Contents

• Introduction
• The Administration's FY2019 Budget Request
• Congressional Actions
• International Trade Administration (ITA)
• Global Markets Unit
• Industry and Analysis
• Enforcement and Compliance
• U.S. International Trade Commission (USITC)
• Office of the U.S. Trade Representative (USTR)
• Selected Trade-Related Programs and Activities
• China Trade Enforcement and Compliance Activities
• SelectUSA Program
• Survey of International Air Travelers (SIAT)
• Trade Enforcement Trust Fund
(TETF)
• Implementation, Monitoring, and Enforcement (ICTIME, formerly the Interagency Trade Enforcement Center [ITEC])
• Overview of Issues for Congress

Summary

On February 12, 2018, the Trump Administration submitted its FY2019 budget request to Congress. The proposal includes a total of $590.8 millionThe Consolidated Appropriations Act, 2019 (P.L. 116-6), was signed into law on February 15, 2019. The act included a total of $647.0 million in funding for three trade-related agencies— the under the Commerce, Justice, Science and Related Agencies (CJS) account—the International Trade Administration (ITA), the U.S. International Trade Commission (USITC), and the office of the United States Trade Representative (USTR). This is 8.9% less than therepresents a 0.2% decrease from FY2018 appropriations. For FY2019, the Consolidated Appropriations Act, 2019, included $484.0 million in direct appropriations for ITA (a 0.4% increase from the FY2018 appropriation), $95.0 million in funding for USITC (a 1.4% increase), and a total of $68.0 million for USTR (a 0.2% decrease).

The Administration's Request

Congressional Actions

In the spring of 2018, the House and Senate reported FY2019 Commerce, Justice, Science, and Related Agencies (CJS)CJS appropriations bills, which includeincluded proposed funding for ITA, USITC, and USTR. The reported bills dodid not adopt many of the Administration's budget reductions, and instead proposeproposed funding levels that arewere more similar to the FY2018-enacted amounts.

The House Committee on Appropriations reported H.R. 5952 on May 17, 2018. The House proposal recommendsrecommended a total of $647.6 million for the three CJS trade-related agencies. This proposal iswas $56.8 million more (9.6%) than the Administration's request, and $0.7 million less (-0.1%) than the FY2018-enacted legislation. The House committee proposesproposed $480.0 million in direct funding for ITA, $95.0 million for USTIC, and a total of $72.6 million for USTR, comprised of $57.6 million for salaries and expenses and an additional $15.0 million from the Trade Enforcement Trust Fund for trade enforcement activities as authorized by the Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125).

The Senate Committee on Appropriations reported S. 3072 on June 14, 2018. The Senate committee-reported proposal recommendsrecommended a total of $655.6 million for the three CJS trade-related agencies. This is $64.8 million (11.0%) more than the Administration's request, and $7.3 million (1.1%) more than the FY2018-enacted appropriations. The Senate committee proposesproposed $488.0 million in direct funding for ITA, $95 million for USITC, and a total of $72.6 million for USTR, comprised of $57.6 million for salaries and expenses and an additional $15.0 million from the Trade Enforcement Trust Fund.

Introduction

This report provides an overview of the FY2019 budget request and appropriations for the International Trade Administration (ITA), the U.S. International Trade Commission (USITC), and the officeOffice of the United States Trade Representative (USTR). These three trade-related agencies are funded through the annual Commerce, Justice, Science, and Related Agencies (CJS) appropriations act.¹ This report also provides a review of these trade agencies' trade-related programs.

When comparing the Administration's FY2019 request with FY2018 funding, it should be consideredone may want to consider that the Administration formulated its FY2019 budget request before full-year appropriations for FY2018 were enacted. In this report, FY2018 funding levels reflect the amounts appropriated in the Consolidated Appropriations Act, 2018 (P.L. 115-141), enacted on March 23, 2018.

The Consolidated Appropriations Act, 2018, provided $482.0 million in direct funding for ITA,² $93.7 million for USTIC, and a total of $72.6 million for USTR³ for FY2018. The FY2018 appropriation for the three CJS trade-related agencies totaled $648.3 million.

The Consolidated Appropriations Act, 2019, provided $484.0 million in direct appropriations for ITA,⁴ $95.0 million in funding for USITC, and a total of $68.0 million for USTR.⁵ The FY2019 appropriations for three CJS trade-related agencies totaled $647.0 million, a 0.2% decrease from FY2018 appropriations.

The Administration's FY2019 Budget Request

The President submitted his FY2019 budget request to Congress on February 12, 2018. In it, the Administration requestsrequested a total of $590.8 million for FY2019 for the three CJS trade-related agencies, an amount that is 8.9% less than (see Table 1). This request represented an 8.9% decrease in funding from the FY2018 appropriated amount. The request includesincluded reduced funding for all three trade agencies: $440.1 million in direct funding for ITA (an 8.7% decrease from the FY2018 appropriation), $87.6 million for USITC (a 6.5% decrease), and $63.0 million for USTR (a 13.2% decrease).⁴

Despite the proposed overall decrease in funding for CJS trade-related agencies, the Administration proposes to increaseproposed increasing some trade enforcement activities within ITA and USTR. For ITA, the Administration proposes to increaseproposed increasing trade enforcement activities while reducing funding for certain export promotion activities. For USTR, the Administration requestsrequested funds to increase staffing; however, the request doesdid not include additional funding for the a request for funding to be drawn from the Trade Enforcement Trust Fund. (For a description of the "Trade Enforcement Trust Fund.," see section below.) The President's budget doesdid not provide a rationale for requesting a decrease in funding for USITC.⁵7 A more detailed overview of these agencies' FY2019 budget requests is provided below.

Congressional Actions

The House and Senate Appropriations Committees reported their CJS appropriation bills in the spring of 2018. Both committees largely declined the budget cuts requested by the Administration for these three trade agencies.

The House Committee on Appropriations reported H.R. 5952 on May 17, 2018. The House committee bill includesincluded a total of $647.6 million for the three trade-related agencies, which iswas $56.8 million more (9.6%) than the Administration's request, and $0.7 million less (-0.1%) than the FY2018-enacted amount. The House committee recommendsrecommended $480.0 million in direct funding for ITA, $95.0 million for USTIC, and a total of $72.6 million for USTR.⁶8

The Senate Committee on Appropriations reported S. 3072 on June 14, 2018. The Senate bill includesincluded a total of $655.6 million for the three agencies, which iswas $64.8 million (11.0%) more than the Administration's request, and $7.3 million (1.1%) more than the FY2018-enacted appropriation. The Senate committee recommendsrecommended $488.0 million in direct funding for ITA, $95.0 million for USITC, and a total of $72.6 million for USTR.⁷

International Trade Administration (ITA)

Within the Department of Commerce, ITA's mission is to improve U.S. prosperity by strengthening the competitiveness of U.S. industry, promoting trade and investment, and ensuring compliance with trade laws and agreements. ITA provides export promotion services; works to enforce and ensure compliance with trade laws and agreements; administers trade remedies such as antidumping and countervailing duties; and provides analytical support for ongoing trade negotiations.

ITA went through a major organizational change in October 2013 in which it consolidated four organizational units into three more functionally aligned units: (1) Global Markets; (2) Industry and Analysis; and (3) Enforcement and Compliance. ITA also has a fourth organizational unit, the Executive and Administrative Directorate, which is responsible for providing policy leadership, information technology support, and administration services for all of ITA. (Table A-1 shows budget amounts for ITA by unit between FY2008 and FY2018FY2009 and FY2019.)

For FY2019, the Administration requestsrequested $440.1 million for ITA in direct funding, with an additional $11.0 million to be collected in user fees, for a total of $451.1 million in authorized spending. The request for direct funding represents a $41.9 million decrease (-8.7%) from the FY2018-enacted amount ($482.0 million).

According to ITA's budget justification, the Administration intends to increaseproposed increasing ITA's enforcement and compliance efforts in FY2019, while deemphasizing other initiatives, such as export promotion. The Administration specifically proposesproposed closing some domestic and international offices of the United States and Foreign Commercial Service (US&FCS).⁹

The House committee-reported H.R. 5952 would provideproposed $480.0 million for ITA in direct funding, with an additional $11.0 million to be collected from user fees, for a total of $491.0 million in authorized spending. The amount in direct funding proposed by the House Committee on Appropriations iswas $39.9 million (9.1%) more than the Administration's request, and $2.0 million less (-0.4%) than the FY2018-enacted amount.

The Senate committee-reported S. 3072 includesincluded $488.0 million in direct funding for ITA, with an additional $11.0 million in user fees, for a total of $499.0 million in authorized spending. The amount in direct funding proposed by the Senate Committee on Appropriations iswas $47.9 million (10.9%) more than the Administration's request, and $6.0 million (1.2%) more than the FY2018-enacted amount.

The Consolidated Appropriations Act, 2019 (P.L. 116-6) provided $484.0 million in direct appropriations for ITA, with an additional $11.0 million to be collected in user fees, for a total of $495.0 in authorized spending. The act provided $2 million more (0.4%) in direct appropriations for ITA than the FY2018-enacted amount and $43.9 million more (10.0%) than the Administration's request.

Global Markets Unit

ITA's Global Markets (GM) unit is a combination of the United States and Foreign Commercial Service (US&FCS) unit, a program that provides export promotion services to U.S. businesses, and SelectUSA, a program that works to attract foreign investment into the United States. Through US&FCS, GM promotes U.S. exports by helping U.S. exporters research foreign markets and identify opportunities abroad. GM's country and regional experts―in domestic and overseas offices—help to advise U.S. companies on market access, local standards, and regulations. The unit also helps to make connections through business-to-business trade shows, fairs, and missions. GM is designed to advance U.S. commercial interests by engaging with foreign governments and U.S. businesses, identifying and resolving market barriers, and leading efforts that advocate for U.S. firms with foreign governments. Through its SelectUSA program, the GM unit also promotes the United States as a destination for foreign investment. (For more on SelectUSA, see section below, "SelectUSA Program.")¹⁰

For FY2019, the Administration proposesproposed reducing funding for the Global Markets unit. The Administration requestsrequested $276.5 million for Global Markets in direct funding, a 13.4% decrease from the FY2018-enacted appropriation.¹¹12 In its FY2019 budget submission, ITA proposesproposed "rescaling export promotion" activities in the GM unit by reducing staff and its domestic and overseas offices, with a total reduction of 133 positions.¹²13 The budget submission doesdid not indicate how many or which domestic and overseas offices it iswas proposing to close.

The House and Senate Appropriation Committees dodid not adopt the proposed cuts.

The House Appropriations Committee recommendsrecommended $319.0 million for the Global Markets unit for FY2019. This iswas $42.5 million (15.4%) more than the Administration's request. According to the committee report, "the recommendation does not adopt the proposal to reduce U.S. and Foreign Commercial Service staff or close overseas offices or U.S. Export Assistance Centers."¹³

The Senate Appropriations Committee report doesdid not provide an exact funding amount, but recommendsrecommended that ITA "fund US&FCS, and its core mission of export promotion, at the highest possible level in fiscal year 2019, and at no less than the amount provided in fiscal year 2018."¹⁴15 Like the House committee, the Senate committee doesdid not adopt the Administration's proposal to close offices. The Senate committee report specifically notesnoted, "No offices shall be closed in fiscal year 2019 unless the Committee approves a reprogramming request to close such office or offices. Additionally, the Committee will not approve requests to close any domestic offices, called U.S. Export Assistance Centers, if such Center is the only one located in a given State."¹⁵

Industry and Analysis

ITA's Industry and Analysis unit brings together ITA's industry, trade, and economic experts to advance the competitiveness of U.S. industries through the development and execution of international trade and investment policies, export promotion strategies, and investment promotion. It develops economic and international policy analysis to improve market access for U.S. businesses, and designs and implements trade and investment promotion programs. The unit serves as the primary liaison between U.S. industries and the federal government on trade and investment promotion. It administers programs that support small and medium-sized enterprises, such as the Market Development Cooperator Program.

For FY2019, the Administration requestsrequested $52.3 million for Industry and Analysis. This would beThe request is $3.4 million less than the FY2018 funding level.¹⁶18 The Administration proposesproposed refocusing some of the unit's priorities away from export promotion and toward trade enforcement. Specifically, the Administration proposesproposed reducing activities related to trade missions, the International Buyer Program, and certified trade fairs, and eliminating Market Development Cooperator Program grants.¹⁷

The House committee proposesproposed $52.0 million for Industry and Analysis. This isrepresented $0.3 million less (-0.5%) than the Administration's request.

The Senate committee-reported bill doesdid not include a specific recommendation for Industry and Analysis. The Consolidated Appropriations Act, 2019 (P.L. 116-6), did not provide an exact funding guidance for Industry and Analysis.

Enforcement and Compliance

The mission of ITA's Enforcement and Compliance unit is to enforce U.S. trade laws and ensure compliance with negotiated international trade agreements. It is responsible for enforcing U.S. antidumping and countervailing duty (AD/CVD) laws; overseeing a variety of programs and policies regarding the enforcement and administration of U.S. trade remedy laws; assisting U.S. industry and businesses with unfair trade matters; and administering the Foreign Trade Zone program and other U.S. import programs.

For FY2019, the Administration requested $90.6 million for the Enforcement and Compliance unit, which isan increase of $3.1 million (3.6%) more thanfrom the FY2018-enacted amount. TheFor the requested increase in funding is to support, ITA cited the unit's increasing number of AD/CVD investigations, its new focus on self-initiating AD/CVD cases,¹⁸20 and the increased workload due to the tariffs and investigations initiated through Section 232 of the Trade Expansion Act of 1962.¹⁹21

The House Appropriations Committee proposesproposed $85.5 million for Enforcement and Compliance. The House committee proposal isrepresented $2.1 million less (-2.3%) than the Administration's request, and $1.0 million (1.1%) more than the FY2018-enacted amount.²⁰

The Senate Committee on Appropriations recommendsrecommended $91.5 million for Enforcement and Compliance. The Senate recommendation isrepresented $0.9 million more than the Administration's request and $4.0 million more than the 2018-enacted amount.²¹23 The Senate committee report notesnoted that the committee iswas supportive of the Administration's request to self-initiate AD/CVD cases.²²24 For FY2019 appropriations, the conference report accompanying the Consolidated Appropriations Act, 2019 (P.L. 116-6), included $88.5 million for Enforcement and Compliance.²⁵ This amount was $1.0 million more (1.1%) than the FY2018 funding,²⁶ and $2.1 million less (-2.1%) than the Administration's request.

U.S. International Trade Commission (USITC)

USITC is an independent, quasijudicialquasi-judicial agency responsible for conducting trade-related investigations and providing independent technical advice related to U.S. international trade policy to Congress, the President, and the USTR. The commission (1) investigates and determines whether imports injure a domestic industry or violate U.S. intellectual property rights; (2) provides independent tariff, trade, and competitiveness-related analysis to the President and Congress; and (3) maintains the U.S. tariff schedule. USITC also serves as a federal resource for trade data and other trade policy information. It makes most of its information and analyses available to the public to promote understanding of competitiveness, international trade issues, and the role that international trade plays in the U.S. economy. In addition to the President's budget request for the commission, USITC also has bypass authority to submit its budget directly to Congress without revision by the President, pursuant to Section 175 of the Trade Act of 1975.

For FY2019, the President requestsrequested $87.6 million for USITC, which representsrepresented a $6.1 million decrease (-6.5%) from the FY2018-enacted amount ($93.7 million). While the President requests reducingrequested a decrease in funding for USITC, the commission's independent budget submission—sent directly to Congress without revision by the President—requestsrequested $97.5 million for FY2019, an increase of $3.8 million (4.0%) from the FY2018-enacted amount. USITC cited. USITC cites the increasing number of import injury cases in the previous five years and projectsprojected that the caseload willwould increase further in FY2019.²³

Both the House and Senate committee-reported bills includerecommended $95.0 million for USITC. This amount iswas $7.4 million (8.4%) more than the President's request and $1.3 million (1.4%) more than the FY2018-enacted amount. The Consolidated Appropriations Act, 2019 (P.L. 116-6), provided $95.0 million for USITC, which was $7.4 million (8.4%) more than the President's request and $1.3 million (1.4%) more than the FY2018-enacted amount.

Office of the U.S. Trade Representative (USTR)

USTR, located in the Executive Office of the President, is responsible for developing and coordinating U.S. international trade and direct investment policies. USTR is the President's chief negotiator for international trade agreements, including commodity and direct investment negotiations. It negotiates directly with foreign governments to create trade agreements, resolve disputes, and participate in global trade policy organizations such as the World Trade Organization. It also meets with business groups, policymakers, and public interest groups on trade policy issues.²⁴28 In 2018, USTR led the negotiations for the modernization of the North American Free Trade Agreement (NAFTA) and the investigations into Chinese intellectual property practices.

In addition to direct appropriations for USTR, additionalsupplementary funding for the agency is available through the congressionally established Trade Enforcement Trust Fund. For more detail on the Trust Fundtrust fund, see section "Trade Enforcement Trust Fund," below.."

For FY2019, the Administration requestsrequested $63.0 million for USTR's salaries and expenses, and no additional funding from the Trade Enforcement Trust Fund. The request represents a $9.6 million decrease (-13.2%) from the FY2018-enacted amounts ($72.6 million).

In the Administration's budget request, USTR outlinesoutlined the Trump Administration's "aggressive trade agenda," and its goals of "(1) defending U.S. national sovereignty over trade policy; (2) strictly enforcing U.S. trade laws; (3) using all possible sources of leverage to encourage other countries to open their markets to U.S. exports of goods and services, and protecting U.S. intellectual property rights; and (4) negotiating better trade deals with countries in key markets around the world."²⁵

Both the House and Senate committee-reported bills includerecommended a total of $72.6 million for USTR for FY2019. These proposals includeincluded $57.6 million for USTR's salaries and expenses and $15.0 million from the Trade Enforcement Trust Fund for enforcement activities authorized in Section 611 of the Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125). The total proposals arewere $9.6 million (15.2%) more than the Administration's request, and arewere equal to the FY2018-enacted amount.

The Consolidated Appropriations Act, 2019 (P.L. 116-6), provided a total of $63.0 million for USTR, which included $53.0 million in salaries and expenses for USTR and an additional $15.0 million to be derived from the Trade Enforcement Trust Fund. The total funding was $4.6 million less (-6.3%) than the FY2018 appropriated amount.

Selected Trade-Related Programs and Activities

Over the past decade, Congress has provided funding for specific trade-related programs, including (1) China trade enforcement and compliance activities; (2) trade promotion and attracting foreign direct investment to the United States through ITA's SelectUSA program; and (3) trade enforcement activities through the Trade Enforcement Trust Fund and the Interagency Center on Trade Implementation, Monitoring, and Enforcement (ICTIME, formerly the Interagency Trade Enforcement Center [ITEC]).²⁶

China Trade Enforcement and Compliance Activities

Since 2004, Congress has dedicated some of ITA's funding to AD/CVD enforcement and compliance activities with respect to China and other nonmarket economies. ITA's Office of China Compliance was established by the Consolidated Appropriations Act of 2004 (P.L. 108-199). Its primary role has been to enforce U.S. AD/CVD laws and to develop and implement other policies and programs aimed at countering unfair foreign trade practices in China. ITA's China Countervailing Duty Group was established in FY2009 to accommodate the workload that resulted from the application of countervailing duty law to imports from nonmarket economy countries.²⁷

The Office of China Compliance is within the Enforcement and Compliance unit at ITA. ITA's FY2019 budget justification doesdid not provide a breakdown of funding for its China AD/CVD activities.

Both the House and Senate committee-reported bills includeincluded $16.4 million from ITA's funding for China AD/CVD enforcement and compliance activities for FY2019. The Consolidated Appropriations Act, 2019 (P.L. 116-6), provided $16.4 million from ITA's funding for China AD/CVD enforcement and compliance activities for FY2019. This amount iswas equal to the FY2018-enacted amount.

SelectUSA Program

Created in 2011, SelectUSA is SelectUSA was created in 2011 and is now part of ITA's Global Markets unit. It coordinates investment-related resources across more than 20 federal agencies to (1) promote the United States as an investment market and (2) address investor climate concerns that may impede investment in the United States. The program serves as an information resource for international investors and advocates for U.S. cities, states, and regions as investment destinations.²⁸

ITA's budget justification doesdid not provide a breakdown for requested funding for SelectUSA.

The House committee-reported bill doesdid not propose a specific funding amount for SelectUSA.

The Senate committee-reported bill includes report recommended $10.0 million in funding for SelectUSA, which isan amount equal to the FY2018-enacted amount. The Senate Committee on Appropriation's proposed funding ismaking funding contingent on (1) SelectUSA updating its protocol to ensure that its programs dodid not encourage foreign investments in the United States by state-owned entitiesby state-owned entities into the United States and (2) SelectUSA reporting its updated protocol to the committee within 30 days of enactment of the bill.²⁹

Survey of International Air Travelers (SIAT)

ITA's Survey of International Air Travelers (SIAT) gathers statistics about air passenger travelers in the United States. These statistics are used across federal agencies, for a variety of purposes, such as to estimate the contribution of international travel to the economy, develop public policy on the travel industry, and forecast staffing needs at consulates and ports of entry.

The Administration requestsrequested $5.0 million for FY2019 for SIAT to expand the survey and data collection. The Administration proposesproposed that "$5 million in fee revenues collected from the surcharge on international travelers utilizing the Electronic System for Travel Authorization (ESTA) be redirected to fully fund the SIAT."³⁰

The House committee-reported bill doesdid not include a specific recommendation for SIAT.

According to the Senate committee report, the Senate Committee on Appropriations doesdid not adopt the Administration's proposal to seek alternative funding sources for SIAT and "directsdirect[ed] ITA to continue funding SIAT out of its base budget. Within funds provided, ITA is[was] encouraged to increase the sample size for SIAT."³¹

Trade Enforcement Trust Fund

In order to provide additional funding for USTR's trade enforcement activities, Congress established the Trade Enforcement Trust Fund (TETF) in 2016. In Section 611 of the Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125), Congress directed the Department of the Treasury to set up the trust fund and outlined the authorized uses of the funds.³⁵ According to Section 611(d), USTR or other federal agencies can use funds from the trust fundTETF to monitor and enforce trade agreements and WTO commitments and to support trade capacity-building assistance to help partner countries meet their free -trade agreement obligations and commitments.³²

For FY2019, the Administration requestsrequested no funding to be derived from the Trade Enforcement Trust FundTETF; the FY2018-enacted amount was $15.0 million.³³37

Both the House and Senate committee bills proposeproposed $15.0 million for the Trade Enforcement Trust Fundfrom the TETF for enforcement activities authorized in Section 611 of the Trade Facilitation and Trade Enforcement Act of 2015. These proposals are equal to the FY2018-enacted amount.

Implementation, Monitoring, and Enforcement (ICTIME, formerly the Interagency Trade Enforcement Center [ITEC])

ITEC was established by executive order in 2012 to take a "whole-of-government" approach to monitoring and enforcing U.S. trade rights by using expertise from across the federal government.³⁵38 In 2016, the ITEC was succeeded by ICTIME, which Congress established through the Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125).³⁶39 The executive-established ITEC received its funding through ITA; funding for ICTIME is now appropriated through USTR.³⁷

ICTIME's purpose is to advance U.S. trade policy through strengthened and coordinated enforcement of U.S. trade rights. ICTIME investigates potential disputes under the auspices of the World Trade Organization; inspects potential disputes pursuant to bilateral and regional trade agreements to which the United States is a party; and carries out the functions of USTR with respect to the monitoring and enforcement of trade agreements to which the United States is a party. USTR and ITA work closely within the ICTIME to identify issues and develop information in areas of economic importance to U.S. industries.

The USTR's budget justification doesdid not provide a breakdown for requested funding for ICTIME.

The House committee-reported bill does not include a specific funding amount for ICTIME.

Theand Senate committee-reported bill also doesbills did not include a specific funding amount for ICTIME. The Senate committee report statesdid note that the Senate committee supports ICTIME within the funds provided for USTR.³⁸

Overview of Issues for Congress

Appendix. Budget Authority Tables

Author Contact Information

Footnotes