November 1, 2018
U.S. Trade Policy Functions: Who Does What?
Overview
interests were being overlooked under the State
At the nexus of foreign and domestic policy, U.S. trade
Department’s historical lead.
policy comprises a distinct set of issues that shape U.S.
Table 1. Milestone Trade Statutes: USTR Evolution
participation in the global economy and relations with
trading partners. It also affects the U.S. economy as a
Trade Expansion Act of 1962. Created an ambassador-level
whole, specific sectors, firms, and workers, and the overall
Special Representative for Trade Negotiations (precursor to
standard of living of Americans. Cross-cutting in nature,
USTR) to lead the new interagency system to coordinate
U.S. trade policy has many “voices” and is controversial at
trade policy, which the act also created.
times. Historically, it has focused on supporting economic
Trade Act of 1974. Designated the Special Representative as
growth and jobs through more open and rules-based trade
the chief U.S. trade negotiator, lead of the trade agreements
by negotiating and enforcing reciprocal trade agreements
program, and head of the new private sector advisory
and other measures, while offering relief to specific
committee system, which the act also created. Elevated
segments of the U.S. economy affected by import
position to cabinet rank and placed in the White House.
competition and “unfair” foreign trade practices. It also
Trade Agreements Act of 1979. Required the President to
aims to promote trade and investment, while regulating
develop and present a trade reorganization plan, including to
these flows for national security, health, safety, and other
strengthen the coordination and functional responsibilities of
reasons. Other goals are to support economic development
the Special Representative.
in developing countries and expand U.S. influence abroad.
Omnibus Trade and Competitiveness Act of 1988. Elevated
The Constitution gives Congress primacy over trade policy,
USTR’s role to coordinate trade policy, serve as the
specifically the power to levy tariffs and regulate foreign
President’s principal trade advisor and trade “spokesperson,”
commerce. By contrast, the President lacks specific
and lead U.S. international trade negotiations. Required USTR
authority over trade, but has power over foreign affairs. The
to report to both the President and Congress.
role of the executive branch in trade stems from the
President’s power to negotiate treaties with other nations,
and legislative grants of authority to adjust tariff rates and
Commerce conducts many non-agricultural trade functions.
implement trade policy. The Office of the U.S. Trade
The International Trade Administration (ITA), supported
Representative (USTR) and many other agencies conduct
by U.S. and foreign commercial service officers, provides
U.S. trade and international economic functions under
market research, business connections, and other services
various statutory and administrative authorities. USTR-led
to promote U.S. exports and attract foreign investment. It
systems to coordinate U.S. trade policy among the agencies
also conducts antidumping and countervailing duty (AD/
and obtain input from public and private stakeholders aim
CVD) investigations to address potential adverse effects
to balance diverse interests to reach a unified U.S.
on U.S. industry of “unfair” foreign trade practices, and
government “voice” on trade matters. This architecture has
monitors foreign compliance with U.S. trade agreements.
evolved over time to reflect changes in international trade,
The Bureau of Industry and Security (BIS) administers
the U.S. economic position, and other factors. Periodic
licensing and enforcement functions for dual-use exports.
proposals on trade reorganization, as well as newer debates
It also investigates whether certain imports harm, or
over the balance of power on trade, have rekindled
threaten to harm, national security (“Section 232”).
congressional interest in examining U.S. trade functions.
The Economic Development Administration (EDA)
Key Trade Agencies
manages Trade Adjustment Assistance (TAA) for firms,
(to adjust to import competition and trade liberalization).
The Bureau of Economic Analysis (BEA) and Census
USTR is the President’s principal advisor on trade policy,
Bureau collect and analyze trade data.
chief U.S. trade negotiator, and head of the interagency
trade policy coordinating process. USTR also administers
U.S. law to combat “unfair” foreign trade practices (e.g.,
USDA aims to promote and regulate U.S. agricultural trade,
“Section 301”), and trade preference programs for
weighing in on agriculture issues in U.S. trade negotiations.
developing countries. A Cabinet-level official in the
The Animal and Plant Health Inspection Service
Executive Office of the President, the U.S. Trade
(APHIS) works to prevent plant and animal pests and
Representative is also historically a “creature of Congress.”
diseases from entering U.S. borders.
In creating and elevating USTR, Congress sought an
The Food Safety and Inspection Service (FSIS) regulates
“honest broker” to balance competing interests between
U.S. meat, poultry, and egg products, including imports.
U.S. domestic and foreign policy, among the range of trade-
The Foreign Agricultural Service (FAS) administers U.S.
related agencies, and the many domestic stakeholders.
agricultural export financing and assistance, U.S. quotas
Congress also wanted to address concerns that trade policy
against agricultural imports, and TAA for farmers.
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U.S. Trade Policy Functions: Who Does What?
State oversees U.S. trade and economic relationships
SBA conducts certain trade and export promotion financing
through its bureaus and embassies. State and USTR jointly
for U.S. small business (terms vary from Ex-Im Bank).
administer the U.S. Bilateral Investment Treaty program.
SBA’s State Trade Expansion Program (STEP) administers
grants for states to conduct trade show exhibits, training
workshops, and other activities to help small businesses.
The Secretary of the Treasury is the President’s chief
international economic policy advisor. For U.S. trade
agreements, Treasury leads negotiations on currency
ITC, an independent agency, investigates AD/CVD cases
provisions, and on financial services with USTR. It leads
(with ITA), “Section 201” safeguard cases on temporary
U.S. participation in the G-20 and G-7 forums, manages the
relief from import surges of “fairly” traded goods, and
Committee on Foreign Investment in the United States
alleged infringement of U.S. intellectual property rights
(CFIUS) to examine potential inbound investment for
(IPR) (“Section 337”). It provides trade analysis to
national security implications, and administers U.S.
Congress, the President, and USTR (e.g., on economic
sanctions via the Office of Foreign Assets Control (OFAC).
effects of U.S. trade agreements) and maintains the U.S.
Harmonized Tariff Schedule (HTS).
Interagency Trade Policy Mechanism
HHS weighs in on trade policy issues that can affect public
health, such as food products (not regulated by USDA),
U.S. trade policy is coordinated through a USTR-led system
cosmetics, drugs, and medical devices. HHS’s Food and
first established by Congress in 1962, with membership
Drug Administration (FDA) regulates products produced
drawn from key trade agencies and White House bodies.
domestically and abroad for safety, security, and efficacy.
By statute, Cabinet-level review on trade issues is
through the Trade Policy Committee (TPC), but in
practice, the National Economic Council (NEC) is the
DHS seeks to secure U.S. borders while enabling legitimate
primary forum for high-level trade action. The National
trade. Customs and Border Protection (CBP) of DHS
Security Council also may coordinate at this level.
regulates the flow of goods through U.S. ports of entry. It
At the Deputies level, the Trade Policy Review Group
collects tariffs and trade laws at the border. It works with
(TPRG) carries out coordinating functions.
DHS’s Immigration and Customs Enforcement (ICE).
The Trade Policy Staff Committee (TPSC), composed
of senior civil service members, develops and reviews
policy and negotiating documents on trade policy.
DOL provides U.S. representation in international
Issues percolate up the ranks if consensus fails or major
negotiations before the International Labor Organization
issues are raised. Other interagency bodies coordinate on
(ILO), monitors compliance with the labor chapters of U.S.
specific areas (e.g., export promotion, export controls, IPR).
trade agreements, tracks eligibility for certain trade
Advisory Committee System
preferences, and administers the TAA program for workers.
U.S. trade policy incorporates public and private input, such
as on negotiating objectives, through an advisory committee
Ex-Im Bank finances and insures U.S. exports of goods and
system established by Congress in 1974. USTR manages
services to support U.S. jobs, aiming to do so when the
the system, in collaboration with USDA, Commerce, and
private sector is unwilling or unable to do so; and/or to
Labor. There are 26 committees with up to 700 advisors.
counter financing offered by foreign countries.
The high-level President’s Advisory Committee for
Trade Policy and Negotiations (ACTPN) examines
U.S. trade policy and agreements for the overall
OPIC aims to promote economic growth in developing and
national interest. Members represent key sectors.
emerging economies by facilitating U.S. private investment
Five policy advisory committees (agricultural, inter-
through project financing, political risk insurance, and other
governmental, labor, Africa, and environment)
support. Legislation was enacted to consolidate OPIC and
examine issues from their specific policy lens.
some USAID functions into a new U.S. International
Sectoral and technical input comes from 6 Agricultural
Development Finance Corporation (P.L. 115-254).
Technical Advisory Committees (ATACs) and 14
Industry Trade Advisory Committees (ITACs).
Issues for Congress
A foreign assistance agency, USAID focuses on economic
matters affecting U.S. relations with developing countries.
The trade debate raises a number of issues, including: how
It manages trade capacity building programs to promote
much authority should Congress grant to the executive
economic growth in developing countries.
branch over trade policy; if current functions and agency
roles advance U.S. trade policy and are well-coordinated;
and if the current architecture reflects and balances the
TDA aims to support U.S. jobs by linking U.S. firms to
diverse views in trade policy into one U.S. “voice.”
export opportunities for projects in emerging economies. It
Shayerah Ilias Akhtar, Specialist in International Trade
funds feasibility studies, other project preparation activities,
and partnership-building activities such as reverse trade
and Finance
missions to bring foreign buyers to the United States.
IF11016
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U.S. Trade Policy Functions: Who Does What?
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