International Trade:

Strategy Needed to Better Monitor and Enforce Trade Agreements

NSIAD-00-76: Published: Mar 14, 2000. Publicly Released: Mar 14, 2000.

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Pursuant to a congressional request, GAO reviewed whether federal agencies have the capacity to monitor and enforce trade agreements, focusing on: (1) the federal structure for monitoring and enforcing trade agreements; (2) the increasing complexity of the federal monitoring and enforcement task and key activities that federal agencies must perform; and (3) whether the Office of the U.S. Trade Representative (USTR), the Department of Commerce, and the Department of Agriculture (USDA) have the capacity to handle their monitoring and enforcement workload, that is, whether their human capital resources and support mechanisms enable them to perform needed monitoring and enforcement activities.

GAO noted that: (1) U.S. government efforts to monitor and enforce trade agreements involve at least 17 federal agencies, with USTR having primary statutory responsibility; (2) the other agencies' contributions to federal monitoring and enforcement efforts vary according to their legal requirements, mission, and expertise, but Commerce, USDA, and the Department of State have substantial monitoring and enforcement roles; (3) USTR and Commerce both created offices in 1996 specifically dedicated to trade agreement monitoring and enforcement; (4) at least 13 other federal agencies provide policy input or technical expertise to U.S. monitoring and enforcement efforts; (5) several interagency mechanisms exist to coordinate the contributions and perspectives of the multiple agencies involved in monitoring and enforcement; (6) private sector input is obtained from statutory advisory councils, informal advisory groups, trade associations, and private companies; (7) the task of monitoring and enforcing foreign compliance with trade agreements had become more complex as the number of trade agreements and trade agreement partners has grown and the issues covered by trade agreements have expanded; (8) in the past, trade agreements primarily helped to reduce tariffs charged on merchandise imports; (9) however, current trade agreements address more complicated types of import restrictions, such as product standards and food safety regulations, and cover a broader range of issues, such as trade-related investment measures or intellectual property rights; (10) federal agencies that monitor and enforce trade agreements must be able to perform several key activities that include identifying and prioritizing compliance problems, analyzing information about them, and seeking ways to resolve them; (11) although USTR, Commerce, and USDA have taken steps to improve their monitoring and enforcement efforts, certain capacity weaknesses limit their ability to handle the federal monitoring and enforcement workload; (12) officials at all three agencies told GAO that steadily declining staff levels in recent years have adversely impacted the agencies' monitoring and enforcement activities; (13) agency officials also told GAO that although the technical complexity of trade agreements has been increasing, the expertise needed to analyze compliance problems is not always available; and (14) although private sector information about trade agreement compliance problems is essential to federal monitoring and enforcement efforts, some agency offices that GAO examined had better mechanisms than others for obtaining comprehensive and balanced input from the private sector.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In response, USDA, in conjunction with USTR and Commerce, helped develop a trade compliance training course through the Department of State's Foreign Service Institute. This course is available to monitoring and enforcement staff for federal agencies. In addition, USDA helped create the Monitoring and Enforcement Subcommittee of the interagency Trade Policy Staff Committee to strengthen the existing interagency process for prioritizing the monitoring and enforcement workload.

    Recommendation: In order to improve U.S. capacity to monitor and enforce trade agreements, USTR, the Secretary of Commerce, and the Secretary of Agriculture, in consultation with other relevant agencies, should develop a strategy for how the U.S. government will manage its growing trade agreement monitoring and enforcement workload. This strategy should: (1) assess the human capital skills needed and available to monitor and enforce U.S. trade agreements now and in the future and determine how any gaps can be addressed; (2) consider whether the current workload is targeted toward the highest risks and properly allocated among key agencies; and (3) assess whether the mechanisms for obtaining private sector input provide full and balanced coverage of existing and future trade issues.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: In response, Commerce, in conjunction with USTR and USDA, helped develop a trade compliance training course through the Department of State's Foreign Service Institute. This course is available to monitoring and enforcement staff for federal agencies. In addition, Commerce helped create the Monitoring and Enforcement Subcommittee of the interagency Trade Policy Staff Committee to strengthen the existing interagency process for prioritizing the monitoring and enforcement workload.

    Recommendation: In order to improve U.S. capacity to monitor and enforce trade agreements, USTR, the Secretary of Commerce, and the Secretary of Agriculture, in consultation with other relevant agencies, should develop a strategy for how the U.S. government will manage its growing trade agreement monitoring and enforcement workload. This strategy should: (1) assess the human capital skills needed and available to monitor and enforce U.S. trade agreements now and in the future and determine how any gaps can be addressed; (2) consider whether the current workload is targeted toward the highest risks and properly allocated among key agencies; and (3) assess whether the mechanisms for obtaining private sector input provide full and balanced coverage of existing and future trade issues.

    Agency Affected: Department of Commerce

  3. Status: Closed - Implemented

    Comments: In response, USTR, in conjunction with USDA and Commerce, helped develop a trade compliance training course through the Department of State's Foreign Service Institute. This course is available to monitoring and enforcement staff for federal agencies. In addition, USTR helped create the Monitoring and Enforcement Subcommittee of the interagency Trade Policy Staff Committee to strengthen the existing interagency process for prioritizing the monitoring and enforcement workload.

    Recommendation: In order to improve U.S. capacity to monitor and enforce trade agreements, USTR, the Secretary of Commerce, and the Secretary of Agriculture, in consultation with other relevant agencies, should develop a strategy for how the U.S. government will manage its growing trade agreement monitoring and enforcement workload. This strategy should: (1) assess the human capital skills needed and available to monitor and enforce U.S. trade agreements now and in the future and determine how any gaps can be addressed; (2) consider whether the current workload is targeted toward the highest risks and properly allocated among key agencies; and (3) assess whether the mechanisms for obtaining private sector input provide full and balanced coverage of existing and future trade issues.

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

 

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