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Before the Subcommittee on Trade, Committee on Ways and Means, House of 

United States Government Accountability Office: 

For Release on Delivery: 
Expected at 10:00 a.m. EDT:
Tuesday, July 21, 2009: 

International Trade: 

Prior Updates of the Trade Advisory System Offer Insights for Current 

Statement of Loren Yager, Director:
International Affairs and Trade: 


[End of section] 

Mr. Chairman and Members of the Subcommittee: 

Thank you for the opportunity to appear today before the Subcommittee 
to provide insight from GAO's work on the issues associated with the 
private sector trade advisory system and public participation in the 
development of trade policy. In particular, we have provided one 
detailed report specifically on the subject of the trade advisory 
system[Footnote 1] and another on the subject of Congressional and 
private sector consultations under Trade Promotion Authority[Footnote 
2]. The numerous negotiators, agency officials, and committee members 
with whom we met in the course of our work emphasized that the trade 
policy advisory committee system plays an important role in U.S. trade 
policy and has made valuable contributions to U.S. trade agreements. 

In my statement today, I will provide a summary of key findings from 
the comprehensive report on the trade advisory system that we provided 
to the Congress in 2002, as well as from our more recent report in 2007 
on the Congressional and private sector consultations under Trade 
Promotion Authority.[Footnote 3] In particular, I will highlight our 
recommendations in three key areas--committee consultations, logistics, 
and overall system structure--as well as the changes that have been 
made by the U.S. agencies since those reports were published. I believe 
that this material is directly relevant to the stated focus of this 
hearing as the reports are based on extensive input from major 
stakeholder groups and provide numerous insights into the revisions to 
the system that have been implemented as a result of the GAO 

My remarks are based primarily on the two assignments mentioned above 
that GAO conducted on the trade advisory system and the consultation 
process. To address these issues, we surveyed 720 of the 735 committee 
members in 2002 about their experiences in the system; interviewed 
every type of participant in the committee process, including selected 
committee chairs, members, relevant U.S. officials, nongovernmental 
interest groups, and trade experts; and analyzed USTR and committee 
data and documents. In addition, we collected information from USTR and 
other agencies on the changes that they have made in recent years in 
response to the recommendations in those reports. We conducted our work 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provided a reasonable basis for our findings and 
conclusions based on our audit objectives. 


Congress established the trade advisory committee system in Section 135 
of the Trade Act of 1974 as a way to institutionalize domestic input 
into U.S. trade negotiations from interested parties outside the 
federal government. This system was considered necessary because of 
complaints from some in the business community about their limited and 
ad hoc role in previous negotiations. The 1974 law created a system of 
committees through which such advice, along with advice from labor and 
consumer groups, was to be sought. 

The system was originally intended to provide private sector input to 
global trade negotiations occurring at that time (the Tokyo Round). 
Since then, the original legislation has been amended to expand the 
scope of topics on which the President is required to seek information 
and advice from "negotiating objectives and bargaining positions before 
entering into a trade agreement" to the "operation of any trade 
agreement, once entered into," and on other matters regarding 
administration of U.S. trade policy.[Footnote 4] The legislation has 
also been amended to include additional interests within the advisory 
committee structure, such as those represented by the services sector 
and state and local governments. Finally, the amended legislation 
requires the executive branch to inform the committees of "significant 
departures" from their advice.[Footnote 5] The Trade Act of 1974 
required the President to seek information and advice from the trade 
advisory committees for trade agreements pursued and submitted for 
approval under the authority granted by the Bipartisan Trade Promotion 
Authority Act of 2002.[Footnote 6] The Trade Act of 1974 also required 
the trade advisory committees to provide a report on the trade 
agreements pursued under the Bipartisan Trade Promotion Authority Act 
of 2002 to the President, Congress, and USTR.[Footnote 7] This 
requirement lapsed with TPA on June 30, 2007. 

The trade advisory committees are subject to the requirements of the 
Federal Advisory Committee Act (FACA),[Footnote 8] with limited 
exceptions pertaining to holding public meetings and public 
availability of documents.[Footnote 9] One of FACA's requirements is 
that advisory committees be fairly balanced in terms of points of view 
represented and the functions the committees perform.[Footnote 10] FACA 
covers most federal advisory committees and includes a number of 
administrative requirements, such as requiring rechartering of 
committees upon renewal of the committee.[Footnote 11] 

Four agencies, led by USTR, administer the three-tiered trade advisory 
committee system. USTR directly administers the first tier overall 
policy committee, the President's Advisory Committee for Trade Policy 
and Negotiations (ACTPN), and three of the second tier general policy 
committees, the Trade Advisory Committee on Africa (TACA), the 
Intergovernmental Policy Advisory Committee (IGPAC), and the Trade and 
Environment Policy Advisory Committee (TEPAC), for which the 
Environmental Protection Agency also plays a supporting role. The 
Department of Labor co-administers the second tier Labor Advisory 
Committee (LAC) and the Department of Agriculture co-administers the 
second tier Agricultural Policy Advisory Committee (APAC). The 
Department of Agriculture also co-administers the third tier 
Agricultural Technical Advisory Committees (ATACs), while the 
Department of Commerce co-administers the third tier Industry Trade 
Advisory Committees (ITACs). Ultimately, member appointments to the 
committees have to be cleared by both the Secretary of the managing 
agency and the U.S. Trade Representative, as they are the appointing 
officials. Figure 1 illustrates the committee structure. 

Figure 1: Trade Advisory Committee Structure: 

[Refer to PDF for image: illustration] 

Top level: 
The President. 

Second level, reporting to The President: 
U.S. Trade Representative USTR). 

Third level, reporting to USTR: 
Tier 1 committee: Advise on overall trade policy; 
* President's Advisory Committee for Trade Policy and Negotiations 

Fourth level, reporting to USTR: 
Tier 2 committees: Advise on general policy areas; 
* Trade Advisory Committee on Africa; 
* Intergovernmental Policy Advisory Committee; 
* Agricultural Policy Advisory Committee, Department of Agriculture; 
* Labor Advisory Committee, Department of Labor; 
* Trade and Environment Policy Advisory Committee, Environmental 
Protection Agency. 

Fifth level, reporting to USTR: 
Tier 3 committees: Advise on technical aspects of trade agreements; 

* Agricultural Technical Advisory Committees (ATACs), Department of 
- Animal and Animal Products; 
- Tobacco, Cotton, and Peanuts; 
- Grains, Feed, and Oilseeds; 
- Processed Foods; 
- Fruits and Vegetables; 
- Sweeteners. 
* Industry Trade Advisory Committees (ITACs), Department of Commerce: 
- ITAC–1, Aerospace Equipment; 
- ITAC–2, Automotive Equipment and Capital Goods; 
- ITAC–3, Chemicals, Pharmaceuticals, Health/Science Products and 
- ITAC–4, Consumer Goods; 
- ITAC–5, Distribution Services; 
- ITAC–6, Energy and Energy Services; 
- ITAC–7, Forest Products; 
- ITAC–8, Technologies, Services and Electronic Commerce; 
- ITAC–9, Nonferrous Metals and Building Materials; 
- ITAC–10, Services and Finance Industries; 
- ITAC–11, Small and Minority Business; 
- ITAC–12, Steel; 
- ITAC–13, Textiles and Clothing; 
- ITAC–14, Customs Matters and Trade Facilitation; 
- ITAC–15, Intellectual Property; 
- ITAC–16, Standards and Technical Trade Barriers. 

Source: GAO and USTR. 

[End of figure] 

Consultations with Trade Advisory Committees Have Generally Improved: 

Our 2002 survey of trade advisory committee members found high levels 
of satisfaction with many aspects of committee operations and 
effectiveness, yet more than a quarter of respondents indicated that 
the system had not realized its potential to contribute to U.S. trade 
policy. In particular, we received comments about the timeliness, 
quality, and accountability of consultations. For example, the law 
requires the executive branch to inform committees of "significant 
departures" from committee advice.[Footnote 12] However, many committee 
members reported that agency officials informed committees less than 
half of the time when their agencies pursued strategies that differed 
from committee input. 

As a result, we made a series of recommendations to USTR and the other 
agencies to improve those aspects of the consultation process. 
Specifically, we recommended the agencies adopt or amend guidelines and 
procedures to ensure that (1) advisory committee input is sought on a 
continual and timely basis, (2) consultations are meaningful, and (3) 
committee advice is considered and committees receive substantive 
feedback on how agencies respond to their advice. 

In response to those recommendations, USTR and the other agencies made 
a series of improvements. For example, to improve consultations between 
the committee and the agencies, including member input, USTR and TEPAC 
members established a communications taskforce in 2004. As a result of 
the taskforce, USTR and EPA changed the format of principals' meetings 
to allow more discussion between the members and senior U.S. government 
officials, and they increased the frequency of liaison meetings. In 
addition, USTR instituted a monthly conference call with the chairs of 
all committees, and now holds periodic plenary sessions for ATAC and 
ITAC members. Furthermore, the agencies created a new secure Web site 
to allow all cleared advisors better access to important trade 

When we interviewed private sector advisory committee chairs again in 
2007, they were generally pleased with the numerous changes made to the 
committee system in response to our 2002 report. In particular, they 
found the secure Web site very useful. Reviews of the monthly chair 
conference call and plenary sessions were mixed, however. Chairs told 
us that their out-of-town members might find the plenaries a helpful 
way to gain an overall perspective and to hear cabinet-level speakers 
to whom they would not routinely have access, whereas others found them 
less valuable, largely due to the perceived lack of new or detailed 
information. The chairs also said that USTR and the relevant executive 
branch agencies consulted with the committees on a fairly regular 
basis, although overall views on the opportunity to provide meaningful 
input varied. For example, we heard from committee chairs who felt the 
administration took consultations seriously, while other chairs felt 
the administration told them what had already been decided upon instead 
of soliciting their advice. USTR officials told us that the fact that 
the advice of any particular advisory committee may not be reflected in 
a trade agreement does not mean that the advice was not carefully 

Changes Made to Improve Committee Logistics Have Not Been Fully Tested: 

In 2002, we found that slow administrative procedures disrupted 
committee operations, and the resources devoted to committee management 
were out of step with required tasks. In several instances, for 
example, committees ceased to meet and thus could not provide advice, 
in part because the agencies had not appointed members. However, the 
length of time required to obtain a security clearance contributed to 
delays in member appointment. To address these concerns, we recommended 
the agencies upgrade system management; and in response, they began to 
grant new advisors interim security clearances so that they could 
actively participate in the committee while the full clearance is 

Despite these actions, however, trade advisory committee chairs we 
contacted in 2007 told us certain logistics such as delays in 
rechartering committees and appointment of members still made it 
difficult for some committees to function effectively. We found several 
committees had not been able to meet for periods of time, either 
because agencies allowed their charters to lapse or had not started the 
process of soliciting and appointing members soon enough to ensure 
committees could meet once they were rechartered. The Labor Advisory 
Committee, for example, did not meet for over 2 years from September 
2003 until November 2005 due in part to delays in the member 
appointment process. These types of process delays further reduced a 
committee's ability to give timely, official advice before the 
committee was terminated, and the rechartering process had to begin 
again. This was particularly true in the case of the Labor Advisory 
Committee, which, at the time of our 2007 report, still had a 2-year 

To address these concerns, we recommended that USTR and other agencies 
start the rechartering and member appointment processes with sufficient 
time to avoid any lapse in the ability to hold committee meetings and 
that they notify Congress if a committee is unable to meet for more 
than 3 months due to an expired charter or delay in member 
appointments. Furthermore, we recommended that USTR work with the 
Department of Labor to extend the Labor Advisory Committee's charter 
from 2 years to 4 years, to be in alignment with the rest of the trade 
advisory committee system. 

USTR and the other agencies have taken some steps to address these 
recommendations. In May 2008, for example, the Labor Advisory 
Committee's charter was extended to 4 years. Not enough time has 
passed, however, to assess whether steps taken fully address the 
problems associated with rechartering and member appointment, since at 
present all committees have current charters and members appointed. 
Furthermore, even though committees are now chartered and populated, 
some of them have not met for over three years, despite ongoing 
negotiations of the Doha Round of the World Trade Organization (WTO), 
including the July 2008 ministerial meeting in Geneva. For example, 
although the ATAC charters were renewed in May 2007 and members 
appointed in January 2008, the FACA database shows that no ATAC has 
held a meeting since fiscal year 2006. In addition, although USTR held 
multiple teleconferences for all first and second tier advisors in 
fiscal year 2008, LAC and APAC members did not participate.[Footnote 
13] It is unclear, therefore, whether the administration received 
official advice from all trade advisory committees for the Doha 

Representation of Key Stakeholders Remains Important for Any Review of 
Trade Advisory Committee System: 

In addition to the need to improve certain committee logistics, we also 
found that representation of stakeholders is a key component of the 
trade advisory committee system that warrants consideration in any 
review of the system. In particular, as the U.S. economy and trade 
policy have shifted, the trade advisory committee system has needed 
adjustments to remain in alignment with them, including both a revision 
of committee coverage as well as committee composition. 

In our 2002 report, we found that the structure and composition of the 
committee system had not been fully updated to reflect changes in the 
U.S. economy and U.S. trade policy. For example, representation of the 
services sector had not kept pace with its growing importance to U.S. 
output and trade. Certain manufacturing sectors, such as electronics, 
had fewer members than their sizable trade would indicate. In general, 
the system's committee structure was largely the same as it was in 
1980, even though the focus of U.S. trade policy had shifted from 
border taxes (tariffs) toward other complex trade issues, such as 
protection of intellectual property rights and food safety 
requirements. As a result, the system had gaps in its coverage of 
industry sectors, trade issues, and stakeholders. For example, some 
negotiators reported that some key issues such as investment were not 
adequately covered. In addition, nonbusiness stakeholders such as 
environment and labor reported feeling marginalized because they have 
been selected to relatively few committees. The chemicals committee, 
representing what at the time was one of the leading U.S. export 
sectors, had been unable to meet due to litigation over whether the 
apparent denial of requests by environmental representatives for 
membership on the committee was consistent with FACA's fair balance 

In 2007, several committee chairs we interviewed also expressed the 
perception that the composition of their committees was not optimal, 
either favoring one type of industry or group over another or industry 
over nonbusiness interests. Furthermore, some members were the sole 
representative of a nonbusiness interest on their committee, and those 
we spoke with told us that although their interest was now represented, 
they still felt isolated within their own committee. The result was the 
perception that their minority perspective was not influential. At the 
same time, while Congress mandates that the advisory committee system 
is to involve representative segments of the private sector (e.g., 
industry, agriculture, and labor and environmental groups),[Footnote 
14] adherence to these statutory requirements has been deemed non- 
justiciable. For example, although the Departments of Agriculture and 
Commerce solicit new members for their committees through Federal 
Register notices which stipulate members' qualifications, including 
that they must have expertise and knowledge of trade issues relevant to 
the particular committees, neither the notices nor the committee 
charters explained how the agencies would or have determined which 
representatives they placed on committees. Without reporting such an 
explanation, it was not transparent how agencies made decisions on 
member selection or met statutory representation requirements. 

As a result, we made a series of recommendations suggesting that USTR 
work with the other agencies to update the system to make it more 
relevant to the current U.S. economy and trade policy needs. We also 
suggested that they seek to better incorporate new trade issues and 
interests. Furthermore, we recommended they annually report publicly on 
how they meet statutory representation requirements, including 
clarifying which interest members represent and explaining how they 
determined which representatives they placed on committees. 

In response, USTR and the other agencies more closely aligned the 
system's structure and composition with the current economy and 
increased the system's ability to meet negotiator needs more reliably. 
For example, the Department of Agriculture created a new ATAC for 
processed foods because exports of high-value products have increased. 
USTR and Commerce also split the service industry into several 
committees to better meet negotiator needs. Furthermore, USTR and the 
Department of Agriculture now list which interest members represent on 
the public FACA database, as the Department of Commerce has been doing 
for years. USTR's 2009 Trade Policy Agenda and 2008 Annual Report also 
includes descriptions of the committees and their composition. It does 
not, however, explain how USTR and the agencies determined that the 
particular membership appointed to each committee represents a fair 
balance of interests in terms of the points of view represented and the 
committee's functions. 


Mr. Chairman, we appreciate the opportunity to summarize our work 
related to the Trade Advisory System. Based on the recommendations we 
have made in the areas of quality and timeliness of consultations, 
logistical issues, and representation of key stakeholders, we believe 
that USTR and other managing agencies have strengthened the Trade 
Advisory System. However, we support the Committee's oversight and the 
ongoing policy review of the system to ensure that it works smoothly 
and the input received from business and non-business stakeholders is 
sufficient, fairly considered, and representative. 

[End of section] 


[1] GAO, International Trade: Advisory System Should be Updated to 
Better Serve U.S. Policy Needs, [hyperlink,], (Washington, D.C.: September 
24, 2002). 

[2] GAO, International Trade: An Analysis of Free Trade Agreements and 
Congressional and Private Sector Consultations under Trade Promotion 
Authority, [hyperlink,], 
(Washington, D.C.: November 7, 2007). 

[3] In addition to the above reports, GAO has also done recent work on 
federal advisory committees in general. See GAO, Federal Advisory 
Committees: Additional Guidance Could Help Agencies Better Ensure 
Independence and Balance, [hyperlink,], (Washington, D.C.: April 16, 
2004) and GAO, Federal Advisory Committee Act: Issues Related to the 
Independence and Balance of Advisory Committees, [hyperlink,], (Washington, D.C.: April 2, 

[4] Trade Agreement Act of 1979, Pub. L. No. 96-39, § 1103, 93 Stat. 
144, 308. 

[5] 19 U.S.C. § 2155(i). 

[6] 19 U.S.C. § 2155(a). 

[7] 19 U.S.C. § 2155(e). 

[8] 5 U.S.C. App. 2 §§ 1-14. 

[9] 19 U.S.C. § 2155(f). 

[10] 5 U.S.C. App. 2 § 5. 

[11] 5 U.S.C. App. 2 § 14. 

[12] 19 U.S.C. § 2155(i). 

[13] A Department of Labor official told us that the call-in 
information for each teleconferences was passed on to the LAC liaison 
group. Both LAC and TEPAC, as well as ACTPN, have liaison groups that 
meet more often than the official committee. According to members from 
these committees, liaison meetings are at the staff level and are 
usually fairly technical, whereas the principals' meetings tend to look 
at broader, political issues. 

[14] 19 U.S.C. § 2155. 

[End of section] 

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