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Growing Workload for Monitoring and Enforcing Trade Agreements' which 
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Report to the Ranking Minority Member, Committee on Finance, U.S. 
Senate: 

June 2005: 

International Trade: 

Further Improvements Needed to Handle Growing Workload for Monitoring 
and Enforcing Trade Agreements: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-537]:

GAO Highlights: 

Highlights of GAO-05-537, a report to the Ranking Minority Member, 
Committee on Finance, U.S. Senate: 

Why GAO Did This Study: 

The vast majority of U.S. exports are covered by at least one trade 
agreement. Ensuring that U.S. companies can take advantage of the 
market opportunities created by trade agreements has therefore become a 
critical responsibility for U.S. government agencies. 

GAO examined U.S. government efforts to monitor and enforce trade 
agreements. Specifically, GAO (1) reviewed how the nature and scope of 
U.S. trade agreements has changed in the last 10 years and what effect 
changes had on agencies’ monitoring and enforcement workload, (2) 
evaluated how U.S. government agencies monitor and enforce trade 
agreements, and (3) analyzed how the U.S. government allocates 
resources for monitoring and enforcement of trade agreements within the 
context of other trade activities.

What GAO Found: 

The number and scope of trade agreements have grown significantly in 
recent years, increasing the monitoring and enforcement workload for 
federal agencies. For example, membership in the World Trade 
Organization (WTO) has grown over 30 percent in the past 10 years. In 
addition, trade agreements increasingly cover complex subjects like 
intellectual property and technical standards. As a result, the amount 
of work needed to ensure countries comply with such agreements has 
increased.
 
The Office of the U.S. Trade Representative (USTR) and the Departments 
of Agriculture, Commerce, and State generally monitor market access 
issues brought to the agencies’ attention by complaints from the 
private sector or that they identify themselves. They also monitor 
countries’ compliance with certain trade agreements. Over the past 5 
years, agencies with trade responsibilities have taken steps to improve 
their ability to address compliance issues. However, weaknesses still 
exist. For example, staff we spoke with in Washington, D.C., and at 
overseas posts told us that communication is sometimes inefficient. 
Moreover, Commerce staff do not always have access to complete 
information from overseas posts regarding compliance issues they are 
working on in those countries.

Agency resources for handling compliance issues face growing demands. 
Competition with other activities, such as trade negotiations, and 
staffing and training limitations, all affect agencies’ ability to 
effectively monitor and enforce trade agreements. For example, 
officials responsible for monitoring and enforcing trade agreements in 
all eight overseas posts we visited said that additional training would 
help them monitor and enforce trade agreements more effectively. 
Despite these constraints and agencies’ shared responsibility for 
monitoring and enforcing trade agreements, agencies do not 
systematically coordinate their assessment or planning for future 
resource needs. 

Growing Workload for Monitoring and Enforcing Trade Agreements: 

[See PDF for image]

[End of figure] 

What GAO Recommends: 

GAO recommends that agencies (1) take steps to facilitate communication 
on trade issues, (2) develop a strategy for improving trade compliance 
training, and (3) develop a resource strategy for monitoring and 
enforcing trade agreements. The Departments of Agriculture and State 
generally concurred with GAO’s recommendations. The Department of 
Commerce offered comments to clarify certain facts. USTR provided 
technical comments.

www.gao.gov/cgi-bin/getrpt?GAO-05-537.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Loren Yager at (202) 512-
4347 or yagerl@gao.gov.

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

The Number and Scope of Trade Agreements Have Grown, Thus Increasing 
the Monitoring and Enforcement Workload: 

Trade Agencies' Ability to Identify and Address Potential Trade 
Agreement Violations Has Improved, Although Communication Needs Further 
Improvement: 

Despite Growing Demands on Agency Resources, the U.S. Government Lacks 
a Coordinated Resource Strategy for Monitoring and Enforcing Trade 
Agreements: 

Conclusions: 

Recommendations: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Additional Information about U.S. Trade Agreements: 

Countries and Regions with Which the United States Has Trade 
Agreements: 

Types of U.S. Trade Agreements: 

Agency Trade Agreement Archives: 

Appendix III: Examples of U.S. Government Trade Monitoring and 
Enforcement Activities: 

Korea: 

Japan: 

Turkey: 

Morocco and Singapore: 

Appendix IV: Comments from the Department of Agriculture: 

Appendix V: Comments from the Department of Commerce: 

Appendix VI: Comments from the Department of State: 

Appendix VII: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Table: 

Table 1: Key Federal Agencies That Participate in Trade Agreement 
Monitoring and Enforcement Efforts: 

Figures: 

Figure 1: Growing Workload for Monitoring and Enforcing Trade 
Agreements: 

Figure 2: USTR Estimates of the Numbers of Staff Needed to Support Key 
Initiatives, 2005: 

Figure 3: Domestic Staff in Key Monitoring and Enforcement Units: 

Figure 4: Overseas Staff in Key Monitoring and Enforcement Units: 

Figure 5: Trading Partners with Which the U.S. has Five or More 
Agreements, as of 2005: 

Figure 6: U.S. Trade Agreements by Region, as of 2005: 

Figure 7: U.S. Trade Agreements by Type, as of 2005: 

Figure 8: Comparison of USTR, Commerce, and Agriculture Archives of 
Trade Agreements, as of 2005: 

Abbreviations: 

APHIS: Animal and Plant Health Inspection Service: 

CS: Trade Promotion/U.S. Foreign and Commercial Service: 

EU: European Union: 

FAS: Foreign Agricultural Service: 

FDA: Food and Drug Administration: 

FSN: Foreign Service National: 

FSIS: Food Safety Inspection Service: 

FTA: free trade agreement: 

MAC: Market Access and Compliance: 

NAFTA: North American Free Trade Agreement: 

USTR: U.S. Trade Representative: 

WIPI: Wireless Internet Platform for Interoperability: 

WTO: World Trade Organization: 

Letter June 30, 2005: 

The Honorable Max Baucus: 
Ranking Minority Member: 
Committee on Finance: 
United States Senate: 

Dear Senator Baucus: 

A top trade priority for the United States is opening foreign markets 
for American goods and services by ensuring that U.S. trading partners 
comply with existing trade agreements. This is because the vast 
majority of U.S. exports in 2004 were covered by at least one trade 
agreement. Ensuring that U.S. companies can take advantage of the 
market opportunities created by trade agreements has therefore become a 
critical responsibility for U.S. government agencies. Since U.S. 
government efforts to monitor and enforce trade agreements involve 
numerous federal agencies, these agencies must coordinate their 
activities to be effective and to help ensure that trade agreements are 
beneficial to the United States. 

Given the large and growing number of U.S. trade agreements, the wide 
subject areas covered by such agreements, and the limited resources 
available to negotiate and enforce trade agreements, we examined U.S. 
government efforts to monitor and enforce trade agreements. 
Specifically, we (1) reviewed how the nature and scope of U.S. trade 
agreements has changed in the last 10 years and what effect the changes 
had on agencies' monitoring and enforcement workload, (2) evaluated how 
U.S. government agencies monitor and enforce trade agreements, and (3) 
analyzed how the U.S. government allocates resources for monitoring and 
enforcement of trade agreements within the context of other trade 
activities. 

To describe the nature and scope of U.S. trade agreements, we reviewed 
data on trade agreements from the Office of the U.S. Trade 
Representative (USTR) and the Departments of Agriculture and Commerce. 
To evaluate how U.S. government agencies monitor and enforce trade 
agreements, we examined the activities of officials at four key trade 
agencies: USTR and the Departments of Agriculture, Commerce, and 
State.[Footnote 1] In addition, we met with overseas staff involved in 
monitoring and enforcement in eight countries. To select the countries 
to visit, we considered several variables and attempted to visit a 
variety of posts. We further met with private sector representatives in 
Washington, D.C., and in the eight countries where we conducted 
overseas fieldwork, including private sector representatives who had 
recently worked with U.S. government officials to resolve trade 
compliance issues. We also analyzed U.S. government reports and 
documents, and prior GAO reports related to monitoring and enforcement 
activities.[Footnote 2]To determine how the U.S. government allocates 
resources for monitoring and enforcement activities, we met with 
officials from the four key trade agencies and reviewed budget 
documents, strategic plans, and agency performance reports. For a more 
detailed explanation of our scope and methodology, including how we 
selected countries to visit and private sector representatives to 
interview, see appendix I. We conducted our work from July 2004 to 
April 2005 in accordance with generally accepted government auditing 
standards. 

Results in Brief: 

Increasing membership in key trade agreements and the widening scope 
and complexity of U.S. trade agreements have added to the monitoring 
and enforcement workload for federal agencies. World Trade Organization 
(WTO) membership has increased by almost one-third over the past 10 
years, increasing the workload for agency officials responsible for 
monitoring countries' compliance with their WTO obligations. In 
addition, since 2000 the United States has negotiated comprehensive 
free trade agreements with 12 countries. These agreements cover complex 
topics such as intellectual property rights and technical standards. 
Monitoring compliance with these agreements requires intensive efforts 
from agency staff, as well as staff with specialized knowledge. 

Trade agencies generally monitor market access issues that U.S. 
companies bring to their attention or that they identify themselves, 
some of which may be covered by a trade agreement. They also routinely 
monitor countries' compliance with certain specific trade agreements. 
Agencies employ a variety of approaches to address these issues, 
including using trade agreements as leverage for resolving a particular 
trade issue. In recent years, agencies have taken action to improve 
coordination and enhance human capital available to monitor and enforce 
trade agreements. For instance, they have taken steps to create more 
effective formal and informal coordination with other agencies and with 
the private sector. However, Commerce and State staff in Washington, 
D.C., and at overseas posts told us that communication is sometimes 
inefficient. For example, State sometimes uses classified e-mail and 
Web sites to exchange important, updated information on trade issues, 
even if the information itself is not classified. However, Commerce 
staff in Washington, D.C., and overseas who work on compliance issues 
told us that even though they have the appropriate clearances, they 
have limited access to these classified systems, which can impede their 
ability to address compliance issues. 

Despite growing demands on resources for monitoring and enforcing 
agreements, agencies typically independently assess and plan for 
resource needs. As a result, the U.S. government lacks a coordinated 
strategy to ensure that agencies can effectively handle the growing 
monitoring and enforcement workload. Resources for monitoring and 
enforcement face growing demands from competition with other trade 
activities such as trade negotiations, staffing limitations, and 
barriers to developing and accessing expertise. For example, many 
Agriculture, Commerce, and State staff responsible for monitoring and 
enforcing trade agreements have not received training regarding how to 
fulfill these responsibilities, and staff in all eight countries we 
visited said additional training would help them fulfill these 
responsibilities more effectively. In spite of these growing demands 
and the fact that responsibility for monitoring and enforcing trade 
agreements is spread across multiple agencies, there is no systematic 
interagency coordination regarding assessing and planning for resource 
needs. Since it does not routinely use an interagency trade policy- 
making structure to address current trade policy issues, the U.S. 
government lacks a formal interagency mechanism or strategy for 
assessing and allocating resources for future monitoring and 
enforcement activities. While agencies have previously recognized that 
effectively monitoring and enforcing trade agreements requires 
developing a strategy for coordinating their respective resources, they 
have not done so since 2001. The lack of such a strategy complicates 
each agency's individual resource planning and sometimes strains agency 
resources. 

In this report, we make several recommendations to improve agency 
efforts to monitor and enforce trade agreements in the areas of 
communication, training, and resource planning. We provided a draft of 
this report to the Office of the U.S. Trade Representative and the 
Departments of Agriculture, Commerce, and State for their comments. 
Agriculture and State generally concurred with GAO's recommendations. 
Commerce offered comments to clarify certain facts. USTR submitted 
technical comments. 

Background: 

Most U.S. trade is covered by trade agreements, which vary in type and 
complexity. In 2004, 97 percent of U.S. exports were to members of the 
WTO,[Footnote 3] and 43 percent of U.S. exports were to countries with 
which the United States had a free trade agreement (FTA). Some 
agreements are multilateral, such as the WTO agreements, which cover 
trade in multiple industries among 148 members. Most U.S. trade 
agreements, however, are bilateral, such as the U.S.-Singapore Free 
Trade Agreement. The number of trade agreements to which the United 
States is a party has grown significantly over the past 10 years. 
According to USTR data, the number of bilateral trade agreements grew 
nearly 50 percent in the last 10 years: from 176 in 1995 to 254 in 
2004.[Footnote 4]

Monitoring and enforcing trade agreements primarily involves four 
agencies and multiple units within each agency. USTR has primary 
statutory responsibility for implementation of U.S. international trade 
policy. In addition, the Departments of Agriculture, Commerce, and 
State make substantial contributions to federal monitoring and 
enforcement efforts, both by performing their own monitoring activities 
and by supporting USTR's efforts. Each of these agencies has both 
domestic and overseas components as well as multiple geographic-, 
industry-, and issue-specific units involved in monitoring and 
enforcement (see table 1). 

Table 1: Key Federal Agencies That Participate in Trade Agreement 
Monitoring and Enforcement Efforts: 

Agency: U.S. Trade Representative; 
Monitoring and enforcement unit (headquarters): Monitoring and 
Enforcement Unit; 
Units performing monitoring and enforcement work overseas: U.S. Mission 
to the WTO, and Trade Policy Officer, U.S. Mission to the EU; 
Examples of other units involved: General Counsel; WTO and Multilateral 
Affairs; and region- specific offices. 

Agency: Commerce; 
Monitoring and enforcement unit (headquarters): Market Access and 
Compliance Office; 
Units performing monitoring and enforcement work overseas: Trade 
Promotion/U.S. and Foreign Commercial Service, Market Access and 
Compliance overseas officers; 
Examples of other units involved: Manufacturing and Services, Import 
Administration, Patent and Trademark Office. 

Agency: State; 
Monitoring and enforcement unit (headquarters): Trade Policy and 
Programs; 
Units performing monitoring and enforcement work overseas: Economic 
section of embassy; 
Examples of other units involved: Country desk staff, issue-specific 
task forces. 

Agency: Agriculture; 
Monitoring and enforcement unit (headquarters): Foreign Agriculture 
Service; 
Units performing monitoring and enforcement work overseas: Foreign 
Agriculture Service; 
Examples of other units involved: Animal and Plant Health Inspection 
Service, Food Safety and Inspection Service. 

Source: GAO. 

[End of table]

Agencies coordinate monitoring and enforcement activities through an 
extensive interagency network for trade policy development led by USTR 
and involving at least 17 other federal agencies.[Footnote 5] The 
structure for interagency monitoring and enforcement coordination flows 
from the Trade Policy Committee, which was established pursuant to 
Section 242 of the Trade Expansion Act of 1962.[Footnote 6] The Trade 
Policy Committee has two subordinate bodies--the Trade Policy Review 
Group, a management-level committee, and the Trade Policy Staff 
Committee, a senior-staff level committee subordinate to the Trade 
Policy Review Group. Two of the nearly 100 subsidiary bodies of the 
Trade Policy Staff Committee--the Monitoring and Enforcement 
Subcommittee and the Compliance Task Force--meet on a regular basis to 
discuss trade compliance issues. Other geographic and sectoral 
subcommittees are also involved in monitoring and enforcement efforts 
as part of their overall mandates. 

Trade agencies perform a number of monitoring and enforcement 
activities following the same general process. In a prior report, we 
described several key steps in monitoring and enforcing trade 
agreements and noted that communication is important throughout the 
process.[Footnote 7] The key steps we identified are: 

* Identifying problems. Agency officials rely on multiple sources for 
information about potential trade compliance problems. In general, the 
private sector is the most important source for information for 
identifying problems. Agency staff posted overseas are also a valuable 
source of information because of their involvement with both private 
sector and foreign government officials. 

* Setting priorities. Agency officials prioritize among the multiple 
trade agreements and compliance issues needing their attention. There 
are some common factors that agencies apply when setting priorities, 
including the amount of U.S. trade, the trade principles at stake, and 
how quickly action needs to be taken. 

* Gathering and analyzing information. Once agencies have identified 
potential problems, they gather and analyze a wide range of information 
about the allegation of noncompliance, such as documentation on foreign 
practices that may be inconsistent with trade obligations. 

* Developing responses. Developing responses to compliance problems is 
a collaborative effort. Federal agencies take into account other agency 
views and private sector interests to develop the most appropriate U.S. 
response. 

* Taking enforcement action. In some cases, the U.S. government can 
invoke formal dispute settlement procedures built into trade agreements 
or take other actions under U.S. trade law, such as increasing tariff 
levels on foreign imports. Since formal dispute settlement procedures 
are time-intensive, decisions to pursue these are always vetted through 
an interagency process that considers how such actions affect a broad 
range of U.S. interests. 

The Number and Scope of Trade Agreements Have Grown, Thus Increasing 
the Monitoring and Enforcement Workload: 

In addition to the growing number of bilateral trade agreements, other 
key factors have increased the monitoring and enforcement workload for 
U.S. trade agencies. These factors include growth in WTO membership and 
the widening scope and complexity of trade agreements. 

Increasing membership in key multilateral trade agreements, 
particularly WTO agreements, has significantly expanded agencies' 
monitoring and enforcement workload. WTO membership has grown by 36 
countries (over 30 percent) to 148 members since 1995, and an 
additional 27 countries are in the accession process. The WTO's primary 
means of facilitating monitoring of the global trading system is 
through the WTO committee structure, which oversees implementation of 
each WTO agreement. This includes a requirement that each member file 
notifications of certain government actions, such as providing 
subsidies. Since agency officials must review these notifications, as 
the number of WTO members grows, so does the workload for trade 
agencies. The increase in WTO membership especially affects USTR's 
workload, because it is responsible for advocating and defending U.S. 
trade agreement rights and obligations within the WTO. To meet this and 
other responsibilities, USTR has posted 13 permanent staff and 14 
detailees from other agencies or contractors to the U.S. Mission to the 
WTO in Geneva, Switzerland. The other key trade agencies are also 
affected by growing WTO membership. For example, China's December 2001 
accession to the WTO required the four trade agencies to add staff 
resources to meet the demands of monitoring China's compliance with its 
WTO commitments.[Footnote 8] Officials from Agriculture told us they 
have assigned 3 staff members to monitor China's WTO notifications to 
ensure it is complying with the terms of its accession agreement. In 
addition, Commerce has dedicated more than 95 staff members (more than 
is dedicated to any other country or region) to monitoring China's 
compliance. 

An additional reason for the increased workload is the widening scope 
of recent trade agreements. For example, FTAs, which cover a wide 
variety of areas including agricultural products, services, and 
intellectual property, are of growing importance to U.S. trade policy. 
As shown in figure 1, the United States has negotiated several new FTAs 
in recent years.[Footnote 9] Monitoring and enforcing free trade 
agreements requires intensive effort on the part of USTR and other 
trade agencies. For example, staff at the U.S. embassy in Singapore 
used a formal free trade agreement monitoring plan to track Singapore's 
efforts to implement the FTA and identify areas in which Singapore 
needed to take additional action to fully implement the terms of the 
agreement. Officials said that these efforts involved significant 
involvement by embassy staff throughout the year and a particularly 
large effort in advance of a joint U.S.-Singapore review of the 
operation of the agreement during its first year. 

Figure 1: Growing Workload for Monitoring and Enforcing Trade 
Agreements: 

[See PDF for image] 

[End of figure] 

The federal government's monitoring and enforcement workload is also 
affected by the growing complexity of subjects covered in trade 
agreements. For example, USTR coordinates with other agencies to 
increase intellectual property protection around the world, including 
negotiating agreements that address intellectual property protection, 
which require monitoring and enforcement.[Footnote 10] Agency officials 
noted that they spend a significant amount of time attempting to 
resolve complex intellectual property rights issues. Foreign 
governments are increasingly using technical standards as trade 
barriers, which can require some specific technical knowledge to 
understand. To address such issues, Commerce has posted standards 
attachés in Mexico, Brazil, and at the U.S. Mission to the EU in 
Brussels, Belgium, specifically to try to help U.S. companies deal with 
complex standards related issues for a wide variety of products. 

Trade Agencies' Ability to Identify and Address Potential Trade 
Agreement Violations Has Improved, Although Communication Needs Further 
Improvement: 

Trade agencies generally monitor market access issues that are brought 
to them by private industry or that they identify themselves. Once a 
market access or trade agreement compliance issue is identified, 
agencies attempt to resolve the problem as quickly and efficiently as 
possible.[Footnote 11] Trade agencies have taken a number of steps to 
specifically address and improve their monitoring and enforcement 
capabilities. In particular, agencies have improved their coordination 
with one another and increased their investment in human capital. 
Although trade agencies have taken steps to improve their 
communication, it could be further improved because communicating 
important information on compliance issues is sometimes inefficient. 

Trade Agencies Generally Monitor Market Access Issues and Use Trade 
Agreements as Leverage: 

Trade agencies generally monitor market access issues,[Footnote 12] 
some of which may be covered by a trade agreement. They also monitor 
countries' compliance with certain specific trade agreements and will 
use trade agreements as leverage for resolving a particular 
case.[Footnote 13] Efforts to monitor and enforce trade agreements are 
part of a larger effort to improve market access for U.S. exports. One 
part of these efforts is identifying and addressing trade barriers in 
foreign markets. To track such efforts, Commerce has created a database 
that includes all market access cases that Commerce staff work on, and 
it identifies those cases that are covered by a trade 
agreement.[Footnote 14] About half of the 161 cases Commerce staff 
initiated in fiscal year 2004 related to market access issues not 
covered by specific provisions of trade agreements. Most often, trade 
agencies become aware of these issues when a U.S. company comes forth 
with a complaint. These agency officials told us they then research the 
specifics of the issue, including whether it involves a potential 
violation of a specific trade agreement.[Footnote 15] If it does, the 
officials can then use the trade agreement as leverage for resolving 
the issue. For example, Commerce officials told us that U.S. 
construction companies that want to bid on construction projects in 
Japan often report having difficulty doing so because of strict 
regulations imposed by the government of Japan. Commerce's Trade 
Promotion/U.S. Foreign and Commercial Service (CS) staff in Japan 
therefore often use the terms of a bilateral trade agreement between 
the United States and Japan, the Major Projects Agreement, to encourage 
Japan to open up the bidding process. 

Trade agencies' domestic staff also play a significant role in 
monitoring international market access issues. For example, CS has a 
network of export and industry specialists located in U.S. Export 
Assistance Centers throughout the United States. These U.S. Export 
Assistance Centers are one-stop shops ready to provide small or medium- 
sized businesses with local export assistance. One important function 
of these centers is to perform regular outreach to companies. Through 
this outreach, CS domestic staff are sometimes the first to hear about 
potential market access issues. 

Several large U.S. companies told us they often prefer to work directly 
with foreign governments to try to resolve market access issues. If 
these efforts are unsuccessful, they may request assistance from the 
U.S. government. In those instances, the companies with which we spoke 
were highly satisfied with the efforts of the U.S. government in 
addressing their complaints. At times, however, companies turn to the 
U.S. government only as a last resort or ask the U.S. government not to 
get involved in certain issues. Companies told us this was particularly 
the case in those countries where association with the U.S. government 
might be seen as more of a detriment than an aid. For example, several 
private sector representatives from large U.S. companies operating in 
Europe told us that they typically attempt to resolve compliance issues 
with European governments without help from the U.S. government. In 
France, for example, a private sector representative told us that 
negative public sentiment toward the U.S. government makes some U.S. 
companies shy away from U.S. government assistance on trade issues. 

Trade agencies also proactively identify new market access issues and 
monitor developments regarding long-standing trade issues as a part of 
their overall efforts to improve market access for U.S. exporters. At 
the overseas posts we visited, we observed that agencies' overseas 
staff play a large role in these efforts by monitoring local political 
and economic developments and engage in such activities as daily 
monitoring of the local press and reviewing official government 
publications. For example, a Foreign Agricultural Service (FAS) 
official in Turkey is assigned to review the Turkish government's daily 
publication of newly proposed regulations in order to identify any 
proposals that may affect U.S. agricultural exports. Overseas staff 
also try to maintain good contact with their foreign government 
counterparts, so as to stay informed of foreign government activities. 
In addition, Foreign Service Nationals (FSNs) often play an invaluable 
role in proactive monitoring.[Footnote 16] With their institutional 
knowledge and expertise, FSNs may be the best positioned staff to 
identify a potential market access issue and monitor long standing 
trade issues. Moreover, at some posts the FSNs are the only staff an 
agency may have in the country to carry out monitoring activities. For 
example, the Agricultural Attaché who covers Romania is posted in 
Bulgaria. Although he makes frequent visits to Romania, FSNs employed 
by USDA must deal with the day-to-day monitoring of agricultural trade 
issues in Romania. 

In addition, agencies also proactively monitor countries' compliance 
with some trade agreements, often because the issues are particularly 
important to U.S. exporters or because of requirements in the 
agreements. For example, since trade with Japan is important to U.S. 
exporters, the United States and Japan have an agreement that requires 
annual talks to discuss ongoing trade issues of interest to both 
countries. In addition, trade agencies are involved in periodic WTO 
reviews of each member's overall trade policy as a part of the WTO's 
Trade Policy Review Mechanism. Some other agreements such as FTAs also 
include built-in structures for monitoring compliance. For example, the 
U.S.-Singapore FTA requires the countries to meet periodically in order 
to review implementation progress by both sides and discuss any issues 
that have arisen. 

USTR is also required by domestic law to prepare a variety of trade- 
related reports that assist it in its efforts to monitor and enforce 
trade agreements. These requirements range from providing broad trade 
policy objectives and plans to reporting on specific issues or sectors. 
For instance, USTR's required reports include: 

* The Annual Report on the Trade Agreements Program. USTR, in 
consultation with other agencies, prepares this broad report, which 
includes, among other things, discussion of foreign trade restrictions 
against U.S. exports. 

* The National Trade Estimate Report on Foreign Trade Barriers. This 
report identifies and estimates the impact of foreign barriers to U.S. 
exports. 

* Special 301 Report. USTR is required to identify those countries that 
deny adequate and effective protection for intellectual property 
rights, or fair and equitable market access for U.S. persons that rely 
on intellectual property protection. 

* The Annual Review of Telecommunications Trade Agreements. USTR also 
reports on individual sectors, such as telecommunications. This 
particular report reviews the operation and effectiveness of U.S. 
telecommunications trade agreements and determines whether foreign 
countries are complying with the terms of these agreements. 

Trade Agencies Can Employ a Variety of Approaches to Attempt to Resolve 
Market Access and Compliance Issues: 

Once trade issues have been identified, agencies can employ a variety 
of tools to attempt to resolve them, depending on the context. This 
includes using overseas staff to take both informal and formal actions. 
Staff will attempt to resolve an issue by calling their foreign 
government counterparts to discuss the issue. In Korea, for instance, 
embassy officials work very closely with the Ministry of Foreign 
Affairs and Trade on standards issues. For example, the Korean 
government is currently considering switching its automobile license 
plates to a size that would require American car manufacturers to alter 
their vehicles. In response, embassy officials set up meetings of 
standards experts from the ministry, industry, and the U.S. government 
to try to prevent damaging regulations from being issued. If this type 
of initial low-level action does not resolve the issue, agency 
officials may send a letter to a foreign government official in the 
relevant ministry. If unsuccessful, they may send a formal letter on 
behalf of the U.S. government (called a démarche) requesting that the 
government take specific action. 

While trade agency officials state they try to resolve an issue at the 
lowest level possible, they also look to use the most efficient means 
possible. Sometimes the most efficient way to solve a problem is 
through the immediate involvement of senior officials to raise the 
visibility of the issue. Thus, agencies use visits by senior officials 
as leverage to attempt to resolve trade issues. For example, the United 
States and Japan engage in annual trade talks involving senior 
government officials. These talks provide a good opportunity for senior 
U.S. officials to discuss unresolved trade issues with their Japanese 
counterparts. 

A particularly contentious issue may require additional intervention by 
more senior U.S. officials. In a recent dispute, for instance, the 
European Union (EU) had proposed a regulation that would require wood 
packaging material such as boxes, pallets, and crates to be made from 
debarked wood to ensure no pests or fungi in the wood packaging could 
be spread to Europe. This could have hurt U.S. companies exporting to 
the EU using methods that were consistent with the international 
standard for the treatment of wood packaging material rather than 
packaging material made from debarked round wood required by the 
EU.[Footnote 17] The industry turned to the U.S. government for 
assistance, and the issue progressively made its way up the government 
hierarchy, eventually resulting in letters from both the Secretaries of 
Agriculture and Commerce and the U.S. Trade Representative to their 
European counterparts. The European Commission agreed to postpone the 
new rules for 1 year, to give experts time to discuss technical aspects 
of debarking. 

The U.S. government can also use an international forum to try to 
resolve a compliance issue. For instance, the United States has 
utilized the Joint Commission on Commerce and Trade in an attempt to 
resolve some of China's WTO compliance problems. At the April 2004 
meeting of this government-to-government consultative forum, the U.S. 
and Chinese governments discussed key trade issues and formed working 
groups; signed several memoranda of understanding and letters of 
intent; and reached several more specific agreements to improve China's 
implementation.[Footnote 18]

When necessary, the U.S. government can use domestic law and 
established dispute settlement mechanisms to enforce trade agreement 
obligations. U.S. trade law provides several opportunities for taking 
action to ensure countries' compliance with trade agreements. For 
instance, Section 301 of the Trade Act of 1974 allows the U.S. 
government to increase duties on imports from foreign countries found 
to be in violation of a trade agreement they have entered into with the 
United States. In addition, some trade agreements, such as the North 
American Free Trade Agreement and the WTO, also include binding dispute 
settlement mechanisms to which members can take their 
disputes.[Footnote 19] For example, since 1995, the United States has 
brought 79 cases against other WTO members for alleged violations of 
WTO agreements. 

Trade Agencies Have Taken Steps to Improve Coordination and Enhance 
Human Capital for Monitoring and Enforcement Activities: 

Since we reported on the monitoring and enforcement process in 2000, 
trade agencies have taken a number of measures to improve their 
monitoring and enforcement activities. These measures fall into two 
general categories: coordination and enhancing human capital. 

Coordination: 

To improve interagency coordination, agencies created formal structures 
within the Trade Policy Staff Committee specifically for the purpose of 
discussing compliance issues. The Monitoring and Enforcement 
Subcommittee and the Compliance Task Force each provide a regular forum 
for federal agencies to share and discuss information, set priorities, 
assign responsibilities, and design and implement strategies. In 
addition, some overseas posts have instituted both formal and informal 
interagency trade compliance teams to coordinate monitoring and 
enforcement efforts abroad and in Washington, D.C. In Morocco, for 
example, agencies established a formal, embassy-wide committee to 
discuss issues related to the FTA. The committee meets on an as-needed 
basis, although it plans to revive the weekly meetings once FTA 
implementation begins.[Footnote 20] Trade agencies have also attempted 
to improve coordination by taking advantage of technology. For 
instance, officials in Washington and several overseas posts noted that 
since GAO reported on trade compliance in 2000, e-mail and video- 
teleconferencing have become important tools for communicating 
information on trade compliance issues. 

Trade agencies have also attempted to improve coordination with the 
private sector. This is particularly true with regard to the formal 
private sector advisory committees that USTR relies on for input on 
important trade issues. Following a GAO report recommending 
improvements in the private sector advisory committee structure, trade 
agencies made several changes to the system.[Footnote 21] For instance, 
USTR now holds monthly teleconference calls with all advisory committee 
chairs and e-mails updates to advisors on important U.S. trade 
initiatives. In addition, Commerce has increased its outreach efforts 
by holding private sector advisory committee meetings outside of 
Washington, D.C; speaking to domestic trade associations and overseas 
American Chambers of Commerce; and coordinating trade shows and events 
with its U.S. Export Assistance Centers. Commerce also sponsors a 
Compliance Liaison Program to help U.S. exporters overcome trade 
barriers, identify problems in overseas markets, and solicit new 
compliance cases.[Footnote 22]

Human Capital: 

Trade agencies have also taken measures to enhance their human capital 
resources for monitoring and enforcing trade agreements in several 
areas. For instance, some agencies have instituted trade-and compliance-
targeted training for their officers. One such example is the week-long 
core trade agreement monitoring and implementation course that State 
began offering in 2002. The course covers elements of major trade 
agreements (focusing on the WTO) and U.S. trade laws. The course has 
been offered about five times a year, four times at State's training 
facilities in Virginia and once overseas. Each class accommodates 
approximately 30 officials, predominately from State but with a few 
officials from other agencies as well. Commerce also offers a similar 
trade agreement compliance course for officials involved in monitoring 
trade agreements. 

In addition to the formal trade compliance training discussed above, 
Commerce and State offer additional formal and informal training 
opportunities to officials with monitoring and enforcement 
responsibilities. For instance, portions of other formal State training 
courses on issues such as intellectual property rights and 
telecommunications directly or indirectly train staff to monitor trade 
agreements. Commerce also provides additional informal training related 
to trade agreements through videoconferences and teleconferences. 

Commerce recently addressed human capital issues for monitoring trade 
agreements by revising performance guidelines to clarify when staff can 
report performance data based on market access and compliance work. The 
current guidelines, implemented in April 2005, allow staff to take 
credit for the removal, reduction, or alleviation of a market access 
barrier whether or not an export sale immediately follows. CS officers 
told us that previously, they did not receive credit for the results 
they were achieving from monitoring trade agreements because they could 
not be directly tied to increased exports. 

Furthermore, some trade agencies have placed policy experts in overseas 
posts, in part to help monitor and enforce trade agreements. For 
instance, Commerce has, for the first time, posted four Market Access 
and Compliance (MAC) officers and three standards attachés 
overseas.[Footnote 23] A number of trade agency officials--who must 
divide their attention among multiple job priorities--told us these 
officials serve as an invaluable resource, as they dedicate their time 
almost solely to market access, compliance, and standards issues. In 
China, for example, intellectual property rights violations are a 
common problem that U.S. trade agency officials must resolve.[Footnote 
24] To attempt to address this issue, the U.S. Patent and Trademark 
Office has stationed a patent attorney in China to provide specialized 
support on intellectual property rights issues. 

Exchanging Information on Trade Issues Is Sometimes Inefficient: 

While trade agencies' overall coordination has improved since our 2000 
report, communication is still sometimes inefficient. According to 
agency officials with whom we met, the trade agencies generally 
coordinate their monitoring and enforcement efforts well at various 
levels: within headquarters, between headquarters and posts, and within 
posts. Opportunities exist, however, for further improvement in agency 
communication regarding compliance issues. 

Communication between Commerce and State, for example, can be 
difficult, because of Commerce's limited access to the classified 
communication systems that State sometimes uses to exchange information 
on trade issues.[Footnote 25] Both Commerce and State officials told us 
that not all the information transmitted on classified systems is, in 
fact, classified; however the agencies disagree on the extent to which 
this occurs.[Footnote 26] According to State, information regarding 
trade issues rarely appears on the classified email system. Commerce, 
however, believes that unclassified information that might be utilized 
in compliance work may be frequently transmitted over the classified 
email system. Regardless of the amount of unclassified information sent 
over classified systems, Commerce officers at headquarters have no 
access to classified information from their desktop computers. Some 
other officials told us that they had trouble obtaining classified 
information on compliance issues on which they were working. In order 
to read classified e-mails or cables, they must go to a secure reading 
room. Commerce is in the process of obtaining access to the secure 
system for email used by State, but a Commerce official told us this 
process has already taken more than four years. 

Some overseas officials also experience obstacles to accessing 
classified information. At the U.S. Mission to the European Union, for 
example, CS officers do not have the means to access classified systems 
in the Commercial Section of the Embassy. They must go to a different 
floor of the embassy and enter a secure area to obtain access to 
classified systems. In addition, FSNs, who we observed play a key role 
in monitoring and enforcement activities, cannot have access to 
classified systems because they do not have appropriate security 
clearances. Furthermore, at some posts the various trade agencies are 
not located in the same building, or sometimes even the same city, 
making communication more difficult still. In Korea, for example, only 
one Commerce computer allows access to State's classified system, yet 
CS has officers that are located in satellite offices separate from the 
embassy. Some officials overseas said that while they could obtain all 
the information they needed, inefficiencies in obtaining information 
and guidance from officials in Washington sometimes affected their 
monitoring and enforcement activities. 

Despite Growing Demands on Agency Resources, the U.S. Government Lacks 
a Coordinated Resource Strategy for Monitoring and Enforcing Trade 
Agreements: 

Agency resources for monitoring and enforcing trade agreements face 
growing demands, but USTR, Agriculture, Commerce, and State 
independently assess and plan for resource needs. Despite these 
demands, the U.S. government lacks a coordinated strategy for assessing 
and planning for resource needs for monitoring and enforcement 
activities. 

Trade Agencies Face Significant and Growing Resource Demands: 

Trade agencies face growing demands on their resources for handling 
their monitoring and enforcement workloads. Since monitoring and 
enforcing trade agreements is only one activity undertaken by trade 
agencies, resources for monitoring and enforcement face competition 
from other trade activities, such as negotiating new agreements. 
Further, tight budgets and growing costs in recent years constrained 
staffing levels. In addition, agencies sometimes face constraints to 
developing and accessing necessary expertise such as limited training. 

Monitoring and enforcement activities face growing competition from 
other trade activities for resources: 

Staff from USTR, Agriculture, Commerce, and State perform a variety of 
trade activities, only one of which is monitoring and enforcing trade 
agreements. Each trade agency therefore allocates its own resources 
among these various activities. For instance, USTR has categorized its 
responsibilities as the lead U.S. trade agency into four areas--trade 
policy development, negotiations, communication and management, and 
monitoring and enforcement. As shown in figure 2, USTR estimates in its 
Fiscal Year 2005 Performance Plan under the Government Performance and 
Results Act that about 50 (or about 22 percent) of its 225 full-time 
equivalents are needed to support its monitoring and enforcement 
activities. 

Figure 2: USTR Estimates of the Numbers of Staff Needed to Support Key 
Initiatives, 2005: 

[See PDF for image] 

[End of figure] 

One area with which monitoring and enforcement activities must compete 
for resources is the negotiation of new trade agreements. Since the 
passage of Trade Promotion Authority in 2002,[Footnote 27] trade 
agencies have been heavily involved in supporting numerous 
negotiations. These have included the WTO's Doha Development Agenda, 
the Free Trade Area of the Americas, and other FTAs. Since 2000 alone, 
the United States has completed negotiations on free trade agreements 
with 12 countries, and negotiations: 

are under way or about to begin with 12 more countries.[Footnote 28] 
These negotiations require significant amounts of staff time and 
resources. This can have an effect on monitoring and enforcement 
activities because oftentimes the same units contributing to 
negotiating new agreements also monitor existing agreements. In 
addition, once FTAs are completed, trade agencies then must devote 
significant resources to monitoring countries' compliance with these 
new agreements, thus adding further to the workload. 

[See PDF for image] 

[End of figure] 

Trade agency officials told us they do not expect to receive 
significantly more resources for monitoring and enforcing trade 
agreements. Commerce officials said that as the Administration attempts 
to meet its goal of reducing the federal budget deficit, they expect to 
receive few, if any, additional resources for monitoring and enforcing 
trade agreements. Likewise, USTR's fiscal year 2006 budget request 
includes no increase in staffing levels. In addition, Agriculture 
anticipates having fewer resources because of tight budget conditions. 

Units responsible for monitoring and enforcing trade agreements also 
typically have multiple additional responsibilities. For instance, 
staff in MAC regional units are also responsible for other tasks, 
including: 

* providing technical knowledge and detailed expertise to support trade 
negotiations;

* participating in international trade conferences, events, and 
missions to assess trade barriers; and: 

* providing technical knowledge and expertise in support of senior 
level contacts with foreign government officials. 

Staff at the overseas posts we visited reported spending significantly 
varying proportions of their time on monitoring and enforcement 
efforts. Some staff at posts in Japan and the EU reported spending most 
or almost all of their time on such activities. In contrast, staff in 
some other posts reported spending little, if any, time on these 
activities. Overseas units with monitoring and enforcement 
responsibilities also typically have additional responsibilities 
related to improving the ability of U.S. companies to export their 
products. For example, Agriculture's FAS overseas officers also: 

* prepare reports on changes in policies and other developments that 
could affect U.S. agricultural exports;

* assess U.S. export marketing opportunities; and: 

* respond to the information needs of those who develop, initiate, 
monitor, and evaluate U.S. food and agricultural policies and programs. 

Staffing Levels Face Significant Constraints: 

As discussed earlier, the monitoring and enforcement workload has 
increased significantly in recent years. However, since 2002, staffing 
levels in trade agency units with primary monitoring and enforcement 
responsibility have not increased significantly. While the number of 
staff in Commerce's MAC unit and State's Economic and Business Affairs 
Bureau grew substantially between 2000 and 2002, the number has grown 
little since then. As shown in figure 3, total staff levels in key 
trade agencies' primary monitoring and enforcement units has been 
essentially static since 2002. 

Figure 3: Domestic Staff in Key Monitoring and Enforcement Units: 

[See PDF for image] 

Note: State data represent the number of staff in the Bureau of 
Economic and Business Affairs. Commerce data represent the number of 
staff in the International Trade Administration's Market Access and 
Compliance unit. Agriculture data represent the number of staff in the 
Foreign Agriculture Service's International Trade Policy unit. USTR 
data represent the number of staff in the Monitoring and Enforcement 
Unit. 

[End of figure] 

Some trade agencies have faced particular constraints to overseas 
staffing in recent years. As shown in figure 4, the number of overseas 
staff in key monitoring and enforcement units in Agriculture and 
Commerce has been relatively steady or has declined since 
2000.[Footnote 29] For instance, the number of CS staff has declined by 
more than 10 percent, from more than 750 in 2000 to less than 670 in 
2004.[Footnote 30]

Figure 4: Overseas Staff in Key Monitoring and Enforcement Units: 

[See PDF for image] 

Notes: State data represent the number of economic officers. Commerce 
data represent the number of staff in the Trade Promotion/U.S. and 
Foreign Commercial Service. Agriculture data represent the number of 
staff in the Foreign Agriculture Service. Data for Commerce and 
Agriculture include U.S. officers and Foreign Service Nationals. 
Commerce has posted four MAC officers overseas since 2002. USTR has 
also posted about 30 staff at the U.S. Mission to the WTO and one staff 
person to the U.S. Mission to the European Union. 

[End of figure] 

In addition, some Agriculture and Commerce overseas staff are 
responsible for overseeing activities in several countries other than 
the one in which they are posted. For example, the Commercial Counselor 
posted in Turkey oversees Commerce operations in five other countries; 
as a result, he spends a significant portion of his time traveling, 
thus reducing the amount of time he can devote to his monitoring and 
enforcement responsibilities in any single country. 

The growing costs associated with maintaining an overseas presence in 
an era of heightened security concerns may cause some agencies to scale 
back their future overseas monitoring and enforcement efforts. For 
instance, the cost of shared administrative expenses and accelerated 
embassy construction schedules have contributed to the growing costs to 
each agency of maintaining an overseas presence. Costs for overseas 
administrative support services are distributed among 50 agencies 
through the International Cooperative Administrative Support Services 
system. These costs rose nearly 30 percent from fiscal year 2001 to 
2003, when they reached a level of about $1 billion.[Footnote 31] In 
addition, agencies share the cost of constructing new embassies and 
consulates. The $17.5 billion required to construct overseas facilities 
through 2018 will be allocated proportionally to each agency based on 
the number of staff the agencies have in overseas posts worldwide. For 
instance, Commerce's assessment is expected to increase from $4.5 
million in 2005 to $40.2 million annually in 2009 through 2018, and 
Agriculture's assessment is expected to increase from $0.6 million in 
2005 to $16.3 million annually in 2009 through 2018.[Footnote 32] Some 
agencies are concerned these increases could affect their ability to 
accomplish their overseas missions. Officials from Agriculture and 
Commerce have stated that without additional funding, their agencies 
would have to cut their overseas staff and some ongoing activities at 
numerous locations. For example, we have previously reported that 
Commerce has projected that it may have to close offices at as many as 
51 of its 152 overseas posts by 2009, reducing staff levels by 498 
persons. 

Trade Agencies Face Constraints to Developing and Accessing Necessary 
Expertise: 

Effectively monitoring and enforcing trade agreements requires 
significant expertise, but agencies face constraints to developing and 
accessing such expertise. Monitoring and enforcing trade agreements 
typically involves staff with expertise in trade policy as well as 
staff with knowledge about the foreign country and expertise in the 
particular industry. One way to develop the additional trade policy 
expertise necessary to monitor and enforce increasingly complex trade 
agreements is through training, which Commerce and State in particular 
have worked to improve. However, officials in all eight countries we 
visited told us that additional training on monitoring and enforcing 
trade agreements would help them fulfill their responsibilities in this 
area more effectively. 

Many staff responsible for monitoring and enforcement activities have 
not yet attended State's Foreign Service Institute's trade agreement 
compliance training. This course was developed by USTR, Agriculture, 
Commerce, and State in response to a GAO recommendation regarding the 
need to improve staff training for monitoring and enforcing trade 
agreements.[Footnote 33] The agencies' stated goal was to offer trade 
compliance training to monitoring and enforcement staff of all agencies 
assigned overseas and in Washington, D.C. While the exact number of 
U.S. government personnel responsible for monitoring and enforcing 
trade agreements is hard to determine precisely, in reporting to 
Congress,[Footnote 34] Commerce estimated that it devotes 602 staff, 
Agriculture estimated devoting 222 staff, and State estimated devoting 
775 staff to goals that include monitoring and enforcement activities. 
However, in the 5 years since our recommendation, approximately 450 
officials (or less than 30 percent of the nearly 1,600 staff identified 
above) had taken the course; the vast majority (84 percent) of which 
were from State. According to officials responsible for facilitating 
the course, Commerce staff have accounted for about 15 percent of the 
course attendees, and Agriculture staff less than 1 percent. 

In addition, not all staff at overseas posts have been able to attend 
monitoring and enforcement training. State has made efforts to target 
its trade agreements compliance course to staff in need of the training 
by offering the class at overseas posts. However, even when the course 
was offered overseas, some interested staff were not able to attend. 
For instance, Commerce staff in Japan told us that when State arranged 
for the course to be taught in the Tokyo embassy, Commerce staff did 
not attend because Commerce would have had to reimburse State for the 
tuition.[Footnote 35] In addition, despite Commerce efforts to offer 
training courses on trade compliance, staff who have not received such 
training include those posted in key U.S. trading partners like Mexico, 
where Commerce staff have received no formal training on monitoring and 
enforcing trade agreements from fiscal year 2000 to date. 

Similarly, FAS staff have been offered no formal training on monitoring 
and enforcing trade agreements. FAS officials noted that this is due in 
large part to the fact that the agency has a very limited training 
budget. In 2005 its $2 million budget for training provides, on 
average, $150 per employee to build subject matter expertise. FAS 
officials added that they try to minimize the effect of this constraint 
by spending 1 or 2 days focusing on trade compliance issues at regional 
meetings of FAS overseas staff. 

Although the four trade agencies worked together to design the Foreign 
Service Institute course, recent efforts suggest a lack of 
coordination. For instance, State and Commerce separately contracted 
with the same company to provide training on trade agreement compliance 
to their staff. State pays the contractor $15,000 to teach a 5-day 
course discussed earlier for about 30 students, thus equaling an 
average cost of $100 per student per day. Commerce contracted with the 
same company to teach several 3-day courses covering similar material, 
at a cost of $25,000 per class. According to Commerce records, about 30 
Commerce staff attended one such class, thus equaling an average cost 
of about $275 per student per day for that class. 

In addition, while input from staff with specialized legal, technical, 
or scientific knowledge may be necessary, depending on the nature of 
the issue, agencies face limitations in accessing this expertise. Trade 
agency officials told us that as trade agreements cover an increasingly 
broad set of issues including regulatory issues, they are increasingly 
relying on staff with specialized technical and scientific expertise. 
For instance, officials from FAS rely heavily on officials in 
Agriculture's Animal and Plant Health Inspection Service (APHIS) and 
Food Safety Inspection Service (FSIS) to handle complex issues relating 
to the WTO's Agreement on Sanitary and Phytosanitary 
Standards.[Footnote 36] According to APHIS and FSIS officials, the 
amount of work they perform to support FAS' monitoring and enforcement 
of trade agreements has grown steadily over time, and they have tried 
to dedicate sufficient resources to such activities. However, both 
these agencies' primary missions are focused on U.S. public and 
agricultural health.[Footnote 37] Officials from both agencies told us 
that given existing resource constraints, they must place primary 
emphasis on allocating resources to their primary mission areas. USTR 
officials also told us that similar issues face the Food and Drug 
Administration (FDA). USTR has utilized the expertise of FDA officials 
for handling a variety of trade issues, most notably, trade in 
biotechnology products. Several countries have blocked U.S. exports of 
biotechnology products, and FDA officials have helped USTR attempt to 
dismantle these barriers by supplying scientific research and analysis 
demonstrating that such products do not pose a health risk. However, 
USTR noted that it realizes that FDA's dedication of significant 
resources to these efforts has caused it to make trade-offs with other 
activities. 

U.S. Government Lacks a Mechanism and Coordinated Strategy for 
Assessing and Planning Future Resource Needs: 

While trade agencies have established formal mechanisms and a strategy 
for coordinating on trade policy issues, no such formal mechanism or 
strategy exists for coordinating agency resource planning efforts for 
trade activities. Agency officials told us that USTR, which leads this 
formal interagency structure, holds regular discussions to develop 
trade policy strategy. However, officials from all four key trade 
agencies told us that the formal interagency process is not used to 
assess or plan for future resource needs for trade activities in 
general or monitoring and enforcing agreements specifically. Instead, 
each agency independently assesses its resource needs for fulfilling 
its mission. 

While trade agencies have previously recognized that effectively 
monitoring and enforcing trade agreements requires developing a 
strategy for coordinating their respective resources, they have not 
done so since 2001. At that time, the Administration recognized the 
need for an integrated approach to improving U.S. capacity to monitor 
and enforce trade agreements rather than having each agency address its 
capacity independently. This approach, coordinated by the National 
Economic Council, led interagency discussions aimed at enhancing 
coordination in this area and increasing funding to bolster expertise 
in key trade agencies. This initiative proposed a $22 million increase 
in the resources for Agriculture, Commerce, State, and USTR. Following 
this initiative, USTR agreed to continue to work with other agencies to 
assess the monitoring and enforcement workload and the resources needed 
to address it. However, trade agency officials told us that no such 
coordinated, comprehensive effort has taken place since then. 

Trade agency officials told us they recognize the need to coordinate 
their resources and have taken some steps to address this 
need.[Footnote 38] However, these efforts did not include involving all 
trade agencies in developing a comprehensive interagency strategy for 
resource planning. State officials told us that they recognize the 
importance of coordinated resource planning and in the past have 
invited officials from trade agencies to meetings at which the Bureau 
of Economic and Business Affairs justifies its budget request to the 
Deputy Secretary of State. State officials told us that the Deputy 
Secretary often asks officials from other trade agencies whether they 
have any issues with the bureau's requested resources, especially 
regarding the posting of overseas staff. Commerce and State officials 
also told us that there have been recent discussions regarding 
coordinating their resources for handling commercial issues in other 
countries. However, these efforts focused on overseas posts where 
Commerce has no staff. 

Officials from all four trade agencies told us that there is currently 
no comprehensive interagency strategy regarding resources for 
monitoring and enforcement efforts. We have previously reported that 
without sufficient interagency coordination, scarce funds can be wasted 
and the overall effectiveness of the federal effort is 
limited.[Footnote 39] We have also previously reported that agencies 
lack coordinated resource planning for trade activities.[Footnote 40] 
In that report, we found that USTR relies heavily on other trade 
agencies to staff negotiating teams but lacks a systematic approach for 
addressing resource issues because formal interagency meetings do not 
include any detailed discussion of these issues. Agencies reported that 
while they have been able to meet USTR's needs, doing so has 
complicated their own resource planning efforts and sometimes strained 
their resources. We also found that at times it was necessary for 
agencies to make trade-offs. For instance, according to Department of 
the Treasury officials, they have had to "perform triage" on some 
operations because of the heavy negotiating workload. We recommended 
that USTR work with other trade agencies to develop more systematic 
data and plans for allocating staff and resources across the full U.S. 
trade agenda, including FTAs and other negotiating priorities. The 
Trade Representative disagreed with our recommendation, stating that in 
his view the straining of resources by an ambitious negotiating agenda 
is mainly caused by the amount of resources available, not their 
allocation. We responded that given limited resources, USTR needs to 
develop a resource strategy based on solid data and planning and 
coordinate with other agencies whose resources USTR routinely calls 
upon during the course of negotiations. Without coordinated resource 
planning for shared functions, each agency's individual resource 
planning efforts are more difficult, and the government's ability to 
effectively utilize the unique talents and skills of each agency can be 
limited. 

Conclusions: 

The steps that trade agencies have taken to monitor and enforce trade 
agreements since we last reported on U.S. government efforts, such as 
the creation of formal structures to coordinate agency efforts, have 
helped to increase the attention trade agency officials focus on 
ensuring other countries comply with their trade agreement obligations. 
However, as the monitoring and enforcement workload continues to 
increase without commensurate increases in resources, USTR, 
Agriculture, Commerce, and State will find it more difficult to ensure 
countries comply with trade agreements while also fulfilling their 
other trade responsibilities. For example, unless agencies address 
communication issues, they may miss opportunities to open foreign 
markets to U.S. exports. In addition, to the extent that some trade 
agency officials, including those posted in important trading partner 
countries, are not adequately trained to effectively monitor and 
enforce complex and technical trade agreements, they cannot provide 
effective service to U.S. exporters that face barriers in foreign 
markets. 

As we have noted in previous reports, without interagency coordination 
on resource assessments and planning, fulfilling future monitoring and 
enforcement responsibilities will be even more difficult. Agencies have 
recognized the importance of assessing human capital needs in a 
strategic way, as in the National Economic Council-led effort in the 
early 2000s that resulted in a more coordinated human capital approach. 
However, the benefits of this concept have not been institutionalized 
or applied in a broader trade context for all monitoring and 
enforcement activities. In an environment of growing workloads and 
static or declining resources--particularly in vital overseas posts-- 
lack of an interagency coordination strategy regarding resource 
planning means that the federal government cannot be assured that its 
limited resources are sufficiently prioritized or targeted at the areas 
of greatest risk. 

Recommendations: 

In order to improve efforts to monitor and enforce trade agreements so 
that U.S. companies are able to take full advantage of the trade 
agreements negotiated by the U.S. government, we recommend that the 
Secretaries of Commerce and State work together to facilitate 
communication between officials working on trade compliance issues. 
Such steps could include installing a secure cable in Commerce 
headquarters and encouraging State staff to send unclassified 
information regarding trade issues using unclassified systems. We also 
recommend that the Secretaries of Agriculture, Commerce, and State 
jointly develop a strategy for meeting the training needs of staff 
responsible for monitoring and enforcing trade agreements to better 
equip them to effectively handle increasingly complex or technical 
barriers to U.S. exports. This interagency strategy should include an 
assessment of what trade compliance training exists, what knowledge and 
skills will be necessary to effectively handle future trade compliance 
issues, and what additional training is required to provide staff with 
the necessary knowledge and skills. 

Further, to most effectively utilize the unique talents and skills of 
each agency to meet monitoring and enforcement objectives, we recommend 
that the U.S. Trade Representative work with the Secretaries of 
Agriculture, Commerce, State, and other trade agencies to develop and 
update as necessary an interagency strategy for assessing and planning 
for resource needs for monitoring and enforcing trade agreements. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Departments of Agriculture, 
Commerce, and State, as well as to the Office of the U.S. Trade 
Representative. 

Agriculture acknowledged the merits of our recommendations and intends 
to work with other trade agencies to implement the two recommendations 
that apply to it. 

Commerce had concerns regarding the completeness of our 
characterization of its efforts in several areas, including emphasizing 
its proactive monitoring and training activities. We added clarifying 
language, where appropriate, to provide a more complete picture. 

State commented that the report appeared factual and reflective of 
State's efforts. State emphasized its variety of formal and informal 
training that relate to trade agreement compliance and agreed to 
implement our recommendation by improving coordination of training 
activities. State also commented that it believes that the use of 
classified communication systems to exchange information on trade 
issues is rare. 

Commerce and USTR also provided technical comments, which we have 
incorporated where appropriate. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time we will send copies to other 
interested congressional committees. We will also send copies to the 
U.S. Trade Representative and the Secretaries of Agriculture, Commerce, 
and State. We will also make copies available to others upon request. 
In addition, this report will be available at no charge on the GAO Web 
site at [Hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-4347 or [Hyperlink, yagerl@gao.gov] [Hyperlink, 
yagerl@gao.gov]. Contact points for our Offices of Congressional 
Relations and Public Affairs may be found on the last page of this 
report. GAO staff who made major contributions to this report are 
listed in appendix VII. 

Sincerely yours,

Signed by: 

Loren Yager: 
Director, International Affairs and Trade: 

[End of section]

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

The Ranking Minority Member of the Senate Committee on Finance 
requested that we review U.S. government efforts to monitor and enforce 
trade agreements. This report addresses (1) how the nature and scope of 
U.S. trade agreements has changed in the last 10 years and what effect 
changes have had on agencies' monitoring and enforcement workload, (2) 
how U.S. government agencies monitor and enforce trade agreements, and 
(3) how the U.S. government allocates resources for monitoring and 
enforcement of trade agreements within the context of other trade 
activities. 

To analyze how the nature and scope of U.S. trade agreements has 
changed in the last 10 years and what effect changes have had on 
agencies' monitoring and enforcement workload, we reviewed data on 
trade agreements from the Departments of Agriculture and Commerce and 
the Office of the U.S. Trade Representative (USTR) and interviewed 
officials with each agency. In addition, to determine the types of U.S. 
trade agreements currently in force, we analyzed archives of U.S. trade 
agreements held by each agency. To categorize each agreement, we 
generally used the official name of the agreement, though in some cases 
the official name was too vague to determine the category, so we looked 
at the agreement itself. We included each agreement in only one 
category to ensure that there would be no double-counting, so in some 
cases we made a determination to categorize an agreement when it could 
have fit into more than one category. We counted the World Trade 
Organization agreements to which all WTO members are party to as one 
agreement. We also analyzed the combined list of U.S. trade agreements 
to obtain trade agreement data by country and region. 

Further, to determine the growth in the number of trade agreements, we 
analyzed trade agreement data from USTR's Annual Report on the Trade 
Agreement Program for each year from 1995 through 2004. Since USTR is 
the only trade agency to publish its list annually, this was the only 
consistent way to determine how many trade agreements were in force 
each year. In addition, to determine the growth in WTO membership, we 
compiled the accession years for each WTO member through 2004. 

To assess the reliability of these data, we interviewed knowledgeable 
agency officials about the data and performed visual and logic tests on 
the data. We do not have complete assurance that we have identified 
every trade agreement the United States has entered into because other 
agencies beyond USTR, Agriculture, and Commerce may have additional 
agreements. However, we believe that because USTR, Agriculture and 
Commerce are the agencies most involved in the monitoring and 
enforcement of trade agreements, their archives contain the vast 
majority of U.S. trade agreements. We chose not to include data from 
State's annual publication Treaties in Force, which includes some trade 
agreements but does not clearly define what it considers to be a trade 
agreement.[Footnote 41] We determined that the data are sufficiently 
reliable for the purposes of this report. 

To review how U.S. government agencies monitor and enforce trade 
agreements, we began by determining whether the general monitoring and 
enforcement framework we established in our 2000 report was still 
correct. We did this by examining the activities of four key trade 
agencies in Washington, D.C.: USTR and the Departments of Agriculture, 
Commerce, and State. We focused on agencies' efforts to monitor and 
enforce trade agreements that open foreign markets and did not focus 
on, for instance, agreements covering foreign government subsidies or 
trade remedy laws. We also visited 10 U.S. embassies and consulates in 
eight countries and interviewed USTR, Agriculture, Commerce, and State 
overseas staff involved with monitoring and enforcement. In addition, 
we met with more than 35 private sector representatives in Washington, 
D.C., and overseas to obtain their perspective on the role of the U.S. 
government in monitoring and enforcing trade agreements. This included 
representatives from business groups such as the American Chamber of 
Commerce as well as individual company representatives from a range of 
sectors, including insurance and other financial services, 
telecommunications, pharmaceuticals, automotives, and software. The 
private sector representatives overseas were chosen because they had 
recently worked with U.S. government officials to resolve trade 
compliance issues. Although some of the business groups we met with 
include small and medium-sized companies, the individual companies we 
met with were large and may not reflect the views of small or medium 
sized companies. Furthermore, we analyzed U.S. government reports and 
documents on monitoring and enforcement activities. 

To select the overseas posts to visit, we considered several variables 
and attempted to visit a variety of posts. Specifically, we considered 
for each of 34 countries whether there was a Market Access and 
Compliance Officer, the number of bilateral trade agreements, the types 
of agreements (e.g., free trade agreements, bilateral investment 
treaties, etc.), the number of open compliance issues listed in 
Commerce's Market Access Database, the number of Commerce and 
Agriculture staff at the post, the country's total trade with the 
United States, and the country's gross domestic product. We then 
selected countries to get a broad and varied understanding of 
monitoring and enforcement activities conducted overseas. For instance, 
we chose to visit some countries with many bilateral trade agreements 
with the United States and others with few agreements. Similarly, we 
chose to visit countries that frequently experience compliance issues 
as well as others that experience few compliance issues. We also chose 
to visit some countries with Agriculture staff and some countries for 
which the responsible Agriculture staff were not posted in the country. 
However, the posts we visited may not provide a representative view of 
how all posts operate, and we cannot generalize our observations to all 
overseas posts. 

To review how the U.S. government allocates resources for monitoring 
and enforcement of trade agreements within the context of other trade 
activities, we interviewed key agency officials and reviewed agency 
documents. We interviewed unit management officials in each of the 
monitoring and enforcement units to understand how they make decisions 
regarding allocating resources for trade activities, including 
monitoring and enforcing trade agreements. We identified resource 
constraints by reviewing agency performance reports, budget requests, 
and staffing data. We also identified resource constraints by 
interviewing unit managers and staff in Washington, D.C., and in 
overseas posts. To analyze USTR's allocation of staff to various trade 
activities, we reviewed its Fiscal Year 2005 Performance Plan under the 
Government Performance and Results Act. This report includes USTR 
office managers' estimates of the number of staff required to support 
each activity. Because these estimates are not based on official 
records, they should not be viewed as precise calculations of the 
number of staff working on each activity. However, we compared the 2005 
estimates with estimates for prior years. We concluded that these 
estimates are reliable for the purpose of demonstrating the general 
breakdown of USTR's staff into its self-identified key initiatives. In 
addition, we met with Agriculture officials from units trade officials 
rely on heavily for technical or other specialized expertise. 

We also discussed agency training activities related to monitoring and 
enforcement with Agriculture, Commerce, and State unit management and 
training officials. We identified interagency structures and efforts to 
assess and plan for resource needs by reviewing interagency reports on 
monitoring and enforcement and interviewing key officials at each trade 
agency. We also reviewed prior GAO reports discussing monitoring and 
enforcing trade agreements, interagency resource planning, and the cost 
of maintaining an overseas presence. 

We conducted our work in Washington, D.C; Brussels, Belgium; Paris, 
France; Rabat and Casablanca, Morocco; Ankara and Istanbul, Turkey; 
Bucharest, Romania; Tokyo, Japan; Seoul, South Korea; and Singapore 
from July 2004 through April 2005 in accordance with generally accepted 
government auditing standards. 

[End of section]

Appendix II: Additional Information about U.S. Trade Agreements: 

You requested that we provide some additional information about the 
scope and nature of U.S. trade agreements. This information is provided 
below. 

Countries and Regions with Which the United States Has Trade 
Agreements: 

The U.S. currently has bilateral trade agreements with 105 
countries.[Footnote 42] With the vast majority (95) of these countries, 
we have four or fewer bilateral trade agreements. In contrast, we have 
five or more agreements with 11 trading partners (see fig. 5). 

Figure 5: Trading Partners with Which the U.S. has Five or More 
Agreements, as of 2005: 

[See PDF for image] 

[End of figure] 

As shown in figure 6, the United States has more agreements with 
countries in the Asia-Pacific region than with countries in any other 
region, though there are also many agreements with European countries. 
There are relatively few agreements with countries in Africa, the Near 
East, and South Asia. 

Figure 6: U.S. Trade Agreements by Region, as of 2005: 

[See PDF for image] 

[End of figure] 

Types of U.S. Trade Agreements: 

Trade agreements vary widely by type (see fig. 7). A large percentage 
(41 percent) of agreements are industry-specific agreements, covering 
such things as agricultural products, steel, telecommunications issues, 
or textiles. There are also many framework agreements, which open trade 
between two nations without directly setting conditions for trade in 
any particular industry. There are over 40 bilateral investment 
treaties, which concern the reciprocal encouragement and protection of 
investment. 

Figure 7: U.S. Trade Agreements by Type, as of 2005: 

[See PDF for image] 

Note: Subtotals for issue-and industry-specific agreements do not add 
up to category totals because of rounding. 

[End of figure] 

Agency Trade Agreement Archives: 

In order to determine the scope and nature of U.S. trade agreements, we 
examined the trade agreement archives of three agencies: USTR, 
Commerce, and Agriculture.[Footnote 43] USTR publishes a list of trade 
agreements annually in its Trade Policy Agenda and Annual Report, and 
Commerce and Agriculture each maintain an archive of trade agreements 
that is available via each agency's Web site. Agencies keep archives 
for a variety of purposes, including tracking for their own monitoring 
and enforcement purposes, and providing the public with information on 
agreements currently in force. 

As shown in figure 8, of the 384 agreements that we identified, only 19 
appear in all three archives, and each archive is the only source for 
numerous agreements: USTR is the only source for 80 agreements and 
Commerce is the only source for 90 agreements. Commerce's archive 
includes active, binding agreements covering manufactured products and 
services, and does not include agricultural commodity agreements. 
Agriculture's archive contains agriculture-related agreements only. 

Figure 8: Comparison of USTR, Commerce, and Agriculture Archives of 
Trade Agreements, as of 2005: 

[See PDF for image] 

Note: WTO agreements to which all WTO members are a party to are 
counted as one agreement. 

[A] USTR data are from the 2004 Annual Report of the President of the 
United States on the Trade Agreements Program and include trade 
agreements since 1984. 

[B] Commerce data are from its Trade and Related Agreements Database, 
which includes active, binding agreements between the United States and 
its trading partners covering manufactured products and services. 

[C] Agriculture lists agriculture-related agreements on its Web site. 

[End of figure] 

[End of section]

Appendix III: Examples of U.S. Government Trade Monitoring and 
Enforcement Activities: 

U.S. trade agencies undertake monitoring and enforcement activities as 
part of a larger U.S. government strategy to improve market access for 
U.S. exports. In general, these monitoring and enforcement activities 
tend to be similar across agencies. Once a market access or compliance 
issue is identified, agency officials in the countries we visited told 
us they will investigate the case and gather information. They will 
then take whatever action is deemed appropriate to resolve the problem, 
trying to resolve the issue as quickly and efficiently as possible. 
Trade agencies tend to follow this procedure whether the issue relates 
to a specific trade agreement or not. 

Korea: 

The U.S. government was recently successful in getting the government 
of Korea to drop its plans to mandate a telecommunications technology 
standard that would have become a significant barrier to trade. For 
several years, a U.S. company has successfully marketed cell phone 
"middleware" (the software that allows applications such as ring tones 
and games downloaded on to the handset from the Internet to work with 
the handset's operating system), reaching 7 million subscribers. 
Because each mobile service operator used different middleware for its 
phones, subscribers of one cellular provider could not share their 
downloaded applications with subscribers of a different provider. With 
the argument that this lack of interoperability constituted a market 
failure, the Korean government announced a plan to mandate that all 
mobile service providers exclusively use a technology called the 
Wireless Internet Platform for Interoperability (WIPI) that was 
developed by a state-financed research institute. The U.S. government 
considered this to be a clear-cut case of protectionist industrial 
policy that would have immediately closed the market to a U.S. company 
that had already developed a relationship with 7 million Korean 
consumers. 

Representatives from the affected U.S. company complained to USTR and 
the U.S. embassy in Korea about the problem. U.S. embassy officials 
embarked on an extended series of meetings at all levels of the Korean 
government. This intervention went all to way to the ambassadorial 
level, as the U.S. Ambassador raised this issue in meetings with Korean 
ministers on more than one occasion. The Ambassador also used this 
trade dispute as a key point in all his speeches dealing with economic 
issues. In addition, State's Coordinator for International Information 
and Communications Policy and Commerce's Assistant Secretary for Market 
Access and Compliance visited Korea, in part to raise this issue with 
their Korean counterparts. USTR and Commerce officials became involved 
in the case not only during the quarterly U.S.-Korea trade meetings, 
where this topic was given a high priority, but also through visits of 
the Deputy USTR and USTR's chief telecommunications negotiator. After 
approximately 3 years of negotiations, the two governments reached a 
compromise in which carriers may use any middleware in addition to 
WIPI, which was satisfactory for the U.S. company. During the 
negotiations, several embassy staff rotated to assignments in different 
countries and were replaced by new embassy staff, but company 
representatives said the U.S. government's efforts never faltered in 
persuading the Korean government to allow multiple protocols. 

Japan: 

Many trade compliance issues that the United States faces in Japan 
pertain to regulatory issues and competition (antitrust) policy. To 
address these and other issues, the United States and Japan created the 
U.S.-Japan Economic Partnership for Growth, which provides a broad 
framework for addressing ongoing trade compliance issues. It 
establishes working groups whose purpose is to address measures to 
promote regulatory reform and competition policy. The working groups 
are required to report to a high-level officials' group, which is in 
turn required to report annually on the progress the working groups 
have made in their respective fields. The most recent report, published 
in 2004, lists progress made in key U.S. export sectors such as 
telecommunications, information technologies, energy, and medical 
devices and pharmaceuticals. For example, the report notes that the 
government of Japan has removed various barriers to e-commerce and will 
ensure that its ministries and agencies continue to do so in order to 
promote free and diverse e-commerce activities. U.S. government 
officials noted that the agreement is valuable to the United States 
because it provides a forum for discussing key compliance issues and 
allows U.S. agency officials to monitor progress on these issues. 

Turkey: 

In July 2002, a U.S. company's high-fructose corn syrup facility in 
Turkey was threatened with being shut down because of alleged 
deficiencies with its zoning permits. The U.S. company immediately 
contacted the embassy and the Departments of Commerce and State. 
Commerce, in turn, called in the Acting Turkish Ambassador to meet with 
the Deputy Secretary of Commerce, and the U.S. Ambassador voiced 
similar concerns in Ankara. All embassy activities were closely 
coordinated. Soon thereafter, the Turkish Prime Minister passed a 
ministerial decree that allowed the plant to continue operations and 
promised to change the zoning law to permit the facility to operate 
free of these constraints. According to U.S. officials, last year the 
Turkish Parliament passed amendments to the Industrial Zone Law that 
were signed into law by the President. These amendments allow the U.S. 
company to retroactively seek all the necessary permits it needs to 
operate its facility. 

Morocco and Singapore: 

Since 2000, the U.S. government has entered into free trade agreements 
with 12 countries, including Morocco and Singapore. Trade agency 
officials realize that increased trade with these countries will 
undoubtedly create market access or compliance issues and increase the 
monitoring workload. Commerce therefore developed a set of guidelines 
for formulating a blueprint for monitoring recent free trade 
agreements. The plan includes the detailed commitments made by the 
foreign government and therefore lays the groundwork for U.S. trade 
agencies' future monitoring and enforcement activities. Agency 
officials told us that this blueprint greatly facilitates monitoring 
activities in Singapore, and they expect similar results in Morocco 
once implementation of the free trade agreement begins. 

[End of section]

Appendix IV: Comments from the Department of Agriculture: 

USDA: 

United States Department of Agriculture: 
Farm and Foreign Agricultural Services: 
Foreign Agricultural Service: 
1400 Independence Ave, SW: 
Room 5071-S: 
Stop 1001: 
Washington, DC 20250- 1001: 

Mr. Loren Yager: 
Director, International Affairs and Trade: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548: 

Dear Mr. Yager: 

Thank you for providing the U.S. Department of Agriculture (USDA) with 
your draft report entitled "INTERNATIONAL TRADE: Improvements Needed to 
Handle Growing Workload for Monitoring and Enforcing Trade Agreements." 
Your report offered three recommendations, two of which impact USDA. 

The two recommendations of consequence for USDA are: 

(1) "..that the Secretaries of Agriculture, Commerce, and State jointly 
develop a strategy for meeting the training needs of staff responsible 
for monitoring and enforcing trade agreements to better equip them to 
effectively handle increasingly complex or technical barriers to U.S. 
exports"; and: 

(2) "..that the U.S. Trade Representative work with the Secretaries of 
Agriculture, Commerce, State, and other trade agencies to develop and 
update as necessary an interagency strategy for assessing and planning 
for resource needs for monitoring and enforcing trade agreements."

We have carefully reviewed the report, and we acknowledge the merits of 
these recommendations. Therefore, we intend to work very closely with 
the above mentioned trade agencies in order to implement these two 
recommendations. 

In closing, I again want to thank you for allowing us to comment on 
this draft report. 

Sincerely,

Signed by: 

A. Ellen Terpstra: 
Administrator: 

[End of section]

Appendix V: Comments from the Department of Commerce: 

UNITED STATES DEPARTMENT OF COMMERCE: 
The Under Secretary for International Trade: 
Washington, D.C. 20230: 

JUN 14 2005: 

Mr. Loren Yager: 
Director: 
International Affairs and Trade: 
Government Accountability Office: 
Washington, DC 20548: 

We appreciate the opportunity to provide advance comments on the May 
26"' draft of your proposed report, Improvements Needed to Handle 
Growing Workload for Monitoring and Enforcing Trade Agreements. Below I 
have highlighted a few general facts that we suggest be considered for 
inclusion in the final report to give the reader a complete view of our 
compliance program. 

Our Proactive Commerce Monitoring Program: The Government 
Accountability Office (GAO) report says that Commerce focuses on 
complaints that are brought to us by U.S. industry, but we feel it 
under emphasizes our proactive monitoring efforts. The report also does 
not highlight Commerce's extensive outreach efforts designed to ensure 
that we find industry complaints about foreign government practices and 
trade barriers that might be challenged to the benefit of overall U.S. 
industry interests. Assistant Secretary for Market Access and 
Compliance William H. Lash III has been highly active in this area, and 
has visited approximately seventy countries over the past four years to 
advocate compliance cases with foreign government officials and to 
outreach to the local U.S. business community about Commerce Department 
compliance services. 

To comprehensively monitor implementation of and compliance with an 
agreement, we must look at both the changes a country makes in its 
domestic laws to bring them in line with the obligations of the 
agreement and how it changes its practices to implement these 
obligations. These two aspects require different monitoring approaches. 

The monitoring of trade agreement implementation measures taken by a 
foreign partner is undertaken by Commerce on a systematic basis, driven 
by headquarters through various tools, including meetings of the 
Compliance Coordinators, performance plans, strategic goals, and 
implementation matrices. As an illustration, we have developed a 
template in a matrix format setting out the crucial obligations of a 
Free Trade Agreement (FTA) for the purpose of monitoring recent FTAs. 
Our country specialists use the matrix to follow and document the 
status of foreign government efforts to meet these obligations and 
ensure that any outstanding issues are addressed. One use of this 
template is referenced on page eight of GAO's report with regard to the 
Singapore FTA, but is described merely as a useful tactic of the 
Commercial Service in Singapore, rather than an element of our 
proactive monitoring program in Washington and overseas. Similar 
templates have been used for recent FTAs, such as Australia and Chile, 
and will be used in forthcoming FTAs. 

Similarly, although GAO did report that Commerce assigns an individual 
to serve as a Designated Monitoring Officer (DMO) for each agreement, 
this information was contained in a footnote, which describes the DMO 
as a point of contact, but does not reference the importance of the DMO 
as an expert on the assigned agreement and the responsibility to 
monitor the status of any changes in implementation of the agreement. 
There is a DMO for each of the 270 agreements in our database. 

The second component of our monitoring program looks at the day-to-day 
impact on U.S. business of each agreement. With discreet case evidence 
in hand showing how market access was denied in contravention of a 
country's obligations under an agreement, it is possible to challenge a 
country's practices. Thus, Commerce not only puts a great deal of 
emphasis on cases voluntarily brought to it by U.S. exporters or 
investors, but also has a systematic and routine program for doing 
outreach, engaging the members of trade associations, Congress, and 
other members of our Compliance Liaison program, and soliciting 
assistance of our field offices in USEACs and the Foreign Commercial 
Service to proactively identify instances of potential non-compliance. 
We also coordinate our activities on specific cases with other U.S. 
government agencies through a monthly report on new cases and through 
interagency meetings of the Monitoring and Enforcement Subcommittee 
chaired by the Office of the U.S. Trade Representative. 

Training: The report emphasizes some of the formal training sessions in 
which the Commerce Department participates, but gives less recognition 
to the numerous informal training practices in which we engage. 
Commerce routinely briefs Senior and other Commercial Officers during 
home visits and prior to overseas postings on the Commerce Compliance 
Program, reiterating the priority the Administration and Congress place 
on compliance and ensuring that each officer knows how to use the 
market access and compliance database and understands the importance of 
compliance in our daily work. Commerce also provides training on trade 
agreements compliance and specific trade issues through 
videoconferences and teleconferences, visits to USEACs, regular 
participation in Commercial Service regional events, industry team 
sectoral conference calls, and other USEAC-sponsored events. The 
Department believes that these sessions are some of the most effective 
and cost-efficient tools available for training. 

On page 27, it is suggested that ITA overpaid for training services, 
when compared to a similar State Department procurement. Our records 
show that the initial training investments served closer to 80 or 90 
people over several fiscal years, rather than the 30 indicated in the 
report. 

DOC Statutory authority: DOC's statutory authority gives it a major 
role in monitoring. On page 4, the GAO report states that USTR "has 
primary statutory responsibility for monitoring and enforcing U.S. 
trade agreements." USTR clearly has primary statutory responsibility 
for developing, and for coordinating the implementation of, United 
States international trade policy and related direct investment 
matters, and lead responsibility for the conduct of international trade 
negotiations and enforcement. The Department of Commerce, however, has 
specific authority to monitor compliance with international trade 
agreements pursuant to the Reorganization Plan No. 3 of 1979. We 
propose that the sentence state: "The Office of the U.S. Trade 
Representative (USTR) has primary statutory responsibility for 
implementation of U.S. international trade policy. In addition, the 
Departments of Commerce, Agriculture, and State perform their own 
monitoring activities and support USTR's efforts."

Communication: Increasing the effectiveness of communications is a 
valid goal but we note that most compliance problems do not involve 
classified information. We believe that the report somewhat confuses 
the questions of access to a classified email system and access to 
classified information as if they were the same problem. We believe 
that the real problem explained in the report is that unclassified 
information that might be utilized in compliance work seems to be 
frequently transmitted over the classified email system. However, the 
Commerce Department, of course, has access to classified information 
and is in the process of obtaining access to the secure system for 
email used by the State Department. 

Compliance on unfair subsidies: Finally, we also note that the report 
apparently did not have within its scope the responsibilities and 
efforts of the Department of Commerce's Import Administration (IA), 
which is responsible for monitoring and enforcement of disciplines 
against unfair government subsidies and application of foreign trade 
remedy laws that affect U.S. exporters. IA's broader focus on 
compliance issues includes the Unfair Trade Practices Task Force, which 
was established as one of the initiatives proposed in Commerce's 
Manufacturing Report. Building upon existing programs, IA seeks to 
address potential unfair trade problems at their sources, and at the 
earliest stage possible, as a complement to the enforcement of the 
antidumping and countervailing duty laws. 

We offer these comments to clarify certain facts and provide you with a 
more complete picture of our efforts. We hope you will consider 
reflecting these points in the appropriate sections of the report. 

Thank you for a good working relationship and for your professional 
review of such an important issue. We look forward to the finalized 
report. 

Sincerely,

Signed by: 

Timothy J. Hauser: 

The following are GAO's comments on the Department of Commerce's letter 
dated June 14, 2005. 

GAO Comments: 

1. Since our report attempts to provide a description of monitoring and 
enforcement activities performed consistently across U.S. government 
agencies, we did not initially include information on some of 
Commerce's proactive outreach and monitoring activities. We have 
revised the report to include additional information on Commerce's 
efforts in these areas, including citing some of the specific examples 
mentioned in Commerce's letter. 

2. We highlight the specific trade agreement compliance training 
courses because they are solely focused on training staff regarding 
monitoring and enforcing trade agreements and because officials we met 
with identified them as useful courses. However, we have supplemented 
our report with additional information regarding Commerce's and State's 
other related formal and informal training efforts. 

3. Based on documents obtained from Commerce and State, we note that 
both agencies contracted with the same vendor to provide similar 
training, but that Commerce paid significantly more per student, per 
day. Commerce provided a participant list for the July 2003 course, 
which included 27 Commerce staff. Our point was to demonstrate the cost 
differential between the two similar courses. 

4. We have revised the report to clarify the various trade agencies' 
statutory authority and their role in monitoring and enforcing trade 
agreements. 

5. Based on comments from Commerce and State, we have revised the 
report to clarify that the two agencies disagree about the extent to 
which unclassified information about trade issues is sent using 
classified systems. We also note that while Commerce is in the process 
of obtaining access to the secure system for email used by State, 
Commerce officials told us that this process has taken more than four 
years. 

6. Foreign trade remedy laws and subsidies were not within the scope of 
this review. We have clarified this in our scope and methodology, which 
is discussed in appendix I. 

[End of section]

Appendix VI: Comments from the Department of State: 

United States Department of State: 
Assistant Secretary and Chief Financial Officer: 
Washington, D.C. 20520: 

Ms. Jacquelyn Williams-Bridgers 
Managing Director: 
International Affairs and Trade: 
Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548-0001: 

JUN 16 2005: 

Dear Ms. Williams-Bridgers: 

We appreciate the opportunity to review your draft report, 
"INTERNATIONAL TRADE: Improvements Needed to Handle Growing Workload 
for Monitoring and Enforcing Trade Agreements," GAO Job Code 320274. 

The enclosed Department of State comments are provided for 
incorporation with this letter as an appendix to the final report. 

If you have any questions concerning this response, please contact 
Andrew Dilworth, Foreign Affairs Officer, Bureau of Economic and 
Business Affairs, at (202) 736-4021. 

Sincerely,

Signed by: 

Sid Kaplan (Acting): 

cc: GAO - Judith Williams; 
EB - E. Anthony Wayne; 
State/OIG - Mark Duda: 

Department of State Comments on GAO Draft Report: 

INTERNATIONAL TRADE: Improvements Needed to Handle Growing Workload for 
Monitoring and Enforcing Trade Agreements, (GAO-05-537, GAO Code 
320274): 

The Department of State appreciates the opportunity to participate in 
the work of the Government Accountability Office (GAO) in examining how 
we can improve our role in monitoring and enforcing trade agreements. 
Although we currently coordinate extensively within our Department and 
with other agencies on trade agreement monitoring and enforcement, we 
are always open to suggestions for improvement. Overall, the draft 
report appears factual and reflective of current practices at the 
Department. Upon closer inspection of the draft report, however, we 
would like to offer a few comments for GAO's consideration prior to its 
publication of the final report. 

1. FSI's Trade Agreement Implementation Course: 

Throughout the report, GAO makes it appear that .there is only one 
course at the Foreign Service Institute (FSI) related to trade 
agreement compliance. Although there is only one FSI course titled 
"Trade Agreement Implementation," there are many other courses that 
directly or indirectly train staff to monitor trade agreements, 
including the nine-month Economics and Commercial Studies course and 
shorter courses on telecommunications, intellectual property rights, 
biotechnology, and aviation. Foreign Service nationals (FSNs) are 
eligible to take most of these courses but FSI also offers one course 
per year for FSNs on economic issues that touch on trade agreement 
compliance. We also offer two distance-learning courses related to 
trade agreement compliance (Basics of International Trade and World 
Trade Organization History and Core Principles) that can be accessed 
through the Internet. 

The Department of State also fosters informal training that touch upon 
trade agreement compliance. Foreign Service Officers and FSNs conduct 
consultations with Washington-based trade officials, participate in 
short-term bridge assignments in Washington trade agency offices, and 
receive ad hoc on-the-job training as necessary. 

GAO notes that there is a need for more training on trade agreement 
compliance (p. 25). FSI offers the "Trade Agreement Implementation" 
course to meet the demand for the course as determined by those who 
register. If there is excess demand, those students are added to a 
waiting list and we have the option of adding more classes. Based on 
this measure of demand, in contrast to GAO's measure of students who 
need or would like to take the course, we feel we are offering a 
sufficient number of courses per year. As needed and with appropriate 
funding, we could add additional offerings of "Trade Agreement 
Implementation."

Lastly, GAO recommends that State, Commerce, USTR and Agriculture 
increase coordination on training activities. We will continue to 
coordinate with these agencies and consider any ways to improve 
coordination. 

2. Usage of Classified System for Trade Monitoring and Enforcement: 

GAO reports that communication between Commerce and State can be 
difficult due to Commerce's limited access to the classified 
communications systems that State staff use with increasing frequency 
(p. 18). As a general rule, posts conduct almost all trade agreement 
implementation reporting on the unclassified email system. It is very 
rare that issues dealing with trade agreement monitoring and 
enforcement appear on the classified email system. 

3. U.S.-Japan Economic Partnership for Growth: 

GAO incorrectly refers to the U.S.-Japan Economic Partnership for 
Growth as a signed "agreement." On page 42, the report states, "To 
address these and other issues, the United States and Japan signed the 
U.S.-Japan Economic Partnership for Growth agreement. The agreement 
provides a broad framework for addressing ongoing trade compliance 
issues."

The Partnership is really a Presidential-Prime Ministerial initiative. 
Here is a suggested revision: "To address these and other issues, 
President Bush and Prime Minister Koizumi launched the US-Japan 
Economic Partnership for Growth. This initiative provides a broad 
framework for addressing ongoing trade compliance issues." 

The following are GAO's comments on the Department of State's letter 
dated June 16, 2005. 

GAO Comments: 

1. We highlight the Foreign Service Institute's specific trade 
agreement compliance training course because it is solely focused on 
training staff regarding monitoring and enforcing trade agreements and 
because officials we met with identified it as a useful course. 
However, we have supplemented our report with additional information 
regarding Commerce's and State's other related formal and informal 
training efforts. 

2. Based on comments from Commerce and State, we have revised the 
report to clarify that the two agencies disagree about the extent to 
which unclassified information about trade issues is sent using 
classified systems. 

3. We have revised the report to clarify the fact that the U.S.-Japan 
Economic Partnership for Growth was not a signed agreement. However, 
both USTR's and Commerce's publicly available lists of trade agreements 
in force list this agreement. Further, agency officials in Japan and 
Washington, D.C. told us this is the key trade agreement that covers 
the compliance issues they monitor. 

[End of section]

Appendix VII: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Loren Yager, (202) 512-4347: 

Staff Acknowledgments: 

In addition, Anthony Moran, Jason Bair, Leah DeWolf, Judith Williams, 
Ernie Jackson, and Jamie McDonald made key contributions to this 
report. 

[End of section]

Related GAO Products: 

Embassy Construction: Proposed Cost-Sharing Program Could Speed 
Construction and Reduce Staff Levels, but Some Agencies Have Concerns, 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-32] (Washington, 
D.C.: Nov. 15, 2004). 

U.S.-China Trade: Opportunities to Improve U.S. Government Efforts to 
Ensure China's Compliance with World Trade Organization Commitments, 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-53] 
(Washington, D.C.: Oct. 6, 2004). 

Intellectual Property: U.S. Efforts Have Contributed to Strengthened 
Laws Overseas, but Challenges Remain, 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-912] 
(Washington, D.C.: Sept. 8, 2004). 

Embassy Management: Actions Are Needed to Increase Efficiency and 
Improve Delivery of Administrative Support Services, 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-511] 
(Washington, D.C.: Sept. 7, 2004). 

International Trade: Intensifying Free Trade Negotiating Agenda Calls 
for Better Allocation of Staff and Resources, 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-233] 
(Washington, D.C.: Jan. 12, 2004). 

Human Capital: Significant Challenges Confront U.S. Trade Agencies, 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-301T] 
(Washington, D.C.: Dec. 9, 2003). 

World Trade Organization: Standard of Review and Impact of Trade Remedy 
Rulings, 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-824] 
(Washington, D.C.: July 30, 2003). 

International Trade: Advisory Committee System Should Be Updated to 
Better Serve U.S. Policy Needs, 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-876] 
(Washington D.C.: Sept. 24, 2002). 

Human Capital: Major Human Capital Challenges at SEC and Key Trade 
Agencies, 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-662T] 
(Washington, D.C.: April 23, 2002). 

World Trade Organization: Issues in Dispute Settlement, NSIAD-00-210 
(Washington D.C.: Aug. 9, 2000). 

World Trade Organization: U.S. Experience to Date in Dispute Settlement 
System, NSIAD/OGC-00-196BR 
(Washington D.C.: June 14, 2000). 

International Trade: Strategy Needed to Better Monitor and Enforce 
Trade Agreements, NSIAD-00-76 
(Washington, D.C.: March 14, 2000). 

International Trade: Improvements Needed to Track and Archive Trade 
Agreements, NSIAD-00-24 
(Washington, D.C.: Dec. 14, 1999). 

(320274): 

FOOTNOTES

[1] For the purposes of this report, we use the term "trade agencies" 
to collectively refer to the Office of the U.S. Trade Representative 
and the Departments of Agriculture, Commerce, and State. 

[2] GAO, International Trade: Strategy Needed to Better Monitor and 
Enforce Trade Agreements, GAO/NSIAD-00-76 (Washington, D.C.: Mar. 14, 
2000), and International Trade: Improvements Needed to Track and 
Archive Trade Agreements, NSIAD-00-24 (Washington, D.C.: Dec. 14, 
1999). 

[3] The WTO administers rules for international trade, provides a 
mechanism for settling disputes, and provides a forum for conducting 
trade negotiations. 

[4] For more information about U.S. trade agreements, see appendix II. 

[5] USTR works with the following federal agencies in monitoring and 
enforcement activities: the Departments of Agriculture, Commerce, 
Defense, Energy, Health and Human Services, Homeland Security, 
Interior, Justice, Labor, State, Transportation, and Treasury, as well 
as the Council of Economic Advisers, the Council on Environmental 
Quality, the Environmental Protection Agency, the Office of Management 
and Budget, and the U.S. Agency for International Development. 

[6] 19 U.S.C. 1872. 

[7] See GAO/NSIAD-00-76. 

[8] The Chinese WTO accession agreement contains commitments in eight 
broad areas of China's trade regime--e.g., import regulations, 
agriculture, services, and intellectual property rights--covering 
nearly 700 individual commitments. These obligations include 
commitments to reduce tariffs on more than 7,000 products and remove 
600 other restrictions. 

[9] Since 2000, the United States has negotiated FTAs with 12 
countries. These countries are Australia, Bahrain, Chile, Costa Rica, 
the Dominican Republic, El Salvador, Guatemala, Honduras, Jordan, 
Morocco, Nicaragua, and Singapore. Prior to 2000, the United States 
entered into FTAs with 3 countries--Canada, Israel, and Mexico. 

[10] For more information on U.S. efforts to improve intellectual 
property protection, see GAO, Intellectual Property: U.S. Efforts Have 
Contributed to Strengthened Laws Overseas, but Challenges Remain, GAO- 
04-912 (Washington, D.C.: Sept. 8, 2004). 

[11] For examples of how trade agencies have handled some market access 
and compliance cases, see appendix III. 

[12] For the purposes of this report, we use the term "market access 
issue" to include all barriers to U.S. exports to foreign markets, 
regardless of whether there is a trade agreement that relates to the 
barrier. We use the term "trade compliance issue" to refer to a barrier 
covered by the provisions of one or more trade agreement. 

[13] Commerce has identified specific individuals to serve as 
Designated Monitoring Officers who serve as the primary point of 
contact for inquiries regarding trade agreement. According to Commerce, 
these officers are experts on their assigned agreements. 

[14] Commerce is the only trade agency that maintains a database that 
tracks market access issues, including compliance with trade 
agreements. 

[15] For additional information on the U.S. government's process for 
monitoring and enforcing trade agreements see USTR, Coordinating the 
Interagency Monitoring and Enforcement of Trade Agreements: Report to 
the Senate and House of Representatives Committees on Appropriations 
(Washington, D.C.: 2004). 

[16] Foreign Service Nationals are non-U.S. citizens employed to work 
in U.S. embassies and consulates throughout the world. 

[17] U.S. companies do not use debarked wood pallets, claiming that the 
internationally agreed upon measures that they follow for treating 
softwood logs and timber adequately eradicate all pest and fungi. 

[18] For additional information on the Joint Commission on Commerce and 
Trade, see GAO, U.S.-China Trade: Opportunities to Improve U.S. 
Government Efforts to Ensure China's Compliance with World Trade 
Organization Commitments, GAO-05-53 (Washington, D.C.: Oct. 6, 2004). 

[19] For additional information on WTO dispute settlement, see GAO, 
World Trade Organization: U.S. Experience to Date in Dispute Settlement 
System, GAO/NSIAD/OGC-00-196BR (Washington D.C.: June 14, 2000); World 
Trade Organization: Issues in Dispute Settlement, GAO/NSIAD-00-210 
(Washington D.C.: Aug. 9, 2000), and World Trade Organization: Standard 
of Review and Impact of Trade Remedy Rulings, GAO-03-824 (Washington, 
D.C.: July 30, 2003). 

[20] The government of Morocco ratified the FTA in January 2005. As of 
April 2005, U.S. officials were awaiting the King's signature and the 
exchange of notes between USTR and the government of Morocco before the 
agreement goes into effect. 

[21] GAO, International Trade: Advisory Committee System Should Be 
Updated to Better Serve U.S. Policy Needs, GAO-02-876, (Washington, 
D.C.: Sept. 24, 2002). 

[22] The Compliance Liaison Program is a public/private partnership 
that consists of 250 congressional offices, 96 trade associations, 71 
District Export Councils, 53 state government offices, and 26 other 
business or trade organizations. 

[23] According to Commerce, a fourth standards attaché position has 
been approved and will be posted in Beijing, China, in August 2005. 

[24] See GAO-05-53. 

[25] State officials noted that while the use of classified 
communication systems has increased in recent years, this is not 
necessarily its primary means of communicating information on trade 
issues. 

[26] State officials told us that even though the information may not 
be classified, State staff use classified systems to send some 
information in order to protect the sources of the information. 

[27] Title XXI of the Trade Act of 2002, Pub. L. No. 107-210. 

[28] These countries are Botswana, Colombia, Ecuador, Lesotho, Namibia, 
Oman, Panama, Peru, South Africa, Swaziland, Thailand, and the United 
Arab Emirates. 

[29] The number of State economic officers has increased since 2000, 
but State officials noted that if other agencies reduce their number of 
staff overseas, the workload for State officials will increase. 

[30] These data include Commercial Service Officers and Foreign Service 
Nationals. 

[31] GAO, Embassy Management: Actions Are Needed to Increase Efficiency 
and Improve Delivery of Administrative Support Services, GAO-04-511 
(Washington, D.C.: Sept. 7, 2004). 

[32] GAO, Embassy Construction: Proposed Cost-Sharing Program Could 
Speed Construction and Reduce Staff Levels, but Some Agencies Have 
Concerns, GAO-05-32 (Washington, D.C.: Nov. 15, 2004). 

[33] See GAO/NSIAD-00-76. 

[34] Office of the U.S. Trade Representative, Coordinating the 
Interagency Monitoring and Enforcement of Trade Agreements: Report to 
the Senate and House of Representatives Committees on Appropriations 
(Washington, D.C.: 2004). 

[35] In another overseas post (Beijing, China), Commerce staff were 
able to participate in the course without paying tuition to State 
because Commerce staff provided the classroom and administrative 
support for the course. 

[36] Sanitary and phytosanitary standards are measures taken to protect 
animal and plant health. 

[37] APHIS is responsible for protecting and promoting U.S. 
agricultural health, administering the Animal Welfare Act, and carrying 
out wildlife damage management activities. FSIS is responsible for 
ensuring that the nation's commercial supply of meat, poultry, and egg 
products is safe, wholesome, and correctly labeled and packaged. 

[38] According to USTR, the most recent interagency effort regarding 
resources for monitoring and enforcing trade agreements was in response 
to a 2004 congressional mandate. In this effort, USTR surveyed all the 
Trade Policy Staff Committee subcommittees regarding their efforts to 
monitor and enforce trade agreements and the resources necessary to 
undertake these efforts. 

[39] GAO, Managing for Results: Barriers to Interagency Coordination, 
GAO/GGD-00-106 (Washington, D.C.: Mar. 29, 2000). 

[40] GAO, International Trade: Intensifying Free Trade Negotiating 
Agenda Calls for Better Allocation of Staff and Resources, GAO-04-233 
(Washington, D.C.: Jan. 12, 2004). 

[41] After reviewing Treaties in Force and meeting with officials from 
State's Office of Treaty Affairs, we determined that State relies on 
other agencies to report trade agreements to them and does not have a 
reliable procedure for removing any trade agreements from its list that 
were no longer in force. Therefore, we determined that the information 
was not sufficiently reliable for the purpose of accurately determining 
the number of trade agreements currently in force. 

[42] The United States has no bilateral trade agreements with 87 
countries. 

[43] These three archives do not represent the entire universe of trade 
agreements. For example, State also keeps track of some trade 
agreements in its annual publication Treaties in Force. Other agencies 
may track trade agreements for their own purposes as necessary. 

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