At least 17 federal agencies, led by USTR, are involved in developing and  implementing U.S. trade policy. The Department of Commerce has a relatively broad role with  respect to trade agreement activities, with three units in the International  Trade Administration performing the key trade functions: The Import  Administration helps enforce U.S. trade laws; Market Access and  Compliance is responsible for ensuring that other nations live up to their  trade agreements; and Trade Development focuses on advocacy for U.S.  companies, export promotion services, support for trade negotiations, and  market analysis. 2). The Increased Importance of Security Has Significant Implications for Human Capital Strategies and Trade Functions

After September 11, 2001, combating terrorism became the priority  mission for the U.S. Customs Service and remained so when the Customs  Service was transferred to the Department of Homeland Security and  incorporated into CBP. As part of its focus on  terrorism, CBP has implemented new programs to screen high-risk  containers for weapons of mass destruction at overseas ports and to  improve security in the private sector’s global supply chain. USTR has also  asked for additional staff to address the increased workload. In addition to the WTO and the FTAA negotiations,  USTR has notified Congress of its intent to pursue free trade agreements  (FTA) with a number of countries and has started negotiations toward this  end. For example, we recently reported that the United States has  become the most frequent defendant in WTO trade dispute resolution  proceedings, particularly in the trade remedy area. In  each of these cases, the shifting global forces require the United States to  respond, and an effective response requires a clear link between the trade  agencies’ human capital strategies and the goals of the agencies in that  changing environment. For example, the trade policy  advisory committee system performs an important function through  which private sector committee members are able to provide input to  trade agencies to help them negotiate, monitor, and enforce trade  agreements; however, our September 2002 report found that the structure  and composition of the trade advisory committee system had not been  fully updated to reflect changes in the U.S. economy and U.S. trade policy. Growing Importance of China Creates Range of Human Capital Challenges for Trade Agencies

China’s rapid expansion in the world economy presents U.S. trade  agencies with significant human capital challenges as they strive to  monitor and enforce compliance with trade agreements. Commerce has also increased the number of staff involved in  the agency’s compliance efforts on the ground in China by creating a  Trade Facilitation Office within the U.S. embassy in Beijing. Conclusions

As we have reported in numerous studies and testimonies before this  Subcommittee and others, effective alignment between federal agencies’  human capital approaches and their current and emerging strategic and  programmatic goals is critical to the ability of agencies to economically,  efficiently, and effectively perform their missions. In other cases, such as the U.S.’s  ambitious trade negotiating agenda, human capital resources may be a  constraint on the ability of the trade agencies to carry out their  negotiations at the multilateral, regional, bilateral, and subregional level.
Why GAO Did This Study

Recent developments in global trade have created human capital challenges for U.S. trade agencies. At least 17 federal agencies, with the Office of the U.S. Trade Representative (USTR) as the lead, negotiate, monitor, or enforce trade agreements and laws. These agencies' strategies for effectively aligning their current and emerging needs in handling international trade functions and their human capital resources are critical to improving agency performance. GAO was asked to summarize its recent studies to illustrate important human capital challenges arising from current trade developments as U.S. trade agencies strive to negotiate, monitor, and enforce existing trade agreements and laws. For this testimony, GAO discussed the challenges that USTR, the Commerce Department, and the Bureau of Customs and Border Protection are facing in light of three recent developments in international trade: (1) the increased importance of security, (2) the ambitious U.S. negotiating agenda, and (3) the shifting global trade environment.

What GAO Found

The importance of international trade to the U.S. economy has grown in the last decade, as have the responsibilities of federal agencies involved in implementing international trade functions. For example, the September 11, 2001, terrorist attacks have heightened the need for increased focus on security within the global trade environment. In response, the Bureau of Customs and Border Protection has implemented new programs to improve the security of the global supply chain. These new programs require greater attention to human capital strategies to ensure that they achieve their goals of facilitating trade while preventing terrorist acts. In addition, the administration has continued to pursue multilateral negotiations within the World Trade Organization and with the Free Trade Area of the Americas countries as well as a series of new, bilateral and subregional trade negotiations. The increase in the number of initiatives has strained available human capital, leading to a USTR request for additional staff. Finally, the shifting global trade environment has complicated efforts to monitor and enforce trade agreements. For example, the United States has become the most frequent defendant in World Trade Organization trade dispute proceedings. Furthermore, as the U.S. economy has shifted toward services and high-tech industries, the industry advisory committees that provide trade advice to the U.S. government have required structural realignment to reflect these changes. Also, China's growing influence in international trade has resulted in new challenges to its trading partners. These changing global forces require U.S. trade agencies to continuously ensure that their human capital strategies closely link to the nation's strategic trade functions.