Summary: GAO discussed the administration's implementation of certain provisions of the Export Administration Act of 1979 which requires consideration of the domestic economic impact of foreign policy controls. Specifically, GAO focused on administration compliance with the act's provisions requiring consultation with businesses affected by the proposed controls and consideration of the economic impact of such controls before imposing, expanding, or extending them. GAO noted that, in four recent cases in which export controls were imposed, the administration carried out consultation in only one. Further, that consultation was poorly conducted and received strong criticism from the affected businesses. GAO stated that, generally, the administration had sufficient knowledge of direct export costs and the effects of the controls on some individual companies. However, it did not have the data to assess the controls' secondary effects, such as the consequences for future trade, impact on subcontractors, jobs, and government revenues. GAO concluded that, although export controls are an important part of U.S. foreign policy, their economic costs have been more visible than their political benefits. GAO does not believe that fine tuning the act will change this situation.
