Summary

Pursuant to a congressional request, GAO reviewed the President's plan for revitalizing the U.S. machine tool industry and evaluated voluntary export restraint agreements with Japan and Taiwan, focusing on: (1) Departments of Commerce and Defense implementation of the President's plan; (2) Commerce's program to monitor and ensure compliance with export restraints; and (3) the impact of voluntary export limits on the domestic machine tool industry.

GAO found that: (1) Commerce concluded that imports in certain machine tool markets threatened U.S. national security; (2) in December 1986, the United States concluded 5-year voluntary restraint agreements with Japan and Taiwan to limit their exports in certain categories of machine tools; (3) Commerce's Office of Agreements Compliance did not have documentation of the policies, procedures, or criteria used to monitor Japan's and Taiwan's compliance with export restraints or the import penetration levels of other countries; (4) Commerce did not use the most timely methods available to monitor Japan's and Taiwan's quota compliance; and (5) the domestic industry's share of the restricted machine tool market had improved, but had not reached the levels intended by the President's plan.