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President Proposes to Consolidate Six Federal Trade Agencies

Monday, January 16, 2012
Sandler, Travis & Rosenberg Trade Report

President Obama announced Jan. 13 a proposal to consolidate six federal trade agencies into one department whose function will be to “promote competitiveness, exports and American business.” The agencies affected are the Department of Commerce (core business and trade functions), the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, the U.S. Trade and Development Agency and the Small Business Administration, along with “other related programs.” The current multi-agency structure is “redundant and inefficient,” a White House fact sheet said, and has resulted in business owners “confused about where to go for assistance and often … unaware of services that would help them, particularly those trying to break into the export market for the first time.” Instead, the president is proposing to establish “one department where entrepreneurs can go from the day they come up with an idea and need a patent, to the day they start building a product and need a warehouse, to the day they are ready to export and need help breaking into new markets overseas.”

Initial reaction to the proposal included a healthy dose of skepticism. Former trade officials disapproved of the idea of combining USTR and DOC because of their different roles in trade policy, and Inside US Trade noted that key lawmakers such as Senate Finance Committee Chairman Max Baucus and House Ways and Means Committee Chairman Dave Camp have come out against such a move. Other observers noted that the proposal could harm international trade negotiations by demoting the U.S. trade representative from a Cabinet-level official with ambassadorial rank. The Washington Post cited one former official as saying the president’s proposal does not include many other agencies also involved in trade policy and that those agencies that are included “aren’t high on the list of ones that businesses typically complain about as inefficient or a source of burdensome regulation.”

The president said he would also ask Congress to reinstate authority given to past presidents to reorganize and consolidate the federal government, which he said he would only use “for reforms that result in more efficiency, better service and a leaner government.” The White House added that this proposal “would initiate new accountability by mandating that any plan must reduce the number of government agencies or save taxpayer dollars.”

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