference imports: $0.2; 
All preference programs: Coverage rate: 74%; 
All preference programs: Utilization rate: 28%; 
GSP: Preference imports: $0.2; 
GSP: Coverage rate: 74%; 
GSP: Utilization rate: 28%; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Albania; 
Total imports: 12.5; 
All preference programs: Preference imports: 0.2; 
All preference programs: Coverage rate: 5; 
All preference programs: Utilization rate: 62; 
GSP: Preference imports: 0.2; 
GSP: Coverage rate: 5; 
GSP: Utilization rate: 62; 
Eligible for GSPLDC: [Empty]; 
Regional programs: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Algeria; 
Total imports: 14,752.7; 
All preference programs: Preference imports: 0.3; 
All preference programs: Coverage rate: 0; 
All preference programs: Utilization rate: 55; 
GSP: Preference imports: 0.3; 
GSP: Coverage rate: 0; 
GSP: Utilization rate: 55; 
Eligible for GSPLDC: [Empty]; 
Regional programs: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Angola; 
Total imports: 11,513.8; 
All preference programs: Preference imports: 11,307.2; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 100; 
GSP: Preference imports: 6,774.3; 
GSP: Coverage rate: 100; 
Utilization rate: 60; GSP: 
Eligible for GSPLDC: [Check]; 
Regional programs: AGOA; 
Regional programs: Preference imports: 4,532.9; 
Regional programs: Coverage rate: 100; 
Regional programs: Utilization rate: 40. 

Beneficiary: Anguilla; 
Total imports: 4.2; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 0; 
All preference programs: Utilization rate: N.A. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: [Empty]; 
GSP: Utilization rate: [Empty]; 
Eligible for GSPLDC: [Empty]; 
Regional programs: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Antigua and Barbuda; 
Total imports: 5.8; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 49; 
All preference programs: Utilization rate: 4; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 49; 
Utilization rate: 0; GSP: 
Eligible for GSPLDC: [Empty]; 
Regional programs: CBI; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 65; 
Regional programs: Utilization rate: 3. 

Beneficiary: Argentina; 
Total imports: 3,924.7; 
All preference programs: Preference imports: 666.4; 
All preference programs: Coverage rate: 33; 
All preference programs: Utilization rate: 78; 
GSP: Preference imports: 666.4; 
GSP: Coverage rate: 33; 
GSP: Utilization rate: 78; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Armenia; 
Total imports: 46.5; 
All preference programs: Preference imports: 28.1; 
All preference programs: Coverage rate: 85; 
All preference programs: Utilization rate: 97; 
GSP: Preference imports: 28.1; 
GSP: Coverage rate: 85; 
GSP: Utilization rate: 97; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Aruba; 
Total imports: 2,605.7; 
All preference programs: Preference imports: 0.2; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: [Empty]; 
GSP: Coverage rate: [Empty]; 
GSP: Utilization rate: [Empty]; 
Eligible for GSPLDC: [Empty]; 
Regional programs: CBI; 
Regional programs: Preference imports: 0.2; 
Regional programs: Coverage rate: 100; 
Regional programs: Utilization rate: 0. 

Beneficiary: Bahamas; 
Total imports: 435.7; 
All preference programs: Preference imports: 125.1; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 59; 
GSP: Preference imports: [Empty]; 
GSP: Coverage rate: [Empty]; 
GSP: Utilization rate: [Empty]; 
Eligible for GSPLDC: [Empty]; 
Regional programs: CBI; 
Regional programs: Preference imports: 125.1; 
Regional programs: Coverage rate: 99; 
Regional programs: Utilization rate: 59. 

Beneficiary: Bahrain; 
Total imports: 632.3; 
All preference programs: Preference imports: 0.7; 
All preference programs: Coverage rate: 37; 
All preference programs: Utilization rate: 1; 
GSP: Preference imports: 0.7; 
GSP: Coverage rate: 37; 
GSP: Utilization rate: 1; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Bangladesh; 
Total imports: 3,267.8; 
All preference programs: Preference imports: 20.5; 
All preference programs: Coverage rate: 1; 
All preference programs: Utilization rate: 72; 
GSP: Preference imports: 20.5; 
GSP: Coverage rate: 1; 
GSP: Utilization rate: 72; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Barbados; 
Total imports: 33.0; 
All preference programs: Preference imports: 4.7; 
All preference programs: Coverage rate: 85; 
All preference programs: Utilization rate: 87; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 79; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 4.7; 
Regional programs: Coverage rate: 85; 
Regional programs: Utilization rate: 87. 

Beneficiary: Belize; 
Total imports: 146.4; 
All preference programs: Preference imports: 78.2; 
All preference programs: Coverage rate: 98; 
All preference programs: Utilization rate: 70; 
GSP: Preference imports: 6.0; 
GSP: Coverage rate: 27; 
GSP: Utilization rate: 19; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 72.2; 
Regional programs: Coverage rate: 98; 
Regional programs: Utilization rate: 65. 

Beneficiary: Benin; 
Total imports: 0.6; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 89; 
All preference programs: Utilization rate: 90; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 89; 
GSP: Utilization rate: 90; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 0; 
Regional programs: Utilization rate: 0. 

Beneficiary: Bhutan; 
Total imports: 1.1; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 47; 
All preference programs: Utilization rate: 9; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 47; 
GSP: Utilization rate: 9;
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Bolivia; 
Total imports: 362.4; 
All preference programs: Preference imports: 187.9; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 85; 
GSP: Preference imports: 21.7; 
GSP: Coverage rate: 60; 
GSP: Utilization rate: 16; 
Eligible for GSPLDC: [Empty]; 
Regional program: ATPA/ATPDEA; 
Regional programs: Preference imports: 166.2; 
Regional programs: Coverage rate: 99; 
Regional programs: Utilization rate: 76. 

Beneficiary: Bosnia and Herzegovina; 
Total imports: 25.6; 
All preference programs: Preference imports: 3.5; 
All preference programs: Coverage rate: 22; 
All preference programs: Utilization rate: 89; 
GSP: Preference imports: 3.5; 
GSP: Coverage rate: 22; 
GSP: Utilization rate: 89; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Botswana; 
Total imports: 252.1; 
All preference programs: Preference imports: 28.3; 
All preference programs: Coverage rate: 96; 
All preference programs: Utilization rate: 97 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 2; 
GSP: Utilization rate: 4;
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 28.2; 
Regional programs: Coverage rate: 94; 
Regional programs: Utilization rate: 99. 

Beneficiary: Brazil; 
Total imports: 26,169.0; 
All preference programs: Preference imports: 3,737.7; 
All preference programs: Coverage rate: 48; 
All preference programs: Utilization rate: 58; 
GSP: Preference imports: 3,737.7; 
GSP: Coverage rate: 48; 
GSP: Utilization rate: 58; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: British Indian Ocean Territory; 
Total imports: 0.8; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 39; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 39; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: British Virgin Islands; 
Total imports: 26.3; 
All preference programs: Preference imports: 0.2; 
All preference programs: Coverage rate: 54; 
All preference programs: Utilization rate: 11; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 47; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI; 
Regional programs: Preference imports: 0.2; 
Regional programs: Coverage rate: 54; 
Regional programs: Utilization rate: 11. 

Beneficiary: Bulgaria; 
Total imports: 457.4; 
All preference programs: Preference imports: 61.1; 
All preference programs: Coverage rate: 39; 
All preference programs: Utilization rate: 83 
GSP: Preference imports: 61.1; 
GSP: Coverage rate: 39; 
GSP: Utilization rate: 83; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Burkina Faso; 
Total imports: 1.0; 
All preference programs: Preference imports: 0.1; 
All preference programs: Coverage rate: 94; 
All preference programs: Utilization rate: 10; 
GSP: Preference imports: 0.1; 
GSP: Coverage rate: 92; 
GSP: Utilization rate: 9; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 83; 
Regional programs: Utilization rate: 1. 

Beneficiary: Burundi; 
Total imports: 1.9; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 25; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 25; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 0; 
Regional programs: Utilization rate: 0. 

Beneficiary: Cambodia; 
Total imports: 2,188.2; 
All preference programs: Preference imports: 5.0; 
All preference programs: Coverage rate: 0; 
All preference programs: Utilization rate: 54; 
GSP: Preference imports: 5.0; 
GSP: Coverage rate: 0; 
GSP: Utilization rate: 54; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Cameroon; 
Total imports: 223.5; 
All preference programs: Preference imports: 153.2; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 92; 
GSP: Preference imports: 0.8; 
GSP: Coverage rate: 2; 
GSP: Utilization rate: 24; 
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 152.4; 
Regional programs: Coverage rate: 98; 
Regional programs: Utilization rate: 94. 

Beneficiary: Cape Verde; 
Total imports: 1.0; 
All preference programs: Preference imports: 0.1; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 37; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 100; 
GSP: Utilization rate: 7; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.1; 
Regional programs: Coverage rate: 30; 
Regional programs: Utilization rate: 100. 

Beneficiary: Central African Republic;
Total imports: 4.3; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 41; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 41; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Chad; 
Total imports: 1,904.7; 
All preference programs: Preference imports: 1,698.0; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 91; 
GSP: Preference imports: 166.6; 
GSP: Coverage rate: 100; 
GSP: Utilization rate: 9; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 1,531.4; 
Regional programs: Coverage rate: 100; 
Regional programs: Utilization rate: 82. 

Beneficiary: Christmas Island; 
Total imports: 0.4; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 54; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 54; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Cocos (Keeling) Islands; 
Total imports: 1.5; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 52; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 52; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Beneficiary: Colombia; 
Total imports: 9,239.8; 
All preference programs: Preference imports: 4,972.8; 
All preference programs: Coverage rate: 91; 
All preference programs: Utilization rate: 91; 
GSP: Preference imports: 181.6; 
GSP: Coverage rate: 14; 
GSP: Utilization rate: 22; 
Eligible for GSPLDC: [Empty]; 
Regional program: ATPA/ATPDEA; 
Regional programs: Preference imports: 4,791.2; 
Regional programs: Coverage rate: 92; 
Regional programs: Utilization rate: 88. 

Beneficiary: Comoros; 
Total imports: 1.5; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 0; 
All preference programs: Utilization rate: N.A. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: [Empty]; 
GSP: Utilization rate: [Empty]; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Congo; 
Total imports: 3,045.5; 
All preference programs: Preference imports: 774.6; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 26. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 0; 
GSP: Utilization rate: 37; 
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 774.5; 
Regional programs: Coverage rate: 100; 
Regional programs: Utilization rate: 26. 

Cook Islands; 
Total imports: 2.1; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 53; 
All preference programs: Utilization rate: 5. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 53; 
GSP: Utilization rate: 5; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Costa Rica; 
Total imports: 3,813.5; 
All preference programs: Preference imports: 1,495.3; 
All preference programs: Coverage rate: 94; 
All preference programs: Utilization rate: 92. 
GSP: Preference imports: 113.3; 
GSP: Coverage rate: 37; 
GSP: Utilization rate: 18; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 1,382.0; 
Regional programs: Coverage rate: 94; 
Regional programs: Utilization rate: 85. 

Croatia; 
Total imports: 352.6; 
All preference programs: Preference imports: 145.6; 
All preference programs: Coverage rate: 76; 
All preference programs: Utilization rate: 90. 
GSP: Preference imports: 145.6; 
GSP: Coverage rate: 76; 
GSP: Utilization rate: 90; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Democratic Republic of the Congo (formerly Zaire); 
Total imports: 85.1; 
All preference programs: Preference imports: 2.6; 
All preference programs: Coverage rate: 98; 
All preference programs: Utilization rate: 94. 
GSP: Preference imports: 2.6; 
GSP: Coverage rate: 98; 
GSP: Utilization rate: 94; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 1; 
Regional programs: Utilization rate: 0. 

Djibouti; 
Total imports: 3.3; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 2; 
All preference programs: Utilization rate: 0. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 2; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Dominica; 
Total imports: 3.1; 
All preference programs: Preference imports: 0.1; 
All preference programs: Coverage rate: 23; 
All preference programs: Utilization rate: 29. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 18; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI; 
Regional programs: Preference imports: 0.1; 
Regional programs: Coverage rate: 23; 
Regional programs: Utilization rate: 29. 

Dominican Republic; 
Total imports: 4,540.0; 
All preference programs: Preference imports: 2,613.8; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 86. 
GSP: Preference imports: 132.7; 
GSP: Coverage rate: 42; 
GSP: Utilization rate: 10; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 2,481.0; 
Regional programs: Coverage rate: 99; 
Regional programs: Utilization rate: 82. 

Ecuador; 
Total imports: 7,011.4; 
All preference programs: Preference imports: 5,396.4; 
All preference programs: Coverage rate: 98; 
All preference programs: Utilization rate: 94. 
GSP: Preference imports: 71.2; 
GSP: Coverage rate: 4; 
GSP: Utilization rate: 27; 
Eligible for GSPLDC: [Empty]; 
Regional program: ATPA/ATPDEA; 
Regional programs: Preference imports: 5,325.2; 
Regional programs: Coverage rate: 98; 
Regional programs: Utilization rate: 92. 

Egypt; 
Total imports: 2,404.2; 
All preference programs: Preference imports: 69.9; 
All preference programs: Coverage rate: 8; 
All preference programs: Utilization rate: 90. 
GSP: Preference imports: 69.9; 
GSP: Coverage rate: 8; 
GSP: Utilization rate: 90; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

El Salvador; 
Total imports: 1,842.7; 
All preference programs: Preference imports: 164.0; 
All preference programs: Coverage rate: 97; 
All preference programs: Utilization rate: 10. 
GSP: Preference imports: 9.9; 
GSP: Coverage rate: 4; 
GSP: Utilization rate: 15; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 154.1; 
Regional programs: Coverage rate: 97; 
Regional programs: Utilization rate: 10. 

Equatorial Guinea; 
Total imports: 1,718.1; 
All preference programs: Preference imports: 1,558.9; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 95. 
GSP: Preference imports: 1,558.9; 
GSP: Coverage rate: 100; 
GSP: Utilization rate: 95; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Eritrea; 
Total imports: 0.9; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 69; 
All preference programs: Utilization rate: 0. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 69; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Ethiopia; 
Total imports: 81.1; 
All preference programs: Preference imports: 7.2; 
All preference programs: Coverage rate: 86; 
All preference programs: Utilization rate: 98. 
GSP: Preference imports: 2.2; 
GSP: Coverage rate: 28; 
GSP: Utilization rate: 92; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 5.0; 
Regional programs: Coverage rate: 61; 
Regional programs: Utilization rate: 97. 

Falkland Islands; 
Total imports: 12.2; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 41; 
All preference programs: Utilization rate: 0. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 41; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Fiji; 
Total imports: 145.8;
All preference programs: Preference imports: 52.8; 
All preference programs: Coverage rate: 41; 
All preference programs: Utilization rate: 98. 
GSP: Preference imports: 52.8; 
GSP: Coverage rate: 41; 
GSP: Utilization rate: 98; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Gabon; 
Total imports: 1,331.0; 
All preference programs: Preference imports: 1,290.0; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 100. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 0; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 129.0; 
Regional programs: Coverage rate: 100; 
Regional programs: Utilization rate: 100. 

Gambia; 
Total imports: 0.3; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 58; 
All preference programs: Utilization rate: 60. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 56; 
GSP: Utilization rate: 62; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 2; 
Regional programs: Utilization rate: 0. 

Gaza Strip; 
Total imports: 0.8; 
All preference programs: Preference imports: 0.3; 
All preference programs: Coverage rate: 44; 
All preference programs: Utilization rate: 92. 
GSP: Preference imports: 0.3; 
GSP: Coverage rate: 44; 
GSP: Utilization rate: 92; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Georgia; 
Total imports: 115.6; 
All preference programs: Preference imports: 34.5; 
All preference programs: Coverage rate: 54; 
All preference programs: Utilization rate: 96. 
GSP: Preference imports: 34.5; 
GSP: Coverage rate: 54; 
GSP: Utilization rate: 96; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Ghana; 
Total imports: 192.2; 
All preference programs: Preference imports: 45.3; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 65. 
GSP: Preference imports: 10.5; 
GSP: Coverage rate: 16; 
GSP: Utilization rate: 96; 
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 34.9; 
Regional programs: Coverage rate: 84; 
Regional programs: Utilization rate: 59. 

Gibraltar; 
Total imports: 0.8; 
All preference programs: Preference imports: 0.1; 
All preference programs: Coverage rate: 86; 
All preference programs: Utilization rate: 37. 
GSP: Preference imports: 0.1; 
GSP: Coverage rate: 86; 
GSP: Utilization rate: 37; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Grenada; 
Total imports: 4.5; 
All preference programs: Preference imports: 0.1; 
All preference programs: Coverage rate: 28; 
All preference programs: Utilization rate: 62. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 24; 
GSP: Utilization rate: 33; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI; 
Regional programs: Preference imports: 0.1; 
Regional programs: Coverage rate: 28; 
Regional programs: Utilization rate: 33. 

Guatemala; 
Total imports: 3,102.7; 
All preference programs: Preference imports: 699.3; 
All preference programs: Coverage rate: 97; 
All preference programs: Utilization rate: 30. 
GSP: Preference imports: 46.4; 
GSP: Coverage rate: 16; 
GSP: Utilization rate: 12; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 652.8; 
Regional programs: Coverage rate: 97; 
Regional programs: Utilization rate: 28. 

Guinea-Bissau; 
Total imports: 0.5; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 76; 
All preference programs: Utilization rate: 0. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 76; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 0; 
Regional programs: Utilization rate: 0. 

Guinea; 
Total imports: 91.7; 
All preference programs: Preference imports: 0.1; 
All preference programs: Coverage rate: 44; 
All preference programs: Utilization rate: 58. 
GSP: Preference imports: 0.1; 
GSP: Coverage rate: 43; 
GSP: Utilization rate: 59; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 2; 
Regional programs: Utilization rate: 0. 

Guyana; 
Total imports: 125.0; 
All preference programs: Preference imports: 19.7; 
All preference programs: Coverage rate: 95; 
All preference programs: Utilization rate: 95. 
GSP: Preference imports: 14.6; 
GSP: Coverage rate: 73; 
GSP: Utilization rate: 91; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 5.1; 
Regional programs: Coverage rate: 95; 
Regional programs: Utilization rate: 25. 

Haiti; 
Total imports: 496.1; 
All preference programs: Preference imports: 380.7; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 82. 
GSP: Preference imports: 1.4; 
GSP: Coverage rate: 4; 
GSP: Utilization rate: 8; 
Eligible for GSPLDC: [Check]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 379.3; 
Regional programs: Coverage rate: 99; 
Regional programs: Utilization rate: 82. 

Heard Island and McDonald Islands; 
Total imports: data not significant; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: data not available; 
All preference programs: Utilization rate: data not available; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: data not available; 
GSP: Utilization rate: data not available; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Honduras; 
Total imports: 3,734.7; 
All preference programs: Preference imports: 568.6; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 19;
GSP: Preference imports: 12.7; 
GSP: Coverage rate: 20; 
GSP: Utilization rate: 2; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 555.8; 
Regional programs: Coverage rate: 99; 
Regional programs: Utilization rate: 18. 

India; 
Total imports: 21,673.6; 
All preference programs: Preference imports: 5,678.0; 
All preference programs: Coverage rate: 53; 
All preference programs: Utilization rate: 84; 
GSP: Preference imports: 5,678.0; 
GSP: Coverage rate: 53; 
GSP: Utilization rate: 84; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Indonesia; 
Total imports: 13,267.8; 
All preference programs: Preference imports: 1,945.7; 
All preference programs: Coverage rate: 33; 
All preference programs: Utilization rate: 76; 
GSP: Preference imports: 1945.7; 
GSP: Coverage rate: 33; 
GSP: Utilization rate: 76; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Iraq; 
Total imports: 11,326.3; 
All preference programs: Preference imports: 0.2; 
All preference programs: Coverage rate: 0; 
All preference programs: Utilization rate: 68; 
GSP: Preference imports: 0.2; 
GSP: Coverage rate: 0; 
GSP: Utilization rate: 68; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Ivory Coast; 
Total imports: 722.7; 
All preference programs: Preference imports: 20.0; 
All preference programs: Coverage rate: 14; 
All preference programs: Utilization rate: 76; 
GSP: Preference imports: 20.0; 
GSP: Coverage rate: 14; 
GSP: Utilization rate: 76; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Jamaica; 
Total imports: 470.9; 
All preference programs: Preference imports: 257.8; 
All preference programs: Coverage rate: 98; 
All preference programs: Utilization rate: 98; 
GSP: Preference imports: 12.1; 
GSP: Coverage rate: 17; 
GSP: Utilization rate: 27; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 245.8; 
Regional programs: Coverage rate: 98; 
Regional programs: Utilization rate: 93. 

Jordan; 
Total imports: 1,421.3; 
All preference programs: Preference imports: 15.3; 
All preference programs: Coverage rate: 9; 
All preference programs: Utilization rate: 12; 
GSP: Preference imports: 15.3; 
GSP: Coverage rate: 9; 
GSP: Utilization rate: 12; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Kazakhstan; 
Total imports: 988.9; 
All preference programs: Preference imports: 483.1; 
All preference programs: Coverage rate: 61; 
All preference programs: Utilization rate: 97; 
GSP: Preference imports: 483.1; 
GSP: Coverage rate: 61; 
GSP: Utilization rate: 97; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Kenya; 
Total imports: 352.8; 
All preference programs: Preference imports: 272.9; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 96; 
GSP: Preference imports: 7.9; 
GSP: Coverage rate: 4; 
GSP: Utilization rate: 61; 
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 265.1; 
Regional programs: Coverage rate: 95; 
Regional programs: Utilization rate: 97. 

Kiribati; 
Total imports: 1.3; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 25; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 25; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Kyrgyzstan; 
Total imports: 4.2; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 33; 
All preference programs: Utilization rate: 2; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 33; 
GSP: Utilization rate: 2; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Lebanon; 
Total imports: 87.8; 
All preference programs: Preference imports: 34.2; 
All preference programs: Coverage rate: 80; 
All preference programs: Utilization rate: 96; 
GSP: Preference imports: 34.2; 
GSP: Coverage rate: 80; 
GSP: Utilization rate: 96; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Lesotho; 
Total imports: 408.4; 
All preference programs: Preference imports: 384.6; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 99; 
GSP: Preference imports: 0.1; 
GSP: Coverage rate: 0; 
GSP: Utilization rate: 30; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 384.5; 
Regional programs: Coverage rate: 100; 
Regional programs: Utilization rate: 99. 

Liberia; 
Total imports: 139.8; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 98; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 98; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 98; 
Regional programs: Utilization rate: 0. 

Macedonia; 
Total imports: 42.2; 
All preference programs: Preference imports: 7.5; 
All preference programs: Coverage rate: 34; 
All preference programs: Utilization rate: 99; 
GSP: Preference imports: 7.5; 
GSP: Coverage rate: 34; 
GSP: Utilization rate: 99; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Madagascar; 
Total imports: 281.1; 
All preference programs: Preference imports: 231.6; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 96; 
GSP: Preference imports: 2.1; 
GSP: Coverage rate: 2; 
GSP: Utilization rate: 57; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 229.5; 
Regional programs: Coverage rate: 98; 
Regional programs: Utilization rate: 96. 

Malawi; 
Total imports: 79.0; 
All preference programs: Preference imports: 60.9; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 80; 
GSP: Preference imports: 31.0; 
GSP: Coverage rate: 76; 
GSP: Utilization rate: 54; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 29.9; 
Regional programs: Coverage rate: 94; 
Regional programs: Utilization rate: 42. 

Mali; 
Total imports: 7.9; 
All preference programs: Preference imports: 0.5; 
All preference programs: Coverage rate: 48; 
All preference programs: Utilization rate: 56; 
GSP: Preference imports: 0.5; 
GSP: Coverage rate: 47; 
GSP: Utilization rate: 56; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 8; 
Regional programs: Utilization rate: 2. 

Mauritania; 
Total imports: 51.2; 
All preference programs: Preference imports: 28.3; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 56; 
GSP: Preference imports: 28.3; 
GSP: Coverage rate: 100; 
GSP: Utilization rate: 56; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Mauritius; 
Total imports: 218.6; 
All preference programs: Preference imports: 157.5; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 92; 
GSP: Preference imports: 11.7; 
GSP: Coverage rate: 8; 
GSP: Utilization rate: 80; 
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 145.8; 
Regional programs: Coverage rate: 90; 
Regional programs: Utilization rate: 93. 

Moldova; 
Total imports: 37.1; 
All preference programs: Preference imports: 2.4; 
All preference programs: Coverage rate: 12; 
All preference programs: Utilization rate: 78; 
GSP: Preference imports: 2.4; 
GSP: Coverage rate: 12; 
GSP: Utilization rate: 78; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Mongolia; 
Total imports: 113.9; 
All preference programs: Preference imports: 0.5; 
All preference programs: Coverage rate: 1; 
All preference programs: Utilization rate: 58; 
GSP: Preference imports: 0.5; 
GSP: Coverage rate: 1; 
GSP: Utilization rate: 58; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Montserrat; 
Total imports: 0.8; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 75; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 59; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 75; 
Regional programs: Utilization rate: 0. 

Mozambique; 
Total imports: 15.6; 
All preference programs: Preference imports: 11.8; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 100; 
GSP: Preference imports: 10.9; 
GSP: Coverage rate: 94; 
GSP: Utilization rate: 97; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.9; 
Regional programs: Coverage rate: 9; 
Regional programs: Utilization rate: 90. 

Namibia; 
Total imports: 115.6; 
All preference programs: Preference imports: 33.2; 
All preference programs: Coverage rate: 96; 
All preference programs: Utilization rate: 70; 
GSP: Preference imports: 0.2; 
GSP: Coverage rate: 0; 
GSP: Utilization rate: 87; 
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 33.0; 
Regional programs: Coverage rate: 96; 
Regional programs: Utilization rate: 70. 

Nepal; 
Total imports: 99.4; 
All preference programs: Preference imports: 4.0; 
All preference programs: Coverage rate: 8; 
All preference programs: Utilization rate: 78; 
GSP: Preference imports: 4.0; 
GSP: Coverage rate: 8; 
GSP: Utilization rate: 78; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Niger; 
Total imports: 123.7; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 95; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 95; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 94; 
Regional programs: Utilization rate: 0. 

Netherlands Antilles; 
Total imports: 1,100.6; 
All preference programs: Preference imports: 2.2; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: [Empty]; 
GSP: Coverage rate: [Empty]; 
GSP: Utilization rate: [Empty]; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI; 
Regional programs: Preference imports: 2.2; 
Regional programs: Coverage rate: 100; 
Regional programs: Utilization rate: 0. 

Nicaragua; 
Total imports: 1,526.1; 
All preference programs: Preference imports: 111.0; 
All preference programs: Coverage rate: 96; 
All preference programs: Utilization rate: 9; 
GSP: Coverage rate: [Empty]; 
GSP: Utilization rate: [Empty]; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional program: AGOA; 
Regional programs: Preference imports: 111.0; 
Regional programs: Coverage rate: 96; 
Regional programs: Utilization rate: 9. 

Nigeria; 
Total imports: 27,863.4; 
All preference programs: Preference imports: 25,824.3; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 96; 
GSP: Preference imports: 1.2; 
GSP: Coverage rate: 0; 
GSP: Utilization rate: 66; 
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 25,823.1; 
Regional programs: Coverage rate: 100; 
Regional programs: Utilization rate: 96. 

Niue; 
Total imports: 0.1; 
All preference programs: Preference imports: 0.1; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 100; 
GSP: Preference imports: 0.1; 
GSP: Coverage rate: 99; 
GSP: Utilization rate: 100; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Norfolk Island; 
Total imports: 0.1; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 97; 
All preference programs: Utilization rate: 44; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 97; 
GSP: Utilization rate: 44; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Oman; 
Total imports: 782.0; 
All preference programs: Preference imports: 64.7; 
All preference programs: Coverage rate: 12; 
All preference programs: Utilization rate: 98; 
GSP: Preference imports: 64.7; 
GSP: Coverage rate: 12; 
GSP: Utilization rate: 98; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Pakistan; 
Total imports: 3,666.6; 
All preference programs: Preference imports: 130.3; 
All preference programs: Coverage rate: 4; 
All preference programs: Utilization rate: 90; 
GSP: Preference imports: 130.3; 
GSP: Coverage rate: 4; 
GSP: Utilization rate: 90; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Panama; 
Total imports: 337.6; 
All preference programs: Preference imports: 58.0; 
All preference programs: Coverage rate: 93; 
All preference programs: Utilization rate: 87; 
GSP: Preference imports: 24.2; 
GSP: Coverage rate: 76; 
GSP: Utilization rate: 45; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 33.8; 
Regional programs: Coverage rate: 93; 
Regional programs: Utilization rate: 51. 

Papua New Guinea; 
Total imports: 83.6; 
All preference programs: Preference imports: 2.9; 
All preference programs: Coverage rate: 10; 
All preference programs: Utilization rate: 99; 
GSP: Preference imports: 2.9; 
GSP: Coverage rate: 10; 
GSP: Utilization rate: 99; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Paraguay; 
Total imports: 51.4; 
All preference programs: Preference imports: 24.8; 
All preference programs: Coverage rate: 82; 
All preference programs: Utilization rate: 98; 
GSP: Preference imports: 24.8; 
GSP: Coverage rate: 82; 
GSP: Utilization rate: 98; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Peru; 
Total imports: 5,896.9; 
All preference programs: Preference imports: 3,381.2; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 98; 
GSP: Preference imports: 179.4; 
GSP: Coverage rate: 42; 
GSP: Utilization rate: 12; 
Eligible for GSPLDC: [Empty]; 
Regional program: ATPA/ATPDEA; 
Regional programs: Preference imports: 3,201.9; 
Regional programs: Coverage rate: 99; 
Regional programs: Utilization rate: 93. 

Philippines; 
Total imports: 9,696.7; 
All preference programs: Preference imports: 1,141.5; 
All preference programs: Coverage rate: 38; 
All preference programs: Utilization rate: 72; 
GSP: Preference imports: 1,141.5; 
GSP: Coverage rate: 38; 
GSP: Utilization rate: 72; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Pitcairn Island; 
Total imports: 0.1; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 47; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 47; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Romania; 
Total imports: 1,151.6; 
All preference programs: Preference imports: 283.5; 
All preference programs: Coverage rate: 52; 
All preference programs: Utilization rate: 77; 
GSP: Preference imports: 283.5; 
GSP: Coverage rate: 52; 
GSP: Utilization rate: 77; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Russia; 
Total imports: 19,641.6; 
All preference programs: Preference imports: 512.1; 
All preference programs: Coverage rate: 15; 
All preference programs: Utilization rate: 34; 
GSP: Preference imports: 512.1; 
GSP: Coverage rate: 15; 
GSP: Utilization rate: 34; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Rwanda; 
Total imports: 8.9; 
All preference programs: Preference imports: 0.9; 
All preference programs: Coverage rate: 97; 
All preference programs: Utilization rate: 100; 
GSP: Preference imports: 0.9; 
GSP: Coverage rate: 97; 
GSP: Utilization rate: 100; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Sao Tome and Principe; 
Total imports: 0.2; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 95; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 95; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 27; 
Regional programs: Utilization rate: 0. 

Senegal; 
Total imports: 21.4; 
All preference programs: Preference imports: 14.4; 
All preference programs: Coverage rate: 87; 
All preference programs: Utilization rate: 94; 
GSP: Preference imports: 0.1; 
GSP: Coverage rate: 2; 
GSP: Utilization rate: 44; 
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 14.2; 
Regional programs: Coverage rate: 85; 
Regional programs: Utilization rate: 95. 

Serbia/Montenegro; 
Total imports: 68.6; 
All preference programs: Preference imports: 29.8; 
All preference programs: Coverage rate: 85; 
All preference programs: Utilization rate: 80; 
GSP: Preference imports: 29.8; 
GSP: Coverage rate: 85; 
GSP: Utilization rate: 80; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Seychelles; 
Total imports: 10.1; 
All preference programs: Preference imports: 0.1; 
All preference programs: Coverage rate: 33; 
All preference programs: Utilization rate: 26; 
GSP: Preference imports: 0.1; 
GSP: Coverage rate: 32; 
GSP: Utilization rate: 26; 
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 0; 
Regional programs: Utilization rate: 0. 

Sierra Leone; 
Total imports: 35.9; 
All preference programs: Preference imports: 0.1; 
All preference programs: Coverage rate: 62; 
All preference programs: Utilization rate: 16; 
GSP: Preference imports: 0.1; 
GSP: Coverage rate: 62; 
GSP: Utilization rate: 16; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 2; 
Regional programs: Utilization rate: 0. 

Solomon Islands; 
Total imports: 2.2; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 44; 
All preference programs: Utilization rate: 3; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 44; 
GSP: Utilization rate: 3; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Somalia; 
Total imports: 0.4; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 79; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 79; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

South Africa; 
Total imports: 7,497.3; 
All preference programs: Preference imports: 1,783.3; 
All preference programs: Coverage rate: 97; 
All preference programs: Utilization rate: 92; 
GSP: Preference imports: 1,065.9; 
GSP: Coverage rate: 59; 
GSP: Utilization rate: 91; 
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 717.4; 
Regional programs: Coverage rate: 38; 
Regional programs: Utilization rate: 96. 

Sri Lanka; 
Total imports: 2,141.0; 
All preference programs: Preference imports: 143.6; 
All preference programs: Coverage rate: 9; 
All preference programs: Utilization rate: 88; 
GSP: Preference imports: 143.6; 
GSP: Coverage rate: 9; 
GSP: Utilization rate: 88; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

St. Helena; 
Total imports: 1.7; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 0; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 99; 
GSP: Utilization rate: 0; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

St. Kitts and Nevis; 
Total imports: 50.0; 
All preference programs: Preference imports: 25.8; 
All preference programs: Coverage rate: 96; 
All preference programs: Utilization rate: 91; 
GSP: Preference imports: 1.0; 
GSP: Coverage rate: 85; 
GSP: Utilization rate: 4; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI; 
Regional programs: Preference imports: 24.7; 
Regional programs: Coverage rate: 96; 
Regional programs: Utilization rate: 87. 

St. Lucia; 
Total imports: 37.3; 
All preference programs: Preference imports: 7.6; 
All preference programs: Coverage rate: 94; 
All preference programs: Utilization rate: 24; 
GSP: Preference imports: 0.5; 
GSP: Coverage rate: 19; 
GSP: Utilization rate: 7; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 7.1; 
Regional programs: Coverage rate: 94; 
Regional programs: Utilization rate: 22. 

St. Vincent and the Grenadines; 
Total imports: 2.0; 
All preference programs: Preference imports: 0.2; 
All preference programs: Coverage rate: 98; 
All preference programs: Utilization rate: 19; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 97; 
GSP: Utilization rate: 2; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI; 
Regional programs: Preference imports: 0.2; 
Regional programs: Coverage rate: 98; 
Regional programs: Utilization rate: 17. 

Suriname; 
Total imports: 164.2; 
All preference programs: Preference imports: 0.2; 
All preference programs: Coverage rate: 83; 
All preference programs: Utilization rate: 14; 
GSP: Preference imports: 0.2; 
GSP: Coverage rate: 83; 
GSP: Utilization rate: 14; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Swaziland; 
Total imports: 155.8; 
All preference programs: Preference imports: 149.8; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 98; 
GSP: Preference imports: 14.4; 
GSP: Coverage rate: 10; 
GSP: Utilization rate: 95; 
Eligible for GSPLDC: [Empty]; 
Regional program: AGOA; 
Regional programs: Preference imports: 135.4; 
Regional programs: Coverage rate: 89; 
Regional programs: Utilization rate: 99. 

Tanzania; 
Total imports: 34.6; 
All preference programs: Preference imports: 3.7; 
All preference programs: Coverage rate: 72; 
All preference programs: Utilization rate: 93; 
GSP: Preference imports: 0.7; 
GSP: Coverage rate: 17; 
GSP: Utilization rate: 71; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 3.0; 
Regional programs: Coverage rate: 57; 
Regional programs: Utilization rate: 96. 

Thailand; 
Total imports: 22,344.7; 
All preference programs: Preference imports: 4,252.3; 
All preference programs: Coverage rate: 53; 
All preference programs: Utilization rate: 83; 
GSP: Preference imports: 4,252.3; 
GSP: Coverage rate: 53; 
GSP: Utilization rate: 83; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Togo; 
Total imports: 3.6; 
All preference programs: Preference imports: 2.3; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 99;
GSP: Preference imports: 2.3; 
GSP: Coverage rate: 99; 
GSP: Utilization rate: 99; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Tokelau Islands; 
Total imports: 5.1; 
All preference programs: Preference imports: 1.0; 
All preference programs: Coverage rate: 33; 
All preference programs: Utilization rate: 91; 
GSP: Preference imports: 1.0; 
GSP: Coverage rate: 33; 
GSP: Utilization rate: 91; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Tonga; 
Total imports: 7.3; 
All preference programs: Preference imports: 0.2; 
All preference programs: Coverage rate: 9; 
All preference programs: Utilization rate: 54; 
GSP: Preference imports: 0.2; 
GSP: Coverage rate: 9; 
GSP: Utilization rate: 54; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Trinidad and Tobago; 
Total imports: 8,398.5; 
All preference programs: Preference imports: 3,685.1; 
All preference programs: Coverage rate: 99; 
All preference programs: Utilization rate: 95; 
GSP: Preference imports: 7.4; 
GSP: Coverage rate: 27; 
GSP: Utilization rate: 1; 
Eligible for GSPLDC: [Empty]; 
Regional program: CBI/CBTPA; 
Regional programs: Preference imports: 3,677.7; 
Regional programs: Coverage rate: 99; 
Regional programs: Utilization rate: 95. 

Tunisia; 
Total imports: 427.8; 
All preference programs: Preference imports: 113.9; 
All preference programs: Coverage rate: 40; 
All preference programs: Utilization rate: 89; 
GSP: Preference imports: 113.9; 
GSP: Coverage rate: 40; 
GSP: Utilization rate: 89; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Turkey; 
Total imports: 5,387.0; 
All preference programs: Preference imports: 1,125.7; 
All preference programs: Coverage rate: 48; 
All preference programs: Utilization rate: 70; 
GSP: Preference imports: 1,125.7; 
GSP: Coverage rate: 48; 
GSP: Utilization rate: 70; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Turks and Caicos Islands; 
Total imports: 12.1; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 17; 
All preference programs: Utilization rate: 16; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: 17; 
GSP: Utilization rate: 16; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Tuvalu; 
Total imports: 0.0; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: 0; 
All preference programs: Utilization rate: N.A. 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: [Empty]; 
GSP: Utilization rate: [Empty]; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Uganda; 
Total imports: 21.8; 
All preference programs: Preference imports: 2.5; 
All preference programs: Coverage rate: 97; 
All preference programs: Utilization rate: 95; 
GSP: Preference imports: 1.0; 
GSP: Coverage rate: 41; 
GSP: Utilization rate: 89; 
Eligible for GSPLDC: [Check]; 
Regional program: [AGOA]; 
Regional programs: Preference imports: 1.5; 
Regional programs: Coverage rate: 56; 
Regional programs: Utilization rate: 100. 

Ukraine; 
Total imports: 1,637.9; 
All preference programs: Preference imports: 23.8; 
All preference programs: Coverage rate: 26; 
All preference programs: Utilization rate: 34; 
GSP: Preference imports: 23.8; 
GSP: Coverage rate: 26; 
GSP: Utilization rate: 34; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Uruguay; 
Total imports: 512.1; 
All preference programs: Preference imports: 50.3; 
All preference programs: Coverage rate: 14; 
All preference programs: Utilization rate: 86; 
GSP: Preference imports: 50.3; 
GSP: Coverage rate: 14; 
GSP: Utilization rate: 86; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Uzbekistan; 
Total imports: 151.5; 
All preference programs: Preference imports: 2.8; 
All preference programs: Coverage rate: 16; 
All preference programs: Utilization rate: 99; 
GSP: Preference imports: 2.8; 
GSP: Coverage rate: 16; 
GSP: Utilization rate: 99; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Vanuatu; 
Total imports: 2.3; 
All preference programs: Preference imports: 0.1; 
All preference programs: Coverage rate: 80; 
All preference programs: Utilization rate: 100; 
GSP: Preference imports: 0.1; 
GSP: Coverage rate: 80; 
GSP: Utilization rate: 100; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Venezuela; 
Total imports: 36,283.4; 
All preference programs: Preference imports: 685.2; 
All preference programs: Coverage rate: 3; 
All preference programs: Utilization rate: 96; 
GSP: Preference imports: 685.2; 
GSP: Coverage rate: 3; 
GSP: Utilization rate: 96; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Wallis and Futuna; 
Total imports: data not significant; 
All preference programs: Preference imports: 0.0; 
All preference programs: Coverage rate: data not available; 
All preference programs: Utilization rate: data not available; 
GSP: Preference imports: 0.0; 
GSP: Coverage rate: data not available; 
GSP: Utilization rate: data not available; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

West Bank; 
Total imports: 3.1; 
All preference programs: Preference imports: 0.8; 
All preference programs: Coverage rate: 46; 
All preference programs: Utilization rate: 60; 
GSP: Preference imports: 0.8; 
GSP: Coverage rate: 46; 
GSP: Utilization rate: 60; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Yemen; 
Total imports: 447.4; 
All preference programs: Preference imports: 390.2; 
All preference programs: Coverage rate: 100; 
All preference programs: Utilization rate: 89; 
GSP: Preference imports: 390.2; 
GSP: Coverage rate: 100; 
GSP: Utilization rate: 89; 
Eligible for GSPLDC: [Check]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Zambia; 
Total imports: 29.0; 
All preference programs: Preference imports: 0.4; 
All preference programs: Coverage rate: 94; 
All preference programs: Utilization rate: 74; 
GSP: Preference imports: 0.4; 
GSP: Coverage rate: 86; 
GSP: Utilization rate: 79; 
Eligible for GSPLDC: [Check]; 
Regional program: AGOA; 
Regional programs: Preference imports: 0.0; 
Regional programs: Coverage rate: 8; 
Regional programs: Utilization rate: 19. 

Zimbabwe; 
Total imports: $103.2; 
All preference programs: Preference imports: $67.7; 
All preference programs: Coverage rate: 95%; 
All preference programs: Utilization rate: 99%; 
GSP: Preference imports: 67.7; 
GSP: Coverage rate: 95; 
GSP: Utilization rate: 99; 
Eligible for GSPLDC: [Empty]; 
Regional program: [Empty]; 
Regional programs: Preference imports: [Empty]; 
Regional programs: Coverage rate: [Empty]; 
Regional programs: Utilization rate: [Empty]. 

Source: GAO analysis of official U.S. trade statistics and tariff 
schedule. 

Note: Program eligibility information is for 2006. For detailed 
information about changes in country eligibility during 2006, see GAO- 
07-1209, appendix III, table 1, pages 51-55. 

[End of table] 

Appendix IV: U.S. Imports and Global Exports from Least-Developed 
Countries (Dollars in millions): 

Product group: Animal and plant products; 
Imports: $408; 
Imports: 2%; 
Preference imports: $29; 
Preference imports: 0%; 
Ratio of U.S. preference to total U.S. imports: 7; 
2005 LDC exports to the world: 62%. 

Product group: Prepared food, beverages, spirits, and tobacco; 
Imports: $90; 
Imports: 0%; 
Preference imports: $56; 
Preference imports: 0%; 
Ratio of U.S. preference to total U.S. imports: 62; 
2005 LDC exports to the world: 6%. 

Product group: Chemicals, plastics, and minerals except fuel; 
Imports: $370; 
Imports: 2%; 
Preference imports: $92; 
Preference imports: 1%; 
Ratio of U.S. preference to total U.S. imports: 25; 
2005 LDC exports to the world: 2%. 

Product group: Fuel; 
Imports: $15,129; 
Imports: 66%; 
Preference imports: $14,513; 
Preference imports: 92%; 
Ratio of U.S. preference to total U.S. imports: 96; 
2005 LDC exports to the world: 3%. 

Product group: Wood and paper products; 
Imports: $12; 
Imports: 0%; 
Preference imports: $2; 
Preference imports: 0%; 
Ratio of U.S. preference to total U.S. imports: 17; 
2005 LDC exports to the world: 5%. 

Product group: Textiles, leather, and footwear; 
Imports: $178; 
Imports: 1%; 
Preference imports: $5; 
Preference imports: 0%; 
Ratio of U.S. preference to total U.S. imports: 3; 
2005 LDC exports to the world: 1%. 

Product group: Apparel; 
Imports: $6,214; 
Imports: 27%; 
Preference imports: $1,008; 
Preference imports: 6%; 
Ratio of U.S. preference to total U.S. imports: 16; 
2005 LDC exports to the world: 16%. 

Product group: Glassware, precious metals and stones, jewelry; 
Imports: $179; 
Imports: 1%; 
Preference imports: $9; 
Preference imports: 0%; 
Ratio of U.S. preference to total U.S. imports: 5; 
2005 LDC exports to the world: 5%. 

Product group: Base metals and articles of base metals; 
Imports: $38; 
Imports: 0%; 
Preference imports: $5; 
Preference imports: 0%; 
Ratio of U.S. preference to total U.S. imports: 12; 
2005 LDC exports to the world: 0%. 

Product group: Machinery, electronics, and high-technology apparatus; 
Imports: $16; 
Imports: 0%; 
Preference imports: $1; 
Preference imports: 0%; 
Ratio of U.S. preference to total U.S. imports: 7; 
2005 LDC exports to the world: 0%. 

Product group: Aircraft, autos, and other transportation; 
Imports: $0; 
Imports: 0%; 
Preference imports: $0; 
Preference imports: 0%; 
Ratio of U.S. preference to total U.S. imports: 30; 
2005 LDC exports to the world: 0%. 

Product group: Miscellaneous manufacturing; 
Imports: $160; 
Imports: 1%; 
Preference imports: $7; 
Preference imports: 0%; 
Ratio of U.S. preference to total U.S. imports: 5; 
2005 LDC exports to the world: 0%. 

Total: 
Imports: $22,796; 
Imports: 100%; 
Preference imports: $15,728; 
Preference imports: 100%; 
Ratio of U.S. preference to total U.S. imports: 69; 
2005 LDC exports to the world: 100%. 

Source: GAO analysis of official U.S. trade statistics and U.N. trade 
statistics. 

[End of table] 

[End of section] 

Appendix V: Preference Imports by Program and Product Group, 2006 
(Dollars in billions): 

Product group: Animal and plant products; 
Preference imports in 2006: Value: $2.4; 
Preference imports in 2006: Percentage of preference imports: 3%; 
Preference imports in 2006: Percentage of total U.S. imports: 6%; 
Share in each preference program: GSP: 2%; 
Share in each preference program: AGOA: 0%; 
Share in each preference program: ATPA/ATPDEA: 7%; 
Share in each preference program: CBI/CBTPA: 9%. 

Product group: Prepared food, beverages, spirits, and tobacco; 
Preference imports in 2006: Value: 2.9; 
Preference imports in 2006: Percentage of preference imports: 3; 
Preference imports in 2006: Percentage of total U.S. imports: 8; 
Share in each preference program: GSP: 4; 
Share in each preference program: AGOA: 0; 
Share in each preference program: ATPA/ATPDEA: 3; 
Share in each preference program: CBI/CBTPA: 9. 

Product group: Chemicals and plastics; 
Preference imports in 2006: Value: 5.6; 
Preference imports in 2006: Percentage of preference imports: 6; 
Preference imports in 2006: Percentage of total U.S. imports: 3; 
Share in each preference program: GSP: 12; 
Share in each preference program: AGOA: 0; 
Share in each preference program: ATPA/ATPDEA: 1; 
Share in each preference program: CBI/CBTPA: 14. 

Product group: Wood and paper products; 
Preference imports in 2006: Value: 1.0; 
Preference imports in 2006: Percentage of preference imports: 1; 
Preference imports in 2006: Percentage of total U.S. imports: 2; 
Share in each preference program: GSP: 3; 
Share in each preference program: AGOA: 0; 
Share in each preference program: ATPA/ATPDEA: 0; 
Share in each preference program: CBI/CBTPA: 0. 

Product group: Textiles, leather, and footwear; 
Preference imports in 2006: Value: 0.9; 
Preference imports in 2006: Percentage of preference imports: 1; 
Preference imports in 2006: Percentage of total U.S. imports: 2; 
Share in each preference program: GSP: 2; 
Share in each preference program: AGOA: 0; 
Share in each preference program: ATPA/ATPDEA: 0; 
Share in each preference program: CBI/CBTPA: 1. 

Product group: Glassware, precious metals and stones, jewelry; 
Preference imports in 2006: Value: 6.0; 
Preference imports in 2006: Percentage of preference imports: 7; 
Preference imports in 2006: Percentage of total U.S. imports: 10; 
Share in each preference program: GSP: 17; 
Share in each preference program: AGOA: 0; 
Share in each preference program: ATPA/ATPDEA: 2; 
Share in each preference program: CBI/CBTPA: 3. 

Product group: Base metals and articles of base metals; 
Preference imports in 2006: Value: 5.1; 
Preference imports in 2006: Percentage of preference imports: 6; 
Preference imports in 2006: Percentage of total U.S. imports: 5; 
Share in each preference program: GSP: 12; 
Share in each preference program: AGOA: 0; 
Share in each preference program: ATPA/ATPDEA: 8; 
Share in each preference program: CBI/CBTPA: 0. 

Product group: Machinery, electronics, and high-technology apparatus; 
Preference imports in 2006: Value: 4.9; 
Preference imports in 2006: Percentage of preference imports: 5; 
Preference imports in 2006: Percentage of total U.S. imports: 1; 
Share in each preference program: GSP: 14; 
Share in each preference program: AGOA: 0; 
Share in each preference program: ATPA/ATPDEA: 0; 
Share in each preference program: CBI/CBTPA: 4. 

Product group: Aircraft, autos, and other transportation; 
Preference imports in 2006: Value: 1.9; 
Preference imports in 2006: Percentage of preference imports: 2; 
Preference imports in 2006: Percentage of total U.S. imports: 1; 
Share in each preference program: GSP: 5; 
Share in each preference program: AGOA: 1; 
Share in each preference program: ATPA/ATPDEA: 0; 
Share in each preference program: CBI/CBTPA: 0. 

Product group: Miscellaneous manufacturing;
Preference imports in 2006: Value: 0.7; 
Preference imports in 2006: Percentage of preference imports: 1; 
Preference imports in 2006: Percentage of total U.S. imports: 0; 
Share in each preference program: GSP: 2; 
Share in each preference program: AGOA: 0; 
Share in each preference program: ATPA/ATPDEA: 0; 
Share in each preference program: CBI/CBTPA: 0. 

Product group: Fuels; 
Preference imports in 2006: Value: 54.8; 
Preference imports in 2006: Percentage of preference imports: 59; 
Preference imports in 2006: Percentage of total U.S. imports: 17; 
Share in each preference program: GSP: 27; 
Share in each preference program: AGOA: 94; 
Share in each preference program: ATPA/ATPDEA: 68; 
Share in each preference program: CBI/CBTPA: 27. 

Product group: Apparel; 
Preference imports in 2006: Value: 5.9; 
Preference imports in 2006: Percentage of preference imports: 6; 
Preference imports in 2006: Percentage of total U.S. imports: 7; 
Share in each preference program: GSP: 0; 
Share in each preference program: AGOA: 3; 
Share in each preference program: ATPA/ATPDEA: 10; 
Share in each preference program: CBI/CBTPA: 32. 

Total: 
Preference imports in 2006: Value: $92.1; 
Preference imports in 2006: Percentage of preference imports: 100%; 
Preference imports in 2006: Percentage of total U.S. imports: 5%; 
Share in each preference program: GSP: 100%; 
Share in each preference program: AGOA: 100%; 
Share in each preference program: ATPA/ATPDEA: 100%; 
Share in each preference program: CBI/CBTPA: 100%. 

Source: GAO analysis of official U.S. trade statistics and tariff 
schedule. 

[End of table] 

[End of section] 

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Loren Yager, (202) 512-4347, or [email protected]: 

Staff Acknowledgments: 

In addition to the individual named above, the following persons made 
major contributions to this report: Kim Frankena, Assistant Director; 
Juan Gobel, Assistant Director; Ann Baker; Gezahegne Bekele; Ken 
Bombara; Karen Deans; Etana Finkler; Richard Gifford Howland; Ernie 
Jackson; Marisela Perez; and Celia Thomas. The team also benefited from 
the expert advice and assistance of Martin de Alteriis, Susan Offutt, 
and Mark Speight. 

[End of section] 

Footnotes: 

[1] GAO, International Trade: An Overview of Use of U.S. Trade 
Preference Programs by Beneficiaries and U.S. Administrative Reviews, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1209] (Washington, 
D.C.: Sept. 27, 2007). 

[2] MFN trade is a concept promulgated in Article I of the General 
Agreement on Tariffs and Trade (GATT). The article provides that 
contracting parties to GATT must grant each other treatment as 
favorable as they give to any country in the application and 
administration of import duties. 

[3] See the Decision on Differential and More Favourable Treatment 
Reciprocity and Fuller Participation of Developing Countries, Nov. 28, 
1979, GATT Doc. L/4903, known as the Enabling Clause, paras. 3(a) and 
(b). 

[4] ATPA expires Dec. 31, 2008. 

[5] Certain CBI countries receive enhanced benefits under CBTPA on 
previously excluded products, such as apparel, footwear, handbags, etc. 
These enhanced benefits expire on Sept. 30, 2008. Other CBI benefits 
are permanent. 

[6] GSP expires Dec. 31, 2008. 

[7] Section 206 of ATPA requires ITC to prepare a biennial report 
assessing the actual and the probable future effects of ATPA on U.S. 
industries and U.S. consumers. The most recent is: ITC, The Impact of 
the Andean Trade Preference Act, 12th Report 2005, Investigation No. 
332-352 (Washington, D.C., ITC Publication 3888, September 2006). 

[8] Section 215 of CBI requires ITC to report biennially to Congress 
with an assessment of the actual and probable future effects of CBI on 
U.S. consumers and U.S. industries. The most recent is: ITC, The Impact 
of the Caribbean Basin Economic Recovery Act, 18th Report 2005-2006, 
Investigation No. 332-227 (Washington, D.C.: ITC Publication 3954, 
September 2007). 

[9] Congressional Research Service, Generalized System of Preferences: 
Background and Renewal Debate (Washington, D.C., January 2008). 

[10] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1209]. 

[11] For more information on the overall review, see p. 41. 

[12] See ITC, CBI 18th Report (Investigation No. 332-227) and ATPA 12th 
Report (Investigation No. 332-352), analytical approach section. 

[13] ITC defines consumer surplus as a dollar measure of gains (or 
losses) to consumers resulting from lower (higher) prices. 

[14] Title V of Pub. L. No. 109-432, Dec. 20, 2006. 

[15] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1209]. 

[16] In the annual GSP review process, petitions may be filed by 
interested parties to request actions allowed by the statute and 
regulations governing the GSP program, including adding or removing a 
product from overall GSP eligibility and waiving the CNL for a product 
from a specific beneficiary. In addition, any person may file a 
petition requesting that the status of any eligible beneficiary be 
reviewed with respect to any of the designation criteria listed in the 
statute governing the GSP program. 

[17] In principle, a country granted duty-free access under U.S. trade 
preference programs would see demand for its exports grow, relative to 
exporting countries still facing MFN (normal) tariffs. If the exporter 
is a "price taker" on world markets for its goods--i.e., if its share 
of world supply is so small that it does not change world prices--it 
may also be able to keep the difference between the prevailing world 
market price and what it is able to charge as a result of duty savings, 
thereby transferring the foregone duties to the exporting country. The 
increase in exports and the duty transfer both would benefit the 
exporting country. Quantifying these effects and isolating them from 
other forces influencing countries' growth and development has proven 
difficult. As a result, economists tend to look at descriptive data on 
program coverage, use, and trade to analyze the likely effect of 
preferences on countries' development. 

[18] See appendix II for a discussion of our definition of eligible and 
dutiable, and our methodology for calculating country trade coverage. 

[19] Judith Dean and John Wainio, "Quantifying the Value of U.S. Tariff 
Preferences for Developing Countries," World Bank Policy Research 
Working Paper 3977 (2006), forthcoming in C. Braga, B. Hoekman, and W. 
Martin, eds., Trade Preference Erosion: The Terms of the Debate (New 
York: The World Bank and Palgrave Macmillan). The authors develop and 
use detailed tariff rate data for all U.S. imports, and estimate ad 
valorem (by value) tariff rates for goods such as agriculture and 
apparel that face complex tariffs and tariff-rate quotas, as well as 
the overall tariff savings from preferences by country. Such analysis 
is beyond the scope of GAO's present study. 

[20] Despite relatively low MFN tariffs, petroleum-related products, 
chemicals, jewelry, and electrical machinery were also significant 
products in the duty savings of countries. Regarding cut flowers, ITC 
staff note that with duty rates of some 6.8 percent and high shipping 
costs, the effective duty rate (margin of preference) is somewhat 
lower. 

[21] Caglar Ozden and Eric Reinhardt, "Unilateral Preference Programs: 
The Evidence"; chapter 6 in Simon J. Everett and Bernard Hoekman, eds., 
Economic Development and Multilateral Trade Cooperation (Washington, 
D.C.: The World Bank and Palgrave Macmillan, 2006), 197-199. For 
another review of the research on trade preferences, see chapter 1, 
Bernard Hoekman and Caglar Ozden, eds., Trade Preferences and 
Differential Treatment of Developing Countries (Cheltenham, U.K., and 
Northampton, MA: Edward Elgar, 2006), xi-xlii. 

[22] The ratio of the actual imports entering the United States that 
claim a preference, to the total imports that are eligible to do so, is 
termed the "utilization rate." See appendix III for data and further 
discussion. 

[23] Some of the 12 did export under GSP. 

[24] The United Nations currently designates 50 countries as "Least 
Developed Countries." Least Developed Countries (LDC) are countries 
which according to the United Nations meet certain specific criteria, 
including a low-income criterion, a human resource weakness criterion, 
and an economic vulnerability criterion. To be added to the list, a 
country must satisfy all three criteria. To qualify for graduation, a 
country must meet the thresholds for two of the three in two 
consecutive reviews. Also, the list does not include countries whose 
population exceeds 75 million. There is thus not a one-to-one 
correspondence between the level of income of countries and their LDC 
designation. 

[25] With the entry into force of the Dominican Republic-Central 
America-United States Free Trade Agreement (CAFTA-DR), the Dominican 
Republic was no longer a U.S. preference program beneficiary as of Feb. 
28, 2007. 

[26] For further information comparing the distribution of total U.S. 
preference imports in 2006 to the distribution of total LDC exports to 
the world, see appendix IV. Forty-six of the 50 countries identified by 
the United Nations as LDCs are U.S. preference program beneficiaries. 

[27] See appendix II for further information on methodology. We 
conducted the analysis at a fairly high level of product aggregation-- 
that is, at the two-digit level of product classification in the 
Harmonized Tariff System. 

[28] It should be noted that the data are for total U.S. imports for 
the relevant countries (present U.S. beneficiaries) over the period. 
Our more detailed analysis showed that products such as fuel, which 
have come to dominate U.S. preference imports in the AGOA program, were 
imported by the United States prior to the advent of the AGOA program 
in 2000 and their designation as preference imports. Therefore, fuels 
could be considered as a "traditional" import product by the United 
States and would not generally change the diversification profile of 
U.S. imports from AGOA countries. 

[29] For additional background, see GAO, Foreign Assistance: U.S. Trade 
Capacity Building Extensive, but Its Effectiveness Has Yet to be 
Evaluated, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-150] 
(Washington, D.C.: Feb. 11, 2005). 

[30] USTR has provided training and outreach to producers in the 
government and business associations in Turkey to promote GSP awareness 
and continues to assist U.S.-based Turkish-American business 
associations. Other than that, Brazil and Turkey receive little or no 
assistance from U.S. agencies, such as USAID. 

[31] An analysis provided GAO by the Federation of Industry of Sao 
Paolo, for example, shows that inter-company trade accounted for 
(depending on the sector) roughly 25 percent to 50 percent of Brazil's 
GSP exports to the United States and is particularly prevalent in the 
machinery, auto part, agrichemical, and glass industries. 

[32] Brazil Ministry of Commerce, GSP presentation to GAO, shows that 
nearly 95 percent of the value of Brazil's exports to the United States 
were manufactured goods and that 33 percent of the value of Brazil 
exports to the United States under GSP would otherwise face tariffs 
ranging up to 2.5 percent, whereas an additional 51 percent would 
otherwise face tariffs of greater than 2.5 percent but equal or less 
than 5 percent, meaning that 84 percent of Brazil's preference exports 
would otherwise face tariffs of 5 percent or less. 

[33] The legal exclusion applies to all textile and apparel articles 
that were not eligible articles on Jan. 1, 1994; all watches, except 
those entered after June 30, 1989, that the President specifically 
determines will not cause material injury to watch or watch band, 
strap, or bracelet manufacturing and assembly operations in the United 
States or its insular possessions; and all footwear, handbags, luggage, 
flat goods, work gloves, and leather wearing apparel that were not 
eligible articles on Jan. 1, 1995. Electronic articles, steel articles, 
and semimanufactured and manufactured glass products that are 
considered import-sensitive are also excluded. USTR indicated that 
these categories of articles could be considered for GSP eligibility 
based on a petition by an interested party and an ITC study of the 
impact of such a designation on the relevant domestic producers and on 
consumers. 

[34] Under this multilateral agreement, which was in effect from 1974 
to 1994, countries whose markets were disrupted by increased imports of 
textiles and apparel from another country were able to negotiate quota 
restrictions. 

[35] Paul Brenton and Takako Ikezuki, "The Initial and Potential Impact 
of Preferential Access to the U.S. Market under the African Growth and 
Opportunity Act," World Bank Policy Research Working Paper No. 3262, 
April 2004. 

[36] Of the 46 LDC preference beneficiaries, 18 enjoy some form of duty-
free access for apparel in the U.S. market under AGOA or CBI/CBTPA. 

[37] In addition, Aruba, Bahamas, Cayman Islands, Cyprus, French 
Polynesia, Greenland, Israel, Macau, Malta, Netherlands Antilles, New 
Caledonia, and Slovenia were graduated between 1995 and 2002, based on 
high income. Some of these countries remain eligible for CBI and CBTPA. 

[38] The GSP statute states that European Union members are ineligible 
for GSP. The Czech Republic, Estonia, Hungary, Latvia, Lithuania, 
Poland, and the Slovak Republic were also removed from GSP in 2004. 

[39] The Dominican Republic, El Salvador, Guatemala, and Honduras were 
removed from eligibility for all these programs, and Nicaragua only 
from CBI/CBTPA, as it was not eligible for GSP. Upon entering a free 
trade arrangement with the United States, a country gains phased duty- 
free access for virtually all its exports while providing duty-free 
treatment for U.S. imports. Thus, trade preferences are no longer 
necessary. 

[40] The CNL caps--$135 million in GSP imports of one product from a 
single country in 2008, or 50 percent of all U.S. imports of the 
product--are set by legislation. When GSP imports of a product reach 
one of these limits, the country is denied GSP benefits for that 
product unless imports fall below the CNL level in a subsequent year 
and it seeks renewed designation for GSP eligibility. However, an 
interested party could petition for a waiver of the CNL before imports 
reach the CNL cap. 

[41] A significant portion of GSP-eligible trade is not subject to the 
CNL ceiling because LDCs and AGOA beneficiaries are exempt from the CNL 
review. 

[42] The purpose of the review was to determine whether the program 
should be modified to expand participation by GSP-eligible countries 
that were not major users of the program. 

[43] A large developing country, such as India, may have more 
competitive export industries than smaller least-developed countries, 
but it also may have many more people living in poverty, who may 
benefit from the economic opportunities provided under trade 
preferences. 

[44] Officially called the "Decision on Differential and More Favorable 
Treatment, Reciprocity, and Fuller Participation of Developing 
Countries," the Enabling Clause applies as part of GATT under the WTO. 

[45] A CNL waiver can be revoked, after it has been in effect for 5 
years or more, when imports of the product from that country reach a 
ceiling equal to 1.5 times the CNL ($202.5 million in 2008), or 75 
percent of all U.S. imports of the product. 

[46] H.R. 3890, 110th Cong., 1st Sess. The related Senate bill (S. 
2257, 110th Cong., 1st Sess.), which is currently pending before the 
Senate Foreign Relations Committee, does not include the GSP provision. 

[47] Members of the Southern African Customs Union are Botswana, 
Lesotho, Namibia, South Africa, and Swaziland. 

[48] See [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-150], 
appendix IV, and GAO, World Trade Organization: Congress Faces Key 
Decisions as Efforts to Reach Doha Agreement Intensity, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-379] (Washington, D.C.: Mar. 
5, 2007). 

[49] Selected studies include: Mary Amiti and John Romalis, "Will the 
Doha Round Lead to Preference Erosion?" National Bureau of Economic 
Research Working Paper, No. 12971, March 2007; Yongzheng Yang, "Africa 
in the Doha Round: Dealing with Preference Erosion and Beyond," IMF 
Policy Discussion Paper, PDP/05/8, November 2005; Caglar Ozden and Eric 
Reinhardt, "The Perversity of Preferences: GSP and Developing Country 
Trade Policies, 1976-2000," Journal of Development Economics, vol. 78 
(2005), 1-21; R.E. Baldwin and T. Murray, "MFN Tariff Reductions and 
Developing Country Trade Benefits Under the GSP," The Economic Journal, 
vol. 87, no. 345, March 1977, 30-46. 

[50] Amiti and Romalis (2007). See also: Dean and Wainio (2006); 
Patrick Low, Roberta Piermartini, and Jurgen Richtering, "Multilateral 
Solutions to the Erosion of Non-Reciprocal Preferences in NAMA," WTO 
Economic Research and Statistics Division Working Paper, ERSD-2005-05, 
October 2005; Low, Piermartini, and Richtering, "Non-Reciprocal 
Preference Erosion Arising from MFN Liberalization in Agriculture: What 
Are the Risks?" WTO Economic Research and Statistics Division Working 
Paper, ERSD-2006-02, March 2006. 

[51] Judith Dean, "Is Trade Preference Erosion Bad for Development?" 
ITC Office of Economics Working Paper, No. 2006-11-A, November 2006. 

[52] Products coming from CBI or ATPA countries are eligible to enter 
under either the GSP program or the regional program. In contrast, AGOA 
simply made all AGOA countries eligible for GSP (with certain 
enhancements) but did not duplicate the product coverage of the GSP 
program. 

[53] On May 16, 2007, the Senate Committee on Finance held a hearing to 
assess U.S. trade preference programs. U.S. Preference Programs: How 
Well Do They Work? Hearing before the Senate Committee on Finance, 
110th Congress (2007). 

[54] "Special 301" refers to certain provisions of the Trade Act of 
1974, as amended, that require USTR to annually identify foreign 
countries that deny adequate and effective IPR protection or deny fair 
and equitable market access for U.S. entities or individuals who rely 
on IPR protection. 

[55] The requirement for the Labor report is in the GSP statute. 

[56] Countries placed on the Tier 2 Watch List are those countries 
whose governments do not fully comply with the minimum standards but 
are making significant efforts to do so; and have a very significant or 
increasing number of victims; fail to show increasing efforts to combat 
trafficking from previous year or have been assessed as making 
significant efforts to comply based on commitments to take steps over 
the next year. Countries placed in Tier 3 are those whose governments 
do not comply with minimum standards and are not making significant 
efforts to do so. 

[57] CBI benefits were withdrawn for a limited number of products from 
Honduras in 1997 and restored in 1998. 

[58] AGOA requires the President to convene annual high-level meetings 
between appropriate officials of the U.S. government and officials of 
the governments of Sub-Saharan African countries to foster close 
economic ties between the United States and Sub-Saharan Africa. 

[59] The U.S. Census Bureau lists imports that qualify for regional 
preference programs under chapter HTS98 (certain textiles and apparel) 
under the original tariff line. Importers must provide the original 
tariff line between HTS1 and HTS97 plus the HTS98 code that shows they 
are eligible for trade preferences. The ITC tariff schedule only lists 
the HTS98 tariff lines as eligible for preferences. Therefore, trade 
data show imports under tariff lines that don't appear eligible for 
trade preferences. We confirmed that this is the case with ITC. We 
marked the original tariff lines as being eligible for trade 
preferences under the relevant regional program with a # sign and 
excluded HTS98 to avoid double counting. 

[60] It should be noted that these classifications are slightly more 
disaggregated than those presented in our September 2007 report. 
Notably, in that report: 

Agriculture includes what we present in this report under animal and 
plant products and prepared food, beverages, spirits, and tobacco; 

Chemicals, plastics, paper includes both chemicals and plastics and 
wood and wood products; 

Textiles and apparel includes both what we report under textiles, 
leather, and footwear and what we report under apparel; and 

Machinery and electronics includes what we report under the three 
categories of machinery, electronics, and high-tech apparatus; 
aircraft, autos, and other transportation; and miscellaneous 
manufacturing. 

[61] According to Hirschman (1964), the index is designed as a measure 
when concentration is a function of both unequal distribution and 
fewness. Albert O. Hirschman, "The Paternity of an Index," The American 
Economic Review, vol. 54, no. 5, Sept. 1964, 761. 

[62] Despite relatively low MFN tariffs, petroleum-related products, 
chemicals, jewelry, and electrical machinery were also significant 
products in the duty-savings of countries. 

[63] Judith Dean and John Wainio, "Quantifying the Value of U.S. Tariff 
Preferences for Developing Countries," World Bank Policy Research 
Working Paper 3977 (2006), forthcoming in C. Braga, B. Hoekman, and W. 
Martin, eds., Trade Preference Erosion: The Terms of the Debate (New 
York: The World Bank and Palgrave Macmillan). The authors develop and 
use detailed tariff rate data for all U.S. imports, and estimate ad 
valorem (by value) tariff rates for goods such as agriculture and 
apparel that face complex tariffs and tariff-rate quotas, as well as 
the overall tariff savings from preferences (including GSP) by country. 
Such analysis is beyond the scope of GAO's present study. 

[64] Dean and Wainio (2006), 18. 

[65] The data used in the Dean and Wainio analysis was for 2003. 

[66] While the data on coverage and margins of preference suggest a 
degree of success in improving the benefits of U.S. preference 
programs, in general, recent assessments of the literature express some 
skepticism as to whether trade preferences, and GSP in particular, have 
had more than a very modest impact on the export performance, and hence 
the development, of eligible countries. (See Hoekman and Ozden (2006) 
and Caglar Ozden and Eric Reinhardt, "Unilateral Preference Programs: 
The Evidence," chapter 6, in Simon J. Evenett and Bernard M. Hoekman, 
eds., Economic Development and Multilateral Trade Cooperation 
(Washington, D.C.: The World Bank and Palgrave Macmillan, 2006). For 
example, Ozden and Reinhardt (Ozden and Reinhardt (2006) 197-199) not 
only indicate that GSP often fails to cover products in which 
beneficiary countries have the greatest comparative advantage, such as 
agricultural products, but cite administrative features of the 
programs--notably export ceilings and rules of origin--as key 
constraints on benefits. 

[67] Early assessments of the AGOA program, based on simulation work, 
suggested that the program would benefit many African countries. One 
study that focused on the possible gains from apparel exports and the 
relaxation of the rules of origin estimated that AGOA could raise non-
oil exports by 8-11 percent (Mattoo, Aaditya, Devesh Roy and Arvind 
Subramanian, "The Africa Growth and Opportunity Act and its Rules of 
Origin: Generosity Undermined?" World Economy, 26 (6), 829-51). This 
study further asserted that the estimated benefits of AGOA would be 
much greater, up to fivefold, after 2005, if more liberal rules of 
origin were to continue to be applied to apparel and the program had 
wider coverage. Another study reiterated these points that apparel 
preferences and liberal rules of origin were key to AGOA's impact but 
also noted that "with the exception of clothing most of the products 
liberalized under AGOA had been liberalized under GSP for LDCs." The 
study indicated that AGOA is mainly about LDCs and clothing, and that 
for nonoil exporters and LDCs not eligible for the clothing provisions, 
the benefits of AGOA would be small (Paul Brenton and Takako Ikezuki, 
"The Initial and Potential Impact of Preferential Access to the U.S. 
Market under the African Growth and Opportunity Act," World Bank Policy 
Research Working Paper 3262 (April 2004). 

More recent studies allow an assessment of AGOA based on historical 
data and subsequent to the extension of the special rules of origin for 
apparel to 2012. One study uses updated empirical techniques and finds 
that the apparel provisions of AGOA are associated with a 53 percent 
increase in imports to the United States, and for GSP products, AGOA 
accounts for a 14 percent increase. The positive effect of AGOA grew 
over time and despite the dismantling of the Multi-fiber Agreement in 
2005. This study also finds that AGOA also had a positive impact on the 
growth of U.S. imports of GSP agricultural and manufacturing products 
(Garth Frazer and Johannes Van Biesebroeck, "Trade Growth Under the 
African Growth and Opportunity Act," National Bureau of Economic 
Research Working Paper 13222 (July 2007). Another recent study 
estimates an even larger effect from the liberalized apparel provisions 
of AGOA (Paul Collier and Anthony J. Venables, "Rethinking Trade 
Preferences: How Africa Can Diversify its Exports," World Economy, 
August 2007, 1,326-1,345). 

[End of section] 

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