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PAD-82-29 1 (1982-05-07)

handle is hein.gao/gaobabdit0001 and id is 1 raw text is: 

                     UNITED STATES GENERAL ACCOUNTING OFFICE
                             WASH INGTON, D.C. 20548


PROGRAM ANALYSIS
   DIVISION    RESTRC     -          ;                 Ue General
     B-207221    COfU,.      1C                ICprva
               by the    -fC0ce oR           AE       MAY 7,4982
                                         RELEASED
     The Honorable Nick J. Rahall, II                          I
     House of Representatives

     Dear Mr. Rahall:                                          118605

          Subject:  Effects of Cargo Preference Requirement for
                    Dry Bulk Exports and Imports (GAO/PAD-82-29)

          In your letter of January 18, 1982, you asked us to comment
     on some of the effects of requiring at least 40 percent of the
     Nation's dry bulk imports and exports to be carried in U.S. flag,
     U.S.-built vessels. Such a requirement appears in the pending
     Port Development and Navigation Act of 1981 (H.R. 4627), which
     was recently reported out of the House Committee on Merchant Marine
     and Fisheries.

          You specifically asked whether such a cargo preference provi-
     sion would:

          --Inhibit U.S. dry bulk export trade;

          --Burden U.S. consumers with increased import costs;

          --Increase the costs of U.S. coal and other dry bulk
            exports so that they would not be competitive on the
            world market;

          --Stimulate investment in domestic maritime trades
            and shipbuilding;

          --Erode the concept of free trade among nations by
            artificially distorting market prices and by
            dictating source of transportation; and

          --Be practical from a regulatory aspect.

     You added that you were particularly interested in the effect of
     the proposed legislation on exports of coal.

          It is impossible to provide precise quantitative responses
     to your questions. Even if a major research study were undertaken,
     any numerical estimates of the effects of the cargo preference
     provision of H.R. 4627 would be of doubtful reliability. Since



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