International Trade

The United Stated has entered into more than 400 trade agreements since the early 1980s, most of which were intended to liberalize trade and increase U.S. companies' access to foreign markets. More than half of these agreements were signed between 1992 and 1998. Among them were the far-reaching 1994 World Trade Organization agreements, which cover about $1.4 trillion in annual U.S. trade with 135 countries as well as significant bilateral agreements with key trading partners, such as Japan and China. This report looks at the ability of U.S. agencies to monitor and enforce trade agreements. GAO (1) identifies the federal structure for monitoring and enforcing trade agreements; (2) describes the increasing complexity of the federal monitoring and enforcement task and key activities that federal agencies must perform; and (3) assesses whether the Office of the U.S. Trade Representative, the Department of Commerce, and the Department of Agriculture have the staff and support to handle their monitoring and enforcement workloads.

GAO noted that: (1) U.S. government efforts to monitor and enforce trade agreements involve at least 17 federal agencies, with USTR having primary statutory responsibility; (2) the other agencies' contributions to federal monitoring and enforcement efforts vary according to their legal requirements, mission, and expertise, but Commerce, USDA, and the Department of State have substantial monitoring and enforcement roles; (3) USTR and Commerce both created offices in 1996 specifically dedicated to trade agreement monitoring and enforcement; (4) at least 13 other federal agencies provide policy input or technical expertise to U.S. monitoring and enforcement efforts; (5) several interagency mechanisms exist to coordinate the contributions and perspectives of the multiple agencies involved in monitoring and enforcement; (6) private sector input is obtained from statutory advisory councils, informal advisory groups, trade associations, and private companies; (7) the task of monitoring and enforcing foreign compliance with trade agreements had become more complex as the number of trade agreements and trade agreement partners has grown and the issues covered by trade agreements have expanded; (8) in the past, trade agreements primarily helped to reduce tariffs charged on merchandise imports; (9) however, current trade agreements address more complicated types of import restrictions, such as product standards and food safety regulations, and cover a broader range of issues, such as trade-related investment measures or intellectual property rights; (10) federal agencies that monitor and enforce trade agreements must be able to perform several key activities that include identifying and prioritizing compliance problems, analyzing information about them, and seeking ways to resolve them; (11) although USTR, Commerce, and USDA have taken steps to improve their monitoring and enforcement efforts, certain capacity weaknesses limit their ability to handle the federal monitoring and enforcement workload; (12) officials at all three agencies told GAO that steadily declining staff levels in recent years have adversely impacted the agencies' monitoring and enforcement activities; (13) agency officials also told GAO that although the technical complexity of trade agreements has been increasing, the expertise needed to analyze compliance problems is not always available; and (14) although private sector information about trade agreement compliance problems is essential to federal monitoring and enforcement efforts, some agency offices that GAO examined had better mechanisms than others for obtaining comprehensive and balanced input from the private sector.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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