When Congress established the Trade Promotion
Coordinating Committee (TPCC) in 1992, it authorized the
commerce secretary to act as a messenger of commerce,
communication, and innovationlike the Roman god Mercury. Housed in
the International Trade Administration (ITA) of the U.S. Department
of Commerce (DOC), the committeechaired by Secretary Gary Lockemet
as the Obama administrations first cabinet-level interagency group
in late October 2009. Since then, its aim has been to focus on
presidential initiatives that might boost American exports globally
and create jobs locally.
With the growing trade deficit and increasing national debt, it is
imperative that TPCC reinvigorate its mandate, which is often
viewed as an ineffective and disorganized set of government
programs intended to help the private sector increase export sales.
The more effective national export strategy of the Obama
administration seems to upgrade the most needed government-wide
export promotion endeavors.
Even with a slow start in nominating a new secretary (after New
Mexico Governor Bill Richardson and New Hampshire Senator Judd
Gregg withdrew) and appointing key political leadership positions,
the Obama administration and Congress are committed to articulating
broader export policy priorities and using TPCC as the principal
vehicle to coordinate U.S. government-wide export promotion
strategies.
During a congressional hearing in early October 2009, Senator Amy
Klobuchar of Minnesotasubcommittee chair of the Senate Committee on
Commerce, Science, and Transportationelaborated on why the United
States needs to promote trade: Exporting is literally a world of
opportunity. Over 95 percent of the worlds customers are located
outside the United States. Increasing our exports will mean more
business, more jobs, and more growth for the American economy.
Given the magnitude of current financial challenges, a coordinated
national trade promotion strategy between not only the executive
and legislative branches, but also among executive agencies is
essential, because our economic survival and national pride depend
largely on international commerce and trade promotion.
Secretary Locke told his cabinet colleagues at the first TPCC
meeting, We have 30 million companies in the United States, but
less than 1 percent of them exporta percentage that is
significantly lower than all other developed countries. America
already makes great stuffnow we just have to work at selling more
of it around the world.
To solidify President Obamas overall economic stimulus package,
upon which the national export promotion strategy rests, U.S. Trade
Representative Ron Kirk and National Economic Council Director
Larry Summers joined Secretary Locke with other top administration
officials from 20 federal agencies on the White House campus to
demonstrate the importance of their concerted effort in national
strategy.
Moving Toward a Mercurial Doctrine
Just as President Clintons foreign policy resonated with trade
promotion and support for the World Trade Organization and the
North American Free Trade Agreement, President Obamas strategy is a
complicated gambit to increase overseas investment possibilities
and market opportunities for U.S. products, services, and ideas.
The presidents trademark policy tripod of advancing change in
healthcare, energy, and education is designed to fundamentally
revitalize Americas economic organization and to compete in the
global marketplace.
With his entrepreneurial zeal, intellect, and eloquence, the
president is a model of what may be called American Mercury. His
multi-tasking ability in the midst of the inherited financial
crisis, the ever-increasing national debt, and two wars in
Afghanistan and Iraq is a mercurial characteristic. His commercial-
and exportpromotion strategies are housed within a smart-power
foreign policy framework, which is precisely the sort of governing
agenda needed to direct the presidents plan of action for
international trade.
Obamas former presidential rival, Secretary of State Hillary
Clinton, complemented the mercurial vision with the introduction of
her food security initiativea strategic pillar of the presidents
international development diplomacy intended to energize the United
States agro-businesses and agricultural exports while addressing
worlds hunger.
To some conservatives, the presidents promise of changeand even
trade promotion strategiesseems ostensibly illusory in the midst of
ever-entangling, octopus-like activities that stretch from bank and
auto rescue plans to a plethora of hotspots like Iran, North Korea,
Haiti, and Yemen. Yet, at the end of the day, as President Clintons
advisor James Carville famously said, Its the economy, stupid.
A number of TPCC challenges have arisen since the time of President
Clintons late commerce secretary Ronald Brown (who implemented the
most aggressive and comprehensive government-wide plan for export
promotion in 1992), which have presented an opportunity for the
mercurial Obama administration to rejuvenate the federal
governments interagency process.
Need for a Government-Wide Trade Promotion
Strategy
Since the inception of TPCC, the investigative arm of
CongressGAOhas studied its progress twice (once in 2002 and again
in 2006). In December 2009, the office issued a report that
observes the current state of export promotion activities both
within the United States and in foreign countries. Each report
repeatedly articulates why a government-wide trade promotion
strategy is necessary. Exports and trade generally contribute to
U.S. economic growth and job creation by achieving a higher
standard of living through competitive advantage by producing and
exporting goods made in the United States relatively efficiently
and importing goods and services made relatively inefficiently on
U.S. soil.
Businesses involved in international trade tend to be more
productive, pay higher wages, and offer other benefits to their
workers than non-exporting firms of the same size. The economic
benefits generated by foreign exports can also provide a
countercyclical income base to mitigate economic downturns. A
national strategy maximizes the effectiveness of isolated export
programs that, when applied in an agency or firm-specific manner,
are hampered by disparate methods of evaluation, quantification,
and lack of coordination within and among TPCC member agencies.
With specific benefits in mind, the mandate given by former
President Clintons 1993 Executive Order provided a unifying
framework to coordinate the export promotion and financing
activities of the U.S. government and to develop a government-wide
strategic plan for implementing such programs among diverse
executive agencies. These executive agencies include the
Departments of Commerce (DOC), State (DOS), Agriculture (USDA), and
Energy (DOE), as well as the Departments of Defense and Labor, the
Overseas Private Investment Corporation (OPIC), and the
Export-Import Bank of the United States (Ex-Im Bank), among others.
Implementing a National Strategy
The 2002 and 2006 GAO reports, as well as a 2009 review in the wake
of the U.S. economic downturn, offer information and insight on the
advantages, limitations, and status of efforts affecting a national
export strategy.
What Has Happened?
By 2002, the government had identified the overall national export
strategies. Each TPCC member agency had also identified programs
and activities that could be construed as trade-promoting under a
general budget authority. Together, DOC and USDA command more than
threequarters of the total budget for export promotion, followed by
Ex-Im Bank and DOS. Their programs included ones like those within
DOCs International Trade Administration and DOSs trade capacity
building.
In testimony delivered in March 2009 before a House subcommittee,
GAO Director Loren Yager described the various activities of these
and other agencies, such as DOCs advice and advocacy to businesses
during the export process, the USDAs financing for promotional
activities, and the Export-Import Banks loan guarantees for foreign
buyers of U.S. exports.
In 2006, TPCC agencies sought to remedy the mixed progress verdict
levied by earlier GAO reports and alleviate confusion over the
export process by establishing cross-agency staff training;
strengthening the dissemination of trade information; and improving
outreach to new exporters.
What Remains to Be Done?
Still, an overarching strategy to integrate TPCC agency programs
and activities is not yet in place. As of 2006, TPCC was still
struggling to define specific goals associated with each assigned
agency and clarifying them with targets and responsibilities.
Longstanding issues with strategic focus shift from year to year
continued with little evaluation of the previous efforts
effectiveness. For example, the 1997 national export strategy
recognized that the United States was losing market share to the
European Union; however, the 1998 strategy failed to adjust to
changing EU strategies for competition. Similarly, the 2000
strategy did not review Eastern European market opportunities, but
concentrated on China. In 2002, the Chinese market was sidelined.
To encourage and aid agencies in addressing impediments to
interagency collaboration and coordination, an October 2005 review
of several joint agency efforts identified key practices to
sustaining and enhancing cooperation:
-
defining and articulating a common outcome
(or uniformly measurable goal) to orient agency efforts
-
articulating mutually reinforcing or joint
strategies so that needs may be identified and addressed by
leveraging resources
-
agreeing on agency roles and responsibilities
so that compatible policies and procedures might be
established to bridge agency boundaries
-
developing unifying mechanisms to monitor,
evaluate, and report on results
- reinforcing individual and agency
accountability through planning, reporting, and performance
management syste
Four years later, GAO similarly observed the need for action in
these areas, echoing the results of other relatively recent studies
conducted by experts noting that TPCC continues to face challenges
in areas of its coordination responsibilities. For example, after
underscoring inconsistencies between budget allocations and trade
priorities both within agencies and within governmentwide trade
promotion strategies, GAO identified the allocation of overseas
staff for trade promotion activities as a coordination challenge in
USDA, DOC, and DOS.
Finally, the report recommended that as chair of TPCC, the commerce
secretary should ensure that national export strategies
consistently identify specific goals of agencies within the broad
strategic priorities; allocate agency resources to support their
specific goals; and analyze progress annually to evaluate previous
strategies and outcomes.
What Impedes Progress?
Securing additional funding to improve the previously described
functions has been a challenge. Besides funding, TPCC continues to
have little influence over agencies resource allocation for trade
promotion despite its mandate to propose a unified federal trade
promotion budget.
By late 2009, the National Export Strategy continued to lack an
overall review of agencies allocation of resources relative to
government-wide export promotion priorities. The GAO review
determined that export promotion activities warranted further
attention in the areas of targeted services for small and
medium-sized enterprises/businesses (SMEs/SMBs), performance
monitoring, partnerships, and methodologies for setting user fees.
Individual SMEs have unique needs and require tailored services to
account for common financing. To that end, program assistance must
be prioritized to certain sectors or firms based on national
exporting goals. However, agencies efforts remain fragmented by
having too many targets, which tends to undermine an agencys change
for success.
Market research and stakeholder consultation would help agencies
identify and rank priorities. Models of how to do so include the
United Kingdoms Export Explorer and Passport to Export Success
programs, as well as Indian and Malaysian cluster development
programs detailed in the review.
The absence of meaningful performance monitoring has compromised a
valuable tool for learning. GAO reports have long noted that TPCC
agencies do not identify or measure agencies progress toward goals
as part of the National Export Strategy. Though some agencies like
Ex-Im Bank recently developed program standards in most areas
specified by Congress, evaluation of progress against standards
lacked targets and timeframes. The information collected on small
businesses by the bank was only just starting to be compiled and
used to improve operations. The GAO report again points to foreign
efforts such as Australian and New Zealand systems to improve
performance monitoring.
Some programs were successfully established in 2007 to promote
partnerships with the private sector, cities, and states. These
included DOCs Corporate Partnership Program to leverage private
sector expertise and USDAs Market Access and Foreign Market
Development Programs.
In 2009, individual state offices reported that the partnerships
were important to their export promotion activities. However, the
review noted that although DOC collects $10 million annually in
fees for these services, it lacks good information on the true
costs of providing services. As a result, it is unclear whether the
fees DOC established reflect its policy objectives or whether DOC
optimizes efficient and effective program management.
The absence of a unified system of resource allocation, of
monitoring performance against established standards, and of
targeted program prioritization and fee-setting for partnerships
with businesses and state offices impedes measured progress toward
a national trade promotion strategy. Without uniform systems for
information gathering, assessment of strategic progress remains
clouded; collaboration is dissuaded; and future planning is
shrouded in uncertainty.
A Budget-Backed Strategy
Most recently, Secretary Lockes newly proposed TPCC working group
approach consisting of 20 agencies is aimed at addressing the
challenges identified earlier and engaging more U.S. companies to
boost exports. These groups will provide analysis and data,
identify priority and next-tier markets, investigate clean energy
technology and services, and advocate abroad for better use of
competitive practices to ensure that U.S. companies get a fair
chance at winning projects and contracts.
Within this organizational architecture of national priorities for
a common outcome with measurable results, TPCC still needs to
address the fundamental constraint for a plan to coordinate federal
trade promotion activities as directed by Congress: a unified
national budget for trade promotion.
For TPCC to succeed, its mandate requires an endorsement of an
annually unified trade promotion budget; however, the committee
secretariat does not review member agency budgets in correspondence
to the national export strategy and its budgetary requirements.
Each agency has its own statutory requirements and budgets
appropriated by various congressional subcommittees. Thus, each
agency submits its proposed budget separately to OMB.
With President Obamas new American Recovery and Reinvestment Act of
2009 and $7.9 billion allocated to DOC, the agency has
multi-faceted activities to perform. The USG-wide national export
strategy extends through these activities to almost every federal,
state, and local entity. For this approach to gain its desired
results, DOC needs to work closely with OMB in order to align
strategies with budgets. Such leadership demands shared
responsibilitiesby both executive and legislative branchesfor a
more effective and comprehensive national export strategy.
By rejuvenating the federal interagency process, President Obamas
three-pronged strategy intends to revitalize the foundation of the
U.S. economy by exporting U.S. ideals and values alongside its
goods and services. As the agency critical to strategic
implementation, a mercurial Commerce Department is the catalytic
elementthe messengerwithin the framework for promoting our
commercial republics continued success. Our history is prologue for
such a mercurial doctrine.
