United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Trade, Committee on Ways and

Means, House of Representatives

July 1998 U.S. - AFRICA TRADE

U.S. Textile and

Apparel Importers’

Reactions to Trade

Preference Options

GAO/NSIAD-98-217

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-280424 

July 17, 1998

The Honorable Philip M. Crane

Chairman, Subcommittee on Trade

Committee on Ways and Means

House of Representatives

Dear Mr. Chairman:

At your request, we are providing information regarding the possible

reactions of major U.S. textile and apparel importers to different

approaches for granting trade preferences to sub-Saharan African

countries. You asked us to report on (1) the expected reactions of major

U.S. textile and apparel importers to alternative approaches to that taken

in the African Growth and Opportunity Act (bill number H.R. 1432) and

(2) the factors that would likely influence U.S. importers’ decisions on

whether to begin or increase importing textiles and apparel from

sub-Saharan Africa. To obtain this information, we completed interviews

with 65 out of the 80 largest U.S. importers of textile and apparel (in terms

of dollar value of imports) in 1996. These companies accounted for almost

one-third of total U.S. textile and apparel imports at that time. While the

results of the company interviews are representative of the largest 80 U.S.

textile and apparel importers, these results are not projectable or

generalizable to the universe of all U.S. textile and apparel importers.

This report provides information on how major U.S. importers of textile

and apparel might react to providing trade preferences to sub-Saharan

Africa but does not address whether any of the discussed trade preference

approaches would promote economic growth and development in the

region. It also does not address the possible impact of increased

sub-Saharan African textile and apparel imports on U.S. consumers and

producers nor whether the potential increased trade with the region might

represent diversion of trade from other countries or regions. Appendix IV

discusses our scope and methodology in further detail.

Background In March 1998, the House of Representatives passed the African Growth

and Opportunity Act, which includes provisions that would offer

preferential tariffs and other benefits to textile and apparel imports from

sub-Saharan Africa to increase U.S. trade with that region. (See app. III for

a listing of the 48 sub-Saharan African countries.) The bill would authorize

the President to grant duty-free and quota-free treatment to

Page 1 GAO/NSIAD-98-217 U.S. - Africa Trade
B-280424 

products—including textiles and apparel—from eligible sub-Saharan

African countries under the Generalized System of Preferences (GSP).1

 This

treatment would be provided for textile and apparel articles assembled in

eligible sub-Saharan African countries without specifying where the yarn,

fabric, or thread is made nor where the fabric is cut.2

In addition to the House bill, we asked about two alternative approaches

for extending trade preferences to sub-Saharan African textile and apparel

products. While all three approaches would provide duty-free, quota-free

access for textile and apparel products assembled in sub-Saharan Africa,

the two alternate approaches have more restrictive product eligibility

requirements. The most restrictive approach would require that

U.S.-formed fabric, thread, and yarns be used and that the fabric be cut in

the United States. The less restrictive alternative approach would require

the use of U.S.-formed fabric, thread, and yarn but permit cutting in

sub-Saharan Africa. Unlike the House bill, both of the other approaches

would require that companies ship U.S. fabric or cut pieces to sub-Saharan

Africa for assembly into finished textile and apparel products.

Sub-Saharan Africa is currently a very small exporter of textiles and

apparel to the United States, accounting for less than 1 percent of total

U.S. general imports of these products in 1997.3

 Over 95 percent of

sub-Saharan African textile and apparel exports to the United States

originated from just 7 out of the 48 sub-Saharan African countries—Kenya,

Lesotho, Madagascar, Mauritius, South Africa, Swaziland, and Zimbabwe.

Results in Brief Our interviews with major U.S. importers of textile and apparel revealed

that the companies’ interest in initiating or increasing imports from

sub-Saharan Africa varies widely, depending on the various trade

liberalizing approaches. Only a limited number of the companies we

interviewed, 7 out of the 65, reported that they might begin or increase

importing these products from the region over the next 5 years if the most

1

The GSP program provides duty-free access to the United States for some products of developing

countries. The program eliminates tariffs on certain imports from eligible developing countries in

order to promote development through trade rather than through traditional aid programs. See

International Trade: Assessment of the Generalized System of Preferences Program (GAO/GGD-95-9,

Nov. 9, 1994).

2

Although all sub-Saharan African countries would potentially be eligible under the House bill, their

individual eligibility would be contingent on the President’s annual determination that the country

(1) does not engage in gross violations of human rights and (2) has established, or is making progress

toward establishing, a market-based economy.

3

General imports measure the total physical arrivals of merchandise from foreign countries, whether

such merchandise enters consumption channels immediately or is entered into bonded warehouses or

foreign trade zones under the custody of the U.S. Customs Service.

Page 2 GAO/NSIAD-98-217 U.S. - Africa Trade
B-280424 

restrictive product eligibility requirements for sub-Saharan African trade

benefits are implemented. This approach would provide duty-free,

quota-free treatment only to products assembled in sub-Saharan Africa

from U.S.-made thread and fabric that must also be cut in the United

States. Of the 65 companies, 15 reported that they might begin or increase

importing from the region if eligibility were restricted to products made

from U.S. fabric but not requiring that the fabric be cut in the United

States. This contrasts with 54 out of the 65 companies that reported that

they might begin or increase imports under the House bill, which would

provide eligibility for products assembled in sub-Saharan Africa without

specifying where the fabric is made or cut.4

 There were no major

distinctions or systematic patterns distinguishing the types of companies

that might import textiles and apparel from sub-Saharan Africa under any

of the three approaches.

Most of the importers we interviewed indicated that increases in the time

and costs of shipping associated with transporting U.S. fabric to

sub-Saharan Africa were important factors that would discourage them

from importing from the region under either of the more restrictive

approaches. Conversely, the single most important factor influencing

companies’ interest in importing from sub-Saharan Africa under the House

bill was the increased flexibility to choose the source of the fabric (that is,

the lack of a requirement for U.S.-cut and -formed fabric).

Importer Interest

Varies Substantially

Under Different

Product Eligibility

Requirements

Far fewer of the companies we interviewed expressed an interest in

beginning or increasing sub-Saharan textile and apparel imports under the

more restrictive product eligibility approaches, in comparison to the

House bill’s less restrictive approach. Of the 65 importers interviewed for

the study, only 7 reported that they might increase imports if eligibility

were restricted to products assembled in sub-Saharan Africa from fabric

cut and formed in the United States over the next 5 years.5

 Fifteen of the

65 companies reported that they might begin or increase importing

sub-Saharan textile and apparel if eligibility were restricted to products

made from U.S. fabric but not requiring that the fabric be cut in the United

States.6

 This contrasts with 54 out of the 65 companies interviewed

responding that they might increase imports over the next 5 years under

4

Under each of the alternative approaches, three companies responded that they “didn’t know”

whether they would begin or increase imports.

5

One of these companies reported that it was currently importing sub-Saharan textile or apparel

products.

6

Five of these companies reported that they were currently importing sub-Saharan textiles or apparel.

Page 3 GAO/NSIAD-98-217 U.S. - Africa Trade
B-280424 

the House bill.7 Almost three-fourths of these companies, or 39 out of 54,

indicated that they might not begin or increase imports under either of the

more restrictive alternative approaches. Also included in this latter group

of 54 companies were all 22 firms we interviewed that currently import

textiles and apparel from sub-Saharan Africa. (See app. II.) More than half

of these companies, 12 out of 22, reported getting 1 percent or less of their

total textile or apparel imports from sub-Saharan Africa. Of the remaining

companies, eight reported importing on average about 5 percent of these

products from the region, while two did not know how much they import.

The study included a wide range of companies that engaged in different

importing activities. Of the 65 companies we interviewed, 43 reported that

they import both textiles and apparel, 20 import apparel only, and 2 import

textiles only. The interview respondents also included companies using

diverse importing strategies.8

 While more than half of the companies

interviewed, 36 out of 65, reported that they mainly import products that

they source offshore under their own specifications, the study also

included companies that mainly import finished products, companies that

mainly import products from their own offshore manufacturing facilities,

and companies that import equally under a combination of these

strategies. Also, our study included 29 companies that mainly sell textiles

and/or apparel, including major national discount department stores,

retailers, and wholesalers, as well as 26 companies that mainly

manufacture these products in the United States or offshore.9

The interview respondents also import textiles and apparel globally. All

but one company reported importing from Asia, while the vast majority

also reported importing from the Caribbean Basin10 and Mexico.

Furthermore, most of the companies use existing U.S. trade preference

programs—such as the North American Free Trade Agreement (NAFTA)11

7

Seven companies reported that they would not import from sub-Saharan Africa under any of the three

alternative approaches.

8

According to the Department of Commerce, U.S. importers of apparel generally (1) import finished

products, (2) source or contract offshore production under exact specifications, and/or (3) engage in

production sharing with contractors in other countries or own offshore production facilities.

9

We relied on Dun & Bradstreet’s Dun’s Market Identifiers database to identify each company’s

business activity.

10Caribbean Basin countries include Antigua and Barbuda, Aruba, the Bahamas, Barbados, Belize,

Costa Rica, Dominica, the Dominican Republic, El Salvador, Grenada, Guatemala, Guyana, Haiti,

Honduras, Jamaica, Montserrat, the Netherlands Antilles, Nicaragua, Panama, St. Kitts and Nevis, St.

Lucia, St. Vincent and the Grenadines, Trinidad and Tobago, and the British Virgin Islands.

11NAFTA generally eliminates quotas and phases out tariffs on apparel originating in Mexico or Canada

that is made from fabric produced in a NAFTA country.

Page 4 GAO/NSIAD-98-217 U.S. - Africa Trade
B-280424 

and the Caribbean Basin Initiative (CBI)—to import textiles and apparel

from these countries into the United States.

We analyzed the distribution of these characteristics for the different

groups of companies that expressed an interest in importing sub-Saharan

African textiles and apparel under each of the three approaches. Our

analysis indicated that the various groups shared diverse characteristics

and that there were no major distinctions or systematic patterns in the

types of companies that might import textiles and apparel from

sub-Saharan Africa. For example, we found that a company’s participation

in existing U.S trade preference programs was not an indicator of how it

might react to extending preferences to sub-Saharan textiles and apparel.

The proportion of companies that currently import these products under

NAFTA trade regulations, Harmonized Tariff Schedule (HTS) 807A, or HTS

9802 (807)12 that expressed an interest in importing from sub-Saharan

Africa was similar under the various approaches we considered. Similarly,

a company’s experience with importing from sub-Saharan Africa also was

not a major indicator of how it might react to trade preferences for

sub-Saharan textiles and apparel. Companies indicating that they might

begin or increase importing under the different approaches included both

those that do and do not currently import from sub-Saharan Africa. See

appendix I for additional information on company characteristics.

Shipping Time and

Costs, and Sourcing

Flexibility Are Key

Factors in Company

Import Decisions

Increased time and costs of shipping associated with transporting U.S.

fabric to sub-Saharan Africa would discourage most of the importers we

interviewed from importing textiles and apparel from the region under

either of the more restrictive trade preference approaches. Increased

shipping time was cited as an influential factor by three-quarters of the

importers that indicated they might not import sub-Saharan textiles and

apparel under the more restrictive approaches. Increased shipping costs

were cited as an influential factor by more than half of this group of

12HTS 807A provides for virtually quota-free access to the U.S. market for CBI apparel assembled from

U.S.-formed and -cut fabric. Under 807A, duties are only paid on the value added in the CBI countries.

HTS 9802 refers to any products imported under the product-sharing provisions of item 807 of the U.S.

Harmonized Tariff Schedule, which is now heading 9802 of the HTS. Although products imported

under this provision are exempted from duties on the value of their U.S-made components, apparel

imports are subject to quotas.

Page 5 GAO/NSIAD-98-217 U.S. - Africa Trade
B-280424 

companies.13 Furthermore, higher U.S. fabric costs were also cited as an

influential factor by about one-third of the companies.

On the other hand, we found that increased flexibility to choose the

fabrics’ source was the single most important factor influencing

companies’ interest in importing. Increased sourcing flexibility was cited

as an influential factor by 52 out of the 54 companies that said that they

might import textiles and apparel from sub-Saharan Africa under the

House bill. Furthermore, this was a major factor cited by 27 of the 39

importers that indicated that they might import sub-Saharan textiles and

apparel under the House bill but might not under either of the more

restrictive trade preference approaches.

Duty-free, quota-free benefits were also cited as influential factors in the

decision to import textiles and apparel from sub-Saharan Africa by over

two-thirds of the companies that might increase imports under the House

bill and by most of the limited number of companies that might do so

under the more restrictive alternatives that we asked about. However, the

fact that 39 out of 54 companies that might import sub-Saharan textiles

and apparel under the House bill might not do so under the more

restrictive alternative approaches suggests that duty-free, quota-free

benefits alone were generally not sufficient to substantially encourage

increased textile and apparel imports from the region. Some companies

stated that in light of the uncertainty related to doing business in

sub-Saharan Africa, preferential tariffs would influence their

decision-making if the companies were given the flexibility to buy fabric

from anywhere in the world. See appendix II for additional information on

factors influencing companies’ decisions on whether to import from

sub-Saharan Africa.

In addition to the business-related factors that could influence companies’

interest in importing from sub-Saharan Africa, the provisions of other

trade preference programs could be relevant. Given that many of the

companies are already participating in preference programs such as NAFTA

and CBI, their interest in importing from sub-Saharan Africa might be

influenced by possible revisions to these programs. For example, although

CBI granted Caribbean Basin countries preferential access to the U.S.

13The U.S. International Trade Commission (ITC) recently reported that shipping times and

transportation costs between sub-Saharan Africa and the United States are already generally higher

than other regions in the world, including Asia and the Caribbean Basin. See Likely Impact of

Providing Quota-Free and Duty-Free Entry to Textiles and Apparel From Sub-Saharan Africa, U.S. ITC,

Publication 3056, Energy, Chemicals and Textiles Division (Washington, DC.: Sept. 1997) and

U.S.-Africa Trade Flows and Effects of the Uruguay Round Agreements and U.S. Trade and

Development Policy, U.S. ITC, Publication 3067 (Washington, DC.: Oct. 1997).

Page 6 GAO/NSIAD-98-217 U.S. - Africa Trade
B-280424 

apparel market in 1986, this region does not have parity with the greater

trade preferences provided to Mexico in 1994 under NAFTA. If NAFTA-like

treatment were granted to CBI textiles and apparel, about half of the 65

companies (32 to 34) we interviewed reported that their decision on

whether to import from sub-Saharan Africa under the three approaches

would not be affected. However, about one-third of the companies (20 to

24) indicated that they would be less likely to import from sub-Saharan

Africa if NAFTA-like treatment were extended to CBI. This pattern generally

held for the 7, 15, and 54 companies, respectively, that expressed an

interest in importing from sub-Saharan Africa under the three approaches.

We are sending copies of this report to appropriate congressional

committees and other interested parties—including companies that

participated in the study. We will also make copies available to others

upon request.

Please contact me at (202) 512-8984 if you or your staff have any questions

concerning this report. The major contributors to this report are listed in

appendix V.

Sincerely yours,

JayEtta Z. Hecker, Associate Director

International Relations and Trade Issues

Page 7 GAO/NSIAD-98-217 U.S. - Africa Trade
Contents

Letter 1

Appendix I 

Characteristics of

Responding

Companies by Their

Reactions to

Alternative Trade

Preference

Approaches

10

Appendix II 

Factors Influencing

Companies’ Reactions

to Trade

Liberalization

Approaches

12

Appendix III 

Sub-Saharan African

Countries

14

Appendix IV 

Objectives, Scope,

and Methodology

16

Appendix V 

Major Contributors to

This Report

19

Tables Table II.1: Reasons Companies Might Import 12

Table II.2: Reasons Companies Might Not Import 13

Page 8 GAO/NSIAD-98-217 U.S. - Africa Trade
Contents

Abbreviations

CBI Caribbean Basin Initiative

GSP Generalized System of Preferences

HTS Harmonized Tariff Schedule

ITC U.S. International Trade Commission

NAFTA North American Free Trade Agreement

Page 9 GAO/NSIAD-98-217 U.S. - Africa Trade
Appendix I 

Characteristics of Responding Companies

by Their Reactions to Alternative Trade

Preference Approaches

Characteristics

All

companies

Yes, if required to

use U.S.-formed

and -cut fabric

Yes, if required to

use U.S.- formed

(not cut) fabric

Yes, if no

restrictions on

fabric or

cutting

No, under any

of the three

approaches

Number of responding companiesa 65 7 15 54 7

Type of imports

Apparel 20 2 5 15 3

Textiles 2 1 1 1 0

Apparel and textiles 43 4 9 38 4

Type of business

Seller 29 5 6 28 1

Manufacturer 26 1 4 20 2

Both seller and manufacturer 7 0 3 4 3

Other 3 1 2 2 1

Main import activityb

Source offshore 36 4 7 28 6

Import finished products 14 2 4 13 0

Own offshore facilities 8 1 3 6 1

Combination 6 0 1 6 0

Rank by import value

of responding companies

Top 1/3 of companies 22 1 5 20 0

Middle 1/3 of companies 21 2 5 18 3

Bottom 1/3 of companies 22 4 5 16 4

Participation in U.S. trade preference

programs

NAFTA

Yes 49 5 12 40 5

No 16 2 3 14 2

HTS 807Ac

Yes 35 5 9 30 3

No 29 2 6 23 4

HTS 9802 (807)

Yes 29 3 7 24 3

No 31 3 6 25 4

Don’t know 5 1 2 5 0

Current importing sources

Sub-Saharan Africa

Yes 22 1 5 22 0

No 43 6 10 32 7

(continued)

Page 10 GAO/NSIAD-98-217 U.S. - Africa Trade
Appendix I 

Characteristics of Responding Companies

by Their Reactions to Alternative Trade

Preference Approaches

Characteristics

All

companies

Yes, if required to

use U.S.-formed

and -cut fabric

Yes, if required to

use U.S.- formed

(not cut) fabric

Yes, if no

restrictions on

fabric or

cutting

No, under any

of the three

approaches

Mexico

Yes 52 5 12 43 5

No 13 2 3 11 2

CBI countries

Yes 56 5 13 49 4

No 9 2 2 5 3

Asia

Yes 64 7 15 54 6

No 1 0 0 0 1

Other countries

Yes 49 5 11 40 6

No 15 2 4 13 1

Don’t Know 1 0 0 1 0

Legend:

CBI = Caribbean Basin Initiative

NAFTA = North American Free Trade Agreement

HTS = Harmonized Tariff Schedule

aUnder each of the alternative approaches, three companies responded that they “didn’t know”

whether they would begin or increase textile or apparel imports from sub-Saharan Africa.

bMain import activity was not determined for one company.

cParticipation status was not determined for one company.

Page 11 GAO/NSIAD-98-217 U.S. - Africa Trade
Appendix II 

Factors Influencing Companies’ Reactions

to Trade Liberalization Approaches

Table II.1: Reasons Companies Might

Import

Factors

If required to

use

U.S.-formed

and -cut fabric

If required to

use U.S.-

formed

(not cut) fabric

If no

restrictions on

fabric or

cutting

Total number of companies that

might import under each of the

approachesa 7 15 54

Increased sourcing flexibility 1 4 52

Quota-free benefits 7 10 38

Duty-free benefits 7 10 36

Lower labor costs in

sub-Saharan Africa 6 10 20

Lower unit cost of production

in sub-Saharan Africa 1 3 11

Lower fabric costs in

sub-Saharan Africa 0 0 11

Lower cutting costs in

sub-Saharan Africa 1 9 7

Support sub-Saharan African

development 0 0 4

aUnder each of the alternative approaches, three companies responded that they “didn’t know”

whether they would begin or increase textile or apparel imports from sub-Saharan Africa.

Page 12 GAO/NSIAD-98-217 U.S. - Africa Trade
Appendix II 

Factors Influencing Companies’ Reactions

to Trade Liberalization Approaches

Table II.2: Reasons Companies Might

Not Import Total number of companies that might not import under

each of the approachesa 55 47 8

Increased shipping time 42 35 3

Increased shipping cost 34 26 2

Less sourcing flexibility 23 17 0

Higher cost of U.S. fabric 18 16 0

Sub-Saharan Africa not in company plans 6 6 4

Concerns over lack of infrastructure 6 6 1

Higher U.S. labor costs 6 2 0

Concerns regarding the quality of sub-Saharan African

finished goods 5 5 3

Concerns regarding the quality of sub-Saharan

workmanship 5 5 3

Concerns regarding the reliability of deliveries from

sub-Saharan Africa 3 4 1

Concerns regarding the quality of sub-Saharan African

fabric 2 3 4

Concerns about political instability 2 2 0

aOne company indicated that while it might begin or increase importing sub-Saharan textiles and

apparel under either of the more restrictive approaches, it might not do so under the House bill.

Page 13 GAO/NSIAD-98-217 U.S. - Africa Trade
Appendix III 

Sub-Saharan African Countries

Republic of Angola

Republic of Benin

Republic of Botswana

Burkina Faso

Republic of Burundi

Republic of Cameroon

Republic of Cape Verde

Central African Republic

Republic of Chad

Federal Islamic Republic of Comoros

Republic of Côte d’Ivoire

Democratic Republic of the Congo

Republic of the Congo

Republic of Djibouti

Republic of Equatorial Guinea

State of Eritrea

Ethiopia

Gabonese Republic

Republic of the Gambia

Republic of Ghana

Republic of Guinea

Republic of Guinea-Bissau

Republic of Kenya

Kingdom of Lesotho

Republic of Liberia

Republic of Madagascar

Republic of Malawi

Republic of Mali

Islamic Republic of Mauritania

Republic of Mauritius

Republic of Mozambique

Republic of Namibia

Republic of Niger

Federal Republic of Nigeria

Republic of Rwanda

Democratic Republic of Sao Tomé and Principe

Republic of Seychelles

Republic of Senegal

Republic of Sierra Leone

Somalia

Republic of South Africa

Republic of Sudan

Kingdom of Swaziland

Page 14 GAO/NSIAD-98-217 U.S. - Africa Trade
Appendix III 

Sub-Saharan African Countries

United Republic of Tanzania

Republic of Togo

Republic of Uganda

Republic of Zambia

Republic of Zimbabwe

Page 15 GAO/NSIAD-98-217 U.S. - Africa Trade
Appendix IV 

Objectives, Scope, and Methodology

As requested, this report provides information on (1) the expected

reactions of major U.S. textile and apparel importers to alternative

approaches to that taken in the 1997 African Growth and Opportunity Act

(bill number H.R. 1432) and (2) the factors that would likely influence U.S.

importers’ decisions on whether to begin or increase importing textiles

and apparel from sub-Saharan Africa.

In preparing this report, we reviewed the African Growth and Opportunity

Act, as well as two alternative trade preference approaches. In addition,

we met with representatives from key U.S. trade associations, including

the American Apparel Manufacturers Association, the U.S. Association of

Importers of Textiles and Apparel, and the American Textile

Manufacturers Institute, and federal agencies to discuss issues related to

the alternative trade preference approaches for sub-Saharan Africa and to

obtain their review of our interview instrument and our study design. We

met with officials from the U.S. Customs Service, the Commerce

Department, and the U.S. International Trade Commission (ITC). Although

we did not obtain any written comments on our report, the ITC reviewed a

draft of the report and provided technical comments. We incorporated its

comments in the text where appropriate.

For background, we compiled trade data on sub-Saharan Africa’s textile

and apparel exports to the United States from the Department of

Commerce, the U.S. Treasury, and the ITC. In addition, we reviewed a

September 1997 ITC report assessing the competitiveness of the region’s

textile and apparel sector, as well as an October 1997 ITC report regarding

trade flows between the United States and sub-Saharan Africa.

To report on how major U.S. importers of textiles and apparel might react

to the different trade preference approaches for sub-Saharan African

textiles and apparel, as well as what factors influence these importers’

decisions, we contacted 80 of the largest U.S. textile and apparel importers

and asked (1) whether they would begin or increase importing of textiles

and apparel from the region under the three alternative trade preference

approaches over the next 5 years and (2) what factors would influence

their decisions. The factors listed in appendix III were provided voluntarily

by the respondents rather than by prompted responses to questions. We

completed telephone interviews with 65 of these companies for a response

rate of 81 percent. The other 15 contacted companies either refused to

participate (6) or could not be scheduled for an interview within the study

period (9). To determine whether responding companies differed

systematically from those that did not, we compared the two groups in

Page 16 GAO/NSIAD-98-217 U.S. - Africa Trade
Appendix IV 

Objectives, Scope, and Methodology

terms of type of importer, region of the country, and value of imports; no

differences were found between respondents and nonrespondents. The

item nonresponse rate (the rate of respondents not answering a question

that should have been answered) ranged from 0 to 2 percent. Prior to

initiating our telephone interviews, we pretested our questions with eight

companies not included in the study.

Our report provides information on how companies that account for

almost one-third of U.S. worldwide textile and apparel imports might react

to different approaches for granting trade preferences to sub-Saharan

African countries. Although the results of the company interviews are

representative of the largest 80 U.S. textile and apparel importers, these

results are not projectable or generalizable to the universe of U.S. textile

and apparel importers. Because we were requested to focus on the largest

U.S. importers of textile and apparel, our report is not based on a

probability sample. Also, the company response information reported is

speculative because we asked selected importers to respond to

hypothetical situations. Their decisions in an actual situation may be

different. However, to ensure that we obtained company-specific

information from informed sources, we interviewed company officials

directly involved in import-related decision-making.

This report does not assess whether any of the discussed trade preference

approaches would constitute an effective trade benefit that furthers

development in sub-Saharan Africa. Also, this report does not assess the

impact of any of these trade preference approaches on U.S. consumers or

producers of competitive textile and apparel products. Nor does the report

consider their impact on other countries or regions, such as the extent to

which increased trade with sub-Saharan Africa might be shifted away from

another region.

The study consisted of the largest importers of textiles and apparel, based

on 1996 total dollar value of imports. We obtained this data—the latest

available—from the U.S. Customs Service, which provided a rank-order

listing of the top 250 apparel importers and the top 250 textile importers

during 1996. To select the largest 80 U.S. importers of textiles and/or

apparel, we first combined the total dollar value of imports for those

companies appearing on both lists (30). We then ranked the companies

from 1 through 470. Because the value of apparel imports (about

$37.2 billion) was much greater than that of textile imports (about

$12.6 billion), our study included more companies that import apparel. Of

the 65 companies interviewed, 43 reported importing both textiles and

Page 17 GAO/NSIAD-98-217 U.S. - Africa Trade
Appendix IV 

Objectives, Scope, and Methodology

apparel, 20 reported importing apparel only, and 2 reported importing

textiles only. We believe that this grouping of companies does not impair

the value of our study since, according to the ITC, preferential access to the

U.S. market is more likely to result in investment in sub-Saharan Africa’s

apparel, rather than textile, industry.1

The combined worldwide U.S. textile and apparel imports of the 65

companies totaled about $15.4 billion, or 31 percent, of total U.S. imports

of these products during 1996, based on the data provided by Customs.

The dollar value of imports for the companies ranged from about

$73 million to over $1.1 billion. We did not independently verify the

importer information obtained from Customs.

We conducted our work from April to July 1998 in accordance with

generally accepted government auditing standards.

1

In its September 1997 report, the ITC reported that in terms of capital and infrastructure

requirements, entry barriers for apparel production are generally lower in comparison with that for

textiles.

Page 18 GAO/NSIAD-98-217 U.S. - Africa Trade
Appendix V 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Elizabeth J. Sirois

Michael J. Courts

Emil E. Friberg

Kathleen M. Joyce

Nina S. Pfeiffer

Office of General

Counsel, Washington,

D.C.

Ernie E. Jackson

Atlanta Field Office Carlos J. Evora

Los Angeles Field

Office

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