USAID’s TCB Strategy Does Not Guide TCB Activities and Parts of It Are No Longer Current

		TCB Activities in the Field Are Guided by Country- Specific Needs

According to USAID officials, development and implementation of TCB  activities in the field are guided more by country-specific strategies that  incorporate country needs, circumstances, and priorities than by USAID’s  2003 TCB strategy. According to  USAID officials, the priorities presented in the TCB strategy—participation  in trade negotiations, implementation of trade agreements, and economic  responsiveness to opportunities for trade— are still relevant and cover all  TCB activities although the strategy has not been updated since 2003. It is generally accepted that strategies should be periodically updated to  reflect the current environment. We also note that the Government Performance  and Results Act Modernization Act of 2010 requires agencies to update  and revise their strategic plans at least every 4 years. USAID officials in Washington, D.C., told us that although they have had  discussions about updating the strategy, they have not updated it  because they question the costs and benefits of a new strategy given that  trade resources are declining and because the priorities presented in the  strategy still remain relevant, in their view. TCB also  contributes to meeting goals outlined in USAID and State’s Joint Strategic  Plan. USAID Uses Various Methods to Coordinate Trade Capacity Building Activities with Other Agencies

		At Headquarters, USAID Participates in Coordinating Bodies and Uses Informal Dialogue to Coordinate TCB Activities

The 2003 strategy calls for USAID to be the primary coordinator for U.S.  government TCB efforts, and we found that USAID headquarters staff  participate in coordinating bodies, such as interagency working groups,  and maintain ongoing discussions with relevant counterparts to  coordinate TCB activities. One coordinating body USAID uses is the  Trade Policy Staff Committee (TPSC), a USTR-chaired interagency  working group that includes a broad range of stakeholders, meets  multiple times a year, and has subcommittees focused on development  and TCB. Moreover, we found that the strategy may not be as useful  as it could be because it is outdated in several areas. For example, the  coordination section of the strategy does not include all agencies now  providing TCB assistance, the trade initiatives discussed in the strategy  are no longer current, and the categories of TCB activities identified in the  strategy have changed. Recommendation for Executive Action

To help ensure that USAID’s 2003 TCB strategy is as useful as it could  be for informing TCB activities, we recommend that the Administrator of  USAID update the strategy to reflect the current TCB environment. We did not receive comments from State or  USTR. Appendix II: Objectives, Scope, and Methodology

Our objectives were to (1) determine the extent to which the U.S. Agency  for International Development’s (USAID) 2003 strategy guides USAID’s  trade capacity building (TCB) activities; (2) describe methods USAID uses  to coordinate TCB efforts with other U.S. government agencies at home  and abroad; and (3) describe how, if at all, USAID has used TCB  evaluations in its program and project management. We primarily focused on TCB activities that USAID conducted because  USAID provided the most funding of all U.S. agencies for TCB activities in  2012. A variety of U.S. agencies have a role in providing TCB  assistance, including the Departments of State, the Army, Labor, the  Treasury, and Commerce; the Millennium Challenge Corporation (MCC);  and USAID. Those four agreements benefit  from TCB in their own categories.
Why GAO Did This Study

Since at least 2001, the United States has provided TCB assistance to developing countries to help them participate in and benefit from global trade. Multiple agencies provide this assistance, which may include support for World Trade Organization accession, customs procedures improvement, or development of infrastructure such as ports and roads. In this report, GAO focuses primarily on USAID because it provided the most funding for TCB in fiscal year 2012 and has a formal strategy focused entirely on TCB. GAO was asked to review the strategy, which is more than a decade old. GAO was also asked to examine USAID efforts to coordinate TCB activities to ensure that the United States is fulfilling its commitment in the most effective way.
In this report, GAO (1) determines the extent to which USAID's 2003 strategy guides USAID's TCB activities and (2) describes methods USAID uses to coordinate TCB efforts with other U.S. government agencies at home and abroad. GAO analyzed agency documents, interviewed relevant officials, and conducted fieldwork in six countries in Africa and Asia, selected for their diverse stages of development and geographic locations.

What GAO Found

The U.S. Agency for International Development's (USAID) 2003 trade capacity building (TCB) strategy does not directly guide TCB activities, and parts of the strategy no longer reflect the current TCB environment. USAID's TCB activities are primarily guided by country needs and many of these activities are elements of large development projects that have their own objectives. According to USAID, the strategy's priority areas—participation in trade negotiations, implementation of trade agreements, and economic responsiveness to opportunities for trade—remain relevant. However, some parts of the strategy are not current. For example, the strategy does not include discussion of how USAID should coordinate with the Millennium Challenge Corporation (MCC), which did not exist in 2003 and is a major TCB contributor (see figure). USAID officials told GAO that they had not updated the strategy because they questioned the costs and benefits of doing so given that trade resources were declining and they believed the priorities presented in the strategy were still relevant. However, USAID is still committing significant resources to TCB, and TCB contributes to goals outlined in USAID and the Department of State's joint strategic plan. USAID's TCB strategy may not be as useful as it could be for informing TCB activities because parts of it are no longer current. Moreover, directives, such as those in the Government Performance and Results Act Modernization Act of 2010, can serve as guidance for periodic updating of strategic plans.
The 2003 strategy calls for USAID to be the primary coordinator for U.S. government TCB efforts, and GAO found that USAID coordinates TCB activities at home and abroad using a range of methods, including structured and informal dialogue between stakeholders. Specifically, USAID staff report that they participate in interagency working groups and maintain ongoing discussions with counterparts from other agencies to coordinate TCB activities. For example, at headquarters USAID participates in the Trade Policy Staff Committee, an interagency working group that includes a range of stakeholders and has subcommittees on development and TCB. In the countries GAO visited, GAO found that USAID missions coordinate TCB through formal mechanisms, such as working groups, as well as informal communication.

What GAO Recommends

GAO recommends that the Administrator of USAID update the 2003 TCB strategy to reflect the current TCB environment. USAID agreed with the recommendation.