NSIAD-99-38 Agricultural Trade: Changes Made to Market Access Program, but Questions Remain on Economic Impact

In a modern world with rapidly growing international trade, countries compete less based on the availability of natural resources, geographical advantages, and lower labor costs and more on factors related to firms' ability to enter and compete in new markets. One such factor is the ability to demonstrate the quality and safety of goods and services expected by consumers and confirm compliance with international standards. To assure such compliance, a sound quality infrastructure (QI) ecosystem is essential. Jointly developed by the World Bank Group and the National Metrology Institute of Germany, this guide is designed to help development partners and governments analyze a country's quality infrastructure ecosystems and provide recommendations to design and implement reforms and enhance the capacity of their QI institutions.

The 48-year U.S. embargo on Cuba aims to deny resources to the Castro regime by prohibiting most trade, travel, and financial transactions with Cuba. The departments of Commerce, Homeland Security (DHS), Justice, and the Treasury are responsible for enforcing the embargo as well as protecting homeland and national security. Since 2001, U.S. agencies have changed the embargo's rules in response to new laws and policies. GAO was asked to examine (1) the rule changes in 2001-2005 and their impact on U.S. exports, travel, cash transfers, and gifts to Cuba; (2) U.S. agencies' embargo-related activities and workloads; and (3) factors affecting the embargo's enforcement. GAO analyzed laws, regulations, and agency data, interviewed agency officials, and observed agency activities at Port Everglades and Miami International Airport, Florida. The loosening of embargo rules on some exports led to increased agricultural shipments to Cuba, but the impact of tighter restrictions on travel, cash transfers, and gifts is unknown. In 2001, responding to a new law, Treasury's Office of Foreign Assets Control (OFAC) and Commerce's Bureau of Industry and Security (BIS) loosened embargo restrictions on some trade with Cuba. U.S. exports to Cuba--mostly agricultural products--rose from about $6 million to about $350 million from 2000 to 2006. In 2004, responding to new administration policy, OFAC tightened rules on travel to Cuba, for example, by requiring that all family travelers obtain specific Treasury licenses and reducing the permitted frequency of family visits from once a year to once every 3 years, and it also tightened rules for sending cash transfers and gift parcels. Because reliable data are not available, the impact of these tighter restrictions on travel, cash transfers, and gifts cannot be determined. U.S. agencies enforce the Cuba embargo primarily by licensing and inspecting exports and travelers and by investigating and penalizing or prosecuting embargo violations. BIS processed twice as many exports license applications for Cuba in 2006 than in 2001, and OFAC issued about 40 percent more Cuba travel licenses in 2006 than in 2003. Reflecting the administration's embargo-tightening policy, DHS's Customs and Border Protection (CBP) inspects all exports to Cuba at Port Everglades and, since 2004, has increased intensive, "secondary" inspections of passengers arriving from Cuba at the Miami airport; in 2007, CBP conducted these inspections for 20 percent of arrivals from Cuba versus an average of 3 percent of other international arrivals. CBP data and interviews with agency officials suggest that the secondary inspections of Cuba arrivals at the airport may strain CBP's ability to carry out its mission of keeping terrorists, criminals, and other inadmissible aliens from entering the country. Moreover, recent GAO reports have found weaknesses in CBP's inspections capacity at key U.S. ports of entry nationwide. After 2001, OFAC opened more investigations and imposed more penalties for embargo violations, such as buying Cuban cigars, than for violations of other sanctions, such as those on Iran. In contrast, BIS, DHS's Immigration and Customs Enforcement, and Justice have primarily investigated, penalized, or prosecuted export violations and crimes that present a greater threat to homeland and national security or public safety. U.S. officials and others told GAO that several factors hinder enforcement of the Cuba embargo, sometimes acting in concert. (1) Lack of cooperation from foreign countries has undercut the embargo's effectiveness and hampered inspections and investigations. (2) Divided U.S. public opinion, particularly regarding the new travel and cash transfer restrictions, has contributed to widespread, small-scale embargo violations and the selling of fraudulent religious and other travel licenses, among other problems. (3) Some embargo violations are difficult to detect or control, such as fraudulent licenses and on-line money transfers via third countries. (4) The embargo's complexity and changing rules may have led to unintended violations by some individuals and companies.

High-Containment Laboratories: National Strategy for Oversight Is Needed

Nearly half of trade agreements concluded in the past five years included either a labor chapter or labor provision that makes reference to international labor standards and ILO instruments. The evidence so far suggests that labor provisions have been an important tool for raising awareness and improving laws and legislations with respect to workers' rights, increasing stakeholder involvement in negotiation and implementation phases, and developing domestic institutions to better monitor and enforce labor standards. But challenges remain, particularly with respect to sustainability of impacts, coherence, and cooperative efforts. This new report, part of the Studies on Growth with Equity series, gives a full examination of the scope and effectiveness of these labor provisions.