Updated December 3, 2020
U.S. Trade Policy Functions: Who Does What?
At the nexus of foreign and domestic policy, U.S. trade
Trade Act of 1974. Designated the Special Representative as
policy comprises a distinct set of issues that shape U.S.
the chief U.S. trade negotiator, lead of the trade agreements
participation in the global economy and relations with
program, and head of the new private sector advisory
trading partners. It also affects the overall U.S. economy
committee system, which the act also created. Elevated
and standard of living of Americans, as well as specific
position to cabinet rank and placed it in the White House.
sectors, firms, and workers. Controversial at times, U.S.
Trade Agreements Act of 1979. Required the President to
trade policy historically has focused on supporting
submit a trade reorganization plan, including to boost the
economic growth and jobs through more open and rules-
Special Representative’s coordination and functional roles.
based trade by negotiating and enforcing reciprocal trade
Omnibus Trade and Competitiveness Act of 1988. Elevated
agreements and other measures, while offering relief to
USTR to coordinate trade policy, serve as the President’s
specific segments of the U.S. economy affected by trade
principal trade advisor and trade “spokesperson,” and lead
liberalization and “unfair” foreign trade practices. It also
U.S. international trade negotiations. Required USTR to
aims to promote trade and investment, while regulating
report to both the President and Congress.
these flows for national security, health, safety, and other
reasons. Other goals are to support economic development
in developing countries and expand U.S. influence abroad.
Commerce conducts many non-agricultural trade functions.
The Constitution gives Congress primacy over trade policy,
The International Trade Administration (ITA), supported by
specifically the power to levy tariffs and regulate foreign
U.S. and foreign commercial service officers, provides
commerce. By contrast, the President lacks specific
market research, business connections, and other services
authority over trade, but has power over foreign affairs. The
to promote U.S. exports and attract foreign investment. It
executive branch’s role in trade stems from the President’s
also conducts antidumping and countervailing duty (AD/
power to negotiate treaties with other nations, and
CVD) investigations to address potential adverse effects on
legislative grants of authority to adjust tariff rates and
U.S. industry of “unfair” foreign trade practices, and
implement trade policy. The Office of the U.S. Trade
monitors foreign compliance with U.S. trade agreements.
Representative (USTR) and other agencies conduct trade
The Bureau of Industry and Security (BIS) administers
functions under various authorities. USTR-led interagency
licensing and civil enforcement functions for dual-use
and advisory systems aim to seek input and balance diverse
exports. It also investigates whether certain imports harm,
interests to reach a coherent U.S. position on trade matters.
or threaten to harm, national security (“Section 232”).
The U.S. trade policy architecture has evolved to reflect
The Economic Development Administration (EDA) manages
changes in international trade, the U.S. economic position,
Trade Adjustment Assistance (TAA) for firms, (targets
and other factors. Congress has a keen interest in examining
adjustment to import competition and trade liberalization).
U.S. trade functions, agencies, and coordinating structure.
The Bureau of Economic Analysis (BEA) and Census Bureau
Key Trade Agencies
col ect, analyze, and disseminate trade data.
USDA aims to promote and regulate U.S. agricultural trade,
The U.S. Trade Representative, a Cabinet-level official in the
weighing in on agriculture issues in U.S. trade negotiations.
Executive Office of the President, is the President’s principal
advisor on trade policy, chief U.S. trade negotiator, and head
The Animal and Plant Health Inspection Service (APHIS)
of the interagency trade policy coordinating process. USTR
works to prevent plant and animal pests and diseases from
administers U.S. law to combat “unfair” foreign trade practices
entering U.S. borders.
(e.g., “Section 301”), and trade preference programs for
The Food Safety and Inspection Service (FSIS) regulates U.S.
developing countries. In creating and elevating USTR,
meat, poultry, and egg products, including imports.
Congress sought to balance competing interests between U.S.
The Foreign Agricultural Service (FAS) administers U.S.
domestic and foreign policy, among the range of trade-related
agricultural export financing and assistance, U.S. quotas
agencies, and the many domestic stakeholders. Congress also
against agricultural imports, and TAA for farmers.
sought to address concerns that trade policy interests were
being overlooked under the State Department’s historical lead.
Milestone statutes in the USTR’s evolution include the:
HHS weighs in on trade policy issues that can affect public
Trade Expansion Act of 1962. Created an ambassador-level
health, such as food products (not regulated by USDA),
Special Representative for Trade Negotiations (precursor to
cosmetics, drugs, and medical devices. HHS’s Food and Drug
USTR) to lead the new interagency system to coordinate
Administration (FDA) regulates products produced
trade policy, which the act also created.
domestically and abroad for safety, security, and efficacy.
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U.S. Trade Policy Functions: Who Does What?
DHS seeks to secure U.S. borders while enabling legitimate
USAID focuses on economic matters affecting U.S. relations
trade. Customs and Border Protection (CBP) of DHS
with developing countries. It manages trade capacity building
regulates the flow of goods through U.S. ports of entry. It
programs to promote economic growth in developing
col ects tariffs and enforces trade laws at the border. It works
countries, reduce poverty, and support trade liberalization.
with DHS’s Immigration and Customs Enforcement (ICE).
TDA aims to support U.S. jobs by linking U.S. firms to export
DOL provides U.S. representation in international negotiations
opportunities for infrastructure and other projects in emerging
before the International Labor Organization (ILO), monitors
economies. It funds feasibility studies, reverse trade missions
compliance with the labor chapters of U.S. trade agreements,
to bring foreign buyers to the United States, and other project
tracks eligibility for certain trade preferences, and administers
preparation/partnership-building activities.
the TAA program for workers.
Interagency Trade Policy Mechanism
U.S. trade policy is coordinated through a USTR-led system
State oversees U.S. trade and economic relationships through
that Congress first established in 1962. Membership draws
its bureaus and embassies to advance U.S. trade policy
from key trade agencies and White House bodies.
consistent with national security and foreign policy priorities.
It supports U.S. trade agreement negotiation and enforcement,
By statute, Cabinet-level review on trade issues is through the
co-leads with USTR the U.S. bilateral investment treaty
Trade Policy Committee (TPC); in practice, the National
program, advocates for U.S. business interests abroad, and
Economic Council (NEC)/National Security Council (NSC)
licenses U.S. munitions exports, among other things.
coordinates at this level.
At the Deputies level, the Trade Policy Review Group (TPRG)
carries out coordinating functions.
Treasury is the lead agency on international economic matters.
The Trade Policy Staff Committee (TPSC), composed of senior
For U.S. trade agreement negotiations, it leads on currency
civil service members, develops and reviews policy and
provisions, and jointly leads with USTR on financial services. It
negotiating documents on trade policy.
heads U.S. participation in the G-20 and G-7 forums, manages
Issues percolate up the ranks if consensus fails or major
the Committee on Foreign Investment in the United States
issues are raised. Other interagency bodies coordinate on
(CFIUS) to examine potential inbound investment for national
specific areas (e.g., export promotion, export controls, IPR).
security implications, and administers U.S. sanctions via the
Office of Foreign Assets Control (OFAC).
Advisory Committee System
First established by Congress in 1974, the advisory
committee system incorporates public and private input on
DFC, the successor to the Overseas Private Investment
U.S. trade policy, e.g., on negotiating objectives. USTR
Corporation (OPIC), aims to promote private investment in
manages the system, in collaboration with USDA,
developing countries to support U.S. global development goals
Commerce, and Labor. There are 26 committees with up to
and economic interests. Its toolkit includes financing, political
risk insurance, equity support, and technical assistance.
700 advisors.
The high-level President’s Advisory Committee for Trade
Policy and Negotiations (ACTPN) examines U.S. trade policy
and agreements for the overall national interest. Members
Ex-Im Bank finances and insures U.S. exports of goods and
represent key sectors.
services, aiming to fil in gaps in private sector support and/or
to counter foreign officially-backed export credit competition.
Five policy advisory committees (agricultural, inter-
It supports exporters of all sizes and in a range of sectors.
governmental, labor, Africa, and environment) examine issues
from their specific policy lens.
Sectoral and technical input comes from 6 Agricultural
Technical Advisory Committees (ATACs) and 14 Industry
ITC investigates AD/CVD cases (with ITA), safeguard cases on
Trade Advisory Committees (ITACs).
temporary relief from import surges of “fairly” traded goods
(“Section 201”), and alleged violations of U.S. intellectual
Issues for Congress
property rights (IPR) (“Section 337”). It provides trade analysis
to Congress, the President, and USTR; and maintains the U.S.
Policy issues include: how much authority Congress should
Harmonized Tariff Schedule (HTS).
grant to the executive branch over trade policy; if current
functions and agency roles are adequate to advance U.S.
trade policy and well-coordinated; and if the current system
reflects and balances the diverse views in trade policy.
SBA conducts certain trade and export promotion financing
for U.S. small businesses (terms vary from Ex-Im Bank). SBA’s
Shayerah I. Akhtar, Specialist in International Trade and
State Trade Expansion Program (STEP) administers grants for
Finance
states to conduct trade show exhibits, training workshops, and
other activities to help small businesses.
IF11016
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U.S. Trade Policy Functions: Who Does What?
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