Trade Reorganization:
Overview and Issues for Congress
Shayerah Ilias
Analyst in International Trade and Finance
May 31, 2012
Congressional Research Service
7-5700
www.crs.gov
R42555
CRS Report for Congress
Pr
epared for Members and Committees of Congress
Trade Reorganization: Overview and Issues for Congress
Summary
On January 13, 2012, President Obama asked Congress for authority to reorganize and
consolidate into one department the business- and trade-related functions of six federal entities:
Department of Commerce; Export-Import Bank (Ex-Im Bank); Overseas Private Investment
Corporation (OPIC); Small Business Administration (SBA); Trade and Development Agency
(TDA); and Office of the United States Trade Representative (USTR). U.S. policymakers’ interest
in the organizational structure of U.S. government trade functions has grown in recent years,
stimulated by congressional and federal efforts to promote U.S. exports and employment,
including through the National Export Initiative (NEI). Interest also has been stimulated by
national debates on reducing federal spending and the size of the U.S. government.
Reorganization has been a recurring theme in U.S. trade policy. Over the past several decades,
Congress, successive Administrations, and other stakeholders have crafted and debated proposals
to reorganize the trade functions and structure of the federal government in order to enhance the
effectiveness of U.S. trade policy and promotion efforts; improve U.S. trade policy coordination;
avoid duplication of functions and activities; boost the international competitiveness of U.S.
industries; and for other reasons. Previous proposals have called for a range of actions, including
consolidation of all U.S. export- or trade-related programs under one federal agency (such as a
“Department of Trade”) to provide a “one-stop-shop” for the trade community; termination or
transfer of functions of departments and agencies considered to be duplicative or unnecessary to
U.S. trade policy priorities; and strengthening coordination of federal trade-related agencies, such
as through the Trade Promotion Coordinating Committee (TPCC).
A central question in public policy debates about the U.S. trade policy structure is whether
reorganization would enhance the effectiveness of U.S. trade policy or merely result in
bureaucratic reshuffling. On one hand, proponents of reorganization proposals believe that they
may eliminate duplication of federal trade functions, provide a more streamlined organizational
structure for U.S. trade-related activities and policy based on more clearly defined goals and
priorities, and reduce overall government costs. They argue that federal trade policy efforts could
be enhanced through a more centralized government body. On the other hand, critics contend that
such proposals could result in the creation of a large, costly federal bureaucracy, possibly making
certain trade functions and agencies less effective if they are subsumed in a larger bureaucracy.
They also assert that the diffusion of trade functions across the federal government helps to
advance various aspects of U.S. trade policy, and express concern that a “one-stop” federal source
may not be responsive to the unique needs of certain types of exporters. Furthermore, some
contend that, while changes to U.S. trade policy—and by extension the policymaking structure—
may benefit individual U.S. businesses and workers in the short-run, they have little influence in
the long-run on U.S. export and employment levels and trade balances, which relate more closely
to macroeconomic factors.
Congress would play a significant role in a trade reorganization debate through its legislative and
oversight responsibilities; it could engage in consultations with the Administration, hold hearings,
grant reorganizational authority to the President, and/or introduce and enact trade reorganization
legislation separate from the President’s plan. In addition to considering possible reorganizational
authority for the executive branch, Congress could consider policy alternatives such as to
maintain the current trade organizational structure, privatize or terminate certain trade functions,
strengthen or revise existing coordination of trade functions, or create a trade reorganization
commission to examine the issue further.
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Trade Reorganization: Overview and Issues for Congress
Contents
Introduction...................................................................................................................................... 1
President Obama’s Trade Reorganization Proposal......................................................................... 1
Related Action by the Administration ....................................................................................... 5
Context of Trade Reorganization Debate......................................................................................... 6
Trade-Related Functions of U.S. Government .......................................................................... 6
Previous Legislative Proposals Related to Trade Reorganization ............................................. 7
Key Statutes and Administrative Plans Related to Trade Reorganization ................................. 8
Organizational Structure of Trade Functions ...................................................................... 8
Interagency Trade Coordinating Structures....................................................................... 10
Issues for Congress ........................................................................................................................ 13
Rationales for Trade Reorganization ....................................................................................... 13
Some General Pros and Cons of Trade Reorganization........................................................... 15
Analysis of President Obama’s Trade Reorganization Proposal ............................................. 16
Effectiveness of Trade Functions ...................................................................................... 16
Selection of Federal Agencies ........................................................................................... 17
Representing Stakeholder Interests ................................................................................... 18
Alternative Policy Options for Congress ....................................................................................... 18
Maintain Status Quo ................................................................................................................ 19
Privatize or Terminate Certain Trade Functions ...................................................................... 19
Strengthen Coordination of Trade Agencies............................................................................ 20
Create a Commission............................................................................................................... 20
Outlook .......................................................................................................................................... 20
Tables
Table 1. U.S. Trade-Related Agencies in President’s Proposed Trade Reorganization:
Appropriations and Full-Time Equivalents (FTEs) ...................................................................... 4
Table 2. Overview of Trade-Related Functions of the Federal Government ................................... 7
Table C-1. Key Milestones in Administrative and Legislative Action
Related to Trade Reorganization................................................................................................. 26
Appendixes
Appendix A. Acronyms.................................................................................................................. 22
Appendix B. Summary of Legislative Proposals on Trade Reorganization, Select
Congresses.................................................................................................................................. 23
Appendix C. Key Milestones in Administrative and Legislative Action Related to Trade
Functions .................................................................................................................................... 26
Congressional Research Service
Trade Reorganization: Overview and Issues for Congress
Contacts
Author Contact Information........................................................................................................... 28
Acknowledgments ......................................................................................................................... 28
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Trade Reorganization: Overview and Issues for Congress
Introduction
On January 13, 2012, President Obama asked Congress for authority to reorganize and
consolidate into one department the business- and trade-related functions and programs of six
federal entities: Department of Commerce; Export-Import Bank (Ex-Im Bank); Overseas Private
Investment Corporation (OPIC); Small Business Administration (SBA); Trade and Development
Agency (TDA); and Office of the United States Trade Representative (USTR).1 U.S. policy
interest in the organizational structure of U.S. government trade functions has grown in recent
years, stimulated by congressional and federal efforts to promote U.S. exports and employment,
including through the National Export Initiative (NEI), in response to the global and U.S.
economic downturn; concerns about the international competitive position of U.S. industries vis-
à-vis emerging markets, such as China, Brazil, and India; efforts to enhance the effectiveness and
efficiency of government service by reducing duplication of functions and improving
coordination; national debates on reducing federal spending and the size of the U.S. government;
and concerns about the size of the U.S. trade balance.2 Members of Congress would play a
significant role in a trade reorganization debate through their legislative and oversight
responsibilities.
This report discusses: (1) President Obama’s trade reorganization proposal; (2) the context of the
trade reorganization debate; (3) key issues that Congress may face related to the debate; (4)
potential policy options for Congress; and (5) the outlook for trade reorganization. This report
focuses on the substantive aspect of the trade reorganization debate. For a discussion of the
reorganization authority that the President has requested from Congress, see CRS Report R41841,
Executive Branch Reorganization Initiatives During the 112th Congress: A Brief Overview, by
Henry B. Hogue. For a detailed discussion of key federal agencies with trade functions, see CRS
Report R41495, U.S. Government Agencies Involved in Export Promotion: Overview and Issues
for Congress, coordinated by Shayerah Ilias.
Separately, President Obama also has launched a comprehensive review of the U.S. export control
system and has proposed changes to the organizational structure for the export control system.
This issue is beyond the scope of this report. For a discussion of this issue, see CRS Report
R41916, The U.S. Export Control System and the President’s Reform Initiative, by Ian F.
Fergusson and Paul K. Kerr.
President Obama’s Trade Reorganization Proposal
In the 2011 State of the Union Address, President Obama advocated the need to reorganize the
federal government to ensure that it is “more competent and more efficient.” Along those lines,
the President noted that there are multiple federal agencies that have export-related functions. On
March 11, 2011, the President issued a memorandum directing the Office of Management and
Budget (OMB) to conduct a review of federal agencies and programs “involved in trade and
competitiveness, including analyzing their scope and effectiveness, areas of overlap and
duplication, unmet needs, and possible cost savings” and to submit recommendations on
1 The White House, “Government Reorganization Fact Sheet,” press release, January 13, 2012,
http://www.whitehouse.gov/the-press-office/2012/01/13/government-reorganization-fact-sheet.
2 President Obama established the National Export Initiative through Executive Order 13534, issued March 11, 2010.
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Trade Reorganization: Overview and Issues for Congress
reorganizing and streamlining federal government functions in these areas.3 OMB’s
recommendations to the President have not been publicly released to date.
On January 13, 2012, President Obama asked Congress for authority to reorganize and
consolidate the functions of six business- and trade-related federal agencies into one federal
department: the Commerce Department, Ex-Im Bank, OPIC, SBA, TDA, and USTR (see the
textbox for an overview of these agencies).4 The reorganization authority requested by the
President is currently dormant. This authority, which was available to Presidents periodically
between 1932 and 1984, would allow the President to present reorganization plans to Congress
under an expedited process.5 On February 16, 2012, President Obama sent draft legislation,
entitled the Reforming and Consolidating Government Act of 2012, to Congress that would give
him the authority to reorganize and consolidate the federal government. The legislation,
introduced as S. 2129 (Lieberman) on February 17, 2012, would reinstate authority granted to
past Presidents to reorganize the executive branch.6 A similar bill was introduced in the House
(H.R. 4409, Barrow) on April 19, 2012.
3 The White House, “Presidential Memorandum—Government Reform for Competitiveness and Innovation,” press
release, March 11, 2011, http://www.whitehouse.gov/the-press-office/2011/03/11/presidential-memorandum-
government-reform-competitiveness-and-innovation.
4 The White House, “Government Reorganization Fact Sheet,” press release, January 13, 2012,
http://www.whitehouse.gov/the-press-office/2012/01/13/government-reorganization-fact-sheet.
5 For additional information on the reorganization process, see CRS Report R41841, Executive Branch Reorganization
Initiatives During the 112th Congress: A Brief Overview, by Henry B. Hogue.
6 The White House, “President Obama Calls on Congress to Partner on Government Reform,” press release, February
16, 2012, http://www.whitehouse.gov/the-press-office/2012/02/16/president-obama-calls-congress-partner-
government-reform.
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Overview of Federal Agencies in President Obama’s Trade Reorganization Proposal
The Department of Commerce has general operational responsibility for major non-agricultural international
trade promotion functions. The International Trade Administration (ITA), a Commerce Department bureau,
administers many of the Department’s international trade responsibilities. It is organized into four main units: (1)
Manufacturing and Services (MAS), which is responsible for certain industry economic and trade policy analysis,
promoting the competiveness and expansion of the U.S. manufacturing sector, and other functions; (2) Market
Access and Compliance (MAC), which monitors foreign county compliance with trade agreements with the
United States, identifies compliance problems and market access obstacles, and informs U.S. firms of foreign business
practices and opportunities; (3) Import Administration (IA), which enforces trade remedy laws and agreements,
such as anti-dumping and countervailing duty laws, and develops and implements policies and programs to counter
unfair foreign trade practices; and (4) Trade Promotion and the U.S. and Foreign Commercial Service
(Commercial Service), which has a domestic and international network of trade specialists, along with high-level
representation at certain U.S. foreign missions, who work with U.S. companies to help them began or expand export
activities. The Advocacy Center of this unit leads interagency efforts for U.S. companies pursuing major overseas
projects by assisting them with seeking foreign business opportunities and dealing with foreign governments.
Other sub-agencies of the Commerce Department also handle trade and non-trade issues. For example, the Bureau
of Industry and Security (BIS) administers certain export control functions (U.S. Department of State administers
other aspects of export control functions). The Bureau of the Census and the Bureau of Economic Analysis
(BEA) collect and analyze trade, industry, economic, and other types of data. The National Oceanic and
Atmospheric Administration (NOAA) is a scientific agency focused on analyzing changes in climate, weather,
oceans, and coasts, as well as on conserving and managing coastal and marine ecosystems and resources.
The Export-Import Bank (Ex-Im Bank) maintains finance programs to facilitate U.S. exports to developing
countries, especially in circumstances when alternative financing is not available, with the goal of supporting U.S. jobs.
Some Ex-Im Bank programs are used to counter official y backed export credit financing, including tied aid and
concessional financing extended by other countries. Its main programs are direct loans, export credit guarantees,
working capital guarantees, and export credit insurance. Ex-Im Bank activities are backed by the ful faith and credit of
the U.S. government.
The Overseas Private Investment Corporation (OPIC) seeks to promote economic growth in developing
economies by providing investment insurance, project financing, and other services to U.S. firms investing in those
countries, in support of U.S. foreign policy goals. OPIC’s programs are intended to promote U.S. private investment
by mitigating risks, such as currency inconvertibility, expropriation, political violence, and terrorism. OPIC’s programs
are backed by the ful faith and credit of the U.S. government.
The Small Business Administration (SBA) administers several programs to support small businesses. SBA's
Office of International Trade provides export financing and promotion services to small businesses.
The U.S. Trade and Development Agency (TDA) operates under a dual mission of promoting economic
development and U.S. commercial interests in developing and middle-income countries. TDA links U.S. businesses to
export opportunities by funding feasibility studies, reverse trade missions, technical assistance, and other activities,
while creating sustainable infrastructure and economic growth in partner countries.
The Office of the U.S. Trade Representative (USTR), located in the Executive Office of the President
(EOP), leads the development and coordination of U.S trade policy. The USTR serves as the principal adviser to the
President on international trade policy; serves as the President’s chief negotiator for international trade agreements;
conducts U.S. affairs related to the World Trade Organization (WTO); and chairs the Trade Policy Review
Group (TPRG) and the Trade Policy Staff Committee (TPSC), which along with the National Economic
Council (NEC) located in the White House, compose the interagency trade policy mechanism.
Note: President Obama’s trade reorganization proposal excludes certain federal agencies with key trade functions,
such as the U.S. Department of Agriculture (USDA), which conducts major agricultural international trade
promotion and financing functions; the Department of Homeland Security (DHS), which conducts key trade
enforcement activities; the Department of State, which is involved in a range of trade-related functions, including
negotiating U.S. bilateral investment treaties; and the International Trade Commission (ITC), which administers
U.S. trade remedy laws and conducts studies on trade and tariff issues.
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The Administration’s stated intention for the proposed new department is to streamline trade
negotiation, financing, promotion, and enforcement functions. The new department reportedly
would be organized into four “pillars”: (1) trade and investment functions; (2) small business and
economic development; (3) technology and innovation; and (4) economic statistics.7 Elements of
the Commerce Department not associated with these four pillars would be transferred to other
agencies. For example, functions of National Oceanic and Atmospheric Administration (NOAA),
currently in the Commerce Department, could be transferred to the Department of the Interior.8
According to press reports, the USTR would maintain Cabinet-level status, but would report to
the Secretary of the newly created department.9 OMB projects that the new department would
save $3 billion over the next 10 years and eliminate between 1,000 to 2,000 full-time equivalent
jobs by attrition over a couple of years.10
The President’s FY2013 budget request for the six agencies in the proposed reorganization
reflects the current organizational structure of U.S. trade functions. Table 1 provides the budget
information for these six agencies. While information about the Administration’s plan is limited,
the agency-specific budget information provided may offer a sense of the scope of the proposed
reorganization.
Table 1. U.S. Trade-Related Agencies in President’s Proposed Trade Reorganization:
Appropriations and Full-Time Equivalents (FTEs)
(FY2012 Enacted and FY2013 Requested)
Budget
Budget
FY2012
FY2013
FTE
FTE
Enacted
Requested
FY2012
FY2013
Department/Agency
($ million)
($ million)
Enacted
Requested
Department of Commerce
$7,807.7
$7,997.7
41,497
42,829
International Trade Administration (ITA)
455.6
517.0
1,867
1,838
Export-Import Bank (Ex-Im Bank)
-266.0
-359.1
421
483
Overseas Private Investment Corporation (OPIC)
-197.0
-192.1
215
235
Smal Business Administration (SBA)
919.8
1,115.4
3,368
3,368
Trade and Development Agency (TDA)
50.0
57.6
50
50
U.S. Trade Representative (USTR)
51.3
53.0
248
252
Source: President’s FY2013 budget request, congressional budget justifications of individual departments and
agencies.
7 The economic statistics pillar of the proposed new department reportedly would include the Department of
Commerce’s Bureau of the Census and the Bureau of Economic Analysis (BEA), as well as the Department of Labor’s
Bureau of Labor Statistics (BLS). “Lawmakers Express Bipartisan Concern for USTR Under Proposed
Reorganization,” International Trade Daily, January 17, 2012.
8 “USTR To Maintain Cabinet Status in Reorganization; Initial Reactions Cool,” World Trade Online, January 13,
2012.
9 White House officials have noted a comparable arrangement, under which the U.S. ambassador to the United Nations
reports to both the Secretary of State and the President.
10 “USTR To Maintain Cabinet Status in Reorganization; Initial Reactions Cool,” World Trade Online, January 13,
2012.
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Notes: The Ex-Im Bank and OPIC are self-sustaining agencies that use offsetting col ections (generated from
fees and interest charged for their services and other source) to fund their activities. The appropriation amounts
for the Ex-Im Bank and OPIC are negative because they reflect net revenues from offsetting col ections.
Related Action by the Administration
On February 17, 2012, the President issued a memorandum announcing his intention to move
administratively, while waiting for reorganizational authority from Congress, to ensure the
effectiveness of federal programs and functions supporting trade and investment. The
memorandum focuses on the work of two interagency bodies, the Trade Promotion Coordinating
Committee (TPCC) and the Export Promotion Cabinet (EPC).11 The President directed:
• the EPC, in coordination with the TPCC, to develop strategies and initiatives in
support of the Administration’s strategic trade and investment goals and
priorities;
• the Assistant to the President and Deputy National Security Advisor for
International Economics to coordinate the activities of the TPCC;
• the EPC to support efforts to create BusinessUSA, an online platform intended to
be a central resource for accessing federal business programs and services;12 and
• the EPC, in consultation with the TPCC, to present a unified federal trade budget
consistent with the Administration’s strategic trade and investment goals and
priorities, and to take steps to ensure the most efficient use of the domestic and
foreign offices and distribution networks of federal agencies that are members of
the EPC.13
Subsequently, on February 28, 2012, President Obama issued Executive Order (E.O.) 13601 for
the Establishment of the Interagency Trade Enforcement Center (ITEC), for the purpose of
strengthening and coordinating enforcement of U.S. rights under trade agreements and U.S. law.14
E.O. 13601 states that the ITEC will be housed within the USTR with a designated director from
the USTR; a designated deputy director from the Department of Commerce; and support from the
Departments of State, the Treasury, Justice, Agriculture, Commerce, and Homeland Security, as
well as the Director of National Intelligence. The Administration has emphasized the need for
creating the ITEC in order to better combat unfair trade practices by countries such as China.
USTR officials have stated that President Obama’s executive order will double the resources to
bring trade dispute resolution cases at the World Trade Organization (WTO) “more effectively
11 Coordination of export promotion activities is conducted through interagency bodies. In 1992, Congress attempted to
enhance coordination of U.S. export promotion policy by creating the Trade Promotion Coordinating Committee
(TPCC), an interagency task force chaired by the Department of Commerce. The TPCC releases the National Export
Strategy (NES), an annual report that serves as an effort to guide federal export promotion policy, goals, and activity.
The Export Promotion Cabinet (EPC), a higher level coordinating body established under the National Export Initiative
(NEI), is to work with the TPCC to make the NEI operational.
12 The beta version of BusinessUSA is accessible at http://business.usa.gov/.
13 The White House, “Presidential Memorandum—Maximizing the Effectiveness of Federal Programs and Functions
Supporting Trade and Investment,” press release, February 17, 2012, http://www.whitehouse.gov/the-press-office/
2012/02/17/presidential-memorandum-maximizing-effectiveness-federal-programs-and-fu.
14 The White House, Office of the Press Secretary, “Executive Order—Establishment of the Interagency Trade
Enforcement Center,” February 28, 2012.
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and more swiftly.”15 Some policymakers have criticized the creation of the ITEC, stating that it is
duplicative and unnecessary, and that it replicates the “core statutory mission” of USTR.16 For
example, intellectual property rights (IPR) may be a key trade enforcement issue, and there is the
possibility that the newly created ITEC could overlap with the interagency IPR enforcement
system.17
Context of Trade Reorganization Debate
Trade-Related Functions of U.S. Government
The role of Congress in international trade is based on powers set out in Article 1, Section 8, of
the U.S. Constitution to “lay and collect Taxes, Duties, Imposts and Excises” and “regulate
Commerce with foreign Nations, and among the several States,” as well as the general provision
to “make all Laws which shall be necessary and proper” to carry out these specific authorities.
While Congress has maintained a critical role in trade policy, it also has delegated significant
authority to the executive branch. For example, since 1934, Congress has delegated some form of
trade negotiating authority to the President on a temporary basis (most recently known as “trade
promotion authority”). The President directs overall trade policy in the executive branch and
performs specific trade functions granted to him in statute. In addition, Congress and the
President have delegated to a range of federal agencies the administration of many federal trade
functions.18 Table 2 provides an overview of the primary trade-related functions of the federal
government.
15 World Trade Online, “Trade Enforcement Unit Will Not Dilute U.S. Standard for Bringing WTO Cases,” March 1,
2012.
16 World Trade Online, “Republican Senators Attack Trade Enforcement Unit, Lack of Consultation,” March 8, 2012.
17 Language drawn from M. Angeles Villarreal.
18 U.S. General Accounting Office (now the U.S. Government Accountability Office), Government Reorganization:
Issues Relating to International Trade Responsibilities, GAO/T-GGD-95-218, July 25, 1995, http://www.gao.gov/
products/T-GGD-95-218.
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Table 2. Overview of Trade-Related Functions of the Federal Government
Trade Function
Description
Trade policymaking
The development and implementation of U.S. trade policy on a range of matters concerning
and coordination
U.S. exports and imports and trade relations with other countries; coordination of the
views of other participants in the policymaking process to ensure a cohesive policy on
foreign trade.
Trade negotiation
The negotiation of trade and investment agreements and other arrangements to eliminate
and reduce barriers to trade and to establish rules and principles to govern trade and
investment, i.e., free trade agreements (FTAs) and bilateral investment treaties (BITs); such
negotiations are conducted bilaterally and regionally, as well as multilateral y within the
World Trade Organization (WTO) or other international bodies.
Trade promotion
The development and implementation of federal programs to assist U.S. companies in
marketing their goods and services abroad, such as providing market research, conducting
feasibility studies; providing financing and insurance to support U.S. exports and
investments; conducting trade missions; and conducting advocacy on behalf of U.S.
companies to ensure that they can compete on a level playing field with foreign competitors
in export markets.
Trade and investment
The licensing and control of sensitive U.S. exports; examination of foreign direct
regulation
investments for national security reasons; enforcement of U.S. rights under trade
agreements and action on foreign practices considered to be unjustifiable and that restrict
U.S. commerce; and administration and implementation of U.S. statutes concerning unfair
trade practices related to import trade (including antidumping and countervailing measures,
patent and copyright infringement) and fairly traded imports that may threaten to injure
domestic industries.
Data col ection and
The collection and analysis of data related to trade, industry, and other international
analysis
economic activities used by policymakers and other public and private stakeholders.
Other trade-related
The administration of trade adjustment assistance for workers and firms dislocated due to
functions
trade; col ection of import duties; promotion inward direct investment; among other
activities.
Source: U.S. statute, agency websites, U.S. General Accounting Office (now the U.S. Government
Accountability Office), Government Reorganization: Issues Relating to International Trade Responsibilities, GAO/T-
GGD-95-218, July 25, 1995.
Previous Legislative Proposals Related to Trade Reorganization19
Trade reorganization has been a recurring theme in various Administrations and Congresses. The
early 1980s and the mid-1990s were two particularly active periods of debate on trade
reorganization, when legislative proposals were considered. For a summary of key bills
considered by Congress during these time periods, see Appendix B.
During the 98th Congress (1983-1984) and the Reagan Administration, there was renewed interest
in trade reorganization. Proposals were introduced based on the rationale that the federal
government needed to play a stronger role in U.S. trade to meet competition from Japan, Europe,
and the newly industrialized countries of East Asia. These proposals also were motivated by
efforts to reduce federal spending and eliminate institutions and functions deemed to be
unnecessary or duplicative. Legislation introduced focused largely on creating some form of a
“Department of Trade” that included consolidation of the USTR and the trade-related functions of
19 Language drawn from CRS Report IB95106, U.S. Trade: Proposals to Reorganize the Trade Policy Structure, by
William H. Cooper and Wayne Morrison.
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the Department of Commerce and other agencies. Some proposals focused primarily on selected
federal agencies whose primary functions relate to trade policy (e.g., USTR) and export
promotion (e.g., Department of Commerce, Ex-Im Bank, OPIC, and TDA). Other proposals
included a wider array of departments whose primary functions generally focus on other aspects
of U.S. policy (though some aspects may have related to trade policy), including the Departments
of Energy, Labor, State, Transportation, and the Treasury.
The last major set of legislative initiatives to reorganize the U.S. trade policy structure were
developed during the 104th Congress (1995-1996) and the Clinton Administration. These
proposals were motivated by efforts to reduce federal spending and eliminate institutions and
functions deemed to be unnecessary or duplicative or considered to be subsidies for U.S.
businesses. The initiatives focused on reorganization, largely by eliminating the Department of
Commerce. The proposals generally would have terminated certain functions of the Commerce
Department and transferred others to various federal agencies. Some bills also would have
transferred functions of other agencies, such as the Ex-Im Bank, OPIC, and TDA, to a larger
“Department of Trade” body.
Past proposals for major trade reorganization generally failed to advance beyond the
congressional committee consideration stage. However, in 1995, the House passed a bill (H.R.
2491) and the Senate reported a bill out of committee (S. 929), both of which would have
terminated the Department of Commerce and reorganized the functions of other trade-related
agencies, albeit in different ways. Enacting major structural reforms to merge trade agencies has
proved to be politically difficult on multiple levels, and past proposals were not enacted.
Supporters of such proposals found it difficult to reach consensus among various interest groups
that trade reorganization was necessary, and failed to address concerns raised among various
stakeholders, such as representatives of manufactured goods and agricultural goods producers, of
the impact of reorganization on their interests. Efforts to reorganize federal government agencies
also spurred turf battles among federal government agencies, making it difficult to reach
interagency consensus on how best to restructure trade functions of different agencies.20 In
addition, trade reorganization proposals prompted questions and debate over congressional
committee jurisdiction, since jurisdiction of trade-related federal government agencies is spread
across multiple committees. In the absence of major reorganization, successive Administrations
and Congresses have made revisions to certain aspects of the trade policymaking structure, as
described in the next section.
Key Statutes and Administrative Plans Related to
Trade Reorganization
Organizational Structure of Trade Functions
The organizational structure of U.S. trade functions has changed over time through action by the
Congress and executive branch. While a range of federal agencies administer various U.S. trade
functions, the USTR has emerged as the lead in formulating and coordinating U.S. trade policy
and negotiating U.S. international trade agreements. Likewise, the Department of Commerce has
emerged as the lead in administering several U.S. trade functions such as providing export
20 “Observers Doubt Success, Necessity Of Trade Agencies Reform Proposal,” Inside U.S. Trade, February 3, 2011.
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assistance, administering export controls, administering anti-dumping (AD) and countervailing
duty (CVD) measures, and conducting market analysis. See Appendix C for further information
about the key milestones in administrative and legislative action related to trade reorganization.
Until the early 1960s, the U.S. Department of State was the lead agency responsible for
conducting U.S. trade and investment diplomacy and administering the President’s trade
agreements program. During this time, U.S. trade policy largely consisted of negotiating and
implementing international agreements to reduce tariffs, and was considered to be an instrument
of U.S. foreign policy. The 1960s ushered in changes to U.S. trade policymaking, as Congress
grew concerned that trade policy and commercial issues were being subsumed by foreign policy
considerations under the auspices of the State Department.21 (It is worth noting that the State
Department continues to play an active role in U.S. trade policy. For example, the State
Department, along with the USTR, jointly lead the negotiation of U.S. bilateral investment
treaties.)
In order to address concerns that U.S. trade interests were not sufficiently represented in the
policymaking process, successive Congresses have statutorily elevated and expanded the position
of the USTR. Beginning with the Trade Expansion Act of 1962 (P.L. 87-794), Congress removed
most trade policy negotiation functions from the State Department and transferred them to a new
position, the Special Representative for Trade Negotiations, which is the predecessor to the
current USTR.22
The landmark Trade Act of 1974 (P.L. 93-618) codified the establishment of the Office of the
Special Trade Representative (STR) in the Executive Office of the President (EOP) as a Cabinet-
level position of ambassadorial rank, making the STR responsible to the Administration and
Congress for administering the U.S. trade agreements program, chairing the interagency U.S.
trade policy process, and other trade functions. The stated purpose of Congress for establishing
the STR was to provide a better balance between competing domestic and international interests
in the formulation of U.S. trade policy and negotiations, serving as an “executive broker” or
“honest broker.”23
The position of the STR was further elevated by President Carter’s Reorganization Plan No. 3 of
1979, which was submitted by President Carter based on a provision in the Trade Agreements Act
of 1979, in which Congress required the President to develop and present a trade reorganization
plan. Reorganization Plan No. 3 changed the name of the Office of the STR to the current USTR,
and broadened the USTR’s mandate, assigning it lead responsibility for developing and
coordinating U.S. trade policy; conducting international trade negotiations, “including commodity
and direct investment negotiations;” and serving as the principal adviser to the President on trade
policy. Subsequently, the Omnibus Trade and Competitiveness Act of 1988 (P.L. 100-418) further
strengthened the role of the USTR in U.S. trade policy formulation and negotiation.
21 It is worth noting that, even in this present period, certain trade policy actions are undertaken with foreign policy
considerations in mind. For example, a number of the free trade agreements (FTAs) negotiated by the United States
have foreign policy objectives, such as the ones with countries in the Middle East. These FTAs could be considered to
have low commercial value compared to gains that could be achieved by negotiating FTAs with more significant
trading partners, but they are believed to advance important foreign policy and strategic goals.
22 The Trade Expansion Act of 1962 (P.L. 87-794) did not contain provisions on the staff or positional location of the
Special Representative for Trade Negotiations in the federal government.
23 I.M. Destler, American Trade Politics, Fourth Edition (Washington, DC 2005).
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Since the 1970s, the role of the Department of Commerce in administering the day-to-day
functions of U.S. trade policy (such as export promotion) has strengthened and expanded. In
Reorganization Plan No. 3 of 1979, President Carter established the ITA within the Commerce
Department, consolidating the administration of export promotion, export controls24, trade policy
programs, AD and CVD investigations and remedies (formerly in the U.S. Department of the
Treasury), and operations of the Foreign Commercial Service (a new service created from
commercial officer positions of the U.S. Department of State’s Foreign Service). The shift in
responsibility from the Treasury Department to the Commerce Department for administering AD
and CVD laws emerged from congressional and U.S. business concerns that the Treasury
Department was not conducting such investigations adequately, and that the Commerce
Department might be more sensitive to industry concerns.25 The shift in responsibility from the
State Department to the Commerce Department for administering the Commercial Service arose
from concerns that trade promotion and commercial interests were not considered a top priority
for the State Department. Subsequently, the Export Enhancement Act of 1988 (P.L. 100-418),
enacted as part of the Omnibus Trade and Competitiveness Act of 1988, codified the
establishment the U.S Commercial Service in the ITA.
Additionally, federal agencies with trade functions have been reorganized as part of other
initiatives. For example, the Homeland Security Act of 2002 (P.L. 107-296) transferred several
border and transportation security agencies to the newly established Department of Homeland
Security (DHS), including the U.S. Customs Service, which was formerly in the Department of
the Treasury. The Customs Service collects duties and tariffs, administers export laws, and has
other trade responsibilities. The Customs Service was transferred to the newly created U.S.
Customs and Border Protection (CBP) unit of the DHS.26
Interagency Trade Coordinating Structures
Federal trade-related agencies have different missions, represent a range of stakeholder interests,
and conduct an array of trade-related programs and activities. They coordinate and implement
their trade functions through a network of formal and informal interagency relationships. In trade
policy coordination, federal agencies have an interagency process, dating back to and evolving
since the 1950s, to formulate and coordinate trade policy and conduct trade negotiations. In
export promotion, federal agencies use an interagency process to integrate their export strategies
and coordinate their activities.27 Various pieces of legislation and executive action have
established many of the mechanisms intended to coordinate U.S. trade functions.
24 Within the Department of Commerce, export control functions are now handled outside of the ITA in the Bureau of
Industry and Security (BIS).
25 I.M. Destler, American Trade Politics, Fourth Edition (Washington, DC 2005), p. 148.
26 For additional information on executive branch reorganization initiatives, see CRS Report R41841, Executive Branch
Reorganization Initiatives During the 112th Congress: A Brief Overview, by Henry B. Hogue.
27 In the arenas of trade regulation (e.g., trade remedies for AD and CVD, and export controls) and trade data collection
and dissemination, comparatively fewer agencies are involved. U.S. General Accounting Office (now the U.S.
Government Accountability Office), Government Reorganization: Issues Relating to International Trade
Responsibilities, GAO/T-GGD-95-218, July 25, 1995, http://www.gao.gov/products/T-GGD-95-218.
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Trade Policy Coordination
Until the 1950s, the State Department was the major initiator and coordinator of international
trade policy. The Secretary of State originally chaired the Trade Agreements Committee.28 In
1962, Congress authorized the President to establish a new interagency trade organization to carry
out specified trade policy functions under section 242 of the Trade Expansion Act of 1962 (P.L.
87-794). In 1975, the Trade Policy Committee (TPC), a Cabinet-level body, replaced the previous
Trade Agreements Committee. The TPC was established by section 3 of E.O. 11846, as
authorized by section 242(a) of the Trade Expansion Act of 1962, as amended.29 Two subordinate
coordinating groups—the sub-Cabinet-level Trade Policy Review Group (TPRG) and the staff-
level Trade Policy Staff Committee (TPSC)—were subsequently created by the authority of
USTR. As such, interagency trade policy coordination takes places through a three-tiered
mechanism:
• Cabinet/Principals level: Historically, the trade policy coordination functions at
the Cabinet-level have been carried out by the TPC, the senior U.S. government
interagency trade committee established to provide broad guidance on trade
issues to the President and the USTR, including on carrying out functions under
trade law, developing and implementing U.S. international trade policy
objectives, and the relationship between trade policy objectives and other major
policy areas. The TPC is composed of the USTR (chairperson), and the
Secretaries of Commerce, State, Treasury, Agriculture, and Labor.30 (Cabinet-
level trade policy coordination functions currently are carried out by the National
Economic Council; see below.)
• Sub-Cabinet/Deputies level: Trade policy coordinating functions at the sub-
Cabinet/Deputies-level are carried out by the TPRG, which is headed by the
USTR and is composed of members at the Deputies-level of 19 federal agencies
and offices: Council of Economic Advisors; Council of Environmental Quality;
Departments of Agriculture, Commerce, Defense, Energy, Health and Human
Services, Homeland Security, Interior, Justice, Labor, State, Transportation, and
the Treasury; EPA; Agency for International Aid and Development; National
Economic Council; National Security Council; OMB; and International Trade
Commission (non-voting member). The TPRG helps to coordinate U.S.
government positions on international trade and trade-related investment issues.
Disagreements within the TPRG are referred to the Cabinet-level body for
review.
• Staff level: The TPSC is the “primary operating group” composed of senior civil
service members drawn from the same federal agencies and offices that
participate in the TPRG. Over 90 subcommittees and task forces support the work
of the TPSC. If the TPSC does not reach consensus on particular trade policy
matters, these issues are referred to the TPRG.
28 The Trade Agreements Committee included 8 agencies: the Departments of State, Agriculture, Commerce, and
Treasury; the Tariff Commission; the Agricultural Adjustment Administration; the National Recovery Administration;
and the Office of the Special Advisor to the President on Foreign Trade Committee on Ways and Means, U.S. House of
Representatives, Overview and Compilation of U.S. Trade Statutes, Part I of II, June 2005, pp. 324-325.
29 40 Federal Register 18419, April 28, 1975.
30 Committee on Ways and Means, U.S. House of Representatives, Overview and Compilation of U.S. Trade Statutes,
Part I of II, June 2005, pp. 324-325.
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Presently, Cabinet-level trade policy coordinating functions take place through the National
Economic Council (NEC).31 Established in 1993, the NEC is located in the White House, chaired
by the President of the United States and is composed of the Vice President, the Secretaries of
State, Treasury, Agriculture, Commerce, Labor, Housing and Urban Development, Transportation,
and Energy, the Administrator of the Environmental Protection Agency (EPA), the Director of the
OMB, the USTR, the Chairman of the Council of Economic Advisors, the National Security
Advisor, and the Assistants to the President for Economic Policy, Domestic Policy and Science
and Technology Policy.32 The NEC advises the President on U.S. and global economic policy,
including trade policy. The TPRG and the TPSC continue to form the other tiers of the
interagency trade policy coordinating mechanism.33
The work of these interagency bodies is supported by a private sector advisory system, intended
to provide information and advice on U.S. negotiating objectives and bargaining positions before
entering into trade agreements, on the operation of existing U.S. trade agreements, and on other
U.S. trade policy matters. Congress established the private sector advisory committee system
under Section 135 of the Trade Act of 1974 (P.L. 93-618) to ensure that U.S. trade policy and
trade negotiation objectives reflect U.S. commercial and economic interests. This body arose
from concerns from members of the U.S. business community that their role in U.S. trade
negotiations was limited and “ad hoc.”34 Congress expanded the advisory role of the private
sector in subsequent trade acts, most recently the Trade Act of 2002 (P.L. 107-210).35 The private
sector advisory system consists of 28 advisory committees, with a total of approximately 700
advisors, and is arranged in three tiers: (1) the President’s Advisory Committee for Trade Policy
and Negotiations (ACTPN); (2) 5 policy advisory committees—Agricultural Policy,
Intergovernmental Policy, Labor, Africa, and Trade and Environmental Policy; and (3) 22 sectoral
and technical advisory committees—6 on agriculture and 16 on industry. The USTR manages this
system, in cooperation with other agencies, including the Departments of Agriculture, Commerce,
and Labor, and the EPA.36
Export Promotion Coordination
Interagency bodies also exist to coordinate the federal government’s trade promotion activities.
One body is the Trade Promotion Coordinating Committee (TPCC), whose stated purpose is to
develop a government-wide strategic plan for carrying out federal export promotion and financing
programs and to propose a unified export promotion budget to the President. The TPCC is
composed of 20 member departments and agencies, 9 of which are key in federal export
promotion efforts: Departments of Agriculture, Commerce (chair), State, and the Treasury; Ex-Im
Bank, OPIC, TDA, SBA, and USTR. The TPCC, first established in May 1990 by President Bush
during remarks on U.S. trade policies and U.S. companies involved in exporting, was enacted by
31 The Trade Policy Committee (TPC) continues to exist statutorily but is no longer active. Telephone conversation
with USTR official, May 23, 2012.
32 Telephone conversation with USTR official, May 23, 2012.
33 USTR, Office of the United States Trade Representative Open Government Plan, Version 3.0, July 2011, p. 30,
http://www.whitehouse.gov/sites/default/files/ustr_open_government_plan_july_2011_ver3.pdf.
34 I.M. Destler, American Trade Politics, Fourth Edition (Washington, DC 2005), p. 109.
35 Committee on Ways and Means, U.S. House of Representatives, Overview and Compilation of U.S. Trade Statutes,
Part II of II, June 2005, p. 1466.
36 Office of the U.S. Trade Representative (USTR), “Advisory Committees,” http://www.ustr.gov/about-us/
intergovernmental-affairs/advisory-committees.
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Title II of the Export Enhancement Act of 1992 (P.L. 100-412). The TPCC emerged from
concerns that existing U.S. export promotion programs lacked coordination and an overall
strategy. However, there have been debate about the effectiveness of the TPCC. Many of the
alleged problems associated with the TPCC stem from lack of enforcement “teeth” given to the
body.37
More recently, a higher level of coordination of trade and export promotion functions has been
introduced through the National Export Initiative (NEI). As part of the NEI, President Obama
established an Export Promotion Cabinet (EPC) to enhance and organize federal efforts to
promote exports, to ensure that export promotion is a high priority for all relevant agencies, and
to development and implement the NEI along with the TPCC.38 Members of the EPC include the
9 key Secretaries or Directors of the export promotion agencies of the TPCC and senior White
House advisors. While some stakeholders have welcomed the creation of the EPC as a way to
elevate export promotion as a national priority, others have expressed concern that it may
duplicate the TPCC’s functions.
In addition, private sector input on export-related issues is provided through the President’s
Export Council (PEC), which advises the President of “government policies and programs that
affect U.S. trade performance; promotes export expansion; and provides a forum for discussing
and resolving trade-related problems among the business, industrial, agricultural, labor, and
government sectors.”39 The PEC is to be composed of up to 28 private sector members; 5 U.S.
Senators and 5 members of the House of Representatives; and the heads of the Departments of
Agriculture, Commerce, Energy, Homeland Security, Labor, State, Transportation, and the
Treasury; Ex-Im Bank, OPIC, SBA, TDA, USTR, OMB, Council of Economic Advisors, and
NEC. The PEC was first established by E.O. 11753 in 1973, and has been subsequently renewed
by Administrations. Most recently, in 2011, President Obama issued E.O. 13585, which renewed
the PEC and certain other federal advisory committees until September 30, 2012.40
Issues for Congress
Trade reorganization raises a number of issues for Congress. This section first discusses the
general debate about the reorganization, and then analyzes specific issues raised by President
Obama’s trade reorganization proposal.
Rationales for Trade Reorganization
Rationales for the reorganization of U.S. trade functions tend to be derived from the assumption
that the structure of the U.S. trade policy apparatus have constrained the effectiveness of U.S.
trade policy. One issue for Congress is how to measure the effectiveness of the U.S. trade policy
37 GAO, International Trade: Effective Export Programs Can Help in Achieving U.S. Economic Goals, GAO-09-480T,
March 17, 2009.
38 E.O. 13534, “National Export Initiative,” 75 Federal Register 12433, March 16, 2010.
39 Department of Commerce, “President’s Export Council History,” http://trade.gov/pec/history.asp.
40 E.O. 13585, “Continuance of Certain Federal Advisory Committee,” 75 Federal Register 62281-62282, October 7,
2011.
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structure. Potential indicators for measuring the effectiveness tend to flow from views of what the
goals of U.S. trade policy should be, and how those goals should be prioritized.41
• International trade policy objectives for trade policy include opening and
accessing foreign markets, “levelling the playing field” for U.S. businesses in the
international marketplace, and advancing U.S. trade policy objectives in
international negotiations. In this vein, potential indicators for the effectiveness
of U.S. trade policy could be examining the number, scope, and content of U.S.
trade agreements and the extent to which trade barriers have been eliminated or
reduced.
• Macroeconomic goals for U.S. trade policy include supporting U.S. employment
and economic growth, boosting U.S. export levels, and improving the U.S. trade
balance. To this end, possible indicators for measuring the effectiveness of U.S.
trade policy functions could be an evaluation of how the organizational structure
of U.S. trade functions contributes to these goals.
• At times, U.S. trade policy has focused on supporting certain firm-specific,
sectoral, or regional objectives. As such, possible indicators of the effectiveness
of U.S. trade policy could be the extent to which the organizational structure of
U.S. trade policy functions supports exports by small- and medium-sized
enterprises (SMEs), “green” exports, exports to specific emerging markets and
developing economies, and other priority exports.
For advocates of trade reorganization, such indicators generally have led to the view that the U.S.
trade policy structure is not suited to respond to the growing demands and competitive challenges
of the current global marketplace (such as increasing competition from China, Brazil, and India),
and does not adequately support U.S. businesses in accessing foreign markets and reaching
foreign consumers. In evaluating the effectiveness of the organizational structure for U.S. trade
policy functions, some stakeholders point to how trade functions are organized in other countries.
Supporters of trade reorganization contend that the comparatively more consolidated structures of
trade functions in certain countries help them to pursue more effective trade policies.42
Some opponents of trade reorganization contend that, while changes in trade policy—and by
extension the policymaking structure—may benefit individual U.S. businesses and workers in the
short-run, they have little influence in the long-run on U.S. export and employment levels and
trade balances. They assert that macroeconomic factors (such as global economic growth,
exchange rates, and the balance between domestic savings and investment) hold greater sway
over economic factors such as a nation’s level of exports and trade balance. For example, under
this argument, any economic gains from changes to the U.S. trade organizational structure could
be washed out by impacts resulting from changes to macroeconomic factors. Critics of trade
41 For more information on the objectives and prioritization of U.S. trade policy, see CRS Report R41929, Boosting
U.S. Exports: Selected Issues for Congress, by Shayerah Ilias et al.
42 Examples of consolidation in foreign countries include the United Kingdom’s Department of Business, Innovation
and Skills, which is “responsible for economic development, trade, workforce development, higher education, small
business, and science and technology policies;” Germany’s Ministry of Economics and Technology, which “handles
energy, domestic and international economics, technology, telecommunications and mail, and industrial relations
policies;” and India’s Ministry of Commerce and Industry, whose portfolio includes “international trade, domestic and
foreign business, infrastructure, intellectual property, and industrial policy and promotion.” John Podesta, Sarah Rosen
Wartells, and Jtinder Kohli, A Focus on Competitiveness: Restructuring Policymaking for Results, Center for American
Progress, December 2010.
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reorganization also note that the nature of a government’s trade organizational structure depends
on a range of factors that vary by country, and that it may not make sense to make direct
comparisons between the organizational structure of the United States and other countries.
In addition to trade policy rationales, other drivers of trade reorganization have been policy goals
of reducing the size and costs of government. In terms of these goals, possible considerations are
the budgetary impact of a proposed trade reorganization, such as changes in administrative and
program costs and personnel levels. The budgetary impact could be examined both in the short-
term and the long-term. For example, initial costs of transferring trade functions in a
reorganization could be offset by cost savings from greater efficiency in the long-run. At the same
time, based on the DHS reorganization experience, some might suggest that consolidation efforts
could lead to the creation of larger government bureaucracy that brings unforeseen costs.
Some General Pros and Cons of Trade Reorganization
Public policy debate about trade reorganization generally is rooted in a central question of
whether trade reorganization would enhance the effectiveness of the U.S. trade policy and
administration structure or merely result in a superficial exercise of bureaucratic reshuffling. On
one hand, proponents of trade reorganization maintain that the existence of multiple trade-related
federal agencies, often with overlapping missions and services, is difficult and complex for
businesses to navigate when securing federal assistance. They argue that U.S. businesses would
benefit from a more centralized, “one-stop-shop” resource for accessing federal assistance instead
of having multiple entry points for accessing government services. Supporters also maintain that
reduction of duplicative programs would lower overall costs of government, such as
administrative costs.43 Consolidation of federal trade functions, supporters further argue, would
facilitate a more coherent U.S. trade policy structure, making it “easier to set priorities, enlist
resources of diverse programs in services of a national strategy for competitiveness and align
agencies’ work to deliver outcomes that matter to the public.44
On the other hand, opponents of trade reorganization contend that restructuring merely would
result in an exercise of “moving-the-boxes-around.” In their view, reorganization would not
address fundamental issues underlying U.S. trade policy—such as balancing competing
stakeholder interests, coordinating trade functions, and enforcing trade agreements—and could
even divert federal resources away from addressing greater trade policy priorities. While
acknowledging that terminating certain agencies may result in cost-savings, they point out that
there also may be costs associated with transferring their functions, if deemed necessary, to other
agencies. In that same vein, the federal government’s capacity to provide trade-related services
may be limited during a period of time as the federal government restructures trade functions;
U.S. businesses could lose out on opportunities for federal support during this transition time.
Critics express concern that consolidation proposals may limit the effectiveness of certain trade
functions, contending that it is the smaller size of certain agencies, such as the USTR, that allow
them to be agile and “non-bureaucratic” and more effective in administering their trade
functions.45 In addition, opponents assert that the diffusion of trade functions across the
43 Brian M. Riedl, How to Cut $343 Billion from the Federal Budget, The Heritage Foundation, No. 2483, October 28,
2010.
44 John Podesta, Sarah Rosen Wartell, and Jitinder Kohli, A Focus on Competitiveness: Restructuring Policymaking for
Results, Center for American Progress, December 2010.
45 “News Briefs: Baucus Critical Of Obama On Reorganizing Federal Export Agencies,” World Trade Online, February
(continued...)
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government helps to advance the diverse range of interest in U.S. trade policy by providing
specialized support, such as for small businesses and agricultural exporters.
Analysis of President Obama’s Trade Reorganization Proposal
The President’s proposal to reorganize the functions of six federal agencies into a broader
department raises a number of issues for Congress. While some Members of Congress have been
broadly supportive of efforts to improve the U.S. trade policy structure’s effectiveness and
efficiency, others have expressed concern that such efforts would simply result in a bureaucratic
exercise. The issues discussed below could also arise in congressional examination of other
administrative or legislative proposals on trade reorganization.
Effectiveness of Trade Functions
Reorganization of trade agencies raises questions about the extent to which certain functions can
be effectively implemented in a new structure. Much of the debate on effectiveness has centered
on the positioning of the USTR in a new trade structure. For example, there has been significant
debate about the implications for a reorganization on USTR’s capacity to serve as an “honest
broker.” Proponents of USTR claim that the agency is unique in its role as an honest broker that
intermediates between and among the executive and legislative branches of government, among
federal agencies, and between domestic and foreign interests. Some contend that USTR’s ability
to serve as this honest broker would be compromised if it was subsumed in a larger agency.
Critics counter that USTR is far from being an honest broker and that many of its actions and
decisions are politicized.
Some also express concern that the federal government’s capacity to negotiate trade policy could
be constrained under the proposed reorganization. A central issue has been the proposal to remove
the USTR from the EOP and place it in the newly created trade department, but allow the USTR
to maintain Cabinet-level status, reporting to the both the President and the head of the new
department. Critics contend that removing the USTR from the EOP and subsuming it into a larger
agency could be considered a “downgrade” in its stature. They argue that this could limit the
USTR’s clout in international trade negotiations, as many other countries are very “status
conscious.” Others contend that because the President’s reorganization plan would allow USTR
to maintain Cabinet level status, the trade policy negotiating body’s stature or clout would not be
compromised.46 White House officials have noted a comparable arrangement, under which the
U.S. ambassador to the United Nations reports to both the Secretary of State and the President.
From the perspective of resources, proponents of the proposal contend that it would allow USTR
to take advantage of a wider array of federal resources in a more structured manner, such as
analytical support of Commerce’s country and industry desk offices to support trade policy and
inform U.S. trade negotiations. Others argue that USTR already takes advantage of Commerce
support, and that merging the two agencies would only serve to create greater bureaucracy.
(...continued)
17, 2011. “Hatch on President’s Announcement to Reorganize Federal Agencies,” press release, January 13, 2012,
http://hatch.senate.gov/public/index.cfm/releases?ID=5a75184e-4eaf-4c22-84c6-d23f9536970a.
46 “NFTC: Trade Reorganization Proposed by Obama May Marginalize USTR,” Inside U.S. Trade, January 27, 2012.
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In addition, there are concerns that the transfer of the functions of smaller agencies into a larger
department may raise bureaucratic concerns. Some may wonder if there is a contradiction in
efforts to reduce the size of government by creating a larger federal agency. For example, Senate
Finance Committee Chairman Max Baucus and House Ways and Means Committee Chairman
David Camp said in a joint statement, “Taking USTR, one of the most efficient agencies that is a
model of how government can and should work, and making it just another corner of a new
bureaucratic behemoth would hurt American exports and hinder American job creation. We
certainly need to look for ways to reduce government and cut taxes, but not at the expense of
programs that are helping businesses, ranchers and farmers create jobs and expand our
economy.”47
Selection of Federal Agencies
A dual question that Congress could examine is: If trade reorganization is considered, what mix
of agencies should be included in the reorganization, and what agencies should not? The
President’s proposal does not encompass all agencies with trade functions. For example, the
proposal excludes the U.S. Department of Agriculture (USDA)—which conducts major
agricultural international trade functions, including export financing and commercial
representation abroad, through its Foreign Agricultural Service (FAS). The proposal also excludes
the State Department, which helps to advance U.S. trade policy objectives, in part, through U.S.
representation in foreign diplomatic missions.
Exclusion of such key trade-related agencies may raise questions for the cohesion of trade policy.
For instance, excluding USDA and the State Department from the proposal could remove an
opportunity to consolidate the international representation functions, i.e., bringing together the
foreign agricultural officers of USDA, the foreign service officers of State, and the commercial
service officers of the Commerce Department into one unit. At the same time, some may point out
the responsibilities of foreign service officers often extend beyond trade functions, as they may
work to advance a wide range of U.S. political and economic initiatives. As such, it may not
necessarily make sense to consolidate these functions into one body. In addition, exclusion of
such agencies may mean that, as stand-alone agencies, they are more appropriately responsive to
the needs of certain stakeholder interests (see next section).
At the same time, the President’s reorganization proposal includes agencies that some may prefer
to be excluded from the conversation. Such a debate may arise with SBA. On one hand, much of
SBA’s functions are unrelated to trade. Consequently, some may question the rationale of
transferring the SBA to the proposed new department. On the other hand, the proposed new
department would include both trade and industry functions. In this vein, transferring SBA
functions may be highly relevant for streamlining federal trade-related functions.
There is debate about whether maintaining separation between certain policy functions may
enhance U.S. trade policy. For example, if trade negotiating and all trade enforcement functions
are brought together, some argue that the United States might find itself in a difficult situation if
the department that is negotiating for greater market access with one country (functions currently
led by the USTR) is the same one that is levying anti-dumping and countervailing duties on that
47 Senate Finance Committee, “Baucus, Camp Comment on Trade Agency Reorganization Proposal,” press release,
January 13, 2012, http://finance.senate.gov/newsroom/chairman/release/?id=e67329f7-f317-4eae-880a-4193606d9bf0.
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country (functions currently led by the Commerce Department).48 At the same time, some may
point out that the USTR, in its current form, conducts both trade negotiation and trade
enforcement functions. For instance, the USTR both leads FTA negotiations and handles WTO
dispute settlement issues, which involve the enforcement of U.S. rights under WTO agreements.
Representing Stakeholder Interests
Another issue that Congress could examine is the impact of a proposed reorganization on the
ability of the federal trade structure to promote the interests of certain economic sectors or to
advance other U.S. policy objectives. For instance, specific to USTR, certain agricultural and
commodity groups express concern that subsuming USTR in a larger trade department that does
not have a specific agricultural focus may adversely affect expertise and interests in U.S. trade
negotiations that relate to agriculture. Such concerns arise because the USTR conducts
negotiations on all trade issues, including those related to agriculture.49
The trade reorganization debate also has raised questions about the implications for small
business interests. Small business advocates have welcomed the elevation of the Small Business
Administrator to Cabinet level status by the Administration, but have expressed concerns about
the impact on small business interests if SBA is merged with other entities in the President’s
proposed reorganization. Some argue that small business concerns may be diluted. Others
contend that, in a number of agencies aside from SBA, small business concerns rank as a
secondary focus and pulling together small business resources across agencies in a reorganization
could strengthen federal support for small business exports.
In addition, trade reorganization could prompt questions about the implications on the dual trade
and development functions served by certain agencies, namely OPIC and TDA. Given that the
proposed new department would focus on trade, business, industry, and competitiveness, some
question the extent to which the trade functions currently undertaken with development and
foreign policy objectives would be met. For example, both OPIC and TDA place significant
emphasis on support to projects in the Middle East and Sub-Saharan Africa, which are top foreign
policy priorities but not necessarily a top priority of U.S. trade policy, because these regional
markets are relatively small. On the one hand, a newly created trade-focused department may not
offer a similar emphasis on supporting investments and exports in these regions as OPIC and
TDA currently do. On the other hand, since OPIC and TDA conduct their development and
foreign policy functions through commercial tools, it is possible that these development-oriented
functions would not be diluted in a reorganization.
Alternative Policy Options for Congress
Congress may ultimately examine several different policy options on trade reorganization, as
discussed below.
48 U.S. General Accounting Office, Government Reorganization: Observations About Creating a U.S. Trade
Administration, GAO/T-GGD-95-234, September 6, 1995, http://www.gao.gov/products/T-GGD-95-234.
49 David Bennett, “Agriculture Industry Wary of Merging Trade Agencies,” Western Farm Press, January 26, 2012.
“Business Critics Of Reorganization Oppose Relocation Of USTR,” Inside U.S. Trade, January 19, 2012.
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Maintain Status Quo
Congress could consider maintaining the current trade policy structure. Some Members take the
position that the current structure is adequate for implementing effective U.S. trade policy, and
that addressing challenges of competitiveness and coordination requires other policy tools aside
from trade reorganization. Other Members may hold the view that while the current structure is
not ideal, restructuring may result in more problems than benefits. Others also may be wary of the
short-term costs of restructuring, and value not losing U.S. effectiveness in the short-run in
negotiation of trade agreements, promoting exports, and enforcing trade commitments over any
long-term gains or future cost-savings.
In the event that Congress does not act on trade reorganization, the Administration might
nevertheless move forward with some aspects of the trade reorganization that could be carved out
under the President’s authority and not require congressional approval. For example, the President
has announced his intention to move administratively, while waiting for reorganizational
authority from Congress, to ensure the effectiveness of federal programs and functions supporting
trade and investment. To this end, as noted earlier, the President issued a memorandum with
directives intended to strengthen the coordination of trade policy functions by the TPCC and the
EPC.50 In addition, the President established the Interagency Trade Enforcement Center, for the
purpose of strengthening and coordinating enforcement of U.S. rights under trade agreements and
U.S. law.51
Privatize or Terminate Certain Trade Functions
Policy debate about the arrangement of trade functions in the U.S. trade policy apparatus has been
related to questions about whether the federal government should even be involved in carrying
out certain functions. As such, alternate policy options for Congress related to trade
reorganization may be the privatization or termination of certain federal trade functions.
Central premises behind such options may include concerns about the size and scope of the
federal government, the economic rationale for government intervention in markets, the view that
federal trade-related activities may compete with or crowd out private sector activity, the notion
that the private sector is more effective and better suited than the government in conducting trade
promotion and financing activities, that state- and local-level government entities are conducting
similar trade functions, corporate welfare arguments, and the possible costs and risks transferred
to U.S. taxpayers. For example, some have argued that the Ex-Im Bank and OPIC could be
considered potential candidates for privatization or termination in a reauthorization.
Others may oppose privatization or termination of certain federal trade functions on the grounds
that the federal government plays a unique role in its capacity to address market failures that may
dampen the most efficient level of U.S. exports and investment. For example, critics of
privatization and termination assert that the credit and insurance activities of the Ex-Im Bank and
OPIC are backed by the full faith and credit of the U.S. government, making certain transactions,
50 The White House, “Presidential Memorandum—Maximizing the Effectiveness of Federal Programs and Functions
Supporting Trade and Investment,” press release, February 17, 2012, http://www.whitehouse.gov/the-press-office/
2012/02/17/presidential-memorandum-maximizing-effectiveness-federal-programs-and-fu.
51 The White House, Office of the Press Secretary, “Executive Order—Establishment of the Interagency Trade
Enforcement Center,” February 28, 2012.
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such as those for major infrastructure projects, more commercially attractive or giving the
agencies more leverage to guarantee repayment in a way that is not available to the private sector.
In addition, they may hold the view that federal trade programs equip U.S. firms with tools to
compete for export and investment contracts with foreign firms that have access to similar
support offered by their governments.
Strengthen Coordination of Trade Agencies
Congress could consider enhancing the effectiveness of U.S. trade agencies not by consolidating
them, but rather, by enhancing coordination among the agencies. One option for Congress could
be to strengthen existing coordinating bodies for trade functions. For example, in terms of export
promotion coordination, Congress could give the TPCC and EPC greater authority to develop a
unified trade budget based on clear priorities and objectives. Another approach for Congress
could be to streamline existing coordinating bodies for trade functions. For instance, there have
been concerns that the creation of the EPC is duplicative, as it focuses on largely similar issues as
the TPCC. As such, Congress could consider streamlining the TPCC and EPC for enhanced
coordination.
Alternatively, Congress could set up new coordination mechanisms. Greater coordination could
help to achieve some of the goals of trade reorganization, such as reducing duplication of
functions and activities, possibly with less “bureaucratic shuffling.” However, the extent to which
coordination mechanisms may be effective could depend on the authority assigned to them by
Congress to bring about changes to government processes. In addition, increased coordination
may not mitigate concerns about fragmentation of trade functions across the federal government.
Create a Commission
Congress could establish a commission, composed of public and/or private sector stakeholders, to
examine trade reorganization. For example, the commission could examine the effectiveness of
the current organizational structure for federal trade functions, identify opportunities for
improvement, develop recommendations or plans for reorganizing trade functions. The
establishment of such a commission would be in line with previous commissions established by
the government during previous times of trade reorganization debate.52
Outlook
Congress could conduct oversight, engage in consultations with the Administration, hold
hearings, grant reorganizational authority to the President, and/or introduce and enact trade
reorganization legislation separate from the President’s plan. Whether or not, and to what degree,
trade reorganization action is taken in the 112th Congress may depend on a range of factors.
Catalysts for trade reorganization include the U.S. policy focus on export promotion and
emphasis on smaller government and cost-savings measures. It is worth noting that
52 For example, President Reagan established the Private Sector Survey on Cost Control (PSCC). Commonly referred to
as the “Grace Commission” the PSSCC was headed by Peter Grace, a U.S. businessman and was charged with
identifying inefficiencies in the U.S. government. The Grace Commission report provided recommendations that were
presented to Congress in January 1984.
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reorganizations of other parts of the executive branch have happened in response to major crises
or events, such as the post-9/11 creation of the Department of Homeland Security. In the case of
trade reorganization, it is difficult to tell to what extent the dynamics of the U.S. economy or
other factors could make a compelling argument for trade reorganization.
At the same time, there are a number of potential impediments for trade reorganization. Enacting
major structural reforms to merge trade agencies may be politically difficult. Congressional
jurisdiction of federal government agencies involved in export promotion, for example, is spread
across multiple congressional committees. Some observers predict that congressional committees
“will be reluctant to agree to such changes due to concerns about an impact on their
jurisdiction.”53 In cases where the Administration cannot act alone to reorganize elements of
federal trade functions, merging new agencies may require legislation. Efforts to reorganize
federal government agencies also may spur turf battles among federal government agencies, and
it may be difficult to reach interagency consensus on how best to restructure, for example, export
promotion-related agencies.54 In addition, certain stakeholders, such as small business or
agricultural producers, may express concern about the impact of reorganization on their special
interests.
In terms of timing, while trade reorganization may not be politically feasible during an election
year, it is possible that the issue could be examined and advanced in the longer-term. While some
attempts at trade reorganization have resulted in significant changes to the federal trade apparatus,
other reorganizations have been more incremental. It remains to be seen to what extent, if at all,
trade reorganization takes place. It is also unclear how trade reorganization might affect the
interagency process for trade policymaking, trade promotion, and other trade functions. In the
event that some form of trade reorganization advances, a need for interagency coordination likely
would remain, given the range of federal government agencies that conduct trade functions and
that are not included in the current proposal.
53 “Observers Doubt Success, Necessity Of Trade Agencies Reform Proposal,” Inside U.S. Trade, February 3, 2011.
54 Ibid.
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Appendix A. Acronyms
Acronym Term
AD
Anti-dumping
BEA
Bureau of Economic Analysis
BIS
Bureau of Industry and Security
BIT
Bilateral investment treaty
BXA
Bureau of Export Administration
CVD
Countervailing duty
CS
U.S. and Foreign Commercial Service
EDA
Economic Development Administration
EPC
Export Promotion Cabinet
Ex-Im Bank
Export-Import Bank of the United States
FTA
Free trade agreement
IA
Import Administration unit
ITA
International Trade Administration
MAC
Market Access and Compliance unit
MAS
Manufacturing and Services unit
MBDA
Minority Business Development Administration
NEC
National Economic Council
NEI
National Export Initiative
NOAA
National Oceanic and Atmospheric Administration
NTIA
National Telecommunication and Information Administration
NTIS
National Technical Information Service
OMB
Office of Management and Budget
OPIC
Overseas Private Investment Corporation
SBA
Small Business Administration
TDA
U.S. Trade and Development Agency
TDP
Trade and Development Program
TPC
Trade Policy Committee
TPCC
Trade Policy Coordinating Committee
TPRG
Trade Policy Review Group
TPSC
Trade Policy Staff Committee
USDA
U.S. Department of Agriculture
USTR
Office of the United States Trade Representative
USTTA
U.S. Trade and Tourism Administration
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Appendix B. Summary of Legislative Proposals on
Trade Reorganization, Select Congresses
The early 1980s, during the Reagan Administration, and the mid-1990s, during the Clinton
Administration, were two particularly active periods of debate on trade reorganization. During
these time periods, Congress considered several legislative proposals to reorganize the federal
government’s trade functions. What follows is a discussion of the some of the legislative
proposals introduced during these periods
96th Congress
The International Trade and Investment Reorganization Act (S. 377), introduced on February 7,
1979, and referred to the Senate Committee on Governmental Affairs, would have established a
Department of International Trade and Investment by absorbing the Office of the Special Trade
Representative (now the USTR); placing the trade and foreign investment functions of the
Departments of Commerce, State, and the Treasury in the new department; and transferring the
functions of the Export-Import Bank (Ex-Im Bank) and Overseas Private Investment Corporation
(OPIC) to the new department.
98th Congress55
In 1983, the Reagan Administration proposed the consolidation of the USTR and the trade-related
functions of the Department of Commerce and other agencies. The primary legislative vehicle for
the Administration’s proposal was the Department of International Trade and Industry Act of
1983 (S. 121) and its companion bill (H.R. 2288). This legislative initiative would have created
the United States Trade Administration (USTA), headed by a U.S. Trade Representative. The bill
would have transferred the functions of the USTR to the USTA. It also would have transferred the
trade-related functions of the Department of Commerce to the new department, including the
International Trade Administration (ITA), the U.S. and Foreign Commercial Service, International
Economic Policy, Trade Development, the Export Administration, the Import Administration, and
the National Telecommunication and Information Administration. In addition, the bill would have
transferred the functions of the Ex-Im Bank, OPIC, and TDA to the newly created USTA.
Some reorganization proposals considered in Congress include agencies whose primary functions
extended beyond trade. For example, the Department of Trade and Commerce Act of 1983 (S. 21)
and its companion bill (H.R. 1202), which would have renamed the Department of Commerce as
the Department of Trade and Commerce, would have consolidated trade functions from an
expansive range of federal agencies in the proposed new department: USTR; Secretary of
Defense (export of strategic materials); Secretary of Energy (trade in energy and energy-
producing materials); Secretary of Labor or Department of Labor (Trade Adjustment Assistance);
Secretary of State (international trade and investment functions); Secretary of the Treasury
(international trade and investment functions); Secretary of Transportation (transportation
systems and equipment); Department of Agriculture (export of agricultural products); and SBA)
55 Drawn from American Enterprise Institute, Proposals to Establish a Department of Trade, Legislative Analysis No.
43, 98th Congress, May 1984; and I.M. Destler, American Trade Politics, 4th Edition (2005).
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(export financing for small businesses). The bill also would have transferred to the new
department all functions of the Ex-Im Bank, OPIC, the Trade and Development Program of the
International Development Cooperation Agency, U.S. Customs Service of the Treasury
Department, and the international trade functions of the U.S. International Trade Commission.56
The Trade Reorganization Act of 1983 (H.R. 4432) was introduced on November 16, 1983 in the
House. The bill would have created a Department of Commerce and Trade that would have
resembled S. 121, with some differences, notably the creation of an Office of Industrial Policy
and an Industrial Competitiveness Council.
104th Congress
H.R. 1756, the Department of Commerce Dismantling Act, would have eliminated the
Department of Commerce by terminating certain functions and transferring others to existing
agencies. The bill would have eliminated the ITA and transferred the Import Administration and
the foreign component of the U.S. and Foreign Commercial Service to the USTR. The domestic
component of the Commercial Service would have been eliminated, as would the other
international economic policy and trade development functions of the ITA. The bill also would
have eliminated the Bureau of Export Administration (BXA), transferred BXA’s export licensing
functions to the State Department, and transferred the BXA’s export enforcement functions to
Customs.57
In addition, H.R. 1756 would have terminated certain other functions of the Commerce
Department and transferred others to existing agencies. The bill would have terminated
Commerce’s administrative functions, the Economic Development Administration, the Minority
Business Development Agency (MBDA), the United States Travel and Tourism Administration
(USTTA), and industrial technology programs.58 It would have transferred the weight and
measure functions of the National Institute for Standards and Technology (NIST) to the National
Science Foundation (NSF). It would have terminated the National Telecommunications and
Information Administration (NTIA) and transferred its functions to the Federal Trade
Commission (FTC). It would have transferred the Patent and Trademark Office (PTO) to the
Department of Justice. It would have eliminated the Economic and Statistics Administration
(ESA), transferred the Bureau of the Census to the Treasury Department, and transferred the
Bureau of Economic Analysis (BEA) to the Federal Reserve System. It would have transferred
many of the functions of the National Oceanic and Atmospheric Administration (NOAA) to
several different federal agencies.
Another trade reorganization bill (S. 929) was introduced in the Senate on June 15, 1995, and
referred to the Senate Committee on Governmental Affairs. On September 7, 1995, the Senate
Committee on Governmental Affairs reported out Senator Roth’s substitute amendment to S. 929,
56 The Jobs Through Exports Act of 1992 (P.L. 102-549) renamed the Trade and Development Program (TDP) as the
Trade and Development (TDA), and made the TDA into an independent agency. The Homeland Security Act of 2002
(P.L. 107-296) transferred the functions of the U.S. Customs Service to the U.S. Customs and Border Protection (CBP)
of the Department of Homeland Security (DHS).
57 In 2002, in the Department of Commerce, the Bureau of Export Administration (BXA) was replaced by the Bureau
of Industry and Security (BIS).
58 In 1996, the functions of the U.S. Travel and Tourism Administration were transferred to the Department of
Commerce’s International Trade Administration (ITA).
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the Commerce Department Termination and Government Reorganization Act of 1995. On
October 20, 1995, the bill was placed on Senate Legislative Calendar under General Order. S. 929
would have abolished the Department of Commerce and replaced it with an independent agency,
the United States Trade Administration (USTA). S. 929 would have transferred the functions of
the Department of Commerce (specifically the functions of the ITA), along with the Ex-Im Bank,
OPIC, TDA, and USTR, to the newly created USTA. Under the bill, the USTA would have been
headed by the USTR, who would have retained cabinet status and ambassadorial rank. The USTR
would have continued to be responsible for trade policy and negotiations, but under the bill, the
USTR’s responsibility also would have extended to export promotion, trade policy analysis, trade
law administration, and other functions of the ITA and the BXA. S. 929 also would have
terminated several of Commerce’s sub-agencies: USTTA, EDA, NTIA, MBDA; National
Technical Information Service (NTIS); Office of the Chief Economist; Technology
Administration; Advanced Technology Program; and the Manufacturing Extension Program
(MEP). S. 929 would have transferred the functions of the Bureau of the Census and the Bureau
of Economic Analysis to the Department of Labor. In addition, it would have established a
bipartisan Government 2000 Commission to develop a comprehensive reorganization plan for the
government.
On October 26, 1995, the House passed H.R. 2491, the budget reconciliation bill. Title XVII, the
“Abolishment of Department of Commerce,” would have required the dismantling of the
Department of Commerce. The bill incorporated provisions from H.R. 1756. The bill would have
transferred to the USTR the functions of the ITA and the BXA; eliminated the TDA and
transferred its functions to the USTR; and reestablished the Office of the USTR as an
independent office outside of the EOP. On October 28, 1995, the Senate passed a different version
of H.R. 2491, which did not include the provision to dismantle the Department of Commerce.
The House-Senate conference report on H.R. 2491, which was agreed to on November 16, 1995,
did not contain the Commerce Department dismantling provision. The bill was vetoed by
President Clinton on December 6, 1995.
H.R. 2124, the Trade Reorganization Act of 1995, was introduced on July 27, 1995. It was similar
to the Roth substitute for S. 929 in its provisions to consolidate the functions of the ITA and the
BXA with the USTR, along with the TDA, into a newly created United States Trade
Administration. In addition, the bill called for the appointment of a Deputy Administrator to be
responsible for the trade functions transferred from the Commerce Department and the
appointment of two Deputy U.S. Trade Representatives, one for overall trade negotiations and
one for negotiations at the WTO. In contrast to the Roth amendment, H.R. 2124 would not have
changed the status of the Ex-Im Bank and OPIC.
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Appendix C. Key Milestones in Administrative and
Legislative Action Related to Trade Functions
Table C-1. Key Milestones in Administrative and Legislative Action
Related to Trade Reorganization
Year Description
1903
The U.S. Department of Commerce and Labor was created (P.L. 57-87, 15 U.S.C. 1501).
1913
The Department of Commerce and Labor was split into two separate departments: the
Department of Commerce and the Department of Labor (37 Stat. 7365, 15 U.S.C. 1501).
1934
President Roosevelt issued E.O. 6581, creating the Export-Import Bank (Ex-Im Bank) of
Washington to finance U.S. trade with the Soviet Union, and issued E.O. 6638, creating a Second
Ex-Im Bank of Washington to finance U.S. trade with Cuba.
1936
E.O. 7386 abolished the Second Ex-Im Bank and transferred its functions to the Ex-Im Bank of
Washington.
1945
Congress made the Ex-Im Bank an independent agency in the executive branch through the
Export-Import Bank of 1945, as amended (12 U.S.C. §635 et seq.).
1953
Congress authorized the creation of the Smal Business Administration (SBA) in the Small
Business Act (15 U.SC. §631 et seq.).
1962 The
Trade Expansion Act of 1962 (P.L. 87-794, 19 U.S.C. 1801 et seq.) authorized the
appointment of a Special Representative for Trade Negotiations to conduct U.S. trade
negotiations. Congress authorized the President to establish a new interagency trade organization
to carry out specified trade functions under section 242 of the Act. The Special Representative for
Trade Negotiations was authorized to serve as the chair of a new interagency trade organization
established to enhance policy coordination.
1963
President Kennedy issued E.O. 11075 to create a new Office of the STR in the Executive Office
of the President (EOP).
1969 The Foreign Assistance Act of 1969 (P.L. 91-175), which amended the Foreign Assistance
Act of 1961 (P.L. 87-195, 22 U.S.C. 2151 et seq.), established the Overseas Private Investment
Corporation (OPIC), spun out of the U.S. Agency for International Aid and Development (AID).
1973
President Nixon issued E.O. 11753 to establish the President’s Export Council (PEC). Subsequent
executive orders have been used to renew the council.
1974 The
Trade Act of 1974 (P.L. 93-618, 19 U.S.C. 201 et seq.) codified the establishment of
the Office of the Special Trade Representative (STR) in the EOP as a Cabinet-level position of
ambassadorial rank. It made the STR responsible for the U.S. trade agreements program and other
trade responsibilities and elevated the STR to cabinet level.
The Act directed the President to establish an Advisory Committee for Trade Policy and
Negotiations (ACTPN) to provide overall policy advice on trade policy formulation and
negotiation. It also directed the President to establish a private sector advisory committee system
to ensure that U.S. trade policy and trade negotiation objectives reflect U.S. commercial and
economic interests. It required that advisory committee membership broadly represent key
economic sectors affected by trade.
The Tariff Commission, renamed the International Trade Commission (ITC), was made an
independent agency and its findings on import injury were afforded greater weight. The Act
required Presidential action in cases where the ITC found import injury, unless providing import
relief was deemed contrary to national interest.
1975
E.O. 11846 established the interagency Trade Policy Committee (TPC), as authorized by section
242(a) of the Trade Expansion Act (P.L. 87-794), as amended. The TPC was led by the
predecessor to the U.S. Trade Representative (USTR).
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Year Description
1979
Reorganization Plan No. 3 of 1979 was submitted by President Carter to Congress on
September 25, 1979, based on a provision in the Trade Agreements Act of 1979, in which
Congress required the President to develop and present a trade reorganization plan. President
Carter’s reorganization plan went into effect on January 3, 1980. It changed the name of the Office
of the STR to the Office of the United States Trade Representative (USTR) and broadened its
mandate, assigning lead responsibility to the USTR for developing and coordinating U.S. trade
policy and for conducting international trade and investment negotiations and designating the
USTR as the principal adviser to the President on trade policy.
Reorganization Plan No. 3 also reorganized the Department of Commerce, granting it general
responsibility for the administration of U.S. trade policy. It established the International Trade
Administration (ITA) within the Commerce Department, consolidating the administration of
export promotion, export controls, trade policy programs, anti-dumping and countervailing duty
remedies (formerly in the U.S. Department of the Treasury), and operations of the Foreign
Commercial Service (new service created from commercial officer positions of the U.S.
Department of State’s Foreign Service).
1988 The
Omnibus Trade and Competitiveness Act of 1988 (OCTA, P.L. 100-418) codified
the role of the USTR as the “principal adviser to the President on international trade policy.”
The Export Enhancement Act of 1988 (P.L. 100-418, 15 U.S.C. 4701 et seq.) enacted in
Title XXIII of the OCTA, established in statute the United States and Foreign Commercial Service
(CS) in the ITA. Section 2303 (15 U.S.C. 4723) authorized the Secretary of Commerce to establish
a market development cooperator program in the ITA to develop, maintain, and expand foreign
markets for U.S. non-agricultural goods and services. Section 2304 (15 U.S.C. 4724) required the
Secretary of Commerce to provide assistance for trade shows in the United States that bring
together representatives of U.S. business and foreign companies. Section 2306 (15 U.S.C. 4725)
required the CS to make a special effort to encourage U.S. exports of goods and services to Japan,
South Korea, and Taiwan.
Section 2204 established the Trade and Development Program (TDP) as a separate component
agency of the International Development Cooperation Agency (IDCA), a newly created umbrel a
agency, tasked with coordinating U.S. development assistance programs. It also established a
Director of the TDP to be appointed by the President with Senate consent, and designated the
TDP as the primary federal agency to provide information to the private sector concerning trade
development and export promotion related to bilateral development projects.
1992
Title II of the Export Enhancement Act of 1992 (P.L. 102-429), which added Sections 2312
to the Omnibus Trade and Competitiveness Act of 1988, was enacted by Congress in an attempt
to rectify perceived shortfal s in the U.S. export promotion regime. Section 2312 (15 U.S.C. 4727)
codified the Trade Promotion Coordinating Committee (TPCC). It authorized the President to
establish the TPCC, which was to be headed by the Department of Commerce, to coordinate the
export promotion and export financing activities among federal government agencies; directed the
TPCC to develop a government-wide strategic plan for implementing federal export promotion
and financing programs; and directed the TPCC to propose to the President an annual unified
federal budget proposal on trade promotion activities based on the strategic plan.
1992 The Jobs Through Exports Act of 1992 (P.L. 102-549) renamed the TDP as the Trade and
Development Agency (TDA), and made the TDA an independent agency within the executive
branch.
2000 The
Trade and Development Act of 2000 (P.L. 106-200) established two new posts in the
Office of the USTR, the Chief Agricultural Negotiator and the Assistant U.S. Trade Representative
(AUSTR) for African Affairs. The Chief Agricultural Negotiator is to conduct trade negotiations
and enforce trade agreements relating to U.S. agricultural interests and products, and the AUSTR
for African Affairs is to serve as the chief advisor to the U.S. Trade Representative on issues of
trade and development with Africa and to serve as coordinator and point of contact within the
Administration on such issues.
2002 The
Trade Act of 2002 (P.L. 107-210) required each advisory committee to write a report on
proposed free trade agreements.
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Year Description
2010 In
E.O. 13534, President Obama formalized the National Export Initiative (NEI) and, among other
provisions, instructed the U.S. government to enhance and organize federal efforts to promote
exports through high-level coordination. E.O. 13534 created a President’s Export Promotion
Cabinet (EPC) to ensure that export promotion is a high priority for al relevant agencies.3
Members of the EPC include the nine key Secretaries or Directors of the export promotion
agencies of the TPCC and senior White House advisors. The Export Promotion Cabinet is to
coordinate with the TPCC on the export promotion initiative.
2011
On February 17, 2012, President Obama issue a memorandum announcing his intention to
move administratively to ensure the effectiveness of federal programs and functions supporting
trade and investment, while waiting for reorganizational authority from Congress. The President
directed the Export Promotion Cabinet (EPC), in coordination with the Trade Promotion
Coordinating Committee (TPCC), to develop strategies and initiatives in support of the
Administration’s strategic trade and investment goals and priorities. The President also stated that
the Assistant to the President and Deputy National Security Advisor for International Economics
shall coordinate the activities of the TPCC. The President directed the EPC to support efforts to
create BusinessUSA, an online platform intended to be a central resource for accessing federal
business programs and services.59 In addition, the President directed the EPC, in consultation with
the TPCC, to present a unified federal trade budget consistent with the Administration’s strategic
trade and investment goals and priorities, as well as to take steps to ensure the most efficient use
of its members’ domestic and foreign offices and distribution networks.
On February 28, 2012, President Obama issued E.O. 13601 for the Establishment of the
Interagency Trade Enforcement Center (ITEC), for the purpose of strengthening and coordinating
enforcement of U.S. rights under trade agreements and U.S. law. E.O. 13601 states that the ITEC
will be housed within the USTR with a designated director from the USTR; a designated deputy
director from the Department of Commerce; and support from the Departments of State, the
Treasury, Justice, Agriculture, Commerce, Homeland Security, as well as the Director of National
Intelligence. The Administration has emphasized the need for creating the ITEC in order to better
combat unfair trade practices by countries such as China.
Source: U.S. Code, Office of the U.S. Trade Representative, “History of the United States Trade
Representative,” http://www.ustr.gov/about-us/history.
Notes: The legislative and executive activity listed in this table do not form a comprehensive account of the
evolution of the U.S. trade policy structure. Rather, they are intended to highlight key milestones.
Author Contact Information
Shayerah Ilias
Analyst in International Trade and Finance
silias@crs.loc.gov, 7-9253
Acknowledgments
The author wishes to thank Carolyn C. Smith, Information Research Specialist, for assistance in
identifying historical administrative and legislative action related to trade reorganization.
59 The beta version of BusinessUSA is accessible at http://business.usa.gov/.
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