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TRADE POLICY: WHO DECIDES WHAT GETS DONE AND HOW
The Constitution of the United States gives the U.S. Congress the power to
regulate foreign commerce and to collect duties. However, decisions to raise or
lower tariffs, impose import quotas, or take other trade policy actions that
affect both domestic and foreign interests are so complex that Congress, through
a series of acts, has relegated much of the responsibility to the executive
branch, which works on a daily basis with both private sector advisory groups
and key congressional committees.
Congress
Congress's role in trade policy is essentially two-fold: the creation and the
oversight of trade laws.
To ensure proper implementation of the trade laws by the executive branch,
Congress requires that the executive branch regularly consult with it and submit
to extensive notification procedures prior to submission of a draft trade
agreement or implementing legislation.
In addition, trade law specifies that five members from the House of
Representatives Ways and Means Committee and five members from the Senate
Finance Committee be appointed as congressional advisers to U.S. delegations
negotiating international trade agreements. The Office of the U.S. Trade
Representative (USTR) must keep these advisers informed of U.S. objectives and
the status of negotiations, and whether a potential agreement would require
changes in U.S. laws.
Congress also requires numerous annual reports from the Office of the U.S.
Trade Representative and from the U.S. International Trade Commission (ITC) to
keep the Congress informed regarding actions taken under various trade laws and
programs. The most prominent of these reports are the USTR's "National Trade
Estimate Report on Foreign Trade Barriers" and the ITC's "The Year in Trade:
Operation of the Trade Agreements Program."
Finally, Congress can make its trade policy concerns known through its power
to authorize and appropriate funds for the functions of the major trade
agencies.
Executive Branch
The principal mechanism for developing and coordinating U.S. government
positions on international trade and trade-related investment issues lies within
a three-tiered interagency trade policy process.
The interagency process is coordinated by a Trade Policy Committee (TPC),
whose primary function is to assist and make recommendations to the president on
broad issues of policy implementation and development.
The U.S. Trade Representative chairs and administers the TPC, which has two
subordinate coordinating groups: the Trade Policy Review Group (TPRG) and the
Trade Policy Staff Committee (TPSC). The TPSC, consisting of senior-level
officials from TPC member agencies, has more than 60 subcommittees and task
forces. If the TPSC cannot reach consensus on an issue, or if the issue is one
involving a significant policy matter, it is referred to the TPRG, whose members
are officials at the under secretary and deputy USTR level in the member
agencies.
The TPC member agencies include the departments of Commerce, Agriculture,
State, the Treasury, Labor, Justice, Defense, the Interior, Transportation,
Energy, and Health and Human Services; the Environmental Protection Agency; the
Office of Management and Budget; the Council of Economic Advisers; the
International Development Cooperation Agency; the National Economic Council; and
the National Security Council. The U.S. International Trade Commission is a
non-voting member of the TSPC and an observer at TPRG meetings. Representatives
of other agencies also may be invited to attend meetings depending on the
specific issues discussed.
Disagreements at the TPRG level are referred to a final cabinet-level tier of
the interagency trade policy mechanism -- the National Economic Council (NEC).
The NEC has overall responsibility for advising the president on a broad range
of domestic and international economic issues. In this final interagency trade
process, the NEC meetings are chaired by the president and include the vice
president; the secretaries of State, the Treasury, Agriculture, Commerce, Labor,
Housing and Urban Development, Transportation, and Energy; the administrator of
the Environmental Protection Agency; the director of the Office of Management
and Budget; the U.S. Trade Representative; the chair of the Council of Economic
Advisers; the National Security Adviser; and the assistants to the president for
economic policy, domestic policy, and science and technology policy.
As policy decisions are made within the interagency process, the USTR assumes
responsibility for directing the implementation of that decision.
U.S. Trade Representative
The U.S. Trade Representative, a cabinet-level position with the rank of
ambassador, has the overall responsibility for developing and coordinating the
implementation of U.S. trade policy and is the president's principal adviser and
chief spokesperson on trade. Under U.S. law, the USTR must be included in all
economic summits and other international meetings at which international trade
is a major topic, and the USTR has the lead responsibility for all negotiations
on any matter considered under the auspices of the World Trade Organization.
The Office of the U.S. Trade Representative includes two deputy USTRs, one
based in Washington, D.C., and the other in Geneva, Switzerland.
Department of Commerce
The major trade responsibilities of the Department of Commerce are centered
in the International Trade Administration (ITA) and the Bureau of Export
Administration (BXA).
ITA has general operational responsibility for export development, commercial
representation abroad, the administration of antidumping and countervailing duty
laws, export controls, and trade adjustment assistance to firms. BXA controls
exports of commodities and technology for reasons of national security, foreign
policy, and short supply. BXA issues export licenses in accordance with export
control regulations.
U.S. Customs Service
The U.S. Customs Service, headed by the commissioner of customs, collects
duties on imports and enforces more than 400 laws and regulations relating to
international trade. Some of its responsibilities include interdicting and
seizing illegally entered merchandise; processing persons, carriers, cargo, and
mail into and out of the United States; administering quotas and other import
restrictions; and helping enforce U.S. laws on copyright, patent, and trademark
rights.
U.S. International Trade Commission
The U.S. International Trade Commission is an independent quasi-judicial
agency that conducts studies, reports, and investigations, and makes
recommendations to the president and the Congress, on a wide range of
international trade issues.
One of its primary functions is to determine whether U.S. industries are
materially injured by imports that benefit from subsidies or are priced or
otherwise traded unfairly. Under Section 337 of the Tariff Act of 1930, the ITC
also is authorized to order actions, subject to presidential disapproval, to
remedy situations in which unfair methods of competition or unfair acts are
being committed in the importation of goods into the United States.
The ITC's six commissioners, not more than three from the same political
party, are appointed for nine-year terms.
Private Sector Advisory Committees
In 1974, the U.S. Congress established the private sector advisory committee
system to ensure that U.S. trade policy and trade negotiation objectives
adequately reflect U.S. commercial and economic interests. Over the last 23
years, Congress has expanded and enhanced the role of this system, which now
includes some 33 advisory committees, with a total membership of approximately
1,000 advisers.
The USTR manages a three-tiered advisory committee structure. The committees
meet on a regular basis, receive sensitive information about ongoing trade
negotiations and other trade policy issues, and report to the president on any
trade agreement entered into under U.S. trade law.
The most senior level, the Advisory Committee for Trade Policy and
Negotiations (ACTPN), is a 45-member body composed of presidentially appointed
representatives of government, labor, industry, agriculture, small business,
service industries, retailers, consumer interests, and the general public. The
group, which convenes at the call of the USTR, considers trade policy issues in
the context of the overall national interest.
The second tier is made up of seven policy advisory committees representing
overall sectors of the economy, such as industry, agriculture, labor, and
services, whose role is to advise the government of the impact of various trade
measures on their respective sectors.
The third tier is composed of 25 sectoral, functional, and technical advisory
committees consisting of experts from various fields, who provide specific
technical information and advice on trade issues involving their particular
sector. Members of the second and third tiers are appointed by the USTR and the
secretary of the relevant department or agency.
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