International Trade:

An Analysis of Free Trade Agreements and Congressional and Private Sector Consultations under Trade Promotion Authority

GAO-08-59: Published: Nov 7, 2007. Publicly Released: Dec 7, 2007.

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Congress granted the President Trade Promotion Authority (TPA) to negotiate agreements, including free trade agreements (FTA) in 2002. TPA stipulated negotiating objectives and procedural steps for the administration, including consulting with Congress and trade advisory committees. TPA lapsed in July 2007 amidst questions about its use. GAO was asked to review: (1) What FTAs have been pursued under TPA and why? (2) Overall, what is the economic significance of these agreements for the United States? (3) What is the nature of the consultation process for Congress and how well has it worked in practice? (4) What is the nature of the consultation process for trade advisory committees, and how well has it worked in practice? GAO interviewed staff of the Office of the U.S. Trade Representative (USTR), the International Trade Commission (ITC), congressional committees with jurisdiction, trade advisory committees, and others, and reviewed USTR documents.

In the 5-year period thatTPA was granted to the President, from 2002-2007, the United States pursued 17 FTAs with 47 countries for a variety of foreign and economic policy reasons. Six FTAs have been approved and are in force, and negotiations for another 4 FTAs have been concluded. The United States has simultaneously pursued comprehensive, high-standard trade agreements on the bilateral and multilateral levels. Trade with countries for which FTAs were pursued under TPA comprises about 16 percent of U.S. trade and foreign direct investment. Twenty-seven percent of U.S. trade is with countries with FTAs in force prior to TPA (e.g., Canada and Mexico); 56 percent is with countries with which the United States does not have FTAs. The largest U.S. trade partners not pursued under TPA are the European Union, Japan, and China; the rest account for relatively small shares of U.S. trade. USTR held 1,605 consultations with congressional committee staff from August 2002 through April 2007, but satisfaction with the consultations was mixed. About two-thirds of these meetings were with the House and Senate trade and agriculture committees. Almost all the congressional staff GAO contacted viewed the consultations as providing good information, but slightly more than half said that they did not provide opportunities for real input or influence. These staff often said that they were not given sufficient time to provide meaningful input. The trade advisory committee chairs GAO contacted said that USTR and managing agencies consulted with their committees fairly regularly, although process issues at times hindered some from functioning effectively. For example, about half said that the 30-day deadline for reporting on the likely impact of FTAs can be difficult to meet, and the ITC had a similar problem. In addition, adherence to statutory representation requirements is not always transparent. Several committees have not been able to meet while their charters were expired, or members had not been reappointed. However, USTR and managing agencies are not required to report to Congress such lapses in a committee's ability to meet.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Certain circumstances were required for Congress to have an opportunity to act on GAO's recommendation. Specifically, the said deadlines were included as part of the 2002 Bipartisan Trade Promotion Authority legislation which expired in July 2007. The President has not requested a renewal of Trade Promotion Authority in the 4 years since this matter for Congressional consideration was made. In the past, such a Presidential request has served as the starting point for discussions with Congress on what such legislation should include. Moreover, the current USTR has suggested the President would not seek TPA until negotiations towards a Transpacific Partnership Agreement are more advanced. As a result, Congress has not had occasion to act on GAO's recommendation yet. Nevertheless, GAO has reminded relevant committee staff of GAO's suggestion.

    Matter: To assist the U.S. Trade Representative and the other agencies in improving the operations and input of the trade advisory committees, Congress may wish to consider extending the reporting deadlines for the trade advisory committees and the ITC by 15 days, giving them 45 days and 195 days, respectively.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In June 2011 and August 2012, USTR staff told us that they have developed a general, although unwritten, understanding with congressional staff that they will share information about any new trade proposals well in advance of tabling them with negotiating partners. They said their current practice goes far beyond the Trade Promotion Authority requirement of providing documents 5 days in advance of consultation meetings. The USTR staff provided examples of consultations over new trade proposals in the ongoing Trans-Pacific Partnership (TPP) negotiations being initiated weeks or months in advance of tabling those proposals. To assure they are on the same page and enable Congress to prepare, they have also tried to establish a consultation schedule with staff on the committees of jurisdiction a couple of months in advance. These steps occurred in tandem with improvements in Congressional access to confidential negotiating proposals. They said USTR is willing to brief virtually any congressional member, staff, or group on the status of negotiations and has held hundreds of meetings and conference calls on the TPP negotiations. For members of Congress who do not have access to the classified negotiating documents on USTR's secure website, USTR is also willing to meet in person to show and review trade documents.

    Recommendation: To facilitate better consultations with Congress, the U.S. Trade Representative should take steps to reach agreement with the committees of jurisdiction on the amount of time they need to receive information in advance of consultation meetings in order to afford them better opportunity for meaningful input.

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

  2. Status: Closed - Implemented

    Comments: Since GAO's 2007 report, USTR has worked with congressional offices to complete the extension of a secure website to both House and Senate committee staff. The website allows committee staff with clearances to have electronic access to review trade negotiation documents before USTR holds consultation meetings. Previously, USTR provided paper copies to House and Senate security offices, which took time to log in and required staff to visit secure facilities in the Capitol to read them. USTR reported that improvements to the system were made in April 2011, allowing web-based notification, review, and comment capability for congressional advisors. This system has been used for congressional review of documents pertaining to the Korea, Panama, and Colombia trade agreements and the ongoing Trans-Pacific Partnership negotiations.

    Recommendation: To facilitate better consultations with Congress, the U.S. Trade Representative should work together with Congress on ways to improve access to information prior to consultation meetings, such as through security clearances, so that congressional staff can better assess the status of negotiations and provide advice to USTR.

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

  3. Status: Closed - Implemented

    Comments: In response to GAO's recommendation, the Commerce Department has taken steps to more clearly explain to the public (in a May 2010 Federal Register notice and on its website) how it determines which representatives are appointed to its 16 Industry Trade Advisory Committees (ITACs). Specifically, Commerce indicated that an important goal is striving for balanced representation among industry subsectors on each committee, as well as consideration of geographic balance and other factors. Commerce officials told us that the questionnaire used to vet ITAC appointments now shows which industry subsector the nominee comes from and the appointment letter states that the individual is appointed as a representative of that subsector. The officials said they use standard industry definitions from the North American Industry Classification System to check the composition of the ITACs across subsectors. In the May 2010 public notice requesting nominations for the ITACs, Commerce included new wording stating that eligible applicants would be considered for ITAC membership based partly on their ability to represent an industry subsector's interests on trade matters along with the interests of the entity that sponsors them. In terms of ongoing public reporting, the Department's external ITAC website provides information on eligibility and selection of members, stating that USTR and Commerce "will make every effort to maintain balanced industry representation on each Committee and among Committees. In order to achieve balanced representation, consideration will be given to balance among sectors, product lines, small, medium, and large firms, and geographic areas."

    Recommendation: To provide transparency and accountability to the composition of the trade advisory committees, the Secretaries of Agriculture, Commerce, and Labor should work with the U.S. Trade Representative to annually report publicly on how they meet the representation requirements of the Federal Advisory Committee Act and the Trade Act of 1974, including clarifying which interest members represent in a manner similar to the Department of Commerce and explaining how they determined which representatives they placed on committees.

    Agency Affected: Department of Commerce

  4. Status: Closed - Implemented

    Comments: In our November 2007 report, International Trade: An Analysis of Free Trade Agreements and Congressional and Private Sector Consultations under Trade Promotion Authority, we recommended that the Office of the U.S. Trade Representative (USTR) and the Department of Labor extend the Labor Advisory Committee charter from 2 years to 4 years, to be in alignment with the rest of the trade advisory committee system. USTR concurred with this recommendation. In May 2008, USTR and the Department of Labor renewed the Labor Advisory Committee charter and extended it from 2 years to 4 years in length.

    Recommendation: To promote greater efficiency in trade advisory committee function, the Secretary of Labor should work with the U.S. Trade Representative to extend the Labor Advisory Committee charter from 2 years to 4 years, to be in alignment with the rest of the trade advisory committee system.

    Agency Affected: Department of Labor

  5. Status: Closed - Implemented

    Comments: In our November 2007 report, International Trade: An Analysis of Free Trade Agreements and Congressional and Private Sector Consultations under Trade Promotion Authority, we recommended that the Office of the U.S. Trade Representative (USTR) work with the Departments of Agriculture and Labor to annually report publicly on how they meet the representation requirements of the Federal Advisory Committee Act (FACA) and the Trade Act of 1974, including clarifying which interest trade advisory committee members represent in a manner similar to the Department of Commerce. At the time, a member's place of employment was listed in the public FACA database, but particularly in cases where that happened to be a law firm, large company, etc., it was impossible to tell from that information alone what interest a specific member represented. In response, USTR and the Department of Labor began to include a "Represented Group" column in the FACA database for members of the Labor Advisory Committee (LAC).

    Recommendation: To provide transparency and accountability to the composition of the trade advisory committees, the Secretaries of Agriculture, Commerce, and Labor should work with the U.S. Trade Representative to annually report publicly on how they meet the representation requirements of the Federal Advisory Committee Act and the Trade Act of 1974, including clarifying which interest members represent in a manner similar to the Department of Commerce and explaining how they determined which representatives they placed on committees.

    Agency Affected: Department of Labor

  6. Status: Closed - Implemented

    Comments: In our November 2007 report, International Trade: An Analysis of Free Trade Agreements and Congressional and Private Sector Consultations under Trade Promotion Authority, we recommended that the Office of the U.S. Trade Representative (USTR) work with the Departments of Agriculture and Labor to annually report publicly on how they meet the representation requirements of the Federal Advisory Committee Act (FACA) and the Trade Act of 1974, including clarifying which interest trade advisory committee members represent in a manner similar to the Department of Commerce. At the time, a member's place of employment was listed in the public FACA database, but particularly in cases where that happened to be a law firm, large company, etc., it was impossible to tell from that information alone what interest a specific member represented. In response, USTR and the Department of Agriculture began to include a "Represented Group" column in the FACA database for members of the Agricultural Technical Advisory Committees (ATACs) as well as the Agricultural Policy Advisory Committee (APAC).

    Recommendation: To provide transparency and accountability to the composition of the trade advisory committees, the Secretaries of Agriculture, Commerce, and Labor should work with the U.S. Trade Representative to annually report publicly on how they meet the representation requirements of the Federal Advisory Committee Act and the Trade Act of 1974, including clarifying which interest members represent in a manner similar to the Department of Commerce and explaining how they determined which representatives they placed on committees.

    Agency Affected: Department of Agriculture

  7. Status: Closed - Implemented

    Comments: USDA reported in July 2011 that the six Agricultural Technical Advisory Committee (ATAC) charters and the Agricultural Policy Advisory Committee (APAC) charter were renewed in a timely fashion on June 9, 2011, within 3 days after they expired, and that the committees are operational for the purposes of providing consultation and advice. The renewal of the charters was sufficiently timely so as to avoid any lapse in committee meetings. The Federal Advisory Committee Act database also shows that the ATAC and APAC charters have been updated as of August 2011.

    Recommendation: To assure Congress that it is receiving the private sector advisory opinions that it intended in the Trade Act of 1974, the Secretaries of Agriculture and Labor should work with the U.S. Trade Representative to start the advisory committee rechartering and member appointment processes with sufficient time to avoid any lapse in the ability to hold committee meetings.

    Agency Affected: Department of Agriculture

  8. Status: Closed - Implemented

    Comments: DOL reported in June 2012 that the Labor Advisory Committee for Trade Negotiations and Trade Policy (LAC) charter was renewed on May 25, 2012. The Federal Advisory Committees database also shows that the LAC charter was renewed May 2012. The renewal of the charter was sufficiently timely so as to avoid any lapse in committee meetings. In addition, DOL reported in August 2012 that nearly all of the members have renewed their LAC member appointment. Due to the cycle of LAC meetings, DOL expects to hold their next meeting on October 4, 2012. DOL reported that the pending membership appointments have allowed them to avoid any lapse in meetings.

    Recommendation: To assure Congress that it is receiving the private sector advisory opinions that it intended in the Trade Act of 1974, the Secretaries of Agriculture and Labor should work with the U.S. Trade Representative to notify Congress if a committee is unable to meet for more than 3 months due to an expired charter or a delay in the member appointment process.

    Agency Affected: Department of Labor

  9. Status: Closed - Implemented

    Comments: DOL reported in June 2012 that the Labor Advisory Committee for Trade Negotiations and Trade Policy (LAC) charter was renewed on May 25, 2012. The Federal Advisory Committees database also shows that the LAC charter was renewed May 2012. The renewal of the charter was sufficiently timely so as to avoid any lapse in committee meetings. In addition, DOL reported in August 2012 that nearly all of the members have renewed their LAC member appointment. Due to the cycle of LAC meetings, DOL expects to hold their next meeting on October 4, 2012. DOL reported that the pending membership appointments have allowed them to avoid any lapse in meetings.

    Recommendation: To assure Congress that it is receiving the private sector advisory opinions that it intended in the Trade Act of 1974, the Secretaries of Agriculture and Labor should work with the U.S. Trade Representative to start the advisory committee rechartering and member appointment processes with sufficient time to avoid any lapse in the ability to hold committee meetings.

    Agency Affected: Department of Labor

  10. Status: Closed - Implemented

    Comments: USDA reported in July 2011 that the six Agricultural Technical Advisory Committee (ATAC) charters and the Agricultural Policy Advisory Committee (APAC) charter were renewed in a timely fashion on June 9, 2011, within 3 days after they expired, and that the committees are operational for the purposes of providing consultation and advice. The renewal of the charters was sufficiently timely so as to avoid any lapse in committee meetings. The Federal Advisory Committee Act database also shows that the ATAC and APAC charters have been updated as of August 2011.

    Recommendation: To assure Congress that it is receiving the private sector advisory opinions that it intended in the Trade Act of 1974, the Secretaries of Agriculture and Labor should work with the U.S. Trade Representative to notify Congress if a committee is unable to meet for more than 3 months due to an expired charter or a delay in the member appointment process.

    Agency Affected: Department of Agriculture

 

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