Trade Agency Consolidation, Funding Increases in President’s Budget Request
The fiscal year 2014 budget proposal released by President Obama this week includes a controversial proposal to consolidate six trade agencies into one department. The budget also includes funding increases for many federal agencies with trade-related responsibilities.
Trade Agency Consolidation. As first proposed in January 2012 and reiterated as a campaign pledge last fall, the president is seeking to consolidate the following into a “new department with a focused mission to foster economic growth and spur job creation:” the Department of Commerce’s 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, the Small Business Administration, the Department of Agriculture’s business development programs, the Treasury Department’s Community Development Financial Institutions Fund program, the National Science Foundation’s statistical agency and industry partnership programs, and the Bureau of Labor Statistics from the Department of Labor.
The rationale for the change is to eliminate redundancy among programs and services and make it easier for U.S. companies to increase their exports, which has been one of the Obama administration’s top trade priorities. “With more effectively aligned and deployed trade promotion resources, strengthened trade enforcement capacity, streamlined export finance programs, and enhanced focus on investment in the United States,” the proposal states, the federal government “could more effectively implement a strong, pro-growth trade policy” that would “help American businesses compete in the global economy, expand exports, and create more jobs at home.”
However, the president’s proposal has been widely criticized by current and former government officials as well as the business community. Particularly objectionable has been the idea of combining USTR and DOC because of their different roles in trade policy. However, the president has opined that opposition to his plan is “not because of some big ideological difference” but instead is due to lawmakers “being very protective about not giving up their jurisdiction over various pieces of government.”
Funding Levels and Other Provisions. The president’s FY 2014 budget proposal includes the following.
- $520 million (up $64 million from FY 2012) for the International Trade Administration to support the National Export Initiative, including $22 million for the Interagency Trade Enforcement Center and $20 million to support implementation of the SelectUSA program, which encourages foreign direct investment in the U.S.
- $12 million for the Economic Development Administration to create a Regional Export Challenge, a competitive grant program that will support U.S. regions that develop and implement sustainable export action plans to proactively identify and support firms and sectors with the greatest export potential
- $112 million (up $11 million) for the Bureau of Industry and Security to support ongoing work under the Export Control Reform Initiative, including an additional $8.3 million for expanded export licensing and enforcement operations as controlled items shift from State Department jurisdiction
- the expansion of export control officers to Germany (covering Europe), Turkey (covering Malta, Cyprus, Syria, Jordan, Egypt, Lebanon and Israel) and the United Arab Emirates (covering Pakistan, Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and Yemen)
- organizational changes such as focusing on higher priority enforcement and compliance activities such as antidumping and countervailing duty casework and ITEC; reducing the number of Global Markets specialists who combat non-tariff barriers in customs, standards and transparency in markets that are not priorities or have a limited return on investment; and consolidating GM staff to cover priority markets such as free trade agreement partners, emerging markets such as China and India, and next tier markets such as Turkey and Indonesia
- $12.9 billion for U.S. Customs and Border Protection, including $221 million for 1,600 new CBP officers and mobile equipment to speed the processing and inspection of passengers and cargo at U.S. ports of entry
- $3.3 million for the automation and centralization of CBP processing of all single transaction bonds
- increases in customs inspection user fees
- transfer of land border port of entry facilities from the General Services Administration to CBP
- an additional $295.8 million to bolster the Food and Drug Administration’s food safety efforts, primarily through implementation of the Food Safety Modernization Act
- new user fees for food facility registration and inspection, food importers, and cosmetics and food contact substance notifications
- a $10 million increase for FDA efforts to detect and address the risks of food and medical products and ingredients manufactured in foreign countries
Other Trade Agencies
- $85.1 million for the International Trade Commission (up $5.1 million)
- $56.2 million for the Office of the U.S. Trade Representative (up $5 million)
- $117 million for the Consumer Product Safety Commission (up $2 million)
- $25 million for the Federal Maritime Commission (up $1 million)