Foreign Assistance:

U.S. Trade Capacity Building Extensive, but Its Effectiveness Has Yet to Be Evaluated

GAO-05-150: Published: Feb 11, 2005. Publicly Released: Feb 11, 2005.

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Many developing countries have expressed concern about their inability to take advantage of global trading opportunities. The United States considers this ability a key factor in reducing poverty, achieving economic growth, raising income levels, and promoting stability. U.S. trade capacity building assistance is designed to address these concerns. GAO (1) identified the nature and extent of U.S. trade capacity building; (2) described how agencies implement such assistance, including coordination; and (3) assessed whether agencies evaluate its effectiveness.

U.S. trade capacity building is primarily a collection of existing trade and development activities placed under the umbrella of trade capacity building. The U.S. government initiated an annual governmentwide survey in 2001 to identify U.S. trade capacity building efforts, which it defined as assistance meant to help countries become aware of and accede to the World Trade Organization (WTO); implement WTO agreements; and build the physical, human, and institutional capacity to benefit from trade. U.S. agencies self-reported that they had provided almost $2.9 billion in trade capacity building assistance to over 100 countries from fiscal years 2001 through 2004. The Agency for International Development (USAID) reported providing about 71 percent of the trade capacity building funding. Agencies are coordinating their assistance through the trade capacity building interagency group formed in 2002 to help countries negotiate and implement U.S. free trade agreements. Most of the U.S. agencies we reviewed are not systematically measuring the results of their trade capacity building assistance or evaluating its effectiveness. Although some agencies have set program goals for building trade capacity, they have not generally developed performance indicators, compiled data, or analyzed the results in terms of building trade capacity. USAID's March 2003 strategy for building trade capacity includes a limited number of performance indicators. USAID officials have stated that developing such indicators is difficult but have begun work independently and with other international donors toward that end. Without a strategy for evaluating the effectiveness of its trade capacity building assistance, the United States cannot identify what works and what does not work to ensure the reasonable use of resources for these efforts.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In response to the GAO recommendation, USAID, in consultation with USTR, is developing a trade capacity building evaluation framework to be used as a strategy for evaluating the effectiveness of the U.S. government's trade capacity building activities. Toward this effort, USAID is now in the process of collecting project information from its field missions and implementing partners.

    Recommendation: To provide more objective information on the progress of U.S. trade capacity building efforts and allow the United States to assess their effectiveness, the Administrator, U.S. Agency for International Development, and the U.S. Trade Representative, as co-chairs of the trade capacity building interagency group, in consultation with other agencies that fund and implement trade capacity building assistance, should develop a costeffective strategy to systematically monitor and measure program results and to evaluate the effectiveness of U.S. trade capacity building assistance.

    Agency Affected: Executive Office of the President: Office of the U.S. Trade Representative

  2. Status: Closed - Implemented

    Comments: In our February 2005 report (Foreign Assistance: U.S. Trade Capacity Building Extensive, but Its Effectiveness Has Yet to Be Evaluated. Feb. 11, 2005) we recommended that USAID set milestones for completing its efforts to develop trade capacity building performance indicators to be used by its field missions to monitor and measure the results of their trade capacity building efforts, and by relevant bureaus to conduct periodic program evaluations. In March 2006, a USAID official reported that the agency had developed indicators to monitor and assess its programs and activities, including those related to trade. They consisted of "core components", the most relevant to trade capacity building (TCB) being "increase trade and investment." Under these components were "common indicators" designed in the form of questions sent out to field personnel (country missions). The answers were to be sent back to headquarters to create progress reports. Examples of questions under the core component of "Increase Trade and Investment" include: "Has your mission engaged in activities aimed at increasing participation in international trade and investment, including regional trade? If yes, did it have an impact on integrating the country with the global economy or improve regional trade in FY05? If yes, describe; if no why not." More recently in January 2008, another USAID official reported that USAID had collected indicators data for TCB under the first consolidated (e. worldwide) Operational Plan conducted under the Administration's foreign assistance reforms for FY07. The official reported that some common indicators considered to be most important for measuring country progress related to TCB included number of customs harmonization procedures implemented in accordance with internationally accepted standards as a result of U.S. government assistance, and number of consultative processes with private sector as a result of U.S. government assistance. USAID had collected FY06 data, and preliminary FY07 data subject to verification for these and other indicators and compared them to targets for each fiscal year, as well as identifying leading country recipient performers. In addition, USAID is in the preliminary stages of developing a workplan that envisions organizing information from the TCB data base (the TCB data base derives from a survey initiated in 2001 to capture qualitatively and quantitatively the nature and extent of existing trade-related capacity building activities), and other secondary sources to conduct a series of evaluations over the next several years.

    Recommendation: To provide more objective information on the progress of U.S. trade capacity building efforts and allow the United States to assess their effectiveness, the Administrator, U.S. Agency for International Development, and the U.S. Trade Representative, as co-chairs of the trade capacity building interagency group, in consultation with other agencies that fund and implement trade capacity building assistance, should develop a costeffective strategy to systematically monitor and measure program results and to evaluate the effectiveness of U.S. trade capacity building assistance.

    Agency Affected: Department of State: Agency for International Development

  3. Status: Closed - Implemented

    Comments: In our February 2005 report (Foreign Assistance: U.S. Trade Capacity Building Extensive, but Its Effectiveness Has Yet to Be Evaluated. Feb. 11, 2005) we recommended that USAID set milestones for completing its efforts to develop trade capacity building performance indicators to be used by its field missions to monitor and measure the results of their trade capacity building efforts, and by relevant bureaus to conduct periodic program evaluations. In March 2006, a USAID official reported that the agency had developed indicators to monitor and assess its programs and activities, including those related to trade. They consisted of "core components", the most relevant to trade capacity building (TCB) being "increase trade and investment." Under these components were "common indicators" designed in the form of questions sent out to field personnel (country missions). The answers were to be sent back to headquarters to create progress reports. Examples of questions under the core component of "Increase Trade and Investment" include: "Has your mission engaged in activities aimed at increasing participation in international trade and investment, including regional trade? If yes, did it have an impact on integrating the country with the global economy or improve regional trade in FY05? If yes, describe; if no why not." More recently in January 2008, another USAID official reported that USAID had collected indicators data for TCB under the first consolidated (e. worldwide) Operational Plan conducted under the Administration's foreign assistance reforms for FY07. The official reported that some common indicators considered to be most important for measuring country progress related to TCB included number of customs harmonization procedures implemented in accordance with internationally accepted standards as a result of U.S. government assistance, and number of consultative processes with private sector as a result of U.S. government assistance. USAID had collected FY06 data, and preliminary FY07 data subject to verification for these and other indicators and compared them to targets for each fiscal year, as well as identifying leading country recipient performers. In addition, USAID is in the preliminary stages of developing a workplan that envisions organizing information from the TCB data base (the TCB data base derives from a survey initiated in 2001 to capture qualitatively and quantitatively the nature and extent of existing trade-related capacity building activities), and other secondary sources to conduct a series of evaluations over the next several years.

    Recommendation: To provide more objective information on the progress of U.S. trade capacity building efforts and allow the United States to assess their effectiveness, the Administrator, U.S. Agency for International Development, should direct the agency to set milestones for completing its efforts to develop trade capacity building performance indicators to be used by (1) its field missions to monitor and measure the results of their trade capacity building efforts and (2) its relevant agency bureaus to conduct periodic program evaluations. The U.S. Agency for International Development should share its findings with other agencies that fund and implement trade capacity building assistance.

    Agency Affected: Department of State: Agency for International Development

 

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