Export Promotion:

Problems in Commerce's Programs

NSIAD-89-44: Published: Jan 26, 1989. Publicly Released: Jan 26, 1989.

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In response to a congressional request, GAO reviewed the U.S. and Foreign Commercial Service's (US&FCS) foreign operations and progress in revitalizing U.S. export promotion efforts.

GAO found that: (1) US&FCS was more responsive to overseas governments and businesses than the Department of State; (2) although the US&FCS budget remained constant, its program costs increased, resulting in staff reductions at overseas posts and reductions in some export promotion activities; (3) the level of participation by some small- and medium-sized business firms decreased because of the elimination of previous government subsidies that encouraged firms to exhibit their goods overseas, and the privatization of some events; (4) a 1980 reorganization of the International Trade Administration (ITA), along with a major realignment, resulted in a substantial number of new assistant-secretary-level positions, compartmentalization of trade activities, and a lack of coordination on trade events requiring joint efforts; (5) ITA had not established formal guidelines outlining various units' duties and responsibilities for planning and executing trade events; (6) the absence of central management authority resulted in poor event selection and inadequate support for some events; (7) overseas posts wasted time in planning and arranging events that were cancelled, resulting in continuous rescheduling; (8) US&FCS developed an automated trade information database with current marketing and trade information, and expected full implementation by February 1989, with costs totalling $39.9 million through 1993; and (9) the US&FCS trade information system would not be fully operational because it was in various stages of development and had many technical, management, and resource problems.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Commerce has taken other action to streamline the reporting system. Commerce retained the quarterly statistical report because it was needed for multiple management purposes.

    Recommendation: The Secretary of Commerce should direct the Under Secretary for International Trade to combine the quarterly statistical report and the monthly narrative highlight report.

    Agency Affected: Department of Commerce

  2. Status: Closed - Implemented

    Comments: Commerce has revised the events management process.

    Recommendation: The Secretary of Commerce should direct the Under Secretary for International Trade to issue instructions that all proposals for ITA-approved events must be supported by detailed market research and that the proposed location should be compatible with the best prospects identified in annual country marketing plans.

    Agency Affected: Department of Commerce

  3. Status: Closed - Implemented

    Comments: Commerce has revised the trade events management system, and shortened the planning process by 6 months.

    Recommendation: The Secretary of Commerce should direct the Under Secretary for International Trade to formalize the trade promotion event schedule and require periodic reports on the status of each event, including developing a firmer event schedule, establishing management controls over event additions and cancellations, and reducing the current 24-month planning interval for trade events.

    Agency Affected: Department of Commerce

  4. Status: Closed - Implemented

    Comments: Commerce developed formal guidelines outlining formal duties and responsibilities of each ITA unit. This recommendation was implemented on August 1, 1989.

    Recommendation: The Secretary of Commerce should direct the Under Secretary for International Trade to develop guidelines outlining the duties and responsibilities of each ITA unit and operational procedures and instructions to govern the event planning, selection, and implementation processes.

    Agency Affected: Department of Commerce

  5. Status: Closed - Implemented

    Comments: Commerce plans to take other action to address the identified deficiencies.

    Recommendation: The Secretary of Commerce should reorganize ITA to reflect its major responsibilities and its two key trade-related missions.

    Agency Affected: Department of Commerce

  6. Status: Closed - Implemented

    Comments: ITA has revised its Trade Fair Certification marketing plan to include a process to evaluate participation by small- and medium-sized and new-to-export/new-to-market firms.

    Recommendation: The Secretary of Commerce should direct the Under Secretary for International Trade to establish a process to evaluate the trade show certification program's effectiveness in meeting congressional and ITA export promotion objectives of expanding the volume of exports by small- and medium-sized and new-to-export/new-to-market firms.

    Agency Affected: Department of Commerce

  7. Status: Closed - Implemented

    Comments: Commerce is testing an alternative approach which should accomplish the objective of this recommendation. The new certification will require organizers to describe plans to recruit small- and medium-sized firms.

    Recommendation: The Secretary of Commerce should direct the Under Secretary for International Trade to revise the regulations for the trade show certification program to require, as a condition for U.S. government certification, that applicants agree to meet participation targets or goals for small- and medium-sized firms and new exporters.

    Agency Affected: Department of Commerce

  8. Status: Closed - Implemented

    Comments: An independent technical review of CIMS was completed by Price Waterhouse in November 1989. The system is being revised in response to new information needs identified in the December 1989 Strategic Review of US&FCS services.

    Recommendation: The Secretary of Commerce should commission an independent expert review of the Commercial Information Management System's (CIMS) technical status and the potential to overcome technical problems and develop projections of total costs to fully implement and maintain the system. The Secretary should then direct the Under Secretary for International Trade to establish a new management structure to provide oversight of system implementation and expansion, as required by the Omnibus Trade and Competitiveness Act of 1988.

    Agency Affected: Department of Commerce

 

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