MFA also contained a “safeguard” provision, which allowed importing countries to impose unilateral quotas when it determined that imports were causing actual or threatened serious damage to the U.S. domestic market based on factors specified in MFA. The committee will continue to participate in negotiations (led by USTR) for bilateral quota agreements with non-WTO member countries. CITA has no budget of its own, but portions of the individual budgets of the five principal agencies related to CITA functions added up to $3.6 million in fiscal year 1995. To date, CITA has not published guidelines or documented procedures that describe its decision-making process for imposing quotas. For example, they questioned (1) whether in some cases import increases had been “sharp and substantial” as required under ATC, (2) why changes occurred in the direction of data levels—in one case in U.S. domestic production levels and in another case in U.S. employment levels—between the consultation period and the TMB review, (3) whether the United States had adequately considered the exporting country’s world market share of the products in question, and (4) whether reimports under the U.S. Special Access Program could damage U.S. producers. Japan has not invoked safeguard measures under MFA or ATC. The act mandates that ITC hold public hearings, solicit briefs from interested parties, and issue public reports throughout the course of its investigation. IX for more information on the ITC safeguard process.) The Committee for the Implementation of Textile Agreements: Functions, Resources, and Costs

The Committee for the Implementation of Textile Agreements CITA carries on several functions beyond overseeing the gradual integration of quotas and utilizing the Agreement on Textiles and Clothing’s (ATC) transitional safeguard mechanism. It will make all decisions on a consensus basis. We also found that some compatibility problems exist between the domestic producer price and employment data CITA uses and the CITA categories. Import data are more current than production data because it is provided monthly, while production data is provided quarterly. The data shows that CITA does not apply any standard numerical thresholds in finding damage to U.S. industry and in deciding to request consultations to impose quotas. In 1995, CITA requested consultations with some small suppliers. Both the EU and Canada imposed quotas under MFA and have well-established processes for determining whether to make a call to a foreign country for consultations. In 1994, Canada imported $4.3 billion in textiles, up from about  $3 billion in 1990. Scope and Methodology

To identify and describe CITA’s authority, functions, resources, and costs under MFA and ATC, we reviewed pertinent CITA agency and other government documents, including (1) the executive order establishing CITA’s authority in textile trade matters; (2) U.S. legislation to implement ATC; and (3) budget data provided to us by officials of USTR and the Departments of Commerce, Labor, State, and the Treasury. GAO Comments

1. 5. 6. 7. 8. 9. 10.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the U.S. Committee for the Implementation of Textile Agreements' (CITA) role in administering the U.S. textile program, focusing on: (1) CITA authority, functions, resources, and costs under the Multifiber Arrangement (MFA) and the 1994 Agreement on Textiles and Clothing (ATC); (2) the CITA process for imposing quotas; (3) CITA use of data to make quota decisions; (4) CITA use of ATC temporary import quota safeguards in 1995; (5) European Union (EU), Canadian, and Japanese use of quotas under MFA and ATC and their processes for imposing quotas; and (6) the U.S. International Trade Commission's (ITC) safeguard process.

What GAO Found

GAO found that: (1) CITA has broad delegated authority to impose quotas when it determines that imports are causing or threatening to cause damage to the domestic textile industry; (2) since its main function, to implement textile agreements, has not changed under ATC, CITA does not expect its workload to increase significantly, but it will continue to participate in negotiations for bilateral quota agreements; (3) CITA received about $3.6 million in fiscal year 1995 from five agencies and had a staff of 33 provided by the Department of Commerce to support CITA operations; (4) CITA has not published guidelines or procedures describing its quota decisionmaking process; (5) CITA tries to match import data and domestic production data to establish a causal link between imports and damage to domestic producers on a case-by-case basis before requesting consultations with exporting countries and seeking comments from interested parties; (6) CITA uses U.S. government statistics in its quota decisionmaking process, but some data compatibility problems occur due to varying collection methods; (7) the United States has been the only country to impose quotas under ATC; (8) EU and Canada have imposed quotas under MFA, but Japan has never imposed any quotas; (9) although EU and Canada use similar import data, their decisionmaking processes are different; and (10) the ITC quota decisionmaking process differs significantly from CITA because it is based on U.S. legislation that stipulates specific procedures and time-frames for imposing quotas and holding public hearings.