However, 18 agencies have self-reported that they obligated  almost $2.9 billion for trade capacity building activities in over 100  countries from fiscal years 2001 through 2004. USAID reported providing 71 percent of the trade capacity  building assistance. United States Categorizes a Range of Assistance as Trade Capacity Building

The U.S. government survey administered by USAID defined trade capacity  building as activities meant to help countries become aware of and accede  to the WTO; implement WTO agreements; and build the physical, human,  and institutional capacity to benefit more broadly from a rules-based  trading system. While some of the  agencies we reviewed have set program goals for building trade capacity,  generally, most have neither developed performance indicators related to  trade capacity building, nor have they compiled performance data and  analyzed the results in terms of building trade capacity. USDA’s trade capacity building strategy does not include  performance indicators. Although USAID officials have called developing  trade capacity building performance indicators difficult, they are working  toward that end independently and with other donors. Without evaluating the effectiveness of its  trade capacity building assistance, the United States cannot ensure the  reasonable use of resources devoted to such assistance, determine whether  the assistance is helping countries participate in and benefit from trade,  and credibly demonstrate that trade capacity building is a useful U.S. trade  and development policy. Recommendations for Executive Action

To provide more objective information on the progress of U.S. trade  capacity building efforts and allow the United States to assess their  effectiveness, we make the following two recommendations:  The Administrator, U.S. Agency for International Development, and the  U.S. Trade Representative, as co-chairs of the trade capacity building  interagency group, in consultation with other agencies that fund and  implement trade capacity building assistance, should develop a cost- effective strategy to systematically monitor and measure program  results and to evaluate the effectiveness of U.S. trade capacity building  assistance. This report (1) identifies the nature and  extent of U.S. trade capacity building; (2) describes how agencies  implement such assistance, including coordination; and (3) assesses  whether agencies evaluate its effectiveness.
Why GAO Did This Study

Many developing countries have expressed concern about their inability to take advantage of global trading opportunities. The United States considers this ability a key factor in reducing poverty, achieving economic growth, raising income levels, and promoting stability. U.S. trade capacity building assistance is designed to address these concerns. GAO (1) identified the nature and extent of U.S. trade capacity building; (2) described how agencies implement such assistance, including coordination; and (3) assessed whether agencies evaluate its effectiveness.

What GAO Found

U.S. trade capacity building is primarily a collection of existing trade and development activities placed under the umbrella of trade capacity building. The U.S. government initiated an annual governmentwide survey in 2001 to identify U.S. trade capacity building efforts, which it defined as assistance meant to help countries become aware of and accede to the World Trade Organization (WTO); implement WTO agreements; and build the physical, human, and institutional capacity to benefit from trade. U.S. agencies self-reported that they had provided almost $2.9 billion in trade capacity building assistance to over 100 countries from fiscal years 2001 through 2004. The Agency for International Development (USAID) reported providing about 71 percent of the trade capacity building funding. Agencies are coordinating their assistance through the trade capacity building interagency group formed in 2002 to help countries negotiate and implement U.S. free trade agreements. Most of the U.S. agencies we reviewed are not systematically measuring the results of their trade capacity building assistance or evaluating its effectiveness. Although some agencies have set program goals for building trade capacity, they have not generally developed performance indicators, compiled data, or analyzed the results in terms of building trade capacity. USAID's March 2003 strategy for building trade capacity includes a limited number of performance indicators. USAID officials have stated that developing such indicators is difficult but have begun work independently and with other international donors toward that end. Without a strategy for evaluating the effectiveness of its trade capacity building assistance, the United States cannot identify what works and what does not work to ensure the reasonable use of resources for these efforts.