Summary: In response to a congressional request, GAO assessed the implementation of the Department of Agriculture's (USDA) Export Enhancement Program (EEP) and its effectiveness in: (1) increasing U.S. agricultural exports; and (2) encouraging negotiations on agriculture trade problems with U.S trading partners.
GAO found that: (1) although wheat exports increased for several EEP-targeted markets, decreased exports to other markets offset them; (2) the EEP design restricted its effectiveness in increasing U.S. exports; (3) although EEP appeared to increase selected U.S. agricultural exports, there was doubt that the markets would sustain the gains without major changes in the market and the European Community's subsidy policies; (4) because EEP has increased the European Community's Common Agriculture Policy's financial cost through increased subsidies, it has contributed to the inclusion of agricultural subsidies in multilateral trade negotiations; (5) although broadening EEP to other markets would eliminate discrimination charges and increase competition, it would antagonize non-subsidizing exporters; and (6) although EEP may have some effect in encouraging the European Community to negotiate, more fundamental changes are needed to restore equilibrium, since it does not increase world demand in periods of overproduction and surplus.
